    [Senate Hearing 106-1073]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 106-1073

                        THE CHARLES LA BELLA MEMORANDUM

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

                                    HEARING

                                   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 2, 2000

                                   __________

                              Serial No. J-106-78

                                   __________

             Printed for the use of the Committee on the Judiciary

                       U.S. GOVERNMENT PRINTING OFFICE
    75-238                     WASHINGTON : 2001

    ----------------------------------------------------------------------------
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpr.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

                           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

                                  ----------

                        STATEMENTS OF COMMITTEE MEMBERS

                                                                       Page

    Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     3
    Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....     8
    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.......................................................     7

                                    WITNESS

    La Bella, Charles G., Supervising Attorney, Campaign Financing
      Task Force, U.S. Department of Justice, Washington, DC.........     9

                           SUBMISSIONS FOR THE RECORD

    Committee on the Judiciary, U.S. Senate, Washington, DC, letter
      to Attorney General Janet Reno, dated July 22, 1999............    37
    La Bella, Charles G., memorandum, November 30, 1997..............   138
    La Bella, Charles G., Supervising Attorney, Campaign Financing
      Task Force and James DeSarno, Assistant Director, CAMPCON Task
      Force, Federal Bureau of Investigation, Washington, DC, Interim
      Report, July 16, 1998..........................................    41
    Specter, Hon. Arlen, a U.S. Senator from the State of
      Pennsylvania, letter to Attorney General Janet Reno, dated
      September 29, 1999.............................................    38

                        THE CHARLES LA BELLA MEMORANDUM

                                  ----------

                              TUESDAY, MAY 2, 2000

                               U.S. Senate,
           Subcommittee on Administrative Oversight
                                            and the Courts,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 9:33 a.m., in
    room SD-106, Dirksen Senate Office Building, Hon. Arlen Specter
    presiding.
        Also present: Senators Thurmond, Sessions, and Leahy.

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

        Senator Specter. Good morning, ladies and gentlemen. The
    hour of 9:30 a.m. having arrived, the subcommittee on
    Department of Justice oversight will now proceed.
        This hearing had originally been scheduled for May the 3rd
    but was moved back a day when the committee had scheduled
    hearings on the matter involving young Elian Gonzalez so that
    notice was given for today's hearing. Our hearing today will
    focus on the report of Charles La Bella, on his recommendation
    to the Attorney General for the appointment of independent
    counsel to inquire into campaign financing for the 1996
    Presidential election covering both Republicans and Democrats.
    It is part of a broader series which also involved a report
    from FBI Director Louis Freeh dated November 24, 1997, where
    Director Freeh, like Mr. La Bella, recommended that the
    Attorney General appoint independent counsel. It is the
    intention of the subcommittee to hear from Director Freeh on
    this subject and on his memorandum of November 24, 1997, where
    he recommended independent counsel.
        Another memorandum has been prepared by FBI General Counsel
    Larry Parkinson dated November 20, 1998, and it may be that we
    will call Mr. Parkinson as a witness as well.
        It is not within the subcommittee's choosing to have a
    hearing in the midst of the Presidential election. Very
    strenuous efforts have been made to obtain this La Bella report
    for a long time. The La Bella report is dated July 16, 1998.
    One week later, on July 23, 1998, I wrote to the Attorney
    General requesting a copy of the La Bella report and received
    no response.
        On July 22, 1999, Senator Hatch and I wrote to the Attorney
    General requesting all documents relating to the 1996 Federal
    election campaigns which would have comprehended the La Bella
    report, and the staff of the Department of Justice responded by
    providing a smattering of information but no La Bella report.
        On September 29, 1999, a follow-up letter was written to
    the Attorney General requesting documents which included the La
    Bella report, and again no response.
        The La Bella report has not been made available to
    committees looking into campaign finance reform such as the
    Governmental Affairs Committee, but very heavily redacted
    copies were made available to chairmen and ranking members of
    some congressional committees with the prohibition against
    taking notes and the prohibition against having any copies.
        I finally had consent to have my Judiciary Committee
    counsel David Brog invited to the DOJ offices to review the
    partially redacted copy of the report on March 15 of this year,
    and when he got there, he was denied access to the report. And,
    finally, the Judiciary Committee on a party-line vote, 10-8,
    issued a subpoena on the La Bella report and the Freeh report
    and the Parkinson report and the Brian report, and other
    documents were turned over to the committee under an
    arrangement where they were deposited in S-407, which is not in
    strict compliance with the subpoena; but at the risk of not
    receiving the documents at all, they were received in S-407
    under restrictions which first limited access even to members
    of this subcommittee, which has subsequently been broadened,
    but prohibiting taking out of those reports from S-407, which I
    think is not a valid restriction but in the interest of caution
    have not challenged that determination. So we will be
    proceeding today without having documents present, but I have
    read them, others have read them, so we are in a position to
    proceed. And we will deal with the broader public disclosure of
    those documents at a later time.
        The issues which are involved here relate in very
    substantial measure to soft money and the so-called issue ads,
    and it was even before the La Bella report when efforts,
    unsuccessful efforts, were made to obtain information from the
    Department of Justice on this issue.
        Slightly more than 3 years ago, I questioned the Attorney
    General in a Judiciary Committee hearing about the so-called
    issue ads on soft money, and the following day, May 1, 1997,
    wrote her a lengthy letter, which I will cite only one of the
    ads, because it sets the foundation for Mr. La Bella's
    testimony. And this is one of the so-called issue ads:
    ``Protecting families. For millions of working families,
    President Clinton cut taxes. The Dole-Gingrich budget tried to
    raise taxes on 8 million people. The Dole-Gingrich budget would
    have slashed Medicare $270 billion, cut college scholarships.
    The President defended our values, protected Medicare, now a
    tax cut of $1,500 a year for the first 2 years of college. Most
    community college is free. Help adults go back to school. The
    President's plan protects our values.''
        Now, inexplicably, at least in my judgment, this has been
    categorized as an issue ad which can be paid for by soft money,
    which does not count against so-called campaign contributions.
    I wrote to the Attorney General on May 1. She wrote back on
    June 19 declining to comment, saying the matter was for the
    Federal Election Commission. The subject was pursued by me with
    the Attorney General at a later hearing, pointing out that
    there were criminal provisions to the violations and that the
    Department of Justice and the Attorney General as chief law
    enforcement officer had jurisdiction there, but, again, to no
    avail in receiving a response.
        Today's hearing will involve discussion, extended
    discussion of the independent counsel statute, and on one
    specific provision where, under a 1987 amendment, the Congress
    added a provision that the Attorney General shall not base a
    determination that there are no reasonable grounds to believe
    that further investigation is warranted upon a determination
    that such person lacked the state of mind required for the
    violation of criminal law involved unless there is clear and
    convincing evidence that the person lacked such state of mind.
    That provision of law was added because on so many occasions
    the Department of Justice had declined to proceed with an
    investigation under the independent counsel statute on the
    excuse that there was not a showing of criminal intent. And the
    conference report cited the example of Attorney General Edwin
    Meese in theEnvironmental Protection Agency case where the
    Attorney General declined to appoint independent counsel, request
    independent counsel, to investigate whether Edward Schmults, the Deputy
    Attorney General, had obstructed a congressional inquiry, with Attorney
    General Meese saying there was a lack of evidence of criminal intent,
    notwithstanding very substantial evidence to the contrary, which led to
    this rule of law in the statute that there could be no declination to
    proceed in the absence of clear and convincing evidence that there was
    not criminal intent since that had been the excuse in the past.
        Now, that is, believe it or not, a somewhat abbreviated
    statement of some of the very complex issues we will be facing
    in today's hearing, but I thought we ought to lay some of the
    groundwork, which I have just done.
        I yield now to the ranking member of the full committee,
    Senator Leahy.

      STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE
                            STATE OF VERMONT

         Senator Leahy. Well, thank you, Senator Specter. I
    appreciate you making the opportunity for me to make an opening
    statement. As we know, Senator Torricelli, who is the ranking
    member of this subcommittee, had made it clear some time ago
    that he could not be available today. And I am aware of the way
    schedules were changed around.
        The chairman has outlined for the committee the scope of
    the campaign finance investigation he wished to pursue in the
    earlier statements and would hope this would not be dealing
    with campaign finance generally but would be targeted at the
    three convictions obtained by the Justice Department's campaign
    finance task force pursuant to plea agreements with John Huang
    and Charlie Trie and Johnny Chung. And, of course, it is within
    the rights of the Republican majority to review the plea
    agreements and sentences in these three cases if that is their
    priority, if that is how they choose to focus the attention of
    this committee. And I have stated that before. It is their
    determination and their right to have as many investigations as
    they want.
        Incidentally, it is nice to see you again, Mr. La Bella.
        Mr. La Bella. Nice to see you, Senator.
         Senator Leahy. And I enjoyed our other talks we have had
    with Senator Hatch and you earlier.
        To the extent that the plea agreements for Johnny Chung and
    Charlie Trie and John Huang are deserving of this
    subcommittee's scrutiny, Mr. La Bella actually may be able to
    resolve the concerns of some of our members. Mr. La Bella, you
    were the supervisor of the task force September 1997 to June
    1998. During that time the plea agreement for Mr. Chung was
    negotiated by attorneys of the task force. It was approved and
    signed by Mr. La Bella.
        In addition, as I understand it, the Trie case, in which an
    indictment was returned on January 29, 1998, was well underway,
    and given the publicly expressed criticisms of the resolution
    of these matters achieved by Mr. La Bella's task force, I hope
    that the subcommittee will use the opportunity to voice their
    concerns to Mr. La Bella, and I think he should have the
    opportunity to respond.
        Frankly, I think that is far afield from the limited focus
    on those three plea agreements to use this hearing in the
    subcommittee to reiterate the recommendation of Mr. La Bella
    that the Attorney General appoint an independent counsel. That
    topic has been explored with the Attorney General before this
    committee and with Mr. La Bella before other committees of this
    Congress. Indeed, as I understand, Mr. La Bella has offered
    public assurances that, whatever his disagreements with the
    Attorney General, he believes that her integrity and
    independence were beyond reproach. He also recently reiterated
    that whatever his frustration with the Department of Justice,
    he does not believe that the Attorney General in any way,
    shape, or form was protecting anybody, or anyone else at the
    Justice Department was politically protecting anybody. We can
    go over that ground again, but I thought his answer was pretty
    clear on that.
        Now, on the other hand, a review of the shortcomings in the
    campaign finance law would be helpful. According to a recent
    press account, Mr. La Bella identified in his investigation
    certain flaws in the current campaign finance laws, including
    the fact that serious campaign finance offenses are only
    misdemeanors and the applicable statute of limitations only 3
    years. I agree with Mr. La Bella that these are serious flaws.
    That is why I cosponsored S. 1991, a bill that would amend the
    Federal Election Campaign Act in just these areas and treat as
    felonies violations involving improper contributions
    aggregating more than $25,000 in any calendar year. And it
    would increase the statute of limitations to 5 years, which is
    the standard statute for Federal offenses.
        It would give increased direction to the Sentencing
    Commission in the area of Federal election violations, and
    hopefully we might go into questions of that.
        We may well be embarking on a much more free-ranging
    endeavor than previously announced. This inquiry has moved from
    examining events in Mount Carmel, TX, to the ongoing matter of
    Wen Ho Lee, to the plea agreement in the case of Peter Lee. It
    is now turning its attention to fundraising activities in the
    1996 Federal elections. These have been explored for a number
    of years by other congressional committees. They are under
    active review at the Department of Justice. In fact, they have
    a task force to conduct a thorough analysis and investigation.
    And that task force, which for a time was headed by Mr. La
    Bella, had launched 121investigations by the end of last year.
    Perhaps we should review all 121.
        But as of March 31 of this year, the task force had
    initiated 24 prosecutions, obtained the conviction of 15
    individuals and one corporation. I hope we will not be going
    back and second-guessing every one of those.
        Questions about the financing of the 1996 Federal elections
    have already been the subject of multiple, expensive,
    overlapping, repeated, and continued congressional hearings.
    For example, in 1997, the Senate Committee on Governmental
    Affairs held 32 days of hearings, calling 70 witnesses, at a
    cost to the taxpayers of $3.5 million to investigate campaign
    finance violations relating to the 1996 Federal elections. And
    that doesn't count the millions of dollars spent by those
    people who were called.
        Then they had another hearing this fall to review the
    investigation of Charlie Trie. The House Committee on
    Government Reform and Oversight has been investigating campaign
    finance violations since June 1997. Chairman Burton has
    included over 45 days of hearings. In November 1998, the House
    committee issued a four-volume interim report and in 1998
    reports spending already $4 million. That was a year and a half
    ago.
        The Senate Judiciary Committee has already focused
    extensively on the campaign finance question in hearings with
    Attorney General Reno on April 30, 1997, July 15, 1998, March
    12, 1999. We have talked to her about her decision not to call
    for the appointment of an independent counsel. We have talked
    to her about this to some extent. The chairman actually
    threatened to sue her over her decision and, of course, that is
    up to him.
        Now, we have not questioned her about the times that she
    has recommended the appointment of independent counsel over the
    last 7 years. I do find it disappointing that we are revisiting
    the matter of campaign fundraising in 1996 as we approach the
    general elections of November 2000. I wish we were looking at
    some of the other matters. We have at least showed some wisdom
    in cancelling the Elian Gonzalez hearing tomorrow, as though
    there is anything more to know, a hearing which I think would
    have been a form of congressional child abuse to call that
    little boy up here, Lord knows why, and fortunately, cooler
    heads prevailed.
        But in the last 2 weeks, we have witnessed the anniversary
    of the shooting deaths of 15 at Columbine High School in
    Littleton, CO. We have seen the senseless shooting of children
    at the National Zoo here in Washington. We had the apparent
    hate crime shooting spree last week, saw the shooting of a
    Jewish woman, two Asian Americans, a man from India, an
    African-American man, but we can't bring up sensible gun safety
    laws. We have bottled up action on updated hate crimes
    legislation, the Violence Against Women Act reauthorization,
    and we won't fill the 79 judicial vacancies. Those are all
    things this committee could do. We won't move forward on hate
    crimes. We won't move forward on violence against women. We
    won't move forward on the juvenile justice bill which is
    bottled up in a conference because the gun lobby tells us not
    to, but we will continue on campaign finance violations.
        We can investigate but apparently not legislate. We know
    that a lot of investigations go on. Independent Counsel Kenneth
    Starr up to September 30 spent $52 million. We still don't know
    how much more he spent, but his successor has spent another $3
    or $4 million. As of May 1999, the Justice Department had
    detailed 96 employees to help Mr. Starr in his investigations.
    Ninety-six, 78 of them FBI agents. He still spent $1.5 million
    on other investigators.
        We love to investigate. I wish we would legislate. I wish
    we would move the hate crimes legislation. I wish we would move
    the violence against women legislation. I wish we would move
    the juvenile justice bill, notwithstanding the gun lobby's
    opposition to it, at least vote on it up or down. But if we are
    going to have investigations, we can go on for them, I am
    pleased at least that this committee finally showed enough
    sense to say that tomorrow we wouldn't be dragging poor Elian
    Gonzalez and his father or anybody else before us to rehash
    that matter over and over again.
        So thank you, Mr. Chairman, for letting me sit in for
    Senator Torricelli.
        Senator Specter. Thank you, Senator Leahy.
        One other comment with respect to timing because, as noted
    earlier, we had made very substantial efforts to get the La
    Bella report early on. It had been the subcommittee's hope to
    conclude any inquiries on the campaign finance matters early
    on. When we were talking about structuring the subcommittee
    last October, the suggestion was made that we would put
    campaign finance ahead of Chinese espionage, try to conclude it
    late March, early April. But that bipartisan agreement could
    never be worked out. So while there may be talk about the
    millions spent by the Governmental Affairs Committee and the
    millions spent by the independent counsel run by Mr. Starr,
    this subcommittee spent zero, no money, or extra money.
    Staffing has been done with the Senators so that we have
    proceeded as best we could, and I think rather expeditiously,
    with major reports on Wen Ho Lee and hearings on Dr. Peter Lee
    and other matters.
        Now, Mr. La Bella, if you will stand for the administration
    of the oath? Do you solemnly swear that the testimony you will
    give before this subcommittee of theJudiciary Committee of the
    Senate of the United States will be the truth, the whole truth, and
    nothing but the truth, so help you God?
        Mr. La Bella. I do.
        Senator Specter. Mr. La Bella, we appreciate your being
    here. For the record, you are under subpoena. For the record,
    your report and all related memoranda and documents are also
    under subpoena.
        We had sought a relaxation of the rules put on by the
    Department of Justice on not bringing reports over here, but at
    least for the moment, we do not have that. The Department of
    Justice is being represented by Ms. Cheryl Walter, whom I met
    yesterday for the first time, a little after 6 p.m. She brought
    over a long ream of material so that they wouldn't be given to
    us after the hearing, she said, but before the hearing. Staff
    worked long hours into the night to review that material. I
    wish I had it so I could at least weigh it or show it. And we
    would ask again, Ms. Walter, that you reconsider our request to
    bring those documents over. One way or another we are going to
    do it. It would be more convenient to do it now.
        The Department of Justice has not lodged any objection to
    our subpoena as to Mr. La Bella. I don't think the Department
    of Justice would have any standing or any objection to our
    subpoenaing Mr. La Bella's report, which we intend to ask him
    about. Is there any comment, Ms. Walter, that you would care to
    make on behalf of the Department of Justice?
        Ms. Walter. No, thank you, Mr. Chairman.
        Senator Specter. Thank you.
        We have been joined by our illustrious, distinguished
    President Pro Tempore of the U.S. Senate, former chairman of
    this committee and most other committees in the Senate. Senator
    Thurmond, would you care to make an opening statement?

    STATEMENT OF HON. STROM THURMOND, A U.S. SENATOR FROM THE STATE
                           OF SOUTH CAROLINA

        Senator Thurmond. Thank you very much, Mr. Chairman.
        Mr. Chairman, I am pleased that Mr. Charles La Bella is
    with us today to discuss his memorandum regarding the need for
    an independent counsel to investigate campaign finance
    irregularities. Mr. La Bella was personally chosen by Attorney
    General Reno in September 1997 to lead the Department's
    investigation into campaign fundraising abuses because the
    matter was being poorly handled by the Department's Public
    Integrity Section. At the time, he was widely praised by the
    Department of Justice. He was a distinguished career prosecutor
    who had a reputation for being aggressive, tough, fair, and
    effective.
        Less than a year later, he strongly urged the Attorney
    General to appoint an independent counsel in a now famous
    document that the Department of Justice has made every effort
    to keep secret. Even though his views were consistent with
    those of many, including FBI Director Louis Freeh, the Attorney
    General steadfastly rejected his advice. He was suddenly
    criticized and was passed over to be a U.S. Attorney in
    California. His detailed report confirms what we have known for
    some time: The Attorney General has a duty and obligation under
    the independent counsel statute to appoint an independent
    prosecutor to investigate the campaign fundraising
    irregularities during the Clinton-Gore re-election campaign in
    1996. Although the Attorney General did open some extremely
    narrow inquiries under the independent counsel statute, she
    would always close them. It is clear that her approach to this
    case has always been far different from that of any independent
    counsel probes that she had approved in the past.
        It should be noted that since Mr. La Bella's departure, the
    task force has not been entirely dormant. It has successfully
    prosecuted some participants, including Maria Hsia, who was
    integral to the Vice President's 1996 fundraiser at the
    Buddhist temple. However, the task force has also entered some
    plea agreements such as for John Huang. In any event, its
    accomplishments will be greatly limited if the matter is not
    turned over to a special prosecutor.
        This subcommittee will later investigate some of these
    issues. Although many leads and opportunities have probably
    been lost forever, it is still my sincere hope that the
    Attorney General will do what is right and appoint an
    independent prosecutor in this matter. It is the only way to
    restore public trust and confidence in this investigation. I
    welcome Mr. La Bella and look forward to his testimony. Thank
    you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Thurmond.
        Senator Sessions.

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

        Senator Sessions. Thank you, Mr. Chairman. I know time is
    short, and we want to hear from the witnesses. I would just say
    that, with regard to Mr. La Bella, I observed from afar his
    selection to head this task force. I believe, and it was said
    then, that he was the kind of professional with integrity that
    could handle this investigation and, therefore, we would not
    need an independent counsel, that the Department of Justice
    could do it itself, and that we had a man of integrity and
    ability in Mr. La Bella who was going to undertake it. And the
    result has not been such that it placed great credit in my view
    on the Department of Justice. I am sad to say that, having
    spent 15 years of my life working in the Department of Justice.
    I believe in the ideals of equal justice under law. I believe
    that you can find truth, and I believe you can determine
    whether or notpeople have violated laws, and I believe that no
    one is above the law. I think that is consistent with American
    heritage.
        So when Mr. La Bella was not allowed, was not able to
    complete the investigation, I thought that was a stunning and
    significant event. And then when he was going to be named for
    the U.S. Attorney's job in California, I thought it was very,
    very sad that he was denied that position simply for doing his
    work as a professional, it seems to me.
        Now, I am willing, I am open, I want to hear the whole
    facts, but it strikes me as very unhealthy what happened here,
    and his opinions are the opinions of a professional and career
    prosecutor, entitled to great respect, and I am glad we are
    going to be hearing from him today.
        I would also note that he handled the plea bargain of
    Johnny Chung in California and handled it in a way that is, I
    believe, fairly consistent with what a professional would do in
    a plea bargain arrangements. He insisted on cooperation. He got
    it before he made the recommendations for final recommendation
    of downward departure and had a plea to legitimate charges. I
    am very disturbed to learn that after he left the Department,
    with regard to the John Huang case, who had raised $1.6 million
    for the Democratic National Committee and the Clinton-Gore
    campaign, that Mr. Huang was allowed to plead guilty to $7,500
    in contributions to the mayor's race of Los Angeles and not one
    dime of his plea affected his fundraising to the Democratic
    National Committee, really for the benefit of the Clinton-Gore
    campaign. And he got a sweetheart plea, and his cooperation was
    never fully obtained. So I would like to ask him a little bit
    about that.
        Those are some of the things that are on my mind, Mr.
    Chairman. Thank you for going through this. It is a thankless
    task, your work, but this is a Government of laws and not of
    men. I just left a meeting with members of the Russian Duma.
    They say corruption is the thing they are most concerned about
    in their country. I believe it is a stain on us that we must
    constantly fight against, we must constantly be alert to, and
    bringing these things to light are important, and thank you for
    doing so.
        Senator Specter. Thank you very much, Senator Sessions.
        Mr. La Bella, again, you are here under subpoena. Your
    report is under subpoena. And we would ask you at this time to
    proceed with your testimony as to what your investigation found
    and what your report said.
        Mr. La Bella. You want me just to go to a narrative?
        Senator Specter. Well, I would be glad to ask you
    questions.

     STATEMENT OF CHARLES LA BELLA, SUPERVISING ATTORNEY, CAMPAIGN
                          FINANCING TASK FORCE

        Mr. La Bella. Let me just begin by saying that, you know, I
    have been subpoenaed. My documents, the documents I prepared
    when I was a Department employee, were subpoenaed. My testimony
    has been subpoenaed. And with respect to the Department, the
    Department has not given me any, you know, instructions or
    directions. And in fairness to the Department, I think that is
    because it doesn't want to be perceived as, you know, trying to
    shape or mold my testimony or my actions.
        With respect to the report, I'm aware of the communications
    back and forth between the Senate and the Department of Justice
    concerning my report and the production of my report and the
    conditions placed upon the production of my report. Basically,
    with respect to my producing my version of my report, which I
    still have, and my exhibits, the addendum, the problem is I'm
    flying by my own lights with respect to the report and my
    testimony. And I'm just going to tell you what my best judgment
    tells me to do because no one has told me what to do. And the
    temperature between the Department of Justice and myself
    changed quite dramatically after our September 2, 1998,
    meeting, briefing on the Hill. After that time, I really had
    very little to do--I had nothing to do with the campaign
    financing issues. I was not included in any discussions, and
    perhaps rightfully so, because I had moved on to another post
    at that point.
        Before that time, after I handed my report in, in July,
    towards the end of July, within a week the result of the report
    had been reported in the New York Times. On August 4 or 5--I
    forget the date--I testified in the House Oversight Committee,
    and at that time I was asked whether I had discussed the report
    with the Attorney General. My response was no. We hadn't had a
    chance to discuss it between the time I handed my report in in
    that meeting.
        Senator Specter. Have you ever discussed the nuts and bolts
    of this report with the Attorney General?
        Mr. La Bella. Well, following that hearing, the Department
    put together a meeting, I think it was on August 13 or 14,
    1998, ostensibly to discuss my report. We met with the Attorney
    General. We discussed some very generic issues. I think the
    major issue we discussed was whether or not there was anything
    in the report that would require us to trigger an Independent
    Counsel Act inquiry at that time. But it was a very generic,
    macro discussion. We didn't get into the nuts and bolts or a
    substantive discussion at that time.
        Senator Specter. At any time?
        Mr. La Bella. Not after that, no. After that, I was really
    gone----
        Senator Specter. Never had, as you put it, a nuts and bolts
    discussion with the Attorney General of your report?
        Mr. La Bella. No. No, I mean, we never really discussed
    line by line or chapter by chapter or heading by heading. We
    had that one generic discussion on August 14, but that was
    about it.
        But, in fact, I had been replaced, though. In fairness to
    the Department, I had been replaced as chief of the campaign
    financing task force. Someone else was in that position from
    June on, and, you know, I had moved on----
        Senator Specter. When were you replaced as head of the task
    force?
        Mr. La Bella. Well, I guess--I was appointed U.S. Attorney,
    Acting U.S. Attorney in June 1998, and I kept loose affiliation
    with the task force and the Department vis-a-vis campaign
    financing issues through the September 2 meeting, and then
    after that we really kind of severed ties with respect to
    campaign financing.
        Senator Specter. And what was the cause of your being
    replaced as head of the campaign finance task force?
        Mr. La Bella. Because I went out to San Diego to replace
    the U.S. Attorney, interim U.S. Attorney--to act as interim
    U.S. Attorney to replace the U.S. Attorney who had just left.
    And that was the reason I left.
        So with that time line in mind and the fact that I'm really
    flying by my own lights and my own moral compass, I'm glad to
    talk about certain issues in the report. I really feel
    compelled--and I'll just tell you this. I don't know how else
    to deal with people except up front. OK? I'm somebody to just
    lay it out on the table. I may have differences with the
    Department. The Department may have differences with me. But I
    was a Department lawyer for nearly 17 years. I have a certain
    amount of loyalty and respect for the office of Attorney
    General and for the Department of Justice. I don't want to do
    anything to disparage the office of Attorney General or to
    disparage the men and women who work for the Department of
    Justice.
        I feel as a former prosecutor and a former public servant
    that it's really incumbent upon me to respect the Department's
    views with respect to the deliberative process as much as, you
    know, any ego in me would love my report to come out, because I
    think it's a sound report. I think it was well written. I think
    it was well reasoned. I think it was a sound legal document.
        I think the deliberative process is important, and I really
    would ask that we do not go into the nuts and bolts of the
    evidence underlying my conclusions. I'm happy to discuss my
    conclusions. I'm happy to generically discuss my conclusions.
    If we have to go into closed session, I'd be happy to do that.
    I have nothing to hide. I stand by my report. I stand by my
    career. But I don't want to jeopardize the important work that
    the Department continues to do, and I don't want to--also,
    frankly, I don't want to have--give someone grist for
    criticizing me publicly, because in one sense I have not been
    given any instructions. I'm left to fly by my own moral
    compass, and I'm doing that. But I know if I step--if I say
    something inappropriate, there are people waiting, just waiting
    to jump on it, and so I'm cautious of that, too.
        So, cognizant of all that, I'm happy to answer questions. I
    want to answer questions. I think Senator Leahy brought up a
    good point that one of the issues we really should be talking
    about is campaign financing reform. I know Senator Thompson--
    and it's cosponsored--has some pending legislation that's very
    important that--and I say that because all my suggestions in my
    report are included, I think, in that piece of legislation. I
    think it's a wonderful piece of legislation. It would be an
    important step in the right direction, and I think that's a
    useful road to go down.
        With respect to the problems with the law, the problems
    with the Independent Counsel Act, the problems with maybe
    generically how we handled things in the Department, that's all
    fair game for questions. I just am a little reluctant to answer
    questions as to, for example, why Mr. X--why I thought Mr. X,
    his conduct required the appointment of an independent counsel.
    If I get into the nuts and bolts of Mr. X's conduct and the
    evidence, I really just think that I'm giving away the
    deliberative process that's so important to the Department's
    ability to do what it needs to do, whether I agree with the
    Department or not. And I did not agree with the Attorney
    General on this issue, but I think that has to be preserved.
        So, you know, I'll do the best I can to answer all your
    questions, and you want to know something that really goes to
    the heart of why I reached a certain decision, I think we
    really do have to go in closed session or at least discuss
    amongst ourselves how we best--how I can best answer the
    question, give you what you need to do your job, and preserve
    the integrity--my own integrity plus the integrity of the
    deliberative process that the Department really needs.
        Senator Specter. Mr. La Bella, we understand your position
    and have structured this in a way which is designed to the
    maximum extent to make it obvious that you are responding to a
    subpoena, a compulsory process. And you and I compared your
    report. You had your report within your possession, and I went
    over the report in S-407 that the Department of Justice had
    provided on the redacted items and said to you that we would
    not ask you any questions aboutthe redacted items, so that will
    be respected.
        The inquiries made by the subcommittee of the Department of
    Justice relate only to the deliberative process, and the
    Judiciary Committee, as I said earlier, by a 10-8 party-line
    vote decided that the public interest and public policy in
    oversight of the Department of Justice, as it touches quite a
    number of matters--number one, just pure oversight as to how
    the Department is functioning. The second aspect of our inquiry
    is what we ought to do by way of legislative change, and I have
    sponsored and cosponsored campaign finance reform legislation.
    And there is a bipartisan group sponsoring legislation to put
    back the independent counsel statute, so that the experience
    here and your testimony is important on that subject.
        We will not go into matters which require closed session
    because we are not going to go into any 6(c) or any redacted
    information. And we are interested in your conclusions, but
    necessarily, in the view of the subcommittee, which is why we
    subpoenaed the report, we may get into some of the specifics as
    to what you had your conclusions for. And I know what your
    conclusions are, and I know what the specifics are because I
    have read the report. But we will just move along and handle it
    in a way which is consistent with all of our professional
    responsibilities, and emphasizing again that the Department is
    represented here and has raised no objection. I repeat, which I
    don't like to do, I don't know that there is any objection they
    can raise, but they haven't in any event.
        Mr. La Bella, if you prefer, we will just start with
    questions.
        Mr. La Bella. That would be better if I could answer
    questions.
        Senator Specter. We can proceed in that manner.
        Perhaps a good way to start would be, as you had commented
    to me last night, on the index. What subject matters were
    comprehended within your report with respect to generalized
    topics of investigation or individuals subject to
    investigation?
        Mr. La Bella. I started with the statutory framework and
    our investigative approach, to just set the stage for the
    Attorney General and the Director of the FBI. This was to the
    Attorney General and the Director of the FBI. And then section
    2, I went into information that myself and Jim DeSarno, who was
    the head of the FBI, believed was sufficient to trigger a
    preliminary investigation and to support a determination that
    further investigation was warranted under the ICA.
        Senator Specter. And essentially what was the evidentiary
    base for triggering a preliminary investigation and a follow-up
    investigation?
        Mr. La Bella. My understanding of the law was that if there
    was sufficient information from a credible source to warrant an
    investigation, then an investigation had to be conducted. We
    believed, Jim and I, after, you know, assembling all the
    evidence, we believed that there was sufficient information
    from credible sources to warrant the appointment of an
    independent counsel.
        Senator Specter. With respect to the individuals, I believe
    you label them as starting with Mr. Harold Ickes, the
    President, then the Vice President, et cetera. Essentially what
    were your findings, starting with the first on your agenda, Mr.
    Ickes?
        Mr. La Bella. Well, with respect to Mr. Ickes, without
    going into the nuts and bolts of the analysis, I obviously
    concluded that, you know, for purposes--you know, with respect
    to the evidence that I detailed and outlined in the, I guess,
    20-some-odd pages that followed, that his conduct warranted the
    Attorney General appointing an independent counsel. It wasn't
    his conduct alone, but his conduct in connection with cross-
    cutting several of the investigations that we had conducted at
    the task force.
        Senator Specter. And which investigations were those?
        Mr. La Bella. Well, he touched upon a lot of
    investigations. He was someone who had cameo appearances in
    several investigations.
        Senator Specter. What was your essential finding as to
    ultimate control of the campaign by Mr. Ickes operating as
    Deputy Chief of Staff?
        Mr. La Bella. Well, I can refer to public documents, and
    there's certainly memos that--reflecting that, in fact, he
    functioned as really the coordinator of the DNC during the
    critical years. He had people report to him, and he made
    decisions, you know, budgetary decisions and those sorts of
    things. So that was part of the analysis.
        Senator Specter. And who was next on your itinerary?
        Mr. La Bella. Well, I had--the captions are--you know, we
    talked about the President, and under several topics, and then
    we had the Vice President, the----
        Senator Specter. What were the several topics with respect
    to the President?
        Mr. La Bella. Well, it's going to be difficult for me to go
    into those without really going into the underlying--the
    underlying facts of the investigation. That's----
        Senator Specter. Well, Mr. La Bella, we want the underlying
    facts. This does not really touch on the deliberative process
    where you confer with the Attorney General, which, in fact, you
    didn't, except for the one generic meeting that you have
    described. To understand the basis for your conclusion, we do
    need the facts. Regrettably, it has all been in the newspapers,
    anyway.
        Mr. La Bella. Well, it hasn't. I mean, that's the dilemma I
    have. There's some--there's been some reports of leaks of this
    report with respect to positions taken, but not to the
    underlying evidence.
        Now, if--for example, there's no way--it's very difficult
    for me to discuss my analysis without getting into the nuts and
    bolts of the evidence. I mean, I understand the Department's
    view on this, and I've got to respect it, that, you know, the
    deliberative process is critical. They believe, the Department
    believes--and I've actually testified earlier in front of the
    Government Oversight--House Oversight Committee that it's
    just--it's just difficult for a former prosecutor to--you know,
    to publicly go into the analysis that he or she engages in in
    order to reach a certain conclusion.
        I reached a conclusion as a 17-year prosecutor that there
    was sufficient information from credible sources to warrant the
    appointment of an independent counsel.
        Senator Specter. Mr. La Bella, when we talk about
    deliberative process, we are talking about a report which an
    investigator in your position submits to his superiors and the
    conversations which you have and the way a judgment is formed
    and the way there are discussions which are not chilled by
    somebody looking over your shoulder at some time.
        Now, there are circumstances where the case law has upheld
    congressional oversight going into pending investigations, and
    we have already had hearings on Peter Lee with line attorneys,
    strenuously objected to by the Department of Justice, where the
    committee has decided to overrule the Department's objections.
    We are not asking you for your conversations with the Attorney
    General, and we don't intend to because there is nothing to ask
    you about, which is the reason we are not asking you about
    them. And perhaps we wouldn't if there was something to ask you
    about. But with respect to the factual matters that led to your
    conclusion, that is not part of the deliberative process, as I
    see it.
        Mr. La Bella. But this is a report to the Attorney General.
    This is a conversation, the only conversation I had, but maybe
    a one-sided conversation, but this is my conversation with the
    Attorney General and the Director of the FBI as to why Jim
    DeSarno and I thought an independent counsel needed to be
    appointed. So, I mean, it really is a--it is a conversation in
    that I was--you know, I put my heart and soul into this, and
    this is my best judgment as to what went on. But I analyze
    evidence. I get very particular about what went on and why I
    thought it was appropriate to appoint an independent counsel.
        I am not shying away from that decision. I mean, don't get
    me wrong. I think I was right then, and I think I'm right now.
    But my dilemma is I don't want to go into the nuts and bolts of
    why I think under--you know, under the caption, let's take the
    President, why I think--you know, the five areas that I thought
    triggered or demonstrated in a matter of evidence and
    information, why I concluded based on that information and
    evidence that there was reason to further investigate
    particular allegations.
        The allegations are not a surprise to anybody. They're very
    similar allegations that were--you know, have been public
    record. What is not public record is my analysis and my piecing
    together the different pieces of evidence.
        Now, I know that there are probably some people who don't
    want this report to come out because circumstantially it's
    fairly powerful. But I think the greater concern is that it
    would compromise the way the Department conducts its business
    in U.S. attorneys' offices around the country. And if a
    prosecutor can't write an analysis like this without fear that
    his or her analysis is going to become public, it could chill
    that. I mean, it will chill that. And I think that's the
    critical issue that's at stake here, and I'm glad to talk
    about--you know, I stood on my own two feet and said that I
    think that an independent counsel should have been appointed.
    The Attorney General disagreed. I took the shots and I have
    moved on.
        But I don't know how to go into the nuts and bolts of why I
    think an independent counsel should have been appointed vis-a-
    vis the President, the Vice President, or Harold Ickes without
    going into the nuts and bolts. It's just not going to make
    sense to anybody. I can talk about the conclusion, but to talk
    about the nuts and bolts, it requires me to really draw upon
    the evidence. And I know that's frustrating, and I know it
    probably serves some people's interest. But I'm concerned with
    the greater issue here, which is my loyalty to the Department
    of Justice, not a person, not a bunch of bricks, but to the
    Department of Justice and what it stands for. And I can't just
    sort of brush that aside because I maybe don't have a friendly
    relationship with the Attorney General of the United States
    anymore.
        Senator Specter. Well, Mr. La Bella----
        Mr. La Bella. That's where I am.
        Senator Specter. I don't propose to have an elongated
    discussion as to the deliberative process, simply to say that
    it is my conclusion that you are not talking about a
    deliberative process. The deliberative process involves
    deliberation within the Department where you would make a
    report and where you would have a discussion, and that did not
    occur here. What you were talking about is the work of an
    individual lawyer, investigator, prosecutor who writes a
    report. That is not the deliberative process.
        Now, whatever it is, the committee has already decided that
    we want the facts, and that is what we intend to ask you about
    pointblank.
        Mr. La Bella. OK.
        Senator Specter. And we have already been through this with
    others, with line attorneys; the Attorney General herself has
    appeared and has answered specific questions about a warrant
    under the Foreign Intelligence Surveillance Act. It was in
    closed session, but she answered that. She has also answered in
    public sessions specific questions. So that is what we intend
    to deal with.
        Senator Sessions. Mr. Chairman, I would just like to join
    you in that, and I know Mr. La Bella has had witnesses before
    him that didn't want to testify also, and they thought for some
    reason or another they didn't have to testify, but he has
    required them to testify. Isn't that right, Mr. La Bella?
        Mr. La Bella. Yeah, I----
        Senator Sessions. A lot of times.
        Mr. La Bella. Absolutely.
        Senator Sessions. As a professional.
        Mr. La Bella. Right.
        Senator Sessions. Well, you are under subpoena here.
        Mr. La Bella. Right.
        Senator Sessions. And to my knowledge, there is no
    objection to your testimony, and I don't see why you ought not
    to give it. You would recognize at some point that the
    Department of Justice is subjected to some oversight, would you
    not?
        Mr. La Bella. Absolutely.
        Senator Sessions. And that if a professional who is
    investigating a case is turned down by the Attorney General who
    serves at the pleasure of the President, when the professional
    said that the President should be subjected to an independent
    counsel, then I think the people of this country have a right
    to have some understanding of what this is about.
        Mr. La Bella. Right.
        Senator Sessions. Because we don't have an independent
    counsel anymore.
        Mr. La Bella. Well, I think if you----
        Senator Sessions. This is all we got here is the U.S.
    Congress to attempt to make sure the people understand what
    happens, and if there is a good explanation, so be it. If it is
    not, we need to know it.
        Mr. La Bella. Well, I think if you want to ask me, you
    know, what broke down in the process, that is a legitimate
    question. And I'm not shy to tell you that, you know, the
    process within the Department I think was dysfunctional. And
    I've said that and I will repeat it.
        Senator Sessions. Well, I think the chairman's asked you
    some questions to which, to my knowledge, there is no real
    objection to, and I would hope that you would answer them.
        Mr. La Bella. Well, give me another question. I'll try
    better.
        Senator Specter. OK. Mr. La Bella, there has been a lot of
    concern about the Attorney General's refusal to proceed with
    the investigation as to the Vice President on her finding that
    there was lack of intent on the part of the Vice President to
    violate the Federal election laws. And I have already cited a
    statute which says that the Attorney General may not stop an
    inquiry. ``The Attorney General shall not base the
    determination that there are no reasonable grounds to believe
    that further investigation is warranted upon a determination
    that such person lacked the state of mind required for the
    violation of criminal law involved unless there is clear and
    convincing evidence that the person lacked such state of
    mind.'' And the Congress, in putting that provision in, cited
    Attorney General Meese letting the Deputy Attorney General go
    on his unilateral finding that there was not criminal intent.
        And the issue has arisen as to the Vice President's state
    of mind, and, again, I repeat, this would have been a good
    subject for inquiry in 1998 or 1999 as opposed to May 2 of the
    year 2000. But we just got this report and have had a chance to
    go into specifics as to what was before the Department of
    Justice.
        Now, your report and Director Freeh's report relate to the
    Vice President having made so-called hard money calls because
    it was the Clinton-Gore credit card which raised hard money as
    opposed to soft money, which is raised by the Democratic
    National Committee. And there were 13 memoranda which had been
    sent from Mr. Ickes to the Vice President from August 1995
    until July 1996. And these 13 memos contained divisions as to
    hard money/soft money, and also using Federal contributions,
    which are equivalent to hard money contributions.
        And the Vice President is quoted as saying, quote, the
    subject matter of the memos--memorandums would already have
    been discussed in his presence and in the President's presence.
    And there was an issue raised as to whether the hard money/soft
    money was discussed in the Vice President's presence, and Mr.
    Strauss, his Deputy Chief of Staff, had a memorandum which
    related--specified a 65 percent split in hard money and a 35
    percent--65 percent soft money and 35 percent in hard money.
        And there was an issue raised by the Vice President as to
    whether he was present all the time, whether he had drunk so
    much iced tea that he had a ``restroom break'' at
    thatparticular time, and the Vice President's further statement that he
    was experienced for many years of campaigning.
        There was also the question raised as to his credibility on
    the false statement issue, and your memorandum noted that it
    was inconceivable that the topic of hard money/soft money was
    not addressed at these regular Wednesday night meetings in the
    light of the Ickes memo, and you commented based on this memo
    and others penned by Ickes to the Vice President, everyone was
    on notice about the need for the hard dollars.
        Now, coming right down to the core conclusion where you
    recommended to the Attorney General that there be a further
    investigation, it was your conclusion that the matter could not
    be ruled out as clear and convincing evidence that there was no
    criminal intent with so many of these facts in dispute, and the
    defense of advice of counsel where somebody says, well, I told
    my lawyer everything and I relied upon his advice and,
    therefore, I do not have the criminal intent, is in the nature
    of an affirmative defense, which is a jury question, not one
    which you can rule out as a matter of law.
        And the flavor of the report is that it is not a matter of
    prosecutorial discretion. A prosecutor can decide what to
    charge and what not to charge, but a lot of the independent
    counsel statute that says you can't rule out criminal intent in
    the absence of clear and convincing evidence.
        My question to you is: What was your basis for recommending
    independent counsel?
        Mr. La Bella. Virtually all that is public information, so
    I can talk about that. Let me just put it in its perspective,
    proper perspective, proper context.
        When I arrived in September 1997, there was already
    underway the initial investigation concerning the 607
    violation, the phone calls from the public office.
        Senator Specter. 607 is exactly what, Mr. La Bella?
        Mr. La Bella. 607 is the Pendleton Act. That was the
    alleged violation.
        Senator Specter. I just want to ask you for the record what
    607 provides so it is clear.
        Mr. La Bella. Well, I don't have it in front of me, but it
    is basically the Pendleton Act.
        Senator Specter. Paraphrase.
        Mr. La Bella. In any event, the 607 violation was underway
    already when I got there. In December, early December, when it
    was decided--like December 7 or 8 was the cut-off date. I at
    that point had recommended to the Attorney General that I
    thought it was appropriate to warrant further investigation.
    She decided that it wasn't.
        The report was written in July--I mean, it was concluded in
    July and handed in in July. At that same time there was the
    emergence of or the surfacing of the Strauss memo and the Leon
    Panetta interviews and those sorts of things that suggested
    additional facts. In my memo----
        Senator Specter. Let me interrupt you just on the point of
    the Panetta memo, which has been in the public domain, and that
    is that Leon Panetta, the Chief of Staff, has said that the
    Vice President was attentive during the course of discussions
    about the hard money. Correct?
        Mr. La Bella. Right.
        Senator Specter. OK. Go ahead.
        Mr. La Bella. In my July report, you're right, the
    conclusion was that it was inconceivable that at the Wednesday
    meetings that hard money/soft money split wasn't discussed.
    That was the best evidence we had at that point. We had the
    Ickes memos, and we had all that material that you've just
    alluded to.
        Right after that, or at that same time, as I was writing
    this, the Strauss memo emerged. The Leon Panetta interview
    occurred I think in August 1998. I'm not exactly sure.
        Senator Specter. And what was the Strauss memo?
        Mr. La Bella. The Strauss memo was the notations of Strauss
    that indicated the split of the hard and soft money.
        Senator Specter. Sixty-five percent hard, 35 percent----
        Mr. La Bella. Exactly----
        Senator Specter. Sixty-five percent soft, 35 percent hard.
        Mr. La Bella. Yeah, something to that effect. I don't have
    it in front of me, but there was a memo with the handwritten
    notes.
        Senator Specter. At this point, Mr. La Bella, make it clear
    for the record what the import was of the hard money, that that
    counted as a contribution under the Federal election law,
    whereas the soft money did not under the Department of
    Justice's interpretation.
        Mr. La Bella. Right. The initial analysis was--and I think
    it was correct--that if you're just soliciting soft money, that
    it's not soliciting contributions and it doesn't come under
    607. So there was no--if it was just soft money, there could be
    no potential violation of 607. If it was hard money----
        Senator Specter. But if you're soliciting hard money, there
    could be a violation of 607?
        Mr. La Bella. A potential violation.
        Senator Specter. And 607 prohibited raising money on
    Government property.
        Mr. La Bella. Right. It is a very old statute. It is a very
    technical statute. But, arguably, it did prohibit that sort of
    conduct.
        Now, the issue, the only issue before us at that time was
    whether or not there was sufficient evidence, sufficient
    information from credible sources to warrant a further
    investigation. Based on that and my 17 years as a prosecutor, I
    thought that was a ground ball, that yes, indeed, there was
    enough information that you would want to conduct an
    investigation. That's not to say that at the conclusion of the
    investigation you would do anything with it, that you would
    prosecute it. In fact, in my judgment, you know, based on the
    facts and the evidence, you probably wouldn't.
        Senator Specter. Well, why was there enough information, as
    you just put it, to conduct additional investigation?
        Mr. La Bella. Because you had the memos, you had the Leon
    Panetta interview, you had the Strauss memo, you had, I think,
    information from credible sources that there's reason to
    believe that the Vice President, you know, knew that he was
    raising, in part, soft money and hard money. But, you know, it
    could be that he didn't. I'm not saying he did. I'm just
    saying----
        Senator Specter. When you say the memos, you are----
        Mr. La Bella. Possibility.
        Senator Specter [continuing]. Talking about the 13 memos
    from Ickes to the Vice President?
        Mr. La Bella. Right, the 13 memos from Ickes to--I'm taking
    your number as accurate. The number of Ickes memos to the Vice
    President, the Strauss handwritten notes, the Leon Panetta
    interview, if you put all those together, it seems that a
    further investigation is warranted.
        Again, not saying that a further investigation is going to
    result in charges. Probably would not, based on my experience.
    But, you know, in my judgment--and it was just my judgment and
    Jim DeSarno's judgment that at the early stage we thought there
    was sufficient information, and then after the Strauss memo
    emerged and the Leon Panetta interview occurred, there was
    additional information. But I guess it was still deemed
    insufficient.
        Senator Specter. I am going to yield now to Senator Leahy.
    We have not run the clock this morning because this discussion
    doesn't lend itself to 5-minute segments, and I conferred with
    Senator Leahy about the procedure, and he said go ahead a few
    minutes ago until you find a convenient spot. He has other
    commitments, and there will be more questions, but this is a
    convenient spot, so I yield now to the ranking member.
        Mr. La Bella. Are you going to give me an easy one?
        Senator Leahy. Yes, let's talk about our Italian ancestry.
    What part of Italy does your family come from originally?
        Mr. La Bella. My father's from Sicily, my mother's from
    northern Italy, so it made for interesting Sunday dinners.
        Senator Leahy. Whereabouts in northern Italy?
        Mr. La Bella. The Genoa area.
        Senator Leahy. Mine is from the Friuli area over on the
    other side. So that is the easy part.
        Senator Specter. I think the Department of Justice objects
    to this part of the dialogue. [Laughter.]
        Senator Leahy. And the chairman is absolutely right when he
    said normally we put on a time, and I thought he had, in asking
    his questions, an absolutely legitimate right, and I wasn't
    about to object to it. I was finding the questions interesting
    myself.
        I know, Mr. La Bella, you are in somewhat of a rock and a
    hard place here, and I know Senator Hatch and the Department of
    Justice have started negotiating on what would be the use of
    this material that was sent up here, and I guess those
    negotiations are still going on, and in the meantime you are
    here.
        I was pleased with what you said about the Thompson bill on
    amending the Federal Election Campaign Act. That is S. 1991
    that was introduced by Senator Thompson, Senator Lieberman,
    Senator Collins, and myself as a bipartisan piece of
    legislation. I think a number of the issues that you have
    raised in your statements earlier, some of the private
    discussions you have had with members, and also some of the
    public ones, some of the problems with the Federal election
    campaign law could be taken care of there.
        You have also alluded to the question of what is raising
    funds on public or on governmental property, including the
    statute that was put together before there were telephones and
    those things. The idea that somebody might have written a note
    and mailed it out on their way home but wrote the note in a
    public place probably would not have had any question now if
    they are doing basically the same thing but a telephone call
    isn't.
        I also am struck by one thing you said, and I want to re-
    emphasize it. In the special counsel law or special prosecutor
    law, or whatever, one of the criticisms of it and one of the
    reasons why it has not been renewed and one of the reasons why
    significant Republicans and Democrats whom I have a great deal
    of respect for say they would not renew it in its present
    form--I think everybody agrees it would not--if it were to be
    renewed, it would not be renewed in its present form because of
    the low threshold it has to trigger an investigation.
        You are an experienced prosecutor. Is it safe to say that
    you have had a lot of cases where somebody brought something to
    you and you said, it could be something, let's justtake a look
    at it, and thus start an investigation, and then pretty soon said,
    there is nothing there, let's go on to something else?
        Mr. La Bella. Absolutely.
        Senator Leahy. And wouldn't that be pretty much the
    experience of most prosecutors?
        Mr. La Bella. Yes. I mean, you exercise a great deal of
    prosecutorial discretion, and the cases you decline on are
    never really public. I mean, it is only the rare one that
    becomes public, but I think prosecutors, Federal prosecutors
    everyday decline on cases because every technical violation of
    a Federal statute does not require the full weight and majesty
    of the Federal law coming down on someone. So I mean there is a
    lot of prosecutorial discretion that is exercised everyday in
    U.S. attorneys' offices, and appropriately so.
        Senator Leahy. It is on a far different level, but it is
    against the law to go 1 mile an hour over the speed limit. Most
    of us would wonder what was wrong with a prosecutor if suddenly
    a whole pile of people were brought in for going 41 miles an
    hour in a 40-mile-an-hour zone.
        But with the low threshold on the special prosecutor, did
    you find that oftentimes there was, just in general, a
    discussion that this may or may not trigger the special
    prosecutor law, but even if it does, at the end of the day
    there is not going to be any special prosecution.
        Mr. La Bella. Right. I mean, that view was always
    expressed. I mean, everybody had that feeling about many of
    these prosecutions. I mean, if I prosecuted every person who
    came into the grand jury and lied to me, that is all I would
    have done. It is, you know, a hazard of the job. You get a lot
    of people who come into the grand jury and don't tell you the
    truth. Some of them you have to prosecute as perjury.
        You know, if it is significant, if it is a centerpiece of a
    criminal activity, you go after it. But by and large, you know,
    the minor ones you sort of let go. You have to let certain
    things go. But we had that discussion. I mean, people discussed
    that openly. I can't say we ever had the discussion in front of
    the Attorney General about that, but we certainly amongst
    ourselves--you know, between the lawyers in Public Integrity
    and the other supervisors around the table, you would scratch
    your head at some of these things and say, you know, 10 out of
    10 prosecutors are ultimately going to decline this case, but
    we need to sort of go through the numbers.
        And that is where I sort of parted company with some of the
    people, because I said, it is the law, we need to go through
    the numbers, we need to go by the numbers. That is not to say
    all of them would, and you never know what you are going to
    find if you do the investigation. But, you know, that was
    certainly part of our discussions.
        Senator Leahy. Well, let me take one example. There were
    two special prosecutor investigations, costing millions of
    dollars, on the Vincent Foster suicide, and at the end they
    both found exactly the same thing. Millions of dollars were
    spent, but both found at the end we had a suicide.
        On a lesser thing, as a State prosecutor, you always have
    the experience of somebody who comes in after a bitter divorce
    case. And with diametrically opposed testimony, it is obvious
    somebody lied, and they say--usually the person who came out on
    the short end of the stick--we want a prosecution, but there
    isn't one.
        You have got a contractor who does something. One person
    sues. The contractor promised to do such and so for this money.
    The contractor says, I never promised to do such and so for
    that money. Somebody is lying, but you don't prosecute.
        These things, however, are difficult because in the public
    domain we may have set the threshold to trigger the special
    counsel law too law. That is my feeling. I don't know if you
    have a feeling on that.
        Mr. La Bella. I think there is two things. I think you have
    the double whammy. It is a very low standard, but in addition,
    you are hamstrung by a lack of investigative tools. You can't
    use subpoena, you can't immunize witnesses, and these are the
    tools of the prosecutor. Without subpoena power, without the
    right to immunize witnesses, it is very difficult to get to the
    bottom of a situation.
        Senator Leahy. Well, isn't it safe to say if you have a
    case involving a whole lot of people, at some point you are
    going to take somebody out and say, all right, we are going to
    put you on the bubble, we are going to immunize you, but----
        Mr. La Bella. Right. I mean, in a white-collar case that is
    generally the way you have to go. You have to immunize somebody
    to get an insider to testify as to what went on inside the
    white-collar conspiracy. That is just the way it is.
        Senator Leahy. Unless you got really lucky on a piece of
    evidence or had a wiretap or something like that, there is
    probably not much you can do.
        Mr. La Bella. Right, if you get lucky on a search warrant
    or something like this. But in cases like this, these are
    generally very public investigations and people know you are
    coming, you know, miles before you are there.
        Senator Leahy. Now, Mr. La Bella, I know you have a great
    deal of respect for people in the Justice Department, and I do
    too, and I have said this. The professional andcareer people--I
    have probably given more speeches about my respect for them in both
    Republican and Democratic administrations. As a lawyer and as a
    prosecutor, I have dealt with some of them and I think that the country
    has been darn lucky to have the men and women that you are referring
    to.
        You described in your report that the circumstantial
    evidence was powerful, but there was also some significant
    dissent among other career prosecutors within the Department
    about your conclusions. Is that correct?
        Mr. La Bella. There is some dissent among career people in
    the Justice Department. My difference with you is that my
    definition of a career prosecutor is different than just
    someone who has worked for the Department of Justice for 20
    years.
        Senator Leahy. What is your definition, then?
        Mr. La Bella. Someone who has tried cases and stared down
    juries and has gone into the grand jury substantial amounts of
    times who has done significant prosecutions, who knows his or
    her way around the courtroom, his or her way around the grand
    jury room.
        Senator Leahy. That is my definition, too.
        Mr. La Bella. Yes, and I think that there are people in the
    Department of Justice who are career bureaucrats, and that is
    not to demean the fact that they are career bureaucrats. There
    is a place for that. I mean, we need people in the Department
    to be concerned about, you know, policy and issues that are
    more national in scope, but I wouldn't necessarily call them a
    career prosecutor. But, you know, I think that you could
    probably get--you could find career prosecutors who may
    disagree with me. I haven't met any.
        Senator Leahy. But you have had this same thing in some
    cases before where you have had this back-and-forth on whether
    there should be a prosecution.
        Mr. La Bella. Absolutely.
        Senator Leahy. And sometimes your side wins out and
    sometimes the other.
        Mr. La Bella. Right.
        Senator Leahy. Would you say, if you were the one making
    the ultimate decision on a case that might be a close call,
    would you encourage this debate in presenting a recommendation
    to you?
        Mr. La Bella. I started out as a line assistant and I ended
    up as U.S. attorney, so I held every position along the way.
    And I was very often in the position of having to argue for a
    position and very often in the position of having to make a
    decision as Chief of the Criminal Division or as U.S. attorney.
        So you really do need to encourage vigorous debate, but you
    need to encourage real debate and you also need to encourage
    the fact that once the debate is over, there is a professional
    respect and closure to the debate. I mean, in a U.S. attorney's
    office, when we had knock-down, drag-outs about whether we
    should proceed with a case, we walked out of the room
    respecting each other and not casting aspersions on each other.
    So, yes, I think that is something you need to encourage.
        Senator Leahy. In fact, when you testified before the House
    Committee on Government Reform and Oversight, you said, and I
    am going to quote this, ``The last thing I want to see as the
    prosecutor heading this task force is that this memo ever gets
    disclosed. I don't think it should ever see the light of day
    because this, in my judgment, would be devastating to the
    investigations. I can't see a set of circumstances under which
    this report should see the light of day.''
        Is that a basically accurate recompilation of what you
    said, and if so, do you feel that way today?
        Mr. La Bella. It sounds like something I would say. Oh,
    yes, I think, you know, then there were greater concerns
    because things were actively under investigation. I think a lot
    of that has been mooted, but I think just to make public the
    document, because you can't make this document public in a
    vacuum--you would have to make the responses public and the
    whole debate would have to become public that was internal. The
    Lee Radek response to my memo would have to be made public.
        I understand from the Department that Jim Robinson wrote a
    memo analyzing my memo. And, you know, once you go down that
    slippery slope, there is no stopping, and that is the problem.
        Senator Leahy. Is that why you wanted a subpoena to appear
    here today?
        Mr. La Bella. Yes. I don't want to--let me just tell you, I
    am not a reluctant public servant, but I just--you know, I
    don't want to seem to be a volunteer on this. I feel strongly
    about this. I felt strongly when I wrote it, I feel strongly
    today. But I just think that, you know, there are issues we
    need to deal with and we should probably move on to those
    issues.
        Senator Leahy. You have spoken about the Attorney General's
    integrity and independence. And when you testified before the
    House Government Reform Committee on August 4, 1998, you said
    you thought that the task force was adequately staffed and the
    attorneys and FBI agents working on the investigation were
    competent and professional.
        You said that neither the Attorney General nor the White
    House prohibited the task force from interviewing any
    witnesses, or prohibited them from bringing any charges
    orseeking any indictments. Do you still feel that way today?
        Mr. La Bella. Yes. I had finished my work then, so nothing
    has changed. I didn't do any more work with the task force, but
    we had adequate staff. You know, there were legitimate debates
    inside the Department as to one road or another, but I think we
    did--as long as I was there, we did the job as best we could.
        Senator Leahy. And whether you agree or disagree with any
    decisions of the Attorney General, do you still feel that her
    integrity and good faith and independence are clearly obvious?
        Mr. La Bella. She made no decisions, you know--and I have
    said this before--my perception is she made no decisions to
    protect anyone. You know, she listened to the advice of certain
    people and she followed that advice.
        Senator Leahy. I worry, as your testimony has indicated you
    do, about anything that may come into question of second-
    guessing what prosecutors do because of all the decisions they
    have to make every single day. I am not suggesting that this
    committee does not have the authority and the right to look
    into aspects of the Department of Justice. Of course, it does.
        But we seem to have those who are going to be the
    prosecutors, the line prosecutors and all--we have gone a long
    way from decades ago where you put the county chairman's weak-
    brained nephew in for a place, for a job. We now have
    extraordinarily good people. At least that has been my
    experience in the U.S. attorneys' offices I go to.
        So because of that, do you think if we are going to ask
    questions, they ought to be at least at the supervisor level
    and not at the line prosecutor level?
        Mr. La Bella. Yes, I think it is helpful to keep line
    people out of it. Supervisors are responsible for the decisions
    that are made ultimately. And, you know, if heads need to roll,
    theirs should be the heads that roll. The line assistants
    generally--and, again, I have filled all these positions. They
    are just doing their job, and they do them to the best of their
    abilities. And we are supposed to as supervisors--when I was a
    supervisor, we are supposed to be providing them guidance, and
    if we fail, then we should be held responsible for it.
        Senator Leahy. In fact, would it be safe to say when you
    were a line attorney, there were times you would probably come
    in and do a devil's advocate debate on whether a case should be
    brought or not?
        Mr. La Bella. Oh, sure, yes.
        Senator Leahy. But you didn't want to see that next week
    before a congressional committee?
        Mr. La Bella. Right. I mean, you would have to take
    positions and argue the other side of a position very often to
    flesh out all the pros and cons, and that was a technique we
    used in the U.S. attorneys' offices all the time.
        Senator Leahy. Now, we have had criticism of the plea
    bargains struck and the results obtained in the Johnny Chung,
    Charlie Trie, and John Huang cases prosecuted by the Campaign
    Finance Task Force. Did you have involvement with any of these
    plea agreements at any stage?
        Mr. La Bella. No, no. I did the Chung agreement, but that
    is the only one I did. I think everything else happened after I
    left.
        Senator Leahy. On Chung, did you approve the final version
    of that agreement?
        Mr. La Bella. Yes, yes, I did.
        Senator Leahy. And, to your knowledge, did these include
    provisions requiring cooperation?
        Mr. La Bella. I put it in my agreement. I know that one.
        Senator Leahy. And was that important to you?
        Mr. La Bella. It was important to me, yes.
        Senator Leahy. And why was that, sir?
        Mr. La Bella. Just to advance the investigations, and it is
    standard in a situation like this where you believe someone has
    information to provide that you want to make sure that you have
    an agreement and an understanding with that person that they
    have an obligation to provide that to you. So they are not just
    doing it out of the goodness of their heart. You want to make
    sure that that is part of the deal, part of the final agreement
    with that person.
        Senator Leahy. In fact, it is probably unusual that
    somebody might be making a plea just because they want to be a
    good citizen.
        Mr. La Bella. Generally, people don't plead guilty to
    crimes because they want to be good citizens. They generally
    plead guilty because they are guilty and if they can cooperate,
    they want to get themselves out of a jam and advance the
    investigations.
        Senator Leahy. In fact, is it safe to say, given the
    appropriate circumstances, that has always been a very
    effective tool for the prosecutor?
        Mr. La Bella. Cooperation agreements?
        Senator Leahy. Yes.
        Mr. La Bella. Very effective.
        Senator Leahy. Mr. La Bella, as I say, it is good to see
    you again. Maybe sometime at a later moment, we can talk about
    some of our shared ancestry. But I appreciate you being here
    and I appreciate the difficult situation you are in, but I also
    appreciate very much your feeling that--or your very candid
    assessment both about the integrity of the Attorney General,
    but also about the fact that these are issues where indeed
    there are debates that go on anddifferences of opinion. Thank
    you.
        Thank you, Mr. Chairman.
        Senator Specter. Thank you, Senator Leahy.
        Senator Sessions.
        Senator Sessions. Mr. La Bella, the question and what your
    memo was directed to was simply whether or not an independent
    counsel should be appointed. Is that correct?
        Mr. La Bella. That is correct.
        Senator Sessions. In other words, the Federal law says if
    there is a sufficient amount of evidence involving a covered
    person that an independent counsel shall be called.
        Mr. La Bella. That was the law then, yes.
        Senator Sessions. And that is gone now.
        Mr. La Bella. That is gone.
        Senator Sessions. But it was the law then, and you weren't
    making an opinion as to whether or not the prosecution should
    ultimately go forward. In other words, even if there were a
    violation of a law, a prosecutor might decline to prosecute it,
    for various reasons.
        Mr. La Bella. Right, and there is also the discretionary
    clause, too. It is not only the mandatory clause, but there was
    a discretionary clause if the Attorney General believed there
    was a conflict of interest or some reason why the Department
    should not do it. It was not mandatory. There was also that
    discretion to do it.
        Senator Sessions. Well, the whole deal of the independent
    counsel and the covered person is that the Congress did not
    desire that the person serving at the pleasure of the
    President, the Attorney General, should be called upon to make
    decisions in areas of tough criminal law involving the
    President or his highest associates. Isn't that right?
        Mr. La Bella. I mean, I have been through the legislative
    history and that is my understanding of it.
        Senator Sessions. And so that was why you felt like
    somebody else ought to make this decision other than the
    Attorney General?
        Mr. La Bella. Yes, and I felt a lot of these calls were
    very close calls and what we call jump balls and they could go
    either way. And in order for the people to have faith in the
    integrity of the decision, it was always my position that it
    was better made by someone who was independent.
        Senator Sessions. And you did note in your remarks earlier
    that based on what you knew then, it might be that a prosecutor
    would not go forward with the case, but it is always possible
    something else would come up.
        Mr. La Bella. Absolutely.
        Senator Sessions. And isn't it a fact, Mr. La Bella, just
    based on your core experience as a prosecutor--and I was in it
    15 years--isn't it a fact that the real deal sometimes comes
    down to how determined a prosecutor is when conducting plea
    bargains and negotiations with defendants, how determined they
    are to insist that that person tell the full truth?
        Mr. La Bella. Well, sure. I mean, the prosecutor is
    probably one of the most important elements in that formula
    because he or she really controls whether or not the plea is
    accepted, you know, whether or not it gets to court because he
    or she has to determine, yes, I am going to accept this plea.
        Senator Sessions. Well, let's say you have a defendant that
    wants to plead guilty, and you have a case against him, but he
    wants a sweetheart deal and wants to tell you about one-tenth
    of the truth. That is not unusual, is it?
        Mr. La Bella. No. I mean, you----
        Senator Sessions. And so it is down to that prosecutor's
    personal judgment and integrity on whether or not they insist
    that the full truth is--you probably, like I have, have
    rejected pleas by the fact that, well, that is about half the
    truth, Mr. Defendant, and if you are not telling the whole
    truth, I have got enough to convict you and you can go to jail.
    Is that right?
        Mr. La Bella. There are stories about me in the Southern
    District of New York where I would pound the table and leave a
    proffer session and call people and tell people that they
    weren't----
        Senator Sessions. But that is your obligation, isn't it?
        Mr. La Bella. It is your obligation.
        Senator Sessions. I mean, that is your duty.
        Mr. La Bella. It is.
        Senator Sessions. If you are going to put that person on
    the witness stand or say he deserves a recommendation of
    leniency, he or she should tell the full truth.
        Mr. La Bella. Right.
        Senator Sessions. Now, I guess what I am saying to you is,
    isn't that another reason you need an independent counsel?
    Aren't there some areas in which the person prosecuting the
    case has some reluctance to do so? There are a lot of stages in
    the case in which they could perhaps be a bit soft and not
    pursue as aggressively as they could.
        Mr. La Bella. Cooperation is a process.
        Senator Sessions. And I believe the Radek memorandum--Mr.
    Radek is not a trial lawyer?
        Mr. La Bella. He may have tried some cases.
        Senator Sessions. Not in your recent knowledge, is that
    right?
        Mr. La Bella. Not in my recent knowledge, no.
        Senator Sessions. There is a difference when somebodyis
    trying to evaluate a case who knows what the evidence is going to be
    and has some experience about how a jury will react to it, and I think
    you are correct.
        With regard to the Attorney General, the Attorney General
    had never served in the Department of Justice, had she, before
    becoming Attorney General?
        Mr. La Bella. Not that I am aware of.
        Senator Sessions. Had never prosecuted RICO cases or Hobbs
    Act cases or traditional tough Federal corruption cases, had
    she?
        Mr. La Bella. I don't believe so. I don't know her
    background as far as----
        Senator Sessions. Well, she was just basically a State
    prosecutor that supervised a substantial staff of people
    involved in murders and robberies and rapes and things that are
    very important. But it is a different category of crime, some
    of these white-collar corruption cases, aren't they?
        Mr. La Bella. They are peculiar.
        Senator Sessions. Well, I would just say that under those
    circumstances I think you were correct that there was a basis
    for a case to be brought here.
        Let me ask you this: has there been a declination by the
    Department of Justice on the matters you recommended an
    independent counsel on as of this date?
        Mr. La Bella. I am assuming so. I assume that they just
    decided there was nothing that warranted triggering the
    Independent Counsel Act. But I don't know. I was gone then, so
    I don't know.
        Senator Sessions. Well, there is something good to be said
    for that independent counsel who issues a report and declines
    to prosecute and sets forth some reasons why. Isn't that
    healthy when you are involving the highest level of the
    Government of the United States?
        Mr. La Bella. That would have been a nice closure to this.
        Senator Sessions. I don't think we have had that. I think
    it has soured and been a bitter pill in the body politic. And
    the Attorney General--the chairman of this committee and the
    chairman of this subcommittee, Senators Hatch and Specter, and
    others, have urged her to not do this, to allow it to go
    forward, as you recommended, and we would have been a lot
    better off. There is no doubt in my mind about this.
        Let me ask this one more thing, and I know the chairman has
    a lot to ask. When you interviewed the Vice President, and
    during the other interviews of the Vice President that we are
    aware of, was he ever asked specifically and in detail about
    the Buddhist temple fundraising activity?
        Mr. La Bella. I only participated in one interview, and
    that was the one in November 1997, and he was not asked any
    questions in that interview.
        Senator Sessions. And you supervised that?
        Mr. La Bella. I was at that interview.
        Senator Sessions. Did you supervise that interview?
        Mr. La Bella. Yes. I mean, myself, Lee Radek, the line
    assistants who were conducting the investigation, and the FBI
    agents who were conducting the investigation were there.
        Senator Sessions. And why didn't you ask about that?
        Mr. La Bella. Because the understanding was that we had a
    very particular area that we wanted to talk to him about. That
    was really about the Pendleton Act and the phone calls from the
    Government office and the use of the telephones. That was the
    investigation that was underway at that point. We had time
    pressures. We had to get that interview conducted with respect
    to that particular investigation.
        It was our understanding that if at any time we needed to
    go back to talk to the Vice President, he was going to be made
    available. I don't know that the Buddhist Temple case was ripe
    at that point to ask him questions about it. But as that case
    developed and the Maria Hsia case developed, you know, maybe
    they went back to him. I don't know.
        Senator Sessions. Do you know or not know whether they----
        Mr. La Bella. I don't know. I don't know if they did or
    not.
        Senator Sessions. Mr. Chairman, I am through.
        Senator Specter. OK, thank you very much, Senator Sessions.
        Mr. La Bella, when you accurately say that the judgment is
    only as to continuing to investigate, it is not possible for an
    investigator or prosecutor to know until the investigation is
    finished whether there will be a basis for prosecution or not.
        Mr. La Bella. That is absolutely true, and the decision has
    to be made by that person at the end of the process.
        Senator Specter. Could be, might not be, might or might not
    be, depending on the evidence. But the independent counsel
    statute is designed to remove the Attorney General from making
    that decision as to covered people where you have the close
    association or the appointing power, as with the President or
    where there is a conclusive conflict of interest a la the
    enumerated people who are so-called covered people, correct?
        Mr. La Bella. Right. If there is sufficient information
    from credible sources, the Act is triggered.
        Senator Specter. And that is what you call the mandatory
    provision.
        Mr. La Bella. Right.
        Senator Specter. The law says we shall proceed with
    theinvestigation, and if sufficient evidence occurs, is uncovered, to
    proceed to appoint independent counsel.
        Mr. La Bella. Right.
        Senator Specter. And then the second part which you talked
    about, the discretionary part, says may proceed where there are
    reasons to conclude that there is a conflict of interest with
    somebody else, although not the lofty so-called covered
    persons.
        When Senator Leahy had started to ask you about dissent
    among the career personnel, career prosecutors, you got off on
    the discussion as to who is a career prosecutor and who is not.
    I don't think you came back to the question of whether there
    was dissent. And you mentioned Mr. Radek, and Mr. Radek wrote a
    memorandum against appointing independent counsel because, as
    he put it, there was not evidence of a willful violation. Is
    that the essence as to the Radek memorandum?
        Mr. La Bella. It was a lengthy memo. I know that that was
    probably in there somewhere, and I don't know what specific
    point that was addressed to. I don't know exactly what he was
    talking about there. I know he used those words. I think he
    used those words, but----
        Senator Specter. You wrote a reply to Mr. Radek's
    memorandum, correct?
        Mr. La Bella. Well, I wrote an addendum to my interim
    report, yes, I did.
        Senator Specter. OK, in the nature of a reply. You did it
    once Mr. Radek had written and you wanted to respond to some of
    his points.
        Mr. La Bella. Right.
        Senator Specter. Mr. Radek's standard was disagreed to by
    others in the Department, was it not? Assistant Attorney
    General James Robinson disagreed with the standard which Mr.
    Radek had stated?
        Mr. La Bella. I don't have a copy of the Robinson memo.
    That was----
        Senator Specter. There is no way you could. The Department
    of Justice won't let us bring it into this room. It is not
    sanitized.
        Mr. La Bella. Yes. I don't know what he said. That was
    after my tenure.
        Senator Specter. Well, we looked at it last night together,
    Mr. La Bella.
        Mr. La Bella. Yes.
        Senator Specter. We will get into this at a later time with
    the committee, so in the absence----
        Mr. La Bella. But there was something about the standard
    that he disagreed with. I don't know what it--I don't remember
    as I sit here now what exactly it was, but it was something
    about the standard.
        Senator Specter. Well, the specific language which
    Assistant Attorney General Robinson, head of the Criminal
    Division, picked up in disagreeing with Mr. Radek was that
    there was a rejection by Mr. Radek of willful intent. Mr.
    Radek's conclusion was you couldn't prove willfulness, and Mr.
    Robinson responded that that wasn't determinative for stopping
    the investigation because the statute specifically left open
    that issue unless there was clear and convincing evidence. So
    Mr. Robinson concluded Mr. Radek had applied the wrong standard
    in disagreeing with your recommendation about independent
    counsel.
        Does that refresh your recollection?
        Mr. La Bella. Yes, that seems right, and I had said in my
    memo that I thought he applied the wrong standard because he
    used sufficient evidence from a credible source. I said it is
    information. He said that is a silly distinction. I thought it
    was a real distinction.
        Senator Specter. Pretty big difference for a prosecutor as
    to whether it is evidence or information.
        Mr. La Bella. Well, if I go to a Federal judge and say,
    Your Honor, I offer this information, he is going to look at me
    and take my head off, or she is going to take my head off. If I
    offer evidence, then I have a colorable claim to get into
    evidence.
        Senator Specter. But then you are a career prosecutor.
        Mr. La Bella. Right. I think there is a difference between
    evidence and information.
        Senator Specter. Well, of course there is.
        Mr. La Bella. And I think that the Congress, when they
    wrote it, they intended it.
        Senator Specter. Well, for the record, state what the
    difference is between evidence and information.
        Mr. La Bella. I mean, evidence is more directed, evidence
    is more substantive; it has the earmarks of reliability.
    Information can be much more generic, can be much more general.
    Information can be hearsay. Evidence, if it is hearsay, has to
    have an exception to get into evidence. I mean, lawyers just
    know it. I mean, you know the difference between evidence and
    information.
        Senator Specter. Evidence is the standard for what you can
    say in a courtroom, compared to information which is the
    standard for what you can say on the floor of the Senate.
        Mr. La Bella. Right. I mean, evidence is what is admissible
    in a court of law. Information is anything that can be heard on
    the Internet or with your own ears.
        Senator Specter. So when you proceed to have an
    investigation based on information, it is obviously an
    articulation of a much lower standard.
        Mr. La Bella. A much lower standard.
        Senator Specter. And when Mr. Radek is requiringevidence,
    he is not following the standards set for by the Congress in the
    independent counsel statute.
        Mr. La Bella. In my effort to be fair to him, he just
    argues that they use the words interchangeably, but for him
    they mean the same thing. And Public Integrity has always
    applied the right standard; they just interchange the words and
    it is form over substance. And that was his point in his
    addendum, as I recall. I mean, I disagree with that. I don't--
    --
        Senator Specter. These words have a lot of specific
    meanings for lawyers in courtrooms, or for application of
    standards of statutes, don't they, Mr. La Bella?
        Mr. La Bella. Well, I mean, as a former prosecutor, you
    deal with the laws that Congress passes. You don't deal with
    the laws as you think they should have been passed.
        Senator Specter. When the comment is made that there was
    dissent among career prosecutors, is that true? To your
    knowledge, was there dissent within the Department of Justice
    among career prosecutors, if you move out Mr. Radek, whom we
    have already said applied the wrong standard and interchanged
    evidence and information?
        Mr. La Bella. It is hard for me to know who was in the
    debate because I wasn't in the debate after I left. But I mean,
    you know, Jim Robinson was a former U.S. attorney, so I mean I
    don't know how--I mean, you have to ask these people how many
    cases they tried, you know, how many investigations they have
    conducted. I mean, people call themselves career prosecutors,
    and I just don't know. I don't know the resumes of all those
    people.
        Senator Specter. How many cases would you have to try to
    qualify? I want to know if I qualify, in your opinion.
        Mr. La Bella. I think it depends. I think a Federal
    prosecutor, after about eight or nine trials, can be a trial
    lawyer because, you know, they can be month-long trials.
        Senator Specter. If you are only a district attorney, more
    than that?
        Mr. La Bella. Well, district attorney--they usually put
    like 150 under their belt each year, so I think after about 2
    or 3 years they are pretty much seasoned trial lawyers.
        Senator Specter. Mr. La Bella, coming back to the
    information as to the others, there is a section of your report
    which deals with Loral on the technology transfer from Loral to
    the People's Republic of China. And there was a recommendation
    as to proceeding as to an investigation for the chief executive
    officer of Loral, Mr. Bernard Schwartz, who had contributed
    some $1,500,000 to the Democratic National Committee. And there
    was the judgment that you had articulated that if the matter
    was to be opened as to Mr. Schwartz, it ought to be open to
    President Clinton as well.
        Mr. La Bella. Let's assume that the allegation that
    appeared in the paper was that, you know, someone had given
    contributions and, as a result of the contributions, had
    received some benefit.
        Senator Specter. A presidential waiver for technology
    transfer. Let's put that in the assumption.
        Mr. La Bella. OK.
        Senator Specter. You are postulating a hypothetical
    question.
        Mr. La Bella. Hypothetical. And if, hypothetically, you are
    going to investigate the person who gave the contribution
    because you think something was wrong with that because they
    were seeking a quid pro quo, then it seems to me that part of
    the area of investigation would be the person who received the
    contribution. I mean, that just is my analysis, you know, so--
    --
        Senator Specter. So, hypothetically, if you proceed as to
    A, Mr. Schwartz, you would proceed as to B, Mr. Clinton,
    hypothetically?
        Mr. La Bella. Well, hypothetically, I would think you would
    have to because it is part of the same subject area, but that
    would be just my reaction as a--that would be my reaction as an
    investigator.
        Senator Specter. Mr. La Bella, in the second part of the
    report which you submitted, dated August 14, 1998, you raised
    the issue of further investigation, ``The Vice President may
    have given false statements.'' What was your approach on that
    particular item?
        Mr. La Bella. Well, by that time, what had surfaced--in
    addition to what was in my initial report of July, the Strauss
    memo had surfaced. In my initial report, I think I was basing
    it on the Ickes memorandum and the fact that it was generally
    discussed in the memos that went into the Vice President from
    Ickes. I concluded that, you know, it was inconceivable to me
    to rule out that it was an issue that he knew nothing about.
        After the report, the Strauss memo surfaced, and then
    following that the Leon Panetta interview had occurred, I
    think, before my addendum, or at just about the same time, and
    those were additional facts that came forward.
        Senator Specter. And your report made a comparison of the
    Vice President's not recalling the Ickes memoranda, the 13
    memoranda; as you put it, ``reminiscence of the lack of
    recollection of the Buddhist Temple matter.''
        Mr. La Bella. That sounds like a phrase I used, yes.
        Senator Specter. It sounds like a phrase you used?
        Mr. La Bella. It sounds like a phrase I used.
        Senator Specter. With respect to your recommendations, Mr.
    La Bella, with which I agree totally, but I think it would be
    good for the record to amplify why you think that these
    campaign finance violations ought to be categorized asfelonies
    as opposed to misdemeanors.
        Mr. La Bella. I think for two reasons. Number one, it sends
    a message publicly that we are going to take these things
    seriously, because for years I think we have not taken them
    seriously because they have been denominated as misdemeanors.
    And when you denominate something in the Federal law as a
    misdemeanor, that sends a message to prosecutors. That means no
    one really cares about it, and it is something that you use
    when you really want to give somebody a good deal. You would
    look for a misdemeanor to get them out of their predicament,
    and that is a fact of life that prosecutors view misdemeanors
    as an escape hatch, as a way out.
        Felonies are what prosecutors are about; that is what they
    do. If conduct is important enough to be brought into a Federal
    criminal courtroom, it is important enough to be a felony. And
    I think it sends a public message that these are serious--this
    is serious conduct, and if you violate this conduct, it goes to
    the integrity of our electoral process and therefore we are
    going to take this seriously.
        It also gives the prosecutor much more room to move when he
    or she is investigating a crime. You know, if you have a
    misdemeanor, you have got a floor and there is nowhere you can
    go except a get out of jail free card and let them walk out the
    door.
        If you have got a felony, at least you have got some
    gradations, and if a case requires a misdemeanor disposition,
    then you can go down to a misdemeanor. But if it requires and
    screams out for a felony prosecution, you can do your job and
    use a felony prosecution.
        I think the other issue is the statute of limitations has
    to be changed, and there are other issues about the present
    state of the law. But I think that goes a long way--making it a
    felony goes a long way into showing how serious we consider
    this conduct.
        Senator Specter. Before moving to the statute of
    limitations issue, because I want to take that up specifically
    with you because it is a very important provision, the felony
    categorization also carries a substantially stiffer penalty.
        Mr. La Bella. Right, and I am sorry. That is really the
    second prong of it because you can use that obviously to
    extract cooperation. Now, some people are repulsed by the idea
    that a prosecutor can use a heavy jail sentence as a mechanism
    to extract cooperation from someone. But if you have served as
    a prosecutor, you know people don't willingly cooperate,
    especially against their friends in a white-collar case. It
    just doesn't happen unless you have got something to hold over
    their heads.
        And fortunately for prosecutors--and I know the public
    sometimes doesn't like to hear this--but, fortunately, you can
    use that severe sanction as a way that someone can, you know,
    give full cooperation and you can make sure that you are
    getting truthful testimony before they get any break
    whatsoever. So it is a tool that prosecutors use, so it is an
    important tool and if you have that tool, you can advance
    investigations.
        Senator Specter. And the statute of limitations, for
    explanation, is the period of time in which a prosecution must
    be brought after the acts are completed.
        Mr. La Bella. Correct.
        Senator Specter. And you have made a recommendation that
    the statute of limitations be extended from 3 to 5 years?
        Mr. La Bella. Yes.
        Senator Specter. And would you amplify why you think that
    is an important legislative change?
        Mr. La Bella. Well, virtually all Federal statutes are 5
    years. So if any of us commit a Federal offense, other than an
    election violation, the prosecutor's office has 5 years--the
    FBI or Customs or Immigration, whatever agency is going to
    investigate, and the prosecutor have 5 years to investigate and
    bring that case to closure, bring that case to an indictment.
        Three years is an incredibly short amount of time when you
    are dealing with a white-collar case; it can be. It sounds like
    a long period of time, but when you are talking about hundreds
    of thousands of documents that have to be reviewed and many
    witnesses that have to be interviewed and grand-juried, it goes
    very rapidly, especially if the prosecutor doesn't learn about
    the conduct until 2 years after it is committed, or 2\1/2\
    years. Then you have 6 months to close your case, which is
    virtually impossible.
        So you have got to understand that prosecutors don't learn
    about the conduct always right when it happens. It could be a
    year, it could be 2 years in a white-collar situation before
    someone comes forward and drops a dime on someone, as we say,
    and says, hey, you should look at this, because, you know,
    sometimes it is a disgruntled employee. So you never know where
    you are going to get the lead from in a white-collar case, but
    5 years is appropriate.
        Senator Specter. Mr. La Bella, when you conducted your
    inquiry, were you aware of the issue of the e-mails that were
    not collected by the White House that may have been relevant to
    your investigation?
        Mr. La Bella. The task force was aware, and I was in
    contact with White House counsel about the e-mails during our
    investigation. We did broach that subject. They had a lot of
    difficulty pulling the e-mails up and it was a constant source
    of discussion between myself and White Housecounsel.
        Senator Specter. Did you feel at that time or do you feel
    now that you got an adequate response from the White House on
    the e-mail issue?
        Mr. La Bella. White House counsel was always very
    straightforward with me and I never had a problem with them. I
    don't know if they were being given the information, accurate
    information, but I always trusted what they told me. I never
    had reason to question what either Lanny Brewer or Chuck Ruff
    told me in that regard. But I don't know--because they were
    depending on other people to give them the information, I don't
    know if they were getting the straight information.
        Senator Specter. Mr. La Bella, there is a distinction as to
    in an electioneering message which contrasts with the two
    categories of advocacy ads and issue ads. The ad that I read at
    the outset of the proceeding is categorized as an issue ad
    because it doesn't say ``vote for x, vote against y.''
        There is an in-between message which is called an
    electioneering message, which is a distinction made by the
    Federal Election Commission and was adopted by the Tenth
    Circuit, although not mentioned in the Supreme Court decision
    on the Colorado case.
        The FEC has concluded that electioneering messages should
    not be paid for with soft money, and the FEC confirmed that.
    Yet, the Attorney General found clear and convincing evidence
    that the President and the Vice President lacked intent.
    Wouldn't that come under the category, as you put it, of jump
    ball or ultimately an issue for a jury?
        Mr. La Bella. That you do so in the context of the
    electioneering message?
        Senator Specter. Yes.
        Mr. La Bella. You know, not having read the whole thing, I
    think there were a series of close calls. You know, that may be
    one of them. I would really have to investigate that further,
    but I think that certainly may be one of them.
        I think you bring up a good point, though, about the FEC,
    and part of the report that I think is worth talking about is
    the fact that the FEC is absolutely impotent by design. And I
    have said that before and I said it in the report, and I think
    if there is going to be some way to--there has to be some way
    to address that. It can be a significant organization just like
    the SEC is and it can actually root out campaign financing
    violations, but it needs to be restructured. It can't operate
    by committee and it just is absolutely ineffective.
        Senator Specter. Your report included evidence that high-
    ranking officials from the Democratic National Committee were
    aware of illegal contributions from both foreign donors and
    executive branch officials. Was there a sufficient basis for
    appointment of independent counsel on the basis of the failure
    of the White House to take action there?
        For example, on the issue of campaign contributions to the
    President, when it was determined that Charlie Trie had
    gathered for the legal defense fund contributions which were
    inappropriate, then, as your report specified, Mr. Trie
    continued to raise money for the Democratic National Committee
    without the President's campaign fund alerting the recipients
    of additional funds raised by Mr. Trie that they came from
    inappropriate or illegal sources.
        Would you comment on that?
        Mr. La Bella. It gets very close to the nuts and bolts, but
    I will try to do it in a sort of generic way.
        Senator Specter. Well, do it hypothetically, since you
    don't like nuts and bolts.
        Mr. La Bella. Well, I will try to use a corporate analogy.
    If an individual is on the board of directors of a charitable
    corporation and is the heart and soul of that charitable
    corporation, and in the context of that charitable corporation
    inappropriate conduct occurs--someone gives money to the
    company that is questionable, not per se illegal but
    questionable, comes from questionable sources, and the charity
    decides not to take that money. They make a determination that
    we don't like this, it doesn't fit.
        Now, if the corporation were to take that same money, it
    would be illegal, as opposed to the charity. The charity--it
    wasn't illegal for it to take it; it was just inappropriate.
    But for the company, it would be illegal to take that money.
        Now, if on the board of directors of that charity is also a
    member of the board of directors of corporation x, and if he or
    she sits at corporation x and watches the same person come in
    with similar money, query: do you have an obligation to advise
    your fellow directors for the company that, you know what, in
    my other life, with my other hat on, this conduct happened with
    this person, therefore I think you may want to look at closely
    his activities in connection with this corporation. I think we
    have an obligation to do that.
        Now, I believe that is a sound principle of law. I know Mr.
    Radek ridiculed that and thought it was silly, so maybe the
    truth is somewhere in the middle. But as a prosecutor, that is
    the way I analyzed it.
        Senator Specter. Senator Sessions, do you have anything
    further to inquire on?
        Senator Sessions. Well, let me just say that Mr.Radek's
    position was Chief of Public Integrity?
        Mr. La Bella. Yes, sir.
        Senator Sessions. And that is a political appointment of
    the Attorney General?
        Mr. La Bella. I don't know.
        Senator Sessions. Or a discretionary appointment of the
    Attorney General. It is not a career-type position. He is a
    career attorney. He can drop back to a career position, but he
    was temporarily holding a position at the pleasure of the
    Attorney General. Isn't that right?
        Mr. La Bella. I believe the position is appointed by the
    Attorney General.
        Senator Sessions. All of the chief of divisions, I think,
    are that way. So you are not aware of any career prosecutor
    that ever disagreed with your opinion on this matter?
        Mr. La Bella. It really depends on who you--I mean, I don't
    know the resumes of all the people in the Department when I was
    there and when I left, and there may have been people who read
    and said, no, he is----
        Senator Sessions. But you are not aware of it?
        Mr. La Bella. I am not aware of it.
        Senator Sessions. All right. I think that even though this
    might have been a case, the phone calls of the White House-type
    case using Government phones, that ultimately did not need to
    result in a full prosecution, I believe you are correct that
    there was ample evidence, and certainly information, to
    indicate that a law had been violated, and therefore an
    independent counsel should have been called. And they could
    have concluded the case one way or the other, and they could
    have declined officially and stated their reasons, and this
    matter would have been a lot better off and this Nation would
    have been better off.
        So, that has concerned me about this, and it does appear
    that the Attorney General reached out and made a decision here
    that leaves people to be able to say that she did not use
    objective decisionmaking processes. I am not happy with that. I
    think that was an error in the Department of Justice.
        With regard to the e-mails, were you aware of all the e-
    mail material that has been in the paper, and that certain
    people were told not to disclose this information? How much did
    you know about what was available from the computer search?
        Mr. La Bella. We were told that the system was limited and
    it was an archaic system and it would take a long time to
    retrieve e-mails. And it was a very slow process, and I knew
    they had called in a company to try to retrieve e-mails, but it
    was a very slow process. And I think it was 8 months or even
    longer before we could hope to get certain e-mails. That is
    what I was told when I was there and----
        Senator Sessions. And who was telling you this, the White
    House counsel?
        Mr. La Bella. The White House counsel, right. That is my
    best recollection. It was a long time ago, but I think it was
    something like that. It was a long time to retrieve them
    because it was an archaic system.
        Senator Sessions. Well, apparently, that is not accurate
    from what we read in the papers.
        Mr. La Bella. Yes. I don't know. I mean, I have read the
    same articles.
        Senator Sessions. So you said White House counsel was
    straight up with you. Apparently, perhaps not?
        Mr. La Bella. Well, I don't know if they were getting--I
    don't think they were actually doing the investigative work. I
    think they were relying upon other people to tell them on the
    staff what could you do and what could you not do as far as
    retrieval.
        Senator Sessions. Well, a lawyer has an obligation to make
    accurate representations under those circumstances. You just
    don't do it off the seat of your britches when you tell the
    chief counsel that you can't get documents. You should have a
    basis for that, should you not?
        Mr. La Bella. Yes, and they weren't telling us they
    couldn't get them. They said that it was going to take a long
    time, and I don't know what happened with respect to the e-
    mails, whether they got them or not, the task force. I just
    don't know.
        Senator Sessions. I would just add, Mr. Chairman, I agree
    very much that the 3-year statute of limitations is too short.
    In fact, in some ways it needs to be longer than the normal 5
    because these things take time. Election issues and those kinds
    of things take time.
        I suspect--and I have seen it in my State, a short statute
    of limitations on election cases--that if you lose the
    election, it takes the new guy a long time to figure out what
    is happening. By the time he does, the statute has run. It
    really is a problem, and has complicated some of my efforts as
    attorney general in State court.
        So many of the cases involving corruption and fraud and
    extortion, would you not agree, Mr. La Bella, get prosecuted in
    the fourth and fifth year of the statute of limitations?
        Mr. La Bella. Very often, we are right up against it before
    you bring the indictment.
        Senator Sessions. It just takes a long time, and 3 years is
    exceedingly short. In these kinds of cases, if anything, it
    should be longer than 5, and I thank you for raising that
    point.
        Senator Specter. Thank you, Senator Sessions.
        Before we wrap up, just one more factual point. TheVice
    President admitted making these calls in March 1997, but there was no
    investigation started by the Public Integrity Section or anybody else
    in the Department of Justice until July 1997, some 4 months later. Do
    you know why there was that delay?
        Mr. La Bella. I wasn't privy to that, but I remember the
    fact that before that time they thought they were all soft
    money calls. And it wasn't until around July that someone
    realized, based on documents, I think, or testimony, that--
    well, I think it was documents because there was no testimony
    at that point--that there was a hard money/soft money component
    to the calls. I don't think it was until July that someone
    realized that.
        The Attorney General initially--and I know this all from,
    you know, documents I have seen--said, well, this is all soft
    money, there can be no violation. And then later it was
    determined that there was hard money component to it, and
    therefore I think the investigation was started then.
        Senator Specter. But the question wasn't even raised, no
    inquiry, for some 4 months.
        Mr. La Bella. Right.
        Senator Specter. Well, Mr. La Bella, we thank you very much
    for coming. I believe that your testimony is extraordinarily
    important. I believe your report is extraordinarily important.
        In September 1997, the Governmental Affairs Committee was
    conducting an investigation into campaign finances, and we had
    a closed-door session with the Attorney General, the FBI
    Director and the CIA Director where we found out that the CIA
    had information about what was in the FBI's files which the FBI
    hadn't disclosed to the Governmental Affairs Committee.
        And that was a very rugged session; we broke some
    furniture. It was a closed session in the Intelligence
    Committee room. And it was shortly thereafter that you were
    brought in. The Attorney General did not want to appoint
    independent counsel, but she wanted to come close to it, and
    she brought you in as an experienced prosecutor, 17 years'
    experience, or 15 at that time, whatever it was, and known for
    integrity.
        And as soon as you wrote your report on July 16 and it
    became public knowledge, in 1998, I wrote to the Attorney
    General asking her for it, and 1 week later, as I put in the
    record earlier, renewed those requests and had the chairman of
    the full committee join me in those requests. And we had
    started earlier than that, even back in 1997, April 30, asking
    these questions in a very pointed way about the soft money, and
    had asked the Attorney General for a judgment as to violation
    of law.
        Those letters will be put in as a part of this record. They
    have been put in the Congressional Record.
        [The letters referred to follow:]

                                           U.S. Senate,
                                    Committee on the Judiciary,
                                         Washington, DC, July 22, 1999.
    Hon. Janet Reno,
    Attorney General of the United States, U.S. Department of Justice,
            Washington, DC.
        Dear Madam Attorney General: We are writing to request that you
    provide to the Judiciary Committee all documents in the Department's
    possession relating to (1) the Department's investigation of illegal
    activities in connection with the 1996 federal election campaigns, and
    (2) the Department's investigation of the transfer to China of
    information relating to the U.S. nuclear program. Your submission
    should include a copy of Charles La Bella's report recommending
    appointment of a campaign finance independent counsel. In addition,
    your submission should include, but not be limited to, any and all
    memoranda, reports, agreements, notes, correspondence, filings and
    other documents pertaining to:
        1. The allegations against, cooperation from and plea bargains with
    Peter H. Lee.
        2. The allegations against, cooperation from and plea bargains with
    Johnny Chung.
        3. The allegations against, cooperation from and plea bargains with
    Charlie Trie.
        4. The allegations against, cooperation from and plea bargains with
    John Huang.
        5. The Department's reported decision not to prosecute Mr. Wen Ho
    Lee.
        6. Any other individuals who were or still are under investigation
    by the Department for campaign finance violations.
        7. Any other individuals who were or still are under investigation
    by the Department for passing nuclear technology to China.
        These matters--for which we now seek documents--are at the heart of
    this Committee's oversight responsibilities. Indeed, it would be
    difficult to imagine more compelling cases for this Committee's
    oversight than those involving the Department's investigation and
    prosecutorial decisions concerning the possible theft of the nation's
    nuclear secrets and the possible violation of our campaign finance
    laws. The fulfillment of these oversight responsibilities is imperative
    to ensure that our national security and campaign finance interests are
    adequately protected, and to identify any shortcomings in current law
    or procedure so that any necessary corrective action can be taken in a
    timely fashion. Moreover, the information we seek herein is imperative
    if this Committee is to meaningfully address various matters left
    outstanding following your appearances before this Committee on March
    12, May 5 and June 8, 1999.
        We would appreciate a response within ten days as to whether you
    intend to comply with this request, including a timetable for document
    production.
        Thank you for your cooperation.
                Sincerely.
                                       Orrin G. Hatch.
                                       Arlen Specter.

        Additional signatures for the July 22, 1999 letter to Attorney
    General Reno signed by Senators Hatch and Specter.

                                       Bob Smith.
                                       Jon Kyl.
                                       Jeff Sessions.
                                       Strom Thurmond.
                                       Chuck Grassley.
                                       Mike DeWine.
                                   __________
                                                   U.S. Senate,
                                    Washington, DC, September 29, 1999.
    Hon. Janet Reno,
    Attorney General, Main Justice Building, Washington, DC.
        Dear Attorney General Reno: On behalf of the Senate Judiciary
    Committee Task Force on Department of Justice Oversight, I am writing
    to request information referred to in the U.S. Department of Justice,
    Office of the Inspector General Special Report on the Handling of FBI
    Intelligence Information Related to the Justice Department's Campaign
    Fiance Investigation (July, 1999). To conduct its oversight of the
    Department's activities, the Judiciary Committee Task Force needs to be
    able to assess the reliability of the ten pieces of intelligence
    information described in the report, and to do so in the context of any
    prosecutions, plea agreements or other actions by the Justice
    Department to which these ten pieces of information pertain. Therefore,
    the Task Force requests the ten pieces of intelligence information
    mentioned in the report, as well as any analysis available to the
    Department of Justice related to the validity of the information and
    its suitability for use in a prosecution or relevance to a plea
    agreement.
        Any classified information responsive to this request should be
    delivered to the Office of Senate Security, Room S407, The Capitol, to
    the Attention of Mr. Dobie McArthur.
        Your prompt attention to this request is appreciated.
                Sincerely,
                                                         Arlen Specter.

        Senator Specter. But we have persevered, and these are big,
    big questions as they will affect the future of independent law
    enforcement. The independent counsel statute, I predict, will
    come back. It is an oddity that none was appointed here and we
    had the Starr investigation, and then Judge Starr recommends
    against independent counsel. But we need to think these matters
    through, and your work is very important.
        Your report is still under subpoena, Mr. La Bella. We
    haven't physically taken it from you, and don't intend to, but
    the subpoena remains. And we are discussing in the committee
    that some of the members believe this ought to be in the public
    domain, as I do, and we want to be as careful as we can not to
    politicize this matter. We have been very delicate in going
    through the matters today, and you have hypothesized here and
    there and you have referred to some matters in the public
    domain.
        But I think a few nuts and bolts have been spread upon this
    record; as we lawyers say, spread upon the record, I think, in
    the public interest. And we are going to pursue it. We are not
    going to be worn out by these matters, however late the
    Department of Justice records come to us and however voluminous
    they are. Dobie McArthur spent a good part of the early morning
    hours going through those thick reports, as did David Brog and
    the others who have functioned really in Senator Sessions' and
    Senator Grassley's and Senator Thurmond's and Senator
    Torricelli's and Senator Feingold's and Senator Schumer's
    staffs. This is the least expensive investigation in the
    history of Congress, and it is a record which will never be
    broken. You can't get any less than zero in expenditures on an
    investigation.
        But your contribution has been very important, and you have
    been the model of circumspection in what you have had to say
    about it.
        May the record show that Mr. La Bella finally smiled.
        And when Mr. Vega was appointed in your place, in September
    of 1998, I raised hell about it and said there ought to be a
    Judiciary Committee hearing, not that I have any concerns as to
    Mr. Vega, but I have concerns as to what happened to Mr. La
    Bella. And Mr. Vega still hasn't been confirmed. He is the U.S.
    Attorney for the San Diego area as a matter of court
    appointment, and I do hope yet that we will have a hearing on
    Mr. Vega. That is an appropriate forum to go into questions
    which I am not going to except to reference.
        But you are one of the heroes around here, Mr. La Bella, in
    my opinion, and this is a town without many heroes.
        Do you want the last word, Jeff?
        Senator Sessions. I do, because I have been pretty
    aggressive about making this record public. And I have served
    in the Department and I understand Mr. La Bella's concern that
    internal deliberations be made public. But with regard to the
    special counsel law, the Attorney General was required to act.
    This was not an area in which prosecutorial discretion was at
    stake, in my view.
        There is a real question about whether or not she performed
    her duty under the law, a requirement under the law. If there
    was sufficient evidence, she shall call for an independent
    counsel. And to say that this body can never inquire into that
    is to say that the Attorney General doesn't have to abide by
    that law, and there would be no way to find out if she did or
    did not. So, reluctantly, I believe we have had to go into
    this. I know you and Senator Hatch called for the independent
    counsel earlier, and we wouldn't be here today if they had
    answered your call.
        Senator Specter. Well, the law is plain that we have
    oversight authority to get reports like this, to question line
    attorneys, to deal even on pending prosecutions as we are
    pushing ahead on the Loral Hughes technology transfer. And we
    are not going to be deterred and we are not going to be worn
    out. And we have tried, and I think succeeded, in
    depersonalizing this inquiry today.
        We are looking to the future. We want to know how we are
    going to handle the Department of Justice investigations in the
    future and how the statute ought to be changed, and if we go
    back to an independent counsel statute, the finance matters,
    statute of limitations, and felonies--and if we go back to an
    independent counsel statute, how we will learn and how we
    improve the processes for the future.
        This is not a matter as to the Attorney General personally.
    We had a closed-door session on Wen Ho Lee and the Foreign
    Intelligence Surveillance Act, and one of the members of the
    Judiciary Committee raised some very hard questions. And I
    sided with the Attorney General not raising issues as to
    integrity or competency.
        But there are laws to be followed and we are going to do
    our very best to see to it that when these issues arise in the
    future--and they will come up just as surely as the sun will
    rise tomorrow in Washington, D.C., going back to Teapot Dome
    and before--that we use the experience that you have brought to
    bear, Mr. La Bella to improve the system.
        Mr. La Bella. Well, I promise you I am not going to leave
    the country with my report. I will stay in the country.
        Senator Specter. Thank you.
        That concludes our hearing.
        [Whereupon, at 11:46 a.m. the subcommittee was adjourned.]
        [Submissions for the Record follow:]

        Note: Redacted to delete information the disclosure of
    which could adversely affect a pending criminal investigation
    or prosecution or would violate Rule 6(e) of the Federal Rules
    of Criminal Procedure. Redactions completed on March 24, 2000.

    [GRAPHIC] [TIFF OMITTED] T5238A.001

    [GRAPHIC] [TIFF OMITTED] T5238A.002

    [GRAPHIC] [TIFF OMITTED] T5238A.003

    [GRAPHIC] [TIFF OMITTED] T5238A.004

    [GRAPHIC] [TIFF OMITTED] T5238A.005

    [GRAPHIC] [TIFF OMITTED] T5238A.006

    [GRAPHIC] [TIFF OMITTED] T5238A.007

    [GRAPHIC] [TIFF OMITTED] T5238A.008

    [GRAPHIC] [TIFF OMITTED] T5238A.009

    [GRAPHIC] [TIFF OMITTED] T5238A.010

    [GRAPHIC] [TIFF OMITTED] T5238A.011

    [GRAPHIC] [TIFF OMITTED] T5238A.012

    [GRAPHIC] [TIFF OMITTED] T5238A.013

    [GRAPHIC] [TIFF OMITTED] T5238A.014

    [GRAPHIC] [TIFF OMITTED] T5238A.015

    [GRAPHIC] [TIFF OMITTED] T5238A.016

    [GRAPHIC] [TIFF OMITTED] T5238A.017

    [GRAPHIC] [TIFF OMITTED] T5238A.018

    [GRAPHIC] [TIFF OMITTED] T5238A.019

    [GRAPHIC] [TIFF OMITTED] T5238A.020

    [GRAPHIC] [TIFF OMITTED] T5238A.021

    [GRAPHIC] [TIFF OMITTED] T5238A.022

    [GRAPHIC] [TIFF OMITTED] T5238A.023

    [GRAPHIC] [TIFF OMITTED] T5238A.024

    [GRAPHIC] [TIFF OMITTED] T5238A.025

    [GRAPHIC] [TIFF OMITTED] T5238A.026

    [GRAPHIC] [TIFF OMITTED] T5238A.027

    [GRAPHIC] [TIFF OMITTED] T5238A.028

    [GRAPHIC] [TIFF OMITTED] T5238A.029

    [GRAPHIC] [TIFF OMITTED] T5238A.030

    [GRAPHIC] [TIFF OMITTED] T5238A.031

    [GRAPHIC] [TIFF OMITTED] T5238A.032

    [GRAPHIC] [TIFF OMITTED] T5238A.033

    [GRAPHIC] [TIFF OMITTED] T5238A.034

    [GRAPHIC] [TIFF OMITTED] T5238A.035

    [GRAPHIC] [TIFF OMITTED] T5238A.036

    [GRAPHIC] [TIFF OMITTED] T5238A.037

    [GRAPHIC] [TIFF OMITTED] T5238A.038

    [GRAPHIC] [TIFF OMITTED] T5238A.039

    [GRAPHIC] [TIFF OMITTED] T5238A.040

    [GRAPHIC] [TIFF OMITTED] T5238A.041

    [GRAPHIC] [TIFF OMITTED] T5238A.042

    [GRAPHIC] [TIFF OMITTED] T5238A.043

    [GRAPHIC] [TIFF OMITTED] T5238A.044

    [GRAPHIC] [TIFF OMITTED] T5238A.045

    [GRAPHIC] [TIFF OMITTED] T5238A.046

    [GRAPHIC] [TIFF OMITTED] T5238A.047

    [GRAPHIC] [TIFF OMITTED] T5238A.048

    [GRAPHIC] [TIFF OMITTED] T5238A.049

    [GRAPHIC] [TIFF OMITTED] T5238A.050

    [GRAPHIC] [TIFF OMITTED] T5238A.051

    [GRAPHIC] [TIFF OMITTED] T5238A.052

    [GRAPHIC] [TIFF OMITTED] T5238A.053

    [GRAPHIC] [TIFF OMITTED] T5238A.054

    [GRAPHIC] [TIFF OMITTED] T5238A.055

    [GRAPHIC] [TIFF OMITTED] T5238A.056

    [GRAPHIC] [TIFF OMITTED] T5238A.057

    [GRAPHIC] [TIFF OMITTED] T5238A.058

    [GRAPHIC] [TIFF OMITTED] T5238A.059

    [GRAPHIC] [TIFF OMITTED] T5238A.060

    [GRAPHIC] [TIFF OMITTED] T5238A.061

    [GRAPHIC] [TIFF OMITTED] T5238A.062

    [GRAPHIC] [TIFF OMITTED] T5238A.063

    [GRAPHIC] [TIFF OMITTED] T5238A.064

    [GRAPHIC] [TIFF OMITTED] T5238A.065

    [GRAPHIC] [TIFF OMITTED] T5238A.066

    [GRAPHIC] [TIFF OMITTED] T5238A.067

    [GRAPHIC] [TIFF OMITTED] T5238A.068

    [GRAPHIC] [TIFF OMITTED] T5238A.069

    [GRAPHIC] [TIFF OMITTED] T5238A.070

    [GRAPHIC] [TIFF OMITTED] T5238A.071

    [GRAPHIC] [TIFF OMITTED] T5238A.072

    [GRAPHIC] [TIFF OMITTED] T5238A.073

    [GRAPHIC] [TIFF OMITTED] T5238A.074

    [GRAPHIC] [TIFF OMITTED] T5238A.075

    [GRAPHIC] [TIFF OMITTED] T5238A.076

    [GRAPHIC] [TIFF OMITTED] T5238A.077

    [GRAPHIC] [TIFF OMITTED] T5238A.078

    [GRAPHIC] [TIFF OMITTED] T5238A.079

    [GRAPHIC] [TIFF OMITTED] T5238A.080

    [GRAPHIC] [TIFF OMITTED] T5238A.081

    [GRAPHIC] [TIFF OMITTED] T5238A.082

    [GRAPHIC] [TIFF OMITTED] T5238A.083

    [GRAPHIC] [TIFF OMITTED] T5238A.084

    [GRAPHIC] [TIFF OMITTED] T5238A.085

    [GRAPHIC] [TIFF OMITTED] T5238A.086

    [GRAPHIC] [TIFF OMITTED] T5238A.087

    [GRAPHIC] [TIFF OMITTED] T5238A.088

    [GRAPHIC] [TIFF OMITTED] T5238A.089

    [GRAPHIC] [TIFF OMITTED] T5238A.090

    [GRAPHIC] [TIFF OMITTED] T5238A.091

    [GRAPHIC] [TIFF OMITTED] T5238A.092

    [GRAPHIC] [TIFF OMITTED] T5238A.093

    [GRAPHIC] [TIFF OMITTED] T5238A.094

    [GRAPHIC] [TIFF OMITTED] T5238A.095

    [GRAPHIC] [TIFF OMITTED] T5238A.096

    [GRAPHIC] [TIFF OMITTED] T5238A.097

    [GRAPHIC] [TIFF OMITTED] T5238A.098

    [GRAPHIC] [TIFF OMITTED] T5238A.099

    [GRAPHIC] [TIFF OMITTED] T5238A.100

    [GRAPHIC] [TIFF OMITTED] T5238A.101

    [GRAPHIC] [TIFF OMITTED] T5238A.102

    [GRAPHIC] [TIFF OMITTED] T5238A.103

    [GRAPHIC] [TIFF OMITTED] T5238A.104

    [GRAPHIC] [TIFF OMITTED] T5238A.105