[Congressional Record Volume 140, Number 22 (Thursday, March 3, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
             WHITEWATER AND MADISON GUARANTY INVESTIGATION

  Mr. BOND. Mr. President, I rise today to take a few minutes of the 
Senate's time to outline for my colleagues where we are in terms of the 
ongoing disclosures with the White House, the Resolution Trust 
Corporation and the Treasury's activities regarding Madison Guaranty 
and related issues.
  As my colleagues know, Madison Guaranty was a Little Rock savings and 
loan which was owned by James McDougal, the business partner of the 
Clintons in the Whitewater real estate deal. Madison Guaranty was a 
classic S&L story of insider dealing, reckless loan policies and 
ultimate failure with the U.S. taxpayers picking up the tab. But in 
this case, there is a small twist. Many of its benefactors were in 
politics and Government.
  The tangled web of Madison and Jim McDougal has led to two criminal 
referrals by the RTC, an ongoing civil action investigation by the RTC, 
a conflict of interest case for the Rose law firm and a trial, which is 
about to start, concerning David Hale. It has also led to the 
appointment by the Attorney General of Special Prosecutor Robert Fiske, 
who is looking at all these issues to see what happened, who was 
involved, who benefited and was there a coverup.
  In the middle of all this action, as has been noted by our 
distinguished Republican leader, Republicans in the House and Senate 
have been attempting to get the facts, not to interfere, to impede or 
to delay the investigation, but in order to fulfill our obligation of 
oversight of those who are now running the Government. This means 
asking questions of the RTC, the FDIC, the OCC and others about whether 
they are receiving outside pressure; is this White House staff 
attempting to get information that these so-called independent agencies 
would never give to anyone else? Is this information being provided? If 
so, by whom and to whom?
  As my colleagues know, it was in the course of asking these 
questions, questions some of my colleagues do not believe should ever 
have been asked, that we first discovered from the acting head of the 
RTC, Mr. Roger Altman, that he had briefed the White House staff on the 
status of the RTC investigation. For those of you who are saying stay 
out of the way, the special counsel is on the case, perhaps you would 
be interested to know that this meeting took place 2 weeks after Mr. 
Fiske was named.
  Mr. President, let me tell the Senate about this episode which should 
go a long way toward explaining why the Republicans signed and sent a 
letter to the majority leader that Senator Dole has just outlined.
  When Mr. Altman was before the Banking Committee on February 24, I 
asked him a series of questions about how he and the RTC had been 
handling the case. Given the sensitivity of the case, with the 
President and the First Lady having been named in a criminal referral 
by the RTC regional office, I asked Mr. Altman:

       Are there special measures taken in the resolution of a 
     failed thrift when you find it to be affiliated with a high-
     profile individual, someone in Government, for example?

  Mr. Altman replied:

       The procedures, Senator, which the RTC follows are intended 
     to be identical in each case; and they certainly have been 
     identical in the case discussed this morning.

  He went on to say:

       When the possibility of criminal referral was brought to 
     me, I took one step. That was to instruct all the relevant 
     RTC personnel to handle criminal judgments in the same exact 
     fashion that they would handle any other PLS matter with no 
     deviation whatsoever.

  I should note for the record that Mr. Altman answered these questions 
before he had divulged the meeting at the White House in February. I 
should also point out that in the course of this discussion with me 
when he was assuring me and the Senate that the RTC was treating the 
Madison case in an identical manner and that the staff should treat the 
criminal referral in the exact same fashion with no deviation 
whatsoever, that Mr. Altman did not at that point see fit to tell us 
about how they had not followed the exact same or identical procedures. 
But it only gets worse.
  Later in the hearing, I asked Mr. Altman:

       When did you become aware of the RTC recommendation that 
     further criminal prosecution be taken against Madison?

  Mr. Altman replied:

       Last fall. I was advised that a question of referral to the 
     Justice Department was under consideration at the RTC and, as 
     other members of the RTC will attest, I said that normal 
     procedures with no deviations whatsoever should be pursued, 
     including chain of command in terms of reaching that 
     conclusion.

  I then asked him:

       Were you aware that the regional office had asked the 
     national office to make a determination as to whether the 
     Clinton's names should be in the new expanded referral?

  Mr. Altman replied:

       No, I was simply informed that this issue was on the table, 
     and my reaction was, and I only had one conversation about 
     it, the normal procedure should be followed. That is the way 
     we are going to handle it from beginning to end.

  I then asked:

       How was the White House notified in the referral?

  Mr. Altman replied:

       They were not notified by the RTC, to the best of my 
     knowledge.

  I then followed up:

       Nobody in your agency, to your knowledge, advised the White 
     House staff that this was going to be a major--this could be 
     a major source of concern?

  Mr. Altman replied:

       Not to my knowledge.

  Now, Mr. President, what we have just heard is the repeated 
assurances that the RTC did nothing different in the Madison case from 
any other case, that the head of the RTC had instructed his people from 
the moment he was aware of Madison's new criminal referral to treat the 
case no differently than all others.
  But we now know that this story is simply not true. Not only did the 
head of the RTC brief the White House staff--and I believe it bears 
repeating--but by briefing Mr. Bernie Nussbaum and Ms. Maggie Williams, 
Mr. Altman was briefing the very people who stand accused of taking 
Whitewater-Madison files out of the late Mr. Foster's office and then 
attempting to conceal that they existed. These files are certainly ones 
that the RTC's own investigators would want to review.
  But now we find out that at least two additional meetings were held, 
both late last year, as the RTC was putting together their second 
criminal referral.
  According to the Washington Post article--and this was confirmed to 
me by Mr. Altman by telephone last night--Jean Hanson, the general 
counsel of the Treasury--and I assume acting counsel of the RTC at the 
time--briefed Mr. Nussbaum in late September and told him that the 
Clintons would be named in the criminal referral.
  The second meeting occurred in October and again included Jean Hanson 
plus two other Treasury political appointees and was held in Mr. 
Nussbaum's office. Also in attendance, according to the Post, were 
White House Communications Director Mark Gearan and the designated 
White House spokesman, Bruce Lindsey.
  Before the meeting, Hanson was briefed by RTC senior Vice President 
Bill Roelle.
  Mr. President, something is very wrong. Either Mr. Altman 
deliberately misled the committee, which I do not believe he did, or 
the political appointees beneath him deliberately failed to inform him 
or to correct the misimpression left by him in his testimony when the 
Secretary of the Treasury came before the Banking Committee the next 
day or prior to last night.
  Mr. Altman has recused himself. It is better late than never. And the 
President's Chief of Staff, Mack McLarty, has now laid down the law. No 
more meetings. Again, better late than never.
  But this is something that should not have to be stated explicitly. 
Has Ms. Hanson recused herself? After all, she has had three meetings. 
She is the general counsel and chief lawyer of the Department of the 
Treasury.
  Did she suggest to Mr. Altman that a February briefing was in order? 
Did she set up other meetings that have not yet come to light? Why was 
she involved in the first place? Is it true that she has been acting as 
the general counsel of the RTC as there is no one currently in that 
position?
  As I stated in the committee, we now have five examples of what it 
takes for Presidential appointees in this administration to see 
conflicts of interest and bow out. They have to be caught in the act.
  Mr. President, for those of us in Congress who work with the 
administration on a daily basis, trust is a very important commodity. 
Unfortunately, it is easy to lose and hard to regain, and the 
administration's handling of Whitewater-Madison has seriously eroded 
the trust of many of us in the body of the administration.
  I believe the Senate owes it to the public to get to the bottom of 
this, and that is why I support our minority leader in asking for 
further hearings.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa [Mr. Grassley] is 
recognized.

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