[Congressional Record Volume 141, Number 25 (Wednesday, February 8, 1995)]
[House]
[Pages H1456-H1459]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             THE CONTRACT WITH AMERICA IS GOOD FOR AMERICA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Indiana [Mr. Burton] is recognized for 30 minutes.
  Mr. BURTON of Indiana. Mr. Speaker, let me just start off by saying 
that I have spent the last hour listening to my distinguished 
colleagues from the Democrat Party talking about the Contract With 
America and what is wrong with it. Let me start off by saying, before I 
get into my special order, that the capital gains tax cut that they 
maligned so viciously over the past hour would end up probably bringing 
$2 to $3 trillion of investment into the economy which would create 
jobs, $2 to $3 trillion.
  Mr. OWENS. Mr. Speaker, will the gentleman yield?
  Mr. BURTON of Indiana. I am very sorry. I only have a half hour, but 
I would be happy to have a colloquy with the gentleman at a different 
time.
  But when people sell a farm, when people sell stocks, when people 
sell a business, that money just does not disappear. That money is 
reinvested in our society, and we are talking about two to three 
thousand, thousand, million dollars that would be reinvested in new 
plants, and equipment, and job expansion in this country. That is one 
of the things that they discounted.
  Now their party had control of this place for the last 40 years, and 
during those 40 years we saw the great War on Poverty that Lyndon 
Johnson talked about that was supposed to eradicate poverty in one 
decade end up being an abject failure, and the people of this country 
have said, ``Enough welfarism, enough socialism. We want to get back to 
the free enterprise concepts that made this country great,'' and that 
is why the Republican Party won the majority in both the House and 
Senate in the last election.
  Now they talked about corporate taxes. ``Let's soak the 
corporations.''
  Corporations do not pay taxes. Those taxes are added to the price of 
the product. If you raise corporation taxes on the automobile industry, 
for instance, then they add that to the price of a car. It is the cost 
of doing business, and when you go to buy a car, you pay more money for 
that care because the corporation has a fixed profit margin in their 
books.
  So, when you raise corporate taxes, that means the consumer is going 
to pay more for that car, so they in effect are paying the tax when you 
raise corporate taxes. The consumer always pays, and the tax and spend 
policies of the Democrats are the reason for their demise in the last 
election, and I think that everybody in the country now realizes that, 
at least a majority.
  They talked about the Contract With America being bad for America. 
The fact of the matter is every one of the 10 items in the Contract 
With America was approved by more than 70 percent of the American 
people. In polling data that we got before we came up with the Contract 
With America, Mr. Speaker, we found the top 10 items that Americans 
were concerned about, and many of those items were approved or 
requested by more than 70 percent of the people of this country. The 
problems is they do not have any ideas. They are attacking our Contract 
With America, and they are going to lose that battle because the 
American people simply want the things that we put in that Contract 
With America to be passed by this Congress.
  They want a balanced budget amendment. They want a line-item veto. 
They want tax fairness for seniors. They want to stop violent 
criminals. They want welfare reform. They want to protect our kids. 
They want a strong national defense. They want to roll back government 
regulations. All these things we are going to bring to the floor for a 
vote, which they would not do over the past 40 years.

                              {time}  2320

  I think the American people will see the difference very clearly in 
the weeks and months to come. They are seeing it already, because 
polling data shows American people support what the Congress of the 
United States is doing under the new Republican leadership.
  Tonight I want to talk briefly about some unethical contacts that 
have taken place in the Whitewater debacle that has taken place over 
the last several years we have been talking about in this body and the 
other body, unethical contracts between the White House and the 
Treasury Department.
  Mr. Speaker, last November 7 members of the Senate Banking Committee 
asked Independent Counsel Kenneth Starr to investigate possible perjury 
charges by two
 high-ranking White House officials, White House senior advisor George 
Stephanopoulos and deputy chief of staff Harold Ickes.

  Members of the committee believe these two men lied under oath to the 
Banking Committee during hearings last August about Whitewater and 
unethical contacts between the White House and the Treasury Department. 
The charges against Mr. Stephanopoulos and Mr. Ickes are a very serious 
matter. However, this only touches the tip of the iceberg of how 
improper conduct within the Clinton administration was to slow down and 
coverup the White House investigation. Tonight I would like to review 
this whole matter, and the best place to start is at the beginning.
  Criminal referrals from the RTC, the Resolution Trust Corporation: 
When Madison Guarantee Savings & Loan in Little Rock failed, its debts 
and its assets were inherited by the Government-run Resolution Trust 
Corporation.
  Madison Guarantee was owned by then Gov. Bill Clinton's business 
partner, James McDougal, and the Governor. In March 1992, the RTC began 
an investigation of possible criminal activity at Madison after the New 
York Times broke a major story about the Whitewater Development Corp. 
In September 1992, the RTC sent a criminal referral, criminal 
investigation request, to the Justice Department. The RTC urged a 
thorough investigation of a ``check kiting scheme'' in which over 
$100,000 in Madison funds were alleged to be illegally funneled into 
the Whitewater Development Corp. to pay its bills. President and Mrs. 
Clinton were named as potential beneficiaries of this scheme.
  A year later the Resolution Trust Corporation sent a second criminal 
referral to the Justice Department regarding Madison Guarantee. This 
referral contained nine specific allegations 
[[Page H1457]] of criminal wrongdoing. The second referral named 
President and Mrs. Clinton as possible witnesses.
  The U.S. attorney in Little Rock, Paula Casey, had been appointed by 
President Clinton. She let the first referral sit on her desk for over 
a year without taking any action on it. She should have recused 
herself, excused herself from acting in that capacity in this case 
because she was a friend and political ally of the President of the 
United States. In October 1993 she formally declined to investigate any 
of the allegations in the first referral.
  Later in October the second referral was reported in the press, and 
only then did Paula Casey excuse herself from the entire matter.
  Here are some questions that need to be answered. Why did the 
Resolution Trust Corporation's first referral sit on Paula Casey's desk 
for over a year? Was that because of her connections with people at the 
White House? Why did she refuse to open an investigation into the 
serious charges raised by the Resolution Trust Corporation? Why did 
Paula Casey wait until the criminal referrals became public knowledge 
before she recused herself? As a friend of President Bill Clinton and 
one of his campaign workers, she should have recused herself 
immediately because of that connection. Are Paula Casey's actions being 
investigated by the Justice Department's Ethics Office?
  Let's talk about Roger Altman and his Senate testimony. In March 
1993, Roger Altman, Deputy Secretary of the Treasury, became the acting 
chief of the Resolution Trust Corporation. This became necessary when 
Treasury Secretary Lloyd Bentsen forced out the RTC chief Albert Casey. 
At the time, the first RTC referral involving Whitewater and Madison 
Guarantee was sitting on Paula Casey's desk gathering dust for over a 
year.
  In a routine hearing in February 1994, Roger Altman testified before 
the Senate Banking Committee that he had participated in one 
substantive meeting with White House officials about the RTC referrals. 
Under questioning from the Senators, he testified that he could not 
recall, remember, any other substantive contacts. In fact, from 
September 1993 to February 1994, there had been a flurry of improper 
meetings, phone calls, and faxes between the White House and the 
Treasury Department about this case. Treasury Department general 
counsel Jean Hanson has testified that she prepared talking points for 
Mr. Altman--this is unethical--outlining all of the contacts that he 
took, outlining all those contacts, and he took those talking points 
with him to the hearing. Mr. Altman denied he ever saw those talking 
points.
  The full scope of these contacts became clear when the Senate Banking 
Committee held full hearings on the issue last August. After the 
hearings, even Democrat Senators criticized Mr. Altman and his 
counterparts at the White House because of this involvement, one with 
the other,
  Senator Chris Dodd said, ``In my view, there were far too many 
meetings, there were far too many people involved, and the testimony 
gets just too cute for my tastes, quite frankly.''
  Senator Shelby. ``I think he, Roger Altman, has been less than 
candid. He has been very selective in his answers.'' Senators Reigle 
and Sarbanes told Lloyd Bentsen they no longer had confidence in Mr. 
Altman.
  On August 17, Roger Altman resigned his position after his testimony. 
The next day general counsel Jean Hanson also resigned her post.
  Here are some questions that need to be answered. Did Roger Altman 
lie to the Banking Committee during the February hearings, or did he 
actually forget all but one of the contacts between the Treasury 
Department and the White House?
  It seems farfetched to me he would forget all of those meetings. Did 
Roger Altman read the talking points Jean Hanson prepared for him 
before the February hearing? These talking points listed the contact.
  Three, were there any other meetings or contacts that we still do not 
know about?
  Four, how much information about the investigation of Madison 
Guarantee did the Treasury Department give to the White House? And this 
would be unethical, very unethical.
  No. five, was the RTC or the independent counsel's investigation 
jeopardized by these contacts?
  Now, why were the contacts improper? When the Resolution Trust 
Corporation investigates a failed savings and loan that the taxpayers 
are going to have to bail out, it has two avenues it can pursue. First, 
it can recommend investigation of criminal wrongdoing to the Justice 
Department. That is called criminal referrals. Or, second, it can file 
civil suits against people who are responsible for the S&L's failure 
and try to recover some of those losses. When the RTC is in the middle 
of an investigation, it is very important that the details remain 
confidential. So if Mr. Altman was talking to Treasury and the White 
House about these things, he sure was not keeping these things 
confidential.
  If information about an investigation is leaked to a potential target 
of the investigation, that person could potentially destroy evidence, 
like shred files, hide assets, or take other actions to impede the 
investigation. If a police department investigates a bank robbery, it 
does not share any of the information it has with any of the suspects. 
And that is exactly the kind of thing that was taking place between Mr. 
Altman, Treasury and the White House.
  Neither of the criminal referrals from the RTC accuses the Clintons 
of wrongdoing. However, the Clintons are named as potential witnesses 
in one and potential beneficiaries in the other. Many of the top 
officials at the White House were from Arkansas and friends of the 
President. Some were probably friends and political allies of targets 
of the investigation. Any details of the investigation could have been 
leaked from the White House to people being investigated in connection 
with the failure of Madison Guaranty which cost the taxpayers, get 
this, $47 million.
  Now, here is the chronology of events and contacts between Treasury 
and the White House. In March of 1993, after becoming Acting Chief of 
the Resolution Trust Corporation, Roger Altman was briefed on the first 
criminal referral by RTC vice president William Roelle. Altman faxed a 
copy of the New York Times article which broke the Whitewater story to 
White House counsel Bernie Nussbaum, Mr. Nussbaum was the chief counsel 
to the President of the United States.
  He later testified that he does not remember either being briefed or 
sending the article to Nussbaum. However, the fax cover sheet, which is 
a document that tells when it was sent, the fax cover sheet confirms 
that it did come from Mr. Altman's office.
                              {time}  2330

  So once again, he conveniently forgot something that came from his 
office to the White House, to Bernie Nussbaum, the chief legal counsel 
to the President.
  September 1993, the Resolution Trust Corporation is preparing its 
second criminal investigation or referral. Treasury Department General 
Counsel Jean Hanson briefs Altman on the confidential referral. 
According to Hanson, Roger Altman then directed her to brief the White 
House on the situation, which was against RTC procedure. That, once 
again, is letting people who may be under criminal investigation 
knowing what the investigation is about. You just do not do that. Mr. 
Altman denies this.
  September 29, 1993, Jean Hanson initiates the first formal contact 
with the White House. At a White House meeting, she briefs Chief 
Counsel to the President, Bernie Nussbaum, in detail on the referral. 
Also at the meeting was Clifford Sloan, a lawyer on Nussbaum's staff. 
Nussbaum appoints Clifford Sloan to be Hanson's designated White House 
liaison on the issue. She should have not been talking to the White 
House and here they are setting up an official liaison.
  During the next several days, Hanson and Sloan have several follow up 
conversations on the phone.
  October 4, 1993. Senior White House aide Bruce Lindsey, who is 
traveling with the President, informs President Clinton about the RTC 
referrals.
  October 7, 1993, Jean Hanson calls Clifford Sloan at the White House 
to tell him about press inquiries into the Whitewater investigation.
  October 14, 1993, a full-fledged meeting is called at the White House 
to discuss the RTC investigation. Attending 
[[Page H1458]] from the Treasury Department, Communications Director 
Jack DeVore, General Counsel Jean Hanson, Chief of Staff Joshua 
Steiner, and attending from the White House was White House Counsel to 
the President, Bernie Nussbaum and Senior Advisor, Bruce Lindsey. They 
should not have even been talking about this. Here they are having a 
full-scale meeting.
  February 2, 1994, the second full-fledged meeting on the Whitewater 
investigation is held at the White House. This meeting was reportedly 
called to discuss potential civil claims against Madison and people 
associated with Madison by the Resolution Trust Corporation. Attending 
this meeting from the Treasury Department, Deputy Treasury Secretary 
Roger Altman, General Counsel Jean Hanson. Attending from the White 
House again, White House Chief Counsel Bernie Nussbaum, Chief Counsel 
to the President, Deputy Chief of Staff Harold Ickes, Hillary Clinton's 
Chief of Staff, Margaret Williams comes. According to those in 
attendance, the substance of the case was not discussed, only 
procedures. But once again, a formal meeting involving this 
investigation which should not have been discussed between those doing 
the investigating and those who are being investigated.
  February 24, 1994, as I mentioned earlier, on this day, Roger Altman 
appeared before the Senate Banking Committee at an RTC oversight 
hearing. He testified that he attended one meeting concerning the White 
House investigation and denied any recollection of any other contacts. 
He had a lot of failures of memory.
  March 4, 1994, then independent counsel Robert Fiske subpoenaed 10 
Treasury and White House officials who participated in the contacts and 
questioned them before a grand jury. Here are some questions that need 
to be answered.
  Did Roger Altman order Jean Hanson to brief the White House about the 
first criminal investigation or referral in September of 1993 as Hanson 
alleges? Would Hanson go and brief the White House officials without 
approval from higher up? I do not think so. Why would she go over there 
and start briefing them unless somebody asked her to do it?
  Number two, why was it necessary for Jean Hanson to have a liaison at 
the White House with whom to discuss the Resolution Trust Corporation's 
investigation of Whitewater and Madison? She was not even supposed to 
be discussing the investigation with the White House.
  Number three, did officials from the Treasury Department who had 
attended the three White House meetings discuss only procedures and 
policies of the RTC as they have claimed or did they reveal substantive 
information about the Madison Guarantee case as well? And how can we 
ever know for sure.
  Number four, did White House officials share any of the information 
they received through these meetings and phone conversations with any 
potential targets of the investigation, and how can we know about that 
for sure?
  All of the details about these meetings that I have been just 
discussing became public knowledge
 during the Senate and House banking committee hearings last August. 
And additional detail that was revealed at that time concerned White 
House efforts to stop Roger Altman from excusing, recusing himself from 
the Whitewater investigation?

  In January 1994, Altman was considering recusing himself, stepping 
aside, from the entire Madison-Whitewater case because of his close 
friendship with President Clinton. They had attended college together 
at Georgetown University and had been friends ever since. Treasury 
Department General Counsel Jean Hanson advised Altman that he should 
recuse himself, step aside, according to her testimony. Prior to the 
February 2 meeting at the White House, Altman reportedly had decided to 
step aside and recuse himself. However, during the meeting, the Chief 
Counsel to the President, Bernie Nussbaum, talked Altman out of it.
  Nussbaum testified that he simply asked Altman to reconsider his 
decision. However, Treasury Department Chief of Staff Josh Steiner 
tells a different story in his personal diary. Steiner's diary says 
that Nussbaum told Altman this his decision to excuse himself or step 
aside was ``unacceptable''. They didn't want him stepping out of the 
picture because there might be some incriminating evidence that he 
could stop. At least that is what it appears to be.
  After the meeting Jean Hanson spoke to White House Deputy Chief of 
Staff Harold Ickes. According to Hanson's testimony, Ickes asked her 
who else knew that she had advised Altman to step aside or recuse 
himself. Hanson told him that only three people knew. According to her 
testimony, Ickes told her that that was good that nobody else should 
know about it. According to Jean Hanson's testimony at the hearings 
last August, Mr. Ickes asked me, this is her quote, ``Mr. Ickes asked 
me who else knew that I had recommended to Mr. Altman that he recuse 
himself, and I gave him three names. He said, `that's good, because if 
it gets out, it will look bad.'''.
  When Harold Ickes testified before the Senate banking committee in 
August, he denied ever making such a statement. Ickes maintains that 
all he said to Hanson at the meeting was, hello, nice to see you and 
goodbye.
  At the beginning of my statement, I said that the 7 Members of the 
Senate banking committee have asked the independent counsel to 
investigate possible perjury by Mr. Ickes. The Senators were 
particularly concerned about his statements about his conversation or 
lack of conversation with Jean Hanson. The whole episode raises a 
number of questions.
  First, why would Jean Hanson lie about her conversation with Harold 
Ickes?
  Two, why would Bernie Nussbaum, legal counsel to the President, try 
to talk Roger Altman out of stepping aside, recusing himself, when 
Altman was clearly such a close personal friend of President Clinton?
  Three, how forcefully did Chief Counsel to the President, Bernie 
Nussbaum, discourage Mr. Altman from recusing himself? Is Nussbaum 
lying or is Josh Steiner lying?
  Four, did Bernie Nussbaum, Chief Counsel to the President, take this 
action on his own or did someone higher up in the White House urge him 
to do so?
  Now, let us talk about Jay Stephens. As I mentioned earlier, the 
Senators also asked the independent counsel to investigate the 
testimony of George Stephanopoulos from the White House. 
Stephanopoulos' alleged perjury involved the hiring of Jay Stephens 
from by the Resolution Trust Corporation as an outside counsel in the 
Madison Guarantee case. Jay Stephens was hired by an independent board 
at the Resolution Trust Corporation for the Whitewater investigation. 
Stephanopoulos and other officials at the White House were really 
upset. They were furious because Stephens was a Republican and had been 
a U.S. Attorney under President Reagan.
  In his testimony before the Senate banking committee in August, 
Stephanopoulos testified about a conversation he had with Treasury 
Department Chief of Staff Josh Steiner. He said that he complained 
about Stephens to Josh Steiner, but he denied trying to get rid of him. 
Mr. Stephanopoulos testified, and I quote, ``I did blow off steam in 
the conversation, based on my belief that Mr. Stephens could not be an 
impartial investigator. Mr. Steiner informed me that the decision had 
been made by an independent board. That ended the conversation. I took 
no further action.'' That is what Stephanopoulos testified. However, 
Josh Steiner's personal diary tells a different story.
  The February 27 entry reads: ``Stephanopoulos and Ickes also asked 
about how Jay Stephens had been hired to be outside counsel on this 
case. Simply outrageous, they said, that RTC had hired him, Stephens, 
but even more amazing when George Stephanopoulos then suggested to me 
that we needed to find a way to get rid of him.'' Obviously because he 
did not want him to go on and conduct an investigation. ``Persuaded 
George,'' he persuaded George Stephanopoulos, ``that firing him would 
be incredibly stupid and improper.''
  Stephanopoulos's testimony was also contradicted by Roger Altman.

[[Page H1459]]

                              {time}  2340

  Altman testified that in a phone call on February 25, Stephanopoulos 
and Ickes complained about Stephens being hired by the RTC. Altman 
testified that he told Josh Steiner that he thought it was unwise for 
them to be complaining so vocally about Jay Stephens, because he was a 
Republican and he might get too deeply involved in the investigation.
  Stephanopoulos was also contradicted by Jean Hanson.
  Here are some questions:
  No. 1, did George Stephanopoulos and Harold Ickes lie to the Senate 
Banking Committee, and if they did, should they be prosecuted for it?
  Two, what motive could Josh Steiner, Roger Altman, and Jean Hanson 
all have to falsely contradict their testimony? Why would they do that?
  Three, how many other people did George Stephanopoulos call to 
attempt to get Jay Stephens fired?
  All of these questions need to be thoroughly investigated and 
answered by the independent counsel. There is so much that smells about 
what has gone on between the RTC, Mr. Altman, Treasury, and the White 
House that a full and thorough investigation needs to be conducted, not 
only by the independent counsel but by the committees of Jurisdiction 
in this House and in the other body, and possibly hiring other people 
to conduct this investigation.
  The House, the Senate, and the independent counsel need to thoroughly 
investigate this. If there is lying, if people have committed perjury 
before the House and Senate Banking Committees, they need to be brought 
to justice. We need to follow this all the way to its final conclusion. 
There are all kinds of questions about shredded documents involving 
Whitewater and Madison that go all the way to the top.
  We need to get to the bottom of it for the benefit of the American 
people. We are talking about $47 million of taxpayers' money that has 
been squandered or stolen. We need to get to the bottom of it, no 
matter where it leads us.

                          ____________________