[Congressional Record Volume 141, Number 126 (Tuesday, August 1, 1995)]
[House]
[Pages H8169-H8172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                        WHITEWATER INVESTIGATION

  The SPEAKER pro tempore (Mr. Metcalf). Under the Speaker's announced 
policy of May 12, 1995, the Chair recognizes the gentleman from Indiana 
[Mr. Burton] for 30 minutes.
  Mr. BURTON of Indiana. Mr. Speaker, I would like to talk today about 
the conviction of Webster Hubbell, the indictment of Governor Jim Guy 
Tucker (both close friends of President Clinton) and the two Arkansas 
judges overseeing these cases.
  The judge in Webster Hubbell's case stepped aside because of his 
close ties to all of Arkansas' top Democrat politicians. The judge in 
Governor Tucker's case has made no move to recuse himself, even though 
many observers believe he has even more conflicts of interest.
  Mr. Speaker, about a month ago former Associate Attorney General 
Webster Hubbell was sentenced to 21 months in prison. On December 6, 
1994, Mr. Hubbell pled guilty to one count of mail fraud and one count 
of tax evasion to the independent counsel investigating Whitewater, 
Kenneth Starr. Last week, Mr. Hubbell, who a little more than a year 
ago was the Nation's third highest ranking law officer, testified 
before the Senate about the death of Vincent Foster and the 
obstructions of the investigation at the White House.
  I'd like to talk for a moment about Webster Hubbell. He is often 
characterized in the media as the President's frequent golfing partner. 
But he is much more than that.
  Mr. Hubbell was a partner along with Hillary Clinton, William Kennedy 
III, and the late Vincent Foster at Little Rock's powerful Rose Law 
Firm. In fact, Mr. Hubbell served as the firm's managing partner. He 
also served as mayor of Little Rock, and was appointed by then-Governor 
Bill Clinton as interim Chief Justice of the Arkansas State Supreme 
Court.
  He came to Washington with the Clintons after the 1992 election and, 
in the opinion of many Washington insiders, ran the Justice Department 
until Janet Reno was confirmed by the Senate. Mr. Hubbell resigned as
 Associate Attorney General in March 1994 after his former partners at 
the Rose Law Firm began to investigate him for overbilling some of his 
clients, including the federal government for work done in a case 
against the auditors of Madison Guaranty Savings and Loan. Now, like 
many of the President's friends from Arkansas, Mr. Hubbell has left the 
government in disgrace and legal trouble.

  On June 23, 1995, Mr. Hubbell asked the judge presiding over his case 
for leniency, stating that he had made proper restitution to his former 
firm. Under the sentencing guidelines, Mr. Hubbell was required to 
serve a mandatory minimum sentence unless the independent counsel asked 
the presiding judge for leniency. Mr. Starr replied to Mr. Hubbell's 
request by stating that he had no intention to ask for leniency.
  The fact that Mr. Starr had no intention of asking for the court to 
be lenient with Mr. Hubbell leads us to believe that Hubbell did little 
to help Starr's investigation.
  After he left the Justice Department, Hubbell landed a new job at G. 
William Miller and Co., the law firm of Michael Cardozo. Cardozo is the 
former Clinton Justice Department official who handles the Clintons' 
legal defense fund. He became notable in the summer of 1993 because he 
spent the entire weekend with Vincent Foster three days before Foster's 
death. Webster Hubbell and Michael Cardozo spent the weekend at the 
Eastern Shore secluded with Mr. Foster and his wife. Both have claimed 
that Foster did not seem unusually depressed, even though investigators 
have cited Foster's depression as the reason for his suicide 3 days 
later.
  And somehow, Mr. Hubbell's wife was offered a job at the Interior 
Department after Mr. Hubbell entered his plea. We know that Mrs. 
Hubbell's hiring was orchestrated by talks between the White House and 
the Interior Department. Since Mr. Hubbell and his wife were both being 
employed by their friends, many people wonder whether he cooperated 
with the Starr probe as much as he might have.
  The judge originally assigned to preside over the Hubbell case was 
one William Wilson in Little Rock. However, as is so often the case 
among the political and social elite of Arkansas, Judge Wilson had 
close associations with Bill and Hillary Clinton, and before becoming a 
judge was very active in the Arkansas Democrat party. Judge Wilson 
realized the possible conflict of interest, and 2 days after Mr. 
Hubbell's guilty plea he recused himself from the case. In doing so, 
Judge Wilson stated, ``Not only must you do justice, you must have an 
appearance of doing justice.'' I take that quote from an editorial in 
the June 21, 1995 edition of the Wall Street Journal and ask that this 
editorial be entered into the Record.
                          Who Is Henry Woods?

       Last year, the President was reminiscing with Connie Bruck 
     of The New Yorker about his 1990 gubernatorial race. At one 
     point, he said, he was undecided about running and an 
     influential Arkansan came up with a substitute: Hillary 
     Clinton. The powerful member of the Arkansas political family 
     ``desperately wanted her to run for governor,'' the President 
     told Ms. Bruck, ``and it got out and around the state.''
       That gentleman was Judge Henry Woods of the U.S. District 
     Court for the Eastern District of Arkansas. ``Henry,'' a 
     friend of the judge told Ms. Bruck, ``just hangs the moon on 
     Hillary.'' Judge Woods has contributed 15 years of 
     distinguished service to the judiciary, particularly in the 
     long-running Little Rock school desegregation cases. At a 
     critical point in 1987, Judge Woods named Mrs. Clinton 
     counsel to a citizens' committee working for racial balance 
     in the schools. ``I called on Hillary a lot,'' he told Ms. 
     Bruck. ``She was not just functioning as advisor to the 
     committee.''
       Judge Woods will soon be back in the news, starting with 
     tomorrow's arraignment of Arkansas Gov. Jim Guy Tucker and 
     two associates. They're charged with defrauding the 
     government in a scheme linked to David Hale's Capital 
     Management Services. While the arraignment will take place 
     before other magistrates in Little Rock, the trial is 
     scheduled to unfold in the courtroom of Mrs. Clinton's 
     biggest fan.
       Gov. Tucker has angrily declared his innocence and says he 
     may challenge Independent Counsel Kenneth Starr's 
     jurisdiction. ``None of the allegations,'' Gov. Tucker said, 
     ``involve President Clinton, Mrs. Clinton or any other person 
     in the executive branch that the regular U.S. Attorneys would 
     have had a conflict in prosecuting.'' As we have noted in 
     regard to the Clintons, this is correct in a narrow sense; 
     but it is also true that the indictments and guilty pleas so 
     far obtained by Mr. Starr paint a disturbing picture of the 
     political and business landscape from which the President and 
     First Lady emerged.
       Understandably, for example, Gov. Tucker would have 
     preferred that ``the regular U.S. Attorney'' handle his case. 
     That would be Paula Casey, the long-time Friend of Bill who 
     first received criminal referrals from the Resolution Trust 
     Corp. allegedly naming the Clintons and Mr. Tucker. After 
     making some crucial decisions, Ms. Casey belatedly recused 
     herself from
      the Madison Guaranty case, in November 1993, in the midst of 
     a six-week period which saw Treasury contacts 

[[Page H8170]]
     with the White House. Bruce Lindsey informing the President about the 
     referrals, two Clinton-Tucker meetings, and Associate 
     Attorney General Webster Hubbell's own recusal from 
     Whitewater matters.
       The problem, of course, is that everyone from the Arkansas 
     political culture comes from the Arkansas political culture. 
     When it came time for Mr. Hubbell to plead guilty to a scheme 
     to defraud the government and his former partners at the Rose 
     Law Firm, he stood before U.S. District Court Judge William 
     Wilson in Little Rock. Two days after the plea, Judge Wilson 
     stepped down from the case, saying his contacts with the 
     Clintons over the years might be misconstrued. ``Not only 
     must you do justice,'' Judge Wilson said, ``you must have an 
     appearance of doing justice.''
       Naturally Judge Woods has the same sort of associations. 
     Now 77, he was for some 40 years a close associate of 
     Arkansas financier and legislator Witt Stephens--head of the 
     Stephens Inc. investment giant until his death in 1991. ``Mr. 
     Witt'' first earned a reputation as a political kingmaker 
     with the 1948 election of Gov. Sid McMath; Henry Woods was 
     Gov. McMath's top aide. Mr. Woods later fought segregationist 
     Gov. Orval Faubus and was a supporter of current Sen. Dale 
     Bumpers and Rep. Ray Thornton, among others. Messrs. Clinton, 
     Tucker, Hale, and James McDougal of Madison Guaranty fame all 
     got their early political education from one of the towering 
     figures in Arkansas politics, former Sen. William Fulbright. 
     It's a tight, if sometimes feuding, family.
       Mr. Woods actively supported Mr. Bumpers' 1970 
     gubernatorial run. In 1974, Gov. Bumpers knocked Sen. 
     Fulbright out of the Democratic primary and went on to the 
     Senate; Mr. Fulbright went to work for the Saudis and 
     Stephens Inc. In 1978, Mr. Woods supported Mr. Stephens' 
     nephew, Mr. Thornton, in a three-way primary race against 
     then-U.S. Rep. Tucker and David Pryor for the Democratic 
     nomination to the Senate. President Carter nominated Mr. 
     Woods to the federal bench in 1979; when he was sworn in, 
     Gov. Clinton saluted him, saying he was a man who would 
     ``feel the pain'' of the people.
       The defendant to the contrary, the Tucker case is not just 
     another case, but one pregnant with implications for the 
     President, the First Lady and the whole circle of the judge's 
     friends and associates. Judge Woods can best honor his 
     distinguished record on the bench by following Judge Wilson's 
     example and stepping aside.

  This editorial raises an interesting question, because we are 
awaiting the trial of Bill Clinton's successor as Governor of Arkansas, 
Jim Guy Tucker. On June 7, 1995, Governor Tucker and two associates 
were indicated by a Federal grand jury in Little Rock. Governor Tucker 
was indicated for fraudulently obtaining a federally backed small 
business loan and evading taxes and is facing up to 12 years in prison 
if convicted.
  On October 6, 1993, Jim Guy Tucker and President Bill Clinton met 
privately at the White House. About a week before this meeting, White 
House Counsel Bernard Nussbaum and White House Advisor Bruce Lindsey 
and other top administration officials were informed of the fact that 
the Resolution Trust Corporation had forwarded criminal referrals 
regarding Madison Guaranty Savings and Loan to the Justice Department. 
These criminal referrals named not only Bill and Hillary Clinton but 
also Jim Guy Tucker.
  The White House has stated that President Clinton and Governor Tucker 
never discussed these criminal referrals, neither at the White House 
meeting nor at a later meeting in Seattle. But we have no way knowing. 
That is why so many people are so concerned about the many improper 
contacts between the White House staff and the Treasury Department.
  The judge assigned to preside over the Tucker case is Judge Henry 
Woods. For some background on Woods, I refer my colleagues to the Wall 
Street Journal editorial I quoted earlier, as well as a column by 
former elected Arkansas Supreme Court Justice Jim Johnson that ran in 
the June 23, 1995, edition of the Washington Times. I ask that these 
articles be entered into the Record.
               [From the Washington Times, June 23, 1995]

                The Life and Times of Judge Henry Woods

                            (By Jim Johnson)

       To understand how the federal courts work in Arkansas, you 
     have to understand Stephens Inc.
       To understand Stephens, you have to understand Henry Woods, 
     77, the senior U.S. judge in Arkansas, and the judge to whom 
     the fortunes of Jim Guy Tucker, our governor now under 
     federal indictment, have been assigned.
       You might say, ``it's an Arkansas thing.''
       U.S. district judges and other major officials of the 
     federal judiciary are selected by political appointment, and 
     politicians are moved by political influence. The most 
     powerful political influence in Arkansas for the past 40 
     years has been Stephens Inc., owned and operated for many 
     years by Witt Stephens and his younger brother, Jack.
       Stephens Inc., is the largest bond house off Wall Street, 
     bigger than any in Chicago or Los Angeles or Dallas, and one 
     of the top commodities traders in the nation. Stephens took 
     Tyson Foods and a number of other business giants public, for 
     example, and continues to influence their operations.
       In 1992, when the Clinton campaign was knocked to its knees 
     by the first allegations of the candidate's draft-dodging and 
     womanizing, a Stephens subsidiary advanced him over $3 
     million to save his campaign. This advance was identical to 
     the sum the Stephens organization got in a sweetheart deal it 
     had manipulated with the Clinton-controlled Arkansas Student 
     Loan Fund just a few months earlier.
       These people play hardball, and play it well. When Sen. 
     John L. McClellan died in 1977, the Stephens brothers 
     determined to replace him with their nephew, Rep. Ray 
     Thornton, who then represented a district in southern 
     Arkansas. Our governor, Jim Guy Tucker represented the Little 
     Rock district, and David Pryor, now our junior U.S. Senator, 
     was the governor.
       All three entered the race for Mr. McClellan's seat. The 
     nephew ran a close third, leaving the Stephens brothers in a 
     position to pick the winner in the runoff primary, by 
     throwing the nephew's support to one of the two top 
     candidates.
       They selected David Pryor, on condition that he arrange the 
     appointment of their friend, Henry Woods, a Little Rock 
     lawyer, to a U.S. district judgeship. As soon as Mr. Pryor 
     was elected, he kept his promise.
       I first knew Henry Woods when I arrived in Little Rock in 
     1951 to represent Ashley County, where I was born, in the 
     Arkansas state senate. Henry was the executive secretary to 
     Sidney S. McMath, the governor.
      In that era, our governors exerted complete control over the 
     state Highway Department, the agency that expended 
     millions of dollars annually, by far the agency with the 
     most rewards to dispense.
       Henry was promising roads to everybody who could offer 
     something in return. He became such a promising fellow that 
     I, along with a number of other members of the state senate, 
     introduced legislation to require an audit of the state's 
     highway-construction operations.
       Our bill became law, over the strenuous objections of the 
     governor, and the audit commenced. It wasn't long until it 
     appeared that Henry had his hands in the highway funds up to 
     his elbows, and a Pulaski County grand jury was empaneled to 
     determine whether crimes had been committed.
       The hearings waxed hot and heavy, and three weeks before 
     the governor's term expired, and with it Henry's job as the 
     governor's executive secretary, the judge presiding over the 
     grand jury abruptly and unexpectedly resigned, thereby 
     enabling the governor to appoint his replacement. The 
     governor appointed a Little Rock lawyer distinguished mostly 
     for his enthusiastic appreciation of distilled spirits, and 
     his first judicial act was to dismiss the grand jury--which, 
     according to speculation the grand jurors never discouraged, 
     was about to indict Henry.
       Henry Woods is an empire-builder. He concerns himself not 
     only with the appointment of federal judges, but clerks, 
     magistrates, U.S. district attorneys, U.S. marshals, the 
     office secretaries, clerks and even the janitors. Henry spent 
     World War II on the home front, working as an FBI agent. He 
     keeps himself informed as to every sparrow that falls by 
     being the most active alumnus in the FBI association. Henry 
     does not miss much.
       Henry was the closest friend Witt Stephens ever had. He 
     took lunch with Witt every day for years in the private 
     dining room at Stephens Inc., in downtown Little Rock, and 
     when Witt passed away two years ago Henry gave the eulogy. 
     Henry knew of every federal vacancy before it occurred, just 
     in time to make the wishes of the Stephens brothers known to 
     the official assigned to fill the vacancies.
       For example, Henry engineered the appointment of his former 
     classmate and co-campaign manager, Elsijane Trimble Roy, to 
     the federal bench in Arkansas. His public admiration of the 
     president and the first
      lady has been remarked on for years, and when they went to 
     Washington he saw to it that they leased a presidential 
     office in the Stephens Building, even though ample space 
     was available in Little Rock's spacious new federal office 
     building.
       When Mr. Clinton became the president, another of Henry's 
     friends, his former law partner, William R. Wilson, was 
     appointed to a federal judgeship, too. Mr. Wilson had been 
     Henry's leg man and gofer for years; it was well known in 
     Little Rock that when Mr. Wilson walked into your office you 
     were actually dealing with Henry.
       When Webster Hubbell, the U.S. associate attorney general 
     and the No. 3 man in the Justice Department, pleaded guilty 
     to having committed 2 of 47 felonies charged against him, the 
     case was assigned to Judge Wilson for sentencing--even though 
     Webb Hubbell worked on Judge Wilson's appointment, and as a 
     lawyer Judge Wilson had represented Roger Clinton, the 
     president's brother, when he was charged in a drug case. He 
     had represented Mrs. Virginia Kelley, the president's late 
     mother, in another matter. It did not occur to Judge Wilson 
     to recuse himself until the pressure created by national news 
     coverage became to intense that he finally stepped aside.

[[Page H8171]]

       This brings us to Whitewater. Six judges sit in Little Rock 
     for the Eastern District of Arkansas. Three are there through 
     the maneuvering of Henry Woods, affording those persons 
     indicted as a result of the investigation that began with the 
     president and Mrs. Clinton a 50-50 chance of drawing a judge 
     with a connection to Henry and Stephens Inc. Jim Guy Tucker 
     had just such luck.
       Further, anyone indicted as a result of an investigation 
     into whether someone at Tyson Foods, Inc., bribed Mike Espy, 
     the former U.S. secretary of agriculture, would be tried in 
     the Western District of Arkansas, headquarted in Fort Smith, 
     before Judge Harry Barnes, the former law partner of Sen. 
     David Pryor; Judge Franklin Waters, the former law partner of 
     James Blair, who is the chief counsel for Tyson and the guru 
     of Hillary Clinton in the making of her miraculous fortune in 
     the commodities-trading market; or Judge Jim Larry Hendren, 
     the former personal attorney for Sam Walton, the founder of 
     Wal-Mart. Stephens Inc., took Wal-Mart public. Jack Stephens 
     and Hillary Clinton have been members of the board of Wal-
     Mart.
       Kenneth Starr, the independent counsel, appears to us in 
     Arkansas to be conducting his investigation in a vigorous and 
     professional manner, but members of Congress should bear in 
     mind that even if these judges recuse themselves, the 
     judicial machinery for the selection of U.S. grand and petit 
     juries will remain in place and exercise a marked influence 
     on the outcome. All clerks, marshalls, secretaries, and even 
     the janitors know they will be spending the remainder of 
     their careers under the supervision of the judges who would
      be stepping aside only until the great spotlight dims, 
     silence falls and the special prosecuting lawyers leave 
     Little Rock.
       If justice should be done with convictions secured, the 
     convictions will be appealed to the U.S. Court of Appeals for 
     the Eighth Circuit in St. Louis. The chief judge there is 
     Richard Arnold, a protege of Henry Woods, who lunches with 
     him nearly every day he is in Little Rock, at Stephens Inc. 
     Witt is gone but the private dining room lives on.
       His brother, Morris Arnold, also serves on the appeals 
     court. Morris (or Buzz, as we call him at home) was the only 
     Republican confirmed by the old Democratic Senate after Bill 
     Clinton was elected president of the United States.
       On his last visit home, Mr. Clinton spent the first several 
     hours with Richard Arnold, the chief judge of the St. Louis 
     court, which hears all federal appeals in Arkansas. The Paula 
     Jones case is before that court now.
       Judge Richard Arnold was an administrative assistant to 
     Sen. Dale Bumpers, whose wife Betty is the chief Washington 
     lobbyist for the largest utility company in our state. 
     Arkansas can be an accommodating place.
       Judge Arnold was, in the president's own description, Bill 
     Clinton's sentimental choice for the seat that finally went 
     to Stephen Breyer. Judge Arnold said his health was not good. 
     It was also disclosed, in the FBI check into his background, 
     that he earned more than $500,000 last year in the 
     commodities-trading market--the very same market where 
     Hillary struck gold ``Brutus is an honorable man,'' said Mark 
     Anthony ``So are they all, all honorable men.'' But why, 
     someone must ask, given their loyalties and the uncanny 
     coincidences that thrive in Arkansas like Delta cotton in 
     August, must we lead them into temptation?
       Arkansas is a small state with a wealth and abundance of 
     many wonderful God-fearing people. I was born here and when I 
     die my mortal remains will return to the soil I love as a 
     Southerner loves the land of his people. Many hearts have 
     been broken by the squalid evidences of corruption paraded 
     past America over these past 2\1/2\ years, besmirching the 
     reputation of the state we love. We should have done 
     something about it years ago. We failed.
       Now Congress must meet its obligations to the Constitution 
     and to the people who sent them to Washington to defend that 
     Constitution. Congressional hearings on the order of 
     Watergate must be conducted at once, and only when they are 
     concluded after a thorough and vigorous effort, and 
     everything has been laid out before America, can America know 
     that justice has been done.

  Judge Woods is a longtime member of the Arkansas political elite. He 
is a major power broker in the Arkansas Democrat party. He served as 
chief assistant to Democratic Governor Sid McMath. He freely admits 
that he is good friends with Bill and Hillary Clinton. Judge Woods 
named Mrs. Clinton to a State panel to work toward racial balance in 
schools. Woods and McMath later went on to form a law partnership, 
McMath, Leatherman, and Woods. McMath's son, Sandy McMath, a member of 
the law firm, was an instrumental leader in the early political 
campaigns of Jim Guy Tucker. So even if Judge Woods and Governor Tucker 
aren't the best of friends, they are undoubtedly members of the same 
tightly knit network from which Bill Clinton emerged.
  In the Webster Hubbell case, Judge Wilson realized immediately that 
he had no business trying the case. Even if he could have been 
completely objective, many people would still question what they saw as 
the appearance of a conflict. In the Jim Guy Tucker case, Judge Woods 
has given us no indication that he intends to recuse himself, despite 
his multiple potential conflicts of interest. With Judge Woods, the 
conflict of interest is more than just an appearance. It is a very 
serious matter.


                               questions:

  If Jim Guy Tucker's attorneys move to throw out the indictments 
claiming that Kenneth Starr has exceeded his jurisdiction, would Judge 
Woods' many ties to the State Democrat party color his decision?
  What other connections exist between Judge Woods and Governor Tucker 
that we do not know about?
  With Judge Wilson's recusal due to possible conflicts of interest in 
the Hubbell case, isn't it in Judge Woods' best interest, after a long 
and illustrious career, to follow his example and recuse himself?
  What did Jim Guy Tucker and Bill Clinton talk about at their meeting 
at the White House in 1993? How can we ever know for sure whether or 
not they shared confidential information about the RTC criminal 
referrals that had been revealed to the White House?
  What did Jim Guy Tucker and Bill Clinton talk about in their meeting 
in Seattle?


                               david hale

  When Jim Guy was indicted, the media were quick to proclaim that the 
indictment was not connected in any way to Bill and Hillary Clinton. 
But this isn't the case. The charges brought by the Independent Counsel 
against Governor Tucker are the direct result of testimony and 
documentary evidence provided by Judge David Hale.
  Judge Hale is the same man who has accused the president of 
pressuring him to approve an illegal loan in 1986 to obtain funds to 
help the failing Madison Guaranty Savings and Loan.
  Judge Hale pled guilty to defrauding the Small Business 
Administration. He has testified to a Federal grand jury that he was 
pressured by Governor Bill Clinton and his Whitewater partner, James 
McDougal, and by Jim Guy Tucker, to provide an illegal $300,000 loan to 
McDougal's wife, Susan McDougal. This loan was never repaid, and more 
than $100,000 of the loan reportedly ended up in Whitewater Development 
Company's account.
  The day after the Tucker indictment, Mr. Starr secured a guilty plea 
from Stephen A Smith, who was one of Bill Clinton's top aides during 
his first term as Arkansas governor. Smith pleaded guilty to defrauding 
the Small Business Administration, lying to obtain $65,000 from David 
Hale's lending agency, Capital-Management Services.
  The indictment of Jim Guy Tucker and the guilty plea of Stephen Smith 
show us that the grand jury--made up, incidentally, or normal citizens 
of Arkansas, not a bunch of right-wing Clinton critics--is looking 
closely at the documents and listening very carefully to the testimony 
offered by David Hale. The actions taken by Mr. Starr tell us that both 
the independent counsel's office and the grand jury consider David Hale 
a credible witness.
               [From the Washington Post, March 4, 1995]

       White House Officials Detail Aide's Role in Hubbell Hiring

                           (By Susan Schmidt)

       Administration officials yesterday offered more details 
     about the White House role in helping Suzanna W. Hubbell 
     secure a political post at the Interior Department last 
     month, saying that Bruce Lindsey, a top presidential aide, 
     was involved only peripherally.
       Hubbell is the wife of former associate attorney general 
     Webster L. Hubbell, who has agreed to cooperate with 
     Whitewater independent counsel Kenneth W. Starr in hopes of 
     receiving a reduced sentence on felony fraud and tax charges. 
     Among other matters, Starr is investigating Lindsey's 
     handling of campaign funds in then-Gov. Bill Clinton's 1990 
     presidential campaign.
       Sen. Lauch Faircloth (R-N.C.), has complained that Lindsey 
     should not have discussed Suzanna Hubbell's job with the 
     Interior Department, given that her husband is cooperating 
     with a criminal investigation that touches Lindsey. But White 
     House officials said yesterday that Lindsey did nothing to 
     help Suzanna Hubbell return to her $59,022-a-year job after 
     an 11-month leave of absence caused by her husband's legal 
     problems.
       Suzanna Hubbell, formerly a special assistant in the 
     secretary's office, came back to a job as an assistant to the 
     director of external affairs.
       Interior spokesman Kevin J. Sweeney said yesterday that 
     Suzanna Hubbell had arranged to return to the department Feb. 
     6., 

[[Page H8172]]
     and Interior officials sought throughout January to get the White 
     House's okay, without success. When Suzanna Hubbell showed up 
     for a staff
      meeting on that date, Interior Chief of Staff Tom Collier 
     directed his deputy, B.J. Thornberry, to pull her out, 
     until the White House approved her status. Hubbell and 
     Thronberry then both got on the phone and tried to get an 
     answer themselves, Sweeney said.
       ``Suzy called Lindsey to see if he could find out about the 
     request for approval,'' said Sweeney. Lindsey, the associate 
     White House counsel and a family friend, was unavailable, so 
     she left a message.
       Suzanna Hubbell then called Deputy White House Chief of 
     Staff Erskine Bowles, who said he would get back to her, 
     Sweeney said.
       While she waited, Lindsey returned Suzanna Hubbell's call, 
     and talked to both Thornberry and Hubbell. ``He said he'd 
     check and get back, which he did not do,'' said Sweeney. 
     Later, Sweeney said, Bowles called Thornberry and said that 
     Suzanna Hubbell could be reinstated.
       A White House official, who asked not to be named, 
     described Lindsey's conversation differently. The official 
     said that by the time Lindsey called Suzanna Hubbell back, 
     the ``glitch'' already had been resolved and Thornberry told 
     Lindsey that. The official said Lindsey was not asked to do 
     anything, and was not involved in or aware of a decision by 
     White House counsel Abner J. Mikva that day to allow Suzanna 
     Hubbell to return to work.
       The accounts given by the White House and Interior 
     Department officials yesterday not only differed slightly 
     from each other, they varied from Sweeney's statement 
     Wednesday that Thornberry initiated the contact with Lindsey 
     as ``a courtesy'' to inform him that Suzanna Hubbell had been 
     reinstated.
                              {time}  2115

  Let me just end up by saying that Judge Woods, we believe, should 
recuse himself to eliminate any possibility of an appearance of 
impropriety in the case involving Jim Guy Tucker. I think that most of 
my colleagues, when they look at this information and read it in the 
Congressional Record, will agree with that.
  One other thing, Mr. Speaker, I would like to put into the 
Congressional Record tonight and talk about is an article that was in 
the Washington Post today. The FDIC says that the Rose Law Firm, for 
which Hillary Rodham Clinton was a partner, was faulted by this 
agency's inspector general.
  Mr. Speaker, I submit the following:

                [From the Washington Post, Aug. 1, 1995]

        FDIC, Rose Law Firm Faulted By Agency Inspector General

                           (By Susan Schmidt)

       The inspector general of the Federal Deposit Insurance 
     Corp. concluded yesterday that the agency ignored numerous 
     conflicts of interest in hiring the Rose Law Firm and glossed 
     over its failings in a report last year intended to examine 
     whether Rose had been improperly hired.
       The report issued yesterday took both Rose and FDIC lawyers 
     to task.
       The inspector general's investigation was prompted by 
     Republican charges of a ``whitewash'' in the FDIC's earlier 
     inquiry into conflict of interest charges involving the 
     Arkansas law firm, where first lady Hillary Rodham Clinton 
     was a partner.
       The inspector general's office said it sent the report to 
     the FDIC general counsel for possible legal sanctions against 
     the Rose firm, including recovery of overbillings, and said 
     it reported professional misconduct to authorities. The 
     report came a week before the House Banking Committee is 
     expected to examine Rose's work for the government as part of 
     overall hearings into Whitewater.
       Former Rose partner Webster L. Hubbell came in for the 
     harshest criticism for failing to disclose his own and his 
     firm's extensive ties to Madison Guaranty Savings & Loan when 
     he agreed to sue the failed thrift's accountants on behalf of 
     taxpayers in 1989.
       Hubbell, the former number three official in the Clinton 
     Justice Department, is scheduled to report to prison next 
     week for defrauding his firm and overbilling clients, 
     including the FDIC.
       Among the conflicts the inspector general said Rose failed 
     to disclose to the FDIC was the fact that the firm--in 
     particular partner Hillary Clinton--had represented Madison 
     before the Arkansas state securities department during the 
     mid-1980s when the struggling S&L was seeking approval for a 
     recapitalization plan. As part of that effort, Rose presented 
     statements prepared by the accounting firm of Frost & Co. 
     showing that Madison was in good financial shape, though the 
     thrift was actually close to insolvency.
       Hillary Clinton was on a $2,000-a-month retainer at Madison 
     during the mid-'80s. The inspector general's report found no 
     conflict of interest in her performance of a few hours of 
     work in an S&L case that involved Dan Lasater, a Little Rock 
     bond dealer and Clinton supporter who went to prison for 
     cocaine distribution.
       Hillary Clinton gave an affidavit to the FDIC inspector 
     general, then submitted to an interview, but was not placed 
     under oath. Her attorney, David Kendall, said she would have 
     been willing to take questions under oath, but the inspector 
     general did not want a court reporter present, as Kendall 
     said he would have required.
       The inspector general's office launched its investigation 
     18 months ago after the FDIC legal division issued a report 
     finding that neither the Rose firm nor the FDIC had al(?) 
     look into both the alleged conflicts and how the report was 
     prepared.
       In 1989, Hubbell circulated a memo among his colleagues 
     saying he intended to sue Frost & Co. on behalf of the FDIC. 
     He asked whether anyone knew of any Rose firm conflicts that 
     would prevent the firm from taking the case, but got no 
     reply.
       Hubbell's own conflicts should have kept the firm out of 
     the case under a standard that forbids even the ``appearance 
     of impropriety,'' according to the inspector general.
       Hubbell failed to tell FDIC lawyers that his father-in-law 
     was a Madison consultant and borrower whose loans were among 
     those the government contended Frost & Co. should have 
     flagged for Madison board members.
       Rose's conflicts were so extensive, said the inspector 
     general, that the firm was even representing a company partly 
     owned by the very auditor who did Madison's books--putting 
     Rose in position of both suing and representing the same 
     person.
       Rose managing partner Ronald Clarke said lawyers there 
     ``disagree with everything in the report. We did not have a 
     conflict of interest in the Madison-Frost litigation.'' He 
     said the firm hired two independent legal experts who agreed 
     it did not have conflicts, but he said lawyers there believe 
     the inspector general's findings were inevitable given the 
     political interest in the issue in Congress.
       The House Banking Committee's hearings next week will focus 
     on Madison and owner James B. McDougal's financial 
     relationship with the Clintons, including their joint 
     ownership of Whitewater. Madison failed in 1989 at a cost to 
     taxpayers of $65 million.
       The voluminous FDIC report and backup documents were sent 
     to congressional banking committee leaders Friday. The agency 
     released a seven-page executive summary yesterday. A separate 
     report is expected soon from the inspector general's office 
     of the federal S&L cleanup agency, Resolution Trust Corp., 
     for which Rose also did work.

  Mr. Speaker, the fact of the matter is there have been numerous 
people indicted, numerous people removed from positions of authority in 
the White House, numerous people who have been convicted or will be 
convicted, I believe, because of the indictments that are coming down 
who are connected to this administration.
  I believe and hope that the Banking Committee here in the House and 
the corresponding committee in the other body, will get to the bottom 
of all of this and bring to justice those people who broke the law.
  At the very least, the appearance of impropriety for so many people 
in this administration is something that everybody in this country 
ought to be worried about. As the weeks and months come as these 
investigations continue to unfold, I will bring to the floor 
information for my colleagues to take a look at, because I think it is 
extremely important that the people's House and the people who 
represent the people of this country are apprised of all the facts of 
the case of Whitewater, the Arkansas Financial Development Authority, 
the Madison Guaranty Corporation, and other situations involving people 
in this administration.
  With that I yield back the balance of my time.
  

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