[Congressional Record Volume 140, Number 48 (Thursday, April 28, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: April 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                               WHITEWATER

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                        Thursday, April 28, 1994

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, April 27, 1994, into the Congressional Record:

                               Whitewater

       Despite the extensive media coverage, it is often difficult 
     to understand the allegations, to say nothing of the facts, 
     surrounding Whitewater. Many people believe the President and 
     the First Lady have done nothing wrong and are angry about 
     what they see as a political distraction. Another view is 
     that the allegations are credible and the White House may be 
     holding back information. Other are simply confused. At this 
     point, I know of no evidence the President or the First Lady 
     has done anything illegal. However, when the agenda of a 
     President is clouded by allegations such as those concerning 
     Whitewater, I think it is important to get all the facts out 
     as quickly as possible so that the country can move on.


                               Background

       The Whitewater affair involves several things, most 
     directly the financial relationship between Bill Clinton and 
     two businesses: the Whitewater Development Corporation and 
     Madison Guaranty Savings and Loan.
       In 1978, while he was Attorney General of Arkansas, Bill 
     Clinton, along with Hillary Clinton and James and Susan 
     McDougal, entered into a real estate venture, which they 
     later named the Whitewater Development Corporation. 
     Whitewater consisted of over 200 acres of land in northern 
     Arkansas that the investors hoped to develop and sell as 
     individual properties. Clinton was Governor of Arkansas from 
     1979 to 1981 and 1983 to 1992. The Clintons sold their share 
     of the Whitewater corporation in 1992. In 1982 James McDougal 
     bought a savings and loan, which he renamed Madison Guaranty 
     Savings and Loan. Madison, like many S&Ls, got into financial 
     trouble in the mid-1980s. Madison was taken over by federal 
     regulators in 1989 at an estimated $60 million cost to the 
     taxpayer.
       The Resolution Trust Corporation (RTC), the federal agency 
     charged with disposing of failed S&Ls, began an investigation 
     of Madison that in 1992 resulted in a referral to the Justice 
     Department for a criminal investigation of Madison, including 
     possible links to the Whitewater Corporation and the 1984 
     Clinton gubernatorial campaign. The Clintons were named in 
     the referral as possible beneficiaries of allegedly illegal 
     Madison transactions. In January, Attorney General Reno 
     appointed Robert Fiske, a former U.S. attorneys, as special 
     counsel for the investigation.


                          principal questions

       The RTC investigation apparently uncovered evidence of 
     questionable financial practices by Madison in relation to 
     Whitewater and the Clinton gubernatorial campaign. The 
     central question is whether funds from Madison were diverted 
     illegally to Clinton's gubernatorial campaign fund. Madison 
     money also might have been used improperly to sustain the 
     unprofitable Whitewater venture. There is no evidence that 
     the Clintons were aware of the alleged funding of Whitewater 
     or any illegal donations to the governor's campaign.
       A second question is whether Clinton might have repaid 
     Madison with political favors, including lenient treatment by 
     regulators, or whether there was special treatment because 
     the Rose law firm, including Hillary Clinton, represented 
     Madison before state regulators. The evidence seems to show 
     otherwise--Arkansas regulators were at least as aggressive as 
     federal officials in dealing with the Madison case.
       The third question relates to charges made by David Hale, 
     then the owner of Capital Management Services, a corporation 
     licensed by the Small Business Administration to make 
     guaranteed loans to underprivileged individuals seeking to 
     start their own businesses. Hale, who was convicted in mid-
     March on two counts of fraud related to Capital Management 
     Services, has charged that in 1986 Clinton pressured him to 
     make loans that benefitted both Madison and Whitewater. 
     President Clinton denies ever pressuring Hale, and the 
     Clintons say they were unaware of any use of loans to benefit 
     Whitewater.
       Finally, there are the separate questions raised about the 
     Clinton administration's handling of Whitewater. First, have 
     they covered up the facts? Second, did the Washington RTC 
     office interfere with the regional office's investigation? 
     Third, did any of the various contacts between the White 
     House and RTC officials constitute attempts to impede the 
     investigation? Thus far, there is little to suggest 
     interference at either level.


                             investigations

       Unanswered questions remain about dealings in Arkansas, so 
     I think the appointment of the special counsel was in order. 
     The special counsel is currently investigating these 
     questions and has convened a grand jury to hear testimony and 
     evidence.
       My concern is that his investigation could take months. The 
     facts need to get out as quickly and fairly as possible. So 
     far as I am aware, the White House is cooperating with the 
     special counsel and it has made public a significant amount 
     of information, including the Clintons' tax records. These 
     efforts have helped to defuse the situation. Some in Congress 
     argue that the work of the special counsel and the 
     President's disclosures make congressional hearings 
     unnecessary. My present view is that we should proceed with 
     hearings. Hearings not only help Congress fulfill its 
     responsibility to explore possible abuses of power in the 
     executive branch, they also give the public the facts it 
     needs to judge the performance of the President and his 
     administration. The job of the Congress is to conduct a 
     legitimate inquiry without impeding a thorough and fair 
     criminal investigation. Clearly the Congress has to work out 
     an accommodation with the special counsel. We should not put 
     the criminal investigation at risk for the sake of some 
     publicity.
       The news media is part of this process as well. The media 
     has a responsibility to pursue the story, but also to pursue 
     it responsibly. Several stories have been published about 
     events and actions for which there is no nameable offense let 
     alone any evidence of impropriety.


                               Conclusion

       My view is that most Americans give a President the benefit 
     of the doubt and will continue to do so until they are 
     confronted with strong proof of wrongdoing. They are far more 
     interested in hearth care, welfare, jobs, and other issues, 
     but they are also quite curious and even a little confused 
     about Whitewater, and they want to know more. Like them, I 
     simply do not feel I know the full facts. The investigations 
     should proceed, but the White House and Congress need to make 
     sure their primary focus remains on finding solutions to the 
     most pressing national problems.

                          ____________________