[Congressional Record Volume 141, Number 137 (Wednesday, September 6, 1995)]
[House]
[Pages H8579-H8582]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
JUDGE HENRY WOODS AND THE WHITEWATER CASE
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Indiana [Mr. Burton] is recognized for 5 minutes.
Mr. BURTON of Indiana. Mr. Speaker, about 4 or 5 weeks ago I took a
special order talking about a judge in Arkansas, in Little Rock, a
Federal judge who has close political ties to the current Governor, Jim
Guy Tucker, and President Clinton, and particularly the First Lady,
Hillary Rodham Clinton. Judge Henry Woods has been a longtime political
adviser to the President and to Mrs. Clinton. He has appointed her to a
number of boards. He recently was given a case involving the current
Governor, Jim Guy Tucker, which was brought to his attention and put
before his court by Mr. Starr, who is investigating the Whitewater
matter and other related matters.
At that time, when I had my special order. I suggested that in order
to eliminate any appearance of impropriety, Judge Henry Woods should
recuse himself and not be the judge to hear this case, because no
matter what he did, if he rendered a decision in favor of Mr. Tucker,
Governor Tucker, it would have the appearance of impropriety.
One of the other judges down there in a related case dealing with
Webb Hubbell, who was indicated and convicted, you remember Webb
Hubbell, he was the Assistant Attorney General appointed by President
Clinton, did recuse himself. He did it because he felt like the
appearance of impropriety was something that should not even be
considered by a Federal judge.
I urged during my special order that Judge Henry Woods recuse
himself, as the other Federal judge did in a related case, but Judge
Henry Woods did not do that. This week it was announced that he
dismissed one of the indictable offenses against Governor Jim Guy
Tucker, and it certainly does give the appearance of impropriety
because of this connection with Jim Guy Tucker and the people who are
currently residing in the White House, as well as other Democrat
leaders throughout Arkansas.
Tonight I would like to submit for the Record, Mr. Speaker, all of
the information I have regarding Judge Henry Woods, my previous special
order, an article that was written by a person from little Rock who
served in the Arkansas State Senate with Judge Henry Woods when he was
in the Senate, and I would like for
all of these articles to be included in the Congressional Record so at
some future date, if Judge Henry Woods renders decisions that are of
concern to Members of the House, there will be a record in the
Congressional Record.
Mr. Speaker, I would also like to say to all who are on the Committee
on Government Reform and Oversight that we ought to have a complete and
thorough hearing on the Whitewater case and all the related cases,
including the one currently pending before the courts involving Jim Guy
Tucker, the Governor of Arkansas, I think there is so much that appears
to be collusion down there that it boggles the mind. For Judge Henry
Woods to participate and render the decision he did last week regarding
Jim Guy Tucker is just beyond comprehension.
As a matter of fact, I would like to just read one thing that was
said in the newspaper article which I think was put in the paper today.
``It's typical hometown anger at the Feds coming in,'' says James
Madison University political science professor Robert Roberts. ``But if
it hadn't been for Federal prosecutors, the level of scandal at the
local and State level would be 10 times greater than it is today,''
Roberts predicted. This is the part I want to put in the Congressional
Record. In particular, ``Roberts predicted Starr would win on appeal,''
that is the decision by Judge Henry Woods he is going to appeal, that
``Roberts predicted Starr would win on appeal because of the long
tradition of granting independent counsels widespread discretion. This
is nothing for President Clinton to cheer about,'' says Roberts. ``He
is best served by letting the investigation run its course quickly, and
this just delays things.''
I submit to my colleagues here in the House that the reason for this
delay is because of the close personal relationship Judge Henry Woods
has with First Lady Hillary Rodham Clinton and other people in the Jim
Guy Tucker administration. It is unfortunate this happened. It should
not have happened. He should have recused himself.
The material referred to follows:
[From the USA TODAY]
Independent Counsel Challenged
(By Tony Mauro)
A Little Rock federal judge's decision Tuesday to dismiss
fraud indictment against Arkansas Gov. Jim Guy Tucker marks
the first time the broad powers of an independent counsel
have been trimmed.
U.S. District Judge Henry Woods said Whitewater independent
counsel Kenneth Starr overstepped his authority in June by
indicting Tucker of fraud charges related to a federal loan
to finance a cable TV venture.
Starr contends the judge has no authority to rule on the
scope of the investigation, which was launched to look into
irregularities relating to the Whitewater real estate venture
in which President Clinton and Hillary Rodham Clinton were
partners.
``I cannot accept the proposition that . . . no court has
the power to determine where there is jurisdiction to proceed
in the matter,'' wrote Woods, a 1979 Carter appointee.
Starr promptly announced he would seek an expedited review
by a federal appeals court in St. Louis.
Tucker still faces an 11-count indictment stemming from
dealings with Madison Guaranty Savings & Loan, which was
owned by the Clintons' Whitewater partners, James and Susan
McDougal. They also have been indicted.
The ruling comes amid debate over the power of independent
counsels, a hybrid breed of prosecutors created by a post-
Watergate federal law in 1978.
Independent counsels are appointed by a three-judge panel
at the request of the attorney general when a high-level
official is suspected of violating federal law.
Originally viewed as properly insulated from political
influence, critics now say
[[Page H 8580]]
independent counsels are too insulated--politically unaccountable and
prone to lengthy fishing expeditions that go far beyond the
original allegations.
``The logic of the law is to sweep in more and more
potential cases, things the Justice Department would not have
punished,'' says former Justice Department official Terry
Eastland, who wrote a book on independent counsels. ``It
becomes a very messy business and it's bad for the system.''
Starr, a former Republican administration official, came
under attack in Arkansas and in the White House for straying
beyond Whitewater and reviewing every political transaction
in recent Arkansas political history.
``It's typical hometown anger at the feds coming in,'' says
James Madison University political science professor Robert
Roberts. ``But if it hadn't been for federal prosecutors, the
level of scandal at the local and state level would be 10
times greater than it is today.''
Roberts predicted Starr would win on appeal because of the
long tradition of granting independent counsels wide
discretion.
``This is nothing for President Clinton to cheer about,''
says Roberts. ``He is best-served by letting the
investigation run its course quickly, and this just delays
things.''
____
[From the Washington Post, Sept. 6, 1995]
One Whitewater Indictment of Tucker Dismissed
Federal Judge Rules Independent Counsel Starr Exceeded His Authority in
Tax Case
(By Susan Schmidt)
A federal judge yesterday dismissed one of two indictments
against Arkansas Gov. Jim Guy Tucker on grounds that the
prosecutor, Whitewater independent counsel Kenneth W. Starr,
exceeded his authority in bringing the case.
U.S. District Judge Henry Woods threw out a June tax fraud
and conspiracy indictment of Tucker and two other men
involved with him in a cable television venture, saying the
case ``bears no relation whatsoever'' to the questions Starr
was charged with investigating. A second bank fraud
indictment of Tucker, handed up last month, still stands.
Tucker has not sought dismissal of that indictment, which
relates more directly to the Whitewater investigation. That
case is being handled by a different judge.
The 21-page ruling, issued after 1\1/2\ hours of oral
arguments, touches on the controversial question of how broad
a special prosecutor's authority should be in pursuing
evidence not directly connected to the central theme of an
investigation.
Objections to broad inquires have been raised in other
independent counsel investigations, including the probe of
former agriculture secretary Mike Espy.
Woods agreed with Tucker's lawyers that the allegations had
nothing to do with the independent counsel's mandate to
investigate the interrelationships between two defunct
Arkansas lending institutions and the two couples who owned
the Whitewater Development Corp.--Bill and Hillary Rodham
Clinton and James B. and Susan McDougal.
It was not enough, the judge said, that Starr
``fortuitously stumbled across the defendants' alleged
violation of law.'' The authority to bring charges against
Tucker rested with the Justice Department, he said.
The issues raised in the tax fraud indictment ``were not
related in any way to the investigation of Whitewater,'' said
Tucker's lawyer, William H. Sutton. ``We felt the independent
counsel legislation was very special, applicable to a defined
set of people, primarily high officials in the federal
government.''
Starr said his office will seek an expedited appeal of
Woods's ruling before the 8th U.S. Circuit Court of Appeals
and then the Supreme Court, if necessary.
Appearing before Woods in Little Rock yesterday morning,
Starr argued that his evidence against Tucker was
sufficiently related to the main areas of his investigation
to justify his bringing an indictment.
Even if Woods did not agree, Starr said, the judge did not
have the authority to limit the powers of an independent
counsel's activity.
The scope of such a probe has never been successfully
challenged ``since Watergate, since the scandals that gave
rise to the Ethics in Government Act'' under which he was
appointed, he said. Attorney General Janet Reno filed a court
brief in support of Starr's position.
But Woods disagreed. ``I cannot accept the proposition that
a citizen can be put on trial in my court for a loss of his
liberty, and that no court has the power to determine whether
there is jurisdiction to proceed in the matter,'' he wrote.
``Surely the independent counsel and attorney general do not
suggest that there can be no judicial review of prosecutorial
jurisdiction of an independent counsel. . . . Such a
precedent would be both novel and dangerous.''
Starr had argued that one of the elements of the June
indictment stemmed from a business deal between Tucker and
David Hale, owner of Capital Management Services, which Starr
is investigating along with McDougal's savings and loan
association, Madison Guaranty.
Starr said the second Tucker indictment shows that the
crimes alleged in the June indictment were directly tied to
Capital Management and to Madison.
Tucker was accused in the dismissed indictment of
falsifying a loan application to Capital Management, a
company funded by the federal Small Business Administration
to make loans to disadvantaged businesses.
He allegedly used the money he borrowed from Capital
Management to help purchase a cable television company, then
sold the company and allegedly conspired to avoid paying
several million dollars in federal taxes.
Tucker has not sought a dismissal of the second 21-count
indictment, in which James and Susan McDougal are also named
as defendants. The three are accused of engineering financing
for millions of dollars in allegedly phony real estate
transactions through Madison and Capital Management.
Tucker, a Democrat, has complained that he is being made a
scapegoat in a politically motivated investigation, and he
has made much of Starr's Republican background.
Even if Woods's ruling is overturned, it will delay by many
months Tucker's trial on the first set of charges, pushing it
well into next year. If Tucker prevails on appeal, Starr
would turn the case over to the attorney general for
prosecution.
Woods, appointed to the federal bench by President Jimmy
Carter, has had a long-standing professional relationship
with Hillary Clinton who practiced law in Arkansas until her
husband was elected president.
Woods wrote to late deputy White House counsel Vincent W.
Foster Jr. in June 1993 to ask whether he should grant an
interview to a reporter from Mother Jones magazine who was
preparing an article on Hillary Clinton.
In a written inquiry to Woods, the reporter said she wanted
to interview him because he had appointed Hillary Clinton to
a trial advocacy panel early in her career and later to the
committee on the Little Rock school desegregation case.
``Would you take this up with Hillary or her press
secretary and give me instructions as to whether this
interview should be granted?'' Woods asked Foster.
Woods's letter to Foster was turned over to congressional
investigators by the White House.
____
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.''
* * * * *
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 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 come 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 Will Stephens--head of the
Stephens Inc. investment giant until his death in 1991. * *
* 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
[[Page H 8581]]
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.
____
webster hubbell and gov. jim guy tucker
Mr. Speaker, I would like to talk today about the conviction of
Webster Hubbell, the indictment of Gov. 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 would 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 3 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 now 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.
This editorial raises an interesting question, because we are
awaiting the trail of Bill Clinton's successor as Governor of Arkansas,
Jim Guy Tucker. On June 7, 1995, Governor Tucker and two associates
were indicted by a Federal grand jury in Little Rock. Governor Tucker
was indicted 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 of
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.
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 are not 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 Tuckers'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, is it not 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 is not 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.
[[Page H 8582]]
Judge Hale pled guilty to defrauding the Small Business
Administration. He has testified to a Federal grand jury that he was
pressured by Gov. 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, of 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.
____________________