[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

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                       COMMITTEE ON THE JUDICIARY

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

        Subcommittee on Administrative Oversight and the Courts

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


                            C O N T E N T S

                              ----------                              

                    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.

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