[House Report 104-849]
[From the U.S. Government Publishing Office]



                                                 Union Calendar No. 461

104th Congress, 2nd Session -  -  -  -  -  -  -  - House Report 104-849

 
  INVESTIGATION OF THE WHITE HOUSE TRAVEL OFFICE FIRINGS AND RELATED 
                                MATTERS

                               ----------                              

                            FIFTEENTH REPORT

                                 by the

                        COMMITTEE ON GOVERNMENT
                          REFORM AND OVERSIGHT

                             together with

                     MINORITY AND ADDITIONAL VIEWS


                                     



 September 26, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed


   INVESTIGATION OF THE WHITE HOUSE TRAVEL OFFICE FIRINGS AND RELATED 
                                 MATTERS


                                                 Union Calendar No. 461

104th Congress, 2nd Session -  -  -  -  -  -  -  - House Report 104-849

  INVESTIGATION OF THE WHITE HOUSE TRAVEL OFFICE FIRINGS AND RELATED 
                                MATTERS

                               __________

                            FIFTEENTH REPORT

                                 by the

                        COMMITTEE ON GOVERNMENT
                          REFORM AND OVERSIGHT

                             together with

                     MINORITY AND ADDITIONAL VIEWS


                                     


                                     

 September 26, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed


              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

            WILLIAM F. CLINGER, Jr., Pennsylvania, Chairman

BENJAMIN A. GILMAN, New York        CARDISS COLLINS, Illinois          
DAN BURTON, Indiana                 HENRY A. WAXMAN, California        
J. DENNIS HASTERT, Illinois         TOM LANTOS, California             
CONSTANCE A. MORELLA, Maryland      ROBERT E. WISE, Jr., West Virginia 
CHRISTOPHER SHAYS, Connecticut      MAJOR R. OWENS, New York           
STEVEN SCHIFF, New Mexico           EDOLPHUS TOWNS, New York           
ILEANA ROS-LEHTINEN, Florida        JOHN M. SPRATT, Jr., South Carolina
WILLIAM H. ZELIFF, Jr.,             LOUISE McINTOSH SLAUGHTER, New York
  New Hampshire                     PAUL E. KANJORSKI, Pennsylvania    
JOHN M. McHUGH, New York            GARY A. CONDIT, California         
STEPHEN HORN, California            COLLIN C. PETERSON, Minnesota      
JOHN L. MICA, Florida               KAREN L. THURMAN, Florida          
PETER BLUTE, Massachusetts          CAROLYN B. MALONEY, New York       
THOMAS M. DAVIS, Virginia           THOMAS M. BARRETT, Wisconsin       
DAVID M. McINTOSH, Indiana          BARBARA-ROSE COLLINS, Michigan     
RANDY TATE, Washington              ELEANOR HOLMES NORTON,             
DICK CHRYSLER, Michigan               District of Columbia             
GIL GUTKNECHT, Minnesota            JAMES P. MORAN, Virginia           
MARK E. SOUDER, Indiana             GENE GREEN, Texas                  
WILLIAM J. MARTINI, New Jersey      CARRIE P. MEEK, Florida            
JOE SCARBOROUGH, Florida            CHAKA FATTAH, Pennsylvania         
JOHN B. SHADEGG, Arizona            BILL BREWSTER, Oklahoma            
MICHAEL PATRICK FLANAGAN, Illinois  TIM HOLDEN, Pennsylvania           
CHARLES F. BASS, New Hampshire      ELIJAH CUMMINGS, Maryland          
STEVEN C. LaTOURETTE, Ohio                      ------                 
MARSHALL ``MARK'' SANFORD,          BERNARD SANDERS, Vermont           
  South Carolina                      (Independent)                    
ROBERT L. EHRLICH, Jr., Maryland    
SCOTT L. KLUG, Wisconsin            

                  James L. Clarke, Staff Director
                  Kevin M. Sabo, General Counsel
                    Judith McCoy, Chief Clerk
           Barbara Olson, Chief Investigative Counsel
                Barbara Comstock, Special Counsel
       Joe Loughran, Investigator/Professional Staff Member
               Robert Shea, Professional Staff Member
                   Kristi Remington, Investigator
                    Laurie Taylor, Investigator
                Bud Myers, Minority Staff Director


                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                Washington, DC, September 26, 1996.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: By direction of the Committee on 
Government Reform and Oversight, I submit herewith the 
committee's fifteenth report to the 104th Congress.
                                 William F. Clinger, Jr., Chairman.

                                     


                            C O N T E N T S

                              ----------                              
                                                                   Page
Introduction.....................................................     1
  I. Summary overview.................................................2
       A. The White House stonewalled all investigations into the 
          White House Travel Office firings and related matters..     3
       B. The full cooperation pledged by the President was a 
          hollow promise.........................................     8
       C. President Clinton's staff engaged in an unprecedented 
          misuse of executive power and executive privilege......     9
       D. The consequences of the White House's cover-up have 
          been dramatic to the Travel Office employees, the 
          Foster family, and administration officials in 
          personal, as well as in institutional terms............    10
 II. Committee findings and recommendations..........................11
III. Actions in May 1993 which led to the White House Travel Office 
     firings.........................................................28
       A. The career Travel Office employees are fired, accused 
          by the White House of wrongdoing and political cronies 
          are put in charge of the Travel Office.................    28
       B. The Travel Office firings were a result of pressure by 
          Harry Thomason and Mrs. Clinton which accelerated in 
          the week before the firings............................    29
 IV. The Travel Office firings were part of a campaign payback scheme 
     that was in place long before May 1993..........................52
       A. Harry Thomason sought the travel business from the 
          early days of the transition, told Mrs. Clinton he 
          could provide the service and President Clinton and 
          Mrs. Clinton provided the access to do so. Harry 
          Thomason maligned the Travel Office employees, as well 
          as Travel Office contractor UltrAir in order to move 
          them out of that office. Thomason's travel business 
          interests posed an inherent conflict with his 
          involvement in Travel Office decisions or any 
          solicitation of business in this area..................    52
           1. Harry Thomason's ownership interest in aviation 
              companies presented inherent conflicts of interest 
              in his seeking Travel Office business..............    52
           2. TRM, Thomason's company, provided service to the 
              Clinton/Gore campaign and sought to capitalize on 
              their association with the new administration......    53
           3. A January 29, 1993 memorandum from Darnell Martens 
              to Harry Thomason catalogs the ambitious Washington 
              agenda for TRM: pursuing Travel Office business and 
              obtaining ``official status'' at the White House...    55
               a. Seeking ``Washington opportunities''...........    55
               b. Obtaining ``some form of official status''.....    55
               c. Seeking the Travel Office business.............    57
           4. Putting Martens in touch with the White House to 
              obtain Travel Office business......................    57
           5. Drafting a memorandum covering his conversation 
              with Dale which shows he was seeking the Travel 
              Office business....................................    58
           6. Laying out the strategy to get the Travel Office 
              business in a March 5, 1993 memorandum: dig up dirt 
              on the current employees and replace them with 
              campaign cronies...................................    58
       B. Catherine Cornelius pursued her interest in taking over 
          the Travel Office from the very first days of the 
          transition and into the early days of the 
          administration, proposing herself as co-director of the 
          office.................................................    61
       C. Darnell Martens gives the nod to his campaign 
          benefactor Penny Sample of Air Advantage...............    63
       D. Arkansas travel agency World Wide Travel provided 
          services during the campaign, obtained the DNC contract 
          in November 1992, and sought White House Travel Office 
          business...............................................    64
       E. Conclusion.............................................    65
  V. Harry Thomason pursued opportunities in Government contracts 
     through his relationship with the President which would have 
     resulted in a financial benefit to him and his company..........66
 VI. Employment status of selected advisors to the President.........69
       A. Special Government employee defined....................    69
       B. An individual may undertake certain activities that 
          qualify for a special Government employee status 
          without formal appointment.............................    70
       C. Treatment of SGES in the executive branch..............    71
           1. Michael S. Berman's activities at the Clinton White 
              House..............................................    72
           2. Activities of Harry Thomason and Darnell Martens...    74
               a. The Justice Department found that there is no 
                  evidence that Martens or Thomason had any 
                  formal status as a Government employee or 
                  special Government employee....................    76
               b. The Justice Department found that there is not 
                  sufficient evidence that either Thomason or 
                  Martens was a de facto Government employee or 
                  special Government employee or that they sought 
                  to avoid the formalities of Government office 
                  in an effort to skirt the conflict of interest 
                  laws...........................................    77
               c. The Justice Department found that insufficient 
                  evidence exists that Thomason performed a 
                  Federal function or acted under the supervision 
                  of a Federal employee..........................    77
               d. The Justice Department found that both men 
                  participated in some manner in the inquiry 
                  concerning the Travel Office--at minimum 
                  providing information relevant to the 
                  decisionmakers. It is not at all clear, 
                  however, that such participation would qualify 
                  as ``substantial'' under the statute...........    78
               e. The Justice Department found that Thomason and 
                  Martens clearly had no decisionmaking role.....    78
               f. The Justice Department found that even if we 
                  could establish that they had some employment 
                  status, we would have difficulty establishing 
                  that the employment was connected with the 
                  Travel Office..................................    79
           3. Activities of Penny Sample.........................    81
           4. Conclusion.........................................    82
VII. Lack of competitive bidding.....................................83
       A. Background.............................................    83
       B. Competitive bidding in the Clinton White House.........    84
       C. KPMG Peat Marwick contract.............................    85
       D. World Wide Travel......................................    87
       E. Air Advantage..........................................    88
       F. American Express.......................................    89
VIII.The White House initiated a full-scale campaign of misinformation 
     in the aftermath of the Travel Office firings and put in place a 
     cover-up from which it could not extricate itself...............90
       A. President Clinton led the misinformation campaign from 
          the first days of the Travelgate debacle...............    90
       B. The initial press offensive against the Travel Office 
          employees mischaracterized the Peat Marwick review and 
          the FBI's role in order to cover-up the real reasons 
          for the firings........................................    91
       C. Neither the Congress, the press nor the public bought 
          the White House story..................................    93
       D. The last best hope for a cover-up? A man from hope, 
          Mack McLarty...........................................    95
           1. David Gergen assumes damage control patrol.........    95
           2. White House Management Review: Truth or 
              obfuscation?.......................................    96
           3. The Management Review excluded information which 
              was exculpatory to Travel Office employees and 
              derogatory to President Clinton and his cronies....    97
           4. The Management Review minimized the role of Mrs. 
              Clinton............................................    99
 IX. The White House's failure to admit Thomason's baseless 
     ``kickback'' allegations were false and led to a fruitless IRS 
     investigation..................................................102
       A. Introduction...........................................   102
       B. UltrAir................................................   103
       C. The UltrAir matter was not handled under the same 
          standards as other potential tax violations............   104
       D. Securing the records...................................   106
       E. KPMG Peat Marwick: Both sides now......................   107
       F. Bill Kennedy and the IRS...............................   107
       G. Kickback allegations disproved by the White House......   107
       H. Internal Revenue Code 6103.............................   108
  X. Vincent Foster became increasingly disturbed by the problems 
     generated by Travelgate--as did numerous high ranking White House 
     officials......................................................109
       A. Despite Foster's initial efforts during the management 
          review, he was unsuccessful in concealing ``the 
          clients'' role in the Travel Office firings............   109
       B. The Management Review's inclusion of Bill Kennedy's 
          reference to the involvement of ``the highest levels'' 
          of the White House in the firings raised problems for 
          both President Clinton and Mrs. Clinton................   110
       C. Foster was troubled by the prospect of numerous 
          congressional and criminal investigations into the 
          Travel Office firings..................................   112
       D. Foster was in the middle of problems related to Harry 
          Thomason, which were starting to gather steam..........   115
       E. Foster strongly argued for private attorneys to assist 
          the White House in handling the coming investigations 
          but Nussbaum rebuffed him. Foster discussed the issues 
          with outside attorneys and friends.....................   120
 XI. Foster's death generated another layer of a cover-up over a cover-
     up.............................................................121
       A. Foster's death shattered a White House just recovering 
          from an abysmal first 6 months of administration.......   121
       B. At the time of Foster's death on July 20, 1993, his 
          office contained damaging evidence about the Travelgate 
          matter and related events. Individuals with a reason to 
          hide or cover-up documents were at or around Foster's 
          office prior to the office being sealed................   122
       C. White House Counsel Bernard Nussbaum obstructed 
          numerous investigations into the Travel Office and the 
          death of Vince Foster, by withholding the Vince Foster 
          Travel Office notebook.................................   125
       D. Neil Eggleston withheld the Foster Travel Office file 
          from relevant investigations even after it was 
          belatedly disclosed to him by Bernard Nussbaum.........   130
       E. Craig Livingstone provided testimony about his 
          activities on the morning after Foster's death which is 
          inconsistent with law enforcement officials and new 
          White House documents which were withheld under a claim 
          of executive privilege until August 1996...............   131
       F. Evidence of Mrs. Clinton's involvement in the response 
          to the finding of Foster's ``suicide'' note. Her 
          direction not to tell the President about the note, on 
          July 26, 1993, was withheld from investigators.........   134
XII. The White House has stonewalled all previous investigations and 
     engaged in an unprecedented damage control operation run out of 
     the White House Counsel's Office...............................138
       A. Hearings were requested in 1993 on this matter.........   138
       B. White House history of stonewalling....................   138
           1. GAO investigation..................................   139
           2. OPR investigation..................................   149
XIII.Stonewalling this committee's investigation....................154

       A. History of seeking Travelgate documents from the White 
          House..................................................   154
           1. Chairman Clinger's efforts to investigate while in 
              the minority.......................................   154
           2. Committee efforts in the 104th Congress............   155
       B. White House protection efforts were particularly keyed 
          to withholding documents potentially damaging and 
          shielding key players..................................   160
           1. Harry Thomason role................................   160
           2. Notes of interview with Mrs. Clinton--missing......   161
           3. Missing memo in Kennedy's office which was reviewed 
              by FBI agents......................................   161
           4. Missing Mack McLarty memo..........................   162
       C. White House response on matters related to Mrs. Clinton   162
       D. Pattern of obstruction.................................   165
           1. Delays in document production......................   165
           2. Reluctant witness..................................   166
       E. Committee moved to depositions under oath..............   167
           1. ``I don't recall . . .''...........................   167
           2. Who couldn't ``recall''............................   167
XIV. The stonewall begins to crack..................................171
       A. Watkins memo begins to explain the true story..........   171
           1. Pressure from First Lady and Mack McLarty..........   172
           2. Pressure from Harry Thomason.......................   174
           3. Secret Service incident............................   175
       B. White House made ineffective claims of ``executive 
          privilege'' over discussions about ``Watkins memo''....   176
       C. Congress holds White House accountable.................   176
 XV. President Clinton has abused executive power and executive 
     privilege and misused the counsel's office in order to effectuate 
     a cover-up of the Travel Office matter.........................176
       A. The long road to getting White House documents--from 
          foot dragging to executive privilege...................   176
       B. The President engaged in an unprecedented use of 
          executive privilege in the course of the committee's 
          depositions............................................   178
       C. Executive privilege claims are being asserted for 
          political security not national security...............   178
           1. Conversations with Mrs. Clinton = executive 
              privilege?.........................................   179
           2. Executive privilege for debriefings with outside 
              attorneys?.........................................   179
           3. Executive privilege over White House briefing 
              papers created for Congress?.......................   179
           4. Executive privilege over information regarding 
              Vincent Foster?....................................   179
       D. The misuse of the counsel's office began under the 
          tenure of Bernard Nussbaum as President Clinton's first 
          White House counsel....................................   180
       E. President Clinton's second counsel, Lloyd Cutler, 
          sustained the pattern of obstruction set by Nussbaum...   181
       F. President Clinton's special counsel begins her ``task 
          list'' of oversight of all congressional as well as 
          independent counsel investigations.....................   181
       G. President Clinton pushes the boundaries of his claims 
          of executive privilege against producing relevant 
          documents to Congress..................................   184
       H. The President has insisted that all of his counsel's 
          maintain an obstructionist position with Congress......   185

                                APPENDIX

Supporting documentation for the record..........................   187

                                 VIEWS

Minority views of Hon. Cardiss Collins, Hon. Henry A. Waxman, 
  Hon. Tom Lantos, Hon. Robert E. Wise, Jr., Hon. Major R. Owens, 
  Hon. Edolphus Towns, Hon. John M. Spratt, Jr., Hon. Louise 
  McIntosh Slaughter, Hon. Paul E. Kanjorski, Hon. Karen L. 
  Thurman, Hon. Carolyn B. Maloney, Hon. Thomas M. Barrett, Hon. 
  Barbara-Rose Collins, Hon. Eleanor Holmes Norton, Hon. James P. 
  Moran, Hon. Gene Green, Hon. Carrie P. Meek, Hon. Chaka Fattah, 
  Hon. Tim Holden, and Hon. Elijah Cummings......................   858
Additional views of Hon. Paul E. Kanjorski.......................   887
  

                                                 Union Calendar No. 461
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2nd Session                                                    104-849
_______________________________________________________________________

  INVESTIGATION OF THE WHITE HOUSE TRAVEL OFFICE FIRINGS AND RELATED 
                                MATTERS

                                _______
                                

 September 26, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                            FIFTEENTH REPORT

                             together with

                     MINORITY AND ADDITIONAL VIEWS

    On September 18, 1996, the Committee on Government Reform 
and Oversight approved and adopted a report entitled 
``Investigation of the White House Travel Office Firings and 
Related Matters.'' The chairman was directed to transmit a copy 
to the Speaker of the House.

                              Introduction

    In order to establish a baseline for examining the facts 
compiled by the committee, it is useful to begin with the 
statements uttered by the President early on in his 
administration. It is also useful to measure the statements 
against his deeds. This will provide the public with a proper 
measure for determining the success of this President in 
resolving issues in his own backyard--in particular this issue 
known as ``Travelgate.'' As President Clinton stated himself 
when this matter first come to light, ``Look at the facts, 
evaluate the facts, and draw your own conclusions.'' \1\
---------------------------------------------------------------------------
    \1\ Transcript of remarks by President Clinton, May 21, 1993.

``It will be a great story [firing the Travel Office 
        employees]--Bill Clinton cleaning up the White House.''
                  --Harry Thomason, May 1993 in a conversation 
                with White House aide Jennifer O'Connor.
``May 12, p.m.--Thomason comes back in DW's [office]--says he 
        bumped into Hillary and she's ready to fire them all 
        that day.
                  --David Watkins notes of May 31, 1993 
                discussing contacts on the Travel Office.
``Harry says his people can run things better; save money, etc. 
        And besides we need those people out--we need our 
        people in--We need the slots-- . . . Is the real story 
        to be told?''
                  --David Watkins notes of a conversation with 
                the First Lady on May 14, 1993.
``If we do any kind of report & fail to address these 
        q[uestion]s, press jumps on you wanting to know 
        answers; while if you give answers that aren't fully 
        honest (e.g., nothing re HRC) you risk hugely 
        compounding the problem by getting caught in half-
        truths. You run risk of turning this into a 
        `coverup'.''
                  --Todd Stern, co-author of the White House 
                Management Review of the Travel Office firings.
``Defend management decision, thereby defend HRC role whatever 
        it is, was in fact or might have been misperceived to 
        be.''
                  --Vincent Foster, July 1993.
``Bernie, are you hiding something?''
                  --Former Deputy Attorney General Philip 
                Heymann in a conversation with Bernard Nussbaum 
                following Nussbaum's refusal to allow law 
                enforcement authorities to review Foster's 
                documents, July 1993.

                          I. Summary Overview

    Travelgate is a story about the failure of the Clinton 
White House to live up to the ethical standards expected of the 
highest office in the land. The wrongdoing of this 
administration lies not in the firings of the seven Travel 
Office employees. They served at the pleasure of the President. 
If the President chose to fire them to reward political 
cronies, that was his prerogative. And he must reap the 
consequences.
    Rather, the wrongdoing occurred after the firings. It 
resulted from a desire to hide the truth about who actually 
fired them and why.
    The committee spent 3\1/2\ years investigating not just who 
fired them and why, but the wrongdoing that followed. The 
resulting mosaic pieced together from the facts uncovered 
reveals the answers the White House refused to disclose. In the 
end, the actions of the Clinton administration following the 
firings may have a lasting and damaging impact on the Office of 
the Presidency.
    The committee has found that the motive for the firings was 
political cronyism: the President sought to reward his friend, 
Harry Thomason, with the spoils of the White House travel 
business. A pretext for the firings was created, and the 
trigger was pulled.
    When the public reacted to the firing with outrage, the 
roles of the President, First Lady and Thomason were minimized 
as the White House staff engaged in a colossal damage-control 
effort.
    First, it had to portray the victims of the firings as the 
wrongdoers. This was achieved by White House officials 
unleashing the full powers of the Federal Government against 
the seven former workers. The extraordinary might of the 
Federal Bureau of Investigation, the Internal Revenue Service 
and the Department of Justice--not to mention the prestige of 
the White House itself--all were brought to bear. These actions 
constitute a gross abuse of the rights of seven American 
citizens and their families.
    Second, an enormous and elaborate cover-up operation, 
housed in the White House Counsel's Office, sought to prevent 
numerous investigations from discovering not only the roles of 
who fired the workers and why, but also their efforts to 
persecute the victims. In the process, the administration may 
have severely damaged the credibility and prestige of the White 
House: it obstructed and frustrated all investigations; it 
turned the Office of the White House Counsel into a political 
damage-control operation; it made frivolous claims of executive 
privilege; it abused its powers to smear innocent citizens; and 
most important, it failed to level with the American people.
    As a result, it is the committee's view that the White 
House stands in contempt of its own constitutional 
responsibilities to faithfully uphold and execute the 
Constitution and laws of the Nation. Never before has a 
President and his staff done so much to cover up improper 
actions and hinder the public's right to learn the truth. The 
following chapters reveal the facts that tell this story.

A. The White House stonewalled all investigations into the White House 
               Travel Office firings and related matters

    Three and a half years ago, the friends of Webb Hubbell,\2\ 
David Watkins,\3\ Jim and Susan McDougal,\4\ Mike Espy,\5\ 
Harold Ickes,\6\ Bruce Lindsey,\7\ Bernard Nussbaum,\8\ Susan 
Thomases,\9\ Jim Guy Tucker,\10\ Craig Livingstone,\11\ Bill 
Kennedy,\12\ and Dick Morris\13\ came to Washington vowing to 
provide the ``most ethical'' administration in the history of 
the Republic.\14\ One of their first targets in allegedly 
``cleaning up'' Washington was the small, tucked-away White 
House Travel Office, where then-Director Billy Dale had served 
for over 30 years through eight Presidents and had voted for 
the new President, William Jefferson Clinton. Before long, Bill 
Clinton, who campaigned on the mantra, ``I feel your pain,'' 
caused a great deal of pain in the lives of seven career 
Government employees as well as countless others caught up in 
the events known as ``Travelgate.''
---------------------------------------------------------------------------
    \2\ The former Associate Attorney General for the Clinton 
administration convicted of tax evasion and mail fraud for stealing 
money from clients of the Rose Law Firm which included the Federal 
Government.
    \3\ The former White House administrator who resigned in May 1994 
after using a Presidential helicopter to play golf. The cost of the 
flight was estimated at more than $13,000.
    \4\ The former business partners and good friends of Bill and 
Hillary Clinton. James McDougal was convicted in June 1996 on 18 counts 
of bank fraud and conspiracy. His ex-wife Susan McDougal was convicted 
in June 1996 on 4 counts of bank fraud and conspiracy.
    \5\ The former Clinton Agriculture Secretary who resigned December 
31, 1994, due to potential conflicts of interest relating to his 
relationship with the poultry industry (specifically Tyson Foods). The 
appointment of an Independent Counsel in October 1994, spurred Espy's 
resignation.
    \6\ Currently the White House Deputy Chief of Staff. Ickes was the 
lawyer for LIUNA (Laborers' International Union of North America), a 
union investigated by the Justice Department for alleged mob activity.
    \7\ Deputy White House Counsel, close advisor to President Clinton 
and unindicted co-conspirator in Independent Counsel Starr's 
prosecution of Arkansas bankers, Hill and Branscum. Lindsey was alleged 
to have distributed funds from Arkansas Banks for Clinton gubernatorial 
campaign.
    \8\ The controversial first Clinton White House Counsel who 
presided over numerous administration debacles, including Travelgate, 
and resigned in March 1994 following the issuance of numerous 
Whitewater subpoenas to the White House.
    \9\ Close friend and advisor to Mrs. Clinton. Thomases was 
allegedly involved in advising Bernard Nussbaum that Mrs. Clinton was 
concerned about law enforcement officials having ``unfettered access'' 
to Foster's office following his death.
    \10\ The former Governor of Arkansas who resigned after his 
conviction for obtaining illegal loans from David Hale. His prison term 
was suspended pending his good behavior while on probation.
    \11\ The ex-bar bouncer who was brought to the White House to 
direct the Office of Personnel Security after serving on the Clinton/
Gore campaign as senior consultant on ``counter events operations'' 
including the ``deployment'' of ``Chicken George.'' Livingstone 
reportedly hurled racial epithets at a senior aide to Representative 
Floyd Flake earlier this year and in 1993 threatened to ``punch in'' 
the face of a female neighbor. Mr. Livingstone resigned in the wake of 
the FBI files matter while appearing before this committee on June 26, 
1996.
    \12\ Former associate counsel who was and is a partner in Mrs. 
Clinton's former law firm. Mr. Kennedy was Craig Livingstone's boss and 
distinguished himself by failing to obtain passes for White House 
officials in a timely fashion and neglecting to report his ``nanny 
tax'' problem when he joined the White House staff. Mr. Kennedy 
resigned in November 1994.
    \13\ Resigned from the Clinton/Gore '96 Campaign amidst reports 
that he had a year-long relationship with a Virginia call girl in his 
official office/suite at the Jefferson Hotel. Reported to have told 
$200-an-hour prostitute Sherry Rowlands that a paranoid Mrs. Clinton 
ordered the FBI files of Republicans for review by the Clinton White 
House. Mr. Morris claims he was only talking about ``polling data'' 
which indicated the American people thought Mrs. Clinton was behind the 
FBI files matter.
    \14\ Bill Clinton 1992 campaign statement.
---------------------------------------------------------------------------
    Because the White House has gone to great lengths to 
prevent this committee from investigating the Travelgate 
matter, the committee must ask: Why have so many on the 
Government payroll at the White House worked so hard for so 
long to keep the real story about the Travel Office firings and 
related events from the American people? Why, to use the words 
of a senior White House official, did the President ``run the 
risk of turning this into a cover-up?'' \15\ Why did the 
President ultimately resort to the most frivolous claim of 
executive privilege rivaling even the Nixon administration in 
his determined efforts to delay this investigation and push it 
into the political season? Why did the White House hide the 
fact of President Clinton's knowledge of the firings before 
they occurred?
---------------------------------------------------------------------------
    \15\ Handwritten notes of Deputy Staff Secretary Todd Stern, May 
27, 1993, CGEPR 682-683.
---------------------------------------------------------------------------
    The Committee on Government Reform and Oversight has 
discovered endless cover-ups hidden within cover-ups. One of 
President Clinton's lawyers offered a prophetic rationale as to 
why the White House continues to keep matters under wraps. In 
typed notes over which President Clinton claimed executive 
privilege, a White House Counsel tellingly quoted William 
Safire:

          No politician is stupid enough to hide something when 
        he has nothing to hide.\16\
---------------------------------------------------------------------------
    \16\ ``Whitewater Potential Questions'' prepared by White House 
Counsel's office, DF 781532.

    The evasiveness with which President Clinton's lawyers have 
dealt with congressional investigators for more than 3 years 
presented the committee with the following dilemma: If there 
really is nothing there, why are the President's lawyers 
working so hard to hide something?
    We learned that the lives of seven innocent long-time 
career Government employees were shattered, their reputations 
smeared, to make way for the ambitions and arrogance of the 
President's friends and family. We learned that the FBI and IRS 
became involved in this matter because of Harry Thomason's 
false allegations that Travel Office Director Billy Dale 
received illegal ``kickbacks'' from a charter airline company. 
The White House knew very quickly that the alleged source of 
the kickback charges denied ever making them. But upon learning 
this fact, the White House did nothing to correct the public 
record it had created through misinformation.
    In fact, long after President Clinton's White House staff 
knew the allegations were false, they continued in their 
efforts to make a case against the beleaguered and increasingly 
impoverished Billy Dale. The Department of Justice (``DOJ'') 
case, U.S. v. Billy Ray Dale, was sorely lacking in evidence. 
It was compromised by missing records that had not been secured 
by the Clinton White House or the Justice Department.
    It was obvious, even to Justice Department prosecutors, 
that they had no witnesses who could provide any derogatory 
information about Billy Dale. Finally, they were left only with 
the dubious claim that the notoriously frugal Mr. Dale lived a 
``lavish lifestyle.'' The prosecution revealed to the jury the 
``scandalous'' evidence that Mrs. Dale went to a hairdresser 
and purchased large quantities of groceries for the Lake Anne 
vacation home the two-career Dales saved many years to build 
and enjoy. Predictably, Dale was acquitted in less than 2 hours 
by a jury of his peers.
    Unfortunately, Mr. Dale's speedy acquittal did not put an 
end to his 3-year ordeal. The IRS pursued Dale, threatening 
income tax audits. The IRS also was busy in Smyrna, TN auditing 
the company that did business with Mr. Dale at the Travel 
Office, UltrAir.
    Only recently was Mr. Dale given a clean bill of health by 
the Internal Revenue Service after 3 years of intense scrutiny. 
UltrAir had no tax liability and an owner of UltrAir received a 
$5,000 refund before the IRS gave up its search for any shred 
of evidence to justify its harassment of this small struggling 
business.
    We learned that the individual responsible for ``securing'' 
the Travel Office on the day of the firings and maintaining the 
records was none other than the now famous ex-bouncer and 
political operative, Craig Livingstone, former Director of the 
White House Security Office.\17\ Mr. Livingstone was the same 
individual seen by Secret Service Agent Bruce Abbott removing 
boxes of documents from the White House the morning after Vince 
Foster's death in July 1993.
---------------------------------------------------------------------------
    \17\ Committee deposition of Craig Livingstone, March 22, 1996 p. 
115.
---------------------------------------------------------------------------
    The much-heralded White House Management Review 
(hereinafter ``WHMR'') proved to be nothing more than a 
whitewash overseen by then-Chief of Staff and childhood friend 
of Bill Clinton, Mack McLarty, the very person who had 
authorized the Travel Office firings. In the course of the 
committee investigation, evidence of a vast cover-up of 
President Clinton's knowledge and dealings with his close 
friend Harry Thomason as well as his staff's deliberate 
minimization of Hillary Clinton's role emerged and still 
continues to unfold.
    We learned that access does indeed have its privileges. For 
the seven fired White House Travel Office employees, this meant 
they had to be moved out of the picture to make way for 
President Clinton's Hollywood connection, Harry Thomason. The 
committee obtained evidence that President Clinton personally 
gave the nod for Harry Thomason to come to the White House to 
work on the ``Image Project''--not Political Director Rahm 
Emanuel as has been represented by the White House. We learned 
that having powerful friends and the same lawyer as President 
Clinton can make for timid prosecutors.\18\
---------------------------------------------------------------------------
    \18\ President Clinton's personal defense lawyer, Robert Bennett, 
who handles the Paula Jones case, also represents ``Friend of Bill'' 
Harry Thomason in both criminal and civil matters. Deputy Chief of 
Staff Harold Ickes is another of the colorful clients responsible for 
monopolizing Bennett's legal dance card.
---------------------------------------------------------------------------
    We learned that a long-hidden memo by a key figure in the 
Travel Office affair, David Watkins, disclosed that Hillary 
Clinton, based upon information provided by Harry Thomason, 
pressured senior White House aides for the firings.\19\ Despite 
President Clinton's misleading press accounts that he knew 
little about the firings, we learned Bill Clinton actually was 
briefed on the firings 2 days before they occurred.\20\ And 
then-Assistant to President Clinton for Management and 
Administration, David Watkins reluctantly became the designated 
fall guy for the firings in order to protect the higher-ups who 
had directed his actions.
---------------------------------------------------------------------------
    \19\ Undated memorandum by David Watkins entitled ``Response to 
Internal White House Travel Office Management Review,'' (otherwise 
known as the ``Watkins soul-cleansing memo''), White House document 
production Bates Stamp No. CGE 012286-012294. (Hereinafter document 
numbers preceded by ``CGE'', ``CGEPR'', or ``DF'' indicate White House 
documents.)
    \20\ White House Management Review interview notes of Bruce 
Lindsey, June 9, 1993, CGEPR 331-334.
---------------------------------------------------------------------------
    We learned of the long-hidden notebook kept by Vincent 
Foster had been in the office of White House Counsel Bernard 
Nussbaum following Mr. Foster's death. The notebook chronicled 
Mr. Foster's anguish over Hillary Clinton's role in the 
firings, Harry Thomason's potential criminal liability, and 
whether the White House scandal containment strategy could be 
maintained to stop at the level of David Watkins.
    We learned that Mrs. Clinton directed President Clinton's 
Chief of Staff, Mack McLarty not to tell President Clinton 
about the torn up ``suicide'' note found in Vincent Foster's 
briefcase on July 26th, 6 days after his death. Mrs. Clinton 
instructed the President's senior aides to wait until a 
``coherent position'' was developed before informing the 
President.\21\ The note was essentially an outline of a defense 
of the Travel Office firings. When it took more than a day to 
turn the note over to the proper law enforcement authorities, 
both the Attorney General and Deputy Attorney General were so 
concerned that the Deputy Attorney General immediately 
initiated an FBI investigation into the delay in turning over 
the note.\22\ In the investigation of the delay, no one 
mentioned Mrs. Clinton's involvement in reviewing the note or 
recommending a delay in turning it over.\23\
---------------------------------------------------------------------------
    \21\ White House debriefing of David Gergen's attorney Andy 
Krulwich, by Miriam Nemetz, July 13, 1995. The debriefing pertained to 
David Gergen's deposition before the Senate Whitewater Committee on 
July 12, 1995, DF 781220-781224.
    \22\ ``Vincent Foster, Jr., Deputy White House Counsel to the 
President--Victim; 7/20/93,'' by Special Agent Scott M. Salter, 7/29/
93-8/9/93. The report was made to the Deputy Attorney General who 
requested the FBI to enter the captioned investigation and to ``focus 
FBI efforts on the turning over of a note found in the office of 
Vincent W. Foster.''
    \23\ Id.
---------------------------------------------------------------------------
    We learned of the existence of a letter long withheld from 
all investigators which David Watkins wrote to ``Hillary.'' In 
that letter, Watkins lamented that the GAO revealed 
conversations that Watkins had with Mrs. Clinton. Mr. Watkins 
assured Mrs. Clinton that he knew who his ``client'' was and 
regretted revealing that Mrs. Clinton told him she wanted 
``those people out'' and ``our people in.'' \24\
---------------------------------------------------------------------------
    \24\ Letter to Hillary Rodham Clinton from David Watkins, May 3, 
1994, CGE 39294.
---------------------------------------------------------------------------
    After a long battle to obtain responsive subpoenaed 
documents, White House Counsel to the President Jack Quinn 
finally turned over documents one of which led us to discover 
that hundreds of FBI files of Reagan and Bush officials, 
including that of former Travel Office Director Billy Dale, 
were wrongfully requisitioned from the FBI in 1993 and 1994 by 
two political operatives, Craig Livingstone and his sidekick 
Anthony Marceca, who had specialized in opposition research for 
the Democratic Party.
    We now know that the individual placed by President Clinton 
in charge of the FBI files was the very same individual whom 
the White House had put in charge of securing the Travel Office 
records on the day of the firings--the now infamous security 
officer, Craig Livingstone.
    We learned that the White House Counsel's office withheld 
Billy Dale's FBI background file for months misrepresenting it 
to the committee as a personnel file, effectively keeping the 
lid on the Filegate scandal.\25\
---------------------------------------------------------------------------
    \25\ Letter from White House Counsel Jack Quinn to Chairman 
Clinger, June 10, 1996. But see, conflicting testimony by Special 
Counsel to the President, Jane Sherburne in her committee deposition of 
July 23, 1996, p. 32. (Although Quinn, in his letter suggests that the 
White House knew of its possession of the Billy Dale FBI background 
file-referring to it as a ``personnel file,'' Sherburne, in sworn 
testimony, stated unequivocally that she did not know of the existence 
of the file in February of this year.)
---------------------------------------------------------------------------
    The fact that Craig Livingstone held the fate of Billy Dale 
and his colleagues in his hands, however, came as no surprise 
to Mr. Dale. He and his family were subjected to inexcusable, 
unending indignities by the Clinton White House, hounded by the 
servile Justice Department and the IRS. Mr. Dale was denied the 
opportunity to defend himself by a Department of Justice 
prosecutor who opposed Dale's defense motion to present facts 
detailing the missing Travel Office records. We know that the 
prosecutor himself told IRS investigators that records were 
missing, most likely removed by Presidential cousin Catherine 
Cornelius, who had designs on running the Travel Office.\26\ 
Why didn't the Justice Department's prosecutor feel he had the 
same disclosure responsibilities to Mr. Dale as to other 
Government investigative units? This question never was 
answered.
---------------------------------------------------------------------------
    \26\ IRS Agent Bruce Brown's memorandum of his discussion with DOJ 
Prosecutor Stuart Goldberg, August 16, 1993.
---------------------------------------------------------------------------
    Fortunately, Mr. Dale was acquitted despite the actions of 
the White House and the Justice Department. His colleagues were 
totally exonerated of any wrongdoing. Nevertheless, to this 
day, President Clinton continues to malign Mr. Dale and 
continues to exhibit an unusually thin-skinned response to 
press inquiries about this matter. In January of this year, 
White House Press Secretary Mike McCurry gave his assurances 
that President Clinton would sign a bill to reimburse Billy 
Dale's legal expenses.\27\ However, the President recently, and 
angrily, reneged on that promise.\28\
---------------------------------------------------------------------------
    \27\ White House press briefing, January 30, 1996. (Q: ``Would the 
President . . . sign . . . such a measure, were it to pass?'' McCurry: 
``Yes, he would sign it.'')
    \28\ In an August 1, 1996, press conference, Clinton addressed 
questions regarding his prior commitment to sign a bill, which would 
reimburse Billy Dale for $500,000 in legal fees Dale incurred in his 
defense. Clinton angrily declared, ``I never gave my word on that.'' 
Referring to White House aides who have been asked to give testimony to 
this and other investigations, he snapped, ``There are a lot of people 
who were never charged with anything, much less offering to plead 
guilty to anything . . . Are we going to pay their legal expenses, 
too?''
---------------------------------------------------------------------------
    Although the committee has been far more successful in 
uncovering new information to explain these events than has any 
previous investigation, the disappearance of relevant 
documents, the selective amnesia among dozens of relevant 
witnesses and the sustained obstruction orchestrated by 
President Clinton's stable of White House lawyers, have kept 
the full story from being told. This continues to be the 
standard operating procedure of the Clinton White House to this 
day.

 B. The full cooperation pledged by the President was a hollow promise 
                                  \29\
---------------------------------------------------------------------------

    \29\ January, 12, 1996, press briefing. (President Clinton, in 
answer to questions about Republican assertions that the White House 
has not been cooperative with probes into the Travel Office and 
Whitewater affairs, stated: ``We're in the cooperation business. That's 
what we want to do.'' In a July 13, 1993 letter to Jack Brooks, 
President Clinton stated, ``The Attorney General is in the process of 
reviewing any matters relating to the Travel Office and you can be 
assured that the Attorney General will have the Administration's full 
cooperation in investigating those matters which the Department wishes 
to review.''
---------------------------------------------------------------------------
    The President's promise to cooperate fully with 
investigations into the Travel Office and related matters never 
was honored. Requested records never were appropriately 
provided to the Justice Department or any other investigative 
body over the course of numerous inquiries--including criminal 
investigations and the investigation by this committee.
    Five separate investigations examined various aspects of 
the Travel Office firings. What all five previous 
investigations had in common was the White House's success in 
denying production of relevant documents to each of them. Such 
sustained obstruction over so long a period of time only could 
persist if directed from the very ``highest levels.'' The buck 
stops at the President.
    While this committee has been far more successful in 
obtaining relevant records than any other previous 
investigation, its painstaking efforts have met with 
obstruction from President Clinton's staff at every turn. As a 
result, in some areas the committee's investigation is still 
inconclusive. Since the firings and especially since the 1994 
elections, the White House Counsel's office hired a team of 
lawyers for a major damage control operation which we have 
concluded focused on withholding from the committee documents 
related to Harry Thomason, Mrs. Clinton and President Clinton.
    In January 1995, Congressman Clinger became the chairman of 
the new House Committee on Government Reform and Oversight and 
announced that a thorough investigation into the growing Travel 
Office scandal would be undertaken. Three hearings had been 
held and subpoenas were issued when documents suddenly 
materialized inside the White House that previously had been 
subpoenaed by other bodies and requested by the committee. On 
March 9, 1996, the U.S. House of Representatives by voice vote 
adopted House Resolution 369 which authorized committee staff 
to take depositions pursuant to a subpoena in the White House 
Travel Office matter.
    The committee has deposed 72 witnesses, informally 
interviewed 23 witnesses, obtained 58,734 documents from the 
White House and approximately 45,000 documents from the Justice 
Department, Treasury Department and other agencies.
    The committee was determined to ensure that the Clinton 
administration did not succeed in its attempt to derail this 
Travel Office investigation, as it had with every preceding 
investigation. Unfortunately, the committee found that issuance 
of subpoenas was not sufficient to ensure the production of all 
relevant records. It became necessary for the committee to take 
the rare action, holding White House Counsel John M. Quinn in 
contempt of Congress on May 9, 1996 by the committee. It was 
only after scheduling a May 30, 1996, House floor vote on the 
Resolution that the White House turned over 1,000 pages over 
which it initially had asserted were ``subject to'' executive 
privilege.
    However, the White House continued to withhold 2,000 pages 
of documents. President Clinton asserted a blanket claim of 
executive privilege, stalling for time throughout the summer of 
1996. The White House Counsel's Office/Chief of Staff's 
Sherburne ``team'' finally provided the committee with access 
to the 2,000 pages of overly-redacted documents only when a 
second threat of a House floor vote on contempt of Congress was 
made. Only at that point did President Clinton finally 
relinquish the outstanding subpoenaed documents to the 
committee on August 15, 1996. A date calculated to attract the 
least attention from the media as it was the same evening that 
Senator Dole accepted the Republican nomination for President.
    Had the committee failed to pursue its right to obtain this 
information, its investigation would have been severely 
undermined and we never would have learned the key facts 
surrounding the termination of the seven Travel Office 
employees. We likely never would have uncovered the Clinton 
White House's receipt of hundreds of FBI background files or 
evidence of the vast White House cover-up of Travelgate and 
Filegate.

  C. President Clinton's staff engaged in an unprecedented misuse of 
                executive power and executive privilege

    From the start, the White House Travel Office matter has 
reflected a disturbing pattern of misuse of executive power and 
resistance by the White House to any type of public 
accountability for highly questionable activities. Ironically, 
while President Clinton preaches individual responsibility, he 
assembled a team of taxpayer-funded White House attorneys to 
evade accountability and avoid responsibility for his actions 
and those of his staff and advisors. President Clinton created 
his own personal legal defense team, the likes of which the 
Office of the President has never before seen.
    We have learned through documents most reluctantly produced 
to the committee that President Clinton's White House Counsel 
routinely engaged in the practice of debriefing witnesses' 
attorneys after giving sworn testimony. The witnesses, mostly 
current and former White House staff, included those being 
deposed by this and other committees as well as those 
testifying before criminal grand juries. This practice is 
unprecedented for any White House undergoing an investigation, 
and may result in the waiver of the attorney-client privilege 
in matters currently being investigated by the Independent 
Counsel.
    In addition, other documents contained in the 2,000 were 
provided to the committee only after a threat of a 
congressional criminal contempt vote. These detailed scripts 
were created by White House Counsel for use by minority members 
of the committee to thwart this investigation. Such meticulous 
executive branch scripting for congressional hearings is 
something even the Nixon White House did not dare to undertake. 
The information from these debriefings and scripts demonstrates 
that the White House was privy to information which was 
inconsistent with public statements made by Clinton officials 
and even President Clinton and Mrs. Clinton.
    It became clear that President Clinton ultimately had 
resorted to a blanket claim of executive privilege over these 
and other documents which clearly were not covered by any 
logical reading of the law of the privilege, in a last-ditch 
effort to forestall the committee's review of relevant 
documents.

D. The consequences of the White House's cover-up have been dramatic to 
  the Travel Office employees, the Foster family, and administration 
        officials in personal, as well as in institutional terms

    Undeniably, the Travel Office fiasco and the resulting 
cover-up have had sad and even tragic consequences. They caused 
irreparable damage to the lives and reputations of seven 
innocent Travel Office employees, led to numerous thwarted and 
even obstructed investigations, and it seems clear contributed 
to the depression and death of one of the central figures in 
the firings, former Deputy Counsel to the President, Vincent 
Foster.
    The White House's reasons for obscuring facts, covering up 
the initial events and covering up the cover-ups, often were 
petty or otherwise reflected the vanity of a new administration 
refusing to admit its mistakes in the matter, or acknowledge 
inappropriate interference in other areas. In some cases, it 
was an administration seeking favors for friends that, if 
implemented, at the very least, would have crossed ethical 
lines. It is clear that once the ``official'' story was made 
public, any movement toward the truth brought the threat of 
damaging legal and political ramifications that the Clinton 
White House could not afford to risk.
    The extensive documentary record constructed over the past 
year has dismantled the White House cover story. The committee 
sought records of meetings, phone logs, Secret Service logs and 
White House residence records that were the only way to fill in 
the missing memories of countless witnesses. While the 
recollections of witnesses frequently have been implausibly 
flawed, the documentary record often tells a very different and 
far more complete story.
    Finally, it is the President himself who ultimately must be 
held accountable for this persistent pattern of White House 
misinformation and misuse of executive power and executive 
privilege. Given the alarming turnover of key White House 
operatives over the past 3\1/2\ years, only the President 
himself could have sustained such a pattern of misbehavior. Why 
has President Clinton tried to keep the true story from being 
told? A recurring question arises whether the President is 
above the law--whether the First Lady is above the law.
    The discrepancies, vagaries and omissions between the 
``official'' White House account of these matters and the 
factual record now properly falls within the scope of the 
criminal investigation by Independent Counsel Kenneth Starr, 
now known as ``Travelgate.''

               II. Committee Findings and Recommendations

                           Committee Findings

PLANS TO FIRE THE WHITE HOUSE TRAVEL OFFICE EMPLOYEES AND REPLACE THEM 
  WITH CAMPAIGN PERSONNEL WERE IN PLACE FROM THE EARLIEST DAYS OF THE 
                         CLINTON ADMINISTRATION

         Efforts to dislodge the longstanding White 
        House Travel Office employees began shortly after the 
        1992 election and continued throughout the Clinton 
        transition. Presidential cousin Catherine Cornelius, 
        who had worked on travel arrangements for the campaign, 
        teamed up with Arkansas-based travel company World Wide 
        Travel to advocate ``out-sourcing'' the travel 
        operations at the White House.
         White House Administrator David Watkins met 
        with Cornelius and World Wide representatives several 
        times prior to January 20, 1993, and Cornelius 
        submitted several memos during this timeframe. 
        Meanwhile, World Wide Travel secured the Democratic 
        National Committee business, an account it still holds 
        today.
         Harry Thomason, whose air charter consulting 
        company Thomason, Richland and Martens, Inc. (TRM) 
        provided services to the Clinton/Gore campaign, spoke 
        with Mrs. Clinton during the transition and pressed his 
        view that the long-time career employees ``should be 
        replaced because they were disloyal.'' \30\ Thomason 
        also told President Clinton about allegations of 
        wrongdoing in the Travel Office in March 1993.
---------------------------------------------------------------------------
    \30\ Notes of White House Associate Counsel Natalie Williams of 
conversation with Harry Thomason attorney, Amy Sabrin, undated (but 
most likely from January 1996 timeframe), DF 780464-465. The President 
exerted a claim of executive privilege over these notes on May 30, 1996 
and they were not provided to the committee until August 15, 1996.
---------------------------------------------------------------------------

   HARRY THOMASON WHO HAD A FINANCIAL STAKE IN THE TRAVEL BUSINESS, 
INSTIGATED THE FIRING OF THE TRAVEL OFFICE EMPLOYEES. MR. THOMASON HAD 
PERSONAL AND FINANCIAL STAKES IN ENSURING THAT THE FORMER TRAVEL OFFICE 
  EMPLOYEES WERE FIRED WHICH MADE IT CLEARLY INAPPROPRIATE FOR HIM TO 
                  HAVE ANY INVOLVEMENT IN THIS MATTER

         Harry Thomason was the first person to pass 
        along rumors about the Travel Office employees to Mrs. 
        Clinton and President Clinton. (While Mrs. Clinton has 
        suggested that Vincent Foster may have told her first 
        about the rumors, Foster's own notes indicate that he 
        did not know about the rumors until May 12, 1993, when 
        Watkins and Harry Thomason first approached him. Mrs. 
        Clinton only raised this issue with Foster the 
        following day.) Neither Mrs. Clinton nor anyone in Mrs. 
        Clinton's office could identify any alternative source 
        of the rumors.\31\
---------------------------------------------------------------------------
    \31\ See depositions of First Lady's Chief of Staff Maggie 
Williams, July 29, 1996, and Press Secretary Lisa Caputo, May 14, 1996, 
and responses to interrogatories from the First Lady of March 21, 1996.
---------------------------------------------------------------------------
         The suggestion by President and Mrs. Clinton 
        that there were ``rumors everywhere'' and Harry 
        Thomason's sworn testimony about ``a buzz in the air'' 
        of wrongdoing in the Travel Office are not consistent 
        with the more than 70 depositions conducted by the 
        committee and dozens of informal interviews. Virtually 
        no one--except those in direct contact with Harry 
        Thomason--heard rumors. The White House Management 
        Review authors confirmed that they discovered no other 
        source of the rumors and their notes make clear that 
        Thomason was the source of the rumors. Both the General 
        Accounting Office review and the DOJ Office of 
        Professional Responsibility (``OPR'') review concluded 
        that Harry Thomason passed on the rumors to Mrs. 
        Clinton.
         Harry Thomason and Darnell Martens made 
        efforts to investigate the Travel Office employees in 
        the spring of 1993. Martens had Penny Sample of Air 
        Advantage make calls to UltrAir, the company that had 
        the Travel Office business, and Martens sought out a 
        former UltrAir employee for information. Documents 
        related to these efforts are missing. A March 5, 1993, 
        memo indicated that Darnell Martens was to receive a 
        package from Miami Air and would have a ``complete 
        summary with substantive information'' for Thomason. 
        These documents never were produced to the committee.
         Harry Thomason contacted David Watkins on 
        April 16, 1993, and passed on rumors of wrongdoing 
        about the Travel Office. According to Watkins' 
        contemporaneous notes, Harry Thomason related the 
        allegations of 5% kickbacks in this conversation.\32\ 
        Watkins then relayed this information to Catherine 
        Cornelius and asked her to investigate the office.
---------------------------------------------------------------------------
    \32\ David Watkins handwritten notes dated April 16, 1993, CGE 
29184.
---------------------------------------------------------------------------

 PRESIDENT CLINTON APPROVED HARRY THOMASON'S ``IMAGE PROJECT'' AT THE 
 WHITE HOUSE, GIVING THOMASON AN ``OFFICIAL STATUS.'' THIS FACILITATED 
   HARRY THOMASON'S EFFORTS TO OBTAIN LUCRATIVE GOVERNMENT CONTRACTS

         President Clinton, Mack McLarty, George 
        Stephanopoulos, and Mandy Grunwald ``all approved'' the 
        ``White House Project''--Harry Thomason's image project 
        at the White House.\33\ Contrary to White House 
        representations that Rahm Emanuel was responsible for 
        bringing Harry Thomason to the White House, Mack 
        McLarty, with President Clinton's approval, authorized 
        Thomason's work at the White House. Emanuel would not 
        have had the authority to bring anyone into the White 
        House in such a fashion. There was a McLarty memo, now 
        missing, that was circulated to senior staff about 
        Thomason's role.\34\
---------------------------------------------------------------------------
    \33\ Committee deposition of Todd Stern, May 29, 1996, pp. 38-39. 
[Note: all committee deposition citations reflect the page(s) of the 
original deposition transcripts.]
    \34\ Jennifer O'Connor's handwritten notes dated August 18, 1993, 
identify the memo, CGE 37586; committee deposition of Jennifer 
O'Connor, March 29, 1996, p. 45.
---------------------------------------------------------------------------
         Thomason's White House Project went beyond 
        simple ``image'' issues and he was involved in meetings 
        on how to obtain more money for staffing purposes 
        throughout the White House. The possibility of using 
        excess Presidential inaugural funds for extra staff 
        also was being explored by the White House.\35\
---------------------------------------------------------------------------
    \35\ The White House later inappropriately withheld from GAO 
investigators the page of the White House Project memo which discusses 
this issue on the grounds that it was a ``political'' issue.
---------------------------------------------------------------------------

 HARRY THOMASON ABUSED HIS OFFICIAL STATUS AND WHITE HOUSE ACCESS AT A 
   TIME WHEN HE HAD A FINANCIAL STAKE IN THE TRAVEL BUSINESS. HARRY 
THOMASON'S ACTIVITIES AT THE WHITE HOUSE MAKE HIM A SPECIAL GOVERNMENT 
         EMPLOYEE TO WHICH THE CONFLICT OF INTEREST LAWS APPLY

         Darnell Martens, Harry Thomason's partner in 
        his air charter consulting company, TRM, wrote a 
        January 29, 1993 memo to Thomason outlining how they 
        should pursue ``Washington opportunities'' in the early 
        days of the Clinton administration. These opportunities 
        included seeking White House travel business as well as 
        a quarter-of-a-million dollar GSA contract to survey 
        all non-military Government aircraft. Documents 
        provided to this committee and only subsequently 
        provided to the Justice Department, clearly establish 
        that TRM was seeking both Travel Office business and 
        the GSA contract.
         Darnell Martens, with the assistance of his 
        partner Harry Thomason, contacted Billy Dale in 
        February 1993 seeking the Travel Office business. 
        Martens' post-May 19, 1993, explanations that he was 
        seeking the business on behalf of others, contradicts 
        his own documents of March 5, 1993, in which he 
        advocates that ``the Administration . . . disband the . 
        . . system in favor of the functions being outsourced 
        to TRM/Air Advantage.'' Furthermore, TRM would have 
        stood to benefit from potential commissions as well as 
        business goodwill even if only seeking the contracts 
        for others.
         On or around February 16-17, 1993, Harry 
        Thomason gave President Clinton a February 11, 1993, 
        memo drafted by Martens soliciting the GSA contract to 
        audit non-military aircraft. At this time, Thomason was 
        working at the White House and staying as a guest in 
        the White House residence.\36\ At or around this same 
        time, Harry Thomason first told President Clinton of 
        rumors of wrongdoing in the Travel Office and informed 
        President Clinton he would speak with the appropriate 
        office at the White House about this. President 
        Clinton, fully aware of Thomason's business interests 
        in this area, took no action to discourage Thomason's 
        involvement.
---------------------------------------------------------------------------
    \36\ See committee deposition of John Podesta, June 5, 1996, p. 23. 
Podesta was then-Staff Secretary at the White House, testified that he 
did not see the February 11, 1993, memo go into President Clinton's 
office but he did see it coming out of his office. Harry Thomason 
stayed at the residence on February 16 and 17, 1993. Thomason recalls 
bowling with President Clinton on this occasion--and beating the 
President--and he is listed in White House residence records but he 
does not recall whether he passed on the February 11 memo (CGE 2223) on 
which the President wrote a February 17, 1993, note. Committee 
deposition of Harry Thomason, May 17, 1993, p. 122.
---------------------------------------------------------------------------
         President Clinton reviewed the TRM proposal 
        for the GSA contract and set in motion efforts to 
        assist TRM in obtaining Government business by sending 
        a note to Mack McLarty reading: ``Mack/These guys are 
        sharp/shd discuss/w/Panetta/Lader.'' On February 17, 
        1993, Staff Secretary John Podesta passed along this 
        memo from the President to McLarty, David Watkins and 
        Mark Gearan for ``ACTION.'' \37\
---------------------------------------------------------------------------
    \37\ February 17, 1993, buck slip from John Podesta to Mack 
McLarty, Mark Gearan and David Watkins marked for ``ACTION'' attached 
to a February 11, 1993, memo from Darnell Martens to Harry Thomason, 
CGE 02296.
---------------------------------------------------------------------------
         Mr. Thomason, who then was working on the 
        White House ``image'' project for the purpose of 
        obtaining good press stories for President Clinton, 
        told David Watkins, Jennifer O'Connor and others that 
        firing the Travel Office employees would be a ``good 
        press story.'' Thus, creating a good news story to 
        bolster President Clinton's image was an objective of 
        the Travel Office firings. This was all done in the 
        course of Thomason's duties in the image project for 
        which even White House Counsel Beth Nolan opined that 
        he was a special Government employee.
         Mr. Thomason was involved in numerous meetings 
        concerning the Travel Office. Thomason's advice on 
        restaffing a new Travel Office was both offered to Mrs. 
        Clinton and relayed to David Watkins and Catherine 
        Cornelius. Ms. Cornelius was instructed to meet with 
        Thomason about the Travel Office. Thomason tasked 
        Darnell Martens about having Penny Sample come to 
        Washington and the White House to work in the Travel 
        Office. While an SGE for purposes of the imaging 
        project, Thomason independently became an SGE for 
        purposes of the Travel Office by virtue of his integral 
        involvement in these matters.

 THE WHITE HOUSE COMMUNICATIONS OFFICE, IN CONJUNCTION WITH THE WHITE 
HOUSE COUNSEL'S OFFICE, PUBLICLY ACCUSED THE TRAVEL OFFICE EMPLOYEES OF 
 CRIMINAL CONDUCT AND MISUSED AND MANIPULATED THE FBI TO FURTHER THEIR 
                            POLITICAL AGENDA

         George Stephanopoulos and Dee Dee Myers 
        relayed wrong information to the press about reasons 
        for the firings and the involvement of the FBI. On May 
        21, 1993, the FBI again was misused and abused when 
        Stephanopoulos and Myers summoned the FBI 
        Communications Director to in effect come to the White 
        House and take dictation for the FBI press release that 
        the White House wished for, and insisted that the FBI 
        release.
         After the Travel Office firings were announced 
        and met with great controversy with the press, the 
        White House immediately initiated a disinformation 
        campaign. The White House tried to contain the 
        responsibility for the firings at the level of David 
        Watkins even though his actions undeniably were 
        precipitated by pressures from above.
         The White House announced the Travel Office 
        firings and claimed they resulted from a Peat Marwick 
        review that had yet to be completed. Peat Marwick 
        representatives then were pressured by the 
        communications office to brief the press and to rush to 
        produce a review corroborating the White House 
        allegations.

    PRESIDENT CLINTON INAPPROPRIATELY ALLOWED HIS COUSIN CATHERINE 
  CORNELIUS TO REMAIN IN A POSITION WHERE SHE HAD A CLEAR CONFLICT OF 
INTEREST. CORNELIUS PURSUED AN INVESTIGATION OF EMPLOYEES OF AN OFFICE 
     IN WHICH SHE COVETED THE TOP JOB AND FOR WHICH SHE PLANNED A 
                             REORGANIZATION

         Once at the White House working for David 
        Watkins, Catherine Cornelius continued her efforts to 
        take over the Travel Office, among other things writing 
        a January 26, 1993, memo and a February 15, 1993, memo 
        co-authored with Clarissa Cerda, designating herself 
        and Cerda as future co-directors of the office.

   MRS. CLINTON, ACTING ON HARRY THOMASON'S BASELESS ALLEGATIONS OF 
 WRONGDOING AGAINST THE TRAVEL OFFICE EMPLOYEES, ASSERTED PRESSURE ON 
      SENIOR WHITE HOUSE STAFF TO FIRE THE TRAVEL OFFICE EMPLOYEES

         When Harry Thomason arrived at the White House 
        during the week of May 10, 1993, he was anxious to 
        learn what had transpired since he passed on rumors 
        about the Travel Office to David Watkins. Watkins had 
        not yet acted upon Thomason's allegations, so Thomason 
        spoke with Mrs. Clinton about these matters. Mrs. 
        Clinton in turn pressured Mack McLarty, Vince Foster 
        and David Watkins to fire the employees. Thomason also 
        met with Catherine Cornelius to exchange information. 
        Thomason told Jennifer O'Connor about the kickback 
        allegations and told her that the Travel Office 
        employees had been ``ripping us off for years.''
         Harry Thomason had numerous contacts with 
        President Clinton and Mrs. Clinton throughout the first 
        half of May 1993, including: calls to the residence 
        private line on May 5 and May 6; phone messages both to 
        and from Mrs. Clinton throughout the week of May 10-14; 
        meetings with President Clinton on the mornings of May 
        12 and May 13; and a lengthy dinner in the White House 
        residence on the evening of May 13, 1993. Thomason 
        provided incomplete testimony to the committee about 
        the nature of these contacts and exhibited selective 
        memory loss in recounting these meetings.
         Once Mrs. Clinton's wishes were relayed to 
        Watkins on May 12, Watkins turned to Foster to 
        determine a course of action. Foster tasked Associate 
        Counsel Bill Kennedy to find a solution. Kennedy called 
        the FBI and informed them that the ``highest levels'' 
        of the White House were interested in this matter.
         On May 14, 1993, Mrs. Clinton, following a 
        lengthy dinner with Harry Thomason the evening before, 
        relayed to David Watkins that ``Harry'' had a ``plan'' 
        for the Travel Office and that ``we need to get those 
        people out'' and ``our people in.'' Harry Thomason 
        continued to press for the firings throughout the day.
         On May 16, 1993, in a previously undisclosed 
        meeting between Mrs. Clinton and Mack McLarty, Mrs. 
        Clinton pressured McLarty to fire the Travel Office 
        employees.
         On May 17, 1993, McLarty met with Watkins and 
        told him the Travel Office was on Mrs. Clinton's radar 
        screen. Watkins, responding to pressure from McLarty, 
        Foster and Mrs. Clinton, decided to fire the employees 
        because he thought there ``would be hell to pay'' if he 
        did not accede to the First Family's wishes. McLarty 
        approved the decision and the May 17 memo on the firing 
        was ``cc'd'' to ``Hillary Rodham Clinton'' and faxed to 
        President Clinton in California.
         Even though it was cited as the basis for the 
        firings, the Peat Marwick review was not completed 
        until May 21, 1993, 2 days following the firings.

   BILL KENNEDY ABUSED THE FBI BY REPEATEDLY INVOKING THE ``HIGHEST 
          LEVELS'' OF THE WHITE HOUSE IN MEETINGS WITH THE FBI

         Bill Kennedy sought to and in fact did abuse 
        and compromise the FBI by invoking the ``highest 
        levels'' of the White House in order to involve FBI 
        headquarters officials rather than a field agent as 
        would have been the normal procedure. Mr. Kennedy 
        provided inaccurate and incomplete testimony to this 
        committee and numerous other investigative bodies 
        regarding his statements to the FBI.
         White House officials hoped to fire the 
        employees on May 13 and drafted talking points on May 
        13, 1993, discussing the Travel Office firings and 
        claiming an FBI investigation was underway. The FBI, 
        however, could not move that quickly and did not 
        believe it had sufficient predication to launch a 
        criminal fraud audit.
         The alleged ``predication'' for the FBI 
        investigation was the ``kickback allegation'' relayed 
        to the FBI by Catherine Cornelius.\38\ Cornelius 
        obtained this information from Harry Thomason who 
        subsequently had repeated it to numerous other White 
        House staffers.
---------------------------------------------------------------------------
    \38\ OPR Report, tab B: May 13, 1993, FBI e-mail from Richard Wade 
to Thomas Kubic, subject: White House Travel Office, DOJ document #AZ 
000603.
---------------------------------------------------------------------------
         FBI headquarters never should have been 
        contacted directly on this matter. Such allegations 
        normally would have been handled by a field agent or 
        even the local police.

WHITE HOUSE OFFICIALS COVERED-UP THE REAL REASONS FOR THE FIRING OF THE 
WHITE HOUSE TRAVEL OFFICE EMPLOYEES. THE FIRINGS WERE NOT BASED ON THE 
   PEAT MARWICK REVIEW, BUT RATHER WERE DECIDED BEFORE PEAT MARWICK 
               EXAMINERS EVER SET FOOT IN THE WHITE HOUSE

         At the very latest, the decision to fire the 
        Travel Office employees was made by May 12, 1993, a 
        full day before the FBI was called to the White House 
        and 2 days before the Peat Marwick review team came to 
        the White House. On May 12, Harry Thomason told David 
        Watkins that he had talked with Mrs. Clinton and she 
        was ``ready to fire them all that day.'' On May 10, 
        Thomason had circulated the memo by Martens outlining 
        allegations of wrongdoing in the Travel Office. The 
        decision to fire was made first; the White House 
        rationale was sought later.

THE WHITE HOUSE MISREPRESENTED THE PEAT MARWICK REVIEW. IT WAS NEITHER 
 AN AUDIT NOR INDEPENDENT AND WAS DIRECTED BY A WHITE HOUSE WHICH DID 
                   NOT WANT AN AUDIT TO BE CONDUCTED

         The Peat Marwick employee who was called in to 
        conduct a supposed ``audit'' already had volunteered 
        his services to the Vice President's National 
        Performance Review in a May 10, 1993, meeting with 
        Jennifer O'Connor. The Peat Marwick work, as explained 
        in its own engagement letter and subsequent draft and 
        formal reports was a review conducted in keeping with 
        and limited by the White House's needs. It was neither 
        ``independent'' nor an audit as represented by the 
        White House.
         Contrary to representations made by both the 
        White House and Peat Marwick, the Travel Office records 
        were auditable according to Dan Russell, the Peat 
        Marwick auditor who worked on the review.\39\ An audit 
        would have taken longer and the White House did not 
        want to take the extra time. The White House dictated 
        how the Peat Marwick review would be conducted and 
        focused its attentions on particular issues including a 
        ``kickbacks.''
---------------------------------------------------------------------------
    \39\ Committee deposition of Daniel Russell, March 27, 1996, p. 59.
---------------------------------------------------------------------------
         Peat Marwick found no basis for the 
        ``kickbacks'' allegations in its review. The findings 
        of the Peat Marwick review have been seriously 
        misrepresented by the White House.
         On July 8, 1993--6 days after the Management 
        Review was published--Vince Foster has notes indicating 
        that Peat Marwick auditors contacted the White House. 
        His notes state: [auditors] ``strongly disagree[d] with 
        [the] review conclusion'' of the Management Review.\40\
---------------------------------------------------------------------------
    \40\ CGE 000967.
---------------------------------------------------------------------------

      THE FBI ALLOWED THE WHITE HOUSE TO CONTROL ITS INVESTIGATION

         Once the FBI was brought to the White House on 
        May 13, 1993, despite its desire to be involved in the 
        investigation, it ceded control of the investigation to 
        the White House. The White House told the FBI that Peat 
        Marwick auditors would be brought in first and that the 
        FBI could not observe the audit despite its request to 
        do so.
         From May 13, 1993, when the FBI first was 
        contacted through May 19, 1993, the FBI exerted no 
        control over the investigation. The White House ignored 
        the FBI's request not to fire the employees on May 19, 
        1993, and the White House failed to honor its 
        commitment to maintain control over the Travel Office 
        records.

THE FBI MISHANDLED THE TRAVEL OFFICE INVESTIGATION FROM THE BEGINNING, 
   ALLOWING THE WHITE HOUSE TO CONTROL THE INVESTIGATION AND DID NOT 
      ADEQUATELY SECURE TRAVEL OFFICE RECORDS IN A TIMELY FASHION

         There was no integrity in maintaining the 
        Travel Office records in the White House due to a total 
        abdication of responsibility by anyone in the White 
        House Counsel's office, the Office of Administration, 
        and the Staff Secretary's office. The Staff Secretary, 
        John Podesta, was contacted by Records Management 
        officials who were concerned about the loss of Travel 
        Office records on the day after the firings. No one 
        from Mr. Podesta's office responded.
         Craig Livingstone, the Director of Personnel 
        Security, was the individual put in charge of securing 
        the office and the records and files in the Travel 
        Office on May 19, 1993. In light of what we now know 
        about Craig Livingstone's gathering of hundreds of FBI 
        files on former Republican administration officials, 
        his background as an ex-bouncer and his grand ambitions 
        at the White House, the integrity of the Travel Office 
        records is all the more suspect.
         Vincent Foster, Bill Kennedy, David Watkins 
        and others were aware that Catherine Cornelius was 
        removing records from the Travel Office and taking them 
        home over a month-long period. No immediate efforts 
        were made to ensure that all records secreted out of 
        the office by Cornelius were returned.
         The FBI failed to secure any records in the 
        Travel Office until almost a month after the firings. 
        David Bowie, the Washington Metropolitan Field Office 
        supervisor in charge of the investigation, negligently 
        failed to exert control over the records in a timely 
        fashion and generally remained unaware of the ongoing 
        controversy.
         Whether due to White House withholding of 
        documents or by its own design, the Justice Department 
        cavalierly responded to the potential for missing 
        records. Furthermore, the Department was grossly 
        negligent in failing to gain any control over Travel 
        Office documents or prevent the destruction of 
        documents which could ultimately have determined 
        whether or not allegations made against former Travel 
        Office Director Billy Dale were true.
         Despite the fact that lead Justice Department 
        prosecutor Stuart Goldberg acknowledged to IRS 
        officials that Travel Office records were missing, 
        Justice Department officials vigorously opposed efforts 
        by Billy Dale to seek White House documents pertaining 
        to this subject.

 THE WHITE HOUSE ENGAGED IN A CONSPIRACY OF SILENCE OF THE TRUE STORY 
   BEHIND THE FIRINGS FROM THE VERY FIRST DAYS. IT DID SO FOR DAMAGE 
                            CONTROL PURPOSES

         President Clinton denied knowing anything 
        about the Travel Office firings even though he had been 
        briefed on the matter 2 days before the firings. This 
        was known to at least Bruce Lindsey and Jeff Eller. 
        Such statements by the President had to have sent a 
        chilling message to all those individuals who were 
        aware of President Clinton's prior knowledge of the 
        firings, in effect creating a conspiracy of silence. 
        The fact that President Clinton was briefed prior to 
        the firings was not disclosed publicly until this 
        investigation.

      PRESIDENT CLINTON ESTABLISHED A COVER-UP SITUATION WHEN HE 
 INAPPROPRIATELY PLACED THE PERSON WHO HAD APPROVED THE FIRINGS--MACK 
   McLARTY--IN CHARGE OF THE MANAGEMENT REVIEW AND McLARTY WITHHELD 
INFORMATION IN THE COURSE OF THE INVESTIGATION. IT IS INAPPROPRIATE FOR 
     THE WHITE HOUSE TO INVESTIGATE ITSELF IN MATTERS OF CONFLICTS

         It was inappropriate for Mack McLarty, the 
        individual who both pushed Watkins to fire the Travel 
        Office employees and approved the firings pursuant to 
        ``pressure'' from Mrs. Clinton, to oversee the 
        subsequent White House Management Review announced on 
        May 25, 1993, in the wake of a firestorm of media 
        criticism and the embarrassing upbraiding of the White 
        House by Attorney General Reno about the misuse of the 
        FBI.
         McLarty represented that Podesta and Stern 
        were chosen to conduct the review because neither had 
        been involved in any of the relevant events. But Staff 
        Secretary Podesta was aware of the efforts by Thomason 
        to obtain Government business through his contacts with 
        the President and also had been informed that the 
        records in the Travel Office were not being 
        appropriately secured. Further, two McLarty aides were 
        provided to assist Podesta.
         The White House set up a sham investigation in 
        which a key person involved in the firings was to be 
        briefed on, oversee and steer the investigation of 
        alleged wrongdoing for which he was in large part 
        responsible.
         In the initial meetings with Podesta and 
        Stern, McLarty did not disclose his full role in the 
        firings, and he withheld the fact that the May 17 memo 
        was cc'd to Mrs. Clinton and that he had a May 16 
        meeting with Mrs. Clinton. While Podesta and Stern 
        learned of the May 17 memo in the course of their 
        review, they never were informed by McLarty of the May 
        16 meeting in which McLarty was pressured by Mrs. 
        Clinton to take action in the Travel Office matter. It 
        should come as no surprise that Podesta and Stern were 
        ineffective in investigating their own bosses.

THE INTERNAL WHITE HOUSE MANAGEMENT REVIEW WAS A CATALOG OF ``MISTAKES 
AND DECEPTION'' \41\ WHICH OMITTED INCRIMINATING INFORMATION ABOUT THE 
 PRESIDENT, MRS. CLINTON AND HARRY THOMASON. THE WHITE HOUSE CHOSE TO 
      COVER-UP INCRIMINATING INFORMATION FOR POLITICAL EXPEDIENCY
---------------------------------------------------------------------------

    \41\ ``A Stealthy, Evasive Confession,'' the New York Times, July 
11, 1993.
---------------------------------------------------------------------------
         When the White House conducted the Management 
        Review, the President was at an abysmally low 36 
        percent approval rating, his budget and health plans 
        were on the ropes, and numerous debacles in the first 6 
        months had the White House reeling.
         The White House Management Review covered up 
        President Clinton's prior knowledge of the Travel 
        Office firings beginning at least 2 days before they 
        occurred.
         The White House Management Review covered up 
        the fact that it was President Clinton who approved of 
        Harry Thomason's working at the White House. Thomason 
        was designated on his pass as a ``White House 
        staffer,'' not as a volunteer. And Thomason was to 
        report to President Clinton.
         The White House Management Review covered up 
        President Clinton's efforts to assist Harry Thomason in 
        obtaining Government contracts for TRM. Even though a 
        specific section in the report discussed ``appearances 
        of impropriety'' by Harry Thomason and Darnell Martens, 
        it ignored this most blatant abuse of White House 
        access which directly involved President Clinton.
         The White House Management Review minimized 
        Mrs. Clinton's role in the Travel Office firings and 
        omitted the testimony of witnesses indicating a larger 
        role by Mrs. Clinton. It also failed to note that 
        senior White House aides initially had withheld 
        information about Mrs. Clinton's involvement in the 
        firings.
         The White House Management Review omitted 
        conversations Harry Thomason had with Mrs. Clinton 
        about the Travel Office and failed to note that 
        Thomason refused to cooperate with the review after an 
        initial interview.
         The White House Management Review concealed 
        the fact that the alleged source of Harry Thomason's 
        rumor--the President of Miami Air--denied that Billy 
        Dale or anyone in the Travel Office ever solicited 
        kickbacks.\42\ As a result, the IRS continued a 2\1/2\ 
        year fruitless investigation in which UltrAir prevailed 
        with a $5,000 refund from the agency.
---------------------------------------------------------------------------
    \42\ WHMR interview of Ross Fischer of Miami Air, June 17, 1993. 
CGEPR 237-239.
---------------------------------------------------------------------------
         The White House Management Review largely 
        ignored the fact that Peat Marwick, World Wide Travel 
        and Penny Sample of Air Advantage were brought into the 
        White House with no competitive bidding. White House 
        ethics officials had reviewed these matters and 
        expressed such concerns. The concerns were not 
        contained in the final report.
         The White House Management Review, contrary to 
        representations made to the press on July 2, 1993, by 
        McLarty, Gearan and Podesta, attempted to conduct its 
        own investigation of the seven employees. However, when 
        they came up empty-handed, they abandoned these efforts 
        and failed to disclose the exculpatory information they 
        had discovered which would have been of benefit to the 
        reputations of the Travel Office employees.
         In the aftermath of the Travel Office firings 
        and in the course of the White House Management Review, 
        Patsy Thomasson sought to intimidate and coerce false 
        representations from Catherine Cornelius and Clarissa 
        Cerda regarding whether or not David Watkins had read 
        their February 15, 1993, memo on the takeover of the 
        Travel Office. Chief of Staff McLarty inappropriately 
        ignored this gross violation of standards of conduct by 
        Ms. Thomasson when he was informed of it. Further, 
        Thomasson even resorted to pulling Cornelius' and 
        Cerda's mess privileges when they did not comply with 
        her request that they misrepresent Watkins' knowledge.

  THE WHITE HOUSE MANAGEMENT REVIEW REPRIMANDED PEOPLE WHO WERE ONLY 
              FOLLOWING THE ORDERS OF THE REAL INSTIGATORS

         Despite Mr. Nussbaum's request to McLarty that 
        both he and Foster be reprimanded if Kennedy were 
        reprimanded, McLarty refused to issue those reprimands 
        because they would have been too close to the ``highest 
        levels.''
         It was apparently politically unthinkable for 
        President Clinton to hold those actually responsible 
        for the firings publicly accountable. This set in 
        motion a cover-up that grew more convoluted with each 
        subsequent investigation. With the intersection of the 
        investigations into the death of Vincent Foster, the 
        tangled Travelgate web became harder to re-weave to 
        accommodate subsequent revelations.
         Rather than reprimanding the lower-level 
        players (Bill Kennedy, David Watkins, Jeff Eller and 
        Catherine Cornelius), the appropriate action would have 
        been for the President to acknowledge his role in 
        bringing Harry Thomason to the White House and 
        providing him the opportunity to inappropriately seek 
        Government business.
         The White House Management Review, the 
        possibility of congressional hearings and the pending 
        criminal investigation by Public Integrity were of 
        great concern to Vincent Foster. But a concerted effort 
        was launched by McLarty to downplay his concerns in 
        investigations with GAO, OPR and the FBI.

THE WHITE HOUSE'S OBSTRUCTION OF THE REVIEW OF VINCE FOSTER'S DOCUMENTS 
  WAS DUE IN PART TO CONCERNS ABOUT TRAVELGATE DOCUMENTS IN FOSTER'S 
                                CUSTODY

         Independent Counsel Fiske properly concluded 
        that the Travel Office firings were a significant 
        factor in Mr. Foster's depression in the weeks 
        preceding his death. His colleagues, most notably 
        Bernard Nussbaum, ignored the potential ramifications 
        of the problems faced by Harry Thomason's actions and 
        President Clinton and Mrs. Clinton's involvement in the 
        Travel Office matter and dismissed Foster's attempts to 
        have these matters handled by outside counsel as would 
        have been appropriate.
         White House Counsel Bernard Nussbaum conducted 
        a sham review of the documents in Foster's office 
        following Foster's death. Mr. Nussbaum did not 
        adequately or accurately describe to law enforcement 
        officials relevant documents in Foster's office, 
        including the Vince Foster Travel Office file. Despite 
        Nussbaum's claims to the contrary, no one present in 
        Foster's office during the July 22, 1993, search 
        recalls seeing the Vince Foster Travel Office file or 
        hearing of any document described as such by Nussbaum.
         Mr. Nussbaum withheld information concerning 
        the existence of, and concealed the critical Vince 
        Foster Travel Office notebook from GAO, Public 
        Integrity and FBI investigators for almost a year 
        following Foster's death and only informed the White 
        House of its existence after he disclosed it to a Grand 
        Jury in May 1994.
         Following Vincent Foster's death, high-ranking 
        White House officials quietly killed efforts by TRM to 
        obtain the GSA contract, concealed all documents 
        pertaining to these efforts from the ongoing General 
        Accounting Office investigation, and long-delayed their 
        production of documents to the Justice Department's 
        Public Integrity unit investigating possible criminal 
        conflicts of interest by Harry Thomason and Darnell 
        Martens while they were at the White House.

  MRS. CLINTON INSTRUCTED WHITE HOUSE STAFF ON THE HANDLING OF FOSTER 
DOCUMENTS AND THE FOSTER NOTE FOUND ON JULY 26, 1993, AND SENIOR WHITE 
 HOUSE STAFF COVERED UP THIS INFORMATION AND KEPT IT FROM INVESTIGATORS

         Mrs. Clinton personally was involved in the 
        discussions regarding the White House's handling of 
        documents in Vince Foster's office following his death. 
        Mrs. Clinton made known her views that investigators 
        should be denied ``unfettered access'' to Foster's 
        office prior to the search of the office on July 22, 
        1993.
         The White House withheld evidence subsequently 
        discovered among the 2,000 pages over which President 
        Clinton invoked executive privilege, that senior White 
        House aide Bill Burton spoke with Mrs. Clinton on the 
        evening of Foster's death (July 20, 1993).
         Mrs. Clinton directed that Mack McLarty and 
        others not inform the President about the discovery of 
        the Foster ``suicide'' note on July 26, 1993. This note 
        essentially defended Foster's and the White House's 
        actions in the Travel Office firings and Mrs. Clinton 
        suggested that executive privilege research be done 
        regarding the note.
         The White House's delay in turning over the 
        Foster note was due to senior staffers' deference to 
        Mrs. Clinton's wishes. Statements by Mack McLarty and 
        David Gergen that the note was not immediately turned 
        over because of the need to notify Mrs. Foster and the 
        President are not consistent with the evidence. No one 
        called Mrs. Foster the evening the note was discovered 
        and President Clinton was not told about the note's 
        existence until after Mrs. Clinton met with Bernard 
        Nussbaum and Steve Neuwirth. Mr. Nussbaum and Mr. 
        Neuwirth had been tasked with studying the executive 
        privilege issue at 2:30 p.m. Susan Thomases and Bob 
        Barnett also were in the residence that afternoon at 
        approximately 3 p.m.
         The Foster note most likely was not a 
        ``suicide'' note but rather a note in preparation for 
        resigning or in the event that Foster was asked to 
        resign or take the fall for the problems generated by 
        the firings and related matters.\43\
---------------------------------------------------------------------------
    \43\ Foster's sister, Sheila Anthony told OPR investigators that in 
July 1993, Foster had told her he was considering resigning. Mrs. 
Foster told the Independent Counsel that the note was probably written 
on or about July 11, 1993: ``On that day, she had encouraged him to 
write down everything that was disturbing him. . . . Later that day, 
Foster told his wife that he had written the opening argument for his 
defense.'' Report of the Independent Counsel, June 30, 1994, p. 14.
---------------------------------------------------------------------------

     THE JUSTICE DEPARTMENT DEFERRED TO THE WHITE HOUSE DURING ITS 
INVESTIGATIONS OF THE WHITE HOUSE TRAVEL OFFICE AND HARRY THOMASON AND 
   IGNORED THE OBSTRUCTIVE BEHAVIOR EXHIBITED BY THE COUNSEL'S OFFICE

         The Justice Department vigorously pursued 
        criminal allegations from the White House about Billy 
        Dale while minimally investigating allegations of 
        conflicts by Presidential friend Harry Thomason. 
        Prosecutor Stuart Goldberg told an FBI agent that DOJ 
        intended to indict Dale before the 1994 elections.
         Prosecutor Goldberg also told an IRS agent 
        that there were missing documents in this case and that 
        Public Integrity believed they might be in Catherine 
        Cornelius' possession. Yet when Dale raised the issue 
        of missing documents as a defense at his own trial, the 
        Justice Department opposed this request and the Judge 
        ruled in the Government's favor.
         Even after the White House stonewalled the 
        Justice Department on its requests for Harry Thomason 
        documents and engaged in obstructive behavior that 
        necessitated the issuance of a September 13, 1994, 
        subpoena to the White House, the Justice Department 
        showed little interest in further investigating. In 
        fact the Department failed to obtain critical documents 
        from Thomason himself until this committee threatened a 
        subpoena to obtain them and did in fact obtain 
        documents particularly relevant to a conflicts 
        investigation.\44\
---------------------------------------------------------------------------
    \44\ In particular, the January 29, 1993 (EZ 037684), and March 12, 
1993 (CGE 00224), memos demonstrated a clear interest in obtaining the 
Travel Office business as well as numerous other ``Washington 
opportunities.''
---------------------------------------------------------------------------
         In stark contrast to the stated intent of 
        indicting Billy Dale before the 1994 elections,\45\ the 
        Justice Department declined prosecution of Harry 
        Thomason and Darnell Martens citing, in part, concerns 
        that it might be viewed as a ``political prosecution.''
---------------------------------------------------------------------------
    \45\ FBI e-mail from Gregory D. Meacham, to Tom Kubic, dated 
September 26, 1994, ``Regarding your inquiry . . . I . . . was advised 
by SA Pam Bombardi, that DOJ Trial Attorney Stuart Goldberg had stated 
that he wanted to do the indictment before the elections, probably on 
October 4, 1994.'' Bates Stamp No. FBI-00000242.
---------------------------------------------------------------------------
         In startling contrast to its chronic 
        stonewalling on all matters related to Harry Thomason 
        or Vincent Foster, the White House not only cooperated 
        fully with the investigation of Billy Dale but 
        conducted its own investigation into wrongdoing and 
        provided any incriminating information it could find to 
        both the Public Integrity Section and the GAO.
         The FBI ignored the fact that the White House 
        interviewed many witnesses (in the course of the White 
        House Management Review) before the FBI interviewed 
        them in the weeks following the Travel Office firings. 
        In direct contrast to the Justice Department's strong 
        opposition to this committee interviewing witnesses 
        involved with the Travel Office matter, the Justice 
        Department registered no protests against this and took 
        no action to ensure that the FBI was allowed to 
        interview witnesses before the White House did. David 
        Bowie once again was woefully negligent and entirely 
        unaware of the fact that the White House was conducting 
        a Management Review.\46\
---------------------------------------------------------------------------
    \46\ Committee interview of David Bowie.
---------------------------------------------------------------------------
         The Justice Department deferred to the White 
        House by allowing the White House: to initially control 
        the investigation of the Travel Office and call all the 
        shots; to maintain custody and control over the Travel 
        Office documents for almost a month after the firings; 
        and to delay for almost a year the production of 
        documents relevant to the DOJ investigation of Harry 
        Thomason. At every turn, the Justice Department was 
        overly accommodating of a controlling White House.
         In the course of the committee's 
        investigation, the Justice Department put a former 
        Clinton campaign staffer in charge of handling 
        documents produced to the committee. Following Billy 
        Dale's November 1995 acquittal, his 1994 plea 
        negotiations were leaked to the press. This information 
        inappropriately was used by the White House and 
        President Clinton to malign Billy Dale long after 
        President Clinton publicly wished Dale well and hoped 
        Dale could put the matter behind him.

    WHITE HOUSE OFFICIALS ENGAGED IN A PATTERN OF DELAY, DECEIT AND 
   OBSTRUCTION OVER THE COURSE OF 3 YEARS OF INVESTIGATIONS INTO THE 
      TRAVEL OFFICE AND MATTERS RELATED TO VINCENT FOSTER'S DEATH

         The GAO's investigation was delayed for months 
        by document production delays. Ultimately GAO did not 
        receive all documents relevant to its inquiry 
        including: the Vince Foster Travel Office file, the 
        White House Management Review interview notes, 
        documents related to the TRM efforts to obtain GSA 
        contracts and the Watkins ``soul cleansing'' memo. A 
        GAO representative noted that the level of cooperation 
        that it received from the White House was not conducive 
        to properly conducting GAO's work.\47\
---------------------------------------------------------------------------
    \47\ Testimony of Nancy Kingsbury before the House Committee on 
Government Reform and Oversight, October 24, 1995.
---------------------------------------------------------------------------
         The ``Watkins memo'' was responsive to 
        numerous document requests and was inappropriately 
        withheld by David Watkins, Matthew Moore and Patsy 
        Thomasson. All three had hard copies and/or computer 
        copies of the memo and were made aware of the various 
        document requests and subpoenas to which it would have 
        been responsive.
         In responding to a Public Integrity request 
        for documents regarding Harry Thomason, Matthew Moore 
        wrote an April 4, 1994 memo to Neil Eggleston stating: 
        ``I know of no documents in my possession, or ever in 
        my possession, responsive to the request.'' This was 
        false. The Watkins memo clearly was responsive to this 
        request. At or around this time, Moore removed the 
        Watkins memo from his computer and provided a disk copy 
        to Watkins as he left the White House. However, Moore 
        maintained his own copy of the disk which included 
        several previous drafts of the memo.
         The White House withheld documents from the 
        Justice Department's Office of Professional 
        Responsibility including the Vince Foster Travel Office 
        file, the White House Management Review interview notes 
        and the Watkins ``soul cleansing memo.'' OPR Counsel 
        Michael Shaheen found the White House's lack of 
        cooperation ``unprecedented'' in his 20 year Government 
        career.
         White House stonewalling forced the Public 
        Integrity Section at the Justice Department to 
        acknowledge it had no confidence that the White House 
        had faithfully produced all documents ``relating to the 
        Thomason allegations.'' While Section Chief Lee Radek 
        noted that the ``integrity of our review is entirely 
        dependent upon securing all relevant documents,'' he 
        did not obtain all relevant documents: notably the 
        complete Vince Foster Travel Office notebook and the 
        Watkins ``soul cleansing'' memo, as well as more than 
        120 items over which the White House claimed executive 
        privilege. The Justice Department quietly acceded to 
        this inappropriate invocation of privilege. One of the 
        key items that it did not receive was a White House 
        Counsel's Office memo demonstrating that the Counsel's 
        office did believe there was a case to be made that 
        Harry Thomason was a special Government employee.\48\
---------------------------------------------------------------------------
    \48\ Memo by Beth Nolan, Associate White House Counsel handling 
ethics issues, CGE 43349.
---------------------------------------------------------------------------
         Bernard Nussbaum obstructed the FBI 
        investigation into the discovery of the Foster note as 
        well as numerous other investigations, including 
        congressional investigations, by failing to timely 
        inform anyone in law enforcement, the White House, or 
        Congress about the Vince Foster Travel Office notebook 
        that he had secreted in Nussbaum's office by July 22, 
        1993.
         An FBI investigation was ordered on July 28, 
        1993 by Philip Heymann, the day after the note was 
        turned over to the Park Police after the 30-hour delay 
        in informing law enforcement authorities. Heymann 
        instructed David Margolis to be ``very aggressive'' in 
        the investigation.
         Nussbaum failed to inform those tasked with 
        overseeing document production to both the Justice 
        Department and the GAO that he was secreting a relevant 
        document in his office. Nevertheless, once he informed 
        Neil Eggleston in May 1994, Eggleston also failed to 
        turn over the documents to the Public Integrity Section 
        in a timely and responsive manner.
         Neil Eggleston and Cliff Sloan, at Nussbaum's 
        direction, delayed the production of documents relating 
        to the criminal investigation of Harry Thomason and 
        Darnell Martens to the Public Integrity section and 
        ultimately denied all such documents to GAO.

DAVID WATKINS' ``SOUL CLEANSING'' MEMO ACCOUNT OF THE TRAVEL OFFICE IS 
  SUBSTANTIALLY CORROBORATED BY NUMEROUS RECORDS AND WITNESS TESTIMONY

         Watkins' contemporaneous account of Travel 
        Office events told by Watkins in his ``soul cleansing'' 
        memo is corroborated by the records of meetings, phone 
        calls, contacts and documents that demonstrate the 
        involvement and pressures to act from Mrs. Clinton, 
        Mack McLarty and Harry Thomason.
         The President's invocation of executive 
        privilege over discussions about the Watkins memo held 
        between and among White House Counsel, Maggie Williams, 
        Ann Lewis, and Mrs. Clinton is an extraordinary misuse 
        of the privilege in light of the ongoing criminal 
        investigation of these matters.
         The Watkins memo and the documentary evidence 
        contradict sworn testimony by Mrs. Clinton that the 
        claims in her April 1994 GAO responses that she had 
        ``no role'' in the firings of the Travel Office 
        employees were accurate.

    PRESIDENT CLINTON HAS ENGAGED IN AN UNPRECEDENTED MISUSE OF THE 
   EXECUTIVE POWER, ABUSE OF EXECUTIVE PRIVILEGE AND OBSTRUCTION OF 
             NUMEROUS INVESTIGATIONS INTO THE TRAVEL OFFICE

         The White House Counsel's office coordinated 
        and controlled to the greatest extent possible, all 
        investigations into this matter. It engaged in pre-
        interviews, debriefings and regular efforts to 
        coordinate with outside attorneys for the individuals 
        involved in investigations. This conduct is unsuitable 
        for the White House Counsel's office and is 
        unprecedented.
         Attorneys of numerous current and former White 
        House officials and others may have waived their 
        clients' attorney-client privilege by debriefing White 
        House attorneys about their clients' depositions and in 
        some cases providing information to the White House 
        that was withheld from Congress.
         The White House Counsel's office hired a team 
        of lawyers to mount a massive damage control operation 
        which focused on minimizing public awareness of the 
        roles of President Clinton and Mrs. Clinton in the 
        firings and their contacts with Harry Thomason. This 
        team reported directly to Deputy Chiefs of Staff Harold 
        Ickes and Evelyn Liebermann, among the closest of 
        confidantes with the First Family, instead of the White 
        House Counsel.
         White House efforts to obstruct all 
        investigations of this matter were part of a larger 
        pattern exhibited by the Counsel's office which 
        continues to this day to shadow the investigations of 
        this and other congressional committees as well as the 
        Independent Counsel. A task list prepared by Special 
        Counsel Jane Sherburne demonstrates that the White 
        House even tracked convicted felon and former Associate 
        Attorney General Webster Hubbell's cooperation with the 
        Independent Counsel.
         The pattern of behavior of the White House 
        Counsel's office, including unprecedented misuse of 
        executive privilege, was designed deliberately to 
        obstruct all investigations and thereby avoid full 
        disclosure of the facts surrounding the Travel Office 
        firings and matters related to Vincent Foster.
         The collective memory loss of dozens of 
        employees is unconvincing and disturbing. Throughout 
        the course of the committee's depositions, the phrases 
        ``I don't recall,'' ``I don't know'' and ``I can't 
        remember'' were uttered thousands of times and 
        regarding the most basic and memorable information.
         Those closest to the President and First Lady 
        appear to suffer the most significant memory losses 
        about key events involving the First Family. The White 
        House Counsel's office and those who conducted the 
        Management Review--and were most intimately familiar 
        with the factual record in this case--also are affected 
        with seeming memory disorders. And while many of the 
        key events in this investigation occurred 3 years ago, 
        memory losses of key individuals were consistently poor 
        whether the events occurred years or weeks ago.
         Covering up the true story behind the Travel 
        Office matter led to the White House's obstruction of 
        numerous investigations. This obstruction was 
        conducted, overseen and encouraged by those at the 
        ``highest levels'' of the White House, compounded by 
        the death of Vincent Foster which then caused a further 
        cover-up on top of the Travelgate cover-up.

                       Committee Recommendations

    1. The ``Special Government Employee'' (SGE) provisions of 
the U.S. Code should be reformed to prevent its requirements to 
be ignored. Clear standards should be identified under which 
agencies, including the Executive Office of the President, 
should analyze the activities of volunteers to determine if 
they meet the definition of SGE. Agencies should be required to 
perform this analysis for each volunteer and maintain 
appropriate records. Congress should conduct rigorous oversight 
of the activities of advisors and volunteers throughout 
Government.
    2. The Executive Office of the President should establish 
financial and internal review controls consistent with the 
requirements of the Chief Financial Officers Act and the 
Inspectors General Act. These requirements should include the 
development of annual, audited financial statements of all 
business activities and the establishment of an internal review 
system. Such systems could be crafted to protect the 
constitutionally protected responsibilities of the President. 
Some of these provisions are included in H.R. 3452, while other 
provisions require further study by Congress.
    3. The Presidential Records Act and the Federal Records Act 
should be amended to provide for jurisdiction of Federal courts 
to ensure that Government records are not unlawfully destroyed, 
but are managed and preserved as required by law. A recent 
court decision in Armstrong v. Bush, 924 F.2d 282 (D.C. Cir. 
1991) held that judicial review was available to enforce the 
provisions of the Federal Records Act, but not the Presidential 
Records Act. The Department of Justice has interpreted that 
ruling to be so broad that it would preclude the courts from 
enjoining the wholesale destruction of records that the 
Presidential Records Act clearly requires be preserved.
    4. The Office of the Counsel to the President should return 
to its traditional mission of providing traditional legal 
counsel to the President and his immediate staff. Not more than 
a couple of decades ago, the White House Counsel's office 
consisted of just a few highly qualified jurists. The 
congressional appropriation committees, when funding the White 
House, should oversee the size and mission of the Counsel's 
office. The Counsel's office should be required to disclose the 
number of attorneys working in the Counsel's office, each 
attorney's job description, and the supervision of each 
attorney. If necessary, limitations should be placed on 
Executive Office appropriations designed to limit the scope of 
responsibilities performed by the White House Counsel's office.
    5. Congress should consider the feasibility of prohibiting 
the EOP from procuring goods and services through its own 
procurement operations and requiring the EOP, where possible, 
to procure using existing contracts of other agencies, such as 
the General Services Administration's Federal Supply Schedules. 
Where current contracts do not satisfy the specific 
requirements of the EOP, the EOP should select another agency 
for its purchasing needs.
    Further, Congress should consider requiring the EOP to 
submit to Congress a report detailing each noncompetitive 
procurement and the justification for the use of such 
procedure.
    6. Only individuals of the highest quality and ethics 
should be employed by and volunteer services to the Government. 
The committee is frustrated that such obvious recommendations 
must be made at this time in our country's history. Individuals 
with their own financial interest as their paramount goal, with 
little respect for the constitutional responsibilities of the 
U.S. Congress, and with loyalties to anyone other than the 
American people should not seek or obtain employment in the 
public sector.

  III. Actions in May 1993 Which Led to the White House Travel Office 
                                Firings

 A. The career Travel Office employees are fired, accused by the White 
  House of wrongdoing and political cronies are put in charge of the 
                             Travel Office

    At approximately 10 a.m., on May 19, 1993, all seven 
members of the White House Travel Office staff were fired.\49\ 
They were ordered to vacate the White House compound within 2 
hours. Returning to the Travel Office by 10:30 a.m., the fired 
Travel Office employees found their desks already occupied by 
the President's cousin, Catherine Cornelius and employees of 
World Wide Travel, the Arkansas travel agency which arranged 
for press charters during the Clinton Presidential campaign. A 
week before any determination had been made by the FBI or Peat 
Marwick, World Wide Travel was summoned to Washington by 
Cornelius.
---------------------------------------------------------------------------
    \49\ There were only five employees present on May 19, 1993, when 
the firings of all seven occurred. The individuals present that day 
included Director Billy Dale, John Dreylinger, Barney Brasseux, Ralph 
Maughan and Robert Van Eimeren. Two of them were out of the country: 
John McSweeney was on vacation in Ireland and Deputy Director Gary 
Wright was on an advance trip in Seoul, South Korea.
---------------------------------------------------------------------------
    Presidential friend, Clinton/Gore campaign operative and 
Hollywood producer, Harry Thomason, began working at the White 
House in early 1993, allegedly on the ``staging'' of White 
House events. Mr. Thomason's company, TRM, had brokered 
charters during the campaign, and he shortly thereafter got in 
touch with his partner, Darnell Martens, to collaborate on 
future business. Mr. Thomason requested that Martens ask Penny 
Sample, another Clinton/Gore campaign veteran, to come to the 
White House to assist in the Travel Office.\50\ Ms. Sample 
owned an airline charter brokerage company called Air Advantage 
which arranged charters for the Clinton/Gore campaign. Mr. 
Thomason claims he doesn't know how Martens came to be asked 
for this assistance,\51\ but in sworn testimony both Martens 
and Catherine Cornelius confirm that Thomason did make such a 
request.\52\
---------------------------------------------------------------------------
    \50\ Committee deposition of Darnell Martens, April 11, 1996, pp. 
148-150.
    \51\ Committee deposition of Harry Thomason, May 17, 1996, pp. 126-
128.
    \52\ Committee deposition of Catherine Cornelius, April 30, 1996, 
p. 104; Martens deposition, pp. 172-173.
---------------------------------------------------------------------------
    By early afternoon on May 19, the Travel Office employees 
heard then-White House Press Secretary Dee Dee Myers 
inappropriately announce at a press briefing that they were the 
subject of an FBI criminal investigation. Ms. Myers also 
falsely reported that an audit had found ``gross 
mismanagement.'' An official audit of the Travel Office never 
was performed, and nowhere in the report of the management 
review did Peat Marwick refer to ``gross mismanagement'' in the 
White House Travel Office prior to May 19, 1993.\53\
---------------------------------------------------------------------------
    \53\ Committee interview of Larry Herman, August 29, 1995.
---------------------------------------------------------------------------
    The Travel Office employees had been given no indication at 
the time of their dismissals that they were under 
investigation. They had cooperated fully with a review 
conducted by Peat Marwick in the days preceding the firings, 
which they were falsely told was part of the National 
Performance Review. After the completion of their out-
processing, the Travel Office employees, shadowed by White 
House Security Officer Craig Livingstone, were driven out of 
the White House compound in a windowless panel van with no 
passenger seats. What the fired Travel Office employees did not 
know was that their nightmare had just begun.

    B. The Travel Office firings were a result of pressure by Harry 
  Thomason and Mrs. Clinton which accelerated in the week before the 
                                firings

May 10, 1993, Monday

    The events precipitating the Travel Office firings erupted 
more than a week before in a May 10, 1993 meeting. At that 
time, Harry Thomason's baseless kickback allegations were 
coupled with Catherine Cornelius' open ambition to run the 
Travel Office. Mr. Thomason had already pressed his allegations 
on David Watkins, Mrs. Clinton and President Clinton.
    Mr. Watkins told Cornelius that she should speak with 
Thomason about the Travel Office and she e-mailed White House 
colleagues, Clarissa Cerda and Mike Lufrano:

          I have a meeting with Harry Thomason at 10 a.m. this 
        morning . . . to discuss the future of this office . . 
        . could be over very soon.\54\
---------------------------------------------------------------------------
    \54\ CGE 39295.

---------------------------------------------------------------------------
Lufrano e-mailed back with the warning:

          remember . . . everything you send on e-mail is 
        stored forever in the archives. Careful! \55\
---------------------------------------------------------------------------
    \55\ CGE 39296.

    Following her meeting with Thomason, Cornelius e-mailed 
Clarissa Cerda: ``I need to start thinking about how you 
officially bring in someone to help . . . Does the White House 
engage in a memorandum of understanding to assist in crisis 
situation . . . please let me know.'' \56\
---------------------------------------------------------------------------
    \56\ CGE 39297.
---------------------------------------------------------------------------
    On May 10, 1993, Matt Moore, another assistant to David 
Watkins wrote a memo to Watkins' deputy, Patsy Thomasson, 
stating in part: ``Billy Dale informs me that there is no 
written agreement in place to cover travel . . . no contracts 
in place.'' Moore's handwritten notes on the document mentioned 
Charlie Caudle, the owner of UltrAir and Express One who soon 
would be under investigation by the IRS.\57\
---------------------------------------------------------------------------
    \57\ CGE 8391.
---------------------------------------------------------------------------
    The same day, Thomason had a message on his calendar to 
``call Hillary . . . she wants to talk to you tonight.'' \58\ 
Mr. Thomason also had messages to call David Watkins, Mack 
McLarty for a meeting the next day, and Susan Thomases at 
home.\59\ At 1 o'clock, Thomason received a memo he requested 
from his TRM partner, Darnell Martens, outlining allegations of 
wrongdoing concerning the Travel Office.\60\ He provided the 
memo to Catherine Cornelius, Vincent Foster, and Bill Kennedy 
at the White House that week.\61\ In describing when and why he 
had the Martens memo faxed to the White House, Thomason 
testified:
---------------------------------------------------------------------------
    \58\ Harry Thomason phone logs, May 10, 1993, Thomason document 
production, Bates Stamp No. 00000105.
    \59\ Id.
    \60\ Committee deposition of Bobbie Faye Ferguson, April 12, 1996, 
p. 63.
    \61\ Id.; Thomason deposition, p. 128.

          Answer. To the best of my knowledge it was after some 
        conversations about the Travel Office had been 
        discussed. There were some conversations about the 
        Travel Office, and some of the White House personnel, 
        and I am not exactly sure who wanted to know does Mr. 
        Martens have anything on this and at that time I 
        requested that--I told somebody to call Mr. Martens' 
        office and request that it be sent.
          Question. Do you know who was making those requests 
        at the White House?
          Answer. To the best of my recollection it was David 
        Watkins or somebody in his office.\62\
---------------------------------------------------------------------------
    \62\ Committee deposition of Harry Thomason, May 17, 1996, pp. 107-
108.

    Mr. Thomason enjoyed a very busy White House schedule for 
an avowed ``non-employee.'' He was utilizing a White House 
office, had the benefit of a White House pass, had a full-time 
assistant who helped schedule his numerous meetings with White 
House staff. It was fitting that on May 11, 1993, David Watkins 
approved a work order to put phones and a computer hookup in 
``Harry Thomason's office.'' \63\
---------------------------------------------------------------------------
    \63\ Committee deposition of Bonnie Berry, May 21, 1996, pp. 30-32.
---------------------------------------------------------------------------

May 11, 1993, Tuesday

    The next morning, May 11, Mrs. Clinton called Harry 
Thomason at 10 a.m. and left a message for him to call her.\64\ 
He also received a message to call Craig Livingstone: ``come 
over while Susan is here.'' Mr. Thomason also had a meeting 
with Mack McLarty scheduled on this afternoon.\65\ (McLarty had 
the same time scheduled for a meeting with Thomason on his 
calendar.) \66\ Mr. Thomason does recall a meeting in which he 
provided McLarty with a copy of the White House ``image'' 
project report during this week.\67\
---------------------------------------------------------------------------
    \64\ Harry Thomason telephone logs for May 11, 1993, Thomason 
document production, Bates Stamp No. 00000106.
    \65\ Id.
    \66\ McLarty calendar, CGE 26860.
    \67\ Thomason deposition, p. 179.
---------------------------------------------------------------------------
    Mr. McLarty had no recollection of any meetings with 
Thomason on the White House Project but stated that he believed 
the President Clinton and Mrs. Clinton asked Thomason to come 
to the White House for the staging of events.\68\ Mr. Thomason 
was given his pass on March 23, 1993.\69\ The request for his 
pass did in fact show him reporting to President Clinton, 
contrary to White House reports that Rahm Emanuel, Assistant to 
the President and Director of Special Projects, was responsible 
for Thomason's tour of duty at the White House.\70\ Mr. 
Thomason also had a 3 p.m. meeting scheduled with Susan 
Thomases following the meeting with McLarty and a message to 
call her at her home that evening.\71\
---------------------------------------------------------------------------
    \68\ Committee deposition of Thomas F. McLarty, July 12, 1996, pp. 
23-24, 66-67.
    \69\ CGE 2931, 2933.
    \70\ In the White House Management Review, GAO interviews and in 
public statements, the White House gave the impression that Rahm 
Emanuel was responsible for bringing Harry Thomason to the White House. 
Rahm Emanuel's interview with the White House Management Review 
indicated that he told them that the President, Mack McLarty, George 
Stephanopoulos and Mandy Grunwald ``all approved'' the project, yet the 
review omitted Rahm Emanuel not being the sole actor in bringing 
Thomason to the White House. CGEPR 236.
    \71\ Harry Thomason phone logs, documents provided by Harry 
Thomason, Bates Stamp No. 00000106.
---------------------------------------------------------------------------
    On May 11, 1993, Cornelius, while on a trip to Chicago with 
President Clinton, was paged by the Travel Office and given a 
message to call a Time magazine reporter who was seeking 
information on whether or not Cornelius was the President's 
cousin.\72\ Steve Davison of World Wide Travel informed White 
House investigators that in this timeframe, ``HT [Harry 
Thomason], JC [James Carville], GS [George Stephanopoulos], and 
HRC [Hillary Rodham Clinton] furious and ready to throw them 
out that day.'' \73\
---------------------------------------------------------------------------
    \72\ White House Management Review (``WHMR''), authored by John 
Podesta and Todd Stern, July 2, 1993, p. 7.
    \73\ White House Management Review interview of Steve Davison, June 
5, 1993, CGEPR 185.
---------------------------------------------------------------------------
    The Management Review reported that in response to the call 
from Time, ``Cornelius spoke with Deputy Communications 
Director Jeff Eller, with whom she had a personal relationship. 
She told Eller that she believed a Travel Office employee 
leaked this information to the press.'' \74\
---------------------------------------------------------------------------
    \74\ Id.
---------------------------------------------------------------------------

May 12, 1993, Wednesday

    On May 12, 1993, Watkins called Foster to set up a meeting 
with him. Mr. Watkins mentioned that Mrs. Clinton was 
interested in the matter which they were to discuss.\75\ Mr. 
Thomason testified that the meeting was for President Clinton 
to sign some commemorative inaugural books for campaign 
workers. He claimed that the Travel Office was never 
mentioned.\76\
---------------------------------------------------------------------------
    \75\ Foster Travel Office notebook, CGE 899a.
    \76\ Thomason deposition, p. 156.
---------------------------------------------------------------------------
    Mr. Martens arrived at the White House that morning for a 
9:30 a.m. meeting with OMB's Jack Kelly. Mr. Martens set this 
meeting to discuss the logistics of obtaining a GSA Government 
contract for his and Thomason's company, Thomason, Richland & 
Martens (TRM). Also that day, Martens received a White House 
pass. Mr. Martens was to report to Harry Thomason and David 
Watkins.\77\
---------------------------------------------------------------------------
    \77\ CGE 18296, 18298.
---------------------------------------------------------------------------
    Following his meeting with President Clinton, Thomason met 
with Foster about personal issues concerning President 
Clinton's family.\78\ Michael Berman also attended the 
meeting.\79\ At the end of their conversation, Thomason 
mentioned that he ``may have learned of some graft'' in the 
Travel Office and promised to let Foster know when he learned 
more.\80\
---------------------------------------------------------------------------
    \78\ Foster Travel Office notebook, CGE 899a.
    \79\ Foster Travel Office notebook, CGE 899a. Mr. Berman was at the 
White House working on determining how they could utilize an excess of 
$10 million in leftover Presidential inaugural funds for White House 
activities.
    \80\ Foster Travel Office notebook, CGE 000923.
---------------------------------------------------------------------------
    Mr. Thomason next met with Cornelius to exchange 
information on the Travel Office and then discussed their 
suspicions with Watkins. Ms. Cornelius showed Thomason her 
``file'' and told him that cash seemed to be missing. Mr. 
Thomason told Cornelius on this date that Mrs. Clinton would be 
unhappy with what he believed was going on in the Travel 
Office. He made it clear to Mrs. Clinton that he was going to 
share his concerns with her.\81\ Ms. Cornelius said Thomason 
repeated references to Mrs. Clinton during the course of the 
week.\82\ The two later moved the meeting to Watkins' office.
---------------------------------------------------------------------------
    \81\ Cornelius deposition, pp. 114-115.
    \82\ Id.
---------------------------------------------------------------------------
    Mr. Martens arrived after his OMB meeting and he joined in 
the meeting which had grown to include Cornelius, Thomason, 
Watkins and Patsy Thomasson.\83\ Mr. Martens previously had 
been gathering information about the Travel Office and had 
contacted Billy Dale about obtaining the travel business.\84\
---------------------------------------------------------------------------
    \83\ Cornelius deposition, p. 85.
    \84\ See infra section V.
---------------------------------------------------------------------------
    During his visit to the White House, Martens was asked by 
Thomason if the charter company, Air Advantage, would be able 
to handle a trip for the White House the following Sunday. This 
clearly indicated that the plan for the Travel Office firings 
was in place. (A fax sent the next day by Martens detailing how 
he could provide planes for Sunday also confirms the plan was 
in place.\85\ Mr. Martens explained in his deposition:
---------------------------------------------------------------------------
    \85\ Fax to Harry Thomason at the White House from Darnell Martens, 
May 13, 1993, discussing ``30 day billing cycle'' and ``aircraft being 
reviewed for Sunday . . . '' (Documents provided by Harry Thomason.)

          Answer. Harry had asked me at some point in time on 
        the afternoon of May 12th when I was at the White House 
        whether Air Advantage would be able to handle a trip 
        for the White House on Sunday, that coming Sunday.
          Question. Which would have been May 14th?
          Answer. No, this is Friday----
          Question. May 16th, I am sorry.
          Answer. It might be the 16th or 17th, somewhere in 
        there. And so I said I will track her down and ask her. 
        He goes okay, just make sure they can do a 30 day 
        billing, that they can bill like a normal 30 day 
        invoice. I said okay.
          Question. So this is actually asking you to check 
        with Penny Sample to see if 30 day billing is okay, not 
        TRM?
          Answer. Yes. For Air Advantage.
          Question. Harry made that request?
          Answer. Yes.\86\
---------------------------------------------------------------------------
    \86\ Martens deposition, pp. 157-9.

    In Thomason's own deposition, he attempted to explain that 
---------------------------------------------------------------------------
Martens' request for assistance originated:

          in connection with somebody at the White House saying 
        if we do this we don't want to miss a beat and we have 
        to have somebody in place to temporarily take over and 
        could you recommend somebody, and I said the people 
        that worked on the campaign are obviously the people. I 
        don't know what 30-day billing cycle means. I just know 
        that there was somebody from the White House [who] 
        passed, evidently, along this information after I had 
        called in, and this was the answer.\87\
---------------------------------------------------------------------------
    \87\ Thomason deposition, p. 213.

    Mr. Thomason next attended a meeting with Jennifer O'Connor 
to discuss the 25 percent White House staff cut, and other 
personnel matters. During the meeting, Thomason informed 
O'Connor that the Travel Office employees ``were ripping us 
off'' and that firing them would be a ``great press story . . . 
Bill Clinton cleaning up House.'' \88\ Ms. O'Connor recounted 
that she and Thomason had to leave the meeting to tend to a 
``crisis'' in Watkins' office.\89\ Mr. Watkins' contemporaneous 
notes show that Thomason returned to Watkins' office that 
afternoon. Mr. Thomason told Watkins he ``bumped into'' Mrs. 
Clinton in the hall, and she was ready ``to fire them all that 
day.'' \90\
---------------------------------------------------------------------------
    \88\ WHMR interview notes of Jennifer O'Connor, June 11, 1993, 
CGEPR 383-390.
    \89\ WHMR interview notes of Jennifer O'Connor, June 11, 1993, 
CGEPR 383-390.
    \90\ May 31, 1993 notes of David Watkins, Watkins document 
production, PM 000169.
---------------------------------------------------------------------------
    At this point, Watkins, who earlier had contacted Foster 
for assistance, went to meet with him along with Thomason and 
Cornelius. The accounts of the meeting by Cornelius and 
Watkins, as well as Foster's notes all recount Thomason 
discussing the kickback issue.\91\ Mr. Thomason was evasive on 
this point in his deposition:
---------------------------------------------------------------------------
    \91\ Cornelius deposition, p. 79; Watkins memorandum to Mack 
McLarty, May 17, 1993, CGE 17753-17754; Foster Travel Office notebook, 
CGE 000903.

          Answer. Well, I remember Mr. Foster asking what are 
        the rumors; and I remember just saying, okay, here is 
        what all we have heard.
          Question. Was there any discussion that you recall 
        concerning kickbacks or bribery allegations in that 
        meeting?
          Answer. Again, I can't be specific. That was sort of 
        the buzz that was in the air. Now, was it kickbacks or 
        was it taking gifts; I mean, I don't know. You know, I 
        just remember there was something that--and that is 
        about the general term of taking something, you know; 
        and I don't know if they were kickbacks or what, but 
        yes was the buzz in the air.

At another point in his deposition:

          Question. Do you recall ever relaying that 
        information to anyone in the White House that there 
        were kickbacks, or 5 percent kickbacks, or kickbacks, 
        or allegations of bribery?
          Answer. Well, I don't remember 5 percent kickbacks, 
        but there was always--in all of those meetings there 
        was always sort of a buzz in the room that had to do 
        with, well, there were kickbacks, there was this, there 
        was that, and did I start them? I don't know, but I 
        don't think so. Did I hear them? Yes. Did I repeat 
        them? I don't recall.
          Question. Do you know who you heard them from?
          Answer. I don't, because it would always be a group 
        of people in a room, and there was just the buzz about 
        what somebody had heard and, you know, or discovered or 
        something.
          Question. And were these at the White House, these 
        meetings or people in the room?
          Answer. Right, I mean, you know, the--there were a 
        couple of those kind of meetings.\92\
---------------------------------------------------------------------------
    \92\ Thomason deposition, pp. 136-137, 188.

    From the accounts of others present in this and other 
meetings, Thomason was the ``buzz.'' Ms. Cornelius testified 
that Thomason told her about the kickbacks \93\ and in fact, 
further testified that she could not recall ``anyone else 
discussing [kickbacks].'' \94\ Testimony of Bruce Lindsey in 
the White House Management Review recounted that ``Sometime in 
Feb-March-April HT [Harry Thomason] said to me that travel 
office--demanding kickbacks . . .'' \95\ Mr. Thomason's 
kickback allegations also surfaced in Jennifer O'Connor's 
testimony to the White House Management Review. She stated that 
while having lunch with David Watkins on May 12, 1993, Watkins 
told her ``this is confidential,'' that Thomason had dealings 
with travel companies and that the Travel Office was soliciting 
kickbacks.\96\
---------------------------------------------------------------------------
    \93\ Cornelius deposition, p. 79.
    \94\ Id., p. 88.
    \95\ WHMR interview notes of Bruce Lindsey, CGEPR 331.
    \96\ WHMR interview notes of Jennifer O'Connor, CGE 385.
---------------------------------------------------------------------------
    The OPR report noted that Thomason related a conversation 
suggesting that a friend of his ``had seen what he considered 
possible evidence of a kickback involving the Travel Office.'' 
\97\ This account is further supported by an entry in Foster's 
Travel Office notebook where he writes, ``HT related vague 
story of 3d party request for kickback/5 percent--vague.'' \98\ 
Mr. Thomason was passing on information in which he had his own 
financial interest.
---------------------------------------------------------------------------
    \97\ OPR Report, p. 9.
    \98\ Foster Travel Office notebook, CGE 923.
---------------------------------------------------------------------------
    The Watkins/Cornelius/Thomason/Foster meeting adjourned and 
they reconvened later with White House Associate Counsel Bill 
Kennedy joining the group.\99\ Ms. Cornelius returned from a 
quick trip to her house where she was keeping documents she had 
covertly removed from the Travel Office at David Watkins' 
request.\100\ Mr. Kennedy then was tasked with crafting a 
response to this matter.\101\ In the meeting they discussed who 
could do an audit. They sought an alternative to a GAO audit 
because previous investigations by GAO had been unfavorable to 
the White House.\102\
---------------------------------------------------------------------------
    \99\ Cornelius deposition, p. 94.
    \100\ Cornelius deposition, pp. 93-94.
    \101\ Cornelius deposition, p. 96.
    \102\ OPR interview of Catherine Cornelius, September 2, 1993, p. 
3, she quotes Patsy Thomasson saying in response to Kennedy's idea to 
bring in the FBI, ``Well, Billy Kennedy, I certainly would like that, 
because that would keep the GAO out.''
---------------------------------------------------------------------------
    At approximately 5:30 p.m. Kennedy contacted James Bourke, 
Chief of the FBI's Special Inquiry Unit (SPIN). Even though two 
FBI agents were permanently assigned to the White House, 
Kennedy never asked them for ``guidance''--his stated reason 
for contacting the FBI. By this time, Thomason, Foster and 
Watkins were well aware of Mrs. Clinton's interest in this 
matter and discussed it freely. Mr. Kennedy, however, made the 
implausible claim in his committee deposition that he had no 
idea of Mrs. Clinton's interest at that time.\103\
---------------------------------------------------------------------------
    \103\ Committee deposition of Bill Kennedy, April 9, 1996, p. 133.
---------------------------------------------------------------------------
    On this day, Cornelius, while planning the takeover of the 
Travel Office, called World Wide Travel to alert them to the 
opening for the new business. World Wide immediately sent an 
agent, Steve Davison, to Washington, DC in response to the 
call. In this timeframe, the Travel Office employees recall 
Catherine Cornelius' frequent absences from the Travel Office 
to attend meetings elsewhere. One employee recalled an occasion 
in the first weeks of May where Cornelius informed them that 
she had a meeting with Thomason and Mrs. Clinton.\104\
---------------------------------------------------------------------------
    \104\ Committee interview of Robert Van Eimeren, July 26, 1995.
---------------------------------------------------------------------------
    Throughout May 12 and May 13, Watkins received ``periodic 
reports from Vince Foster that [the] First Lady had inquired 
about [the] Travel Office and why wasn't action being taken--
report was that they should be fired immediately and out of 
here by the end of the day.'' \105\ On the 12th, McLarty called 
Susan Thomases with whom Harry Thomason had conversations 
during the week. Lorraine Voles, deputy Press Secretary, 
reported that in this timeframe that Eller advised her about 
the Travel Office allegations. Ms. Voles' notes indicate that 
she had heard that Susan Thomases ``went to Mac . . . Hillary 
wants these people fired . . . Mac wouldn't do it . . . DW 
[David Watkins] didn't want to do it.'' \106\ Susan 
Thomases,\107\ was at the White House the week before on 
Friday, May 7, 1993, from 2:30 to 7:47 p.m.\108\
---------------------------------------------------------------------------
    \105\ Notes of David Watkins, May 31, 1993, Watkins document 
production, Bates Stamp No. PM 000169.
    \106\ Notes of Lorraine Voles, undated (approximately May 1993), 
CGE 009110.
    \107\ Ms. Thomases was a reference for Catherine Cornelius on her 
resume. Ms. Thomases worked on advance throughout the campaign and 
Cornelius worked on travel. Ms. Thomases certainly was not one known 
for being shy with her views on how to run the White House or on her 
authority to speak for Mrs. Clinton.
    \108\ Secret Service WAVES records (for entrances and exits) for 
Susan Thomases, May 7, 1993.
---------------------------------------------------------------------------

May 13, 1993, Thursday

    On May 13, 1993, Kennedy summoned the FBI to the White 
House after a flurry of early morning calls from the White 
House to the FBI. Mr. Kennedy told FBI Unit Chief James Bourke 
that ``he was getting some pressure and he needed a call back 
in the next 15 minutes or he may have to go to another agency, 
such as the IRS.'' \109\ Mr. Kennedy claims that his sense of 
urgency was based on the fear that documents would be 
destroyed, but no other testimony corroborates his claim.'' 
\110\
---------------------------------------------------------------------------
    \109\ OPR Report, p. 15.
    \110\ Contrast this statement with other testimony, such as Vince 
Foster's, that documents of ``kickbacks'' or some other financial 
allegations, simply could not all be destroyed. Furthermore, the idea 
that anyone at the White House was concerned with documents being 
destroyed in the Travel Office is inconsistent with the fact that there 
was no control asserted over the office at any time during the weeks 
before or after the firings. Neither Kennedy nor anyone else in the 
White House Counsel's Office ever made any attempts to secure the 
documents in the Travel Office.
---------------------------------------------------------------------------
    Indeed, it is more likely that his sense of urgency was a 
response to that which Watkins and Foster were responding--
pressure from Thomason and Mrs. Clinton. This is further 
supported by evidence that Kennedy alerted the FBI that those 
at ``the highest level'' in the White House wanted prompt 
action on a matter allegedly involving financial 
wrongdoing.\111\ Mr. Kennedy made the dubious explanation that 
by highest levels, he must have been referring to Foster and 
Watkins.\112\ It is unlikely that the highest levels referred 
to individuals that Kennedy did not report to and in fact, were 
on an equal footing with him.
---------------------------------------------------------------------------
    \111\ OPR Report, p. 20.
    \112\ Committee deposition of William Kennedy, April 9, 1996, p. 
91.
---------------------------------------------------------------------------
    At this time, the FBI was beleaguered by an embattled 
Director and was operating under a reduced budget imposed by 
President Clinton. When the White House called, the FBI 
immediately dispatched two Headquarters agents, Pat Foran and 
Howard Apple, despite their protests that it would be more 
appropriate to assign a field agent.\113\ Mr. Kennedy was 
adamant that FBI Headquarters personnel with a ``national 
perspective'' be involved.\114\ The two agents arrived at the 
White House Counsel's Office for an 11 a.m. meeting, which 
lasted approximately 30 minutes.\115\
---------------------------------------------------------------------------
    \113\ OPR Report, p. 17. Agent Howard Apple was the acting chief of 
the Violent Crimes and Major Offenders section. Agent Pat Foran was the 
Unit Chief of the Operational Intelligence Unit, Criminal Intelligence 
Section, ``CID''.
    \114\ DOJ, OPR interview of Howard B. Apple, Unit Chief of the 
Interstate Theft Crimes Unit, Criminal Investigative Division, August 
11, 1993.
    \115\ OPR Report, p. 20.
---------------------------------------------------------------------------
    Agent Apple reported that Kennedy told Agent Bourke that he 
would contact the IRS if the FBI did not respond.\116\ Mr. 
Kennedy repeated the statement at this meeting, that the 
inquiry was directed from the highest levels. Although Kennedy 
denies making any reference to the ``highest level,'' four FBI 
agents testified under oath that the did.\117\ Agent Apple 
testified that when he questioned Kennedy's reference, Kennedy 
responded, ``Let's just say the highest level.'' \118\ Agent 
Foran testified that he interpreted Mr. Kennedy's reference to 
the ``highest levels'' to mean President Clinton or Vice 
President Gore.\119\
---------------------------------------------------------------------------
    \116\ OPR Report, p. 18.
    \117\ See DOJ, OPR interviews of: Unit Chief Howard Apple, August 
11, 1993; Patrick Foran, Unit Chief of the Operational Intelligence 
Unit, Criminal Intelligence Section, August 16, 1993; Richard Wade, 
Unit Chief of the Governmental Fraud Unit, Criminal Investigative 
Division, August 11, 1993; Thomas Carl, Supervisory Special Agent in 
the Government Fraud Unit, Criminal Investigation Division, August 
1993.
    \118\ General Accounting Office interview of Howard Apple, October 
15, 1993. (Emphasis added.)
    \119\ OPR Report, p. 20.
---------------------------------------------------------------------------
    Mr. Kennedy also told the FBI agents that ``a company which 
had done work for President Clinton during the campaign was 
interested in obtaining a contract for the services provided by 
the Travel Office,'' but had not been allowed to bid on the 
business.\120\ During this discussion, Kennedy gave Agent Foran 
an ``untitled document to read that he retrieved from a folder 
in his desk.'' \121\ The agents testified that ``the document 
repeated the suspicions regarding the Travel Office that 
Kennedy had described to Foran and Apple orally.'' \122\
---------------------------------------------------------------------------
    \120\ OPR Report, pp. 21-22.
    \121\ Id.
    \122\ OPR Report, p. 22.
---------------------------------------------------------------------------
    Although Agents Foran and Apple were not allowed to keep 
the document, both agents described it as a far lengthier 
document than the Martens memo and dissimilar in format from 
the Martens memo. This memo has never been produced to the 
committee and the White House continues to claim it does not 
exist.
    The FBI agents ultimately told Kennedy that they were not 
the appropriate unit to handle this matter and returned to FBI 
Headquarters to determine who should assist. The agents 
testified that they clearly had the sense that Kennedy was 
under considerable pressure to resolve this matter.\123\ Mr. 
Kennedy telephoned his good friend, Webster Hubbell, almost 
immediately after the agents left his office.\124\ At this 
time, Hubbell was the No. 3 person at the Justice Department 
and, effectively, running the Department.
---------------------------------------------------------------------------
    \123\ OPR Report, p. 25.
    \124\ See Hubbell telephone log of 11:30 phone call from Kennedy to 
Hubbell.
---------------------------------------------------------------------------
    By 12:20 p.m. on May 13th, Martens responded to a request 
from Thomason at the White House. Mr. Martens faxed information 
to Thomason that ``aircraft are being reviewed for Sunday, if 
needed . . . Penny [Sample, of Air Advantage] and I can be at 
White House to assist `C' [Cornelius] as needed to begin 
operations.'' \125\
---------------------------------------------------------------------------
    \125\ Martens deposition, p. 187; Bobbie Faye Ferguson production, 
BFF 1013.
---------------------------------------------------------------------------
    A second set of FBI agents was sent to the White House to 
meet with Kennedy the afternoon of May 13; Tom Carl and Rick 
Wade.\126\ Mr. Kennedy repeated his message that this was an 
``urgent matter'' which had interest from ``high levels.'' 
These agents similarly reported that Kennedy was ``very tense 
and frustrated throughout the meeting.'' \127\ Mr. Kennedy 
repeated the various allegations about the Travel Office 
employees, including Thomason's allegations of kickbacks and 
bribery. When it appeared that Kennedy was not making any 
progress with the second set of FBI agents, he asked if it 
would assist them if they spoke with someone who had more 
direct evidence. Mr. Kennedy left and returned with Catherine 
Cornelius, President Clinton's third cousin and current Office 
of Administration Assistant. The agents were left alone with 
Cornelius to discuss her ``allegations.'' \128\
---------------------------------------------------------------------------
    \126\ Richard Wade was Unit Chief of the Governmental Fraud Unit, 
Criminal Investigative Division; Thomas Carl was Supervisory Special 
Agent in the Government Fraud Unit, Criminal Investigation Division.
    \127\ OPR Report, p. 27.
    \128\ OPR Report, pp. 29-31.
---------------------------------------------------------------------------
    Ms. Cornelius reported to the agents that she had copied 
and removed documents from the Travel Office in the course of 
her investigation.\129\ She also relayed the information she 
received from Harry Thomason about solicitations of kickbacks 
from Miami Air. In addition, she gave her version of the 
alleged ``lavish'' lifestyles of the Travel Office employees. 
When Kennedy and Foster rejoined the meeting, they were told 
that the agents were ``keying in'' on the bribery 
allegation.\130\
---------------------------------------------------------------------------
    \129\ OPR Report, p. 31.
    \130\ OPR Report, p. 31.
---------------------------------------------------------------------------
    The FBI accepted Cornelius' recitation of these otherwise 
unsubstantiated allegations as sufficient predication to launch 
a criminal investigation, with a particular focus on 
``kickbacks'' for jurisdictional purposes.\131\ No one 
questioned whether Cornelius had any conflicts of interest 
concerning her investigation of the Travel Office employees. 
Neither her relationship to President Clinton nor her widely 
known desire to take over the Travel Office as its Director 
were revealed to the FBI.\132\ An FBI headquarters supervisor 
later testified that he was ``surprised'' that an interview of 
Cornelius had occurred since witness interviews were supposed 
to be handled by a case agent, not an FBI headquarters 
supervisor.\133\
---------------------------------------------------------------------------
    \131\ OPR Report, pp. 34, 36.
    \132\ OPR Report, p. 30.
    \133\ ``Report of OPR's Review of the Conduct of the FBI in 
Connection with its contacts with the White House in the Travel Office 
Matter,'' to JoAnn Harris, Acting Deputy Attorney General, from Michael 
E. Shaheen, Jr. Counsel to the Office of Professional Responsibility, 
March 18, 1994, p. 33, footnote 37.
---------------------------------------------------------------------------
    Even as the FBI informed the White House it had sufficient 
predication to launch an investigation on May 13, the White 
House Counsel's Office shifted gears. Messrs. Foster and 
Kennedy informed the FBI agents that the White House intended 
to conduct an outside audit and would allow the FBI to proceed 
with an investigation at a later point if it determined that 
one were warranted.
    Mr. Watkins' contemporaneous notes suggest a reason for 
this dramatic shift in strategy:

          What will reaction by press be if we do S&L/bank type 
        audit and no improper findings. . . . What are negative 
        political consequences if no criminal violations? \134\
---------------------------------------------------------------------------
    \134\ Handwritten notes of David Watkins, May 14, 1993, ``White 
House Travel,'' CGE 007989-7991.

    The FBI telephoned the White House Counsel's office several 
times that afternoon to insist that for the sake of the 
investigation, FBI agents should be present in the Travel 
Office during the audit. Mr. Foster offered to check with 
``higher authority'' to see whether the FBI should participate 
and promised to call back with an answer at 6:30 p.m.\135\
---------------------------------------------------------------------------
    \135\ OPR Report, p. 33.
---------------------------------------------------------------------------
    FBI White Collar Crime Unit Chief Tom Kubic \136\ testified 
about the issue of whether FBI should be present at the audit. 
He said that he thought ``that decision ought to be made not by 
FBIHQ, but by the agent conducting the investigation in 
consultation with the prosecutor.'' \137\ In a strange turn of 
events, the FBI acquiesced when Foster called Agent Wade and 
informed him that ``the White House did not want FBI agents to 
accompany the auditors.'' \138\
---------------------------------------------------------------------------
    \136\ Agent Kubic also was the supervisor for Agents Wade and Carl.
    \137\ OPR Report, p. 33, fn. 37.
    \138\ OPR Report, p. 36, fn. 41.
---------------------------------------------------------------------------
    Agent Wade initially tried to convince Foster that FBI 
involvement in the audit would prevent the auditors from 
possibly being witnesses in a criminal matter. Mr. Foster 
remained firm that he did not want agents present during the 
audit.\139\ According to Foster's notes, he consulted with 
Hubbell about the FBI being present. He wrote, ``WH [Hubbell] & 
I, he agrees . . . discussion w/ Wade . . .'' \140\ A 
commitment was made to the agents that the documents would be 
properly secured. Mr. Kennedy had no recollection of any 
identifiable actions by anyone in the White House to ensure 
that records were properly secured.\141\
---------------------------------------------------------------------------
    \139\ OPR Report, p. 37.
    \140\ Vince Foster Travel Office notebook, CGE 1050.
    \141\ Committee deposition of William Kennedy, April 9, 1996. pp. 
98-99.
---------------------------------------------------------------------------
    The only ``higher ups'' with whom Foster met on May 13 
concerning this matter were President Clinton's Chief of Staff, 
Mack McLarty and twice with Mrs. Clinton. Based upon the fact 
that McLarty is not a lawyer, he would have little knowledge 
about FBI concerns regarding the preservation evidence and the 
likelihood that the auditors might become witnesses at a trial. 
On May 13, Mrs. Clinton raised the topic of the Travel Office, 
asking Foster, ``Are you on top of it?'' \142\ Mr. Foster 
assured her that Kennedy was addressing the matter but that he 
had ``just heard about it yesterday.'' \143\
---------------------------------------------------------------------------
    \142\ Foster Travel Office notebook, CGE 000971. (In these same 
notes Foster describes the First Lady's demeanor in this meeting--
``general impatience'' . . . ``general frustration.'')
    \143\ Foster Travel Office notebook, CGE 000971.
---------------------------------------------------------------------------
    Mr. Foster recorded in his notebook that in his second 
meeting with Mrs. Clinton, she appeared less than satisfied 
with the timeliness of decisionmaking.\144\ Mr. Foster 
particularly was concerned about who, other than Mrs. Clinton, 
may have known about this second meeting or overheard the 
conversation. He writes:
---------------------------------------------------------------------------
    \144\ See Foster Travel Office notebook.

          Q--anyone else present . . . don't recall . . . when 
        SS [Secret Service] in hall and door open I go in . . . 
        sometimes other persons present, sometimes not.\145\
---------------------------------------------------------------------------
    \145\ Foster Travel Office notebook, CGE 001003.

This meeting occurred after Kennedy's meetings with the FBI 
that day.
    Mrs. Clinton also called McLarty on May 13 requesting to 
meet, specifically to talk about the Travel Office. Mrs. 
Clinton arrived at his office at approximately 3 p.m. McLarty 
testified that,

          [Mrs. Clinton] had heard that there might be serious 
        problems, deep concerns, in the Travel Office, about 
        management and conduct. . . . I responded that I was 
        aware of those possibilities and with that she said, 
        well, good, you are aware of it. I think this is a 
        serious matter, we should look into it.\146\
---------------------------------------------------------------------------
    \146\ McLarty deposition, p. 33.

    Following this meeting, McLarty met with Watkins, Foster, 
and Patsy Thomasson about the Travel Office at approximately 4 
p.m.\147\ Prior to the start of this meeting, Foster told Patsy 
Thomasson that his ``clients,'' a reference to the President 
and Mrs. Clinton, were very concerned about the Travel 
Office.\148\ At this meeting, they decided to call in an 
outside company to audit the Travel Office.
---------------------------------------------------------------------------
    \147\ McLarty deposition, pp. 30-31; OPR interview of P. Thomasson, 
September 22, 1993, p. 2.
    \148\ OPR interview of P. Thomasson, p. 2.
---------------------------------------------------------------------------
    Later that evening, Watkins and Patsy Thomasson contacted 
Larry Herman of KPMG/Peat Marwick (Peat Marwick).\149\ Mr. 
Herman had already volunteered his services for NPR and had 
been scheduled to conduct some NPR work the following day. Mr. 
Watkins' assistant, Jennifer O'Connor, later contacted Herman 
to brief him with background information on the Travel Office 
work.\150\
---------------------------------------------------------------------------
    \149\ O'Connor deposition, p. 63.
    \150\ O'Connor deposition, p. 63.
---------------------------------------------------------------------------
    Director of Media Affairs Jeff Eller \151\ had at least two 
meetings with Thomason, in which Eller advised quick firings to 
get ahead of the press story.\152\ Mr. Thomason had two 
messages from Eller on this date, May 13, marked ``very 
important.'' Mr. Eller was working on ``May 13 talking 
points,'' which assumed the Travel Office firings were to occur 
on that day and that the FBI was investigating.\153\
---------------------------------------------------------------------------
    \151\ It was revealed that Eller had a close, personal relationship 
with Catherine Cornelius during this period.
    \152\ Committee deposition of Jeff Eller, April 18, 1996, pp. 15-
16. Outside of these two meetings, Eller could recall virtually nothing 
of substance and stated, ``I don't recall,'' ``I don't know'' or ``I 
have no recollection,'' almost 700 times in the course of his 
deposition in response to questions about his involvement in and 
knowledge of the firings.
    \153\ May 13, 1993, talking points on the Travel Office by Jeff 
Eller, CGE 7933. (Although Eller could not recall doing the talking 
points or discussing them with anyone, Patsy Thomasson, John Podesta, 
Todd Stern and others identified them as ``Jeff Eller's Talking 
Points.'')
---------------------------------------------------------------------------
    That evening of May 13, 1993, Foster called to update Mrs. 
Clinton on the day's activities. The call came in during a 3-
hour dinner Mrs. Clinton had with Harry Thomason in the 
residence.\154\ Despite the flurry of events on this day, as 
well as the keen and urgent interest expressed by both Mrs. 
Clinton and Thomason throughout this dinner, neither has any 
specific recollection of any discussions about the Travel 
Office during that dinner.
---------------------------------------------------------------------------
    \154\ White House residence logs.
---------------------------------------------------------------------------
    GAO investigators asked Mrs. Clinton in March 1994, if she 
participated in ``any other discussions with White House staff 
or Mr. Thomason concerning the White House Travel Office matter 
during the period leading up to the removal of the Travel 
Office employees on May 19, 1993? If so, when and how would you 
describe those discussions.'' \155\ Mrs. Clinton decided to 
limit her April 6, 1994, response with the oft-repeated mantra:
---------------------------------------------------------------------------
    \155\ GAO questions submitted to Mrs. Clinton, April 6, 1994.

          She has no specific recollection of any particular 
        conversation with Mr. Thomason on this issue at that 
        time.\156\
---------------------------------------------------------------------------
    \156\ Id.

Two years later Mrs. Clinton responded under oath to the 
---------------------------------------------------------------------------
committee's March 1996 interrogatories:

          I believe I became aware from Vincent Foster or Harry 
        Thomason of concerns about financial mismanagement in 
        the White House Travel Office. . . . I cannot recall 
        specific conversations with him regarding the White 
        House Travel Office or its personnel, but as indicated 
        above, it is possible that at some point in May 1993, 
        he may have mentioned to me issues of possible 
        financial mismanagement in the Travel Office. I do not 
        recall what, if anything, I may have said to him on 
        this topic.\157\
---------------------------------------------------------------------------
    \157\ Mrs. Clinton's answers to Government Reform and Oversight 
Committee's interrogatories, March 21, 1996.

    The evidence points to Harry Thomason as the first person 
to pass on rumors of wrongdoing in the Travel Office to Mrs. 
Clinton. It is impossible that Foster could have been the 
person who first told Mrs. Clinton about the Travel Office 
matter unless he was lying to his notebook when he said he 
first heard about it on May 12. It is clear that Mrs. Clinton 
knew about the Travel Office at the time she first approached 
Foster and that she was not responding to information he was 
relaying to her. Moreover, David Watkins' notes state that on 
May 12, 1993, Mrs. Clinton told Thomason she wanted them all 
fired that day.\158\ Mr. Thomason confirmed through his 
attorney to the White House Counsel's office that he told 
Watkins that Mrs. Clinton shared his views that the Travel 
Office employees should be replaced.\159\
---------------------------------------------------------------------------
    \158\ Notes of David Watkins, May 31, 1993, Watkins document 
production, PM 000169.
    \159\ Thomason deposition, p. 228; handwritten notes of Associate 
White House Counsel Natalie Williams, DF 780464.
---------------------------------------------------------------------------
    The only other source of rumors that the committee has come 
across in over a year of investigation was Craig Livingstone. 
Mr. Livingstone testified that he heard of rumors in the spring 
of 1993 from a source he could not identify. He passed those 
rumors on to Kennedy, who thanked him.\160\ Mr. Kennedy 
testified that he considered Livingstone's rumors to be the 
``worst kind of third party hearsay'' and that he took no 
action and made no response to the rumors.\161\
---------------------------------------------------------------------------
    \160\ Livingstone deposition, March 22, 1996, pp. 27-28.
    \161\ OPR Report, p. 10, fn. 10. (Mr. Kennedy pinpointed the date 
of his receipt of these rumors at February 1993.)
---------------------------------------------------------------------------
    Recently Mrs. Clinton denied even knowing who Livingstone 
was in 1993. Mr. Kennedy denied ever talking with Mrs. Clinton 
about these matters. This leaves Harry Thomason as the only 
possible source of these allegations against the Travel Office 
employees. Neither John Podesta nor Todd Stern could uncover 
any other sources of the rumors in their White House 
investigation.\162\ The same is true of all the other 
investigations.
---------------------------------------------------------------------------
    \162\ See committee depositions of John Podesta, June 5, 1996 and 
Todd Stern, May 31, 1996.
---------------------------------------------------------------------------
    It is doubtful that either Livingstone or Kennedy could 
have informed Mrs. Clinton of all the rumors she reported 
hearing. It is most likely that by at least May 12, Thomason 
had ample opportunity and informed Mrs. Clinton of his 
allegations against the Travel Office employees. David Watkins' 
``soul cleansing'' memorandum provides further confirmation:

          [T]he First Lady took interest in having the Travel 
        Office situation resolved quickly, following Harry 
        Thomason's bringing it to her attention. Thomason 
        briefed the First Lady on his suspicion that the Travel 
        Office was improperly funnelling business to a single 
        charter company, and told her that the functions of 
        that office could be easily replaced and reallocated.
          Once this made it onto the First Lady's agenda, Vince 
        Foster became involved, and he and Harry Thomason 
        regularly informed me of her attention to the Travel 
        Office situation--as well as her insistence that the 
        situation be resolved immediately by replacing the 
        Travel Office staff.
          Foster regularly informed me that the First Lady was 
        concerned and desired action--the action desired was 
        the firing of the Travel Office.\163\
---------------------------------------------------------------------------
    \163\ Watkins memorandum, CGE 012287.
---------------------------------------------------------------------------

May 14, 1993, Friday

    On May 14, 1993, the White House brought in what it 
heralded as an ``independent'' auditor. In fact, the individual 
brought in to head the White House Travel Office review was 
neither independent nor an auditor. The White House engaged the 
management consulting division, not the public accounting 
division of Peat Marwick, to conduct its ``Management Review'' 
of the Travel Office. Peat Marwick's engagement letter, draft 
report and final report all state that Peat Marwick was not 
asked to and indeed did not conduct the work necessary for an 
``audit, examination or review'' in accordance with established 
accounting standards.\164\ Although the Management Review team 
was directed to look for kickbacks, it found no such evidence.
---------------------------------------------------------------------------
    \164\ CGE 006965-006980. Mr. Herman, partner in charge of the 
review for Peat Marwick, confirmed ``we were never asked to perform an 
audit.'' Response to committee interrogatories, June 19, 1996.
---------------------------------------------------------------------------
    Throughout the day, Patsy Thomasson kept Watkins and 
Kennedy apprised of developments.\165\ Mr. Kennedy called FBI 
Agent Carl during the course of the Peat Marwick review to 
advise him of the progress.\166\
---------------------------------------------------------------------------
    \165\ Committee deposition of Patsy Thomasson, April 22, 1996, pp. 
98, 101. Mr. Watkins was out of town at the time attending his 
daughter's graduation.
    \166\ OPR Report, p. 44.
---------------------------------------------------------------------------
    The White House directed Peat Marwick's efforts in the 
Travel Office review. In its draft report, Peat Marwick stated, 
``The procedures we performed were limited in nature and extent 
to those which the Office of the Counsel determined best fit 
its needs.'' \167\ In contrast, the final report, states that 
the Office of Management and Administration limited the review 
procedures.\168\ The distinction is telling, given the fact 
that the White House Counsel's Office would determine whether 
or not the FBI proceeded with a criminal investigation. 
Obviously, the White House did not want the White House 
Counsel's role in directing Peat Marwick's efforts to be 
revealed in its final report.
---------------------------------------------------------------------------
    \167\ CGE 006965.
    \168\ CGE 006980.
---------------------------------------------------------------------------
    Over the course of the last 3 years the White House has 
maintained that the Travel Office records were not auditable. 
The testimony of Dan Russell, a Peat Marwick accountant, 
contradicts this.\169\ He testified that the White House Travel 
Office records were indeed auditable and that an audit of the 
records could have been performed within several weeks.\170\
---------------------------------------------------------------------------
    \169\ For example, in the White House Management Review it stated 
that Peat Marwick was unable to conduct a formal audit because 
financial records were too disorganized and irregular. WHMR, p. 10.
    \170\ Russell deposition, p. 59.
---------------------------------------------------------------------------
    In a morning meeting in McLarty's office, Eller argued 
vigorously that the employees should be fired that day.\171\ 
Mr. Eller later explained to the GAO that he made this argument 
only under the assumption that the decision to fire the 
employees had already been made by Watkins and Patsy Thomasson.
---------------------------------------------------------------------------
    \171\ McLarty deposition, p. 35. Other evidence shows that Eller 
had been meeting with Harry Thomason and Cornelius throughout this 
week.
---------------------------------------------------------------------------
    At approximately 6:30 or 7 p.m. on May 14, Foster asked 
Watkins to speak with Mrs. Clinton about the Travel Office. 
Mrs. Clinton had inquired about the Travel Office with Foster 
earlier in the day.\172\ Even though Watkins was in Memphis, 
TN, trying to celebrate his daughter's graduation, Foster 
insisted that:
---------------------------------------------------------------------------
    \172\ OPR Report, p. 45.

          it was important that [he] speak directly with the 
        First Lady that day. [Watkins] called her that evening 
        and she conveyed to [him] in clear terms her desire for 
        swift and clear action to resolve the situation.\173\
---------------------------------------------------------------------------
    \173\ Watkins memorandum, CGE 012287.

---------------------------------------------------------------------------
During this conversation, Watkins recorded that Mrs. Clinton:

          mentioned that Thomason had explained how the Travel 
        Office could be run after removing the current staff--
        that plan included bringing in World Wide Travel and 
        Penny Sample to handle the basic travel functions, the 
        actual actions taken post dismissal--and in light of 
        that she thought immediate action was in order.\174\
---------------------------------------------------------------------------
    \174\ Id. Watkins also reported that ``Harry Thomason indicated 
that he could put a more efficient structure in place in an hour's time 
to handle all the tasks of the Travel Office.'' CGE 012292.

Foster was present during the conversation.\175\
---------------------------------------------------------------------------
    \175\ Responses to questions for the First Lady from the Committee 
on Government Reform and Oversight of the House of Representatives, 
March 21, 1996, p. 11.
---------------------------------------------------------------------------
    In contrast, Mrs. Clinton's recall of this conversation was 
first provided in responses to GAO inquiries on April 6, 1994, 
in which she responded:

          Mrs. Clinton does not recall this conversation with 
        the same level of detail as Mr. Watkins. She recalls 
        that on Friday, May 14, she had a very short telephone 
        call with Mr. Watkins. Mr. Watkins stated that Mr. 
        Foster had mentioned that Mrs. Clinton was interested 
        in knowing what was going on with the Travel Office. 
        Mrs. Clinton knew that Mr. Watkins was out of town. Mr. 
        Watkins conveyed to her that even though he was not in 
        Washington, his office was taking appropriate 
        action.\176\
---------------------------------------------------------------------------
    \176\ April 6, 1994 response to GAO interrogatories by Mrs. 
Clinton.

Mrs. Clinton also told the GAO that she ``did not know the 
origin of the decision to remove the White House Travel Office 
employees'' and that she had ``no role in the decision to 
terminate the employees.'' \177\ These statements are 
inconsistent with Watkins' sworn statements. He testified that 
``Foster regularly informed me that the First Lady was 
concerned and desired action--the action desired was the firing 
of the Travel Office staff.'' \178\
---------------------------------------------------------------------------
    \177\ Mrs. Clinton's responses to committee interrogatories, p. 3.
    \178\ Watkins' testimony in committee hearing, January 17, 1996; 
see also Watkins ``soul cleansing'' memo, CGE 012287.
---------------------------------------------------------------------------
    Almost 2 years later, Mrs. Clinton took an oath that her 
original answers were accurate. However, she provided 
additional information which indeed does show a role:

          I may have expressed the view that appropriate action 
        should be taken if the circumstances warranted it. . . 
        . I expressed my concern . . . that if there were 
        fiscal mismanagement in the Travel Office or in any 
        part of the White House, it should be addressed 
        promptly.\179\
---------------------------------------------------------------------------
    \179\ Mrs. Clinton's answers to interrogatories, pp. 12-13.

    On this day, Harry Thomason was asking about the Travel 
Office developments throughout the day. He had a message from 
Cornelius that ``the audit started in the travel office.'' 
\180\ Late that evening, Patsy Thomasson interrupted the 
Watkins' family graduation celebration again to ``urge him'' to 
call Harry Thomason who was staying at the Jefferson Hotel. Mr. 
Watkins reached Harry Thomason at midnight and told him the 
Peat Marwick report would not be released before Monday.\181\ 
It appears that Harry Thomason and Eller had been pressing 
since the previous day for the firings to take place before 5 
p.m. on May 14, 1993, which was a Friday.\182\
---------------------------------------------------------------------------
    \180\ Thomason message logs, Thomason document production, Bates 
Stamp No. 00000112.
    \181\ FBI 302 interview of David Watkins, August 10, 1993.
    \182\ It is a common practice to release information on Fridays to 
minimize news coverage.
---------------------------------------------------------------------------

May 15-16, 1993, Saturday-Sunday

    Throughout the weekend, the Peat Marwick review continued. 
Despite numerous conversations with FBI Headquarters, no one at 
the White House ever informed the agents that Peat Marwick was 
not performing an ``audit.''
    Moreover, the White House did not inform the FBI that it 
was conducting its own investigation. Patsy Thomasson enlisted 
Jennifer O'Connor and Brian Foucart under the pretense of an 
NPR review to interview Billy Dale and report back to her.\183\ 
Ms. Thomasson requested they provide a memo of the 
results.\184\ Ms. Thomasson also tried to enlist one of her 
assistants, Peter Siegel, to go on a trip scheduled for the 
following Monday to shadow the Travel Office employees and 
record an ``hour-by-hour'' accounting of what they did. This 
mission was to be carried out ``unobtrusively.'' \185\
---------------------------------------------------------------------------
    \183\ Committee deposition of Brian Foucart, May 3, 1996, pp. 30-
32.
    \184\ OPR Report, p. 46.
    \185\ White House typed memo ``For Peter,'' undated [but is from 
May 1993], CGE 008268.
---------------------------------------------------------------------------
    On May 15, Kennedy contacted FBI Agent Carl at home to 
receive an private briefing from Peat Marwick. Agent Carl 
arrived at the White House at 5 p.m. with the Washington 
Metropolitan Field Office Supervisor assigned to the matter, 
David Bowie.\186\ Again, Kennedy assured the FBI agents that 
the Travel Office records were secure.
---------------------------------------------------------------------------
    \186\ OPR Report, p. 46.
---------------------------------------------------------------------------
    Also on May 15, McLarty telephoned Foster to tell him that 
he was going to New York with Mrs. Clinton that evening and 
wanted Foster to ``give highlights, status'' to him before the 
trip.\187\ Steve Davison of World Wide Travel reported, ``We'd 
heard that Mack couldn't get a hotel room, that HRC was pissed 
at Travel staff,'' as a possible reason for the firings.\188\
---------------------------------------------------------------------------
    \187\ Foster Travel Office notebook, CGE 000909.
    \188\ WHMR interview notes of Steve Davison, June 5, 1993, CGEPR 
185-198.
---------------------------------------------------------------------------
    On Sunday, May 16, 1993, Patsy Thomasson continued her own 
investigative work by calling in several computer people to 
remove the hard drives on all the computers in the Travel 
Office. Again, the FBI was not informed of these 
activities.\189\
---------------------------------------------------------------------------
    \189\ Thomasson deposition, pp. 123-124.
---------------------------------------------------------------------------
    A World Wide Travel employee Fan Dozier talked with Harry 
Thomason on this day and recounted that Thomason remarked: 
``you mean you're not up there working [in the Travel 
Office]?'' \190\ Mr. Thomason added that ``the First Lady would 
be very upset'' to hear that World Wide Travel was not already 
in place.\191\
---------------------------------------------------------------------------
    \190\ WHMR interview notes of Fan Dozier, June 8, 1993, CGEPR 204-
211.
    \191\ Id.
---------------------------------------------------------------------------
    Later that evening, McLarty was in the White House 
residence for a dinner with President Clinton and Mrs. Clinton 
and several cabinet members.\192\ Mrs. Clinton spoke with 
McLarty in private about the progress of the Travel Office 
investigation. McLarty later added a notation to one of the 
numerous chronologies subsequently created by the White House 
Counsel's office that on this date, there was ``HRC pressure.'' 
\193\ Although McLarty previously did not acknowledge this 
meeting, he testified before this committee that Mrs. Clinton 
did pressure him to act at this time.\194\
---------------------------------------------------------------------------
    \192\ McLarty deposition, pp. 37-38.
    \193\ ``Chronology of Travel Office Firings (as of 5.25.93)'' with 
handwritten notations by Chief of Staff Mack McLarty, CGEPR 0563-0564.
    \194\ McLarty deposition, pp. 40-42.
---------------------------------------------------------------------------
    Mr. Foster arrived at the White House for a late night 
meeting with President Clinton at approximately 9 p.m. The 
meeting lasted approximately 2 hours, until 11 p.m. On Foster's 
calendar detailing his activities on May 16 for Travel Office 
matters, the only notation he wrote was ``?'' \195\
---------------------------------------------------------------------------
    \195\ Foster Travel Office notebook, CGE 911, 1039.
---------------------------------------------------------------------------

May 17, 1993, Monday

    Mr. Watkins had an early morning meeting with McLarty. Mr. 
McLarty informed him that this matter was on Mrs. Clinton's 
``radar screen.'' \196\ Mr. Watkins recorded that there ``would 
be hell to pay if . . . we failed to take swift and decisive 
action in conformity with the First Lady's wishes.'' \197\
---------------------------------------------------------------------------
    \196\ Watkins memorandum, CGE 012287.
    \197\ Watkins ``soul cleansing memo,'' CGE 012287.
---------------------------------------------------------------------------
    Mr. Watkins drafted a memo to McLarty later this same day 
covering the planned Travel Office firings. Mr. Watkins copied 
this memo to Mrs. Clinton.\198\ The memo was faxed to Eller who 
was traveling with President Clinton in California.\199\ Mr. 
Eller discussed the memorandum with Presidential confidante 
Bruce Lindsey. In turn, Lindsey discussed the memorandum with 
President Clinton in California.\200\ That morning, Lindsey 
placed a phone call to Kennedy from Air Force One and left a 
message for Kennedy to call him.\201\
---------------------------------------------------------------------------
    \198\ Early White House productions of this memorandum to the 
committee contained copies of this memorandum with Mrs. Clinton's names 
crossed out and unable to be read. No explanation has been given for 
why her name had been crossed out on these copies.
    \199\ White House Management Review interview notes of Bruce 
Lindsey, June 9, 1993, CGEPR 331-334. President Clinton's ill-fated 
trip to California ended with a $200 haircut on the runway of the Los 
Angeles airport.
    \200\ The fact that the President knew of the firings prior to 
their occurrence on May 19 had always been denied by the White House 
prior to this investigation. The committee uncovered notes that 
detailed the briefing of President Clinton on this matter. For example, 
on July 2, 1993, during a press briefing on the release of the White 
House Management Review, Mack McLarty was asked:
    Question. Was the President aware that the Travel Office was being 
dismissed before it was dismissed?
    Mr. McLarty. He was interviewed, Mr. Podesta interviewed him. He 
was not aware of the other----
    Question. Neither one?
    Mr. McLarty. I don't believe he was, not to my knowledge. And I 
think in terms of perhaps his being aware of some of this perhaps he 
was ill served in that regard.
    \201\ Phone logs of William Kennedy, CGE 23023. Neither Kennedy nor 
Lindsey have any recollection of this telephone call. See committee 
deposition of Bruce Lindsey, July 29, 1996, p. 50; see also Kennedy 
deposition (April 9, 1996), pp. 130-131.
---------------------------------------------------------------------------
    Mr. Dale went to see Watkins later this day to inquire 
about retiring. Mr. Watkins advised Dale that he did not want 
to discuss it at this time and scheduled a meeting for 
Wednesday morning, May 19, at 10 a.m. with all the 
employees.\202\
---------------------------------------------------------------------------
    \202\ WHMR, p. 11.
---------------------------------------------------------------------------

May 18, 1993, Tuesday

    The FBI called the White House to see what was happening to 
the ``audit'' only to be put off for the day. Throughout the 
day, Cornelius was finalizing plans with World Wide Travel 
staff to effectuate the takeover of the Travel Office 
operations. A new director of the Travel Office was selected by 
David Watkins: the reticent Brian Foucart.\203\ Mr. Foucart 
recalled little of any events while at the White House. He 
testified that he could not recall what his title was or 
exactly when he began working there.\204\
---------------------------------------------------------------------------
    \203\ Foucart deposition, p. 42.
    \204\ Mr. Foucart arrived at the White House after serving as the 
budget and finance person at the DNC.
---------------------------------------------------------------------------
    Harry Thomason also had a meeting with Craig Livingstone on 
this day although the purpose is unknown.\205\ Ms. Cornelius 
enlisted Thomason's help as she had in the previous week to 
determine how the Travel Office could be run.\206\
---------------------------------------------------------------------------
    \205\ Mr. Thomason had undated notes of a meeting that he testified 
was with Craig Livingstone to discuss Livingstone's interest in 
securing the Director's job in the White House Military Office. 
Thomason did not recall when this meeting occurred. On May 18, 1993, 
Livingstone put Anthony Marceca on an access list to the White House. 
CGE 47618.
    \206\ Cornelius deposition, pp. 116-117.
---------------------------------------------------------------------------
    At the end of the day, Kennedy put his arms around the 
shoulders of FBI agents assigned to the White House, Dennis 
Sculimbrene and Gary Aldrich and said,

          You guys are really going to thank me in the morning. 
        . . . I can't talk about it right now, but I kept you 
        out of something and you are going to be very grateful 
        in the morning that you were kept out of this.\207\
---------------------------------------------------------------------------
    \207\ Committee deposition of Gary Aldrich, July 18, 1996, p. 49.

The only event that occurred the next day was the firing of the 
seven White House Travel Office employees and the announcement 
that they were under investigation by the FBI. We now know that 
Kennedy exhibited an uncanny foresight into future events. 
However, Kennedy's statement reveals a level of prescience that 
being a part of the firing of the seven Travel Office employees 
was not something anyone wanted to acknowledge.

May 19, 1993, Wednesday

    While the FBI awaited the completion of what it had been 
falsely told was going to be an audit, the White House suddenly 
decided to fire the Travel Office employees on Wednesday, May 
19, 1993. The firings were announced in a press briefing and 
the President's press office proceeded, contrary to official 
policy, to announce that there was an ongoing FBI 
investigation.
    Early that morning, Watkins provided White House Press 
Secretary Dee Dee Myers with talking points which included the 
mention that the White House asked the FBI to investigate.\208\ 
When Kennedy called Agents Carl and Wade to tell them about the 
impending firings, Agent Wade warned ``that the termination 
could pose problems for the investigation.'' \209\ The White 
House ignored the FBI's concerns and neither the FBI nor the 
Justice Department ever publicly voiced any further objections.
---------------------------------------------------------------------------
    \208\ WHMR, p. 11.
    \209\ OPR Report, p. 49.
---------------------------------------------------------------------------
    When word of the firings reached the Justice Department, 
its Criminal Division Acting Chief, Jack Keeney, drafted an 
``Urgent Memo'' on May 19, 1993. In that memorandum, he noted 
that the FBI had become involved due to the ``kickbacks'' 
allegation.\210\
---------------------------------------------------------------------------
    \210\ Urgent memo of May 19, 1993 from Jack Keeney to Janet Reno, 
Philip Heymann and Webster Hubbell. While Attorney General Reno, Deputy 
Attorney General Heymann and Associate Attorney General Hubbell all 
deny reading this memo until the following week, an assistant to 
Heymann, Cynthia Monaco states that she personally handed the memo to 
Heymann on the day it was written or possibly as late as the next day 
and that she watched him read it according to her informal interview 
with the committee. Nevertheless, the oblivious response from the 
Justice Department to the highly unorthodox developments of this 
investigation in the earliest days seemed to set a pattern.
---------------------------------------------------------------------------
    Peat Marwick's report was not available when the White 
House announced the firings on May 19. In fact, it was not yet 
written. Consequently, Peat Marwick's primary author, partner 
Larry Herman, was ushered into a meeting with George 
Stephanopoulos, Dee Dee Myers, Vince Foster, Bill Kennedy, 
Ricki Seidman and Harry Thomason. He was immediately greeted 
with the question, ``Where the hell is the report?'' \211\ Mr. 
Herman testified that Harry Thomason pressed him with questions 
about whether they had uncovered anything about ``kickbacks.'' 
\212\
---------------------------------------------------------------------------
    \211\ Herman interview.
    \212\ Id.
---------------------------------------------------------------------------
    During this timeframe, Thomason spoke to Ross Fischer of 
Miami Air and discovered that Fischer never made any 
allegations of kickbacks.\213\ Harry Thomason quickly learned 
that his allegations were turning to dust.
---------------------------------------------------------------------------
    \213\ Staff interview of Ross Fischer in fall 1995. This 
information was notably absent from any public accounts or in the White 
House Management Review which was released on July 2, 1993 absent this 
exculpatory information.
---------------------------------------------------------------------------
    Meanwhile, Thomason contacted his partner Darnell Martens 
and asked for his assistance in contacting Penny Sample of Air 
Advantage to come to Washington to help in the Travel Office. 
She arrived the next day.\214\ Mr. Thomason again was vague 
about his participation to summon Penny Sample. He testified:
---------------------------------------------------------------------------
    \214\ Martens deposition, p. 173.

          Question. There was a time before the firings when 
        Darnell Martens placed a telephone call to Penny 
        Sample. It was in May of 1993. Did you have any 
        involvement or offer any advice concerning the 
        telephone call that was placed to Penny Sample to come 
        to the White House?
          Answer. I don't know. I don't know. I mean, at one 
        point I remember somebody in the White House said: Who 
        could do this if we decided to make a change in this 
        department? But so, I don't remember anything else 
        about it actually.
          Question. Do you know who recommended Mr. Martens 
        call Ms. Sample to come to the White House prior to the 
        firing of the White House Travel Office employees on 
        May 19th?
          Answer. I don't. Mr. Martens was at the White House 
        in a meeting with several people later, and I'm not 
        sure what the date was or anything, and it came out of 
        that conversation. But exactly who, I couldn't tell 
        you.\215\
---------------------------------------------------------------------------
    \215\ Thomason deposition, pp. 17-18.
---------------------------------------------------------------------------

May 20, 1993, Thursday

    The firings were met with near universal skepticism in the 
press once it was revealed that President Clinton's cousin and 
Harry Thomason were in the wings to take over the operations of 
the White House Travel Office. The press soon began to learn 
just how instrumental they had been in generating the firings.
    The announcement of the FBI investigation was a particular 
problem because to this point, the FBI had allowed the White 
House to totally control the alleged investigation. The White 
House had already made a premature announcement of the 
investigation and now the FBI press office was busy catching up 
with the White House ``press responses.'' The FBI had to deal 
with White House press responses that continued to support the 
White House's indications that there would be an FBI 
investigation.\216\
---------------------------------------------------------------------------
    \216\ See OPR Report, p. 62.
---------------------------------------------------------------------------
    The FBI press response did concede that the FBI planned to 
await the ``final report of the auditors'' in order to 
``analyze their findings and conduct appropriate 
investigation.'' \217\ At this point, the FBI did not have the 
report and had not learned there was not going to be an 
``audit'' upon which to base an investigation. FBI Media 
Affairs Director John Collingwood testified that he sent copies 
of his ``press responses'' to the White House throughout this 
week.\218\
---------------------------------------------------------------------------
    \217\ FBI press response, May 20, 1993, OPR Report, p. 57; see 
supra note 64.
    \218\ OPR Report, p. 57, fn. 65.
---------------------------------------------------------------------------
    The press also learned on this date that Cornelius and 
Clarissa Cerda prepared a February 15, 1993 memorandum for 
Watkins which positioned them as co-directors of the Travel 
Office. When this broke in the press, Patsy Thomasson 
instructed Cornelius and Cerda to deny that Watkins ever read 
the memo, a claim which both believed was false.\219\ A White 
House created chronology disclosed that Gene Gibbons of Reuters 
and Wolf Blitzer of CNN informed Stephanopoulos that they had 
obtained this memorandum. They agreed to hold their stories 
until Watkins, Myers and Stephanopoulos met with the reporters' 
bureau chiefs the following morning.\220\
---------------------------------------------------------------------------
    \219\ Cornelius deposition, p. 143; committee deposition of 
Clarissa Cerda, April 16, 1996, pp. 124-125. Ms. Cornelius testified in 
detail to the actions taken by Patsy Thomasson against her in her 
attempt to ``save David's job.'' Not only was Cornelius asked to resign 
from her job at the White House, but her mess privileges were taken 
away by Thomasson when she refused to do so. Ms. Cornelius testified 
that she would not leave the White House unless President Clinton asked 
her to do so. Ms. Cornelius' attorney authored a letter to Deputy Chief 
of Staff Bill Burton requesting a substantial raise for Ms. Cornelius 
above the pay rate of the job. In this letter, it is noted that 
Cornelius had ``admirably chosen to remain silent'' as a ``complete 
team player'' throughout this whole Travel Office ordeal. Letter from 
Stephen Braga to Charles William Burton, August 6, 1993, CGE 029028-30.
    \220\ ``Chronology of Travel Office Firings (as of 5.25.93)'', CGE 
563-564.
---------------------------------------------------------------------------
    Once Eller's personal relationship with Cornelius became 
public, he told interviewers that he threw away all his 
documents and allegedly ``removed himself'' from the issue. 
However, Cornelius testified that Eller was engaged in a heated 
discussion with Stephanopoulos about this matter about this 
time--an altercation neither can now recall.\221\
---------------------------------------------------------------------------
    \221\ Cornelius deposition, p. 142; committee deposition of Jeffrey 
Eller, April 18, 1996, p. 129; committee deposition of George 
Stephanopoulos, May 15, 1996, p. 33.
---------------------------------------------------------------------------
    With the pressure growing for a Peat Marwick report that 
matched the advance hype, Larry Herman called in front office 
reinforcements from Peat Marwick. Mr. Kennedy informed the FBI, 
which had made several requests for the report, that the 
``auditors'' were working on the report but that ``changes were 
being made to the draft and that [the FBI] would get a copy as 
soon as it was available.'' \222\
---------------------------------------------------------------------------
    \222\ OPR interview of Supervisory Special Agent Thomas Carl, 
August 1993, p. 10.
---------------------------------------------------------------------------

May 21, 1993, Friday

    The FBI still had not received what they thought would be 
an ``audit'' report from the White House. Ms. Myers and 
Stephanopoulos met with various White House personnel to try to 
put a story together to quell the growing press fury. Mr. 
Foster recorded in his notes of this date that at some point 
Stephanopoulos was told of HT's [Harry Thomason's] memo and 
that Stephanopoulos ``gets upset'' because he had already told 
the press that Thomason had no financial interest at 
stake.\223\
---------------------------------------------------------------------------
    \223\ Foster Travel Office notebook, CGE 917.
---------------------------------------------------------------------------
    Ann Devroy and Ruth Marcus of the Washington Post contacted 
Stephanopoulos about the ``Martens memo'' they had obtained. 
This memorandum detailed Martens' efforts to obtain Travel 
Office business as well as his call to Dale in February 1993, 
about obtaining Travel Office business.
    The story about the Cornelius/Cerda memorandum to take over 
the Travel Office was reported that morning by CNN and 
Stephanopoulos quickly dismissed it as the work of yet another 
``low-level staffer'' in the Clinton White House. He claimed 
that the memorandum had nothing to do with the firings. The 
Martens memorandum's release made it imperative that the 
``management decision'' to fire the employees not only be 
backed up by Peat Marwick but also by the FBI.
    Delays in the final Peat Marwick review and the FBI formal 
announcement of an investigation had become a problem. The 
White House called John Collingwood at the FBI to come to a 
White House press strategy meeting. Once there, Stephanopoulos 
asked him to revise his FBI press response.\224\ He did so upon 
his return to the FBI and faxed it to the White House. Mr. 
Stephanopoulos used the revised response in his 4 p.m. press 
conference.
---------------------------------------------------------------------------
    \224\ OPR Report, p. 62.
---------------------------------------------------------------------------
    The White House finally released the long-awaited Peat 
Marwick review at this press conference. The FBI did not 
receive the Peat Marwick review until later that evening at 
Headquarters. The assigned FBI field office did not receive the 
report until the following week. Nevertheless, before anyone at 
the FBI reviewed the Peat Marwick report, the FBI 
``investigation'' had been confirmed.
    In a previously undisclosed phone conversation between 
White House Counsel Bernie Nussbaum and Deputy Attorney General 
Phil Heymann on the morning of Friday, May 21, Nussbaum asked 
Heymann if the White House could say that the FBI had signed 
off on an investigation.\225\ Mr. Nussbaum later claimed that 
Stephanopoulos pressed him to take action.\226\ Mr. Nussbaum 
also said FBI Deputy Director Floyd Clarke happened to be in 
Heymann's office when Heymann gave the go ahead to announce the 
investigation.
---------------------------------------------------------------------------
    \225\ WHMR interview notes of Bernard Nussbaum, June 8, 1993, CGEPR 
380-382.
    \226\ Id.
---------------------------------------------------------------------------
    White House Deputy Director of Records Management Lee 
Johnson sent a memorandum to Staff Secretary John Podesta on 
this date expressing serious concerns about the records in the 
Travel Office and the lack of control over these records.\227\ 
Podesta's office was responsible for records management at the 
White House.\228\
---------------------------------------------------------------------------
    \227\ CGE 7763.
    \228\ May 21, 1993 memo to John Podesta from Lee Johnson, CGE 
007763. This memo was not provided to the Justice Department in the 
course of the investigation into Billy Dale. It was finally provided to 
the defendant in the course of his trial after it became public. This 
was among a number of documents that the White House was seriously 
deficient in providing the Justice Department which continued to 
receive records from the White House throughout the trial.
---------------------------------------------------------------------------
    Mr. Johnson repeatedly contacted Steven Neuwirth in the 
White House Counsel's office about this matter and received no 
response. FBI Agent Sculimbrene also raised concerns about the 
lack of control over the documents. He stated that he had seen 
people throwing out records and documents from the Travel 
Office and was shocked that there was absolutely no FBI 
presence or control over the investigation at this point.\229\ 
Mr. Podesta's Deputy Todd Stern later noted that: ``document 
handling . . . terrible . . . no documents secured . . . but 
FBI may not want this--prejudice case . . . who drove it and 
who knew.'' \230\
---------------------------------------------------------------------------
    \229\ Sculimbrene Public Integrity interview, August 16, 1995. None 
of the Justice Department prosecution team for the Dale case questioned 
Agent Sculimbrene about these documents even though he made his 
knowledge of the situation abundantly clear to his superiors at the 
FBI. After Agent Sculimbrene was asked to testify in the Billy Dale 
trial, he was treated as an outcast by his superiors at the FBI. Agent 
Sculimbrene testified that he was drug tested for the first time in his 
career and then ultimately removed from the White House so that he 
would not cause the Clinton administration to be ``uncomfortable.'' 
After months of working without any assignments at a desk in the field 
office, Agent Sculimbrene finally resigned from the FBI. FBI general 
counsel Howard Shapiro attacked Agent Sculimbrene's integrity and 
honesty in testimony before the committee. Testimony before the 
committee, August 1, 1996.
    \230\ Handwritten notes of Todd Stern, May 27, 1993, CGEPR 0679.
---------------------------------------------------------------------------
    That evening, Cornelius and Cerda had dinner at the 
Jefferson Hotel with Thomason and his White House assistant 
Bobbie Faye Ferguson. Ms. Cerda told Ferguson that she and 
Cornelius had been told to say that Watkins did not read their 
February 15 memorandum.\231\ Ms. Cerda did not think this was 
true and believed she was being asked to lie.\232\
---------------------------------------------------------------------------
    \231\ Ferguson deposition, p. 81.
    \232\ Committee deposition of Clarissa Cerda, April 16, 1996, pp. 
124-125.
---------------------------------------------------------------------------

May 22, 1993, Saturday

    The White House staff was reeling from a grueling press 
week on both the Christophe haircut and the Travel Office 
firings. President Clinton's staff gathered at the White House 
throughout the weekend to ``war room'' the press strategy. Mr. 
Thomason appeared at the White House over this weekend.\233\
---------------------------------------------------------------------------
    \233\ Secret Service logs, CGE 9287.
---------------------------------------------------------------------------

May 24-25, 1993, Monday-Tuesday

    On May 24 and 25, 1993, an increasingly skeptical press 
continued to question White House cronyism and misuse of the 
FBI. The Attorney General was asked by a Washington Post 
reporter on May 24, if she was aware of the White House 
contacts with the FBI. General Reno denied any such knowledge 
in spite of the fact that an Urgent Memo about the matter was 
provided to her on May 19.\234\
---------------------------------------------------------------------------
    \234\ OPR Report, p. 68, fn. 76.
---------------------------------------------------------------------------
    The press learned that Collingwood had been at the White 
House on Friday, May 21, and continued to raise questions about 
President Clinton's staff exerting pressure on the FBI. New 
York Times columnist William Safire accused the White House of 
``politicizing'' the FBI during an appearance on ``Meet the 
Press'' on May 23 and again in his New York Times column on May 
24.\235\
---------------------------------------------------------------------------
    \235\ Numerous copies of Mr. Safire's column were produced by the 
White House.
---------------------------------------------------------------------------
    On May 25, President Clinton was questioned during a photo 
session about Mr. Safire's allegations. President Clinton 
responded that:

          whenever you've asked me a question, I've told you 
        all I know about it. All I knew was there was a plan to 
        cut the size of the office, save tax dollars, save the 
        press money.

President Clinton's lack of knowledge is in conflict with Bruce 
Lindsey's testimony that he briefed President Clinton on the 
matter prior to the firings. When Lindsey briefed him, 
President Clinton asked, ``What's it about?'' \236\
---------------------------------------------------------------------------
    \236\ WHMR interview notes of Bruce Lindsey, CGEPR 331-334.
---------------------------------------------------------------------------
    General Reno took the White House to task for directly 
contacting the FBI without going through the Justice Department 
and expressed her consternation with these events to President 
Clinton's Counsel Bernard Nussbaum.\237\
---------------------------------------------------------------------------
    \237\ OPR Report, pp. 68-69.
---------------------------------------------------------------------------
    The White House announced that a ``White House Management 
Review'' would be immediately undertaken to be presided over by 
then-Chief of Staff Mack McLarty. Mr. McLarty was put in charge 
of the internal investigation even though he clearly had a role 
in the firings. The incongruity of putting the person who 
authorized the firings in charge of this investigation ensured 
from the beginning that the full story would not be told.

May 27, 1993, Thursday

    White House Management Review co-author Todd Stern 
memorialized his concerns in his handwritten notes:

          problem is that if we do any kind of report and fail 
        to address these Qs [questions], press jumps on you 
        wanting to know answers; while if you give answers that 
        aren't fully honest (e.g. nothing re HRC) you risk 
        hugely compounding the problem by getting caught in 
        half-truths. You run the risk of turning this into a 
        `cover-up'. . . . We need to think seriously about 
        whether or not it won't be better to come clean . . 
        .\238\
---------------------------------------------------------------------------
    \238\ Handwritten notes by Todd Stern, May 27, 1993, CGEPR 0682-
683.

Unfortunately, Mr. Stern's musings were never heeded--coming 
clean was not on the White House agenda.

 IV. The Travel Office Firings Were Part of a Campaign Payback Scheme 
                 That was in Place Long Before May 1993

A. HARRY THOMASON SOUGHT THE TRAVEL BUSINESS FROM THE EARLY DAYS OF THE 
    TRANSITION, TOLD MRS. CLINTON HE COULD PROVIDE THE SERVICE AND 
PRESIDENT CLINTON AND MRS. CLINTON PROVIDED THE ACCESS TO DO SO. HARRY 
THOMASON MALIGNED THE TRAVEL OFFICE EMPLOYEES, AS WELL AS TRAVEL OFFICE 
CONTRACTOR ULTRAIR IN ORDER TO MOVE THEM OUT OF THAT OFFICE. THOMASON'S 
     TRAVEL BUSINESS INTERESTS POSED AN INHERENT CONFLICT WITH HIS 
INVOLVEMENT IN TRAVEL OFFICE DECISIONS OR ANY SOLICITATION OF BUSINESS 
                              IN THIS AREA

    The origins of the Travelgate story began long before the 
May 19, 1993, firings and long before the Clintons crossed the 
White House threshold in January 1993. Harry Thomason, famous 
Hollywood producer and a long-time close friend of the 
Clintons, became an indispensable member of the 1992 campaign 
entourage. He and his wife provided much needed assistance: 
from their own personal aircraft in the early days of the 
campaign and help with Hollywood fund-raising, to scripting and 
staging of the 1992 Democrat convention complete with a 
Thomason produced video, ``The Man from Hope.''

1. Harry Thomason's ownership interest in aviation companies presented 
        inherent conflicts of interest in his seeking Travel Office 
        business

    Mr. Thomason possessed an ownership interest in several 
aviation oriented companies. He had a 33 percent ownership 
interest in Thomason, Richland & Martens, Inc., (TRM), an 
aviation consulting company based in Cincinnati, OH. TRM's cash 
flow depended heavily on moneys derived from the Clinton/Gore 
campaign from the fall of 1991 through the election in November 
1992. This reliance continued throughout the Clinton/Gore 
transition.
    Mr. Thomason's two partners had a 33 percent ownership in 
TRM. Darnell Martens was brought into TRM and served as the 
president of the company. Martens testified how the company 
began financially:

          Question. And so there were the two financial 
        backers?
          Answer. Yes.
          Question. Did they in fact put up equal money----
          Answer. No.
          Question. Can you just explain what happened with 
        that?
          Answer. Each were to put up $50,000. Harry put in 25 
        initially, Dan [Richland] did not. Maybe a year and a 
        half later, Dan put up 25,000. He subsequently put in 
        his other 25,000. And Harry has yet to put in his final 
        25,000.
          Question. Were you a financial backer of the company?
          Answer. Only from the aspect of bringing the 
        Executive Jet contract with me as part of the original 
        deal.
          Question. And you served as president?
          Answer. Correct.\239\
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    \239\ Martens deposition, p. 36.

    Mr. Thomason met Darnell Martens in 1989 when he bought a 
plane from Executive Jet while Martens was employed there.\240\ 
Mr. Martens, who claims his real life ambition was to work in 
the television industry, kept in touch with Thomason over the 
next several years. Mr. Martens testified that in 1991, 
Thomason encouraged him to present a business plan for the 
company that ultimately became TRM. TRM was incorporated in 
November 1991, shortly after Bill Clinton announced he was 
running for President.
---------------------------------------------------------------------------
    \240\ Martens deposition, p. 10.
---------------------------------------------------------------------------
    Mr. Martens additionally took on a role with a second Harry 
Thomason-owned aviation company, the Thomason Aircraft Corp., 
as acting president. The Thomason Aircraft Corp., marketed 
aircraft parts and some aircraft sales.\241\ This company 
became a client of TRM and Martens worked between the two 
companies in Ohio and California. At one point, Thomason 
Aircraft supplied an eight-seater plane to TRM.
---------------------------------------------------------------------------
    \241\ Martens deposition, p. 16. The Thomason Aircraft Corp. was a 
``corporate aircraft maintenance facility at Van Nuys Airport,'' 
California. This company had a ``piston maintenance operation, a 
turbine maintenance operation and then a parts department.'' Aircraft 
sales was added to the company's activities the following year. Id., 
pp. 12-14.
---------------------------------------------------------------------------
    Martens' income was covered under an arrangement he made 
with Executive Jet to provide his salary for approximately 1 
year. In May 1993, his 1 year contract was ending and the 
additional commissions he obtained for his service to the 
Clinton/Gore campaign were drying up. The access that Harry 
Thomason could provide was an attractive solution for the cash 
strapped start up company. Mr. Martens testified that after the 
inauguration he wanted to have enough money so that he could 
spend a few months doing research and ``get back to his 
business plan'' providing financial advisory service for 
companies that owned aircraft and developing ``benchmark 
products.'' \242\
---------------------------------------------------------------------------
    \242\ Id., pp. 14, 38, 45, 48.
---------------------------------------------------------------------------

2. TRM, Thomason's company, provided service to the Clinton/Gore 
        campaign and sought to capitalize on their association with the 
        new administration

    In December 1991, Thomason told Martens that he had a 
friend, Bill Clinton, who was running for President. In his 
deposition, Martens explained:

          I kind of rolled my eyes and said: Okay, so what?
          And he goes: Well, it is Bill Clinton.
          I had never heard of Bill Clinton. In fact, when he 
        said it, right then was the first time I had ever heard 
        the name.
          So I said: Yes, so?
          He goes: Well, the thing is that they have been 
        getting into chartering airplanes and just ad hoc, you 
        know, if somebody needs to go somewhere. And we are 
        real concerned about primarily the safety issues, who 
        are they using, how much are they paying, are they 
        properly insured, some of those issues. You know, there 
        has been some discussion around with some of the 
        advisors that maybe somebody should take a look at what 
        they are doing so that they don't actually have 
        something bad happen, you know, use an operator they 
        shouldn't or whatever.
          He said: It seems to me maybe you would want to go 
        down and see if there was an opportunity for you to do 
        some consulting for them.
          I said: Sure, that will be fine.\243\
---------------------------------------------------------------------------
    \243\ Martens deposition, pp. 20-21.

    Mr. Martens attended a Los Angeles fund-raiser with 
Thomason, shook Bill Clinton's hand, and then met with David 
Buxbaum of the Clinton/Gore campaign and obtained the campaign 
charter business. Mr. Buxbaum was in charge of budget matters 
and reported directly to Watkins who was then Clinton/Gore 
campaign manager. Mr. Martens was not aware of any competitive 
bidding done to obtain the business.
    Initially, TRM provided all the planes for the fledgling 
campaign. As Clinton successes mounted in the primary season 
and the entourage grew, Martens utilized a New Mexico charter 
company, Air Advantage, to serve as a charter broker. Air 
Advantage paid an agreed upon percentage to Martens through 
TRM. Although Martens testified that he did billing and 
consulting work with Air Advantage, Air Advantage owner Penny 
Sample claimed she really didn't know what Martens did or for 
what they were paying him.\244\
---------------------------------------------------------------------------
    \244\ GAO deposition of Penny Sample, September 1, 1993, pp. 21-22.
---------------------------------------------------------------------------
    When Bill Clinton won the Presidency in November 1992, the 
TRM partners and their associates set their sights on 
``Washington opportunities.'' Linda Bloodworth-Thomason 
ridiculed the idea of her husband trying to get the Travel 
Office business as the equivalent of taking over someone's 
lemonade stand when the whole Travel Office debacle blew up in 
May 1993, after the firings:

          given our salaries, setting our sights on the White 
        House travel office would be the financial equivalent 
        of us taking over someone's lemonade stand.\245\
---------------------------------------------------------------------------
    \245\ Judith Michaelson, Putting `House' and Past in Order, Old 
Nemeses Delta Burke and Thomason's Combined Forces, Los Angeles Times, 
January 4, 1995.

    However, Thomason and Martens did in fact seek a quarter of 
a million dollar Government contract as well as the potential 
$10 million annual cash flow. It is now apparent, that even 
before the start of the Clinton administration, Harry Thomason 
spoke with Mrs. Clinton about replacing Travel Office employees 
because they were ``disloyal'' and discussed the fact that he 
(TRM) could do the same work he had performed for the 
campaign.\246\
---------------------------------------------------------------------------
    \246\ Handwritten notes of President Clinton's Associate Counsel 
Natalie Williams detailing a conversation with one of Harry Thomason's 
attorneys, Amy Sabrin, DF 780464. Although President Clinton claimed 
executive privilege over all of Ms. Williams' handwritten notes, the 
committee received production on August 15, 1996.
---------------------------------------------------------------------------

3. A January 29, 1993 memorandum from Darnell Martens to Harry Thomason 
        catalogs the ambitious Washington agenda for TRM: pursuing 
        Travel Office business and obtaining ``official status'' at the 
        White House

            a. Seeking ``Washington opportunities''
    In a memorandum never before provided to investigators 
until the committee threatened to subpoena Harry Thomason, the 
multiple Thomason-Martens enterprises were revealed. In the 
January 29, 1993 memorandum from Martens to Thomason, Marten 
detailed numerous ``Washington opportunities'' that could be 
pursued by ``capitaliz[ing] on the `Thomason' name 
recognition.'' \247\
---------------------------------------------------------------------------
    \247\ DOJ document production, EZ 037684.
---------------------------------------------------------------------------
    Mr. Martens first suggested changing the TRM firm name to 
``Harry Thomason & Associates'' as they moved forward with 
their ``opportunities.'' Mr. Martens made up his own letterhead 
and proceeded to use this new name when faxing requests for 
meetings at the White House.\248\ Mr. Thomason testified, 
however, that this was done without his approval and claimed to 
have put an immediate halt to the name change. Nevertheless, 
this same heading appears on later TRM correspondence to the 
White House.\249\
---------------------------------------------------------------------------
    \248\ Confidential fax cover sheet (CGE 2228) with memo offering 
assistance with the Travel Office, May 13, 1993, Bates Stamp No. BFF 
1031; memorandum from Martens to Bruce Lindsey, April 12, 1993, 
regarding proposal to perform financial audit of non-military Federal 
aircraft, CGE 2229.
    \249\ Thomason deposition, p. 110.
---------------------------------------------------------------------------
            b. Obtaining ``some form of official status''
    Second, Martens' memo recommended obtaining ``some form of 
official status as advisors to the White House for general 
aviation policy matters.'' The memorandum proposed achieving 
this goal through special consulting projects such as 
developing a ``computerized safety and operational database'' 
or reviewing ``all non-military Government aircraft to 
determine financial and operational appropriateness.'' \250\ 
President Clinton greatly facilitated this effort after a 
February 10, 1993, cabinet meeting when he announced he was 
``ordering an inventory of the airplane fleet.'' \251\
---------------------------------------------------------------------------
    \250\ Confidential memorandum to Thomason from Martens, January 29, 
1993 regarding ``TRM Action Items'', DOJ production, Bates Stamp No. EZ 
037684.
    \251\ ``Remarks at a Meeting with Cabinet Members,'' 29 Wkly Comp. 
Pres. Documents, p. 67.
---------------------------------------------------------------------------
    Messrs. Martens and Thomason did in fact obtain the 
``official status'' of White House passholders. Harry Thomason 
obtained his pass on March 23, 1993, and Darnell Martens 
obtained his pass on May 12, 1993.\252\ Mr. Thomason was listed 
as reporting directly to President Clinton.\253\ Mr. Martens 
reported to Harry Thomason and Watkins.\254\
---------------------------------------------------------------------------
    \252\ See GAO interview of Craig Livingstone, March 10, 1994. Craig 
Livingstone testified to GAO investigators that this request was 
``unheard of.'' Livingstone went to the Office of Administration to 
find out why he had been given an access form from President Clinton 
requesting a pass for Harry Thomason. According to Livingstone, Watkins 
refused to provide any explanation and only told him that it needed to 
be done.
    But see Thomason deposition, p. 75. Thomason stated in sworn 
testimony that after arriving at the White House for several days and 
having to wait at the gate for someone to grant him entrance through 
the gate, Livingstone approached him one day and said: ``[W]hy are we 
doing this? You know, it causes a waste of time, you a waste of time. 
Why don't we get you a temporary pass so that we just won't have to 
make the call everyday.''
    \253\ CGE 2933.
    \254\ CGE 18296.
---------------------------------------------------------------------------
    Harry Thomason was enlisted to come to the White House when 
the White House fell upon hard times with the press and 
President Clinton's polling figures headed south. Mr. Thomason 
was officially brought in to assist in better ``staging'' of 
events for the President. Mrs. Clinton acknowledged discussing 
these ``staging'' efforts with Harry Thomason.\255\
---------------------------------------------------------------------------
    \255\ Mrs. Clinton's answers to interrogatories, p. 9.
---------------------------------------------------------------------------
    Rahm Emanuel told White House Management Review 
investigators that McLarty, Stephanopoulos, Mandy Grunwald and 
President Clinton were consulted about bringing in Harry 
Thomason for staging advice and they all signed off on the 
project. Mr. Emanuel confirmed in sworn testimony before this 
committee that McLarty approved bringing in Harry 
Thomason.\256\
---------------------------------------------------------------------------
    \256\ WHMR interview notes of Rahm Emanuel, June 14, 1993, CGE 
0236. In his committee deposition, Emanuel could not recall this fact. 
However, Todd Stern, who took notes at Emanuel's interview, confirmed 
that his notes did reflect that the President, Mack McLarty, Mandy 
Grunwald and George Stephanopoulos approved the ``White House Project'' 
that Harry Thomason was working on. See Stern deposition, pp. 38-39.
---------------------------------------------------------------------------
    In stark contrast, McLarty claimed he had no role in 
bringing Harry Thomason to the White House in numerous public 
statements as well as the White House Management Review.\257\ 
Furthermore, McLarty testified to this committee that he 
``thought the President and First Lady had asked him [Harry 
Thomason] to come to the White House.'' \258\ Other Clinton 
administration staff consistently maintained that Emanuel was 
responsible for Harry Thomason coming to the White House. The 
White House Management Review is vague on the subject:
---------------------------------------------------------------------------
    \257\ GAO interview of Thomas F. ``Mack'' McLarty, March 21, 1994.
    \258\ McLarty deposition, p. 23.

          At the end of April, Thomason returned to Washington. 
        He had been asked to consult on the staging of 
        Presidential events and was provided with an access 
        pass of the kind issued to staff, allowing him open 
        passage throughout the White House complex.\259\
---------------------------------------------------------------------------
    \259\ The White House Management Review, p. 6.

    It is unlikely that Emanuel's position gave him the 
authority to bring someone to work at the White House, provide 
an East Wing office, computer, phone hook up, White House pass 
and direct senior staff to meet with such an individual for a 
``project.'' Such a task clearly would be within the scope of 
the Chief of Staff, particularly when it involved the Clintons' 
close friend and supporter, Harry Thomason.
    Mr. McLarty denies his role in bringing in Harry Thomason 
and furthermore, states he never met with Thomason while he was 
at the White House.\260\ Mr. Thomason directly contradicts this 
account. He testified to this committee that in the May 12, 
1993 meeting reflected on his calendar, he gave McLarty a copy 
of ``The White House Project.'' \261\
---------------------------------------------------------------------------
    \260\ McLarty deposition, pp. 23-24.
    \261\ McLarty does not appear to have turned over his copy of ``The 
White House Project'' to John Podesta and Todd Stern in the course of 
the Management Review. Stern recalls receiving the document from Rahm 
Emanuel. Podesta does not recall from whom they received the document.
---------------------------------------------------------------------------
    Mr. McLarty's testimony that he believed President Clinton 
and Mrs. Clinton asked Harry Thomason to come to the White 
House for the ``staging'' efforts, would explain why Thomason's 
White House pass had him reporting directly to the President. 
Moreover, there is evidence that McLarty sent a memorandum to 
certain staff explaining Thomason's designated role at the 
White House prior to Thomason's scheduled interviews with 
department heads. This memorandum has not surfaced in the 
course of the committee's document requests to the White 
House.\262\ Again, the White House Chief of Staff would be the 
logical person to send out such a memo so that staff would 
understand why they were being asked to take time out of their 
schedules to meet with Harry Thomason.\263\
---------------------------------------------------------------------------
    \262\ Jennifer O'Connor recounted such a memo in handwritten notes, 
CGE 37586; see also Cornelius deposition, p. 76. Cornelius testified 
that O'Connor told her of such a memo. The committee specifically 
sought this memorandum from the White House to no avail.
    \263\ In the course of the White House Project, Harry Thomason had 
meetings with dozens of White House staffers as is reflected in an 
agenda provided by both the White House and Harry Thomason. Most of 
Thomason's meetings were conducted on April 30 and May 1, 1993.
---------------------------------------------------------------------------
            c. Seeking the Travel Office business
    Mr. Martens clearly envisioned seeking the Travel Office 
business according to his January 29 memo to Harry Thomason:

          Determine who controls the scheduling of the White 
        House Press Corps aircraft. This can be done by TRM 
        much as the campaign aircraft were handled.

There is no documentary evidence that Thomason ever objected to 
any of these activities. In fact, Thomason personally forwarded 
a proposal memorandum for a GSA contract to President Clinton, 
which was one of the items on the January 29 memorandum 
list.\264\
---------------------------------------------------------------------------
    \264\ CGE 2296-2297.
---------------------------------------------------------------------------
    Mr. Martens January 29 memo also recommended that he and 
Thomason ``travel to Washington within the next 30 to 45 days 
to meet with either DOT [Department of Transportation] or White 
House transportation advisors'' regarding these items. Within 
the month, while an overnight guest at the White House, Harry 
Thomason passed on his ideas personally to President 
Clinton.\265\ Martens even fancied that he and his Hollywood 
partner could provide ``selection assistance'' regarding 
President Clinton's choice for a new FAA Administrator.\266\
---------------------------------------------------------------------------
    \265\ Thomason was an overnight guest in the White House residence 
on February 16 and 17, 1993 and forwarded the February 11, 1993 memo 
(CGE 2297) to the President.
    \266\ See Darnell Martens memorandum, dated January 29, 1993, DOJ 
production, Bates Stamp No. EZ 037684.
---------------------------------------------------------------------------

4. Putting Martens in touch with the White House to obtain Travel 
        Office business

    Mr. Thomason used his access to the White House to put 
Martens in touch with Myers and learn how to solicit the Travel 
Office business. Ms. Myers in turn put Martens in touch with 
Billy Dale. When Martens attempted to seek Travel Office 
business from the former Travel Office Director, Billy Dale, he 
was rebuffed. Then, perhaps, was the point at which Mr. Dale's 
fate was sealed. He made the mistake of not giving business to 
President Clinton's friend even though to do so would have 
disrupted a longstanding arrangement preferred by the customers 
of the Travel Office--the White House press corps.

5. Drafting a memorandum covering his conversation with Dale which 
        shows he was seeking the Travel Office business

    Mr. Martens recounted his impressions of this conversation 
with Dale in a memorandum that was disclosed to the press just 
days after the firings. Mr. Martens testified that he wrote the 
memorandum contemporaneous with his conversation with Dale in 
early February 1993.\267\ The Martens memorandum clearly states 
that TRM was seeking business from the Travel Office:
---------------------------------------------------------------------------
    \267\ Martens deposition, p. 52.

          Dee Dee Myers stated to both Harry Thomason 
        (personally) and Darnell Martens (by phone) that the 
        White House was not tied to any particular charter 
        operator and that based on that assumption, she saw no 
        reason why Thomason, Richland & Martens, Inc. (TRM) 
        should not be able to compete for the White House Press 
        Corps charter business.\268\
---------------------------------------------------------------------------
    \268\ Martens memo, WHMR, exhibit ``G''.

Mr. Martens goes on to detail his conversation with Dale in 
which he was told that ``there was no possible combination of 
price/service under which TRM could earn the White House 
business.\269\
---------------------------------------------------------------------------
    \269\ Id.
---------------------------------------------------------------------------
    Mr. Dale acknowledged that he interpreted Martens' 
overtures as a bid for TRM to get the Travel Office business 
and that he simply didn't need a ``middle man.'' \270\ What 
Martens was soliciting was to take over Dale's job. Robert Van 
Eimeren overheard the conversation and concurred with Dale's 
account.\271\
---------------------------------------------------------------------------
    \270\ Committee interview of Billy R. Dale, November 27, 1995.
    \271\ Committee interview of Robert Van Eimeren, July 26, 1995.
---------------------------------------------------------------------------
    A reading of the Martens memorandum further leads to the 
conclusion that TRM was seeking the Travel Office business. 
Again, Martens wrote, ``Martens informed Dale that TRM 
purchases a much higher volume of charter hours than the White 
House does and that the buying power could be combined with the 
White House business to lower the cost from particular vendors 
to the Press Corps.''
    Mr. Martens' memorandum continues for close to two pages to 
outline his opinion that the Travel Office is a Republican 
operation: ``Airline of Americas [UltrAir--the then current 
charter company] is a Republican-operated charter airline.''
    Mr. Martens seemed to view the White House Travel Office 
business as a political plum that now belonged to Clinton 
supporters:

          Once again, a company which made its choice and has 
        represented that it did not support the Clinton 
        presidential initiative continues to benefit from its 
        special relationship with Billy R. Dale and the White 
        House Travel Services Department.\272\
---------------------------------------------------------------------------
    \272\ Martens memo, WHMR, exhibit ``G''.
---------------------------------------------------------------------------

6. Laying out the strategy to get the Travel Office business in a March 
        5, 1993 memorandum: dig up dirt on the current employees and 
        replace them with campaign cronies

    Even more significant was another version of this ``Martens 
memo'' that never saw the light of day prior to this 
investigation. Even the criminal investigation team in the 
Public Integrity Section of the Justice Department failed to 
obtain this document until brought to their attention by the 
committee. Like its predecessor, this March 5, 1993, memorandum 
further supports that TRM was seeking business in the Travel 
Office. Mr. Martens subsequently tried to explain it away by 
suggesting that it was merely a ``memo to myself.'' Mr. 
Thomason finally turned over this document under threat of a 
subpoena in December 1995.
    The March 5 memorandum from Martens to Thomason discussed 
Martens' efforts to gather incriminating information on the 
Travel Office employees while promoting TRM's plan to take over 
the Travel Office. In this version, Martens outlines the 
``solution'' for the Travel Office:

          the Administration should disband the antiquated 
        Transportation Department system in favor of the 
        functions being outsourced to TRM/Air Advantage.\273\
---------------------------------------------------------------------------
    \273\ Memorandum from Darnell Martens to Harry Thomason, March 5, 
1993.

Air Advantage was the same charter company used by TRM during 
the campaign. This is precisely what the events of May 1993, 
were designed to achieve. Similar to the May 13, 1993, fax 
discussed above that was sent to the White House, Thomason and 
Martens clearly envisioned ``Penny [Penny Sample of Air 
Advantage] and I [Martens]'' working at the White House.
    Perhaps no other document so clearly lays out the agenda 
behind the maligning of the Travel Office employees--dirty them 
up, move them out and move in TRM and Air Advantage. The 
explanation is all laid out in this long-withheld document. The 
cover memo to this March 5 ``solution'' memo indicates that 
Martens took the following actions to investigate the Travel 
Office employees:
         ``contacted the DOT regarding the AOA [Airline 
        of the Americas/UltrAir] campaign violations''
         ``we are contacting a party Treasurer to 
        determine if AOA's owners made substantial Republican 
        contributions''
         ``we are to receive a package from Miami Air 
        today with additional information on their experience 
        with the White House . . . ''
         ``we are trying to obtain an on-the-record 
        conversation with the ex-AOA employee.''
Mr. Martens noted in his cover memo that he felt like ``Mike 
Wallace on 60 minutes.'' He informed Thomason that he would be 
sending additional information.
    Of course, Martens and Thomason have said that this memo, 
like the others meant nothing.\274\ Mr. Martens testified that 
this was just a memo ``to myself.'' \275\ They attempted to 
explain it away as just a big misunderstanding by people who 
write fabricated memos to themselves that inadvertently fall 
into the wrong hands. In spite of this, Thomason did pass this 
information on to others at the White House including, but not 
limited to, Watkins, Foster, Kennedy, Cornelius, Patsy 
Thomasson, and O'Connor over the next few months.
---------------------------------------------------------------------------
    \274\ See depositions of Martens and Thomason.
    \275\ Martens deposition, p. 74.
---------------------------------------------------------------------------
    Notably, Harry Thomason made numerous phone calls to Mrs. 
Clinton's press office, to Lindsey's office, and to the 
Washington Post on March 5, 1993.\276\ In the following days, 
the calls to Mrs. Clinton's office continued. Thomason's phone 
logs identify numerous contacts with Mrs. Clinton and her 
office throughout the week of May 10 through May 14, 1993. He 
called the private residence phone on both May 5 and May 6, 
1993, and had a lengthy dinner in the residence on May 13, 
1993.
---------------------------------------------------------------------------
    \276\ The phone number called at the Washington Post was 334-7463. 
Thomason phone records, Thomason document production, Bates Stamp No. 
876.
---------------------------------------------------------------------------
    The paperwork for Thomason's White House pass was completed 
on March 10, faxed to Mrs. Clinton's press office on March 23, 
1993, stamped ``RUSH ASAP.'' \277\ Mr. Thomason obtained a 
Temporary White House Office pass, not a Temporary White House 
volunteer pass as would have been appropriate had he been a 
volunteer.\278\ Since Harry Thomason's White House Project did 
not begin until the end of April, why the ``RUSH ASAP'' to get 
his pass in March if not for tending to Travel Office affairs?
---------------------------------------------------------------------------
    \277\ This factual evidence is consistent with Watkins ``soul 
cleansing'' memo in which he states that ``Management and 
Administration had no part in bringing Thomason into the White House . 
. . Contact with this Office on the subject consisted only of the First 
Lady's Office calling to insist on immediate access for Thomason.'' CGE 
12291-12292.
    \278\ CGE 2933.
---------------------------------------------------------------------------
    The January 29 and March 5 Martens memoranda are consistent 
with the information Thomason passed on to White House 
officials. In order to get rid of the Travel Office employees, 
however, the ``good story'' that Thomason was hoping for needed 
a better plot-line. Simple patronage and steering contracts to 
rich friends never makes for a good story.
    ``These guys are crooks,'' Harry Thomason roared through 
the White House. ``They are ripping us off'' he declared 
according to White House employee Jennifer O'Connor.\279\ With 
these words, the lives of seven men changed forever.
---------------------------------------------------------------------------
    \279\ WHMR interview notes of Jennifer O'Connor, June 11, 1993, 
CGEPR 0384.
---------------------------------------------------------------------------
    Mr. Thomason worked with Cornelius and Watkins on his 
vision of the new Travel Office. The May 13, 1993 fax to the 
White House clearly shows that the plan was set in action on 
May 12, 1993. This was the same date that Martens was at the 
White House, obtained his White House pass, assigned to report 
to Harry Thomason. On this same day, Cornelius called upon 
World Wide Travel Agency to send staff to Washington. By the 
time Watkins was assigned this agenda item, the outcome of the 
Travel Office had already been decided by higher ups. He only 
had to determine the means; the ends were set. Mr. Watkins only 
executed the directives from above.
    White House officials preposterously claimed that 
Thomason's efforts in obtaining Travel Office business and 
Government contracts for TRM were unrelated. They clearly were 
contemporaneous and overlapping as part of a larger effort to 
benefit from ``Washington opportunities'' for TRM. Mr. Thomason 
sought to take full advantage of the access that Thomason 
enjoyed with President Clinton and Mrs. Clinton.
    Mr. Thomason's business interests, ``advice'' and 
``staging'' all complemented each other. The good story of the 
Travel Office clean-up was just another ``image project'' to 
get better press for President Clinton and business for TRM. In 
order to accelerate his plans, Thomason and Martens made what 
turned out to be totally baseless allegations against the 
Travel Office employees and UltrAir. Even the Justice 
Department found no basis for kickbacks or bribery allegations.
    In contrast, the Justice Department did dismiss the 
criminal charges against Thomason and Martens after a tortured 
reading of the documents.\280\ Moreover, it took considerable 
gullibility to buy into the ``we lied to our memos'' theory 
Martens presented concerning his memos. Given that DOJ's Public 
Integrity Division never sought these documents until after 
this committee obtained them, the actions of Harry Thomason and 
Darnell Martens deserve additional scrutiny by the Independent 
Counsel. The committee has compiled a far more extensive record 
of documentation that addresses a wider array of issues 
pertaining to Harry Thomason and Darnell Martens.
---------------------------------------------------------------------------
    \280\ See memorandum from Lee Radek to Stuart Goldberg, January 11, 
1996, ``Subject:'' Recommendation to Decline: Harry Thomason and 
Darnell Martens. AX 500000-500023.
---------------------------------------------------------------------------

 B. Catherine Cornelius pursued her interest in taking over the Travel 
 Office from the very first days of the transition and into the early 
  days of the administration, proposing herself as co-director of the 
                                 office

    The firings were long a glimmer in the eye of Catherine 
Cornelius, who wanted to run the Travel Office herself. Ms. 
Cornelius had a relationship with Eller, who also pushed for 
the firings as early as December 1992 when he told reporters 
there may be changes in the office. During the campaign, 
Cornelius handled travel matters along with World Wide Travel 
and wanted to continue that role when she joined the White 
House.
    During the transition, Cornelius met with Betta Carney and 
Steve Davison of World Wide Travel and made suggestions to 
Watkins for reorganizing the Travel Office. On December 2, 
1992, Betta Carney wrote a letter to Cornelius expressing 
interest in the White House Travel Office business.\281\
---------------------------------------------------------------------------
    \281\ CGE 7918.
---------------------------------------------------------------------------
    In late December, Cornelius began to prepare several memos 
detailing her plan to take over the Travel Office. On December 
31, 1992, she sent a memorandum to Watkins and Barbara Yates 
\282\ outlining the functions of the White House Travel Office. 
Cornelius claimed in her memo that the Clinton-Gore 
administration ``has a unique and unprecedented opportunity to 
establish a comprehensive Travel Management Program for the 
White House.'' \283\ In her summary conclusions, Cornelius 
outlines the advantages to her plan which include the 
elimination of five staff positions from the payroll, replacing 
those positions with those of an ``out sourced agency.'' \284\
---------------------------------------------------------------------------
    \282\ Ms. Yates worked as a financial consultant at Baird, Kurtz, 
and Dobson, the financial consulting firm for the Clinton-Gore 
Campaign.
    \283\ Memorandum from Cornelius to Watkins and Yates, December 31, 
1992, Watkins document production, Bates Stamp No. JML 2551.
    \284\ Id.
---------------------------------------------------------------------------
    A follow-up memo to Watkins expands on the existing 
structure of the office.\285\ On the first day of the new 
administration, people 
began calling the Travel Office asking for Cornelius, ``the new 
head of the White House Travel Office.'' \286\ Catherine 
Cornelius herself says she was open about her ambition to run 
the Travel Office.
---------------------------------------------------------------------------
    \285\ Memorandum from Cornelius to Watkins, January 26, 1993, 
Watkins document production, Bates Stamp No. JML 2558.
    \286\ Testimony of John McSweeney before the Committee on 
Government Reform and Oversight, January 24, 1996.
---------------------------------------------------------------------------
    Ms. Cornelius took the job at the White House with Watkins 
with the promise of a better position with a better salary. Ms. 
Cornelius hoped that position to be the co-director of the 
Travel Office. Her desire to be the co-director had been made 
clear to Watkins in her February 15, 1993 memo designating 
herself in that position.\287\ It was particularly 
inappropriate for Cornelius to pursue an investigation of an 
office in which she hoped to assume the position of director. 
Yet that is exactly what happened. Despite her apparent 
conflict of interest, Kennedy put her in front of the FBI 
agents to describe a basis for a criminal investigation of the 
Travel Office employees.
---------------------------------------------------------------------------
    \287\ See WHMR, exhibit F.
---------------------------------------------------------------------------
    After several months in Watkins' office, Cornelius was 
moved over to the Travel Office in early April 1993. She was 
officially tasked to handle the staff travel for White House 
employees including Health Care Task Force travel arrangements.
    On April 16, 1993, Harry Thomason called Watkins to discuss 
a number of items including the Travel Office.\288\ Mr. 
Watkins' notes of this conversation refer to the Travel Office 
and ``charter press . . . be taking kick-backs . . . ask for 5% 
kickbacks.'' \289\ The White House Management Review remarked 
that Thomason phoned Watkins in April to pass on ``allegations 
about corruption in the Travel Office.'' \290\
---------------------------------------------------------------------------
    \288\ Watkins contemporaneous notes of April 16, 1993, CGE 29184. 
These notes also reflect a discussion with Thomason about the Secret 
Service. A Secret Service agent named Bob Coy is reflected in the notes 
as well as some references to agents talking to Bob Woodward and a 
reference to someone named ``George Stewart.'' The committee has 
learned that George Stewart is a private investigator from the Little 
Rock, AR area. It was reported that he was contracted by the White 
House early in the administration to do undisclosed investigative work.
    \289\ Handwritten notes of David Watkins, CGE 029184.
    \290\ WHMR, p. 6.
---------------------------------------------------------------------------
    Mr. Watkins' notes of April 16, 1993, also reference a 
conversation Thomason had with Bruce Lindsey. Mr. Thomason's 
phone records show a call from Thomason's Hollywood studio to 
Lindsey the day before.
    Two days later, Watkins called Cornelius into his office to 
tell that there may be some wrongdoing in the Travel Office. 
Cornelius told DOJ Public Integrity investigators in 1993, and 
the committee in 1996, that Watkins read from a notebook as he 
described the allegations against the Travel Office employees: 
``Those guy are a bunch of crooks. They have been on the take 
for years.'' \291\
---------------------------------------------------------------------------
    \291\ Public Integrity 302 interview of Cornelius, September 19, 
1994; Cornelius deposition, p. 70.
---------------------------------------------------------------------------
    Ms. Cornelius had not observed any wrongdoing at this 
point, however, once the thought was planted in her mind, she 
started to watch over the Travel Office employees with a new 
perspective.\292\ Mr. Watkins told her to keep her ``eyes and 
ears open.'' \293\
---------------------------------------------------------------------------
    \292\ Ms. Cornelius was a 24-year-old, recent college graduate 
working in her first job.
    \293\ Cornelius deposition, p. 70.
---------------------------------------------------------------------------
    Ms. Cornelius began copying receipts and records from the 
Travel Office and removing documents to review. One evening in 
April, she carried documents to Watkins office for his 
review.\294\ In the process of copying and removing documents, 
Cornelius jammed a check in the copier which was later found by 
one of the Travel Office employees. Cornelius also took 
documents home with her, a fact known by Watkins and later by 
Kennedy and Foster. No one raised any concerns about her 
removal of these Presidential records.\295\
---------------------------------------------------------------------------
    \294\ Public Integrity 302 interview of Catherine Cornelius, June 
9, 1993.
    \295\ The White House Records Management employees became very 
concerned after the firings when they learned there was no control over 
the documents, and that Cornelius had asked for boxes. Lee Johnson, the 
Deputy Director of Records Management, wrote a memo to Staff Secretary 
John Podesta on May 21, 1993 expressing concern over the handling of 
White House Travel Office records. CGE 7763.
---------------------------------------------------------------------------
    In the course of her time in the Travel Office, Cornelius 
reported to Watkins that she thought the Travel Office 
employees lived beyond their means. Cornelius offered examples 
of this high-lifestyle to include vacation time in Europe, 
ownership of a race horse and Billy Dale's lake home in 
Virginia.\296\
---------------------------------------------------------------------------
    \296\ Mr. Dale's lake home held a mortgage of less than $100,000. 
Mr. Dale had lived in his home in Maryland for over 30 years and his 
mortgage was paid.
---------------------------------------------------------------------------
    When Harry Thomason arrived in Washington on May 10, 1993, 
Cornelius met with him and the two swapped stories about what 
they thought would merit ``a good story'' about the Travel 
Office employees. Mr. Thomason told Cornelius of his 
allegations that the employees were seeking ``kickbacks'' from 
Miami Air. The committee now has evidence that Thomason 
repeated these allegations to Mrs. Clinton, Foster, Kennedy, 
Lindsey, Patsy Thomasson and numerous others at the White 
House.\297\
---------------------------------------------------------------------------
    \297\ This evidence is derived from their testimony as well as 
Foster's Travel Office notebook.
---------------------------------------------------------------------------
    By May 12, 1993, Thomason and Martens planned to bring 
Penny Sample of Air Advantage into the White House and the 
firings were on the way. The recommendations set forth in the 
TRM memos and in Catherine Cornelius' memos came to fruition 
throughout the rest of the month.\298\
---------------------------------------------------------------------------
    \298\ See supra discussion of May 10-May 27, 1993.
---------------------------------------------------------------------------

   C. Darnell Martens gives the nod to his campaign benefactor Penny 
                        Sample of Air Advantage

    Air Advantage, whose president was Penny Sample, served as 
the Clinton-Gore campaign's charter broker. Mr. Martens knew 
her through the billing and consulting work that he did with 
Air Advantage during the campaign. Mr. Martens testified that 
after the election he wanted to assist or refer Air Advantage 
and other campaign charter carriers in obtaining White House 
press charter business. Even Martens recognized the goodwill, 
if not financial benefits, that would flow from his help to 
provide these companies with White House access.
    In a May 23, 1993, Los Angeles Times article, Harry 
Thomason claimed that ``Darnell Martens had contacted White 
House Travel Office Director Dale in February to find out how 
nine airline charter companies that supplied planes for the 
Clinton campaign could bid for the White House business.'' 
\299\
---------------------------------------------------------------------------
    \299\ David Lauter and John M. Broder, Clinton Friend Defends Role 
in Travel Flap, Los Angeles Times, May 23, 1993.
---------------------------------------------------------------------------
    Mr. Martens enlisted Sample's assistance to provide 
information on the background of the White House Travel Office 
and the charter airline they used. Ms. Sample began gathering 
information for Martens' memorandum. She called Airline of the 
Americas and reported back to Martens the number of airplanes 
and where they were located.\300\ She provided background 
information on the White House Travel Office's contractual 
arrangements with Pan Am and Airline of the Americas for press 
travel charters.\301\ Mr. Martens testified that Penny Sample 
``knows a lot about everybody.'' He added ``that's her job.'' 
\302\ In return for her undercover work, Martens called Sample 
to come to the White House to take over the charter business 
after the firings.
---------------------------------------------------------------------------
    \300\ Martens deposition, p. 73.
    \301\ Id., p. 68.
    \302\ Martens deposition, p. 73.
---------------------------------------------------------------------------

 D. Arkansas travel agency World Wide Travel provided services during 
 the campaign, obtained the DNC contract in November 1992, and sought 
                   White House Travel Office business

    World Wide Travel played a critical role in the 1992 
Clinton Presidential campaign. In particular, the Washington 
Times reported that Watkins credited World Wide with:

          setting up cash management practices that obtained 
        advance payments from traveling journalists. This freed 
        campaign money for advertising in such key states as 
        Michigan and Illinois.

Mr. Watkins stated that World Wide's billing arrangement with 
the Clinton campaign, ``allowed us to win key primaries, to 
have money that otherwise would be tied up in accounts 
receivable to put in advertising.'' \303\ Travel Weekly 
explained that:
---------------------------------------------------------------------------
    \303\ ``Travel agency in loop; Helped Clinton before election,'' by 
Frank J. Murray, the Washington Times, May 21, 1993.

          This was achieved by requiring them to pay by credit 
        card whereby the agency issues ghost American Express 
        cards to those travelers who, for whatever reason, do 
        not carry plastic. Representatives of the press and the 
        Secret Service also were required to sign a manifest 
        each time they boarded a plane chartered by the 
        campaign. The agency billed immediately and collected 
        payment within 48 hours. . . . Because of the quick 
        turn around, the Clinton campaign was then able to 
        spend the freed-up funds on advertising efforts in key 
        primary states, such as Michigan and Illinois.\304\
---------------------------------------------------------------------------
    \304\ ``Clinton Camp Credits Agency for Governor's Primary Wins,'' 
by Fran Golden, Travel Weekly, September 10, 1992.

    Ironically, World Wide's aggressive billing led the White 
House press corps to challenge Stephanopoulos' May 20, 1993, 
---------------------------------------------------------------------------
contention that World Wide would save the press corps money:

          George, speaking of sloppy record-keeping, I don't 
        know anyone on the campaign plane who ever got a 
        detailed accounting of the charges. I think most of us 
        just got a charge on our American Express bill saying, 
        `signature on file,' and had to then call up and hound 
        World Wide Travel to get some sort of detailed bill. I 
        mean, did you look into their accounting procedures at 
        all before you selected them as an interim travel 
        agency? \305\
---------------------------------------------------------------------------
    \305\ White House press conference, May 20, 1993.

    Ms. Cornelius called World Wide Travel to come to 
Washington on May 12, 1993, asking them to be prepared to come 
to the White House at any time. On May 19, 1993, after being 
fired by Watkins, the Travel Office employees returned to their 
office to find at their desks World Wide Travel agents.
    World Wide soon realized that Cornelius had not arranged 
the ``emergency contract'' authorizing them to be in the White 
House. Nor was the bad press following the firings doing 
anything for its reputation. After 2 days in the White House, 
on Friday, May 19, Steve Davison told Watkins that World Wide 
was leaving.\306\ They finally agreed to remain through the day 
and leave the following Monday when American Express was 
brought in to assume the duties of the fired Travel Office 
employees.
---------------------------------------------------------------------------
    \306\ WHMR interview of Steve Davison, CGEPR 174.
---------------------------------------------------------------------------
    When the ``plan began to unravel,'' Watkins, Thomasson, and 
Foucart begged World Wide Travel to stay. Special Assistant to 
the President Patsy Thomasson told World Wide ``we'll give you 
anything you want.'' \307\ World Wide Travel later told White 
House investigators that ``what I needed was the seven 
people.'' \308\ However, the fired Travel Office employees were 
carted out of the White House in a windowless van. The White 
House press offensive to discredit them was well underway.
---------------------------------------------------------------------------
    \307\ Id.
    \308\ Id. Mr. Davison had worked with Watkins and Cornelius during 
the campaign and thought Watkins had placed her in the Travel Office 
``because he wanted to get rid of her.'' He told investigators that 
Cornelius ``portrayed herself as bosom buddy of BC [Bill Clinton],'' 
but that she ``didn't have a clue'' as to running a travel operation. 
WHMR interview notes of Steve Davison, June 5, 1996, CGE 0174-0203.
---------------------------------------------------------------------------
    Mr. Davison explained to investigators that ``no one gave 
any forethought as to what would happen when the seven [Travel 
Office employees] left.'' World Wide Travel said that ``we felt 
betrayed beyond belief.'' \309\ World Wide Travel left the 
White House within 2 days of their arrival.
---------------------------------------------------------------------------
    \309\ CGEPR 200.
---------------------------------------------------------------------------

                             E. Conclusion

    Harry Thomason, assisted by Mrs. Clinton was at the center 
of events leading to the firings of the Travel Office 
employees. Early on in the administration, Thomason had told 
Mrs. Clinton and the President about the alleged problems, and 
by May his rumors of wrongdoing had spread.
    The White House consistently maintained that the firings of 
the Travel Office employees were due to mismanagement evidenced 
by a Peat Marwick audit. There was no audit. The firings were 
initiated long before Peat Marwick was called, and before 
anyone in the Clinton administration met the Travel Office 
employees. Furthermore, as the GAO report noted, if there was 
mismanagement in the Travel Office, it was the responsibility 
of David Watkins and Patsy Thomasson to handle.\310\ GAO found 
serious management deficiencies in the way Watkins and 
Thomasson managed the Travel Office, and in the course of their 
GAO interviews, it became apparent that they had little working 
knowledge of basic Government management regulations.\311\
---------------------------------------------------------------------------
    \310\ See GAO Report on the White House Travel Office Operations, 
May 2, 1994.
    \311\ David Watkins GAO interview, December 9, 1993.
---------------------------------------------------------------------------
    The firings were discussed in December 1992, a full month 
before the new administration took office. Mr. Eller told the 
press in December 1992, that there might be changes in the 
Travel Office. The firings were decided upon in order to 
advance the personal agendas of Presidential friends and 
family, long before any wrongdoing or mismanagement was 
alleged. It is clear from the volume of documents and testimony 
that the committee has obtained that the decision to fire the 
employees was made first--in order to push the interests of 
Clinton friends and family--and the rationale came later.

V. Harry Thomason Pursued Opportunities in Government Contracts Through 
  his Relationship With the President Which Would Have Resulted in a 
                Financial Benefit to him and his Company

    While Harry Thomason was spreading rumors of wrongdoing in 
the Travel Office, he and Martens were seeking other Government 
business, including a quarter of a million dollar Government 
contract. The January 29, 1993, memo discussed above was a 
laundry list of ``Washington opportunities'' for TRM.\312\ One 
of the ``opportunities'' Martens sought for his and Thomason's 
company was a consulting project to review ``the operational 
and fiscal soundness of all federal non-military aircraft.''
---------------------------------------------------------------------------
    \312\ Memo from Darnell Martens to Harry Thomason, January 29, 
1993, Re: TRM Action Memo.
---------------------------------------------------------------------------
    On February 10, 1993, Martens was surprised to hear 
President Clinton discuss the idea on television because he had 
not yet had a chance to formally put something together on the 
topic:

          Question. Okay. In the memo, you talk about the fact 
        that the President had stated in a Cabinet meeting that 
        his staff had informed him that there were savings to 
        be had in the review of government aircraft.
          Answer. Yes.
          Question. Did you actually see that on CNN?
          Answer. Yeah. I was in a hotel room getting dressed 
        in the morning and saw it.
          Question. Did Harry give you any information or did 
        you receive any information that the President was 
        going to bring up basically your project in a Cabinet 
        meeting?
          Answer. No, because it's--I was amazed. In fact, I 
        was stunned. That's why I put it in here. Because it's 
        opposite--I hadn't put it in a memo yet, and to my 
        knowledge Harry hadn't been back to see him so--because 
        that was the purpose of putting this memo together, so 
        Harry would understand what I was talking about, and 
        then he said he would mention it to him if he had a 
        chance.\313\
---------------------------------------------------------------------------
    \313\ Martens deposition, pp. 87-88.

    Mr. Martens put together the February 11, 1993, memo. While 
Thomason has portrayed this as something Martens was pushing, 
it was Thomason who had the access to brief the President. In 
the February 11 memo, Martens said, ``Put me in front of the 
right person at the White House and I will prove the value of 
both the project and Thomason's capabilities.'' \314\
---------------------------------------------------------------------------
    \314\ Confidential memo to Harry Thomason from Darnell Martens, Re: 
White House Inventory of the Federal Aircraft Fleet, CGE 2223.
---------------------------------------------------------------------------
    Mr. Martens explained:

          We've demonstrated our capabilities to the President 
        by coordinating all aircraft activities for the Clinton 
        For President Committee, the Clinton/Gore '92 Committee 
        and the Clinton/Gore Transition Team. . . . Harry, I 
        can state without qualification that TRM is uniquely 
        qualified to conduct this study.

Again, Martens viewed these contracts, as he had the Travel 
Office business, as a reward for good service to the Clinton-
Gore campaign. There are no written documents from Thomason 
disabusing him of that notion and certainly Thomason's actions 
on behalf of TRM kept Martens encouraged.
    The February 11 memo was forwarded to McLarty, Gearan and 
Watkins, with a note indicating that the President had reviewed 
the material and forwarded it to them for ``Action.'' Written 
on the memo was a note for McLarty from the President: ``Mack--
These guys are sharp--shd [should] discuss w/Panetta/Lader.'' 
Staff Secretary Podesta could provide no information as to what 
``Action'' the President intended be taken on this memo.
    Mr. Podesta first became aware of the memo when it showed 
up in the President's ``out box.'' \315\ As Staff Secretary, 
Podesta was responsible for the daily flow of paperwork in and 
out of President Clinton's office. Mr. Podesta had never seen 
the February 11 memo go into the President's office but he did 
see it coming out.\316\ Mr. Thomason spent the night in the 
White House residence on February 16, 1993, and even bowled 
that evening with the President. While Thomason distinctly 
remembers beating the President at bowling that evening, he has 
``no recollection'' of giving the President the February 11, 
memo soliciting the GSA contract for his company TRM.\317\ 
Since Martens later refers to this in an April memo and 
mentions that Thomason discussed it with the President, it is 
clear Thomason did give the President the memo.\318\
---------------------------------------------------------------------------
    \315\ Podesta deposition, p. 54.
    \316\ Podesta deposition, p. 54.
    \317\ Thomason deposition, pp. 118, 122.
    \318\ Darnell Martens sends Bruce Lindsey a cover note on April 6, 
1993 forwarding his February 11, 1993 memo describing it as a memo 
``which was presented and discussed with the President in mid-
February.'' CGE 002227.
---------------------------------------------------------------------------
    On March 12, 1993, Martens sent Thomason another memo about 
the proposed Federal aircraft study and refers to a discussion 
Thomason had with the President about the February 11, 1993 
memo: ``Based on your discussion with President Clinton of my 
2/11/93 memo, I began the process of obtaining specific 
information.'' \319\ This memo provides an overview of the 
proposed project.
---------------------------------------------------------------------------
    \319\ Intercompany memorandum from Darnell Martens, president to 
Harry Thomason, chairman, Re: Federal Aircraft Management Information 
System (FAMIS), on TRM, Inc. stationery, March 12, 1993, CGE 002224.
---------------------------------------------------------------------------
    By April 1993, Thomason had put Martens in touch with Bruce 
Lindsey who took care of aviation matters in the White 
House,\320\ although his official position at that time was 
head of Presidential personnel. On April 6, 1993 Martens faxed 
Lindsey his February 11 memo, detailing a ``follow-up memo to 
Harry's meeting with the President.'' The memo discussed the 
cooperation of ICAP [Interagency Committee on Aviation Policy] 
and a work summary estimating a 1-year timeframe for the 
project and the estimated costs. The cover letter again noted 
TRM's ``loyalty to the Administration.'' \321\
---------------------------------------------------------------------------
    \320\ Lindsey deposition, p. 30.
    \321\ CGE 002227.
---------------------------------------------------------------------------
    The following day Martens met with Lindsey to discuss the 
project. He sent Lindsey a follow-up memo on April 12, 1993 
``recommending that the Office of the President initiate an 
operational and financial audit of all non-military Federal 
aircraft.'' He wanted to do this by working with ICAP and GSA 
participation, but it was clear that the project was to be 
White House based. Martens recommended an Executive order to 
get the project moving.
    By April 26, 1993, Martens sent a note to Lindsey to see if 
any action had been taken and reminded Lindsey that Thomason 
would be in the White House that coming Friday and Saturday. He 
wanted to see if Thomason could follow up with Lindsey at that 
time. Martens sent Lindsey another summary of the proposed 
audit on April 29, 1993.
    Lindsey claims that throughout this time, he had no idea 
that TRM had any connection with Thomason.\322\ This is not 
credible given that the meetings were initiated by Thomason and 
that some of the memos sent to Lindsey had a letterhead which 
read, ``Harry Thomason & Associates.''
---------------------------------------------------------------------------
    \322\ Id., p. 39.
---------------------------------------------------------------------------
    Clearly, as with the Travel Office business TRM sought, 
Thomason and Martens were capitalizing on Thomason's access to 
the White House. The GSA/ICAP contract was being designed so 
that Martens could officially work at the White House, thus 
explaining why he was issued a pass on May 12, 1993, upon 
arriving at the White House. While at the White House, Martens 
would also be able to provide assistance as needed in the new 
Travel Office. Mr. Thomason had already begun work on various 
projects at the White House. These included projects such as 
how to use excess Presidential inaugural funds for paying extra 
White House staff, and the staff cuts issue in addition to his 
``staging'' duties at the White House.
    Mr. Thomason had a financial interest in White House 
business. Despite his protestations that he was too rich to 
care about any of this business, he was maximizing his 
connections to keep his fledgling aircraft business and Martens 
afloat. It is significant that Podesta was aware of Thomason's 
efforts from the first day he was tasked with the Management 
Review. Despite the fact that the review addressed 
``conflicts'' and ``appearances of impropriety,'' the White 
House totally ignored Mr. Thomason's conflicts.
    Furthermore, this project was not eliminated once the 
Travel Office firings occurred. It was not until sometime in 
August 1993, that then-Deputy Chief of Staff Roy Neel wrote 
current Chief of Staff and then-OMB Chief Leon Panetta a memo 
saying that no action should be taken on the project.\323\ By 
this time, the Justice Department's criminal investigation on 
Harry Thomason's possible conflicts of interest was underway 
and no doubt, a second conflict had to be put to bed. Was 
Foster aware about this second looming conflict?
---------------------------------------------------------------------------
    \323\ Memorandum for Leon Panetta from Roy Neel, August 25, 1993. 
CGE 017597.
---------------------------------------------------------------------------

      VI. Employment Status of Selected Advisors to the President

    One of the Federal personnel regulations to which every 
White House is expected to comply is the ``Special Government 
Employee laws.'' \324\ The committee's investigation has 
revealed a general lack of attention that all executive branch 
agencies in the Clinton administration paid to the status of 
their advisors and volunteers. This is especially true of a 
White House which President Clinton pledged would be the most 
ethical ever.
---------------------------------------------------------------------------
    \324\ The category of a ``special Government employee'' was 
established by P.L. 97-849 (1962), to facilitate recruiting persons 
with specialized knowledge and skills to serve Government without 
applying the full range of conflict of interest laws that apply to 
regular Government employees. See, S. Rept. No. 2213, 87th Cong., 2d 
Sess. (1962), reprinted at 1962 U.S. Code Cong. & Ad. News 3852-3853.
---------------------------------------------------------------------------

                 A. Special Government employee defined

    The United States Code defines a special Government 
employee (SGE) as a person who is ``. . . retained, designated, 
appointed, or employed to perform, with or without 
compensation, for not to exceed 130 days during any period of 
365 consecutive days. . . .'' \325\ If the period of employment 
exceeds 130 days during any period of 365 consecutive days, 
that individual should be considered a regular Government 
employee, with or without compensation.
---------------------------------------------------------------------------
    \325\ 18 U.S.C. 202(a).
---------------------------------------------------------------------------
    The law is clear that a person who performs work as a 
Federal employee cannot evade the conflicts laws simply by 
avoiding formal appointment to office.\326\ Thus, a consultant 
or advisor who is not a regular Government employee may be a 
special Government employee for purposes of the conflicts of 
interest laws.
---------------------------------------------------------------------------
    \326\ White House ethics counsel came to this conclusion when 
reviewing the activities of Harry Thomason. See CGE 43349.
---------------------------------------------------------------------------
    While regular and special Government employees are treated 
the same under the conflict-of-interest requirements of Title 
18 U.S. Code Sections 204, 207, 208, and 209, they are treated 
differently in the conflict-of-interest provisions included in 
Sections 203 and 205.\327\ Section 216 of Title 18 sets out the 
criminal penalties for willful and non-willful violations of 18 
U.S.C. Sections 203, 204, 205, 207, 208, or 209. Section 216 
also provides the Attorney General with the option to bring a 
civil action for damages or seek an injunction against a person 
who engages in conduct constituting offenses under the 
conflict-of-interest provisions.
---------------------------------------------------------------------------
    \327\ As will be discussed later, these sections restrict regular 
Government employees from representing anyone except the Government 
before a court or Government agency in a particular matter in which the 
United States is a party. However, this only applies in relation to a 
covered matter involving a specific party or parties in which the 
Government employees at anytime have participated personally and 
substantially for the Government, or which is pending in the department 
or agency in which the special Government employees are serving. The 
restriction on representation on any pending matter does not apply to 
special Government employees who have served in a department or agency 
for not more than 60 days of the last 365 consecutive days.
---------------------------------------------------------------------------
    Section 211 of Title 18 prohibits any SGE from improper use 
of title or position. This prohibits the use of a SGE's 
influence in return for money or any thing of value. Government 
employees also must comply with the Standards of Conduct 
regulations for all executive branch employees including 
regulation of gifts, disclosure of non-public information, use 
of official property for unofficial purposes, and outside 
activity that conflicts with Government duties.

 B. An individual may undertake certain activities that qualify for a 
     special Government employee status Without Formal Appointment

    The Justice Department's Office of Legal Counsel issued an 
opinion concerning the status of advisors to the President and 
whether their act of providing advice to the President 
qualifies them as a SGE is found in an opinion of the Justice 
Department's Office of Legal Counsel.\328\ The Office of Legal 
Counsel found that although ``the term `employee' is not 
defined in the conflict-of-interest laws, it was no doubt 
intended to contemplate an employer-employee relationship as 
that term is understood in other areas of the law.''
---------------------------------------------------------------------------
    \328\ ``Conflict of Interest-Status of an Informal Presidential 
Advisor as a `Special Government Employee' '', 1977 OLC Lexis 9; 1 Op. 
O.L.C. 20, February 24, 1977. See also, OGE Op. 82x22.
---------------------------------------------------------------------------
    Beyond the definition of SGE, discussed above, Title 5 of 
the United States Code identifies several criteria to determine 
whether a person is an ``officer'' or ``employee'' of the 
United States.\329\ As a matter of first principles, an 
individual obviously is an officer or employee if ``properly 
appointed.'' The first SGE requirement, however, only requires 
that the individual be ``retained, designated, appointed, or 
employed.'' There are two other criteria whereby an individual 
may become an officer or employee, when that individual has not 
been formally appointed. If the person:
---------------------------------------------------------------------------
    \329\ 5 U.S.C. Sections 2104, 2105.
---------------------------------------------------------------------------
          --is engaged in the performance of a Federal function 
        under authority of law; and
          --is subject to the supervision of a Federal officer 
        or employee.
    The Office of Legal Counsel, and supporting materials 
prepared by the Office of Government Ethics, stress that any 
determinations of an individual as a SGE must be performed on a 
case-by-case basis. A leading commentator on the subject, cited 
in the OLC opinion, is Professor Bayless Manning. He suggests 
several questions to be posed if the individual does not have a 
formal designation. He writes:

          Is the person's advice solicited frequently? Is it 
        sought by one official, who may be a personal friend, 
        or impersonally by a number of persons in a government 
        agency that needs expert counsel? Do meetings take 
        place during office hours? Are they conducted in the 
        government office, and does, perhaps, the adviser 
        maintain a desk or working materials in government 
        facilities?\330\
---------------------------------------------------------------------------
    \330\ See Bayless Manning, Federal Conflict of Interest Law, pp. 
29-30 (1964).

    It may be helpful to provide a few examples of when 
individuals are or are not considered SGEs based on the 
assistance they provide to the Federal Government.
          Example 1: A question has arisen as to whether Mr. A 
        should be regarded as an SGE for purposes of the 
        Federal conflict-of-interest laws. Generally, Mr. A 
        advises the President almost daily, principally on an 
        informal basis. This essentially personal relationship 
        would not in itself result in Mr. A's being a SGE.
          Example 2: Mr. A, from the example above, departs 
        from his usual role of an informal adviser to the 
        President in connection with his recent work on a 
        current social issue. Mr. A has called and chaired a 
        number of meetings that were attended by employees of 
        various agencies, in relation to this work, and he has 
        assumed considerable responsibility for coordinating 
        the administration's activities in that particular 
        area. Mr. A clearly is engaging in a governmental 
        function when he performs these duties, and he 
        presumably is working under the direction or 
        supervision of the President. For this reason, Mr. A 
        should be designated an SGE for purposes of this 
        work.\331\
---------------------------------------------------------------------------
    \331\ See 1977 (Counsel-Inf. Op.) 1 Op.O.L.C. 20.
---------------------------------------------------------------------------
          Example 3: An expert in policy analysis was used as a 
        consultant by staff of the Office of Management and 
        Budget. Although he took no oath of office, had no 
        tenure and received no salary, he is still an SGE due 
        to the nature of his relationship with individual 
        members of the OMB staff.\332\
---------------------------------------------------------------------------
    \332\ See United States v. Mississippi Valley Generating Co., 364 
U.S. 520, 552 (1961).
---------------------------------------------------------------------------
          Example 4: The First Lady of the United States is not 
        an SGE however frequently she might advise the 
        President or make policy recommendations.

              C. Treatment of SGEs in the executive branch

    Once a person is deemed to be an SGE, he is subject to the 
criminal conflict of interest provisions included in Title 18 
of the United States Code and must file periodic financial 
disclosure forms as well.
    The term ``special Government employee,'' as defined in 
Section 202(a), is used in sections 203, 205, 207, 208, and 209 
of Title 18. A January 28, 1963, memorandum from the Attorney 
General highlighted the similarities and differences among 
conflict-of-interest statute applications to regular and 
special Government employees under these statutes.\333\ Special 
and regular Government employees are treated similarly in 
sections 207 and 208 of Title 18 of the U.S. Code.
---------------------------------------------------------------------------
    \333\ See 18 U.S.C. Sec. 201 nt., for a reprint of this memorandum.
---------------------------------------------------------------------------
    Section 205 prohibits a Federal employee from personally 
representing another before a Federal agency, with or without 
compensation. Specifically, Section 205 prohibits a Federal 
employee from acting as ``agent or attorney'' for anyone before 
any Federal agency in connection with any particular matter in 
which the United States is a party or has a direct and 
substantial interest.
    Section 207(a) restricts employees after leaving Government 
service from representing anyone other than the Government in 
connection with a particular matter:
          (1) in which the Government is a party or has an 
        interest,
          (2) in which he or she participated personally and 
        substantially, and
          (3) which involved a specific party or specific 
        parties at the time of the participation.\334\
---------------------------------------------------------------------------
    \334\ In section 207, the term ``participated'' means an action 
taken as an officer or employee through decision, approval, 
disapproval, recommendation, rending of advice, investigation, or other 
action.
---------------------------------------------------------------------------
    Section 207(c) places a 1 year restriction on senior level 
officers and employees from representing anyone other than the 
United States before his or her former department or agency 
after terminating Federal employment. This restriction does not 
apply to SGEs who serve less than 60 days in a 1-year period 
before terminating their employment.\335\
---------------------------------------------------------------------------
    \335\ At the request of an agency, the Director of the Office of 
Government Ethics may waive this prohibition if the Director determines 
that imposing it would create an undue hardship in obtaining qualified 
personnel and granting the waiver would not create the potential for 
gaining undue influence or unfair advantage.
---------------------------------------------------------------------------
    Section 207(d) applied the 1-year restriction discussed in 
207(c) to ``very senior'' personnel, i.e., the Vice President, 
officials at Executive Schedule levels I and II, and certain 
persons on Presidential and Vice Presidential staffs. Unlike 
those covered by subsection (c), officials covered by 
subsection (d) also may not undertake any representation before 
any Executive Schedule levels I through V person in any 
executive branch department or agency.
    Section 207(f) restricts any person subject to restrictions 
in subsections (c), (d), or (e), from representing a foreign 
entity before any department or agency or aiding or advising a 
foreign entity with the intent to influence a Federal 
Government decision within 1 year after terminating employment.
    Section 208 permanently restricts both special and regular 
Government employees, unless exempted, from participating 
personally and substantially in a governmental capacity in 
which they, their spouses, minor children, general partners, 
organization in which they serve as a director, trustee, 
general partner or employee, or any person or organization with 
whom they are negotiating or have an arrangement concerning 
prospective employment, have a financial interest. A person may 
act in a governmental capacity through such things as decision, 
approval, disapproval, recommendation, rendering advice, 
investigation, or otherwise, in a judicial or other proceeding 
application for request for ruling or other determination, 
contract, claim, controversy, charge or accusation.
    Exceptions may be granted in a number of circumstances. For 
example, an officer or employee may avoid this restriction if 
he or she first advises the appointing official of the nature 
and circumstances of the proceeding or other governmental 
action, and makes full disclosure of the financial interest and 
receives in advance a written determination by the appointing 
official that the interest is not so substantial as to affect 
the integrity of the services of the officer or employee.

1. Michael S. Berman's activities at the Clinton White House

    In many ways, the experience of Michael S. Berman is 
representative of the manner in which the Clinton 
administration views its obligations under Federal personnel 
laws. According to his deposition before the committee, Mr. 
Berman was adjudicated to be a special Government employee by 
the Department of Justice when he volunteered to assist in the 
Senate confirmation of Webster Hubbell.
    Mr. Berman testified that the ``appropriate ethics office'' 
at the Department of Justice determined that to perform these 
duties, Mr. Berman would have to be classified as an SGE and 
comply with all of the conflicts of interest laws when it came 
to representing his clients before the Justice Department. Mr. 
Berman complied,\336\ and while he did not file a financial 
disclosure statement, he did understand that:
---------------------------------------------------------------------------
    \336\ Deposition of Michael Berman, p. 11.

          There was a requirement that I could not do any 
        business at the Department during the period of time, 
        and I didn't do any.\337\
---------------------------------------------------------------------------
    \337\ Id., p. 17.

    This attention to Federal law by the Clinton administration 
ended when Mr. Berman left the Department of Justice and became 
a volunteer at the White House. Again, according to his 
---------------------------------------------------------------------------
testimony before this committee:

          Question. Was there any prohibition placed on you 
        doing work at the White House while you were at the 
        Department of Justice?
          Answer. No.
          Question. Similarly, was there any prohibition placed 
        on your company generally at the White House?
          Answer. No.
          Question. During the period that you had the--were on 
        the access list, did you fill out any disclosure forms 
        or similar forms?
          Answer. No.
          Question. And was there any prohibition on you doing 
        other activities at the White House while you were on 
        the access list?
          Answer. No.\338\
---------------------------------------------------------------------------
    \338\ Id., pp. 17-18.

    While Berman was at the White House to assist in the 
Supreme Court nomination of Ruth Bader Ginsberg and advise on 
the Senate confirmation of Webster Hubbell, he also provided 
advice to numerous Clinton senior staff. It appears that he was 
performing many of the same duties at the White House as he had 
performed at the Department of Justice. This includes attending 
meetings, offering advise on management practices, drafting 
memos, issuing reports, etc. Naturally, he still was 
functioning as a special Government employee. The committee 
found no evidence that the Clinton White House, unlike the 
Department of Justice, ever bothered to inquire or evaluate his 
status.
    During Mr. Berman's deposition, he was asked:

          Question. Did anyone at the White House ever discuss 
        with you special government employee issues or status 
        of special government employees at the White House?
          Answer. No.\339\
---------------------------------------------------------------------------
    \339\ Id., p. 55.

    This lack of attention to statutory requirements is very 
troubling when repeated instances of such ethical lapses are 
uncovered. This issue is of particular importance because Mr. 
Berman admits to representing outside clients during his work 
at the White House. Mr. Berman testified to his numerous 
telephone calls to Bruce Lindsey concerning certain airline 
industry clients that he was representing.\340\ He testified:
---------------------------------------------------------------------------
    \340\ Mr. Berman testified that Bruce Lindsey handled issues 
relating to the airline industry for President Clinton.

          Answer. The White House has a role in deciding, along 
        with DOT--I represent United Airlines--as to whether or 
        not United Airlines will fly from Chicago to Heathrow, 
        or American Airlines will fly from Chicago to Heathrow. 
        And if there were a series of calls--some of them may 
        well have been social, but my guess is that--and I 
        don't know specifically, but there were some cases in 
        '95, and Bruce [Lindsey] is one of the people in the 
        White House that one contacts if you are interested in 
        aviation issues. That was part of his portfolio.
          Question. So this call would have been made in your 
        capacity as part of the Duberstein Group?
          Answer. Yes.\341\
---------------------------------------------------------------------------
    \341\ Id., pp. 85-86.

    Such representation of a private interest while also an 
employee of the Federal Government appears to collide with the 
restriction contained in Section 205, discussed above, which 
prohibits a Federal employee from acting as ``agent or 
attorney'' for anyone before any Federal agency in connection 
with any particular matter in which the United States is a 
party or has a direct and substantial interest. Obviously, if 
Berman was a special Government employee while in the White 
House, a review of his activities in relation to all of the 
conflicts of interest and standards of conduct regulations 
needs to be undertaken.

2. Activities of Harry Thomason and Darnell Martens

    Harry Thomason is a Hollywood television producer and 
personal friend of the President and First Lady. He was 
involved in a variety of aspects of the Clinton/Gore campaign 
from the primary season through the November 3, 1992 
election.\342\ After raising large amounts of money for the 
Clinton campaign, Mr. Thomason flew in from California to 
assist Mr. Clinton in the pivotal New Hampshire primary and 
produced the ``Man from Hope'' video for the 1992 Democratic 
Convention, among other things. Mozark Productions, the 
Hollywood production company owned by Harry Thomason and his 
wife, Linda Bloodworth-Thomason, became known as the 1992 
Clinton campaign's ``second campaign headquarters'' as a result 
of all the activities undertaken there on candidate Clinton's 
behalf. The Los Angeles Times reported,
---------------------------------------------------------------------------
    \342\ For more information on the activities of Harry Thomason 
while at the White House, see memorandum to Lee J. Radek, Chief, Public 
Integrity Section, Criminal Division, U.S. Department of Justice from 
Stuart M. Goldberg, Senior Litigation Counsel and Raymond N. Hulser, 
Trial Attorney, Public Integrity Section, Criminal Division, 
Recommendations to Decline: Harry Thomason and Darnell Martens, January 
11, 1996. See also, memorandum from Beth Nolan, Associate Counsel to 
the President, to Cliff Sloan, July 14, 1993.

          The Thomason's production company, Mozark, has become 
        known as the ``second campaign headquarters'' for 
        Clinton--and has become Hollywood's own little slice of 
        Arkansas. Clinton's brother, Roger, 35, who works as a 
        $500-a-week production assistant on ``Designing Women'' 
        and ``Hearts Afire'', and that each day the ``Clinton 
        Clipper,'' a collection of the day's articles and 
        headlines on the campaign, appears on the office fax 
        machine.\343\
---------------------------------------------------------------------------
    \343\ ``Designing Presidential Politics; Television: Behind the 
Scenes [With the Bloodworth-Thomason's],'' by Diane Haithman, Los 
Angeles Times, July 25, 1992.

    Mr. Martens was an executive with Executive Jet in 
Cincinnati, OH when he first met Thomason in the late 1980s. In 
November 1991, they incorporated Thomason, Richland & Martens, 
Inc. (TRM), an aviation consulting firm in Cincinnati. Mr. 
Thomason and Mr. Martens each were one-third partners in TRM 
along with Dan Richland, the Thomasons' Hollywood agent.
    In January 1992, Mr. Thomason introduced Mr. Martens to 
then-Governor and Mrs. Clinton at a campaign fundraiser 
luncheon in Los Angeles. He also suggested that Mr. Martens go 
to Little Rock to see if he could assist the Clinton campaign 
there. Mr. Martens did so and, for the duration of the 1992 
campaign, Martens assisted in the chartering of aircraft for 
the campaign. Martens reviewed charter contracts and rates, 
determined whether they were proper, checked certifications and 
so forth.
    While TRM never had a formal contract with the Clinton 
campaign, Martens charged a brokerage commission or a 
consulting fee for TRM's work, depending on the size of the 
charter. For corporate aircraft, Martens worked through 
Executive Jet. After interviewing several brokers for larger 
airplanes, he selected Air Advantage of Albuquerque. Through 
Air Advantage, he came to know, and work with, Penny Sample, 
Air Advantage's president. Ms. Sample's activities are 
discussed below.
    In March 1993, Thomason was asked to come to the White 
House and provide guidance on ways to better use the White 
House for public relations events and improve the President's 
image. An itinerary for a series of meetings at the White House 
was developed and Thomason was provided a White House pass.
    At the White House, Thomason was given access to a 
telephone and computer, as well as office space in the East 
Wing. He was even listed in a White House phone directory. Mr. 
Thomason received no compensation from the Government for his 
work at the White House. He was appointed to no Government 
position, had no title and took no oath of office.
    As was discussed in detail in the overview chapter, Mr. 
Thomason and his business partner Darnell Martens clearly were 
central players in events that led to the firings in the Travel 
Office. In fact, the chronology clearly evidences Mr. 
Thomason's involvement in nearly every aspect of the management 
of the White House during the early months of the Clinton 
administration.
    As early as February 1993, Mr. Thomason approached senior 
Clinton administration officials to discuss possibilities for 
his company to bid on lucrative aviation contracts with the 
Federal Government. Messrs. Thomason and Martens were seeking a 
several hundred thousand dollar sole source Government contract 
to perform a review of all civilian Government aircraft. They 
worked with Bruce Lindsey and communicated with the President 
about these activities in the spring of 1993.
    While working at the White House, Thomason told President 
Clinton about alleged problems at the White House Travel 
Office. Mr. Thomason subsequently spread Travel Office rumors 
to various staffers about alleged ``kickbacks'' solicited by 
Travel Office personnel. Mr. Thomason was involved in efforts 
to implement the so-called 25 percent personnel cuts at the 
White House. He authored ``The White House Project,'' and 
worked on management problems in the Correspondence Office. His 
duties clearly went beyond the scope of the imaging project.
    The White House Travel Office Management Review, the 
General Accounting Office review and the Department of Justice 
each concluded that Messrs. Thomason and Martens should not be 
considered special Government employees for the purposes of his 
dealing with the Travel Office matter and, as a result, were 
not required to abide by conflict-of-interest statutes. 
However, each of these reports relied upon the limited fact 
pattern found in the White House Management Review.
    The committee's investigation uncovered numerous documents 
which directly support the conclusion that Mr. Thomason 
fulfilled the requirements of an SGE. Moreover, Thomason 
appeared to be pursuing his personal financial business each 
day while he was at the White House in violation of the 
conflict of interest statutes. Throughout the 3 years of 
investigation, we have seen the elaborate steps taken by White 
House counsel to hide pieces of this material from other 
legitimate investigative bodies.
    On January 11, 1996, the Department of Justice determined 
that neither Harry Thomason nor Darnell Martens were subject to 
the provisions of 18 U.S.C. Sections 208 or 208 and, therefore, 
should not be prosecuted.\344\ Due to the narrow interpretation 
the Justice Department reads into the SGE statute, we believe 
its analysis was flawed for several reasons. After reviewing 
the law, which the committee also believes that it should be 
reviewed during the next Congress. The Justice Department's 
conclusions will be addressed individually here.
---------------------------------------------------------------------------
    \344\ Memorandum from Stuart M. Goldberg, Senior Litigation Counsel 
and Raymond N. Hulser, Trial Attorney, Public Integrity Section, 
Criminal Division, to Lee J. Radek, Chief, Public Integrity Section, 
Criminal Division, January 11, 1996.
---------------------------------------------------------------------------
            a. The Justice Department found that there is no evidence 
                    that Martens or Thomason had any formal status as a 
                    Government employee or special Government employee 
                    \345\
---------------------------------------------------------------------------
    \345\ Justice Department memorandum, p. 22.
---------------------------------------------------------------------------
    The Department points out that neither was appointed to a 
position, took an oath of office or received a title, that the 
personnel office did not keep a file on them, they did not seek 
a regular appointment, receive compensation, or hold themselves 
out to be a Government employee. It comes as no surprise that 
the Clinton White House did not require its volunteer workers 
to take an oath or otherwise review applicable statutes 
regarding the activities of Government volunteers. One thing 
that the American people have learned over the last several 
years is that this White House was hardly vigilant when it came 
to such details.
    Harry Thomason was asked, however, to assist in the White 
House by the President of the United States and regularly 
worked with numerous senior administration officials. He was 
given a White House pass and the paperwork submitted for his 
pass indicates he was to ``report'' to President Clinton. The 
frequent number of telephone calls and meetings with the 
President or Mrs. Clinton clearly demonstrates their 
supervisory nature. Finally, the receipt of compensation is not 
a requirement to become a Government employee.\346\ Beth 
Nolan's review of this section pointed out that a person cannot 
avoid being designated an SGE merely because there has not been 
a formal appointment.
---------------------------------------------------------------------------
    \346\ 364 U.S. p. 552.
---------------------------------------------------------------------------
            b. The Justice Department found that there is not 
                    sufficient evidence that either Thomason or Martens 
                    was a de facto Government employee or special 
                    Government employee or that they sought to avoid 
                    the formalities of Government office in an effort 
                    to skirt the conflict of interest laws \347\
---------------------------------------------------------------------------
    \347\ Id.
---------------------------------------------------------------------------
    Contrary to the Justice Department's findings, it would be 
difficult to imagine a more clear example of a de facto 
Government employee than Harry Thomason. He was asked by 
President Clinton to come into the White House to assist in 
developing a successful management structure at the White 
House, certainly a Government task. He received a ``hard pass'' 
for easy entry into the White House, which were hard to get for 
even regular White House employees. He had a telephone, desk, 
and office in the White House. Harry Thomason was even listed 
in the White House telephone directory.
    Furthermore, an ``intentional'' effort to skirt the 
conflict of interest laws would be informative when determining 
whether someone meets the definition of Government employee, 
but it would not be determinative. What is required, as 
discussed above, is an employer-employee relationship 
characterized by typical criteria.
            c. The Justice Department found that insufficient evidence 
                    exists that Thomason performed a Federal function 
                    or acted under the supervision of a Federal 
                    employee \348\
---------------------------------------------------------------------------
    \348\ Id.
---------------------------------------------------------------------------
    The Department's memo included a shocking footnote:

          Thomason might also argue that his imaging project, 
        which focused on communicating President Clinton's 
        message more effectively, was political campaign work, 
        rather than federal government work. In fact, the 
        proposal that Thomason prepared suggested the use of 
        inaugural funds for its implementation, rather than 
        government funds.\349\ (Emphasis Added).
---------------------------------------------------------------------------
    \349\ Id., p. 23. Footnote 36.

It is startling that the Department of Justice would argue that 
a private individual may have been performing campaign work out 
of the White House, using Federal Government resources such as 
computer equipment, telephones, etc., and then disregard the 
implications of that admission.
    The committee disagrees with the Department's suggestion, 
however, that the work of Thomason and Martens was campaign 
related, rather than governmental. Mr. Thomason's ``imaging 
project'' was similar to the type of work performed by press 
secretaries throughout the Clinton administration. In fact, a 
good portion of the current White House Counsel's Office 
devotes its resources toward improving the ``image'' of the 
President.
    Beyond the imaging project, however, Thomason additionally 
helped to reshape the entire management structure at the 
Clinton White House. The chronology provided in this report 
clearly demonstrates his involvement in numerous management 
issues, many far beyond the scope of Presidential imaging.
    Given that broad range of job duties, it stands to reason 
that Mr. Thomason would make recommendations on the efficiency 
and effectiveness of White House offices and that his changes 
would immediately be implemented. What is not allowed, however, 
is that he would base his recommendations in pursuit of his own 
financial interests.
            d. The Justice Department found that both men participated 
                    in some manner in the inquiry concerning the Travel 
                    Office--at minimum providing information relevant 
                    to the decisionmakers. It is not at all clear, 
                    however, that such participation would qualify as 
                    ``substantial'' under the statute \350\
---------------------------------------------------------------------------
    \350\ Id., p. 24.
---------------------------------------------------------------------------
    Given the lack of cooperation the Clinton White House 
provided to and was accepted by the Justice Department, one can 
quickly see how its analysis would conclude that the activities 
of Thomason and Martens were minimal. Facts uncovered by the 
committee, however, suggest just the opposite.
    A review of the chronology of events, provided earlier in 
this report, suggests that Harry Thomason in particular was 
involved in White House activities nearly every day, including 
numerous telephone calls to Government officials and private 
meetings with the President, Mrs. Clinton, and the Chief of 
Staff. Copies of official correspondence were routinely sent to 
Thomason as though he was a regular member of the White House 
staff, and meetings were scheduled to include Thomason at the 
White House. In the days leading up to the firing of the Travel 
Office workers, Thomason spent nearly all of his time in 
meetings or telephone calls discussing the operations of the 
Travel Office.
            e. The Justice Department found that Thomason and Martens 
                    clearly had no decisionmaking role \351\
---------------------------------------------------------------------------
    \351\ Id.
---------------------------------------------------------------------------
    Once again, the Department makes a conclusion which ignores 
the realities of Government service. Neither Thomason nor 
Martens were required to ``sign'' documents attesting to their 
decisionmaking role. But, given the fact that at least Thomason 
was introduced to the White House staff as a close friend and 
advisor to the President, who occasionally spent the night at 
the White House, their influence was surely felt. That 
influence should not, by itself, suggest that Thomason or 
Martens were Government employees, but in an analysis of the 
facts, it would be inappropriate and not very realistic to 
conclude that Thomason or Martens lacked a decisionmaking role.
    The committee also questions whether holding a 
decisionmaking role is a vital step to being considered a 
Government employee. Thousands of Government employees are 
hired to advise more senior officials on what decisions to 
make. Their services are sought for the quality and type of 
advice they provide, not the decisions they make.
            f. The Justice Department found that even if we could 
                    establish that they had some employment status, we 
                    would have difficulty establishing that the 
                    employment was connected with the Travel Office 
                    \352\
---------------------------------------------------------------------------
    \352\ Id.
---------------------------------------------------------------------------
    The Department echoes a view discussed in an analysis by 
the White House which suggests that an individual can be deemed 
a Government employee for some circumstances but not for 
others. In effect, according to this analysis, an individual 
can wear two hats. One moment, they can meet with a senior 
Government official to advise them on what steps that official 
should take to make the President ``look better'' in public 
functions. The next moment they advise that same Government 
official on how the Government should buy services offered by 
the advisor. The committee rejects that conclusion.
    When an individual gains special status by accepting a 
Government official's request for help, they should not try to 
use that privilege for profit. The committee refuses to accept 
the conclusion that the Congress, when drafting the Government 
employment statutes, meant to allow individuals to profit from 
the Government at a time when they held special authorities 
provided by the Government. The committee agrees that Congress 
should revisit the Government employment statutes to ensure 
that agencies abide by their obligations to determine when 
volunteers become Government employees. But the committee does 
not believe that current law should be read to allow volunteers 
to become profiteers.
    In a revealing inter-office memorandum, White House 
Associate Counsel Beth Nolan opined:

          When viewed as a whole, the facts revealed in the 
        [White House Travel Office Management] Report could 
        support a conclusion that Mr. Thomason was an 
        uncompensated consultant with the status of a special 
        government employee, by virtue of his assignment to 
        consult on the staging of presidential events . . . the 
        matter is not free from doubt, and we should proceed to 
        analyze Mr. Thomason's conduct as if he were a 
        government employee.\353\
---------------------------------------------------------------------------
    \353\ Nolan memorandum, p. 6, CGE 43265.

    Although this document was kept from the committee for 
years under claims of executive privilege, even Nolan's limited 
review of the few facts she had, determined that Harry Thomason 
likely was a special Government employee. However, Nolan went 
on to repeat the Department of Justice's reasoning that even if 
Thomason was an SGE for the purposes of the imaging project, 
such a status should be compartmentalized and should not have 
---------------------------------------------------------------------------
an impact on his other activities. Specifically, she stated,

          Harry Thomason may have been a special government 
        employee with respect to the assignment he was given to 
        consult on staging presidential events, but this did 
        not convert him into a special government employee for 
        other matters, including the Travel Office.\354\
---------------------------------------------------------------------------
    \354\ Id., p. 11.

    Not only did Nolan only rely on the facts provided in the 
White House Travel Office Management Review, but she did not 
discuss how, if Thomason was a special Government employee, his 
activities could be compartmentalized so as to allow him to 
represent his personal business interests when he was not 
wearing his SGE hat. Nothing in the legislative history 
suggests that Congress meant to allow a President to bring his 
campaign staff into the White House as part time SGEs, 
introduce them to influential contracting officers throughout 
the Government, allow them to gain inside advantages on other 
Government contracts, and then bid on Government business 
simply by taking off their SGE hat. The theory that an SGE 
could change his status as easily as walking into another room 
is bad public policy and not found in any legitimate reading of 
the statute.
    In the final analysis, the committee believes that when 
viewed in light of the totality of activities taken on by 
Thomason, he should be viewed as a special Government employee. 
Previous analysis of this matter was fatally flawed, however, 
due to the lack of cooperation by members of the White House 
staff who intentionally withheld information from Government 
officials seeking to investigate the White House activities of 
Harry Thomason and Darnell Martens. Because Martens acted more 
as an assistant to Thomason, without the same trappings of 
approval by the White House, the committee is not prepared to 
conclude that he meets the definition of SGE. That does not 
suggest, however, that the committee condones his efforts to 
use the special access afforded Thomason to profit at the 
public's expense.
    As suggested, the committee's investigation was further 
frustrated by a convenient lack of memory regarding the 
circumstances of Thomason's activities at the White House. 
Individuals who could otherwise remember precise details about 
some of their activities throughout 1993 made inconsistent or 
even conflicting statements about their relations with 
Thomason. Once again, we have seen a friend of the President's 
``air brushed'' out of internal reports and statements since 
the early days of the Clinton administration. Even further, 
Harry Thomason refused to cooperate with the General Accounting 
Office and refused to be interviewed a second time for the 
White House Travel Office Management Review. Without the force 
of a subpoena, Thomason very likely would have refused to 
cooperate with this committee as well. Further inquiry should 
determine whether this lack of cooperation was criminal.

3. Activities of Penny Sample

    What is less disputed is that Penny Sample, president of 
Air Advantage, was a special Government employee for the 
purposes of assisting in White House Travel Office operations 
following the May 19, 1993 firings. On May 20, 1993, after the 
Travel Office workers had been terminated, Sample was brought 
into the White House Travel Office as a volunteer worker. In 
her interview with the General Accounting Office, she stated 
that she had:

          . . . made charter arrangements for the Clinton 
        campaign. She reported that she was contacted on May 17 
        or 18 by Mr. Martens, with whom she had worked during 
        the campaign, to inquire about her availability to work 
        in the White House Travel Office. She was asked to call 
        Ms. Cornelius, who inquired if she would be available 
        to provide temporary assistance in the procurement of 
        aircraft charters for the White House press corps 
        without compensation. She agreed to do so but said that 
        she could only do so for a short period of time.\355\
---------------------------------------------------------------------------
    \355\ General Accounting Office Report, pp. 67-68.

    Ms. Sample did not leave that post until June 2, 1993 
following revelations that she had received a commission from 
the first airline charter that she had booked for a White House 
Travel Office trip to New Hampshire on May 22, 1993. Air 
Advantage forwarded the $52,000 to Midwest Air.
    It is clear from the circumstances surrounding Sample's 
arrival at the White House that she should have been considered 
an SGE. Again, due to the lax management standards at the White 
House, no one analyzed this volunteer's employment standards 
and responsibilities. She was, however, given an affirmative 
work assignment at the White House. She reported to a permanent 
Government employee (David Watkins); performed a single task, 
was provided access to all materials necessary to perform her 
work, and made financial decisions which obligated the Federal 
Government.
    White House attorney Beth Nolan also believed Penny Sample 
was an SGE:

          . . . it seems clear that PS was asked to serve as a 
        volunteer in the White House to perform a federal job, 
        and as such probably was a special government employee.

    As discussed above, Section 208 of Title 18 restricts 
Government employees from participating personally and 
substantially in a governmental capacity in which he or she has 
a financial interest. A person may act in a governmental 
capacity through such things as decision, approval, 
disapproval, recommendation, rendering advice, investigation, 
or otherwise, in a judicial or other proceeding, application 
for request for ruling or other determination, contract, claim, 
controversy, charge, accusation.
    Penalties for violating section 208 of Title 18 appear in 
18 U.S.C. Sec. 216. Section 216 establishes different criminal 
penalties for non-willfully and willfully engaging in conduct 
constituting offenses under the conflict of interest 
provisions. Non-willful engagement is punishable by 
imprisonment for not more than 1 year or a fine in an amount 
set forth in Title 18, or both.\356\ Willful engagement is 
punishable by imprisonment of not more than 5 years or a fine 
in an amount set forth in Title 18, or both.\357\
---------------------------------------------------------------------------
    \356\ See, 18 U.S.C. Sec. 3559, which indicates that the offense of 
non-willful engagement is classified as a Class A misdemeanor because 
the term of imprisonment is 1 year or less, and 18 U.S.C. Sec. 3571, 
which indicates that the fine for an individual convicted of that 
offense is not more than $100,000.
    \357\ See, 18 U.S.C. Sec. 3559, which indicates that the offense of 
willful engagement appears to be classified as a Class E felony, and 18 
U.S.C. Sec. 3571, which indicates that the fine for an individual 
convicted of such an offense is not more than $250,000.
---------------------------------------------------------------------------
    White House attorney Beth Nolan's notes also are revealing 
at this point:

          P.S. is the president of a charter broker, Air 
        Advantage. She arranged for Air Advantage to forward a 
        fee to Midwest Express to cover official White House 
        expenses. Even though there seems to have been no 
        financial advantage to Air Advantage in this 
        transaction, its forwarding of a $52,000 fee probably 
        had a financial effect on Air Advantage. Section 208 
        requires neither that the financial effect be positive, 
        nor that the financial effect be substantial (there is 
        no de minimis exception). (Emphasis Added)

    The fact pattern discussed in this chapter and the 
introductory overview support this committee's conclusion that 
Penny Sample was a special Government employee subject to the 
conflict-of-interest provisions of Title 18. The committee 
further agrees with the analysis of Clinton White House 
attorney Beth Nolan, above, when she concludes that Sample and 
Air Advantage violated Section 208 of U.S.C. Title 18.

4. Conclusion

    What is also clear as a result of the committee's 
investigation is that President Bill Clinton willingly opened 
the doors of the White House to friends and supporters and 
allowed those individuals to, in effect, take whatever booty 
they could find. Documents provided under threat of subpoena by 
Thomason and Martens provide shocking evidence that close 
friends of the President planned to raid the public treasury 
long before Bill Clinton was sworn into office.\358\
---------------------------------------------------------------------------
    \358\ At the time this committee is drafting this report, White 
House political advisor Dick Morris resigned his position with the 
Clinton re-election campaign. This resignation comes on the heels of 
reports that Mr. Morris shared sensitive Government information with an 
outside individual, allegedly a call girl. The White House defended 
themselves by arguing that Mr. Morris was not a Government employee and 
did not hold a security classification. That defense misses the point. 
News accounts suggest that Mr. Morris was involved in not only campaign 
decisions, but public policy decisions concerning actions of the 
Presidency as well. Advising the President on whether the 
administration should support or oppose numerous pieces of legislation 
and public policy proposals clearly is a Government function. Given his 
broad responsibilities, the Clinton White House should have determined 
whether Mr. Morris met the requirements to be a special Government 
employee and should have conducted a security background investigation.
---------------------------------------------------------------------------
    The committee condemns the greedy, self-serving activities 
of those who obviously believed ``access had its privileges'' 
and used their special access to the White House to promote 
their own financial gain. A Washington Post article provides 
interesting insight into Thomason's belief that one's support 
of a successful Presidential candidate entitles one to realize 
personal private gain from subsequent voluntary public service:

          I do find it surprising that a person who was as 
        instrumental as I was in the Clinton campaign cannot 
        pick up a phone in the White House and ask for 
        information for people . . . If President Bush was in 
        office, I would do the same thing if I had this 
        access.\359\
---------------------------------------------------------------------------
    \359\ ``Travel Office Flap Cited as Evidence of Need for White 
House Staff Changes,'' Ann Devroy, Washington Post, May 27, 1993.

Both Thomason and Martens could have gained considerable 
financial advantage had they succeeded in their overall efforts 
to review the entire Federal civilian aircraft fleet under the 
auspices of the Interagency Committee on Aviation Policy 
(ICAP). Taking effective control of the White House Travel 
Office was simply a first step in their plans to capitalize on 
Thomason's name recognition in Washington, DC during the 
Clinton administration.

                    VII. Lack of Competitive Bidding

                             A. Background

    Purchases by the Federal Government from the private sector 
provide opportunities for the expansion of participating 
businesses and the creation of new service-oriented companies. 
Procurement expenditures generate secondary and related 
consumer spending. Thousands of Federal activities are involved 
in acquiring products and services that affect the Nation's 
economy. The economic impact resulting from the award of a 
major contract can greatly benefit a city or region, while the 
loss of a Government contract can cause financial hardship.
    The growth of Federal procurement during the past decades 
resulted in a proliferation of complex and overlapping Federal 
regulations that often hindered an agency's ability to purchase 
the best goods and services at the lowest cost. Potential 
vendors complained of the frustrating labyrinth of Federal 
specifications that controlled the production of goods. This 
committee, working with the Clinton administration, took 
significant steps to reform these bureaucratic procedures.
    On September 7, 1993, Vice President Albert Gore's National 
Performance Review issued a report entitled Creating a 
Government that Works Better and Costs Less.\360\ This report 
included 20 specific recommendations on procurement reform. The 
Clinton administration proposed a legislative package designed 
to restructure and reduce impediments to the Federal 
Government's acquisition practices. Following extensive 
hearings by this committee, President Clinton signed into law 
P.L. 103-355 on October 13, 1994.\361\ That same day, President 
Clinton issued Executive Order 12931, entitled Federal 
Procurement Reform, which requires executive branch agencies to 
make their own administrative procurement procedures more 
effective and innovative ``over and above those required by 
statute.'' \362\
---------------------------------------------------------------------------
    \360\ Albert Gore, Jr., Vice President of the United States; 
Creating a Government that Works Better and Costs Less; Report 1994; 
September 14, 1994.
    \361\ 108 Stat. 3243.
    \362\ Executive Order No. 12931, 59 Fed. Reg. 52,387 (1994).
---------------------------------------------------------------------------
    Federal acquisition laws were further revised, under the 
leadership of Chairman Clinger and this committee and the 
Clinton administration, as part of the 1996 Defense 
Authorization Act.\363\ Division D of that act, referred to as 
the Federal Acquisition Reform Act of 1996, concerns changes to 
the procurement requirements for armed services and civilian 
agency acquisitions. The general effect of Subdivision D is to 
eliminate or simplify certain contracting procedures. For 
example, one provision raises the dollar thresholds for 
contracts that use other than competitive procedures and are 
approved by high-level agency officials. Another provision 
limits the competitive range to the largest number permitting 
an efficient competition. The committee believes that these 
provisions will streamline Government contracting and cut out 
unnecessary requirements.
---------------------------------------------------------------------------
    \363\ The National Defense Authorization Act for Fiscal Year 1996, 
Pub. L. 104-106. For information on the legislative history of the 
National Defense Authorization Act for Fiscal Year 1996, see H.R. Rept. 
No. 450, 104th Cong., 2d Sess. (1996).
---------------------------------------------------------------------------
    Notwithstanding these recent reforms, the preferred method 
for Federal procurement has traditionally been full and open 
competition, where all potential suppliers and vendors are 
given an equal opportunity to compete for Government 
contracts.\364\ In the past, agencies used streamlined small 
purchase procedures only for purchases of $25,000 or less. The 
Federal Acquisition Streamlining Act raised this minimum to 
$100,000. The Federal Government publicizes its intention to 
buy property by posting solicitations in public places, 
announcements in the Department of Commerce publication 
Commerce Business Daily, and by sending invitations for bid to 
business firms on applicable mailing lists.
---------------------------------------------------------------------------
    \364\ 41 U.S.C. s. 253. Subsection (c) states that a competitive 
bid is not required when there is ``an unusual and compelling 
urgency.''
---------------------------------------------------------------------------
    Whenever possible, agency contracting officers are required 
to promote full and open competition in soliciting offers and 
awarding Government contracts. Procurement actions may involve 
sealed bids, negotiated proposals, sole source acquisition, or 
multiple award schedules.
    This committee's position is that any effort to reform the 
Federal Government's procurement process should begin with a 
firm commitment to encourage the use of competition in the 
Federal marketplace. In order to require Federal agencies to 
increase their use of competition in Federal procurement 
actions, Congress enacted the Competition in Contracting Act of 
1984.\365\ This legislation required Federal agencies to open 
their bidding process to all qualified firms wishing to compete 
for the Government's business and by eliminated advertising 
restrictions and non-competitive bidding procedures.
---------------------------------------------------------------------------
    \365\ The Competition in Contracting Act of 1984 can be found in 
Title VII of division B of the Deficit Reduction Act of 1984 (Pub. L. 
98-369; 98 Stat. 1175).
---------------------------------------------------------------------------

           B. Competitive Bidding in the Clinton White House

    Despite the support for competition in the Federal 
marketplace by both the Congress and the administration, the 
Clinton White House apparently believed that full and open 
competition should apply only to other agencies, while it 
awarded lucrative contracts to friends and political supporters 
of the President. The White House contends that the Travel 
Office's failure to conduct competitive bidding for press 
charters played a part in its decision to fire the Travel 
Office workers. However, it was the Clinton administration, 
itself, that failed to utilize competitive bidding in the award 
of lucrative Government contracts. The White House directed 
procurement funds toward friends and supporters of the 
President. For example, on June 24, 1993, 1 month after the 
Travel Office firings, the White House refused to utilize a 
competitive bidding procedure to purchase a $25 million 
telephone system contract for the White House. Clinton aide 
Patsy Thomasson was involved in this and other non-competitive 
awards. In each case, she conveniently claimed that ``urgent 
and compelling'' circumstances existed to obviate any 
obligation to bid the contract competitively.
    According to the White House Management Review, ``[Harry] 
Thomason was concerned that the White House charter business 
was not competitively bid and that the Travel Office might also 
be engaged in wrongdoing.'' \366\ Others professed concerns 
about problems in the Travel Office. The White House Travel 
Office Management Review states that:
---------------------------------------------------------------------------
    \366\ White House Chief of Staff Mack McLarty and Office of 
Management and Budget Director Leon Panetta, White House Travel Office 
Management Review, July 2, 1993, p. 5.

          On May 1, at the White House Correspondents 
        Association Dinner, Thomason heard George Condon, 
        President of the Correspondents Association, address 
        the growing expense to the press of traveling on 
        Presidential trips, a particular problem for smaller 
        news agencies. Harry Thomason viewed the no-bid 
        practices of the Travel Office as part of the 
        problem.\367\
---------------------------------------------------------------------------
    \367\ White House Chief of Staff Mack McLarty and Office of 
Management and Budget Director Leon Panetta, White House Travel Office 
Management Review, July 2, 1993, p. 6.

That view was further echoed in the General Accounting Office 
---------------------------------------------------------------------------
Report:

          To ensure that the Travel Office receives the best 
        value for the funds it spends, goods and services 
        generally should be procured through a competitive 
        process.\368\
---------------------------------------------------------------------------
    \368\ General Accounting Office, White House Travel Office 
Operations: Travel Office Operations, Report No. GGD-94-132, May 1994 
p. 27.

    Clinton administration actions leading up to and following 
the Travel Office firings belie these professed concerns 
regarding competitive bidding, however. From the hiring of KPMG 
Peat Marwick through the recruitment of World Wide Travel, Air 
Advantage, and possibly, American Express, the Clinton 
administration avoided legitimate competitive bidding of Travel 
Office contracts altogether.

                     C. KPMG Peat Marwick Contract

    When it was decided that an outside firm should review the 
Travel Office, David Watkins, Assistant to the President for 
Management and Administration called KPMG partner Larry Herman. 
Mr. Herman, who had addressed staff members of the National 
Performance Review on the issue of reinventing Government, was 
recommended to Watkins by Jennifer O'Connor, a member of the 
White House staff. Mr. Herman's firm was hired over the phone 
on the evening of May 13, 1993. Mr. Herman was asked to be at 
the White House early the following morning. No competitive bid 
was solicited to conduct this review of the White House Travel 
Office.\369\ Mr. Watkins later said that KPMG Peat Marwick was 
sought because the White House had no internal audit 
capability.\370\ Deputy White House Counsel Vincent Foster, 
while in the presence of FBI agents, initially recommended that 
an audit be conducted on the Travel Office. Because the FBI had 
no authority to conduct an audit without the predicate of an 
investigation, the FBI suggested that Foster ``get OMB or GAO 
to do the audit.'' \371\ The committee found no evidence to 
suggest that the White House staff investigated the suitability 
of an audit conducted by the General Accounting Office or the 
Office of Management and Budget.
---------------------------------------------------------------------------
    \369\ General Accounting Office, White House: Travel Office 
Operations, Report No. GGD-94-132, p. 57. Clinton aide David Watkins 
reported to Chief of Staff McLarty on May 17, 1993 that the Travel 
Office staff had been told the audit was part of the Vice President's 
National Performance Review effort. The committee was informed that the 
KPMG partner responsible for the review was on leave and worked on a 
voluntary basis for the National Performance Review. Representatives of 
the Vice President later informed the committee that while reforming 
the Travel Office was consistent with the goals of the National 
Performance Review, the review was not conducted under the auspices of 
the NPR.
    \370\ A bill referred to the House of Representatives by this 
committee, H.R. 3452, 104th Cong., 2d Sess. (1996), the Presidential 
and Executive Office Accountability Act, introduced by Congressman John 
Mica, would provide, inter alia, an internal Inspector General for the 
Executive Office of the President. Surprisingly, the White House has 
expressed its opposition to this measure.
    \371\ Michael E. Shaheen, Jr., Office of Professional 
Responsibility of the U.S. Department of Justice, Report of the Office 
of Professional Responsibility's Review of the Conduct of the FBI in 
Connection with its Contacts with the White House in the Travel Office 
Matter, pp. 28-29.
---------------------------------------------------------------------------
    The White House Travel Office Management Review, while 
criticizing the procurement practices of the fired Travel 
Office staff, did not even discuss the fact that KPMG Peat 
Marwick was brought into the White House without a competitive 
bid. The gap in the report regarding the circumstances under 
which KPMG was hired is problematic. White House documents 
indicate that the authors of the White House Travel Office 
Management Review were aware that a problem existed with the 
non-competitive bid for KPMG. These documents indicate there 
were numerous discussions between White House Counsel and the 
Chief of Staff McLarty about how to get around (i.e., justify) 
this problem.
    In the end, Peat Marwick arrived at the White House without 
a contract for the work it was about to undertake. Mr. Herman 
drafted a preliminary work contract on May 19, 1993, 5 days 
after the review was initiated. While this contract was signed 
the week of May 17, 1993, the final KPMG contract was not sent 
out by the White House until 3 months later, on August 17, 
1993. To justify why normal procurement procedures were not 
followed, the White House argued:

          Normal procurement procedures were not an option due 
        to a perception of potential financial mismanagement. 
        Due to this perception, the need for financial review 
        became urgent and compelling, with time of the 
        essence.\372\
---------------------------------------------------------------------------
    \372\ White House memorandum from Patsy Thomasson to Dale Helms, 
Delegation of Authority Relative to Peat Marwick Contract, August 9, 
1993, CGE 2514-2518.

The committee does not support this conclusion. The White House 
should have searched for other means to conduct an internal 
review of the White House Travel Office. The arguments raised 
in defense of the decision to hire an outside auditor bring 
force to the case for legislation approved by this committee 
that would provide the President with his own, hand picked 
auditor.

                          D. World Wide Travel

    World Wide Travel Service, Inc., was selected by White 
House staff to provide commercial travel services in lieu of 
those formally provided by the long-term employees of the White 
House Travel Office. World Wide had performed similar services 
for the Clinton Presidential Campaign in 1992. According to the 
General Accounting Office report:

          Ms. Betta Carney, President of World Wide, told us 
        that on May 11 she was telephoned by Ms. Cornelius, who 
        reported that the White House Travel Office staff would 
        possibly be dismissed in the near future, due to 
        allegations of wrongdoing; Ms. Cornelius asked that 
        this information be kept secret. The next day, Ms. 
        Cornelius, who told us she called at the direction of 
        Mr. Watkins, asked if World Wide could start at the 
        White House Travel Office for an interim period until a 
        competition could be held. A representative of World 
        Wide arrived in Washington on May 14 and remained on 
        call throughout the weekend, but was not called. 
        According to Mr. Stephen Davison, World Wide's Director 
        of Customer Service, on May 18, he and a World Wide 
        travel agent met with Ms. Cornelius, who reported that 
        the Travel Office matter was not resolved. However, 
        that evening Ms. Cornelius called to ask that the World 
        Wide officials meet her the next morning (May 19) in 
        Mr. Watkins' office. At the meeting the next morning, 
        Mr. Watkins informed the World Wide representatives 
        that the Travel Office employees had been fired and 
        were vacating the premises.\373\
---------------------------------------------------------------------------
    \373\ General Accounting Office, White House: Travel Office 
Operations, Report No. GGD-94-132, pp. 66-67.

Representatives of World Wide were in the offices of the White 
House Travel Office before the career White House employees had 
returned from the 10 a.m. meeting at which Watkins fired them 
on May 19, 1993.
    Also in the General Accounting Office interview, Betta 
Carney said that when Catherine Cornelius called her on May 12, 
1993, to come to the White House, Carney asked:

          [I]s this legal, could we do this, and on site, 
        without a formal contract? And she said something about 
        emergency procurement of some type that the White House 
        lawyers had talked about it, and that there was a 
        possibility that it would be okay and that we should be 
        ready to send someone up there at a moment's 
        notice.\374\
---------------------------------------------------------------------------
    \374\ Barney Gomez and Bob Homan of the General Accounting Office; 
interview with Betta Carney and Steve Davison of Worldwide Travel; 
Little Rock, AR; September 7, 1993; p. 48.

    In questions posed by reporters at a White House press 
---------------------------------------------------------------------------
conference, Betta Carney was referred to as:

          . . . the closest associate with David Watkins here, 
        . . . [and] sort of carried the campaign in its early 
        days when they didn't have any money and agreed to bill 
        them on a delayed basis as their contributions came in. 
        And Watkins has been quoted as saying that that enabled 
        them to free up money to use for advertising in the 
        Michigan and Illinois primaries at a time when they 
        might not otherwise have been able to do so. That 
        sounds like it treads dangerously close to corporate 
        contributions and FEC violations.\375\
---------------------------------------------------------------------------
    \375\ George Stephanopoulos; White House press briefing; 
Washington, DC; May 21, 1993, p. 8.

George Stephanopoulos did not comment on this allegation, but 
he confirmed that individuals at World Wide Travel made 
donations to the Clinton campaign.
    Notwithstanding evidence to the contrary, the White House 
tried to argue that the selection of World Wide Travel was not 
based on its prior personal or business relationship with 
members of the campaign staff, now members of the White House 
staff.\376\ There is no evidence that the White House had any 
other reason to choose World Wide Travel, an Arkansas based 
travel service, over other, nationally known travel firms.
---------------------------------------------------------------------------
    \376\ At the time that World Wide Travel was chosen by the White 
House, both Catherine Cornelius and David Watkins were on staff at the 
White House.
---------------------------------------------------------------------------
    The conclusion of the White House Travel Office Management 
Review simply states that, ``hiring World Wide Travel on a no-
bid basis--even as an interim, stop-gap measure--created the 
appearance of favoritism toward a local friend of the 
campaign.'' \377\ All evidence points to the fact that the 
appointment of World Wide Travel was, in fact, favoritism 
toward a friend of the Clinton campaign. There is evidence, 
however, that this was intended not as an ``interim, stop-gap 
measure,'' but as a permanent, financial arrangement.
---------------------------------------------------------------------------
    \377\ White House Chief of Staff Mack McLarty and Office of 
Management and Budget Director Leon Panetta, White House Travel Office 
Management Review, July 7, 1993, p. 20.
---------------------------------------------------------------------------

                            E. Air Advantage

    Penny Sample, president of Air Advantage, provided airline 
charters for the Clinton campaign and was assisted by Thomason, 
Richland & Martens (TRM), an aviation consulting business. Mr. 
Martens contacted Penny Sample on May 17, 1993, and asked if 
she would be willing ``to provide temporary assistance in the 
procurement of aircraft charters for the White House press 
corps without compensation.'' \378\ Sample agreed to provide 
this service as a volunteer. Within 2 weeks, Sample left the 
White House Travel Office after it was disclosed that she 
received a commission on the first charter trip she arranged 
for the White House, a press trip to New Hampshire on June 22, 
1993.
---------------------------------------------------------------------------
    \378\ General Accounting Office, White House: Travel Office 
Operations, Report No. GGD-94-132, p. 45.
---------------------------------------------------------------------------
    This financial arrangement was mentioned in both the 
General Accounting Office report and White House Travel Office 
Management Review, but neither discussed at any length to the 
lack of competition afforded when the contract was signed. The 
GAO Report stated:

          With the removal of the Travel Office employees, 
        several organizations were approached to provide White 
        House travel services. World Wide Travel Services, Inc. 
        And Air Advantage had both been involved in campaign 
        travel . . . Air Advantage was brought in on May 18 or 
        19 to provide temporary help in procuring aircraft 
        charters for the White House press corps.\379\
---------------------------------------------------------------------------
    \379\ Id., p. 45.

---------------------------------------------------------------------------
The White House Management Review stated:

          Bringing in Penny Sample of Air Advantage, to handle 
        press charters on a no-bid, volunteer basis furthered 
        the appearance that the White House was trying to help 
        its friends. This implies no improper conduct on 
        Sample's part, but again created an appearance of 
        favoritism.\380\
---------------------------------------------------------------------------
    \380\ White House Chief of Staff Mack McLarty and Office of 
Management and Budget Director Leon Panetta, White House Travel Office 
Management Review, July 7, 1993, p. 20.

    Favoritism was a major factor in the selection of a White 
House contractor. Unfortunately, this fact was ignored in each 
of the major Travel Office reviews.

                          F. American Express

    On May 21, 1993, at 4:10 p.m., then White House 
Communications Director George Stephanopoulos announced that 
World Wide Travel would be departing the White House Travel 
Office effective immediately, as a result of White House 
concerns with appearances of favoritism in its hiring 
practices. Mr. Stephanopoulos then announced that American 
Express would replace World Wide Travel in the Travel Office 
beginning Monday, May 24, 1993. Once again, no competitive bid 
preceded this announcement of a major change in the Travel 
Office. The White House engaged in a formal competitive bid for 
this business on Sunday, May 23, 1993, 2 days after 
Stephanopoulos' announcement that American Express had been 
awarded the contract.
    The timing of Stephanopoulos' announcement seems curious, 
when competitive bidding had yet to occur. The committee did 
learn, in the course of its investigation, that Patsy Thomasson 
met behind closed doors with representatives of American 
Express hours before Stephanopoulos' May 21, 1993 announcement. 
In fact, Patsy Thomasson requested that she have the FBI guard 
the doors for her closed-door meeting with American Express. 
When told that was not appropriate given the FBI's role in the 
Travel Office matter, Ms. Thomasson had Secret Service agents 
guard the door. Ms. Thomasson also discussed the travel 
contracts over the phone with American Express, until she was 
told to stop contacting them. There was no indication that 
Patsy Thomasson met with either of American Express' two 
competitors for the Travel Office business. American Express' 
selection subsequently was credited to its excellent bid 
presentation and for including resumes of those who would work 
in the Travel Office in its packet.
    The committee is concerned that this preparation very 
likely followed Ms. Thomasson's own ``heads-up'' of American 
Express.

VIII. The White House Initiated a Full-Scale Campaign of Misinformation 
in the Aftermath of the Travel Office Firings and put in Place a Cover-
              up From Which it Could not Extricate Itself

  A. President Clinton led the misinformation campaign from the first 
                     days of the Travelgate debacle

    Immediately after the firing of the White House Travel 
Office (WHTO) employees on May 19, 1993, the press asked 
whether the President had approved of that decision:

          Question. Who made this decision to fire them?
          Ms. Myers: David Watkins supervised the review. David 
        Watkins runs the Office of Administration. It was his 
        decision.
          Question. And had the acquiescence of the President?
          Ms. Myers: Absolutely.\381\
---------------------------------------------------------------------------
    \381\ White House press conference, May 19, 1993.

    Bruce Lindsey briefed President Clinton about the Travel 
Office firings 2 days before they occurred.\382\ David Watkins 
called Air Force One on May 18th to inform the President of the 
firings.\383\ As Ms. Myers noted, the President approved the 
firings. We now know that the President also approved bringing 
in Harry Thomason for the ``image'' project \384\ which 
included staging good press events--one of which was supposed 
to be the firing of the Travel Office employees--``Bill Clinton 
cleaning house,'' as Harry Thomason explained.\385\
---------------------------------------------------------------------------
    \382\ WHMR interview of Bruce Lindsey, CGEPR 331-334.
    \383\ Phone logs of David Watkins.
    \384\ Committee deposition of Mack McLarty, July 12, 1996, p. 23.
    \385\ Committee deposition of Jennifer O'Connor, March 29, 1996, 
pp. 37-38.
---------------------------------------------------------------------------
    On the afternoon of May 19th, the President was already 
distancing himself from his Press Secretary's statement 
regarding his role in the White House Travel Office matter:

          Question. Mr. President, can we ask you if you feel 
        you were fair in summarily dismissing some employees of 
        the government of long-standing without a hearing, and 
        leaving the impression perhaps that they may have 
        committed criminal acts?
          The President: I don't know. I'll have to refer to 
        the Chief of Staff about that.
          Question. We're speaking about the Travel Office, 
        sir.
          The President: I know. All I know about it is that I 
        was told that the people who were in charge of 
        administering in the White House found serious problems 
        there and thought there was no alternative. I'll have 
        to refer to them for any other questions. That is 
        literally all I know about it. I know nothing else 
        about it.\386\
---------------------------------------------------------------------------
    \386\ May 19, 1993 White House press conference.

On May 25th, the day the White House announced it was placing 
five of the former White House Travel Office employees on 
``extended administrative leave'' and initiating an internal 
---------------------------------------------------------------------------
investigation, the President again was asked about the firings:

          Question. Mr. President, are you upset by this whole 
        Travel Office mess? And who is responsible for it, sir?
          The President: Well, ultimately, anything that 
        happens in the White House is the responsibility of the 
        President. And whenever you've asked me a question, 
        I've told you all I know about it. All I knew was there 
        was a plan to cut the size of the office, save tax 
        dollars, save the press money.\387\
---------------------------------------------------------------------------
    \387\ May 25, 1993 White House press conference.

The next day, May 26th, while responding again to media 
questions about the Travel Office firings, President Clinton 
---------------------------------------------------------------------------
explained:

          . . . the press complained to me repeatedly about 
        being gauged (sic) by the White House Travel Office. I 
        kept hearing everywhere.\388\
---------------------------------------------------------------------------
    \388\ May 26, 1993, White House press conference.

During the CBS This Morning, town hall meeting on the morning 
---------------------------------------------------------------------------
of May 27th, President Clinton said:

          We found out that there were seven people working in 
        the Travel Office, primarily to book travel for the 
        press, and that the press was complaining that the cost 
        was too high. So, there were all these recommendations 
        made to change it. But nothing was done until an 
        accounting firm came in and reviewed the operations and 
        found serious management questions in terms of 
        unaccounted funds and things like that. So then the 
        person in charge of that made the decision to replace 
        them.\389\
---------------------------------------------------------------------------
    \389\ CBS This Morning (CBS television broadcast, May 27, 1993).

Of course this statement was false, as the New York Times 
---------------------------------------------------------------------------
pointed out, writing:

          . . . why even after the public had learned how 
        Clinton friends engineered the travel office flushout, 
        did the staff feed President Clinton the discredited 
        line that the firings were simply economy measures? 
        \390\
---------------------------------------------------------------------------
    \390\ ``A Stealthy, Evasive Confession,'' the New York Times, July 
11, 1993, Section 4.

    ``Let's not obscure what happened,'' the President said in 
the days following the firings.\391\ Yet this is the course set 
by the President himself from the first day of the firings.
---------------------------------------------------------------------------
    \391\ The Washington Post, ``Travel Office'' (Cont'd), May 28, 
1993, p. A20.
---------------------------------------------------------------------------

  B. The initial press offensive against the Travel Office employees 
mischaracterized the Peat Marwick review and the FBI's role in order to 
               cover-up the real reasons for the firings

    The first series of Clinton administration deceptions 
occurred in the days immediately following the firings. White 
House statements on May 19, 1993, indicated the firings 
followed an audit performed pursuant to Vice President Gore's 
National Performance Review, which uncovered ``abysmal 
mismanagement'' and ``shoddy accounting practices.'' \392\ 
Spokesperson Dee Dee Myers added that the FBI was investigating 
possible criminal violations by the fired employees. In fact, 
an audit of the Travel Office never was undertaken, let alone 
completed.
---------------------------------------------------------------------------
    \392\ May 19, 1993, White House press conference. (Statement of Dee 
Dee Myers).
---------------------------------------------------------------------------
    Peat Marwick's engagement letter, draft and final report 
all specify that its work did not constitute an audit. Peat 
Marwick told the White House that:

          such procedures do not constitute an audit, 
        examination, or review in accordance with Standards 
        established by the American Institute of Certified 
        Public Accountants and, therefore, we do not express an 
        opinion or any other form of assurance on the 
        information presented in our report.\393\
---------------------------------------------------------------------------
    \393\ KPMG Peat Marwick Draft Report, CGE 006966, (although it was 
dated May 17, 1993, it was not actually drafted before May 19 or 20, 
1993).

---------------------------------------------------------------------------
Peat Marwick further explained to the White House that:

          The procedures we performed were limited in nature 
        and extent to those which the Office of the Counsel 
        determined best fit its needs.\394\
---------------------------------------------------------------------------
    \394\ KPMG Peat Marwick Draft Report, CGE 006966, (although this 
was dated May 17, 1993, it was not actually drafted before May 19 or 
20, 1993).

    The White House also informed the press that the Travel 
Office records were ``in shambles'' and not auditable. However, 
a Peat Marwick C.P.A., Dan Russell, testified before this 
committee that the pre-firing Travel Office records were 
auditable and that they simply would have needed more than the 
3 days allowed by the White House for their review to perform 
such an audit.\395\
---------------------------------------------------------------------------
    \395\ Committee deposition of Dan Russell, March 27, 1996, p. 59.
---------------------------------------------------------------------------
    The Travel Office employees themselves first heard the 
allegations of criminal wrongdoing on television while packing 
their personal belongings before leaving the White House. When 
firing them earlier that day, David Watkins made no mention of 
any criminal investigation but instead represented the firings 
as part of a reorganization effort.\396\
---------------------------------------------------------------------------
    \396\ Foucart deposition, May 3, 1996, pp. 42-43. Foucart took 
notes of David Watkins' speech to the employees as he fired them: 
``What we are going to do is surgical rather than prolonged.''
---------------------------------------------------------------------------
    The Vice President's office quickly distanced the firings 
from anything having to do with the National Performance Review 
by repudiating the White House press secretary's assertions 
that the Peat Marwick review was part of the National 
Performance Review.\397\ Meanwhile, Larry Herman, Peat 
Marwick's partner in charge of the review, was confounded by 
the fact that the White House would base the Travel Office 
firings on an as-yet-unfinished report. Mr. Herman never told 
anyone at the White House his review would justify the firing 
of all of the employees, particularly those that had nothing to 
do with the financial aspects of the office.\398\
---------------------------------------------------------------------------
    \397\ Letter to Nancy Kingsbury (GAO) from Todd Campbell in the 
Vice President's office, December 1993, CGE 2554.
    \398\ Committee interview of Larry Herman, August 29, 1995; see 
also GAO interview of Larry Herman, August 31, 1993, p. 11.
---------------------------------------------------------------------------
    The White House Press shop pressured Herman to provide 
selective off-the-record press briefings on May 19.\399\ Harry 
Thomason and Jeff Eller were also present in the press room 
that day when ``kickback'' allegations were circulated to the 
press. By that time, Herman informed White House officials that 
he had found absolutely no basis for the kickback 
allegations.\400\
---------------------------------------------------------------------------
    \399\ Committee interview of Larry Herman, August 29, 1995.
    \400\ Committee deposition of Harry Thomason, May 17, 1996, p. 223. 
(Thomason claims he inadvertently ended up in the press briefing room 
at the precise time of the briefing on the Travel Office firings 
because he was taking a tour of the White House.)
---------------------------------------------------------------------------
    George Stephanopoulos stated in a May 20 press conference 
that Harry Thomason had ``no financial interest'' in White 
House travel matters,\401\ a patently false statement in light 
of Thomason's various White House business solicitations on 
behalf of TRM.\402\ Mr. Foster later wrote of a meeting on May 
21 in which they discussed Thomason's financial interests. Mr. 
Foster's notes indicate that Stephanopoulos became ``upset'' 
when he was shown an ``HT memo,'' presumably reflecting that 
Thomason had a financial interest in the matter.\403\ Mr. 
Foster also noted that while Stephanopoulos said there was no 
financial interest, ``DD/M [Dee Dee Myers] & Eller [Jeff Eller] 
and I disagree.'' \404\
---------------------------------------------------------------------------
    \401\ White House press conference, May 20, 1993.
    \402\ See supra at Sections IV, V and VI.
    \403\ Vince Foster Travel Office notebook, CGE 000917.
    \404\ Vince Foster Travel Office notebook, CGE 000917.
---------------------------------------------------------------------------
    The initial response by White House officials when faced 
with a press hostile to the firings was to hide the truth. They 
withheld the full scope and extent of Harry Thomason's favor-
seeking at the White House, misrepresented the Peat Marwick 
review and repeatedly maligned the seven fired Travel Office 
employees. When that did not work and the press raised issues 
of cronyism and patronage, on May 21, the White House press 
office summoned the FBI spokesperson to the White House to edit 
the FBI's press statements in an effort to bolster the White 
House's story.\405\ When news of this additional effort to 
politicize the FBI was learned the following Monday, May 24, 
the Attorney General contacted White House Counsel Nussbaum and 
expressed concern about the direct contact by the White House 
with the FBI.\406\
---------------------------------------------------------------------------
    \405\ OPR Report, p. 58.
    \406\ OPR Report, p. 68.
---------------------------------------------------------------------------
    The press highlighted the fact that at the very time the 
FBI spokesman was attending a White House press strategy 
meeting on the Travel Office, embattled FBI Director William 
Sessions was meeting with Webb Hubbell and Janet Reno about 
whether he would keep his job.\407\ When Attorney General Reno 
learned of the direct contact that the FBI had with the White 
House in both initiating the investigation and revising the FBI 
press statements, she expressed her concerns. Ms. Reno told 
Nussbaum that the FBI should not have the appearance of being 
used for political purposes.\408\
---------------------------------------------------------------------------
    \407\ OPR Report.
    \408\ OPR Report, pp. 68-69.
---------------------------------------------------------------------------

  C. Neither the Congress, the press nor the public bought the White 
                              House story

    The Travel Office firings were met by intense press 
skepticism. From the first days, when the roles of Harry 
Thomason and Catherine Cornelius became apparent, this was a 
clear-cut case of cronyism. The New York Times editorial page 
wrote on May 26, 1993, ``By design or incompetence or a blend 
of the two, the White House has used a highly vulnerable FBI 
for unworthy political purposes.'' \409\
---------------------------------------------------------------------------
    \409\ ``Myopia at the White House: The FBI Abused,'' the New York 
Times, May 26, 1993, p. A20.
---------------------------------------------------------------------------
    The Washington Post editorial page wrote on the same day: 
``It looks as if the FBI logo was being used by the White House 
as a political shield.'' \410\ Washington Post editorial page 
editor Meg Greenfield wrote on June 7, 1993:
---------------------------------------------------------------------------
    \410\ ``The Missing Voice,'' the Washington Post, May 26, 1993, p. 
A18.

          They should see no business, hear no business and 
        speak no business and, above all, do no business. Harry 
        Thomason and Linda Bloodworth Thomason, the First 
        Family friends involved in all the fuss last week, 
        indignantly pointed out that they were much too well 
        off to have even been interested in the money to be 
        gained from a travel-office deal . . . But the familiar 
        ``moi?'' defense (a decent person like me couldn't 
        possibly do a gross thing like that) is irrelevant to 
        the conflict-of-interest issue. Where a prospective 
        conflict exists such people must keep out of it.\411\
---------------------------------------------------------------------------
    \411\ ``The Moi? Defense,'' Meg Greenfield, Newsweek, June 7, 1993, 
p. 72.

    The Baltimore Sun editorial page opined, ``Some Republicans 
have called for a congressional review. Democratic senators 
ought to join them. This is an important matter. It should be 
above partisan point-making.'' \412\
---------------------------------------------------------------------------
    \412\ ``The White House and the FBI,'' the Baltimore Sun, May 26, 
1993, p. 18A.
---------------------------------------------------------------------------
    What became known as ``Travelgate'' was soon being compared 
to Watergate: ``It was no exaggeration when the Senate minority 
leader on Tuesday compared the Clinton administration's use of 
the FBI last week in the flap over the White House Travel 
Office to Richard Nixon's attempt to pervert the agency to 
political purposes during Watergate. It is an outrage,'' noted 
the Chicago Tribune editorial page on May 26, 1993.\413\
---------------------------------------------------------------------------
    \413\ ``Clinton tries to shake Travelgate,'' the Chicago Tribune, 
May 26, 1993, p. 12.
---------------------------------------------------------------------------
    In the face of such severe criticism, acknowledging the 
full extent of Harry Thomason's activities and the President's 
role in promoting Thomason's business interests would cause 
additional political vulnerability. With Mrs. Clinton's health 
care bill being touted as the centerpiece of the Clinton 
agenda, acknowledging her role in the Travel Office would 
detract from one of the administration's highest priorities at 
that time.
    The inability to tell the truth about the Travel Office 
firings must be viewed in the context of the poll-driven, image 
conscious Clinton White House of 1993. The President's 
popularity polls reached a devastating low of 36 percent 
following the May 19, 1993 Travel Office firings.\414\ The 
firings had the misfortune of coinciding with the May 18 $200 
haircut aboard Air Force One on the Los Angeles International 
Airport tarmac.
---------------------------------------------------------------------------
    \414\ ``The Man Who Has Clinton's Ear,'' Michael Kinsley, Time, 
September 2, 1996.
---------------------------------------------------------------------------
    June 1993 brought hard-fought budget battles in which the 
President's tax raising budget narrowly passed the Senate by 
one vote. The headlines at the time were brutal: ``Another 
failed Presidency?'' ``What Went Wrong?'' ``The Incredible 
Shrinking President.'' The hemorrhaging had to be stopped and 
the President called upon confidante and then Chief of Staff, 
Mack McLarty, the very same person who approved the firings.

  D. The Last Best Hope for a Cover-Up? A Man from Hope, Mack McLarty

    The President undermined his own commitment to ``get to the 
bottom'' of the Travel Office matter in announcing the 
Management Review when he incongruously put the person who had 
fired the employees in charge of the review. Then-Chief of 
Staff McLarty presided over a review in which the conclusions 
were as pre-determined as the decision to fire the Travel 
Office employees.
    Mr. McLarty did not fail the President. Mr. McLarty 
participated in the cover-up of the President's involvement in 
bringing Harry Thomason to the White House for the image 
project. Mr. McLarty also concealed how the President 
inappropriately assisted Thomason with getting business for his 
company, Thomason, Richland & Martens. Finally, McLarty covered 
up the fact that the President knew about the firings before 
they occurred.
    While aboard Air Force One, on May 17, 1993, Jeff Eller 
approached senior Presidential aide Bruce Lindsey and informed 
him of the Travel Office and Lindsey asked, ``if involved w/
HT's [Harry Thomason's] concern?'' \415\ Mr. Eller briefed 
Lindsey on the pending firings, Lindsey in turn briefed 
President Clinton a full 2 days before the firings 
occurred.\416\
---------------------------------------------------------------------------
    \415\ WHMR interview notes of Bruce Lindsey, June 9, 1993, CGEPR 
0331.
    \416\ Id.
---------------------------------------------------------------------------
    But Thomason's ``staged'' productions clearly received 
disastrous reviews. It was time for an image make-over.

1. David Gergen assumes damage control patrol

    The President was reportedly furious with his staff when 
Thomason's idea of a good story--firing the Travel Office 
employees--went south. There was talk of a staff shake-up. 
Newspaper stories at the time were strikingly critical of the 
abuse of the FBI in these events. The Washington Post had taken 
the President to task:

          But it was wrong to smear them in public as 
        wrongdoers in advance of any finding that they have 
        done wrong. If they were fired for unconfessed 
        political reasons, that was wrong, too. And the 
        apparent muscling of the FBI to put a stronger gloss on 
        the case (even as its director fights and is beholden 
        to the White House to keep his job) was wrongest of 
        all.\417\
---------------------------------------------------------------------------
    \417\ ``The Missing Voice,'' the Washington Post, May 26, 1993, p. 
A18.

    In late May 1993, the President turned to the another image 
maker, David Gergen. It is noteworthy that on May 28th when 
David Gergen was brought to the White House to meet with the 
President about his new position,\418\ Harry Thomason and Linda 
Bloodworth-Thomason were in the residence that evening for 
dinner with Mrs. Clinton. Gergen was ushered up to the 
residence by Roy Neel at approximately 10 p.m. where Gergen met 
with Mrs. Clinton and the President. Mr. Gergen told the 
committee ``I have to tell you, I do not know Mr. Thomason. If 
he walked in the door now, I wouldn't know him.'' \419\ White 
House residence logs show the Thomasons arriving for dinner at 
8:30 p.m. and David Gergen and the Thomasons leaving the 
residence together at 1 a.m.
---------------------------------------------------------------------------
    \418\ Committee interview of David Gergen, September 13, 1995, p. 
7.
    \419\ Gergen interview, p. 21.
---------------------------------------------------------------------------
    One of Gergen's first tasks was to placate the press in the 
midst of the biggest press debacle to that date: the Travel 
Office firings. Mr. Gergen testified he also was involved in 
quelling rumors that Mrs. Clinton and Susan Thomases were 
behind the firings. Mr. Gergen told the press that this charge 
was false; however, he said he could not recall the source of 
his information.\420\
---------------------------------------------------------------------------
    \420\ Gergen interview, p. 10.
---------------------------------------------------------------------------

2. White House Management Review: Truth or Obfuscation?

    At about the same time Gergen was brought in, McLarty 
tasked Presidential aides John Podesta and Todd Stern to 
conduct the White House Management Review. Mr. Podesta and 
Stern regularly reported back their findings to McLarty 
throughout the review process. Mr. McLarty, the supervisor of 
the review, does not appear to have informed Podesta and Stern 
of his conversations with Mrs. Clinton until information from 
other sources surfaced about her role.\421\
---------------------------------------------------------------------------
    \421\ See committee depositions of John Podesta and Todd Stern.
---------------------------------------------------------------------------
    The White House told the public that John Podesta was put 
in charge of these matters because he had no involvement in the 
events examined. But in fact McLarty, in selecting Podesta to 
head up the matter, selected a person who was knowledgeable 
about Thomason's efforts to obtain Government contracts as well 
as the President's efforts to help Thomason.\422\ Mr. Podesta 
forwarded the Harry Thomason/Darnell Martens ``these guys are 
sharp'' memo to McLarty and others.\423\
---------------------------------------------------------------------------
    \422\ See supra Sections V and VI.
    \423\ In addition, Podesta was contacted by the Office of Records 
Management on the day following the firings to inform him of the grave 
concern about loss of records in the Travel Office.
---------------------------------------------------------------------------
    Mr. Podesta became aware of the February 11, 1993 memo that 
Darnell Martens had forwarded to Harry Thomason when it showed 
up in President Clinton's ``out box'' on February 17.\424\ As 
Staff Secretary, Podesta was responsible for the daily flow of 
paperwork in and out of the President's office. Although 
Podesta had never seen the February 11, 1993 memo go into the 
President's office, he did see it coming out.\425\
---------------------------------------------------------------------------
    \424\ Podesta deposition, p. 54.
    \425\ Id.
---------------------------------------------------------------------------
    On February 16, 1993, Thomason was at the White House, 
spent the night at the White House and even bowled with the 
President that evening.\426\ Although Thomason distinctly 
remembers beating the President at bowling that evening, he has 
``no recollection'' of giving the President the February 11, 
1993 memo soliciting the GSA contract for his company, 
TRM.\427\ Podesta found the memo in the President's out box the 
very next day.\428\
---------------------------------------------------------------------------
    \426\ White House residence logs of February 16-17, 1993.
    \427\ Harry Thomason deposition, pp. 118, 122.
    \428\ Podesta deposition, p. 54.
---------------------------------------------------------------------------
    Yet the Management Review, which distinctly addressed the 
issues of ``personal interests'' and ``the appearance of 
favoritism,'' totally ignored Thomason's efforts in getting 
Government contracts and President Clinton's assistance in 
Thomason's efforts. While earlier drafts of the Management 
Review included these matters and the authors thoroughly 
reviewed the issues involved, they were excluded from the final 
report. In committee depositions, neither Podesta nor Stern 
could credibly explain how Harry Thomason's solicitation of 
aviation contracts had nothing to do with ``the appearance of 
favoritism.'' \429\
---------------------------------------------------------------------------
    \429\ See, Podesta deposition, May 29, 1996; Stern deposition, June 
5, 1996.
---------------------------------------------------------------------------

3. The Management Review excluded information which was exculpatory to 
        Travel Office employees and derogatory to President Clinton and 
        his cronies

    Clearly the omitted facts regarding Thomason's efforts to 
obtain Government business were relevant in learning the true 
picture behind the firings. Mr. Podesta had even asked Beth 
Nolan, the White House ethics counsel, to review the issue of 
whether or not Harry Thomason was a special Government employee 
and whether or not issues of conflict of interest pertained to 
Thomason.\430\ But when Ms. Nolan came back with a preliminary 
conclusion that Thomason might in fact be a special Government 
employee and might have conflicts, the information was excluded 
from the final report.\431\
---------------------------------------------------------------------------
    \430\ Nolan deposition, p. 35.
    \431\ Memorandum for John Podesta and Todd Stern from Beth Nolan, 
July 1993, subject: Questions from Travel Office Report re Harry 
Thomason, CGE 43235-43246.
---------------------------------------------------------------------------
    In striking contrast, while the Management Review excluded 
information that could have had negative public and possibly 
legal impact on Harry Thomason, its authors spent a large 
portion of the report condemning the Travel Office employees 
and their operations. The authors excluded the most significant 
finding regarding allegations against the employees: that the 
``kickbacks'' allegation made by Thomason had no basis in 
fact.\432\
---------------------------------------------------------------------------
    \432\ WHMR interview of Ross Fischer, CGEPR 237-239.
---------------------------------------------------------------------------
    The kickback allegation provided the predicate for FBI 
involvement in the Travel Office matter.\433\ In the course of 
the review, Podesta contacted Ross Fischer of Miami Air, who 
denied he ever made the allegation.\434\ In fact, it appears 
the Management Review authors recognized this problem. Their 
own notes allude to concerns about FBI jurisdiction absent the 
kickbacks issue.\435\ A kickbacks discussion was deemed 
irrelevant, despite the authors' awareness of exculpatory 
information.
---------------------------------------------------------------------------
    \433\ OPR Report, pp. 31-32.
    \434\ WHMR interview of Ross Fischer, CGEPR 237-239.
    \435\ CGEPR 0530-537, memo to Todd Stern from Dwight Holton, dated 
June 22, 1993, re: Complete list of checks, and checking plan.
---------------------------------------------------------------------------
    A pattern developed throughout the course of the review: 
information unflattering to the Travel Office employees was 
included in the report, exculpatory information was not. In the 
case of Harry Thomason, little unflattering information was 
included. This is especially true where such information might 
involve the President.
    In seeking derogatory information on the Travel Office 
employees, Podesta reviewed their personnel files.\436\ Mary 
Beck, the Director of Personnel in the Office of 
Administration, said this was the only instance during her 
tenure in the White House in which such an unusual request was 
made of her office.\437\ The files circulated around the White 
House for several weeks before Ms. Beck made an urgent call for 
them to be returned.\438\ Although asked repeatedly, Podesta 
could provide no ``official need'' for the files.\439\
---------------------------------------------------------------------------
    \436\ CGE 029652, memo from Mary Beck to John Podesta, re: Official 
Personnel folders.
    \437\ Committee deposition of Mary Beck, p. 27.
    \438\ July 15, 1993 memo to Irene McGowan from Mary Beck, CGE 
22205.
    \439\ See Podesta deposition.
---------------------------------------------------------------------------
    Soon after the firings Thomason retained attorney Bob 
Bennett and Thomason thereafter did not cooperate with 
Podesta's review. For example, Thomason refused to do a follow-
up interview and Podesta became aware that Thomason was not 
pleased with the direction of his report.\440\ Mr. Thomason's 
actions were successful; his stonewalling of Podesta worked. 
Mr. Podesta gave up on pursuing further information about 
Thomason.
---------------------------------------------------------------------------
    \440\ Committee deposition of John Podesta, June 5, 1996, p. 120.
---------------------------------------------------------------------------
    By omitting the efforts of Thomason's company, TRM, to get 
business contracts from the Government, the report considerably 
diminished the full picture of Thomason's abuse of Presidential 
access. The report thereby made no reference to the President's 
complicity in that abuse. An internal White House memo, over 
which the President initially claimed privilege, asked:

          Doesn't ICAP [the GSA efforts] show how deeply 
        Thomason and his personal interests had infiltrated the 
        White House? Is the reason this was not included to 
        avoid mentioning the involvement of the President in 
        promoting the financial interests of his friends? \441\
---------------------------------------------------------------------------
    \441\ DF781538-542. This memo was among those initially withheld by 
the President under a claim of executive privilege on May 30, 1996 and 
not released to the committee until August 15, 1996.

The committee believes the answers to these two questions are 
``yes.''
    The fact that TRM and Harry Thomason indeed had sought 
contracts clearly undermines his claim that he was not seeking 
the Travel Office business. The Martens memo, which had been 
made public, clearly showed that TRM was seeking the Travel 
Office business; however, it was implausibly dismissed by 
Martens as not meaning precisely what it said. Had the report 
included information about Thomason's other Government 
interests, this information would have been more damaging.
    In contrast to every other interview conducted during the 
White House Management Review, there were reportedly no notes 
taken of the ``interview'' that Podesta conducted with the 
President.\442\ Mr. Podesta recalls nothing of the interview 
with the President, whether he discussed the President's 
knowledge of the firings, or whether he asked about the 
President's complicity in Thomason's activities. The only 
answer Podesta offered was that everything that the President 
told him was in the report.\443\
---------------------------------------------------------------------------
    \442\ Podesta deposition, p. 98. In contrast, there are brief notes 
of Podesta's interview with the First Lady, CGEPR 0129.
    \443\ See, Podesta deposition, p. 99.
---------------------------------------------------------------------------
    The review also omitted various documents and comments that 
undermined the official White House story. White House talking 
points of May 13, 1993, authored by Jeff Eller, demonstrated 
that there were plans to fire the employees a full day before 
Peat Marwick came to the White House.\444\ This was left out of 
the report. These talking points claimed that the FBI was going 
to perform an audit, thus showing the real purpose of 
requesting FBI involvement.\445\
---------------------------------------------------------------------------
    \444\ CGE 7933, May 13 talking points.
    \445\ Id.
---------------------------------------------------------------------------
    Another story omitted from the final draft of the 
Management Review was David Watkins' and Patsy Thomasson's 
intimidation of Catherine Cornelius. Mr. Watkins enlisted the 
help of his assistant, Brian Foucart, to convince Cornelius to 
resign.\446\ Patsy Thomasson attempted to go through Cornelius' 
friend and roommate, Clarissa Cerda, to secure Cornelius' 
resignation.\447\ Ms. Cerda, however, did not cooperate. Patsy 
Thomasson contacted Cornelius directly regarding Cornelius' 
memo on Travel Office reorganization.\448\ Ms. Thomasson wanted 
it to appear as though Watkins never relied on Cornelius' memo 
on Travel Office reorganization. She wanted Cornelius to 
conceal any knowledge she had regarding whether Watkins read 
the memo.\449\
---------------------------------------------------------------------------
    \446\ Committee deposition of Brian Foucart, May 3, 1996, pp. 64-
69. (Watkins asked Foucart to speak with Cornelius a second time, in 
August 1993, to get her to resign. Foucart refused the request.)
    \447\ Cerda deposition, pp. 123-125.
    \448\ Cornelius deposition, p. 143.
    \449\ WHMR interview of Catherine Cornelius, CGEPR 0161; WHMR 
interview notes of Clarissa Cerda, CGEPR 0117. (The memo which 
Cornelius and Cerda co-wrote outlined how the two could more 
efficiently run the Travel Office without the assistance of the present 
employees.)
---------------------------------------------------------------------------

4. The Management Review minimized the role of Mrs. Clinton

    The White House Management Review, while successful in its 
attempt to cover up the President's actions regarding Harry 
Thomason and to conceal documents which demonstrated a 
predetermined course of action, was not successful in fully 
concealing Mrs. Clinton's role. Mr. Podesta learned of Mrs. 
Clinton's involvement and interest in the matter when he 
discovered the May 17, 1993 memo to McLarty from Watkins 
regarding the firings. The memo includes a notation that it was 
sent to Mrs. Clinton.\450\
---------------------------------------------------------------------------
    \450\ Watkins memorandum to McLarty, May 17, 1993, CGE 17753-54.
---------------------------------------------------------------------------
    Neither Podesta nor his assistant, Stern, could recall when 
they first learned of this May 17 memo or who provided it to 
them.\451\ However, it does not appear that Mack McLarty 
initially made this or other information that he had obtained 
regarding the Travel Office firings available to Podesta for 
his Management Review.\452\
---------------------------------------------------------------------------
    \451\ Podesta deposition, p. 37; Stern deposition, p. 100.
    \452\ See depositions of Podesta and Stern.
---------------------------------------------------------------------------
    Mr. Stern recalled that he first learned definitively of 
Mrs. Clinton's role on June 8, 1993 when he interviewed World 
Wide Travel employee, Fan Dozier. Ms. Dozier told Stern about a 
conversation she had with Harry Thomason on May 16, 1993. 
Stern's notes recount what Dozier told Stern about her 
conversation with Harry Thomason.

          HT [Harry Thomason] said ``You mean you're not up 
        there working?'' HT said he'd call HRC [Hillary Rodham 
        Clinton] and she would be very upset to hear they [the 
        seven Travel Office employees] were still there . . . 
        this was probably Sunday 5/16.\453\
---------------------------------------------------------------------------
    \453\ WHMR notes, June 8, 1993, CGEPR 0208.

    Mr. Stern believes he heard vague rumblings about Mrs. 
Clinton's role prior to this date, however the Dozier interview 
provided the first concrete information in that regard.\454\ It 
is clear that Mr. Stern was concerned from the earliest days of 
the Management Review about the possibility that Mrs. Clinton's 
role would be covered-up: ``if you give answers that aren't 
fully honest (e.g. nothing re HRC) you risk hugely compounding 
the problem by getting caught in half-truths. You run the risk 
of turning this into a cover-up.'' \455\
---------------------------------------------------------------------------
    \454\ Stern deposition, pp. 32-33.
    \455\ Handwritten notes of Todd Stern, May 27, 1993, CGEPR 0683.
---------------------------------------------------------------------------
    There was an effort from the beginning, at least on the 
part of Mrs. Clinton, to blur the facts regarding exactly from 
whom she had heard rumors of wrongdoing in the Travel Office. 
In talking points prepared by her staff for the release of the 
White House Management Review, the summary stated: ``Mrs. 
Clinton heard rumblings about problems in the Travel Office as 
did most White House staff.'' \456\ In over 75 depositions and 
interviews, the committee found no basis for the notion that 
there were ``rumblings'' known to ``most White House staff.'' 
Indeed, the opposite is true. When asked directly about rumors, 
most staff stated that they had heard nothing until the actual 
firings.
---------------------------------------------------------------------------
    \456\ CGE 032978.
---------------------------------------------------------------------------
    Deputy White House Counsel Foster was reluctant to disclose 
his contacts with Mrs. Clinton and President Clinton, or, as he 
referred to them, ``the clients.'' On May 13, while waiting to 
see McLarty, Foster told Patsy Thomasson that ``his clients, 
meaning President and Mrs. Clinton, were concerned about the 
White House Travel Office matter.'' \457\ These comments, 
relayed by Ms. Thomasson, demonstrate that President and Mrs. 
Clinton's interest in the Travel Office were communicated to 
Foster by May 13.
---------------------------------------------------------------------------
    \457\ OPR interview of Patsy Thomasson, September 22, 1993.
---------------------------------------------------------------------------
    When Foster was interviewed in the course of the White 
House Management Review, he told John Podesta, ``I assume many 
of the conversations I had were privileged.'' \458\ Mr. Foster 
initially provided all information about the firings, except 
his contacts with the ``the clients.'' When Foster was asked in 
his interview if ``anyone else'' was ``involved'' he responded, 
``I think that's all I should say about that.'' \459\
---------------------------------------------------------------------------
    \458\ WHMR interview of Foster, CGEPR 0248.
    \459\ WHMR Management interview of Foster, June 3, 1993, CGEPR 
0257.
---------------------------------------------------------------------------
    In Foster's June 3, 1993 meeting with the White House 
Management Review team he omitted his conversations with Mrs. 
Clinton about the Travel Office, yet included events as 
inconsequential as getting a haircut in between Travel Office 
meetings.\460\ David Watkins also carefully omitted the 
conversation he had with Mrs. Clinton as well as his knowledge 
of her involvement from the account he provided to Podesta 
during his interview on June 3, 1993.\461\
---------------------------------------------------------------------------
    \460\ WHMR interview of Foster, June 3, 1993, CGEPR 0249.
    \461\ WHMR interview of David Watkins, June 2, 1993, CGEPR 487-508.
---------------------------------------------------------------------------
    Eventually, Foster and Watkins were forced to disclose 
conversations they had with Mrs. Clinton in later interviews 
with Podesta, who had learned elsewhere of Mrs. Clinton's 
involvement.\462\ However, notes from the June 30 meeting, the 
same day as Mrs. Clinton's interview with Podesta, show that 
her role was down-played as much as possible.\463\
---------------------------------------------------------------------------
    \462\ Podesta deposition, p. 81; WHMR interview of Foster, June 30, 
1993, CGEPR 0258. (Harry Thomason also failed to disclose his 
conversations with the First Lady in his interview with the White House 
Management Review on May 27, 1993. Thomason refused to cooperate in any 
additional interviews with Podesta and Stern.)
    \463\ Foster Travel Office notebook, CGE 1047, 1053-1054.
---------------------------------------------------------------------------
    Mr. Foster's notebook, which was withheld from 
investigators for years, detailed a potential defense for Mrs. 
Clinton's involvement: ``Defend management decision, thereby 
defend HRC role whatever is, was in fact or might have been 
misperceived to be.'' \464\ This was the line of defense used 
by the White House. It became essential that the ``management 
decision,'' firing Dale and others for ``cause,'' be defended. 
Under this ``defend management decision'' tactic, it appears 
Foster thought Mrs. Clinton would be protected whether or not 
her true role became known. This would also serve the President 
and is in fact the defense the White House continues to assert.
---------------------------------------------------------------------------
    \464\ Foster Travel Office notebook, CGE 1047.
---------------------------------------------------------------------------
    The real story was kept from the public. With the Clinton 
ship of state barely afloat after a rocky spring of 1993, the 
review omitted what would have been damaging admissions, 
including:
         That despite the President's public denials, 
        he, in fact, knew about the planned Travel Office 
        firings BEFORE they occurred; he was briefed on the 
        firings by Presidential aide Bruce Lindsey; and he knew 
        of Thomason's quest for aviation contracts.
         That the President, himself, approved Harry 
        Thomason's arrival at the White House for an ``image'' 
        project and that Thomason obtained an official 
        ``staff'' pass, not a ``volunteer'' pass.
         Harry Thomason's solicitations were not 
        limited to the Travel Office business, but involved 
        efforts to get a quarter of a million dollar Government 
        contract through an Executive order. President Clinton 
        spoke with Thomason and assisted him in obtaining 
        Government business.
         That Mrs. Clinton pressured high ranking White 
        House officials and was a driving force behind the 
        firing of the entire Travel Office staff on May 19, 
        1993 and that this pressure came before any Peat 
        Marwick review or FBI guidance.
         That Chief of Staff Mack McLarty, who 
        responded to Mrs. Clinton's pressure, failed to 
        disclose promptly contacts with Mrs. Clinton while 
        McLarty was supervising the Management Review.
         That the rumors passed on by Harry Thomason 
        were denied by the alleged source of those rumors, the 
        President of Miami Air.
         That initially, in the course of the review, 
        senior White House aides Foster, Watkins and McLarty 
        tried to conceal the role of Mrs. Clinton in the 
        firings.
    Given these omissions, McLarty was less than honest when he 
stood at the White House press podium and declared that the 
report was ``thorough'' and ``candid.'' The report was a 
whitewash for the Clinton administration. The report publicly 
lashed the designated scapegoats, who had only responded to 
pressure from superiors. As Cornelius explained, `` . . . I did 
everything everyone told me to do.'' \465\ Mr. Watkins was only 
following orders that he felt were impossible to ignore:
---------------------------------------------------------------------------
    \465\ Committee deposition of Catherine Cornelius, April 30, 1996, 
p. 146.

          I think all this makes clear that the Travel Office 
        incident was driven by pressures for action originating 
        outside my Office. If I thought I could have resisted 
        those pressures, undertaken more considered action, and 
        remained in the White House, I certainly would have 
        done so. . . . I was convinced that failure to take 
        immediate action in this case would have been directly 
        contrary to the wishes of the First Lady, something 
        that would not have been tolerated in light of the 
        Secret Service incident earlier in the year.\466\
---------------------------------------------------------------------------
    \466\ Watkins memo, CGE 12286-12294.

In the end, the White House Management Review had little to do 
with the reality behind the firings.

IX. The White House's Failure to Admit Thomason's Baseless ``Kickback'' 
    Allegations Were False and Led to a Fruitless IRS Investigation

                            A. Introduction

    In a May 20, 1993, news account of the May 19 White House 
Travel Office firings, the Wall Street Journal \467\ reported 
that the White House and FBI also were investigating possible 
kickbacks involving the seven fired Travel Office employees and 
UltrAir. Unnamed ``officials privately said'' and ``those 
familiar with [the investigation]'' indicated that there were 
improprieties in the Travel Office's business dealings with 
UltrAir which another anonymous White House source charged 
``was all done with a wink and a nod.'' \468\ At the time of 
publication, none of these allegations had been corroborated 
and, in fact, they subsequently were found to have been 
baseless. The White House, so quick to broadcast these false 
allegations, made no effort to retract them and correct the 
record publicly when it learned, within a month, that they were 
without merit.
---------------------------------------------------------------------------
    \467\ Michael K. Frisby, Clinton Fires White House Travel Office, 
FBI is Probing Allegations of Kickbacks, the Wall Street Journal, May 
20, 1993, p. A5.
    \468\ Id.
---------------------------------------------------------------------------
    Attorney General Janet Reno later would chastise the White 
House openly for improperly announcing the FBI investigation of 
the Travel Office.\469\ But the White House's announcement 
clearly was calculated to ``dirty up'' the Travel Office 
employees in order to minimize negative reactions to a bald-
faced exercise in political cronyism by which the Clinton 
administration installed Presidential cousin Catherine 
Cornelius, Clinton campaign travel agency World Wide Travel, 
Clinton charter broker Penny Sample and her company, Air 
Advantage, in the Travel Office while raising the possibility 
of Travel Office opportunities for Harry Thomason, Darnell 
Martens and their partnership, Thomason, Richland and Martens, 
Inc. (TRM) From the very start, Cornelius and Thomason had been 
key players in the Travel Office coup.
---------------------------------------------------------------------------
    \469\ OPR Report, pp. 68-69; see also ``Clinton Staff Bypassed Reno 
to FBI, White House Gave Bureau `Guidance' on Travel Statement,'' Ann 
Devroy and Michael Isikoff, Washington Post, May 25, 1993, pp. A1, A9.
---------------------------------------------------------------------------
    The White House's world-wide broadcast of uncorroborated, 
and, in fact, false allegations of criminal conduct against the 
Travel Office employees and UltrAir would have immediate and 
ominous consequences not merely for the Travel Office employees 
but also for UltrAir. Its Smyrna, TN, offices would be raided 
by IRS agents at 3 p.m. on Friday, May 21, 1993, just 1 day 
after the false allegations hit newsstands. A former UltrAir 
executive also found himself the subject of an IRS audit in the 
wake of these false allegations.

                               B. UltrAir

    UltrAir is an airline charter company founded in 1991 which 
provided press charters to the White House Travel Office 
starting in June 1992. UltrAir was a successor company to White 
House press charter carrier Airline of the Americas. Both 
companies were founded by employees who previously worked for 
the now-defunct Pan Am when it provided White House press 
charters.
    At 3 p.m. on May 21, 1993, three IRS agents ``raided'' 
UltrAir's offices in Smyrna, TN. There, UltrAir chief financial 
officer Ed Hamblin informed the IRS that the firm's tax records 
had been transferred to Houston, TX. Mr. Hamblin phoned UltrAir 
CEO Rick Millinor in Houston. Mr. Millinor, on the advice of 
his attorney, told the IRS that UltrAir would not surrender its 
records to IRS. At that time, IRS served UltrAir with an 
administrative summons for its records. UltrAir subsequently 
turned over all requested records on June 9, 1993.
    Coming within a day of the White House's uncorroborated 
allegations of criminal wrongdoing against the Travel Office 
employees and UltrAir, the UltrAir raid raised serious concerns 
of possible misuse of the IRS. Those concerns led to 
investigations by the IRS Inspection Service, the Department of 
Treasury Office of Inspector General and the General Accounting 
Office, which addressed IRS issues most substantively in its 
March 1994, draft report on Travel Office operations.
    Predictably, the IRS Inspection Service, in its 
investigation of the matter, found that IRS personnel took no 
inappropriate actions in the UltrAir matter and concluded that 
there was no evidence of any White House contact on the 
matter.\470\ The IRS Inspection Service was a strictly internal 
review, however, and no one outside the IRS was interviewed in 
the course of its investigation.
---------------------------------------------------------------------------
    \470\ Allegations of Inappropriate White House, FBI, and IRS Action 
Involving UltrAir Company are Unfounded, GAO draft material, 
contemporaneous with March 19, 1994 draft of White House Travel Office 
Report, p. 1.
---------------------------------------------------------------------------
    The Department of Treasury Office of Inspector General 
Report, conducted pursuant to the July 14, 1993 request of 
Congressman Frank Wolf and released on March 31, 1994, also 
concluded that IRS officials took no inappropriate action and 
found no evidence of White House contact.\471\ It did, however, 
raise additional questions. The report referred to an August 5, 
1993 letter to Congressman Wolf from IRS Commissioner, Peggy 
Richardson, in which:
---------------------------------------------------------------------------
    \471\ ``Inquiry of Alleged Misuse of the IRS RE: the White House 
Travel Office,'' Robert P. Cesca, Department of the Treasury, Deputy 
Inspector General, March 31, 1994.

          [S]he stated that IRS Revenue Agents generally do not 
        issue a summons during an unannounced visit in 
        connection with an examination. Taxpayers are notified 
        of an examination through correspondence or by 
        telephone prior to an agent's arrival.\472\
---------------------------------------------------------------------------
    \472\ Id., p. 7.

This suggests that the manner of the IRS raid on UltrAir was, 
in fact, unusual. Additionally, the report's conclusion that, 
``Based on our discussions with IRS officials, and 
corroborating evidence from records of GAO evaluators, we found 
no evidence that there were any contacts generated from anyone 
at the White House to the IRS regarding this matter,'' appears 
less than categorical.\473\ If its discussions were, in fact, 
limited to IRS officials and GAO evaluators, it is not clear 
that the investigation exhausted all the available evidence. 
Such questions are critical in retrospect, given the Clinton 
White House's now well-established practices of withholding 
documents and coordinating witness testimony.
---------------------------------------------------------------------------
    \473\ Id., p. 10.
---------------------------------------------------------------------------
    The Treasury OIG Report also noted that an FBI official, 
subsequently identified as Supervisory Special Agent Tom Carl 
of the FBI Government Fraud Unit:

          . . . contacted an IRS National Office Criminal 
        Investigator to obtain some investigative information, 
        if applicable. The IRS Criminal Investigation did not 
        provide the FBI Official with any material information. 
        (This information was corroborated with the IRS 
        Investigator.) The National FBI Official then contacted 
        a Nashville, Tennessee, FBI agent to make an 
        investigative inquiry with local IRS officials.\474\
---------------------------------------------------------------------------
    \474\ Id., p. 10.

Agent Carl, of course, was made aware of the ``highest levels'' 
interest in the Travel Office matter by Associate White House 
Counsel Bill Kennedy.\475\ And while Agent Carl made his 
inquiries in the week following the IRS raid on UltrAir, his 
involvement with both the White House Counsel's office and the 
IRS investigation of UltrAir raises concerns that his 
understanding of ``highest levels'' interests led to calls to 
the IRS in Washington and Nashville concerning UltrAir. While 
the Treasury OIG Report concluded the IRS did not provide any 
material information to the FBI, it did not say whether the FBI 
provided material information to IRS.
---------------------------------------------------------------------------
    \475\ See GAO interview of Agent Tom Carl, October 20, 1993.
---------------------------------------------------------------------------

C. The UltrAir Matter Was Not Handled Under the Same Standards as Other 
                        Potential Tax Violations

    While the GAO Draft report also suggested that allegations 
of improper contacts among the White House, FBI and IRS were 
unfounded, it too raised further questions. A GAO footnote 
stated, ``IRS' policy is that all referrals of potential tax 
violations are to be handled the same, regardless of the 
source.'' \476\
---------------------------------------------------------------------------
    \476\ GAO draft report, White House Travel Office Operations, p. 1.
---------------------------------------------------------------------------
    Yet, the UltrAir raid was not handled in the usual fashion 
of other potential tax violations. The 1-day turnaround between 
the publication of allegations concerning UltrAir in the Wall 
Street Journal and the May 21, 1993, raid was highly unusual, 
if not unprecedented. In a June 7, 1993, article in Tax Notes 
Today, Lee A. Sheppard reported that several former IRS 
executives had found the raid on UltrAir highly unusual.\477\ 
She wrote that:
---------------------------------------------------------------------------
    \477\ Lee A. Sheppard, Was the IRS Involved in `Travelgate'?; Tax 
Notes Today, Vol. 59, June 7, 1993, p. 1301.

          The usual starting point for an IRS examination is a 
        [tax] return; without a return, there is nothing for 
        agents to talk about.\478\
---------------------------------------------------------------------------
    \478\ Id.

    But UltrAir, which had been founded in 1991, but had not 
begun operations until mid-1992, had yet to file an income tax 
return. On March 15, 1993, the company had filed for and 
received an extension on its 1992 return. It had filed no 
return for 1991, in which it generated no revenues. Ms. 
---------------------------------------------------------------------------
Sheppard added that,

          In a normal audit, the IRS calls first, makes an 
        appointment for an agent to visit, and requests 
        documents that it needs to examine.\479\
---------------------------------------------------------------------------
    \479\ Id.

Referring to Internal Revenue Manual chapter 4022.3, Sheppard 
noted that standard IRS practice is to exhaust all other means 
of obtaining the desired information before issuing an 
administrative summons. In other words, the taxpayer must 
resist IRS requests for information; records provided must be 
thought to be incomplete and/or pertinent details withheld; or 
the availability of the records must be in doubt. That was not 
the case with UltrAir. Ms. Sheppard adds, ``Aggressive nonfiler 
procedures, in the sense of physically going after the 
nonfiler, are usually only invoked in criminal cases.''
    In her June 28, 1993, follow-up article entitled, ``What 
the IRS Travelgate Report Does and Does Not Say,'' Sheppard 
asked:

          Could an excise tax dispute justify sending three 
        agents with an administrative summons on an unannounced 
        visit to the taxpayer? This requires an assumption that 
        UltrAir failed to pay excise taxes, had been notified 
        of that failure, and continued to resist paying. That 
        did not happen.\480\
---------------------------------------------------------------------------
    \480\ ``What the IRS Report Does and Does Not Say,'' Lee A. 
Sheppard, Tax Notes Today, Vol. 59, June 28, 1993, pp. 1743, 1744.

Ms. Sheppard found other aspects of the IRS raid on UltrAir 
unusual. Given the fact that the IRS report indicated that 
UltrAir was not the subject of a criminal investigation, 
---------------------------------------------------------------------------
Sheppard wrote:

          If there is no criminal investigation of UltrAir, why 
        was the IRS treating the company like criminals? Why 
        did the IRS send three agents to an airline so small 
        that the agents outnumbered the airplanes? Why did they 
        make an unannounced visit, which is normal procedure 
        for criminals? Why did they resort to an administrative 
        summons, a coercive tool that the Internal Revenue 
        Manual reserves for uncooperative taxpayers?\481\
---------------------------------------------------------------------------
    \481\ Id., p. 1743.

    Not only was the UltrAir case not a criminal matter, the 
IRS had every reason to believe that the company was an 
otherwise responsible corporate citizen. In fact, in October 
1992, UltrAir CFO Hamblin voluntarily approached the IRS with a 
question concerning excise tax compliance and its White House 
press charter operations. Mr. Hamblin worked with the IRS on 
this issue through early 1993, when the IRS tentatively found 
UltrAir liable for some $220,000 in excise taxes related to the 
White House press charters.\482\ (Because UltrAir had not 
calculated excise taxes into its press charter billings, the 
White House eventually paid them. The IRS ultimately would 
conclude that the Travel Office was responsible for collecting 
excise taxes from the press corps and paying them to the IRS.) 
\483\
---------------------------------------------------------------------------
    \482\ GAO draft letter to (then) ranking minority members of House 
and Senate committees (Chms. Clinger and Grassley) [never sent], May 
1994, p. 9.
    \483\ Id., p. 8.
---------------------------------------------------------------------------

                        D. Securing the Records

    GAO provided some insights into why the IRS issued the 
highly unusual administrative summons. GAO reported that once 
the IRS became aware of media stories implicating UltrAir in 
possible wrongdoing at the Travel Office, it was concerned 
about maintaining access to UltrAir excise tax records. In 
particular, it was concerned that if the FBI subpoenaed those 
documents, it would no longer have access to them. In short, 
UltrAir was caught up in a turf battle between the IRS and the 
FBI. IRS' other reported concerns in securing documents, that 
UltrAir might destroy documents and that it was in the middle 
of a corporate move to Houston, appear specious. The committee 
is confident that the IRS had sufficient Houston-based 
resources to continue any investigation originating in 
Nashville, TN.
    Ironically, IRS personnel advised committee investigative 
staff in an October 23, 1995 briefing that the IRS would not 
have known who--or where--UltrAir was had it not been for the 
fact that CFO Hamblin voluntarily came forward to the IRS some 
7 months before with his questions concerning excise taxes. In 
other words, UltrAir's good faith efforts as a corporate 
citizen led to its May 21, 1993, mistreatment as a suspected 
tax criminal.
    GAO reports that after an IRS agent in Nashville informed a 
group manager and branch chief of the UltrAir media accounts, 
the agents determined that UltrAir had not filed 1991 or 1992 
income tax returns.\484\ In the former case, UltrAir 
incorrectly assumed that it need not file a tax return for a 
year in which it generated no business revenues. In the latter 
case, UltrAir had filed for an extension on March 15, 1993 but 
IRS computers lost the record. UltrAir filed returns for both 
1991 and 1992 on July 1, 1993.
---------------------------------------------------------------------------
    \484\ GAO draft report, p. 7.
---------------------------------------------------------------------------
    Based on this information, IRS' Nashville branch chief 
instructed agents to prepare an administrative summons for 
UltrAir and visit its offices unannounced. It never made any 
effort to call first to raise questions and concerns with 
UltrAir as Sheppard suggested would be the normal procedure.
    GAO noted in its report that UltrAir's refusal, on May 21, 
1993, to turn over the documents called for in the 
administrative summons was appropriate given its surprise at 
the raid and the advice of its attorneys. UltrAir turned over 
all requested documents to the IRS on June 9, 1993.\485\
---------------------------------------------------------------------------
    \485\ GAO draft letter, p. 7.
---------------------------------------------------------------------------

                  E. KPMG Peat Marwick: Both Sides Now

    Importantly, KPMG Peat Marwick's Nashville, TN-based 
certified public accountants gave UltrAir a clean audit opinion 
in March 1993, in essence stating that it found no sign of 
irregularities--such as kickbacks--in UltrAir's financial 
records. This is noteworthy, given the fact that KPMG Peat 
Marwick management consultants would be brought into the White 
House Travel Office 2 months later to look for evidence of 
kickbacks which could have implicated another Peat Marwick 
client. KPMG Peat Marwick found no evidence of kickbacks in the 
White House Travel Office, either.

                      F. Bill Kennedy and the IRS

    In his initial meetings with FBI agents, prior to the 
Travel Office firings, Associate White House Counsel Bill 
Kennedy reportedly stated that if the FBI could not assist him, 
that he would go to another agency, in particular, the 
IRS.\486\ The investigation of UltrAir which immediately ensued 
prompted investigators to question if Kennedy's stated 
intentions were acted upon by him or other White House 
officials. But Kennedy has repeatedly, unequivocally, denied 
taking action. Specifically, he testified to the GAO that:
---------------------------------------------------------------------------
    \486\ OPR Report, p. 27.

          [H]e did not say that he would call the IRS directly, 
        and that he never contacted any IRS official about the 
        White House Travel Office or UltrAir. [Emphasis added] 
        \487\
---------------------------------------------------------------------------
    \487\ GAO draft report, p. 11.

The preceding remarks appear to contradict the notes of a June 
28, 1993, White House Management Review interview of Associate 
White House Counsels Beth Nolan and Cliff Sloan. These notes 
---------------------------------------------------------------------------
read, in part:

          BK [Associate White House Counsel Bill Kennedy] said 
        PR [IRS Commissioner Peggy Richardson] on top of it. 
        She said at party IRS on top of it & some reference to 
        IRS agents aware or something like that.\488\
---------------------------------------------------------------------------
    \488\ WHMR interview of Nolan and Sloan, June 28, 1993, CGEPR 0379.

We believe this contradiction has not been adequately 
investigated.

          G. Kickback Allegations Disproved by the White House

    In a June 17, 1993, interview with Ross Fischer of Miami 
Air, White House Staff Secretary John Podesta, who was in 
charge of the White House Management Review, learned that 
Fischer and Miami Air were ``never approached for kickback.'' 
Mr. Podesta's handwritten note underscores the words ``never 
approached'' twice.\489\ In his committee deposition, Podesta 
acknowledged that he found no information to substantiate the 
kickback allegations.\490\ Similarly, no evidence of kickbacks 
was found by KPMG Peat Marwick (at the Travel Office or 
UltrAir), the General Accounting Office, the FBI or the IRS.
---------------------------------------------------------------------------
    \489\ WHMR interview notes of Ross Fischer, June 17, 1993, CGEPR 
0237.
    \490\ Podesta deposition, pp. 162-163.
---------------------------------------------------------------------------
    Mr. Podesta was aware that the FBI investigation of the 
Travel Office--and the White House's smear campaign against the 
fired Travel Office employees and UltrAir--was based in large 
part on the kickbacks allegation. But Podesta refused to advise 
the FBI of his discovery. The White House's refusal to inform 
the FBI, the IRS, and the press of its discovery immediately, 
needlessly subjected UltrAir, former UltrAir president Charles 
Caudle and the fired Travel Office employees to the threat of 
investigations, audits and worse.
    In late 1994, the IRS informed UltrAir that it had no 
additional income tax liability. At approximately the same 
time, former UltrAir president Charles Caudle received a $4,900 
tax refund when the IRS closed his audit. In testimony before 
the committee in January 1996, Billy Dale and several of his 
Travel Office colleagues indicated that they faced the threat 
of IRS audits for well over 2 years, but, again, no violations 
were found.\491\
---------------------------------------------------------------------------
    \491\ Testimony of Billy R. Dale before the Committee on Government 
Reform and Oversight, January 24, 1996.
---------------------------------------------------------------------------

                     H. Internal Revenue Code 6103

    The committee attempted to determine what precipitated the 
highly unusual 1-day turnaround from the publication of a news 
article to a full-blown audit of a company that had not yet 
filed its first income tax return. However, that attempt was 
stymied by Internal Revenue Code Section 6103.
    For good reason, Section 6103 makes it a crime to disclose 
tax records and tax return material without the proper 
authorities. Yet, the president of UltrAir and his attorneys 
provided several successive 6103 waivers to committee staff 
precisely because they hoped the committee's investigation 
would uncover the impetus of the IRS' audit. Each successive 
6103 waiver form was completed with scrupulous attention to 
requirements dictated by various representatives of the IRS and 
the Treasury Department. In the end, the committee was informed 
that the IRS was ``not comfortable'' with releasing the 
requested information. The committee does not believe ``not 
comfortable'' is a legal term of art which justifies the 
withholding of materials an individual or corporate tax citizen 
wishes to be released.
    Section 6103, at the same time it prevents previous abuses, 
may shield IRS abuses from proper congressional oversight. 
Without the ability to review relevant tax records pursuant to 
UltrAir's own waiver, too many questions still remain 
unanswered.
    In her June 30, 1993, Tax Notes Today article entitled: 
``What the IRS Travelgate Report Does and Does Not Say,'' Lee 
A. Sheppard wrote: ``Nothing in the redacted IRS report 
addresses the exquisite timing of the IRS visit to UltrAir. It 
seems to be more than coincidental.'' \492\ She concluded:
---------------------------------------------------------------------------
    \492\ Lee A. Sheppard, What the IRS Travelgate Report Does and Does 
Not Say, Tax Notes Today, Vol. 59, p. 1743.

          As we cannot emphasize too often, the IRS is not a 
        free-ranging, all-purpose investigative agency 
        empowered to root out crimes and misdeeds wherever they 
        may occur. At least four people at the IRS had to think 
        that the rough treatment of UltrAir was warranted.\493\
---------------------------------------------------------------------------
    \493\ Id.

    The committee concurs in these remarks, and believes that 
the answers to these questions, currently sealed behind IRS 
Code Section 6103, warrant further attention. Moreover, that 
executive branch officials were aware of investigations arising 
from their own false allegations and took no action to inform 
the investigators, constitutes a reckless abuse of the public 
trust.

    X. Vincent Foster Became Increasingly Disturbed by the Problems 
   Generated by Travelgate--as Did Numerous High Ranking White House 
                               Officials

 A. Despite Foster's initial efforts during the Management Review, he 
  was unsuccessful in concealing ``the clients''' role in the Travel 
                             Office firings

    On May 13, 1993, almost a week before the Travel Office 
firings, Foster disclosed to Patsy Thomasson that ``the 
clients'' were interested in this matter. Ms. Thomasson reports 
that ``the clients'' was how Foster referred to President and 
Mrs. Clinton.
    John Podesta and Todd Stern testified that Deputy Counsel 
Vincent Foster did not inform them of his contacts with Mrs. 
Clinton concerning the Travel Office prior to the firings.\494\ 
However, Podesta and Stern did learn of Mrs. Clinton's 
involvement from other sources and questioned Foster in a 
second interview.\495\ Mr. Foster raised the issue of 
privileged conversations in his White House Management Review 
interview.\496\ In the days prior to his death, Foster 
expressed his serious concerns about getting outside counsel 
for ``the clients.'' \497\
---------------------------------------------------------------------------
    \494\ Committee deposition of John Podesta, June 5, 1996, p. 90; 
committee deposition of Todd Stern, May 29, 1996, p. 30.
    \495\ WHMR interview notes of Foster, June 30, 1993, CGEPR 240-259.
    \496\ Id.
    \497\ OPR Report, p. 90.
---------------------------------------------------------------------------
    Independent Counsel Fiske concluded in his report: ``Those 
close to Foster have stated that the single greatest source of 
his distress was the criticism he and others within the 
Counsel's Office received following the firing of seven 
employees from the White House Travel Office.'' \498\ Mrs. 
Clinton told Independent Counsel Fiske she never talked with 
Foster about the Travel Office in June or July 1993,\499\ and 
was unaware of his concerns. In his committee deposition, 
Nussbaum testified that he thought Mrs. Clinton discussed the 
report or related events with Foster at some time at or around 
the release of the Management Review.\500\
---------------------------------------------------------------------------
    \498\ Hearings relating to Madison Guaranty S&L and the Whitewater 
Development Corporation--Washington, DC Phase, Volume I on the Death of 
Vincent W. Foster, Jr., July 29, 1994, p. 185.
    \499\ Testimony of Hillary Rodham Clinton before the Office of the 
Independent Counsel, June 12, 1994 in hearings before the Committee on 
Banking, Housing and Urban Affairs, U.S. Senate, 103d Congress, 2d 
Sess., Volume II on ``Death of Vincent Foster, Jr.,'' July 29, 1994, p. 
2106.
    \500\ Committee deposition of Bernard Nussbaum, June 12, 1996, pp. 
127-129.
---------------------------------------------------------------------------
    Mrs. Clinton's role in the Travel Office firings became an 
issue following the release of the July 2, 1993 Management 
Review. With the onset of numerous investigations into the 
firings, the role of President Clinton and Mrs. Clinton was 
again a problematic issue in the Counsel's office.

B. The Management Review's inclusion of Bill Kennedy's reference to the 
involvement of ``the highest levels'' of the White House in the firings 
      raised problems for both President Clinton and Mrs. Clinton

    Mr. Foster reportedly was distraught by reports from FBI 
agents who said Kennedy informed them the Travel Office matter 
had the interest of those at ``the highest levels'' and ``the 
highest level'' at the White House.\501\ Mr. Kennedy also was 
reported saying that if the FBI didn't respond quickly, he 
would call the IRS.\502\ Mr. Foster strongly opposed including 
this account in the Management Review.\503\ The inclusion of 
the FBI version of events, in effect, verified the agents' 
accounts of these discussions. This implicit admission opened 
the door to consider further both Mrs. Clinton's and President 
Clinton's involvement in the firings.
---------------------------------------------------------------------------
    \501\ See e.g. GAO interview of FBI Agent Howard Apple, October 15, 
1993, pp. 1, 4.; OPR Report, pp. 82-83.
    \502\ OPR Report, p. 27.
    \503\ OPR Report, p. 84.
---------------------------------------------------------------------------
    Mr. Kennedy denied making these statements to the FBI 
agents,\504\ however, the fact that the Management Review 
included a reprimand of Kennedy, acknowledges that the word of 
four FBI agents had been implicitly accepted over that of 
Kennedy. The committee, having interviewed all four FBI agents 
and reviewed their sworn statements to OPR, also finds them 
credible. Mr. Kennedy's statements about whether or not he 
referred to ``the highest levels'' of the White House being 
interested in the Travel Office, are in direct conflict with 
the testimony of the four FBI agents.
---------------------------------------------------------------------------
    \504\ Kennedy deposition, p. 91.
---------------------------------------------------------------------------
    In addition to the sworn testimony of four FBI agents, the 
committee obtained testimony from an additional witness, 
Matthew Moore, who was part of Watkins' team of assistants 
assembled on May 13, 1993 to prepare for the Peat Marwick 
review the next day. According to Moore, Kennedy told the 
group, ``something to the degree that you know, this goes to 
the highest level, the concern about this, you know, goes to 
the highest level.'' \505\
---------------------------------------------------------------------------
    \505\ Committee deposition of Matthew Moore, March 26, 1996, p. 98.
---------------------------------------------------------------------------
    It is notable that in the course of the White House 
Management Review, Podesta and Stern re-interviewed the FBI 
agents to be sure they would uphold their version of events. 
Messers. Podesta and Stern also gave Kennedy a second chance to 
change his account.\506\ According to numerous White House 
aides, Foster argued in vain that these comments should not be 
included in the report and that Kennedy's version of events 
should be accepted.\507\ Mr. Foster also was upset because he 
felt responsible for Kennedy's involvement, and expressed 
remorse at not having handled the matter himself.\508\ Mr. 
Foster's close friend, Webb Hubbell, told OPR investigators 
that, ``even after the White House Report was released . . . 
Foster continued to be upset that Kennedy had been 
reprimanded.'' \509\
---------------------------------------------------------------------------
    \506\ WHMR interview notes. Agent Howard Apple was interviewed 
first on June 9, 1993 and then again on June 25, 1993. Agent Wade was 
interviewed on June 9, 1993 and June 28, 1993; Agent Tom Carl, was 
interviewed on June 9, 1993 and again on June 25, 1993. William Kennedy 
was interviewed first on June 8, 1993 and then again on June 30, 1993.
    \507\ OPR Report, p. 84.
    \508\ See OPR Report, p. 85, discussion of a conversation Foster 
had with Webb Hubbell about his concerns.
    \509\ OPR Report, p. 85.
---------------------------------------------------------------------------
    If, as FBI agents stated and now have testified under oath 
to OPR, Kennedy did point to the involvement of ``the highest 
levels'' of the White House in the Travel Office firings, then 
future investigations could pose problems for President and 
Mrs. Clinton. Would criminal investigators ask Foster or 
Kennedy about the role of President and Mrs. Clinton?
    If there were misuse of Harry Thomason's access to the 
White House and his status as a special Government employee 
became an issue, what would Foster have to disclose regarding 
the knowledge of those at the highest levels? What were the 
liabilities of the President and First Lady in helping Thomason 
obtain Government business, including the Travel Office?
    Mr. Foster's handwritten notebook detailing the Travel 
Office saga notes ``misuse of FBI'' followed by ``they deny'' 
and ``HR no role.'' \510\ In this context, ``HR'' appears to 
refer to ``Hillary Rodham.'' Was Foster worried that Mrs. 
Clinton might be dragged into the ``misuse of the FBI'' issue? 
If so, why?
---------------------------------------------------------------------------
    \510\ Foster Travel Office notebook.
---------------------------------------------------------------------------
    Following the release of the Management Review, Foster 
talked with his sister and his brother-in-law, Sheila and Beryl 
Anthony, on the occasion of a July 9 dinner. He voiced his 
concerns with the report and his belief that the ``FBI lied 
regarding the Travel Office matter.'' Sheila Anthony said she 
thought that Foster's ``remarks regarding the FBI concerned the 
conversations between the White House Counsel's Office and the 
FBI that had been described in the White House Report.'' \511\ 
Mr. Anthony said these remarks made a ``big impression'' on him 
because Foster was not ``subject to exaggeration and never made 
inflammatory remarks.'' \512\
---------------------------------------------------------------------------
    \511\ OPR Report, p. 87, discussion of comments by Sheila Anthony.
    \512\ OPR Report, p. 89.
---------------------------------------------------------------------------
    Mr. Foster also told his sister that he was considering 
resigning his position at the White House.\513\ While it is 
possible that Foster believed Kennedy when Kennedy said he made 
no such statements to the FBI agents, Foster himself, on the 
same day, informed Patsy Thomasson that ``the clients''--the 
same people who are at ``the highest levels''--were concerned. 
It appears unlikely that Foster would have shared information 
about the President and Mrs. Clinton's interest in this matter 
with others such as Ms. Thomasson, but not with Kennedy. Mr. 
Foster repeatedly told Watkins of Mrs. Clinton's interest.\514\ 
Since Kennedy was the main person Foster had tasked with 
responding to this matter, it is implausible that he did not 
inform Kennedy of Mrs. Clinton's interest.
---------------------------------------------------------------------------
    \513\ Id.
    \514\ See Watkins ``soul cleansing'' memo, CGE 12286-12294.
---------------------------------------------------------------------------
    Perhaps what Foster didn't believe is that Kennedy would 
have been foolish enough to tell outsiders at the FBI of Mrs. 
Clinton's interest. But the committee has obtained new 
documentation suggesting Kennedy, indeed, was prone to exerting 
his influence over outside agencies and engaging in a pattern 
of intimidation.\515\ The committee's own experience with 
Kennedy is consistent with this pattern.\516\
---------------------------------------------------------------------------
    \515\ The committee is in receipt of a memo from the CIA 
``Memorandum for the Record, Subject: Halperin Nomination--Conversation 
with Bill Kennedy, White House Counsel's office''. The memo discusses 
Mr. Kennedy's efforts to keep the Senate Armed Services Committee from 
obtaining information from the CIA which pertained to Mr. Halperin. Mr. 
Kennedy was reported to have told the CIA to ``abstain from doing any 
file searches: `don't hit a lick,' to use his precise words.'' A CIA 
official reviewing this memo circled this request and handwrote: ``This 
is an outrage. The WH [White House] staff does not control our files.'' 
Apparently, Mr. Kennedy had a history of muscling outside agencies. If 
he would do this to the CIA, the committee, armed with the testimony of 
four FBI agents, believes he would do the same thing with the FBI. The 
committee does note that the FBI agents stated they did not feel 
intimidated by Kennedy's remarks but this does not excuse Mr. Kennedy 
for making such statements and does not resolve the actual facts behind 
the statements about the ``highest levels.''
    \516\ Kennedy's own indiscretions in failing to report his nanny 
taxes and not providing this information to the White House raises 
additional questions about his veracity.
---------------------------------------------------------------------------
    Prior to considering resignation, it is significant that 
Foster himself was considered for a reprimand for his actions 
in the Travel Office. Mr. Nussbaum informed the committee that 
when he heard that Kennedy was to be reprimanded for his 
actions, he went to McLarty and demanded that he and Foster 
also be reprimanded in the belief that the Counsel's office 
should stick together.\517\ Mr. Nussbaum says that when he told 
Foster of his demand that they all be reprimanded, ``[Foster] 
didn't look about it as happy as I did, at that point.'' \518\ 
However, Nussbaum and Foster were not reprimanded. This would 
have brought matters closer to ``the highest levels'' when the 
White House intended to contain this to mid-level staff. ``Low-
level'' staff are often available to take responsibility for 
mistakes in the Clinton White House.
---------------------------------------------------------------------------
    \517\ Nussbaum deposition, pp. 138-139.
    \518\ Id., p. 139.
---------------------------------------------------------------------------
    But it was not low-level staff who were responsible for 
this blunder, as claimed by the White House. It was not the 
``inexperience and ineptitude'' of young White House staff who 
gave Harry Thomason free reign in the White House. It was the 
arrogance and favor-seeking of President Clinton's friends and 
family, championed by senior White House aides, responding to 
President and Mrs. Clinton that caused these problems.

 C. Foster was troubled by the prospect of numerous congressional and 
         criminal investigations into the Travel Office firings

    Members of Congress, both from the House and the Senate, 
called for the immediate appointment of an independent counsel 
and were getting support from the media by mid-July. On July 2, 
1993, the very day that the White House Management Review was 
released, President Clinton was forced to sign a bill that 
included a provision providing for a General Accounting Office 
review of the Travel Office firings.\519\ The GAO review 
provision was inserted by Senator Byrd on an appropriations 
bill.\520\
---------------------------------------------------------------------------
    \519\ The Supplemental Appropriations Act of 1993 (P.L. 103-50), 
signed the same day, required that GAO ``conduct a review of the action 
taken with respect to the White House Travel Office . . . ''
    \520\ Supplemental Appropriations Act of 1993 (P.L. 103-50).
---------------------------------------------------------------------------
    The White House already ran into trouble with GAO reviews 
of the White House purchase of a new phone system and a resume 
reviewing system in 1993. The thought of GAO investigators 
examining the ``management decision'' Foster had vowed ``to 
defend'' was another headache for the already overburdened 
Deputy White House Counsel who was spending many of his working 
hours on personal matters for the Clintons.\521\
---------------------------------------------------------------------------
    \521\ In testimony before the Senate Whitewater Committee, White 
House Counsel secretary, Linda Tripp, testified that Mr. Foster spent 
most of his time working on personal matters for the Clintons. Since 
Ms. Tripp had previously worked at the White House under other 
Counsels, she recognized this was unusual and raised it with Mr. 
Nussbaum who dismissed her concerns. Senate Whitewater deposition of 
Linda Tripp, July 12, 1995, pp. 52-53.
---------------------------------------------------------------------------
    Senior Democrats in Congress were skeptical about the 
Management Review and Chairman Jack Brooks was reported to have 
told Mack McLarty he should have fired people higher up.\522\ 
Chairman Brooks was faced with fending off a ``House Resolution 
of Inquiry'' in the Judiciary Committee.
---------------------------------------------------------------------------
    \522\ Michael Isikoff, ``Foster Was Shopping for Private Lawyer, 
Probers Find,'' Washington Post, August 15, 1993, p. A20.
---------------------------------------------------------------------------
    On June 16, 1993, Republican House leaders and then ranking 
minority member of the Government Operations Committee William 
Clinger filed a ``House Resolution of Inquiry,'' \523\ which 
was considered on July 14, 1993. The resolution allowed the 
House to ask the President to provide certain documents and 
answer specific questions focusing on the possible misuse of 
the FBI and the IRS. While the President could not be compelled 
to respond to a ``Sense of Congress'' resolution, it would have 
put Congress on record as demanding responses from the White 
House.
---------------------------------------------------------------------------
    \523\ House Resolution 198, 103d Cong., 1st Sess. (1993).
---------------------------------------------------------------------------
    Clinton administration officials were hard at work to ward 
off the attempt to open a congressional inquiry. In a July 13, 
1993 letter to Chairman Brooks, President Clinton pledged that 
the Attorney General would have the administration's ``full 
cooperation'' in a Department of Justice review of the 
Management Review.\524\ Chairman Brooks and his staff were 
communicating with the Associate Attorney General Webb Hubbell 
in the days leading up to the July 14, 1993 consideration of 
the Resolution of Inquiry \525\ and a letter to the committee 
was received from the Attorney General.\526\
---------------------------------------------------------------------------
    \524\ Letter from President Clinton to Chairman Brooks, July 13, 
1993.
    \525\ Phone logs of Webster Hubbell indicate that Chairman Brooks 
phoned Hubbell on July 13, 1993 and on July 15, 1993, the day after the 
Resolution of Inquiry was defeated. Chairman Brooks Counsel, Jon 
Yarowsky called Hubbell on behalf of Brooks and left the message that 
Brooks extended his thanks ``for all your help.'' Yarowsky is now a 
White House Associate Counsel who has been one of the key White House 
lawyers handling the Travelgate investigation.
    \526\ Letter from Attorney General Reno to Honorable Jack Brooks, 
July 14, 1993.
---------------------------------------------------------------------------
    The ``House Resolution of Inquiry'' required President 
Clinton to turn over all responsive documents and answer 
questions concerning FBI and IRS actions related to the 
firings.\527\ During the days and weeks leading up to the 
Resolution, IRS Commissioner Peggy Richardson made numerous 
calls to Webb Hubbell.\528\ The Resolution was defeated but 
House rules still allowed for the full House to vote on the 
inquiry and a plan was in the works for a vote later in the 
month.
---------------------------------------------------------------------------
    \527\ House Resolution of Inquiry, H.Res. 198, voted down in the 
Judiciary Committee, 20-15, July 14, 1993.
    \528\ Webb Hubbell phone logs reflect phone calls from Peggy 
Richardson to Webb Hubbell on June 17, 1993--the day after the House 
Resolution of Inquiry was introduced. Richardson calls Hubbell again on 
June 23 and June 25 (with message she will be out of town for 2 weeks 
and will call). The House Resolution of Inquiry was scheduled for a 
vote on July 14, 1993. Richardson calls Hubbell on July 12, July 13 and 
July 14. Richardson cancelled meetings with Rep. Frank Wolf regarding 
IRS/Travel Office matters on both July 14 and July 15, 1993. In 
reviewing over 15 months of Hubbell's phone logs, there are only one or 
two other phone messages from Commissioner Richardson in the entire 15 
months Hubbell served at the Justice Department.
---------------------------------------------------------------------------
    In the weeks following the Management Review, Foster 
discussed his growing concerns about where the investigations 
would lead with a number of people inside and outside the White 
House.\529\ Both Podesta and Stern, co-authors of the 
Management Review, recall talking with Foster after the report 
was completed. They were tasked with responding to 
congressional efforts in the ``House Resolution of Inquiry.'' 
Podesta discussed one such conversation in his committee 
deposition:
---------------------------------------------------------------------------
    \529\ OPR Report, pp. 82-92.

          Question. Can you describe the discussions you had 
        with him about congressional inquiries?
          Answer. I think that he was--I specifically recall 
        driving him home one evening, obviously prior to July 
        20th, in which he expressed concern about the Hill and 
        what was going on and what was happening on the 
        Resolution of Inquiry, et cetera.
          Question. So you place this discussion sometime prior 
        to the House Resolution of Inquiry, or thereabouts?
          Answer. I would place it between July 2nd and July 
        20th. I think it was before our briefing of the House 
        committee, so it would have been probably the week of 
        the 4th or something.
          Question. Do you recall having any discussion with 
        him after you briefed the committee, telling him what 
        went on with the committee or after the vote?
          Answer. After the vote of the committee?
          Question. Yes.
          Answer. I don't know whether I discussed it with him. 
        I might have. I generally thought that his concern was 
        serious enough that I needed to let him know what was 
        going on.\530\
---------------------------------------------------------------------------
    \530\ Deposition of John Podesta, pp. 187-188.

    The timing of a call that Foster made to Jim Lyons is 
consistent with concerns that he had about the Resolution of 
Inquiry. Mr. Lyons reported that Foster called him in a panic 
approximately a week before his death and wanted Lyons to come 
to Washington as soon as possible to assist him in the Travel 
Office matter.\531\ By the next day, Foster had called back to 
inform him that the situation was not as urgent. Mr. Lyons 
planned to travel to Washington, DC the following week and he 
and Foster made plans to get together to discuss the Travel 
Office and other matters.\532\ This was also the week in which 
Foster spoke with Susan Thomases and Jim Hamilton about Travel 
Office matters.\533\
---------------------------------------------------------------------------
    \531\ OPR Report, p. 91.
    \532\ Id.
    \533\ Id., fn. 97.
---------------------------------------------------------------------------
    Mr. Foster's notes also indicate that he was preparing for 
defending these issues in various forums, including 
congressional investigations, the GAO review, and the 
Department of Justice. In his handwritten notes, he did a 
detailed analysis of ``opponents theories'' and wrote, ``avoid 
forcing DOJ.'' \534\ In preparing for hearings or litigation, 
Foster identified numerous problems for himself and other White 
House lawyers and staff such as: ``5. communications by joint 
defense . . . application to Bernie speaking for WH . . ., 6. 
Witnesses by virtue of participation in mgment review . . . 9. 
Accumulation of add'l evidence, e.g. HT [Harry Thomason] 
tapes,\535\ nexis tvl office, news file . . . 13. Does everyone 
who edited report become a witness . . . existence of drafts . 
. . 14. Difficulty of operating prep w/ 3-4 ws [witnesses] in 
office..'' One item he noted: ``Communications w/top 2'' 
apparently referring to President and Mrs. Clinton.\536\
---------------------------------------------------------------------------
    \534\ Foster Travel Office notebook, CGE 1045, 1047.
    \535\ The committee has subpoenaed all documents related to Harry 
Thomason including tapes. Committee staff has particularly asked about 
Harry Thomason tapes and asked for all tapes he may have produced or 
provided. The only tape the committee has received to date is ``The Man 
from Hope.''
    \536\ Foster Travel Office notebook, CGE 1048.
---------------------------------------------------------------------------
    On July 15, 1993, the day after the Resolution of Inquiry 
was defeated, then Deputy Attorney General Phil Heymann 
directed the Office of Professional Responsibility to 
investigate the FBI's response to the White House in 
investigating the firings. The Public Integrity Section of the 
Justice Department already had a criminal investigation 
underway concerning the Travel Office operations and 
allegations of wrongdoing by the White House. Clearly many 
White House witnesses, including Foster and others at ``the 
highest levels'' would be called upon to testify--and under 
oath.
    While there were numerous other matters arising with 
respect to Whitewater--the Clintons' taxes and other potential 
problems for the White House that Foster would be dealing with, 
it appears that the Travel Office and the future problems it 
threatened, weighed particularly heavily on Mr. Foster.

  D. Foster was in the middle of problems related to Harry Thomason, 
                  which were starting to gather steam

    Mr. Foster's general anxiety about the burgeoning Travel 
Office problems included concerns about Harry Thomason. The 
issue of whether Harry Thomason was a special Government 
employee and whether his actions constituted a conflict of 
interest was going to be reviewed by both Congress and criminal 
investigators and was generating considerable press 
attention.\537\ Mr. Foster in turn tasked White House Associate 
Counsels Beth Nolan and Cliff Sloan with reviewing Thomason's 
status as a special Government employee.
---------------------------------------------------------------------------
    \537\ A July 9, 1993 Washington Times editorial by columnist Tony 
Snow was forwarded to Foster by Mack McLarty's senior counselor Bill 
Burton and found in Foster's long withheld Travel Office file. The 
column details the legal problems that Harry Thomason might face in the 
conflicts area and potential problems for other White House officials, 
including the First Lady.
---------------------------------------------------------------------------
    During the Management Review, Podesta requested Nolan and 
Sloan to review conflicts of interest and standards of conduct 
issues. Ms. Nolan concluded that Penny Sample of Air Advantage 
was a special Government employee and that it was possible that 
Harry Thomason was a special Government employee.\538\ Mr. 
Foster held several meetings with Nolan and Sloan on July 7 and 
8, 1993 about these issues. These meetings are reflected in 
Foster's handwritten Travel Office notebook where potential 
defenses to these issues are mapped out.\539\
---------------------------------------------------------------------------
    \538\ Memorandum for John Podesta and Todd Stern from Beth Nolan, 
Re: Questions from Travel Office Report re Harry Thomason, July 1993, 
CGE 43223.
    \539\ Foster Travel Office notebook, CGE 000965.
---------------------------------------------------------------------------
    On July 7, 1993, Foster's notes reflect a discussion of 
Harry Thomason as an ``SGE who violated ethics rules 
(criminal?) re promoting his company . . . at least in getting 
goodwill (--by promoting process by which there would be 
competitive bidding?)'' \540\ On this same day, Foster's notes 
read: ``Need for coordinating litigator.'' \541\
---------------------------------------------------------------------------
    \540\ Foster Travel Office notebook, CGE 000965.
    \541\ Foster Travel Office notebook, CGE 000966.
---------------------------------------------------------------------------
    Again on July 8, 1993, Foster's notes indicate a meeting 
with Beth Nolan and Cliff Sloan in which they discussed the 
status of Harry Thomason and in which Foster accurately 
comments, ``cannot evade `appointed' '' and points out the 18 
U.S.C. 202 definition of SGE as ``retained . . . to perform 
formal duties.'' \542\ Learning the law that applies to special 
Government employees, Foster recognized there were potential 
problems.
---------------------------------------------------------------------------
    \542\ Foster Travel Office notebook, CGE 1052.
---------------------------------------------------------------------------
    On July 8, 1993, Peat Marwick auditors brought Foster more 
bad news. The auditors strongly disagreed with the conclusions 
of the Management Review.\543\ The seams of the cover-up were 
beginning to fray. How would they ``defend the management 
decision'' if they had to worry about Peat Marwick? Would 
Thomason's role become more of a problem if they didn't have 
the Peat Marwick report as an excuse for the firings?
---------------------------------------------------------------------------
    \543\ Foster Travel Office notebook, CGE 00967.
---------------------------------------------------------------------------
    The information regarding Peat Marwick auditors 
``disagreeing,'' which is reflected in Foster's notebook, 
appears to have been relayed to him by David Watkins. The notes 
also appear to discuss Watkins' response to the Management 
Review with Watkins arguing that most managers would make the 
same decision.\544\ Mr. Foster's notes of July 8 reflect 
sentiments similar to those in Watkins' ``soul cleansing 
memo.'' In that memorandum, Watkins' writes, ``I . . . 
explained my decision to terminate them; I explained that from 
a management perspective, in this case it was best to relieve 
them all immediately from their jobs and provide them an 
additional two weeks in pay. . . . I explained that in light of 
the mismanagement, it was best to dismiss the entire office.'' 
\545\
---------------------------------------------------------------------------
    \544\ Foster Travel Office notebook, CGE 0967.
    \545\ Watkins ``soul cleansing memo,'' CGE 012288.
---------------------------------------------------------------------------
    By this time, Justice Department lawyers were trying to get 
an interview with Harry Thomason and Darnell Martens for the 
ongoing criminal investigation into the Travel Office to no 
avail. On July 8, 1993, Thomason's lawyers contacted the 
Counsel's office and spoke with Cliff Sloan and requested a 
copy of the notes from the interview in which Thomason 
participated with Podesta and Stern during the Management 
Review and informed him the Justice Department had requested an 
interview of Thomason.\546\ Sloan did not initially provide the 
notes, but was later instructed by Nussbaum to read the notes 
verbatim over the phone to Thomason's lawyer.\547\
---------------------------------------------------------------------------
    \546\ Phone records of Cliff Sloan, July 8, 1993, CGE 37130.
    \547\ Committee deposition of Cliff Sloan, June 28, 1996, p. 48.
---------------------------------------------------------------------------
    Both Mack McLarty and Rahm Emanuel contacted Harry Thomason 
on July 8, 1993.\548\
---------------------------------------------------------------------------
    \548\ Phone logs of Harry Thomason, Thomason document production, 
Bates Stamp No. 000820. Thomason had called McLarty on July 6, 1993 and 
his attorney contacted Cliff Sloan on July 7, 1993.
---------------------------------------------------------------------------
    On July 9, 1993, there were several news items that 
directly related to Harry Thomason. The Washington Post carried 
an analysis in Al Kamen's column of Harry Thomason's status as 
a special Government employee. The article noted that Thomason 
had a ``special assignment'' at the White House and was one of 
the ``couple handfuls'' of Clinton pals with ``the ultimate 
power symbols in Washington: a permanent White House pass that 
allows free access to much of the compound. . . .'' \549\ Two 
other people with White House passes were Harold Ickes \550\ 
and Susan Thomases. Ickes and Thomases were exchanging phone 
calls with Thomason during this time.\551\ Harry Thomason 
called Harold Ickes at 3:50 p.m. on the afternoon of July 9, 
1993.\552\
---------------------------------------------------------------------------
    \549\ ``White House May Clamp Down on Passes,'' the Washington 
Post, July 9, 1993.
    \550\ Harold Ickes is currently the Deputy Chief of Staff. His 
major responsibilities however include handling the damage control 
matters related to various Clinton scandals from Whitewater to 
Travelgate to the various Independent Counsels investigating Clinton 
officials. Special Counsel Jane Sherburne testified in her committee 
deposition that she reports to Harold Ickes.
    \551\ ``Ickes, Clinton Insider and Puerto Rico Advocate, Shows Not 
All Who Lobby Must Wait in the Hall,'' Jeffrey Birnbaum, Wall Street 
Journal, September 21, 1993, p. A24; ``Ickes Has His Special Pass to 
the White House Pulled,'' Wall Street Journal, September 29, 1993.
    \552\ Thomason phone logs.
---------------------------------------------------------------------------
    Harold Ickes and Susan Thomases, two powerful New York 
attorneys, were regularly working at the White House throughout 
the spring without the benefit of any conflicts of interest 
analysis or review of their status. Clearly they could be open 
to many of the same problems as Thomason.
    The Washington Post article also stated that, when asked if 
the White House examined this issue, ``a senior official there 
said the lawyer in charge of ethics, Beth Nolan, looked into it 
and concluded Thomason was not covered by the law.'' \553\ 
However, Nolan's phone logs from the same day show that she had 
a ``telephone conference with Vince Foster,'' which notes that 
she left a message with Ricki Seidman, then Communications 
Director for McLarty, talked with Podesta and Stern, and 
planned to call Arthur Jones, a White House press spokesman. 
Nolan also had notes which contradict this statement: ``not 
clear HT [Harry Thomason] had no official status (Got it from 
Mack).'' \554\ Furthermore, the committee is in receipt of 
numerous analyses in which Nolan did indicate Harry Thomason 
could be viewed as a special Government employee.\555\
---------------------------------------------------------------------------
    \553\ ``White House May Clamp Down on Passes,'' the Washington 
Post, July 9, 1993.
    \554\ Beth Nolan phone logs for July 9, 1993, Nolan document 
production, Bates Stamp No. B00059.
    \555\ Memorandum from Nolan to John Podesta and Todd Stern, dated 
July 1993, Subject: Questions from Travel Office Report re Harry 
Thomason, CGE 43223-43234; July 10, 1993 draft of above memorandum, CGE 
43235-43246; memorandum from Nolan to Cliff Sloan, July 13, 1993, 
Preliminary Thoughts on Travel Office Report re Harry Thomason, CGE 
43266-43275; memorandum from Nolan to Sloan, June 20, 1993, Subject: 
Response to Questions from Republican Leadership (includes analysis of 
Thomason as SGE), CGE 043210-43213.
---------------------------------------------------------------------------
    The Washington Times also had an article on July 9, 1993, 
which discussed the fact that Republican leaders were 
investigating whether Thomason ``used his quasi-federal officer 
status to steer White House travel business to his company in 
violation of federal law.'' \556\ In this article, White House 
spokesman Arthur Jones claimed Thomason never held any official 
status at the White House . . . ``He's not a federal employee . 
. . He's just a friend.'' \557\ A hard hitting column in the 
Detroit News also highlighted the conflicts of interest 
problems of Harry Thomason and the role of high ranking White 
House officials as well as Mrs. Clinton.\558\ This column was 
forwarded to Foster's attention from Mack McLarty's Chief of 
Staff, Bill Burton.
---------------------------------------------------------------------------
    \556\ ``GOP says Thomason may have broken law,'' the Washington 
Times, July 9, 1993.
    \557\ ``GOP says Thomason may have broken law,'' the Washington 
Times, July 9, 1993.
    \558\ ``Travelgate Far From Over,'' the Detroit News, Gannett News 
Service, July 9, 1993.
---------------------------------------------------------------------------
    Mr. Thomason made phone calls to New York lawyer and First 
Lady confidante Susan Thomases as well as, Harold Ickes on a 
number of occasions in July 1993.\559\ Susan Thomases, in turn, 
testified that she talked with Foster about the Travel Office 
on July 14. Ms. Thomases came to Washington, visited Nussbaum 
at the White House, and told him she was worried about 
Foster.\560\ Harold Ickes has a July 14, 1993 message from 
Susan Thomases which reads, ``1) Alan Barnes--more 2) Vince 
Foster.'' \561\
---------------------------------------------------------------------------
    \559\ Both Harry Thomason and Harold Ickes share the same lawyer--
Bob Bennett. Mr. Bennett is also representing the President in the 
Paula Jones sexual harassment lawsuit.
    \560\ Thomases' Senate testimony regarding this evening meeting 
with Foster was inconsistent with previous testimony she had provided 
to Independent Counsel Fiske on June 14, 1994 in which she had 
recounted that she had lunch with Foster and some other people on the 
Wednesday or Thursday before his death and ``she noted no change in his 
demeanor or physical appearance but was aware that he was working very 
hard and was under considerable pressure.'' ``Hearings related to 
Madison Guaranty S&L and the Whitewater Development Corporation--
Washington, DC Phase,'' 103d Congress, Volume II, July 29, 1994, pp. 
1777-78.
    \561\ Harold Ickes phone logs, Ickes document production, Bates 
Stamp No. HR-0036.
---------------------------------------------------------------------------
    On July 14, 1993, Harry Thomason's attorney was again 
checked with Cliff Sloan about obtaining documents related to 
the White House Management Review. Mr. Sloan noted that Carl 
Rauh, one of Thomason's attorneys, ``called and talked to him--
suggested that we could discuss matter but I didn't want to 
turn over docs. He agreed.'' \562\
---------------------------------------------------------------------------
    \562\ Cliff Sloan phone logs, CGE 037130. Cliff Sloan did 
eventually read over the phone to Thomason's attorney the White House 
Management Review interview notes from Thomason's interview with 
Podesta and Sloan. Committee deposition of Cliff Sloan, June 28, 1996, 
pp. 49, 54-56
---------------------------------------------------------------------------
    On July 15, 1993, the day after Susan Thomases' visit with 
Foster, she called Harry Thomason. Harry Thomason later placed 
a call to Thomases at 3:40 p.m. on July 15, 1993.\563\ At 5:20 
p.m. that evening, Harold Ickes called Thomason.\564\ At 6:53 
that evening, Foster's brother-in-law, Beryl Anthony, faxed the 
names of six attorneys, as was requested by Foster earlier that 
month.\565\ Consistent with the lack of recall among senior 
officials close to the Clintons, neither Harry Thomason, nor 
Harold Ickes, could remember anything about these phone calls 
or ever talking about any concerns about Foster prior to his 
death.\566\ Ms. Thomases' recollections are hazy.\567\
---------------------------------------------------------------------------
    \563\ Harry Thomason phone logs, Thomason document production, 
Bates Stamp No. 0822.
    \564\ Id.
    \565\ CGE 2649-2654.
    \566\ Committee deposition of Harold Ickes, June 14, 1996, p. 90; 
Thomason deposition, p. 205.
    \567\ See hearing on Investigation into the Whitewater Development 
Corp. and Related Matters, May 14, 1996.
---------------------------------------------------------------------------
    The next day, Friday, July 16, started out with another 
flurry of calls back and forth. Harry Thomason called Harold 
Ickes at 9:14 a.m. and Susan Thomases at 9:17 a.m. Harold Ickes 
had a 12:30 p.m. message from Susan Thomases who also called 
Harry Thomason that day. On Sunday, July 18, 1993, two calls 
were placed to the White House from Harry Thomason's California 
residence--one to Mrs. Clinton's office and the other to the 
main White House number.\568\ Again, no one recalls any details 
of these conversations. However, from the timing of the calls, 
the events which were going on at the time, and the disclosures 
by Ms. Thomases that she did speak with Foster about his grave 
concerns over the Travel Office, it is very probable these 
individuals at least addressed matters related to the Travel 
Office or Mr. Foster's concerns and depression.
---------------------------------------------------------------------------
    \568\ Harry Thomason phone billing records.
---------------------------------------------------------------------------
    In the days leading up to July 20, 1993, Mrs. Clinton was 
staying with the Thomasons at their home in California. 
Therefore, some of the phone calls that involved Mr. Thomason 
also could have included Mrs. Clinton. There may have been 
discussions about these matters between or among Thomason, 
Susan Thomases, Harold Ickes and Mrs. Clinton.
    Over the weekend, Friday, July 16--Sunday, July 18, 1993, 
Foster decided to go on a weekend trip to the Maryland shore 
with his wife. He was joined by Webb and Suzie Hubbell and 
Michael and Carolyn Cardozo. Mr. Hubbell testified that he 
never discussed the Travel Office with Foster over this 
weekend, ``even though you may find that hard to believe.'' 
\569\ Mr. Hubbell also claims he and Foster never had any 
conversations about the Travel Office prior to the firings, and 
only a few very general conversations after the firings. Since 
Foster was such a close friend of Hubbell's it is difficult to 
believe that Hubbell didn't have any conversations about the 
Travel Office with Foster over that weekend since he had been 
talking with so many other people about this topic at that 
time.\570\ Mr. Hubbell also has maintained that he never spoke 
with Foster about the Travel Office prior to the firings.\571\
---------------------------------------------------------------------------
    \569\ Committee interview of Webster Hubbell, June 16, 1995.
    \570\ The OPR Report notes that Foster spoke with Jim Lyons, Jim 
Hamilton, Susan Thomases, Bruce Lindsey and others at the White House 
about his concerns. OPR Report, p. 91, fn. 97.
    \571\ Informal committee interview, June 16, 1993.
---------------------------------------------------------------------------
    But there appears to be a cryptic, but logical, reference 
in Foster's Travel Office notebook to a conversation that 
Foster had with Hubbell on May 13, 1993; a critical day in the 
Travelgate saga. In a section where Foster lays out a detailed 
chronology, on Thursday, May 13 after he has met with the FBI 
agents in the afternoon, he has the reference, ``WH & I, he 
agrees.'' \572\ The context of the notes and the timing of 
these comments suggest that Foster may have called Webb Hubbell 
after the FBI agents left that afternoon. Mr. Foster said he 
had to check with ``higher ups'' to see if they wanted to have 
the FBI present for the Peat Marwick review. Later in the 
evening of May 13, the FBI agents were informed that they 
should not plan on attending the ``audit.'' \573\
---------------------------------------------------------------------------
    \572\ Foster Travel Office notebook, CGE 001050.
    \573\ OPR Report, p. 33.
---------------------------------------------------------------------------
    Mr. Hubbell maintains that he never discussed the matters 
with his close friend, Mr. Foster, even though they were 
together at the height of the controversy. Mr. Hubbell, at 
least, acknowledged that Foster had expressed some general 
concerns about the Travel Office and his concerns with the 
workload in the Counsel's office prior to this weekend.\574\ 
Mr. Hubbell informed the committee that Foster was generally 
anxious, even paranoid, during this time. Mr. Hubbell 
attributed this to Foster's ``illness.'' But it also appears 
there were real reasons for his concerns about the Travel 
Office and that they led directly to White House officials at 
``the highest levels.''
---------------------------------------------------------------------------
    \574\ OPR Report, p. 85; committee interview of Hubbell, June 16, 
1995.
---------------------------------------------------------------------------
    On the evening of Foster's death, Mrs. Clinton was 
travelling to Little Rock from California. Upon learning of Mr. 
Foster's death, Harry Thomason--who met Foster for the first 
time in May 1993--was the second person Mrs. Clinton called. 
The first person Mrs. Clinton called was her Chief of Staff, 
Maggie Williams. Upon concluding her call with Harry Thomason, 
Mrs. Clinton called Susan Thomases.\575\
---------------------------------------------------------------------------
    \575\ See Final Report of the Special Committee to Investigate 
Whitewater Development Corporation and Related Matters, June 17, 1996, 
p. 46.
---------------------------------------------------------------------------

  E. Foster strongly argued for private attorneys to assist the White 
House in handling the coming investigations but Nussbaum rebuffed him. 
     Foster discussed the issues with outside attorneys and friends

    On July 9, 1993, the day after Thomason received a call 
from McLarty and Thomason's lawyers informed the White House of 
the Justice Department's request for an interview with 
Thomason, Foster was seeking outside attorneys to assist White 
House staff in anticipation of future problems. Foster spoke 
with his brother-in-law, Beryl Anthony, asking for names of 
attorneys.\576\ Mr. Anthony explained that Foster's concerns 
``might stem from the fact that some White House staff may have 
reported information to Foster that had not been made public 
but that he would be asked to testify about.'' \577\
---------------------------------------------------------------------------
    \576\ OPR Report, p. 90.
    \577\ OPR Report, p. 90.
---------------------------------------------------------------------------
    Mr. Foster spoke with Jim Lyons about the need for outside 
counsel in this matter. Mr. Lyons is the Denver attorney who 
did the ``Lyons report'' on the Whitewater investments during 
the 1992 campaign. Foster and Lyons got to know each other 
through working together on the campaign and throughout the 
transition.
    Mr. Lyons reported that Foster was:

          concerned that he was so involved in the Travel 
        Office matter that it had affected of his objectivity 
        in advising `his clients,' the Clintons, on how to 
        handle the matter. Foster thought it might be necessary 
        for them to have independent/outside counsel to advise 
        them on this matter.\578\
---------------------------------------------------------------------------
    \578\ OPR Report, p. 90.

    Mr. Lyons also reported that Foster claimed there was 
something in the report which concerned him, and he sent the 
report to Lyons to see if Lyons could find the source of 
Foster's concern.\579\ Lyons told Foster that while he saw no 
apparent problems in the report, he would be happy to discuss 
it with him further.\580\ They spoke again on the evening of 
Sunday, July 18, 1993 to plan a meeting later in the week. 
Lyons was going to meet with Foster on Wednesday, July 21, 
1993.
---------------------------------------------------------------------------
    \579\ OPR Report, p. 90.
    \580\ OPR Report, p. 91.
---------------------------------------------------------------------------
    Mr. Foster repeatedly suggested to Nussbaum that President 
and Mrs. Clinton needed outside counsel in this matter. These 
were not the rantings of a man losing touch with reality. In 
fact, it appears that, despite his depression, Vince Foster was 
one of the few White House officials who saw matters clearly.
    Mr. Lyons said that Foster discussed the issue of outside 
counsel for the President concerning the Travel Office matter 
with Lyons, Lindsey, Susan Thomases and Washington attorney 
James Hamilton.\581\ Clearly, matters were heating up and 
talented lawyers were being sought. Now the White House had to 
cover-up the cover-up.
---------------------------------------------------------------------------
    \581\ OPR Report, p. 91, footnote 97. Mr. Hamilton has always been 
represented as the attorney for Mr. Foster and the Foster family and 
the impression has been given that Foster had gone to Hamilton for his 
own personal legal concerns. But Foster was not seeking Hamilton out as 
a personal lawyer but as a lawyer to represent the White House and/or 
President and Mrs. Clinton. Mr. Hubbell hired Jim Hamilton on the 
evening of Foster's death as the family's attorney. Initial press 
reports acknowledged that Foster was looking out ``for the interests of 
the entire White House counsel's office'' and was not seeking his own 
attorney. ``Foster was shopping for private lawyer, probers find,'' the 
Washington Post, August 15, 1993, p. A20.
---------------------------------------------------------------------------

 XI. Foster's Death Generated Another Layer of a Cover-up Over a Cover-
                                   up

   A. Foster's death shattered a White House just recovering from an 
                abysmal first 6 months of Administration

    The President's popularity polls were just inching over 40 
percent when Vincent Foster's death shattered the White House. 
President Clinton's 36 percent approval rating in May 1993 was 
the lowest for any Postwar-President at that point in his 
administration. The urgency for the need to cover up must be 
viewed in the context of a time when the media driven Clinton 
administration was facing the worst first year of any 
administration in recent history. In 1993, President Clinton 
had fallen fast and the dreams of a Camelot reprise were 
vanishing.
    For the same reasons that the White House had to keep the 
lid on the true Travel Office story and related events, the 
curtains had to be drawn around the death of Vincent Foster. If 
it were learned that Foster despaired over an out-of-control 
cover-up of the Travel Office matter, those at the ``highest 
levels'' would not only have to shoulder the weight of a Travel 
Office scandal but the responsibility for contributing to 
Foster's despair. After Foster's death, President Clinton 
strangely and calmly declared, ``no one can ever know why this 
happened . . . what happened was a mystery about something 
inside him.'' \582\
---------------------------------------------------------------------------
    \582\ ``Excerpts of Remarks in a Meeting with White House Staff on 
the Death of Deputy White House Counsel Vincent Foster, Jr.,'' July 21, 
1993, 29 Wkly Comp. Pres. Docs 1351, 1411.
---------------------------------------------------------------------------
    Sadly for the Foster family, efforts to protect the Clinton 
political family exposed them to countless and continued 
investigations into Mr. Foster's death that have gone on far 
longer than they would have if the President had offered any 
modicum of cooperation from the start. What was in Foster's 
office that the President wanted to keep hidden? As the years 
have passed, we have learned there was a lot to hide: a lot 
about Whitewater; a lot about the Clintons personal taxes; and 
a lot about the Travel Office. What we do not know is what may 
be missing. We do, however, have some ideas about who had the 
now missing documents. We also have reasons as to why those 
documents remain ``missing.''

B. At the time of Foster's death on July 20, 1993, his office contained 
   damaging evidence about the Travelgate matter and related events. 
  Individuals with a reason to hide or cover-up documents were at or 
        around Foster's office prior to the office being sealed

    Mr. Foster was a key attorney involved in the Travel Office 
matter and, as it turned out, he kept a detailed notebook 
describing the events that led to the firings and what occurred 
in the aftermath of the firings.\583\ Since it took almost a 
year before White House Counsel Bernard Nussbaum revealed the 
existence of this document to any law enforcement 
authority,\584\ we will never be able to know if the records 
are complete. Certainly, the White House has shown itself 
capable of misplacing and losing records.\585\
---------------------------------------------------------------------------
    \583\ Foster Travel Office notebook, CGE 894-1240.
    \584\ It appears that Mr. Nussbaum first disclosed the existence of 
the Foster Travel Office notebook during a Grand Jury appearance in May 
1994. White House Counsel's Office notes which were initially withheld 
from the committee under a claim of executive privilege indicated that 
Nussbaum called Eggleston after his Grand Jury appearance.
    \585\ This investigation has been hindered by numerous ``lost'' 
documents. For example: The notes of an interview with the First Lady 
in preparation for her answers to the GAO inquiries taken by White 
House Associate Counsel Neil Eggleston are missing. Mr. Eggleston said 
he left them at the White House with Special Counsel Jane Sherburne who 
heads up document production. Ms. Sherburne could not locate the 
documents left in her custody. An approximately 10 page memo which 
described allegations against the Travel Office is also missing as is a 
memo from Mack McLarty to senior staff describing Harry Thomason's job 
while at the White House. The ``missing'' billing records which turned 
up in the White House residence are another example of the migrating 
records in this White House.
---------------------------------------------------------------------------
    The facts surrounding Mr. Foster's death and the handling 
of his office and papers have been addressed at length by the 
Senate Whitewater Committee.\586\ Regarding the facts relevant 
to the Travel Office, it is particularly interesting that on 
the evening of Foster's death, all three of the individuals who 
were in his office before it was sealed had a Travelgate 
connection:
---------------------------------------------------------------------------
    \586\ See generally The Final Report of the Senate Special 
Committee to Investigate the Whitewater Development Corporation and 
Related Matters. July 17, 1996.
---------------------------------------------------------------------------
         White House Counsel Bernard Nussbaum--his 
        office oversaw the initial requests to the FBI to 
        investigate the Travel Office. Messers. Nussbaum, 
        Foster and Kennedy also sat in on the meeting where the 
        FBI Public Affairs spokesman was asked to revise a 
        statement meet the liking of the White House. In the 
        days before his death, Foster had urged Nussbaum to get 
        outside counsel for President and Mrs. Clinton and 
        others at the White House.
         Mrs. Clinton's Chief of Staff Maggie 
        Williams--Ms. Williams had received a copy of the May 
        17, 1993 memo from David Watkins, which was ``cc'd'' to 
        Mrs. Clinton, and helped prepare talking points with 
        Mrs. Clinton when the Management Report was released. 
        Mrs. Clinton's role in the firings had become a key 
        issue following the issuance of the Management Review.
         Patsy Thomasson--Ms. Thomasson was the 
        assistant to David Watkins and had worked on the Travel 
        Office review by Peat Marwick. Ms. Thomasson attempted 
        to coerce Catherine Cornelius and Clarissa Cerda to 
        misrepresent Watkins' knowledge of their memo proposing 
        a takeover of the Travel Office. Foster had told 
        Thomasson about ``the clients' '' interest in the 
        Travel Office.
    It is clear that Foster's office was never properly sealed 
following his death; that an inappropriate search of his office 
was conducted by Patsy Thomasson, Maggie Williams and Bernard 
Nussbaum on the evening of his death; that files may have been 
removed from his office, and that Bernard Nussbaum changed the 
ground rules for the review of Foster's office after frantic 
phone calls to, from, between and among, Mrs. Clinton, Susan 
Thomases, Maggie Williams, Bernard Nussbaum and perhaps others 
in the Chief of Staff's office and the Counsel's office prior 
to the July 22, 1993 search of Foster's office.\587\
---------------------------------------------------------------------------
    \587\ See The Final Report of the Senate Special Committee to 
Investigate Whitewater Development Corporation and Related Matters, 
July 17, 1996.
---------------------------------------------------------------------------
    Park Police Detective Sgt. Cheryl Braun testified she 
clearly remembered asking White House Administrator David 
Watkins to seal the office on the evening of Foster's 
death.\588\ Sergeant Braun met with Watkins because she and her 
partner were requested to pick up Watkins ``to allow him and 
his wife to assist us with the notification to the Foster 
family.'' \589\ When Watkins introduced himself he provided 
Braun with his business card. Braun unequivocally testified 
that she asked Watkins to seal Foster's office that evening. 
This did not occur.\590\
---------------------------------------------------------------------------
    \588\ Senate Whitewater Final Report, pp. 44-46.
    \589\ Senate testimony of Detective Sgt. Cheryl Braun on July 20, 
1995, the Washington Times, July 21, 1995, p. A12.
    \590\ Testimony of Detective Sgt. Cheryl Braun, the Washington 
Times, July 21, 1995, p. A21.
---------------------------------------------------------------------------
    When Sergeant Braun requested Watkins to seal the office, 
Watkins was well aware that his assistant Patsy Thomasson was 
on her way to the White House to go into Foster's office, 
ostensibly looking for a note. Mr. Watkins, however, never 
informed Braun of this information. Again, the roles of Watkins 
and Thomasson in the Travel Office debacle raise questions. Had 
Watkins provided any documents to Foster that he wanted to 
retrieve? In Foster's Travel Office notebook there is a 
reference to a July 8, 1993 meeting which appears to be with 
David Watkins. The notes appear to discuss Watkins' complaints 
about the Management Review.\591\
---------------------------------------------------------------------------
    \591\ Foster Travel Office notebook, CGE967.
---------------------------------------------------------------------------
    The purpose behind Sergeant Braun's request, with which 
Watkins agreed to comply, was essentially being violated at the 
very same time. In response to this assertion, Watkins claims, 
``I did not hear such a request . . . If I had been asked, I 
would have acted. That was my job.'' \592\ Additional testimony 
indicated that other White House officials had claimed to have 
taken responsibility for securing the office, however, nobody 
did.\593\
---------------------------------------------------------------------------
    \592\ ``Justice was wary of Foster probe,'' the Washington Times, 
July 26, 1995, p. A1.
    \593\ ``Investigation of Whitewater Development Corporation and 
Related Matters,'' Final Report of the Special Committee to Investigate 
Whitewater Development Corporation and Related Matters, June 17, 1996, 
p. 55. Mr. Hubbell said he had been told by Mack McLarty's Chief of 
Staff Bill Burton that McLarty took care of sealing the office. Mr. 
Burton claimed not to recall this even though he had contemporaneous 
notes that were consistent with this information. In addition Major 
Hines of the Park Police also testified that he requested Burton on the 
night of July 20 seal the office. In a 10 a.m. meeting on the morning 
of July 21, White House officials assured Chief Langston that the room 
had been sealed the night before even though it was not.
---------------------------------------------------------------------------
    By failing to seal Foster's office that evening and by 
instead sending in Patsy Thomasson to rifle through the office, 
Watkins and other senior White House officials irreparably 
harmed any legitimate review process.
    One of the key records in Foster's office at the time of 
his death was a Travel Office file which addressed the Travel 
Office firings and related issues--particularly issues related 
to potential conflicts of interest problems for Harry Thomason. 
Mr. Foster's records also contained a file on a ``White House 
Project''--another one of Harry Thomason's efforts at the White 
House.
    From the information the committee has to date, it is not 
clear where the Foster Travel Office notebook was at the time 
of Foster's death although it does appear likely it was in 
Foster's office at that time. Whether it stayed there until 
July 22, 1993 is another question because the White House 
``chain of custody'' on the file only accounts for July 22, 
1993 forward.\594\ The ``White House Project'' file was one of 
the 24 files placed in a closet in the White House residence on 
July 22, 1993--following Nussbaum's sham review of the 
documents.\595\
---------------------------------------------------------------------------
    \594\ Letter to Chairman Clinger from then-Counsel to the 
President, Abner Mikva, August 30, 1995. Judge Mikva claimed that the 
Foster file was first found on July 22, 1993, despite the fact that 
Nussbaum, Maggie Williams, Patsy Thomasson and perhaps others had 
entered Foster's office on July 20, and July 21, ostensibly to search 
for a suicide note. Moreover, Nussbaum's claims that he described the 
file to investigators and staff present on July 22 are not credible, as 
no investigation has found a witness to corroborate his account.
    \595\ Letter to committee Investigative Counsel Barbara Comstock 
from the Clintons' personal attorney David Kendall, September 5, 1995. 
Mr. Kendall explains that there was a file folder labelled ``White 
House Project'' which was empty except for an envelope in it which was 
addressed to Foster from David Watkins. The envelope was a Brookings 
Institution envelope. Mr. Kendall represented that the firm received 
the file empty on July 27, 1993, when Mr. Barnett had obtained the 
files from the White House.
---------------------------------------------------------------------------
    The committee has met with a great deal of White House 
reluctance in explaining the ``chain of custody'' of the Foster 
Travel Office file as well as other files. By July 1995, the 
White House Counsel's office had carefully detailed a ``chain 
of custody'' analysis of the Foster Travel Office notebook, yet 
when the committee made requests for this explanation, it took 
the White House almost 2 months to produce information that was 
clearly available to them in July 1995.\596\
---------------------------------------------------------------------------
    \596\ The White House first released the Foster Travel Office 
notebook to the press in early July 1995 prior to the Whitewater 
hearings. This document was responsive to a June 14, 1995 document 
request that the White House had failed to comply with at that time 
because the committee would not provide armed security guards and a 
special room in which to place the Travelgate documents. On July 13, 
1995, the chairman requested a copy of the Foster Travel Office file 
that the White House had provided to the press. The committee received 
the file on July 19, 1995, and then requested a chain of custody 
explanation on July 20, 1995.
---------------------------------------------------------------------------
    In a July 25, 1995 letter to the chairman, former Clinton 
White House Counsel, Judge Mikva wrote: ``The actual documents 
in Mr. Foster's Travel Office file remained in the custody of 
the Counsel's Office from the time of his death on July 20, 
1993 until they were provided to Independent Counsel Kenneth 
Starr.'' No information was provided at this time about all of 
the people who had learned of the file and how they had come to 
learn about it. That information was not provided until the 
committee received additional letters on August 30, 1995 and 
September 15, 1995.\597\
---------------------------------------------------------------------------
    \597\ Letter to Chairman Clinger from Judge Mikva, Counsel to the 
President, August 30, 1995; letter to Barbara Bracher, chief 
investigative counsel from Jane Sherburne, September 15, 1995.
---------------------------------------------------------------------------
    It is worth noting that the White House Counsel's office 
appears to have been in close contact with Mr. Nussbaum's 
attorneys throughout the summer of 1995.\598\ This was a time 
when Mr. Nussbaum was also explaining the withholding of this 
file to the Senate during Whitewater hearings. This is just one 
of many examples where the White House Counsel's office 
intentionally withheld information from this investigation and 
provided it with their own timetables and press strategy.
---------------------------------------------------------------------------
    \598\ See memorandum to Jane Sherburne, ``Foster Travel Office 
File: Custody and Disclosure Issues,'' July 9, 1995, DF 780008-18.
---------------------------------------------------------------------------
    The documents the committee eventually obtained dealing 
with the chain of custody of the Foster Travel Office file were 
among those withheld from the investigation until August 1996 
due to the President's claim of executive privilege. These 
documents demonstrate how the Counsel's office worked with Mr. 
Nussbaum to craft his explanations for withholding this 
document.
    According to the White House, at least at the time Mr. 
Nussbaum conducted the search of Foster's office on July 22, 
1993, the Vince Foster Travel Office notebook was in Foster's 
briefcase: ``The documents were located in Mr. Foster's 
briefcase on July 22, 1993 by Mr. Nussbaum . . . '' \599\ The 
White House has made no representations as to where the 
documents were before that time: ``We have no knowledge of how 
or where Mr. Foster maintained this material prior to this 
date.'' \600\
---------------------------------------------------------------------------
    \599\ Letter to Chairman Clinger from White House Counsel Abner J. 
Mikva, August 30, 1995.
    \600\ Id.
---------------------------------------------------------------------------
    Since Mr. Foster obviously did not maintain ``this 
material'' between the time of his death on July 20 and July 
22, 1993, when Mr. Nussbaum reviewed the material, there is an 
unaccounted for lapse of approximately 2 days in the chain of 
custody for the file. Did anyone remove this file on the 
evening of Foster's death? Secret Service Agent Henry O'Neill 
did report seeing Mrs. Clinton's Chief of Staff removing 
documents from Foster's office on the evening of July 
20th.\601\ Ms. Williams denies removing any documents from 
Foster's office that evening. Yet why was Nussbaum so secretive 
with this document that he refused to tell his own staff--staff 
who were working on Travelgate document requests and documents 
related to Foster's death?
---------------------------------------------------------------------------
    \601\ Final Report of the Special Committee to Investigate 
Whitewater Development Corporation and Related Matters, June 17, 1996, 
pp. 53-55.
---------------------------------------------------------------------------
    When the committee asked for a ``chain of custody'' 
explanation for the file, after the Counsel had thoroughly 
analyzed this issue, the White House responded with a cryptic 
and nonresponsive answer. The committee had to write several 
more letters before obtaining the appropriate information.\602\ 
It is this kind of ``hide the ball'' tactic pursued by the 
White House Counsel's Office, which has made this committee 
question the candor and cooperation of the President.
---------------------------------------------------------------------------
    \602\ Letter from Abner Mikva to Chairman Clinger, July 25, 1995; 
letter from Abner Mikva to Chairman Clinger, August 30, 1995; letter 
from Abner Mikva to Chairman Clinger, September 18, 1995.
---------------------------------------------------------------------------

      C. White House Counsel Bernard Nussbaum obstructed numerous 
investigations into the Travel Office and the Death of Vince Foster, by 
          withholding the Vince Foster Travel Office notebook

    The withholding of the Vince Foster Travel Office notebook 
by White House Counsel Bernard Nussbaum is one of the most 
blatantly obstructionist actions taken by the White House 
Counsel's Office given both the numerous investigations into 
the Travel Office and the intersection of this matter with the 
various investigations into Mr. Foster's death.\603\
---------------------------------------------------------------------------
    \603\ The discussions between and among White House and Justice 
Department officials about the review of Vince Foster's office 
following his death have been extensively reviewed in the course of the 
Senate Whitewater investigation and will not be re-examined here.
    See ``Investigation of Whitewater Development Corporation and 
Related Matters,'' the final report of the Special Committee to 
Investigate Whitewater Development Corporation and Related Matters, 
June 17, 1996, ``The Foster Phase,'' pp. 1-134.
---------------------------------------------------------------------------
    There were numerous investigations underway into the Travel 
Office at the time of Foster's death: 1) the GAO investigation 
that was initiated by law on July 2, 1993; 2) the Office of 
Professional Responsibility investigation which was initiated 
by Deputy Attorney General on July 15, 1993; and 3) the Public 
Integrity investigation of the Travel Office which included 
both allegations of wrongdoing against the Travel Office 
employees, as well as, allegations of conflicts of interest 
violations of law by Harry Thomason.
    Mr. Nussbaum was clearly aware of all of these 
investigations. A July 1995 memo to Special Counsel Jane 
Sherburne, indicates that ``Nussbaum says he took the file 
because it concerned an active matter for which he would be 
responsible.'' \604\ The fact that he recognized it was 
``active'' indicates that he knew this file was responsive, yet 
he kept it from numerous investigations.
---------------------------------------------------------------------------
    \604\ Memorandum to Jane Sherburne, ``Foster Travel Office File: 
Custody and Disclosure Issues,'' July 9, 1995, DF 780008-18.
---------------------------------------------------------------------------
    Following the death of Vince Foster there were additional 
investigations including: 1) an FBI investigation into the 
delay in finding the Foster ``suicide'' note; and 2) Park 
Police and FBI investigations into Foster's death. By January 
1994, Independent Counsel Fiske's investigation was added to 
this list. As discussed above, investigating the delay in 
turning over the Foster ``suicide'' note is the first 
investigation for which the Foster Travel Office file would 
have been relevant. Nonetheless, Nussbaum very deliberately 
withheld this vital information from the law enforcement 
officials who interviewed him just days after the finding of 
the Foster Travel Office file and the Foster ``suicide'' 
note.\605\
---------------------------------------------------------------------------
    \605\ FBI interview of Bernard Nussbaum by SA Charles K. Dorsey and 
SA Scott Salter, July 30, 1993, WMFO 175B-WF-187743.
---------------------------------------------------------------------------
    In July 1995, Nussbaum's lawyers told the White House 
Counsel's office a curious story. They claimed that Nussbaum 
did not recall any of the document requests but that he did not 
believe the Foster Travel Office file was responsive to any of 
the requests, he couldn't remember! \606\ Both Cliff Sloan and 
Neil Eggleston, Associate Counsels who worked on the Travelgate 
investigations while in the Counsel's office, testified that 
Nussbaum had not informed them of the existence of this 
document.\607\
---------------------------------------------------------------------------
    \606\ Memorandum to Jane Sherburne, ``Foster Travel Office File: 
Custody and Disclosure Issues,'' draft, July 9, 1995, DF 780011.
    \607\ Committee deposition of Cliff Sloan, June 28, 1996, pp. 72-
78; committee deposition of Neil Eggleston, June 3, 1996, pp. 94-95.
---------------------------------------------------------------------------
    When Nussbaum called Eggleston in May 1994 to inform him of 
the existence of the document, Eggleston asked Nussbaum why he 
did not know about it before. Nussbaum did not answer.\608\ Mr. 
Eggleston said, ``why am I just now hearing about this . . . 
how could I just now be learning about this. . . .?'' \609\ Mr. 
Eggleston agreed that Nussbaum was ``well aware of the type and 
nature of documents that were being requested.'' \610\
---------------------------------------------------------------------------
    \608\ Eggleston deposition, p. 95.
    \609\ Eggleston deposition, p. 97.
    \610\ Eggleston deposition, p. 96.
---------------------------------------------------------------------------
    While Mr. Nussbaum has recently suggested that Cliff Sloan 
knew about the Foster Travel Office file, and would remember it 
because he has a ``photographic memory,'' \611\ Sloan clearly 
stated that he did not have any knowledge of this file and had 
never seen it until his committee deposition.\612\
---------------------------------------------------------------------------
    \611\ Nussbaum deposition, p. 123.
    \612\ Sloan deposition, p. 72.
---------------------------------------------------------------------------
    Furthermore, Nussbaum's suggestion that Sloan knew about 
the file does not explain why Nussbaum would have to call Neil 
Eggleston to inquire about it. In May 1994 when Nussbaum made 
his call to Eggleston, Sloan still worked at the White House. 
Mr. Sloan, who initially had worked on the Travelgate document 
requests had passed his duties on to Eggleston. If Mr. Sloan 
had known of the file as Nussbaum suggests, he certainly would 
have informed Eggleston by this time. Why then did Nussbaum 
consider it necessary to inform the White House about the 
document? The answer is that, most likely no one knew it was 
there and Nussbaum knew that. Representations made to the 
committee by the Foster family attorney, indicate that Nussbaum 
did not even tell Mr. Hamilton about this file even though it 
had been marked ``attorney client privileged in anticipation of 
litigation.'' \613\
---------------------------------------------------------------------------
    \613\ Foster Travel Office notebook, CGE 894-1240.
---------------------------------------------------------------------------
    And where was this mystery document in May 1994 when 
Nussbaum finally informed someone of its existence? Mr. 
Eggleston testified that it was filed under the general files 
in the secretarys' suite under ``T for Travel''! \614\ Mr. 
Nussbaum had kept the file in his office during his tenure. 
When he left the White House in March 1994 he apparently placed 
it in the general alphabetical files without telling 
anyone.\615\
---------------------------------------------------------------------------
    \614\ Eggleston deposition, p. 99. Mr. Eggleston testified that he 
rarely utilized these files.
    \615\ Eggleston deposition, p. 94.
---------------------------------------------------------------------------
    Mr. Eggleston testified he had daily meetings with Nussbaum 
from September 1993, when he first joined the White House, 
through April 1994 when Nussbaum left.\616\ Mr. Eggleston would 
``discuss with him regularly document requests from GAO and 
what we were doing to respond.'' \617\ Mr. Eggleston, a top law 
school graduate and Supreme Court clerk, testified about his 
job as an Associate Counsel under Nussbaum: ``I was a grunt 
working on this. Mr. Nussbaum was the decision maker.'' \618\ 
Mr. Nussbaum made the decision to keep this highly relevant 
document under wraps and away from investigators.
---------------------------------------------------------------------------
    \616\ Eggleston deposition, p. 95.
    \617\ Eggleston deposition, p. 96.
    \618\ Eggleston deposition, pp. 132-133.
---------------------------------------------------------------------------
    According to a White House analysis, even the White House 
Counsel's office had a hard time explaining this blatant action 
of obstruction.\619\ The White House Counsel's Office analysis 
of Nussbaum's actions shows that the Foster Travel Office file 
was responsive to at least five requests from GAO \620\ yet it 
was never turned over. More surprisingly, there was never even 
any discussion about the document. The committee has no doubt 
that the Foster Travel Office file was responsive to GAO 
requests and GAO confirmed this in the committee's October 1995 
hearing.\621\
---------------------------------------------------------------------------
    \619\ Memorandum to Jane Sherburne, ``Foster Travel Office File: 
Custody and Disclosure Issues,'' draft July 9, 1995, DF 780008-18.
    \620\ Id., 780013.
    \621\ Testimony of Nancy Kingsbury before the Committee on 
Government Reform and Oversight on October 24, 1995.
---------------------------------------------------------------------------
    The Foster Travel Office file was also responsive to an OPR 
request in August 1993. In July 1995, when OPR Counsel Michael 
Shaheen learned of the Foster Travel Office file in the same 
manner in which the committee learned about it--reading about 
it in Newsweek--he wrote a memo in which he complained:

          We were stunned to learn of the existence of this 
        document since it so obviously bears directly upon the 
        inquiry we were directed to undertake in late July and 
        August 1993, by then DAG Philip Heymann . . . the White 
        House was less than fully cooperative and forthcoming. 
        The fact that we have just now learned of the existence 
        of obviously relevant notes written by Mr. Foster on 
        the subject of the FBI Report is yet another example of 
        the lack of cooperation and candor we received from the 
        White House throughout the inquiry.\622\
---------------------------------------------------------------------------
    \622\ Memorandum to David Margolis, Associate Deputy Attorney 
General, from Michael E. Shaheen, Jr., Counsel, OPR, subject: 
Undisclosed Foster notebook re the White House Travel Office Matter, 
July 24, 1995.

Mr. Shaheen also testified before the committee in October 
1995, that the lack of cooperation and candor from the White 
House in this matter was ``unprecedented'' in his over 20 year 
career in Government.\623\
---------------------------------------------------------------------------
    \623\ Testimony of Michael Shaheen before the Committee on 
Government Reform and Oversight, October 24, 1995.
---------------------------------------------------------------------------
    The White House Counsel's Office had provided the White 
House Management Review interview notes of Mr. Foster to OPR 
based on the fact that Foster was not available as a 
witness.\624\ If notes of an interview with Mr. Foster were 
relevant clearly his own notes of events would have been even 
more pertinent. The White House was also keenly aware of OPR's 
mandate to investigate the meaning of Foster's suicide note 
which addressed many Travel Office issues. At the outset of the 
OPR inquiry, Philip Heymann wrote to Nussbaum and McLarty 
requesting that the White House assist in arranging interviews 
of relevant witnesses in the matter.\625\
---------------------------------------------------------------------------
    \624\ Eggleston deposition, p. 99.
    \625\ Shaheen memo, July 24, 1995.
---------------------------------------------------------------------------
    OPR requested that Nussbaum provide notes taken during the 
White House Management Review. Mr. Shaheen stated, ``the White 
House declined to provide the notes and failed to mention the 
existence of any handwritten notes by Mr. Foster on the 
subject.'' \626\ OPR investigators also carefully explained to 
each witness the purpose of the inquiry and asked for any 
information they were aware of--``through conversations with 
Mr. Foster or otherwise''--that might shed light on Foster's 
``suicide'' note.\627\ The Foster note read as follows:
---------------------------------------------------------------------------
    \626\ Id.
    \627\ Id.

          I made mistakes from ignorance, inexperience and 
        overwork
          I did not knowingly violate any law or standard of 
        conduct
          No one in the White House, to my knowledge, violated 
        any law or standard of conduct, including any action in 
        the travel office. There was no intent to benefit any 
        individual or any group.
          The FBI lied in their report to the AG
          The press is covering up the illegal benefits they 
        received from the travel staff
          The GOP has lied and misrepresented its knowledge and 
        role and covered up a prior investigation
          The Ushers Office plotted to have excessive costs 
        incurred, taking advantage of Kaki and HRC
          The public will never believe the innocence of the 
        Clintons and their [loyal or legal] staff.\628\
---------------------------------------------------------------------------
    \628\ OPR Report, tab A.

    Foster's Travel Office notebook clearly detailed most of 
the issues outlined in this note. The notebook would have been 
the single most instructive record in explaining the meaning of 
---------------------------------------------------------------------------
Foster's note. Shaheen concluded:

          . . . we believe that our repeated requests to White 
        House personnel and counsel for any information that 
        could shed light on Mr. Foster's statement regarding 
        the FBI clearly covered the notebook, and that even a 
        minimum level of cooperation by the White House should 
        have resulted in its disclosure to us at the outset of 
        our investigation.\629\
---------------------------------------------------------------------------
    \629\ Id.

    Furthermore, the note had been found in Foster's briefcase, 
exactly where the Foster Travel Office notebook was found. The 
note may very well have been part of the notebook--in fact it 
was in many ways a summary of the notebook. In trying to 
justify withholding this notebook, Nussbaum's only defense to 
date for his apparent obstruction, is that everyone in the room 
on July 22, 1993, when Foster's documents were reviewed knew 
about this particular document. As is set out extensively in 
the Whitewater report, no one else in the room on that day has 
any recollection of this document.\630\
---------------------------------------------------------------------------
    \630\ See Final Report of Special Committee on Whitewater 
Development Corporation and Related Matters, June 17, 1996, ``The 
Foster Phase.''
---------------------------------------------------------------------------
    Mr. Nussbaum is directly responsible for obstructing the 
GAO and OPR investigations. Along with others who had relevant 
information about the Foster ``suicide'' note, Nussbaum also 
obstructed the FBI investigation into why there was a delay in 
turning over the Foster note after it was found on July 26, 
1993. (See discussion below.)
    Finally, the DOJ Public Integrity criminal investigation 
had an interest in obtaining all documents that related to 
Harry Thomason and the work he was doing at the White House. 
Beginning in the summer of 1993, Public Integrity began to 
investigate the issue of whether Harry Thomason was a special 
Government employee and whether or not he had any criminal 
conflicts of interest problems. Mr. Foster had been keenly 
aware of this problem as is evidenced throughout his Travel 
Office notebook. There had been a flurry of phone calls between 
and among various parties to these concerns as discussed in a 
previous section. That Nussbaum withheld these documents from a 
criminal investigation, is the most clearly obstructionist act 
of all.
    The consistent pattern of withholding information about the 
existence of this file--even from his own staff--demonstrates a 
clear intent on Nussbaum's part to keep this file away from 
investigators. This report has already discussed at length the 
highly relevant information in this file, particularly 
regarding the role of Mrs. Clinton and the activities of Harry 
Thomason in connection with the Travel Office firings. These 
facts were highly relevant to numerous ongoing investigations 
of which Nussbaum was well aware.
    That Nussbaum never discussed this document with anyone 
indicates that it was a record that he did not dare discuss 
even with his colleagues. After the sham search of Foster's 
office on July 22, 1993, then Deputy Attorney General Phil 
Heymann asked Bernard Nussbaum: ``Bernie, are you hiding 
something?'' \631\ The answer was then and remains today: YES.
---------------------------------------------------------------------------
    \631\ Final Report of the Whitewater Committee, p. 8.
---------------------------------------------------------------------------

D. Neil Eggleston withheld the Foster Travel Office file from relevant 
investigations even after it was belatedly disclosed to him by Bernard 
                                Nussbaum

    In May 1994, when Eggleston was belatedly informed about 
the Foster Travel Office file by Nussbaum, he proceeded to 
review the file for an outstanding document request from 
Independent Counsel Fiske and decided it was not 
responsive.\632\ Despite an outstanding document request from 
the Public Integrity investigation for all documents related to 
Harry Thomason, Eggleston ignored this request entirely. Mr. 
Eggleston testified that after he reviewed the Foster Travel 
Office file, he determined it was not responsive and placed it 
back in the ``T for Travel'' file.\633\
---------------------------------------------------------------------------
    \632\ Memorandum for Lloyd Cutler from W. Neil Eggleston, Re: 
Foster File, July 10, 1994, CGE 005909-5918.
    \633\ Eggleston deposition, p. 102.
---------------------------------------------------------------------------
    Mr. Eggleston, who had been involved with narrowing the 
Fiske subpoena claims he never discussed the Foster Travel 
Office file with any of his colleagues before dismissing it as 
nonresponsive to the Fiske subpoena in May 1994.\634\
---------------------------------------------------------------------------
    \634\ Eggleston deposition, pp. 102-103.
---------------------------------------------------------------------------
    Mr. Eggleston's actions in withholding the Foster Travel 
Office from Independent Counsel Fiske cannot be viewed in 
isolation. By the spring of 1994 Eggleston had spent months 
either delaying or denying sensitive records regarding Harry 
Thomason to investigators. Mr. Eggleston was in charge of 
document production on Travelgate matters beginning in 
September 1993 throughout his tenure which ended on September 
1994. (The discussion in Section XII of this report extensively 
details the delays and dilatory tactics engaged in by Mr. 
Eggleston under the direction of Nussbaum.)
    Mr. Nussbaum had directed Eggleston not to turn over 
documents related to Harry Thomason's attempts to get GSA/ICAP 
contracts over to the GAO investigation.\635\ In an April 11, 
1994 memo to the then new White House Counsel Lloyd Cutler and 
John Podesta, Eggleston noted the White House had not addressed 
``the effort by Martens to get a contract to conduct an 
accounting of the federal aircraft fleet'' in responding to 
GAO.\636\ The White House did not end up providing the GSA/ICAP 
documents to GAO even though they would have been responsive to 
GAO's requests.
---------------------------------------------------------------------------
    \635\ Committee deposition of Neil Eggleston, June 3, 1996.
    \636\ CGE 7719.
---------------------------------------------------------------------------
    When Independent Counsel Fiske published his report on the 
death of Vince Foster in June 1994, it focused on Foster's 
concerns about the Travel Office. Mr. Eggleston was asked about 
Foster's Travel Office files by Lloyd Cutler. It was at that 
time that Eggleston says he realized that the Foster Travel 
Office file was possibly responsive to other document 
requests.\637\
---------------------------------------------------------------------------
    \637\ See deposition of Neil Eggleston, June 3, 1996.
---------------------------------------------------------------------------
    Mr. Eggleston then wrote what can best be described as a 
``CYA'' memo, explaining why he had not previously disclosed 
the Foster Travel Office file to all of the various Travel 
Office investigations.\638\ Even though the July 10, 1994 memo 
clearly indicated that the Foster Travel Office file should be 
provided to Public Integrity, it was not turned over for 
another month. Even at that time, only portions of the Travel 
Office file were turned over to Public Integrity. When the 
Justice Department asked for an explanation for the delay, 
Eggleston claimed it was his fault. He resigned shortly 
thereafter. Mr. Eggleston under the supervision of two White 
House Counsels engaged in dilatory delaying tactics in turning 
over the Foster Travel Office file. There was a concerted 
effort at the White House to keep this document from being 
public. Even after Eggleston left and a subpoena was issued for 
all documents relating to Harry Thomason, relevant documents 
such as the Watkins memo was withheld. The pattern of 
obfuscation continued.
---------------------------------------------------------------------------
    \638\ July 10, 1994 memorandum for Lloyd Cutler from Neil 
Eggleston, re: Foster file, CGE 005910-5918.
---------------------------------------------------------------------------

  E. Craig Livingstone provided testimony about his activities on the 
morning after Foster's death which is inconsistent with law enforcement 
  officials and new White House documents which were withheld under a 
             claim of executive privilege until August 1996

    Craig Livingstone went with Bill Kennedy to identify 
Foster's body at Fairfax Hospital on the evening of July 20, 
1993 upon learning of Foster's death from the Secret Service at 
approximately 9 p.m.\639\ That evening upon leaving the 
hospital, Livingstone and Kennedy went to the Foster home.\640\ 
Mr. Livingstone arrived at his home late that evening after 
returning Mr. Kennedy to his home.
---------------------------------------------------------------------------
    \639\ Senate Whitewater deposition of Craig Livingstone, July 10, 
1995, p. 46.
    \640\ Livingstone Senate deposition, p. 53.
---------------------------------------------------------------------------
    The next morning, Livingstone awoke early and made the 
decision--he claims unprompted--to go over to the Foster home 
and watch for any press presence at the home. Mr. Livingstone 
has testified that he believes he arrived at the White House at 
8:14 a.m. based on the Secret Service logs of when he clocked 
in to the White House.\641\
---------------------------------------------------------------------------
    \641\ Livingstone Senate deposition, p. 68.
---------------------------------------------------------------------------
    Exactly when Livingstone arrived at the White House has 
become an issue in both the general investigation of Foster's 
death and the issue of whether any documents were removed from 
Foster's office. The latter is significant because a Secret 
Service agent testified that he saw Livingstone the morning 
after Foster's death (July 21) coming down from the area of the 
Counsel's office with records.\642\ Secret Service Agent Bruce 
Abbott testified that he saw Livingstone passing his post at 
the West Wing basement entrance approximately four times that 
morning. Mr. Abbott estimates the time when he saw Livingstone 
at or around 7 or 8 a.m.
---------------------------------------------------------------------------
    \642\ Senate Whitewater deposition of Bruce Abbott, June 23, 1995, 
p. 42.
---------------------------------------------------------------------------
    On one occasion Abbott saw Livingstone carrying a briefcase 
accompanied by a man in his 20s carrying an open box with 
binders on the top. Mr. Abbott then spoke to his supervisor, 
Agent Dennis Martin, relaying this information about 
Livingstone.
    Mr. Abbott also informed Detective Markland of the U.S. 
Park Police about Livingstone. Detective Markland confronted 
Livingstone and asked him whether or not he had taken boxes 
down from area of the Counsel's office. Mr. Livingstone did not 
deny that he had done so but did deny removing any documents 
from Foster's office.\643\ In testimony before this committee 
Livingstone stated that he does not recall ever carrying boxes 
out of the West Wing.
---------------------------------------------------------------------------
    \643\ Senate Whitewater deposition of Peter Markland, June 28, 
1995, pp. 85-88.
---------------------------------------------------------------------------
    Mr. Livingstone has reported that he arrived at the White 
House at 8:14 a.m. the morning of July 21, 1993 on numerous 
occasions throughout his Whitewater deposition:

          Question. . . . What's the next thing you recall, Mr. 
        Livingstone, in connection with Mr. Foster's death?
          Answer. Getting up a couple hours, a few hours later, 
        and doing my best effort to get to his house around 
        what time I would have thought the morning news shows 
        would be, which I seem to remember being around maybe a 
        little before.
          Question. Your chronology says ``on Wednesday July 
        21st I drove by the house at 6:30 a.m. and stayed until 
        8:00 a.m. There was no press activity.'' Is that your 
        recollection today?
          Answer. Yes, I can't recall if there was or 
        wasn't.\644\
---------------------------------------------------------------------------
    \644\ Livingstone Senate deposition, pp. 64-65.
---------------------------------------------------------------------------
          Question. . . . what time did you arrive at the White 
        House that morning?
          Answer. I believe that I arrived at the White House 
        at around 8:14, something like that, because the Secret 
        Service said that that's when my pass showed me as 
        entering the White House. And I don't believe that I 
        entered the White House at any other time; therefore, I 
        believe that's an accurate accounting of my arrival at 
        the White House.\645\
---------------------------------------------------------------------------
    \645\ Livingstone Senate deposition, p. 68.
---------------------------------------------------------------------------
          Question. Did you ask them [the Secret Service] to 
        search their records and see what time you arrived that 
        morning?
          Answer. I did I asked if it was possible.
          Question. Who did you ask that?
          Answer. Arnold Cole, the Secret Service agent.
          Question. Why did you ask Mr. Cole to do that?
          Answer. Because I could not specifically remember 
        exactly when I arrived, and I knew that I had only come 
        in once, and I wanted to know when I arrived? \646\
---------------------------------------------------------------------------
    \646\ Id., pp. 68-69.
---------------------------------------------------------------------------
          Question. Okay. Whatever the reason, your best 
        recollection today is you arrived at the White House 
        around 8:14?
          Answer. Whatever the report says, I feel comfortable 
        that that's right. I think give or take a minute or 
        two. I don't remember the exact time they said.\647\
---------------------------------------------------------------------------
    \647\ Id., p. 71.
---------------------------------------------------------------------------
          Question. How many times were you in the White House 
        counsel's reception area before the meeting that began 
        at approximately 11:00 a.m. that morning?
          Answer. I don't recall specifically. I think--for 
        sure once, maybe twice.
          Answer. I work with these people. I mean, 
        particularly Ms. Pond I knew. It's my office. Just to 
        visit.
          Question. When you say it's your office, what do you 
        mean?
          Answer. It's the office I report to, that I work 
        under.\648\
---------------------------------------------------------------------------
    \648\ Id., pp. 73-74.

    However, a new White House document--1 of the 2,000 over 
which the President had claimed executive privilege until 
August 15, 1996--indicates that Livingstone arrived at the 
White House that morning between 7:15 and 7:20--not 8:14 a.m. 
as Livingstone has contended.\649\ Thus, the White House had 
information that was consistent with the account of the Secret 
Service agent--not the account of Craig Livingstone. 
Nonetheless, throughout the past 3 years the White House has 
bolstered Livingstone's position and given him a 40 percent 
raise in the process.\650\
---------------------------------------------------------------------------
    \649\ Memorandum to the file from Jane Sherburne, subject: Senate 
deposition of Craig Livingstone (a debriefing of Livingstone's 
deposition from his attorney, Randy Turk) attached to a one page 
summary, ``Livingstone Deposition.'' DF781649-50 and a Draft 
``Privileged and Confidential'' Chronology on Foster, dated May 15, 
1996 [note: this date may be inaccurate and be the date of the print of 
the document rather than when it was written] DF781054-95.
    \650\ Memorandum from Livingstone to William Kennedy, ``Re: 
Extension of Nancy Gemmell's employment'', May 10, 1993. ``I would like 
to bring on my receptionist . . . salary would be $17,000. On August 1, 
1993, my salary would increase to $50,000 from $45,000 based on the 
reduction of salary for the receptionist.'' CGE 47884.
    Memorandum from Livingstone to Abner Mikva, ``Subject: Follow-up to 
pay adjustment request'', May 30, 1995. ``I am well deserving of a pay 
increase to 65K . . . I have done my best to be a good soldier. I am 
facing living pay-check-to-pay-check.'' CGE 48059.
    Memorandum from Livingstone to Abner Mikva, ``Subject: Personal 
Security office issues'', August 28, 1995. ``I hope to increase the 
present payroll by $14K the bulk of which $12.5k, would be used to 
adjust my salary to $70K. The remaining $1.5k would bring my exec. 
assistant up to 30K.'' CGE 48058.
    Memorandum from Jodie R. Torkelson to Kelli McLure, ``Subject: 
Counsel Office $'', May 14, 1996. ``Livingstone's at it again. He's 
submitted paperwork for signature giving himself a raise and saying 
that he was promised the money by Ab. It's to go to $70,000. . . . 
Thanks much. I'd like to kill this before I leave.'' CGE 53840.
---------------------------------------------------------------------------
    Given Livingstone's highly suspect role in the FBI Files 
matter, the committee is skeptical of Livingstone. For example, 
Livingstone testified before this committee that he was not 
Anthony Marceca's supervisor. Mr. Marceca was a political 
operative who helped gather FBI files with Livingstone in 1993.
    Mr. Livingstone's history as a former bar bouncer and 
political operative who boasted of such accomplishments as 
``deploying Chicken George'' at President Bush campaign events 
made him a highly dubious choice for heading up the White House 
Office of Personnel Security. The extensive documents the 
committee has obtained about Craig Livingstone raise serious 
questions: Why was he able to demand substantial raises in the 
face of so little experience and a checkered background? What 
prevented the White House from firing Livingstone?
    Linda Tripp, a secretary in the Counsel's suite provided 
testimony that Livingstone was not a regular presence in their 
office but ``became more a presence thereafter than prior. 
Bernie used to call him `Cliff '.'' \651\ Mr. Livingstone 
reported directly to Bill Kennedy not Vince Foster or Bernard 
Nussbaum. Mr. Kennedy's office was in the Old Executive Office 
Building, not the West Wing as were the offices of Foster and 
Nussbaum.\652\ Why did Livingstone become more of a presence in 
the Counsel's office after Foster's death? Why did Bernie 
Nussbaum ``promise'' him a raise that subsequent counsels felt 
compelled to pay? Why couldn't anyone fire Craig Livingstone?
---------------------------------------------------------------------------
    \651\ Whitewater deposition of Linda Tripp, July 12, 1995, p. 74.
    \652\ White House directory.
---------------------------------------------------------------------------
    The committee believes there is far more to the Craig 
Livingstone story than anyone has disclosed to date.

   F. Evidence of Mrs. Clinton's involvement in the response to the 
  finding of Foster's ``suicide'' note. Her direction not to tell the 
     President about the note, on July 26, 1993, was withheld from 
                             investigators

    On the afternoon of July 26, 1993--6 days after Foster's 
death, and 4 days after the search of his office--Associate 
Counsel Steve Neuwirth while searching Foster's briefcase, 
found a writing by Foster which was torn up into 28 pieces. 
Shortly after finding the note, Mr. Neuwirth was joined by 
Nussbaum, Bill Burton (from the Chief of Staff's office) and 
Mrs. Clinton. They all viewed the note and Nussbaum placed a 
call to Mack McLarty who was travelling with the President in 
Chicago.\653\ It took another 30 hours before the note was 
turned over to the proper law enforcement authorities on the 
evening of July 27, 1993.
---------------------------------------------------------------------------
    \653\ Senate Whitewater deposition of McLarty, July 6, 1995, p. 65.
---------------------------------------------------------------------------
    The ``public,'' sanitized White House version of this story 
to date has been that Mrs. Clinton was in the room only 
briefly, became upset about the note and quickly left the room. 
What had not been revealed to date was that Mrs. Clinton had 
weighed heavily in on how to substantively handle this 
document.
    A new and disturbing revelation about omissions in the 
testimony of Nussbaum, McLarty, Gergen, Burton and Neuwirth has 
emerged in light of the committee obtaining the 2000 pages of 
documents over which President Clinton had claimed executive 
privilege until August 15, 1996.
    A White House Counsel's office document indicates that 
these same individuals who initially failed to tell the FBI of 
Mrs. Clinton's being present upon the finding of the note also 
failed to point out that one of the reasons for the delay in 
turning over the ``suicide'' note--the main reason--was because 
Mrs. Clinton instructed Chief of Staff Mack McLarty not to tell 
the President about it on July 26, 1993.\654\ White House notes 
indicate that former Chief of Staff Mack McLarty said that Mrs. 
Clinton wanted to delay breaking the news of the Foster 
``suicide'' note to President Clinton.\655\ In a debriefing 
conducted of Gergen's attorney, he told Ms. Nemetz:
---------------------------------------------------------------------------
    \654\ Memorandum for the file from White House Counsel Miriam 
Nemetz, July 13, 1995. This was a White House debriefing of David 
Gergen's attorney. This document was 1 of 2,000 over which President 
Clinton claimed executive privilege. DF 781220.
    \655\ Memorandum for the file from Miriam Nemetz, July 13, 1995, 
Re: Gergen deposition. The debriefing took place 1 day after Mr. 
Gergen's July 12, 1995 deposition with the Whitewater Committee. DF 
781220

          Giuffra [Robert Giuffra, Counsel to the Whitewater 
        Committee] did not elicit testimony regarding a second 
        conversation Gergen had with McLarty. According to Burt 
        Rein, in the later conversation, McLarty said he had 
        decided to wait until the next day to decide whether to 
        turn over the note. McLarty said that the First Lady 
        was very upset and believed the matter required further 
        thought and that the President not yet be told. She 
        said they should have a coherent position and should 
        have decided what to do before they told the 
        President.\656\
---------------------------------------------------------------------------
    \656\ Id.

    But the testimony of David Gergen, as well as others privy 
to this information, suggests that they were asked questions 
which should have elicited this information if the witnesses 
had been at all forthcoming. In Gergen's deposition he was 
---------------------------------------------------------------------------
asked:

          Question. Do you have any reason to believe that he 
        [the President] was advised of the note's existence 
        prior to 6:00 o'clock on the 27th?
          Answer. I have no reason to believe either way. He 
        did not say in the meetings I attended that he already 
        knew about it to the best of my knowledge.
          Question. I believe you've testified that as far as 
        you know, Mr. McLarty first advised the President of 
        the discovery of the note at 6:00 o'clock on the 27th?
          Answer. So far as I know. Mr. McLarty did not tell me 
        one way or the other that he may have told him about it 
        prior to that time.

Surely, the fact that McLarty had informed him that Mrs. 
Clinton did not want President Clinton to be told about the 
note gave Gergen a reason ``to believe either way'' about 
whether the President was informed prior to this time. In 
McLarty's deposition of July 6, 1995, he is similarly ``vague 
and protective'':

          Question. Did you tell the President on Monday night 
        that something had been found?
          Answer. No I did not.
          Question. Why not?
          Answer. For the reasons, really, that I've already 
        suggested. I wanted to see the note, and I wanted to 
        have all of this in reasonably good order when it was 
        related to the President. And it just didn't seem to me 
        that we had this matter in good order to give him half 
        information about what the note was and so forth.

    The White House story over the past 3 years has been that 
the reason the Foster ``suicide'' note was not turned over to 
law enforcement authorities for almost 30 hours was because of 
the need to contact Mrs. Foster and to inform the President. 
Yet on the day the note was discovered neither Mrs. Foster nor 
President Clinton were informed.\657\ The operative phrase in 
this communication appears to be: ``McLarty said he had decided 
to wait until the next day to decide whether to turn over the 
note.''
---------------------------------------------------------------------------
    \657\ No attempts were made to contact Mrs. Foster on July 26th and 
Mrs. Clinton specifically instructed McLarty not to inform the 
President about the note.
---------------------------------------------------------------------------
    Senior White House officials, including McLarty, have 
always indicated that there was never any question but that 
this document was going to be turned over to authorities. These 
notes indicate otherwise.
    Senior White House officials, as well as Mrs. Clinton, also 
have insisted that Mrs. Clinton had no role in the handling of 
Foster documents. These notes clearly indicate otherwise.
    It also should be noted that the White House has always 
claimed that the President could not be informed about the note 
until late the next day because his schedule was so full. 
However, the schedule produced for the FBI report, addressing 
why there was a delay in turning over the note, indicates that 
the President had a fairly open schedule that afternoon.\658\
---------------------------------------------------------------------------
    \658\ Investigation by Special Agent Scott M. Salter, Title of 
Case: Vincent Foster, Jr.; Deputy White House Counsel to the 
President--Victim; 7/20/93; investigative period 7/29/93-8/9/93, CZ 
000753-000754.
---------------------------------------------------------------------------
    In light of this new information, a scheduled meeting the 
next day--July 27th at 2:30 p.m.--with Mrs. Clinton, Bernard 
Nussbaum and Steven Neuwirth takes on new significance. Mr. 
Nussbaum had instructed Neuwirth to research the executive 
privilege issues regarding the note. Were executive privilege 
issues regarding the note discussed in this meeting? July 27th 
is the day when there is an almost universal lack of recall 
among the individuals who had any contact with Mrs. Clinton on 
this day.
    On July 28, 1993, the day after the Foster ``suicide'' note 
was turned over to law enforcement authorities, then Deputy 
Attorney General Philip Heymann instructed Associate Deputy 
Attorney General David Margolis to ask the FBI to conduct a 
thorough and aggressive investigation into the discovery of the 
note.\659\ This investigation was undertaken both because of 
the failure to find the note in the course of the July 22 
search of Foster's office, and because of the 30 hour delay in 
turning it over to law enforcement authorities.
---------------------------------------------------------------------------
    \659\ See Final Report of the Special Committee To Investigate 
Whitewater Development Corporation and Related Matters, June 1996.
---------------------------------------------------------------------------
    It is significant, that on July 30, 1993 when Nussbaum was 
interviewed about the delay in turning over the note, FBI 
officials report that he was aware of ``no other notes or 
messages left by Vincent Foster which would be relevant to the 
investigation of his death.'' \660\ Mr. Nussbaum never told 
Agent Salter, the FBI agent in charge of the investigation, or 
anyone else about the Travel Office file, yet he claims to have 
informed them in his Whitewater testimony.\661\ There has been 
no testimony from any Justice Department official which 
supports Nussbaum.\662\
---------------------------------------------------------------------------
    \660\ Investigation by Special Agent Scott M. Salter, Title of 
Case: Vincent Foster, Jr.; Deputy White House Counsel to the 
President--Victim; 7/20/93; investigative period 7/29/93-8/9/93, 
interview of Bernard Nussbaum conducted on 7/30/93, CZ00707.
    \661\ Senate Whitewater deposition of Bernard Nussbaum, July 17, 
1995.
    \662\ See Final Report of the Senate Whitewater Committee, June 17, 
1996, ``The Foster Phase.''
---------------------------------------------------------------------------
    Mr. Nussbaum and his colleagues who were involved in the 
review of Foster's note omitted the fact that Mrs. Clinton had 
reviewed the note on the afternoon of July 26, 1993. This 
information was finally obtained last summer in the course of a 
deposition of Bill Burton during the Whitewater hearings. The 
information about Mrs. Clinton weighing in on the Foster note 
was disclosed only to the Counsel's office and was studiously 
withheld from all investigations.
    The FBI interviewed Bill Burton, David Gergen, Mack 
McLarty, and Steven Neuwirth about the circumstances 
surrounding the discovery of the note. These interviews were 
just days after the finding of the note \663\ so these 
witnesses had no reason to universally forget information about 
Mrs. Clinton unless it was by design. None of the reports of 
these interviews included the fact that Mrs. Clinton had been 
brought in to review the note even though all of the above 
individuals were aware of that fact. Mr. Neuwirth, in testimony 
before the Whitewater Committee attempted to claim that he did 
in fact tell the FBI that Mrs. Clinton had been made aware of 
the note but neither the typed account or the FBI agent's 
handwritten notes recorded this information.
---------------------------------------------------------------------------
    \663\ FBI Report of SA Scott Salter, August 9, 1993. Investigative 
period 7/29/93-8/9/93.
---------------------------------------------------------------------------
    Withholding the Foster Travel Office notebook and the 
information about Mrs. Clinton's reviewing Foster's note have 
one thing in common: protection of Mrs. Clinton and avoidance 
of full disclosure of her role in these matters.
    When the note was finally turned over, David Gergen noted 
that ``Reno questioned the group as to why the note had not 
been turned over sooner and she was advised that the only 
reason that the note was not turned over sooner was that it had 
been decided to notify President Clinton prior to turning over 
the note and that the first opportunity to meet with President 
Clinton occurred at approximately 6 p.m., on July 27, 1993. It 
was explained that the contents of the note had potential 
implications regarding executive privilege. In addition it was 
explained to the AG that it had been decided to meet with Lisa 
Foster prior to the note being disclosed.'' \664\ Notes from 
Mark Gearan regarding the finding of the note indicate that 
Attorney General Reno was displeased with the delay. Mr. 
Gearan's notes indicated that Reno was ``worried'' about the 
``lateness'' in finding the Foster note and the ``length of 
time'' the White House took in disclosing the fact of its 
existence to any law enforcement officials.\665\ Cynthia 
Monaco, an assistant to Deputy Attorney General Philip Heymann, 
also confirmed that both Reno and Heymann were annoyed that the 
note had not been turned over sooner. Ms. Monaco noted that 
Heymann told her he was ``proud'' 
of Reno for taking the White House to task on the tardiness of 
disclosing this relevant information.\666\
---------------------------------------------------------------------------
    \664\ Senate Whitewater deposition of David Gergen, July 12, 1995, 
p. 145.
    \665\ ``Justice war wary of Foster probe,'' the Washington Times, 
July 26, 1995, p. A1.
    \666\ Committee staff interview with Cynthia Monaco, summer 1995. 
The committee notes that Ms. Monaco appears to be one of the rare 
Clinton appointees who had a semblance of a memory about these events. 
Ms. Monaco's testimony was a rare exercise in candor and completeness.
---------------------------------------------------------------------------

                               CONCLUSION

    Following the death of Vincent Foster, Jr., the White House 
deliberately and immediately set upon a pattern of concealment 
and obstruction concerning Foster's documents. That pattern 
exists to this day. Senior White House aides implicated in the 
Travelgate affair were involved with improper searches of the 
office on the evening of July 20, 1993 as well as the sham 
``official'' search of July 22, 1993. Mrs. Clinton also played 
a role in trying to avoid ``unfettered access'' to Foster's 
office and now we know she also weighed in on discussions 
regarding the turning over of the Foster note. Significantly, 
Foster's office contained a large Travel Office file in his 
briefcase which was withheld from numerous investigations for 
years.

 XII. The White House Has Stonewalled all Previous Investigations and 
  Engaged in an Unprecedented Damage Control Operation run out of the 
                      White House Counsel's Office

    For more than 3 years, the Republican members of the 
committee--both as minority members and majority members--have 
attempted to get to the bottom of this matter and faced a White 
House intent on withholding key documents and obscuring the 
truth. By subpoenaing documents from both the White House and 
the individuals involved and by piecing together the 
documentary record, it is clear that the White House's initial 
``mea culpa'' regarding the Travel Office was a whitewash--a 
``limited, modified hangout'' that was misleading at best.

           A. HEARINGS WERE REQUESTED IN 1993 ON THIS MATTER

    Providing oversight of 1600 Pennsylvania Avenue entails 
unique challenges. More than 3 years ago, Chairman Clinger 
requested Travel Office hearings after the White House's 
investigation was led by the Chief of Staff who approved the 
firings in the first place. Far from standing the test of time, 
the White House Management Review's credibility did not even 
survive its first news cycle.

                 B. WHITE HOUSE HISTORY OF STONEWALLING

    The White House response to the various investigations into 
the White House Travel Office matter has been a history of 3 
years of stonewalling. Despite a GAO investigation which was 
mandated by law--a law which President Clinton himself signed--
and an OPR investigation conducted by the President's own 
political appointee, and a criminal investigation conducted by 
the Justice Department, the White House has continued to 
withhold documents relating to Travelgate. An abbreviated 
history of the stonewalling follows.

1. GAO Investigation

    On July 2, 1993, a law was signed by the President which 
included a provision mandating the GAO review of the Travel 
Office.\667\ The report originally was to be completed by 
September 30, 1993, but due in part to numerous White House 
delays, interviews were not completed until March 1994. 
Furthermore, the White House repeatedly delayed productions of 
records critical to the congressionally mandated investigation. 
In some cases, GAO never was informed of the existence of key 
documents responsive to its requests. In the committee's 
October 24, 1995, hearing, a GAO representative testified that 
the measure of cooperation received from the White House was 
less than optimal and that all documents requested were not 
produced.
---------------------------------------------------------------------------
    \667\ P.L. 103-50.
---------------------------------------------------------------------------
    The following is an overview of White House delays and 
denials in dealing with the investigation of the General 
Accounting Office's congressionally mandated review of the 
White House Travel Office matter.
         July 2, 1993: President Clinton signs into 
        law, P.L. 103-50, Fiscal Year 1993 Supplemental 
        Appropriations Act, which, among other things, mandates 
        a GAO investigation of the White House Travel Office 
        matter. The report is due to be completed on September 
        30, 1993.
         August 11, 1993: GAO held an opening meeting 
        with the White House to explain the statutory 
        requirements and scope of its investigation. White 
        House Deputy Chief of Staff Roy Neel arrived 1 hour 
        late, asked what GAO would do if the White House 
        refused to provide documents and whether Congress would 
        have access to GAO work papers, including material Neel 
        said, ``could be explosive.'' Mr. Neel said he 
        considered GAO's work a ``nuisance'' he wanted done as 
        soon as possible.
         August 17, 1993: GAO's Director of Federal 
        Human Resource Management Issues Nancy R. Kingsbury 
        writes Associate White House Counsel Clifford M. Sloan 
        GAO's first document request covering 20 categories of 
        records concerning Travel Office operations before and 
        after the firings; White House Management Review 
        records; White House press releases, personnel and 
        performance records; records concerning Harry Thomason 
        and Darnell Martens, among others. A list of 17 White 
        House staff to be interviewed also is attached.
         August 26, 1993: White House (Mr. Sloan) 
        writes GAO (Ms. Kingsbury) in response to August 17 
        letter promising to do ``our best to respond 
        expeditiously'' but provides no documents. Also agrees 
        to address the timing of any interviews during the week 
        of August 30, 1993.
         September 14, 1993: GAO Assistant Director 
        John S. Baldwin, Sr., writes White House (Mr. Sloan) 
        with four additional records requests, including a list 
        of Presidential trips and, trip files, and procedural 
        and computer manuals relating to the new Travel 
        Office's management system.
         September 15, 1993: White House (Mr. Sloan) 
        cover letter provides GAO (Ms. Kingsbury) documents 
        related to the new Travel Office management system.
         September 23, 1993: Matt Moore meets with 
        Cliff Sloan about GAO records at 2 p.m. in the White 
        House. [White House Travel Office Chronology, prepared 
        by Government Reform and Oversight Majority Staff.]
         September 23, 1993: GAO (Ms. Kingsbury) writes 
        White House (Mr. Sloan) with additional request for 
        Travel Office's bank and financial records. Reiterates 
        the need to promptly review documents.
         September 24, 1993: White House (Mr. Sloan) 
        writes GAO (Ms. Kingsbury) with a document responsive 
        to GAO's August 17, 1993, letter's request #3.
         September 27, 1993: White House (Mr. Sloan) 
        writes GAO (Ms. Kingsbury) four separate letters. Two 
        provide a total of 12 trip files for Presidential trips 
        taking place between April 1992 and April 1993. The 
        other two letters provide documents related to the 
        Travel Office's Riggs National Bank account.
         September 29, 1993: White House (Mr. Sloan) 
        advises GAO (Ms. Kingsbury)--in response to GAO's 
        September 14, 1993, request--that it is seeking ``an 
        audit report done in 1981 or 1982'' from Reagan and 
        Bush Presidential archives.
         September 30, 1993: GAO Interim Report on the 
        White House Travel Office matter was due to the House 
        and the Senate. The report noted the problems GAO was 
        having with the White House in getting access to 
        documents.
         October 1, 1993: White House (Mr. Sloan) 
        advises GAO (Ms. Kingsbury) that it is making available 
        White House canceled checks for May through October 
        1992.
         October 7, 1993: GAO (Ms. Kingsbury) writes 
        White House (Associate Counsel W. Neil Eggleston) a 10-
        page letter reviewing, ``the status of our requests for 
        documents and interviews from the White House.'' This 
        letter states that: 16 of 20 requests made in its 
        August 17, 1993, letter were not provided or were only 
        partially provided; 2 of 3 requests made in its 
        September 14, 1993, letter were incomplete; 7 of 10 
        requests made in its September 23, 1993, letter were 
        not provided or only partially provided. This letter 
        indicates that the White House has yet to provide any 
        documents pertaining to Harry Thomason.
         October 8, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) providing copies of an 
        anonymous 1988 complaint against Travel Office 
        employees and documents relating to a 1981 Travel 
        Office internal review.
         October 14, 1993: White House (Peter C. 
        Pappas) writes GAO (Ms. Kingsbury) two letters, 
        attaching financial disclosure filings of three White 
        House staff and various documents related to Air 
        Advantage.
         October 14, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) a letter providing 
        additional documents relevant to a 1981 Travel Office 
        internal review and the 1988 anonymous complaint.
         October 15, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two separate letters. The 
        first states that the White House is continuing ``in as 
        expeditious a manner as possible'' to photocopy Travel 
        Office trip files but notes that the White House's 
        understanding of GAO's statutory authority limits GAO's 
        trip files request to trips from January 1992 through 
        May 1993, and refers to redactions of material the 
        White House considers privileged, relevant to 
        Presidential security, or not germane. The second 
        letter states that the White House has been unable to 
        locate any Travel Office petty cash journals.
         October 19, 1993: White House (Mr. Pappas) 
        sends GAO (Ms. Kingsbury) four letters concerning: 9 
        trip files; President Clinton's Travel Office remarks 
        on May 21, 1993, and George Stephanopoulos' Travel 
        Office responses in a May 20, 1993, press briefing; a 
        Bush administration document on ``Prohibited Contacts 
        with Agencies,'' and ``In the spirit of cooperation,'' 
        an August 6, 1993, copy of a Travel Office Policies and 
        Procedures Review prepared by GSA.
         October 20, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters. Letter requests 
        ``narrow and specific requests for the time period 
        after May 19'' which the White House will consider in 
        light of the statutory definition of GAO's scope. The 
        second declines to provide a copy of the White House 
        telephone directory and states that interviews with 
        various White House staffers have completed the White 
        House response to Paragraph 7 of GAO's October 7, 1993, 
        letter.
         October 22, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with four additional 
        trip files.
         October 26, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with the trip file 
        for President Bush's October 25-November 4, 1992, 
        ``campaign swing.''
         October 28, 1993. White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter with enclosures it 
        contends complete Paragraph 28 of GAO's October 7, 
        1993, request.
         November 2, 1993. White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with five additional 
        Travel Office trip files dated September through 
        November 1992.
         November 3, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with four additional 
        Travel Office trip files dating from December 1991, 
        through October 1992.
         November 4, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with airline ticket 
        reports for 1992 and travel agent coupons for periods 
        from December 1991, through June 1992.
         November 5, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with six additional 
        trip files from February and March 1992.
         November 10, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with copies of travel 
        agent coupons for various time periods from February 
        1992, through March 1993.
         November 10, 1993: GAO (Mr. Homan) facsimiles 
        White House (Mr. Eggleston) handwritten memo stating 
        that GAO is available for interviews ``on Friday 
        between 8 a.m.-12 noon and 2-4 p.m.'' Still to be 
        interviewed: Jeff Eller, Mark Gearan, John Podesta, 
        Todd Stern, Chris Vein, Jack Kelly (6 of the original 
        17 requested interviewees).
         November 12, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with five further 
        trip files for January and February 1992.
         November 15, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with two additional 
        trip files from January and September 1992. Attached to 
        this document are three letters addressed to the 
        Internal Revenue Service attaching trip files.
         November 18, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) three letters with: 
        additional copies of travel agent coupons for March/
        April 1993; and documents relevant to Paragraph 2 of 
        GAO's October 7, 1993, request.
         November 23, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters with: eight 
        further trip files from June through August 1992, and 
        Travel Office itineraries for January 1992.
         November 29, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters with: Travel 
        Office itineraries for February 1992, and a copy of a 
        newspaper article attached to Catherine Cornelius' and 
        Clarissa Cerda's February 15, 1993, Travel Office 
        reorganization memo.
         November 30, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters: one includes 
        additional trip files; the second includes a 1987 study 
        of White House Facilities and Operating Units.
         November 30, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter confirming GAO's 
        withdrawal of a request to interview a representative 
        of the Vice President's National Performance Review 
        (NPR) ``setting forth the relationship between the 
        Review and the actions taken with respect to the Travel 
        Office.''
         December 1, 1993: White House (Mr. Pappas) 
        forwards Travel Office itineraries for March 1992, to 
        GAO (Ms. Kingsbury).
         December 2, 1993: White House (Mr. Pappas) 
        sends GAO (Ms. Kingsbury) two additional letters. One 
        encloses Travel Office itineraries for April 1992. The 
        second enclosed five additional trip files.
         December 3, 1993: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) a 15-page letter updating 
        the status of GAO's work, White House document 
        productions and interviews. It reviews some 27 of 36 
        document requests not yet provided or only partially 
        provided by the White House as of that date--5 months 
        into the investigation. It further notes that 4 White 
        House staffers and 1 GSA staffer have yet to be 
        interviewed: Gearan, Eller, Podesta, Stern and Kelly 
        (GSA). It closes with: ``If the White House does not 
        intend to arrange these interviews, or does not possess 
        or intend to provide any of the documents requested, we 
        respectfully request that you explain the circumstances 
        or reasons in writing to us by January 10, 1994.''
         December 4, 1993: Neil Eggleston meets with 
        Bernie Nussbaum, John Podesta, Cliff Sloan and Todd 
        Stern concerning how to deal with GAO. Among those 
        issues discussed was whether GAO should be provided 
        access to White House Management Review documents. Mr. 
        Nussbaum decided, ``No.'' Mr. Eggleston notes dated 
        December 4, 1993, discuss Travel Office issues 
        including ICAP, say not to provide GAO the Management 
        Review interview notes.
         December 6, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) contending that GAO's 
        ``December 3, 1993, Request Compilation unnecessarily 
        introduces a measure of confusion into the process of 
        requesting documents and interviews and responding to 
        such requests'' and that it ``undermines our effort to 
        cooperate in this matter.'' It suggests that GAO has 
        ``chosen to alter the requests and the completeness of 
        the responses'' and requests that GAO redraft the 
        December 3, 1993, letter.
         December 7, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) with eight additional trip 
        files.
         December 7, 1993: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) a 16-page letter 
        superseding its December 3, 1993, letter updating the 
        status of document requests and separating new requests 
        from outstanding requests. This letter indicates that 
        the White House still has provided no Harry Thomason 
        documents to GAO.
         December 8, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters with: six 
        further Travel Office trip files and Travel Office 
        itineraries for May through August 1992, respectively.
         December 9, 1993: David Watkins is interviewed 
        by GAO with Watkins' attorney Ty Cobb and Associate 
        White House Counsel Neil Eggleston in attendance. It is 
        at this interview that GAO learns of First Lady Hillary 
        Rodham Clinton's involvement in the White House Travel 
        Office matter.
         December 14, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) with five further trip 
        files.
         December 14, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) four letters regarding, 
        respectively, December 7, 1993, Paragraphs 5 (``fully 
        complied with''), 7 (``fully complied with''), 37 
        (``decline to provide a briefing about the general 
        procedures for the granting of access passes'' . . . 
        but agree to provide a witness to explain how the 
        procedures applied to Messrs. Thomason and Martens) and 
        41 (declining to respond to a request for current legal 
        conclusions).
         December 15, 1993: Neil Eggleston writes a 
        memo for the White House's GAO/Travel Office file 
        outlining, ``GAO Themes in Questioning.'' Several of 
        the themes deal with Mrs. Clinton, including: ``Mrs. 
        Clinton--the Management Report omits earlier 
        involvement by her in the matter and fails to report 
        her conversation with David Watkins on the night of 
        Friday, May 14th.'' Also notes, ``The authors of the 
        Management Review were pressured to omit embarrassing 
        details about Mrs. Clinton or the Administration from 
        the Report.''
         December 15, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters. In one, the 
        White House claims to have complied with Paragraph 6 of 
        GAO's December 7, 1993, letter, ``to the extent that we 
        believe the request is relevant to the GAO inquiry'' 
        and declining further response without GAO's 
        establishing the relevance of materials withheld. This 
        request involved resumes, applications, appointment 
        documents and financial disclosure filings of Kennedy, 
        Watkins, Cornelius, Cerda and Eller. In the second, it 
        claims to have provided what was requested of Paragraph 
        32 of the December 7, 1993, letter, the article 
        attached to Cornelius' and Cerda's February 15, 1993, 
        memo.
         December 16, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters enclosing Travel 
        Office itineraries for September through November 1992, 
        and providing additional trip files.
         December 16, 1993: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) clarifying outstanding 
        requests and adding others arising from the GAO's 
        interview of David Watkins, including a request that 
        Mr. Eggleston arrange for GAO to interview Mrs. 
        Clinton, whose name came up in the Watkins interview. 
        GAO noted it only asked whether or not the White House 
        had made a determination. GAO adds that its ``normal 
        procedures . . . when someone reports to us that 
        another party made certain statements, we arrange an 
        interview . . . '' The letter notes that the White 
        House has refused to provide information on whether or 
        not the White House had determined Harry Thomason and 
        Darnell Martens' status as Special Government 
        Employees.
         December 19, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with December 1992, 
        Travel Office itineraries.
         December 21, 1993: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter with further Travel 
        Office trip files.
         December 29, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) six separate letters 
        claiming to complete its responses to Paragraphs 1, 9, 
        11, 14, 17, 31. Per Paragraph 1, Eggleston claims that 
        GAO's failure to address a White House letter dated 
        October 20, 1993, leaves the White House unable to 
        comply with this request concerning White House Travel 
        Office management since May 19, 1993, and interviews 
        with Foucart and Riewerts. Responding to a GAO inquiry 
        concerning lower charter costs under new Travel Office 
        management, two Brian Foucart memos dated May 27 and 
        May 31, 1993. The other five letters claim prior 
        completion or completion based on attached 
        documentation.
         December 30, 1993: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters. One declines to 
        produce the White House phone book and the second 
        claims to complete the White House response to 
        Paragraph 50. attaches a memorandum from Matthew Moore 
        to David Watkins circa February 15, 1993. This includes 
        a chart that identifies Billy Dale and his staff as 
        ``Bush Person[s]''.
         January 3, 1994: White House (Mr. Pappas) 
        forwards GAO (Ms. Kingsbury) additional Travel Office 
        itineraries for January and February 1993.
         January 4, 1994: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) two letters including the 
        March 1993, Travel Office itineraries and additional 
        trip files, respectively.
         January 7, 1994: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter enclosing 
        miscellaneous travel data and binders.
         January 8, 1994: White House (Mr. Pappas) 
        writes GAO (Ms. Kingsbury) letter enclosing 
        miscellaneous travel binders.
         January 13, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters making more 
        Travel Office worksheets, binders and trip files.
         January 18, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter responding to a 
        request on Page 15 of GAO's December 7, 1993, request 
        compilation for information concerning the Vice 
        President's National Performance Review (NPR) and the 
        review of the White House Travel Office. Attached to 
        this letter is a memo to Ms. Kingsbury from Todd J. 
        Campbell, Counsel to the Vice President, stating that 
        there was no connection between them.
         February 3, 1994: White House (Special 
        Hearings Counsel Matthew Moore) writes GAO (Ms. 
        Kingsbury) letter providing a list of Presidential 
        trips from May 22 through December 31, 1993.
         February 9, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter enclosing copies of 
        the cover and title page of a book on bookkeeping for 
        small business.
         February 14, 1994: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) two letters concerning ``a 
        compulsively complete list'' of what GAO still needs to 
        complete its work by the end of the month. Some 21 
        items, identified as ``A'' through ``V,'' are attached.
         February 14, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters. One challenges 
        the relevance of request ``M'' from GAO's February 14, 
        1994, letter. This referred to several people 
        identified on several passenger lists as Travel Office 
        staff and requests they be identified as civilian or 
        military personnel and that the White House arrange 
        interviews with them. Mr. Eggleston requests that GAO 
        indicate how the request ``would contribute to the 
        statutorily defined scope of the GAO review.'' The 
        second encloses information concerning checks and 
        deposit slips missing from a previous production.
         February 17, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) nine separate letters 
        responding to various of February 14, 1994's compiled 
        requests. These letters: 1) seek to limit Paragraphs 
        ``A'' and ``B'' [respectively: post-May 19 trip files 
        and operations records; and all records pertaining to 
        the decision to bring World Wide Travel and Penny 
        Sample into the White House] per issues of GAO's 
        ``scope''; 2) note that the White House has provided 
        all relevant documents it could locate for item ``C'' 
        [documents describing policies and procedures in place 
        before May 1993, including all financial management 
        records]; 3) enclose White House's KPMG Peat Marwick 
        payment documentation per ``G''; 4) confirm that Travel 
        Office records in FBI custody do not include complete 
        copies of press billings from March 1992 through May 
        1993; 5) ask that GAO provide copies of its documents 
        to assist the White House in fulfilling a request; 6) 
        names the five fired non-supervisory Travel Office 
        employees and their new Federal employers; 7) clarify a 
        request concerning relevant and irrelevant documents in 
        a Gary Wright briefcase; 8) address 9 World Wide Travel 
        file folders; and, 9) make limited production of 
        documents from a ``Presidential and Vice Presidential 
        Visit Manual.''
         February 18, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) six letters responding to 
        various of February 14, 1994's compiled requests. They 
        include: 1) ``Trust Travel Fund Reconciliation;'' 2) 
        press information; 3) travel guidelines; 4) billing for 
        various trips; 5) refund log; and, 6) bus contacts and 
        master call-out list with phone numbers.
         February 23, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters explaining that 
        it cannot comply with two separate requests because: 1) 
        Travel Office documents [documentation of who paid for 
        new ticketing equipment installed in May 1993, before 
        American Express entered the Travel Office] ``were not 
        kept in the form reflected in the inventory and are no 
        longer identifiable''; and, 2) the 15 to 20-year-old 
        documents requested are ``far beyond the scope of GAO's 
        original request.''
         March 4, 1994: Bernard Nussbaum resigns as 
        White House Counsel.
         March 9, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter attaching Harry 
        Thomason and Darnell Martens White House pass 
        applications.
         March 14, 1994: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) three letters. They 
        request: 1) ``copies of processing documents used'' to 
        further its understanding of Travel Office financial 
        management''; 2) authorization to ask Riggs National 
        Bank questions concerning the Travel Office Press Fund, 
        whether Travel Office payments are subject to the 
        Prompt Pay Act and State and local tax issues; and, 3) 
        copies of trip files for the new Travel Office 
        management.
         March 16, 1994: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) letter with questions to be 
        asked of First Lady Hillary Rodham Clinton, Leon 
        Panetta, Patsy Thomasson and Margaret Williams. She 
        requests that the written responses to these questions 
        be provided to GAO by March 25, 1994.
         March 19, 1994: GAO's Ms. Kingsbury completes 
        a draft of the Travel Office report. [White House 
        Travel Office Chronology, prepared by Government Reform 
        and Oversight Committee majority staff.]
         March 25, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) to state that it 
        ``anticipates'' being able to respond to requests due 
        that day the following week.
         March 25, 1994: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) letter beginning, ``I 
        understand that you are busy these days, but I am 
        concerned that we have not been able to be in contact 
        at least by telephone . . . '' and adding, ``Finally, I 
        must express serious concern about our recent 
        experiences with obtaining clearance for staff on this 
        assignment.''
         March 25, 1994: White House (Mr. Eggleston) 
        responds to GAO (Ms. Kingsbury) letter on access.
         March 30, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) four letters which 
        respectively: 1) request that someone call Matt Moore 
        for William Kennedy's notes of his conversations with 
        FBI agents prior to the Travel Office firings; 2) 
        direct GAO to seek drafts of KPMG Peat Marwick from 
        Peat Marwick itself; 3) state that a briefing paper 
        referenced in paragraph 6 of GAO's mid-March document 
        request cannot be located; and, 4) responds to GAO 
        written questions directed to Watkins and McLarty on 
        their behalf. States that Watkins recalled, ``his 
        conversation with Mrs. Clinton on this issue was on the 
        evening of May 14, 1993;'' and that McLarty recalled 
        meeting with the First Lady on May 13, 1993.
         March 31, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) regarding a June 3, 1993, 
        memo from Vince Foster to David Watkins regarding 14 
        C.F.R. 121.
         April 1, 1994: White House (Mr. Moore) 
        facsimile transmittal cover sheet to GAO (Nancy 
        Kingsbury) regarding ``Letters in Response to Travel 
        Office Review Requests. Attached is an April 1, 1994, 
        White House memo (Mr. Eggleston) to GAO (Ms. Kingsbury) 
        regarding Paragraph E of GAO's February 14, 1994, 
        request (granting White House passes in general and 
        Thomason/Martens White House passes in particular) 
        which he said were forwarded to GAO on March 9.
         April 4, 1994: Neil Eggleston writes a memo to 
        White House Counsel Lloyd Cutler, Joel Klein, John 
        Podesta and Todd Stern regarding Travel Office issues 
        involving IRS. Mr. Eggleston discusses the issue of IRS 
        taking the position that the White House is obligated 
        to pay excise taxes on Travel Office press charters. 
        Attached to this memo is a draft copy of the GAO Travel 
        Office Report on the IRS.
         April 11, 1994: Neil Eggleston writes a memo 
        to White House Counsel Lloyd Cutler and John Podesta 
        concerning the GAO Travel Office document requests, 
        noting that the White House had not addressed ``the 
        effort by Martens to get a contract to conduct an 
        accounting of the federal aircraft fleet . . .'' 
        because it previously had decided that the documents 
        were not responsive.
         April 12, 1994: GAO representatives Nancy 
        Kingsbury, David Clark, and others meet with White 
        House staffers Neil Eggleston, Patsy Thomasson, Brian 
        Foucart, Steve Riewerts, Kim Johnson and Matt Moore to 
        discuss completion of the GAO report and outstanding 
        issues.
         April 13, 1994: White House (Mr. Moore) 
        facsimile transmittal cover sheet to GAO (Nancy 
        Kingsbury) followed by White House (Mr. Eggleston) 
        letter to GAO (Ms. Kingsbury) listing individuals 
        responsible for baggage security.
         April 13, 1994: GAO (Ms. Kingsbury) writes 
        White House (Mr. Eggleston) letter stating GAO's need 
        to ``verify that the copies of documents we have 
        received are authentic,'' and ``survey the universe of 
        documents to determine if any classes of records were 
        withheld.'' The letter includes a listing of documents 
        to be verified.
         April 16, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter responsive to 
        Paragraph D of GAO's February 14, 1994, request 
        compilation, with attached memorandum to Harry Thomason 
        and Markie Post concerning their meetings at the White 
        House on April 30 and May 1, 1993, and the White House 
        Project. These documents were withheld for almost 10 
        months from GAO even though they were available 
        immediately.
         April 22, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) two letters. One breaks down 
        administrative leave costs of the five fired non-
        supervisory White House Travel Office employees. The 
        second addresses the status of a Department of 
        Agriculture detailee to the Travel Office.
         April 23, 1994: White House (Mr. Eggleston) 
        writes GAO (Ms. Kingsbury) letter confirming that ``GAO 
        has not requested documents prepared in connection with 
        the White House Management Review,'' and adding that 
        the White House did not provide attorney notes and 
        analysis prepared after the events in the Travel 
        Office. GAO had been told by Podesta and Stern that 
        they only took a ``thimblefull of notes'' in the course 
        of their review.
         May 2, 1994: GAO issues its final Travel 
        Office Report.
         May 3, 1994: David Watkins writes a letter to 
        Mrs. Clinton: ``Hillary--The GAO erred in stating that 
        I said that you urged me to replace members of the 
        travel office with `our people.' `Urge' is not a word I 
        commonly use. Additionally, as I know you have 
        experienced many times, the statement was reported out 
        of context without my complete response to their 
        questions being reported. Obviously, I regret any and 
        all press references and their innuendoes as it related 
        to your involvement in this affair. I have always known 
        who my `client' is.''
         July 10, 1994: Neil Eggleston writes a memo to 
        the file regarding the Vince Foster Travel Office file 
        and how it may or may not be responsive to numerous 
        investigations including GAO, OPR, Public Integrity and 
        Independent Counsel Fiske. He subsequently decides it 
        is responsive to Public Integrity but only portions are 
        provided 1 month later. Mr. Eggleston says that there 
        is no need to tell GAO and OPR because they have 
        completed their reports.
         September 7, 1994: Neil Eggleston writes a 
        memo to Patsy Thomasson and Jodie Torkelson about 
        Travel Office issues and the status of GAO documents, 
        IRS audit and FBI investigations into Billy Dale, Harry 
        Thomason and Darnell Martens. This memo is copied to 
        White House Counsel Lloyd Cutler, Joel Klein and Chris 
        Cerf. A day later, Eggleston writes a letter to Stuart 
        Goldberg at Public Integrity announcing his 
        resignation, effective immediately. A clear pattern 
        emerges in the course of this document production: 
        documents that were potentially damaging to Billy Dale 
        were the first out the door, while those that deal with 
        Harry Thomason or ``high level'' White House officials 
        were deliberately and extensively delayed. Documents 
        re: Harry Thomason clearly were requested in the first 
        GAO request on August 17, 1993. Yet no Harry Thomason 
        documents were produced until March 9, 1994, several 
        days after Independent Counsel Fiske subpoenaed records 
        from the White House and several days after the 
        resignation of Bernard Nussbaum. The withholding of 
        documents re: Harry Thomason and Darnell Martens and 
        their business ventures was deliberate and consistent 
        with attempts to withhold these documents from all 
        other investigations.

2. OPR investigation

    Following the issuance of the White House Management 
Review, the Attorney General committed to reviewing the report 
and following up on any aspects necessary.\668\ By July 15, 
1993, then Deputy Attorney General Heymann tasked the Office of 
Professional Responsibility to conduct a review of ``the 
conduct of the FBI in connection with its contacts with the 
White House on the Travel Office matter and to report its 
findings and recommendations. The report was completed on March 
18, 1994 but never released by the Justice Department.
---------------------------------------------------------------------------
    \668\ July 14, 1993, letter from Attorney General Janet Reno to the 
Honorable Jack Brooks.
---------------------------------------------------------------------------
    Initially the Justice Department was requested to delay the 
release of the report due to the Independent Counsel 
investigations--both by Independent Counsel Fiske and 
Independent Counsel Starr. By the summer of 1995, OPR realized 
it, too, had been stonewalled for 2 years by its own White 
House, which refused to provide access to Vince Foster's Travel 
Office notebook. The Foster notebook was concealed from all 
previous investigations for 2 years.
    In a scathing July 24, 1995, Justice Department internal 
memo, OPR Counsel Michael Shaheen wrote:

          [W]e were stunned to learn of the existence of this 
        document since it so obviously bears directly upon the 
        inquiry we were directed to undertake in late July and 
        August 1993 . . . we believe that our repeated requests 
        to White House personnel and counsel for any 
        information that could shed light on Mr. Foster's 
        statement regarding the FBI clearly covered the 
        notebook and that even a minimum level of cooperation 
        by the White House should have resulted in its 
        disclosure to us at the outset of the investigation.

    In fact, as early as December 1993, OPR considered 
approaching Attorney General Reno to request a full Travel 
Office investigation because ``very dangerous signals'' 
suggested possible obstruction of its investigation.
         July 15, 1993: Then-Deputy Attorney General 
        Philip Heymann decided to call on the Justice 
        Department's Office of Professional Responsibility to 
        conduct a review of the FBI's role in the Travel Office 
        firings. Later, after Vincent Foster's death and the 
        discovery of his ``suicide note,'' Mr. Heymann added to 
        the investigation a review of the comments in Vincent 
        Foster's note about the ``FBI lied.''
         July 28, 1993: Then Deputy Attorney General 
        Heymann publicly announced a review of the FBI's role 
        in the Travel Office firings and included a review of 
        the comments in Vincent Foster's note about the ``FBI 
        lied.'' The FBI had also been tasked on this date with 
        investigating the delay in the turning over of the 
        Foster ``suicide'' note.
         August 1993: First letter to Nussbaum 
        requesting documents.
         Summer 1993: White House failed to provide the 
        Vince Foster Travel Office file. OPR Counsel Michael 
        Shaheen wrote a scathing memo in July 1995 about not 
        receiving this document for OPR's investigation. Mr. 
        Shaheen wrote: ``we were stunned to learn of the 
        existence of this document since it so obviously bears 
        directly upon the inquiry we were directed to undertake 
        in late July and August 1993 . . .''
         The White House only provided the White House 
        Management Review notes from the interview with Vincent 
        Foster to OPR. OPR had asked for all of the interview 
        notes. Mr. Shaheen wrote: ``The White House declined to 
        provide the notes and failed to mention the existence 
        of any handwritten notes by Mr. Foster on the 
        subject.''
         Mr. Shaheen also stated in his memo: ``we 
        believe that our repeated requests to White House 
        personnel and counsel for any information that could 
        shed light on Mr. Foster's statement regarding the FBI 
        clearly covered the notebook [the Vince Foster Travel 
        Office notebook] and that even a minimum level of 
        cooperation by the White House should have resulted in 
        its disclosure to us at the outset of our 
        investigation.''
         Shaheen noted that the Vince Foster Travel 
        Office notebook also had been withheld from the 
        Independent Counsel.
         Mr. Shaheen and members of his staff informed 
        committee Counsel in an interview in August 1995 that 
        by December 1993, OPR was considering going to the 
        Attorney General to request a full investigation into 
        the Travel Office matter because of the ``very 
        dangerous signals'' sent to the investigators which 
        indicated possible obstruction of its investigation. 
        Shaheen and his investigators noted that the memories 
        of White House witnesses were very vague and this was 
        only several months after the events in question. Mr. 
        Shaheen's investigation was cut short by the 
        appointment of the Independent Counsel.

              JUSTICE DEPARTMENT, PUBLIC INTEGRITY SECTION

    While the Clinton White House cooperated fully with the 
Public Integrity Section's investigation of Billy R. Dale, its 
refusal to provide documents relevant to Public Integrity's 
investigation of Harry Thomason and Darnell Martens for more 
than a year was so egregious that the Chief of Public 
Integrity, Lee Radek, concluded on September 8, 1994:

          At this point, we are not confident that the White 
        House has produced to us all the documents in its 
        possession relating to the Thomason allegations. . . . 
        [T]he White House's incomplete production greatly 
        concerns us because the integrity of our review is 
        entirely dependent upon securing all relevant 
        documents.

The following week, the Clinton administration's own Public 
Integrity Section was forced by these concerns to subpoena all 
documents responsive to its investigation of Thomason and 
Martens. Even then, the Clinton administration refused to 
produce some 120 responsive documents. Due to White House 
obstruction, Public Integrity had prosecuted--and lost--the 
Dale case before it even had received all documents relevant to 
its investigation of Thomason and Martens.
         May 1993: Public Integrity began a criminal 
        investigation into the Travel Office matter and shortly 
        thereafter began an investigation into the roles of 
        Harry Thomason and Darnell Martens at the White House.
         July 1993: The Department of Justice began 
        trying to get an interview with Harry Thomason while 
        Thomason's lawyer began trying to get access to the 
        White House Management Review interview notes of Harry 
        Thomason.
         Summer 1993: Public Integrity began seeking 
        documents from the White House in the summer of 1993 
        but received little information. As of September 30, 
        1993, Prosecutor Goldberg wrote to the White House ``to 
        confirm that the White House had only located two 
        documents related to Harry Thomason.''
         October 12, 1993: White House Counsel sent an 
        agreement which would allow Public Integrity Prosecutor 
        Goldberg to ``view'' the two Harry Thomason memos.
         November 12, 1993: Goldberg signed an 
        agreement to view two Harry Thomason ``White House 
        project'' memos but not take any notes or make copies. 
        At this point, almost 6 months after the firings and 6 
        months after the initiation of an investigation into 
        Travel Office related matters, no one at the White 
        House appears to have mentioned the GSA/ICAP contracts 
        Harry Thomason and Darnell Martens generated while 
        seeking business for their company, TRM.
         January 1994--Spring 1994: Public Integrity 
        continued to seek documents about Harry Thomason's 
        activities at the White House and received its first 
        ICAP/GSA contract documents regarding efforts by Harry 
        Thomason and Darnell Martens to seek Government 
        contracts.
         March 14, 1994: Public Integrity wrote to 
        White House Counsel Eggleston asking for confirmation 
        in writing that the White House had searched for all 
        Harry Thomason files.
         April 5, 1994: Neil Eggleston distributed a 
        memo to gather all Harry Thomason and Darnell Martens 
        documents by April 7, 1994. It requires a signed 
        certification stating: ``I have searched my files and I 
        have no documents responsive to the requests set forth 
        in this memorandum.''
         April 5, 1994: An FBI e-mail on this date 
        titled: ``WHTO Update'' states: ``there has been some 
        problem in obtaining records from the White House 
        regarding Thomason's duties and responsibilities. 
        Goldberg is considering issuing a subpoena . . .''
         Spring 1994: Production of Harry Thomason 
        documents to Public Integrity continues. Matt Moore and 
        Neil Eggleston were involved in document production. 
        (Matt Moore possessed copies of the Watkins memos that 
        were never turned over.)
         May 11, 1994: Neil Eggleston, Joel Klein and 
        Marvin Krislov (all in the White House Counsel's 
        office) wrote a letter to the Independent Counsel 
        addressing how the White House would comply with the 
        Independent Counsel's grand jury subpoena. (Their 
        letter narrowed the scope of the Independent Counsel's 
        initial request.)
         May 1994: Neil Eggleston reviews the Foster 
        Travel Office file to determine if it is responsive to 
        the Fiske subpoena. He decides that it is not. 
        Eggleston apparently ignores the fact that the Foster 
        Travel Office file, which mentions Harry Thomason and 
        Darnell Martens throughout, is responsive to the Public 
        Integrity document requests.
         June 24, 1993: Neil Eggleston writes a letter 
        to Stuart Goldberg informing him that Public Integrity 
        has all of the Harry Thomason documents as of this 
        date. (Vince Foster Travel Office file is not 
        included.)
         July 10, 1994: Neil Eggleston writes a memo to 
        Lloyd Cutler about the Vince Foster Travel Office file 
        and why it wasn't produced to any investigation to 
        date. Eggleston recommends producing only portions of 
        the Foster notebook to Public Integrity by that Tuesday 
        (July 12, 1994). Those portions are not provided until 
        1 month later.
         August 30, 1994: Neil Eggleston provides the 
        additional documents from Foster's Travel Office 
        notebook to Public Integrity (approximately 20 pages of 
        the 100-plus page document are provided.).
         August 30, 1994: Public Integrity prosecutor 
        Goldberg writes the White House to ask why Harry 
        Thomason documents were withheld and asks for an 
        explanation by September 8, 1994.
         September 8, 1994: Neil Eggleston writes 
        Goldberg explaining why he failed to turn over all of 
        the Harry Thomason documents saying ``I sincerely 
        apologize for the oversight and hope that the delay in 
        production of these documents has not caused you any 
        inconvenience . . . please be advised that I have 
        resigned effective September 8, 1994.''
         September 8, 1994: Public Integrity Chief Lee 
        Radek writes a memo to Jack Keeney stating: ``At this 
        point we are not confident that the White House has 
        produced to us all documents in its possession relating 
        to the Thomason allegations . . . the White House's 
        incomplete production greatly concerns us because the 
        integrity of our review is entirely dependent upon 
        securing all relevant documents.''
         September 13, 1994: A Grand Jury subpoena for 
        documents from the White House relating to Harry 
        Thomason and Darnell Martens is served on the White 
        House with a September 30, 1994, due date.
         September 30, 1994: All Harry Thomason and 
        Darnell Martens pursuant to the September 13, 1994, 
        subpoena are due to the Grand Jury. The White House 
        produced a ``PRIVILEGE LOG'' which identifies more than 
        120 documents that the White House refuses to turn over 
        to its own Justice Department in the course of a 
        criminal investigation involving activities at the 
        White House.
         July 6, 1995: White House provides complete 
        Vince Foster Travel Office file to the press.
         July 28, 1995: White House, in responding to 
        Public Integrity Prosecutor Goldberg, sends more pages 
        of Vince Foster Travel Office notebook.
         August 17, 1995: Public Integrity prosecutor 
        Goldberg reviews more Vince Foster documents at the 
        White House with White House Associate Counsel Natalie 
        Williams.
         November 4, 1995: In the midst of the Billy 
        Dale trial, a White House Associate Counsel faxes a 
        memo on the Travel Office files that is dated 5/21/93. 
        The memo was from a member of the White House Records 
        Management staff who expressed concerns about the 
        handling of the documents in the Travel Office after 
        the firings. The memo had not been provided previously 
        to Public Integrity or to defendant Billy Dale, whose 
        criminal trial was under way.
         November 6, 1995: The White House sends 
        additional unknown documents to Public Integrity 
        Prosecutor Goldberg.
    In summary, nearly 6 months had passed before the White 
House allowed Public Integrity prosecutors to see any documents 
related to Harry Thomason and nearly a year to provide most of 
the ICAP/GSA documents. The White House refused to provide the 
Vince Foster Travel Office file in its entirety until July 
1995, after it released the file to the press. Portions of the 
file had been provided to Public Integrity in August 1994. A 
September 1994, subpoena failed to produce this document in its 
entirety.
    The White House also failed to provide the Watkins ``soul 
cleansing memo'' which was in Patsy Thomasson's files despite 
numerous document requests and the September 1994, subpoena. At 
the very least, David Watkins, Matt Moore and Patsy Thomasson 
were aware of the existence of this document throughout the 
course of document requests.
    Even after the September 1994, subpoena from Public 
Integrity, the White House produced a privilege log of 120-plus 
documents it refused to provide to its own Justice Department 
in the course of a criminal investigation. White House 
production of documents to Public Integrity continued 
throughout the course of the Billy Dale trial in October-
November 1995. Since these documents belatedly were provided to 
Public Integrity, they also belatedly were provided to the 
defendant during his trial instead of before the trial began.
    Public Integrity does not appear to have sought documents 
directly from Harry Thomason until after the Billy Dale trial 
ended and after both the Committee on Government Reform and 
Oversight and the Independent Counsel had sought documents from 
Thomason and Martens. New documents regarding efforts by 
Thomason and Martens to seek business for TRM were included in 
these productions to the Justice Department after Billy Dale's 
trial.
    Public Integrity's tolerance of White House foot-dragging 
was in stark contrast to the aggressive pursuit of Billy Dale 
and his family throughout the course of the criminal 
investigation of Mr. Dale.
    The contrast is stark between Public Integrity Section's 
prosecution of Billy Dale and its utter passivity while the 
White House stonewalled its investigation of Thomason and 
Martens. Its criminal investigation of Billy Dale was 
compromised from the beginning. The FBI relied on 
uncorroborated--and false--allegations of kickbacks against the 
Travel Office employees in launching a criminal investigation. 
But for nearly a month, it ceded control over Travel Office 
documents to a White House that pledged to secure them while 
allowing numerous individuals with and without White House 
passes free reign to review and destroy documents critical to 
its investigation.
    In the midst of the Dale investigation, FBI Supervisory 
Special Agent Bowie was unaware the White House ordered a 
``Management Review'' of the Travel Office matter which 
provided a ``heads-up'' of sort. The Management Review provided 
political cover to the Clinton administration while forewarning 
the White House of potentially embarrassing discoveries and 
``explosive documents'' in the words of Deputy Chief of Staff 
Neel. The Management Review's discovery that the kickback 
allegations against the Travel Office employees were baseless 
is a prime example: the White House refused to inform the FBI 
or Public Integrity of this fact.
    In Dale's case, an FBI e-mail stated that Justice 
inexplicably intended to indict ``before the November 
elections.'' In addition, prosecutor Stuart Goldberg was well-
aware that Travel Office records it was obligated to secure had 
been lost. As Goldberg himself informed IRS agents: ``Records 
that were there at one time are now missing and they don't know 
who took them. Mr. Goldberg stated that it may have been 
Catherine Cornelius.'' Even so, Justice prevented Dale from 
using this information at trial in his own defense.
    Yet in its investigation of Thomason and Martens, even 
after Justice attempted to end the White House's year-long 
stonewall with a grand jury subpoena, it passively acceded to a 
White House privilege log of 120 withheld documents.
    Public Integrity's experience with the Clinton White House 
offered further evidence of administration obstruction while 
providing critical insights into its own tale of two very 
different investigations.

           XIII. Stonewalling This Committee's Investigation

    A. HISTORY OF SEEKING TRAVELGATE DOCUMENTS FROM THE WHITE HOUSE

1. Chairman Clinger's efforts to investigate while in the minority

    Chairman Clinger began the investigation into the Travel 
Office matter while he was the ranking minority member of the 
committee. Ranking Member Clinger's efforts in the minority 
from 1993-94 included:
         June 16, 1993: Chairman Clinger joins 
        Republican leadership in requesting documents and 
        responses to questions regarding the Travel Office. (No 
        substantive response ever was provided.)
         August 6, 1993: Chairman Clinger joins 
        Republican leadership in requesting information on the 
        IRS investigation and other Travel Office questions. 
        (No substantive response ever was provided.)
         October 15, 1993: Chairman Clinger writes 
        Bernard Nussbaum concerning the status of Harry 
        Thomason as a special Government employee. (No 
        substantive response ever was provided.)
         September 13, 1994: Chairman Clinger requests 
        that the White House provide access to GAO documents 
        maintained at the White House. (Access never provided--
        later memo shows White House Counsel Neil Eggleston 
        recommended denying the request after the 
        Appropriations bill for the White House had passed.)
         September 20, 1994: Chairman Clinger again 
        requests access to GAO documents at the White House.
         October 1994: Chairman Clinger issues a report 
        analyzing the GAO report on the Travel Office and 
        calling for hearings on the discrepancies found in the 
        GAO work papers versus the final report, and other 
        outstanding issues.

2. Committee efforts in the 104th Congress

    In the beginning of the 104th Congress, Chairman Clinger 
committed to a full investigation into the Travel Office matter 
and began making inquiries of the White House in the spring of 
1995. The White House initially would not even provide the GAO 
working papers which Roy Neel had described as ``explosive,'' 
and recommended against congressional review.\669\
---------------------------------------------------------------------------
    \669\ GAO notes on meeting with Roy Neel, August 1993.
---------------------------------------------------------------------------
    The committee initiated document requests on the Travel 
Office matter beginning in June 1995. Initially, the White 
House conditioned its compliance on the provision of armed 
security guards to protect the ``explosive'' documents. The 
foot-dragging that followed is outlined below.
         June 14, 1995: Committee makes first document 
        request to White House focusing on White House 
        Management Review documents and documents related to 
        Harry Thomason's activities at the White House.
    White House Response:
                 Throughout June and July 1995, White 
                House fails to produce any documents and 
                requests that the committee hire security 
                guards to protect any documents provided to the 
                committee.
                 July 18, 1995: White House produces 
                the Vince Foster Travel Office file several 
                weeks after providing it to the press.
                 August 2, 1995: White House produces 
                documents, 90 percent of which have been 
                previously made publicly available (i.e. White 
                House Management Review copies, GAO report 
                copies, press conference transcripts).
                 August 9, 1995: White House produces 
                more copies of the Management Review from 
                various files and several miscellaneous 
                documents.
                 August 28, 1995: White House produces 
                miscellaneous handwritten notes by White House 
                employees.
                 September 5, 1995: White House 
                produces a privilege log identifying 900 pages 
                of documents from the White House Management 
                Review.
                 September 13, 1995: After negative 
                press reaction to White House privilege log, 
                the White House produces approximately 400 
                pages of interview notes from the 900 pages of 
                Management Review documents.
                 September 18, 1995: White House 
                produces Bruce Lindsey documents regarding 
                efforts by Harry Thomason and Darnell Martens 
                to obtain GSA consulting contracts for their 
                business, TRM. These documents had not been 
                identified previously as documents that were 
                being withheld in the privilege log. (On this 
                same day, Harry Thomason cancels a previously 
                scheduled interview with committee staff.)
         September 18, 1995: Committee makes second 
        document request to White House requesting all White 
        House Travel Office documents from all of the various 
        investigations.
    White House Response:
                 September 25, 1995: White House 
                produces more notes from the White House 
                Management Review.
                 September 28, 1995: White House 
                produces more documents from Bruce Lindsey's 
                office, Counsel's office and Office of 
                Administration.
                 October 4, 1995: White House produces 
                additional White House Management Review 
                documents.
                 October 5, 1995: White House produces 
                documents from Neil Eggleston and Bill Kennedy.
                 October 13, 1995: White House produces 
                documents from Counsel's office, Office of 
                Administration and Records Management.
                 October 17, 1995: White House produces 
                documents from Cliff Sloan, Neil Eggleston and 
                various White House Management Review files.
                 October 24, 1995: Committee holds 
                first hearing on the Travel Office matter.
                 October 26, 1995: Billy Dale 
                embezzlement trial begins.
                 November 14, 1995: White House 
                produces more White House Management Review 
                documents, including lengthy chronologies and 
                drafts, but still does not provide the legal 
                analysis done by Beth Nolan about Harry 
                Thomason's status as a special Government 
                employee.
                 November 16, 1995: Billy Dale 
                acquitted.
                 December 19, 1995: White House Counsel 
                sends out memo to all staff in response to 
                committee document requests.
                 December 22, 1995: White House 
                produces more documents from Joel Klein, Office 
                of Records Management, Cliff Sloan, Patsy 
                Thomasson and Counsel's office.
                 December 29, 1995: Watkins memo 
                ``found'' at the White House.
                 January 3, 1996: White House produces 
                more documents from various White House 
                offices. Watkins memo is produced.
         January 5, 1996: Committee issues personal 
        subpoenas to David Watkins and Harry Thomason for all 
        Travel Office documents.
         January 11, 1996: Committee issues subpoenas 
        to White House for all outstanding documents and to six 
        individuals at White House (due on January 22, 1996).
    White House Response:
                 January 22, 1996: White House produces 
                documents from Counsel's office, Chief of 
                Staff's office, Office of Administration and 
                other offices.
                 January 29, 1996: White House produces 
                documents from miscellaneous files including 
                those of Patsy Thomasson and Catherine 
                Cornelius.
                 February 1, 1996: White House Counsel 
                sends out memo to all staff requesting all 
                documents responsive to the January 11, 1996 
                subpoena due on January 22, 1996.
                 February 14, 1996: White House 
                produces documents from various individual 
                files.
         February 7, 1996: Committee sends individual 
        subpoenas to more than 25 present and former White 
        House staff (due February 26, 1996).
         February 15, 1996: Committee issues 
        interrogatories to Mrs. Clinton due on February 29, 
        1996. (Subsequent request for an additional 3 weeks to 
        respond is granted.)
                 February 15, 1996: White House 
                distributes a memo to present and former staff, 
                volunteers and others who received personal 
                subpoenas requesting that they turn over their 
                documents to the White House and stating that 
                the White House in turn will produce relevant 
                documents to the committee.
                 February 22, 1996: White House 
                produces documents from various White House 
                offices, including notes taken by a White House 
                intern monitoring the Billy Dale trial and 
                documents related to Billy Dale trial. White 
                House represents that responsive documents have 
                been produced and this should complete 
                production but that there are documents they 
                believe are subject to privilege which they are 
                withholding. No privilege log is provided.
                 March 4, 1996: White House produces 
                additional documents.
                 March 8, 1996: White House produces 
                documents from Cliff Sloan, Todd Stern, Matt 
                Moore, Dee Dee Myers, Natalie Williams and 
                Counsel's office.
                 March 15, 1996: White House produces a 
                small number of documents including a never 
                before produced letter to Mrs. Clinton from 
                David Watkins dated May 3, 1994--the day after 
                the GAO Travel Office Report was issued.
                 March 21, 1996: First Lady provides 
                responses to committee's interrogatories 
                regarding the Travel Office.
                 April 1, 1996: White House produces 
                additional documents including the first e-mail 
                produced by the White House.
                 April 2, 1996: White House produces 
                additional documents from Cliff Sloan's records 
                and Office of Personal Correspondence.
                 April 18, 1996: White House produces 
                documents from Dee Dee Myers that were left out 
                of earlier productions (documents are notes 
                from May 1993, concerning the Travel Office).
                 April 24, 1996: White House produces 
                several pages of additional documents from Tom 
                Castleton, David Watkins and Information & 
                Systems Technology.
         May 9, 1996: The committee held White House 
        Counsel Jack Quinn and White House aides David Watkins 
        and Matthew Moore in contempt for failing to turn over 
        documents.
                 May 9, 1996.--White House Counsel 
                writes Chairman Clinger a letter claiming 
                blanket executive privilege on behalf of 
                President Clinton over 3,000 pages of documents 
                being withheld from the committee. Attached is 
                a letter to the President from Attorney General 
                Reno endorsing that claim. The Attorney General 
                had not reviewed any documents at that time. 
                The committee votes to hold Messrs. Quinn, 
                Watkins and Moore in contempt of Congress.
                 May 30, 1996: The White House delivers 
                to the committee 1,000 of the 3,000 pages over 
                which it previously had claimed executive 
                privilege and a privilege log for the remaining 
                documents. The committee postpones a scheduled 
                contempt vote on the floor of the House against 
                White House Counsel Quinn in order to review 
                the documents and log. Included in these 
                documents was a December 20, 1993 request for 
                Billy Dale's FBI file.
         June 5, 1996:--In light of the committee's 
        discovery of the White House's December 20, 1993, 
        request of Mr. Billy Dale's confidential FBI background 
        file, Chairman Clinger writes President Clinton to 
        request that the remaining 2,000 pages of documents 
        over which he has claimed executive privilege be 
        produced.
                 June 10, 1996.--White House Counsel 
                advises Chairman Clinger that the 2,000 pages 
                still withheld under a claim of executive 
                privilege are ``unquestionably within the scope 
                of this privilege.''
         June 18, 1996.--Chairman Clinger writes a 
        letter to Ranking Member Cardiss Collins, who has 
        agreed to act as an intermediary to the White House 
        concerning the 2,000 pages. This letter lists documents 
        the committee deems essential to obtain from the 
        remaining 2,000 pages and asks the White House to 
        certify that no other documents remain outstanding.
                 June 25, 1996.--White House Counsel 
                Quinn agrees to Chairman Clinger's proposal as 
                contained in the chairman's letter of June 18, 
                1996, to Ranking Member Cardiss Collins.
                 June 27, 1996.--Chairman Clinger and 
                committee staff begin review of remaining 2,000 
                pages of documents at committee offices in the 
                presence of White House personnel.
                 June 28, 1996.--Chairman Clinger 
                writes White House Counsel Quinn, raising the 
                issue of White House redactions and 
                insufficient detail in the White House 
                privilege log as it relates to the review of 
                the 2,000 pages.
                 July 10, 1996.--White House Counsel 
                Quinn writes Chairman Clinger suggesting 
                protocols for deposing White House lawyers, and 
                recommends confirming White House redactions 
                with the assistance of a neutral third party.
                 July 12, 1996.--White House Counsel 
                Quinn writes Chairman Clinger a letter 
                memorializing his interpretation of an 
                agreement to interview White House attorneys. 
                It suggests that Chairman Clinger has agreed to 
                provide White House lawyers, in advance, with 
                notification of subjects that will or will not 
                be covered.
                 July 18, 1996.--White House Counsel 
                Quinn writes Chairman Clinger concerning the 
                reviewing of redacted documents accompanied by 
                one majority staff member, Ranking Member 
                Collins or her designee and one minority staff 
                member. This letter also acknowledges that 
                Chairman Clinger has reserved the right to 
                request any material relating to Mr. Craig 
                Livingstone.
         July 24, 1996.--Chairman Clinger clarifies 
        White House Counsel Quinn's misinterpretation of 
        agreements outlined in Counsel Quinn's July 12, 1996, 
        letter, suggesting that White House lawyers be advised 
        in advance of subject matters to be covered or excluded 
        in depositions. Under separate cover, Chairman Clinger 
        writes Counsel Quinn a letter indicating more than 200 
        pages of documents unidentified in the White House 
        privilege log.
         July 31, 1996.--Chairman Clinger writes White 
        House Counsel Quinn, after personally having spent 6 
        hours reviewing redacted White House documents, 
        requesting that the White House produce all responsive 
        documents in three categories: 1) communications with 
        outside attorneys relating to interviews, depositions 
        or Grand Jury appearances; 2) briefing materials and 
        questions prepared for Congress; and, 3) the review of 
        Mr. Foster's office.
                 August 15, 1996.--White House produces 
                1,400 of the 2,000 pages of documents it had 
                withheld under claims of executive privilege.
    The above chronology demonstrates the dramatic lengths to 
which the committee had to go to assure that the White House 
would provide all responsive documents. Even after 3 years of 
effort, we know there are still missing documents that are 
relevant to this inquiry that have been ``lost'' at the White 
House or by outside parties.

     B. White House Protection Efforts were particularly keyed to 
  withholding documents potentially damaging and shielding key players

1. Harry Thomason Role

    Time and again, the committee has been denied critical 
documents responsive to the investigation. Sometimes, we were 
told documents did not exist only to later have those documents 
appear when we subpoenaed the right people. This happened with 
two critical documents: a January 29, 1993 memo from Darnell 
Martens to his partner Harry Thomason and a March 5, 1993 memo. 
These documents establish that the idea of seeking Government 
business, including that of the Travel Office, for their 
company, TRM, was explored by the two.\670\ Harry Thomason 
finally turned over this document under threat of a subpoena in 
December 1995. The March 5 memo to Harry Thomason discussed 
Martens' efforts to gather incriminating information on the 
Travel Office employees while promoting TRM for a plan to take 
over the Travel Office.\671\
---------------------------------------------------------------------------
    \670\ The committee had been repeatedly informed by the White House 
Counsel that the January 29, 1993 memo simply didn't exist.
    \671\ March 5, 1993 memo to Harry Thomason from Darnell Martens 
with attached memo on the Travel Office.
---------------------------------------------------------------------------
    These documents suggest that long before Harry Thomason 
promoted rumors of wrongdoing in the Travel Office, he was 
seeking Government business for TRM. This information was 
shielded from the public for the past several years by 
Thomason's White House allies.
    The President withheld notes by Special Counsel Jane 
Sherburne concerning how the White House responded to various 
requests for Harry Thomason documents. Ms. Sherburne noted:

          Only DOJ knows this . . . not GAO or Hill. Relevance 
        is if SGE, wld [would] be conflict. Route to their 
        indictment is from here--which wasn't part of Mgmt 
        Review. Problem: allegations that GAO didn't get it and 
        we not disclose.\672\
---------------------------------------------------------------------------
    \672\ Handwritten notes of Jane Sherburne, undated, discussing 
Travel Office issues and Harry Thomason liability, DF 781903.

    Mr. Thomason used his access to the White House to discuss 
opportunities for Federal Government contracts with the 
President in February. President Clinton forwarded Harry 
Thomason's business proposal to McLarty, Gearan and Watkins 
after writing ``these guys are sharp.'' \673\ The ``ICAP'' 
documents which discussed this proposal were the records that 
were withheld from GAO and Congress.
---------------------------------------------------------------------------
    \673\ February 11, 1993 memo seeking Federal Government contracts, 
CGE 2223.
---------------------------------------------------------------------------
    Curiously, the documents the committee obtained from Harry 
Thomason were never even requested by the Justice Department, 
which was charged with investigating Thomason's activities at 
the White House. Only after the committee obtained these and 
many other documents regarding Harry Thomason, Darnell Martens 
and TRM did the Justice Department in turn seek to obtain 
documents this committee already had received. Had the Justice 
Department been conducting a thorough investigation, it would 
have sought documents from Harry Thomason.

2. Notes of Interview with Mrs. Clinton--Missing

    The committee also learned that documents that once existed 
now supposedly are among the missing. Also missing are notes 
taken by Neil Eggleston of his interview with Mrs. Clinton in 
response to GAO questions about Mrs. Clinton's role in the 
firings of the Travel Office employees.\674\ The White House 
has informed us it had not been able to locate these critical 
notes. Mr. Eggleston testified that he probably did take such 
notes and that he left all of his notes in the custody of 
Special Counsel Jane Sherburne.\675\ Who had access to this 
critical evidence in addition to Sherburne and why has it 
disappeared?
---------------------------------------------------------------------------
    \674\ Mr. Eggleston believes it is most likely that he did take 
notes and says he left them at the White House with Special Counsel 
Jane Sherburne who has headed up the document production for the White 
House in response to the committee's requests and subpoenas. See 
committee deposition of Neil Eggleston, June 3, 1996.
    \675\ Committee deposition of Neil Eggleston, June 3, 1996.
---------------------------------------------------------------------------

3. Missing Memo in Kennedy's office which was reviewed by FBI agents

    The committee also has identified another key missing 
Travel Office memo identified by two FBI agents who said it was 
shown to them by Bill Kennedy when he summoned them to the 
White House to initiate the FBI investigation of the Travel 
Office employees. According to the FBI agents, Kennedy told 
them that a friend of the President's was unsuccessfully trying 
to get business.\676\ Mr. Kennedy pulled out a memo that 
detailed alleged wrongdoing by Travel Office employees--
kickbacks, lavish lifestyles and the like.\677\ This 
approximately 10 page memo was shown to the agents, but they 
were not provided with a copy. These same agents were told of 
``highest levels'' interest in the White House.
---------------------------------------------------------------------------
    \676\ OPR interview of Howard Apple and Patrick Foran.
    \677\ OPR interview of Howard Apple and Patrick Foran.
---------------------------------------------------------------------------
    That same morning, Harry Thomason was scheduled to meet 
with President Clinton.\678\ Harry Thomason had been in touch 
with Mrs. Clinton prior to his meeting with the President 
according to documentary evidence the committee has 
obtained.\679\ Mr. McLarty and Susan Thomases also were on 
Thomason's White House schedule in this timeframe.\680\
---------------------------------------------------------------------------
    \678\ Harry Thomason's phone logs.
    \679\ Handwritten notes of David Watkins, May 31, 1993, PM 00169.
    \680\ Harry Thomason phone logs.
---------------------------------------------------------------------------
    The White House claims the missing 10 page document 
allegedly shown to FBI agents doesn't exist--another mystery 
document that the White House and Kennedy claimed to know 
nothing about.\681\ The White House asks that the committee 
take Kennedy's word over that of two FBI agents after he left 
the White House under an ethical cloud. This is yet another 
situation in which the White House contradicts the 
recollections of career public officials who have no reason to 
provide incorrect information.
---------------------------------------------------------------------------
    \681\ See Chairman Clinger letter of December 14, 1995, to White 
House Counsel Jack Quinn and response from Counsel Quinn to Chairman 
Clinger on December 20, 1995, in Correspondence between the White House 
and Congress in the Proceedings Against John M. Quinn, David Watkins 
and Matthew Moore.
---------------------------------------------------------------------------

4. Missing Mack McLarty Memo

    Another ``missing'' document is a document that first was 
identified by Jennifer O'Connor in the summer of 1993.\682\ Ms. 
O'Connor recalled a memo that Mack McLarty had sent to senior 
staff explaining what Harry Thomason would do at the White 
House.\683\ A directive from the Chief of Staff explaining the 
purpose of Thomason's efforts would be logical since Harry 
Thomason made requests of dozens of staffers to meet with him 
on ``the White House Project.'' The McLarty memo, as described, 
would explain Thomason's official role at the White House.
---------------------------------------------------------------------------
    \682\ Public Integrity interview of Jennifer O'Connor, August 1993.
    \683\ Id.
---------------------------------------------------------------------------

       C. WHITE HOUSE RESPONSE ON MATTERS RELATED TO MRS. CLINTON

    Particularly as regards the role of Mrs. Clinton, Watkins 
was not alone in being ``vague and protective.'' Mrs. Clinton 
herself could remember little of substance about communications 
regarding the Travel Office, except for derogatory information 
about its fired employees.\684\
---------------------------------------------------------------------------
    \684\ Response to committee interrogatories for Mrs. Clinton, March 
21, 1996.
---------------------------------------------------------------------------
    Mrs. Clinton recalled derogatory information with a 
specificity altogether lacking in her other recollections. She 
had no clear recollection who provided her with this 
information. Under oath, however, she acknowledged, ``I became 
aware from Vincent Foster or Harry Thomason of concerns about 
financial mismanagement in the White House Travel Office.'' 
\685\ Since Mr. Foster's notes seem to indicate that he first 
learned of this matter from Mrs. Clinton, not the other way 
around, it appears that only leaves Harry Thomason as the 
likely source of Mrs. Clinton's information.\686\
---------------------------------------------------------------------------
    \685\ Id.
    \686\ Foster Travel Office file, CGE 1003.
---------------------------------------------------------------------------
    When it comes to the role of Mrs. Clinton, the hazy 
memories of the various players in the Travelgate saga exhibit 
a striking pattern of obfuscation and obstruction. This has 
been the case in each successive investigation, from the White 
House itself to congressional committees and the GAO to the 
Independent Counsel.
    The following are just some of the instances where White 
House staff airbrushed Mrs. Clinton out of the Travel Office 
picture and related events:
         When Podesta and Stern were initially tasked 
        with conducting the White House Management Review, 
        notes from the authors indicate that Chief of Staff 
        Mack McLarty did not immediately disclose conversations 
        he had with Mrs. Clinton in which she had urged action 
        on the Travel Office matter. Nor did McLarty 
        immediately provide them with the May 17 memo regarding 
        the firings which was ``cc'd'' to Mrs. Clinton and 
        which discussed Harry Thomason bringing the allegations 
        to light.\687\
---------------------------------------------------------------------------
    \687\ See committee depositions of John Podesta, June 5, 1996, and 
Todd Stern, May 29, 1996.
---------------------------------------------------------------------------
         On May 27, 1993, just a week or so after the 
        firings, Harry Thomason in an interview for the White 
        House Management Review failed to discuss any of the 
        conversations he had with Mrs. Clinton about the Travel 
        Office.\688\ (Mrs. Clinton has made public statements 
        that she did not think it was Harry Thomason who 
        brought the Travel Office issue to her attention. But 
        notes in the 2,000 pages indicate that Thomason's 
        attorneys acknowledged he did have conversations with 
        Mrs. Clinton: Document DF 780464 reads, ``Harry 
         conversations with her in passing  1 
        or 2 in passing  he recalls being in office 
        abt Little Rock/Inauguration. Travel Office comes up 
         Status report. Told her abt things he 
        believed were wrong. They should be replaced disloyalty 
         --remembers telling DW should be replaced, 
        and that FC shares his view.--could  did this 
        during the campaign  could do the job 
          probably told her about plans.'' 
        \689\ And under oath in answers to interrogatories 
        submitted to the committee, Mrs. Clinton acknowledged 
        that Harry Thomason or Vincent Foster brought the 
        matter to her attention.\690\)
---------------------------------------------------------------------------
    \688\ WHMR interview of Harry Thomason, May 27, 1993, CGEPR 451-
465.
    \689\ Handwritten notes of Natalie Williams, DF 780464-780465.
    \690\ Responses to committee interrogatories for Mrs. Clinton, 
March 21, 1996.
---------------------------------------------------------------------------
         On June 2, 1993, in Vince Foster's White House 
        Management Review interview,\691\ he made no mention of 
        his numerous conversations with Mrs. Clinton about the 
        Travel Office. But he did note that he considered some 
        of his conversations to be privileged. He later relayed 
        contacts in a June 30, 1993 meeting but downplayed 
        them.\692\ At this time or sometime shortly thereafter, 
        Foster started keeping a detailed notebook in which he 
        outlined the conversations he had with Mrs. Clinton 
        about the Travel Office. This notebook was kept from 
        investigators for years. Notes in the 2,000 pages of 
        withheld documents refer to entries in the notebook 
        which could be used to suggest Mrs. Clinton urged hasty 
        action by Watkins and others.
---------------------------------------------------------------------------
    \691\ WHMR interview of Vincent Foster, June 3, 1993, CGEPR 240-
259.
    \692\ WHMR interview of Vincent Foster, June 30, 1993, CGEPR 258-
259.
---------------------------------------------------------------------------
         On June 2, 1993, in Watkins' White House 
        Management Review interview, Watkins made no mention of 
        his conversations with Mrs. Clinton about the Travel 
        Office.\693\ Indeed in his ``soul cleansing'' memo, 
        Watkins noted he had been ``vague and protective'' and 
        that there would be ``hell to pay'' if things were not 
        done as Mrs. Clinton wanted.\694\
---------------------------------------------------------------------------
    \693\ WHMR interview of David Watkins, June 3, 1993, CGEPR 487-508.
    \694\ Watkins memorandum, CGE 12286-12294.
---------------------------------------------------------------------------
         In a March 21, 1994, GAO interview, McLarty 
        recounted one meeting that he had with Mrs. Clinton on 
        May 13, 1993, about the Travel Office. Mrs. Clinton 
        says she ``stopped by McLarty's office to say that she 
        had heard about inefficiencies in the Travel Office and 
        asked him to look into it.'' \695\ Mr. McLarty did not 
        discuss a later May 16th encounter with Mrs. Clinton 
        which was explained in his copy of a Travel Office 
        chronology as ``HRC pressure'' and which McLarty has 
        now acknowledged.\696\
---------------------------------------------------------------------------
    \695\ GAO interview of Mack McLarty, March 24, 1994.
    \696\ ``Chronology of Travel Office firings,'' May 25, 1993, CGEPR 
563-564.
---------------------------------------------------------------------------
         On July 26, 1993, the Foster ``suicide'' note 
        was found.\697\ In FBI interviews several days later, 
        the three attorneys--Bernard Nussbaum, Bill Burton and 
        Steve Neuwirth--who had been present when Mrs. Clinton 
        viewed Foster's note failed to acknowledge that Mrs. 
        Clinton had been present shortly after the discovery of 
        the note.\698\ In a pattern emanating from the White 
        House of late, associate counsel Steve Neuwirth, one of 
        those present when Mrs. Clinton looked at Foster's 
        note, said the FBI agent took bad notes and claimed he 
        told about Mrs. Clinton's presence when they reviewed 
        the Foster note.\699\ In the interview of Bill Burton, 
        there was also no mention of Mrs. Clinton being present 
        in the room.\700\
---------------------------------------------------------------------------
    \697\ Final Report of the Special Committee on Whitewater, pp. 83-
90.
    \698\ FBI interview of Special Agent Scott Salter, August 9, 1994.
    \699\ Final Report of the Special Committee on Whitewater, p. 89.
    \700\ FBI interview of SA Scott Salter.
---------------------------------------------------------------------------
         On July 26, 1996 David Gergen had a 
        conversation with McLarty in which McLarty said that 
        Mrs. Clinton was very upset, believed the matter [the 
        ``suicide note''] required further thought and that the 
        President should not yet be told.\701\ She said they 
        should have a coherent position and should have decided 
        what to do before they told the President. (DF781222) 
        Gergen DID NOT relay this conversation in questioning 
        under oath in the Whitewater Committee, nor did he 
        relate this conversation in his informal interview with 
        the Committee on Government Reform and Oversight.\702\ 
        This conversation was relayed in one of the debriefings 
        that White House Counsel did of Gergen's attorney.\703\ 
        If this was relevant enough to tell the White House, 
        why was this information withheld from the Whitewater 
        Committee?
---------------------------------------------------------------------------
    \701\ Memo to the file from Miriam Nemetz re: Gergen deposition, 
July 13, 1995, DF 781222.
    \702\ Informal interview of David Gergen, September 13, 1995.
    \703\ Memorandum for the file from Miriam Nemetz re: Gergen 
deposition, July 13, 1995. DF 781222.
---------------------------------------------------------------------------
         On July 27, 1993--the day after Foster's 
        suicide note was found and the day the Clintons' 
        personal files were turned over to the law firm of 
        Williams and Connolly--virtually no one who was 
        recorded as being in the White House residence that day 
        has a memory of discussing anything about documents or 
        the Foster suicide note with Mrs. Clinton even though 
        records show Mrs. Clinton never left the residence all 
        day. White House records show that Bernard Nussbaum, 
        Bob Barnett, Susan Thomases, Webb Hubbell, Steve 
        Neuwirth, and Maggie Williams were in the residence 
        that day.\704\ Interestingly, the so-called personal 
        documents turned over to Williams and Connolly on this 
        day included documents relating to Harry Thomason and 
        the White House Project.\705\ Mr. Foster's suicide note 
        contained numerous references to the Travel Office.
---------------------------------------------------------------------------
    \704\ White House residence logs, July 27, 1993.
    \705\ White House residence logs, July 27, 1993.
---------------------------------------------------------------------------
    The apparent efforts to ``airbrush'' out Mrs. Clinton's 
role in this matter or her presence on certain occasions has 
been a consistent theme throughout this investigation as well 
as other investigations. This even was apparent in the 
production of a White House privilege log in which the White 
House mischaracterized documents directly related to or 
mentioning Mrs. Clinton.
    For example, a document identified on its face as ``Foster 
conversations with HRC re: Travel Office'' was characterized in 
the privilege log provided to the committee prior to the 
document review as ``Memorandum analyzing Foster communications 
re: Travel Office.'' \706\
---------------------------------------------------------------------------
    \706\ September 5, 1995, letter to Barbara Comstock from David 
Kendall producing documents from the Clinton's ``personal'' files that 
related to Harry Thomason or the White House project.
---------------------------------------------------------------------------
    Why did the Counsel's Office misrepresent this document in 
a log of documents over which the President was claiming 
executive privilege? Was this done with the President's 
knowledge or approval? Under the Reagan executive privilege 
memorandum, the President must personally assert the privilege, 
but only over a very limited universe of documents such as 
those involving the national security, not debriefings of 
witnesses appearing before the House or Senate committees or 
Independent Counsels, for example.
    Another document entitled on its face ``HRC Travel Office 
Chronology'' was labeled in the privilege log as 
``chronological analysis of Travel Office events.'' \707\ Still 
another document entitled ``HRC Role'' which outlined what 
various reviews and investigations said about Mrs. Clinton's 
role in the Travel Office firings was identified by the White 
House as: ``Draft chart analysis and comparison of various 
Travel Office investigations.'' \708\
---------------------------------------------------------------------------
    \707\ DF 780050-780051.
    \708\ DF 780086-780092.
---------------------------------------------------------------------------
    Why, even when producing a privilege log, did the Counsel's 
office continue to engage in such obfuscation? Who is the White 
House Counsel's office responding to when it takes such 
actions? Did the President know of these misrepresentations?
    In what apparently must have been off-message scripts, 
several Democrat members of the committee noted Mrs. Clinton's 
role. Rep. Waxman stated, ``the First Lady said something or 
other to the effect that the administration ought to put its 
own people in or ought to make some change, presumably. What is 
wrong with that?'' \709\ Rep. Kanjorski offered that ``we did 
probably have a sensitive First Lady'' who remembered his 
investigation of the Bush White House into travel matters. Rep. 
Kanjorski explained Mrs. Clinton's involvement as ``a normal 
interest of a protective wife.'' \710\
---------------------------------------------------------------------------
    \709\ DF 780712-780717.
    \710\ Committee on Government Reform and Oversight hearing, January 
17, 1996, p. 16.
---------------------------------------------------------------------------

                       D. PATTERN OF OBSTRUCTION

1. Delays in document production

    As in any other investigation, the committee depended on 
White House cooperation to obtain access to documents and 
witnesses to ascertain what led to the Travel Office firings 
and the actions which followed. Unfortunately, the Clinton 
administration proved singularly uncooperative on both fronts 
just as it had--the committee learned--with all previous 
investigations of the Travel Office matter. The White House 
claimed as recently as September 1995, that all relevant 
documents had been produced.
    When it surfaced 3 months later, the Watkins ``soul 
cleansing memo'' belied those claims and led the committee to 
issue bipartisan subpoenas for all remaining documents relevant 
to the Travel Office investigation. Even after the subpoenas 
were issued, however, the White House delayed the production of 
responsive documents for months, claiming executive privilege 
and leading the committee to vote White House Counsel Jack 
Quinn in contempt of Congress. Of 3,000 documents over which 
the White House had claimed executive privilege, 1,000 were 
produced to the committee in late May 1996, on the very day 
that the committee's contempt resolution against White House 
Counsel Quinn headed to the House floor for a vote. Following 
months of negotiations, the White House produced 1,400 
additional pages to the committee on August 15, 1996.
    The committee believes that the Clinton administration's 
time-honored strategy of delaying and obfuscating legitimate 
investigations of possible administration misconduct--very 
likely intended to avoid responsibility and accountability for 
its actions--in fact has compounded the difficulties it faces 
today.
    The events leading up to the Travel Office firings, 
reflective of cronyism, self-interest and bad faith among 
Clinton administration appointees and volunteers, are 
disturbing in themselves. But the administration's determined 
efforts to obstruct investigations by the GAO, Justice 
Department, this committee and others invites justifiable 
criticism and corrective action.
    The committee's decision to continue its Travel Office 
investigation followed its finding in its first Travel Office 
hearing on October 24, 1995, that the Clinton administration in 
fact had not cooperated with any of the previous independent 
investigations of the Travel Office. In fact, the 
administration clearly limited the scope of its own White House 
Management Review--refusing it access to such key documents as 
the Vince Foster Travel Office diary (and even the very 
knowledge of its existence).

2. Reluctant Witnesses

    In its efforts to complete the work of the previous 
investigations and learn once and for all exactly what had 
happened at the Travel Office, witness interviews were a 
necessary complement to the committee's review of 
contemporaneous White House documents.
    When the committee sought to conduct witness interviews, 
however, the White House proved no more cooperative than it had 
in document production. It sought, unsuccessfully, to have 
representatives of the White House Counsel's office sit in on 
committee interviews as it had done with GAO Travel Office and 
OPR interviews and even criminal FBI interviews.\711\ The White 
House in fact interfered with interviews scheduled by the 
committee with former White House staffers, leading at least 
one to cancel an interview already scheduled with the 
committee.\712\
---------------------------------------------------------------------------
    \711\ Committee on Government Reform and Oversight hearing, January 
17, 1996.
    \712\ White House Counsel was in contact with former White House 
staffer Janet Greene in August 1995. Ms. Greene had agreed to meet with 
committee staff and cancelled her interview with the committee after 
the Counsel's office objected to the interview because they were not 
allowed to attend. Ms. Greene's phone logs indicate numerous phone 
calls from both White House Counsel and minority staff of the committee 
in August 1995.
---------------------------------------------------------------------------
    Key witnesses such as David Watkins and Patsy Thomasson 
also refused to appear before the committee voluntarily and it 
became apparent that the committee would not be able to 
complete the investigation without requiring individuals to 
testify under oath.

              E. COMMITTEE MOVED TO DEPOSITIONS UNDER OATH

    In March 1996, the House of Representatives voted to 
provide the committee with limited deposition authority for the 
purpose of completing its Travel Office investigation. Since 
that time, committee staff has taken sworn depositions from 
more than 70 witnesses.

1. ``I don't recall . . .''

    Even under oath, however, many witnesses have proved less 
than forthcoming. Many of the key players in the Travel Office 
case appear to have suffered massive, if specific, memory 
losses regarding their role in the matter. Unfortunately, this 
repeats a long-established pattern among senior White House 
officials and outside advisors to President and Mrs. Clinton. 
Whether in testimony before Senate or House subcommittees, 
countless senior advisers acclaimed for their intelligence have 
no ``specific''--or general--recollection of any matter under 
review at any given time by the Congress. This is a most 
troubling pattern which has prevented the Congress from 
fulfilling its constitutional obligation to oversee the 
executive branch.
    The extent to which many key witnesses in the committee's 
depositions did not recall, did not know, did not remember and/
or did not recollect critical events in which they participated 
and/or documents which they created or reviewed sufficiently 
concerned the committee that it calculated the incidence of 
memory lapses and outright loss among all the witnesses who 
testified before it. This was accomplished by searching each 
deposition for such key phrases as: ``I don't recall,'' ``I 
don't know,'' ``I don't remember'' and ``I have no 
recollection.'' Slight variations of these phrases also were 
counted into the totals for each witness. Examples of these 
include: ``Not that I recall,'' ``Not to my recollection,'' ``I 
have no specific recollection,'' and so forth.
    The committee understands it is possible that, over the 
course of 3\1/2\ years, witnesses in fact would forget some 
details surrounding their involvement in the White House Travel 
Office matter. However, senior administration officials of the 
Clinton White House who participated in the Travel Office 
firings and subsequent cover-up would still have the benefit of 
personal and White House records to refresh their memories in 
advance of committee depositions and the obligation to fully 
and accurately respond to committee inquiries to the best of 
their abilities.

2. Who couldn't ``recall''

    Not surprisingly, the worst memory losses were incurred by 
those nearest to and most responsible for the Travel Office 
firings and investigation, those who presumably would have the 
best recollections and greatest access to documents which might 
refresh their recollections. The best memories were reserved 
for those not in authority in the White House or elsewhere who 
may have observed or participated only tangentially in the 
White House Travel Office matter. These include longstanding 
Federal employees whose service predates the arrival of the 
Clinton administration.
    [The information referred to follows:]



    In an effort to further explore this pattern, the committee 
categorized witnesses who were deposed under oath in categories 
according to offices in which they worked/volunteered or with 
which they were affiliated in some way, as follows:
          --White House Travel Office--those who participated 
        most directly in the Travel Office firings and 
        aftermath;
          --White House Management Review--those who conducted 
        the review of the Travel Office matter which was 
        released on July 2, 1993, and described as a 
        ``stealthy, evasive confession'' by the New York Times 
        in a July 11, 1993, editorial;
          --White House Counsel's Office--those who have worked 
        on the Travel Office (and other) investigations in any 
        capacity;
          --White House--those not known to be directly 
        involved in the decisionmaking in the Travel Office 
        firings, Management Review, Counsel's office or FBI 
        files matter but who otherwise played advisory or other 
        roles in it;
          --Miscellaneous--three individuals not affiliated 
        with the White House but who testified to their 
        respective roles in the Travel Office and/or FBI files 
        investigations.

White House Travel Office

    White House Media Director Jeff Eller proved the most 
forgetful of all of his former colleagues who were deposed by 
the committee, and perhaps not without reason. As a boyfriend 
of Catherine Cornelius, Eller was aware of her plans to head a 
reorganized White House Travel Office and was among those who 
advocated early action on the firings of seven long-time Travel 
Office employees.\713\
---------------------------------------------------------------------------
    \713\ WHMR, p. 20.
---------------------------------------------------------------------------
    Mr. Eller could not recall talking points that several of 
his colleagues ascribed to him.\714\ In the course of the White 
House Management Review, it was learned that Eller threw away 
his Travel Office notes.\715\ Most ironically given the 
extraordinary level of his forgetfulness, Eller told the 
committee under oath that he does not keep a lot of paper/notes 
because he prefers to keep things in his memory.\716\
---------------------------------------------------------------------------
    \714\ May 13 talking points, Jeffrey Eller, CGE 7933.
    \715\ WHMR interview of Jeff Eller, CGEPR 0230.
    \716\ Committee deposition of Jeff Eller, pp. 82-83.
---------------------------------------------------------------------------
    Patsy Thomasson's memory or knowledge betrayed her some 420 
times in the course of her deposition. She, too, had much to 
forget, including her role in KPMG Peat Marwick's review of the 
Travel Office, her changing of the locks to the Travel Office, 
threats she allegedly made against Catherine Cornelius and 
Clarissa Cerda in order to ensure they would not challenge 
assertions that David Watkins never read their February 15, 
1993, Travel Office reorganization memo, and her activities in 
Foster's office on the night of Foster's suicide.
    Jennifer O'Connor, Deputy Director of the Office of 
Management and Administration at the time of the Travel Office 
firings, currently is a Special Assistant in the Office of the 
White House Chief of Staff. She tallied up some 343 memory 
lapses concerning her role as an assistant to Ms. Thomasson and 
David Watkins at the time of the firings. Ms. O'Connor drafted 
the May 17, 1993, McLarty memo which was copied to First Lady 
Hillary Rodham Clinton. She met with Harry Thomason on the 
subject of the 25 percent staff cuts in the White House and she 
recommended to David Watkins that Larry Herman and KPMG Peat 
Marwick be hired to conduct a review of the Travel Office.\717\
---------------------------------------------------------------------------
    \717\ WHMR interview of Jennifer O'Connor, pp. CGEPR 384-385.
---------------------------------------------------------------------------
    Mr. McLarty who had repeated contact with Mrs. Clinton over 
the Travel Office matter, had 233 instances where he could not 
recall key events. While McLarty did finally ``recall'' a 
previously omitted meeting with Mrs. Clinton about the Travel 
Office in light of the committee's documentation of that 
contact, there were still numerous other instances where 
McLarty forgot.

White House Management Review

    Those involved in preparing the White House Management 
Review arguably should have had as clear an understanding as 
any exactly what happened in the White House Travel Office 
matter and why it happened.
    In short, the memories of those most closely involved with 
the White House Management Review had difficulty recalling key 
events under oath: Dwight Holton, former Special Assistant to 
Deputy Chief of Staff Mark Gearan, now a recent law school 
graduate (348 instances); former Staff Secretary turned law 
school professor John Podesta (264); former Deputy Chief of 
Staff turned Peace Corps Director Mark Gearan (221); Staff 
Secretary Todd Stern (133); former Special Counsel to the 
Office of Management and Administration and assistant at the 
creation of David Watkins' ``soul cleansing memo'' Matthew 
Moore (130).

White House Counsel's Office

    Several attorneys affiliated with the White House Counsel's 
Office played key roles at the time of the White House Travel 
Office firings. Others have been central to the White House 
response to the committee's requests for documents. They have 
every reason to be very fully aware of the details of the White 
House Travel Office matter. Yet their individual memories also 
come up short.
    Neil Eggleston, who prepared First Lady Hillary Rodham 
Clinton's responses to a series of GAO questions after 
interviewing Mrs. Clinton and who handled all of the various 
document productions for Travelgate matters, could not recall, 
did not know, could not remember or recollect on some 250 
occasions. Bill Kennedy, former Associate White House Counsel, 
who summoned the FBI to investigate the Travel Office at the 
behest of ``the highest levels'' could not recall 233 times in 
his April deposition and 116 in a June deposition related to 
the FBI files matter and the hiring of Craig Livingstone. Beth 
Nolan, who reviewed SGE and ethics issues in the Travel Office 
matter, registered 179, while Cliff Sloan tallied 173.
    Bruce Lindsey, a long-time Assistant to the President and 
Senior Advisor turned Deputy White House Counsel, scored some 
161 lapses. Bernard Nussbaum, whose claims that all who watched 
him divide Vince Foster's papers into three stacks were 
contradicted by all those alleged witnesses, registered 158 
memory outages, and another 60 lapses in a subsequent FBI 
files-related deposition.
    Memory or knowledge failed current White House Deputy Chief 
of Staff Harold Ickes some 148 times; Senior Advisor to the 
President George Stephanopoulos some 142 and 102 times in two 
separate depositions; former White House Deputy Chief of Staff 
Roy Neel some 135 times; and, Assistant to the President for 
Special Projects Rahm Emanuel on some 102 occasions. Again, 
given the position of these individuals and their access to 
White House colleagues and records, the committee believes they 
had every reason to be cognizant of far more than admitted in 
their depositions. Mrs. Clinton's Chief of Staff Maggie 
Williams had some 82 lapses, and particularly couldn't recall 
anything related to conversations she had with Mrs. Clinton 
about the Travel Office.\718\
---------------------------------------------------------------------------
    \718\ Deposition of Maggie Williams, July 29, 1996, pp. 15, 20-22, 
28.
---------------------------------------------------------------------------

In Conclusion

    This is the administration which brought, ``I have no 
specific recollection'' and ``vague and protective'' into the 
political lexicon. This is the administration in which one's 
capacity to remember diminishes dramatically as one's authority 
and responsibility increases. Our analysis suggests that the 
nearer to the events and the higher up they are in the ``chain 
of command,'' the more likely these men and women conveniently 
forget.
    The committee is troubled and cannot help but conclude that 
the memory lapses of numerous senior White House officials--who 
otherwise exhibit no incapacity or impairment and in fact 
appear highly regarded--appear in large part to be deliberate, 
not accidental.

                   XIV. The Stonewall Begins to Crack

            A. Watkins Memo Begins to Explain the True Story

    One document--the Watkins ``soul cleansing'' memo--was 
discovered after 2 years of investigations among documents 
belonging to Patsy Thomasson who long before had signed an 
internal White House document claiming she had searched all her 
files for Travel Office documents.\719\ The ``soul cleansing'' 
memo went a long way in explaining the real Travelgate story 
and should have been turned over years earlier to numerous 
congressional and criminal investigations. Ms. Thomasson's 
explanations as to why she didn't turn over the Watkins memo 
are unconvincing.\720\ Rather than conduct a search of her 
records for responsive documents, Ms. Thomasson stated that she 
was ``absolutely positive'' that she didn't have any documents 
and when a copy was mysteriously found in her records she was 
at ``a complete loss'' to explain how it got there.\721\ No 
explanation is offered to explain how she happened to forget 
that she had a copy of this document.
---------------------------------------------------------------------------
    \719\ Watkins memorandum, CGE 12286-12294.
    \720\ Statement of Patsy Thomasson, January 5, 1996, CGE 36932.
    \721\ Id.
---------------------------------------------------------------------------
    Clearly neither Watkins nor others at the White House ever 
wanted this version of events to see the light of day. Mr. 
Watkins explained in his memo he had been ``as protective and 
vague as possible'' when talking with investigators. Indeed 
Watkins was forced most reluctantly to become a witness against 
himself and his former colleagues as a result of this 
discovery.\722\
---------------------------------------------------------------------------
    \722\ Mr. Watkins testified before this committee that all the 
information contained in his memorandum was true. He denied under oath 
that he had ``lied to his memorandum.''
---------------------------------------------------------------------------
    The Watkins ``soul cleansing'' memo surfaced despite the 
fact that Watkins' assistant, attorney Matthew Moore, removed 
the document from the hard drive of his computer and downloaded 
it onto a disk for Watkins before Watkins left the White 
House.\723\ But Watkins had left a copy with Patsy Thomasson in 
whose records it eventually was discovered by career White 
House recordkeeping officials reviewing old files.\724\
---------------------------------------------------------------------------
    \723\ Committee deposition of Matthew Moore, March 26, 1995, p. 56. 
Mr. Moore testified that we worked on 10 different drafts of the 
Watkins memo.
    \724\ Letter to Chairman Clinger from Jack Quinn, January 17, 1996.
---------------------------------------------------------------------------
    The memo provides a candid, unvarnished, and 
contemporaneous account of the behind the scenes maneuvering 
and pressures that led to the Travel Office firings. The White 
House tried to distance Watkins, a former close ally, from the 
actions of others at the White House but this cannot be 
supported by the documentary record. The committee obtained 
considerable evidence of meetings, phone calls and contacts 
that support the version of events relayed in Watkins' ``soul 
cleansing'' memo. In addition, some of the deposition testimony 
has also supported events as recounted in the memo.

1. Pressure from First Lady and Mack McLarty

    In his deposition, Mack McLarty said he never saw Watkins' 
memo, but acknowledged a never before disclosed conversation 
with Mrs. Clinton on May 16, 1993--3 days before the 
firings.\725\ Mr. McLarty previously told GAO that he only had 
one meeting with Mrs. Clinton about the Travel Office.\726\
---------------------------------------------------------------------------
    \725\ Committee deposition of Mack McLarty, July 12, 1996, p. 42.
    \726\ GAO interview of Mack McLarty, March 24, 1994.
---------------------------------------------------------------------------
    Now, 3 years later and after the committee obtained 
documents indicating a May 16 contact between Mrs. Clinton and 
McLarty, he acknowledges an additional conversation with Mrs. 
Clinton concerning the Travel Office.\727\ On one of the 
chronologies of Travel Office events, which the White House 
initially represented was subject to executive privilege, 
McLarty made a handwritten notation: ``May 16: HRC pressure.'' 
\728\
---------------------------------------------------------------------------
    \727\ Committee deposition of Mack McLarty, p. 42.
    \728\ CGEPR 563-564.
---------------------------------------------------------------------------
    Mr. McLarty testified that this notation either reflected 
something that somebody said at a meeting or ``may reflect my 
exchange with the First Lady on the 16th that we had a pressure 
to act about this matter.'' \729\ Mr. McLarty now acknowledges 
``I believe I felt a responsibility, and indeed a pressure, to 
act, given the information I had, and I believe Mrs. Clinton 
had a serious concern about this matter and I felt a pressure 
from her to take it seriously and to act upon it, if 
necessary.'' \730\
---------------------------------------------------------------------------
    \729\ Committee deposition of Mack McLarty, p. 41.
    \730\ Id., p. 42.
---------------------------------------------------------------------------
    Mr. McLarty acknowledged that Mrs. Clinton was encouraging 
action be taken: ``I think that was really what she was saying, 
let's make a decision, you and others charged with this 
responsibility, make a decision and take appropriate action.'' 
\731\ Mr. McLarty had this conversation with Mrs. Clinton in 
the residence on May 16 where he was present for a dinner with 
the President and First Lady.\732\
---------------------------------------------------------------------------
    \731\ Committee deposition of Mack McLarty, pp. 38, 57.
    \732\ Id.
---------------------------------------------------------------------------
    Mr. McLarty provided a more extensive account of his May 
13, 1993 conversation with Mrs. Clinton. Previously McLarty had 
passed off this meeting as a ``stand-up'' 5 minute meeting of 
little consequence.\733\ In his deposition, however, McLarty 
acknowledged that Mrs. Clinton had called to specifically meet 
with him in his office about the Travel Office. Mrs. Clinton 
came to his office to specifically discuss this matter.\734\
---------------------------------------------------------------------------
    \733\ See July 2 press conference.
    \734\ Committee deposition of Mack McLarty, p. 25.
---------------------------------------------------------------------------
    In documents which were long withheld from the committee, 
McLarty's attorneys discussed these meetings with White House 
Associate Counsel Natalie Williams at or around the time of the 
release of the Watkins memo.\735\ In the notes, Williams writes 
``Conversation w/ First Lady, updating her Peat Marwick audit, 
told her on top of it, handling situation.'' Mr. McLarty's 
attorneys also told Williams of McLarty's May 16 conversation 
with Mrs. Clinton.\736\ The White House asserted executive 
privilege over these conversations and refused to allow 
Williams to testify about any conversations contained in her 
notes.\737\
---------------------------------------------------------------------------
    \735\ Handwritten notes of Natalie Williams, undated, DF 780463.
    \736\ Id.
    \737\ Committee deposition of Natalie Williams, July 31, 1996, pp. 
46-48, 55-56, 70-71.
---------------------------------------------------------------------------
    Mr. Watkins described the pressures he felt from Mrs. 
Clinton and Mr. McLarty in his memo:

          I would have much preferred to have my staff 
        carefully review the Travel Office and make a detailed 
        business plan for the new fiscal year. This proved 
        impossible, though, when the pressure for action from 
        Mrs. Clinton and you became irresistible. . . . If I 
        thought I could have resisted those pressures, 
        undertake more considered action, and remained in the 
        White House, I certainly would have done so.\738\
---------------------------------------------------------------------------
    \738\ Watkins ``soul cleansing'' memo, CGE 12286.

    Mr. Watkins testified before this committee that he 
considered ``there would have been a great price to pay and 
perhaps my removal from the White House'' if he didn't fire the 
Travel Office employees.\739\ ``After the Secret Service 
incident, it was made clear that I must forcefully and 
immediately follow the direction of the First Family,'' Watkins 
explained in his memo.
---------------------------------------------------------------------------
    \739\ Committee hearing, January 17, 1996, p. 94.
---------------------------------------------------------------------------
    Under questioning about his actions during the week leading 
up to the firings, Watkins testified that ``the direction of 
the First Family was to take swift and responsive action . . . 
we should reduce the travel--we should get our people in and 
get those people out.'' Congressman Shays asked Watkins just 
what he meant by that statement. Watkins replied: ``It means 
fire them.'' Rep. Shays 
inquired further: ``It means get rid of them; doesn't it?'' Mr. 
Watkins confirmed: ``That is what it means.'' \740\
---------------------------------------------------------------------------
    \740\ Committee hearing on January 17, 1996, p. 95.
---------------------------------------------------------------------------
    In other handwritten contemporaneous notes, Watkins wrote 
about a meeting that he had with McLarty and Patsy Thomasson on 
May 17, in which they talked about McLarty's dinner with the 
President and First Lady the night before.'' \741\ Patsy 
Thomasson testified that Vincent Foster told her on May 13 that 
``the clients''--as Foster referred to the President and First 
Lady--were very interested in the Travel Office.\742\
---------------------------------------------------------------------------
    \741\ Handwritten notes of David Watkins, May 31, 1993, PM 000170.
    \742\ FBI 302 interview of Patsy Thomasson, September 22, 1993, CZ 
00561.
---------------------------------------------------------------------------

2. Pressure from Harry Thomason

    Mr. Watkins also detailed the central role of Harry 
Thomason in initiating Mrs. Clinton's interest in this matter 
and generating pressure throughout the White House: ``Mrs. 
Clinton took interest in having the Travel Office situation 
resolved quickly, following Harry Thomason's bringing it to her 
attention. Thomason briefed Mrs. Clinton on his suspicion that 
the Travel Office was improperly funnelling business to a 
single charter company, and told her that the functions of that 
office could be easily replaced and reallocated.'' \743\
---------------------------------------------------------------------------
    \743\ Watkins memorandum, undated, CGE 12287.
---------------------------------------------------------------------------
    Mr. Watkins account of Thomason's central role is supported 
by numerous others within his office. Bonnie Berry who worked 
as a secretary in Watkins' office stated that Harry Thomason 
would call about two or three times a week, leaving either a 
Washington or Los Angeles phone number. Ms. Berry remembered 
him meeting with Watkins on more than one occasion between May 
1st and May 19th.\744\
---------------------------------------------------------------------------
    \744\ Committee deposition of Bonnie Berry, May 21, 1996, p. 20.
---------------------------------------------------------------------------
    Ms. Berry testified that she arranged for the office space 
and White House passes for Harry Thomason and his assistant, 
Bobbie Ferguson, at the request of David Watkins.\745\ Watkins 
testified that he did so at the request of Mrs. Clinton's 
office.\746\ From Berry's testimony it appears that there may 
have been a different pass application for Harry Thomason that 
was signed by David Watkins.\747\ The copy of the form the 
committee has received was signed by Clarissa Cerda, a Watkins 
assistant.\748\
---------------------------------------------------------------------------
    \745\ Committee deposition of Bonnie Berry, p. 32.
    \746\ Committee hearing, January 17, 1996.
    \747\ Committee deposition of Bonnie Berry, pp. 33, 36.
    \748\ CGE 2931-2933.
---------------------------------------------------------------------------
    Mr. Thomason testified there was a ``buzz in the air'' 
\749\ of rumors about the Travel Office employees. However, the 
consensus from the vast majority of the dozens of witnesses who 
testified in committee depositions only described rumors coming 
from Thomason's contacts with Mrs. Clinton, Foster, Watkins and 
Cornelius.
---------------------------------------------------------------------------
    \749\ Committee deposition of Harry Thomason, pp. 136-137, 188.
---------------------------------------------------------------------------
    While Harry Thomason never disclosed his discussions with 
Mrs. Clinton to those conducting the White House Management 
Review, he admitted in committee depositions that he was: 
``sure that [he] brought it to her attention.'' \750\ 
Furthermore, in notes withheld from this committee, one of 
Thomason's attorneys told White House Associate Counsel Natalie 
Williams that Harry had one or two conversations with Mrs. 
Clinton and remembered telling Watkins that the Travel Office 
employees should be replaced because they were disloyal and 
that Mrs. Clinton shared his view.\751\ This information 
coincides with the information that David Watkins relayed in an 
FBI interview in August 1993 when he stated: ``She [Mrs. 
Clinton] stated action needed to be taken immediately to be 
certain those not friendly to the Administration were removed 
and replaced with trustworthy individuals.'' \752\
---------------------------------------------------------------------------
    \750\ Committee deposition of Harry Thomason, p. 228.
    \751\ Handwritten notes of Natalie Williams, DF 780464.
    \752\ Public Integrity interview of David Watkins, August 10, 1993.
---------------------------------------------------------------------------
    In a committee deposition, Associate Counsel Natalie 
Williams refused to answer any questions about the notes she 
took of conversations with Thomason's attorney.\753\
---------------------------------------------------------------------------
    \753\ Committee deposition of Natalie Williams, July 31, 1996, pp. 
55-62.
---------------------------------------------------------------------------
    Mr. Watkins' contemporaneous handwritten notes detail a 
conversation that he had with Harry Thomason on May 12: 
``Thomason comes back in DW's [office]--says he bumped into 
Hillary and she's ready to fire them all that day.'' \754\
---------------------------------------------------------------------------
    \754\ Handwritten notes of David Watkins, May 31, 1993, PM 169.
---------------------------------------------------------------------------
    Mr. Thomason's own records show numerous phone calls to and 
from Mrs. Clinton and President during this week.\755\ Harry 
Thomason's records show meetings with the President on May 12 
and May 13. Long before this time, Harry Thomason had pitched 
his proposals for TRM with a memo that the President 
subsequently forwarded to White House senior management with 
the notation: ``These guys are sharp.'' \756\
---------------------------------------------------------------------------
    \755\ Phone logs of Harry Thomason, Thomason production, pp. 108-
109.
    \756\ February 17, 1993 memo attached to February 11, 1993 memo of 
Darnell Martens to Harry Thomason, CGE 002296-98.
---------------------------------------------------------------------------
    White House records indicate that Thomason had dinner in 
the residence on a key day--May 13--the day the FBI was called 
in and told that this matter had the attention of those at the 
``highest levels'' of the White House, and the day Mrs. Clinton 
requested a meeting with Mack McLarty to discuss the Travel 
Office and the pressure was on Vincent Foster and Bill Kennedy 
to find a solution.\757\ On this day Foster told Patsy 
Thomasson that ``the clients''--as he referred to the President 
and First Lady--were very interested in the Travel Office.\758\ 
During that evening, Foster also placed a call to Mrs. Clinton 
according to his calendar notes.\759\
---------------------------------------------------------------------------
    \757\ Secret Service logs and White House residence logs for May 
13, 1993.
    \758\ Public Integrity interview of Patsy Thomasson, September 27, 
1993.
    \759\ Vince Foster Travel Office notebook, May-July 1993, CGE 1039.
---------------------------------------------------------------------------

3. Secret Service Incident

    Mr. Watkins also wrote that ``after the Secret Service 
incident, it was made clear that I must more forcefully and 
immediately follow the direction of the First Family.'' \760\ 
In her deposition with the committee, Maggie Williams has 
confirmed that Mrs. Clinton indeed was upset about a ``Secret 
Service incident'' in which Newsweek magazine reported Mrs. 
Clinton was rumored to have thrown a lamp in the residence. Ms. 
Williams personally addressed this situation by calling the 
Secret Service.\761\
---------------------------------------------------------------------------
    \760\ Watkins memorandum, CGE 0012286.
    \761\ Committee deposition of Maggie Williams, July 29, 1996, pp. 
47, 58.
---------------------------------------------------------------------------

B. White House made ineffective claims of ``executive privilege'' over 
                   discussions about ``Watkins memo''

    Overall, the supporting documentation that coincides with 
the revelations in the Watkins memo show that the official 
White House story glossed over significant contacts with both 
the President and First Lady. The President was actually 
informed of the firings by Bruce Lindsey on May 17--a fact 
omitted in the Management Review even though the authors now 
acknowledge they were aware of that fact and probably should 
have reported it. In a disturbing development, the White House 
has asserted executive privilege over conversations that White 
House attorneys or staffers for Mrs. Clinton had with Mrs. 
Clinton regarding the Watkins memo.

               C. CONGRESS HOLDS WHITE HOUSE ACCOUNTABLE

    Should a lower standard of accountability be accorded for 
the highest office in the land? We often hear ``nobody cares'' 
and it's clear enough that in this White House nobody does care 
about following the rules.
    Whether announcing an FBI investigation of employees whose 
``crime'' was to hold jobs coveted by Clinton family and 
friends, or improperly requesting and receiving hundreds of FBI 
background files that they had no business with, or sending a 
cozy ``heads up'' from the FBI to the White House about 
sensitive information, this administration consistently has 
engaged in activities that, at the least, give the appearance 
of abusing the power entrusted to it by the country. We should 
never get used to or tolerate the politicization of law 
enforcement even if nobody cares.

    XV. President Clinton has Abused Executive Power and Executive 
  Privilege and Misused the Counsel's Office in Order to Effectuate a 
                  Cover-up of the Travel Office Matter

 A. The long road to getting White House Documents--from foot dragging 
                         to executive privilege

    Executive privilege is a doctrine of clear necessity, 
created out of the need to protect the Government's most 
sensitive Government information. The need to protect some 
military, diplomatic and sensitive national secrets is not in 
dispute. Furthermore, the privilege is fundamental to 
Government operations and is borne out of the constitutional 
recognition of the separation of powers.\762\ Use of the 
privilege must always be balanced against the congressional 
oversight prerogative, and the democratic need for 
accountability. However, it was not meant to be used for 
purposes of political expediency, as a convenient cloak to 
shield the Presidency from possible embarrassment.
---------------------------------------------------------------------------
    \762\ U.S. v. Nixon, 483 U.S. 683, 705-706, 708 (1974).
---------------------------------------------------------------------------
    The committee believes that President Clinton has abused 
this privilege. The Clinton administration, over the past year, 
has shielded more documents under an executive privilege claim 
than those shielded in the 12 years of the Reagan and Bush 
administrations combined. By asserting executive privilege over 
documents revealing embarrassing events in the White House 
Travel Office matter, President Clinton used the privilege as a 
tool in a larger scheme to deprive the public of the truth of 
his own misdeeds and those of his administration.
    Throughout the investigation into the Travel Office matter, 
the White House delayed the release of documents and denied the 
committee access to the information it sought. Finally, when 
the committee tried to call an end to its stonewalling, the 
White House claimed executive privilege over relevant documents 
and refused to allow witnesses to testify to certain events 
when they appeared for committee depositions.\763\ The 
committee only received the remaining, responsive documents to 
its January 11, 1996 subpoena on August 15, 1996, after a long 
and protracted effort to obtain these documents from the White 
House.
---------------------------------------------------------------------------
    \763\ Numerous witnesses who were deposed by the committee claimed 
executive privilege in regard to conversations that they had with Mrs. 
Clinton. Some of those who refused to answer questions and invoked 
executive privilege on the advice of the White House included Mrs. 
Clinton's Chief of Staff Maggie Williams, Mrs. Clinton's Press 
Secretary Lisa Caputo, Special Counsel Jane Sherburne, Associate 
Counsel Natalie Williams and Associate Counsel Jon Yarowsky.
---------------------------------------------------------------------------
    After a review of the 2,000 pages of documents which the 
White House withheld for months from the committee under a 
claim of executive privilege, it is clear that most of these 
documents were never subject to any reasonable reading of 
executive privilege doctrine.
    Within the 2,000 pages of documents is a disturbing pattern 
of collaboration by the White House Counsel's office with 
outside attorneys. There is an apparent attempt to develop a 
consistent story-line on critical areas of controversy, 
including the ``Watkins memo'', Harry Thomason's role at the 
White House, relevant documents that the late Vincent Foster 
had on these matters and Mrs. Clinton's role in the firings.
    The Counsel's office is acting as an adjunct criminal 
defense team, rather than as legal and ethical advisors to the 
highest office of the land. The activities that the committee 
has discovered raise troubling questions. For instance, the 
committee has yet to determine whether there were additional 
witnesses with whom the White House shared information. In 
particular, Harry Thomason, a major character in the 
committee's investigation, was also the subject of a Justice 
Department investigation. Associate Counsel Cliff Sloan 
testified that he was directed by Bernard Nussbaum to read the 
notes of Thomason's White House Management Review interview to 
Thomason's attorney.\764\ The White House attempted to claim 
executive privilege over this document when the committee first 
sought it.
---------------------------------------------------------------------------
    \764\ Committee deposition of Cliff Sloan, June 28, 1996, p. 49.
---------------------------------------------------------------------------
    The President claims to be following the executive 
privilege doctrine as established in President Reagan's 1982 
Executive order:

          Executive privilege will be asserted only in the most 
        compelling circumstances, and only after careful review 
        demonstrates that assertion of this privilege is 
        necessary. Congressional requests for information shall 
        be complied with as promptly and as fully as possibly, 
        unless it is determined that compliance raises a 
        substantial question of executive privilege.
          A `substantial question of executive privilege' 
        exists if disclosure of the information requested might 
        significantly impair the national security (including 
        the conduct of foreign relations), the deliberative 
        process of the executive branch, or other aspects of 
        the performance of the executive branch's 
        constitutional duties.\765\
---------------------------------------------------------------------------
    \765\ Executive order, Memorandum from President Ronald Reagan for 
the Heads of Executive Departments and Agencies on Procedures Governing 
Responses to Congressional Requests for Information, November 4, 1982.

Claims of privilege under this doctrine would be waived by the 
President if there were any credible allegations of wrongdoing. 
For example, President Reagan waived all claims of executive 
privilege during the Iran-Contra investigation.
    In light of the expansion of the Independent Counsel's 
jurisdiction into the Travel Office matter and, more recently, 
the FBI files matter, the President's actions were particularly 
troubling. The President insisted on keeping thousands of pages 
of documents from public scrutiny while criminal investigations 
were ongoing. Witnesses in the White House have remained silent 
under apparent claims of executive privilege.

B. THE PRESIDENT ENGAGED IN AN UNPRECEDENTED USE OF EXECUTIVE PRIVILEGE 
              IN THE COURSE OF THE COMMITTEE'S DEPOSITIONS

    The White House insisted that witnesses claim executive 
privilege, thereby preventing a discussion of these documents 
during depositions. White House Counsel staff Jane Sherburne, 
Jon Yarowsky, and Natalie Williams, as well as members of the 
First Lady's staff, Chief of Staff Maggie Williams, and former 
Press Secretary Lisa Caputo and numerous others, have asserted 
executive privilege on dozens of occasions in depositions 
before this committee.
    The assertion of executive privilege over conversations 
with Mrs. Clinton was made with troubling frequency. No 
constitutional basis exists for the President to assert 
executive privilege claims over conversations that Mrs. Clinton 
had with staff.

C. EXECUTIVE PRIVILEGE CLAIMS ARE BEING ASSERTED FOR POLITICAL SECURITY 
                         NOT NATIONAL SECURITY

    The President persists in his efforts to shield documents 
under a seriously flawed assertion of executive privilege 
absent any national security interest or cited domestic policy 
matter. For example, there is no justification for a claim of 
executive privilege over notes that a White House Counsel took 
of discussions with attorneys for Harry Thomason or Mack 
McLarty regarding conversations each had with Mrs. Clinton 
about the Travel Office.\766\
---------------------------------------------------------------------------
    \766\ DF 780463-780465, 780467-780469. Natalie Williams handwritten 
notes of conversations with attorneys for Harry Thomason and Mack 
McLarty.
---------------------------------------------------------------------------
    These notes are among those the White House insisted on 
withholding under the umbrella of executive privilege until 
August of this year. They were key to the investigation, as 
they supported Mr. Watkins' account of Travel Office matter, 
which the White House has sought to discredit.

1. Conversations with Mrs. Clinton = executive privilege?

    It is unrealistic to presume that conversations between 
committee witnesses and Mrs. Clinton about the Travel Office 
matter are of a national security concern or otherwise matters 
central to the constitutional duties of the Presidency. The 
White House Counsel's office was used to coordinate the stories 
of various key witnesses, including Harry Thomason, who was 
being investigated by the Justice Department for possible 
conflicts of interest. Many of these witnesses may have 
appeared before the Grand Jury in conjunction with the 
Independent Counsel's investigation.

2. Executive privilege for debriefings with outside attorneys?

    Another category of documents which the President withheld 
for months from the public under a claim of executive privilege 
included dozens of interviews with the attorneys representing 
Clinton White House staff and friends deposed in this 
investigation, as well as the Whitewater matter. Even the 
``independent'' Peat Marwick employee, Larry Herman, appears to 
have submitted to a debriefing concerning his interview with 
this committee.
    The President misused executive privilege when he exerted 
it over notes that are clearly debriefings of individuals or 
attorneys whose clients were questioned in the course of this 
or other related investigations.\767\ These actions may waive 
the attorney-client privilege of the individuals involved when 
their attorneys transmit the information to the White House.
---------------------------------------------------------------------------
    \767\ DF 780533-780535, Natalie Williams handwritten notes of 
conversations with Larry Herman's attorney.
---------------------------------------------------------------------------

3. Executive privilege over White House briefing papers created for 
        Congress?

    Extensively detailed briefing papers and a series of 
questions that were prepared to script the Democrat members of 
the Committee on Government Reform and Oversight for hearings 
on the Travel Office are included in the 2,000 pages over which 
executive privilege was claimed. These documents outlined 
attacks on the Travel Office employees, attacks on the idea of 
conducting this investigation and even attacks on the 
committee's staff. These scripts had detailed responses, for 
example, to any claims that Mrs. Clinton was involved with the 
firings, providing explicit White House instructions to use 
such scripts only if the issue was raised during the hearing.
    During a committee deposition, the attorney for Jon 
Yarowsky, Associate White House Counsel, claimed that it was 
entirely appropriate for the White House Counsel's office to 
script Congress and cited ``the White House submitting the 
proposed questions for John Dean'' during the Watergate 
hearings as his defense.\768\
---------------------------------------------------------------------------
    \768\ Committee deposition of Jon Yarowsky, July 25, 1996, pp. 38-
39.
---------------------------------------------------------------------------

4. Executive privilege over information regarding Vincent Foster?

    Documents relating to Vincent Foster were another key area 
where the White House took extraordinary efforts to keep the 
information from the public. The White House initially redacted 
hundreds of pages relating to Foster's documents and the 
debriefings of witnesses that the Counsel's office obtained 
regarding Foster's documents. These documents were clearly 
responsive to our subpoena but were almost entirely redacted.

D. The Misuse of the Counsel's office began under the tenure of Bernard 
       Nussbaum as President Clinton's first White House Counsel

    Bernard Nussbaum, the first of four White House Counsels, 
exhibited a fundamental misunderstanding of the role of the 
Counsel to the President. Mr. Nussbaum established the Clinton 
White House Counsel's Office as a taxpayer funded legal team, 
whose job was defending the President, rather than the office 
of the Presidency.
    Mr. Nussbaum was well known to President and Mrs. Clinton, 
having worked with Mrs. Clinton on the House Judiciary 
Committee Impeachment Inquiry, better known as the Watergate 
Committee. He was a senior attorney on the committee when Mrs. 
Clinton began as a young lawyer just out of law school. 
President Clinton conferred the title of ``Assistant to the 
President'' on Mr. Nussbaum, officially validating his access 
to the Clinton ``inner circle.''
    Mr. Nussbaum publicly voiced his belief that the 
President's lawyer must ``represent his client [the President] 
faithfully and zealously.'' He hung a black and white picture 
of the Nixon impeachment committee staff on his White House 
office wall located next to Mrs. Clinton's office. Ruth Marcus 
wrote that Nussbaum is ``the $500-an-hour corporate litigator's 
approach to battle'' which he carried into the White House in 
his representation of the client: Bill Clinton.\769\
---------------------------------------------------------------------------
    \769\ Washington Post, ``The Man Behind the President'' July 1, 
1993.
---------------------------------------------------------------------------
    Under Bernard Nussbaum, the Office of Counsel to President 
Clinton prevented the access of investigators undertaking 
legitimate oversight of the executive branch. Mr. Nussbaum 
worked to stonewall substantive investigations into matters 
such as the death of Vince Foster, Whitewater, RTC, and 
Travelgate. President Clinton, meanwhile, publicly proclaimed 
that the White House is ``committed to fully support and 
cooperate'' with all investigations as well as Special 
Counsels.
    Mr. Nussbaum took the unprecedented position that the 
Attorney General was forbidden to see Deputy White House 
Counsel Vince Foster's papers. One writer noted that this 
desperate view of executive privilege ``would make Richard 
Nixon blush.'' \770\ In response to the manner in which 
Nussbaum handled the review of Vince Foster's White House 
documents, Justice Department's No. 2 lawyer, Deputy Attorney 
General Heymann, publicly proclaimed: ``Bernie, are you hiding 
something?''
---------------------------------------------------------------------------
    \770\ Washington Times, ``Bernard Nussbaum's novel view of 
executive privilege'' August 30, 1995.
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    As an attorney in private practice, a lawyer has an 
obligation to his client to advocate the client's position as 
strenuously as the law will allow. The duties of a Government 
attorney, however, are quite different. Even the Counsel to the 
President ultimately serves more than just a single client. 
Although he provides Counsel to the President of the United 
States, it does not include legal defense work for the 
President, if his actions are outside the scope of the 
Presidency. The Counsel to the President, like any other 
Government attorney, has a responsibility to uphold the 
Constitution and laws of the United States.

  E. President Clinton's Second Counsel, Lloyd Cutler, sustained the 
                 pattern of obstruction set by Nussbaum

    Following Nussbaum's resignation, Lloyd Cutler agreed to 
serve as Special Counsel to President Clinton on March 8, 1994. 
Mr. Cutler quickly proclaimed that matters would be handled 
differently. Lloyd Cutler's first press conference with 
President Clinton focused on his prior White House experience 
and that White House matters would be given more scrutiny, 
especially when it came to ethical matters. Mr. Cutler opined,

          The Counsel is supposed to be Counsel for the 
        President in office and for the Office of the 
        Presidency. . . . I don't think there is much of a 
        dichotomy between the two. When it comes to a 
        President's private affairs, particularly private 
        affairs that occurred before he took office, those 
        should be handled by his own private counsel and, in my 
        view, not by the White House Counsel.\771\
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    \771\ Lloyd Cutler's ``Remarks Announcing the Appointment of Lloyd 
Cutler as Special Counsel to the President and an Exchange with 
Reporters,'' 30 Weekly Comp. Pres. Document 462, 465 (Mar. 8, 1994).

    To implement these goals, Cutler brought his former law 
firm partner, Jane Sherburne, into the White House Counsel's 
Office. Ms. Sherburne began her White House service as a 
Special Government Employee and became Special Counsel to the 
President in 1995.

  F. President Clinton's Special Counsel begins her ``Task List'' of 
     oversight of all congressional as well as Independent Counsel 
                             investigations

    A document which defines Ms. Sherburne's responsibilities 
to President Clinton is the December 13, 1994 ``task list'' she 
created.\772\ As an initial matter, the sheer volume of ethical 
and legal issues identified in Sherburne's memo is a powerful 
statement. It stands in stark contrast to President Clinton's 
statement to the public that ``these investigations should go 
forward, unimpeded and as quickly as possible.'' \773\ 
President Clinton assured the press that his White House staff 
did not ``need to have any implication that we are in any way 
trying to manage or affect this process.'' \774\
---------------------------------------------------------------------------
    \772\ ``Task list, December 13, 1994,'' by Jane Sherburne, DF 
780643-654. This list was among those withheld under a claim of 
executive privilege by the President on May 30, 1996 with approximately 
2,000 other pages of withheld documents. Responding to the committee's 
demands to provide the documents, the White House made an offer for the 
chairman and designated staff to review redacted copies of the 2,000 
pages. The Counsel's office provided heavily redacted versions of this 
document. Responding to an August 1996 demand for the documents under a 
threat of contempt of Congress, the White House Counsel finally 
relinquished the documents on August 15, 1996.
    \773\ President Clinton's ``Remarks on the National Performance 
Review and an Exchange with Reporters,'' 30 Wkly Comp. Pres. Documents 
375, 421 (Mar. 3, 1994).
    \774\ Id.
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    In contrast to President Clinton's promise to allow 
investigations to go forward ``unimpeded,'' Special Counsel 
Sherburne created this task list of no fewer than 39 separate 
``issues'' of alleged wrongdoing by members of the Clinton 
administration. These issues were to be reviewed, assigned and 
followed by the White House Counsel. Ms. Sherburne managed the 
team of Government attorneys mobilized in the personal defense 
of President and Mrs. Clinton.
    The Sherburne ``task list'' is impressive for its breadth. 
It is an indepth list of all possible investigations, 
regardless of how remote, for which attorneys in the White 
House were to have been prepared. The widely publicized 
investigations into Whitewater, Vince Foster document handling, 
and Travelgate are included among a myriad of other items. Many 
of the scandals are assigned a specific lawyer and apparently 
binders with relevant information are assembled for each 
issue.\775\
---------------------------------------------------------------------------
    \775\ DF 780643-654, task list, December 13, 1994.
---------------------------------------------------------------------------
    Ms. Sherburne's task list also assigns President Clinton's 
lawyers the duty of ``monitoring'' the criminal investigations 
of other Independent Counsels: \776\
---------------------------------------------------------------------------
    \776\ Id.
---------------------------------------------------------------------------
         Independent Counsel Donald Smaltz's criminal 
        investigation of Agriculture Secretary Espy. Task # 7 
        assigned White House Associate Counsel Cheryl Mills to 
        examine possible ethics violations involving Secretary 
        Espy. White House Associate Counsel Beth Nolan also is 
        listed as tasked to look at the ethics portion of this 
        investigation.
         Other aspects of the Independent Counsel's inquiry 
        ``beyond Espy ethics'' such as Hatch Act violations and 
        contacts with Tyson Foods executives were listed to 
        have a lawyer determine the charter and scope of 
        inquiry, press strategy, congressional interest, 
        assemble a record of what information was already 
        public and then start ``fact gathering.''
         Independent Counsel David Barrett's criminal 
        investigation of HUD Secretary Henry Cisneros's alleged 
        payment to a mistress far in excess of the amounts he 
        told the FBI. Ms. Sherburne had not yet assigned a 
        White House lawyer with the stated duties: ``gather 
        facts,'' ``establish contact'' with Secretary 
        Cisneros's counsel, ``determine press strategy'' and 
        ``develop talking points,'' ``identify the source of 
        congressional interest'' in the investigation, and to 
        ``assemble a binder'' in the White House with a 
        ``summary and key documents.''
         Independent Counsel Daniel Pearson's criminal 
        investigation of Commerce Secretary Ron Brown's 
        financial dealings also had not been assigned by 
        Sherburne. However, the task list outlined that 
        President Clinton's lawyers should ``establish contact 
        with counsel,'' ``determine press strategy,'' ``develop 
        talking points,'' ``identify source of congressional 
        interest,'' and finally to ``assemble binder with 
        summary and key documents.''
    The nature of the task list evolved. By December 1994, for 
example, Webb Hubbell had already pled guilty to felony counts 
of mail fraud and tax evasion. The only tasks remaining for 
Sherburne's ``team'' of lawyers was to ``monitor'' his 
cooperation with Independent Counsel Kenneth Starr, ``determine 
press strategy'' and ``develop talking points.''
    Ms. Sherburne had the insight to put other Clinton staff 
``problems'' that were likely to be investigated on her task 
list. It included ``monitoring'' and assembly of a ``binder'' 
with summary and key documents for:
         Deputy Chief of Staff Harold Ickes' 
        representation of the Laborers' International Union, 
        under investigation by the Justice Department for 3 
        years concerning their ties to organized crime;
         George Stephanopoulos' receipt of a 
        Nationsbank loan under the prime interest rate for his 
        Washington townhome;
         FDIC Chairman Ricki Tigert confirmation was 
        put on hold until her contacts with David Gergen and 
        Joel Klein could be reviewed concerning her recusal on 
        matters involving President Clinton;
         GSA Director Roger Johnson's issues were 
        tasked to ``identify issues,'' ``determine 
        congressional interest,'' and ``assemble binder with 
        summary and key documents,'' regarding the Justice 
        Department investigation of his use of Government 
        employees for his own personal business.
    Ms. Sherburne's task list included other tasks to be 
assigned to White House lawyers by topic rather than by the 
name of the individual Clinton administration official. They 
tasked lawyers to ``identify issues,'' ``determine 
congressional interest,'' and ``assemble binder with summary 
and key documents'' for:
         ``FEC Audit'' of irregularities with the 
        Clinton '92 campaign settlement of sexual harassment 
        charges against Clinton's close advisor and White House 
        Director of the Office of Administration, David 
        Watkins. The campaign also reportedly lost rental cars, 
        laptop computers, cellular telephones, and other 
        equipment that had to be accounted for;
         ``PIC surplus'' involved what the Clinton 
        White House could legally do with the $10 million 
        surplus left over from the President's Inaugural 
        Committee. President Clinton's advisor and PIC 
        official, Michael Berman, was looking into the 
        possibility of placing these PIC funds in a tax exempt 
        organization established to hire personnel that would 
        then volunteer to work in the White House offices as 
        volunteers;
         ``Mena Airport'' allegations of drug smuggling 
        to points south of Mexico;
         ``ADFA'' the Arkansas Development Finance 
        Authority created by President Clinton to provide a 
        finance authority in Arkansas which came under scrutiny 
        for political patronage;
         ``State Department (passport files)'' and 
        ``Archives (abuse of personnel system)'' concerned the 
        Justice Department's investigations of Clinton State 
        Department officials who pulled 160 files of former 
        Bush administration employees and leaked the contents 
        to a Washington Post reporter;
         ``SBA (improper electioneering)'' concerned 
        use of taxpayer dollars to distribute Democratic 
        campaign literature pamphlets on health care issues.
    Under the heading of ``Negative Associations'' the task 
list identifies: ``Jim Guy Tucker'' former Governor of Arkansas 
most recently convicted in Whitewater trial; ``David Hale 
(SBA)'' pled guilty to making fraudulent Small Business 
Administration loans to Susan McDougal under pressure from then 
Governor Clinton; ``Jim McDougal'' former partner of President 
Clinton and most recently convicted in Whitewater trial; and 
``Dan Lasater (bond deals, cocaine, Roger Clinton)'' was one of 
the underwriters for bonds, served prison term for social 
distribution of cocaine, provided President Clinton's brother, 
Roger Clinton, $8,000 to pay off a drug debt.
         ``Commodities'' task list heading involved 
        Mrs. Clinton's foray into the commodities market while 
        still in Arkansas where she made a $100,000 profit on a 
        $1,000 initial investment;
         ``Paula Jones'' tasks were to ``assemble 
        binder with summary and key documents'' concerning the 
        sexual harassment suit currently pending against 
        President Clinton by a former Arkansas State employee;
         ``Presidential immunity'' was assigned to 
        White House Associate Counsel Cliff Sloan. President 
        Clinton's personal lawyers have successfully claimed 
        Presidential immunity over the pending sexual 
        harassment lawsuit;
         ``Troopers'' task lists possible issue to be 
        ``job for silence'' as well as ``other'' issues to be 
        identified, congressional interest to be determined, 
        and ``assemble binder with summary and key documents.'' 
        Allegations made in public that then-Governor Clinton 
        promised Government positions to Arkansas State 
        troopers for their silence;
         ``White House operations (drugs, passes, 
        helicopters)'' was tasked to White House Associate 
        Counsels Cheryl Mills and Beth Nolan to review issues 
        relating to White House staff recent drug use prompting 
        the instigation of a special random drug testing 
        program, the failure of the White House to process its 
        staff to receive clearance for a permanent White House 
        passes, and David Watkins' ``helicopter'' trip to play 
        golf that led to his resignation;
         ``Residence renovations'' was assigned by 
        Sherburne to Associate White House Counsel Steve 
        Neuwirth. The issue was mentioned in Foster's suicide 
        note involving a dispute over the payment of moneys to 
        Kaki Hockersmith for renovations to the Clintons' 
        residence.
    Ms. Sherburne also includes several items on her task list 
with the notation, ``identify issue; determine congressional 
interest; assemble binder with summary and key documents.'' 
They are:
         ``Use by Governor Clinton of loans to further 
        legislative initiatives;''
         And under the heading of ``women,'' President 
        Clinton's personal lawyers David Kendall and Robert 
        Bennett are listed with ``**'' a notation that the 
        issue has yet to be assigned;

 G. President Clinton pushes the boundaries of his claims of executive 
       privilege against producing relevant documents to Congress

    Several of the efforts on the ``task list'' reflect efforts 
by the White House to conceal information from Congress and the 
American public. Ms. Sherburne noted the need to conduct 
research on (1) how far executive privilege can be extended to 
justify withholding materials, and (2) what the limitations are 
on the ``legislative power to investigate.'' Ms. Sherburne 
indicates in her memoranda that there is a need to research the 
``entitlement of Congress to HRC [Hillary Rodham Clinton]/WJC 
[William Jefferson Clinton] transcripts of depositions given to 
[Whitewater Independent Counsel] Fiske.
    President Clinton's attorneys have ventured far from his 
original statements on executive privilege. On March 8, 1994, 
President Clinton stated that it was ``hard for me to imagine a 
case in which I would invoke [executive privilege].'' \777\ 
President Clinton concluded his remarks about cooperating with 
the current ongoing investigations saying, ``[I]t's hard for me 
to imagine a circumstance in which that [an executive privilege 
claim] would be an appropriate thing for me to do.'' \778\ 
President Clinton personally claimed executive privilege over 
Sherburne's December 13, 1994 task list as well as 2,000 pages 
of documents detailing conversations that Travelgate and 
Whitewater attorneys had with President Clinton's lawyers about 
the course of these investigations.
---------------------------------------------------------------------------
    \777\ ``Remarks Announcing the Appointment of Lloyd Cutler as 
Special Counsel to the President and an Exchange with Reporters,'' 30 
Wkly Comp. Pres. Documents, 441, 467 (Mar. 8, 1994).
    \778\ Id.
---------------------------------------------------------------------------
    The hundreds of pages recorded by White House lawyers 
reveals a systematic program whereby the attorney for each 
witness testifying under oath before a congressional committee 
or before the Independent Counsel asks the White House to 
outline what questions were asked and what answers were 
provided. These debriefings provide a clear map of what the 
White House knew and who the White House told.
    Among the executive privilege documents are chronologies 
and reviews created with the aid of information provided in 
these debriefings. The President's staff was able to construct, 
from the debriefings of witnesses that went before each 
investigative body, a single cohesive review. The White House 
Counsel's Office thus operated as the compiler of all of the 
pieces of information gathered as a result of the myriad of 
investigations of the Clinton administration.

  H. The President has insisted that all of his Counsel's maintain an 
                 obstructionist position with Congress

    After 5 months of service, Abner Mikva stepped down from 
the bench at the U.S. Court of Appeals for the District of 
Columbia to become President Clinton's third White House 
Counsel on August 11, 1994. Mr. Mikva remained as Counsel to 
the President for less than 1 year, when he suddenly resigned 
to ``spend more time with his family.'' Mr. Mikva resigned 
shortly after delivering to this committee, a document 
production which had been withheld under a vague ``protective'' 
claim of executive privilege. After producing the documents, 
the Clinton administration asserted executive privilege had 
never been claimed. The production of these documents further 
defined the role of the President and his staff in the 
Travelgate matter and outlined actions taken by the White House 
to conceal their involvement to previous investigators.
    Former Vice Presidential Chief of Staff John Quinn replaced 
Mikva as the fourth Counsel to the President. Mr. Quinn resumed 
document production to the committee and ultimately had to 
claim executive privilege over the remaining subpoenaed 
documents in order to prevent their production to the 
committee. After it became clear that there was no valid 
privilege over the categories of documents called for, Mr. 
Quinn turned over most of the withheld documents to this 
committee rather than face a criminal contempt charge for 
failure to respond to a valid subpoena.

                               Conclusion

    The President committed, over 3 years ago, to full 
cooperation with investigations into the Travel Office matter. 
While the committee does not believe it has been able to fully 
disclose all of the facts in this case, a partial disclosure 
has implicated the President in a cover-up that was base and 
broad. The culture of secrecy in which President Clinton 
insists upon operating is destructive to both public confidence 
and to an open and efficient Government.
    When the President fails to comply fully with 
investigations mandated by Congress or ordered by senior 
Justice Department officials, the oversight role critical to 
our system of checks and balances is compromised. It is 
incumbent upon this committee to assert and to uphold its 
jurisdiction and prerogatives of the legislative branch.
    In its attempt to obfuscate wrongdoing in the Travel Office 
affair, President Clinton and high ranking members of his 
administration, including four successive White House Counsels, 
engaged in unprecedented abuses of executive power and 
executive privilege. President Clinton's executive privilege 
claim over documents relating to the firing of seven Travel 
Office employees, was in no way based on protecting national 
security interests, had no bearing on the deliberative process 
of the President, and had no relation to the constitutional 
duties of the executive branch. It was a frivolous use of the 
President's executive privilege.


                            A P P E N D I X

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                Supporting Documentation for the Record



                                
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