[Congressional Record Volume 142, Number 26 (Thursday, February 29, 1996)]
[Senate]
[Pages S1442-S1446]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               WHITEWATER

  Mr. SARBANES. Mr. President, I listened with great interest while my 
colleague, the distinguished Senator from New York, and his colleagues 
went on for some length, and I do not intend to match that length at 
this hour. I do not think that is really necessary, but there are some 
matters that I think ought to be reviewed with respect to this 
Whitewater matter.
  First, a great deal is being made about these documents that appear, 
as though it is a nefarious plot. I understand that people like to 
attach sinister intentions, but the explanation for it may be far more 
innocent than that. And I really want to include in the Record an 
article that appeared a few weeks ago in the New York Times by Sidney 
Herman, a former partner of Kenneth Starr. Let me quote from it:

       Documents that are relevant to an investigation are found 
     in an unexpected place 6 months after they were first sought. 
     A shocking development? Absolutely not. In most major pieces 
     of litigation, files turn up late. One side or the other 
     always thinks of making something of the late appearance. But 
     these lawyers know the truth. It could just as easily happen 
     to them. Despite diligent searches, important papers in large 
     organizations are always turning up after the initial and 
     follow-up searches.

  Later on he goes on to say:

       My former partner, Kenneth Starr, knows all this. As 
     independent counsel in the Whitewater investigation, he will 
     take it into account. But the American people have no reason 
     to know that this is a normal occurrence. It is not part of 
     their every-day experience. Reporters really do not have any 
     reason to know this either, or they may know and simply 
     choose to ignore it.
  Now, Mr. President, I ask unanimous consent that article be printed 
in the Record at the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SARBANES. I place it in the Record simply to make the point, as 
the article does, that the appearance of documents a considerable 
period of time after they have been requested is, in fact, not a 
shocking development. This goes on all the time, as anyone involved in 
litigation or document requests well knows.
  In each instance, of course, one has to judge the explanation for the 
late-appearing documents with respect to their plausibility, but as I 
indicated when we were discussing Mr. Gearan earlier, his explanation, 
I thought, was very straightforward. He said by mistake these had been 
packed into a box he took with him to the Peace Corps. He thought they 
had remained at the White House where the White House counsel could go 
through them and provide responsive matters to the committee. It was 
only by chance that these documents, then, were later discovered in 
that box that had been sent over to the Peace Corps and then were put 
back into the loop so that they eventually came to the committee.
  A great to-do is made of the fact that if you have a fixed date for 
ending, you will not get the documents, and that to-do is made over 
documents that we have gotten. I find it incredible--in other words, 
these documents are furnished to us and then an argument is made if you 
have a fixed date--as we did, the date of February 29--you will not get 
the documents. I do not know how you square the two. We get the 
documents. They are provided to us. Then the assertion is made if you 
have a fixed date you will not get the documents. We have a fixed date. 
We got the documents. The people provided them to us in response to the 
request. I do not understand that argument. Obviously, logically, it 
does not hold together.
  Now, the issue here is essentially the difference between the request 
of my colleague from New York, Chairman D'Amato, for an open-ended 
extension of this inquiry, and the proposal put forth by Senator 
Daschle for an extension until April 3 for hearings and until May 10 to 
file the report.
  When this resolution was first passed, it was passed on the premise 
that there would be an ending date, February 29, and the rationale 
advanced in part for that ending date was to keep this matter out of 
the Presidential election year and therefore avoid the politicizing of 
these hearings and the erosion of any public confidence in the hearings 
because of a perception that they were being conducted for political 
reasons.
  I listened with some amazement earlier as the Washington Post 
editorial was cited by my colleagues on the other side of the aisle in 
support of their position for an unlimited extension. Now, that is the 
position, and I recognize it, of the New York Times. I recognize that 
the New York Times' posture is for an indefinite extension; but the 
Washington Post, which was also cited in support, said today, very 
clearly, ``The Senate should require the committee to complete its 
work, produce a final report by a fixed date.''
  Now, they question the dates that we put forward as perhaps being too 
short a period. They said a limited extension makes sense but an 
unreasonably short deadline does not. They said 5 weeks may not be 
enough time. They suggested maybe there should be a little extra time, 
running in the range of through April or early May. In other words, a 
few more weeks beyond what the leader has proposed in the alternative, 
which my distinguished friend from Nebraska has suggested was a 
possible way of approaching this matter. 

[[Page S1443]]

  In any event, so that readers of the Record can judge for themselves, 
I ask unanimous consent that this Washington Post editorial entitled 
``Extend But With Limits,'' and which contains as I said the sentence, 
``The Senate should require the committee to complete its work and 
produce a final report by a fixed date,'' which editorial has been used 
by some in support of an indefinite extension--for the life of me I 
cannot understand how one can do that, can make that argument. I ask 
unanimous consent that editorial be printed in the Record at the end of 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. SARBANES. Mr. President, I want to point out with respect to both 
the Gearan and Ickes notes, because the point was raised that we have 
these notes and we got them late in the day. The fact is the committee 
held a full day of hearing with Mr. Gearan and a full day of hearing 
with Mr. Ickes with respect to their notes. There was an opportunity to 
examine their notes, see the contents of their notes, bring them in 
before the committee, and have a hearing with respect to them.
  The White House has, in effect, now responded to every request of the 
committee. We have some e-mails to be obtained, but that is almost 
completed. I outlined earlier the difficult problems that were 
associated with the e-mails. First of all, the extraordinary and 
onerous breadth of the committee's request and the fact that the Bush 
administration had put in a procedure, a process at the White House 
that made the recovery of those e-mails extremely difficult. The White 
House finally had to bring in a consultant, and they are expending 
hundreds of thousands of dollars in order to provide those e-mails. The 
ones that have been provided thus far, the weeks covered, have not 
produced anything. That is in a very real sense a fishing expedition. 
It has not produced anything thus far.
  Now, Mr. President, a lot has been made of citing the book by Senator 
Mitchell and Senator Cohen with respect to having a firm deadline and 
their feeling that the Iran-Contra inquiry would have worked better 
without a firm deadline. Of course, as my colleague from Connecticut 
pointed out earlier, there has been no inquiry conducted in the Senate 
without a firm deadline. This is an entirely new and different 
precedent that was going to be established.
  Let me just quote from their book:

       At the time, the setting of a deadline for the completion 
     of the committee's work seemed a reasonable and responsible 
     compromise between Democratic members in both the House of 
     Representatives and the Senate who wanted no time limitation 
     placed upon the committee, and Republican Members who wanted 
     the hearings completed within 2 or 3 months.

  As an aside, I may note that probably the strongest advocate of a 
time limitation for the committee's work was the then-minority leader, 
Senator Dole. Time and time again he took the floor to argue that very 
strenuously, did the same thing in the meetings that were being held 
between the leadership to work out how that inquiry would be done, and 
did, in fact, press for a timeframe at one point of only 2 or 3 months, 
as this book indicates.
  Now, the book then goes on to say, and I am now quoting it again:
  ``It escaped no one's attention that an investigation that spilled 
into 1988 could only help keep Republicans on the defensive during an 
election year. Both Inouye and Hamilton recommended rejecting'' and I 
underscore that. ``rejecting the opportunity to prolong, and thereby 
exploit President Reagan's difficulties, determining that 10 months 
would provide enough time to uncover any wrongdoing.''
  I want to underscore to this body that the Democratic leadership of 
the Congress, as that book states, Chairman Hamilton from the House and 
Chairman Inouye from the Senate, agreed to a defined timeframe as the 
minority leader, Senator Dole, had pressed for very, very hard. And, of 
course, the reason was to keep it out of the 1988 Presidential election 
year and, therefore, not turn the inquiry into a political football.
  That was the thinking here last year when we passed Senate Resolution 
120 with an ending date of February 29, 1996, which is where we find 
ourselves now. That was the thinking. And many of us have taken the 
view, and I hold to it very strongly, that extending the inquiry deep 
into a Presidential election year will seriously undermine the 
credibility of this investigation and create a public perception that 
this investigation is being conducted for political purposes. I think 
that is clearly happening, and I think the effort to have the inquiry 
continue on through the Presidential election year will contribute to 
that.
  I was very much interested in an editorial that appeared in U.S. News 
& World Report on January 29, by its editor in chief, Mortimer 
Zuckerman.
  I ask unanimous consent that editorial be printed in the Record at 
the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 3.)
  Mr. SARBANES. In the course of it he says, and let me just quote it:

       It would be foolish to expect a congressional investigation 
     to be above politics. But at what point, in a decent 
     democracy, does politics have to yield to objectivity? At 
     what point does rumor have to retreat before truth? In 
     Whitewater that point would seem to have been reached when we 
     have had an independent, exhaustive study of the case under 
     the supervision of a former Republican U.S. attorney, Jay 
     Stephens.

  Of course, he is referring there to the study that was commissioned 
by the RTC, from the Pillsbury, Madison, Sutro law firm.
  He goes on a little later in that editorial to say:

       That official report is in, but hardly anyone who has been 
     surfing the Whitewater headlines will know of it. It has been 
     ignored by both the Republicans and a media hungry for 
     scandal. The Stephens report provides a blow-by-blow account 
     of virtually every charge involved in the Whitewater saga. 
     Let us put the conclusions firmly on the record. The quotes 
     below are directly from the Stephens report.

  And he then goes through questions that were raised about various 
activities and the conclusions of the report. And then goes on to say:

       The report concludes: On this record there is no basis to 
     charge the Clintons with any kind of primary liability for 
     fraud or intentional misconduct. This investigation has 
     revealed no evidence to support any such claims. Nor would 
     the record support any claim of secondary or derivative 
     liability for the possible misdeeds of others.
       Stephens's firm--Pillsbury, Madison & Sutro--spent two 
     years and almost $4 million to reach its conclusions and 
     recommended that no further resources be expended on the 
     Whitewater part of this investigation.

  Pillsbury, Madison actually asked for a tolling agreement from the 
Rose Law Firm at the end of December, because of some new material that 
had come out. And then subsequent to that we received the billing 
records of Mrs. Clinton from the Rose firm. Other matters came of 
public record, and they examined all of those before they submitted 
their final report, which has just come in today. In that report they 
conclude, as they had concluded earlier, that there was no basis on any 
of the matters they investigated--and they went carefully through quite 
a long litany of them--

       . . . no basis on which to charge the Clintons with any 
     kind of primary liability for fraud or intentional conduct, 
     nor would the record support any claim of secondary or 
     derivative liability for the possible misdeeds of others.

  This report needs, obviously, to be carefully examined by my 
colleagues. It is a very important report; $4 million of public money 
was expended on it. And it reached the conclusions which I have just 
outlined.
  Mr. President, I think the proposal that Senator Daschle has put 
forward is an eminently reasonable proposal. It is argued, on the one 
hand, we need even an indefinite time because we need to get more 
material. The material has now all come--an extraordinary request for 
material, some of it delayed, in my judgment, because of how far-
reaching and onerous the document requests were. Other items were 
delayed because people misplaced them, did not find them. They have now 
been provided to the committee.
  The other argument that is made, which is an interesting argument 
given the record of this committee, is that we now need to await the 
trial in Arkansas. It was recognized in Senate Resolution 120 that the 
independent counsel was already at work, and it was never anticipated 
that the committee would defer its work to the independent counsel in 
such a way as to go beyond the February 29 deadline. 

[[Page S1444]]

  In fact, when the independent counsel in September of last year 
indicated to the committee to forbear until some unspecified time any 
investigation and public hearings into many of the matters specified in 
Senate Resolution 120, we rejected that in a joint letter which Senator 
D'Amato and I sent to Mr. Starr. We stated:

       We have now determined that the special committee should 
     not delay its investigation of the remaining matters 
     specified in Senate Resolution 120.

  We went on to say:

       We believe that the concerns expressed in your letter do 
     not outweigh the Senate's strong interest in concluding its 
     investigation and public hearings into the matters specified 
     in Senate Resolution 120 consistent with section 9 of the 
     resolution.

  Section 9 is the provision of the resolution which called for the 
February 29 concluding date for the work of this committee.
  And we went on to say:

       Accordingly, we have determined that the special committee 
     will begin its next round of public hearings in late October 
     of 1995. This round of hearings will focus primarily on the 
     matters specified in section (1)(b)(2) of Senate Resolution 
     120, and through the remainder of this year the special 
     committee will investigate the remaining matters specified in 
     Senate Resolution 120 with the intention of holding public 
     hearings thereon beginning in January 1996.

  That was our position then. I thought it was a correct position. It 
was not anticipated that the committee would defer its work until after 
the independent counsel has pursued his trials. It is now said this 
trial. But he has other trials in the offing as well, all of which, of 
course, would serve to carry this inquiry on into infinity.
  Just to underscore it with respect to Mr. Hale because we, the 
minority, have pressed repeatedly throughout for bringing Mr. Hale in, 
seeking through subpoena to obtain his documents--and that has 
consistently been delayed--this issue was considered at a hearing on 
the 28th of November, and Chairman D'Amato said the following. I now 
quote:

       I would like to bring him, Hale, in sooner rather than 
     later so that he can testify and so that he can be examined. 
     If we drag this, if this matter is dragged out into February 
     or later, I believe legitimate questions can be raised as to 
     why bringing him in so late and getting into next year and 
     the political season--and I think that is a very legitimate 
     concern of this committee--both Democrats and Republicans and 
     I would like to avoid that.

  It certainly was a legitimate concern and the effort to press to move 
on the Hale matter never was realized. The minority staff continually 
sent memoranda to the majority about Hale and nothing was done about 
it. We now find ourselves finding this being used as an argument to 
defer the hearings to the other side of the trial. As I said, the trial 
is not going to be in secret. So the matters developed at the trial 
will be, I can assure you, on the public record and available to the 
public.
  Many of the witnesses sought have indicated they will take the fifth 
amendment. And there is every reason to assume that they will continue 
to do so. So then they are not going to become available to the 
committee in any event. And the committee has to do its work and make 
its report.
  We have taken an extraordinary number of depositions. Much of what we 
are now looking at, which involves matters that occurred in Arkansas 10 
and 15 years ago, had been covered voluminously in the press. I am 
really almost staggered by the fact that we hold a hearing and then it 
is asserted, well, new revelations came out at this hearing. We held a 
hearing with Ickes. And everyone said, ``My goodness, we have 
discovered that a special team was set up in the White House to deal 
with the Whitewater matter in January of 1994.'' A newspaper account in 
early January of 1994 states that a special team under the direction of 
Mr. Ickes was set up. So he comes in. We have these notes. He comes in 
and testifies. We have the situation in the committee where the 
establishment of this team and him as the head of it is considered as a 
new discovery when there is a newspaper story from 2 years earlier 
stating that such a team was being set up and that he would head it up.
  Interestingly enough, the article that was written on the day after 
the hearing paralleled the article that was written 2 years earlier. 
The January 7th, 1994--not 1996, 1994--article in the Washington Post 
stated, and I quote:

       With the start of the new year, the White House launched a 
     major internal effort to fight back against mounting 
     criticism of the way it has handled inquiries into President 
     Clinton's Arkansas land investments. A high-powered damage 
     control squad was appointed under the direction of new Deputy 
     Chief of Staff, Harold Ickes, and daily strategy sessions 
     began.

  That is in 1994. Then we get notes from Ickes about a meeting of the 
special strategy session that he is heading up, and that is treated as 
though we discovered something new. In fact, the article reporting on 
the hearing paralleled the article written 2 years earlier.
  That is what we have been going through; I mean a replowing of 
material that has already been available generally in the press and out 
to the public. In fact, the Atlanta Constitution in the editorial that 
my colleague, Senator Pryor, cited of February 15 states:

       The Senate's Watergate hearings of 1973 and 1974 were 
     momentous delving into White House abuses of power and 
     leading to the resignation of the disgraced President and the 
     imprisonment of many of his aides. They lasted 279 days. Next 
     week, Senator Alfonse D'Amato, Republican of New York and his 
     fellow Whitewater investigators, will surpass that mark. 
     Today is the 275th day, and they have nothing anywhere near 
     conclusive to show for their labors. To put matters in 
     context, all they have to ponder is a fairly obscure 1980's 
     real estate and banking scandal in Arkansas. With the 
     February 29th expiration date for the special panel staring 
     him in the face, Senator D'Amato has the effrontery to ask 
     the Senate for more time and money to continue drilling dry 
     investigative holes. Specifically, he wants open-ended 
     authority and another $600,000. That is on top of $950,000 
     his committee has spent so far plus $400,000 that was devoted 
     to a Senate Banking Committee inquiry into Whitewater in 
     1994. The partisan motives behind Senator D'Amato's request 
     could not be more obvious.

  They then go on along this vein.
  They also make the point in concluding that the independent counsel 
will continue his investigation and, therefore, the legal and business 
affairs of the President and Mrs. Clinton will be scrutinized by the 
independent counsel.
  This editorial actually called for ending on February 29 as the 
resolution provided. The distinguished minority leader has in effect 
come forward and said we will not press this immediate cutoff. We are 
prepared for the hearings to go on for a limited further period of 
time, and for a period of time after that in order to do the report. I 
think that is a very forthcoming proposal, and I very strongly commend 
it to my colleagues on the other side of the aisle.
  Mr. President, I yield the floor.

                               Exhibit 1

                [From the New York Times, Jan. 27, 1996]

                               Docudrama

                         (By Sidney N. Herman)

       Documents that are relevant to an investigation are found 
     in an unexpected place six months after they were first 
     sought. A shocking development?
       Absolutely not. In most major pieces of litigation, files 
     turn up late. One side or the other always thinks of making 
     something of the late appearance, but these lawyers know the 
     truth: it could just as easily happen to them.
       Despite diligent searches, important papers in large 
     organizations are always turning up after the initial and 
     follow-up searches. How many times have you looked for 
     something on your desk and couldn't find it, only to have it 
     appear right under your nose later? Happens all the time.
       Indeed, as every litigator knows, there is nothing worse 
     than having an important document show up late. You've only 
     highlighted its absence for your opponent. If you know where 
     it is, it is far better to include it in the initial delivery 
     of relevant papers, where it gets mixed in with the rest of 
     the morass. Why red-flag it by holding it back?
       My former partner, Kenneth Starr, knows all this. As 
     independent counsel in the Whitewater investigation, he will 
     take it into account.
       But the American people have no reason to know that this is 
     a normal occurrence; it is not part of their everyday 
     experience. Reporters really don't have any reason to know 
     this either. Or they may know, and simply choose to ignore 
     it.
       Last summer, notes that were critical to the celebrated 
     libel suit brought by Jeffrey Masson against the writer Janet 
     Malcolm appeared in her private study, years after they were 
     first sought. I recall that discovery being treated as an 
     interesting happenstance, nothing more.
       When documents show up belatedly, even in private quarters, 
     there is simply nothing unusual about it.

                               Exhibit 2

               [From the Washington Post, Feb. 29, 1996]

                        Extend, But With Limits

       We noted the other day that the White House--through its 
     tardiness in producing 

[[Page S1445]]
     long-sought subpoenaed documents--has helped Senate Banking Committee 
     Chairman Alfonse D'Amato make his case for extending the 
     Whitewater investigation beyond today's expiration date. If 
     one didn't know any better, one might conclude that the 
     administration's Whitewater strategy was being devised not by 
     a White House response team but by the high command of the 
     Republican National Committee.
       However, despite the administration's many pratfalls since 
     Whitewater burst onstage, Sen. D'Amato and his Republican 
     colleagues have not provided compelling evidence to support 
     the entirely open ended mandate they are seeking from the 
     Senate. There are loose ends to be tied up and other 
     witnesses to be heard, as Republican Sen. Christopher Bond 
     said the other day. But dragging the proceedings out well 
     into the presidential campaign advances the GOP's political 
     agenda; it doesn't necessarily serve the ends of justice or 
     the need to learn what made the Madison Guaranty Savings & 
     Loan of Arkansas go off the tracks at such enormous cost to 
     American taxpayers. The Senate should allow the committee to 
     complete the investigative phase of its inquiry, including a 
     complete examination of the Clinton's involvement with the 
     defunct Whitewater Development Corp. and their business 
     relationships with other Arkansas figures involved in 
     financial wrongdoing. But the Senate should require the 
     committee to complete its work and produce a final report by 
     a fixed date.
       Democrats want to keep the committee on a short leash by 
     extending hearings to April 3, with a final report to follow 
     by May 10. A limited extension makes sense, but an 
     unreasonably short deadline does not. Five weeks may not be 
     enough time for the committee to do a credible job. Instead, 
     the Senate should give the committee more running room but 
     aim for ending the entire proceedings before summer, when the 
     campaign season really heats up. That would argue for 
     permitting the probe to continue through April or early May.
       What the Senate does not need is a Democrat-led filibuster. 
     Having already gone bail for the Clinton White House, often 
     to an embarrassing degree, Senate Democrats would do 
     themselves and the president little good by tying up the 
     Senate with a talkathon. Better that they let the probe 
     proceed. Give the public some credit for knowing a witch hunt 
     and a waste of their money if and when they see one. And 
     that, of course, is the risk Sen. D'Amato and his committee 
     are taking. The burden is also on them.

                               Exhibit 3

           [From the U.S. News & World Report, Jan. 29, 1996]

                       The Real Whitewater Report

                       (By Mortimer B. Zuckerman)

       Have you no sense of decency, sir, at long last? Have you 
     left no sense of decency? Forty years ago, Joseph Welch, a 
     venerable Boston lawyer, thus rebuked Joe McCarthy in the 
     Army-McCarthy hearings and stopped his reckless persecution 
     of a naive but innocent young man. How one longs for a Joseph 
     Welch to emerge in the middle of the extraordinary affair now 
     known as Whitewater! The parallels between Sen. Alfonse 
     D'Amato's investigation of a land deal in Arkansas and 
     McCarthy's investigation of communism in the Army are hardly 
     exact, but there is an uncanny echo of 1954 in the fever of 
     political innuendo we are now experiencing and in the failure 
     of an excitable press to set it all in proper perspective. 
     Then, as now, the public found itself lost in a welter of 
     allegation, reduced to mumbling the old line about ``no smoke 
     without fire.''
       It would be foolish to expect a congressional investigation 
     to be above politics. But at what point, in a decent 
     democracy, does politics have to yield to objectivity? At 
     what point does rumor have to retreat before truth? In 
     Whitewater that point would seem to have been reached when we 
     have had an independent, exhaustive study of the case under 
     the supervision of a former Republican U.S. attorney, Jay 
     Stephens, a man whose credibility is enhanced by the fact 
     that he was such a political adversary of the Clintons that 
     his appointment provoked Clinton aide George Stephanopoulos 
     to call for his removal. Yes? No. That official report is in, 
     but hardly anyone who has been surfing the Whitewater 
     headlines will know of it. It has been ignored by both the 
     Republicans and a media hungry for scandal. The Stephens 
     report provides a blow-by-blow account of virtually every 
     charge involved in the Whitewater saga. Let us put the 
     conclusions firmly on the record. The quotes below are 
     directly from the Stephens report.
       Question 1: Were the Clintons involved in the illegal 
     diversion of any money from the failed Madison Guaranty 
     Savings & Loan, either to their own pockets or to Clinton's 
     1984 gubernatorial campaign? ``On this record, there is no 
     basis to assert that the Clintons knew anything of substance 
     about the McDougals' advances to Whitewater, the source of 
     the funds used to make those advances, or the source of 
     the funds used to make payments on bank debt. . . . For 
     the relevant period (ending in 1986), the evidence 
     suggests that the McDougals and not the Clintons managed 
     Whitewater.''
       Question 2: What of money diverted to the campaign? No 
     evidence has been unearthed that any campaign worker for 
     Clinton knew of any wrongdoing pertaining to any funds that 
     might have come out of Madison into Clinton's campaign.
       Question 3: Did taxpayers suffer from Whitewater through 
     Madison's losses on the investment? No. Whitewater did not 
     hurt Madison, the possible exceptions being a couple of 
     payments involving James and Susan McDougal. The report says 
     the Clintons knew nothing about the payments.
       Question 4: Did the Clintons make any money? The report 
     says they did not; instead, they borrowed $40,000 to put into 
     Whitewater and lost it.
       Question 5: What of the charge from David Hale, former 
     municipal judge and Little Rock businessman, that Bill 
     Clinton pressured him to make an improper Small Business 
     Administration loan of $300,000 to Susan McDougal? As to the 
     $300,000 loan to Mrs. McDougal, ``there is nothing except an 
     unsubstantiated press report that David Hale claims then-
     Governor Clinton pressured him into making the loan to Susan 
     McDougal.'' The charge lacked credibility in any event. It 
     was made when Hale sought personal clemency in a criminal 
     charge of defrauding the SBA.
       What's left? Nothing. The report concludes: ``On this 
     record there is no basis to charge the Clintons with any kind 
     of primary liability for fraud or intentional misconduct. 
     This investigation has revealed no evidence to support any 
     such claims. Nor would the record support any claim of 
     secondary or derivative liability for the possible misdeeds 
     of others.''
       Stephen's firm--Pillsbury, Madison & Sutro--spent two years 
     and almost $4 million to reach its conclusions and 
     recommended ``that no further resources be expended on the 
     Whitewater part of this investigation.'' Amen.
       So when you cut through all the smoke from D'Amato's 
     committee and almost hysterical press reports such as those 
     emanating from the editorial page of the Wall Street Journal, 
     what you have is smoke and no fire. No Whitewater wrongdoing 
     to cover up, no incriminating documents to be stolen, no 
     connection between the Clintons and any illegal activities 
     from the real-estate business failure and the web of 
     political and legal ties known as Whitewater.
       But wait. What about the time sheets showing the amount of 
     legal work that Hillary Clinton performed for the failed S&L? 
     Surely we have some flames there? Again, no. Her role, says 
     the Stephens report, was minimal. Mrs. Clinton did perform 
     real-estate work in 1985 and 1986 pertaining to an option for 
     about 2 percent of the land, but as the report says, that was 
     at most related only tangentially to the acquisition itself. 
     Mrs. Clinton did not play a legal part in the original 
     acquisition of the land, known as castle Grande, although the 
     Rose Law Firm did. Both sides pointed out that the 
     principals, as opposed to the lawyers, put together the deal. 
     The lawyers did only the scrivener work, and if this 
     transaction was a sham, there is ``no substantial evidence 
     that the Rose Law Firm knowingly and substantially assisted 
     in its commission.''
       As for the option, the report says there is no evidence 
     that Mrs. Clinton knew of any illegalities in this 
     transaction: ``The option did not assist in the closing of 
     the acquisition. It . . . was created many months after the 
     transaction closed. The option . . . does not prove any 
     awareness on the part of its author of Ward's [Madison's 
     partner] arrangements with Madison Financial. . . . While 
     Mrs. Clinton seems to have had some role in drafting the May 
     1, 1986, option, nothing proves that she did so knowing it to 
     be wrong, and the theories that tie this option to wrongdoing 
     or to the straw-man arrangements are strained at best.''
       Rep. James Leach's spokesman asserts that Hillary Clinton's 
     minimal work on the option put her ``at the center of a 
     fraudulent deal,'' and D'Amato says that her billing records 
     show tremendous inconsistencies with her previous statements 
     on the time she spent on Whitewater. Fraud? The only fraud 
     lies in these congressional statements; they are a political 
     fraud on a credulous public. On the role of real-estate 
     lawyers, I must endorse the Stephens judgments here from my 
     personal business experience of thousands of real-estate 
     transactions. Never, not once, have my lawyers drawing up 
     legal documents determined the business terms or the 
     appropriateness of the price.
       It is appalling that the smoke and smear game has been 
     played so long by the Republicans and the media that everyone 
     is tagged with some kind of presumption of guilt rather than 
     a presumption of innocence. The double standard of judgment 
     is well illustrated by the performance of those standard-
     setting newspapers, the New York Times and the Washington 
     Post. The Times originally broke the Whitewater story on its 
     front page with a jump to a full inside page. What did it do 
     with Stephens's report? Ran it on Page 12, in a 12-inch 
     story. The Post's priorities were so distorted that it 
     mentioned the findings in only the 11th paragraph of a front-
     page story devoted to a much less important Whitewater 
     subpoena battle. Most other major papers ran very short 
     stores on inside pages, and the networks virtually ignored 
     the report.
       The press has slipped its moorings here. It seems to be 
     caught in a time warp from the Nixon-Watergate era. The two 
     questions then--what did the president know and when did he 
     know it?--were at the very heart of the matter. The two 
     questions now--what did the president's wife know and when 
     did she know it?--seem a childish irrelevance by comparison. 
     The time, money, and political energy spent barking up the 
     wrong tree are 

[[Page S1446]]
     quite amazing. The press gives the impression that it has invested so 
     much capital in the search for a scandal that it cannot drop 
     it when the scandal evaporates. The Republicans give the 
     impression that if one slander does not work, they will try 
     another. No wonder the nation holds Congress, the White House 
     and the media in such contempt; the people know that the 
     press seems to be acting like a baby--a huge appetite at one 
     end and no sense of responsibility at the other.
       We have a topsy-turvy situation here. The Republicans win 
     the case on merit over balancing the budget but are losing it 
     politically on the basis of public perception. The Clintons 
     have the better case on Whitewater but are losing it 
     politically because of smear and slander, a situation 
     compounded by their defensive behavior. The media seem 
     unwilling to focus on the substance of either issue. So much 
     for a responsible press!

  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.

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