[Congressional Record Volume 140, Number 24 (Tuesday, March 8, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                               WHITEWATER

  (Mr. MICHEL asked and was given permission to address the House for 1 
minute, and include extraneous matter.)
  Mr. MICHEL. Mr. Speaker, until now I have not made any public comment 
on the growing Whitewater scandal except to ask the Speaker to hold 
hearings in the House.
  I believe such hearings would carry out our constitutional duties of 
oversight and I still believe they would be useful.
  But I feel it necessary today to address ill-advised allegations made 
by President Clinton yesterday that the Whitewater affair is somehow 
the product of what he calls hysteria generated by Republicans.
  May I respectfully suggest that charges of hysteria by the President 
may be the only signs of hysteria this case has thus far generated.
  Since he did not specifically identify any example of this alleged 
hysteria it is difficult to know to whom or what he was referring.
  What I do know is that every major investigation made by the media--
hardly known for their Republican sympathies--has uncovered many 
important questions about Whitewater.
  There are also a growing number of questions that need to be answered 
about how the White House has dealt with the affair.
  The President saw fit to chastise Republicans for what he terms 
``careless use of language and careless use of the facts.'' Those 
charges certainly cannot be directed at our colleague Jim Leach of Iowa 
who has been very cautious and scrupulous about what he has said on the 
issue.
  Perhaps it would be best for a bipartisan congressional hearing to 
look into the question of just who has been careless in language in 
facts and in other matters.
  I do not believe such a request is hysterical. I believe it is, 
instead, a commonsense view that should be shared by both parties.
  I realize that Special Counsel Robert B. Fiske does not favor 
congressional hearings into Whitewater and has set forth his reasons in 
a letter to our colleague, Jim Leach of Iowa, ranking minority member 
of the House Banking Committee.
  At this point I am inserting in the Record Mr. Leach's reply to Mr. 
Fiske's request, as well as my letter of January 25, addressed to the 
Speaker, requesting hearings. I believe our colleagues will discover 
that there are very important reasons why a congressional hearing or 
hearings on Whitewater should be held:

                                     Committee on Banking, Finance


                                            and Urban Affairs,

                                    Washington, DC, March 7, 1994.
     Robert B. Fiske, Jr.,
     Independent Counsel, Office of the Independent Counsel, 
         Little Rock, AR.
       Dear Mr. Fiske: Thank you for the courtesy of your call 
     today alerting me to your letter urging no congressional 
     hearings into Madison/Whitewater. As I indicated, your 
     request that the Banking Committee not hold hearings in the 
     areas covered by the grand jury's ongoing investigation would 
     have a ``chilling'' effect on the role of congressional 
     oversight.
       I understand your concern for the integrity of the criminal 
     justice process. However, the public's concerns, such as the 
     integrity of the regulatory system, abuse of Executive Branch 
     power, and the need for legislative remedies, are broader 
     than just those issues and events which rise to the level of 
     criminal wrongdoing. In addition, agencies of the government 
     as well as the White House have precise rules that govern 
     their employees. Prohibitions against giving preferential 
     treatment to any individual, losing independence or 
     impartiality, or making decisions outside official channels 
     appear to have patently been violated in recent months. Few 
     issues would be more appropriate for congressional review. 
     The Banking Committee not only has the authority but the 
     obligation to conduct investigatory hearings into Madison/
     Whitewater. The key is to ensure your ongoing investigation 
     is assisted not undercut.
       As for the contention that we should not subpoena people 
     related to your investigation, the irony stands out: it was a 
     congressional hearing on the Senate side that produced the 
     acknowledgement that meetings took place between the Treasury 
     and the White House concerning criminal referrals relating to 
     Madison. If it had not been for the Senate hearing producing 
     this troubling information, your office would have had no 
     basis to issue the White House and Treasury subpoenas on 
     Friday. Furthermore, from a historical perspective 
     congressional committees met at the same time Archibald Cox 
     investigated Watergate. It was Senator Sam Ervin's 
     congressional investigation which brought out the 
     existence of the Watergate tapes, an integral finding for 
     the Watergate prosecutor.
       The Constitution, numerous Supreme Court precedents, and 
     statutes clearly establish Congress's investigatory power as 
     an essential component of its legislative function.
       To honor the request in your letter would be an abdication 
     of Congress's investigative responsibility and be in direct 
     contravention to precedent. The pendency or prospect of 
     criminal litigation does not serve as a basis to decline 
     congressional demands for information either in the form of 
     document production or testimony. For instance, in addition 
     to the congressional hearings concerning Iran-Contra and 
     Watergate, the House Banking Committee recently conducted 
     hearings on BNL, BCCI, Lincoln Savings, Silverado, and other 
     failed financial institutions while the Executive Branch was 
     pursuing law enforcement.
       Inherently, Committee hearings do not necessarily pose a 
     threat to the integrity of the grand jury process. In the 
     Iran-Contra circumstance, Congress's granting of immunity to 
     key witnesses was troublesome, but I see no reason the 
     Banking Committee should consider offering any individuals 
     immunity in this hearing. Furthermore, the Committee has 
     hearing rules which allow for the protection of confidential 
     and potentially defamatory material.
       The establishment of the independent counsel office does 
     not relieve the Congress of either its broad constitutional 
     responsibility to provide oversight of the Executive Branch 
     or its specific duties as prescribed by law. In balancing 
     competing interests, the public's right to know should not be 
     overwhelmed by your prosecutorial strategies. Indeed, I'd be 
     surprised if a hearing process did not enhance your office's 
     knowledge of the issues at stake. No credible possibility 
     exists that any hearing the House Banking Committee holds 
     would undercut your investigatory efforts or compromise your 
     ability to pursue these matters with the utmost vigor.
           Sincerely,
                                                   James A. Leach,
                                                   Ranking Member,
                                  ____

                                         House of Representatives,


                              Office of the Republican Leader,

                                 Washington, DC, January 25, 1994.
     Hon. Thomas Foley,
     Speaker, House of Representatives, The Capitol, Washington, 
         DC.
       Dear Mr. Speaker: As you know, Senator Dole and I requested 
     on January 12, 1994 that a select committee be established to 
     look into the Whitewater/Madison circumstances. Later that 
     day, the White House announced that it would call for a 
     special counsel on the matter. Accordingly, as a result of 
     the Justice Department's willingness to pursue an 
     investigation of Whitewater/Madison through a special 
     counsel, on behalf of the Republican Leadership I have 
     decided not to pursue the establishment of a select committee 
     at this time. It remains the view of the Minority, however, 
     that relevant committees of Congress would be abdicating 
     their constitutional oversight obligation if they refuse to 
     delve into and hold hearings on the issues surrounding the 
     Whitewater/Madison affair.
       From the Banking Committee's perspective, the issues 
     surrounding the Madison case involve the possible malfeasance 
     of state regulation of thrifts, public ethics, and 
     accountability for the S&L debacle. Specifically, there are a 
     number of legislative and regulatory aspects relating 
     directly to the failure and resolution of Madison Guaranty 
     that should be investigated. These inquiries include whether 
     there were insider loan abuses, whether sound underwriting 
     standards were followed and whether Madison made political 
     contributions, gifts or improper personal loans with insured 
     deposits. Other lines of inquiry include the timeliness of 
     the actions of state and federal regulators and the extent to 
     which breaches of professional responsibility and numerous 
     conflicts of interest by accountants, law firms and federal 
     regulators contributed to Madison Guaranty's failure. Most 
     troubling is the abuse of a federally-insured institution by 
     a state political system which, in the end, resulted in 
     losses to all the taxpayers.
       From the Small Business Committee's perspective, there 
     appear to be numerous abuses of an SBA program and the misuse 
     of SBA funds. The Committee should continue to look into the 
     failure of Capitol Management Services, Inc. and the SBA's 
     oversight of this specialized small business investment 
     company (SSBIC). The Committee should investigate whether 
     SSBIC loans, which are supposed to be targeted for socially 
     and economically disadvantaged borrowers, were improperly 
     granted. Further, claims that high government officials 
     unduly pressured Capital Management into making improper 
     loans should be investigated. Finally, it appears that a 
     loan to a Madison related party was improperly used by the 
     Whitewater Development Corporation. There appear to be 
     numerous links between the now defunct Capital Management 
     and the failed Madison Guaranty including several projects 
     on which both Capital Management and Madison made loans 
     which later defaulted.
       From the Judiciary Committee's perspective, the Madison 
     case provides a number of oversight issues, including the 
     adequacy of the Justice Department's investigation of Madison 
     Guaranty prior to the recusal of the U.S. Attorney in Little 
     Rock; the Justice Department's overall record in handling 
     criminal referrals from federal banking agencies; 
     implications of the statute of limitations for S&L crimes; 
     renewal of the Independent Counsel law and its implications 
     on Special Counsel Fiske; and, finally, the conflicts that 
     arise from the government's contracting out for legal 
     services.
       Finally, let me stress it has been the long-standing view 
     of the Minority party that the committee with the largest 
     oversight jurisdiction, the Government Operations Committee, 
     should be the one committee in Congress controlled by the 
     Minority party. This is particularly important for such 
     circumstances as we find today where the Majority party is 
     the same as that of the Administration and both desire to 
     limit oversight because of concern for embarrassment to the 
     leadership of that party.
       The public's interest, above all circumstances of this 
     matter, is for full disclosure. As you know, in oversight of 
     a series of banking and savings and loan failures over the 
     last decade, congressional hearings proceeded while Justice 
     Department investigations were underway. For example, 
     congressional hearings on Lincoln Savings and Loan and 
     Silverado Savings ran concurrently with Justice Department 
     investigations and did not impede or hinder prosecutorial 
     efforts. The Minority would continue to be exceedingly 
     sensitive to the problems attendant to the possibility of 
     interfering with Justice Department inquiries in this matter.
       Accordingly, I would urge you to direct the committees of 
     jurisdiction to proceed in an orderly fashion with 
     responsible oversight investigations and hearings on 
     Whitewater/Madison.
           Sincerely,
                                                       Bob Michel,
     Republican Leader.

                          ____________________