[Congressional Record Volume 140, Number 132 (Tuesday, September 20, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: September 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
CALL FOR INVESTIGATION OF POSSIBLE CONFLICTS OF INTEREST
The SPEAKER pro tempore. Under the Speaker's announced policy of
February 11, 1994, and June 10, 1994, the gentleman from Indiana [Mr.
Burton] is recognized for 60 minutes as the designee of the minority
leader.
Mr. BURTON of Indiana. Mr. Speaker, I will not take the whole 60
minutes, but we will go into some very interesting issues tonight.
Everybody in the country has heard about Whitewater and they have heard
about some of the mysterious things that have happened in the
investigation into Vince Foster's death, but there is a lot of other
interesting things that have happened involving the Rose Law Firm in
Little Rock, AR and Hillary Rodham Clinton and the former Governor of
Arkansas, Bill Clinton.
Tonight I would like to talk about two cases involving the failure of
two savings and loans and the involvement of the Rose Law Firm and some
possible conflicts of interest that should be investigated by the
Federal Deposit Insurance Corporation and the Federal Savings and Loan
Insurance Corporation, as well as the Special Counsel, Mr. Starr.
First American Savings and Loan of Oak Brook, IL was seized by the
Federal authorities for the Federal Government in 1986. First American
Savings and Loan of Oak Brook was headed by former Illinois Gov. Dan
Walker.
Dan Lasater, a friend of Bill Clinton, had a brokerage business,
United Capital Corp., and it traded Treasury bond futures for First
Federal Savings and Loan of Illinois and others. Dan Lasater ran a
brokerage firm in Little Rock, AR. He was a big contributor to Bill
Clinton's gubernatorial campaigns, he was a friend of Bill Clinton and
he flew Clinton around in his private jet. Lasater gave Roger Clinton,
Bill Clinton's brother, a job and loaned him $8,000 to pay off a drug
debt.
Lasater's brokerage firm received a lucrative contract from the
government of Arkansas worth $750,000 to sell State bonds for a new
Arkansas State Police communications network. He also received millions
of dollars in bonds for the Arkansas Development Financial Authority.
In 1986, Lasater was convicted on drug charges. This is Bill
Clinton's good friend. He served only part of his sentence and he was
pardoned after serving a small part of his sentence by then Gov. Bill
Clinton.
In 1985, Dan Walker, the former Governor of Illinois, discovered that
First American Savings and Loan was losing money big time on its
Treasury bond future trades with Dan Lasater. According to court
records, Mr. Walker lost approximately $361,000. Walker claims that
Lasater made unauthorized trades with First Federal's money and, Walker
told the Chicago Tribune they, Lasater & Co., had general authority to
trade, but they were supposed to call the First American operating
officer at the time they made the trade and they did not do that.
Walker sued Lasater for $3.3 million for mail, wire, and securities
fraud. The suit charged that one of Lasater's employees used First
Federal's money to carry out what were in effect personal Treasury bill
trades.
Does this sound familiar? Members heard me on the floor not long ago
talking about a gentleman named Dennis Patrick from Kentucky. He had a
similar story. According to Mr. Patrick in published accounts, between
$60 million and $107 million was traded in an account in his name at
Lasater & Co. without Mr. Patrick's knowledge. They traded $60 million
to $107 million in bond trades in his account and he did not even know
about it. On 1 day, $23 million was traded on his account without his
knowledge. Now when Federal regulators, the FSLIC, the Federal Savings
and Loan Insurance Corporation, seized First American of Illinois, they
continued to pursue the lawsuit against Lasater. They wanted to recover
as much money as they possibly could.
Dan Walker, the former Governor of Illinois, was accused of lending
himself $1.4 million in federally insured depositors' money and later
ended up being convicted of bank fraud and perjury.
Hopkins & Sutter, I know this is very complicated, but Hopkins &
Sutter, a Chicago law firm, was the primary contractor or law firm for
the Federal Savings and Loan Insurance Corporation. Hopkins & Sutter
hired or subcontracted with a law firm in Little Rock, AR, called the
Rose Law Firm to handle the suit against Lasater.
I hope everybody will think about this, my colleagues. Lasater & Co.,
Mr. Lasater was a very close friend of Bill Clinton. He flew around in
his private jet. They went on parties together. Lasater was convicted
along with Bill Clinton's brother of drug dealing. Lasater paid one of
Bill Clinton's brother's drug loans of $8,000. And after Lasater was
convicted, he was pardoned by then Gov. Bill Clinton. Rose Law Firm is
hired as a subcontractor for the purpose of the suit against Lasater.
They are going to go after Lasater. And Hillary Rodham Clinton and
Vince Foster were the two lawyers from the law firm, the Rose Law Firm,
to go after Mr. Lasater.
{time} 1750
Think about that for a minute. They are going after Lasater for the
Federal Government at the same time that he is a very good friend of
Gov. Bill Clinton and has been pardoned for drug trafficking by the
Governor. Dan Lasater was convicted of drug charges in 1986, as I said,
and served only a small part of his sentence, and was later pardoned by
the Governor, now President Clinton.
Now enter Hillary Rodham Clinton, Rose Law Firm's powerhouse lawyer,
and Vince Foster. They handled the Government's suit against Lasater.
It is hard to believe this conflict of interest could occur, but they
are handling the case against Lasater, Bill Clinton's friend.
Because of the close ties between Lasater and Bill and Hillary
Clinton, she never should have been involved in this matter in any way.
That is a big conflict of interest.
In late 1987 a confidential settlement was reached between the
Government and Lasater. He ended up paying $200,000 of the $3.3 million
suit. That is all, just $200,000.
The Chicago Tribune learned of the amount of the settlement from a
February 1989 letter that Foster wrote to the FDIC. The letter was not
part of the court filings. Court records show that Hillary Rodham
Clinton and Vince Foster negotiated this settlement from $3.3 million
down to $200,000. It started on May 8, 1987, when Hillary Rodham
Clinton signed an amended complaint on this case that reduced the
damages sought by the FSLIC against Lasater from $3.3 million down to
$1.3 million. She negotiated the reduction of this down from $3.3
million down to $1.3 million for the FDIC at a time when the guy,
Lasater, she was supposed to be nailing to the wall was a good friend
of she and Bill Clinton, the Governor of Arkansas. The FDIC said
Hillary's involvement was not extensive enough to constitute a conflict
of interest. This sounds like a whitewash by the FDIC, and to cover
their tails the FDIC said under Federal rules existing at the time she
did not have to inform the Federal Government about her close
relationship with Lasater and Lasater's company. The FDIC said Hillary
worked only 3 hours on the case. They said she was not involved in the
final decision to settle at $200,000. The FDIC says Vince Foster did
most of the work on this case. He was her partner at Rose. The FSLIC
that hired Hillary and Vince Foster and the Rose Law Firm could not
remember details of the case. The FDIC's earlier inquiry was primarily
a review of court records and records submitted by the Rose Law Firm.
The FDIC did not interview Hillary Rodham Clinton.
Because of the apparent FDIC whitewash, in late February Senator
Alfonse D'Amato of New York requested the FDIC Acting Chairman, Andrew
Hove, to have the FDIC inspector general conduct a thorough review of
this matter and Madison Guaranty. Hove asked the inspector general to
complete its investigation and report to him in 90 days. That was back
in February. Here we are in September and the report has not yet come
down. Now why? Why has the IG's report not come down? It was demanded
or requested by Senator D'Amato of the Senate Banking Committee and it
was supposed to be done in 90 days, and here we are almost a year later
or 8 months later and we have not heard a thing. I wonder if the White
House has anything to do with stopping that report? Obviously 90 days
are over, and we still have no report on this case.
Thomas Scorza, a former assistant U.S. attorney who teaches legal
ethics at the University of Chicago Law School, said the following to
the Chicago Tribune newspaper:
A lawyer is required to represent the interests of their
client zealously. There is a substantial question about
whether an attorney was representing a client zealously if
the opponent of the client is someone with whom the attorney
has a political, financial, and personal relationship.
And make no mistake about it, Hillary Rodham Clinton and Bill Clinton
had a very close relationship with Lasater, and this was not made known
when Hillary Rodham Clinton took on that case. In looking at the
settlement he went on,
Were they, the Rose Law Firm and Hillary Rodham Clinton,
looking after Lasater's interests or the interests of the
Federal Deposit Insurance Corporation?
Actually the Federal Savings and Loan Insurance Corporation. Scorza
told the Chicago Tribune that Hillary Rodham Clinton should not have
worked on the case, especially since the final settlement was
confidential.
William Wernz, a former chairman of the Minnesota Lawyers
Responsibility Board for the Minneapolis Tribune said that the bar
association model rules define as conflict of interest instances where
it is likely a lawyer,
might pull a punch because he or she has some relationship
with the other side or some third party of interest.
Law and accounting firms are usually barred from
representing the Federal Government in S&L cases if they have
personally represented the S&L or if they have personal links
to the persons targeted by the lawsuit,
and that was specifically the case with Lasater and company. Dan
Lasater was a friend of Bill Clinton's. He contributed generously to
Bill Clinton's campaign for Governor. He flew Clinton around in his
private jet. They had parties together, they went out together all of
the time.
Dan Lasater gave Roger Clinton a job and loaned him a large sum of
money to pay drug debts, and after Lasater was convicted on drug
charges and served a small part of his sentence, then Gov. Bill Clinton
pardoned him.
Yet his wife, Hillary Rodham Clinton, who knew Lasater very well,
took the side of the Government in the case against Lasater, reduced
the settlement from $3.3 million down to $200,000 and the FSLIC was
literally screwed out of all of that money from $3.3 million down to
$200,000. There was definitely a conflict of interest that she did not
let the American people know or the FSLIC know about.
Here is a related problem: Home Federal Savings and Loan of
Centralia, IL, was also seized by Federal regulators. Home Federal's
former president, King Betz, sued Lasater and company for $4.6 million
for unauthorized trading. He chose the Rose Law Firm to handle his suit
and Hillary Rodham Clinton was a big partner in that law firm, and he
chose the Rose Law Firm to handle his suit because the issues involved
were similar to the issues in First American.
After the Federal Government took over Home Federal, the Federal
Government continued the case, and they had the Rose Law Firm carrying
the case for them.
Thomas Mars represented Lasater on the other side of the table
against the Home Federal Federal Government suit, so you had on one
side of the table the Rose Law Firm of which Hillary Rodham Clinton was
a partner, like the case I just cited, and on the other side was this
guy named Thomas Mars.
Now where did he come from? He had previously worked at the Rose Law
Firm. So you have on one side of the table negotiating for the Federal
Government the Rose Law Firm, and you have a former lawyer in that same
law firm representing Lasater. Does that sound like some conniving,
some peculiar circumstances? Mars had previously worked at the Rose Law
Firm where he had worked on the American suit. He worked on the First
American suit that I just talked about. Therefore, he may have had some
inside information on the Government's case since the case he worked on
at the Rose Law Firm was very similar.
King Betz, the man who started the case in the first place for Home
Federal Savings and Loan, was advised by Vince Foster of the Rose Law
Firm to accept a $250,000 out-of-court settlement in September of 1989,
and he agreed to the settlement. But he did not know that both sides of
the table were being worked by the Rose Law Firm and a former lawyer
who worked for the Rose Law Firm.
King Betz says that Vince Foster was handling his suit and never told
him about Mar's potential conflict of interest or the Clinton's ties to
Lasater.
According to the Chicago Tribune, when Betz was told that Mars
previously worked with Foster and Hillary Rodham in the First Federal
case for the Rose Law Firm, Betz said, ``He can't do that. He could
have confidential information.'' But the cat was already out of the bag
or in the bag because he had already signed off on the $250,000
settlement on a suit that was supposed to be for $4.6 million.
There are some questions that need to be answered by the Rose Law
Firm and by the FSLIC and the FDIC concerning these two cases.
First, when will the FDIC inspector general issue its report on
Hillary Rodham Clinton, First American, and Madison Guaranty? Is this
report being delayed until after the election? It was ordered in
February, was supposed to be done in 90 days, and here we are in
September, 7 weeks before the election, and we still do not have the
report. Why? That needs to be done quickly.
{time} 1800
Now, here are some questions that need to be answered by the FDIC and
the new independent counsel, Mr. Starr, if he is investigating this,
and I think he probably will, and in full and complete congressional
investigations and hearings: Did Hillary Rodham Clinton and/or the Rose
Law Firm inform the Federal Government of her and her husband's ties to
Dan Lasater? I do not believe she did, but we need to know if she did.
This is regarding the First American. If they did not inform the
Government of their ties to Dan Lasater, then why did they not? Because
it was obviously conflict of interest.
To what extent was Hillary Rodham Clinton involved in the suits? They
said it was only 2 or 3 hours. But she signed or got the agreement to
reduce the suit from $3.3 million down to $1.3 million, so she was very
conversant with it and very actively involved in it.
Specifically what role did Hillary Rodham Clinton have in the final
decision to settle the suit for $200,000 down from the $3.3 million? If
she was involved, how were her actions affected by her ties to Dan
Lasater and Lasater & Co? Who was responsible for handling the case:
Hillary Rodham Clinton, Vince Foster, or both? Obviously they were both
partners in the Rose Law Firm. There had to be a conflict there.
Who decided who would handle this case? If Vince Foster was handling
the case, why was Hillary Rodham Clinton involved at all?
We do know for sure, the FDIC has said that Hillary Rodham Clinton
signed the amended complaint reducing the damages sought from $3.3
million to $1.3 million.
Now, involving the Home Federal case, why was not King Betz, the
chairman there, told about Thomas Mars' conflict of interest? He was a
former lawyer with the Rose Law Firm defending Lasater. Why was not
Betz told about the ties between the Clintons and Lasater? Was the FDIC
informed about any of this? Did Thomas Mars, the former employee of the
Rose Law Firm, use inside information to arrange a $250,000 settlement
on an over $4 million original suit?
These are questions that need to be answered. The more we get into
the machinations of the Clintons, the more we find all kinds of
chicanery from Whitewater to Madison Savings & Loan to these two
savings and loan institutions in Illinois to the Angel Fire development
in New Mexico.
There are so many questions that need to be answered. That is why we
need full and complete congressional hearings, not just the facade we
saw with the Committee on Banking, Finance, and Urban Affairs in the
House just a few months ago. The people of this country have a right to
know if there is corruption in this Government. They have a right to
know if Hillary Rodham Clinton had a conflict of interest when she was
representing these individuals for the FDIC; I mean, her husband was
the Governor. He was a friend of the man that she was supposed to be
nailing to the wall, and she reduced the claim from $3.3 million down
to $200,000. There are all kinds of questions that need to be answered,
and the only way the people of this country are going to know the facts
is for us to have complete and thorough congressional hearings, and
they need to be held as quickly as possible.
I commend to my colleagues the following February 3, 1994, Chicago
Tribune article:
The special prosecutor appointed to scrutinize the business
dealings of the president and first lady will focus on their
role in an Ozark land development called Whitewater.
But there is another case buried deep in court records that
could prove equally troubling to Bill and Hillary Rodham
Clinton, particularly if Robert Fiske, the Republican special
prosecutor and former U.S. attorney in New York, makes good
on his pledge to publish a report on the Clinton's political
and business relationships when the president was governor of
Arkansas in the 1980s.
It involves a court case the first lady helped settle when
she was a high-powered lawyer in Little Rock and the
government was trying to sort out the problems of a bankrupt
Illinois savings and loan.
The Illinois S&L case suggests that Hillary Clinton, as a
private attorney, had a glaring conflict of interest. As an
attorney for the Federal Deposit Insurance Corp., she
helped negotiate a secret, out-of-court settlement that
ended the government's suit against a family friend and an
influential benefactor of her husband.
But the political problems the case could pose for the
president and his wife may go far beyond the narrow questions
about the first lady's conduct as a lawyer, which she
defends.
As in Whitewater, the Illinois case places the president
and his wife once again in an association with an unsavory
wheeler-dealer who had strong personal ties to the Clintons
and even stronger financial ties to the Clinton
administration in Little Rock.
In Whitewater, the trouble stems from the Clintons'
business relationship with James McDougal, the guiding force
behind Madison Guaranty, an Arkansas savings and loan that
went broke and cost taxpayers more than $47 million. Fiske
will examine whether Clinton or his gubernatorial campaign
benefited from McDougal's favorable treatment by a state
agency in Arkansas when Clinton was governor.
In the Illinois case, the problem stems from the Clintons'
friendship with Dan Lasater, a convicted felon whose high-
flying bond trading firm played a hand in the troubles of
several savings and loans, including First American Savings
and Loan Association, an Oak Brook institution headed by
another politician, Dan Walker, who was governor of Illinois
from 1973 to 1977.
It all started in 1979 in an unlikely venue--the Oaklawn
Park racetrack in Hot Springs, Ark. Clinton's mother, the
late Virginia Kelley, had a passion for thoroughbred
horseracing, and her box at the track was next to Lasater's.
An Arkansas native who grew up in poverty in Kokomo, Ind.,
Lasater started a hamburger chain when he was 19 and was
wealthy by the time he met Mrs. Kelley and Clinton's half-
brother, Roger, at the racetrack. In just over two decades,
Lasater had sold his first hamburger chain; moved to
Arkansas; founded the Ponderosa Steakhouse, a nationwide
chain of 650 family restaurants; started a bond trading firm;
and nurtured his love for horseracing.
The racetrack friendship soon blossomed into an
introduction to Clinton, who was trying to regain the
governor's mansion after losing an election in 1980,
according to a Clinton family friend.
By early 1983, Lasater had given Roger Clinton a job at his
Florida horse farm; Clinton had reclaimed the governor's
mansion; and Lasater's bond firm had been added to a list of
brokerage firms eligible to underwrite state bond issues, a
classification that generated millions of dollars in business
for his firm, according to published reports.
Over the next two years, the ties between Lasater and the
Clintons grew stronger.
The Clintons benefited from the relationship. Lasater
contributed money to the governor's campaign; lent Roger
Clinton $8,000 to pay off a drug debt; sponsored fundraising
parties at his offices; made his private plane available to
the ambitious young governor for campaign jaunts; and
encouraged his staff to donate to the governor's campaign,
promising higher commissions to compensate for the donations,
according to published reports. At one point in 1985, he also
made his plane available to squire celebrities to a charity
function organized by Hillary Rodham Clinton.
Lasater benefited from the closer ties, too. In the summer
of 1985, Clinton successfully lobbied the Arkansas
legislature to approve a contract for Lasater to sell $30.2
million in bonds for the new state police radio system.
The contract netted Lasater's firm $750,000, according to
a report in The Los Angeles Times.
Meanwhile, Lasater spread his financial wings beyond
Arkansas, signing deals to trade Treasury bond futures with
several savings and loans, including Walker's First American.
The S&Ls were trying to compensate for their money-losing
mortgage lending operations by engaging in the high-risk
deals being peddled by Lasater.
But things began to sour in late 1985, both in Illinois and
in Arkansas.
At First American, Walker discovered that Lasater's bond
firm didn't have the magic touch. According to court records,
Walker's S&L lost at least $361,572 in T-bond futures trades
made by Lasater's firm.
``They had general authority to trade, but they were
supposed to call the (First American) operating officer each
time they made a trade,'' Walker said in a telephone
interview. ``They did not do that.''
Meanwhile, law enforcement officers in Arkansas had started
picking up reports that Lasater had another problem: He was
distributing cocaine to friends and business associates at
swank parties he threw in Little Rock and Hot Springs.
Walker struck first, filing a 1985 suit against Lasater's
bond firm alleging that the company committed mail, wire and
securities fraud by using First American funds for
unauthorized T-bond futures trades.
Walker never got Lasater in court. First American was
seized in 1986 by federal officials, who later charged the
former Illinois governor with lending himself $1.4 million in
federally insured deposits. Walker was eventually convicted
of bank fraud and perjury.
Federal officials also collared Lasater; they convicted him
of cocaine possession and trafficking in 1986.
Meanwhile, the federal regulators who seized First American
decided to pursue the savings and loan's $3.3 million suit
against Lasater to see if they could recoup some money for
American taxpayers, who funded the billion-dollar bailout of
hundreds of bankrupt savings and loans, including First
American.
The government's deposit insurance fund hired the Rose Law
Firm in Little Rock, where Hillary Clinton was a powerhouse.
Rose had successfully solicited the government's legal work
on failed savings and loans in Arkansas months earlier.
The Lasater connection caused no end of problems for Gov.
Clinton. During his re-election campaign in 1986, Clinton
came under attack from his Republican opponent for steering
state contracts to Lasater while Lasater was under
investigation for drug trafficking.
Clinton acknowledged being friends with Lasater but denied
knowing about Lasater's drug activities. Clinton was re-
elected.
In 1987, Lasater went off to serve his prison sentence
after giving Patsy Thomasson, another key Clinton supporter
and Democratic Party activist, legal authority to manage his
assets, according to court records.
Most of the Rose firm's S&L legal work was handled by
Webster Hubbel, now the No. 3 official at the U.S. Justice
Department. But the firm assigned the government's suit
against Lasater to Hillary Clinton and Vincent Foster, who
later became deputy White House counsel for President
Clinton and who committed suicide last July.
In late 1987, court records show, Hillary Clinton and
Foster negotiated a confidential settlement. Lasater paid the
government $200,000 in return for the dismissal of its $3.3
million suit against him.
Whether Lasater got off cheaply at the expense of the
American taxpayer depends upon his assets at the time and the
strength of the evidence against him, legal experts say.
Nevertheless, Thomas Scorza, a former assistant U.S.
attorney who teaches legal ethics at the University of
Chicago Law School, said Hillary Clinton's decision to
represent the government in a lawsuit against Lasater raises
serious questions about her professional conduct.
``A lawyer is required to represent the interest of their
client zealously,'' he said. ``There is a substantial
question about whether an attorney was representing a client
zealously if the opponent of the client is someone with whom
the attorney had a political, financial and personal
relationship.''
``In looking at the settlement, were they (the Rose Law
Firm) looking after Lasater's interests or the interests of
the FDIC?'' Scorza asked.
Hillary Clinton's office declined to respond to specific
questions about the case but issued a general statement
defending her legal ethics. ``Our view is that Hillary
Clinton, when a lawyer at the Rose Law Firm, acted with the
utmost integrity and professionalism. I have no reason to
believe otherwise,'' said her press secretary, Lisa Caputo.
To avoid even the appearance of a conflict of interest,
Scorza said, Hillary Clinton should not have worked on the
Walker S&L case--especially because the final settlement was
confidential. The Tribune learned of the amount of the
settlement from a February 1989 letter that Foster wrote to
the FDIC; the letter was not part of the court filing.
There's no evidence in the court case that the Rose Law
Firm or Hillary Clinton ever disclosed to their client, the
FDIC, the ties between the Clintons and Lasater or Thomasson,
who was representing Lasater's interests at the time of the
settlement. Thomasson, who later became executive secretary
of the Arkansas Democratic Party, is now director of the
White House Office of Administration.
David Barr, an FDIC spokesman, said FDIC attorneys are
trying to locate records on First American to see if the Rose
Law Firm notified the FDIC about any potential conflict of
interest.
A law firm can be banned from receiving further work from
the FDIC and the Resolution Trust Corp., which disposes the
assets of failed S&Ls, if it misleads FDIC officials about a
possible conflict of interest, Barr said.
The First American case isn't the only problem for the
firm, which Hillary Clinton left before her husband assumed
the presidency.
The FDIC is trying to determine whether the Rose firm
misled federal regulators about a potential conflict of
interest when the firm represented the deposit insurance fund
against the accountants who worked for Madison Guaranty.
Hillary Clinton had represented Madison, the savings and loan
at the heart of Whitewater.
In addition, FDIC officials are looking into the case of
Home Federal Savings and Loan of Centralia, another failed
Illinois institution, which is very similar to the First
American case. It is not known whether Hillary Clinton was
directly involved in the Home Federal case.
The Rose Law Firm represented Home Federal in a $4.6
million suit against Lasater's company for unauthorized
trading. But what is unusual about this case is that Lasater,
too, was represented by an attorney with ties to Rose.
King Betz, former president of Home Federal, said he
initially hired the Rose Law Firm because the claims in his
suit were nearly identical to those in the First American
case. He said that Vince Foster was the lead attorney in the
case and that he had no contact with Hillary Clinton. After
the government took over Home Federal, it continued the case.
Meanwhile, though, Thomas Mars, a Rose attorney who had
worked with Foster and Hillary Clinton in the First American
suit against Lasater, left the Rose firm. Months later, he
started representing Lasater against Home Federal, which was
still represented by Rose.
Legal experts say the Rose Law Firm should have notified
Betz and the FDIC about Mars' potential conflict of interest.
Because Mars worked on the First American suit, he could have
had inside information that gave him an advantage in
negotiating a settlement for Lasater in the Home Federal
suit.
Betz says Foster never told him about Lasater's ties to the
Clintons. He also failed to advise Betz about Mars' potential
conflict of interest. Betz said Foster advised him to accept
a $250,000 out-of-court settlement in September 1989.
``We were told by the attorneys that we were not going to
get any more (money),'' said Betz, who agreed to the
settlement. When told that Mars had previously worked with
Foster and Hillary Clinton in the First Federal case, Betz
said: ``He can't do that. He could have confidential
information.''
Mars denied any wrongdoing. ``There was nothing funny going
on. Everything was always on the up and up. Everything was
done in a businesslike manner,'' he said.
____________________