[Senate Hearing 106-1059]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 106-1059

                  1996 CAMPAIGN FINANCE INVESTIGATIONS

=======================================================================

                                HEARINGS

                               before the

        SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT AND THE COURTS

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                   MAY 24, JUNE 6, and JUNE 21, 2000

                               __________

                          Serial No. J-106-85

                               __________

         Printed for the use of the Committee on the Judiciary

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                       COMMITTEE ON THE JUDICIARY

                     ORRIN G. HATCH, Utah, Chairman
STROM THURMOND, South Carolina       PATRICK J. LEAHY, Vermont
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
ARLEN SPECTER, Pennsylvania          JOSEPH R. BIDEN, Jr., Delaware
JON KYL, Arizona                     HERBERT KOHL, Wisconsin
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JOHN ASHCROFT, Missouri              RUSSELL D. FEINGOLD, Wisconsin
SPENCER ABRAHAM, Michigan            ROBERT G. TORRICELLI, New Jersey
JEFF SESSIONS, Alabama               CHARLES E. SCHUMER, New York
BOB SMITH, New Hampshire
             Manus Cooney, Chief Counsel and Staff Director
                 Bruce A. Cohen, Minority Chief Counsel
                                 ------                                

        Subcommittee on Administrative Oversight and the Courts

                  CHARLES E. GRASSLEY, Iowa, Chairman
JEFF SESSIONS, Alabama               ROBERT G. TORRICELLI, New Jersey
STROM THURMOND, South Carolina       RUSSELL D. FEINGOLD, Wisconsin
SPENCER ABRAHAM, Michigan            CHARLES E. SCHUMER, New York
                       Kolan Davis, Chief Counsel
                 Matt Tanielian, Minority Chief Counsel




                            C O N T E N T S

                              ----------                              

                        Wednesday, May 24, 2000
                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    10
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, 
  prepared statement.............................................    64
Schumer, Hon. Charles E., a U.S. Senator from the State of New 
  York...........................................................     5
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....     9
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................     1
Thurmond, Hon. Strom, a U.S. Senator from the State of South 
  Carolina, prepared statement...................................    65
Torricelli, Hon. Robert G., a U.S. Senator from the State of New 
  Jersey.........................................................     6

                               WITNESSES

Gallagher, Neil, Assistant Director, National Security Division, 
  Federal Bureau of Investigation, U.S. Department of Justice, 
  Washington, DC.................................................    29
Parkinson, Larry, General Counsel, Federal Bureau of 
  Investigation, U.S. Department of Justice, Washington, DC......    32
Radek, Lee J., Chief, Public Integrity Section, U.S. Department 
  of Justice, Washington, DC.....................................    12

                         Tuesday, June 6, 2000
                    STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    69
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....    71
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................    67
Thurmond, Hon. Strom, a U.S. Senator from the State of South 
  Carolina, prepared statement...................................    69

                               WITNESSES

Esposito, William, Former Deputy Director, Federal Bureau of 
  Investigation, U.S. Department of Justice, Washington, DC......    95
Gangloff, Joseph, Principal Deputy Chief, Public Integrity 
  Section, U.S. Department of Justice, Washington, DC............    73

                        Wednesday, June 21, 2000
                    STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.   108
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....   193
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................   107

                               WITNESSES

Conrad, Robert J., Jr., Supervising Attorney, Campaign Financing 
  Task Force, U.S. Department of Justice, Washington, DC.........   165
Litt, Robert S., Former Principal Associate Deputy Attorney 
  General, U.S. Department of Justice, Washington, DC............   210
Mansfield, Stephen, Former Assistant U.S. Attorney, U.S. 
  Department of Justice, Los Angeles, CA.........................   178
McDonald, Danny L., Vice Chairman, Federal Election Commission, 
  Washington, DC.................................................   149
Wold, Darryl R., Chairman, Federal Election Commission, 
  Washington, DC.................................................   149

                         QUESTIONS AND ANSWERS

Responses of Larry Parkinson to Questions from Senator Leahy.....   219

                       SUBMISSIONS FOR THE RECORD

Bryant, Robert M., Assistant Director, Federal Bureau of 
  Investigation, U.S. Department of Justice, Washington, DC, 
  letter and attachment to Director Freeh, May 15, 1997..........   224
Federal Bureau of Investigation, Washington, DC, investigation 
  transcription, November 13, 1997...............................   509
Freeh, Hon. Louis J., Director, Federal Bureau of Investigation, 
  U.S. Department of Justice, Washington, DC:
    memorandum to Mr. Esposito, December 9, 1996.................   300
    letter and attachment to Attorney General Reno, November 24, 
      1997.......................................................   245
    memorandum to Larry Parkinson, December 8, 1998..............   287
Harshbarger, Scott, President, Common Cause, and Fred Wertheimer, 
  President, Democracy 21, joint letter to Senator Specter, June 
  20, 2000.......................................................   147
McBride, Ann, President, Common Cause, Washington, DC, letter to 
  Attorney General Reno, October 9, 1996.........................   111
Neal, James F., Attorney, Neal & Harwell, PLC, Nashville, TN, 
  facsimile transmittal to Peter Ainsworth, July 27, 1998........   362
Parkinson, Larry R., General Counsel, Federal Bureau of 
  Investigation, U.S. Department of Justice, Washington, DC, 
  memorandum to Deputy Attorney General Eric H. Holder, Jr., 
  January 30, 1998...............................................   275
Radek, Lee J., Chief, Public Integrity Section, Criminal 
  Division, U.S. Department of Justice, Washington, DC:
    memorandum to Mark M. Richard, November 24, 1997.............   463
    memorandum to Robert S. Litt, November 25, 1997..............   446
    memorandum to Jim Robinson, July 28, 1998....................   357
    memorandum to Jim Robinson, August 3, 1998...................   373
    memorandum to James K. Robinson, November 17, 1998...........   404
    memorandum to James K. Robinson, November 20, 1998...........   302
    memorandum to James K. Robinson, November 20, 1998...........   346
Robinson, James K., memorandum to Attorney General, August 24, 
  1998...........................................................   378
Trial Attorney, Public Integrity Section, Criminal Division, U.S. 
  Department of Justice, Washington, DC, memorandum to Lee Radek, 
  August 5, 1998.................................................   369
Wertheimer, Fred, President, Democracy 21, and Scott Harshbarger, 
  President, Common Cause, joint letter to Senator Specter, June 
  20, 2000.......................................................   147
Wold, Darryl R., Chairman, Federal Election Commission, 
  Washington, DC:
    letter and attachments to Senator Specter, June 21, 2000.....   532
    letter and attachments to Senator Specter, July 28, 2000.....   536

 
                THE 1996 CAMPAIGN FINANCE INVESTIGATIONS

                              ----------                              


                        WEDNESDAY, MAY 24, 2000

                           U.S. Senate,    
   Subcommittee on Administrative Oversight
                                    and the Courts,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:22 a.m. in 
room SD-226, Dirksen Senate Office Building, Hon. Arlen Specter 
presiding.
    Also present: Senators Grassley, Sessions, Torricelli, and 
Schumer.

 OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM 
                   THE STATE OF PENNSYLVANIA

    Senator Specter. The Senate Judiciary Subcommittee on 
Oversight will now proceed. The purpose of this hearing is on 
the Attorney General's decision not to appoint independent 
counsel.
    At the outset, I note that it is regrettable that this 
inquiry comes in the midst of a presidential election, but it 
should be noted for the record that strenuous efforts have been 
made for a long time to answer the questions which we are 
inquiring into today.
    I first broached some of those questions with the Attorney 
General in this room on April 30, 1997, followed up with a 
detailed letter the next day on May 1, on the issue of advocacy 
ads. A memorandum was prepared by Director Louis Freeh of the 
FBI on November 24, 1997, recommending the appointment of 
independent counsel, and the Attorney General was requested by 
letter of December 2, 1997, to make that memorandum available 
and she declined. The memorandum from Charles La Bella was 
submitted on July 17, 1998, and 1 week later the Attorney 
General was requested to make that memorandum available and 
again she declined.
    So the timing is not a matter for this subcommittee, and 
the three memoranda and other documents have only been produced 
in response to subpoenas, and then beyond subpoenas to the 
preparation of a resolution to seek a contempt citation against 
the people who have not produced the records.
    We have heard from Charles La Bella and his recommendation. 
We will hear today from Mr. Parkinson, General Counsel to the 
FBI. We will hear today from Mr. Lee Radek, Chief of the Public 
Integrity Section. We will hear today from Mr. Neil Gallagher, 
who is Assistant Director for the FBI National Security 
Division. Regrettably, Mr. Esposito cannot be present because 
of personal matters.
    Our inquiry will pick up the details on the Attorney 
General's decision not to seek independent counsel. The 
determination stated by the Attorney General on declining 
independent counsel as to the President and the Vice President, 
which she did on December 8, 1998, turned on the finding, ``the 
President and Vice President were advised that the issue 
advertising campaign was lawful and that lawyers were reviewing 
every advertisement to ensure full compliance with the law.''
    We will be inquiring into that with reference to a number 
of witnesses, specifically Mr. Parkinson, who in his memorandum 
pointed out that there was no advice directly from attorneys 
for either the President or the Vice President, and both of the 
attorneys had a specific interest, one being the attorney for 
the Democratic National Committee and the other being the 
attorney for the Clinton-Gore campaign. And even one of those 
attorneys had expressed that advice of counsel defense with 
substantial reservations.
    When the Attorney General declined the appointment of 
independent counsel as to the Vice President, she did so with 
the essential conclusion being, ``the Government would have to 
prove beyond a reasonable doubt that at the time he made the 
telephone calls that were at issue in the 1997 investigation, 
the Vice President actually knew that the media campaign had a 
hard money component.'' Those words and that articulation 
really sounds in prosecutorial discretion, as opposed to the 
statutory standard of a reasonable basis to proceed with an 
investigation, not whether there is the evidence for 
conviction.
    Similarly, key findings of the Attorney General again sound 
in prosecutorial discretion, ``I find the evidence fails to 
provide any reasonable support for the conclusion that the Vice 
President may have lied.'' Further, a little later on, ``I 
conclude that there is no reasonable prospect that these facts 
could support a successful prosecution,'' again sounding in 
prosecutorial discretion as opposed to a statutory standard of 
a reasonable basis to proceed with an investigation.
    The finding on December 8 as to the President and the Vice 
President did contain language of the Attorney General that she 
found clear and convincing evidence that the President and the 
Vice President lacked the requisite specific intent to violate 
the law. That issue will be a detailed question for this 
subcommittee's inquiry.
    When the Attorney General declined to appoint independent 
counsel as to the Vice President on November 24, 1998, there 
was not even that finding made, although it seems to be 
indispensable in order not to proceed with the appointment of 
independent counsel, although a real question would exist had 
the finding been made if there was any basis for that finding.
    The Congress amended the independent counsel statute in 
1987 to erect what was thought to be a very high barrier for 
the Attorney General to decline the appointment of independent 
counsel on the basis of lack of criminal intent. That reason 
had been used by Attorney General Meese in quite a number of 
matters, one of the most celebrated involving Edward Smultz. So 
the Congress went out of its way to say that was not a basis, 
unless it was, ``clear and convincing evidence.'' And to 
repeat, the Attorney General found that in the December 8 
finding, but did not find it as to the Vice President on 
November 24 on the issues of the telephone calls and the 
criminal intent.
    We are going to be starting today's hearing focusing on a 
memorandum which was written by FBI Director Freeh to Mr. 
Esposito dated December 9, 1996, which was turned over to the 
subcommittee last Thursday, May 18. In my legal opinion, this 
memorandum should have been turned over much, much sooner, and 
it was turned over only after a resolution had been prepared 
for a contempt citation.
    I saw this memorandum for the first time last Thursday, on 
the 18. Then it appears in the New York Times and the 
Washington Post on an Associated Press story the next day, on 
May 19. And it is very troublesome, this kind of a public 
disclosure, before this subcommittee even has an opportunity to 
review the memo and to conduct an inquiry, and it may be a 
preemptive disclosure to soften the blow.
    We intend to pursue that question because there is acertain 
amount of contempt shown for the Congress, the Senate, the Judiciary 
Committee, this subcommittee, when a memorandum is not produced for 
3\1/2\ years and then the day the subcommittee finally gets it, there 
is a contemporaneous release, or perhaps an earlier release to the news 
media.
    As I said earlier, Mr. Esposito cannot be here today 
because of personal reasons, and we are going to start the 
hearing today with an inquiry on this memorandum and then move 
to a broader subject. And we are going to start here because 
Mr. Gallagher, who was present at the meeting with Mr. Radek, 
has commitments to leave the country and has to be out of here 
at a reasonably early time.
    We are handling these documents under the most 
extraordinary limitations imaginable. It seems as if the 
Judiciary Committee can't have access to the documents that the 
newspapers have access to. And these documents could be 
reviewed only in S-407, which is a rather tortuous process. The 
room that I spent the last 2 days in is about the size of a 
telephone booth, and there were four people in it at one time.
    And we got these documents released this morning, after 8 
a.m., and they still aren't going to be released publicly, 
although I would like to have them released to the public. I 
think the public has a right to know what these documents are. 
But in a convoluted series of proceedings, we do have the 
authority to use these documents in the hearing, something we 
didn't even have in the La Bella hearing, questioning him on 
the basis of a 100-page document without having the document 
present.
    I am going to take a minute or two to read this document 
because it can't be released otherwise unless it is read at the 
hearing. To Mr. Esposito from Director of the FBI, dated 12/9/
96, subject, Democratic national campaign matter: ``As I 
related to you this morning, I met with the Attorney General on 
Friday, 12/6/96, to discuss the above-captioned matter. I 
stated that DOJ had not yet referred the matter to the FBI to 
conduct a full criminal investigation. It was my recommendation 
that this referral take place as soon as possible. I also told 
the Attorney General that since she had declined to refer the 
matter to an independent counsel, it was my recommendation that 
she select a first-rate DOJ legal team from outside Main 
Justice to conduct the inquiry. In fact, I said that these 
prosecutions should be `junkyard dogs,' and that in my view, 
PIS, ``Public Integrity Section,'' was not capable of 
conducting the thorough, aggressive kind of investigation which 
was required. I also advised the Attorney General of Lee 
Radek's comment to you that there was a lot of 'pressure' on 
him and PIS regarding this case because the Attorney General's 
job might hang in the balance, (or words to that effect.) I 
stated that those comments would be enough for me to take him 
and the Criminal Division off the case completely. I also 
stated that it didn't make sense for PIS,'' Public Integrity 
Section, ``to call the FBI the `lead agency' in this matter 
while operating a 'task force' with DOC IG's,'' referring to 
Department of Commerce Inspectors General, ``who were 
conducting interviews of key witnesses without the knowledge or 
participation of the FBI. I strongly recommend that the FBI and 
hand-picked DOJ attorneys from outside Main Justice run this 
case, as we would any matter of such importance and complexity. 
We left the conversation on Friday with arrangements to discuss 
the matter again on Monday. The Attorney General and I spoke 
today and asked for a meeting to discuss the 'investigative 
team' and hear our recommendations. The meeting is now 
scheduled for Wednesday, 12/11/96, which you and Bob Litt will 
also attend. I intend to repeat my recommendation from Friday's 
meeting. We should present all of our recommendations for 
setting up the investigation, both AUSAs,'' Assistant U.S. 
Attorneys, ``and other resources. You and I should also discuss 
and consider whether, on the basis of all the facts and 
circumstances, including Huang's recently released letters to 
the President, as well as Radek's comments, I should recommend 
that the Attorney General reconsider referral to an independent 
counsel. It was unfortunate that DOJ declined to allow the FBI 
to play any role in the independent counsel referral 
deliberations. I agree with you that, based on DOJ's experience 
with the Cisneros matter, which was only referred to an 
independent counsel because the FBI and I intervened directly 
with the Attorney General, it was decided to exclude us from 
this decisionmaking process. Nevertheless, based on information 
recently reviewed from PIS/DOC,'' Public Integrity Section/
Department of Commerce, ``we should determine whether or not an 
independent counsel referral should be made at this time. If 
so, I will make a recommendation to the Attorney General. The 
Attorney General has been quoted as saying that she did not 
remember being told by Mr. Freeh that she and Mr. Radek should 
recuse themselves after he complained of pressure to scuttle 
the probe. She said she talked with Mr. Freeh about Public 
Integrity on a continuing basis, but did not remember comments 
concerning pressure on her or the Department.''
    We will need to have, obviously, the Attorney General's 
testimony at a later stage on a wide range of issues, and 
specifically this conversation, at least as reported in this 
memorandum. And Director Freeh has forcefully stated his desire 
not to testify even with a subpoena, and I have just as 
forcefully replied that I thought he was an indispensable 
witness. That was before this memorandum came to light, and in 
view of the Attorney General's contradiction or disagreement 
with the Director's memorandum, there is no doubt in my mind, 
at least, that he will have to testify about that point.
    We have Mr. Radek and Mr. Gallagher here. Mr. Radek was 
quoted as well in the press, but he is here and can speak for 
himself. And I have asked the FBI to make Mr. Esposito 
available during the week of June 5. We have a recess next 
week--preferably on the 7, which is a Wednesday; if not, on a 
Tuesday. We will have to coordinate that schedule with the 
ranking member and the full committee on their schedule.
    Senator Torricelli.
    Senator Torricelli. I would like to yield to Senator 
Schumer at this time, if I could, Mr. Chairman.
    Senator Specter. Well, Senator Schumer is entitled to his 
own time, but so be it.
    Senator Schumer. I have a scheduling problem.
    Senator Specter. Well, let the record show Mr. Schumer was 
waiting here a while. He must have something to say.

 STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE 
                       STATE OF NEW YORK

    Senator Schumer. Well, thank you. I appreciate it, Mr. 
Chairman, and I appreciate my friend from New Jersey's courtesy 
in yielding. I do want to say something today that has been 
gnawing at me for some time, and it is time I just came forward 
and said it.
    What I want to say is simply this, that I believe in the 
integrity of Janet Reno. I have gotten to know the Attorney 
General over the last 7 years. I have listened to her testify 
countless times. I have sat across the table from her in 
negotiating sessions, sometimes as an ally and sometimes not. I 
have looked her dead in the eye and I have debated with her. We 
have agreed and sometimes we have disagreed.
    Right now, we are in a pretty vociferous dispute on Indian 
land claims litigation in upstate New York. But through all of 
this, whether we have agreed or not, she has always been 
honest. She has always made her decision on the merits of every 
issue that faced her, at least the best I can tell.
    Now, I could go into the substantive proof of the Attorney 
General's integrity--the large number of independent counsels 
she has appointed, the many times she has come and testified on 
the myriad of issues that Congress has asked her to explain and 
done so in a straightforward manner, the straightforward way in 
which she handles the sometimes politically unpopular positions 
she takes because she thinks that, on the merits, these are the 
right positions.
    But I will say this instead. Beyond all of the issues and 
all of the partisan wrangling and all the hearings and 
legislative scuffles we have had over the last 7 years, all of 
the ``who is right'' and ``who is wrong,'' all of the finger-
pointing and laying blame--beyond all this, in quieter moments, 
I think we all make judgments about an individual's character 
based largely on instinct. We make gut decisions about people, 
and that is why I came today.
    In my gut, I believe in Attorney General Janet Reno's 
integrity. She is one of the most honest and straight-shooting 
people I have ever dealt with in more than 25 years in 
politics. It is not my opinion alone. To quote the FBI 
Director, Louis Freeh, on this issue he said, ``I have 
tremendous respect for our Attorney General. I have tremendous 
affection for our Attorney General. I do not believe for one 
moment that any of her decisions, but particularly her 
decisions in this matter, have been motivated by anything other 
than the facts and the law which she is obligated to follow. If 
I thought anything differently, I wouldn't be sitting here as 
FBI Director.''
    I know that this hearing, Mr. Chairman, is not directly 
about the Attorney General. It is about differences of opinion 
between the FBI and DOJ. I have great respect for both. I have 
great respect for Louis Freeh, who is my fellow New Yorker and 
a friend.
    Senator Torricelli. Jersey City.
    Senator Schumer. Mr. Torricelli says Jersey City, which is 
sort of New York.
    But in any case, the differences here about the opinions 
between the FBI and DOJ on complicated legal issues related to 
the appointment of independent counsels in 1996 and 1997 are a 
legitimate matter for this subcommittee to look into, no 
question about it. But at the end of the day, I dare say some 
will agree and some will disagree and some will say, wow, it is 
a tough decision, there is a big gray area there.
    And once again, the Attorney General will either be in 
favor with the administration or out of favor with the 
administration. There have been lots of ups and downs of that 
over the last while, and the same can be said of my colleagues 
on the other side of the aisle. At times in her career, they 
have praised her as a person of integrity who stands up to the 
administration. Other times, they have attacked her.
    But whatever the members of this committee ultimately 
conclude, I hope I can convince this committee that the 
Attorney General's decision was based on her very best 
evaluation of the law and the facts. That is the way she makes 
all of her decisions, with integrity, with honesty, on the 
merits, and nothing else. And sometimes it pleases one side and 
sometimes it pleases the other.
    Thank you, Mr. Chairman.
    Senator Specter. Thank you very much, Senator Schumer.
    Senator Torricelli.

STATEMENT OF HON. ROBERT G. TORRICELLI, A U.S. SENATOR FROM THE 
                      STATE OF NEW JERSEY

    Senator Torricelli. Thank you, Mr. Chairman, very much. Mr. 
Chairman, I have believed that this committee in holding 
hearings with regard to Wen Ho Lee and Peter Lee and a variety 
of other matters has provided a very useful service. There 
clearly were problems with the administration of justice and 
there were, in my judgment, some compromises in the national 
interest.
    I am less certain that this review of the enforcement of 
the campaign finance laws and the investigation of the 1996 
campaign is serving a useful purpose. It has been 4 years since 
the Clinton-Gore campaign commenced and then concluded 
operations. That campaign has been the subject of extensive 
congressional hearings and prolonged Justice Department 
investigations through a variety of avenues in a number of 
venues.
    The central difficulty remains that the campaign finance 
laws of the United States are in a virtual state of collapse. 
As much or more than any member on this panel or perhaps in 
this institution, I am involved in those campaign finance laws 
as the Chairman of the Democratic Senatorial Campaign 
Committee.
    A series of court decisions, actions by the Justice 
Department, and both action and inaction by this Congress have 
for all practical purposes left the United States without a 
comprehensive or comprehendible system of campaign finance 
laws. It is not therefore surprising that the Clinton-Gore 
campaign and the Republican National Committee and the 
Democratic National Committee at times find themselves in some 
conflicts of interpretation.
    What remains before the Justice Department, however, is 
whether there were some actions by central participants, 
including the President and Vice President, or a conspiracy at 
any level to evade those laws which remain clear and 
comprehensible. I believe that the evidence is overwhelming 
that that simply did not take place.
    Mr. Radek's memo of November 20, 1998, I think is central 
to our discussions, ``The evidence is clear and convincing that 
the President and the Vice President lacked any intent to 
violate the law in connection with the DNC issue ad campaign 
and reasonably believed that an ad campaign was lawful, and 
that the DNC and Clinton-Gore counsel reviewed every ad to 
ensure compliance with the law.''
    Indeed, I believe, in support of Mr. Radek's conclusion, 
the actions of the Clinton-Gore campaign, while not meeting the 
model of what many of us would like the campaign finance laws 
to be, indeed were acting within current interpretations of the 
political culture of thecountry and on the best advice of 
counsel. Their actions indeed would not be atypical with what was 
taking place in the Republican or the Democratic National Committee, or 
any other campaigns being conducted on a large scale at that time.
    The question then turns on whether or not the Justice 
Department approached this issue itself with the proper 
integrity and with a dispassionate review. I believe the best 
evidence on that fact comes from that famous citizen of Jersey 
City, Mr. Freeh, who, as was quoted earlier by Senator Schumer, 
said, ``The FBI is not being impeded in any way in conducting 
our investigation. No investigative avenues have been closed 
and nothing has changed as a result of the decision last 
Tuesday not to seek an independent counsel. The task force was 
formed last December. Their marching orders are to go wherever 
the evidence may lead.''
    Mr. Lantos had asked, ``Do you have any doubts about Ms. 
Reno's integrity?'' Mr. Freeh: ``No, sir.'' Mr. Freeh then went 
on to say that she meets the standard, and exceeds it, of an 
Attorney General. Mr. Lantos then asked, ``If the Attorney 
General declined to appoint independent counsel, did the 
ongoing investigation come to a grinding halt?'' Mr. Freeh: 
``No, sir, it did not impede it at all.''
    Finally, on August 4, 1998, Mr. Freeh said, ``I do not 
believe for one moment that any of her,'' speaking of the 
Attorney General, ``decisions, but particularly her decisions 
in this matter, have been motivated by anything other than the 
facts and the law which she is obliged to follow.''
    I believe that is overwhelming, it is strong, and it is 
conclusive. Reasonable people could differ, but what remains 
central is that an investigation occurred professionally, 
apparently properly staffed and funded, and has been ongoing. 
It has not yet come to a conclusion 4 years later.
    We are now in the midst of another national election. The 
campaign finance laws are not only not clear, they are worse--
new court decisions, new interpretations, and even less actions 
by the Congress has corrected this myriad of laws. I do not 
believe we are serving any great national purpose. The time of 
this Congress should be spent in rewriting these campaign 
finance laws and giving clear guidance to those of us who must 
live and operate under them.
    I have reviewed many of these memoranda, admittedly not as 
many as Senator Specter. I will conclude by giving my own views 
about having reviewed Mr. La Bella's. Mr. La Bella may be an 
accomplished prosecutor. He may have a good command of the law. 
I found his analysis of the White House operations and the 
Clinton-Gore campaign to be sophomoric and remarkably lacking 
in understanding of the American political culture at this 
point in our history. He was expressing shock at things which 
most interns in political campaigns would find a normal course 
of events, not in legal violations, but in organization and 
operation of campaigns.
    I do not know Mr. Radek and I hold no brief for Ms. Reno. I 
have been among those in this institution, which includes 
almost everyone, who has criticized her when she didn't agree 
with me and praised her when she did. I have more often than 
most of my colleagues disagreed with her. Having read all these 
items over numerous hours, I cannot conclude anything but that 
she was vigilant, defended the public interest, was aided 
enormously by Mr. Freeh; that there were reasonable differences 
of opinion with the Department of Justice and the FBI, but that 
each of the participants seems to respect the judgment of the 
other and generally seem to be content that justice was done.
    If it were otherwise, I would say so. I did with Peter Lee, 
I did with Wen Ho Lee. I do not think the Department of Justice 
or the FBI properly represented the interests of the American 
people in those cases. In this instance, I believe there are 
problems. There are problems with the law, there are problems 
in the political culture.
    But I cannot conclude that any of the central participants 
themselves engaged in anything other than what Mr. Radek has 
outlined in his memorandum, not to suggest as Mr. Freeh did in 
his own memorandum that there were not a myriad of what he 
simply concluded were opportunists who violated laws that were 
clear and brought embarrassment to the President and the Vice 
President and the political system.
    Mr. Chairman, I do, however, look forward to the hearing 
and the testimony and hearing from our witnesses.
    Thank you.
    Senator Specter. Thank you, Senator Torricelli.
    Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Thank you, Mr. Chairman. I recall the old 
maxim that justice grinds slow, but exceedingly fine. I do not 
agree that this was a well-run investigation. It was fitfully 
conducted with interruptions repeatedly from the Public 
Integrity Section and the FBI. And Mr. La Bella, who was 
brought into this case to be the person to provide some 
integrity and leadership, was being demeaned, not even being 
allowed to ask the Vice President questions on one occasion, 
and not even being in the room another time that he was 
interviewed.
    This has not been a good investigation, and it is shocking 
and surprising to me, and disappointing to me really, to see 
that the FBI Director went to the extent, and had to go to the 
extent, and rightly so, to ask that the Public Integrity Chief 
and the Attorney General recuse themselves from this 
investigation because he indicated they could not do their job. 
In fact, their job was on the line if they were to proceed with 
an investigation aggressively. That is a stunning, stunning 
event that ought to shock all of us.
    If there is any doubt about the integrity of Public 
Integrity, who can we trust in the Department of Justice? So I 
feel real strongly about that and find this to be an 
unacceptable way this investigation has been conducted. And I 
am glad that you are finally producing some of the documents 
that are establishing what has gone on here.
    I would say this, that the truth is going to show, in my 
view, that there were interferences with this investigation by 
the Public Integrity Section that stopped the investigation of 
the FBI and others from proceeding in a normal course, stopped 
the U.S. attorney's office in California from proceeding in a 
normal course. All the time, we were being promised that they 
were steadfastly seeking to get the truth in this matter. So, 
Mr. Chairman, I would express my appreciation for your 
leadership. It is a thankless task. It is nothing that gives 
any of us any pleasure.
    I will add one more thing about the Attorney General. I 
remember 2 years ago, I believe, in this room, maybe3 years 
ago, and I reminded her when we were raising the question of the need 
for an independent counsel that she served at the pleasure of the 
President of the United States. That angered her and she did not like 
that, but that is a plain fact.
    The Attorney General was called upon to investigate the 
person who could remove her from office just like that, and 
that is why an independent counsel should have been appointed. 
That is why the chairman of the Judiciary Committee repeatedly 
called on her to do so. That is why the FBI Director did so, 
and that is why his memorandum supported it.
    It is not a light and trivial matter. It was a very big 
deal. In terms of the cases where independent counsels were 
appointed, I think it was trivial compared to this one. This 
was the mother lode, this was the big deal, and this was the 
one she refused to give up. And now we have this mess. Now, we 
have a mess, in an election cycle, a matter that should have 
been cleared up by an independent evaluation by an independent 
truth organization that could have clarified the issues and 
have it over now. But it is not going away. We are going to get 
to the truth of this matter.
    Thank you, Mr. Chairman.
    Senator Specter. Thank you, Senator Sessions.
    Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. Mr. Chairman, I commend you for your 
persistence. You are always running into road blocks. You seem 
to have a way of, one way or another, getting around these road 
blocks. The obstacles keep coming, but you are very persistent 
in pursuing the constitutional mandate of oversight of the 
executive branch.
    Today's oversight activities require the answer to a simple 
question: who in the Justice Department makes decisions about 
the merits of cases involving allegations of misconduct by 
senior public officials? The question arises because of the 
recommendations made by Mr. La Bella. He wanted to appoint an 
independent counsel. Unfortunately, the big wheels at the 
Justice Department overruled the merits of the case. They 
ignored the wisdom of career prosecutors. Some career 
prosecutors were so disgusted by these decisions that they 
quit.
    It looks like the Public Integrity Section at the Justice 
Department just dropped the ball. It looks like Public 
Integrity ignored all the facts. It ignored the evidence, it 
ignored the advice of experts, it ignored the recommendations 
of career prosecutors and the FBI.
    This subcommittee has examined documents on Mr. Radek's 
decision. These documents suggest that Mr. Radek may have 
decided that the La Bella memo posed a threat to Attorney 
General Reno's tenure. Mr. Radek's concerns were also reported 
in the media, and I hope that this issue gets the scrutiny it 
deserves.
    It seems like the Public Integrity Section needs a wake-up 
call. It is supposed to be staffed by civil servants, not 
partisan politicians. In the past, I have dealt with the Public 
Integrity Section and its Chief, Mr. Radek. I am pleased that 
Mr. Radek is here today.
    On May 1, 1997, I referred campaign finance-raising matters 
to Justice. It concerned Mr. William Brandt, the head of a 
company in Chicago. The company invited banking institutions to 
a September 17, 1996, $10,000-per-couple Democratic fundraising 
reception and dinner. It was held in Mr. Brandt's home. The 
invitation listed the Chairman of the National Bankruptcy 
Review Commission as the guest of honor. Mr. Clinton attended 
this fundraiser.
    My staff received numerous calls from banking institutions. 
These were the complaints: the callers objected to the 
suggestion that attendance was an opportunity to influence the 
chairman's decisionmaking on pending issues. To their credit, 
some of the bankers declined the invitation. They declined on 
ethical grounds.
    I, too, became very concerned about the propriety of this 
event. It is illegal to link campaign contributions to pending 
legislation. It doesn't matter which political party is 
sponsoring the event; it is not right and it is illegal.
    There are stark contradictions in Mr. Brandt's explanation 
of this event. He told the subcommittee one thing and he told 
his banking associates something entirely different. The 
difference in the two stories is like night and day. My staff 
has documents that prove Mr. Brandt attempted to exert 
inappropriate pressure. He exerted pressure by requiring 
attendance in exchange for support on bankruptcy issues. Those 
same issues were about to be considered by the Bankruptcy 
Review Commission.
    My staff provided Public Integrity solid evidence that Mr. 
Brandt may have made false statements to Congress in violation 
of Federal law. The evidence given to Mr. Radek was backed up 
with exhibits and witness statements supporting the 
allegations. It took 2 years and 4 months to get an answer, and 
that answer, Mr. Chairman, was a non-answer. The non-answer is 
contained in a letter dated August 9, 1999.
    According to press reports, this letter came 2 weeks after 
Mr. Brandt's company donated $20,000 to the Democratic National 
Committee. The Justice Department's response was not only long 
overdue, it was also unresponsive, and it may have been tainted 
by campaign monies. The two-paragraph response from Mr. Radek 
simply said the allegations had no merit. Mr. Radek apparently 
came to this conclusion with no evidence. He didn't interview 
important witnesses, he didn't interview attendees at 
fundraisers. It looks like Mr. Radek dropped the ball.
    For the record, on March 22, 2000, I referred another case 
to Mr. Radek for investigation. This one involves the current 
Director of the Defense Criminal Investigations Service, Mr. 
John Keenan. Mr. Keenan directs a Federal law enforcement 
agency; he is a Federal law enforcement officer. Official 
records indicate that he personally returned 11 confiscated 
handguns to a convicted felon who was on supervised probation.
    Mr. Keenan's actions were in direct violation of a Federal 
court order. They may have violated Federal statutory law. 
Worst of all, they put a U.S. probation officer in harm's way. 
These allegations were also referred to Mr. Radek's office by 
the Chief of the Criminal Division of the U.S. Attorney's 
office, Eastern District of Virginia.
    I hope that Mr. Radek's response in that case will be 
uncharacteristic of our previous dealings. I expect to receive 
a prompt response and I expect a thorough examination of all 
the facts. I hope that the response is not dismissive of the 
facts referred by the U.S. Attorney, as they apparently were in 
the case of the La Bella memo. I also hope that a response from 
Public Integrity is notinfluenced by campaign money or 
political considerations. I hope that Mr. Radek doesn't drop the ball 
this time.
    Senator Specter, my staff is in regular contact with line 
attorneys and with the inspector general community. These 
contacts pertain to numerous issues of misconduct involving 
high-ranking Government officials. They feel, as I do, that the 
Public Integrity Section at Justice does not have a good 
reputation. It has a reputation for ignoring the facts and 
disregarding evidence.
    Like the U.S. Office of Special Counsel, it has become a 
burial ground for allegations of misconduct by senior 
officials. This reputation, by the way, pre-dates the Clinton 
administration. The mission of the Public Integrity Section 
should be rigorous, impartial oversight, regardless of which 
party is in power. Politics have no place in the Public 
Integrity Section.
    So, Senator Specter, I thank you for your time and look 
forward to exercising oversight of the Public Integrity Section 
at Justice.
    Senator Specter. Thanks very much, Senator Grassley.
    By way of just a comment or two as to what Senator 
Torricelli has said, that he is, ``less certain that we are 
serving a useful purpose here,'' and we are not serving any 
great national purpose--we should be doing legislating--I agree 
that we ought to be doing legislating, and I have introduced a 
statute on campaign finance reform myself, and supported 
McCain-Feingold. There is plenty of time to do legislating and 
to do oversight.
    When Senator Torricelli characterizes the Attorney General 
as vigilant, I am prepared to reserve judgment on that until we 
examine the details of these oversight proceedings. Speaking 
for myself, I am not prepared to make a conclusion about that.
    When Senator Torricelli says that Mr. La Bella was 
sophomoric, I have to disagree with him, having had some 
experience as a prosecutor. I am sorry that that document is 
not in the public domain so that the American people can draw 
their own conclusions about the quality of his investigation. I 
would say that his report was cum laude, maybe magna cum laude. 
But that is something which is going to have to be judged in a 
broader context than by this subcommittee, and only the public 
disclosure of that memorandum will be able to accomplish that.
    The issue of the Attorney General's integrity is not one 
which I personally challenge. The issue as to whether there was 
an appropriate judgment on independent counsel is the principal 
concern. The Director's memorandum does raise the integrity 
issue, but it is a memorandum of a conversation involving Mr. 
Radek, not the Attorney General. And we can't really review 
that until we hear from the Attorney General, and that we will 
do.
    Mr. Radek, would you step forward, please, and raise your 
right hand? Do you solemnly swear that the testimony you will 
present to this subcommittee of the Judiciary Committee of the 
U.S. Senate will be the truth, the whole truth, and nothing but 
the truth, so help you God?
    Mr. Radek. I do.
    Senator Specter. Mr. Radek, please be seated. You have a 
prepared statement. You may proceed at this time as you choose.

  STATEMENT OF LEE J. RADEK, CHIEF, PUBLIC INTEGRITY SECTION, 
           U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

    Mr. Radek. Thank you, Senator. I apologize for the format 
of my printed statement, Mr. Chairman. It was prepared late. I 
also apologize for the way I am going to read it because I 
didn't have time to put it into geezer print for myself, so if 
you will bear with me just a moment, please.
    Good morning, Mr. Chairman and members of the subcommittee. 
I am here today in response to your request to testify about 
matters relating to the Independent Counsel Act and its 
application to campaign finance matters. Before we get into the 
substance of those matters, I would like to correct some of the 
misstatements that have been made about who I am and what my 
role is within the Department of Justice.
    I am and always have been a non-political career 
prosecutor. Including my military service, I have more than 30 
years of service in the Federal Government, spanning six 
administrations and 10 Attorneys General. I joined the Justice 
Department in 1971 through the Attorney General's Honors 
Program. For 5 years, I served as a trial attorney in the 
Criminal Division, dealing with labor racketeering and 
legislation.
    In 1976, I was selected to assist in the formation of the 
Public Integrity Section, where I served as a line prosecutor 
for 2 years. In 1978, I was selected to become Deputy Chief of 
the Public Integrity Section, a position I held for 14 years. 
In 1989, I was detailed to be part of the prosecution team that 
handled the Ill Wind investigation into Defense procurement 
fraud and corruption. As part of that assignment, I became a 
Special Assistant U.S. Attorney in the Eastern District of 
Virginia. In 1992, I was selected to be the Director of the 
Asset Forfeiture Office in the Criminal Division, and in 1994 I 
returned to Public Integrity as Chief, where I have served for 
6 years.
    As Chief of the Public Integrity Section, I have supervised 
the investigation and prosecution of public officials at the 
local and State levels for the commission of Federal crimes, 
and of officials in the judicial, legislative, and executive 
branches of the Federal Government.
    Historically, the Public Integrity Section was also charged 
with the primary responsibility for conducting the necessary 
preliminary investigations under the Independent Counsel Act, 
and providing the Attorney General with the necessary facts to 
permit her to make the decisions entrusted to her under the 
Act.
    With respect to matters that involved campaign financing in 
the course of the 1996 election, the Section discharged that 
responsibility jointly with the Campaign Finance Task Force. It 
was also the practice of the Attorney General to seek out the 
views and recommendations of a variety of advisers concerning 
key decisions under the Act. I routinely provided her with my 
recommendations in the course of that process at her request.
    With respect to the recent independent counsel decisions 
involving campaign finance, I was one of many people who gave 
the Attorney General recommendations. Sometimes she followed my 
advice, sometimes she didn't. At the end of the day, it was the 
Attorney General who made those decisions, as is required by 
the statute. And the reasons for her decisions are set forth on 
each of these specific investigations in detailed, formal 
filings made with the court, some of which you read from this 
morning, Mr. Chairman.
    The Department has obtained permission from the court to 
have those filings unsealed and disclosed to the public, and a 
complete set of the filings has been provided to this 
subcommittee. Any concerns the subcommittee might have as to 
whether the Independent Counsel was properly applied in these 
matters should focus on the analysis and reasoning relied upon 
by the Attorney General and set out in those findings.
    It has been widely known for some time that there were 
internal disagreements among various officials on a number of 
independent counsel issues, particularly with respect to issues 
raised in the so-called La Bella memo. This, of course, is 
hardly surprising and certainly not new. Internal disagreements 
among Department of Justice officials about various aspects of 
the Independent Counsel Act date back to its passage over 20 
years ago.
    What is new is the determination of some to delve into 
those confidential discussions and disagreements that were 
intended as an honest and frank exchange of views between the 
Attorney General and her various advisers. I disagreed with 
some of Mr. La Bella's recommendations, and you have copies of 
my memoranda in which I set forth my disagreements and the 
reasons therefor. But I also agreed with Mr. La Bella on many 
occasions during the time that we worked together. We were both 
non-political career prosecutors. We had different 
interpretations of some aspects of the Independent Counsel Act, 
but I certainly agree with his recent statement that the 
internal debate within the Department was never about politics 
and that nobody at the Department was politically protecting 
anybody.
    Similarly, with Director Freeh, I may not have always 
agreed with him on legal issues, but I agree with his 
congressional testimony where he said, ``I do not believe for 
one moment that the Attorney General's decision, particularly 
her decision in this matter, may have been motivated by 
anything other than the facts and the law which she is 
obligated to follow.''
    Finally, I think it is important that although I am willing 
to answer your questions about my internal recommendations on 
independent counsel matters, I do so reluctantly because I 
believe that the public airing of confidential deliberations 
relating to sensitive criminal investigations will inevitably 
chill frank and candid advice, especially from non-political 
career prosecutors and supervisors.
    When career officials avoid making unpopular 
recommendations for fear of being publicly criticized in a 
political arena, the administration of justice suffers. While 
Congress no doubt has legitimate oversight interests in 
connection with the Independent Counsel Act, I hope that as 
much as possible this subcommittee will focus on departmental 
policies and the actual decisions that were made by the 
Attorney General and not the internal details of who gave what 
advice on any particular matter.
    Thank you, Mr. Chairman.
    Senator Specter. Thank you, Mr. Radek. The subcommittee is 
sensitive to the issue of internal deliberations. We are able 
to exercise our oversight responsibilities only if we do look 
at the reasons behind what the Attorney General has decided, 
and that involves a careful analysis of voluminous documents, 
and that also involves a supplementing of those analyses by 
talking to people have been a party to those recommendations, 
and really a part to those decisions.
    And we have been circumspect in limiting our inquiries on 
so-called line attorneys only where indispensable, and the 
objection has been made by the Attorney General to line 
attorneys, but not to people in other categories, such as 
yourself. And the precedents are clear that the Congress has 
oversight authority on matters of this sort, matters which are 
closed, and even as to pending criminal investigations because 
of our responsibility to see to it that the laws are faithfully 
executed. But we are sensitive to the concerns which you have 
expressed, and we are also sensitive to our own 
responsibilities.
    Mr. Radek, you were in the hearing room and heard me read 
the memorandum from Director Freeh to Mr. Esposito. What did 
occur on the conversation between you and Mr. Esposito where 
Mr. Gallagher was present, if you would set the time frame as 
best you can, the locale?
    Mr. Radek. I can say that the date of this memorandum and 
the date that it attributes to the conversation was very early 
on, before the task force really had any form.
    Senator Specter. Do you have a copy of the memorandum 
before you?
    Mr. Radek. I do, yes, Mr. Chairman.
    Senator Specter. Fine.
    Mr. Radek. I can say that I have no recollection of the 
conversation, so it is very difficult for me to discuss what 
words I may have said or what I may not have said. And that may 
be one reason why the quotation of mine which you referred to 
is so contorted. It is very hard to say you didn't say 
something in a conversation----
    Senator Specter. The quotation was so what?
    Mr. Radek. Contorted in the press, the fact that I--what it 
said was I have no recollection, but I wouldn't have said it 
because it has no basis in fact. That is because I don't 
recall----
    Senator Specter. I didn't refer to your comment as 
contorted.
    Mr. Radek. No. I was referring to it as contorted. I said--
--
    Senator Specter. I didn't refer to your comment at all 
because you are here and you ought to have the benefit of 
expressing yourself without any characterization from me or 
anyone else until you have commented.
    Mr. Radek. Not to bicker, Mr. Chairman, you said I hada 
quote in the paper.
    Senator Specter. Yes.
    Mr. Radek. And I was saying that that quote was contorted. 
I was characterizing it and I was not accusing you of 
characterizing it.
    The quote, which is accurate--it is what I said, but it is 
contorted because I don't remember a conversation on this 
subject with Mr. Esposito at all. And now I have learned that 
Mr. Gallagher was supposedly present, and it still does not 
refresh my recollection as to having any conversation with the 
two of them on this subject.
    I may well have had discussions with them on this subject. 
I simply don't recall this conversation. I can tell you that 
the statements attributed to me in the press were certainly not 
said by me because I never would have said that there was 
pressure on me not to go forward with the investigation, which 
is something that the press carried that is not in this 
memorandum, a phrase ``not to go forward.'' And I can tell you 
that I would never, and I am sure I never did link up the 
Attorney General's job status with the pressure that was on the 
Public Integrity Section.
    Senator Specter. Mr. Radek, at the time of this memorandum, 
early December 1996, the Attorney General had not yet been 
reappointed, and it was the talk of the town that there was an 
issue as to whether she was to be reappointed, correct?
    Mr. Radek. That is correct.
    Senator Specter. And a good bit of that conversation turned 
on how she would treat the President and other ranking 
administration officials with respect to appointment of 
independent counsel.
    Mr. Radek. I recall press speculation that the possibility 
of her being the Attorney General into the second term might be 
being held up because the White House was concerned about the 
way she was doing her job, including this campaign finance 
investigation. I recall press speculation to that effect, Mr. 
Chairman.
    Senator Specter. Well, was there anything that was of 
concern to the White House in the press speculation besides the 
campaign finance matters?
    Mr. Radek. I think there may have been any number of 
things. I think the press usually referred to it as independent 
counsel issues, but----
    Senator Specter. There may have been any number of things. 
Can you recollect any?
    Mr. Radek. No, I can't. Again, it seemed to me that the 
discussion included campaign finance, but wasn't limited to 
that. I am trying to recall what was in the paper 4 years ago, 
so I don't have a clear recollection of it.
    Senator Specter. Well, you do recall the discussion about 
the campaign finance investigation and the issue of whether 
independent counsel would be appointed to investigate the 
President or the Vice President?
    Mr. Radek. Yes, sir.
    Senator Specter. And you don't recall anything specific 
about any other issue, but you think there may have been, was 
the word you used?
    Mr. Radek. I think that there was--again, I am trying to 
recall what was in the paper 4 years ago, so forgive any 
inaccuracy. But my best recollection is that there was 
speculation in the press that any number of independent counsel 
decisions that the Attorney General may have been engaged in 
were unpopular with the White House. But, again, it was press 
speculation. There was no official word coming out of anywhere.
    Senator Specter. You say that you have no recollection of 
this conversation which Mr. Esposito had reported to FBI 
Director Freeh, according to the Director's memorandum, 
correct?
    Mr. Radek. That is correct, sir.
    Senator Specter. Well, in the face of this contemporaneous 
memorandum, would you deny that such a conversation occurred 
where the word ``pressure'' was used?
    Mr. Radek. To the contrary, I would undoubtedly, in 
conversations with Mr. Esposito, talk about pressure on the 
Public Integrity Section at frequent occasions whenever he and 
I would talk.
    Senator Specter. What kind of pressure on the Public 
Integrity Section would you discuss with Mr. Esposito?
    Mr. Radek. Thank you for the opportunity to answer that, 
Mr. Chairman. It was pressure to do the job, and do it well.
    Senator Specter. Well, we are going to give you every 
opportunity to answer a great many questions----
    Mr. Radek. I appreciate it.
    Senator Specter. [continuing.] And an opportunity to speak 
to subjects on which there are no questions, so that you have 
the full opportunity to state your position.
    Mr. Radek. Let me say it again, to do the job, to do it 
vigorously, and to do it well.
    Senator Specter. Well, you say that there were other 
conversations relating to pressure on the Public Integrity 
Section?
    Mr. Radek. At this particular time, and later, I was quite 
willing to describe the situation in the campaign finance 
investigation as being a pressure cooker on the Public 
Integrity Section. We were being scrutinized by the Congress, 
by the media, and by the Attorney General all to do a good job, 
and it was a lot of pressure. It was an unusual situation.
    Senator Specter. Well, what pressure did you get from the 
Attorney General?
    Mr. Radek. I got pressure to do a good job, and to do it 
well. One of our greatest fears was that the Attorney General 
or the media would find a fact before our investigators did, 
and then we would have to explain why we hadn't found it. And 
so were scrambling around to learn as much as we could as fast 
as we could.
    Senator Specter. The media is pretty good at finding facts?
    Mr. Radek. They are.
    Senator Specter. Pretty good at finding memoranda?
    Mr. Radek. They seem to be, yes.
    Senator Specter. Do you know, speaking of that, how the 
media got a hold of this memorandum before the subcommittee 
did?
    Mr. Radek. Absolutely not. It certainly wasn't from me.
    Senator Specter. So when this memorandum refers to the word 
``pressure,'' that is a word that you might well have used in 
the context of lots of pressure on the Public Integrity 
Section?
    Mr. Radek. Yes, sir.
    Senator Specter. And how about the reference in this 
memorandum to the Attorney General's job might hang in 
thebalance, or words to that effect?
    Mr. Radek. Again, I do not recall the conversation. These 
are not words that I would use. I can't think of a time when I 
was concerned or discussing whether the Attorney General's job 
was hanging in the balance, and it is certainly not with 
relation to the pressure on the Public Integrity Section. The 
``because'' in this memo is a mischaracterization. And I don't 
know whether it is Mr. Esposito's mischaracterization or Mr. 
Freeh's mischaracterization, but in no way would I have ever 
said, again not remembering the conversation, that the pressure 
on the Public Integrity Section was related to her job status. 
I didn't feel that. I don't believe it. It would have been 
false, and I wasn't in the habit of lying to Mr. Esposito or 
Mr. Gallagher.
    Senator Specter. Not in the habit of what?
    Mr. Radek. Lying to Mr. Esposito or Mr. Gallagher.
    Senator Specter. Lying?
    Mr. Radek. Yes, because it would be a lie if I said that 
the two were related.
    Senator Specter. It would be a lie?
    Mr. Radek. Yes, sir.
    Senator Specter. If you said the Attorney General's job was 
on your mind at all with respect to the pressure on the Public 
Integrity Section?
    Mr. Radek. It would be a lie if I said there was pressure 
on the Public Integrity Section because the Attorney General's 
job hanged in the balance, which is what this memo quotes me as 
saying.
    Senator Specter. Well, so what you are saying, Mr. Radek, 
is that even though you do not have a specific recollection of 
the conversation and you have a contemporaneous memorandum 
which is very specific on the Attorney General's job being on 
the line, you never said anything to that effect?
    Mr. Radek. Mr. Chairman, there is a reason for hearsay 
rules. I have a memorandum prepared by a person to the person 
who had the conversation with me which characterizes my words 
in a way that I believe are inaccurate.
    Senator Specter. Well, this is a hearsay memorandum. That 
is true. Mr. Gallagher is about to testify in support of it, 
and Mr. Esposito is due to be a witness and there is every 
reason to expect that he will testify in support of it as well.
    Let me come back to my question which I don't think you 
directly answered, and that is in the face of your not 
recollecting the conversation and in the face of a 
contemporaneous memorandum that the Attorney General's job 
might hang in the balance, or words to that effect, are you 
denying that any such statement was made by you?
    Mr. Radek. I am not sure, Mr. Chairman, and I don't want to 
quibble, that you characterize this memorandum accurately. So 
let me say what I deny, and that is what is contained in this 
memorandum. I am certain, although I have no recollection, that 
I never said that there was a lot of pressure on me and the 
Public Integrity Section regarding this case because the 
Attorney General's job might hang in the balance, or words to 
that effect, which is a direct quote from the memorandum.
    Now, I may have said that we were under a lot of pressure 
and I may well have said that her job status was questionable 
because both of those things were true. What I never would have 
done was to relate them and to say that her job was in jeopardy 
because of--or that I was under pressure because her job was in 
jeopardy. It just is not something I would have said.
    Senator Specter. Well, let's explore your statement just 
now that you might have said that her job status might have 
been in jeopardy. Did you make a comment to that effect?
    Mr. Radek. I don't recall the conversation at all, but as 
you and I have just discussed, it is true that at the time she 
was waiting to hear whether she was going to be into the second 
term of this administration, be the Attorney General, and so 
that subject may well have been discussed. What would not have 
been said by me was that that was the cause of the pressure on 
me.
    Senator Specter. All right. So you are saying that the 
subject may well have been discussed that the Attorney 
General's job was in jeopardy?
    Mr. Radek. It may well have. Again, I don't recall.
    Senator Specter. May well have discussed that the Attorney 
General's job was in jeopardy?
    Mr. Radek. It may well have. I don't recall. The words 
``hangs in the balance'' do not sound like anything I would 
say.
    Senator Specter. Well, the memorandum says ``words to that 
effect.'' But you are saying that there may have been a 
discussion that the Attorney General's job may be--you said at 
that time the Attorney General's job may be in jeopardy?
    Mr. Radek. That is possible, yes.
    Senator Specter. Possible. And you do believe that there 
may well have been a discussion about pressure on the Public 
Integrity Section?
    Mr. Radek. Yes, sir.
    Senator Specter. So your narrow line of denial is a 
connection. Is that accurate?
    Mr. Radek. This is not a narrow line of denial, Senator. I 
am trying to describe to you what my thoughts were and what I 
might have said.
    Senator Specter. Well, let's take out the word ``narrow.'' 
The line of denial is that although you may have said that 
there was pressure on Public Integrity and you may have said 
the Attorney General's job may be in jeopardy, you did not 
connect the two.
    Mr. Radek. That is correct.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman, very much.
    Mr. Radek, there is at least the suggestion that as the 
head of the Public Integrity Section, you might have been 
complicit in action or silence to the political benefit of 
President Clinton or Vice President Gore and the Democratic 
National Committee.
    You were appointed to your position by President Clinton?
    Mr. Radek. No, sir. I was selected for my position by a 
Senior Executive Service merit board, and on their 
recommendation I was appointed, I believe, by----
    Senator Torricelli. Which appointments have you received 
from President Clinton?
    Mr. Radek. None, sir. I have never sought or received 
political office.
    Senator Torricelli. And you have just started in the 
Justice Department under a Democratic administration?
    Mr. Radek. I started under the Nixon administration.
    Senator Torricelli. You have served in Democratic and 
Republican administrations for how many years?
    Mr. Radek. Twenty-nine.
    Senator Torricelli. Was this suggestion made about the role 
you have played because of a longstanding relationship you have 
with the President?
    Mr. Radek. I have no relationship with the President, sir.
    Senator Torricelli. Could it be because you have had an 
active involvement in Democratic Party politics?
    Mr. Radek. I have certainly never been involved in 
Democratic Party politics.
    Senator Torricelli. Do you have any reason to suggest why, 
given your longstanding service to the U.S. Government, your 
reputation, and your commitment to the law, based on your 
involvements and relationships, anyone would suggest that you 
would exercise anything other than the proper judgment or act 
with integrity in this instance?
    Mr. Radek. I am sorry, sir. I lost the beginning of the 
question. I can speculate as to why people might make such 
accusations, but the fact is I believe----
    Senator Torricelli. But you cannot think of anything based 
on your background or association with the administration, your 
political involvements, why anyone having looked at your record 
and professional reputation would think that you would look at 
an issue like this with anything other than integrity?
    Mr. Radek. No, sir, except that they disagree with my final 
recommendations.
    Senator Torricelli. How many independent counsels has 
Attorney General Reno named during her tenure?
    Mr. Radek. I have lost track, sir.
    Senator Torricelli. Eleven?
    Mr. Radek. Seven, sir.
    Senator Torricelli. Seven. In those seven instances, has 
there ever been a disagreement with senior officials of the 
FBI, the Justice Department, the Attorney General's staff on 
whether or not any of those seven independent counsels should 
be made?
    Mr. Radek. There clearly has, Senator.
    Senator Torricelli. Is it unusual that there be such a 
disagreement?
    Mr. Radek. To the contrary, it is a difficult statute to 
administer, it is a difficult statute to apply, and there are 
strong feelings about such matters and there are certain 
cautions that people are concerned with. And so this Attorney 
General more than any I have seen certainly encourages vigorous 
debate on all sides of the issue and sometimes those----
    Senator Torricelli. Have you witnessed the decision on all 
seven of these from some perspective or another in Justice?
    Mr. Radek. Not Ken Starr in Whitewater and his first 
appointment, although some of the later----
    Senator Torricelli. That is to your credit. But in the 
other six, you have at least been a witness to the judgment 
being made?
    Mr. Radek. Yes, sir.
    Senator Torricelli. So would you characterize for the 
committee that for one of the Attorney General's assistants, a 
senior official in Justice or in the FBI to be giving different 
advice in tone or substance--would you characterize this as 
unusual or something that would be expected during the course 
of deliberations?
    Mr. Radek. It was much more common to have a disagreement 
than unanimous agreement.
    Senator Torricelli. You have been fairly unequivocal in 
making clear your belief that there was no political pressure 
on the Attorney General or any suggestion that her tenure would 
be jeopardized by appointing an independent counsel. In 
addition to the quotes in these memoranda, is there anything 
the committee should know that would in any way suggest, to 
your knowledge, that indeed there was any pressure put on the 
Attorney General on this issue whatsoever?
    Mr. Radek. No. I am aware of no pressure being put on her, 
and what I was recounting about pressure was all press 
speculation as to why she wasn't being named for the second 
term. If she was under such pressure, I can say that she never 
conveyed it and never in any way apparent to me reacted to it.
    Senator Torricelli. Indeed, wouldn't it probably be a fair 
conclusion that in naming Mr. Starr, to cite the most obvious, 
and each of the other seven independent counsels, it would be 
logical to assume that the White House would have preferred 
that none of those independent counsels be named----
    Mr. Radek. That would be fair, yes.
    Senator Torricelli [continuing.] And probably was not 
pleased by her judgment?
    Mr. Radek. I believe that would be accurate, yes.
    Senator Torricelli. But, indeed, despite naming Mr. Starr 
and each of these independent counsels on seven instances, 
including people closest to the President and members of his 
own Cabinet, up to and including the time of this decision, you 
never heard any suggestions from her or any comments indicating 
that her position was in jeopardy or her continuing as Attorney 
General would be dependent upon any of those instances?
    Mr. Radek. That is correct, I never did.
    Senator Torricelli. The judgment then remained about 
whether or not this investigation would be better done at Main 
Justice or by bringing in personnel from the field or in the 
form of this independent counsel. Was it your judgment that at 
Main Justice, given the complexities of the campaign finance 
laws and the limited number of people who actually have 
experience with these laws, that the case might be pursued more 
vigorously and professionally if you were to rely upon people 
at Main Justice?
    Mr. Radek. Yes, sir, it was my perception. You know, I have 
heard criticism from former U.S. attorneys and others, and 
there always is a sort of friendly rivalry between U.S. 
attorneys' offices and Main Justice. But the fact is that most 
of the expertise for election crimes is contained in the Public 
Integrity Section.
    Senator Torricelli. Indeed, wouldn't it be fair to say that 
overwhelmingly, U.S. attorneys' offices around the country, 
most of them, have never dealt with the campaign finance issue 
or have dealt with very few of those cases?
    Mr. Radek. Some are better than others. I mean, some 
particular problem, districts get into it very heavily and 
their expertise is probably equal to ours. Generally, it is not 
a primary target of enforcement of the Department ofJustice.
    Senator Torricelli. So if there were a dispassionate 
judgment about where there was the most prosecutorial 
experience and knowledge of this law, all other considerations 
aside, the judgment would be that Main Justice had the 
expertise to pursue these cases?
    Mr. Radek. I thought so, yes.
    Senator Torricelli. Let me ask you more directly--Senator 
Specter, I think, ably came to the question from a variety of 
ways about whether or not you had any recollection of that 
specific, unfortunate quote about tying the Attorney General's 
judgment to pressure. I want to do so as well on the question 
of the threshold, specifically the independent counsel law.
    Do you have any special and credible information for any 
person covered under the Act that, in your judgment, even at 
this late date, would require the appointment of an independent 
counsel?
    Mr. Radek. I do not, if the statute were still in effect.
    Senator Torricelli. Do you have any information regarding 
activities of the President of the United States or the Vice 
President of the United States indicating that anything that 
they did or said might suggest specific and credible 
information that would require the appointment of independent 
counsel?
    Mr. Radek. No.
    Senator Torricelli. On September 25, 1998, you wrote a 
memorandum, ``The issues in the Republican National Committee 
investigation are largely identical to the issues in the 
Democratic National Committee investigation. The principal 
difference between the two investigations is that the facts of 
the RNC media project have not been fleshed out as much.''
    In reviewing the political culture in 1996 and the ways in 
which the Democratic and Republican parties approached campaign 
finance laws using the campaign committees and the two 
respective party committees and soft and hard money 
allocations, do you, from this perspective in time, see any 
principal difference in how the parties designed their 
campaigns and operated within the campaign finance laws? I am 
not asking you to cite specific instances, but your general 
impression having watched the investigation to date.
    Mr. Radek. Here is my general impression. The use of soft 
money to buy issue ads, as they were referred, seems to have 
been a Republican invention that the Democrats perfected beyond 
what most would imagine to be possible. The Colorado GOP case 
basically brought this, what I think is a clear loophole in the 
campaign laws, into the area of the light and legitimacy. And 
the White House and the DNC in the 1996 election took advantage 
of that as far as they possibly could.
    Senator Torricelli. Indeed, to take this further, the issue 
advocacy ads and the soft money expenditures from the RNC being 
perfected and duplicated by the DNC also then involved similar 
actions by State parties with Federal and soft money in many 
States in the Nation----
    Mr. Radek. That is correct, yes.
    Senator Torricelli [continuing]. And the Republican 
Senatorial Campaign Committee and even the Democratic 
Senatorial Campaign Committee, despite its extraordinary 
compliance with the law.
    Mr. Radek. That is correct. But back to your original 
question, I think that in the 1996 presidential election the 
volume on the Democrat side in these issues ads was much, much 
greater than the Republicans.
    Senator Torricelli. Well, indeed, which may be because 
there was an incumbent administration that was more successful 
in raising the funds. But this is not a question of degree of 
compliance or violation of the law. It is whether or not the 
principle stands, and the principle seems to have been 
universally shared.
    Mr. Radek. The principle--the loophole was taken advantage 
of by both sides, but as I say, much more so, I thought, on the 
Democrat side.
    Senator Torricelli. Could you quantify for us, since the 
campaign finance investigations began in reaction to the 
allegations regarding the President and the Vice President, the 
DNC and the RNC, approximately the commitment of resources that 
were given either in Assistant U.S. Attorneys or in FBI 
resources?
    Mr. Radek. I am sorry. I do not have those. The number of 
agents approached, I believe, 100 at one time, but I could 
stand to be corrected on that. Attorneys--we had, I think, at a 
max maybe 15 attorneys assigned to the task force. In the early 
days when I was running it out of the Public Integrity Section, 
we set it up with 4 to 5 attorneys, and there were probably 25 
to 30 agents. Then there was a squad of agents assigned----
    Senator Torricelli. Well, the number I have heard is 100, 
so you are basically confirming that number.
    Mr. Radek. Somewhere around----
    Senator Torricelli. A hundred FBI agents and 15 line 
attorneys were involved in this. Now, to give some assurance to 
people about the level of commitment of the Justice Department, 
that, for example, significantly exceeds what Mr. Specter and I 
have found was involved by the Department of Justice in 
prosecuting cases or seeking evidence in the theft of nuclear 
secrets from Los Alamos and Chinese espionage.
    If you were to rate the commitment of the Justice 
Department toward these instances, some of which are 
misdemeanors, some of which are felonies, this nevertheless 
would rank as one of the larger commitment of resources, would 
it not, by the Justice Department?
    Mr. Radek. Of which I am aware, yes, Senator.
    Senator Torricelli. OK. Mr. Chairman, thank you for the 
time. Mr. Radek, thank you for your responses.
    Senator Specter. Thank you, Senator Torricelli.
    Senator Sessions, to the extent possible, we would like to 
focus Mr. Radek now on the memorandum because Mr. Gallagher 
needs to leave. He is going to testify. Mr. Radek is going to 
testify in a second section, but I know that Senator Torricelli 
has other commitments and might have to leave. So if you do, 
too, or Senator Grassley does, I want to provide some 
flexibility as to how we handle it. But if you are able to 
stay, we would like to get Mr. Gallagher on and off as soon as 
we could.
    Senator Sessions.
    Senator Sessions. I will have an opportunity later to ask 
some questions about the conduct of the investigation?
    Senator Specter. Exactly.
    Senator Sessions. I have just got a few questions in that 
regard.
    Senator Specter. The subcommittee will pursue that,but to 
the extent we can limit it now to get Mr. Gallagher on his way to 
Ireland, it would be appreciated.
    Senator Sessions. All right. I would note Senator 
Torricelli suggests there is legal expertise on election 
matters in the Department of Justice. And that is true, but 
there also is investigative and prosecutorial expertise in 
attorneys who are in court regularly, and they are able, in my 
view, to get the truth better. I mean, that is what we are 
involved in here, I think, is an opportunity to get the truth 
and find out what the facts were or were not.
    Well, I am troubled, Mr. Radek. You have taken an oath this 
morning, I believe.
    Mr. Radek. Yes, sir.
    Senator Sessions. And I notice that when you make your 
comments that you would not have said this or would not have 
said this, you add each time ``but I don't remember the 
conversation.''
    Mr. Radek. That is true.
    Senator Sessions. So it is hard for me to take real 
seriously your denial that you said something that you say you 
don't recall. Do you understand that difficulty that I would 
have?
    Mr. Radek. I understand it perfectly, Senator, but if I 
could recall it, of course, I would. I just simply can't.
    Senator Sessions. Let me ask you, were you aware that the 
FBI Director had talked to the Attorney General about this 
statement that you allegedly made shortly after it was 
allegedly made?
    Mr. Radek. I was never aware of it until I saw this 
memorandum the week before last.
    Senator Sessions. She never inquired of you about that?
    Mr. Radek. No.
    Senator Specter. You say you saw the memorandum the week 
before last?
    Mr. Radek. Week before last.
    Senator Specter. Precisely when?
    Mr. Radek. It was faxed to me on May 4.
    Senator Specter. Excuse me, Senator Sessions.
    Senator Sessions. No. That is fine.
    That was the internal FBI memorandum?
    Mr. Radek. Yes, sir.
    Senator Sessions. But you are now aware, are you not, that 
at or about that time the Director of the FBI personally talked 
with the Attorney General about this situation?
    Mr. Radek. No, sir.
    Senator Sessions. Are you aware of it now?
    Mr. Radek. Yes, sir. I don't know. I am aware of it from 
the memorandum, but the Director said he was going to or did 
talk to her.
    Senator Sessions. And despite the fact that the FBI 
Director shared with her that you made the statement that there 
was pressure involved and the Attorney General's job may be on 
the line, and he believed and interpreted that to mean that 
there was pressure not to vigorously investigate the case, she 
never asked you about it?
    Mr. Radek. She never asked me about it. As far as all your 
prefatory facts, I don't know whether they are true or false. I 
don't know that they had the discussion. I know that he says 
they did.
    Senator Sessions. Well, I think the prefatory facts were 
well founded. You don't dispute any of them, do you?
    Mr. Radek. I don't know, Senator.
    Senator Sessions. You chair the Public Integrity Section?
    Mr. Radek. I am its Chief, yes, sir.
    Senator Sessions. Its Chief, and you are appointed by the 
Attorney General, are you not?
    Mr. Radek. I am not. I was appointed by the Assistant 
Attorney General for the Criminal Division, who was JoAnn 
Harris, who was also mostly a career prosecutor. Now, I do have 
a certificate on my wall that looks very nice that is signed by 
Janet Reno, but as far as I know, Janet Reno didn't know my 
name when I became Chief of the Public Integrity Section. And 
all your implications and the La Bella testimony to the 
contrary, I am not in any way subject to the political 
appointment process. I am Senior Executive Service, career.
    Senator Sessions. But the chiefs of sections are appointed 
by the Attorney General, are they not?
    Mr. Radek. They are not. They are Senior Executive Service. 
They are appointed by Merit Systems Protection Board--I mean 
merit systems boards.
    Senator Sessions. Well, you have merit protection. I 
understand that.
    Mr. Radek. But the appointment comes from the Assistant 
Attorney General for the Criminal Division.
    Senator Sessions. Well, the Assistant Attorney General for 
the Criminal Division is appointed by who?
    Mr. Radek. By the Attorney General, and she is appointed by 
the President, but that doesn't mean----
    Senator Sessions. That is exactly right.
    Mr. Radek [continuing]. That the President appointed me. I 
am a career prosecutor, sir.
    Senator Sessions. You held a position at the pleasure of 
the Attorney General, did you not?
    Mr. Radek. Everyone in the Department of Justice does that, 
Senator.
    Senator Sessions. That is correct.
    Mr. Radek. So does Mr. La Bella, or so did Mr. La Bella. I 
mean, that is not----
    Senator Sessions. Well, let's suggest an independent agency 
appointed you. The Attorney General approved your appointment 
and could have removed you, isn't that correct?
    Mr. Radek. The Attorney General can fire me for cause, sir.
    Senator Sessions. I don't mean fire; remove you from the 
position as Chief of Public Integrity without cause.
    Mr. Radek. Sure, the Attorney General can do that to anyone 
in the Justice Department.
    Senator Sessions. That is correct. I don't know why we had 
an argument over that.
    Mr. Radek. Except for the U.S. Attorneys. That would take 
the President.
    Senator Sessions. I think I will pass to the next subject.
    Senator Specter. Thank you, Senator----
    Senator Sessions. Do you recall a conversation in which Mr. 
Gallagher and Mr. Esposito were present on or about the time 
referred to in the memorandum?
    Mr. Radek. I can't place it in time. I recall one 
conversation with Mr. Esposito and Mr. Gallagher in Mr. 
Esposito's office in which we were discussing a certain casein 
Cleveland. I don't recall the topic of campaign finance coming up at 
all.
    Senator Sessions. If those individuals say you said words 
to the effect that are referred to in the memorandum, you 
dispute that only on the fact that you weren't likely to have 
said that, but you are not able to deny it categorically?
    Mr. Radek. I am able to deny that I would have said such a 
thing. I have no recollection of having said these words at 
all, Senator, or anything to their effect.
    Senator Sessions. So the answer is you have no recollection 
of having said these words?
    Mr. Radek. My answer, as discussed with the chairman, is 
that I would never have said this, yes.
    Senator Sessions. But you have no recollection of having 
said them?
    Mr. Radek. That is correct.
    Senator Sessions. And do you deny--well, we will let the 
other witnesses testify.
    Thank you.
    Senator Specter. Thank you, Senator Sessions.
    Senator Grassley.
    Senator Grassley. So you can hurry on, Mr. Chairman, I 
won't ask any questions, but let me make just a couple of 
comments here in a minute-and-a-half.
    The memo from Director Freeh suggests that he told the 
Attorney General that both she and Mr. Radek should remove 
themselves from the decisionmaking process in regard to 
deciding on an independent counsel. I think, Mr. Chairman, that 
when the Director of the FBI brings such a charge to the 
Attorney General, the Attorney General is obligated to act. She 
did not.
    The result, in my view, is at least a perception problem 
now for the Attorney General. The Freeh memo calls into 
question the Attorney General's judgment. Since she did not 
understand the potential conflicts both for her and for Mr. 
Radek, in my view, she has put her judgment on this issue at 
risk and the criticism is warranted.
    I am not prepared to question whether or not the Attorney 
General's decision on the independent counsel was politically 
motivated, but I do think that it looks bad. First, when you 
have a hand-picked career prosecutor vehemently calling for an 
independent counsel--that was Charles La Bella--when you have 
an FBI Director calling for an independent counsel, when you 
have career prosecutors resigning on principle over this issue, 
and, four, not quite as clear, but when you have a chief 
antagonist who is head of an office, the Public Integrity 
Section, which office has a reputation, as I have already 
spoken to, for never seeing a case it really wanted to 
prosecute, this is really a bad combination.
    Thank you.
    Senator Specter. Thank you very much, Senator Grassley.
    Mr. Radek, do you know why the Director Freeh memorandum of 
December 9, 1996, was not turned over to the subcommittee 
sooner than May 18, since you say you saw it on May 4?
    Mr. Radek. No, sir, I do not. I was informed that the 
Director had found it on or about that date.
    Senator Specter. Who informed you of that?
    Mr. Radek. The Deputy Attorney General.
    Senator Specter. And what were the circumstances for Mr. 
Eric Holder telling you that?
    Mr. Radek. He called me and asked me whether I recalled the 
conversation, and I asked him--I informed him that I did not, 
and he said that the Director had just found a memo which was 
being prepared to be turned over to Congress and he wanted----
    Senator Specter. And he said the Director had just found 
this memo?
    Mr. Radek. That is what he told me, yes, sir.
    Senator Specter. Did Mr. Holder tell you when he first saw 
this memo?
    Mr. Radek. No, he did not, and then I asked----
    Senator Specter. Are you aware of the fact that there had 
been a subpoena issued which required the production of this 
memorandum returnable on April 20?
    Mr. Radek. No, I am not aware of that. I am not surprised 
by it. I am just not aware of it specifically.
    Senator Specter. What else did Mr. Holder tell you with 
respect to this issue?
    Mr. Radek. Not much, except that he sort of quoted from it, 
and I asked him to fax it to me and he did.
    Senator Specter. He sort of quoted from it and you asked 
him what?
    Mr. Radek. To fax it to me, which he did.
    Senator Specter. And what did you do next by way of, say, 
making a denial of the substance of the memo to any of your 
supervisors?
    Mr. Radek. I read the memo and called the Deputy Attorney 
General back and told him that I had many remarks about the 
memo, but I told him that I----
    Senator Specter. You said you had many remarks about it?
    Mr. Radek. Many remarks about the memo.
    Senator Specter. What were your remarks about the memo?
    Mr. Radek. Well, I was sort of revisiting the dismissal of 
Ms. Ingersoll from the task force and the fact that Director 
Freeh seemed to have pre-judged the issues before the task 
force was even in place.
    Senator Specter. What issue did Mr. Freeh pre-judge?
    Mr. Radek. The issue of whether or not the Public Integrity 
Section should be involved in the task force.
    Senator Specter. Well, if Mr. Freeh heard from Mr. Esposito 
that the Public Integrity Section was under pressure because 
the Attorney General's job was held in the balance, wasn't that 
a sufficient reason to rule out the Public Integrity Section 
if, in fact, Mr. Esposito was telling Director Freeh the truth?
    Mr. Radek. It might have been if it were true, sir, but 
more specifically I was referring to the fact that he seemed to 
still be holding a grudge about the Cisneros independent 
counsel matter.
    Senator Specter. But on the issue of the sufficiency to 
remove the Public Integrity Section, if the Chief of the Public 
Integrity Section said that the Section was under pressure on 
campaign finance cases because the Attorney General's job was 
in the balance, and if Director Freeh accepted the veracity of 
Mr. Esposito's statement, wouldn't that be sufficient to call 
for the removal of the Public Integrity Section, or at least 
the Chief?
    Mr. Radek. If, in fact, the Chief of the Public Integrity 
Section had said such a thing, certainly someinquiry should 
have been made as to whether or not such a thing was said.
    Senator Specter. Do you think Director Freeh should not 
accept what Mr. Esposito tells him?
    Mr. Radek. I think Mr. Freeh was under some obligation to 
make further inquiry.
    Senator Specter. To talk to you about it?
    Mr. Radek. I mean, we are talking again about a memo 
Director Freeh directed to the person who had the conversation.
    Senator Specter. We are well aware of that. The question--
--
    Mr. Radek. Talk to me about it, talk to the Attorney 
General about it.
    Senator Specter. Well, he did talk to the Attorney General 
about it----
    Mr. Radek. He says he did. She doesn't----
    Senator Specter [continuing]. According to what Director 
Freeh says in the memo.
    Mr. Radek. I am sorry to talk at the same time you were, 
but he says he did. She says she doesn't recall it, to my 
knowledge.
    Senator Specter. Well, we have a sequence of affirmative 
statements by one side memorialized in a document and no 
recollection by others, you and the Attorney General.
    Mr. Radek. That is correct.
    Senator Specter. If Director Freeh is accurate, truthful, 
in what he has put in this memorandum that he told the Attorney 
General that Mr. Radek said the Public Integrity Section was 
under a lot of pressure and that her job held in the balance, 
shouldn't she have talked to you about it?
    Mr. Radek. I am certain that had this been conveyed to her 
that she would have conducted some inquiry, yes, sir.
    Senator Specter. So are you saying that you doubt that this 
was conveyed to her?
    Mr. Radek. I doubt it, yes, sir, but I have no independent 
knowledge.
    Senator Specter. But you doubt the truthfulness of Mr. 
Esposito's report to Director Freeh----
    Mr. Radek. You know----
    Senator Specter. Wait a minute, wait a minute. We won't 
talk together if you wait until I finish the question.
    Mr. Radek. I am sorry.
    Senator Specter. So you doubt the truthfulness of Mr. 
Esposito's statement to Director Freeh that Mr. Radek said that 
the Public Integrity Section was under a lot of pressure and 
the Attorney General's job was in the balance, and the 
truthfulness of Director Freeh's statement as recorded in this 
memorandum by him that he told that to the Attorney General?
    Mr. Radek. You left out the word ``because,'' Senator. I 
doubt the truthfulness of any statement attributed to me that 
the Public Integrity Section was under pressure because the 
Attorney General's job hung in the balance.
    Senator Specter. I wasn't revisiting what you said, 
although I may well do that. I was on a very separate subject, 
and the separate subject was that if Director Freeh told the 
Attorney General what he says he told her in this memo that the 
Chief of the Public Integrity Section had said that the Public 
Integrity Section was under a lot of pressure and the Attorney 
General's job was in the balance--if Director Freeh is honest 
and forthright and truthful about that statement and he told 
her that, as this memorandum says, whether she should have then 
questioned you about it.
    Mr. Radek. She should have questioned me about it, and the 
fact that she didn't is what makes me doubt that it was 
effectively communicated to her.
    Senator Specter. Effectively communicated?
    Mr. Radek. Yes.
    Senator Specter. What Director Freeh says he told the 
Attorney General, he didn't really do, right?
    Mr. Radek. If he had, I am sure she would have talked to me 
about it, and she didn't.
    Senator Specter. Would you sit back, Mr. Radek? We are 
going to call you back on other matters. As I have said, we are 
going to try to get Mr. Gallagher in and out. It is too late 
now to get Mr. Gallagher in and out in a hurry, but we will get 
him in and out as fast as we can.
    Mr. Gallagher, will you raise your right hand, please? Do 
you solemnly swear that the testimony that you will give before 
this subcommittee of the Judiciary Committee of the U.S. Senate 
will be truth, the whole truth, and nothing but the truth, so 
help you God?
    Mr. Gallagher. I do.
    Senator Specter. Mr. Gallagher, do you care to make any 
opening statement?

   STATEMENT OF NEIL GALLAGHER, ASSISTANT DIRECTOR, NATIONAL 
   SECURITY DIVISION, FEDERAL BUREAU OF INVESTIGATION, U.S. 
             DEPARTMENT OF JUSTICE, WASHINGTON, DC

    Mr. Gallagher. No, Senator. I am prepared to answer 
questions.
    Senator Specter. Mr. Gallagher, were you present at a 
conversation which involved Mr. Radek and Mr. Esposito?
    Mr. Gallagher. Yes, Senator, I was.
    Senator Specter. Can you place that conversation in a time 
frame when it occurred?
    Mr. Gallagher. It was in early December 1996.
    Senator Specter. And where did the conversation occur?
    Mr. Gallagher. In Mr. Esposito's office at FBI 
headquarters.
    Senator Specter. And what were the circumstances that led 
to that conversation?
    Mr. Gallagher. Well, first of all, let me put it in 
perspective. At the time, Mr. Esposito was the assistant 
director in charge of the FBI's Criminal Investigative 
Division. I was his principal deputy assistant director. Mr. 
Esposito is in an adjacent--was at the time in an adjacent 
office to mine. He stopped in and asked me if I would join him 
in a meeting with Lee Radek. The purpose of the meeting was the 
beginning of the process of the FBIbecoming directly involved 
in what would become campaign financing investigations.
    Senator Specter. And what conversation then occurred?
    Mr. Gallagher. We discussed two particular aspects. One was 
Mr. Radek reviewed some of the analysis that had been going on 
for a period of time by the Public Integrity Section. We also 
discussed the investigative efforts that had been conducted by 
Department of Commerce inspectors general regarding the 
activities of John Huang while at the Department of Commerce.
    During this discussion, there was a statement made by Mr. 
Radek that, as reflected in the memorandum, that there was a 
lot of pressure on him and on the Public Integrity Section, and 
this was attributed to the fact that the Attorney General's job 
may hang in the balance.
    Senator Specter. Are you sure that conversation occurred?
    Mr. Gallagher. I am certain of the conversation. The only 
addition that I would make to the statement of pressure, that 
it was a general statement of pressure not only on Lee Radek, 
on the Public Integrity Section, but for that matter on the 
FBI, and that it impacted upon the decisions that would be made 
in these early days of the investigation.
    My sense and my reaction to the statements that I heard Lee 
Radek make that day was that this would be a very sensitive, 
very critical investigation, and I felt a sense of urgency on 
behalf of the FBI that we would have to put together an 
investigative team to get moving forward with the 
investigation.
    Senator Specter. Well, was there a specific statement about 
pressure on the FBI?
    Mr. Gallagher. It is my recollection that there was a 
statement. I have a specific recollection of Mr. Radek, who I 
have dealt with extensively during this same time period on 
other investigative matters, talk about a sense of pressure 
that he and the Public Integrity Section felt. But I have a 
less specific but general recollection that there may have been 
some reference to pressure on the FBI, and walked away from the 
meeting with a sense, again, that this would be a very 
sensitive and critical investigation.
    Senator Specter. Well, as of that time, the Attorney 
General had already turned down a request for independent 
counsel, correct?
    Mr. Gallagher. It is my understanding, Senator, that that 
is accurate.
    Senator Specter. And you are sure the conversation occurred 
where Mr. Radek used the language pressure on the Public 
Integrity Section because the Attorney General's job was in the 
balance?
    Mr. Radek. Yes, Senator, and----
    Senator Specter. Are you sure of that?
    Mr. Gallagher. I am positive, and at the same time there 
may have been some general discussion as to the fact that the 
Attorney General had not yet been selected by the President to 
continue in his Cabinet. We had discussions around that issue, 
but again I did not walk away with anything but a sense of 
urgency to move forward with the investigation.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman.
    Just briefly, Mr. Gallagher, where did this conversation 
take place where you were----
    Mr. Gallagher. In Mr. Esposito's office.
    Senator Torricelli. And what was the date of this meeting?
    Mr. Gallagher. I recall it being early December 1996. This 
was the very first meeting between Lee Radek, myself, and Bill 
Esposito to begin the process of the FBI taking a more active--
not a more active--an active role in the investigation that 
would become the campaign financing----
    Senator Torricelli. Were you the only people in the room?
    Mr. Gallagher. I would have to defer, now that I have 
described the meeting, to Lee Radek. It may be that his--one of 
his deputies, Joe Gagloff, was in the room. If he did, he did 
not play an active part in the discussion. If it will help Lee 
Radek, I was sitting on the sofa in Bill Esposito's office. 
Bill Esposito was in the wing chair to my left. Lee Radek was 
in the wing chair to my right. The three of us were the primary 
participants in the discussion, but I have a vague recollection 
that he may have had a deputy off to the side.
    Senator Torricelli. You recognize, Mr. Gallagher, that the 
allegations you are making are contradicting a sworn statement 
by the head of the Public Integrity Section of the U.S. Justice 
Department. If indeed Mr. Radek were not testifying truthfully, 
this would have extraordinary consequences. Yet, he has been 
rather strong in his testimony.
    But you do not remember the date of the meeting or even who 
was in the room. You do have a memory of the seating 
arrangement, but not knowing the date of the meeting or who was 
present, you can understand, would in some people's minds raise 
questions about how specifically you could otherwise remember 
exactly what was said, and I think would make it difficult for 
many to conclude that Mr. Radek's statement would not then be 
taken at face value, and he believes this didn't happen.
    Mr. Gallagher. Senator, I can only respond that it was the 
very first meeting between Lee Radek and the FBI on what would 
become the transformation of the investigation. I have specific 
recollection of where the meeting occurred. Yes, I cannot speak 
to the exact date, but I know it was in early December 1996.
    Senator Torricelli. But you don't remember who was in the 
room?
    Mr. Gallagher. I remember Lee Radek, myself, Bill Esposito.
    Senator Torricelli. But not whether there were any others?
    Mr. Gallagher. At most, there was a fourth person. If it 
was, he sat off to the side and did not actively participate in 
the discussion. So I give you his name in complete candor as to 
who could possibly have been in the room. That is the only 
other person who may have been in the room.
    Senator Torricelli. Finally, I think this is necessary for 
the record and I do not do this to challenge either your 
integrity or your credibility. But it should be pointed out to 
my colleagues that you did testify before the Governmental 
Affairs Committee, of which I am also a member, and there were 
circumstances after that in which you needed to clarify or 
change the context of your testimony.
    Could you explain to the committee, since obviouslyyour 
testimony is in conflict with Mr. Radek's and any nuance of credibility 
is extremely important to the committee, what led to your clarifying 
your previous testimony to the committee?
    Mr. Gallagher. In the unrelated matter before the 
Governmental Affairs Committee?
    Senator Torricelli. Yes.
    Mr. Gallagher. I became aware of information which at the 
time that I testified I was not cognizant of. Once I became 
aware of that information, I felt an obligation----
    Senator Torricelli. You then corrected the record and 
changed your testimony?
    Mr. Gallagher [continuing]. To correct the record and 
submitted a letter to that effect.
    Senator Torricelli. Mr. Chairman, I have no further 
questions.
    Senator Specter. Thank you, Senator Torricelli.
    Senator Grassley.
    Senator Grassley. I won't ask any questions.
    Senator Specter. Thank you very much, Senator Grassley.
    Mr. Gallagher, were there any other written memoranda 
relating to this meeting or arising from this meeting, to your 
knowledge?
    Mr. Gallagher. I am unaware of any, Senator. I was not--and 
maybe as a clarification, I did not participate in the 
subsequent discussion between Mr. Esposito and the Director. My 
only recollections are to the actual meeting. I may have seen 
this document, but I don't have a specific recollection of it.
    Senator Specter. Thank you very much, Mr. Gallagher. The 
final question for you: will you make your plane?
    Mr. Gallagher. I will make my plane, and I appreciate your 
consideration, Senator.
    Senator Specter. You are excused.
    Mr. Gallagher. Thank you.
    Senator Specter. Mr. Parkinson, will you step forward, 
please? Will you raise your right hand? Do you solemnly swear 
that the testimony that you will give before this subcommittee 
of the Judiciary Committee of the U.S. Senate will be the 
truth, the whole truth, and nothing but the truth, so help you 
God?
    Mr. Parkinson. I do.
    Senator Specter. Thank you, Mr. Parkinson. Would you state 
your position, please?

 STATEMENT OF LARRY PARKINSON, GENERAL COUNSEL, FEDERAL BUREAU 
  OF INVESTIGATION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

    Mr. Parkinson. My position is General Counsel with the FBI.
    Senator Specter. And how long have you held that position?
    Mr. Parkinson. I have held that position since August 1997.
    Senator Specter. And before that, you were----
    Mr. Parkinson. Before that, I was the Deputy General 
Counsel at the FBI, dating back to December 1995.
    Senator Specter. Mr. Parkinson, did you have occasion to 
write a memorandum to Assistant Attorney General Robinson of 
the Criminal Division dated November 20, 1998?
    Mr. Parkinson. Yes, sir.
    Senator Specter. Would you tell us the circumstances that 
led you to write that memorandum?
    Mr. Parkinson. At the time, we were reaching the end of the 
preliminary inquiries with respect to Vice President Gore and 
Harold Ickes. The Attorney General was having to reach a final 
decision as to whether to seek an appointment of an independent 
counsel. We were having internally within the Department of 
Justice a number of discussions about what we had learned 
during the preliminary inquiry and discussions about where we 
go from here.
    The views of those participants were solicited by the 
Attorney General. A memo was invited from the FBI, and 
consequently I wrote this memo which referred to the two 
preliminary inquiries.
    Senator Specter. And had Director Freeh written an earlier 
memorandum recommending the appointment of independent counsel 
in campaign finance matters?
    Mr. Parkinson. Yes.
    Senator Specter. Do you know the date of that memorandum?
    Mr. Parkinson. November 24, 1997. There had been a previous 
memo in May 1997 which he also gave to the Attorney General, 
and you have that as well.
    Senator Specter. Mr. Parkinson, who was the first 
individual that you took up an analysis on evidence in the 
memorandum of November 20, 1998?
    Mr. Parkinson. In the November 20, 1998, memo it refers 
primarily to the preliminary inquiry involving Vice President 
Gore. There is a very brief position taken with respect to Mr. 
Ickes at the end of the memo. It is not a lengthy analysis 
because there had been a previous analysis by the Department of 
Justice that we agreed with and I didn't feel the need to go 
into an extensive analysis with respect to Mr. Ickes.
    Senator Specter. And did you believe that independent 
counsel should have been appointed as to Vice President Gore?
    Mr. Parkinson. Yes, and that was our recommendation.
    Senator Specter. Is your recommendation characterized in 
conclusory form by the first paragraph on page 4 under 
``Sufficiency of the Evidence?''
    Mr. Parkinson. Yes. I mean, that begins the analysis with 
respect to the Vice President.
    Senator Specter. And would you read that conclusion, 
please?
    Mr. Parkinson. Do you want me to begin with the first 
sentence, ``Is there?''
    Senator Specter. Correct.
    Mr. Parkinson. OK. ``Is there sufficient evidence as a 
matter of law to prove that Vice President Gore made a false 
statement when he told the investigators on November 11, 1997, 
that he believed the media fund was composed solely of soft 
money? We believe the answer to this first question is clearly 
yes. The Radek-Visinanzo memorandum concludes that the falsity 
element of the offense has not been established. This 
conclusion rests principally on an opinion that there is in 
insufficient evidence that the Vice President was ever aware of 
a hard money component to the media fund. However, the 
memorandum falls short in tworespects. First, it fails to give 
sufficient weight to the inculpatory evidence surrounding the November 
21, 1995, meeting. Second, it focuses almost exclusively on that single 
meeting without taking into account the wide range of other relevant 
evidence.''
    Senator Specter. What was the evidence with respect to the 
people who were present at the meeting who gave evidence 
relevant to the issue or to the discussion of a hard money 
component to the fundraising which the Vice President was 
undertaking?
    Mr. Parkinson. It is set out in my memo, and then attached 
to the memo is an investigative summary prepared by the 
investigators which goes into more detail. But in a nutshell, 
there were a number of participants in the meeting, four of 
which recalled the discussion of a hard money component to the 
media fund during that 1995 meeting.
    Senator Specter. And who were those witnesses and what did 
they say?
    Mr. Parkinson. Those four witnesses were David Strauss, 
Leon Panetta, Bradley Marshall, and Brian Bailey. They vary 
slightly on their recollections, and I am not sure I could, 
without spending considerable time going through this 
investigative summary, be extraordinarily precise. But in a 
nutshell, all of those four--each of those four witnesses 
indicated that they were present at the meeting, that the Vice 
President was present at the meeting, and that there was some 
discussion about a hard money component to the media fund.
    Senator Specter. In the Attorney General's declination to 
appoint independent counsel on November 24, 1998, she says at 
the bottom of page 3, ``Only two attendees of the meeting even 
recall the topic of a hard money component to the media fund 
being raised during the meeting.'' Is that accurate?
    Mr. Parkinson. I don't believe it is accurate. I didn't 
recall that from the notification itself, and as the 
investigative summary points out in more detail, there were 
four people who had that recollection.
    Senator Specter. And was the recollection of Mr. Strauss 
confirmed in a written document?
    Mr. Parkinson. Yes. There was what became known as the 
Strauss memo, and that is also discussed. There is a memo that 
describes some portions of the meeting that was written by 
David Strauss.
    Senator Specter. And what does that memo say with respect 
to the hard money component?
    Mr. Parkinson. It has references in the margins about a 65 
soft and 35-65 percent soft, 35 percent hard, component. Let me 
try to be precise, and this is referred to on page 4 of the 
supplement, but the handwritten notes on the documents were 65 
percent soft, 35 percent hard, corporate or anything over 20K 
from an individual. And he identified those as notes that he 
took during the November 21, 1995, meeting.
    Senator Specter. And for the record, would you briefly 
state what the significance is of the hard versus the soft 
money components of fundraising?
    Mr. Parkinson. Well, obviously in this context it was very 
significant in this sense because what we were focused on in 
that preliminary inquiry in the fall 1998 was the Vice 
President's statement that he made a year previously that he 
was not aware of a hard money component to the media fund. And 
the purpose of the November 21, 1995, meeting was a discussion 
of the media fund, and this was evidence that there was 
clearly--it seems to be clear that there was a discussion of a 
hard money component in a meeting that the Vice President 
attended.
    Senator Specter. And if the Vice President had known that 
there was a hard money component to the money he was raising, 
what would the legal consequence of that have been?
    Mr. Parkinson. The potential legal consequence is that he 
would have made a false statement when he was interviewed by 
the investigators a year previously in November 1997 in 
connection with the first preliminary inquiry that related to 
him.
    Senator Specter. One of the individuals who testified about 
the Vice President's attendance at the meeting where hard money 
was discussed was Mr. Leon Panetta?
    Mr. Parkinson. That is correct.
    Senator Specter. And essentially what did Mr. Panetta say?
    Mr. Parkinson. Essentially, and again in a nutshell--it is 
laid out in significantly more detail in the attachment, but he 
did not recall specifically the November 21, 1995, meeting, but 
he did recall attending several meetings in the Map Room in 
which these budget issues were discussed. And he does recall a 
meeting in which the hard money/soft money components of the 
media fund were discussed, and it was his memory that the Vice 
President was in attendance. He recalls the Vice President 
being there for all of these discussions as part of gearing up 
for the reelection campaign.
    Senator Specter. And did Mr. Panetta say with respect to 
the purpose, quote--or that the purpose of the meeting with 
respect to the attendance of the Vice President and the 
President was to, ``make sure they knew what the hell was going 
on?''
    Mr. Parkinson. I don't have that precisely in front of me, 
Mr. Chairman.
    Senator Specter. Well, take a look at your memo. You will 
find it.
    Mr. Parkinson. Oh, it is in my memo?
    Senator Specter. Correct.
    Mr. Parkinson. If you can direct me to the page, I am sure 
I can find it quickly.
    Senator Specter. If I direct you to the page, you can find 
it quickly? Try 0150, for starters. I can understand, Mr. 
Parkinson, why at this point I know more about your memorandum 
than you do.
    Mr. Parkinson. I am sorry, Mr. Chairman. I don't find it. I 
don't find that quote.
    Senator Specter. Take a look at the next page. It continues 
on to 0151. And talking about Panetta, quote----
    Mr. Parkinson. I am sorry, Mr. Chairman. I was looking at 
my memo, as opposed to the attachment to my memo. I do see that 
and it concludes----
    Senator Specter. Well, these are attachments to your memo.
    Mr. Parkinson. That is correct, and it concludes by saying 
he emphasizes the purpose of the meeting was to, ``make sure 
they knew what the hell was going on.''
    Senator Specter. And two other witnesses testified that the 
Vice President was present at the time hard money was 
discussed?
    Mr. Parkinson. That is correct.
    Senator Specter. And who were those witnesses?
    Mr. Parkinson. Those witnesses were Bradley Marshall and 
Brian Bailey.
    Senator Specter. Was all this information conveyed to the 
Attorney General, Mr. Parkinson?
    Mr. Parkinson. To my knowledge, it was. I don't have 
personal knowledge of what actually went to the Attorney 
General, but certainly these discussions and these memos were 
being generated for her final decision.
    Senator Specter. But these memos went from you to the 
Assistant Attorney General of the Criminal Division, Mr. 
Robinson?
    Mr. Parkinson. That is correct.
    Senator Specter. For the purpose of being forwarded to the 
Attorney General?
    Mr. Parkinson. Yes, that was----
    Senator Specter. Do you have any idea why in her formal 
statement she would only know of two witnesses who testified 
about the Vice President being present when hard money was 
discussed?
    Mr. Parkinson. I do not know the answer to that question.
    Senator Specter. Now, you have referred also to documents 
which were provided to the Vice President. In the appendix to 
your memorandum, there are 13 memoranda sent by Mr. Ickes to 
the Vice President, correct?
    Mr. Parkinson. That is correct.
    Senator Specter. And what is the import of those 13 
memoranda?
    Mr. Parkinson. Well, the memoranda are--there are a couple 
of significant pieces. What these memoranda are, at least in 
the investigators' mind--and I agree with them--these are 
indications of discussions between the time period of August 
1995 and July 1996 that referred to a hard money component of 
the media fund, which was the central issue in the preliminary 
inquiry.
    And as set forth in the description of those 13 memos, 
there were a number of references to that hard money component, 
and these were memos that, based on the evidence, went to the 
Vice President. And they were also--the second piece of that 
that I would note is that they were--most of them were crafted 
as a series of bullets or short summaries designed for a busy 
person to absorb fairly quickly.
    Senator Specter. The Attorney General's declination 
emphasizes the Vice President's statement that he did not read 
the memos. But he made other relevant comments, as you have 
noted, as being--did you put it inculpatory of the Vice 
President as to what he said?
    Mr. Parkinson. Yes. That was the term that I used in the 
memo, yes, ``inculpatory.''
    Senator Specter. And if you turn to the addendum marked 
147, it reads, ``The Vice President has remarked in two 
interviews that he did not read these memos, as he did not as a 
general rule read memos authored by Harold Ickes on DNC 
budgetary matters.'' He nonetheless said that, ``the subject 
matter of the memorandums would have already been discussed in 
his and the President's presence.''
    Mr. Parkinson. Right.
    Senator Specter. Is that an accurate summary of that 
particular issue?
    Mr. Parkinson. Yes, I believe it is.
    Senator Specter. What reliance, if any, in your 
recommendation for independent counsel did you place on the 
Vice President's statement that even though he hadn't read the 
memoranda, the subject matter had already been discussed with 
him and the President?
    Mr. Parkinson. I took some issue with the statement that he 
said he didn't read the memos, and I have a section in my memo 
saying at least we ought to critically examine that.
    Senator Specter. Why did you take issue with his statement 
to that effect?
    Mr. Parkinson. These were issues--a couple of reasons. 
These memos, as I said before, were designed, many of them, as 
bullets designed to be read by him. And it was my view that at 
least we ought to devote some significant investigative effort 
to figuring out whether a blanket statement that ``I didn't 
read Harold Ickes' memos'' would stand up.
    In my view, this was an extraordinarily important issue for 
those running for office, including the Vice President. The 
question at hand, and that is whether or not there was a hard 
money component to the media fund, was not, in my view, a down 
in the weeds kind of issue; it was kind of fundamental. And 
Harold Ickes was the person at the White House who was 
essentially running much of the campaign, and it struck me as 
something that at least we ought to investigate further, 
whether or not we could simply rely on a statement that he said 
``I didn't read Ickes' memos.''
    Senator Specter. Well, all of this is in the context of the 
issue of criminal intent being not subject to the decision by 
the Attorney General on appointing independent counsel unless 
there was, ``clear and convincing evidence,'' under the 
independent counsel statute of the state of mind or lack of 
criminal intent.
    And how did those factors, all the memoranda and the four 
witnesses, impact on your consideration as to whether somebody 
could reasonably say that there was clear and convincing 
evidence that he didn't know anything about the hard money 
component?
    Mr. Parkinson. In my view--and, again, it is set forth in 
my memo on pages 7 and 8--in my view, the clear and convincing 
standard was intended to be a very high threshold. I referred 
at some length in my memorandum about--I referred at some 
length from the legislative history in 1987, in which Congress 
made clear that they intended this to be a high threshold, and 
they criticized the Department at that time for a disturbing 
practice of dismissing or failing to seek an independent 
counsel based on state of mind, and so they intentionally set a 
high threshold.
    They made clear that it would be a rare case--and I have 
quoted the legislative history in that respect--``a rare case 
in which the Attorney General will be able to meet the clear 
and convincing standard and in which such evidence would be 
clear on its face. It would be unusual for the Attorney General 
to compile sufficient evidence at that point in the process.'' 
That was a quote from the legislative history.
    And I concluded that section by simply asking the question 
about whether or not this was indeed such a rare case. And my 
conclusion, at least, was that based on all of the evidence, 
the witnesses, as well as the documentaryevidence, that this 
was hardly one of those rare cases.
    Senator Specter. Hardly?
    Mr. Parkinson. Correct.
    Senator Specter. Clear-cut, not to be classified as one of 
those rare cases?
    Mr. Parkinson. I didn't think this one was very close.
    Senator Specter. With respect to what you characterized as 
inculpatory statements, if you turn to page 0149 of the 
attachments, the first full paragraph, second sentence, 
``pointed out''--this is the Vice President speaking, ``pointed 
out that he had been a candidate for 16 years and thought he 
had a good understanding of the hard/soft money.''
    What impact did that statement of the Vice President have 
on your consideration of the clear and convincing standard for 
ruling out mens rea, state of mind, or criminal intent?
    Mr. Parkinson. Well, I think when we were focusing on state 
of mind, it seemed critical to me that we focus not only on the 
events at hand, but whatever historical knowledge the person 
might have had. And I believed then and believe now that that 
prior experience and his activity in campaigns was a relevant 
factor.
    Senator Specter. Referring back to Leon Panetta, at 0150, 
with respect to this November 21, 1995, meeting, Mr. Panetta 
said that the, ``hard/soft money breakdown of media fund 
discussed at all three meetings. There was always a discussion 
and examination of the overall DNC budget and, at a minimum, a 
reference to the hard/soft breakdown of the media fund. Recalls 
gearing up for the reelection campaign. Meetings were 
structured around making presentations to POTUS,'' President of 
the United States, ``and VPOTUS,'' Vice President of the United 
States. ``Both were provided with whatever documents were being 
discussed, and both always had something to say. Going on, 
``POTUS and VPOTUS would comment on what was being presented to 
them. Media fund was the focus of the 11/21/95 meeting, and the 
purpose was to make sure POTUS and VPOTUS were aware of what 
was going on with the media fund.''
    What impact does that have on the state of mind issue?
    Mr. Parkinson. I thought it was very significant.
    Senator Specter. Why?
    Mr. Parkinson. Obviously, this was not just one meeting. 
There were a series of discussions. This was a critical piece 
of the campaign strategy. This was an indication from someone 
of very significant stature and placement of that process, Mr. 
Panetta, who indicated that the President and the Vice 
President were personally engaged in these discussions.
    Senator Specter. What did the Vice President say about 
leaving the meetings?
    Mr. Parkinson. The Vice President said a couple of things, 
that he may have left the meeting. He said that he drank a lot 
of iced tea during meetings and it may have caused him to leave 
the room. He also indicated that there were----
    Senator Specter. Drank a lot of iced tea, so he might have 
left the room?
    Mr. Parkinson. Correct, and may not have been present when 
the critical words were said. He also indicated, as I recall, 
that there were frequently interruptions to these meetings.
    Senator Specter. Well, he says in the addendum at 0148, a 
statement to the Vice President and then 10 lines down, ``does 
not know if he left the meeting while it was going on, for any 
reason.'' So according to his statement, he was unsure.
    Mr. Parkinson. Correct.
    Senator Specter. So he postulates drinking a lot of iced 
tea and possibly leaving the meetings for a restroom break?
    Mr. Parkinson. That is the way we understood it.
    Senator Specter. How did you weigh that in the state of 
mind issue?
    Mr. Parkinson. I didn't personally find that very 
compelling.
    Senator Specter. Why not?
    Mr. Parkinson. For one thing, if this was just one meeting 
in which this was a one-sentence statement, I may have found it 
more compelling. But as I indicated, this was--the evidence 
indicated that there was a series of meetings, and to me it 
would be quite a coincidence to have missed all of the 
references to a hard money component, for that reason.
    Senator Specter. When the Attorney General declined to 
appoint independent counsel as to the Vice President, she used 
language which I referred to before which is really 
prosecutorial discretionary language. But there was no finding 
that there was clear and convincing evidence that the Vice 
President did not knowingly violate the law.
    Wouldn't that finding be indispensable if she were to 
accept the Vice President's assertion that he didn't know there 
was a hard money component, in the face of the statements of 
the four witnesses who were at the November 21 meeting, the 13 
memoranda, and the Vice President's own statements about his 
experience as a candidate, and the substance of the Ickes memos 
having been discussed in his presence and the presence of the 
President? Wouldn't she have had to make that finding as an 
indispensable basis for declining?
    Mr. Parkinson. As I recall--and I am sure Mr. Radek can add 
to this, but as I recall, in the end she concluded that she did 
not have to get to that issue about clear and convincing 
because she had agreed with Mr. Radek and Visinanzo's 
memorandum that the falsity element of the offense had not been 
satisfied, and therefore she did not have to get to that issue.
    Senator Specter. Well, the falsity element turned 
indispensably on the state of mind, didn't it? There was no 
doubt that he had raised hard money from witnesses who were 
questioned by the FBI, correct?
    Mr. Parkinson. Correct.
    Senator Specter. How many witnesses questioned by the FBI 
whom the Vice President had raised money from testified that he 
had raised hard money from them?
    Mr. Parkinson. I don't--I can't give you a precise number. 
There were some, but there were any number of people that were 
solicited who had no idea whether they were talking about hard 
money or soft money. So, that number gets a little bit hard 
to----
    Senator Specter. Well, there were people who testified that 
he raised hard money from them.
    Mr. Parkinson. Correct.
    Senator Specter. There were some, and weren't there also 
some who were surprised that their contributions hadbeen 
allocated to the hard money account because they were limited to 
$25,000 total annually on hard money and they later found out that when 
the allocations were made to the hard money account that they had 
exceeded the Federal limit on hard money?
    Mr. Parkinson. That is correct.
    Senator Specter. And that was money raised by the Vice 
President?
    Mr. Parkinson. Yes. There is, Senator--just on the clear 
and convincing issue, the last footnote of her notification of 
November 24 does refer to it. It concludes with one sentence 
that says, ``If the clear and convincing evidence were 
applicable to this determination, I would find by clear and 
convincing evidence that the Vice President did not lie,'' 
though she did something in the alternative.
    Senator Specter. But that was not a matter discussed at all 
in the lengthy statement of declination, except for a footnote, 
you say?
    Mr. Parkinson. The best I can recall, that is correct, 
because she didn't find that the fundamental elements of the 
offense had been satisfied.
    Senator Specter. But how could there be a finding that the 
fundamental elements of the offense were not satisfied in the 
absence of finding clear and convincing evidence of no criminal 
intent?
    Mr. Parkinson. We had a lot of discussions about a fairly 
nuanced legal point, and that was that in false statement and 
perjury charges, at what point does the clear and convincing 
standard apply and how does that relate to the falsity element 
of a false statement charge. We had lots of discussions about 
how that applied, and it was the conclusion, at least of the 
Attorney General, that they were separate and distinct issues. 
And while you certainly were focusing on state of mind in 
assessing whether the falsity element was satisfied, it was not 
the same question that you would reach if you had to get to the 
clear and convincing standard under the statute.
    Senator Specter. Well, let's focus on that for just a 
minute. The question was, did the Vice President know that he 
was raising hard money, and here you have his denial and an 
explanation about iced tea. And on the other side, you have 
four witnesses and the fact that some of the people he raised 
money from did contribute hard money, and others where there 
wasn't an express raising of hard money had it allocated to 
hard money, and 13 memoranda which showed that he was supposed 
to raise hard money, and his statement about being experienced, 
16 years as a candidate, and that even if he didn't read the 
memoranda, these were matters discussed with him and the 
President.
    Now, the question is did he know that he had raised hard 
money, because if he did, there would have been a false 
statement. Now, that requires an analysis as to his state of 
mind as to whether he knew he was raising hard money. Wouldn't 
that conclusively involve the question as to whether, on the 
totality of that evidence, there was clear and convincing 
evidence that he did not know he was raising hard money?
    Mr. Parkinson. The clear and convincing evidence standard 
is, as you well know, the part of the independent counsel 
statute which comes into play, and this was the analysis that 
we ended up with within the Department only after you find that 
the elements of the offense have been satisfied. And then the 
question is, having satisfied the elements of the offense, 
focusing on the individual's state of mind, is there clear and 
convincing evidence that he did not have the requisite state of 
mind.
    At a certain point, I think the issues do tend to collapse 
and you are looking at the same fundamental question, and that 
is what was his state of mind. But they are two separate 
issues. First, you figure out whether or not the elements of 
the offense are satisfied, and then if you do, then you get to 
the statutory piece relating to clear and convincing evidence.
    Senator Specter. But the determination as to whether the 
elements of the offense occurred are identical, to wit did he 
know he was raising hard money.
    Mr. Parkinson. I think, at bottom, they are essentially 
identical. The standards are slightly different. Clear and 
convincing is intended under the statute to be a higher 
threshold before you choose not to seek an independent counsel.
    Senator Specter. But if the issue is independent counsel 
and the question is whether he knew he was raising hard money, 
it seems to me to be an inevitable conclusion that the clear 
and convincing evidence standard had to be met.
    She did find that as to the President and the Vice 
President on her December finding, and that was essentially 
based, as I had read into the record before, on the advice of 
counsel argument. You analyzed that in your memorandum of 
December 4, and what were your findings as to that?
    Mr. Parkinson. I concluded--and it is set forth in the memo 
from December 4 as well as the Director's memo to me of 
December 8--that the advice of counsel defense was fairly 
strong in this case, but in my view it was not strong enough to 
satisfy the clear and convincing evidence standard under the 
statute. And I set forth a number of reasons why I thought this 
was not that compelling, and I took some issue with the 
Department of Justice memorandum that said this was one of the 
strongest cases for advice of counsel defense that they had 
seen.
    Senator Specter. And the advice of counsel defense is 
essentially in the nature of an affirmative defense, isn't it, 
Mr. Parkinson?
    Mr. Parkinson. Yes.
    Senator Specter. And the reasons you set forth were, number 
one, that the advice had never been given directly to the 
President and Vice President?
    Mr. Parkinson. There was no direct contact between the 
lawyers that they are relying on for the advice of counsel 
defense and the principals.
    Senator Specter. Well, how can you have an advice of 
counsel defense if the advice is not given by counsel directly?
    Mr. Parkinson. It is certainly legally possible to have an 
advice of counsel defense, notwithstanding the fact that the 
advice filtered through someone else, which is the case in this 
matter.
    Senator Specter. But you found that was a reason not to 
accept it?
    Mr. Parkinson. That was a reason for me to conclude that 
the advice of counsel defense was not as strong as I thought 
others were.
    Senator Specter. And a second reason you have in your memo, 
to try to boil it down and wrap it up a little soonerhere, is 
that both of these lawyers had substantial interests in terms of their 
representing the Democratic National Committee and the Clinton-Gore 
campaign?
    Mr. Parkinson. That is correct. I mean, a fundamental 
strength of an advice of counsel defense is that the attorneys 
who are giving the advice are disinterested. And in our view, 
they were not disinterested in this case.
    Senator Specter. And one of them even had some 
qualifications as to the advice of counsel defense?
    Mr. Parkinson. That is correct.
    Senator Specter. And what was that qualification?
    Mr. Parkinson. It wasn't so much a qualification as it was, 
as a I recall, the difference between--there was a question 
about electioneering message versus express advocacy which was 
a critical issue in this case, and one of the attorney's advice 
was--it appeared to us to be miscommunicated to the principals, 
which raised some question about the viability of relying on an 
advice of counsel defense.
    Senator Specter. What was miscommunicated to the 
principals?
    Mr. Parkinson. I note on page 4 of my memo there is an 
indication that the legal advice of Sandler and Utrecht may not 
have been getting through. Sandler and Utrecht stated that they 
had consistently applied the electioneering message legal 
standard, not the express advocacy standard, when they reviewed 
the content of the DNC ads. Yet, virtually every other witness 
recalled Sandler and Utrecht's advice in terms of express 
advocacy.
    And I conclude saying, while the DOJ memo concludes this 
inconsistency is not significant, certainly it raises some 
question about whether the attorneys' advice was being heard 
and heeded.
    Senator Specter. Especially in the context that neither the 
President nor the Vice President dealt directly with those 
attorneys?
    Mr. Parkinson. That is correct.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman, very much.
    Mr. Parkinson, do you see the FBI's role in this process as 
advisory to the Attorney General?
    Mr. Parkinson. That is correct, Senator.
    Senator Torricelli. Is it unusual for the FBI to give 
advice to the Attorney General in such an instance?
    Mr. Parkinson. It certainly wasn't in the last several 
years, no.
    Senator Torricelli. Do you consider the Attorney General to 
be bound by your advice?
    Mr. Parkinson. No.
    Senator Torricelli. Was it unusual for the Attorney General 
to solicit advice from the head of the Criminal Division or 
Public Integrity, her principal aides, and the FBI, and where 
there was conflicting advice she made her own judgment?
    Mr. Parkinson. Not unusual at all. It was typical.
    Senator Torricelli. Do you in your mind believe that there 
is any question about the integrity of Janet Reno or her 
operating in the national interest in having solicited 
independent advice and then having, to the best of her 
abilities, made a judgment?
    Mr. Parkinson. No, I do not.
    Senator Torricelli. Do you have any information indicating 
that the Attorney General was not acting with integrity, 
consistent with her responsibilities?
    Mr. Parkinson. No.
    Senator Torricelli. Indeed, given the imprecise standards 
of the campaign finance laws and some of the conflicting 
interpretations and facts, wouldn't it be understandable that 
the Attorney General might be receiving different conclusions 
and different advice from her assistants and other prominent 
officials in the Justice Department and the FBI?
    Mr. Parkinson. That would certainly be expected.
    Senator Torricelli. It would be expected. So, indeed, as 
this evolved is really what one might have anticipated?
    Mr. Parkinson. I think that is correct in terms of 
differences of opinion and advice.
    Senator Torricelli. Is there any reason to believe that Mr. 
Radek in writing his memorandum was not adhering to the highest 
professional standards and acting with integrity in reaching 
his own conclusions based on law?
    Mr. Parkinson. No, I do not, Senator.
    Senator Torricelli. Indeed, while you might disagree with 
Mr. Radek's conclusions, as an attorney, having read them, I 
find them plausible. If I do not agree with them in each 
instance, I can understand how a well-reasoned person operating 
in good faith could reach these conclusions even if I don't 
agree with all of them. Do you find yourself in the same 
position that I find myself?
    Mr. Parkinson. I often found myself in that position.
    Senator Torricelli. I think there are several of Mr. 
Radek's points that bear being read into the record. Respond to 
them if you find them appropriate. Responding to Mr. La Bella's 
report, Mr. Radek writes, ``The report leaps to the outrageous 
conclusion that the Public Integrity Section has engaged in a 
results-oriented analysis to protect the White House when it 
asserts that different standards have been applied to the 
various campaign finance matters that have arisen under the 
Act.''
    Do you have any reason to believe that different standards 
are being applied to different people who were being evaluated 
under the provisions of the Act or, Mr. Parkinson, do you think 
that the standard would seem to be fairly evenly applied, even 
if you do not agree with all of the interpretations of the 
Department?
    Mr. Parkinson. Generally, I thought they were evenly 
applied. I did have quibbles occasionally along the way.
    Senator Torricelli. As we all would. But, in fact, anyone 
asserting that there was a results-oriented analysis, that 
would indeed be outrageous, given the integrity of the people 
involved and by your own statement that this seemed to be 
evenly applied.
    Mr. Parkinson. I never concluded that this was results-
oriented.
    Senator Torricelli. No, I am not suggesting that you did. I 
am simply soliciting your help.
    Mr. Radek goes on to cite, referring to the La Bella 
report, that ``There is absolutely no specific and credible 
information suggesting that the President committed a crime 
with respect to any of these matters. The report identifies 
none, but rather lists a series of provocative and speculative, 
hypothetical questions it asserts should be answered.'' 
Clearly, hypothetical questions are not a standard under the 
Act for reaching any conclusion.
    With, I think, reference to the Vice President, Mr. Radek 
concluded that the report was so superficial that he was at a 
loss as to how to respond. I might point out that had I been 
writing the report, that is exactly the word that I would have 
used, ``superficial.''
    Now, let me get to the question of these meetings and the 
Vice President. Being a fair man, I am certain you put this 
into some context before reaching your own conclusions. For the 
committee's purposes, what is the volume of memoranda the Vice 
President receives on a weekly, monthly, or annual basis?
    Mr. Parkinson. I don't know the answer to that, but I would 
assume that it is enormous.
    Senator Torricelli. You are the committee suggesting your 
own belief that it is credible to assume that the Vice 
President did read a specific memorandum. Presumably, if the 
Vice President were receiving two memoranda a week as opposed 
to 2,000, or 500 memoranda a year as opposed to 10,000, it 
would have some bearing on the credibility of whether he read 
an individual memorandum.
    Mr. Parkinson. I think there is no question about that, and 
I want to correct one thing that you said, Senator Torricelli, 
and that is that I was not saying that I found--that I 
concluded that he read a particular memorandum or didn't read a 
particular memorandum. The issue on the table was whether or 
not there was reason for further investigation. I don't think 
we were in a position at that time, nor should we have been in 
a position to reach ultimate conclusions as to what he saw and 
what he didn't see.
    Senator Torricelli. But if indeed it could be concluded 
that the Vice President, having received an enormous number of 
memoranda, could not possibly have read them all and was likely 
to have only read a portion of them, that would go to the 
question of whether or not there was credible information that 
the Vice President knew about the hard/soft money combinations.
    Mr. Parkinson. No question about it.
    Senator Torricelli. And indeed we are unable in the 
committee today to establish the context and the volume of this 
material and how likely it was.
    Would it surprise you to know that as the Chairman of the 
Democratic Senatorial Campaign Committee, memoranda have been 
prepared for me about every State in the Union that has a 
senatorial election this year? I would assume that I am much 
more involved in the daily events of the management of those 
campaigns than the Vice President, who has other 
responsibilities in his own campaign.
    Would it surprise you to know that I could not cite for you 
a single formula of hard/soft money or the determination to use 
such in any State in the Nation, although such memoranda have 
been prepared for me as late as yesterday?
    Mr. Parkinson. No, it would not.
    Senator Torricelli. The meeting that was held where 
allegedly this hard/soft split was discussed in the presence of 
the Vice President, how many people were in that meeting?
    Mr. Parkinson. It appears that there were approximately 15 
people in that meeting.
    Senator Torricelli. Fifteen. Now, unaided by access to 
contemporaneous statements or other written material, how many 
of those people were able to recollect whether there was a 
specific discussion of hard/soft money-raising?
    Mr. Parkinson. Four.
    Senator Torricelli. And they were?
    Mr. Parkinson. They were the ones that I mentioned before--
David Strauss, Leon Panetta, Bradley Marshall, and Brian 
Bailey.
    Senator Torricelli. Well, indeed my information is Mr. 
Strauss only remembered this after having seen contemporaneous 
writings.
    Mr. Parkinson. I believe that is correct, but he did----
    Senator Torricelli. So now we are down to three. Mr. 
Marshall apparently later recalled making the statement, but 
initially when asked did not do so. Is my information accurate 
on that count?
    Mr. Parkinson. I think that is accurate. I would have to 
double-check the investigative summary.
    Senator Torricelli. OK, now we are down to two. I am aware 
of Mr. Panetta. Who was the other one?
    Mr. Parkinson. Brian Bailey.
    Senator Torricelli. Are you certain of that, Mr. Parkinson? 
That is not consistent with what I have.
    Mr. Parkinson. Well, that is what is set forth in the 
investigative summary, and I have no----
    Senator Torricelli. Well, you know what? I will give you 
the benefit of it, but we have now established that there were 
15 people in the room. I am aware of specific information that 
one person, Mr. Panetta, remembered a discussion of hard and 
soft money, and he remembered it only in the second 
conversation. When initially asked, he didn't recall it either.
    So now we are being asked to believe that the Vice 
President, arguably the second busiest person in the room with 
the most other things under consideration, remembered a hard/
soft money discussion, although people specifically involved in 
the campaign with specific responsibilities for hard/soft money 
did not remember this discussion. Some of those directly 
involved in the question did not remember the discussion until 
seeing contemporaneous statements written and presented to 
them. The Vice President remembered this, but none of the 
others did, with the exception of Mr. Panetta, who only 
remembered it upon the second time being asked. It appears to 
me the Vice President is not being held to an unusual standard; 
he is being held to a unique standard that strains credibility.
    Mr. Parkinson. My response is simply as I said----
    Senator Torricelli. Well, it is not required, but if you 
want to make a response.
    Mr. Parkinson. No, that is fine. I think my assessment is 
laid out in the memo.
    Senator Torricelli. In your memorandum, in fairness to the 
Vice President, while I recognize this is not the standard for 
appointment of the counsel, nevertheless I think it should be 
said the following is written, ``There appears to be a 
consensus that the facts as known would not warrant 
prosecution.'' This is in reference to a false statement.
    Is that indeed the conclusion that is in your report?
    Mr. Parkinson. That is correct.
    Senator Torricelli. Mr. Parkinson, I take it as a member of 
this committee that this hearing is of considerable importance 
and that you would do the same.
    Mr. Parkinson. Absolutely.
    Senator Torricelli. And you have paid considerable 
attention to this meeting?
    Mr. Parkinson. When you say ``this meeting,'' what areyou 
referring to?
    Senator Torricelli. This hearing.
    Mr. Parkinson. Sure.
    Senator Torricelli. During the course of this hearing, are 
there three elements that must be reached in the appointment of 
an independent counsel?
    Mr. Parkinson. Well, it comes in different stages, but to 
trigger an independent counsel preliminary inquiry, there are 
three.
    Senator Torricelli. OK, and in my questions to Mr. Radek 
and yourself, how many of the three have I referred to? Do you 
know?
    Mr. Parkinson. You certainly have referred to specific 
information. And I may be missing the thrust of your question, 
Senator.
    Senator Torricelli. Here is my point, Mr. Parkinson. It is 
not to embarrass you. The Vice President of the United States 
was asked some years after attending a meeting in which, based 
on my political experience, he probably was there to show 
interest in the campaign, encouragement to people who were 
working on the campaign by exercising some interest, but 
feigning considerable other interest, about a specific piece of 
information.
    Although there were 15 people in the room, we can establish 
with certainty that one person, upon being asked on a second 
instance, recalls the issue at question. You have been in this 
room considerably less time with considerably greater 
knowledge, I think greater interest, and yet are unable to 
recall two of the three specific elements required for the 
offense being discussed that I made reference to them during 
this meeting.
    I am not raising that because I believe it is a failure of 
you to take this hearing seriously or of your recollection, but 
to put in some context of fairness what it is the Vice 
President of the United States is being expected to recall. 
Indeed, I believe you were correct when you wrote on the issue 
of false statements, whether or not the Vice President could be 
expected not only to remember the conversation but ever to have 
read these memoranda, that no prosecution credibly ever could 
have been obtained, and in my judgment never should have been 
pursued.
    Thank you, Mr. Parkinson, for your time. Thank you, Mr. 
Chairman.
    Senator Specter. Thank you, Senator Torricelli.
    Senator Sessions.
    Senator Sessions. Mr. Chairman, I will just ask a couple of 
questions.
    With regard to the decision on independent counsel, you and 
Director Freeh did not agree with the Attorney General's 
decision, is that correct?
    Mr. Parkinson. That is correct. There were several 
occasions. I don't know which----
    Senator Sessions. And it is your testimony today that you 
have no evidence of improper influence or motivation on behalf 
of the Attorney General?
    Mr. Parkinson. That is correct.
    Senator Sessions. And you don't know what went on and who 
she has talked to or anybody else?
    Mr. Parkinson. No, other than I know who she talked to 
within the Department when she was present at a meeting.
    Senator Sessions. But you don't know if she was talking to 
Charles Ruff or the White House or the President or the Vice 
President or his counsel or anybody else about these matters?
    Mr. Parkinson. No.
    Senator Sessions. You just don't know?
    Mr. Parkinson. Don't know.
    Senator Sessions. How long have you been with the FBI?
    Mr. Parkinson. I have been with the FBI almost 5 years.
    Senator Sessions. That is all I have.
    Senator Specter. Mr. Parkinson, when you take up the issue 
Senator Torricelli did that a conviction is unlikely to occur, 
is that in any way a standard which is to be used to determine 
whether there ought to be an investigation by independent 
counsel?
    Mr. Parkinson. No, it is not, Mr. Chairman, and the last 
sentence after the sentence that he referred to says, ``But 
that is not the issue before us,'' and I think----
    Senator Specter. That was the sentence that Senator 
Torricelli left off?
    Mr. Parkinson. Well, that was the concluding sentence after 
the one that he mentions, and I think that is critical. I mean, 
this is not--we are not discussing whether or not we were at a 
point of making any prosecutable case. That is not the issue; 
it wasn't the issue then.
    Senator Specter. On a preliminary inquiry, you don't have 
access to a grand jury. You don't have access to subpoenas. The 
investigative scope is very limited.
    Mr. Parkinson. That is correct.
    Senator Specter. And it is very limited because there is a 
statutory intent by Congress of an approach that there ought to 
be very little investigation done by the Department of Justice 
before an independent counsel comes in.
    Mr. Parkinson. That is precisely why the statute withholds 
some of the most fundamental investigative tools during 
preliminary inquiries.
    Senator Specter. So that it is hardly to a consideration by 
the Attorney General on following the statute and appointing 
independent counsel as to what the ultimate outcome is going to 
be. That is entirely speculative, but in any event not an 
appropriate standard for the Attorney General's consideration.
    Mr. Parkinson. Right. That, in my view, is an exercise of 
prosecutorial discretion, and the statute and certainly the 
legislative history makes absolutely clear that that is not 
appropriate.
    Senator Specter. Mr. Parkinson, when Senator Torricelli 
tried to reduce your witnesses from four to I don't know how 
many, if Mr. Strauss has his recollection refreshed by a 
written memorandum, then as a matter of law doesn't he have a 
recollection?
    Mr. Parkinson. In my view, that becomes quite compelling. 
He not only has a recollection, but he has a contemporaneous 
notation that describes it.
    Senator Specter. Well, focusing just on the recollection, 
never mind your view or my view, the law is that if a witness 
refreshes a recollection from a document, then he has a 
recollection.
    Mr. Parkinson. That is correct.
    Senator Specter. And when you talk about Bailey and 
Marshall, unless your reports are wrong, Bailey, ``recalls 
individuals discussing hard and soft money at the meeting.'' 
That appears on page 0149. And Leon Panetta, quote, ``hard and 
soft money breakdown in the media fund wasdiscussed at all 
three meetings,'' at 0150. And Bradley Marshall said that the spending 
side of the DNC media campaign was involved, which was 35 percent 
Federal hard money.
    Mr. Parkinson. That is correct, and I believe the 
investigative summary is accurate.
    Senator Specter. So there were four witnesses who testified 
about hard money being discussed in the presence of the Vice 
President.
    Mr. Parkinson. That is correct.
    Senator Specter. Mr. Parkinson, when you come to your 
conclusion that reasonable people can draw different judgments 
as a vast generalization, that is pretty hard to disagree with. 
We are about to question Mr. Radek on a number of the 
specifics, and where the statute calls for a preliminary 
inquiry based on information and he substitutes ``evidence,'' 
that is a pretty big distinction, isn't it?
    Mr. Parkinson. It potentially is. I obviously have read the 
exchange with Mr. La Bella and Mr. Radek. In this case, I think 
when Mr. Radek says he was using the terms interchangeably, I 
think he is accurate that sometimes that was done.
    Senator Specter. It is sometimes done to interchange 
``evidence'' with ``information?''
    Mr. Parkinson. It is important, obviously, to interpret the 
statute as written, and the statute refers to information.
    Senator Specter. Well, there is a tremendous difference 
between evidence and information. Evidence is material which 
comes into a court of law to make a determination of fact. 
Information may or may not have that level of reliability.
    Couldn't reasonable people disagree about using a standard 
of information, which the statute specifies, as opposed to a 
much higher standard of evidence?
    Mr. Parkinson. I think the bottom line is that when the 
standard was applied, I think everybody understood what the 
statute required. But, yes, there is a significant difference 
between information and evidence. I don't question that at all.
    Senator Specter. And when Mr. Radek's memorandum picks up 
the issue of, on looking at a preliminary inquiry, that conduct 
could not have been willful violation of the law and thus could 
not be prosecuted criminally, and the memorandum is submitted 
by Mr. Robinson, his superior, to the Attorney General saying 
that is a wrong standard--you don't consider state of mind on a 
preliminary inquiry--can reasonable minds differ on that that 
the statute specifically excludes state of mind to determine 
whether there is a preliminary inquiry?
    Mr. Parkinson. I guess I am not sure how to answer whether 
reasonable minds can differ. I think there were a lot of 
reasonable minds engaged in this, but I think Mr. Robinson had 
the standard correct.
    Senator Specter. Well, there is a standard of if reasonable 
people disagree, and if no reasonable person would disagree as 
a matter of law if a case is thrown out, not a matter for the 
jury--you don't let a jury speculate if reasonable people would 
not disagree. And Senator Torricelli was asking you if Mr. 
Radek was reasonable, and I am not contending he is not 
reasonable, but I am looking at a series of factors that he 
made critical decisions here which were patently unreasonable; 
that reasonable people could not disagree; that evidence is 
different from information; that the statute calls for state of 
mind not to be considered on the determination of a preliminary 
inquiry.
    That is correct, isn't it?
    Mr. Parkinson. That is correct.
    Senator Specter. And that when you take up the subject of 
state of mind, there has to be clear and convincing evidence, 
not the exercise of prosecutorial discretion saying never mind. 
The prosecutor may decide not to pursue it for a lot of 
reasons, but that is not the same as finding clear and 
convincing evidence that there is no criminal intent, right?
    Mr. Parkinson. That is correct.
    Senator Specter. OK, thank you very much, Mr. Parkinson. It 
was nice talking to a real lawyer. Thank you.
    Mr. Parkinson. Thank you, Mr. Chairman.
    Senator Specter. Mr. Radek, would you come back, please?
    Mr. Radek, you have a very distinguished career as a public 
servant, and I don't think it makes any difference who 
appointed you or whose pleasure you serve at. The question 
really is on a line-by-line analysis of a lot of tough legal 
concepts what is an appropriate judgment here. Was there an 
appropriate exercise of discretion as a matter of congressional 
oversight? If you have a motivation to succumb to pressure if 
the Attorney General's job may be in the balance, that is a 
factor of objectivity of judgment, if that is going to be a 
consideration.
    You were quoted in the New York Times on July 6, 1997. I 
will read you the paragraph. ``Radek, a bluff, cheerful man of 
54, was unwilling to discuss details of the ongoing 
investigation when I spoke to him, but he was happy to defend 
the Justice Department's ability to investigate the executive 
branch. `The independent counsel statute is an insult,' Radek 
said. `It is a clear enunciation of the legislative branch that 
we cannot be trusted on certain species of cases.' ''
    Is that an accurate quotation?
    Mr. Radek. Yes, sir.
    Senator Specter. As a generalization, you don't think very 
much of the independent counsel statute, to put it mildly.
    Mr. Radek. I was very happy to see its demise, Mr. 
Chairman.
    Senator Specter. And before its demise, what did you think 
of it?
    Mr. Radek. I didn't like the statute. The fact that it was 
an insult was not as important to me as the damage I thought it 
did to our system of Government.
    Senator Specter. Why?
    Mr. Radek. Well, it set up a pseudo fourth branch of 
Government, one that was not responsible to the body politic.
    Senator Specter. What do you think of the media?
    Mr. Radek. What do I think of the media?
    Senator Specter. Yes. They are the fourth branch of 
Government, I thought.
    Mr. Radek. Oh, I am sorry. Let's make this one the fifth.
    Senator Specter. This would be the fifth branch of 
Government.
    Mr. Radek. You are absolutely right, Mr. Chairman.
    Senator Specter. The media was there before the independent 
counsel statute.
    Mr. Radek. You are absolutely right, and I apologize to my 
friends in the media.
    The fact is that it set up a system in which the checks and 
balances set up by the Founding Fathers simply did not work, 
and it was to the disadvantage of the investigators. Everybody 
was subject to political criticism and no one was responsible 
to the body politic, and I thought that for that reason the law 
was just a real bad concept, and I think I had a lot of 
agreement in this body.
    Senator Specter. But you took an oath to uphold the law, 
Mr. Radek.
    Mr. Radek. Yes, sir, I did, and I----
    Senator Specter. Not to make the law, not to disagree with 
the law, but to uphold the law.
    Mr. Radek. That is absolutely right, and I did the very 
best I could at all times. And I think I administered that law 
about as well as it could be administered. I know you disagree 
with that.
    Senator Specter. Well, you started off with a pretty 
negative view of the law, as you have just said.
    Mr. Radek. Yes, sir, and can I point out----
    Senator Specter. Usurpation of power, Founding Fathers. If 
you were sitting here in a confirmation proceeding, you might 
not pass. You are making law, not interpreting law, judge.
    Mr. Radek. I don't think we have to worry about my being 
here for a confirmation proceeding, Mr. Chairman.
    Senator Specter. I don't know about that, but I think you 
are right. We don't have to worry about it. We will just await 
the events and see what happens.
    Mr. Radek, when you use a standard of--the statute talks 
about credible information, you use a standard of evidence. 
Isn't that a very far reach, information and evidence being 
very, very different?
    Mr. Radek. They aren't, Senator, in the context of the 
independent counsel statute, because you have to take the 
phrase as a whole. I mean, what the statute says is specific 
information from a credible source. Specific information from a 
credible source is evidence. Now, the fact that I may have said 
at times specific evidence, specific and credible evidence, 
credible evidence, is simply a redundancy.
    What the statute says and what I have consistently 
applied--and I think you will find no one to dispute this--is 
that we have to base the information on--or the independent 
counsel statute has to be triggered by information that is more 
than rumor, innuendo, speculation. It has got to be facts, and 
facts generally can be referred to as evidence because they 
have to be in some way provable or not. And your interpretation 
that I meant admissible evidence just couldn't be further from 
the way it was, Mr. Chairman.
    Senator Specter. But, Mr. Radek, evidence means admissible. 
That is what evidence means.
    Mr. Radek. No, it doesn't, because then what would 
inadmissible evidence be?
    Senator Specter. Evidence which doesn't come in.
    Mr. Radek. You just called it evidence, Mr. Chairman. That 
is what it is. Evidence is facts. Some of it is admissible, 
some of it isn't.
    Senator Specter. Do you think that when the Congress wrote 
the language of the specificity of the information received and 
the credibility of the source of information that those words 
were used unadvisedly?
    Mr. Radek. No, I don't. I think actually that was a pretty 
good standard. If you are going to have an independent counsel 
act to be triggered by something, it seems to me that that was 
a pretty solid and well-thought-out limitation.
    Senator Specter. When you start to talk about inadmissible 
evidence, you are really talking about a non-sequitur. Once it 
is concluded to be inadmissible, it is not evidence, although 
it could be evidence and be excessively prejudicial, so that 
there is some evidence which is not admissible, inadmissible 
evidence, even though it does qualify as evidence.
    Mr. Radek. Mr. Chairman, let me respond by saying I have 
spent a good deal of professional life inside Federal grand 
juries. Every fact that we present to that grand jury we 
consider to be evidence. Some of it is blatant hearsay, some of 
it is less than substantiated, but it is information that the 
grand jury needs to know. That is evidence. It is information; 
it is information that is based upon fact.
    And the only reason I use the word ``evidence'' instead of 
``information'' in some instances, besides the fact that it is 
wordsmithing and I don't want to be too repetitious, is to 
connote that what we mean here is facts and not just 
speculation and innuendo.
    Senator Specter. Well, Mr. Radek, with all due respect, you 
are not accurately citing what is presented to grand juries. 
Grand juries get a lot of materials which are not evidence, a 
lot of hearsay, a lot of material which would not come into a 
court.
    Mr. Radek. We simply disagree on the definition, Senator. 
But I can assure you, please believe that from the beginning to 
the end, the standard that was applied--and Mr. Parkinson just 
said the same thing--the standard we applied was the statutory 
standard, specific information from a credible source.
    Senator Specter. Well, Mr. Radek, I do not accept that. I 
do not accept that at all. I do not accept that when you talk 
about evidence instead of information, but I am interested to 
hear what you were doing. I am interested to hear what the 
Chief of the Public Integrity Section was doing requiring 
evidence instead of information. That is a big distinction to 
me. And we may disagree on it, and I have my rule and you have 
yours.
    Turning to your memorandum to Mr. Robinson dated August 5, 
on page 18 where you say, ``That conduct could not have been a 
willful violation of the law and thus could not be prosecuted 
criminally''--and Mr. Robinson picks that up in his memorandum 
to the Attorney General dated August 25 at page 4 and says, 
``In Public Integrity's version of the `may have violated the 
law' standard, in my view, issues of `state of mind required 
for violation of criminal law involved' that any violation 
could not have been a willful violation''--and then he says a 
little further down, ``considerations of this matter are 
prohibited by the Independent Counsel Act until such time as a 
preliminary investigation has been commenced. Under section,'' 
et cetera, ``state of mind considerations are not even to be 
considered.''
    Is Mr. Robinson correct about the appropriate 
legalstandard?
    Mr. Radek. Yes, he is, because state of mind considerations 
are not to be considered during the preliminary analysis, only 
after a preliminary investigation.
    Senator Specter. So you were corrected on that?
    Mr. Radek. Yes, sir, to the extent that my remark may have 
based a decision or recommendation on state of mind. But I am 
unable to find it in my memo. You said it was page 19?
    Senator Specter. Page 18 in your memo and page 4 in his 
memo.
    Mr. Radek. I am sorry.
    Senator Specter. Mr. Radek, you gave considerable weight to 
the advice of counsel defense. What is your view as to the 
testimony of Mr. Parkinson on that point?
    Mr. Radek. Well, I agree with Mr. Parkinson that the 
problem of the lack of total neutrality of the attorneys 
somewhat weakens the state of--or I mean the advice of counsel 
defense. And, in fact, that was an integral part of my 
memorandum.
    But you have to understand, Mr. Chairman, that I didn't 
think this was a crime. I mean, I didn't think that we had a 
criminal violation here, and so all of the other issues that 
were sort of involved in that--it was sort of intuitive to me 
that there couldn't be criminal intent in a case where I didn't 
believe anybody could understand that this would be a crime.
    Senator Specter. Well, how about the false statement issue 
for the Vice President?
    Mr. Radek. Well, the false statement issue for the Vice 
President was something else, but that didn't involve advice of 
counsel.
    Senator Specter. So you thought essentially the advice of 
counsel point was an irrelevancy because there was no crime to 
begin with, so advice of counsel wasn't necessary?
    Mr. Radek. Well, it is not irrelevant because there were 
clearly those who disagreed with me, including the Attorney 
General, that there might be a potential crime here.
    Senator Specter. But so far as you were concerned, if you 
start out with a conclusion that there is no criminal conduct 
here in any event, that is the beginning and end. Wouldn't that 
be a short memorandum to the Attorney General, no crime 
involved?
    Mr. Radek. My view is expressed early and often as to--and 
we are speaking merely about the Common Cause allegation here 
that the use of soft money to buy the issue ads was never going 
to be a crime until the Federal Election Commission ruled on 
the issue and said that it was going to be a crime; that it 
would be no only impossible for anyone to form criminal intent, 
but until the FEC said it was a crime, it wouldn't be. That was 
my position and I expressed it whenever asked.
    Now, what flows from that is the fact that I believed that 
no one could possibly form criminal intent because the law was 
so unclear that there was no real prohibition. And the fact of 
a--or the element of a knowing violation of the law was 
necessary to get a conviction in an FEC case.
    Senator Specter. What did you think of the conclusion of 
Mr. Robert Litt, Principal Associate Deputy Attorney General, 
in concluding that the evidence did not meet the clear and 
convincing standard of the Act to decide that the Vice 
President did not knowingly make a false statement?
    Mr. Radek. I disagreed with it, but I respected it, like 
many other opinions of Mr. Litt's and others in the 
discussions.
    Senator Specter. Senator Torricelli asked questions about 
other independent counsel appointments. Were you involved in 
the appointment of independent counsel for Secretary of Labor 
Alexis Herman?
    Mr. Radek. I was.
    Senator Specter. I questioned the Attorney General about 
this in this room at some length and found it really an 
inexplicable appointment. In her statement appointing an 
independent counsel, she says this among other things: ``While 
I cannot conclusively determine at this time that any of these 
allegations are credible, much of the detail of the story he 
has told has been corroborated, though none of it clearly 
inculpates Herman.'' And she goes on, ``Although our 
investigation has developed no evidence clearly demonstrating 
Secretary Herman's involvement in these matters and substantial 
evidence suggesting that she may not have been involved, a 
great deal of Yene's story has been corroborated. We are thus 
unable to conclude that he is not credible.''
    With those findings that the evidence against Secretary 
Herman was not credible, how in the world was it justified to 
appoint independent counsel as to her?
    Mr. Radek. The discussion that you are talking about there, 
Senator, is one part of the information, and that is Mr. Yene. 
He made certain allegations and there was much debate about 
whether or not he was believable, he was a credible source of 
information.
    Senator Specter. Well, what was his role? He was the person 
who is supposed to have provided the money?
    Mr. Radek. He was a person who was involved in many of the 
transactions. He was more a witness to the transactions than 
deeply involved in any of them. But he told a story, and most 
of our preliminary investigation involved whether or not we 
could corroborate his story. And his story, to the extent we 
could investigate it, was corroborated, not to the extent that 
we still believed he was totally credible, but not to any 
extent that we could dismiss what he said. And so we were left 
in a situation where further investigation was required.
    Senator Specter. Well, I took a look at the Herman matter 
and it seems to me incredible. She was exonerated by 
independent counsel, which, of course, is not the standard. But 
to have the principal antagonist here and make findings that 
there could not be a determination that Yene's allegations are 
credible, not just him but the allegations, and though none of 
it clearly implicates Herman, and then substantial evidence 
suggesting that she may not have been involved--the Herman 
independent counsel looks to me like a make-weight to start to 
build up a record. Look at all these people the Attorney 
General has found independent counsel for. Independent counsel 
Ray made a finding as to Mr. Nussbaum that there was hardly any 
basis for independent counsel having been appointed.
    And I only mention it tangentially and briefly because I 
don't think it makes a point that because seven independent 
counsels had been appointed that this is a rigorous standard on 
the appointment of an independent counsel.
    Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Well, Mr. Radek, you had no doubt, regardless of everything 
else we have said, that this was a major issue of importance to 
the Nation. This fundraising issue had been part of the last-
minute campaign issue and important to the newly elected 
President and Vice President.
    Mr. Radek. No doubt whatsoever.
    Senator Sessions. And you are aware that that called for--
well, I would agree with the Chairman and the FBI Directors and 
many others that you were compelled to require an independent 
counsel. But assuming you were not and it was just 
discretionary as to whether or not to have an independent 
counsel, if the Department were to be able to keep the case, it 
was going to have to conduct it with the highest degree of 
professionalism, objectivity, and aggressiveness consistent 
with the law. Wouldn't you agree?
    Mr. Radek. I agree.
    Senator Sessions. So you decided to keep the case?
    Mr. Radek. I didn't decide to keep the case.
    Senator Sessions. You didn't give it to the independent 
counsel. The Attorney General, at your recommendation, decided 
to keep it in the Department.
    Mr. Radek. It is not within my discretion to give things to 
an independent counsel. It is not necessarily within the 
Attorney General's discretion, although she could have a 
regulatory independent counsel. The statute requires certain 
things to have or not to have an independent counsel.
    Senator Sessions. Well, the Attorney General----
    Mr. Radek. Senator, I am sorry to interrupt, but again I 
made recommendations on allegations as they came up. I did not 
have a discussion with the Attorney General talking generally 
about who should investigate this. It came to me initially.
    Senator Sessions. And you supervised the investigation and 
still do?
    Mr. Radek. No, sir. I haven't been involved in the 
supervision of that since shortly after Mr. La Bella arrived.
    Senator Sessions. Who is running it now?
    Mr. Radek. Well, her current head of the task force is Mr. 
Conrad, and he is supervised by Mr. Gerschel, a deputy 
assistant attorney general, and Mr. Robinson, the Assistant 
Attorney General.
    Senator Sessions. But if he wanted to interview lawyers and 
ask them questions about the case----
    Mr. Radek. That requires certain approvals within the 
Department.
    Senator Sessions. Are you totally out of the investigation?
    Mr. Radek. I am informed----
    Senator Sessions. At least the Public Integrity task force?
    Mr. Radek. I am informed of the agenda for their weekly 
meetings with the Attorney General, and Mr. Conrad calls me for 
advice from time to time, as did Mr. Visinanzo.
    Senator Sessions. Do they work for the Public Integrity 
Section?
    Mr. Radek. No.
    Senator Sessions. They are not part of the Public Integrity 
Section now?
    Mr. Radek. I believe they are on my rolls as a detail, but 
they are not part of--they are not responsible to the 
management of the Public Integrity Section.
    Senator Sessions. Well, let me just run over some things 
and see. Originally, when this matter broke about the Buddhist 
Temple controversy, the U.S. attorney's office in Los Angeles 
commenced an investigation, did it not?
    Mr. Radek. It did--it did not. I am sorry.
    Senator Sessions. Well, it developed a plan to do the 
investigation, didn't it?
    Mr. Radek. It requested permission from the Public 
Integrity Section to open an investigation, and that permission 
was given.
    Senator Sessions. And how long did they--they developed a 
plan of investigation after it was given to them?
    Mr. Radek. I don't know.
    Senator Sessions. Well, do you recall stopping that 
investigation?
    Mr. Radek. I recall calling Mr. Ziperstein, the first 
assistant out there at the time, and telling him that the 
matter should be transferred to the campaign finance task 
force.
    Senator Sessions. Do you recall a November 1, 1996, letter 
to that office that states the Public Integrity Section--that 
is you--responsible for all independent counsel matters, has 
been assigned to examine all of the allegations to determine 
whether further investigation is warranted?
    Mr. Radek. I recall that well.
    Senator Sessions. Signed by who?
    Mr. Radek. Me.
    Senator Sessions. Well, you don't assign it to yourself, do 
you?
    Mr. Radek. Sure.
    Senator Sessions. You are the Chief of the Public Integrity 
Section?
    Mr. Radek. Yes, sir.
    Senator Sessions. And you wrote them and said you had been 
assigned to examine these allegations, not by the Attorney 
General? She didn't have anything to do with this?
    Mr. Radek. I don't know whether she did or not. I was 
assigned by Mr. Litt.
    Senator Sessions. Mr. Litt?
    Mr. Radek. Yes.
    Senator Sessions. So you were assigned by Mr. Litt, not 
yourself----
    Mr. Radek. Yes.
    Senator Sessions [contining]. To determine whether further 
investigation is warranted and whether the appointment of an 
independent counsel might be appropriate. ``As it would be 
necessary in any matter with potential independent counsel 
ramifications, your office should take no steps to investigate 
these matters at this time.''
    Mr. Radek. That is correct.
    Senator Sessions. So you stopped it there in Los Angeles?
    Mr. Radek. I stopped it--well, actually, I didn't stop it 
because they never got started. And, in fact, when I asked them 
for all their evidence, they had none. They cited lack of agent 
resources for not having conducted any investigation during the 
several weeks that they had it.
    Senator Sessions. Well, on November 30--that wasNovember 
1--the Attorney General made her decision not to appoint an independent 
counsel. Do you recall that?
    Mr. Radek. In response to a letter from Congress, I 
believe, yes. I don't know the----
    Senator Sessions. Did you advise her on that?
    Mr. Radek. Yes, I am sure I did.
    Senator Sessions. Well, let me ask you, between the time 
you stopped the Los Angeles attorney's office and the time 30 
days later she made this decision to not go forward, what was 
done in the investigation?
    Mr. Radek. Well, first of all, Senator, there was no 
decision ever made not to go forward. In fact, the Hsi Lai 
Temple matter to which you refer was investigated vigorously 
and eventually resulted in the conviction of Maria Hsia.
    Senator Sessions. Well, between the time of this 30 days 
and the time you indicated she made her decision that she was 
not going to appoint an independent counsel at your 
recommendation, what evidence was gathered? You said none had 
been done by the U.S. attorney's office.
    Mr. Radek. My understanding is that subpoenas and 
interviews began immediately upon the receipt of that thing to 
the task force.
    Senator Sessions. Well, was the FBI involved in it then?
    Mr. Radek. About then, yes.
    Senator Sessions. During this 30-day period when you made 
the decision and the recommendation, had the FBI participated 
in this investigation at all? And I will advise you I 
understand they did not.
    Mr. Radek. I understood from Mr. Gallagher's testimony 
earlier that the meeting he says happened in December was to 
get the FBI involved. My impression was they were involved 
before that, but he may be right. I just don't recall.
    Senator Sessions. Were witnesses from the Temple 
interviewed? Did you review their reports of interview, the FBI 
302's?
    Mr. Radek. During that 30 days, I am sure I did not, no, 
Senator. But eventually, of course, they were interviewed and 
Ms. Maria Hsia was prosecuted for the----
    Senator Sessions. Some were interviewed, but some had fled 
the country by then, had they not?
    Mr. Radek. I don't know that they fled the country before 
they were interviewed. Clearly, there were witnesses who fled 
the country before the Hsia trial, and we tried to get them 
back, ``we'' being the Department of Justice.
    Senator Sessions. Well, I want to go back and ask you to be 
explicit. You are in charge of one of the most important 
investigations in the country involving the President and Vice 
President of the United States. You advised the Attorney 
General not to appoint an independent counsel. She formally 
declined on November 30, 1996. I would like to know what 
interviews and investigation had been done prior to you 
advising her of that specifically.
    Mr. Radek. Senator, the November 1996 response was a 
response to a letter from Congress. It was about the 
allegations made in a letter from Congress. It had little or 
nothing to do with what we were investigating in the task 
force, except to the extent that it set forth the same things.
    And so when you ask me what was done on the Hsi Lai Temple 
investigation, I will be glad to tell you that everything was 
done and it ended in a prosecution. If you ask me what was done 
during that first 30 days that caused a letter to say no 
independent counsel, I can say nothing because the two were not 
related closely.
    Senator Sessions. Well, I want to talk about the process 
here, is what I am talking about. And I am talking about 
whether or not we should have had an independent counsel, which 
I think the facts in this brouhaha and spasm we are now in is 
absolute proof of why we should have had one. And I would like 
to know at the time she made that opinion whether or not any 
witnesses had been interviewed, and I would like for you to 
name who they were.
    Mr. Radek. I cannot name, and I guess I have to answer I 
don't know just based on my recollection, Senator.
    Senator Sessions. Were John Huang or any Democratic 
National Committee officials interviewed?
    Mr. Radek. I brought John Huang and his counsel in very 
early, but I think it was probably after this.
    Senator Sessions. Now, there was a video of this event, was 
there not?
    Mr. Radek. I believe there was.
    Senator Sessions. How soon did anyone inquire about that 
video and where it was?
    Mr. Radek. I don't know.
    Senator Sessions. The video would have shown exactly what 
the Vice President knew and did and said if it had been--or 
least what he said and did.
    Mr. Radek. And did, yes.
    Senator Sessions. Wouldn't it?
    Mr. Radek. Yes, it would.
    Senator Sessions. It would have been valuable evidence.
    Mr. Radek. It is valuable evidence.
    Senator Sessions. Where is it?
    Mr. Radek. I don't know.
    Senator Sessions. Do you think it may have been recovered 
had the agents moved immediately and perhaps the Los Angeles 
U.S. Attorney's office hadn't been stopped?
    Mr. Radek. I think that the task force moved more quickly 
than the U.S. attorney's office would have, but that is my 
opinion.
    Senator Sessions. Well, let's just say it this way. In that 
30 days of November after you stopped them and it was under 
your supervision, this investigation was under your 
supervision, what did you do to investigate?
    Mr. Radek. It is more accurate to say that we took the case 
from them. It is not accurate to say we stopped them. But that 
aside, this case was handled as a task force matter. It was 
investigated, and it was investigated vigorously. I can't 
recount for you what was done in the first 30 days of that 
investigation. I am sorry.
    Senator Sessions. Well, my information is nothing was done 
of significance. Witnesses fled, the video disappeared, records 
were shredded. You don't dispute that, do you?
    Mr. Radek. Actually, I do. I don't know that there is any 
evidence that there were records shredded in the Hsi Lai Temple 
case, and I don't think there were any witnesses who fled 
during those first weeks. But that is my best recollection.
    Senator Sessions. Well, in 1997 we had had a basic view by 
the Vice President, and I think the Attorney General, that this 
was soft money and it wasn't covered by the law. Isn't that 
correct?
    Mr. Radek. Are we talking about the Hsi Lai Temple?
    Senator Sessions. Yes.
    Mr. Radek. The soft money had nothing really to do with 
that, except as it might have caused us a problem with respect 
to foreign contributions. The real problem in the Hsi Lai 
Temple case was conduit contributions, a concept I know you are 
familiar with.
    Senator Sessions. Well, I know that. But at any rate, in 
September of 1997 the Washington Post reported $120,000 of 
money solicited by Vice President was, in fact, deposited in 
hard money accounts. And you were in charge of conducting a 30-
day review of that with the task force, is that correct?
    Mr. Radek. That is not related to the Hsi Lai Temple 
matter, unless I am confused, Senator.
    Senator Sessions. Well, I am just going through all the 
matters here.
    Mr. Radek. If you would--the hard money/soft money mixup, 
and I will call it a mix-up and I will explain why I will call 
it a mix-up, occurred with relation to the Vice President and 
President's phone calls from Federal properties, potential 
violations of 607, the Pendleton Act. It was----
    Senator Sessions. I am familiar with that, but I guess my 
point to you is in 1997, we had this shake-up, this blow-up, 
when we found out that the excuse on the phone call money was 
not valid. There was hard money involved, isn't that correct, 
and La Bella was appointed?
    Mr. Radek. La Bella came in as a result of the press 
finding out before the task force and the FBI that those 
contributions that had been--some contributions that had been 
solicited by the Vice President and possibly the President had 
been converted from soft money accounts to hard money accounts 
by the DNC.
    Senator Sessions. And that had to be a source of 
embarrassment.
    Mr. Radek. Absolutely.
    Senator Sessions. Well, how was it that the press finds out 
what you are supposed to be investigating?
    Mr. Radek. My understanding is that the information was 
contained in documents that the FBI had in its possession, but 
that they had not had a chance to review because there were 
technical problems with the document software that the FBI had 
and the attorneys were unaware of it.
    Senator Sessions. Now, was Mr. La Bella--when he was 
brought in to head the investigation, was that part of Public 
Integrity or was that part of an independent Department of 
Justice task force?
    Mr. Radek. Well, it evolved. When Mr. La Bella was 
appointed----
    Senator Sessions. What was he told that he was going to do?
    Mr. Radek. Well, I can tell you what he told me he was told 
and I can tell you what I was told. Mr. Litt, who was primarily 
giving instructions as to management issues at this time, told 
me that I was to supervise Mr. La Bella. He told Mr. La Bella 
that he was not to be supervised by me. You can see where this 
might have caused some misunderstandings and didn't get Chuck 
and I off on the right foot. Eventually----
    Senator Sessions. Not a good step if you are trying to 
maintain public confidence in your Department of Justice 
investigation of your ultimate supervisors.
    Mr. Radek. I don't think it really hurt the investigation 
any, but it sure caused some misunderstandings between Mr. La 
Bella and I.
    Senator Sessions. Well, it hurt public perception. I will 
just tell you why. Let's note a few things. On September 9, 
1997, your Public Integrity Section attorneys that were 
investigating the matter sent a letter to Vice President Gore's 
chief legal counsel and they solicited his opinions about 
whether or not the law had been violated. Isn't that right?
    Mr. Radek. In independent counsel matters, we invariably do 
that, Senator.
    Senator Sessions. And they affirmatively sought out whether 
or not there had been, ``any contemporaneous advice of counsel 
concerning the solicitation of contributions on Federal 
property,'' among other things you asked.
    Mr. Radek. Yes, we would do that routinely in an 
independent counsel matter. We are reliant upon the subjects 
because we have no compulsory process.
    Senator Sessions. And then on September 29, 20 days later, 
you advised the Attorney General to proceed to a preliminary 
inquiry before deciding the independent counsel issue. And as 
part of this, you cite a footnote of your letter that Vice 
President Gore's personal counsel had urged the same process to 
negate any, ``appearance,'' in reaching a conclusion prior to 
having such investigation.
    Mr. Radek. I am sorry?
    Senator Sessions. You noted in your footnote that Vice 
President Gore's counsel joined with you in the recommendation 
to the Attorney General that there be a preliminary inquiry. Is 
that right?
    Mr. Radek. I guess so. I wouldn't have said it if it wasn't 
true.
    Senator Sessions. So then on October 2, a few days later, 
you drafted another memo to Mr. Robinson, who was the Chief of 
the Criminal Division, regarding the matter. And on page 2 of 
that memo you stated, ``We have discovered evidence from which 
it can be inferred that the Vice President may have known at 
the time he made his fundraising telephone calls that the DNC 
needed hard money to keep its message on the airwaves.'' Does 
that sound right?
    Mr. Radek. Yes, sir.
    Senator Sessions. But you later recommended no independent 
counsel be appointed. Did you discover any other specific 
information to refute this evidence?
    Mr. Radek. Oh, sure, we discovered a lot. We did a 
preliminary investigation, and you have the memorandum that 
sets for the details.
    Senator Sessions. I am not sure it is as strong as you 
would suggest. On November 30, a month later, a month-and-a-
half later perhaps, Mr. La Bella wrote a letter to the Attorney 
General through Mark Richard and stated that his task force--
were you operating another investigation, in addition to his 
task force?
    Mr. Radek. No, sir.
    Senator Sessions. Well, he wrote to Mr. Richard that his 
task force was requested by you to halt their own investigation 
into these matters, and that as of the same date the 
``investigation remains on hold at therequest of Public 
Integrity.'' Why did you ask Mr. La Bella to back off, especially when 
the Attorney General brought him on board on September 16 to lead this 
aggressive investigation?
    Mr. Radek. I am not familiar with that document, Senator. 
Can you tell me what I was asking him to back off of?
    Senator Sessions. On November 30, Mr. La Bella wrote, 
through Richard, that his task force was requested by you to 
halt their investigation of these matters, suspend them. This 
is a quote from his letter of November 30, ``On November 21, I 
received the first draft of Public Integrity's memorandum on 
VPOTUS,'' Vice President of the United States, ``calls.'' I am 
quoting now: ``This is the first write-up I have seen regarding 
the facts developed by Integrity's inquiry. As structured, I 
have no role in the preliminary investigation of the 
President's calls from the White House, except for my 
attendance at his interview on November 11, 1997. Nor have I 
been provided copies of the key documents referenced in Public 
Integrity's memorandum. Thus my analysis, such as it is, and 
reaction to Public Integrity's memorandum is very limited. I 
must give deference to the instincts and judgments of 
prosecutors and investigators who conducted and participated in 
the preliminary inquiry.''
    Then in footnote 7 he quotes the suggestion on page 11, 
footnote 10, of the Public Integrity draft that the task force 
is continuing to look at the Democratic National Committee's 
allocation practice is somewhat inaccurate. ``The task force 
was halted at the request of Public Integrity because they 
feared it might chill those who were talking voluntarily with 
POTUS and VPOTUS investigators. The investigation was halted at 
the time when the task force was attempting to interview high-
level DNC employees, the very people who might have shed some 
light on the contact with the White House and the essence of 
the Common Cause investigations. This investigation remains on 
hold at the request of Public Integrity.''
    So did you stop that investigation, and if so why?
    Mr. Radek. I stopped it because during the early course of 
our preliminary investigations on the President and the Vice 
President, witnesses expressed reluctance to talk because they 
felt they were subjects of the Common Cause allegation 
investigation. But they were willing to talk on the preliminary 
investigation which had a 90-day window as long as that 
investigation was not moving forward.
    There was also a resource issue with respect to needing 
attorneys and agents to conduct the preliminary investigation 
within a certain window of time. But I assure you that window 
of time was short and they went back to what they were doing 
shortly thereafter.
    Senator Sessions. Well, this is the second incident of you, 
I would suggest, stopping an ongoing investigation. And I find 
it strange and disingenuous that the person the public had all 
been told was conducting the investigation was stopped and not 
allowed to pursue the investigation.
    Mr. Radek. Well, the person who was conducting the 
investigation was never stopped from thoroughly investigating 
any allegation, and I believe he so testified, Senator 
Sessions. But to the extent that there was a temporary halt, I 
admit that it was done, but I thought it was necessary.
    Senator Sessions. So you stepped in and took over and 
started making decisions, contrary to the opinion of the 
attorney the American public had been told was going to conduct 
this investigation.
    Mr. Radek. I don't know that it was contrary to his 
opinion, but the Attorney General left the determination of 
independent counsel matters with the Section because of our 
experience with it.
    Senator Sessions. Well, I will just read you again what he 
said. ``The task force''--that is La Bella's group--``was 
halted at the time when the task force was attempting to 
interview high-level Democratic National Committee employees, 
the very people who might have some light to shed on contact 
with the White House, the essence of the Common Cause 
allegations.'' Do you disagree that he was not happy?
    Mr. Radek. Oh, no.
    Senator Sessions. It doesn't sound like he was happy to me.
    Mr. Radek. No. I am sure he wanted to do this job because 
that is what he did, and I would have been unhappy if I were 
him, too. But I can assure you it was a temporary halt.
    Senator Sessions. Well, as far as I knew and as far as any 
American knew, Mr. La Bella was going to conduct this 
investigation according to his best judgment as a professional 
career attorney. And now we find out that a high-level 
appointee of the Attorney General is intervening and stopping 
it, isn't that correct?
    Mr. Radek. I am not an appointee of the Attorney General, 
Senator, and I didn't stop him for very long.
    Senator Sessions. Well, you stopped him and he was not 
happy about it. In 1998, the investigation began to focus on 
whether the Vice President lied to investigators during the 
November 11, 1997, interview, and this issue was brought to the 
forefront by La Bella's July 16, 1998, report to the Attorney 
General reviewing his strong recommendations that an 
independent counsel be appointed.
    The key point I would like to focus on with you is the 
follow-up investigation was conducted not by a task force 
attorney, but by one of your assistants, Mr. Ainesworth, wasn't 
it?
    Mr. Radek. Mr. Ainesworth was detailed to the task force, 
Senator.
    Senator Sessions. Who detailed him to it?
    Mr. Radek. I did. I hired him onto the task force. Many of 
the task force attorneys are detailed from Public Integrity.
    Senator Sessions. Usually, a task force attorney gets to 
decide who his own attorneys are, doesn't he?
    Mr. Radek. At the time I hired him, I was in charge of the 
task force.
    Senator, let me correct one thing that you have said, and 
that is the fact that the Vice President may have made false 
statements to the FBI. That information came from the Vice 
President through his counsel, Jim Neil. It was not 
investigated because it was brought to anyone's attention in 
the La Bella memorandum.
    Senator Sessions. Well, regardless, that was the 
investigation.
    Let me ask you this. During the follow-up interview of the 
Vice President himself, it was not done by Mr. La Bella or any 
other attorney from the task force. It was done by Mr. 
Ainesworth, isn't that correct?
    Mr. Radek. Mr. Ainesworth was on the task force. And, in 
fact, all of the independent counsel matters that were 
conducted during this investigation were conducted jointly by 
the task force and the Public Integrity Section.
    Senator Sessions. Well, who was the head of the task force?
    Mr. Radek. I believe by that time it was Mr. Visinanzo.
    Senator Sessions. He wasn't in on the interview?
    Mr. Radek. No, and neither was I. It was determined to let 
the trial attorneys do it.
    Senator Sessions. Who determined that?
    Mr. Radek. I think Mr. Visinanzo.
    Senator Sessions. He didn't even appear himself at the 
interview?
    Mr. Radek. No, and to the extent that Mr. La Bella and I 
attended the early interviews, it wasn't all that useful 
either. The trial attorneys and the agents should have been 
conducting these interviews and that is the way it went.
    Senator Sessions. And back at the first interview of the 
Vice President, you issued directions about what subjects would 
be covered and what were not, isn't that correct?
    Mr. Radek. I issued no limitations, except that it was 
agreed generally that we would confine ourselves at that time 
to the independent counsel issues.
    Senator Sessions. Didn't you direct that there be no 
further inquiries into the Temple matter at that time?
    Mr. Radek. Not that I recall. Do you have something to 
refresh my recollection?
    Senator Sessions. That is my understanding.
    Mr. Radek. I don't believe that I did. If I did, it would 
have simply been to expedite the independent counsel matter. 
Again, the rules of that interview were not set too firmly, but 
it was clearly our intention simply to conduct the preliminary 
investigation under the independent counsel statute at that 
time and to conduct other interviews later. And I think Mr. La 
Bella testified we weren't ready to do the whole panoply of 
questions on the President or the Vice President or a whole lot 
of other people at that time.
    Senator Sessions. Well, I would just say, Mr. Chairman, 
that I believe at best this was a herky-jerky, uncoordinated 
investigation that should have been placed in the hands--if it 
were kept in the Department of Justice, which I think was 
wrong, but if it had been it ought to have been placed in the 
hands of a top-flight professional prosecutor who should have 
been allowed to do this job to pursue the facts.
    Ultimately, the Attorney General and the Public Integrity 
Chief would be involved in any decision to charge, but the 
question and concern I have is that the management of the 
investigation, the gathering of the facts, was systematically 
frustrated and not proceeded with effectively. And I think that 
was wrong. I think it has embarrassed the Department of 
Justice, and I think it should embarrass Mr. Radek.
    Senator Specter. Thank you very much, Senator Sessions.
    We will continue the matter. We still have the memorandum 
of FBI Director Freeh to get into, the memorandum of Director 
Freeh recommending independent counsel and the memorandum of 
Director Freeh regarding the conversation between Messrs. Radek 
and Esposito, and the conversation between the Attorney General 
and the Director of the FBI. And we hope to move into those 
matters shortly after we come back from recess in 10 days.
    Mr. Radek, we may want you to come back, depending on the 
testimony of Mr. Esposito.
    Senator Sessions. Mr. Chairman, I would note one more 
matter that frustrated----
    Senator Specter. Before you do, I just want Mr. Radek's 
statement as to his willingness to come back.
    Mr. Radek. I will not say that I am happy, Mr. Chairman, 
but of course I will come back.
    Senator Specter. Thank you.
    Mr. Radek. And I will answer any questions.
    Senator Sessions. I will pass on that.
    Senator Specter. That concludes our hearing.
    Mr. Radek. Thank you.
    Senator Specter. Before we conclude, the statements of 
Chairman Hatch and Senator Thurmond will be included in the 
record.
    [The prepared statements of Senators Hatch and Thurmond 
follow:]

  Prepared Statement of Hon. Orrin G. Hatch, A U.S. Senator From the 
                             State of Utah

    The Judiciary Committee has long been interested in the issues 
surrounding the application of the Ethics in Government Act--the 
Independent Counsel statute--and in particular, how that Act has been 
applied to the fundraising abuses which occurred during the 1996 
presidential elections. The application of the Independent Counsel 
statute raises very serious issues of public confidence in the 
enforcement of our laws and in our institutions of government. As such, 
they are an important area for Judiciary Committee oversight.
    This Committee, in fact, was the first Committee to formally call 
for the appointment of an Independent Counsel for the 1996 campaign 
finance scandal, having done so back in 1997. We held several hearings 
on the issues underlying the debate and explored the critical questions 
of whether the Attorney General was required to appoint an independent 
counsel under the mandatory provisions of the Act, and the related 
question of whether, in any case, she should appoint an independent 
counsel under the discretionary provisions of the Act due to inherent 
conflicts of interest.
    During my questioning of the Attorney General, I made it clear that 
she was inherently conflicted in investigating the President and Vice 
President. Now, evidence uncovered by this Committee, under the joint 
efforts of myself, Senator Specter, Senator Grassley and others, 
demonstrate that Senate Republicans were not the only ones who felt the 
Attorney General was conflicted and should appoint an independent 
counsel.
    We know now that the FBI Director, the hand-picked lead prosecutor 
for the Department of Justice Task Force, Charles La Bella, and other 
senior members of the Justice Department and the FBI were arguing in 
favor of the appointment of an independent counsel, but to no avail. 
Documents grudgingly turned over to the Justice Department reveal that 
senior members of the Justice Department--such as Robert Litt and the 
Chief of the Criminal Division, James Robinson, argued in favor of the 
appointment of an independent counsel as to at least one or more of the 
fund-raising related allegations. Veteran, career prosecutors assigned 
to the Task Force felt the same way. Despite this, and despite the 
strongly held views of the FBI that an independent counsel was 
necessary, the Attorney General refused to appoint one. Indeed, 
Attorney General Reno has persistently suggested that the law 
prohibited her from appointing an independent counsel.
    We will try to get to the bottom of that decision. Part of the 
problem appears to be an overly narrow and constricted interpretation 
of how to proceed under the statute and a failure to analyze the facts 
as a whole.
    There is also evidence that considerations besides the facts and 
the law may have influenced--consciously or unconsciously--the analysis 
of the Justice Department. Documents uncovered by the Committee include 
a memorandum from the FBI Director to his Deputy Director, Mr. 
Esposito, dated December 9, 1996, which reflects the fact that Mr. 
Radek--Attorney General Reno's preferred lead investigator--made 
comments that there was a lot of pressure on him because the Attorney 
General's job may hang in the balance or words to that effect. Such 
comments are profoundly disturbing. As difficult as it may be, the 
Attorney General and her staffmust put justice and the fair, impartial 
application and enforcement of the law ahead of their personal careers. 
The fact that senior officials within the Justice Department felt 
pressure only underscores the inherent conflict of interest she and the 
Justice Department had in investigating allegations against the 
President and Vice President.
    The documents are also disturbing in that they reflect a seeming 
inability of the Justice Department to reassess their early conclusions 
in light of new facts. The documents confirm what I have been saying 
for years--that rather than apply the law, Reno's inner circle saw it 
as their mission to search for new reasons not to appoint an 
independent counsel even when additional facts call into question past 
rationales for not appointing one. For example, new evidence surfaced 
in the investigation of potential false statements by Vice President 
Gore that could not be ignored by some senior members of the Justice 
Department--yet still the Attorney General did not appoint an 
independent counsel. The witnesses may address this in more detail, but 
the discovery of additional notes of meetings, memos to the Vice 
President and witness testimony provided compelling evidence that 
further investigation was necessary into whether the Vice President 
made false statements when he told the Justice Department task force 
that he was not aware of the hard money component of the media fund.
    Not only did the Attorney General reject the views of Mr. 
Parkinson, the FBI Director, and Mr. La Bella on this score, but senior 
members of the Justice Department also concluded that an independent 
counsel was appropriate on this issue.
    In a November 22, 1998 memorandum to the Attorney General, Mr. 
Robert Litt advised that, whether or not there was ultimately an 
indictable case, he could not conclude on the existing evidence that 
there was clear and convincing evidence that Vice President Gore did 
not possess the requisite intent to be guilty of making a false 
statement.
    At this critical stage in applying the Independent Counsel statute, 
it was incumbent upon the Attorney General to focus on the facts--and 
not simply prefer one set of inferences over another.
    There are serious questions to be answered here concerning whether, 
in the end, the Justice Department and the Attorney General did their 
jobs. I commend Senator Specter and the other members of the 
subcommittee for their diligence.
                               __________

  Prepared Statement of Hon. Strom Thurmond, a U.S. Senator From the 
                        State of South Carolina

    Mr. Chairman: I am pleased that we are holding this oversight 
hearing today regarding the 1996 campaign finance investigations. We 
have with us two men who have been actively involved in the details of 
the investigation and of the debate within the Administration over 
whether to seek an Independent Counsel.
    From the beginning, F.B.I. under Director Freeh was convinced that 
this investigation of 1996 fundraising irregularities should not be 
handled within the Department and that an Independent Counsel must be 
appointed. He made this clear to the Attorney General in meetings and 
in memoranda that the Department has made every effort to prevent from 
becoming public.
    The conclusion he reached was based on a straightforward approach 
to the law and the facts. The primary reason for the Independent 
Counsel statute was to have an outside prosecutor investigate potential 
wrongdoing by top Executive Branch officials when the Attorney General 
would have a conflict of interest. The standard was clearly met. For 
example, it was reported in the media this past weekend that Mr. Radek 
told the F.B.I. very early in the investigation that the Attorney 
General's job may hang in the balance. This is a classic example of a 
conflict of interest that makes the need for a special counsel more 
clear.
    The investigation has gone forward within the Justice Department, 
but it has never been aggressive or effective. For example, John Huang, 
who funneled at least $1.6 million of illegal contributions to the 
Democratic Party in 1996, received probation, which only covered 
charges that predated the 1996 campaign.
    I find it particularly unfortunate that the Chief of the Public 
Integrity Section, who is here today, has always been a major 
impediment to the appointment of an independent counsel. Of all people, 
he should understand how critical it is to maintain the people's 
confidence in the fairness and impartiality of our system of justice. 
It is clear that the only way to restore public trust in this 
investigation is to appoint a special counsel, and I again urge the 
Attorney General to do so.

    Senator Specter. That concludes the hearing.
    [Whereupon, at 12:53 p.m., the subcommittee was adjourned.]

 
                THE 1996 CAMPAIGN FINANCE INVESTIGATIONS

                              ----------                              


                         TUESDAY, JUNE 6, 2000

                           U.S. Senate,    
   Subcommittee on Administrative Oversight
                                    and the Courts,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11:08 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Arlen Specter 
presiding.
    Also present: Senators Grassley, Sessions, Smith, and 
Torricelli.

 OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM 
                   THE STATE OF PENNSYLVANIA

    Senator Specter. The Senate Judiciary subcommittee on 
Department of Justice oversight will now proceed. We had 
scheduled this hearing at 11 a.m. to accommodate the schedule 
of the ranking Democrat, whom I am advised is due to be here 
shortly. But in view of the limited time available, with 
witnesses having other commitments this afternoon, and the 
parties having their caucus luncheons, we are going to proceed 
now with opening statements, with the expectation that Senator 
Torricelli will arrive before we call our first witness.
    This hearing today is going to pursue the question of the 
relationship between the Department of Justice generally and 
the FBI specifically on campaign finance investigations, with 
particular focus on the memorandum from Director Freeh to Mr. 
Esposito which was the subject of our hearing on May 24.
    We are going to be pursuing the matter further because Mr. 
Esposito is present today, and in the interim we have found 
that Mr. Esposito's notes reflected the presence of Mr. 
Gangloff at the meeting, of the Department of Justice. So we 
have sought all the participants of the meeting--Mr. Radek, Mr. 
Gangloff, Mr. Esposito, and Mr. Gallagher--to testify on this 
matter.
    This is an important memorandum which has many 
ramifications. The report of the General Accounting Office 
which came out just yesterday comments about, as they put it, 
``bitterness,'' between the Department and the Bureau. There is 
no doubt that the relationship was poisoned between the Bureau 
and the Department, and the extent of the effect of this 
memorandum is a key factor to be considered by the 
subcommittee.
    You have the GAO report commenting that the FBI agents and 
the Department of Justice lawyers had feuds and had to be kept 
on separate floors. We have the later turn-down of the 
Department of the request by the FBI for a search warrant as to 
Charlie Trie.
    You had the extraordinary event less than a year ago where 
the U.S. Marshals went into the FBI quarters at Quantico to get 
materials related to Waco. And a question which the 
subcommittee will explore is whether the application by the FBI 
on the very important warrant for Wen Ho Lee under the Foreign 
Intelligence Surveillance Act was affected by this kind of 
disagreement.
    A second critical ramification which this committee is 
looking at is the issue of the duty of the FBI, and 
specifically Director Freeh, to turn over the memorandum of 
December 9, 1996, to the oversight group. It may well be that 
there was a duty, even in the absence of subpoena, for Director 
Freeh and the FBI to turn over that memorandum because of its 
serious import both to the Judiciary Committee and to the 
Governmental Affairs Committee, which was conducting a detailed 
investigation on these precise subjects all during 1997.
    There is no doubt that Director Freeh and the FBI had a 
duty to turn over the memorandum as of April 20, the return 
date on the subpoena. It was not made available to the 
subcommittee until late in the evening of May 17, and this 
follows a pattern of documents being turned over very, very 
late. And those are issues which we will consider very 
carefully.
    There is no doubt that Director Freeh had a very difficult 
position in terms of reporting for oversight the information 
that Mr. Esposito provided that Mr. Radek had said that there 
was pressure on Public Integrity on campaign finance 
investigations because the Attorney General's job was in the 
balance.
    But the Congress gave the FBI Director a 10-year term 
especially to insulate him from that kind of pressure. We had 
the situation with FBI Director L. Patrick Gray and the 
pressure put on by the executive branch, and the Director of 
the FBI has been given unusual tenure by the Congress, with the 
expectation that the tenure will give him the status and 
stature to turn over information for this committee on 
oversight. And that is something we intend to pursue very, very 
vigorously.
    If Mr. Esposito and Mr. Gallagher are correct as to what 
Mr. Radek said about pressure and the Attorney General's job 
being on the line, that may well explain why independent 
counsel was not appointed. That may well explain the 
extraordinary finding by the Attorney General of clear and 
convincing evidence of no criminal intent by the President and 
Vice President on exceeding Federal spending limits. That may 
account for the Attorney General's disregarding evidence of the 
Vice President raising hard money and knowing that he was 
raising hard money. And those are issues which we shall pursue.
    We have requested the appearance of the Attorney General, 
who has agreed to come before the subcommittee. We are now 
working on a specific date, and we are pushing to have that 
earlier rather than later because we believe this matter ought 
to be concluded as early as possible.
    It was not the timing of this subcommittee to have the 
matter come as close to a presidential election, but there is a 
record of pursuit on the Freeh memorandum recommending 
independent counsel within a few days after he had sent it to 
the Attorney General in 1997. And there is a record of pursuit 
of the La Bella memorandum within 1 week after he submitted it 
to the Attorney General in July 1998.
    And we have been very diligent in pressing this matter so 
that there is no delay here and no effort to have this come in 
the midst of any sort of a campaign season. But we intend to 
pursue, as I say, all the way, and that includes the testimony 
of Director Freeh.
    Let me yield at this time to our distinguished chairman of 
the full subcommittee, again with my thanks for his cooperation 
on this particular aspect of the subcommittee's work.
    I would like to place into the record a statement from 
Senator Strom Thurmond.
    [The prepared statement of Senator Thurmond follows:]

  Prepared Statement of Hon. Strom Thurmond, A U.S. Senator From the 
                        State of South Carolina

    Mr. Chairman: I am pleased that we are holding this oversight 
hearing today regarding the 1996 campaign finance investigations.
    These hearings are reaffirming that an Independent Counsel clearly 
should have been appointed years ago to investigate the illegal 
fundraising activities of the 1996 Clinton-Gore Reelection Campaign. 
Memoranda from F.B.I. Director Freeh discussing the need for an 
Independent Counsel, which has recently been quoted in the press, 
provides additional proof.
    In fact, a Freeh memorandum first revealed a key meeting between 
the F.B.I. and Mr. Lee Radek, the Chief of the Public Integrity 
Section, where Mr. Radek connected the pressure that was being placed 
on them to appoint an Independent Counsel to the fact that the Attorney 
General's job may hang in the balance. Mr. Radek denies this, but the 
F.B.I. had no reason to say something that was not true. I believe the 
F.B.I.
    This meeting is critical because it shows that the Attorney General 
had an absolute, obvious conflict of interest. If she appointed an 
Independent Counsel, she may not be reappointed as Attorney General for 
a second term. This is the exact type of situation the Independent 
Counsel statute was designed to avoid. Mr. Radek understood her 
conflict of interest and all of the facts, but he joined with her in 
opposing the appointment of an Independent Counsel.
    I find it particularly unfortunate that the Chief of the Public 
Integrity Section has always been a major impediment to the appointment 
of an Independent Counsel. Of all people, he should understand how 
critical it is to maintain the people's confidence in the fairness and 
impartiality of our system of justice. The people have no confidence in 
the way this investigation has been handled within the Justice 
Department, and the recent revelations only reaffirm this.
    The only way to restore public trust in this matter is to appoint a 
special counsel, and I again urge the Attorney General to do so.

    Senator Spector. Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. Well, thank you, Mr. Chairman, for your 
very hard work for the last 8 months as you have been pursuing 
this. I guess you have been pursuing it for 3 or 4 years, but 
through this subcommittee and with the full committee and with 
the leadership, trying to getmore attention brought to this 
issue and finally having it done through this subcommittee.
    The purpose behind today's hearing is to determine why the 
Attorney General turned down the advice of high-level Justice 
Department officials in campaign finance investigations. The 
advice was to request that an independent counsel be appointed. 
From the documents we have read, the entire FBI from top to 
bottom favored such an appointment. So did the Attorney 
General's own hand-picked lead attorney and his subordinates. 
All vehemently supported such an appointment.
    The primary opponent of the appointment was Mr. Radek. He 
is head of the Public Integrity Section of the Justice 
Department. His office for many years has had a reputation as a 
black hole for referred cases. The vast majority of cases 
referred are declined. This, I think, has earned Mr. Radek the 
nickname of Dr. No.
    I think it is fair to reiterate the point made at our last 
hearing that Mr. Radek was no fan of the independent counsel 
law. He may not have wanted his power to be usurped by an 
independent counsel. This may be why he fought so hard against 
those arguing for the appointment of an independent counsel.
    I think it is highly instructive that the inspector general 
community and the U.S. attorney community from all around the 
country share the view that Mr. Radek's shop is a black hole of 
case referrals. In fact, at a recent monthly meeting of 
inspectors general, a very interesting and telling thing 
happened.
    A discussion occurred about how Public Integrity never 
prosecutes cases. The frustration was shared by a prominent 
U.S. attorney who happened to be present. That U.S. attorney 
offered to serve as an alternative office for the IG community 
for prosecuting cases, since Public Integrity is such a black 
hole. Now, this is an enormously significant issue, in my view.
    We have heard the same thing from the U.S. attorney 
community. No one will deal with Public Integrity because all 
the hard work that goes into referral is for naught. It is an 
extraordinary step, in my opinion, for a U.S. attorney to tell 
inspectors general that Public Integrity is so bad that you can 
come to me instead for prosecution. That is a very incredible 
situation to be in.
    I say this to provide the context for this hearing. When so 
many high-level officials within the Department of Justice were 
advocating the appointment of an independent counsel, Dr. No 
was saying no. It was a very adamant ``no.'' The question is 
why did the Attorney General choose Mr. Radek's advice over 
that of Mr. Freeh and Mr. La Bella and other career 
prosecutors.
    A second question also arises. Prior to August 1998, the 
Attorney General used the argument that raising soft money from 
the White House was not illegal. After an FEC audit, in August 
1998, undermined that argument, the Attorney General suddenly 
changed to an advice of counsel argument. This switch suggests 
that the important thing for the Attorney General was to 
protect the President and the Vice President at all costs.
    So, Mr. Chairman, it seems to me there is good 
circumstantial evidence that the Attorney General succumbed to 
political pressure in not appointing an independent counsel. 
Listening to the advice of Dr. No might have been expedient at 
the time, but it has become quite clear in hindsight, and in 
oversight, that it might have been the very wrong decision.
    Thank you.
    Senator Specter. Thank you very much, Senator Grassley.
    Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Thank you, Mr. Chairman, for your 
determined efforts to produce the facts in this matter. It is a 
matter of great importance. We are talking about an 
investigation that involved the sitting Vice President of the 
United States. It was in the national newspapers. The matter we 
are talking about today broke on the eve of the election and 
was a remarkable event.
     The meeting at issue that we will be talking about today, 
troubling to me, is that it was the first meeting between high-
level FBI and DOJ officials to investigate campaign finance 
violations. Yet, Mr. Radek, who was in charge of that, has 
difficulty remembering the details of that meeting. I think it 
was a very important meeting.
    After that meeting, and after Mr. Esposito shared his 
results with the Director of the FBI, Mr. Freeh, Mr. Freeh was 
extraordinarily concerned. In very short order, he asked for 
and went to see the Attorney General of the United States. And 
as I review the memorandum that he made of that meeting, 
directed to Mr. Esposito who was in charge of this 
investigation, apparently, I become even more troubled, Mr. 
Chairman, than I have been before.
    The language he used to the Attorney General was forceful 
and significant. I would suggest he had no misunderstanding of 
what he was doing. Mr. Freeh has been around a long time. He 
understands the prosecution of important cases, and he said 
some things that I think ought to be reviewed by us all.
    He said, quote--and this is a quote from his memorandum--
``In fact, I said''--this is Mr. Freeh to Attorney General 
Reno--``that these prosecutors should be `junkyard dogs.' '' 
Now, that is a phrase that is used to refer not to an unfair 
prosecutor, but a prosecutor of skill and determination who is 
going to be facing a defense team that is going to obstruct and 
resist all the way. And you have got to be aggressive to 
pursue, to get the documents, to use the grand jury, to use 
subpoenas, to use court orders and contempt citations, if 
necessary, to get the truth. And that is what Mr. Freeh told 
her. She understood, I trust, precisely what he meant by that.
    Then he went on to say in this memorandum of his 
conversation with the Attorney General of the United States, 
``And in my view, the Public Integrity Section was not capable 
of conducting the thorough, aggressive kind of investigation 
that was required.'' He went on to say, ``I also advised the 
Attorney General of Lee Radek's comments to you,'' Mr. 
Esposito, ``that there was a lot of pressure on him and Public 
Integrity regarding this case because `the Attorney General's 
job might hang in the balance' (or words to that effect). I 
stated that these comments would be enough for me to take him 
and the Criminal Division off the case completely.''
    And I would agree. Anybody who is in charge of this 
investigation who feels pressure and who feels like they can't 
do the job, or suggest it in any way, should not be in charge 
of an investigation like this.
    He also went on to note, ``I also stated that it didn'tmake 
sense for the Public Integrity Section to call the FBI the lead agency 
in the matter, while operating a task force with Department of Commerce 
inspectors general.'' That is also a troubling thing to me, Mr. 
Chairman, because based on my experience with the Department of 
Justice, when you have a matter of this significance, you want not the 
inspector general of the Department of Commerce, an agency that would 
have generally less skill in these kinds of matters, and also be more 
subject to political pressure. But you would want the FBI, which is the 
lead agency for corruption and fraud in the country, and also an 
agency, as you noted, that has a Director that is not subject to 
removal.
    So Mr. Freeh was expressing some legitimate concern here. 
They are saying that the FBI is doing this, but we are not. The 
people who are doing the interviews are Department of Commerce 
inspectors general. He went on to note, ``These inspectors 
general are conducting interviews of key witnesses without the 
knowledge or participation of the FBI. I strongly recommend 
that the FBI and hand-picked DOJ attorneys from outside Main 
Justice run this case, as we would any matter of such 
importance and complexity.''
    Mr. Chairman, the fact that Mr. Radek stopped the work of 
the U.S. attorney's office who initially began to prepare to 
investigate this matter, and apparently did little or no 
investigation of the facts of the case before advising the 
Attorney General not to have an independent counsel, is very 
troubling to me. I just cannot understand how that could 
happen.
    The Attorney General had to know that this was a matter of 
great national importance. And if she was not going to appoint 
an independent counsel, she had to know that there was every 
demand on her, if she were going to defend the rule of law and 
justice in America, to make sure the prosecutors that she 
selected in the Department of Justice were independent, 
experienced and tough, and willing to take on the challenge. 
And I feel very sad about it.
    It would have been so much better to have an independent 
counsel, as you recommended, and Senator Hatch and others 
recommended. And if you don't, you have really got to carry the 
ball aggressively. That was not done, in my view, and as a 
result we have the American people rightly concerned about 
whether justice has been done.
    Frankly, we ought not to overlook the fact that the 
ultimate problem here was the President of the United States, 
and perhaps the Vice President who was to be investigated, 
putting pressure on the Attorney General, actually holding 
perhaps her job at bay over this very decision. And I think 
that is a matter that ought not to be lost on the American 
people, and we have a duty in this Congress to try to make sure 
that the Justice Department operates with integrity above all 
else.
    Thank you for your effort.
    Senator Specter. Thank you, Senator Sessions.
    Senator Torricelli, do you care to make an opening 
statement?
    Senator Torricelli. Mr. Chairman, I would rather we 
proceeded to the witnesses. I have views on this matter, but I 
prefer to express them during the questioning.
    Senator Specter. Fine. Thank you very much, Senator 
Torricelli.
    The scope of this hearing is going to be limited to this 
memorandum and the meetings relating to the memorandum. We have 
been requested to limit to that subject because the witnesses 
have other obligations today, and there will be a follow-up 
hearing next week where we will be looking into specific cases 
where Public Integrity had picked up the cases and what they 
done with them.
    At this time, Mr. Gangloff, would you step forward, please? 
Would you raise your right hand?
    Do you solemnly swear that the testimony that you will give 
before this subcommittee of the Committee on the Judiciary of 
the U.S. Senate will be the truth, the whole truth, and nothing 
but the truth, so help you God?
    Mr. Gangloff. I do.
    Senator Specter. You may be seated. Thank you for joining 
us, Mr. Gangloff.
    Since the hearing on May 24, we had been informed that you 
were present at the meeting with Mr. Radek, Mr. Esposito, and 
Mr. Gallagher, since your name appeared on the calendar of Mr. 
Esposito. And as soon as we determined that, we made the 
request of the Department of Justice that you be present for 
today's hearing, and we thank you for joining us.
    Do you recollect a meeting on Wednesday, November 20, 
involving----

 STATEMENT OF JOSEPH GANGLOFF, PRINCIPAL DEPUTY CHIEF, PUBLIC 
 INTEGRITY SECTION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

    Mr. Gangloff. Senator, I do not recollect a meeting on that 
specific date.
    Senator Specter. Let me finish the question--involving Mr. 
Radek, Mr. Esposito, Mr. Gallagher, and yourself?
    Mr. Gangloff. Senator, I do not recollect a meeting on that 
specific date. The only----
    Senator Specter. Do you recollect a meeting among the four 
of you on any date?
    Mr. Gangloff. I am sure that the four of us met on many 
dates. Whether there were other people present at the time or 
not, I can't really say.
    Senator, I would like to be helpful to you, so if you would 
let me just put it into context, I would certainly be happy----
    Senator Specter. Well, that is fine. You may proceed as you 
wish, of course.
    Mr. Gangloff. Thank you.
    Because the problem that I have is in trying to recollect 
this meeting, I have looked at the text of this memorandum and 
tried to recollect a meeting where this conversation would have 
occurred. And the fact is I can't recollect any meeting where 
these issues were presented inthis particular way.
    So that sort of is my quandary. I am looking back 3\1/2\ 
years and basically trying to find something that is not a 
unique incident in terms of meetings. Mr. Esposito, I dealt 
with quite frequently in my capacity as legal adviser to the 
Integrity Committee of the President's Council on Integrity and 
Efficiency, which is made up of the inspectors general. And I 
also dealt quite frequently with Mr. Gallagher.
    Senator Specter. Well, when you say you cannot recollect 
any meeting where the issues were presented in this particular 
way----
    Mr. Gangloff. Right.
    Senator Specter [continuing]. Can you recollect any meeting 
where there was a generalized discussion, for example, on 
pressure on the Public Integrity Section?
    Mr. Gangloff. Well, not in those words. And, in fact, I 
would go so far as to say that were those type of words used, I 
think I would have recollected the incident. Pressure in the 
Public Integrity is, I think, much like atmospheric pressure. 
It is always present. You might notice if it were absent, but 
otherwise you don't notice it.
    Even as I read this memorandum, I am somewhat perplexed 
because not really knowing the--I don't know--I haven't 
followed the testimony in this matter. I didn't know until 
yesterday afternoon that my presence would be required. But 
even in reviewing this, the fact that there is pressure--there 
is always pressure to do a good job, and I would see it that 
way.
    The characterization that there was some thought that the 
Attorney General's job would be held in the balance seems 
totally foreign to any actual conclusion we could have drawn at 
the time in any event, because our conversations even in the 
hallways would have been much more consistent with the 
observation that, as it often is in the Public Integrity 
Section, you can't tell what the consequences of a particular 
action would be.
    In other words, would the appointment of an independent 
counsel help the Attorney General or others politically, or 
would it, in fact, have the exact opposite effect? And I have 
been in the Public Integrity Section since January 1981, and I 
must say that my experience has been that I can't recall in 
that time, under any administration, where there has been 
pressure to reach a particular result in any particular case.
    Senator Specter. With respect to your only finding out 
about this yesterday afternoon, that is a little surprising 
because Mr. McArthur advises me that the request was made for 
you last Thursday evening, just as soon as we had received a 
fax of Mr. Esposito's diary which showed your name.
    Mr. Gangloff. Well, that could be. I was out of the office 
all day Friday and I had physician's appointments on Monday 
morning.
    Senator Specter. Well, I would think that in a matter of 
this sort they would have let you know early, but let's move 
beyond to the substance.
    When you say that it would be indeterminate as to whether 
appointment of independent counsel would be interpreted one way 
or another, let's examine that for just a minute. In late 
November, about the time a meeting is reflected in Mr. 
Esposito's notes, there was considerable public discussion 
about whether Attorney General Reno would be retained for a 
second term.
    May the record show a nod in the affirmative on that?
    Mr. Gangloff. Yes, I recall that.
    Senator Specter. And there was considerable talk in the 
public domain about a concern which the President had about the 
frequency of the appointment of independent counsel to 
investigate the executive branch, and specifically the 
independent counsel investigation run by Mr. Starr. Isn't that 
a factor of general knowledge?
    Mr. Gangloff. I don't have a specific recollection of the 
President having said that. I know there was certainly 
discussion of the number of appointments.
    Senator Specter. Well, then moving beyond whether you 
recollect the President's having said it, wasn't it pretty 
clearly in the public domain that there was concern by the 
President, by the executive branch, of the Attorney General's 
having appointed these independent counsels?
    Mr. Gangloff. Senator, I will take your word on that. The 
fact is--and it may come as some surprise, but working in the 
Public Integrity Section, I really don't follow from day to day 
the discussions as to whether people agree with or disagree 
with the policies of the Department at the higher level.
    Basically, at the section level what we are charged with 
doing is analyzing allegations, trying to get facts together, 
and making recommendations. And the insulation is so great, 
quite frankly, that there is no profit--it is not worth the 
time to read every editorial, et cetera.
    At the Attorney General's level, and perhaps at Mr. Radek's 
level, it is necessary because people will often question you 
about those things. But for someone at my level, specifically, 
who is involved in the operational aspect of it, I don't want 
to know and I don't care who says we should do one thing or 
another.
    The two points that come to mind, and I think I really 
should make a note of, are, first, we had, as a matter of 
fact--I was acting chief at the time--made an independent 
counsel, or as close as we could, appointment with respect to 
the Whitewater matter. So that is by one way of background.
    I also would point out that, as you want to marshall the 
facts as to what would cut one way, one of the consequences of 
appointing an independent counsel, of course, would be to 
totally preclude the use of a grand jury, the issuance of 
subpoenas, or the use of search warrants. So the effect----
    Senator Specter. When independent counsel is appointed----
    Mr. Gangloff. No, no, at the time the decision was made, 
because at that time if the Department launched into a 
preliminary investigation, and when we were waiting for who 
knows how much time for a court to make an appointment, the 
Department, pursuant to the statute, would have been prohibited 
from engaging in this more vigorous type of investigation. So 
someone could certainly argue that the appointment of an 
independent counsel would have that positive effect from the 
standpoint of the President's position.
    Senator Specter. Well, that would be outside the scope of 
argument because the Congress had already decided that if the 
President was to be involved, or the Vice President or certain 
category of officials, that the Department ofJustice would not 
make the investigation.
    So you have a preliminary inquiry and you have a very 
abbreviated timetable during which the Department of Justice 
would not be authorized to have grand jury subpoenas for the 
specific purpose of not getting the Department of Justice very 
much involved----
    Mr. Gangloff. Well, you are talking about----
    Senator Specter. Well, excuse me. Let me finish--but just 
to make a very preliminary decision as to whether further 
investigation is necessary, where Congress had set a very low 
standard to keep the Department of Justice out.
    And when you refer to a time lag on the court appointing 
independent counsel, that is not factually correct. The court 
had been very prompt. But whatever time it took, this was the 
law of the land----
    Mr. Gangloff. Senator, you are talking about----
    Senator Specter. Just a minute--had been decided by the 
Congress. So the question really is in pursuing your awareness 
of it that this was not a casual matter. It had been on the 
front pages and network television in October about the 
allegations raised about both Republicans and Democrats 
exceeding the spending limits.
    Had those matters not crossed your attention?
    Mr. Gangloff. Senator, you have raised two completely 
different issues in your question. The first issue has to do 
with your response to my observation that it would be difficult 
to decide on which way of a balance it would fall to launch an 
investigation or not. And I simply was pointing out by 
explaining the independent counsel procedures, with the same 
allusion, the fact that it certainly could be argued that if, 
in fact, the decisions were not being made for proper purposes 
but for political advantage, one could argue that there was a 
political advantage that would occur from either course.
    The second issue that you raise is----
    Senator Specter. Would you explain that? What would the 
political advantage be to the President to have independent 
counsel appointed?
    Mr. Gangloff. Well, remember, we are not just talking about 
an advantage to the President, but also to the Attorney 
General, because that is the focus of your inquiry. But the 
advantage to the President, it seems to me, at least arguably, 
would be that by its very nature the first thing that the 
Department could do without criticism would be run into a 60-
day period and a 90-day period of review. During that period of 
time, it certainly could be argued that witnesses could get 
together, orchestrate their stories, et cetera.
    Then an appointment would be made to a court, which, as a 
matter of fact, does not have a reputation for making prompt 
appointments. During that period of time, as well as during the 
previous 120 days, and possibly with an extension inserted, 
there would have been no authority with respect to the 
Department of Justice to issue grand jury subpoenas, to conduct 
searches, or to hold grand jury proceedings.
    So that is what I am suggesting. I am not suggesting in any 
way that it is dispositive. All I am saying is to hear that the 
Attorney General's job was in the balance, depending on a 
particular decision, I am simply telling you that it would be 
difficult to even speculate as to which would have the 
political advantage.
    As to the second----
    Senator Specter. Well, Mr.----
    Mr. Gangloff. Excuse me, Senator.
    Senator Specter. Go ahead.
    Mr. Gangloff. As to the second issue that you raised, the 
legal requirements concerning the appointment of an independent 
counsel, I would recall that when the independent counsel 
statute that is at issue was reauthorized, the Department 
actually urged that reauthorization be permitted on the basis 
of consideration of a, ``matter,'' as opposed to focusing the 
statute on a consideration of allegations against specific 
individuals.
    Congress rejected that approach and instead decided that 
what should occur should be that the independent counsel 
mandatory provisions would only become implicated upon the 
reaching of the ``credible and specific'' standard with respect 
to individuals. So when the analysis is done with respect to 
mandatory appointment, the first requirement is that we analyze 
on the basis of allegations against the individuals.
    Senator Specter. Well, that is true, and that is what the 
Congress had decided. And the statutory framework had been 
decided in accordance with establishing the laws of the United 
States, which left the Department of Justice out of 
investigating people like the President on a charge of 
exceeding the campaign expenditures, and limiting the role of 
the Department of Justice very severely not to go to the grand 
jury, but to look to independent counsel if there were to be a 
further investigation.
    But let's come to the core issues here, Mr. Gangloff, to 
see if this will refresh your recollection. The memorandum has 
already been read by Senator Sessions, and the key language 
here relating to what Mr. Esposito told Director Freeh that, 
``Lee Radek's comments''--``there was a lot of `pressure' on 
him and PIS regarding this case because `the Attorney General's 
job might hang in the balance' (or words to that effect).''
    When Mr. Radek testified on the 24, he was asked by me--and 
this appears at page 20 of the transcript--``So when this 
memorandum refers to the word `pressure,' that is a word you 
might well have used in the context of lots of pressure on the 
Public Integrity Section?'' Mr. Radek: ``Yes, sir.''
    Then on page 22, my question: ``All right, so you are 
saying that the subject may well have been discussed that the 
Attorney General's job was in jeopardy?'' Mr. Radek: ``It may 
well have.'' My question: ``Well, may well have discussed the 
Attorney General's job was in jeopardy?'' Mr. Radek: ``It may 
well have. I don't recall. The words `hangs in the balance' do 
not sound like anything I would say.''
    And my follow-up: ``Well, the memorandum says `words to 
that effect,' but you are saying that there may have been a 
discussion that the Attorney General's job may have been--may 
be--you said at that time the Attorney General's job may be in 
jeopardy.'' Mr. Radek: ``That is possible, yes.''
    And then we had a little discussion about what was a narrow 
line of disagreement, and continuing on page 23 I said, ``The 
line of denial is that although you may have said that there 
was pressure on Public Integrity, and you may have said the 
Attorney General's job may be in jeopardy, you did not connect 
the two.'' Mr. Radek: ``That is correct.''
    Two questions. Does that refresh your recollectionwhen you 
hear Mr. Radek having testified that there may have been language about 
pressure and may have been language about the Attorney General's job 
hanging in the balance, but no connection between the two? Do you think 
that you might have been present when such a conversation occurred?
    Mr. Gangloff. Senator, let me at least make this, again, 
observation. This memorandum is dated December 9, 1996, and I 
see that Mr. Freeh is reporting his best recollection of 
something that he heard a good 2\1/2\ weeks earlier. So it is 
quite possible that there has been some evolution of the 
language, I will say.
    With respect to being at a specific meeting with Mr. 
Esposito and raising these specific points, I don't have a 
specific recollection. The fact is the conversation we would 
have had on an almost daily basis in our own hallways--to back 
up just for a second and to give you some context, I was in 
Europe when these allegations first came in, and Lee called me 
there and said that the allegations had come in and that it was 
a serious matter and that when I came home, you know, that 
would be the first attention that I should pay to something, 
would be to this particular matter.
    Certainly, we recognized that with respect to this matter 
and half a dozen other, or maybe a dozen other matters, there 
are implications at a political level. And the Attorney 
General's job, I suppose, in some respects is always, ``in 
jeopardy.'' But to tie two things together and say that the 
outcome or the specific structure of the work done at the 
Public Integrity Section is somehow tied to that is not only 
something that I don't remember, but is something so foreign to 
my experience that I would suspect that I would remember.
    The other problem that I have even in seeing this 
memorandum is a few things that I'd like to note. First, 
junkyard dogs are not known for having any judgment. A junkyard 
dog, when the gates are closed, eats up whatever comes inside 
that gate. And I also want to mention that within the 20 years 
I have been in the Public Integrity Section, I have never heard 
Mr. Radek referred to as Dr. No.
    So the number of assumptions that are being made here are, 
in my--you know, having reviewed this for only a day, are in 
some respects off the chart. I can't really reconcile, for 
example, the sentence in this memorandum which says ``it was my 
recommendation that the referral take place as soon as 
possible'' with the statement which is in paragraph five that 
says ``it didn't make sense for PIS to call the FBI the lead 
agency in the matter.''
    One expresses a view that it seems that there has been no 
referral. The other seems to say that the Department is tagging 
the FBI with a leadership role. My suspicion is that whatever 
transpired that resulted in the writing of this memorandum is 
that facts that occurred after--and I am assuming that some 
meeting occurred on or about the 20 of November, which is the 
date that we focus on--that some facts occurred during that 
period of time between then and the 9 which are flavored here, 
and in some ways assumptions are being made that they were 
facts as known on the 20, but, in fact, they developed over 
time.
    And, finally, in terms of putting it in context, I checked 
my records this morning and I see--which may also explain some 
of the distraction of this--that I was also out of the country 
for a week ending on December 12. So whatever happened between 
that meeting, assuming that it occurred, and it very well might 
have, and the issuance of this memorandum, I am simply 
suggesting this would have been a moving matter and that it 
would be very surprising to me if Mr. Freeh was not receiving 
information not only from Mr. Esposito and not only from the 
Attorney General, but other information.
    And a careful reading of this memorandum doesn't actually 
tell you when particular conclusions were reached by Mr. Freeh, 
whether they were before or after this meeting, et cetera. The 
same with Mr. Esposito. I would be very surprised to learn that 
Mr. Esposito didn't discuss this matter with Mr. Freeh between 
the 20 and the 9.
    Senator Specter. Mr. Gangloff, all of that may be true or 
it may not be true.
    Mr. Gangloff. Right.
    Senator Specter. But the question is a very narrow one 
which does not make any of that relevant, at least as I see it. 
And the narrow question is what Mr. Radek said to Mr. Esposito. 
Mr. Esposito is here to testify to that, as Mr. Gallagher 
testified. And I won't take the time to read you his testimony 
where he was positive that Mr. Radek made the comment about 
pressure on the Public Integrity Section, and that pressure was 
exerted because the Attorney General's job was on the line, 
that there was a connection. So, that is the context.
    And however you may define junkyard dogs, or whatever you 
may think about Dr. No or Mr. No, those can all be a subject of 
extended discourse. But the point at issue is what was said by 
Mr. Radek to Mr. Esposito, and what was the context, which was 
well known at that time, that there was speculation that the 
Attorney General may not be reappointed, and that there was 
speculation and a lot of talk on the front pages and on network 
news that it was because independent counsel had been appointed 
in Whitewater and other matters, and that was to the 
President's displeasure.
    Now, if those aren't matters which were brought to your 
attention or within your purview so that it would have some 
effect of perhaps stimulating your recollection, or stimulating 
your recollection when you heard what Mr. Radek said, so be it.
    Mr. Gangloff. Well, I certainly was aware of the context, 
and I appreciate your efforts to refresh my recollection. But 
it is true that, as I stated at the beginning, I don't have a 
specific recollection of this conversation. And having reviewed 
it, though, I do go the extra step of saying had I heard a 
conversation that contained the suggestion that you are now 
putting on this--I don't even know that it is really present in 
the memorandum, frankly, but that had this nexus suggested and 
that had this flavor of animosity in terms of our work with the 
Bureau at this time, I would be surprised even 3\1/2\ years 
later to have totally forgotten that.
    Senator Specter. Well, but there is some apparent 
recollection on the part of Mr. Radek at least somewhere down 
that identical road. So we will pursue it.
    Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman, very much.
    Mr. Gangloff, I don't believe that we know each other.
    Mr. Gangloff. Correct.
    Senator Torricelli. The questions raised by this panel go 
to the professionalism of your office and the integrityof Mr. 
Radek, so they are of some substantial importance. So I would like for 
just a moment to lay a foundation here so the committee understands who 
we are talking to and what perspective you bring to the Senate on this 
issue.
    When is it that you joined the Department of Justice?
    Mr. Gangloff. I joined the Department of Justice in 1977 as 
part of the Honors Law program. I was graduated from the 
University of Pennsylvania Law School.
    Senator Torricelli. So you have served under two Democratic 
and two Republican administrations?
    Mr. Gangloff. Yes.
    Senator Torricelli. And when did you join Public Integrity 
in a senior position?
    Mr. Gangloff. Well, I joined the Public Integrity Section 
in 1981. In approximately 1987, I became the Director of the 
Conflicts of Interest Crimes Branch, and then in about 1992 I 
began to serve as an acting deputy and then in a period of 
time----
    Senator Torricelli. So you obtained two senior positions in 
the Reagan and Bush administrations?
    Mr. Gangloff. Senator, I am embarrassed to say it exactly 
this way, but I never associated----
    Senator Torricelli. I am not holding it against you.
    Mr. Gangloff. I never associated the political powers with 
what was happening in my career.
    Senator Torricelli. No. I am developing a time line here.
    Mr. Gangloff. Oh, right.
    Senator Torricelli. Work with me.
    Mr. Gangloff. And then in 1993, I became Acting Chief 
during about a one-year period and----
    Senator Torricelli. So, in fact, in the advancement of your 
career, the political affiliation of the Attorney General has 
had no impact on your career and is of no particular moment?
    Mr. Gangloff. None that I am aware of.
    Senator Torricelli. Indeed, regardless of whether if 
Attorney General Reno had stayed or left last January, you were 
staying in Public Integrity in a senior position?
    Mr. Gangloff. That is absolutely true.
    Senator Torricelli. During your experience at the 
Department of Justice, could you cite for me which Attorney 
General you have worked with who has actually named more 
independent counsels than Janet Reno?
    Mr. Gangloff. Well, no, certainly not.
    Senator Torricelli. Indeed, wouldn't it be fair to say that 
Janet Reno has appointed more independent counsels than all of 
her predecessors combined?
    Mr. Gangloff. That is my recollection.
    Senator Torricelli. In your experience, in past decisions 
to name independent counsels, were all of the Attorneys 
General, advisers, the FBI, and other people involved in the 
decision-making process all of one mind as to whether or not a 
particular independent counsel should be named or have you 
witnessed division in the past?
    Mr. Gangloff. Well, actually, up until this point I wasn't 
really aware of the FBI playing a role with respect to the 
recommendation on appointment because, as I think I indicated 
earlier in my testimony, many of us have a passing 
understanding--certainly, you have more than that here, but 
many people have a passing understanding of what the 
independent counsel statute required.
    But the fact is that it was a very technical statute and 
that very frequently the judgment that was being made was one 
that simply looked at legal requirements and stacked 
information against that to determine whether it was specific, 
whether it was credible, et cetera. So my recollection is, and 
specifically with respect, for example, to the Whitewater 
matter, that the FBI did not play any role, certainly, vis-a-
vis the----
    Senator Torricelli. Typically, the Attorney General would 
get advice from her own staff and from senior department heads 
within Justice that might be relevant to a case?
    Mr. Gangloff. Right.
    Senator Torricelli. But not necessarily the FBI?
    Mr. Gangloff. Well, not at--not mixing it in at the section 
level. So far as I know, there was no kind of preliminary----
    Senator Torricelli. But Mr. Freeh's memo actually refers to 
the fact that he had provided advice with regard to the 
Cisneros matter.
    Mr. Gangloff. That may be true.
    Senator Torricelli. Do you know whether or not he provided 
advice with regard to the Espy matter?
    Mr. Gangloff. I don't know that, I don't know that.
    Senator Torricelli. And the outcome of the Cisneros matter 
was what?
    Mr. Gangloff. Well, there was an appointment made.
    Senator Torricelli. And what was the outcome of the case
    Mr. Gangloff. It was prosecuted.
    Senator Torricelli. To what end?
    Mr. Gangloff. I don't know where you want to take me on 
this.
    Senator Torricelli. Well, I will get you there directly. 
Attorney General Reno has not only appointed more independent 
counsels than any of her predecessors, but some have been 
remarkably unsuccessful. And some of us would be of the mind 
that there has been a tendency to name independent counsels 
when they were not required and perhaps never should have been 
named.
    Mr. Cisneros, for example, had an independent counsel that 
consumed millions of dollars of the taxpayers' money, 
compromised individuals' reputations, destroyed a public 
career, and he pled to a misdemeanor and a $10,000 fine. Mr. 
Espy went through a similar process, consuming millions of 
dollars, destroying a great public career, interrupting the 
work of this Government and this administration, and was 
acquitted.
    This would appear to me to be an Attorney General who was 
not naming independent counsels with the greatest reservation, 
but indeed used the law to its fullest extent. I would argue to 
excess. Perhaps the bar had not been high enough. In light of 
this history and her past use of the statute, it is incredible 
that anyone would argue that indeed it should have been used 
more than it has already been, since in some cases where it 
probably was questionable to do the statute was employed.
    Would you like to respond to that?
    Mr. Gangloff. Well, as you noted, I have served under 
Democratic and Republican administrations, and I will tell you 
that there always was at least some point OK amusement at the 
level of conversation about the statute becausetraditionally 
the Republicans were not in favor of the independent counsel statute. 
And certainly under Republican administrations, there were fewer 
appointments.
    And one of the ironies of that were that those of us who 
were familiar with the statute certainly were aware that if you 
took the thing and lowered the threshold and basically did not 
do some kind of a comprehensive initial investigation, you 
would ultimately make so many referrals that the system would 
collapse. And as a matter of fact, when the reauthorization was 
being discussed, one of the things that we discussed was the 
irony of the fact that the way to undo that statute was 
actually to use it the way that it was really written because 
it didn't make any sense.
    Senator Torricelli. Well, indeed, that ultimately is what 
happened. I have never discussed it with the Attorney General, 
and I do not pretend to speak for her, but I would assume that 
someone in the Attorney General's position, having named seven 
independent counsels, several of which resulted in no 
recommendation for prosecution would think carefully before 
doing so again.
    The Attorney General might have been thinking that in 
approaching yet another one of these judgments, she wanted to 
be sure, to a higher degree of certainty, that the facts and 
the law actually warranted an independent counsel. Indeed she 
might have wanted to be sure that there was at least a chance 
that that independent counsel's investigation would result in a 
successful action by the Department of Justice because the 
record to date had not been very good in justifying the public 
expenditure and the allocation of the Department's resources.
    Mr. Gangloff. Well, if I could just make this point without 
reflecting whether those of us involved in the law thought it 
was a good idea or not, the fact is that when the Attorney 
General initially took office, she was a strong proponent of 
the independent counsel statute. And the fact is that her 
proposal would have actually broadened the reach of this 
statute, as I had mentioned earlier, with respect to covering 
matters as well.
    And I think the fact also is that had the statute covered 
matters as opposed to individuals, it would have been much 
less--the threshold, the standard, whatever you want to call 
it, would have been much less, and there would have been, I 
think, a very much stronger argument that could be made that an 
independent counsel was required if, in fact, you were focused 
on matters, which is what she advocated initially.
    Senator Torricelli. Now, let's turn our attention to the 
day of this meeting where this discussion took place that has 
resulted in these unfortunate allegations.
    How many people were in the room on that day, and could you 
identify them?
    Mr. Gangloff. See, I can't because I don't know the 
specific meeting. I know that I have had meetings with those 
individuals. And as I said, one of the problems is I was 
dealing with Mr. Esposito on a frequent basis on other matters 
as well.
    In fact, when I first learned that I was at this meeting 
with Mr. Radek, or it was suggested that I might be, I was 
surprised when it showed up in his calendar because my 
recollection was that if I had been there with Mr. Radek, I 
probably had met him over there or been there on other business 
and that we just walked in.
    Senator Torricelli. Well, I believe the allegation is that 
Mr. Esposito, Mr. Gallagher, Mr. Radek, and yourself were in 
this meeting.
    Mr. Gangloff. Right, but they may--for example, if I had 
had such a meeting, I would have a difficult time in my own 
mind recalling whether their general counsel was present.
    Senator Torricelli. You cannot say with any certainty that 
you were there.
    Mr. Gangloff. Right.
    Senator Torricelli. If you were there, given the nature of 
the conversation that is alleged, you will testify to a 
certainty you would have remembered it because it would have 
been so extraordinary and out of your experience?
    Mr. Gangloff. Well, the only reservation I want to take 
with that is the conversation as it has been reported in other 
people's testimony is not something I am familiar with. What I 
am familiar with is this memorandum and the way that it has 
been purported to read.
    Senator Torricelli. I understand.
    Mr. Gangloff. And what I am saying is the nexus between one 
statement and another that appears----
    Senator Torricelli. You would have recalled it?
    Mr. Gangloff. I would recall it.
    Senator Torricelli. So you do not have a specific memory of 
being at the meeting, but if you had, you would have recalled 
it because of the alleged nexus between the two comments?
    Mr. Gangloff. I think that is true.
    Senator Torricelli. Mr. Radek does not remember the comment 
at all, and Mr. Gallagher remembers it in a different context 
and seems to attribute to it a different meaning then that now 
being suggested. So we have four professional people allegedly 
in the same room listening to the same conversation, and only 
one of them--albeit Mr. Esposito--who has been a fine public 
servant whom I actually know personally and think is a fine 
man--only one of the four has the recollection to which the 
majority of this committee is now attaching such a great 
importance, as opposed to three of you have who have either a 
different interpretation, no interpretation, or even no memory.
    Mr. Gangloff. Well, I just want to say I have worked with 
Mr. Esposito for a long time and I respect him very much.
    Senator Torricelli. Well, I do, too. This is not an attack 
on Mr. Esposito. I am simply pointing out that we have very 
conflicting information here.
    Mr. Gangloff. Well, the additional point that I would go 
to, though, is I don't know, frankly, whether he has made 
direct statements to the committee, and so what I am saying 
is----
    Senator Torricelli. Well, we haven't heard from him yet.
    Mr. Gangloff. Right, and what I see in this memo--I would 
just again issue the caveat, the careful way we tend to deal 
with things, which is he is not the one who wrote this.
    Senator Torricelli. I think that is a good and a fair 
point.
    In the heart of the matter, having now read many of these 
memoranda over the course of recent weeks, thestatement has 
been clearly made by some of your colleagues that in looking at the 
people specifically covered by the Act and the allegations made that 
the threshold was not reached.
    Do you as a professional in the Department continue to 
share the judgment that the threshold requirement, as the 
Attorney General determined, was not reached as required by the 
Act?
    Mr. Gangloff. Yes, I think that that is true. In fact, to 
the extent that I do try to pay attention to these things, I 
still--to maybe take the risk of going beyond things, what I 
have always seen as sort of the point of misunderstanding with 
respect to the views of the Bureau and ourselves and those who 
think of appointment and not is the difference between actually 
reading the statute and applying it consistently and looking 
for the specific allegations, the credible allegations against 
specific individuals, and the other approach which is simply to 
say this is a hot potato and I think in my gut that xyz is true 
and xyz is false.
    The fact is there is a difference traditionally, I think, 
certainly in my experience, between the way that investigators 
and prosecutors view cases. Investigators are supposed to act 
from the gut, pursue the leads, ask the questions, and 
basically push.
    The prosecutor is the one who basically has to say is the 
evidence there to support a particular conclusion.
    Senator Torricelli. Is that one of the reasons why indeed 
throughout the history of the Independent Counsel Act in both 
Democratic and Republican administrations, the FBI as a matter 
of routine--the investigators were not in the process, but 
ultimately decisions through various administrations of both 
the interpretation was left to prosecutors or senior Justice 
Department officials because they had to apply the law to the 
facts as they appeared?
    Mr. Gangloff. Well, I don't--I am not in charge of making 
those decisions, but that is certainly----
    Senator Torricelli. I am asking you your experience.
    Mr. Gangloff. I would think that that certainly is my 
experience. And, in fact, my experience and my frustration 
myself in being involved with this particularly at the early 
levels is just as I think I have expressed, but it was really 
discussions about two separate things.
    Prosecutors--and I have heard this citation to, you know, 
career prosecutors who came out a different way. But the fact 
is I am not aware--even including some analysis that was done 
by our own appellate division in trying to assess the 
specificity of these allegations, et cetera, I am not aware of 
any career prosecutor who had familiarity with the statute 
reaching a conclusion contrary to the one that was ultimately 
reached. And, in fact, as I say, the----
    Senator Torricelli. In Mr. Radek's memo, he used the word 
``consensus'' of opinion with regard at least to the Vice 
President. So indeed, in your experience, you were really 
independently coming to the same conclusion. You are unaware--
it is your testimony--of no prosecutor who held a different 
judgment.
    Mr. Gangloff. No, that is not true. It is not any 
prosecutor. The fact is there were two sets of prosecutors who 
were involved, those who had worked with the statute before and 
were analyzing something, as I saw it at least, under the 
statutory requirements. Then there was another group of 
prosecutors who really didn't have any familiarity with the 
statute at all.
    The first day that I ever met Mr. La Bella was in Mr. 
Radek's office, and I do recall it because it was one of those 
kind of conversations you tend to recall where he came and 
said--I made some remark about the complexity of the matter and 
he said, well, I will be gone in 90 days because we will make 
the appointment. And I said, welcome to Washington, you will 
spend 90 days walking back across the street because there is 
going to be a lot of meetings on this thing.
    Senator Torricelli. All right. So to narrow the issue, 
then, your judgment of this consensus then is that you do not 
know of a contrary view in the Department from people who knew 
and had worked with the statute and applied the facts with 
regard to the election allegations who reached a different 
conclusion than yourself or Mr. Radek.
    Mr. Gangloff. Well, again, I want to be precise on this. 
There are two standards under the statute. One is mandatory, 
one is discretionary. The Attorney General or others may have 
been getting advice that said, as a discretionary matter, this 
is a hot potato, you should get rid of it, or whatever.
    But, certainly, under the mandatory provisions what I saw 
as the point of frustration in dealing with it was that the 
people who were unfamiliar with the statute were arguing from a 
non-statutory standard. Basically, this is a mess, it is at a 
high level, et cetera, et cetera. And I believe it is true 
unanimously--certainly, in my recollection it is--that those 
who had worked with the statute and understood that we were 
applying a very specific statutory test were constantly asking 
the specific question, which is with respect to an individual--
--
    Senator Torricelli. And they unanimously came to the same 
judgment Mr. Radek came to that the facts and the application 
of the statute based on their familiarity with it did not, on a 
mandatory basis, require the naming of an independent counsel.
    Mr. Gangloff. That is my recollection.
    Senator Torricelli. Thank you very much for your testimony.
    Senator Specter. Before yielding to Senator Sessions, just 
a comment or two. We will come back in my questioning, if 
Senator Sessions doesn't pick it up, about the competency of 
Director Freeh as an attorney, as a judge; Mr. Litt having 
recommended independent counsel as to Vice President Gore; Mr. 
Robinson having recommended preliminary inquiries on a couple 
of those situations.
    And with respect to only one of the four witnesses, Mr. 
Esposito, we really haven't heard from him. We have his hearsay 
document, but I think Mr. Gallagher testified very positively 
about Mr. Radek having made the comments, with the connection. 
And you have Mr. Radek's own testimony about the subject, 
having said both things, but disagreeing on the connection, and 
your own testimony as to lack of recollection.
    With respect to all of these independent counsel, I went at 
some length the last hearing to point out that independent 
counsel were appointed in some cases totally unjustifiably, the 
Alexis Herman case being a really remarkable example where the 
Attorney General's own finding cites lack of credible 
information, which I questioned her about in this room--she 
wouldn't answer the questions--andthen the appointment of Starr 
to pick up the Lewinsky charges. I said publicly at the time in about 
January 1998 that with all the public talk about a vendetta, what 
questionable judgment in bringing Starr into the case.
    But all of these prior independent counsels--and this 
subcommittee is going to examine them one by one, even the one 
that we had gratuitously offered to us about an independent 
counsel consideration as to Director Freeh on some testimony he 
gave before a House committee. We hadn't asked for that, but we 
got that.
    We haven't gotten all the information on many of the other 
independent counsels, but we intend to, to probe the question 
as to whether there was a pattern of appointing all these 
independent counsels without real justification so that 
Senators could later say, look how she appointed all these 
independent counsels; she didn't under-use the statute.
    Senator Sessions.
    Senator Sessions. Thank you. Well, there are a lot of 
questions I would like to ask, but I will just focus primarily 
on the issue at hand here.
    It was in October 1996, Mr. Gangloff, that the stories 
broke and the L.A. field office, the U.S. attorney's office 
there, commenced some effort to develop an investigation of the 
Buddhist Temple fundraiser. It became big news in the 
newspapers.
    You were aware of it, were you not?
    Mr. Gangloff. Yes.
    Senator Sessions. This was, what, a month before the 
election, the presidential election?
    Mr. Gangloff. Well, if it is October, that is right.
    Senator Sessions. A big deal, right? You remember that, 
don't you?
    Mr. Gangloff. Well, I don't remember the timing 
specifically, but I remember----
    Senator Sessions. And you remember this thing broke within 
a month of the election?
    Mr. Gangloff. Elections are--Senator, I don't mean to be 
impertinent, but elections are in November and you just told me 
the other event happened in October.
    Senator Sessions. October, right.
    Mr. Gangloff. How many times can I say that they are close 
to each other in time?
    Senator Sessions. I just want you to admit that it was a 
big deal.
    Mr. Gangloff. I admit that October and November are a month 
apart, Senator. I am sorry to push it this way, but I admit 
that.
    Senator Sessions. I agree, it is a month apart. So here we 
are on November 20--well, on October 31, Mr. Radek stops the 
investigation by the U.S. attorney's office and commences the 
30-day review. Is that correct?
    Mr. Gangloff. I don't know the specific date, but that 
would be consistent with my recollection.
    Senator Sessions. At the request of Senator John McCain and 
a group of Congressmen from the House who asked for an 
independent counsel review, and he took over the case--Public 
Integrity did, and presumably commenced an investigation.
    In the press, it was being suggested that the FBI was 
involved in that. That obviously offended Mr. Freeh and he put 
it in his memorandum. Department of Commerce inspectors general 
were doing it. His people weren't involved. He would have a 
reason to be somewhat concerned about that, would he not?
    Mr. Gangloff. What is reported in the newspaper, I don't 
know whether it is accurate or not.
    Senator Sessions. Well, it wasn't accurate. The newspaper 
said, for whatever reason, that he was involved in it and he 
wasn't. He felt like he should be, or he wanted to clear the 
air. So we have this meeting on November 20, not long after 
this election, and you don't remember being there?
    Mr. Gangloff. Well, let me say this. First----
    Senator Sessions. No. I just asked you, do you remember 
being in this meeting?
    Mr. Gangloff. No.
    Senator Sessions. Well, Mr. Gallagher was here and he said 
where everybody sat in the room, and detailed some of the 
conversation.
    Mr. Gangloff. Excuse me, Senator. Did he say where I sat in 
the room?
    Senator Sessions. I don't recall. He said where people sat 
in the room, as I recall. But you don't remember even being 
there?
    Mr. Gangloff. Excuse me. As best I know--and, again, I 
didn't review the testimony, but the reason I didn't expect 
even to be called was because my understanding was that Mr. 
Gallagher didn't even recall whether I was there or not.
    Senator Sessions. Well, let me ask you this. Are you saying 
you do not recall and you do not believe you were there?
    Mr. Gangloff. I am saying I don't have a specific 
recollection of a meeting held on that date.
    Senator Sessions. Well, that is a good lawyer word, ``don't 
have a specific recollection.'' I am asking you your best 
judgment here before this body. Were you there or were you not?
    Mr. Gangloff. Senator, my best judgment and my best answer 
is that where I was 3\1/2\ years ago for a meeting that would 
have been a routine meeting during the course of my duties--I 
don't have a specific recollection as to whether I attended 
that meeting.
    Senator Sessions. Well, am I wrong to suggest that after 
Mr. Radek stopped the Los Angeles investigation around November 
1--here we are, the 20 of November--was that the first and most 
important meeting involving this investigation?
    Mr. Gangloff. What you are wrong to suggest is that Mr. 
Radek stopped the investigation. Under the statute and under 
the procedures that have been in place in the Department for as 
long as the Independent Counsel Act has been there, as soon as 
it was realized that a U.S. attorney was involved in a matter 
that might warrant treatment under the independent counsel 
statute, that U.S. attorney would be told to step down, not to 
issue subpoenas, not to use the grand jury, not to use search 
warrants, not to immunize anyone. And not only that, they would 
be told that under departmental policies and practices, those 
matters were handled by the Department.
    Senator Sessions. And that was done, and the Department had 
a duty to commence an investigation if it was going to take it 
over, did it not?
    Mr. Gangloff. We had a duty to perform the analysiswithin 
the requirements and restrictions of the independent counsel statute.
    Senator Sessions. And who was in charge of it?
    Mr. Gangloff. Mr. Radek.
    Senator Sessions. And what role did you have in it?
    Mr. Gangloff. I was his principal deputy. So as I 
mentioned, I was out of the country when these allegations 
first came in and he called me and alerted me to the fact that 
important allegations had arisen and that when I got back we 
would be handling those.
    Senator Sessions. What role would you have specifically in 
handling this matter?
    Mr. Gangloff. It would depend. When you say ``would I 
have''--what role did I have?
    Senator Sessions. Did you have.
    Mr. Gangloff. Prior to Laura Ingersoll's appointment, as I 
recall, or her designation, I was working closely with Mr. 
Radek in looking at the incoming information, reviewing the 
analyses that would have been done as to the nature of the 
allegations.
    And I believe that one of the very first things that we did 
was to actually look at the statutes that were involved and to 
reach out to the FEC to try to find out what the statutes 
actually meant. But I don't know that that was in the context 
specifically of the Buddhist allegations or just generally.
    I am sure you appreciate, Senator, that not only is this 
something where, looking back, we can say this was a certain 
event, the fact is the next many years were filled with other 
events on this same issue of importance. And the other fact is 
that there are many, many matters of importance in the Public 
Integrity Section at any given time.
    Senator Sessions. Well, as I understand your testimony, you 
and Mr. Radek were doing the investigation prior to the 
submission of his recommendation to the Attorney General that 
an independent counsel not be appointed. Is that correct?
    Mr. Gangloff. That is your understanding, yes.
    Senator Sessions. My understanding or yours?
    Mr. Gangloff. No, it is not. You make it sound as though we 
were exclusively doing something. I am telling you I don't 
recall----
    Senator Sessions. Well, who else was? You took it from the 
U.S. attorney's office.
    Mr. Gangloff. We have a deputy who has been involved in 
independent counsel matters since the inception of the Act who 
would have been involved in terms of analysis.
    Senator Sessions. Well, who made----
    Mr. Gangloff. Excuse me, Senator. We have a director of an 
Election Crimes Branch who would have been involved in 
performing analysis. At some point, I recall that we requested 
that the appellate section do an analysis of certain aspects of 
the statute, so they would have been involved in it.
    We would certainly have had attorneys who were involved in 
reviewing documents or figuring out what kinds of questions--so 
to say me and Mr. Radek, you know, marched forward and did 
something I just think is not really realizing how much work 
was being done by how many people.
    Senator Sessions. I am sorry it is taking so long, Mr. 
Chairman, but I would like to pursue this to a conclusion.
    Somebody has to be in charge of an investigation. You took 
it from the Los Angeles office. Mr. Radek took charge, is that 
correct? Were you his chief deputy or were these other people 
his deputy?
    Mr. Gangloff. That is correct.
    Senator Sessions. You were his chief deputy?
    Mr. Gangloff. That is correct.
    Senator Sessions. So the two of you were in charge of the 
investigation. Now, he initiated the 30-day review on the last 
day of October or November 1. Mr. Esposito and Gallagher recall 
this meeting to be November 20, 20 days later, and on November 
30 Mr. Radek recommended to Attorney General Reno that an 
appointment of the independent counsel not be made.
    Do you disagree with that?
    Mr. Gangloff. I don't disagree.
    Senator Sessions. And did you concur in that 
recommendation?
    Mr. Gangloff. It was made at that time, yes.
    Senator Sessions. All right. Now----
    Mr. Gangloff. I concur with that recommendation as of 
today.
    Senator Sessions. My question is to you, what was done of 
an investigative matter between the time that case was taken 
over by you and Mr. Radek from the U.S. attorney's office and 
the time that recommendation was made to the Attorney General?
    Mr. Gangloff. There is two parts to that answer. The first 
is I don't specifically recall what specific steps were taken, 
but the other is that the independent counsel analysis and 
investigation is a matter that evolves, so that if new facts 
come in--it is not as though you make a determination and say 
no independent counsel should be there and that freezes things 
forever.
    All it does is says that we are going to proceed in this 
other way, and if something comes up or something develops, 
then, you know, we can make a different recommendation. So I am 
sure some investigation was done, but we could have----
    Senator Sessions. You are sure some investigation was done? 
This was an important recommendation on a matter that was 
front-page news throughout the country, and you don't remember 
whether you had any investigation?
    Mr. Gangloff. I am sure that a thorough and appropriate 
investigation of what could have been gathered up until that 
point was done just as a matter of routine, Senator. But I 
don't recall specifically what took place within the first 30 
days that we had that case, as opposed to which investigative 
steps took place in the several years that followed that.
    Senator Sessions. Are you aware of an investigation under 
your supervision of national importance, what witnesses were 
interviewed and what documents were examined during this 30-day 
period?
    Mr. Gangloff. No. Today, I do not have a specific 
recollection of that.
    Senator Sessions. Mr. Chairman, I think that indicates to 
me from what we have been able to evaluate and study that no 
investigation was done. And the man in charge of it to say it 
is 3 years ago and can't remember a case like this--I can 
remember a case 15 years ago, less important than this one.
    Mr. Gangloff. I remember the case vividly, Senator.
    Senator Sessions. I am not asking a question at this point. 
I am making a statement.
    Mr. Gangloff. Yes, but you are directly attacking my 
character, and I will point out that you didn't recall Mr. 
Gallagher's testimony as to whether I was at the meeting or not 
and that was just a few days ago.
    Senator Sessions. Well, you don't recall being at the 
meeting, I think, is important.
    My view is that this was poorly handled at best, and that 
by denying an independent counsel on a matter of this nature--
the Department of Justice has great responsibility to conduct 
an investigation with expertise, aggressiveness, and 
completeness, which was not done. And the embarrassment is 
going to linger and it is going to hurt respect for justice in 
this country, and I hate that.
    Thank you.
    Senator Specter. Thank you, Senator Sessions.
    Just a couple more questions, Mr. Gangloff. I believe I 
wrote this down correctly when you said that no career 
prosecutor reached another conclusion. You had been asked by 
Senator Torricelli whether the threshold was met for 
independent counsel, and you said it had not been, and that no 
career prosecutor reached any other conclusion.
    Did I accurately quote you?
    Mr. Gangloff. No. I believe that if you look at your notes, 
you will see that I made two distinctions. One was making a 
distinction under the mandatory and discretionary provisions of 
the Act, and the other was career prosecutors familiar with the 
Act who had worked with the Act.
    Senator Specter. No, my notes don't show that, and you did 
not make a reference to it as to career prosecutors familiar 
with the Act. But let's examine that. A lawyer prosecutor can 
become familiar with the Act by studying the Act. And when you 
say that no career prosecutors--and take your addendum--
familiar with the Act thought that the threshold had been 
reached, would you say that Director Freeh, a career prosecutor 
before he became a judge and an FBI Director, fell into the 
category of someone not familiar with the Act, even though he 
had concluded the threshold had been met?
    Mr. Gangloff. I had no direct conversations with 
Secretary--with Director Freeh. My conversations were with the 
general counsel of the FBI, and it was my opinion at the time 
that the FBI's analysis, insofar as it was being expressed in 
my presence, was erroneously focused not on the technical 
requirements of the Act which focus on allegations against 
individuals, but on the more general matter allegations.
    And that is the point that I was trying to make earlier, 
and I am sorry if I am being redundant, but obviously it didn't 
get through that the point of my frustration was that those who 
had dealt with the Act and were familiar with it were 
constantly looking at the statutory language and basically 
taking the facts and putting it against the statutory language. 
And the critical result of that is that you look for 
information against an individual that meets a certain 
threshold.
    On the other hand, when you are in the discretionary field, 
and also when you don't quite understand the Act in its 
specifics, in its technical aspect, you have an impression that 
basically says, oh, this matter involves the President or this 
matter involves the Vice President. Well, the fact is, under 
the Act, that is not a basis for mandatory appointment.
    Senator Specter. Well, let's come back to my question. Do 
you think that Lou Freeh doesn't understand the Act?
    Mr. Gangloff. I think that the information that I received 
from the FBI in terms of legal analysis under the Act reflected 
that those who were engaged in analyzing the Act did not 
understand the central language of the Act. That is correct.
    Senator Specter. Well, let's pursue that. There are a lot 
of people in the FBI besides Director Freeh. Come back to my 
question. Do you think Director Freeh doesn't understand the 
Act?
    Mr. Gangloff. I don't have an opinion as to whether--I 
don't have a basis for opinion----
    Senator Specter. OK, fine, so you don't have an opinion. So 
you are not saying that----
    Mr. Gangloff. If he believed----
    Senator Specter. Wait a minute, wait a minute. So you are 
not saying he doesn't understand the Act. You don't have an 
opinion.
    Mr. Gangloff. No. I have an opinion as to----
    Senator Specter. As to whether Director Freeh understands 
the Act?
    Mr. Gangloff [continuing]. The information I received from 
the Bureau.
    Senator Specter. Does anybody understand the Act besides 
you and Mr. Radek?
    Mr. Gangloff. Yes. And, Senator, I think that you 
understand the Act, and I think that you are able to make the 
distinction between a matter and an individual.
    Senator Specter. Well, I am a career prosecutor.
    Mr. Gangloff. Yes, I am familiar with that.
    Senator Specter. Are you familiar with the fact that 
Director Freeh recommended independent counsel?
    Mr. Gangloff. Yes.
    Senator Specter. But you are not prepared to say that 
Director Freeh understands the Act?
    Mr. Gangloff. I am not prepared to say that he knowingly 
recommended it under the mandatory provisions of the Act. He 
may very well have done it under the discretionary provisions, 
and he may very well have done it with reference to the matter 
as opposed to with respect to individuals.
    Senator Specter. Do you think there is clear and convincing 
evidence that he didn't do it knowingly?
    Mr. Gangloff. Clear and convincing evidence. I don't have a 
basis to make that judgment.
    Senator Specter. Good. How about Mr. Parkinson? He 
recommended independent counsel. Does he understand the Act?
    Mr. Gangloff. I thought at the time that his arguments did 
not address the central portion of the Act which goes to 
individuals as opposed to matters.
    Senator Specter. So he did not understand the Act either?
    Mr. Gangloff. I think that if you read his analysis, you 
will see the distinction made that I have explained.
    Senator Specter. I couldn't hear the last part.
    Mr. Gangloff. If you read the analysis that was prepared by 
the FBI----
    Senator Specter. I have, I have.
    Mr. Gangloff [continuing]. You will see that the 
distinction thatI have made, namely that the allegations 
against individuals were not sufficient to satisfy the threshold of the 
Act, is not addressed within those papers. And, certainly, although I 
haven't seen all of the papers that were done behind the scenes, 
certainly in the arguments that I heard him make orally I thought that 
they were missing this very fine distinction.
    Senator Specter. OK, so Larry Parkinson doesn't understand 
the Act.
    You testified----
    Mr. Gangloff. He may have made the recommendation based on 
the discretionary portion, as I say, and he also may have 
understood the Act in a different way than the arguments that 
he made if, as you propose, Mr. Freeh was making those 
arguments and telling him to express that opinion.
    Senator Specter. But from what you saw of Mr. Parkinson, 
General Counsel of the FBI, longstanding lawyer, as he applied 
the Act, it was incorrectly applied, so that you conclude that 
as to what you saw him do, he didn't understand the Act?
    Mr. Gangloff. He did not--in my opinion, he did not 
appreciate the mandatory provisions of the Act.
    Senator Specter. OK, I will take that as not understanding 
the Act. The threshold wasn't reached.
    Did Mr. Litt understand the Act when he recommended 
independent counsel as to Vice President Gore?
    Mr. Gangloff. Frankly, I would not have been privy to the 
specific recommendation, certainly in written form, and 
analysis. And I believe that Mr. Litt's position was such that 
he also may have been involved in the discretionary aspect of 
it to a greater degree. But my general opinion would be that 
Mr. Litt did understand the Act, yes.
    Senator Specter. Well, and he did recommend independent 
counsel as to Vice President Gore.
    Mr. Gangloff. Yes, and I don't know whether that was done, 
as I say, under the mandatory or the discretionary provisions.
    Senator Specter. Well, the Act has both. But as to one or 
the other, since he did recommend independent counsel as to 
Vice President Gore, you think he did understand the Act?
    Mr. Gangloff. No, I didn't say that. And what I am 
suggesting, though, is if the mandatory requirements of the Act 
are met and no referral is made, then I think that a judgment 
can be made that the Attorney General has acted improperly. If, 
on the other hand, you are in the discretionary section of the 
Act, then it is discretionary to the Attorney General. So if 
she exercises that discretion, it is, by definition, not 
improper under the Act.
    Senator Specter. Well, do you know whether Mr. Litt made a 
recommendation under the mandatory provisions?
    Mr. Gangloff. I don't--I may have known that at some time, 
but I don't have a specific recollection of that. Also, 
Senator, let me point out I don't know over a period of time. 
As I said, it is a continuing process, an investigation that 
may lead to the appointment of an independent counsel. So, you 
know, Mr. Litt may have said--reached one recommendation at one 
time and later modified that recommendation. I just don't know 
that. I don't recall it.
    Senator Specter. Well, at one point Mr. Litt recommended to 
the Attorney General that independent counsel be appointed, and 
you don't know whether that was under the mandatory or 
discretionary. So he may have made a recommendation under the 
mandatory provisions, which would have led to his conclusion 
that the Attorney General was wrong not to appoint independent 
counsel as to the Vice President.
    Mr. Gangloff. I don't know whether that occurred or not. 
That is right.
    Senator Specter. What would the argument be, Mr. Gangloff, 
about not appointing independent counsel to Vice President Gore 
under the mandatory provisions?
    Mr. Gangloff. Senator, rather than give you that off the 
top of my head, I think you have probably seen the analysis. 
The argument at bottom would be that there wasn't specific and 
credible information of the violation of a statute--excuse me--
of a criminal law that is covered under the Act on the part of 
Mr. Gore.
    Senator Specter. Isn't it information, not evidence?
    Mr. Gangloff. Well, let me say yes just for the purpose of 
saying yes. I don't know that I have ever really made the 
distinction between information and evidence. But you know as a 
prosecutor information is evidence, and the question is how 
much probity does it have.
    Senator Specter. Well, the Congress, on going forward with 
a preliminary inquiry, used the word ``information,'' which is 
a lower standard, at least in the Congressional view, than 
evidence.
    But where you have the issue as to whether the Vice 
President knew that he was raising hard money, and you have 
four witnesses who testify to it--Strauss, who has a memorandum 
reflecting 35 percent hard money; Panetta, who said that the 
Vice President was focused and, ``knew what the hell was going 
on;'' and two other witnesses testify about hard money--and you 
have 13 memoranda coming from Ickes to the Vice President and 
you have Ickes at a meeting where he discontinues the meeting 
when the Vice President walks out on the issue of drinking iced 
tea and having rest room breaks, and you have the Vice 
President saying that he has been a campaigner for 16 years and 
has lots of experience, and you have the Vice President saying 
that the materials that were in the Ickes memoranda were gone 
over with the President and the Vice President, isn't that 
sufficient for further investigation, not for an indictment, 
not for deciding to prosecute, but for further investigation 
under the independent counsel statute?
    Mr. Gangloff. First, that is a hypothetical without other 
pertinent facts perhaps there. But I think that--and, again, I 
don't want to be at all unhelpful here, but I haven't reviewed 
the record on this. As I explained, I knew yesterday that I was 
coming and I understood we were going to stay on this 
memorandum. And perhaps this inquiry is relevant to it, and to 
the extent that it is, you know, I apologize, but I am not in a 
position to redo an analysis based on oral representations.
    Senator Specter. OK, fair enough. It is not a hypothetical 
question, it is in the record. But it is true that this goes 
beyond the memorandum, and I pursued the question because you 
affirmatively testified that the threshold wasn't met. If you 
say I don't know that the threshold is met and I am not 
prepared to answer the question, I wouldn't broach it with you.
    OK, thank you very much, Mr. Gangloff.
    Senator Torricelli. Mr. Chairman, could I ask a few 
questions?
    Senator Specter. Oh, by all means, sure.
    Senator Torricelli. Mr. Gangloff, now concluding your 
testimony, I thought we should put it somewhat in perspective.
    A great deal has been made about your presence at this 
meeting in which you have no particular memory. It should be 
noted for the record, since Mr. Gallagher is not sitting next 
to you at this time, that on May 24, 2000, before this 
committee, the following exchange took place which may put in 
perspective the value of your testimony with regard to the 
allegations concerning the Attorney General and her political 
position.
    Mr. Gallagher speaking: ``I have a specific recollection of 
Mr. Radek, who I have dealt with extensively during the same 
time period on other investigative matters, but I have a less 
specific but general recollection that there may have been some 
reference to pressure on the FBI, and walked away from the 
meeting with a sense that, again, this would have been a very 
sensitive and critical investigation.''
    Mr. Gallagher, later: ``There may have been some general 
discussion as to the fact that the Attorney General had not yet 
been selected by the President to continue in his Cabinet.''
    Mr. Gallagher again: ``If it will help Lee Radek, I was 
sitting on the sofa in Bill Esposito's office. Bill Esposito 
was in the wing chair to my left, Lee Radek was in the wing 
chair to my right. The three of us were the primary 
participants in the discussion. I have a vague recollection 
that he may''--my emphasis, ``may''--``have had a deputy off to 
the side.''
    Then Senator Torricelli speaking: ``Do you remember who was 
in the room?'' Mr. Gallagher: ``I remember Lee Radek, myself, 
and Bill Esposito.'' Senator Torricelli again: ``But not 
whether there were any others?'' Mr. Gallagher: ``At most, 
there was a fourth person. If it was, he sat off to the side 
and did not actively participate in the discussion. So while I 
give you his name, in complete candor, as to who could have 
possibly been in the room, that is the only person who may have 
been in the room.''
    So, Mr. Gangloff, if your memory seems sketchy, it appears 
to be because there appears to be no one who is certain you 
were in the room. You would be entitled to not have complete 
recollection. And indeed from what I am told, you may not 
actually have been Mr. Radek's only deputy; there are others in 
the division. It may have been you, it may not have been you. 
But I thought before we closed the record on your testimony, 
that should be included.
    Mr. Gangloff. Well, if I could just make one point on the 
context of that, which is that assuming I was in the room, the 
note that I did not--or the person there did not actively 
participate in the conversation would also indicate why, if I 
were there, I would not really have a full recollection of the 
meeting.
    Senator Torricelli. Exactly.
    Mr. Gangloff. Thank you.
    Senator Torricelli. Thank you, Mr. Gangloff.
    Thank you, Mr. Chairman.
    Senator Specter. So having not participated much, as 
Senator Torricelli has questioned, as you put it, you may not, 
``have a full recollection of the meeting.''
    Mr. Gangloff. I guarantee I don't have a full recollection 
of that meeting.
    Senator Specter. You do not have a full recollection of the 
meeting?
    Mr. Gangloff. That is correct.
    Senator Specter. OK, so some things might have been said 
that you don't recollect.
    Mr. Gangloff. That is correct.
    Senator Specter. Thank you very much.
    Mr. Esposito, will you step forward, please? Would you 
raise your right hand?
    Do you solemnly swear that the evidence you will present to 
this subcommittee of the Judiciary Committee of the U.S. Senate 
will be the truth, the whole truth, and nothing but the truth, 
so help you God?
    Mr. Esposito. I do.
    Senator Specter. Mr. Esposito, back on November 30, 1996, 
what was your position?

STATEMENT OF WILLIAM ESPOSITO, FORMER DEPUTY DIRECTOR, FEDERAL 
     BUREAU OF INVESTIGATION, U.S. DEPARTMENT OF JUSTICE, 
                         WASHINGTON, DC

    Mr. Esposito. I was the Assistant Director of the Criminal 
Division of the FBI.
    Senator Specter. And what is your occupation today?
    Mr. Esposito. I am a senior executive vice president with a 
company up in Wilmington, DE.
    Senator Specter. Do you recollect a meeting on November 30, 
1996--November 20, 1996?
    Mr. Esposito. Yes, I do, sir.
    Senator Specter. Who was there?
    Mr. Esposito. It was in my office. I was there. My deputy, 
who at that time was Neil Gallagher, was there. Lee Radek was 
there, Chief of Public Integrity, and Joe Gangloff was there.
    Senator Specter. What was the purpose of the meeting?
    Mr. Esposito. There were two purposes of the meeting. The 
first purpose was to formally request that we receive some kind 
of formal referral on the matter involving campaign finances. 
The second purpose of the meeting was to discuss with Mr. Radek 
the Bureau's input into whatever conclusion was made on the 
recommendation to the Attorney General as far as recommending 
an independent counsel.
    Senator Specter. And what was said at the meeting, by whom?
    Mr. Esposito. The meeting--and Mr. Gallagher was correct; I 
specifically remember where we were sitting. And Mr. Gangloff 
was seated to the right, my right, of Mr. Radek, on the couch 
also.
    And the meeting--we discussed those two points. It was a 
very cordial meeting, and the indications were that we were 
going to receive a formal referral on this matter, and that we 
would work together as far as input, as far as recommendations 
to the Attorney General.
    At the end of the meeting, if I--do you want me to finish 
what----
    Senator Specter. Go ahead, yes.
    Mr. Esposito. At the very end of the meeting, the meeting 
was breaking up and we were--and I had known Mr. Radek and Mr. 
Gangloff for many years and we worked together on many 
different matters. And like I said, it was a cordial meeting, 
and at the end of the meeting, as a matter of fact, I think I 
was out of my chair at that time and I think Mr. Radek, as I 
remember it, was even rising out of his chair.
    And the topic came up about the pressure that was put on 
both organizations, but specifically Public Integrity because 
they had to make the recommendation in this matter. And Lee did 
make the statement that, as a matter of fact,the Attorney 
General's job could hang in the balance. I do remember that 
specifically.
    Senator Specter. Did you make any response to that 
statement?
    Mr. Esposito. I can't recall exactly what I said, but 
something to the fact that I am sure you will do the right 
thing.
    Senator Specter. And what was the context----
    Mr. Esposito. And we walked out of the room.
    Senator Specter. Where was Mr. Gangloff, as best you 
recollect, at the time Mr. Radek said that?
    Mr. Esposito. If I can construct the seating arrangements 
in my office, there is a couch, and on each side of the couch 
there is wing chairs. On the right side, if you are looking at 
the couch, is where I was sitting. Neil Gallagher was to my 
right. Across from me was Mr. Radek, who was in the opposite 
wing chair, and to his right was Mr. Gangloff.
    Senator Specter. This comment by Mr. Radek was said at the 
very conclusion of the meeting?
    Mr. Esposito. Yes, it was, just as we were getting ready--
as a matter of fact, I was already out of my chair, I believe. 
And right after that, they walked out my door.
    Senator Specter. And specifically where was Mr. Radek at 
the time? You were out of your chair and where was Mr. Radek?
    Mr. Esposito. He was in his chair, in the same wing chair.
    Senator Specter. And where was Mr. Gangloff?
    Mr. Esposito. Sitting on the couch.
    Senator Specter. Was Mr. Gangloff within earshot of what 
Mr. Radek was saying?
    Mr. Esposito. Yes. I mean, I was much further away and I 
could hear it, so----
    Senator Specter. And where was Mr. Gallagher?
    Mr. Esposito. He was sitting on the couch, to my right.
    Senator Specter. And was Mr. Gallagher within earshot?
    Mr. Esposito. Yes, he was.
    Senator Specter. What was your reaction to Mr. Radek's 
statement?
    Mr. Esposito. My reaction was that I immediately after the 
meeting went down and reported it, reported the results of the 
meeting, including the statement, to the Director.
    Senator Specter. Did you consider Mr. Radek's statement an 
unusual one?
    Mr. Esposito. Well, I think it indicated to me the thought 
that he had to put into this decision.
    Senator Specter. What was the context of the public 
discussion, if you recall, at that time, November 20, 1996, 
about the Attorney General staying on in a second Clinton 
administration term?
    Mr. Esposito. The general knowledge I have--this was not 
discussed at any meeting I was at, but general discussion in 
the media around this period of time was the Attorney General 
had not been renamed to be Attorney General for the next 4 
years, or for the next administration.
    Senator Specter. And whom did you report this conversation 
to in the FBI, if anyone?
    Mr. Esposito. To Louis Freeh, the Director of the FBI.
    Senator Specter. And how soon after the meeting did you 
make that report to Director Freeh?
    Mr. Esposito. That was probably with--my recollection is 
that we did it almost right away.
    Senator Specter. Did you go straight from that meeting to 
Director Freeh's office?
    Mr. Esposito. My recollection is that after Mr. Gangloff 
and Mr. Radek left the office that Mr. Gallagher and I 
discussed personnel that we would assign to this investigation, 
and then I walked down to Mr. Freeh's office.
    Senator Specter. Did Mr. Radek's comment surprise you about 
pressure and the Attorney General's job being on the line?
    Mr. Esposito. Yes, it did. Yes, it did.
    Senator Specter. Did you discuss that with Mr. Gallagher 
contemporaneously with the event?
    Mr. Esposito. I don't recall if I did or not. I know I 
discussed it with Mr. Freeh.
    Senator Specter. And how long after the meeting, as best 
you can tell, did you report that to Director Freeh?
    Mr. Esposito. It had to be within 30 minutes, I would say.
    Senator Specter. And what, if anything, did Director Freeh 
say to you when you reported that to him?
    Mr. Esposito. He indicated to me that he thought this was a 
very serious matter and he was going to have to have a 
discussion with the Attorney General. Subsequently, whether it 
was that night or the next day, we had a further discussion 
about this conversation.
    Senator Specter. Whom do you mean by ``we?''
    Mr. Esposito. The Director and I; Mr. Freeh and myself.
    And I asked him specifically if he wanted me to put the 
discussion of this meeting in an FD-302, which is a form that 
most Federal prosecutors are familiar with. A 302 is a form 
that Bureau agents put reports on. And Mr. Freeh told me that, 
no, do not. He was going to have a meeting with the Attorney 
General and then he would construct a memo, which he 
subsequently did.
    Senator Specter. And did the Director then send you a 
memorandum?
    Mr. Esposito. Yes, he did.
    Senator Specter. And what did that memorandum say, in 
essence?
    Mr. Esposito. Well, it is the memo----
    Senator Specter. Do you have the memorandum with you?
    Mr. Esposito. Yes, I do. It is the memo of December 9 that 
Senator Sessions referred to earlier. It is a memo from the 
Director of the FBI to me, Mr. Esposito; subject: Democratic 
national campaign matter.
    Do you want me to read the----
    Senator Specter. Just read it. It is a short memo. Put it 
in the record.
    Mr. Esposito. Let me put my glasses on, sir.
    ``As I related to you this morning, I met with the Attorney 
General on Friday, 12/6/96, to discuss the above-captioned 
matter. I stated that DOJ had not yet referred the matter to 
the FBI to conduct a full criminal investigation. It was my 
recommendation that this referral take place as soon as 
possible.''
    ``I also told the Attorney General that since she had 
declined to refer the matter to an independent counsel, it was 
my recommendation that she select a first-rate DOJ legal team 
from outside Main Justice to conduct the inquiry. In fact, I 
said that these prosecutors should be `junkyarddogs,' and that 
in my view, PIS was not capable of conducting the thorough, aggressive 
kind of investigation which was required.''
    ``I also advised the Attorney General of Lee Radek's 
comment to you that there was a lot of pressure on him and PIS 
regarding this case because the `Attorney General's job might 
hang in the balance' (or words to that effect). I stated that 
those comments would be enough for me to take him and the 
Criminal Division off the case completely.''
    ``I also stated that it didn't make sense for PIS to call 
the FBI'' the lead agency' in this matter while operating a 
task force with DOC IG's,'' meaning Department of Commerce, 
``who were conducting interviews of key witnesses without the 
knowledge or participation of the FBI. I strongly recommended 
that the FBI and hand-picked DOJ attorneys from outside Main 
Justice run this case as we would any matter of such importance 
and complexity.''
    ``We left the conversation on Friday with the arrangement 
to discuss the matter again on Monday. The Attorney General and 
I spoke today,'' which is Monday, ``and she asked for a meeting 
to discuss the `investigative team' and hear our 
recommendations. The meeting is now scheduled for Wednesday, 
12/11/96, which you and Bob Litt will also attend.''
    ``I intend to repeat my recommendations from Friday's 
meeting. We should present all of our recommendations for 
setting up the investigation, both AUSA's and other resources. 
You and I should also discuss and consider whether, on the 
basis of all the facts and circumstances, including Huang's 
recently released letters to the President, as well as Radek's 
comments--whether I should recommend that the Attorney General 
reconsider referral to an independent counsel.''
    ``It was unfortunate that DOJ declined to allow the FBI to 
play any role in the independent counsel referral 
deliberations. I agree with you that based on DOJ's experience 
with the Cisneros matter, which was only referred to an 
independent counsel because the FBI and I intervened directly 
with the Attorney General, it was decided to exclude us from 
this decisionmaking process. Nevertheless, based on information 
recently reviewed from PIS/DOC, we should determine whether or 
not independent counsel referral should be made at this time. 
If so, I will make the recommendation to the Attorney 
General.''
    Senator Specter. That concludes the memo?
    Mr. Esposito. Yes, sir.
    Senator Specter. What did you take the Director's reference 
to, ``junkyard dogs,'' to mean?
    Mr. Esposito. Well, I have discussed this with the Director 
because I remember discussing it with him at the time. And my 
interpretation of a junkyard dog is somebody who latches--a dog 
that latches onto somebody, like an ankle, and won't let loose. 
And I think in this context, what I took it to mean is somebody 
who will latch onto this and overturn every stone to find out 
what actually happened.
    Senator Specter. The Director has quotes around, ``Attorney 
General's job might hang in the balance,'' ``(or words to that 
effect).'' What is your best recollection as to the specific 
language which Mr. Radek used in that respect?
    Mr. Esposito. The quote I remember is Attorney General's 
job might hang in the balance. I remember that specifically. I 
think why he put ``(or words to that effect)'' is because I 
cannot remember if he said pressure or stress. But we had 
discussed this memo 3\1/2\ years ago and I had not seen it 
until about a month ago.
    Senator Specter. Do you know if this memo was made 
available to any oversight committee of Congress?
    Mr. Esposito. I am not aware of that, sir.
    Senator Specter. Did you then attend a meeting with the 
Director and the Attorney General on December 11?
    Mr. Esposito. Yes, I did.
    Senator Specter. And is that meeting reflected in your 
diary?
    Mr. Esposito. It is my 1996 calendar, and I do have--I do 
have an entry on December 11: at 2:15 p.m., meet with AG re 
campaign finance reform with Director.
    Senator Specter. When you use the word ``reform,'' what do 
you mean by that?
    Mr. Esposito. Well, this is--my secretary had put that note 
in. I think what that specifically means is the campaign 
finance investigation.
    Senator Specter. And what was the substance of that 
meeting?
    Mr. Esposito. I believe this meeting was----
    Senator Specter. First of all, who all was present and 
where was the meeting held?
    Mr. Esposito. I believe the meeting was held at the 
Attorney General's conference room, at Department of Justice. I 
believe the Attorney General was there, Bob Litt was there, I 
was there, Director Freeh was there. Other than that, it would 
just be speculation on my part as far as who was there. I know 
there could have been others.
    Senator Specter. And who said what to whom?
    Mr. Esposito. I can't recall the exact specifics, but I 
think the basis of the meeting was to set up groundwork, or 
talk about the groundwork to set up for the task force to begin 
this investigation.
    Senator Specter. Was there any discussion at that time 
about any pressure on the Public Integrity Section?
    Mr. Esposito. No, there was not.
    Senator Specter. Was there any discussion about the 
Attorney General's job hanging in the balance or being on the 
line, or words to that effect?
    Mr. Esposito. No, there was not.
    Senator Specter. Was there ever any following discussion 
with Mr. Radek or anybody else from the Department of Justice 
about pressure on campaign finance investigations or potential 
prosecutions?
    Mr. Esposito. Not to me, no.
    Senator Specter. Any other discussion with Mr. Radek or 
anybody else of the Department of Justice about the Attorney 
General's job hanging in the balance or being on the line?
    Mr. Esposito. No, there wasn't.
    Senator Specter. Senator Sessions.
    Senator Sessions. Is it fair to say, Mr. Esposito, that 
this statement about the job hanging in the balance troubled 
you enough that you went rather directly to the Director of the 
FBI to discuss that with him?
    Mr. Esposito. Yes.
    Senator Sessions. And did it trouble him, also?
    Mr. Esposito. Yes, it did.
    Senator Sessions. And that was the primary reason--or was 
that a factor in his deciding to go to see the AttorneyGeneral?
    Mr. Esposito. That was one of the reasons, yes.
    Senator Sessions. You mentioned that the purpose of this 
meeting was two-fold. One was to request a formal referral. 
Now, a matter comes up and potentially a crime is reported that 
is a potential crime. At some point, someone has to be the lead 
agency to investigate it, to be the person charged, the agency 
charged with the investigation.
    Is that what you meant, that it would be referred to the 
FBI formally as the agency in charge of the investigation?
    Mr. Esposito. That is part of it. What I actually meant was 
that, as I recall, there were numerous articles appearing daily 
in the paper about the work that was being done by the 
inspector general's office at Department of Commerce regarding 
Mr. Huang. Although it was referred to as the FBI was the lead 
agency, we had not received any formal request from anybody to 
do anything.
    The Director normally holds morning briefings, around 8 
a.m. in the morning, at this particular time, and it was 
discussed at that meeting that I thought that since we are 
being bandied about in the paper as the lead agency but we have 
not received any formal referral, which is usually the way it 
occurs, from DOJ, that I was going to call Mr. Radek and set up 
a meeting.
    I do recall calling Mr. Radek and ask him to stop by my 
office sometime today. This was the day in question. And I seem 
to recall--my memory tells me that Public Integrity Section at 
that time,--and I don't know if they still are because I have 
been retired for 2 years and 9 months--their offices were not 
at Main Justice. And I seem to recall that Mr. Radek told me 
that he was either going to go--and I can't remember specifics, 
but he was either going to a meeting at DOJ or coming back from 
a meeting at DOJ and we would meet at my office. And according 
to my calendar, it shows a meeting at 4:30 in the afternoon.
    Senator Sessions. But it was important for the FBI, if they 
were going to be publicly identified with this investigation, 
to be in charge of it, or not, have that matter clarified?
    Mr. Esposito. Well, we felt that eventually somebody was 
going to ask us to be in charge of it and we wanted to get 
moving on it.
    Senator Sessions. And the second request was to ask for 
input into the independent counsel decision. Of course, the 
Department of Justice has the ultimate authority to decide the 
call or not. That is the Attorney General's call.
    Mr. Esposito. That is correct.
    Senator Sessions. But as a Federal prosecutor for a long 
time, I was never offended or in any way reluctant to receive 
any memorandum or suggestions from the FBI or any other law 
enforcement agency. And you were going to ask that you be 
allowed at least to provide some input from the FBI on this 
matter?
    Mr. Esposito. That is correct.
    Senator Sessions. Were you allowed to do so?
    Mr. Esposito. Yes, we were.
    Senator Sessions. What about the preliminary investigation 
decision that was entered into that concluded on, I believe, 
the November 30, 10 days after this meeting? Were you involved 
in that recommendation? Did you know that decision was going to 
be made?
    Mr. Esposito. I don't think we were, sir.
    Senator Sessions. Well, isn't it a fact, Mr. Esposito, that 
sometimes you have got to move promptly on cases?
    Mr. Esposito. That is correct.
    Senator Sessions. And isn't it a fact that quite a number 
of witnesses who were present at the Buddhist Temple are no 
longer in the country and have never been interviewed?
    Mr. Esposito. I believe once we started on the 
investigation, it was determined that some had left the 
country, yes.
    Senator Sessions. Ed Siong was one of those. Do you recall?
    Mr. Esposito. I couldn't tell you the specific names, sir.
    Senator Sessions. And are you aware that there were records 
shredded in this case?
    Mr. Esposito. No, I am not.
    Senator Sessions. Testimony, I believe, in the House 
committee from individuals who did not flee that records were 
shredded.
    But let me go back to this point. According to the facts we 
have, Senator McCain and a number of House members requested an 
independent counsel as a result of this fundraising event at 
the Buddhist Temple, and they detailed quite a number of 
complaints they had, and bases for that request.
    At that point, Mr. Radek at Public Integrity stopped the 
initial investigation that was ongoing in Los Angeles, or at 
least being prepared to go forward in Los Angeles by the U.S. 
attorney's office, and undertook to make a 30-day review. And I 
guess my question to you is, did you participate in doing any 
evidence-gathering to help him make that decision 10 days later 
from your meeting, November 30?
    Mr. Esposito. I think as was stated earlier, this was the 
very first meeting we had about this matter where we asked for 
a formal referral. I think the next----
    Senator Sessions. Did you even know that the Attorney 
General was going to make a decision a few days later, and that 
Mr. Radek was going to make a recommendation as to whether an 
independent counsel should be appointed?
    Mr. Esposito. I believe not, sir.
    Senator Sessions. And to your knowledge, no investigation 
was done by the FBI during that period?
    Mr. Esposito. Correct, unless it was the Los Angeles 
office, but they had not--I am sure they would have forwarded 
that to me.
    Senator Sessions. Well, I just wonder how you make a 
decision if you don't interview witnesses and gather evidence, 
unless you just read the newspaper. And going back and reading 
law books is not the way to do an investigation.
    In fact, Mr. Esposito, based on your experience with the 
FBI, isn't it true that a lot of times a case begins on a 
rather maybe significant but not particularly shocking criminal 
allegation, and that aggressive investigation uncovers a whole 
can of worms and a pattern of criminality?
    Mr. Esposito. Yes, that happens, sir.
    Senator Sessions. And isn't that why, when you do an 
investigation of this kind, you need an absolutely independent 
prosecutor and investigative team?
    Mr. Esposito. Yes. There was no--there is no mixing of 
words here. The FBI was pretty adamant in its position that 
they thought early on that this should be referred to an 
independent counsel.
    Senator Sessions. And isn't it a fact, also--well, I guess 
I want to get----
    Senator Specter. Senator Sessions, I am reluctant to 
interrupt you, but the House has their proceedings set for one 
o'clock, and there are people waiting. So to the extent we can 
expedite the balance of our questioning, I think they would 
appreciate it.
    Senator Sessions. Well, I will ask one more question.
    In the memorandum, Mr. Freeh referred to meeting with the 
Attorney General again to discuss the investigative team. Did 
he report to you what kind of commitments the Attorney General 
had made to establishing an independent investigative team of 
skilled prosecutors who were used to litigating?
    Mr. Esposito. My recollection is that--and this is a 
question that should be directed to Mr. Freeh, but we had a 
conversation about the--Director Freeh and I had a conversation 
about his conversation with the Attorney General, and he pretty 
much told me that she was going to not seek somebody outside of 
the Department, of Main Justice, and was going to give this to 
the Public Integrity Section.
    Senator Sessions. Which would have been contrary to his 
recommendation?
    Mr. Esposito. Yes, sir.
    Senator Sessions. Thank you, Mr. Chairman.
    Senator Specter. Thank you, Senator Sessions.
    Mr. Radek, would you step forward?
    Mr. Gallagher, would you pull your chair forward?
    Both of you men have been sworn in at the last proceedings, 
so you understand, Mr. Gallagher, you are still under oath?
    Mr. Gallagher. Yes, I do.
    Senator Specter. Mr. Radek, you understand you are still 
under oath?
    Mr. Radek. Yes, I do.
    Senator Specter. To try to boil this all the way down, Mr. 
Gallagher, we hadn't expected you to be here, but we thank you 
for being here. You were on your way to Ireland last week. I 
want to read you just two questions and two answers. I think 
that would be the fastest way to handle your testimony today.
    Your testimony at page 38 of the record, you said, ``During 
this discussion, there was a statement made by Mr. Radek that, 
as reflected in the memorandum, there was a lot of pressure on 
him and on the Public Integrity Section, and this was 
attributed to the fact that the Attorney General's job may hang 
in the balance.'' My question to you: ``Are you sure that 
conversation occurred.'' ``I am certain of the conversation.''
    And then similarly, at page 39, my question: ``And you are 
sure the conversation occurred where Mr. Radek used the 
language pressure on the Public Integrity Section because the 
Attorney General's job hangs in the balance?'' And you said, 
``Yes, Senator; yes, Senator.'' My question: ``Sure of that?'' 
Your response: ``I am positive.''
    Do you reaffirm that testimony?
    Mr. Gallagher. Yes, Senator, I do.
    Senator Specter. Is it absolutely clear, Mr. Gallagher, in 
your mind that the two issues, the pressure and the Attorney 
General's job hanging in the balance, were linked?
    Mr. Gallagher. Yes, Senator.
    Senator Specter. Mr. Esposito, is it absolutely clear in 
your mind that the two issues, the pressure and the Attorney 
General's job hanging in the balance, were linked?
    Mr. Esposito. Yes, sir.
    Senator Specter. Mr. Radek, we discussed this issue at some 
length on the 24, and as I had read your testimony earlier, you 
said that you may have used the word ``pressure'' and you may 
have talked about the Attorney General's job hanging in the 
balance, but there was no link between the two.
    Are you absolutely certain that there was no link between 
the two, Mr. Radek?
    Mr. Radek. Sir, if I may reiterate my testimony----
    Senator Specter. Yes, you may.
    Mr. Radek [continuing]. I have no recollection of the 
meeting and I have no recollection of the conversation. The 
speculation that I engaged in was speculation about things that 
I would have said because they were true.
    What was not true at the time, and so therefore 
myconclusion is I would not have said it, is that there was any link 
between anything having to do with the Attorney General's job status 
and any pressure on the Public Integrity Section. I acknowledged at 
that testimony as I acknowledge now that there was press speculation 
that the Attorney General's job was in such a state that she might not 
serve a second term. And I clearly acknowledge and was willing to tell 
anyone at the time that the Public Integrity Section was under a lot of 
pressure to do a good job in this investigation.
    Senator Specter. So those two factors were true, pressure 
on the Public Integrity Section and the Attorney General's job 
hanging in the balance?
    Mr. Radek. Well, hanging in the balance necessarily relates 
to something and makes that connection. What I testified to was 
I was aware that there were press reports that she might or 
might not be chosen to serve a second term.
    Senator Specter. But the pressure on the Public Integrity 
Section was not due to trying to protect the Attorney General's 
job?
    Mr. Radek. That is correct.
    Senator Specter. Senator Sessions.
    Senator Sessions. Is it your testimony that--well, do you 
remember a phone call from Mr. Esposito to you asking you to 
come over to discuss this matter at the FBI office?
    Mr. Radek. I do not. I do remember that it was a cause of 
some concern that while the investigation was going forward--
and I believe FBI agents were actually working on the case; I 
may be wrong, but I believe that is true--no formal referral 
had been received from the Bureau by the Department. And that 
very often happens. We will get a case started with a phone 
call, followed by a formal referral later.
    Senator Sessions. Well, that does happen, but it was 
appropriate at this point to do it formally, was it not?
    Mr. Radek. Yes.
    Senator Sessions. It was a fair request of the FBI?
    Mr. Radek. Yes, and----
    Senator Sessions. Bandied about in the paper, and they 
needed to be either in or out?
    Mr. Radek. There was no disagreement about that, yes, sir.
    Senator Sessions. And do you recall that you were requested 
to allow the FBI to have input into the appointment of the 
independent counsel?
    Mr. Radek. I do not remember that specifically, although it 
does not surprise me to hear that I would have been asked that. 
It seems natural. The history of the independent counsel 
deliberations in the Department was generally that the 
decisions were made without input as to the final 
recommendation by the FBI.
    I think that changed in the Cisneros matter because the FBI 
had an institutional interest there. They were the organization 
that was lied to, and so the Attorney General involved them 
quite a bit. And I think from that time on, they stayed 
involved in every independent counsel matter that I have been 
involved with.
    Senator Sessions. But with regard to the recommendation 
that you made on November 30, or thereabouts, against an 
independent counsel to the Attorney General?
    Mr. Radek. I am not sure which recommendation----
    Senator Sessions. The 30-day initial inquiry. Did you offer 
them an opportunity to participate in that?
    Mr. Radek. I am just not sure what recommendation you are 
referring to, Senator, if there is a document there. I don't 
recall specifically making a recommendation on November 30 on 
any independent counsel matter. There was a letter, a 
congressional letter, which under the statute had to be 
answered at that time which rejected a lot of independent 
counsel suggestions or demands, recommendations from the 
Congress. Is that what you are referring to?
    Senator Sessions. Well, yes. The Congress made that 
recommendation. You took over the case under the rubric of the 
30-day review, did you not, from the U.S. attorney's office in 
Los Angeles? Mr. Gangloff said you took it over because you had 
a request for an independent counsel.
    Mr. Radek. You are confusing this matter, the entire 
campaign finance matter, with a small part of it, which was the 
Hsi Lai Temple matter. The Hsi Lai Temple matter is a discreet 
matter that fell under the rubric of campaign finance, but the 
allegations that we were investigating and looking at initially 
were much broader than that.
    Senator Sessions. Well, in our last----
    Mr. Radek. So when you say this case, yes, I reached out 
and stopped the Hsi Lai Temple matter, but that wasn't the 
entire campaign finance matter and that wasn't the beginning of 
it.
    Senator Sessions. Well, I know our time is short. I guess 
the last time you testified here, you talked about recommending 
not having an independent counsel, and apparently the Attorney 
General at that point did so.
    Mr. Radek. On a number of specific matters, I have made 
recommendations to the Attorney General. Some of them have been 
not to have an independent counsel, and some of those she has 
agreed with.
    Senator Sessions. Well, Mr. Radek----
    Mr. Radek. On the Hsi Lai Temple matter, we examined 
quickly, once we received the information, whether or not the 
independent counsel statute was triggered. We determined it was 
not because there was no specific and credible allegation 
against the Vice President.
    Senator Specter. Senator Sessions, we are going to have Mr. 
Radek back a week from today. We had sought to limit his 
testimony to just the memorandum, but these matters are 
familiar. But I just wanted to call to your attention that we 
are going to go into a number of matters where Mr. Radek had 
taken control of investigations under the rubric, as you two 
have worked out the term--you agreed upon a term--under that 
rubric, and we are going to be discussing those next week, so 
that you will have ample opportunity to go into detail.
    I say that because your trusted deputy just brought you a 
big sheaf of materials and the House members are waiting, and 
as a matter of comity, we ought to liberate the witnesses.
    Senator Sessions. That is all I have.
    Senator Specter. Thank you very much, Senator Sessions.
    Thank you, Mr. Gangloff, Mr. Radek, Mr. Esposito, Mr. 
Gallagher.
    Mr. Radek. Thank you, Mr. Chairman.
    [Whereupon, at 1:13 p.m., the subcommittee was adjourned.]

 
                THE 1996 CAMPAIGN FINANCE INVESTIGATIONS

                              ----------                              


                        WEDNESDAY, JUNE 21, 2000

                           U.S. Senate,    
   Subcommittee on Administrative Oversight
                                    and the Courts,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:05 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Arlen Specter 
presiding.
    Also present: Senators Grassley, Sessions, and Torricelli.

 OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM 
                   THE STATE OF PENNSYLVANIA

    Senator Specter. Well, it is a little past 2 p.m., so we 
are going to begin these hearings. We had wanted to wait for 
others who had committed to be here by 2:00 p.m., but it is 
2:05 p.m. and we have a great many witnesses who have other 
commitments. So we will proceed.
    This hearing is another in our line of subcommittee 
oversight on the Department of Justice to inquire into the 
practices of the Department on enforcing the campaign laws. We 
have a long group of witnesses today. We are going to be 
dealing with a number of the specific cases where the Public 
Integrity Section had intervened and inquire as to their 
reasons for intervening in cases and why they did not pursue 
them.
    We are going to be inquiring into the allegations of Common 
Cause in 1996, and we have the Chairman and Vice Chairman of 
the Federal Election Commission here today to comment about 
what happened in 1996. And Common Cause has given public notice 
of an intention to pursue complaints again this year. The 
officials from Common Cause could not be here today because of 
board meetings, but we have a letter from Mr. Fred Wertheimer, 
President of Democracy 21, and Mr. Scott Harshbarger, President 
of Common Cause. It was written in response to the 
subcommittee's request for them to appear as witnesses, and I 
am going to read a portion of the letter to start the 
proceeding.
    ``In response to your recent inquiry, we are writing to 
confirm that Common Cause and Democracy 21 will shortly ask the 
Justice Department to conduct an investigation of the illegal 
use of soft money in the 2000 presidential campaigns by both 
major party candidates and their political parties.''
    ``These soft money funds are being used by the presidential 
campaigns to run ads promoting the Gore and Bush candidacies in 
the guise of being so-called political party `issue ads.' ''
    ``In fact, the ads are clearly campaign ads to promote the 
presidential candidates, are created by members of the 
respective presidential campaigns, are targeted to run in key 
presidential battleground states, and are without question for 
the purpose of influencing the presidential campaign.''
    ``As such, it is illegal to fund these ads with soft money. 
If this practice, which has just begun for the 2000 
presidential election, is not stopped, massive violations of 
the federal campaign finance laws will occur this year, in 
amounts even greater than the similarly massive violations that 
occurred in the Clinton and Dole 1996 presidential campaigns.''
    Skipping ahead, ``In our view, the Gore for President 
Committee and the Bush for President Committee, and their 
agents, along with their respective national political parties, 
are engaging in an illegal scheme to violate the prohibitions 
of corporate and labor union contributions, and the limits on 
individual contributions, in presidential campaigns.''
    Skipping further, ``In October 1996, Common Cause filed a 
complaint with the Justice Department charging that the Clinton 
and Dole campaigns similarly were using ad campaigns to 
illegally inject millions of dollars in soft money into the 
presidential campaigns.''
    ``The Justice Department originally responded by stating in 
a letter that the allegations `warrant careful consideration by 
the Department.' The letter also stated, `the facts you allege 
in your letter and the points you raise will be carefully 
reviewed and considered.' ''
    ``Recently released Justice Department documents, however, 
establish that this commitment was never kept.''
    ``These documents highlight the fact that key Department 
officials--including Louis Freeh, the Director of the FBI, and 
Charles La Bella, appointed by Attorney General Reno to head 
the task force investigating campaign finance charges--raised 
serious concerns about the Department's failure to conduct an 
investigation of the Common Cause allegations.''
    I know Senator Sessions plans to be here. He has an 
amendment pending on the Foreign Operations appropriations 
bill, and I just talked to Ranking Member Senator Torricelli a 
few minutes before 2 p.m., and I know he intends to be here. 
But because of the long list of witnesses and other 
commitments, we are going to proceed at this time. Now I call 
on my distinguished colleague from Iowa, Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. Thank you, Mr. Chairman. I think it is 
fair to say that, given the documents that we have been 
provided for this investigation and specifically for this 
hearing, an independent counsel should have been appointed for 
the campaign fundraising violations. There were many prominent 
players in the decisionmaking process who wanted it. Those that 
did not--and Mr. Radek was chief among them--really had to 
stretch the logical arguments.
    In the end, Mr. Radek bought hook, line, and sinker the 
argument peddled by the President's attorneys and advice of 
counsel argument which basically says that my lawyers made me 
do it.
    From documents that we have read, many people in the 
process were trying to do the right thing. They were calling 
them as they saw them. There should have been an independent 
counsel for the Vice President and for Mr. Ickes, and I would 
say that at a minimum. But the Public Integrity Section really 
was operating with a mind of its own, and it rubbed just about 
everyone the wrong way as it went through this process. Even 
James Robinson and Robert Litt disagreed with Public Integrity 
on the key issues involving an appointment. The FBI Director 
and everyone in the FBI from top to bottom believed with 
passion that an independent counsel should have been appointed, 
and the Attorney General's own hand-picked attorney, Charles La 
Bella, and his lieutenants supported it with equal passion.
    And this tells me a lot, Mr. Chairman. It appears that Mr. 
Radek, who is known in the investigative community as ``Dr. 
No,'' had cases from the field transferred to Main Justice and 
placed under his control. It is quite obvious those cases 
languished. He butted heads with the task force's lead 
attorney, Mr. LaBella. He referred the casesto the FEC with a 
memorandum of understanding between the Department of Justice and the 
FEC that clearly stated that the cases were in the Department of 
Justice's jurisdiction.
    He kind of wrote a scorch-and-burn memo to his superiors 
blasting the work of the task force. Some attorneys of that 
task force even resigned in protest. One of those attorneys, 
Steve Clark, we have yet to hear from. He was brought in to 
investigate the Common Cause allegations, yet he was prevented 
from even commencing the investigation.
    Mr. Clark wrote this upon his exit, ``Never did I dream 
that the task force's efforts to air this issue would be met 
with so many behind-the-scenes maneuvering, personal animosity, 
distortions of fact, and contortions of law.''
    The single most egregious non-act performed by Mr. Radek 
was his failure to allow the Common Cause allegations to be 
investigated, and for nearly 2 years that was the case. His 
office is called Public Integrity for a reason. The allegations 
charged a massive fraud being perpetrated on the American 
taxpayers. The Public Integrity Section's response was to 
abrogate its responsibilities to preserve public integrity. Its 
response was to look the other way to frustrate the process, to 
lawyer the case to inaction.
    So, Mr. Chairman, I believe that today's hearing will bring 
out much of this story contained in the documents that we have 
been provided, and I would like to commend you for your 
diligence in pursuing this and look forward to today's 
testimony.
    Senator Specter. Thank you very much, Senator Grassley.
    For the record, without objection, we will introduce the 
Common Cause letter to Attorney General Reno dated October 9, 
1996, and the letter from Mr. Harshbarger and Mr. Wertheimer to 
me, dated June 20, 2000.
    [The letter to Attorney General Reno follows:]
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    [The letter to Senator Specter follows:]
                                                     June 20, 2000.
Senator Arlen Specter,
711 Senate Hart Building,
Washington, DC.
    Dear Senator Specter: In response to your recent inquiry, we are 
writing to confirm that Common Cause and Democracy 21 will shortly ask 
the Justice Department to conduct an investigation of the illegal use 
of soft money in the 2000 presidential campaigns by both major party 
candidates and their political parties.
    These soft money funds are being used by the presidential campaigns 
to run ads promoting the Gore and Bush candidacies in the guise of 
being so-called political party ``issue ads.''
    In fact, the ads are clearly campaign ads to promote the 
presidential candidates, are created by members of the respective 
presidential campaigns, are targeted to run in key presidential 
battleground states, and are without question for the purpose of 
influencing the presidential campaign.
    As such, it is illegal to fund these ads with soft money. If this 
practice, which has just begun for the 2000 presidential election, is 
not stopped, massive violations of the federal campaign finance laws 
will occur this year, in amounts even greater than the similarly 
massive violations that occurred in the Clinton and Dole 1996 
presidential campaigns.
    The argument that these ads are legal as long as they are run as 
``political party'' ads and do not contain so-called magic words, such 
as ``vote for'' or ``vote against,'' has no basis in law.
    In fact, when the Supreme Court established the magic words test, 
it did so for outside groups only, and explicitly made clear that it 
was not creating this test for either candidate or political party ads.
    Furthermore, the political parties here are merely conduits, 
providing thinly veiled cover for the fact that the presidential 
campaigns design, create, target and control the ad campaigns, which 
are no different in kind or approach than other campaign ads being run 
by the Gore and Bush campaigns.
    In our view, the Gore for President Committee and the Bush for 
President Committee, and their agents, along with their respective 
national political parties, are engaging in an illegal scheme to 
violate the prohibition of corporate and labor union contributions, and 
the limits on individual contributions, in presidential campaigns.
    The Gore and Bush presidential campaigns are also engaging in an 
illegal scheme to violate the disclosure requirements of the federal 
election laws.
    And the Gore campaign is engaging in an illegal scheme to violate 
the presidential primary spending limits. Governor Bush did not opt to 
take public funding in the primaries and thus did not agree to comply 
with a primary spending limit.
    Furthermore, both the Gore and Bush campaigns will also be in 
violation of the presidential general election spending limits if they 
accept presidential general election public financing and continue 
these soft money funded ads during the general election period.
    Any such scheme to knowingly and willfully spend ``soft money'' to 
influence a federal election, to knowingly and willfully violate the 
federal disclosure requirements and to knowingly and willfully exceed 
the presidential primary spending limit is a criminal violation of the 
federal election laws.
    We also intend to file a complaint with the Federal Election 
Commission, which has jurisdiction over civil violations of the federal 
election laws.
    In October 1996, Common Cause filed a complaint with the Justice 
Department charging that the Clinton and Dole campaigns similarly were 
using ad campaigns to illegally inject millions of dollars in soft 
money into their presidential campaigns.
    The justice Department originally responded by stating in a letter 
that the allegations ``warrant careful consideration by the 
Department.'' The letter also stated, ``the facts you allege in your 
letter and the points you raise will be carefully reviewed and 
considered.''
    Recently released Justice Department documents, however, establish 
that this commitment was never kept.
    These documents highlight the fact that key Department officials--
including Louis Freeh, the Director of the FBI, and Charles La Bella, 
appointed by Attorney General Reno to head the task force investigating 
campaign finance charges--raised serious concerns about the 
Department's failure to conduct an investigation of the Common Cause 
allegations.
    According to a November 1997 memo sent by Freeh to Reno:
          [T]he Campcom Task force has failed to address an overarching 
        issue: whether the Clinton/Gore campaign (as well as the Dole 
        campaign) engaged in an illegal scheme to circumvent the 
        federal campaign finance laws. This issue was first raised by 
        Common Cause in October 1996, long before the Task force was 
        even constituted, but it has never been pursued.

See Memorandum attached to Letter of November 24, 1997 from Louis J. 
Freeh, Director of FBI to Attorney General Janet Reno, at 10.
    According to a June 7, 2000 article in the Washington Post 
referring to task force head La Bella:
          La Bella, in a December 1997 memo, complained that he had 
        been foreclosed from pursuing a complaint, filed by the 
        watchdog group Common Cause, alleging that both the Clinton and 
        Robert J. Dole campaigns had violated the law by having their 
        political parties run millions of dollars' worth on ``issue 
        advocacy'' advertising in their behalf.

    La Bella noted in his interim report:
          One could argue that the Department's treatment of the Common 
        Cause allegations has been marked by gamesmanship rather than 
        even-handed analysis of the issues.
                          interim report at 38
    Similarly, the FEC twice reviewed this matter, once in the context 
of an audit repayment determination, and once in the context of an 
enforcement action. In both cases the professional staff of the FEC, 
including the general counsel and the audit staff, concluded that the 
Clinton and Dole soft money funded ad campaigns violated the campaign 
finance laws.
    The FEC Commissioners both times failed to approve these 
conclusions, the second time--in the case of the proposed enforcement 
action--by a tie vote of 3 to 3.
    In 1996, tens of millions of dollars of soft money were illegally 
used by the two presidential candidates to conduct ad campaigns that 
clearly were intended, and clearly had the effect, of promoting their 
candidacies and influencing the presidential election.
    The abject failure by both the Department of Justice and the FEC to 
take action against these massive illegalities is now being improperly 
seen as a license for further illegal conduct, such as the soft money 
funded ad campaigns recently begun by Gore and Bush.
    We intend to strongly urge the Justice Department and the FEC to 
properly and promptly carry out their enforcement responsibilities and 
prevent tens of millions of dollars of soft money from being illegally 
contributed to and spent by the 2000 presidential campaigns.
            Sincerely,
                                   Fred Wertheimer,
                                           President, Democracy 21.
                                   Scott Harshbarger,
                                           President, Common Cause.

    Senator Specter. I will call the first two witnesses: the 
Honorable Darryl R. Wold and the Honorable Danny L. McDonald, 
Chairman and Vice Chairman of the Federal Election Commission. 
If you gentlemen would step forward and raise your right hands, 
our practice in the subcommittee is to swear in all witnesses. 
Do you each solemnly swear that the testimony you will give in 
this proceeding before the subcommittee of the Judiciary 
Committee of the U.S. Senate will be the truth, the whole 
truth, and nothing but the truth, so help you God?
    Mr. Wold. I do.
    Mr. McDonald. I do.
    Senator Specter. Thank you very much. Be seated.
    First, the subcommittee expresses its appreciation for your 
willingness to come on short notice. Let me turn to you, first, 
Chairman Wold, for any opening statement you care to make.

    STATEMENT OF DARRYL R. WOLD, CHAIRMAN, FEDERAL ELECTION 
                   COMMISSION, WASHINGTON, DC

    Mr. Wold. Thank you, Mr. Chairman. Good afternoon. And, 
Senator Grassley, good afternoon. I'm Darryl Wold. It's my 
privilege to be the Chairman this year of the Federal Election 
Commission, and with me, as you noted, at the table, is our 
Vice Chairman this year, Commissioner Danny McDonald.
    We are pleased to be here, primarily, I understand, to 
answer questions, so I will keep any remarks I have very brief. 
We have provided you with a couple pages of materials that 
explain some of the provisions of the Federal Election Campaign 
Act and how it is applied that might help put any questions you 
might have in context and provide us a point of reference if we 
need to refer to that in explaining or answering any questions.
    The first of those documents, of course, explains the hard 
money contributions limits. The cover letter also explains the 
prohibitions of the Act against receipt of contributions from 
prohibited sources--primarily corporations, labor 
organizations, and foreign nationals. So I think everyone 
understands that when we're talking about hard money, those are 
the limitations that we are talking about. And soft money, of 
course, is donations of money that do not meet those 
limitations of the Act.
    An issue that has arisen in several contexts that I believe 
this committee is interested in and that has also arisen in our 
enforcement actions is the question of a communication paid for 
by a political party or an advocacy organization, some 
independent organization, that has been coordinated with the 
candidate. That is not explained in great detail in the chart 
that you have, but it does appear there. But what doesn't 
appear is what constitutes the coordination.
    Of course, the Act recognizes that the coordinated 
expenditure--that is, one made in cooperation, consultation, or 
at the request of the candidate--is a coordinated expenditure, 
and that makes it a contribution to that candidate.
    The Supreme Court in Buckley v. Valeo recognized and 
acknowledged that the Act has that effect, that an expenditure 
made by an organization, including a political party, in 
coordination with the candidate is deemed to be a contribution 
to that candidate. And it is in that context that many of the 
difficult issues that we have had to face recently have arisen.
    So, with that, maybe that puts our position in a little 
context and gives us a framework of reference. I think at that 
point I will ask the Vice Chairman if he has anything he would 
like to say, and then we'd be glad to entertain any questions 
the committee might have.
    Senator Specter. Thank you, Mr. Wold.
    Mr. McDonald.

STATEMENT OF DANNY L. MCDONALD, VICE CHAIRMAN, FEDERAL ELECTION 
                   COMMISSION, WASHINGTON, DC

    Mr. McDonald. Mr. Chairman, Senator Grassley, thank you, 
only to say that I'll be happy to answer any questions. I think 
the Chairman has more than adequately covered the ground, and 
we'd be happy to answer any questions you have.
    Senator Specter. Mr. Wold, did the Federal Election 
Commission undertake an investigation of the activities of both 
the Democratic and Republican nominees for President in the 
year 1996?
    Mr. Wold. We did, Mr. Chairman. We are required to audit 
the campaigns of every candidate for President that receives 
matching funds in the primary under the Presidential Primary 
Matching Payment Act. So we conduct--first, we conduct those 
mandatory audits of every candidate for President who has 
received Federal funds in the primary. So we conducted those 
audits. Our audit staff made reports and recommendations to the 
Commission.
    Then at the same time we also received complaints from 
outside the Commission based on certain activities undertaken 
by those candidates. And the investigation was, in effect, our 
audit. Our general counsel's office did conduct a further 
investigation in support of the audit and in response to those 
complaints before it maderecommendations to us.
    So the short answer is, yes, we did investigate. I just 
want to make it clear, though, we did a good part of that 
investigation as part of our mandatory audit process.
    Senator Specter. And what was the conclusion of the Federal 
Election Commission as to the campaign of President Clinton and 
Vice President Gore for 1996?
    Mr. Wold. Well, we reached a number of different 
conclusions because there were a lot of issues that were raised 
in those audits. I couldn't begin to describe or to list the 
variety of conclusions that we did reach. But before we pursue 
that further, I should note that we regard the campaigns in the 
primary for the nomination as separate from those in the 
general because they're under two different parts of the law. I 
think the complaints that we received from the outside were 
directed at the primary campaigns conducted respectively by the 
Clinton-Gore campaign committee and by Senator Dole's campaign 
committee.
    Senator Specter. Well, did the Federal Election Commission 
undertake any enforcement action as to either Clinton-Gore or 
Dole-Kemp?
    Mr. Wold. We did undertake enforcement actions, but they 
did not result in any determination of a violation that I 
recall in any respect.
    Senator Specter. So there was no determination of violation 
by either Clinton-Gore or by Dole-Kemp.
    Mr. Wold. Not in the enforcement track, no. I cannot recall 
if in approving the audits, if there were determinations that 
reimbursements should be made or other actions taken. I'm 
sorry, I just don't recall. But that was not in the enforcement 
track.
    Senator Specter. Well, the general counsel of the FEC did 
make a recommendation for enforcement as to both campaigns?
    Mr. Wold. Yes, he did.
    Senator Specter. And what was the Commission response by 
way of voting on the general counsel's recommendation?
    Mr. Wold. I can't recall if there were more recommendations 
than the recommendations concerning the media ads run by the 
national parties in support of their respective nominees or 
future nominees. The principal focus of the general counsel's 
report, the one that has received the most attention, anyway, 
concerned the media ads run by the national party committees, 
the Democratic National Party's Committee and the Republican 
National Committee, respectively, in support of the Clinton-
Gore campaign and the Dole for President campaign during the 
primary election period.
    Senator Specter. Did the Commission split 3-3 on each of 
those votes?
    Mr. Wold. Yes, it did.
    Senator Specter. The Commission is composed of six members?
    Mr. Wold. Six Commissioners, yes.
    Senator Specter. And three from each of the parties, 
Republican and Democratic Parties?
    Mr. Wold. That's right. The law provides that no more than 
three Commissioners may be of the same party. There are, in 
fact, three Democrats and three Republicans serving as 
Commissioners.
    Senator Specter. The report that I have from your general 
counsel is dated January 12, 2000, and my question to you is: 
Notwithstanding the grave complexities involved, is there any 
way that it can be expedited? Why does it, in fact, take so 
long for a 1996 election to have the general counsel's 
recommendation in the year 2000?
    Mr. Wold. Well, there are a number of factors that go into 
that. The audit process that takes place first begins shortly 
after the campaigns are over. In the case where a candidate in 
the primary wins that party's nomination, the audit does not 
begin until after the general election. So the audits of these 
two campaigns would have begun sometime after the November 1996 
general election. We have a target now of completing those 
audits within 2 years after the election. That process is time-
consuming because it involves our auditors going out into the 
field and reviewing the records of these campaigns; after a 
Presidential campaign is over, records are sometimes not in the 
best condition that one would hope and it just takes time to go 
through that process.
    But our auditors did meet our target date of providing an 
audit report to us within 2 years after the general election. 
We got those reports in late 1998. It took the Commission then 
a period of some months to digest these, to vote on various 
aspects of those audits reports, on the various issues that 
were raised by them, and to adopt a final audit report 
reflecting the Commission's views on the issues raised by our 
audit staff.
    Senator Specter. The Commission is the sole agency which 
has authority to apply for injunctive relief to stop violations 
of the Federal campaign laws?
    Mr. Wold. The Commission does have statutory authority to 
do that under the Federal Election Campaign Act, yes. I cannot 
say that we're the only entity that could seek injunctive 
relief. I don't--I simply haven't----
    Senator Specter. Well, I believe the statute does make that 
provision, and I will give you a citation in a moment. We're 
going to have to go vote, and I want to give Senator Grassley 
some time to question here before we go to vote. But the 
question that I would like to focus on--a vote has been called. 
We will have to leave for a few minutes, and we will be back as 
fast as we can. But the question I would like you to focus on 
in the interim is that, given the ads which have already 
started by both Presidential campaigns, and given the findings 
of your general counsel last time, and given the fact that you 
have authority to seek injunctive relief to stop the process, 
what are the prospects that the Commission might be able to 
undertake that in a meaningful way, it now being June 21 and 
these ads are now proliferating.
    Let me give you time to ponder that question, which is 
substantial, and let me turn to Senator Grassley.
    Senator Grassley. I don't have any questions of these two 
witnesses. Mine are going to be for witnesses later on.
    Senator Specter. Well, fine, Mr. Wold. Then answer the 
question. [Laughter.]
    Mr. Wold. I appreciate the time you've given me, Senator.
    Senator Specter. Well, I think it is a very fundamental 
question.
    Mr. Wold. It is.
    Senator Specter. The Federal campaign laws provide 
atChapter 14, ``The Commission shall have exclusive jurisdiction with 
respect to civil enforcement of such a provision.'' And the difficulty 
obviously is that to come in long after the fact, the horse is out of 
the barn--I see Vice Chairman McDonald nodding in the affirmative--that 
injunctive relief is very important which could stop violations. And 
this is a tough question of complexity of the issues, but you have been 
through a lot of them. It is a question of resources, and I want to 
come to that, as to whether you have adequate resources, because that 
is an issue for the Congress. And what are the realistic possibilities 
that the Commission could come to grips with this matter now in June 
and consider injunctive relief?
    Mr. Wold. Should I start on the answer now?
    Senator Specter. Please do.
    Mr. Wold. All right. Well, Senator, as you noted, it is a 
complex area, and overlaying the complexity of the Act itself 
and the facts of any particular violation are considerations of 
the First Amendment. As a lawyer, I have a concern about any 
law that infringes on First Amendment rights of speech and with 
any judicial procedures that interfere with those. And seeking 
injunctive relief in this area raises the specter of or the 
prospect of it being a prior restraint. And I'm not sure how 
the courts would deal with that. I'm not aware of any action 
that any time the Commission has, in fact, sought injunctive 
relief, that is, of any time that it has exercised that 
authority it has under the statute. But assuming that----
    Senator Specter. Well, Chairman Wold, when you talk about 
prior restraint, you are talking about Near v. Minnesota. You 
are talking about going in, stopping--Pentagon Papers cases, 
about going in and stopping publication of something which 
hasn't been disclosed, and that is a prior restraint.
    But here you have a long record of what has been the 
practice, and now you have advertisements which have already 
been in the public domain. So that you are in a position to say 
not that you shall not advertise, but that you shall not 
advertise as you have advertised on the advertisements which 
constitute advocacy ads or intent to influence an election, a 
statutory term.
    Let me ask you to ponder that question because we are close 
to the end of this vote, and we will stand in recess for a few 
minutes, and we will return as fast as we can.
    [Recess 2:30 to 2:54 p.m.]
    Senator Specter. Chairman Wold, coming back to the point of 
the last question, where you have a pattern of conduct and you 
have had an analysis that they are ads which are intended to 
influence an election, and they have all the other indications 
of violation of Federal election law, wouldn't you think that 
that kind of a situation would be appropriate for injunctive 
relief where you may have information as to the next ads which 
are coming because they are repeating themselves or they are 
being repeated, wouldn't that be an appropriate basis for 
injunctive relief, notwithstanding the great concern which I 
share with you about First Amendment and customary prior 
restraint?
    Mr. Wold. Well, Senator, I can understand the appeal of 
that, of the Commission seeking injunctive relief. On the face 
of it, that sounds like a very appealing route to go.
    One impediment to that is the somewhat, I might candidly 
say, very cumbersome enforcement procedure that we have to go 
through under the Act that is mandated by Section 437(g) of the 
Act. And it's my understanding that that would apply to an 
action for injunctive relief as well as to our actions seeking 
penalties.
    Senator Specter. Well, what are those cumbersome 
procedures? Perhaps we could legislatively act on them to 
simplify them.
    Mr. Wold. That could certainly be done.
    Senator Specter. What would you like to see done so that 
you would have some effective injunctive powers?
    Mr. Wold. Well, I guess the answer would be to bypass some 
of those procedural steps that we are required to go through, 
but----
    Senator Specter. Well, what are they?
    Mr. Wold. After we receive a complaint or a matter comes to 
our attention through our internal processes, the first stage 
is we get a report from our general counsel advising us whether 
we have sufficient allegations of a violation to find what the 
Act refers to as ``reason to believe'' that there has been a 
violation. We then have a Commission meeting to consider that, 
and assuming we do find that there is reason to believe that 
there has been a violation--I should add that if the complaint 
comes from the outside before we can find reason to believe, we 
have to send the complaint to the respondent and give the 
respondent the opportunity to file a brief showing why we 
should not find reason to believe. But assuming we do find 
reason to believe, then the general counsel can begin an 
investigation. Counsel has the usual typical civil discovery 
tools at his disposal to conduct that investigation. When the 
counsel feels he has enough facts under the applicable law to 
advise that we should proceed to the next stage, the next stage 
that is given to us, mandated by the statute, is to find 
``probable cause to believe'' that there has been a violation.
    Before we do that, though, the general counsel has to 
prepare a brief supporting that finding, send it to the 
respondent, and give the respondent time to reply to the 
general counsel's brief with their own brief. Then the 
Commission meets and considers the issues, the arguments raised 
on both sides, and at that point we can find probable cause to 
believe that there has been a violation.
    If we do cross that threshold and find that there is 
probable cause, then the statute mandates a conciliation period 
of at least 30 days before we can--during which time we have to 
try to reach an agreement on a penalty, or in this case on an 
injunction. And if we do not reach an agreement during that 
period of time, then our remedy is to file suit in the Federal 
district court to ask the court to impose the penalty, civil 
monetary penalty or in this case an injunction. And then that 
starts the typical proceedings in court.
    So injunctive relief, while it has some appeal on the face 
of it, would be subject to these very time-consuming steps that 
we have to go through that have time periods built into them 
that we have to respect. So by the time we would get around to 
actually--if we didn't conciliate--filing suit in the Federal 
district court and getting the court to order the injunction, 
even if the court acted on an expedited basis, as they 
sometimes do in giving injunctive relief----
    Senator Specter. Well, there are----
    Mr. Wold [continuing]. It would be months before we would 
get a result there.
    Senator Specter. There are timetables for all of the 
filings. If you talk about conciliation, we might make some 
legislative changes on that. It would be appreciated if you 
would give, the Commission would give us your thinking on what 
we might do to speed it up.
    Do you have adequate resources, Chairman, to handle these 
matters? Would additional resources be of assistance to you in 
moving along this chain, this timetable in a more expeditious 
manner?
    Mr. Wold. Well, we have wrestled with the question of 
adequate resources each year in our budget process. I can say 
that for our fiscal year 2001 budget request we have not 
requested additional resources in our enforcement staff because 
we have, I think, been doing a pretty good job of staying on 
top of the enforcement actions that we have. The number of 
cases that we have had to dismiss because we haven't been able 
to get to them in a timely manner has dropped considerably in 
the last couple of years.
    In our current year's budget, fiscal year 2000, we had an 
increase of four in our enforcement staff between our audit 
division and our general counsel's office, which is only a 
couple less than we had actually asked for. So Congress gave us 
basically what we asked for there.
    In the previous year's budget, fiscal year 1999, Congress 
had given us a very substantial increase in our enforcement 
staff that we took a long time--it took a long time to actually 
hire up to that level. But as I say, the real test is how many 
cases we are not able to get to in a timely manner, and that 
number has been dropping quite dramatically in the last couple 
of years.
    So, generally speaking, I think we have had adequate 
resources. We have not told Congress that we need more at this 
point.
    Now, if an additional task was given to us to seek 
injunctive relief, that's a time-consuming, time-intensive job. 
I know that as a private attorney. I'm sure you do, also, 
Senator. And we would almost undoubtedly need additional staff 
to handle that, because another aspect of that is actually the 
facts of coordination. You know, we can look at the ads, we can 
say that that ad running on television is obviously for the 
purpose of influencing a Federal election, but that doesn't 
mean it was coordinated. We still have to do that investigation 
and get the depositions, get the testimony, get the admissible 
evidence to show that was, in fact, the case.
    Senator Specter. Well, if you would take a look and give us 
your suggestions, we would appreciate it. It may be that some 
of those procedures like conciliation might be eliminated or we 
might not give you exclusive jurisdiction, let other parties 
come in.
    Vice Chairman McDonald, I see you nodding in the 
affirmative. Do you think that would be a good approach to take 
away your exclusive jurisdiction?
    Mr. McDonald. I hope we can have an opportunity to follow 
up on the discussion, because we would like to look for ways 
that we might be able to move more rapidly in all these areas, 
not only this area of injunctive relief.
    Senator Specter. Mr. McDonald, moving to another subject 
for just a moment before yielding to the ranking member here, 
what is your thinking about having a Commission which is six, 
an even number, which has resulted in so many 3-3 decisions? Do 
you think Congress might be well advised to structure a 
Commission so that we do not have the political composition and 
might come to some resolution of some of these issues?
    Mr. McDonald. Well, I think it presupposes something, Mr. 
Chairman, that I don't think the record actually reflects. For 
example, in the case you alluded to at the outset of this 
hearing, that vote was along party lines. Now, you----
    Senator Specter. No, no. I know----
    Mr. McDonald [continuing]. Didn't indicate that, but I'm 
just saying as a practical matter, when we hear----
    Senator Specter. I did not--I know it wasn't along party 
lines. But sometimes there is speculation that there may be an 
accommodation here so that it is not along party lines but 
really is.
    Mr. McDonald. Well, if the issues are about speculation and 
accommodation, no matter how many Commissioners you have, 
whether you have six, seven, nine, or five, I think you're 
always going to have that problem, if the issue is trying to 
anticipate speculation.
    I think what's really more realistic about what you find at 
the Commission is that you have individuals who have a thorough 
knowledge of the law and they legitimately differ over a number 
of very fundamental issues. And I think the Chairman did a very 
good job indicating the battleground in one sense, which is 
over the First Amendment and just how far you can or cannot go.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman. I really only 
have one area of inquiry, and that is that while the focus of 
this committee and, indeed, the Justice Department is on 
previous elections, the Nation is now in the midst of a new 
election cycle. And in my judgment, whatever abuses there were 
of soft money or other problems in 1996 could pale in 
significance with what is unfolding before us at the moment 
with the misuse of the Tax Code and 527 organizations.
    Soft money was important to the 1996 election, but the sum 
total of all improper money that entered the 1996 election, in 
my judgment, was not decisive in the outcome of any races of 
which I am aware. Laws were either violated or stretched to 
their limits, but it has not to my mind yet undermined the 
integrity of the process.
    I am not convinced by the time the 2000 elections are over 
we will come to the same judgment. I am already witnessing in 
my own State that the misuse of the Tax Code for 527 elections 
are proving decisive.
    Does the Commission believe it is in its jurisdiction to 
look at these organizations or the proliferation of other 
organizations that are a clear effort to evade the campaign 
finance limitations and structural limitations? And if you do, 
do you feel you have jurisdiction and means to deal with the 
problem, or is it a law enforcement problem that should be 
dealt with elsewhere?
    Mr. McDonald. I'll be happy to respond, Senator. We just 
actually had in an open meeting session about 3 weeksago this 
very discussion. One of my colleagues put forth a proposition, 
Commissioner Sandstrom, on this very issue of 527's. I indicated in 
that public session I do think we have the authority. I think we 
currently have the authority. Now, there is honest disagreement about 
whether we do or whether we don't, and I'll admit to you that it's 
always a tough call. I think we have the authority based on the nature 
of what I think the 527's are doing.
    My concern about any group, whether it's 527's or anyone 
else, as a practical matter is the issue of secrecy. In that 
particular format, what you have, quite frankly, is substantial 
sums of money going into what surely most people would consider 
is the political process, and yet there is no indication of 
where the money's coming from.
    I have spent years trying to work on issues of people's 
rights in terms of human rights and their ability to have free 
and fair elections around the globe. So I'm always somewhat 
chagrined when people talk about what their interpretation of 
my interpretation of the First Amendment is.
    I'm real strong for the First Amendment. I don't believe 
any of us at the Commission are not. But the First Amendment, 
and secrecy, I don't find it in there.
    As a practical matter, I think we currently do have the 
authority to proceed in those matters, and I think we should. 
Although soft money is a major issue and it is another issue 
the Commission is trying to grapple with and come to grips 
with, at least there is a record.
    One of the most ironic things historically about the soft 
money issue is that the Commission in 1991 started requiring 
the disclosure of soft money. The irony is that without 
disclosure, as a practical matter, we probably would not be 
having this debate today because people were not cognizant of 
the amount of soft money being spent before it was recorded via 
disclosure.
    At a minimum, I would hope we would do the same thing in 
the area of 527's because, again, there is a substantial amount 
of money, it appears to me, being put into the political 
process. I think anyone ought to be able to participate in the 
process.
    Senator Torricelli. Let me pose the contradictions for you 
if I can. Here is my concern. I raise this with you not simply 
as a member of this committee, but as the chairman of the 
Democratic Senatorial Campaign Committee.
    I watch these campaigns across the Nation every day. Here 
is the reality that we face. I know the Commission's reluctance 
to become engaged in investigations and these judgments during 
the course of a political campaign. Indeed, the FEC and the 
Justice Department, I think, should always err on the side of 
suspending investigations during the middle of a Presidential 
or other campaign.
    You can influence the outcome simply by the inquiry. It is 
best left. That has been your policy. I believe it should be 
your policy.
    However, this is an instance where the composition of the 
U.S. Congress and potentially the Presidency can be influenced 
by whether or not these 527 organizations proliferate. This is 
not a marginal question. This is not like soft money in 1996 
that can have some ancillary impact. Races are being won and 
lost now because of organizations that, in my judgment, are 
created for the sole purpose of evading campaign finance laws, 
where within the current political culture and the laws that 
are being interpreted and applied, either foreign money or 
great individual wealth are being channeled into these 
organizations in what at least appears to be coordination with 
political entities in violation of the law.
    I am outlining for you a dilemma, not an answer. I believe 
you err on the side of not interfering in the process by 
investigating during a campaign. I think that is true for you, 
and I think it is for the Justice Department.
    However, if you do not, we are going to be having hearings 
in 2 years about how the U.S. Senate and the U.S. House of 
Representatives were altered in their composition because of 
patently illegal acts and you did not investigate and you did 
not act during an election campaign, and we will all be 
regretting that it happened. We will be discussing new laws to 
deal with it, or we will be chastising you or people in the 
Justice Department because you did not act, but the fact is the 
damage will be permanent and irreparable.
    Mr. Wold. Senator, if I could jump in on this. I recognize 
the concern that the Senator has and that many people have 
about these entities that have tax-exempt status under section 
527 and are not subject to the reporting requirements of the 
Act. The limits on organizations that we can bring under the 
coverage of the Act, though, is defined in the Act as being for 
the purpose of influencing a Federal election, and on the 
expenditure side, anyway, the U.S. Supreme Court has said that 
we have to apply a bright line test to determine whether an 
expenditure is for the purpose of influencing a Federal 
election. That bright line test, they articulated is what we 
call the express advocacy standard.
    If an organization is not engaged in that kind of express 
advocacy, expressly advocating the election or defeat of a 
clearly identified candidate by using the words ``of advocacy'' 
that the court listed or the functional equivalent of those 
words, I do not think that the Act enables us to say that they 
should be subject to the reporting requirements of the Act and 
to the limitations of the Act.
    Senator Torricelli. Let me interrupt you for a second 
because I think we can narrow what I am looking for.
    So, indeed, you may not actually have the current authority 
to deal with the problem that is now concerning me, and that is 
an advertisement is placed in television or on the radio or 
through mail that is advocating a position and, consistent with 
the interpretation by the Supreme Court, is not an express 
advocacy. Therefore, you have either limited ability or no 
ability to audit the source of those monies or to investigate 
coordination.
    Mr. Wold. We can investigate coordination because, if the 
coordination has been with the candidate and we receive a 
complaint that a candidate coordinated with some entity, even 
if that entity is not under our jurisdiction, we can 
investigate that coordination because that would be a 
contribution to the candidate, and that is within our 
jurisdiction. But if the organization is operating 
independently of a candidate and engaging in its own speech 
that falls short of expressly advocating the election or defeat 
of a candidate, then I have very substantial doubt that that 
could be brought within the coverage of the Act.
    As the vice chairman said, there are reasonable people that 
disagree on that, but that is my basic concern.
    Senator Torricelli. My concern--with all due respect to you 
and the people at the Justice Department, you have studied this 
as a matter of law and you followed these issues. Sometimes 
what looks to you like it does not meet the threshold, to some 
of us it does not get past the laugh test.
    I am seeing campaigns every day where a former chief of 
staff leaves the office and establishes a 527. The same media 
consultant is used for both campaigns. Remarkably, they stress 
the same issue, and all of a sudden, the candidate has very 
little money in their own campaign, is spending millions of 
dollars on a tax-free basis and nobody knows where the money 
comes from or how this happened.
    That, understandably, may not meet your threshold, look 
like a violation of the election laws, but to anyone engaged in 
these campaigns, this is the most transparent laundering of 
money on an illegal basis to evade reporting requirements in a 
coordination that one could witness.
    If you do not have the authority or it does not meet your 
threshold, I understand, but somewhere in this Government, 
somebody has to recognize this or I am telling you the campaign 
finance laws of this country in the next 90 days are going to 
collapse around our ankles. We are close to no governing 
authority.
    While you audit campaigns of 4 years ago, the Justice 
Department looks at what Al Gore or Bill Clinton may or may not 
have said 4 years ago, the campaign finance laws of the country 
are crumbling.
    What I want to know is if you do not have that authority 
and you cannot deal with it, I understand, but we need 
somewhere in this Government, somebody, from the Attorney 
General on down, who has got to decide someone is going to get 
engaged.
    Mr. McDonald. Senator, it is interesting. It is an ongoing 
debate at the Commission, and the chairman is a true good and 
valued friend of mine. We obviously have a fundamental 
difference of opinion.
    I do not believe the law says simply that you have to have 
express advocacy to find a violation. For the purpose of 
influencing the election is the standard in the statute. And 
personally I think we do have the authority to regulate in this 
area. It is a close call on either side. I will be the first to 
say that.
    But let me point out one other thing that is happening 
which is unfortunate. By the way, there are a number of 527's, 
I think, that certainly play by the rules of the game. That is 
the other side of this issue, and I would not want to leave 
that out.
    Senator Torricelli. I do not want to leave the impression 
that some do not either. I may not like the rules of the game, 
but some of them, undoubtedly, comply.
    Mr. McDonald. But the other side of it is that, ironically, 
I think at some point, it is going to start hurting the two 
political parties. Why would I go to a political party and put 
myself in jeopardy of being on the public record, when I can 
get the same result and I really do not have to be on the 
public record unless I want to?
    Again, my concern about it is that the element of secrecy 
is a pretty serious matter. But, I have said this on numerous 
occasions, and so it is not a closet secret. Periodically, on 
some of these matters, I think we appear to be the only people 
in town that do not know what is going on. I do not mean that 
negatively. I just think we stretch and strain at a time we do 
not need to. And with the full understanding, with the 
differences I have with my colleagues, all of us try to get to 
these problems the best we can. But, realistically, from my 
vantage point, what we see out there, I do think we have the 
authority and I have always thought we had the authority. 
Otherwise, what you are basically saying is someone would just 
have to be incredibly naive to overstep the bounds. You would 
have to want to write out a statement, it seems to me, that 
yes, this, is express advocacy, and, therefore, I just want to 
tell you I am going to do that. I do not know anybody who would 
do that in this day and time. But, I think it hurts the 
political parties because they may start getting left out of 
the process, too.
    Senator Torricelli. Thank you very much.
    Mr. Wold. Senator, if I could add one comment about this, 
also. One dilemma that we have considered is if we did--if the 
incentive to bring what we refer to as 527 organizations under 
the coverage of the Act, is driven by the need for disclosure, 
that is something that I don't believe that we can do under the 
present structure of the Act. We don't have any means of 
defining an organization that is subject only to disclosure 
requirements, but not to the limitations of the Act.
    So, by interpreting the provisions of the Act to cover 
these organizations, we are automatically--the Commission would 
automatically be imposing not only the disclosure requirements, 
which have a relatively mild effect on the First Amendment 
rights of an organization, but we would also be imposing the 
limitations of the Act on the amounts of contributions and the 
sources of contributions.
    Senator Specter. Mr. Wold, I think most of us would agree 
that you need some statutory change, and that is something we 
are going to be pursuing after the hearing.
    I want to turn to Senator Sessions because we have got a 
great many witnesses, but before I do, I want to say that I 
agree with what Senator Torricelli has said about the campaign 
laws in a state of collapse as to the 527's. I think we are 
virtually in a state of collapse as to the proliferation of 
soft money if it accumulates as it did in 1996, but those are 
issues we will take up further.
    Let me turn now to our distinguished colleague, Senator 
Sessions.
    Senator Sessions. Mr. Chairman, I thank you for offering me 
the time and for your leadership. I have been on the floor of 
the Senate and was not able to be here, and I would not ask any 
questions at this time. So you can go on to your next subject.
    Senator Specter. OK. I just have one final question. This 
may intrude upon your deliberations. So I am treading lightly. 
I think it is an appropriate question, but I shall not press 
it, but if you would care to answer it--Commissioner McDonald, 
Commissioner Thomas raised a public issue in his opinion 
statement of reasons in the Dole for President, Clinton-Gore, 
et cetera, and I quote from his printed public record, ``As I 
consider the varying approaches of others on these matters, I 
might focus on my criticism on my friend and colleague, 
Commissioner McDonald, who always heretofore has joined me in 
finding similar partycommunications to be in-kind contributions 
or coordinated expenditures.'' That appears at page 17.
    An answer may be intrusive. So I am not going to press you 
for an answer, but I would like to give you an opportunity to 
respond to that, if you care to.
    Mr. McDonald. I would be happy to, and he will still be my 
friend. I don't need to look it up. I believe I have read that.
    Yes, I would be happy to discuss it, Senator. Actually, it 
was something I wanted to say at the outset when we first--when 
you opened the hearing this afternoon.
    First of all, he is right about the history at least in 
relationship to myself in terms of trying to come to grips with 
these coordination issues. What transpired, though, I must say 
to you--and I think it may be a key component to what is 
discussed later here this afternoon--in 1996--I'm sorry--in 
1998, I guess in about December--I will have to look back 
through my notes just a second, but the Commission on December 
10, 1998 by a vote of 6 to nothing, unanimously, rejected the 
audit recommendations for repayment of public funds, 
unanimously, not 3 to 3, unanimously.
    The day before that vote, several of my colleagues--in 
fact, a majority of my colleagues, rejected a precedent which 
is understandable. I didn't happen to agree with it, but they 
rejected the precedent of repayment which we always had 
throughout the history of the Commission.
    Subsequently, we had other matters that involved pretty 
much the same issue. We had a case in Wyoming--I'm sorry, my 
lawyer is whispering to me, Montana, and she is right. We had 
another case that, from my vantage point, was exactly the same 
in terms of the issues; that is to say, the participants of the 
National Committee on public record had gotten together with 
their candidates to arrange particular ads to be run.
    I might say, Mr. Chairman, I had also voted for reason to 
believe for the first time around on the Clinton-Gore case. As 
you know we brought this case, the Clinton-Gore matter at 
least, through the process on two different occasions. It 
became very clear to me, after rejecting a program we had used 
for about 25 years in relationship to repayment determinations, 
and striking down Advisory Opinions 1915 and 1914, in which we 
used the shorthand version of the electioneering message 
standard, quite frankly, other than the names of the players, I 
could see no distinctions in the other two cases.
    It appeared to me we have a very serious notice problem. I 
don't care what the rules of the game are, and I don't think 
the regulated community does as long as they feel they are 
consistent. And, I have an honest disagreement with some of my 
colleagues about how we applied the law.
    If you tell me tomorrow a touchdown is worth 3 points and a 
field goal is worth 7, that is fine. I will just start 
practicing kicking. But I think you are entitled to know when 
you are in the regulated community what the rules of the game 
are.
    It became clear to me, after being in a number of public 
sessions--I think the Justice Department may have had 
representatives there as well--the one thing that the six 
Commissioners agreed on was that there was no agreement on the 
rules of the game. Now, I am referring to the ads very 
specifically in the case you made reference to. We voted 
unanimously not to proceed for repayment in those matters.
    I didn't feel in good conscience I could turn around after 
we had done that in a public session, which I might point out 
parenthetically that a major part of the action in the 1995-
1996 case with the Clinton-Gore Campaign in particular focussed 
on 1995. And, two where we took no action at all in 1996, those 
were activities during the election year itself.
    I think notice is a very important matter. I go back to 
something that Senator Torricelli said earlier. I would prefer 
to err on the side of being realistic about what we are saying 
to the regulated community, and Commissioner Thomas was right 
in his assessment of the history of my record at the 
Commission.
    When I concluded that we were no longer applying the same 
rules that we have applied for the first 25 years of the 
Commission, and certainly in the first 16 or 17 years of my 
term, I could not go forward in the Clinton-Gore matter. I saw 
this from my own vantage point, I pass no judgment on my 
colleagues. My direction is not at my colleagues, but how I 
thought the regulated community would look at it.
    I think it is incumbent on the Commission to come up with 
some sort of bright line test that we can get an agreement on 
out of the context of a particular political matter. I think 
failure to do that lends itself to the kind of problems you 
have alluded to from the outset in this process.
    We said very clearly in the meetings in December 1998--and 
there was not a Commissioner, including Commissioner Thomas, 
who did not say that this has been a tortured, difficult, and 
unclear path. I think that being the case, it may well be why 
we voted 6 to nothing not to proceed. I hope we won't find 
ourselves in that posture anymore. In relationship to my vote, 
however, I am comfortable with it only in the sense I really 
didn't see any alternative because I do think notice and the 
ability for parties to have some understanding of what they get 
into is absolutely critical.
    Mr. Wold. Senator, if I could add a couple comments, just 
briefly. Since I was on the same 6-0 side of that vote, as was 
the vice chairman, I did not see any connection between that 
vote to not require a repayment--that is, not to reach a 
repayment determination--and the issue of whether the ads run 
by the parties had been coordinated with the candidates. At 
least from my standpoint--and I know that of at least a couple 
other Commissioners--our reason for not voting for a repayment 
determination was based on our reading of the Presidential 
Primary Matching Payment Act as it applies to the limitation on 
spending by a candidate who receives public funding in the 
primary. The Act itself did not provide for repayment as a 
remedy for exceeding the cap, as contrasted to that remedy 
which is provided for exceeding the cap in the general 
election. So I did not see any connection between the vote not 
to require a repayment and the issues of whether those media 
ads were coordinated.
    In fact, the Commission at the same time also voted 6-0 to 
specifically leave that question of coordination open for a 
determination in the enforcement track. We said the Commission 
has not reached any conclusion regarding thestaff's in-kind 
contribution analysis; that is, whether those expenditures were 
coordinated. So I didn't reach the same conclusion that the vice 
chairman did that that decision not to seek repayment confused the 
question or even bore on the question of whether the expenditures were 
coordinated.
    Mr. McDonald. Senator, I would be happy to continue the 
debate, if you would like. I am not shy about any vote I have 
ever cast. I would be happy to read you some more, if you would 
like.
    Senator Specter. I would not like that, but I think Senator 
Sessions has one more question.
    Senator Sessions. There was a lot of hard feelings about 
the Commission. Some people believed it was not fair in a lot 
of different ways, and I know Mr. McDonald in one vote in 1997 
on the 1996 campaign, you abstained. The reason you gave for 
abstaining was because you were at that time negotiating to be 
chairman of the Democratic National Committee.
    Mr. McDonald. I wasn't negotiating, Senator, but my name 
had been mentioned.
    Senator Sessions. All right. And later, though, you did not 
hesitate to vote to prosecute, which failed on a 3-to-3 vote, 
the Republicans.
    Mr. McDonald. I am not sure what you have made reference 
to. Prosecute and what? I'm sorry.
    Senator Sessions. Out of the 1996 campaign.
    Mr. McDonald. I voted to proceed in a number of Democratic 
matters, if you want to look--if you would like for me to 
submit that for the record. If the inference is I have only 
proceeded against the Republicans, that is just simply not so. 
I would be happy to answer any question about a specific vote, 
and I will be happy to supply the committee any vote you would 
like.
    Senator Sessions. This was a Republican Senatorial 
Committee vote, Republican Senate vote, tied 3 to 3 at any 
rate. You voted on that.
    I must note I also----
    Mr. McDonald. Would you have preferred I had voted in that 
matter or recuse myself? I thought recusal was the best 
approach to take. Is that the criticism of me?
    Senator Sessions. No. My criticism is you abstained or 
recused yourself from the Democratic vote, but you voted to 
prosecute the Republicans.
    Mr. McDonald. Should I have voted in the matter when I was 
talking to the national party? I just didn't think that was 
appropriate.
    Senator Sessions. I am not saying you shouldn't have voted. 
I am saying that one of the problems we have had with the FEC 
is there is some concern about its objectivity.
    I also would just note for the record, Mr. Chairman, that 
the day after the Commission voted 3 to 3 not to prosecute the 
DNC, Mr. McDonald voted not to prosecute. You were announced to 
a reappointment to a 5-year term as vice chairman of the 
Commission.
    Mr. McDonald. No, I had been nominated long before that, 
Senator.
    Senator Sessions. Had you?
    Mr. McDonald. Yes, I had. And let me be very clear, if you 
don't mind me saying.
    Senator Sessions. I will be glad for you to clarify that. 
If I am in error, I would like you to clarify that.
    Mr. McDonald. Yes. That is just simply not so. I had been 
nominated earlier. My nomination had been up for some time as a 
practical matter. It is on the record.
    Senator Sessions. Well, at any rate, I believe that we do 
have to be careful about these issues because they are so 
intense and there is so much fudge room in some of this 
campaign disclosure stuff that scares everybody that is in the 
business. I think we need to be careful that our nominees can 
stand the test of objective scrutiny.
    Mr. McDonald. I think it is an awfully important question. 
I am kind of glad you raised it.
    I would be willing--and I think even my colleagues who 
disagree with me--I hope that is the case--will take the 
position I have tried to be fair and objective.
    One of the things you failed to mention there, and I guess 
you simply don't have it, but as a practical matter, one of my 
colleagues left immediately from the Commission and went over 
to represent the Republican National Committee. Another went 
from the Commission to work in the Reagan White House. We had 
another lawyer who left, a Commissioner, to go over and 
represent the party directly from the Commission. So I think it 
is not unheard of. I am hopeful that out of the thousands of 
votes I have cast--and that has gotten a lot of celebration, 
ironically, for not casting a vote--I, was puzzled by that.
    The other thing about that particular vote, as you may 
know, actually a Republican joined in that vote, and that is 
why the case didn't move forward as a practical matter, but, 
ironically, I am surprised. And, I think you are absolutely 
right. I totally agree with you. I think the business about 
people's integrity is pretty important. I know you take it 
important. I know something about your background. I take it 
important, but I would certainly not want to be in a position 
of casting a vote when my name was being mentioned at all. I 
just felt that was just not something I would be comfortable in 
doing. And I also knew, quite frankly, that I was going to get 
it either way.
    Now, I must tell you, the bigger surprise was there were 
votes to move forward on that case previously without my vote, 
and the shocker wasn't the fact that I didn't vote, but that a 
Commissioner changed their mind and actually that was on the 
Republican side.
    Senator Sessions. Well, I guess my only concern is it is 
all right, I think, for staff members to move and go back and 
forth, but the Commissioners, while they are sitting there, 
when they are negotiating to be chairman of a committee that is 
under investigation maybe should tell us all that we ought to 
be concerned about the appointment process.
    I mean, it is all right to appoint someone who is involved 
in politics, I think, but to the degree that we could maintain 
some objectivity and maybe someone who is out of the business 
or has retired or a Howard Baker type or some people like that 
might be a better approach than people who are actively engaged 
at the very time these issues are coming before them.
    Thank you, Mr. Chairman.
    Mr. McDonald. Mr. Chairman, if I might on that point, I 
don't disagree with the Senator. Actually, there is a real 
irony to this. The reason I got a call to begin with was I was 
at the Commission, as you may recall. The committee was having 
some difficulty at that point with the FECA, and the 
consideration was maybe someone with mybackground could go over 
there and try to work to correct the problems they had. So, you know, 
maybe that is not the right approach. There wasn't any negotiation. I 
am kind of glad I was elevated in the press--not by you, but in the 
press. I sounded a lot closer than I was, but it was true I did get a 
call about that, and the question was, look, obviously we have got some 
problems. My record is very clear. I am extremely comfortable for any 
member of the committee to look at my record. I have proceeded against 
both sides. I have been criticized by both sides on numerous occasions, 
and I am awfully comfortable with my record.
    Senator Specter. Thank you very much, Senator Sessions.
    Thank you very much, Chairman Wold and Vice Chairman 
McDonald.
    What the subcommittee would like to do would be to have 
staff pursue with your staff some of the issues we have 
discussed here today to see if there might be a streamlining, 
also to get your recommendations as to whether there ought to 
be an odd number, so you have 4-to-3 decisions as opposed to 3-
to-3 decisions, and to pursue the issue also on the memorandum 
of understanding with the Department of Justice. They have left 
to you a great ambit of authority. We have not gotten into that 
because we have so many other witnesses. Where the Department 
of Justice has responsibilities to enforce the criminal laws, 
it is curious that they have delegated to the Federal Election 
Commission baseline judgments before they will undertake to 
have enforcement responsibility, but these are very important 
subjects which I think could be usefully discussed at the staff 
level, and we may be asking you to come back.
    Thank you very much, Mr. Wold. Thank you, Mr. McDonald.
    Mr. Wold. Thank you, Mr. Chairman, Senators.
    Commissioner McDonald is absent from another engagement he 
has this afternoon. Are we excused for the afternoon?
    Senator Specter. Oh, absolutely. You certainly are, yes. 
Thank you.
    Mr. McDonald. Thank you very much.
    Senator Specter. Mr. Robert Conrad, step forward, please. 
Mr. Conrad, would you raise your right hand. Do you solemnly 
swear that the testimony you will give before this subcommittee 
of the Judiciary Committee of the U.S. Senate will be the 
truth, the whole truth, and nothing but the truth, so help you 
God?
    Mr. Conrad. I do.
    Senator Specter. Mr. Conrad, you submitted an opening 
statement. Would you care to read it or otherwise make an 
opening statement?
    Mr. Conrad. Yes, sir, I would.
    Senator Specter. Please do.

   STATEMENT OF ROBERT J. CONRAD, JR., SUPERVISING ATTORNEY, 
  CAMPAIGN FINANCING TASK FORCE, U.S. DEPARTMENT OF JUSTICE, 
                         WASHINGTON, DC

    Mr. Conrad. Mr. Chairman, other members of the 
subcommittee, my name is Bob Conrad.
    I have been an Assistant U.S. Attorney for over 11 years. I 
was originally hired by the U.S. Attorney's Office in the City 
of Charlotte in the Western District of North Carolina by U.S. 
Attorney Tom Ashcraft in January 1989. From August 1992 until 
my present detail, I was chief of the Criminal Division in the 
U.S. Attorney's Office in the Western District of North 
Carolina.
    I have served in both Republican and Democratic 
administrations as chief of the Criminal Division. In that 
capacity, I have been responsible for supervising hundreds of 
prosecutions involving white collar crime, public corruption, 
narcotics trafficking, firearms violations, and a wide variety 
of other types of Federal crimes. I have personally tried 
numerous cases ranging from bank robberies to capital 
litigation.
    The U.S. Attorney's Office in the Western District of North 
Carolina is known for its aggressiveness, consistently ranks 
high in all categories of Federal prosecution nationwide, and I 
am proud of its accomplishments over the last 10 years.
    Since the day after Christmas in 1999, I have been the 
supervising attorney in charge of the Justice Department's 
Campaign Financing Task Force. I am personally committed to 
aggressively pursuing all violations of the campaign finance 
laws.
    Today, I would like to announce to this committee the 
filing of two plea agreements in the task force cases. Pauline 
Kanchanalak and Georgie Kronenberg have filed plea agreements 
this morning to campaign finance violations. Those plea 
agreements bring to five the number of defendants this month 
who have pled guilty and agree to cooperate in the ongoing task 
force investigations.
    I am appearing here today voluntarily in response to your 
request to answer the committee's questions about the Campaign 
Financing Task Force. I do so mindful of the admonition to open 
your mind before you open your mouth, as well as a two-fold 
caveat. Frankly, I will not disclose information about pending 
criminal matters, ongoing investigations. I would not want to 
say anything today that would potentially compromise ongoing 
investigations, violate grand jury secrecy rules, or otherwise 
jeopardize the integrity of an investigation. My obligation as 
a prosecutor requires that.
    I also want to emphasize at the outset that I started with 
the task force more than 6 months after the Independent Counsel 
Act expired. I played no role in any independent counsel 
decisions and have only a general familiarity with the now-
defunct Independent Counsel Act. I have had no input in 
specific Independent Counsel Act decisions which were made by 
the Attorney General well before I became involved with the 
task force. I do not feel qualified to render any opinion 
regarding its applicability to any matter occurring before my 
tenure, having had no opportunity to study the statute or apply 
it in a concrete factual context.
    Because I am not competent to discuss matters occurring 
before my tenure nor able to talk about ongoing matters, I 
think my testimony may be of limited value to you. In this 
respect, I feel like someone from the movie, ``Dumb and 
Dumber.'' Nonetheless, I am happy to answer any questions you 
have.
    Senator Specter. Thank you, Mr. Conrad, and congratulations 
to you on working through the plea agreements. We would like to 
take a look at those to see precisely what is involved, and we 
like the sound of both Ms. Kanchanalak and Ms. Kronenberg 
agreeing to cooperate in further investigations.
    Mr. Conrad. Yes, sir.
    Senator Specter. Is that the similar situation with Mr. 
Charlie Trie?
    Mr. Conrad. I understand that Charlie Trie's pleaagreement 
included cooperation provisions. Yes, sir.
    Senator Specter. And cooperation from Johnny Chung?
    Mr. Conrad. I understand that as well. Yes, sir.
    Senator Specter. And John Huang?
    Mr. Conrad. Yes, sir.
    Senator Specter. And Maria Hsia?
    Mr. Conrad. Maria Hsia was convicted after trial, and there 
is no cooperation agreement with respect to her.
    Senator Specter. Is Maria Hsia cooperating?
    Mr. Conrad. No, sir.
    Senator Specter. Mr. Conrad, you have left a very narrow--I 
was about to say you have left a very narrow ambit for 
responding, but you really have not left any ambit at all. But 
I do believe, difficult as these matters are, that this 
subcommittee has a duty to find out what is going on, and we 
intend to do just that.
    We believe we have a right to know what is happening within 
the Department of Justice upon the issue of special 
prosecutors, which is the replacement now for independent 
counsel, and we have reviewed the long line of authorities with 
the Department of Justice on the precedence which give 
congressional oversight authority on pending matters. We have 
pursued the recommendations of the Department of Justice on 
this issue of recommending independent counsel and similarly a 
special prosecutor from Mr. Radek who is chief of the 
Department of Justice Public Integrity Section. We have the 
recommendation from Mr. Litt, who will be a witness here later, 
who was Principal Associate Deputy Attorney General. We had the 
recommendation from Charles La Bella who was head of the task 
force. We had the recommendation from Director Freeh, and 
through a torturous route, we have secured the memoranda and 
the writings on those recommendations and we are interested in 
your recommendations.
    We have a good bit of information as to what happens 
because this is a town where at least I found nothing is 
secret. Have you in your capacity as chief of the task force 
had occasion to personally question people under investigation?
    Mr. Conrad. Yes, sir.
    Senator Specter. And whom have you questioned?
    Mr. Conrad. I feel comfortable in stating because the 
people who were examined have issued press releases concerning 
the examinations, but on April 18, I personally examined the 
Vice President of the United States, Albert Gore. On April 21, 
Good Friday, I personally examined the President of the United 
States, Bill Clinton. Both of those examinations were disclosed 
to the public via a press release issued by the White House.
    Senator Specter. Have you made or attempted to make a 
recommendation as to either of those matters with respect to 
special prosecutor?
    Mr. Conrad. That, I don't feel comfortable discussing in 
public. I would perceive whether I have done that or not as 
something that pertains to an ongoing investigation.
    Senator Specter. When you say you do not feel comfortable 
doing it in public, were you suggesting you would do it in 
private?
    Mr. Conrad. No, I am not suggesting that. I am suggesting 
that my obligations as a prosecutor would prevent me from 
discussing that.
    Senator Specter. Well, both of the individuals whom you 
mentioned have been the subject of extensive hearings by this 
subcommittee. Are you conducting to be even handed any 
investigation as to Senator Dole who was a candidate for the 
Presidency?
    Mr. Conrad. You asked me--Senator, you asked me questions 
about whether I had examined people personally, and I felt 
comfortable answering your questions because the two 
individuals that I mentioned had issued press releases saying 
that I had done that. I don't feel comfortable talking about 
any other potential matter.
    Senator Specter. Well, I want to ask the question, and I 
have asked the question, so that it is asked in both directions 
in an even-handed manner.
    This subcommittee is interested in knowing whether you have 
made a recommendation as to either the President who has made 
the press release and as to the Vice President who has made the 
press release, and we would cite as our authority in the 
practice of the Department of Justice, which has responded, to 
subpoenas. Actually, the subpoena was not directed at the 
Department of Justice. It was directed to Mr. Freeh and Mr. La 
Bella, but the Department of Justice then made available not 
only their records, but also the records of Mr. Radek and Mr. 
Litt and the recommendations of others. So we think we do have 
the precedent of what this Department has done and the 
precedent of the authority to get a response to that question.
    Mr. Conrad. My only involvement in that process was to 
screen those documents prior to their issuance to you or 
pending-matter concerns, and I was involved in that process.
    The question you are now asking me deals with matters--
subject matter of the examinations of both the President and 
the Vice President are pending-matter concerns, and so my 
answer to you plays the same role as my process was--my role in 
the process was earlier, to screen from disclosure things that 
might affect pending investigations.
    Senator Specter. Well, Mr. Conrad, are you saying that the 
matters under investigation as to the President, which he has 
publicly disclosed, do not relate to matters which have 
previously been under investigation? I am probing now on the 
question as to the subject matter. My judgment here is that 
they are, and that they have been responded to on the question 
of whether there should be independent counsel/special 
prosecutor as to the President. So, if you are telling me they 
are different matters, then I might see some distinction, but 
if they are the same, I would press you for an answer. Are they 
the same?
    Mr. Conrad. As to the subject matter of the examinations, I 
think the examinations dealt with pending matters which I am 
not comfortable answering.
    Senator Specter. Well, are those matters different from the 
ones which have been the subject of the investigation before 
for the President which have been in all these documents we 
have seen from La Bella and Freeh and Radek and everybody else?
    Mr. Conrad. Not being totally familiar with all of that, 
what has gone on before me, I know that the matters I inquired 
into on April 18 and April 21 were matters that are pending 
matters.
    Senator Specter. Well, the question is, Are they the same? 
As to the Vice President, aren't they the same as before?
    Mr. Conrad. I don't feel at liberty to discuss thesubject 
matter in that examination, no, sir.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman.
    Mr. Conrad, you were polite in your introduction, but for a 
fellow under oath may have been only marginally frank with the 
committee. You said that you had limited knowledge of the 
matters dealing with an independent counsel.
    Mr. Conrad. Yes, sir.
    Senator Torricelli. Wouldn't indeed it have been more 
accurate to say since you never attended meetings discussing 
the independent counsel, never wrote memorandums for the 
discussion of appointment of independent counsel, had no 
contemporaneous knowledge on the question of appointing 
independent counsel, that you didn't have limited knowledge, in 
fact, you have no knowledge of the events surrounding the 
decision to appoint independent counsel?
    Mr. Conrad. My limited knowledge dealt with the Act itself 
and its application to certain facts. I do have some knowledge, 
having been in this position for 6 months and read some of the 
things that you have read, about----
    Senator Torricelli. But the focus of the committee's 
questions, that is, how Attorney General Reno reached her 
judgment, the advice that was given to her, the meetings that 
were held, is it not true that you were at a safe distance in 
North Carolina at that point and participated in none of these 
deliberations?
    Mr. Conrad. That's true. I had no personal participation in 
any of them.
    Senator Torricelli. Therefore, as to contemporaneous 
knowledge or firsthand experience with the actual judgment of 
the Attorney General whether or not to appoint independent 
counsel, you really have nothing to offer this committee?
    Mr. Conrad. No, sir.
    Senator Torricelli. Now, let us deal for the moment, Mr. 
Conrad, with whether or not the process of justice has been 
compromised by there not being an independent counsel as 
opposed to the task force exploring these matters, and whether 
that has meant the process is not proceeding with integrity. 
What is the sum total of appointments that you have received by 
direct appointment of President Clinton or Vice President Gore?
    Mr. Conrad. I have not been directly appointed to any 
position by either one of those two----
    Senator Torricelli. Do you have any political association 
with either campaigns or either individual?
    Mr. Conrad. No, sir.
    Senator Torricelli. Is there any reason why this committee 
or the Attorney General or the American people should have a 
lack of confidence in your objectivity, fairness, impartiality, 
as a partisan matter in pursuing this investigation?
    Mr. Conrad. Not that I'm aware of, no, sir.
    Senator Torricelli. It seems to be in the mind of some that 
having the task force now proceed with these matters--and, 
indeed, I am not asking you to discuss any of the matters with 
regard to the President or Vice President--that somehow the 
public interest is not being served by the task force doing so 
as opposed to an independent counsel.
    Is there reason to believe that if an independent counsel 
were pursuing this matter as opposed to the task force that 
somehow the people on the independent counsel's staff would 
have greater knowledge, more experience, or greater expertise 
than those now available on the task force?
    Mr. Conrad. Well, the Independent Counsel Act has expired, 
so there would be no----
    Senator Torricelli. I understand that.
    Mr. Conrad [continuing]. Possibility of that situation.
    Senator Torricelli. But let's speak theoretically. The 
American people are entitled to know this is being pursued 
aggressively and impartially. I want you to give a frank 
accounting through us to the American people that indeed, if 
there were an independent counsel, if theoretically it were 
possible, if the Attorney General had named one before the 
statute had expired, it would be your judgment that you now 
have the expertise, you have the manpower, you have the support 
of the Department to vigorously pursue these cases wherever 
they might go, and that in sum and substance that does not 
differ from if there had been an independent counsel.
    Would you share your own judgment with the committee on 
that question?
    Mr. Conrad. I don't know what value my judgment would be--
--
    Senator Torricelli. Well, it entertains me, and it may 
prove persuasive with Senator Specter.
    Mr. Conrad. I can say this: that I have a reputation for 
aggressiveness, I have a reputation for serious--pursuing 
serious violations of the criminal law. I would attempt in any 
leadership position I was in to do that and to inspire others 
to do that.
    Senator Torricelli. And how many attorneys do you have now 
at your disposal?
    Mr. Conrad. Approximately a dozen.
    Senator Torricelli. Have you asked for any resources by 
your superiors at the Justice Department of any appreciable 
nature and been denied?
    Mr. Conrad. No, sir.
    Senator Torricelli. Have you asked for cooperation from the 
FBI in investigations and been denied cooperation?
    Mr. Conrad. No, sir.
    Senator Torricelli. Have you felt that at any point, as 
someone with no partisan affiliation, that there has been an 
interference with your judgment, other than the advice that you 
would naturally receive from experienced superiors, that in any 
way compromised your ability to perform responsibly?
    Mr. Conrad. I don't believe my ability to perform the tasks 
that I have conducted to date has been compromised in any way, 
no, sir.
    Senator Torricelli. Therefore, can I assume it would be 
your testimony that even if there were still an independent 
counsel statute or if the Attorney General had appointed an 
independent counsel before the law expired, in sum and 
substance you have no reason to believe that violations of the 
law would be pursued any more or less aggressively or any more 
or less fairly than you are now doing?
    Mr. Conrad. I really would have no opinion on that. I just 
wouldn't.
    Senator Torricelli. OK. Mr. Conrad, thank you very much.
    Senator Specter. Before turning to Senator Sessions, Mr. 
Conrad, I want to say that you have an outstanding professional 
record. There is no doubt about it. And everything I hear about 
you is very good, and I have a pretty good idea of what it is 
like to be a prosecutor for 11 years. I was one for 12 years, 
and I know the sort of things you face. So----
    Mr. Conrad. I hope I make it to your tenure.
    Senator Specter. Oh, you will. Whatever happens, you will. 
The odds are strong that you will exceed it.
    So that on the professional level, you have an outstanding 
record, and it is a curious town, it is a curious world; when 
people know you are coming in to testify, people come to 
volunteer about what a straight shooter you are. And there have 
been volunteers who have spoken for you. A person's reputation 
goes a long way. That is to say nothing of the questions which 
I have asked you and will repeat, but let's turn now to Senator 
Sessions.
    Senator Sessions. Thank you, Mr. Chairman. And I have heard 
good things, also. As I get older, reputations usually turn out 
to be fairly good indices of the character of a person. And 
your office is a good office. I am familiar with the 
statistical production of the Western District of North 
Carolina over the years, and it has always been at the top in 
the United States.
    Mr. Conrad. Thank you.
    Senator Sessions. And even beat the Southern District of 
Alabama.
    Senator Torricelli. That is extraordinary.
    Senator Sessions. That is. We were all in the top four, 
three or four consistently.
    Well, let me say this: You bring with you a lot of 
experience. You have been through some tough cases in your 
career. You have had to deal with pressures and political 
attacks and other things that go with the territory of being a 
prosecutor.
    Are you ready for this one? Let me ask you that: Are you 
ready to see this one through if that becomes your cup to 
drink?
    Mr. Conrad. Yes, sir.
    Senator Sessions. And are you prepared to call it as you 
see it and to defend your position even if others who may think 
they have more experience disagree?
    Mr. Conrad. Yes, sir.
    Senator Sessions. Do you feel an obligation, if you were 
asked to take actions that you did not believe were justified 
within the parameters of honest dispute, would you speak out on 
that if need be?
    Mr. Conrad. I'm trying to understand your question so I can 
answer it appropriately. I wouldn't do anything that violated 
my own ethical or conscientious beliefs. I would stand for that 
which I believe to be the right thing to do in the appropriate 
setting.
    Senator Sessions. As a career Assistant U.S. Attorney, your 
basic training is that you do the task you are assigned, you do 
it fairly and objectively, you fight for what you think is 
right. But if someone higher up makes a decision and they have 
the responsibility ultimately of making that decision, you take 
it and try to do the best you can with it.
    Mr. Conrad. Yes, sir.
    Senator Sessions. Is that fair to say?
    Mr. Conrad. Yes, sir.
    Senator Sessions. So by being in the Department of Justice, 
being a career employee, there is some ability for the 
Department to affect your decisionmaking process or the 
decisionmaking process in the case.
    Mr. Conrad. Yes, sir; in particular cases, without getting 
into management, as a general rule, I've won some battles and 
lost some battles.
    Senator Sessions. Have you ever been----
    Mr. Conrad. That's both in the district and here.
    Senator Sessions. Have you ever been overruled by the 
bureaucrats in Washington?
    Mr. Conrad. Well, if I had an attorney here, he might 
object to the characterization. But I have not----
    Senator Sessions. Well, there are good lawyers in 
Washington in any case. I mean, a lot of your decisions are 
reviewed in North Carolina by the Department of Justice. Isn't 
that correct?
    Mr. Conrad. Yes, sir.
    Senator Sessions. But if they say no, you have to go along 
with what they say. Isn't that correct?
    Mr. Conrad. Yes, sir. I recognize my role in a hierarchical 
organization.
    Senator Sessions. Well, what would happen if--now, are you 
operating under Mr. Radek?
    Mr. Conrad. No, sir. My chain of command would be up 
through the Assistant in charge of the Criminal Division and 
ultimately the Attorney General.
    Senator Sessions. So you have a direct reporting link to 
the Assistant Attorney General for Criminal?
    Mr. Conrad. There's a Deputy Assistant Attorney General 
between me and the Assistant Attorney General, yes, sir.
    Senator Sessions. And who is that person?
    Mr. Conrad. That would be Alan Gershel.
    Senator Sessions. Gershel?
    Mr. Conrad. Gershel, G-e-r-s-h-e-l.
    Senator Sessions. And he would answer to Mr. Robinson?
    Mr. Conrad. Yes.
    Senator Sessions. And he to the Attorney General?
    Mr. Conrad. Yes, sir.
    Senator Sessions. But in any decision to indict a person of 
prominence, you would expect the Attorney General would be 
briefed on this, would you not?
    Mr. Conrad. Yes, sir.
    Senator Sessions. If there came to be a point in which 
there were serious disagreements, would you be prepared to 
recommend to the Attorney General an independent counsel should 
be appointed?
    Mr. Conrad. That statute having lapsed 6 months before I 
came here, I would not be in that situation. If you're talking 
about the potential for a special counsel----
    Senator Sessions. A special prosecutor, a special counsel, 
would be the correct phrase.
    Mr. Conrad. The language used by Senator Specter, I would 
call it as I saw it, yes, sir.
    Senator Torricelli. I am sorry, Mr. Conrad. I didn't hear 
that.
    Mr. Conrad. I would call it as I saw it.
    Senator Sessions. In other words, if you felt that it was 
the right thing to do, you would recommend it?
    Mr. Conrad. Yes, sir.
    Senator Sessions. I don't know what you can say aboutthis. 
I am just looking at an article from the New York Post. The first 
paragraph says this: ``Vice President Al Gore blew his top when he was 
grilled last week by funny-money investigators.'' Is that you?
    Mr. Conrad. That article was brought to my attention by Jim 
Neill, an attorney in Nashville, TN.
    Senator Sessions. OK. Blew his top because they asked about 
his illegal Buddhist Temple fundraiser for the first time, 
sources say. Gore seemed stunned, fumed that the questions were 
``outrageous'' and the session was contentious.
    It is a free country. If that happened, it happened. First 
of all, can you confirm or deny that?
    Mr. Conrad. I've read that article.
    Senator Sessions. Would you. [Laughter.]
    You can confirm that article exists?
    Mr. Conrad. Yes, sir.
    Senator Sessions. The best of your knowledge. Well, I am 
really trying to get at this thing we are talking about here. 
The reason an independent counsel is important is this is the 
Vice President of the United States. You are trained to respect 
that office, and all of us are. If a serious allegation is 
afoot, then you work for the Department, you work for the 
Attorney General, the chief of the Criminal Division, and you 
answer to them and they are ultimately answerable to the 
President of the United States, who is a friend of the Vice 
President, who picked him for his Vice President, and who 
supports him to be the next President. So it just creates an 
awkward situation, would you not agree?
    Mr. Conrad. There is the potential for that, yes, sir.
    Senator Sessions. And particularly if the persons higher 
up, to some degree, in your ultimate chain of command are 
contentious and hostile and blow their top and reject--and are 
not totally forthcoming with matters, it would make it more 
difficult.
    Mr. Conrad. Are you asking me if----
    Senator Sessions. Yes, I am asking you.
    Mr. Conrad. A hypothetical situation?
    Senator Sessions. Hypothetically.
    Mr. Conrad. I wouldn't want to comment on anything that 
happened in either one of the examinations that I took, but I 
understand all the points you have made with respect to the 
awkwardness of the situation in a hypothetical sense.
    Senator Sessions. See, we represent the people of the 
United States at this deal. We no longer have an independent 
counsel law. And the people of this country have got to know 
that--they have got to know that you, Mr. Conrad, find yourself 
on the hot seat primarily at this very moment, are going to do 
what a professional prosecutor would do. And the Vice President 
would be treated like anybody else. True, if the facts are 
there, or if they are not there, you call it as you see it. But 
you have to obtain the facts and do your duty, and I think 
there is cause for concern when the ultimate decisions are made 
well above your level on most of these matters.
    Let me ask you about the team at your disposal, the 
attorneys at your disposal. Were they working on the case 
before you arrived? And did you select any of them yourself, or 
was that the group that was previously involved?
    Mr. Conrad. Most of the attorneys on the task force are 
attorneys that have--that were members of the task force prior 
to the time that I came. I have hired two attorneys in the 6 
months that I have been the chief of the task force.
    Senator Sessions. Were those attorneys people you knew 
previously?
    Mr. Conrad. One of the attorneys was an attorney from my 
district, which our U.S. attorney was generous enough to detail 
to us for a year. The other attorney worked for one of the 
independent counsels prior to the time he was hired by me to 
join our task force.
    Senator Sessions. And those attorneys you chose, basically?
    Mr. Conrad. Yes, sir.
    Senator Sessions. Have you investigated the Hsi Lai Temple 
matter? Can you tell us that?
    Mr. Conrad. I would feel uncomfortable testifying about 
specific matters that I've investigated.
    Senator Sessions. So we are just left with the New York 
Post.
    Thank you, Mr. Chairman.
    Senator Torricelli. Could I, Mr. Chairman----
    Senator Specter. Go ahead.
    Senator Torricelli. Thank you, Mr. Chairman, very much.
    Mr. Conrad, first, I want to thank you for being here 
today. I think your testimony has been very helpful. With the 
exception of knowing that you read the New York Post, you have 
certainly increased my confidence in the task force and----
    Mr. Conrad. I thought I made it clear that Attorney James 
Neill brought that article to my attention. [Laughter.]
    Senator Torricelli. Well, then, you have fully restored my 
confidence.
    I wanted only to address the question that I raised with 
the Commissioners from the Federal Election Commission, and 
that is, not looking back but looking forward, and not with any 
specific matter but with a theoretical problem. You are in the 
Nation's highest political debating society, and you could not 
help but notice real consternation in this institution about 
the fact that our campaign finance laws are now not only being 
violated, in my judgment, wholesale, but may be at the point of 
near collapse. The Tax Code is being misused to establish 
parallel organizations that, in my judgment, are unquestionably 
in some instances being coordinated.
    As I was corrected by Mr. McDonald, that is clearly not 
true in all instances. But in my experience as the chief 
political organizer of the Democratic side of the aisle in this 
institution, it is happening in many instances.
    It appears to me from the testimony of the Federal Election 
Commission they either do not think they now have the mandate 
or the resources to deal with this problem, and yet I repeat to 
you, as I suggested to them, us having this hearing 2 years 
from now is going to prove very inadequate for many of these 
problems. If these laws are violated in the next few months, it 
is going to change the composition of this Congress. And once 
these laws are violated to this extent, I don't think we are 
ever going to restore respect generally for the disclosure and 
the separation of these organizations.
    My question to you, in spite of that rather complex build-
up, is really very simple. Is it in your mandate, do you 
believe you have the authority, to look at these organizations 
and conduct investigations if you have reason to believe the 
law might be violated?
    Mr. Conrad. I don't think the 2000 election is within my 
mandate. I think that would be a Public Integrity issue at 
this----
    Senator Torricelli. So that ultimately is Mr. Radek's 
responsibility, in your----
    Mr. Conrad. Yes, sir.
    Senator Torricelli. Thank you, Mr. Conrad.
    Senator Specter. Mr. Conrad, just a couple more questions. 
What would be the procedure if you obtained information that 
there was a need to have a special prosecutor? Whom would you 
recommend that to?
    Mr. Conrad. I think I would recommend--hypothetically, I 
think I would recommend that up through my chain of command. 
That would be, first level, Jim Robinson, the Assistant 
Attorney General in charge of the Criminal Division, and Alan 
Gershel, his Deputy, and up through them to the Attorney 
General.
    Senator Specter. Are there guidelines that you are 
operating under as to when--do you call it special counsel now 
as opposed to special prosecutor?
    Mr. Conrad. Yes, sir.
    Senator Specter. Are there guidelines that you are 
operating under, written guidelines?
    Mr. Conrad. There are special counsel regulations which 
would inform the recommendation and the decision. There is a 
practice of a regular meeting with the people I've described to 
you and myself. So there are now--as I understand it, there are 
no formal steps that I would take, but such a decision would--
the situation would be created on a regular basis for me to 
bring it to the attention of the people I needed to bring it 
to.
    Senator Specter. If there were an allegation of campaign 
finance violations as to Governor George W. Bush, would it fall 
to you to investigate, or would that come under the Public 
Integrity Section?
    Mr. Conrad. My understanding at this point is that would be 
a Public Integrity matter. I have not been given any 2000 
election cycle----
    Senator Specter. Your authority is just under the 1996 
election cycle?
    Mr. Conrad. Prior to 2000, yes, sir.
    Senator Specter. So that involves matters from 1998 as 
well?
    Mr. Conrad. The mandate is really the 1996 election cycle. 
As part of our investigation of that election cycle, there have 
been matters that occurred both prior to 1996 and subsequent to 
1996. But it would not extend as far as the 2000 election 
cycle.
    Senator Specter. Or the 1998 election cycle?
    Mr. Conrad. That's correct.
    Senator Specter. Are there any memoranda or other writings, 
Mr. Conrad, on any of your recommendations for appointment of 
special counsel?
    Mr. Conrad. I would not feel comfortable answering your 
question and would respectfully decline.
    Senator Specter. Thank you very much.
    Senator Sessions. Mr. Chairman, may I ask him two 
questions?
    Senator Specter. Go ahead, Senator Sessions.
    Senator Sessions. With regard to Maria Hsia, has that case 
gone to sentencing, been sentenced yet?
    Mr. Conrad. No, sir. The conviction was in January. There 
have been post-trial motions filed by the defendant. They 
include post-trial motions to dismiss, motions to disqualify 
the district court judge presiding over that case, and other 
motions. As I'm sure you're aware from your past experience, 
there is also the process whereby a pre-sentence report is 
prepared by the probation office, and parties have an 
opportunity to file objections to that report. And that whole 
process has not been completed.
    My best recollection is that sentencing in that case is 
scheduled for September of this year.
    Senator Sessions. Now, that case would be under your 
supervision?
    Mr. Conrad. Yes, sir.
    Senator Sessions. And are you able to tell us, has there 
been a public memorandum, sentencing memorandum, by the 
Department of Justice setting forth what the Sentencing 
Guidelines range should be in that? And could you tell us what 
that is?
    Mr. Conrad. I could tell you we have not yet filed our 
sentencing memorandum because of the stage and the process that 
we're in. We're waiting for the pre-sentence report.
    Senator Sessions. Now, you have tried that case. The 
defendant has been convicted, assuming it is upheld by the 
judge. I would expect that you would pursue vigorously the 
sentencing phase of that case and that you personally would 
oversee it. Will you?
    Mr. Conrad. Yes, sir.
    Senator Sessions. I think that is important because, for 
the edification of others, sometimes the sentence a person is 
facing can be affected by the skill of the prosecutor, and I 
have seen some cases previously involving these very matters in 
which I believe the Department of Justice was not sufficiently 
aggressive toward sentencing. And a person can achieve a 
downward departure--let me ask you this: The only way a person 
who has been tried and convicted can get a downward departure 
under normal circumstances is to provide evidence that they 
have cooperated fully with the prosecution. Is that correct?
    Mr. Conrad. That's the most usual way. I believe the 
Sentencing Guidelines allow district court judges other 
latitude, but----
    Senator Sessions. Under certain circumstances.
    Mr. Conrad [continuing]. They're very circumscribed, yes.
    Senator Sessions. But I would expect that you would treat 
this like any other case, that unless the defendant was 
prepared to testify fully and completely and provide 
information that you can verify, that you would not accept a 
recommendation of any downward departure?
    Mr. Conrad. In fact, with respect to substantial 
assistance, downward departures, we would actually have to make 
a motion before the district court even had the authority to 
depart, and we would not make that motion in this or any other 
case unless the information provided had been valuable.
    Senator Sessions. But if you thought that the cooperation 
had been partial and Mr. Robinson, your supervisor, said, well, 
that is good enough for me, file for downward departure, what 
would you do then?
    Mr. Conrad. I would anticipate that if the recommendation 
of the line attorneys and myself was that the--I would 
anticipate that our evaluation of the cooperation would be 
deferred to, in much the same way that if you pursued a case in 
the appellate courts, there would be an abuse of discretion 
standard. I would not anticipate our decision on an issue like 
that being overruled by someone who has less contact with the 
case than we do.
    Senator Sessions. You wouldn't normally expect that, but we 
have seen some odd things, in my opinion, as we have gone 
through these cases.
    Well, I hope that you will use your best judgment, your 
experience, and that you will follow those standards of dealing 
in a plea and sentencing.
    Mr. Chairman, thank you.
    Senator Specter. Thank you very much, Mr. Conrad.
    Mr. Conrad. Thank you.
    [The prepared statement of Mr. Conrad follows:]

              Prepared Statement of Robert J. Conrad, Jr.

    Good Afternoon, Mr. Chairman and other members of the Subcommittee. 
My name is Bob Conrad. I have been an Assistant United States Attorney 
in the Western District of North Carolina for over eleven years, having 
been originally hired by USA Tom Ashcraft in January, 1989. From 
August, 1992 to my recent detail as Chief of the CFTF, I was Chief of 
the Criminal Division in the U.S. Attorney's Office. I have served as 
chief of that criminal unit under both Republican and Democratic 
administrations. In that capacity I have been responsible for 
supervising hundreds of criminal prosecutions involving white collar 
crime, public corruption, narcotics trafficking, firearms violations, 
and a wide variety of other types of federal crimes. I have personally 
tried numerous cases ranging from bank robberies to capital litigation. 
The USAO for the WDNC is known for its aggressiveness. It consistently 
ranks high in all categories of prosecution and I'm proud of its 
accomplishments over the last ten years.
    Since, the day after Christmas, 1999, I have been the Supervising 
Attorney, in charge of the Justice Department's Campaign Financing Task 
Force. I am personally committed to aggressively pursuing all 
violations of the campaign finance laws. Today, I would like to 
announce the filing of two plea agreements in task force cases. Pauline 
Kanchanalak and Georgie Kronenberg filed plea agreements this morning 
to campaign finance violations. That brings the number of defendants to 
five who have this month pled guilty and agreed to cooperate in the 
ongoing task force investigations.
    I am appearing here today voluntarily, in response to your request, 
to answer the Committee's questions about the Campaign Financing Task 
Force. I do so mindful of the admonition to ``open your mind before you 
open your mouth'' as well as a two fold caveat.
    Frankly, I will not disclose information about pending criminal 
matters. I certainly would not want to say anything today that could 
potentially compromise ongoing investigations, violate grand jury 
secrecy rules, or otherwise jeopardize the integrity of an 
investigation. My obligation as a prosecutor requires that.
    I also want to emphasize at the outset that I started with the Task 
Force more than 6 months after the Independent Counsel Act expired. I 
played no role in any independent counsel decisions and have only a 
general familiarity with the now defunct Independent Counsel Act. I 
have had no input in any specific Independent Counsel Act decisions, 
which were made by the Attorney General well before I became involved 
with the Task Force. I do not feel qualified to render any opinion 
regarding its applicability to any matter occurring before my tenure 
having had no opportunity to study that statute or apply it in concrete 
factual context.
    Because I am not competent to discuss matters occurring before my 
tenure, nor able to talk about ongoing matters. I think my testimony 
may be of limited value to you. Nonetheless, I am happy to answer your 
questions.

    Senator Specter. I would like to call now Mr. Stephen 
Mansfield. Step forward, please.
    Mr. Mansfield, would you raise your right hand? Do you 
solemnly swear that the testimony you will give to this 
subcommittee of the Judiciary Committee of the U.S. Senate will 
be the truth, the whole truth, and nothing but the truth, so 
help you God?
    Mr. Mansfield. I do.
    Senator Specter. Thank you for joining us here today, Mr. 
Mansfield. Would you care to make an opening statement?

STATEMENT OF STEPHEN MANSFIELD, FORMER ASSISTANT U.S. ATTORNEY, 
          U.S. DEPARTMENT OF JUSTICE, LOS ANGELES, CA

    Mr. Mansfield. No, Senator. I'm happy to answer any 
questions you may have.
    Senator Specter. Mr. Mansfield, you were an Assistant U.S. 
Attorney in Los Angeles, California?
    Mr. Mansfield. Yes, sir.
    Senator Specter. Tell us a little bit about your 
background, education, practice, tenure with the U.S. 
Attorney's Office, present occupation.
    Mr. Mansfield. Yes, Senator. When I graduated law school, I 
came to Washington, DC, and served as a law clerk to Judge 
Thomas Lyden in the U.S. Claims Court. After that I worked as 
an associate at a law firm here in Washington, DC, Freed, 
Frank, Harris, Shriver and Jacobson. After about 3 years, I 
moved to Los Angeles to begin a career as a Federal prosecutor 
where I served for 11 years.
    At the U.S. Attorney's Office in Los Angeles, I specialized 
in public corruption and white-collar crime prosecutions. 
During my tenure, I tried a lot of cases in that area, 
supervised a large number of investigations. For a period of 
time, I served as a deputy chief in the Criminal Division 
responsible for public corruption cases, and I also served as a 
senior litigation counsel for a period of years in that office.
    One of the cases that I handled involved a Member of 
Congress and resulted in the conviction of the Member of 
Congress for campaign finance fraud violations as well as the--
--
    Senator Specter. And who was that?
    Mr. Mansfield. Congressman Jay Kim. His campaign committee 
was also convicted, as was his campaign treasurer and five 
Korea-based corporations.
    Senator Specter. Mr. Mansfield, you had occasion to 
participate in the investigation of the so-called Hsi Lai 
Temple case?
    Mr. Mansfield. Well, I think we probably need to define the 
term ``investigation.'' I opened a file in the Los Angeles U.S. 
Attorney's Office in mid-October 1996 and began preliminary 
steps in an investigation relating to the temple and another 
entity that had been mentioned in press accounts.
    Senator Specter. Would you repeat the last part of that, 
relating to what?
    Mr. Mansfield. Another entity that had been mentioned in 
press accounts.
    Senator Specter. And what entity was that?
    Mr. Mansfield. Cheong Am.
    Senator Specter. And what happened during the course of 
your investigation?
    Mr. Mansfield. Well, basically, it started because there 
were a number of news accounts that alleged possible violations 
of campaign finance rules. I had been, as I mentioned, in the 
midst of a campaign finance fraud investigation involving 
Congressman Kim, and I had at that point in time prosecuted, I 
believe, four of the Korea-based corporations based on campaign 
finance violations. And in reading these stories, it appeared 
that there might be evidence of violations of the campaign 
finance laws, and so I consulted with my U.S. attorney about 
the possibility of beginning an investigation relating to what 
had been described in the newspaper accounts. The U.S. attorney 
agreed----
    Senator Specter. Who was the U.S. attorney?
    Mr. Mansfield. I'm sorry?
    Senator Specter. Who was the U.S. attorney?
    Mr. Mansfield. Norma Minella.
    I also conferred with the Public Integrity Section and 
advised them that we were going to take this action as well. 
And so at that point----
    Senator Specter. What happened to your investigation?
    Mr. Mansfield. I began accumulating news accounts from 
various papers around the country to get a handle around what 
the allegations were and where the allegations pointed. I 
conferred with the FBI agent who had been working with me on 
the Congressman Kim investigation, who assisted me in pulling 
together some of this basic factual information. I also 
conferred with an individual at the FEC, Kent Cooper, who was 
helpful in providing to me various FEC reports that related to 
individuals mentioned in those press accounts. And so we were 
also analyzing that material from the FEC.
    I also obtained FEC advisory opinions that related to 
issues concerning foreign national contributions and began to 
prepare an outline for investigative steps in terms of issuing 
subpoenas and interviewing witnesses.
    In that regard, I was conferring with another FBI agent who 
had been assigned to the case out of the Los Angeles office of 
the FBI.
    Senator Specter. And what happened with this investigation? 
Were you able to complete it?
    Mr. Mansfield. Well, I received an instruction from the 
Public Integrity Section--I think it was on October 31--to stop 
work on the investigation because they were going to handle it.
    Senator Specter. You are quoted in the New York Times to 
this effect, Mr. Mansfield--it might be faster if I simply read 
it and asked you if it is accurate. `` `I wanted to move very 
quickly to gather evidence by issuing subpoenas, interviewing 
witnesses, and considering the execution of search warrants,' 
said Mr. Mansfield, who had extensive experience prosecuting 
campaign finance cases. `But it got yanked off my desk, and as 
far as I know, nothing happened for many, many months. The 
consequence of a strategy of sitting back and doing nothing 
means you effectively make the matter go away. It is so much 
harder to develop. Speed is everything in a highly publicized 
case.' ''
    Then the story goes on to say: ``In the months that 
elapsed, several figures involved in the temple fundraising 
fled the country.''
    Were you accurately quoted, Mr. Mansfield?
    Mr. Mansfield. Yes. Those quotes are accurate, but I would 
like to explain and clarify the final segment of that quote.
    Senator Specter. Please do.
    Mr. Mansfield. Because I think it's important.
    Senator Specter. Yes.
    Mr. Mansfield. The final segment of the quote says 
something to the effect--I don't have it in front of me--the 
consequence of moving slowly can hurt an investigation. Perhaps 
you could read the last----
    Senator Specter. It says, ``Speed is everything in a highly 
publicized case.'' The last thing you said says this.I will 
read it all. ``But it got yanked off my desk, and as far as I know, 
nothing happened for many, many months. The consequence of a strategy 
of sitting back and doing nothing means you effectively make the matter 
go away. It is so much harder to develop. Speed is everything in a 
highly publicized case.''
    Mr. Mansfield. The segment of the quote starting with ``The 
consequence of a strategy of sitting back and doing nothing,'' 
that quote was in response to a generic hypothetical question 
from the reporter. Specifically, the reporter said: What if 
there was a high-profile case and prosecutors didn't do 
anything for months? I made the point to the reporter--I'm not 
commenting in any way on what the Department of Justice did 
with respect to this investigation because, frankly, I have no 
knowledge of what they did. So my quote was basically answering 
the hypothetical that was put to me, that if there was a high-
profile case that was publicized and prosecutors didn't move 
quickly, you really jeopardize making the case. And that is 
precisely my belief about these matters, having worked on them 
for many years, which is why, going back to the first part of 
the quote, it was my strategy to move quickly on the 
investigation. It was a strategy that I had used really for 11 
years as a prosecutor in Los Angeles.
    An example was in the Congressman Kim case, which started 
similarly in a sense with a newspaper story. There had been a 
L.A. Times story in that case that had detailed allegations, 
rather specific allegations of wrongdoing by the Congressman's 
campaign committee. And so as a result, what we did in that 
case was within a couple, 3 weeks, issued grand jury subpoenas, 
and then within a couple of months we executed search warrants. 
And I think by moving quickly we were able to gather a lot of 
the important documentary evidence in that case.
    Senator Specter. And that is what you wanted to do in this 
matter?
    Mr. Mansfield. Yes, sir.
    Senator Specter. Well, did your hypothetical answer as such 
apply factually in this case, that when you didn't move there 
was--the matter, in effect, went away?
    Mr. Mansfield. I really can't answer that because I don't 
know what happened once the case was taken over by Public 
Integrity. I don't know what they did or did not do, so I think 
they are in the best position to respond to that.
    Senator Specter. Are you aware that some 18 witnesses left 
the country shortly after this matter was removed from your 
desk to Public Integrity?
    Mr. Mansfield. I'm not aware of details. I've read, you 
know, press accounts occasionally over the years, but I'm not 
aware of the details.
    Senator Specter. Mr. Radek, would you step forward, and 
let's talk about this case with Mr. Mansfield here. Thank you 
for joining us today, Mr. Radek.
    As I know you know from your experience as a trial lawyer, 
you are still under oath.
    Mr. Radek. Yes, I do, Mr. Chairman. Thank you.
    Senator Specter. Thank you. Mr. Radek, I have the letter 
dated November 1, 1996, addressed to Mr. Stephen E. Ziperstein, 
Chief Assistant U.S. Attorney, which says in pertinent part on 
page 2, ``Your office should take no steps to investigate these 
matters at this time.'' Signed by--purporting to be signed by 
you. Is, in fact, that your letter?
    Mr. Radek. It is my letter.
    Senator Specter. What was this case all about, Mr. Radek?
    Mr. Radek. Well, at the time I wrote the letter, we weren't 
sure. Mr. Mansfield, as he has testified, contacted Mr. 
Donsanto, who informed me that Mr. Mansfield was beginning to 
conduct this investigation. At the same time, press reports 
were coming to our attention as well as a letter from five 
Members of Congress alleging that there was some type of 
misconduct involving the Hsi Lai Temple event that the Vice 
President spoke at. And Mr. Mansfield had communicated to Mr. 
Donsanto that there was in the press reports some indication 
that possibly conduit contributions were involved.
    Senator Specter. And what happened after you issued 
instructions to the U.S. Attorney's Office in Los Angeles to 
take those steps to investigate these matters?
    Mr. Radek. Well, I think it's important for the committee 
to understand why I sent that letter, and it was because of 
really two factors, the first being I was instructed by my 
superiors in the Criminal Division, Mr. Litt and Mr. Richard, 
to take the matter over for the task force, which was then just 
being started, and I was also informed by them after a 
discussion with me to inform the U.S. Attorney's Office in Los 
Angeles that the matter needed to be examined to see whether 
there was any allegation which constituted specific and 
credible information against Vice President Gore, that is, to 
do an independent counsel scrub on it.
    Senator Specter. And you determined as a matter of your 
judgment that independent counsel should not be appointed?
    Mr. Radek. It was determined somewhat later after an 
analysis of the materials that Mr. Mansfield sent and the 
materials that we were gathering at the same time, that there 
was no allegation amounting to specific and credible allegation 
against the Vice President, specific and credible information.
    Senator Specter. Well, was the matter pursued on 
anyinvestigative level, then, either by the Public Integrity Section or 
by the U.S. Attorney's Office in Los Angeles or by anybody else?
    Mr. Radek. Oh, yes. As I've said, it was anticipated, and, 
in fact, it was taken over by the task force, which was then 
under the Public Integrity Section.
    Senator Specter. And what happened?
    Mr. Radek. Well, for one, Maria Hsia has been convicted in 
that investigation and is now awaiting sentencing. Other 
indictments were returned, and the matter was pursued most 
vigorously, I assure you.
    Senator Specter. And why was it taken over by the task 
force instead of being handled by the U.S. Attorney's Office in 
Los Angeles?
    Mr. Radek. Well, first of all, let me say that our office 
had a long relationship with Mr. Mansfield, and we recognized 
that he was a very good prosecutor, and it had absolutely 
nothing to do with his abilities to carry it out. And, in fact, 
I'm sure that had he been left in charge of the matter, it 
could have been and would have been handled more quickly.
    The problem is that the independent counsel statute 
required that we do an examination without issuing subpoenas 
and without issuing immunities. And so in each and every case 
where we had an allegation that was potentially an independent 
counsel matter, we would instruct the U.S. Attorney's Office to 
stop their investigation, not issue subpoenas, not issue 
immunities, not engage in plea bargaining, and that's what I 
did here with Mr. Mansfield and Mr. Ziperstein.
    Senator Specter. Well, Mr. Radek, the task force wasn't 
even in existence until sometime substantially after November 
1. You had your meeting with Mr. Esposito November 20. The 
matter was in abeyance for a period of time. What----
    Mr. Radek. Well, I've heard that----
    Senator Specter. Excuse me. Let me ask you the question.
    Mr. Radek. I'm sorry. I thought you were finished, Mr. 
Chairman.
    Senator Specter. What losses were there for the speed of 
this prosecution? Mr. Mansfield has described what was 
necessary during the intervening weeks before the task force 
was set up?
    Mr. Radek. I'm sorry. What's the question? What losses were 
there?
    Senator Specter. Right.
    Mr. Radek. Well----
    Senator Specter. Was anybody working on this case from the 
time you took it from Mr. Mansfield until the task force was 
set up?
    Mr. Radek. Yes, sir. Somebody was working on it from the 
time we took it over.
    Senator Specter. But it wasn't the task force.
    Mr. Radek. Well----
    Senator Specter. You didn't have a task force.
    Mr. Radek. It was the task force. It was what was to become 
the task force. There was, as has been testified here, a group 
of attorneys who were doing these matters, who later came to be 
referred to as a task force, headed by Ms. Ingersoll, who was 
in place at that point. But you have to understand, what was 
done here first and what was required to be done was to do an 
independent counsel analysis to see whether there was specific 
and credible information against the Vice President. That took 
some time.
    Senator Specter. Well, while that analysis was undertaken, 
was this matter being investigated by the task force or by the 
people that later became the task force? Because you didn't 
have a task force at that time.
    Mr. Radek. We couldn't issue subpoenas or do other 
investigative matters that were prohibited by the independent 
counsel statute. But, clearly, this matter was under analysis, 
the same type of analysis that Mr. Mansfield was doing, with an 
eye towards investigating it, which investigative steps were 
begun in December.
    Senator Specter. Well, Mr. Radek, do you agree with the 
thrust of what Mr. Mansfield is quoted as saying, even be it 
hypothetical or applicable to this case, that the consequence 
of a strategy of sitting back doing nothing means that you 
effectively make the matter go away, much harder to develop, 
speed is everything in a highly publicized case? Beyond that, 
isn't it true that some 18 witnesses moved out of the country?
    Mr. Radek. I don't know that 18 witnesses moved out of the 
country. I talked to the trial attorney who handled this matter 
and was assured by him that there were no losses of evidence 
due to witnesses leaving the country. So I've read that in 
places. I don't know where that comes from, Mr. Chairman.
    Senator Specter. Well, how long did it take after November 
1, when this letter was written, and the Los Angeles U.S. 
Attorney's Office got out of the case, to have a full-scale 
investigation going where you could use the grand jury 
subpoenas, search warrants, et cetera?
    Mr. Radek. I'm prohibited from saying exactly what the 
investigative steps were by grand jury secrecy rules, but by 
the middle----
    Senator Specter. All I have asked you for is how much time 
was lost.
    Mr. Radek. By the middle of December, investigative steps 
were taken.
    Senator Specter. So 6 weeks was lost?
    Mr. Radek. Well, again, we wanted for Mr. Mansfield to 
provide us whatever evidence we got, and I got a letter from 
him on the November 13. Again, the analysis was being done on 
the independent counsel matter, so we couldn't issue subpoenas, 
engage in immunities, or whatnot. So some time was lost, 
absolutely, and it was due to the independent counsel statute. 
You can say it's 6 weeks, you can say it's 4 weeks, you can say 
it's 2 weeks. I don't know. You may want to ask Mr. Mansfield 
how quickly those subpoenas would have gotten out. I'm sure 
they would have taken a little time, but, yes, some time was 
lost. There's no doubt about it.
    Senator Specter. He has a question for you, Mr. Mansfield. 
How quickly would those subpoenas have gotten out if he left it 
with you?
    Mr. Mansfield. Well, I mean, you're asking me to pinpoint 
the time it would take to issue subpoenas on something I looked 
at 4 years ago. When you've figured out where you want to go in 
your investigation and who you want to contact for information, 
it takes a matter of minutes to issue a subpoena, and then the 
question is how long does it take to get it served. The Bureau 
in my experience----
    Senator Specter. It doesn't take you minutes if you'reon 
the Judiciary Committee.
    Mr. Mansfield. I've been happy to comply with your 
subpoena.
    I think we were about a few days, a week. It's hard to say 
exactly. But we had begun--I had been working with an agent 
from the Westwood office of the FBI, and we were putting 
together an investigative outline. We identified various 
individuals and entities, and we were prepared to issue those 
subpoenas promptly. Frankly, one factor that we were 
considering--and I believe I had some discussion, perhaps with 
Craig Donsanto about this. But one factor that we took into 
consideration was that we didn't want to issue subpoenas prior 
to the election to have any sort of unfair influence on the 
election, because, obviously, once you take the step of issuing 
subpoenas, you make a grand jury investigation potentially 
public if the subpoenas party publicizes the information.
    So we were about at the time--I don't remember the date 
that the election was in November that year, but on the 31, 
when we were--when the case was transferred to Public 
Integrity, we were probably a few days to a week away, I would 
guess.
    Senator Specter. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman, very much.
    Mr. Mansfield, could you refresh for me who Mr. Donsanto 
is?
    Mr. Mansfield. Craig Donsanto is a career prosecutor who 
has worked for many years in the Department of Justice and has 
a specialty and expertise in campaign finance law.
    Senator Torricelli. Do you have high confidence in him?
    Mr. Mansfield. I certainly defer to Mr. Donsanto on a lot 
of questions and areas on campaign finance, although there were 
times in cases that we worked together that we disagreed in 
terms of the application of law to fact.
    Senator Torricelli. A man of integrity?
    Mr. Mansfield. Yes, I think so.
    Senator Torricelli. Mr. Donsanto claims in a memorandum 
dated November 1 that you claimed that subpoenas were, 
``prepared and ready to serve yesterday afternoon.'' He 
actually cites that several times in his memorandum. Did you 
tell him on November 1 or the days before that that you had 
subpoenas prepared and ready to serve?
    Mr. Mansfield. Absolutely not. I did not have any subpoenas 
prepared, and they certainly weren't ready to be served because 
that would have been prior to the election.
    What I did have was--again, what is the date of the memo 
he's referring to?
    Senator Torricelli. November 1.
    Mr. Mansfield. As of November 1, I would have had an 
outline prepared, because I believe I had prepared an 
investigative outline with the FBI agent. And in the outline, 
we had identified names of entities and individuals who were 
going to be subpoenaed, as well as I think there were 
references to the types of documents and materials----
    Senator Torricelli. This is Mr. Donsanto's statement: 
``He''--meaning Mr. Mansfield--``then told me that in his view 
these subpoenas were needed to prevent records from being 
destroyed, and he asked me whether he could serve them.''
    Mr. Mansfield. It's true that the reason to issue subpoenas 
promptly is to ensure that evidence would not be destroyed and 
also, obviously, to gather the evidence.
    Senator Torricelli. That I understand, Mr. Mansfield. We 
all went to law school. But the point is this--a man that you 
have now claimed is a man of integrity, a superior in the 
Department of Justice, a man in whom you have confidence, who 
has claimed in his memorandum that you said that subpoenas were 
prepared and ready to be delivered.
    Mr. Mansfield. Well, if he is saying that in a memo, I've 
never received the memo. He's absolutely----
    Senator Torricelli. Well, the memo is not to you----
    Mr. Mansfield. Excuse me, Senator. I'm trying to respond to 
your question. You've asked me a question----
    Senator Specter. Senator Torricelli, let the witness 
respond.
    Senator Torricelli. I will let him respond but----
    Senator Specter. Senator Torricelli, let the witness 
respond.
    Senator Torricelli. Mr. Chairman, is this time not 
allocated to me for me to engage the witness?
    Senator Specter. Yes, it is, and as chairman, it is my 
responsibility to see that there is fairness to the witness. 
And he is in the process of responding.
    Senator Torricelli. He can't respond without my clarifying 
the question, because he, I think, is not understanding the 
paper that is before me. This is a memorandum that is to Mr. 
Radek, from Mr. Donsanto to Mr. Radek, so it was not to you. 
You would not have seen it.
    Mr. Mansfield. Right. He could have copied me, but he chose 
not to, apparently, with this letter.
    Senator Torricelli. All right. Now, that is Mr. Donsanto's 
statement on November 1.
    Mr. Mansfield. Yes, I'd like to respond to the question 
that was pending before that digression. It is absolutely 
incorrect that I told Craig Donsanto I had subpoenas prepared. 
I did not have subpoenas prepared. I was working on an 
investigative outline with the FBI agent to get to the point 
where we could issue subpoenas. The reason we wanted to do that 
was to be ready so that shortly after the election we could 
begin issuing the subpoenas so that we could gather the 
evidence and avoid any possible document destruction.
    Senator Torricelli. Well, indeed, you seem to have made an 
impression on him because not only did he claim that you said 
that subpoenas were prepared and ready to be delivered, he on 
three instances in his memorandum comes to the conclusion that, 
though you have claimed this, he does not believe you. He says, 
``My guess is that there are no subpoenas and that this call 
was designed to give him ammo to charge that the change in 
jurisdiction was designed to prejudice the investigation of 
whatever crimes may have been present.'' Rather prescient 
thought, don't you think? Your reaction----
    Mr. Mansfield. Am I entitled to that question, Senator?
    Senator Torricelli. Please.
    Mr. Mansfield. That's absolutely untrue, as far as I'm 
concerned. There were no subpoenas prepared during the time 
that I had this matter before it was removed from me. The 
reason there were no subpoenas prepared is because we were not 
planning--and I had discussed with Mr. Donsanto this issue. We 
were not planning to issue subpoenas prior to theelection, for 
one very good reason: it would have been a bad thing to do. It would 
have politicized an investigation just prior to a Presidential 
election, and that's not a good way to begin a criminal investigation.
    So we had made the decision not to issue subpoenas until 
after the election. I did not have subpoenas prepared before 
the election. We weren't ready to serve them before the 
election. In fact, what we were doing, as I explained earlier, 
was trying to get our arms around the facts. New facts were 
coming out in press accounts every day. We wanted to make sure 
that we had prepared a strategic investigative plan that 
allowed us to go to Point A before Point B in a logical way to 
maximize the evidence that we obtained. So we were not going to 
rush in some blunderbuss fashion to issue subpoenas willy-
nilly. We were trying to do it in a strategic way, but also 
being aware of the need to move quickly. So that's what we were 
trying to do.
    Senator Torricelli. Let me bring your attention to Mr. 
Donsanto, who in a later recollection writes, on July 30, 1999, 
that he pressed you on the question of the subpoenas. ``He was 
very thin on what these subpoenas sought on his theory that 
data they were to obtain would be lost forever if the subpoenas 
were not served immediately. I remain unpersuaded that he had 
the subpoenas ready to serve when he placed this November 1, 
1996, call to me.''
    It should be very troubling to have a superior in the 
Justice Department who on two occasions expresses a lack of 
confidence in your credibility and a call you are making on 
official business about an investigation which you are 
conducting.
    Mr. Mansfield. Well, if Mr. Donsanto had questions about 
whether we were ready to issue subpoenas, Senator, they were 
never communicated to me before the case was removed from me 
or, significantly, after. And, frankly, I would have thought 
that either Mr. Donsanto or someone else in his section who 
took over the case would have called at some point to discuss 
what our thinking had been. I don't know whether they consulted 
with the agent I worked with. There were actually two agents. 
But I never received a call from them about where I thought 
subpoenas ought to be issued or as a follow-up to the 
investigative outline that I had prepared.
    Senator Torricelli. But the call that----
    Mr. Chairman, may I ask just one--interject one point?
    Senator Specter. Will you yield, Senator Torricelli?
    Senator Torricelli. Yes.
    Senator Sessions. Have you seen these memos that Senator 
Torricelli is referring to? Have you been given a copy of them?
    Mr. Mansfield. This is apparently a memo that Mr. Donsanto 
makes statements about the investigation, but he did not copy 
me on it. I'd like an opportunity to review them if there are 
going to be more questions about them.
    Senator Sessions. Well, my question was: Have you had a 
chance to read it and study it before you are being asked about 
it?
    Mr. Mansfield. I may have seen this memo in the last few 
days. The one that's been placed before me I have not reviewed.
    Senator Sessions. Well, just do the best you can. I just 
wanted----
    Senator Specter. Do you have a copy of it now, Mr. 
Mansfield?
    Mr. Mansfield. I have a copy of a memo with no date that 
says ``Lee'' on the top. Is that the memo to which we're 
referring?
    Senator Torricelli. That is, and that is from November 1, 
1996.
    Senator Specter. Senator Torricelli, is your copy--the 
memorandum is dated on page 2.
    Senator Torricelli. Yes.
    Senator Specter. At the bottom.
    Senator Torricelli. It is.
    Senator Specter. Single line on page 2.
    Senator Torricelli. Did this telephone call, Mr. Mansfield, 
from Mr. Donsanto, in fact, take place? ``Mr. Mansfield called 
me at 1:50 p.m. I returned the call at 2:05 p.m. and spoke with 
him for 5 minutes.''
    Senator Specter. Let's give Mr. Mansfield just a moment to 
read the memorandum.
    [Pause.]
    Mr. Mansfield. I was never provided a copy of this memo at 
the time that it was apparently drafted.
    Senator Torricelli. Did the telephone conversation actually 
take place, Mr. Mansfield?
    Mr. Mansfield. I'm sure that I spoke with Mr. Donsanto 
after the case was removed. I don't have a particular 
recollection of the date and time, but I know that--I would 
guess that I spoke with him on the day the case was removed, 
which would have been October 31. This seems to be dated 
November 1, but I don't have a specific recollection. I think 
it was about 4 years ago.
    Senator Torricelli. Well, Mr. Mansfield, this is obviously 
a troubling situation to have someone in the Justice Department 
as your superior who seems intimately involved and 
knowledgeable of your work in several instances in two 
different memorandums over the period of 3 years raise 
questions about your credibility on an issue that is so 
important as your reporting to the Department of Justice on 
whether or not you have indeed drafted subpoenas or not. But, 
fortunately, the question is ultimately resolved by you on 
November 13, when you send correspondence under your own name 
and that of Norma Minella, who is the U.S. Attorney at that 
point in your district. Is that correct?
    Mr. Mansfield. The point being November of 1996?
    Senator Torricelli. I am asking you to identify Norma 
Minella.
    Mr. Mansfield. For November 1996?
    Senator Torricelli. That is correct.
    Mr. Mansfield. Yes.
    Senator Torricelli. In that letter, you write, ``No 
subpoenas have been drafted or served, and no interviews have 
been conducted by this office or the FBI in Los Angeles in 
connection with this matter.'' Do you have a memory of that 
correspondence?
    Mr. Mansfield. Let me take a look. Is this document in the 
binder before me?
    Senator Torricelli. No, it is not.
    Mr. Mansfield. Can I see a copy of it, please?
    Senator Torricelli. Of course, now I don't have a copy of 
it, but we will share.
    Mr. Mansfield. Yes, this is an accurate letter that Isent 
to Mr. Radek, and it responds to the letter that was formally sent to 
my office about removing the case. It does not include what I recall 
being attached, which was an outline of investigative steps, and as I 
recall, the reason it's dated November 13 is the letter that was sent 
to my office went to Stephen Ziperstein, who was the chief assistant, 
not to me. And by the time I got it, apparently a number of days had 
elapsed. But----
    Senator Torricelli. In any case----
    Mr. Mansfield. It is my letter, and there was attached to 
it an outline of investigative steps.
    Senator Torricelli. I understand that. Thank you. But in 
any case, on November 13, it would then be accurate that indeed 
you did confirm, as indeed it was Mr. Donsanto's suspicion 
previously, that, in fact, not only had no subpoenas been 
served, but none had been drafted previously.
    Mr. Mansfield. It was not only Mr. Donsanto's suspicion, it 
was absolutely true that no subpoenas had been drafted. I have 
never maintained otherwise to Mr. Donsanto or anyone else. We 
were not going to issue subpoenas before the Presidential 
election. We were using our time to get our hands around the 
facts, which were unfolding every day. It's 4 years later. 
People know a lot more now----
    Senator Torricelli. Of course.
    Mr. Mansfield [continuing]. About all these events. At the 
time, if I can complete my answer, new facts were coming out 
every day, many new facts. And so we were assimilating that 
information and working with the FEC In terms of getting 
information from public records as well as advisory opinions 
about foreign national finance rules, and putting together an 
investigative plan to issue subpoenas.
    I believe Mr. Donsanto was aware of that. Why he is saying 
in a memo that I would have prepared subpoenas ready to serve 
before a Presidential election, I do not know.
    I also noticed in his memo he said that in his experience 
documents don't get trashed. Well, I was a Federal prosecutor 
for 11 years, and I can tell you that it is certainly a risk in 
every case involving documents and Federal violations that 
there is a significant risk of people destroying evidence or 
trashing it. So I would disagree with Mr. Donsanto on that 
point as well.
    Senator Torricelli. Mr. Mansfield, you were involved in the 
prosecution of the Kim case in California?
    Mr. Mansfield. Yes, sir.
    Senator Torricelli. Are you aware that Mr. Donsanto has 
stated criticism of your handling of that case?
    Mr. Mansfield. No, I'm not, because Mr. Donsanto approved 
each prosecutive decision made in the case in terms of 
indictment decisions, plea agreement decisions, and sentencing 
decisions. Each time a critical decision needed to be made in 
that case, I conferred with Public Integrity and specifically 
with Mr. Donsanto. Each time he concurred with the 
recommendation that we ultimately pursued in that case.
    Senator Torricelli. Would it surprise you to know that in 
his memorandum of July 30, 1999, he wrote that his memory was 
that you had been calling every other day complaining that your 
superiors were undermining your investigation and the strategy 
in the case?
    Mr. Mansfield. I don't know what memo you're referring to 
in 1999. I wasn't even in the Department of Justice in 1999.
    Senator Torricelli. This is Mr. Donsanto's recollection of 
his experiences with you and the Kim case.
    Mr. Mansfield. In 1999, you're telling me that Mr. Donsanto 
was writing a recollection of what had happened 3 years or 4 
years earlier?
    Senator Specter. Excuse me. Let's make a copy of that 
memorandum available to Mr. Mansfield.
    Senator Torricelli. Mr. Mansfield, admittedly, Mr. 
Donsanto's memo was written several years later, but it was one 
year closer in time than what you are expressing to the 
committee right now. So, indeed, it cannot be claimed not to 
have any credibility whatsoever.
    Senator Specter. Let's just take a moment to give Mr. 
Mansfield a chance to read the memo.
    [Pause.]
    Mr. Mansfield. I have never seen this before, and I don't 
know why in July 1999 Mr. Donsanto would be writing a memo 
unless it had to do with the fact that congressional committees 
were investigating decisions by Public Integrity.
    Senator Torricelli. Mr. Mansfield, you and I are the only 
ones here who have the advantage of reading this. I don't know 
if--do you, Senator Sessions, have it?
    Senator Sessions. I have a copy, yes.
    Senator Torricelli. And Senator Specter does. For those 
others who are listening, the reason is clear on this. He 
received a press question about the handling of this matter, so 
he is reconstructing contemporaneously at that time his 
recollection of events, just as we are asking you to do so 
orally today.
    Now, there are several things in this memorandum that bear 
on this question, and in a moment I will explain why I am 
raising them. But one of those is whether or not--indeed, Mr. 
Mansfield, I regret to raise--you have a pattern of raising 
questions as to whether you are being undermined by your 
superiors. It would appear to be, at least the inference from 
your testimony today, that in this matter being removed to Mr. 
Radek's office, this somehow was not in the interest of justice 
and was undermining an investigation.
    Mr. Mansfield. That's absolutely incorrect, and that is not 
my testimony, Senator. I've never----
    Senator Torricelli. So you believe that----
    Mr. Mansfield. Excuse me----
    Senator Specter. Let him finish.
    Mr. Mansfield. Excuse me, Senator. I'd like to respond to 
the point you've just made. It is incorrect to say that I have 
information to believe the investigation was undermined. I do 
not. I was not involved in the investigation that occurred when 
the case was taken from me. I have no information----
    Senator Torricelli. So would it be your testimony----
    Senator Specter. Senator Torricelli, let the----
    Mr. Mansfield [continuing]. What was done----
    Senator Torricelli [continuing]. Witness finish his----
    Senator Specter, I----
    Senator Specter. Excuse me, Senator Torricelli. The witness 
has been repeatedly interrupted, and I think unfairly.
    Senator Torricelli. Senator Specter, if I cannot conduct an 
interview of a witness as I as a member of this committee want 
to do so in the limited time that I have to elicit the best 
answers I believe are appropriate, not only will this 
examination not continue, but neither I nor amember of my party 
will remain in this committee. This witness is here to testify. He is 
under oath. He has important information about the integrity of Mr. 
Radek, a senior official at the Justice Department, the Attorney 
General of the United States, and the President of the United States. 
This is a matter of great seriousness.
    I have never and would never interfere with your 
examination of a witness. I have not been rude to him. I have 
not been abusive to him. I am not leading him. I am trying to 
focus his testimony on documents in the limited time that I 
have available. And I would like to proceed, with all due 
respect, to do so.
    If at any point you find I am abusive to him, misleading 
him, confusing him, by all means, interrupt my testimony 
because that is not my intention. But if I am doing so politely 
and properly in procedures of this committee, I would like to 
proceed. I only have a few minutes left, and I have three more 
matters I would like to get his testimony on.
    Now, it appears from Mr. Mansfield's testimony I may have 
misunderstood him. He has now said that he does not question 
the integrity of the judgment, that indeed if I am now 
understanding him properly, it may not have been improper in 
his opinion for this matter to be transferred from Los Angeles 
to the Justice Department. If that is his testimony, it is 
welcome. If I have misunderstood him for that, I apologize. 
But, indeed, it would be helpful to this committee.
    So if I could restate the question, is it----
    Mr. Mansfield. Can I----
    Senator Torricelli. I am restating the question for you. Is 
it, therefore, your testimony that given what the committee now 
knows about procedures in the independent counsel law, that 
their judgment about not interfering with the electoral 
process, the issuance of subpoenas, the resources available in 
Washington, whatever other reasons Mr. Radek may cite, that 
indeed in your judgment it was not improper and indeed was in 
the public interest to transfer this matter to Mr. Radek's 
office?
    Senator Specter. Before you answer, I want to respond to 
Senator Torricelli briefly. You may have as much time as you 
like with Mr. Mansfield. No one is saying you have been abusive 
or in any way discourteous. I have been a party to many, many 
proceedings and hearings and in court, and a witness is always 
permitted to finish an answer. It may be that on some occasions 
a witness may be interrupted if he has finished a thought and 
if--there is a wide latitude which the questioner has, 
especially a Senator questioner. And as far as I am concerned, 
you have very, very broad latitude. But a witness also has a 
right at a point to finish an answer. That is my only point.
    Senator Torricelli. That right will be respected by me, 
Senator Specter, and indeed I will not prohibit any answers 
from coming. But I simply want to focus the question, because--
let's clear up this matter. Is it your testimony, then----
    Mr. Mansfield. May I respond?
    Senator Torricelli [continuing]. That that was proper?
    Mr. Mansfield. Well, that is a very large question, and let 
me do my best to answer it based on the limited knowledge I 
have, and so there is no misunderstanding about my testimony at 
all, Senator.
    I do not have information that can be critical of the way 
the Public Integrity Section handled the investigation after it 
was taken from me because I don't know what they did or did not 
do. I was not involved in that. So I have never been critical 
of what they have done or not done in terms of investigation, 
and I have never had a basis to opine about their position on 
Independent Counsel Act review. I was not involved in that. I 
did not have any information. The matter was simply taken off 
my desk effective October 31.
    That is my testimony. It is as narrow as that.
    I don't know if that responds to your question.
    Senator Torricelli. Therefore, you do not have anything to 
offer this committee or any reasons to believe that this matter 
was not pursued aggressively or with integrity or that there 
was any reason to remove this matter from the Los Angeles 
office other than Mr. Radek's judgment of his interpretation of 
the independent counsel law, his resources, experience with the 
matter, and that he thought justice was better served by this 
matter being handled in Washington?
    Mr. Mansfield. Well, I don't have any reason to doubt Mr. 
Radek's good-faith decisions about the case. I did what I 
thought was the right thing to do during the short, approximate 
2-week period I had the matter. I had worked as a prosecutor by 
that time for 9 years. I had made a lot of complex cases as a 
prosecutor. I saw the need to put together an investigative 
plan and hit the ground running after election with a full-
scale investigation to preserve evidence and move forward on 
certain targeted subjects based on our analysis of what was 
coming out at that point. That's what I did, and I think, 
frankly, we did the right thing.
    Now, if the case was taken by Public Integrity and the 
Department of Justice and there are questions about how it was 
handled once taken by them, I'm simply not in a position to 
answer those questions because I don't know what was done or 
not done.
    Senator Torricelli. That is very helpful. Now let me just 
for a moment put the committee in Mr. Radek's position. Mr. 
Radek sees these allegations about matters in the midst of a 
Presidential campaign in 1996. It is Justice Department 
procedure, and indeed I believe in the best interest of justice 
in the middle of a Presidential campaign, not to conduct 
investigations or have the risk of things becoming public that 
would interfere with the electoral process.
    He then receives reports on November 1 from a trusted 
subordinate that makes several claims: one, stating his own 
belief that, in fact, there were not subpoenas ready; 
therefore, there was not an interference with anything that was 
ongoing; second, this subordinate apparently was of the belief 
that in the handling of the Kim case there was a failure of 
focus, that is, the case which you handled had dealt with 
subordinate and side issues which had detracted from the main 
matter, meaning Congressman Kim.
    Now, this may or may not be an accurate portrayal of the 
situation, but I am trying to re-create the situation in which 
Mr. Radek found himself.
    Mr. Mansfield. Well, let me--I have never--I was not a 
party to this memo that was created last year by Mr. Donsanto, 
but if you'd like to talk about the Kim case, Ican fill you in 
on what went on in that case because it was actually a very, from my 
standpoint, interesting and ultimately successful investigation and 
prosecution. I believe both Mr. Radek and Mr. Donsanto would agree with 
that.
    It was a long-haul investigation. It is incredibly 
difficult and time-consuming to make campaign finance 
prosecutions, and----
    Senator Torricelli. It is not my intention to criticize 
your handling of the case.
    Mr. Mansfield. No, but you raised questions about the 
investigation and whether there was a focus, and I wanted to 
respond to that statement about the focus of the investigation.
    There were times in the course of that investigation that, 
frankly, there was an interest in closing it down, in shutting 
it down, because it did take a lot of time to complete. And, 
frankly, I did disagree. At times I think Mr. Donsanto thought 
we should wrap it up. I think at times there may have been 
people in my office who thought maybe we should wrap it up. The 
agent and I who had been working with it were, frankly, dogged. 
We wanted to get to the bottom of it. We continued to pursue 
it. And as we got to the fifth foreign company, Hitai, the 
fifth one that we obtained a conviction, it was at that point 
that we actually had a very significant amount of cooperation 
in the deal that broke the case. And had we shut it down--just 
so I can finish because you raised this, had we shut it down 
earlier, we would not have gotten that cooperation from Hitai, 
the fifth corporation we convicted. That cooperation led to the 
conviction of the campaign treasurer, the campaign committee, 
and ultimately the Congressman.
    So I think at the end of the day, Mr. Donsanto and I know 
Mr. Radek would agree, it was a successful prosecution. It was 
ultimately the largest campaign fraud prosecution ever brought 
against a Member of Congress.
    Senator Torricelli. Indeed, Mr. Mansfield, it may have all 
been done properly, and it may be a model of prosecution. I am 
trying to re-create Mr. Radek's situation in November 1996. He 
was faced with a judgment on what is potentially the most 
important campaign finance question in history dealing with the 
President of the United States. He was dealing with Justice 
Department procedures not to proceed with a case in the midst 
of an election because it could influence the electoral 
process. He was dealing with a subordinate indicating that he 
had a conversation with you right before the election in which 
the subordinate expressed doubts whether you were dealing with 
him frankly and whether or not, in fact, you had prepared 
subpoenas. It now appears by your own correspondence that 
subordinate was correct, you had not done so.
    He is dealing with criticism from a subordinate who is 
claiming in the only other major campaign finance case that you 
had handled that there was a lack of focus and criticism of the 
case, criticism which may or may not be well founded but, 
nevertheless, was making its way to Mr. Radek. And then Mr. 
Radek was dealing with the independent counsel law, which does 
not envision subpoenas or offering immunity but had specific 
procedures which were better handled in Washington.
    He then, I assume, was making the judgment he had the 
expertise and the proper resources to handle this matter 
correctly and bring it to its proper conclusion. And you----
    Mr. Mansfield. I don't quarrel----
    Senator Torricelli [continuing]. Are not quarreling with--
--
    Mr. Mansfield. I don't quarrel with the idea that Public 
Integrity believed it should handle the case or that it wanted 
to take the case away from the U.S. Attorney's Office.
    Senator Torricelli. I recognize----
    Mr. Mansfield. I don't quarrel with it because it doesn't 
matter who the person is working a case. It really doesn't. And 
it's not about the individual. It's about doing things right. 
And if the case is handled properly, it doesn't matter who's 
handling it, whether it's someone out of D.C. or in Los 
Angeles.
    I'm very proud of the office I was with for 11 years. I 
know the caliber of work product and the caliber of AUSA in 
that office, and I know that we've always done a great job on 
our cases. So I am always confident that my former office can 
handle a case well.
    But it's not to say that it couldn't be handled by the 
Public Integrity Section or other U.S. Attorney's Offices 
around the country. I don't quarrel with that at all, and if 
there is a question about whether things were done properly 
once the case was assumed by Public Integrity, they're really 
the ones in the position to respond to that, not me. I've never 
offered an opinion of it, and I don't quarrel with the fact 
that the case needed to be handled in some way by some 
prosecutor at all.
    Senator Torricelli. Very good. I think that testimony is 
helpful. I think it puts perspective on Mr. Radek's judgment, 
makes clear that you are not questioning the judgment in doing 
so. I think it lays the facts out properly, and I think your 
testimony is very helpful, and I thank you.
    Senator Specter. Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Mr. Chairman, I think it is important for 
us to refocus a bit, and I will make a few opening comments, 
and I think I can clarify some of this confusion that is going 
on here.
    I know Mr. Donsanto well. I don't know how many cases he 
has tried. I know how many Mr. Mansfield apparently has tried. 
And as to the judgment of a case, I would tend to favor the 
discretion and judgment of the one who is living with it on the 
field, who has got to stand in court before a judge and defend 
it.
    And I would just comment on the memos of Mr. Donsanto. They 
were a little bit of a cover-your-fanny mentality about them, 
pretty dramatic, I think.
    In 1996, people were raising money for the campaign. This 
was late in the campaign. The evidence--a newspaper broke the 
story that there had been a fundraiser at the Buddhist Temple, 
the Vice President had been there, that foreign money had been 
contributed. It is illegal to give foreign money to a campaign. 
That was big news. It actually became a significant issue in 
the latter days of the campaign. Everybody in this country had 
some knowledge of it who paid any attention to the issues, and 
it was discussed whether or not one of the sources was the 
People's Republic of China and whether or not the People's 
Republic of China was participating in a determined effort to 
influence this campaign.
    The Democratic National Committee, which handles much of 
the fundraising for the Clinton-Gore campaign, returnedover $2 
million in illegally raised money from many foreign sources, including 
the People's Republic of China.
    An examination of the fundraising for that election, most 
of which, of course, was legitimate, must include an 
examination of the 1996 Buddhist Temple event which Vice 
President Gore attended. Who were the people surrounding him at 
that event? Were the people involved in this event involved in 
illegal foreign-source contributions? What was the role of the 
Vice President's staff and the DNC staff in raising these 
monies? What was the Vice President's role regarding the event?
    The questions arising from the funding of the 1996 
Presidential campaign in general and the Buddhist Temple in 
particular are so important to the integrity of our process 
that they resulted in a series of investigations. And so Mr. 
Mansfield testified how he started his investigation.
    And so I would just say this: There are two issues involved 
in this campaign of real significance. The first is the legal 
question, which we have been discussing for some time, of 
whether the Attorney General should have appointed an 
independent counsel to investigate Vice President Gore, who 
would have been the relevant covered person. Second, what was 
the weight of the proof of the facts that show that a violation 
may have occurred and whether or not that required an 
independent counsel?
    So that is the matter we are dealing with. It is not an 
itty-bitty one. It was a big deal. I think it is appropriate 
for us to analyze the decisionmaking process of the Department 
of Justice.
    Now, let me ask you, Mr. Mansfield, a few things here. From 
what you have studied in the newspaper, you were concerned 
about it. You had a number of years of expertise in white-
collar fraud and public corruption cases. Is that correct?
    Mr. Mansfield. Yes, sir.
    Senator Sessions. And you thought something should be done.
    Mr. Mansfield. Yes, sir.
    Senator Sessions. I believe in your book there, your 
binder, there is a document. Is there a document there that you 
prepared? My staff I think handed it to you.
    Mr. Mansfield. Oh, yes.
    Senator Sessions. Yes. Now, all this talk about you issuing 
a subpoena and Mr. Donsanto saying you issued a subpoena and 
you looked right at us befuddled and say you never issued one, 
sometimes a telephone conversation can get a little bit 
confused, and it is easy to happen. People hear different 
things.
    Is Mr. Donsanto kind of excitable?
    Mr. Mansfield. Well, I'll leave that to those who have met 
him and worked with him to answer----
    Senator Sessions. Well, you met with him and worked with 
him. Does he get excited sometimes?
    Mr. Mansfield. Yes, I think it might be fair to say that 
he's excitable.
    Senator Sessions. All right. Well, at any rate, he is a 
good person. I have known him for many years. But I guess what 
I would say to you is: It wasn't untrue that you had begun to 
think about subpoenas and had actually done some paperwork as 
of October 30, the day before this phone call reported, to 
begin commencing drafting subpoenas. Is that correct?
    Mr. Mansfield. Absolutely right. I mean, the point here is 
that there was a need to begin an investigation, a need to do 
it properly, and a need to do it in a strategic, organized way. 
We were on the path to do that.
    The question about whether someone had subpoenas on a 
particular day versus another day is really a red herring. The 
question is----
    Senator Sessions. I can't understand why that----
    Mr. Mansfield [continuing]. Was there a proper 
investigation proceeding to gather and preserve evidence. We 
were on that track for the 2 weeks that we had it, and if 
subpoenas were issued or prepared by Mr. Donsanto on the day 
that he took the case over or someone else, that is for Mr. 
Donsanto and others to answer. I no longer had the case. It was 
taken from me. But during the time period that my office had 
the case, I believe we proceeded expeditiously and properly in 
trying to move forward.
    Senator Sessions. Well, and you even as of that date, 
October 30, had prepared a list of some potential people to be 
subpoenaed and some of the documents to be requested, had you 
not?
    Mr. Mansfield. This was a partial list, and it's something 
that prosecutors do, and I know that Senator Specter, who has 
me beat by one year as a prosecutor, I'm sure did this in his 
cases as well. You begin a working outline.
    Senator Sessions. Right. That is all I am saying.
    Mr. Mansfield. And it changes over time.
    Senator Sessions. You had begun to think about the question 
of subpoenas. In your professional judgment and experience, it 
was important to subpoena the records, either you or somebody 
else, before they got destroyed----
    Mr. Mansfield. Absolutely.
    Senator Sessions [continuing]. Removed or otherwise been 
disposed of.
    Mr. Mansfield. Yes.
    Senator Sessions. And you were aware that many of the 
people in the Buddhist Temple were not American citizens and 
had the potential to flee the country or leave the country.
    Mr. Mansfield. There was that risk.
    Senator Sessions. And if you don't interview people like 
that before they go back to Red China, you are not going to 
ever be able to interview them. Isn't that correct?
    Mr. Mansfield. Well, once they leave the country, it is 
exceedingly difficult to ever, you know, make the case with 
those witnesses. That's true.
    Senator Sessions. Wasn't it prudent and sensible to you to 
think that the matter, whether there was any merit to the 
complaints or not, the investigation needed to go on and get 
started promptly?
    Mr. Mansfield. Yes. I did agree, though, with the 
proposition that we ought to not issue the subpoenas until 
after the election because I thought that was the responsible 
way to proceed.
    Senator Sessions. Well, all right. That is a judgment call 
that I would respect. You could take another position, too. Why 
wait just because the guy is running for President of the 
United States? Why does he get a break that an average guy 
wouldn't? But I can understand your----
    Mr. Mansfield. The decision wouldn't be made to give a 
person a break but, rather, a weighing of the risks of what 
effect the issuance of the subpoena might have.
    Senator Sessions. ``Give him a break'' was my term. But 
there was no law that told you you should wait until after the 
election. It was a courtesy, a respect for the system that you 
decided outweighed the other choice.
    Mr. Mansfield. Yes, it was a balance, and I think it's the 
correct balance. You're right that, you know, these are 
judgment calls. I think it was the correct balance because you 
have to go back in time, I mean, this was all unfolding on a 
daily basis and----
    Senator Sessions. Well, I am not criticizing you for that.
    Mr. Mansfield. And what we were--we were trying to piece it 
together, and we had a couple of weeks. And, frankly, we needed 
a couple of weeks to make sense of it all and put together an 
outline for subpoenas and interviews. And that's really what we 
were doing.
    Senator Sessions. In this memo, I see in the third or 
fourth paragraph, Mr. Donsanto says, you told me--Donsanto--
``that in his view''--I will just read it--``he''--talking 
about Mansfield--``then told me that in his view these 
subpoenas were needed to prevent records from being 
destroyed.'' Is that a concern of yours that you may have 
expressed with Mr. Donsanto during that conversation?
    Mr. Mansfield. Yes.
    Senator Sessions. Later on, ``I asked him whether he had 
any specific exigent circumstances suggesting to the 
contrary''--that is, destruction--``and he did not, although he 
restated his view that the stuff would be trashed if his 
subpoenas were not served.'' Does that sound like something you 
may have told him in that conversation?
    Mr. Mansfield. It does in the sense that--I mean, I'm not 
sure those would have been my words, but, you know, I did have 
concern about document destructions, and I did have a concern 
about moving at an expeditious rate to secure the documents. 
And there's a concern about loss of documents. I mean, I 
frankly had cases early as a prosecutor where massive amounts 
of documentary material had been destroyed. In fact, it became 
a count in the indictment, an obstruction of justice count.
    So it does happen. I disagree strongly with what's written 
in this memo that document destruction is not something to be 
concerned about in campaign finance fraud cases. I think it's 
just completely inaccurate, and I think the job of a prosecutor 
is to vigorously enforce the law and to conduct thorough, 
informed investigations, and you need simply to secure the 
evidence. You can't, you know, make decisions not to secure the 
evidence.
    Senator Sessions. Well, let me ask another, a different 
question. This Congressman Kim, he was a Republican 
Congressman, was he not?
    Mr. Mansfield. Yes, sir.
    Senator Sessions. And you pursued that investigation to its 
end, and he was convicted.
    Mr. Mansfield. Yes, sir.
    Senator Sessions. Are you suggesting that at points during 
the process that Mr. Donsanto and others didn't feel like the 
case was going to succeed and wanted to pull back? Is that what 
you were suggesting?
    Mr. Mansfield. In the Kim case?
    Senator Sessions. Yes.
    Mr. Mansfield. Well, I'm trying to make sense of Mr. 
Donsanto's statements in these memos about the case not being 
focused and there being some disagreement with superiors.
    I do recall--and I don't criticize Mr. Donsanto for this. I 
mean, you know, being a prosecutor is a very demanding job, and 
you have to make judgments.
    Senator Sessions. He has the advantage over----
    Mr. Mansfield. And there are times--there are times when it 
makes sense to simply decline a case or stop proceeding on a 
case, on an investigation. And so it's a healthy debate and 
it's an important debate, and it's one that, you know, 
prosecutors and supervisors need to have on a regular basis.
    In the Kim case, I can tell you--and I had to be the ``I 
told you so'' mode, but there were people who wanted to shut it 
down at various points in time. I don't say that because they 
had some bad intent, but it was their sense that it was taking 
longer than they thought it should take. And I can tell you, 
these cases are extraordinarily difficult to make. They're hard 
to make, they take a lot of time, and there's just an immense 
amount of political and other loyalties involved that you don't 
see in other cases. And it makes it very difficult to flip 
witnesses and build cases, so it does take time.
    In our experience in the Kim investigation, what we found 
is that by being dogged and moving forward--and in this case it 
was on the fifth corporation that we convicted--we finally got 
the cooperation we needed and the documents we needed to close 
out the case.
    Senator Sessions. Well, we need to move on, but I would 
just suggest that you had to take some of these contributors 
which he criticized you for in that memorandum and prosecute 
those, and it took the fifth one before they confessed and 
admitted the scheme and you were able to really make the case. 
And I think that shows sometimes that the person on the front 
line who's trying the case has a better perspective than a line 
attorney, an attorney back in Washington.
    I also would note, Mr. Chairman, the tenor of this memo 
shows why it is hard for even career attorneys--Mr. Mansfield 
had been there a number of years--to ever speak out. They are 
sort of victims of their superiors. This is what Craig Donsanto 
wrote: ``I responded to him and ended my conversation by 
telling Mansfield that he and I are both soldiers in this 
matter, that there is nothing personal this, he should not 
consider this personal, that we needed to follow whatever the 
marching instructions are, and do so without discussing the 
matter outside the circle of Federal law enforcement, that as 
one particularly sensitive to such issues, I saw nothing 
sinister in the reassignment of the particular matter to Public 
Integrity,'' et cetera, et cetera. There are several other 
notes there.
    So there is a lot of discipline within the Department, and 
people, professionals, don't like to criticize their 
supervisors, and they are overruled, they take it and go about 
their business day after day and don't get involved in that.
    Mr. Mansfield. I appreciate that, Senator, and could I just 
add something to that?
    Senator Sessions. Please.
    Mr. Mansfield. This wasn't a personal decision from my 
standpoint. I mean, I had enough work on my plate at the time. 
I had the Kim investigation at the time. There was an 
investigation of a Federal judge, and there were 
othercorruption investigations I was involved in.
    This wasn't personal to me. I didn't need another case. 
There were other prosecutors who could have handled this, 
either in my office or in other parts of the Department of 
Justice. So I don't have any quarrel with the notion that the 
case is going to be assigned to someone else to work.
    If there are questions about what was done during my 
handling of it, I'm happy to answer all those. But the 
questions about what was done after it was taken from me need 
to be answered by the people who had the case then.
    Senator Sessions. Well, Mr. Radek--well, let me just say 
this: I do believe there is evidence at the time that you 
possessed, that all of you possessed, that the Vice President 
exercised bad judgment and was involved with a cast of 
characters we now know are criminals. Many of them have been 
convicted. I have got a poster here I would just like to show. 
This is what occurred at that Buddhist Temple. This is a 
photograph of the group that was there.
    It shows a picture of the Vice President. To his far right 
is Maria Hsia, his long-time friend and fundraiser of more than 
10 years, who was subsequently convicted on five felony counts. 
Her conviction stemmed directly from the Buddhist Temple 
fundraiser.
    To Vice President Gore's immediate left is Ted Sioeng, who 
fled the country as soon as he was implicated in the 
fundraising scandals, as Mr. Mansfield suggested might happen, 
and who we believe is still under criminal investigation.
    Behind and to Vice President Gore's right is John Huang, a 
vice chairman of the Democratic National Committee staff who 
helped the Vice President plan the temple event. Mr. Huang also 
subsequently pleaded guilty to a felony charge. He raised over 
$1 million in illegal foreign-source campaign contributions.
    Finally, behind the Vice President and to his far right is 
Man Ho Shih, a Buddhist nun, who admitted to another committee 
of the Senate that she and others set about destroying 
documents at the fundraiser, the temple fundraiser. Those 
documents were destroyed because they ``did not want to 
embarrass the Vice President.'' She also fled the country 
before she was scheduled to testify in a court of law.
    There was a video of that event showing what happened. That 
video has disappeared.
    Moreover, the Senate Governmental Affairs Committee has 
stated that Maria Hsia is ``an agent of the Chinese Government, 
that she acted knowingly in support of it, and that she 
attempted to conceal her relationship with the Chinese 
Government.'' The committee concluded that Ted Sioeng ``worked 
and perhaps still works on behalf of the Chinese Government.'' 
These conclusions have never been satisfactorily refuted and 
must be thoroughly investigated.
    I believe that the Vice President owes an explanation to 
the American people about this. More importantly, for this 
hearing, it is important for us to know why the planned 
investigation by the Los Angeles U.S. Attorney's Office was 
stopped, but, more importantly, why no investigation occurred 
after that investigation was stopped. That was what was really 
wrong, in my opinion. So I hope our hearings will focus on 
that.
    Mr. Radek, to follow up on what Senator Specter asked you, 
again, as of approximately a month after you wrote to Mr. 
Mansfield in the U.S. Attorney's Office and took over that 
case, you recommended to the Attorney General that there be no 
independent counsel. You took over the case under the theory 
that you were investigating whether or not an independent 
counsel appointment should be made. And my question to you is: 
Did you issue any subpoenas for any documents? Did you 
interview any witnesses at the Buddhist Temple who had been 
there before you made that recommendation? And if you did any 
other investigation, please share it with us.
    Mr. Radek. Senator, first let me point out that all those 
people are convicted felons because of the work of the campaign 
finance task force. All right? So let's give a little credit 
where credit's due.
    Now, let's talk about what we did. There was an immediate 
investigation done, but first there was an independent counsel 
analysis done. And what was done there was to look at the 
allegations. There were no interviews conducted. There were no 
subpoenas issued. The independent counsel statute doesn't let 
us do it.
    And so what happened was we analyzed a letter from 
Congress, five Members of Congress, the material that Mr. 
Mansfield had sent, which wasn't just that outline, which sort 
of laid out and gave some leads, but also the press accounts 
that he had accumulated that he sent, the press accounts that 
we had accumulated. We looked at all that information to see if 
there was an allegation against the Vice President. Is there 
something here that says he committed a crime? And does that 
amount to specific and credible information? The answer was no, 
Senator, and----
    Senator Sessions. OK. Well, let me ask you this----
    Mr. Radek. And then we started an investigation of the Hsi 
Lai Temple matter, and that was as vigorous an investigation as 
you could ever want to see.
    Senator Sessions. You said this special prosecutor act 
doesn't allow you to investigate--interview witnesses?
    Mr. Radek. No. I said it didn't allow us to issue 
subpoenas. I was referring to the second problem----
    Senator Sessions. But the U.S. Attorney's Office could 
have, and you stopped them.
    Mr. Radek. No, sir. Once we started an independent counsel 
analysis, that had to be stopped, and it was done on many other 
occasions with other U.S. Attorney's Offices on other 
independent counsel matters. That's what the statute required.
    Senator Sessions. But you could have interviewed witnesses?
    Mr. Radek. Oh, yes, sir, we could have.
    Senator Sessions. And none were interviewed?
    Mr. Radek. None were interviewed during the one month that 
we were doing the analysis on the independent counsel statute.
    Senator Sessions. No investigation was done other than from 
your own letter to the Attorney General or the Attorney 
General's declination of a special prosecutor. All you did was 
review the letter from Congress and the newspaper reports. You 
don't say you considered any other evidence before you 
suggested that they--you denied an independent counsel?
    Mr. Radek. I'm glad you used the term ``evidence.'' We 
considered all the information that was before us. We 
considered everything we had to see whether any of thatamounted 
to an allegation that the President--Vice President had committed a 
crime. And we came up no.
    Senator Sessions. Well, do you deny that witnesses fled the 
country and that evidence was destroyed before your 
investigation got untracked?
    Mr. Radek. I am aware that the two clerics, Man Ho and Yi 
Chu, have testified before a congressional committee that they 
were destroying documents shortly after the matter hit the 
newspaper and also in November.
    Senator Sessions. Do you know how many people that were at 
that temple fundraiser have fled the country and are now unable 
to be interviewed?
    Mr. Radek. I don't know how many witnesses have fled the 
country and weren't able to be interviewed. I asked the trial 
attorney in charge of this matter, and he told me that he was 
confident that they didn't lose any evidence due to people 
fleeing the country.
    Now, the two clerics that you talked about that fled, that 
were unavailable for trial and under indictment for having not 
shown up for trial, their evidence was obtained. We know what 
they said. They're the ones who told us that they were 
destroying documents.
    Senator Sessions. But they have now fled and are not 
available for testimony----
    Mr. Radek. That's right, but Ms. Hsia was----
    Senator Sessions [continuing]. In any trial or prosecution 
that----
    Mr. Radek. Ms. Hsia was convicted anyway.
    Senator Sessions. Well, there are others that might be 
charged in this case. Isn't that correct?
    Mr. Radek. That's correct, and that's why the investigation 
is proceeding.
    Senator Sessions. Well, do you deny that you received a 
letter from five Members of Congress, you stopped the 
prosecutor who was ready to do investigations, you conducted no 
independent investigation yourself, and then you advised the 
Attorney General and she declined a special prosecutor?
    Mr. Radek. She declined to appoint a special prosecutor 
based upon the letter from Congress. At the time she made that 
decision, we gave her all the information we had, which was not 
investigative information but was press reports and the other 
information that Mr. Mansfield provided.
    Senator Sessions. Well, it would be my view that before you 
advise the Attorney General on a matter of this import, just as 
a person who has been involved in prosecutions, I would think 
you would interview some witnesses. I think you would go and 
talk to the people at the temple and ask them what happened. I 
think you might even have interviewed the Vice President. It 
seems to me almost beyond belief that you would not do that, 
and as a result of that, evidence was lost, in my view.
    Mr. Radek. Well, I'm sorry, I question that as a result of 
that the evidence was lost. And if it was, it's unfortunate. 
But that was the requirement of the independent counsel 
statute.
    Senator, what you're saying is you wanted the decision made 
after an investigation, and that's exactly what we tried to do. 
We started the investigation. We conducted it, and had any 
evidence come up that was specific and credible against a 
covered person, we would have triggered the independent counsel 
statute, as indeed the Attorney General did on several 
occasions.
    Senator Sessions. What about the first time the Vice 
President was interviewed about this matter, about the temple? 
How long was it before he was even interviewed about it?
    Mr. Radek. I don't know. As I testified previously, the one 
interview I conducted, he was not asked about this.
    Senator Sessions. Well, it was 4 years, according to our 
records, and that does not suggest to me, Mr. Chairman, that we 
are handling this matter wisely. I do not dispute that Mr. 
Radek may have had the authority and maybe even the right--if 
not the right, the ability to take over the case and pursue it. 
Maybe that was even the right thing to do for him. But if he 
were going to do that, he should have done the things an 
investigation required. Those were not done. The Attorney 
General herself was not given the kind of evidence that she 
needed to make a good decision, and I believe a bad decision 
was made. And it has hurt the Department of Justice. Whether or 
not there was any criminal wrongdoing by any covered person, I 
believe this decision should have been made outside the 
Department.
    Senator Specter. Thank you, Senator Sessions.
    Mr. Radek, moving on to some other subject matters----
    Mr. Radek. Yes, Mr. Chairman.
    Senator Specter. And, Mr. Mansfield, that concludes your 
portion, so we thank you, and you are free to go. Thank you 
very much.
    Mr. Mansfield. Thank you, Senator.
    Mr. Radek. Mr. Chairman, may I get a glass for water?
    Senator Specter. Of course, yes. Would you like a break, 
Mr. Radek?
    Mr. Radek. I'm fine. I just need a drink.
    Senator Specter. OK. Back to the inquiries made as to Mr. 
Terry McAuliffe, on March 13, 1996, you submitted a memorandum 
to Mr. Keating, which the essential part is, ``I have concluded 
for the reasons set forth below that McAuliffe is not a covered 
person.''
    Subsequent to that memorandum, on September 30, 1997, there 
was an issue raised as to Mr. McAuliffe being the subject of a 
Federal criminal investigation in the Southern District of New 
York. The memorandum says this: ``Because McAuliffe is a 
subject of a Federal criminal investigation of the Southern 
District of New York, we advise the U.S. Attorney's Office for 
SDNY''--meaning Southern District of New York--``that it was 
required to hold any investigation that encompassed activities 
by McAuliffe in abeyance pending results of the inquiry into 
McAuliffe's status under the law.''
    Now, the issue or the question has been raised as to your 
removing the New York U.S. Attorney's Office from the case in 
order to stymie that investigation. What reason was there to 
call off the Southern District of New York U.S. Attorney when 
you had already made a determination that Mr. McAuliffe was not 
a covered person?
    Mr. Radek. Well, Mr. Chairman, if I may go into the 
statute----
    Senator Specter. By all means.
    Mr. Radek [continuing]. This was one of the most troubling 
parts of the independent counsel statute. It defined campaign 
officials in a sort of amorphous way, and I think the 
congressional intent was to keep campaigns from avoiding the 
strictures of the Act by redesignating in terms of title so the 
Act wouldn't name anybody in particular.
    It called for a person to be covered if they were anational 
officer or an officer of the campaign exercising national authority. I 
can't find the language right here, but it's something close to that 
effect.
    Senator Specter. Mr. Radek, before you go too deeply into 
that--and I will give you a full chance to do that. By the way, 
it is now 5:38 p.m., and we have been notified that there are 
going to be two votes at 6:10 p.m., and we have a fair amount 
of ground to cover. But I will hear you out on the point you 
are making, but let me just ask you a very narrowly focused 
question. Whatever the statute defines a covered person to be, 
you had already determined that Mr. McAuliffe was not a covered 
person.
    Mr. Radek. That's because he was holding a different 
position in the first memo than the second memo, and the 
coverage is dictated by the position.
    Senator Specter. What position was he holding at the time 
of the first memo?
    Mr. Radek. If you'll let me read the memo so I know----
    Senator Specter. I will read it along with you, whether----
    Mr. Radek. The first one was the 1992 election campaign.
    Senator Specter. Well, this is March 13, 1996.
    Mr. Radek. No, but his position was in the 1992 election 
campaign.
    Senator Specter. Well, you define Mr. Terence McAuliffe as 
``the Finance Chair of the Clinton-Gore Re-election Campaign,'' 
and in your letter of September 30, 1997, you define his----
    Mr. Radek. Honorary Campaign Co-Chair.
    Senator Specter. Wait just a minute. As the Finance Chair 
and then Honorary Campaign Co-Chair of the Clinton-Gore Re-
election Campaign.
    Mr. Radek. Right. And it was the change in status to that 
second one that caused the re-evaluation. And, Mr. Chairman, 
may I say, I didn't take this case away from New York. I 
temporarily halted their investigation while this analysis was 
done.
    Senator Specter. How long did you halt it?
    Mr. Radek. Not very long. I can't remember but it was a 
matter of weeks, I think.
    Senator Specter. So you are saying that the status as 
Honorary Campaign Co-Chair led you to question whether that 
would make him a covered person. Both times he was the Finance 
Chair, but the second time he was also an Honorary Campaign Co-
Chair. And you are saying that the title of Honorary Campaign 
Co-Chair required an analysis as to whether he was a covered 
person and to remove that matter from the New York U.S. 
Attorney's Office even for some period of time.
    Mr. Radek. I still argue with your term ``remove,'' 
Senator. I asked them to stop--I asked them to stop while I 
made that analysis. And, yes, any kind of national title like 
that would cause us concern and cause us to do a quick 
analysis.
    Senator Specter. How quick was the analysis?
    Mr. Radek. Again, I don't remember, but I'm quite confident 
it was very brief.
    Senator Specter. Mr. Radek, turning to the inquiry as to 
Charlie Trie, a subpoena was issued by the Governmental Affairs 
Committee in March of 1997, and there was a trash cover--and I 
am trying to boil this down to a focused essence to move as 
quickly as we can. Testimony by FBI Agent Smith before the 
Governmental Affairs Committee was this: ``As we continued the 
investigation, a trash cover of Mapill's residence revealed 
documents in the case, checks with Asian-sounding names all in 
the amount of $1,000 payable to the `Presidential Legal Expense 
Trust' were being destroyed. And I was told that departmental 
attorney Laura Ingersoll stated this matter would not be 
pursued. And, further, she was of no obligation to advise the 
Senate Ms. Magdali was routinely destroying documents covered 
by a Senate subpoena.''
    As a result of this testimony, the chairman of the 
Governmental Affairs Committee, Senator Thompson, had some very 
harsh comments. My question to you is: First of all, was Laura 
Ingersoll under your Department at that time?
    Mr. Radek. Yes, she was.
    Senator Specter. Well, why did she do what she did, saying 
that the matter would not be pursued and not even to advise the 
Senate Governmental Affairs Committee about the document 
destruction?
    Mr. Radek. Well, the quote that you cite from Mr. Smith 
deals with the Presidential Legal Expense Trust. And it was the 
FBI's theory in Arkansas that it would be a Federal crime for 
the Presidential Legal Expense Trust to accept foreign 
contributions.
    We disagreed, and so I'm sure what is here is a 
memorialization of Laura Ingersoll's legal opinion that this 
was not a Federal offense.
    Senator Specter. Was there an ultimate determination made 
as to whether there was a possible violation by Mr. Trie on 
that subject?
    Mr. Radek. On the Presidential Legal Expense Trust?
    Senator Specter. Yes.
    Mr. Radek. The determination was made early that it's not a 
crime to obtain foreign funds for the Presidential Legal 
Expense Trust. It's not regulated by the Federal Elections 
Campaign Act.
    Senator Specter. And it is your position that when the FBI 
wanted to obtain a search warrant that it was an inappropriate 
application?
    Mr. Radek. No, Senator. The FBI wanted a search warrant to 
find evidence of campaign finance violations possibly on the 
part of Mr. Trie.
    Senator Specter. It is that which was turned down, though, 
by----
    Mr. Radek. By Ms. Ingersoll and me.
    Senator Specter. Laura Ingersoll.
    Mr. Radek. And me, Senator, and this was a subject of a 
hearing before Senator Thompson's committee. I'm sure you've 
read the proceedings.
    The problem was that an agent was proceeding to Little Rock 
without an attorney review of a search warrant affidavit, and 
by the time that search warrant affidavit arrived in Little 
Rock and was being reviewed--and it, in my opinion had some 
serious problems--we learned that an attorney had removed the 
records that were supposedly the subject of the search warrant 
and had called the FBI--an attorney had called the FBI and 
said, ``I'm ready to produce these documents.'' In my opinion, 
probable cause went away at that moment. And I'm sure I would 
have been before the full Judiciary Committee had I seized 
records from an attorney before he had a chance to turn them 
over to the FBI.
    Senator Specter. Why was the FBI so upset about this 
matter, if you know?
    Mr. Radek. Well, there were a lot of disagreements, and 
that eventually is what led to the Attorney General taking the 
move she did. You know, you'll have to ask the FBI that 
question.
    We, the Public Integrity Section, had had some dealings 
with Mr. Smith when he was here in Washington, and Special 
Agent Parker was sort of off there on her own. And it seemed to 
me highly inadvisable to have an FBI agent going to take an 
affidavit to a judge for a search warrant when an attorney had 
not approved it. Sometimes mistakes are made, and it seems to 
me that in every case an attorney ought to approve that.
    Senator Specter. Shifting to one other subject, Mr. Radek, 
FBI Deputy Director Robert Bryant, in a memo in May 1997, 
raised a question about the Public Integrity Section attorneys 
investigating White House activities, even though it has 
insufficient predication. And the memo says, ``If the attorneys 
truly believe that predication is lacking, it is difficult to 
justify the use of grand jury subpoenas and other criminal 
investigative tools.''
    Now, this was just a month after the Attorney General had 
declined a preliminary investigation. And my question to you 
is: What was the justification for proceeding if, in fact, 
Deputy Director Bryant is correct that there was no sufficient 
predication?
    Take whatever time you need, Mr. Radek, to----
    Mr. Radek. I have the document here, Senator, but I don't 
see that part. Can you cite me to a paragraph or page?
    Senator Specter. The paragraph reads as follows: ``On more 
than one occasion''--perhaps my staff can pinpoint it for you--
``Public Integrity Section attorneys have stated that the task 
force is investigating certain White House activities even 
though it has insufficient predication.'' And then there is 
some information deleted. Continuing: ``If the attorneys truly 
believe that predication is lacking, it is difficult to justify 
the use of grand jury subpoenas and other criminal 
investigative tools.''
    Mr. Radek, the point here is that if it in quest of an 
independent counsel, you can't use the grand jury. And the 
secondary issue is the insufficient predicate.
    Mr. Radek. Well, they are separate issues, Mr. Chairman. It 
is true that the independent counsel statute prohibits us from 
using grand jury subpoenas, immunities, or plea bargaining 
while we conduct our preliminary investigation.
    This issue is one that is more general, and the problem was 
this: The Attorney General had serious and repetitive marching 
orders. I mean, she looked each of us in the eye and said, 
``Leave no stone unturned. You have to gather all the facts. 
Don't miss anything.'' That was constant. She hammered us with 
that.
    That left a charter, a universe to investigate a lot of 
things, a lot of scandal, some of which were not crimes. We had 
to sort through and it was difficult to in the end sort of 
focus on what was crimes. It was one of the most difficult 
things we had to do both as attorneys and agents.
    Senator Specter. OK, Mr. Radek. But if the question is 
whether independent counsel should be appointed, you can't use 
the grand jury.
    Mr. Radek. Correct.
    Senator Specter. That is precisely the time where you have 
to turn it over to somebody who is impartial. And if you found 
reason to pursue the matter, to turn over the stones because 
further investigation was required, isn't that precisely the 
purpose of the independent counsel statute, that you should not 
do that but an independent counsel should do that?
    Mr. Radek. I don't dispute that the purpose of the 
independent counsel statute was to take matters away from the 
Department of Justice when there was certain statutory 
requirements met. And it accomplished that to a limited extent. 
What it didn't do was to say any time that the Department of 
Justice feels that there is an appearance of a problem on any 
matter, it should appoint an independent counsel, which is, I 
think, what you suggest and what you take from this.
    The fact is what the statute says is, if there is specific 
ad credible information on a person, you must conduct a 
preliminary investigation. That person can either be covered 
under the independent counsel statute or create a conflict for 
the Department of Justice.
    Then at the end of that preliminary investigation, the 
Attorney General has to make a decision. She has to decide if 
further investigation warranted. If she says yes, the statute 
requires an independent counsel. If she says no, it doesn't. 
And don't forget, the Department of Justice came to this body 
and asked for jurisdiction under the discretionary clause over 
matters, and the Senate refused--and the Senate and the House 
refused to do it.
    Senator Specter. Well, I don't know if the last part is 
relevant, and I am not going to get into that. But I am going 
to come back just one last time to the point that once you get 
around to issuing subpoenas, you have a basis for doing so, and 
that it must have met the minimal test of specific and credible 
information. So that at that point--and I am just going to make 
a statement because I have heard you out and I just can't 
accept--I will give you a chance to reply, however--can't 
accept your justification for proceeding there without going to 
independent counsel once you think there is a sufficient basis 
for issuing the grand jury subpoenas.
    Mr. Radek. Perhaps the misunderstanding is this says 
certain White House activities. This does not say an 
investigation of the President or the Vice President. And, 
clearly, we were investigating White House activities. We were 
investigating how much the White House was involved in the 
campaign financing crimes that were involved that we were 
uncovering. We never came up with specific and credible 
information against a covered person where the Attorney General 
did not trigger, and she did trigger on a couple of occasions.
    Senator Specter. Mr. Radek, in 1997, the November 21, 1997, 
memorandum to Mark Richard, you had made the point that the 
media fund suffered from a shortage of Federal hard funds. And 
in a memorandum on November 17, 1998, you had shifted and said 
that there was no need to differentiate between hard and soft 
funding.
    Now, that distinction is important because the Vice 
President would not be implicated on the facts available in 
1997 if there were a shortage of hard funds. But once the issue 
arose to his soliciting hard funds, then it became relevant or 
perhaps some would say convenient for you to saythat it didn't 
matter whether they were hard or soft. So that when he was soliciting 
the money, he would have no motivation to solicit for hard funds 
instead of soft funds.
    And the question to you is why the change of position 
from--there was no shortage of--the media fund suffered from a 
shortage of hard funds in 1997 to exactly the opposite that 
dovetailed and helped the Vice President's defense, 
exoneration, and declination to appoint independent counsel.
    Mr. Radek. Senator, as I sit here--and I haven't seen the 
remark to which you refer--I don't believe there was a shortage 
of hard funds in the media fund. I think the opposite was true. 
I think there was a shortage of soft money. Can you point to 
where I said that?
    Senator Specter. Well, this is your November 21, 1997, memo 
to Mark Richard. Our staff can pinpoint it, but you say that 
the media fund suffered from a shortage of Federal hard funds. 
If they did suffer from hard funds, Mr. Radek, there would have 
been a reason for the Vice President to raise hard funds and to 
solicit hard funds. But in 1997, there was no indication--this 
hard fund/soft fund category was not relevant. But then in 
1998, you change your position, and you say that it didn't 
matter whether they were hard funds or soft funds, so that the 
Vice President would have no reason to have specific hard 
funds.
    It is a convenient change of position which helped you say 
there was no basis for proceeding to get independent counsel as 
to the Vice President.
    Mr. Radek. The point here is a little obscure for me, and 
I'm sorry, I just don't recall it, Senator. All I can say is my 
belief today is that there was not a shortage of hard funds. 
There was a line of credit for hard funds for that media fund 
use. And, by the way, the fund was not a separate fund. And I 
don't think I ever changed my position. I'm citing something 
here that Harold Ickes said, and I just don't--I'd have to read 
before and after a little bit more to get it in context.
    But my impression is that the media fund did not suffer 
from----
    Senator Specter. The hour is growing late. Give us a 
response in writing on it, would you, please?
    Mr. Radek. Sure.
    Senator Specter. With respect to the investigation into 
Loral--and now I am referring to a memorandum which you wrote 
on August 5, 1998--``It is true that with regard to the Loral 
matter the task force is examining a transaction without a 
predicate. That happens from time to time when there is 
substantial public concern about a matter.''
    Now, Mr. La Bella in his memo said that if there is going 
to be an investigation as to Mr. Bernard Schwartz, CEO of 
Loral, then there had to be an investigation as to the 
President as well, requiring independent counsel. When I had 
questioned Mr. La Bella about that in his hearing, I did not 
know of a supplemental memo which he had--at that time we had 
to keep all the documents in S-407--where he had said that 
there was no evidence as to Mr. Schwartz, and, therefore, there 
wouldn't be any reason to have any investigation as to anybody. 
But he did say that if you were going to proceed as to Mr. 
Schwartz, you should have proceeded as to the President, 
because you can't have a quid pro quo without having people at 
two ends of the quid and the quo.
    Now, focusing on the part I just read to you, how can you 
possibly initiate an investigation without a predicate, where 
there is no basis to do so, because of newspaper articles, 
which embodies the public concern concept?
    Mr. Radek. Well, I didn't initiate it. Chuck La Bella did 
at the Attorney General's instruction. And the reason he did it 
was that the Attorney General has some discretion in this area. 
While our investigation was a criminal investigation--and I 
argued on the other side of that issue. I thought that we 
shouldn't be conducting investigations without predication. But 
the Attorney General had some discretion, and so she wanted 
this matter looked into. Again, her standing order----
    Senator Specter. So who recommended it?
    Mr. Radek. I don't know that anyone recommended it. I think 
the Attorney General told Chuck to investigate it.
    Senator Specter. Told Chuck La Bella to investigate it.
    Mr. Radek. Yes.
    Senator Specter. Well, Mr. Radek, here you are in this memo 
in black and white justifying an investigation without any 
basis to investigate. That is essentially what you are saying.
    Mr. Radek. What I'm saying to you--what I said there and 
what I'm saying to you is the Attorney General has some 
discretion. To the extent that there are matters that need 
investigation--and may I suggest to you that any crimes 
committed at Waco, the statute of limitations is long past, and 
yet there's an investigation of that. Sometimes there are 
matters that require investigation. The Attorney General 
reached beyond the normal purview of what a criminal 
investigation is in order to satisfy herself and, I presume, 
the American people that this matter was investigated. And so 
she ordered it to be investigated.
    That's a totally different standard from the independent 
counsel statute which says you have to have specific and 
credible information.
    Senator Specter. Well, I know you will be glad that I am 
not going to take your opening of the door on Waco to get into 
that subject today. And I disagree with you when you start to 
talk about the Attorney General's discretion to start an 
investigation without any basis. I disagree with you totally. 
But I am not going to argue the point; I am just going to give 
you a principle of my understanding of the law with some 
experience in the field. Public prosecutors, Attorneys General, 
and district attorneys do not start investigations without a 
basis. You don't put somebody through an investigation unless 
you have a basis. And if you have a newspaper account, that is 
not a basis.
    And to say that the task force is examining a transaction 
without a predicate just seems to me to be incorrect. I won't 
characterize it beyond that.
    Would you care to comment? You are welcome to.
    Mr. Radek. Well, I tend to--I know exactly where you're 
coming from, Mr. Chairman, and I tend to agree with you. But 
there are extraordinary circumstances where the Department of 
Justice investigates things that will never be prosecutable. 
That is an unusual circumstances, but it is done. And I think 
that's what was done here.
    Senator Specter. That happens all the time. You investigate 
matters which you can't prosecute, which you don't prosecute, 
but you have some reason to investigate.
    Mr. Radek. Well, but you know at the beginning that it's 
not going to be prosecutable. Some of the biggest scandals, it 
was at the very beginning known that therewould never be a 
criminal case come out of them, and yet it's investigated because of a 
lot of reasons, but mainly because the Attorney General in this case 
wanted it investigated.
    Senator Specter. Senator Sessions.
    Senator Sessions. I would just conclude my thoughts, Mr. 
Chairman, by noting that since Mr. Conrad has been on board, 
apparently they have gotten five guilty pleas, two of them I 
guess today or yesterday, and the case is moving. And I find it 
unacceptable, however it developed, that with all the 
activities that went on that the Vice President was 4 years 
being interviewed. Had that been done promptly, maybe this 
thing would have been laid to rest and be over with.
    I do not know of evidence that convicts the Vice President 
of any crime. I would expect and hope that he never was aware 
of the illegal shenanigans that were going on around him. I 
hope and pray that was true. And would expect that it would be 
that he did not know.
    However, the Department of Justice is required to find the 
facts and do an investigation and let the American people know 
the truth, and this thing has not gone well. I believe it is 
worthwhile for you to labor through these issues to discuss 
what kind of standards and activities we will expect out of the 
Department of Justice in the future. And thank you for your 
leadership.
    Senator Specter. Mr. Radek, as a final point here, a good 
bit of the disagreement comes down to what was expressed by Mr. 
La Bella in his memorandum about your analysis. And some might 
say that there is room for disagreements, that reasonable 
people can differ. But many of us have been troubled why the 
analysis which you have gone through, which draws different 
sets of inferences and varying legal standards at variance with 
what the statute says, all which come out to the conclusion 
that you don't need an independent counsel. You and I went 
through at some length your--you concede a bias that you don't 
like the independent counsel statute. Am I correct, quoting you 
correctly on that?
    Mr. Radek. I didn't like it. Yes, Senator.
    Senator Specter. OK. Well, and La Bella says this: ``The 
type of analysis involved in determining whether the Vice 
President was part of a scheme to solicit soft money knowing 
that it would be turned into hard money for the media campaign 
is subjective and open to debate.'' And now he refers to what 
you have done: ``By routinely embracing the most innocent 
inference at every turn, even if the inferences are factually 
defensible, the memorandum creates an appearance that the 
Department is straining to avoid the appointment of an 
independent counsel and foreclose what many would characterize 
as an impartial review of the allegation. When you look to the 
facts, the memos, the meetings, and the DNC practice, it is 
hard to say that there is only one conclusion to be reached.''
    And FBI Director Freeh said it somewhat differently: 
``Based on the facts, the Attorney General simply cannot reach 
such a conclusion.'' And at another point, ``The Department of 
Justice has invited substantial criticism by appearing to 
resolve these untested legal issues at the outset of the 
investigation before the facts are fully developed.'' Which you 
did, except that from time to time you conducted more 
investigation, which under the statute really was the purview 
of somebody who was outside of the Department of Justice, an 
independent counsel.
    Would you care to comment?
    Mr. Radek. Well, the fact that Mr. La Bella and Director 
Freeh and I disagreed, of course, is not news. I called those 
shots as I saw them. I never stretched the law. I never engaged 
in inferences favorable to anybody. I looked at that stuff as 
objectively as I think anybody in the world. And let me assure 
you, Mr. Chairman, so did the Attorney General.
    There was the vigorous debate, and the fact that people 
disagreed with me and disagreement with me in the Department I 
think is both healthy and natural. It is probably not healthy 
and natural to have disputes--and it was a shame to see the 
formerly good relationship between Mr. Mansfield and Mr. 
Donsanto dragged out here. But I do appreciate that there is a 
need for oversight.
    All I can say is, yes, people disagreed but, no, no 
inferences were drawn improperly. And if you disagree with my 
conclusions, I respect you for that. But I think my conclusions 
were right, and I stand by them. And those were the 
recommendations I made to the Attorney General. But ultimately 
she made the decisions, and as everybody has testified, she did 
it free from politics.
    Senator Specter. OK. Thank you very much.
    Mr. Radek. Thank you.
    Senator Specter. Mr. Litt, would you step forward, please?
    Mr. Litt, do you solemnly swear that the evidence you will 
give before this subcommittee of the Judiciary Committee of the 
U.S. Senate will be the truth, the whole truth, and nothing but 
the truth, so help you God?
    Mr. Litt. I do.
    Senator Specter. Mr. Litt, I know you have an extensive 
opening statement. It is now 6:07 p.m. and we are going to 
start a vote at 6:10 p.m. It will be made a part of the record 
in full. To the extent you wish to present it, we are prepared 
to listen to you.

STATEMENT OF ROBERT S. LITT, FORMER PRINCIPAL ASSOCIATE DEPUTY 
  ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

    Mr. Litt. Mr. Chairman, I will rely, thank you, on the 
submission of the written statement with one exception, and 
that is that there is one matter that I didn't cover in the 
written statement that I would like to just briefly address 
orally.
    Senator Specter. That would be fine.
    Mr. Litt. You read as part of your opening statement a 
letter from Common Cause, which, as I understood it, suggested 
or alleged that the Department had never looked into the 
allegations that were set forth in the 1996 letters from Common 
Cause to the Attorney General.
    And as you know from the materials that have been provided 
to you, that is incorrect. There was an extensive legal 
analysis done. Many memoranda were prepared. I had the 
unfortunate assignment of being the person who was responsible 
for trying to make sense out of all these complicated legal 
issues and preparing a cover memo to the Attorney General that 
I think has been provided to you.
    And the fact of the matter is that the issue that was 
before the Department of Justice was not whether the use of 
soft money for issue advertisements was a good thing or a bad 
thing for the American political process. The issue was whether 
this was a crime under the Federal election laws.
    And as you heard from the Chairman and the Vice Chairman of 
the Federal Election Commission, the FEC, which is the body 
that is charged by Congress with the primary interpretation of 
the election laws, the FEC did not conclude that these ads 
violated the election laws for the purposes of a civil remedy. 
And, indeed, I think that the initial decision of the FEC on 
the audit indicate that the conclusion of the Commissioners, or 
at least the majority of them, was that the legal standard 
applied was so vague that nobody could possibly understand it.
    Criminal violations require an even higher standard. A 
criminal violation of the election law requires that there will 
be a willful violation of a known standard. The decision not to 
prosecute or not to investigate these matters criminally I 
think was an entirely appropriate one given the facts that were 
known and the legal standard. And I believe that there was a 
full analysis of this done, and the analysis assumed all the 
facts that Common Cause set forth in their letter, which is to 
say they assumed that the advertising campaigns done by the DNC 
and the RNC were completely controlled by the candidates and, 
nonetheless, concluded--correctly, in my view--that that was 
not a crime under the Federal election laws.
    Senator Specter. Well, Mr. Litt, you recommended 
independent counsel as to the Vice President. You did so in a 
very lawyerly, judicious way, saying that you thought there 
would not be a prosecution, but the statute required 
independent counsel, as you saw it. Is that an accurate 
paraphrase of what you said?
    Mr. Litt. Yes, that's correct.
    Senator Specter. If at the end of the rainbow, at the end 
of the whole process, there is no statute, no definable 
criminal violation, what is the point of any of it?
    Mr. Litt. I'm sorry. I don't understand your question.
    Senator Specter. Well, are you saying that the campaign 
finance laws are so vague that you can't have a prosecution 
under them?
    Mr. Litt. I'm not saying that with respect to the campaign 
finance laws in general. I'm saying that specifically with 
respect to the issue of the legality or illegality of the use 
of soft money to finance issue ads in the 1996 election 
campaign. But there are many areas of the campaign finance laws 
where there are clear and bright lines and a prosecution is 
possible, as the actions of the task force have demonstrated.
    Senator Specter. Mr. Litt, how can the Attorney General, in 
a memorandum of understanding with the Federal Election 
Commission, delegate to the Commission what may turn out to be 
essential judgments for whether there can be a prosecution or 
not? I don't have to say to you that the Attorney General has 
the responsibility for prosecuting all the Federal criminal 
laws. And there is a criminal law attached to the Federal 
election law. But how can there be a delegation of reaching 
issues which impact upon what is essentially her job?
    Mr. Litt. I think, Mr. Chairman, that this goes back to 
what--I think it was--I forget whether it was the Chairman or 
the Vice Chairman of the FEC was talking about earlier, and 
that is the question of notice. As I mentioned before, under 
the applicable cases, a criminal violation of the Federal 
election laws requires that there be a willful violation of a 
known legal standard. In areas of ambiguity and unclarity in 
the Federal election laws, the FEC is given the responsibility 
for fleshing those ambiguities out. And I think that's 
appropriate because we're dealing with matters here, political 
advertising and political campaigns, that are absolutely at the 
heart of the First Amendment. And I think that it is 
appropriate for the criminal prosecutive process to tread 
carefully in this area so that prosecutions are brought only 
when people have clearly violated known legal standards.
    When there is no known legal standard, I think it is 
appropriate for the Department of Justice to defer to the FEC 
to establish that standard.
    Senator Specter. Well, I agree with you totally about 
treading very, very carefully, but not to delegating to anybody 
outside of the Department of Justice to make judgments as to 
whether there is adequate notice or what is the appropriate 
basis for a criminal prosecution.
    We questioned the Attorney General about that at length. 
This is a matter which has gone on since the spring of 1997. In 
this room I asked her the questions about those ads which----
    Mr. Litt. I remember.
    Senator Specter. Which have all the indicia of advocacy 
ads. We asked her for the Freeh memorandum within a week after 
he wrote in late 1997, November 1997, and the La Bella memo a 
few days after he wrote it in July 1998. So we have been 
looking at this matter for a long time.
    But the Attorney General is the chief law enforcement 
officer of the country, and it seems to me she cannot defer to 
anybody else to set the standards.
    Mr. Litt. Mr. Chairman, I would respectfully disagree with 
you to this extent, and that is, you did, as I recall, ask the 
Attorney General--at the very first hearings in this matter, 
you read to her the text of some advertisements, and you asked 
her, ``Doesn't this contain an electioneeringmessage?'' And I 
think the fact of the matter is, as we heard earlier, the FEC, which 
has a staff whose job it is to make this kind of analysis and has 
experience and expertise in the area that neither the FBI nor the 
Department of Justice has, the FBI has looked at--the FEC has looked at 
these and has not recommended either a repayment under the audit or an 
enforcement action.
    Senator Specter. Well, they may be right, but I would be a 
lot more comfortable if the Department of Justice made the 
judgment.
    When we heard the testimony of Mr. Gangloff, he said that 
those who--this is sort of a sweeping statement, but I think it 
is one I would like your comment on. He said that those who 
recommended the Independent Counsel Act did not understand the 
Act. But you recommended that independent counsel be appointed 
for the Vice President. He also said at one point that I 
probably understood the Act. But the question that I have for 
you was: What made you conclude that independent counsel should 
have been appointed for the Vice President?
    Mr. Litt. If I can back up a minute to summarize what the 
issue was there, originally, in 1997 or so, the Department 
conducted a preliminary investigation under the Independent 
Counsel Act of whether the President and the Vice President had 
violated Section 607 of Title 18 by making fundraising 
telephone calls from the White House. She ultimately concluded 
that independent counsel was necessary. One of the reasons for 
that determination--and there were several--was a conclusion 
that the telephone calls that were made were raising soft money 
rather than hard money. And she relied on a number of facts to 
support that conclusion. One of the facts was a statement that 
the Vice President made that he did not understand that the 
media fund for which they were raising this money had a hard 
money component.
    Subsequently, in the summer of 1998, the Vice President's 
lawyers turned over to the Department some documents which 
suggested that the Vice President had been present at a meeting 
at which somebody had said that there was a hard money 
component to the media campaign, and this raised the 
possibility that the Vice President's statement had not been 
accurate.
    The Department again commenced a preliminary investigation 
that was really--it was quite extensive. They interviewed I 
think everybody who was present at that meeting. They reviewed 
a lot of documents. And at the end of the day, I think 
everybody came to the conclusion--I don't think there was 
anybody who was part of this process, as I think Senator 
Sessions referred to earlier, who thought there was actually a 
prosecutable case against the Vice President here.
    The question was sort of the technical one of whether the 
standard of the Independent Counsel Act that further 
investigation was required was met. In my judgment, that 
standard was met, although I believed it was a question that 
was very close to the line. There were a lot of people whose 
judgment I respect very greatly, including my boss, Eric 
Holder, the Deputy Attorney General, who is a former public 
corruption prosecutor and a judge, including career lawyers 
like Lee Radek and Dave Vicinanzo, who was then the head of the 
task force, they disagreed with me and ultimately the Attorney 
General did as well.
    Senator Specter. Is it your view that a section 1001 
violation, false statements, would have to be investigated by 
someone other than the Public Integrity Section? In other 
words, if it comes up now, would it have to go to special 
counsel, special prosecutor?
    Mr. Litt. I can't say that with respect to any potential 
1001 violation, and I'm not familiar, frankly, with the 
regulations that are in effect today.
    Senator Specter. Well, as to one involving the Vice 
President.
    Mr. Litt. As I said, I'm not familiar with the regulations. 
I believe they're discretionary with the Attorney General and 
not mandatory, but I just don't know that.
    Senator Specter. Turning for just a moment to the waiver 
signed by the President, you and I have talked about this 
before.
    Mr. Litt. Yes, we have, Mr. Chairman.
    Senator Specter. I would like to put it on the record. Our 
discussion was an informal one, as I say. At that time, the 
Department of Justice objected to a waiver on the ground that 
it would have a potentially detrimental effect if there were a 
criminal prosecution brought as to Loral and Hughes. Would you 
state the background and your participation in that matter?
    Mr. Litt. I'll try to remember. To begin with, I wouldn't 
characterize it as an objection by the Department. I received a 
phone call from Mr. Ruff, who was counsel to the President, who 
informed me that there was a waiver decision pending and he had 
learned that there was a grand jury investigation pending, and 
he wanted the Department's views on what impact the granting of 
a waiver would have on the pending criminal investigation.
    I made some inquiries, and I called him back, and I said 
that the judgment of the Department was that it could have an 
adverse impact, not on the actual conduct of the investigation 
but on the jury appeal of any prosecution that might 
subsequently be brought because a jury might view the granting 
of a subsequent waiver as, in effect, a ratification of the 
company's conduct.
    Senator Specter. So you would articulate that it could have 
an adverse impact on the prosecution?
    Mr. Litt. Yes. I believe I conveyed that to Mr. Ruff.
    Senator Specter. Thank you very much.
    The vote has just started. It is 6:20 p.m. We had a brief 
intermission for one vote at about 2:30 p.m., so we have gone a 
little over 4 hours today. We appreciate very much your all 
coming in.
    Mr. Litt. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Litt follows:]

                  Prepared Statement of Robert S. Litt

    Mr. Chairman, members of the Subcommittee:
    I had the privilege to serve as Deputy Assistant Attorney General 
in the Criminal Division of the Department of Justice from 1994 through 
1997, and as Principal Associate Deputy Attorney General from 1997 
through January 1999. I am now a partner in a law firm in Washington, 
D.C.
    While I was at the Department of Justice, I participated in the 
Attorney General's decisions whether to seek an independent counsel to 
investigate allegations of campaign finance abuses, in the 
establishment of a centralized task force to investigate those 
allegations, and in the ongoing management and operation of that task 
force.
    From the beginning, the Department's campaign finance investigation 
was subject to outside scrutiny and criticism to a degree that I 
believe is unprecedented for an ongoing criminal investigation.
    I also believe that that criticism was unjustified.
    Mr. Chairman, legal decisions like those required by the 
Independent Counsel Act are not like math problems. There is often no 
single ``right'' answer. Rather, the decisions require a careful and 
thorough analysis of the law and the facts, and the exercise of sound 
judgment. Reasonable people can often disagree on these matters, just 
as the Supreme Court often decides cases by a 5-4 vote.
    So I think that the real issue is not always who was ``right'' or 
``wrong,'' but whether the process by which the Attorney General 
reached her decision was proper. Did she reach a decision after hearing 
all of the arguments and after weighing the law and the facts? Did she 
decide solely on the merits, or was she influenced by improper 
considerations such as politics?
    The Department's deliberations in this matter have now been made 
public. The thousands of pages of memoranda analyzing this issue which 
have been released to the public make it abundantly clear that all of 
the Attorney General's decisions were made solely on the merits, after 
full--indeed exhaustive--consideration of the factual and legal issues 
involved, and without any political influence at all.
    Director Freeh and Mr. La Bella, who disagreed with her decision on 
several occasions, have said that. And as one who participated in some 
of the discussions concerning these matters, I can attest to that.
    In late 1996, a number of allegations surfaced around the country 
of improprieties or illegalities in the election.
    The Attorney General recognized that the nature of these 
allegations required a centralized task force to investigate them 
efficiently. It simply would not have worked to have individual 
prosecutors in individual districts working individual cases in 
isolation. Coordination, interchange of information, and centralized 
direction were required, and it was for that reason that the Attorney 
General established the Campaign Finance Task Force within the Public 
Integrity Section, and charged it with investigating all of these 
related allegations.
    The Attorney General emphasized that she was placing no limits on 
the conduct of the investigation. The Task Force was instructed to 
pursue all the evidence, wherever it led. It was to explore all 
evidence, all theories, and all allegations fully. The Attorney General 
also made clear that if anyone ever felt an independent counsel was 
required, she wanted to hear it, and she would trigger the provisions 
of the Independent Counsel Act if it was required. She repeated that 
instruction many times at the weekly meetings that she had with the 
task force leadership and the FBI.
    On a number of occasions the possibility of appointing an 
independent counsel arose. These questions were reviewed by the Public 
Integrity Section of the Department's Criminal Division, just as all 
independent counsel matters were reviewed during the 20 or so years 
that the statute was in existence.
    In each case, the Public Integrity Section--which is staffed and 
led by nonpolitical career prosecutors such as Mr. Radek--made 
recommendations based on its analysis of the facts, the law and the 
precedents. These recommendations have now been made public and people 
can see how thorough and careful they were.
    In each case, the Public Integrity Section's recommendation was 
reviewed at several levels within the Department. If there was any 
disagreement, dissenting views were heard in full. I participated in 
numerous meetings at which the Attorney General met with line 
attorneys, supervisors, FBI agents and FBI supervisors, up to Director 
Freeh, and heard a full debate on independent counsel issues. There was 
vigorous discussion of the facts and the law--and only of the facts and 
the law.
    In some instances, after careful consideration, the Attorney 
General concluded that an independent counsel was necessary. In others, 
she concluded that one was not necessary.
    As you know, on several occasions Mr. La Bella and Director Freeh 
recommended that an independent counsel should be appointed. On some 
occasions, so did I.
    But the decision to seek an independent counsel is given by law to 
the Attorney General, not to me, or Mr. La Bella, or Director Freeh.
    Mr. La Bella was an experienced prosecutor, but he had no prior 
experience with the Independent Counsel Act. And Director Freeh, as 
capable and experienced as he is, is still the director of the FBI. 
There are good reasons why we have these sorts of decisions made by 
prosecutors rather than law enforcement agents.
    In each case, the Attorney General fully considered their views, as 
well as the recommendations of many others involved in the 
investigation, including myself. But ultimately, she made the decision, 
as the law required her to do, and she made it solely on the merits.
    Because it has recently been made public, I would like to discuss 
briefly my recommendation that the Attorney General seek the 
appointment of an independent counsel to investigate whether Vice 
President Gore made false statements to investigators concerning his 
knowledge that an advertising campaign was funded in part with so 
called ``hard money.''
    One of the original allegations that arose at the end of 1996 was 
whether the President and Vice President had made telephone calls from 
the White House seeking to raise money for a DNC issue advertising 
campaign. These calls could have been illegal if they were made from 
official office space, as opposed to personal residence areas, and if 
they were solicitations of hard money contributions rather than soft 
money. If they were soft money, or not made from office areas, they 
would not have been illegal.
    In 1997, the Department did a preliminary investigation of these 
allegations under the Independent Counsel Act. They interviewed 
hundreds of people and reviewed many pages of documents.
    At the end of this preliminary investigation, the Attorney General 
concluded that there was no basis to investigate these allegations 
further. There was overwhelming evidence that the calls were made to 
solicit soft money rather than hard money. Moreover, there was an 
established Department of Justice policy--a policy that the Department 
was required to follow in making independent counsel decisions--against 
bringing cases under this particular statute unless there were 
aggravating circumstances not present in this case.
    With respect to the Vice President, one of the facts the Attorney 
General noted in finding that his calls were made to solicit soft money 
was the Vice President's statement during the preliminary investigation 
that he believed that the DNC media campaign was funded only with soft 
money. This fact was mentioned in one sentence of the Attorney 
General's lengthy determination, which contained an extensive analysis 
of the evidence and the law.
    In 1998, evidence surfaced that the Vice President had been present 
at a meeting where persons may have discussed the fact that there was a 
hard money component to the media campaign. The Attorney General 
decided that this required her to determine whether an independent 
counsel was needed to investigate whether the Vice President had lied. 
A full preliminary investigation under the Independent Counsel Act was 
done, again with interviews of the people who were present at the 
meeting and others with knowledge.
    After this preliminary investigation, while it was a very close 
question, I felt that appointment of an independent counsel was 
required.
    It is important to remember that no one really thought that the 
Vice President ought to be prosecuted. The question was only whether 
the technical provisions of the Independent Counsel Act required that 
an independent counsel be appointed to make that decision.
    And everyone recognized that this case was very close to the line. 
Some people agreed with my view. Many others whose judgment I greatly 
respect disagreed with me. These included Mr. Radek, a non-political 
career prosecutor who had two decades' experience with the Independent 
Counsel Act; Dave Vicinanzo, a career prosecutor who replaced Mr. La 
Bella as head of the Task Force; Jim Robinson, the Assistant Attorney 
General in charge of the Criminal Division; and the Deputy Attorney 
General, my boss, who had been a public corruption prosecutor and a 
judge himself. They all concluded after a careful review of the 
evidence that overwhelming proof showed that the Vice President had not 
been lying, and that there was no basis to seek an independent counsel. 
I know that everyone who was part of this process gave their best 
views, based solely on the law and the evidence.
    Ultimately the Attorney General disagreed with me as well. But the 
record shows that she rejected my recommendation because she thought I 
was wrong; that she made the decision entirely on the merits of the 
facts and the law, as she did in every case.
    Mr. Chairman, as I mentioned at the outset, this case has been the 
subject of a degree of Congressional scrutiny and pressure that I 
believe is unprecedented for an ongoing criminal investigation.
    The Congress has an extremely important oversight function, with 
respect to the Department of Justice as all other parts of the 
Executive Branch. Congressional oversight is a necessary check on 
malfeasance by Executive Branch officials and can be essential to bring 
to light corruption, improper behavior, or the need for reform.
    But because the purpose of Congressional oversight is ultimately to 
ensure the honest and efficient workings of government, it should be 
exercised with due respect for the impact that oversight has on the 
agencies in question.
    As a matter of law and policy, criminal investigations are supposed 
to be conducted outside of the public eye, for very good reasons. 
Public exposure of an ongoing criminal investigation can hamper the 
investigation and tarnish the reputation of innocent persons. And 
outside political pressure on prosecutors damages the legitimacy of law 
enforcement, by making it appear that prosecutive decisions are 
influenced by politics.
    In this case the internal deliberations of Department employees 
have been exposed--deliberations that were never intended to be 
public--and line attorneys and career prosecutors have been required to 
testify about those deliberations. This may make it more difficult for 
future Attorneys General to get candid and comprehensive 
recommendations from Department employees in sensitive cases.
    There have been bitter partisan attacks on public servants who do 
not deserve it--people like Lee Radek, a career prosecutor who has 
passed up the chance to make considerably more money in the private 
sector, in order to serve the public with distinction in both 
Republican and Democratic administrations. These unfounded attacks are 
going to make it a lot harder in the future to attract talented people 
to work for the government.
    And the constant political pressure with respect to this matter--
and the unceasing but utterly unfounded allegations that the Department 
was influenced by politics--may create the dangerous perception that 
the law enforcement decisions are subject to political pressure.
    In short, I fear that the net effect of this congressional 
oversight--oversight that is intended to improve the functioning of 
government--may be a damaged, less effective, more timid Department of 
Justice, and I do not think that would serve the public well.
    This is not a partisan issue. It is an institutional one. Over the 
last decade, both parties have engaged in increasingly intrusive 
oversight of the Department of Justice. I would hope that thoughtful 
members of Congress on both sides of the aisle would take stock of the 
effects of this oversight on the Department and on the public, and 
would make a joint decision to draw back for the long-term good of the 
American people.
    Thank you, Mr. Chairman. I would be pleased to answer any questions 
that you have at this time.

    [Whereupon, at 6:20 p.m., the subcommittee was adjourned.]
                         QUESTIONS AND ANSWERS

                              ----------                              


                             June 21, 2000

      Responses of Larry Parkinson to Questions From Senator Leahy

    Question 1. Among the numerous documents the Justice Department has 
provided to the Judiciary Committee in connection to oversight of the 
1996 campaign finance investigations is a memorandum written by Lee J. 
Radek, Chief, Public Integrity Section, Department of Justice, dated 
September 25, 1998, to Assistant Attorney General James Robinson of the 
Criminal Division, which states: ``we were seeking to obtain from the 
FEC copies of the Audit Division's Exit Conference Memo on the Dole for 
President and the Dole/Kemp `96 committees, which we understand reach 
similar conclusions on the legality of issue ads run by the RNC during 
the 1996 election cycle. We have now received those memoranda, which 
similarly find that the costs of certain RNC ads should be attributed 
to Dole for President and Dole/Kemp `96, and that those costs would 
constitute unlawful contributions to and expenditures by the 
committees* * *[w]e have accordingly opened a criminal investigation. 
The issues in the RNC investigation are largely identical to the issues 
in DNC investigations. The principal difference is that the facts in 
the RNC media project have not been fleshed out as much.'' (DOJ-P-00754 
to DOJ-P-00755).
    Question 1a. Please explain why the facts of the RNC media project 
had not been ``fleshed out as much'' at the time this memorandum was 
prepared.
    Answer 1a. At the time Mr. Radek prepared his September 25, 1998 
memorandum, the Campaign Financing Task Force had not undertaken a 
comprehensive investigation of the Common Cause or ``media fund'' 
allegations relating to either the DNC or the RNC. However, from the 
time of its creation in 1996, the Task Force had investigated a variety 
of allegations of campaign finance violations. During the course of the 
investigation, the Task Force acquired a significant amount of 
information about the fundraising practices of the DNC, some of which 
related to the DNC's ``media fund.'' While the Task Force has also 
acquired some general information about the RNC's fundraising 
practices, that information was significantly less than the DNC 
information. I assume this is what Mr. Radek meant when he said the 
facts of the RNC media project had not been ``fleshed out as much.''
    Question 1b. Has the status of the Department's review of the 
above-referenced allegations changed in any way since 1998?
    Answer 1b. To my knowledge, there has been no Department of Justice 
review of these allegations since 1998.

    Question 2. Over the past year, the Chairman of the Senate 
Committee on the Judiciary has to date been authorized to issue seven 
subpoenas, including four to the Department of Justice, on a variety of 
oversight issues being handled by the Subcommittee on Administrative 
Oversight and the Courts; the Subcommittee has to date held six 
hearings and conducted about thirty interviews of Department personnel; 
and the Department has made numerous, continuing document productions 
in response to Committee requests amounting to over 500,000 pages of 
documents. Please provide a breakdown of the number of personnel 
diverted, the estimated cost of and the number of hours expended to 
comply with the continuing oversight investigations by the Senate 
Judiciary Committee and its Subcommittee on Administrative Oversight 
and the Courts, including by personnel of the Public Integrity Section, 
the Campaign Financing Task Force, U.S. Attorney Offices, the Federal 
Bureau of Investigation and other components of the Department of 
Justice pertaining to the matters set forth below: a. Waco; b. Wen Ho 
Lee; c. Peter Lee; d. John Huang, Johnny Chung, Charlie Trie; e. 
Technology Transfers to China; f. Campaign finance and application of 
the lapsed Independent Counsel statute; and g. White House electronic 
messages.
    Answer 2. The cost and effort expended to comply with the various 
oversight requests was substantial. However, the FBI does not maintain 
records reflecting this cost and effort.

    Question 3. Mr. Radek testified that the use of ``soft money'' to 
fund issue ads was a campaign financing strategy invented by 
Republicans and perfected by Democrats. In a similar vein, Charles La 
Bella stated, in his July 16, 1998 memorandum, ``For its part the RNC, 
* * * had its fair share of abuses. The Barbour matter is a good 
example of the type of disingenuous fundraising and loan transactions 
that were the hallmark of the 1996 election cycle. In fact, Barbour's 
position as head of the RNC and NPF--and the liberties he took in these 
positions--makes the one $2 million transaction even more offensive 
than some concocted by the DNC. Indeed, with one $2 million 
transaction, the RNC accomplished what it took the DNC over 100 White 
House coffees to accomplish.'' (DOJ-0087). Do you agree with these 
assessments?
    Answer 3. I cannot comment on these particular characterizations by 
Mr. Radek and Mr. La Bella.

    Question 4. Despite the fact that he is neither the author nor the 
recipient of the December 9, 1996 memorandum referring to a meeting 
which took place over three year ago, Neil Gallagher, Assistant 
Director of the FBI, National Security Division, testified he was 
``positive'' Mr. Radek said during that meeting that the pressure he 
was feeling was ``because'' the Attorney General's job was on the line.
    Question 4a. The December 9, 1996 memorandum from Director Freeh to 
Mr. Esposito (DO 03137-03138) referring to this meeting states: ``I 
also advised the Attorney General of Lee Radek's comment to you there 
was a lot of `pressure' on him and PIS regarding this case because the 
`Attorney General's job might hang in the balance' (or words to that 
effect).'' The word ``because'' is not in quotation marks. Does this 
suggest that the statement in the memorandum was Director Freeh's 
interpretation of Mr. Radek's comments rather than a direct quote from 
Mr. Radek?
    Answer 4a. Director Freeh was not present when Mr. Radek made his 
comments. The Director's memorandum reflected his understanding of 
those comments based on what he was told by Mr. Esposito. As to whether 
the language in the memorandum represents a direct quote, I would refer 
to the previous testimony by the participants in the meeting (Mr. 
Esposito, Mr. Gallagher, Mr. Radek, and Mr. Gangloff).

    Question 4b. With whom within the Department of Justice and its 
components did Mr. Gallagher discuss this memorandum, including in 
preparation for this hearing?
    Answer 4b. Mr. Gallagher did not discuss this memorandum with 
anyone at the Department of Justice. Within the FBI, Mr. Gallagher 
recalls discussing the memorandum with Director Freeh, Mr. Esposito, 
Mr. Parkinson, Mr. Collingwood, and Mr. Lampinski.

    Question 5. FBI employees have testified that 1995 and 1996 
memoranda from Harold Ickes to the Vice President describing the split 
between hard and soft money being solicited was sufficient to impute 
knowledge to the Vice President about these matters. Yet, as Robert 
Litt points out in a November 22, 1998 memorandum, a different standard 
of imputed knowledge was apparently applied to the Director of the FBI 
regarding whether he testified falsely to Congress on March 5, 1997. 
Specifically, Mr. Litt cites ``[f]or example, in the Freeh matter there 
was evidence from which one could have inferred that Director Freeh 
knew his statement was false (a briefing book presented to him 
contained the true information), yet the Attorney General found this 
outweighed . . . by other evidence showing he did not.'' (DOJ-VP-
00784). Do you agree that the Attorney General may--as any prosecutor 
does--draw factual conclusions about a person's state of mind in 
determining whether to bring charges or seek appointment of an 
independent counsel?
    Answer 5. Yes.

    Question 6. In a December 4, 1998 memorandum, Larry Parkinson 
opined that an independent counsel referral should be made for 
allegations against the Dole Presidential Campaign. (DOJ-P-01381). 
Please explain the basis for an independent counsel referral for the 
Dole Presidential Campaign.
    Answer 6. I wrote my December 4, 1998 memorandum in the context of 
a specific decision facing the Attorney General at that time: whether 
to seek the appointment of an independent counsel to further 
investigate potential election law violations in connection with the 
DNC's ``media fund''. I believed that further investigation was 
warranted and that an independent counsel should conduct the 
investigation because of the involvement of the President and Vice 
President, two ``covered persons'' as defined by the Independent 
Counsel Act. Although the Dole campaign was not a ``covered person'' 
under the Act, the allegations that had been made against that campaign 
could have been referred to an independent counsel under either the 
Act's ``discretionary clause,'' 28 U.S.C. Sec. 591(c)(1), or the 
``related matters'' provision, 28 U.S.C. Sec. 592(d) and 594(e). In my 
view, if the Attorney General concluded that she should seek the 
appointment of an independent counsel to investigate the DNC's ``media 
fund,'' the independent counsel's mandate also should include the RNC's 
``media fund.'' Because similar allegations had been made against the 
two campaigns, and the FEC had made similar findings about both, I 
believed that one entity should have been responsible for investigating 
both.

    Question 7. Among the documents produced by the Department of 
Justice are memoranda from FBI Director Freeh, dated December 9, 1996 
and December 8, 1998, to subordinates describing conversations he had 
with the Attorney General regarding the campaign finance 
investigations, without copies being sent to the Attorney General.
    Question 7a. Does the FBI Director prepare memoranda to his 
subordinates on every occasion when he has a substantive conversation 
over the telephone or in person with the Attorney General, without 
forwarding a copy to the Attorney General?
    Answer 7a. No.

    Question 7b. If the FBI Director does not prepare such memoranda on 
every occasion, is this his routine practice?
    Answer 7b. No.

    Question 7c. If the FBI Director does not prepare such memoranda 
routinely, please describe the circumstances under which the Director 
has prepared such memoranda.
    Answer 7c. Director Freeh frequently conveys to his subordinates 
the relevant substance of conversations with the Attorney General. 
These communications take a variety of different oral and written 
forms, in any particular instance depending upon numerous factors, such 
as the schedules of the Director and the recipient of the information, 
the need (or lack thereof) for prompt action, and the need (or lack 
thereof) for face-to-fact discussion. As for the memoranda of December 
9, 1996 and December 8, 1998, Director Freeh prepares this specific 
type of memorandum only in rare circumstances--such as these were--to 
memorialize a very significant series of events involving senior 
leadership of the FBI.

    Question 8. In 1997, the Federal Election Commission requested 
resource assistance from the Department of Justice to investigate the 
large number of cases arising out of the 1996 election cycle after the 
Congress failed to act on a request for additional resources. While 
senior officials within the Department of Justice recommended providing 
resources to the FEC, the FBI opposed the request. In a November 25, 
1997 memorandum, FBI Director Freeh explains that ``[w]hile the Task 
Force is appropriately staffed at the moment, we must maintain the 
flexibility to redirect even more resources to the Task Force if the 
need arises.'' (DOJ-03148).
    Question 8a. Were additional resources directed to the FEC by the 
Department of Justice over the FBI's objections and, if so, when?
    Answer 8a. To my knowledge, the Department of Justice did not 
provide any resources to the FEC.

    Question 8b. Did the FBI's objection to detailing personnel and 
resources to the FEC hinder or slow down the FEC's investigations into 
allegations relating to the misuse of soft money in the 1996 election 
cycle?
    Answer 8b. Director Freeh's November 25, 1997 memorandum to the 
Attorney General set forth in two pages the reasons why he opposed 
committing FBI resources to the FEC at that time. The ultimate decision 
on whether to commit DOJ or FBI resources to the FEC rested with the 
Department of Justice. I do not know whether the Department's decision 
had an effect on the FEC's investigation.

    Question 9. The July 1998 La Bella memorandum states that ``[e]very 
time'' it was suggested that the Task Force ``conduct [] an inquiry or 
investigation of the entire campaign finance landscape in order to 
determine if there exists specific information from a credible source'' 
that would trigger the Act, ``it has been rejected on the theory that 
such an inquiry can only be conducted pursuant to a preliminary 
investigation.'' A senior Justice Department official commenting on the 
La Bella memorandum states, in a July 20, 1998 memorandum, that ``I am 
unaware of any occasion on which this has happened. On the contrary, 
the Attorney General constantly asks whether we have uncovered 
information sufficient to trigger the Act, and constantly emphasizes 
that the Task Force must follow the evidence wherever it leads.'' (DOJ-
03149)
    Question 9a. Do you concur in the observation that the Attorney 
General constantly asked whether the Task Force has uncovered 
information sufficient to trigger the Act?
    Answer 9a. For a substantial period of time, I was a regular 
attendee at weekly Task Force meetings with the Attorney General. 
During many of those meetings, the Attorney General asked whether the 
Task Force had uncovered information sufficient to trigger the Act, 
typically in the context of specific investigative matters raised 
during the course of the meeting. In addition to the weekly meetings, I 
attended many other meetings with the Attorney General devoted to 
specific campaign finance matters, in which the very purpose of the 
meetings was to discuss whether the Act had been triggered.

    Question 9b. Do you concur in the observation that the Attorney 
General constantly emphasized that the Task Force must follow the 
evidence wherever it leads?
    Answer 9b. The Attorney General frequently emphasized that the Task 
Force should follow the evidence wherever it led.

    Question 10. In a July 20, 1998 memorandum to the Attorney General, 
a senior Justice Department official states that ``[o]ur decision to 
investigate the Loral matter was, thus, in part a response to outside 
pressure . . . I do not doubt that had this matter been brought to any 
U.S. Attorney's office in the country it would have been closed without 
investigation. (I note that no one has expressed interest in following 
up criminally on the recent Wall Street Journal article setting forth 
numerous instances in which Senator Lott took actions favoring large 
contributors).'' (DOJ-03150).
    Question 10a. What was the ``outside pressure'' to which this 
memorandum refers?
    Answer 10a. I have to defer to the author of the memorandum to 
explain what he meant by ``outside pressure.'' I never saw the 
memorandum until after it had been released in connection with this 
year's congressional hearings, and I never spoke to the author about 
this comment.

    Question 10b. In your view, does it undermine confidence in the 
criminal justice system and is it dangerous for political pressure to 
be applied to bring criminal charges against an individual?
    Answer 10b. Yes.

    Question 11. In an August 3, 1998 memorandum, Lee Radek states that 
Mr. La Bella ``denied on a weekly basis that there was any specific and 
credible evidence concerning a covered person'' that would trigger the 
Independent Counsel law. (DOJ-03156).
    Question 11a. Were the ``weekly'' denials by Mr. La Bella in 
meetings with the Attorney General?
    Answer 11a. For a substantial period of time, I was a regular at 
weekly Task Force meetings with the Attorney General. I believe it is 
inaccurate to say that Mr. La Bella ``denied on a weekly basis that 
there was any specific and credible evidence concerning a covered 
person.'' When independent counsel issues arose during the course of 
those meetings, Mr. La Bella gave his opinion. As with many other 
participants, his opinion on whether the Independent Counsel Act had 
been triggered differed depending on the specific topic being discussed 
at any given time.

    Question 11b. Was the conclusion reached by Mr. La Bella in his 
July 1998 memorandum regarding appointment of an independent counsel 
different from the recommendation he had been making to the Attorney 
General in regular meetings up to that point?
    Answer 11b. I did not consider Mr. La Bella's conclusion in his 
July 1998 memorandum to be inconsistent with the comments or 
recommendations he had expressed in previous meetings with the Attorney 
General.

    Question 12. Chairman Hatch has stated that he is ``not nearly as 
concerned with the allegations about some of the occurrences within the 
White House with regard to a phone call or phone calls that may have 
been made, although they may unknowingly have violated the law . . .'' 
(Transcript of Executive Business Meeting of Senate Committee on the 
Judiciary, March 6, 1997, at p. 19). Nevertheless, the La Bella 
memorandum cites the Vice President's telephone call solicitations from 
the White House as grounds for seeking an independent counsel. (DOJ-
FLB-0090-0091).
    Question 12a. In your view, would prior Department precedent on 
when prosecutions were initiated when solicitations were made from 
federal property be relevant in evaluating such prosecutions?
    Answer 12a. Yes, prior Department precedent would be relevant in 
evaluating whether investigation or prosecution was appropriate. It is 
important to note that Mr. La Bella recommended an investigation, and 
not a prosecution, by an independent counsel.

    Question 12b. Was the Department correct to consider the precedent 
that in 1988, the Justice Department learned that Republican Senator 
Gordon Humphrey and another Republican Senator had sent solicitation 
letters to employees of the Criminal Division, but that prosecution had 
been declined? (DOJ-VP-00353).
    Answer 12b. I have insufficient knowledge of that 1988 matter to 
give a responsible answer.

    Question 12c. Was the Department correct to consider the precedent 
that in 1976, the Department declined prosecution when federal 
employees complained about receiving solicitation letters from then 
President Ford for Republican congressional candidates that the Fraud 
section found were ``patently coercive'' in content and tone? (DOJ-VP-
00351).
    Answer 12c. I have insufficient knowledge of that 1976 matter to 
give a responsible answer.
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                               Federal Election Commission,
                                     Washington, DC, June 21, 2000.
Hon. Arlen Specter,
711 Hart Senate Office Building,
Washington, DC.
    Dear Senator Specter: In response to your invitation to us on 
Monday, both Vice Chairman Danny McDonald and I will be pleased to 
attend the hearing of the Judiciary Subcommittee on Oversight on 
Wednesday afternoon, June 21.
    We understand the purpose of our appearance is primarily to respond 
to questions from the Committee concerning the Commission's application 
of the provisions of the Federal Election Campaign Act, including in 
the context of the 1996 Presidential campaigns. We will of course be 
glad to answer any questions that the Committee has.
    In advance of the hearing, I thought it might be helpful to provide 
some brief written materials that may assist the Committee in putting 
the issues that it is concerned within the context of the provisions of 
the FECA.
    The limitations of the FECA on the amount and sources of 
contributions to candidates, political parties, and other entities for 
the purpose of influencing a federal election are well known as the 
``hard money'' limits of the FECA. These ``hard money'' limits have two 
aspects: limitations on the amount of contributions, and prohibitions 
against contributions from certain sources.
    The first attachment shows the limitations imposed by the FECA on 
the amount of contributions.
    The second aspect of hard money, the prohibitions on sources, 
prohibits contributions from three sources that are well-known: 
corporations, labor organizations, and foreign nationals. Other 
prohibited sources include national banks, and federal contractors.
    A key question, however, is when recipients must use only hard 
money, and when they may use soft money.
    The second attachment describes many of the more common 
circumstances in which hard money must be used, and when soft money may 
be used. I caution that this chart is a general description only, and 
is subject to a number of caveats, including those mentioned in the 
endnotes.
    I hope that these materials and other materials that the Commission 
has provided in response to your earlier requests will be helpful. I 
look forward to seeing you this afternoon.
            Sincerely,
                                            Darryl R. Wold,
                                                          Chairman.
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                               Federal Election Commission,
                                     Washington, DC, July 28, 2000.
Hon. Arlen Specter,
U.S. Senator, Committee on the Judiciary, Subcommittee on 
        Administrative Oversight and the Courts, Washington, DC.
    Dear Senator Specter: During the hearing before the Senate 
Judiciary, Subcommittee on Administrative Oversight and the Courts on 
June 21, 2000, you asked the Commission to supplement the record with 
information on two matters. First, you requested the Commission's views 
on possible legislative amendments to expedite the enforcement process 
by authorizing the Commission to seek injunctive relief earlier in the 
enforcement process. And, second, you asked whether a seventh 
Commissioner is advisable to remedy deadlocked votes at the Commission.
    With respect to seeking timely injunctive relief, the Commission 
made a recommendation on this subject as part of its legislative 
recommendation package submitted to Congress in 1998. A copy of that 
recommendation is enclosed, including the dissent of one Commissioner. 
In 1999, however, that recommendation did not receive four affirmative 
votes for inclusion in our legislative recommendation package, and has 
not been included since.
    With regard to the FEC's structure, the Commission never has taken 
a position, or discussed this issue as a policy matter. As you know, 
Congress carefully structured the Agency by requiring that no more than 
three of the six members may be from the same political party. In 
addition, the statute requires at least four votes to pursue a 
violation or issue a ruling. This precludes either party from gaining 
control of the FEC and using the Commission for partisan purposes. 
Commissioners work hard to avoid 3-3 deadlocks. As Vice Chairman 
McDonald noted during the hearing, however, while all Commissioners 
have a thorough knowledge of the law, we legitimately differ over a 
number of fundamental issues.
    Under the current structure, to the extent 3-3 votes occur, there 
is a system in place to review the issue when it reaches the 
enforcement stage. As provided by the statute, a complainant who is 
aggrieved by the FEC's failure to pursue a complaint can sue the Agency 
in U.S. District Court. If the court concludes the position of those 
voting not to pursue the matter is contrary to law, the court may order 
the FEC to act on the matter, and may even allow the complainant to sue 
the respondent directly. Thus, the courts can resolve 3-3 deadlocks of 
the enforcement process under these circumstances.
    As the public record reflects, however, these 3-3 deadlocks along 
partisan lines on controversial matters are rare occurrences. For 
example, a study the Commission conducted last year concluded about 
2.56% of Commission votes resulted in some sort of split or deadlock 
vote. Specifically, of the 4,725 Commission votes cast from 1993 
through early 1999, only 121 (2.56%) resulted in a 3-2 or 3-3 deadlock. 
IN addition, for your information, I have enclosed a response submitted 
to the House Appropriations Subcommittee answering questions for the 
record last year which address the Clinton and Dole Audits 
specifically.
    Thank you for giving the Commission the opportunity to appear 
before the Committee. If the Committee has additional questions, please 
do not hesitate to contact me.
            Sincerely,
                                            Darryl R. Wold,
                                                          Chairman.
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                        Clinton and Dole Audits

    Mr. Hoywer. You read in the Washington Post that this 3-3 vote cost 
us $25 million in recompense from the Dole and the Clinton campaigns. 
Could you comment on that. What about the Washington Post premise 
(editorial)--and other premises that, because you have this 3/3 split, 
you really have a toothless tiger that can't do anything when it 
readlly gets tough because the parties will sort of block up, lock up 
and confirm one another and no resolution will be forthcoming. My view 
is it can work if we have six honest people who want to do a job to 
enforce the law. Please respond.
    [The information follows:]
    With respect to the recent votes in the Clinton and Dole campaign 
audits, it is true the commissioners did reduce substantially the 
staff's recommended public funding repayment determinations. The staff 
recommended that the Dole primary campaign repay about $2.5 million and 
that the Dole general campaign repay about $14.5 million. The staff 
recommended that the Clinton primary campaign repay about $7 million 
and that the Clinton general campaignn repay less than $.5 million.
    The vast majority of the staff's recommended repayment amounts 
stemmed from spending by the party committees assertedly in 
coordination with or in support of the candidate committees. The staff 
believed: (1) the party spending should be attributed to the 
candidates' spending limitations in the nomination phase or general 
phase, (2) this caused the candidates to exceed the limitations, and 
(3) the candidates thereby incurred repayment obligations regarding the 
``non-qualified'' excessive spending.
    The commissioners unanimously agreed that most of the party 
spending at issue should be attributed to the primary phase based on 
when it occurred. This by itself reduced the total potential Dole 
repayment from about $17 million to about $8 million. Then, however, 
the commissioners failed by a vote of 3-2 (and 1 absention) to pass a 
motion to interpret the primary funding statute in a way that would 
preclude the FEC from ordering repayment based on excessive primary 
spending. Thus, the bulk of the remaining repayment recommended by the 
staff fell short of the 4 vote majority required. The adjusted 
potential Dole primary repayment for excessive spending was reduced 
from about $5.5 million to $zero, and the potential Clinton campaign 
repayment for excessive spending went from about $7 million to $zero. A 
copy of materials explaining the alternative viewpoints on the issue 
that led to the 3-2 vote can be found at Attachment 3 at the end of the 
questions.
    It must be noted that one of the most controversial elements of the 
potential repayment amounts involved party spending for ads that 
included reference to one or the other of the presidential candidates. 
After the 3-2 vote referred to above, there was a unanimous vote 
rejecting the staff recommendation to require repayment from the 
primary campaign committees stemming from all of the ads identified in 
the audit reports. Different commissioners voiced different reasons for 
supporting the motion, however. Clearly, at least three believed the 
FEChad no legal authority to seek repayment; some believed that some, 
but not all, of the ads should generate a repayment; and some believed 
that none of the ads should generate a repayment.
    There were remaining repayment obligations, even after the 
foregoing votes. The Commission approved repayments for the Dole 
campaign totaling about $3.7 million and for the Clinton campaign 
totaling about $140,000.
    With respect to whether the FEC's structure--with 3 Democrats and 3 
Republicans, historically--results in a ``toothless tiger,'' there are 
proponents on either side of the debate. Perhaps the following would 
help assess this oft-reported charge.
    Many, including Republican and Democratic party representatives, 
have argued the FEC is too tough. For example, when in 1991 the FEC 
required parties to use set allocation formulas for party building 
expenses, forbade non-federal account advance payments, and required 
disclosure of national party ``soft money'' receipts, many party 
officials were not pleased. Moreover, given the number of compliance 
cases the FEC has pursued against Republican or Democratic party 
entities over the years, it would be difficult to argue the FEC has 
been ``toothless.'' See, e.g., MUR 4398 ($82,000 civil penalty 
regarding Republican Party of Florida receiving prohibited 
contribution); MUR 3620 ($75,000 civil penalty regarding DSCC's tally 
system).
    On the other hand, the FEC has been unable to reach a 4-vote 
consensus on several difficult, controversial issues affecting party 
entities or other players in the political process. For example, the 
FEC split 3-3 on whether the NRSC's practice of routing donors' funds 
to particular candidates was a form of ``direction or control'' that 
should affect the NRSC's own contribution limits. See, FEC v. National 
Republican Senatorial Committee, 966 F.2d 1471 (D.C. Cir. 1992). The 
FEC also split 3-3 on whether certain contributions the 1992 Clinton 
campaign received after the nomination were improperly treated by the 
campaign as general election compliance fund proceeds. See, Gottlieb v. 
FEC, 143 F.3d 618 (D.C. Cir. 1998).
    The structure of the FEC is designed to assure that no one 
political party can force its will on other parties regarding FEC 
matters. The importance of that goal probably outweighs the problems 
generated by occasional 3-3 split votes. It should be noted, moreover, 
that 3-3 votes in enforcement matters can be brought to the courts by 
an aggrieved complainant. See 2 U.S.C. Sec. 437g(a)(9).
    On balance over the years, the FEC has shown an ability to reach 
consensus on most of the issues that come before it. The Commission has 
conducted 4,725 votes since 1993. Only 121 (2.56%) of these votes 
resulted in a 3-3 or 3-2 margin. While we have not attempted to analyze 
each of the 3-3 and 3-2 votes, they have not always been along party 
lines. These figures indicate that the phenomenon of split votes is a 
relatively rare occurrence in the Commission's overall operations. The 
fact that commissioners of more than one party approve any majority 
vote lends credibility to FEC decisions.
    Compared to the situation that existed before the FEC's creation, 
the attention to enforcement of the law is certainly greater. Whereas 
before the FEC's creation thousands of referrals of violations to the 
Department of Justice were simply ignored, the FEC has activated over 
4,000 compliance cases and conducted over 500 full-scope audits. Over 
the last 10 years the FEC has collected over $7 million in civil 
penalties. The auditing of publicly funded committees has yielded over 
$10 million in repayments. These actions, against persons and entities 
of all political stripes, have proceeded with majority votes reflecting 
a political consensus among the six commissioners.