[House Report 106-1027]
[From the U.S. Government Publishing Office]
Union Calendar No. 595
106th Congress, 2d Session - - - - - - - - House Report 106-1027
JANET RENO'S STEWARDSHIP OF THE JUSTICE DEPARTMENT:
A FAILURE TO SERVE THE ENDS OF JUSTICE
__________
TENTH REPORT
by the
COMMITTEE ON GOVERNMENT REFORM
together with
MINORITY VIEWS
Volume 1 of 2
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
December 13, 2000.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
__________
U.S. GOVERNMENT PRINTING OFFICE
67-356 WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS III, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, District of
MARK E. SOUDER, Indiana Columbia
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
David A. Kass, Deputy Counsel and Parliamentarian
Kristi L. Remington, Senior Counsel
Jim Schumann, Counsel
Kimberly A. Reed, Counsel
Maria P. Tamburri, Assistant to the Chief Counsel
Robert A. Briggs, Chief Clerk
Philip Schiliro, Minority Staff Director
Philip S. Barnett, Miniority Chief Counsel
Kristin Amerling, Minority Deputy Chief Counsel
Paul Weinberger, Minority Counsel
LETTER OF TRANSMITTAL
House of Representatives,
Washington, DC, December 13, 2000.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: By direction of the Committee on
Government Reform, I submit herewith the committee's tenth
report to the 106th Congress.
Dan Burton,
Chairman.
C O N T E N T S
----------
Page
Findings of the Committee on Government Reform................... VII
I. The Attorney General's conflicted investigation..................1
A. Background on the Independent Counsel Act............. 3
B. A rocky start: early conflicts in the Justice
Department's campaign finance investigation.......... 9
C. Attorney General Reno changed her interpretation of
the Independent Counsel Act.......................... 14
D. Memoranda from FBI Louis J. Freeh and Task Force
Supervising Attorney Charles La Bella recommending
that an independent counsel be appointed............. 19
E. Department of Justice rebuttal memoranda.............. 44
F. Department of Justice's bad faith in its application
of the Independent Counsel Act....................... 54
G. The failure to appoint a special counsel for Vice
President Gore....................................... 59
II. The failures of the Justice Department investigation............63
A. The Justice Department failed to pursue the December
15, 1995, coffee tape................................ 63
B. The Justice Department has failed to question the
President and Vice President effectively............. 71
C. The Justice Department failed to pursue relevant
documents............................................ 74
D. The Justice Department failed to pursue key
individuals and entities............................. 84
E. The Justice Department failed to pursue the Kansas
conduit contribution scheme.......................... 107
F. The Justice Department failed to investigate leaks
harmful to the campaign fundraising investigation.... 116
III. The Justice Department's political interference with congressional
oversight......................................................123
A. Failure to comply with subpoenas for the Freeh and La
Bella memoranda...................................... 123
B. Failure to produce the Conrad memorandum.............. 143
C. The Justice Department's political gamesmanship....... 146
IV. The favorable treatment of the Attorney General's friends......154
A. The Justice Department's handling of the Soka Gakkai
matter............................................... 154
B. Robert Bratt.......................................... 181
Exhibits......................................................... 188
APPENDIXES
Appendix 1.--Correspondence between the committee and the Justice
Department..................................................... 638
Appendix 2.--Kansas Democratic party disclosure forms (receipts
and disbursements)............................................. 1862
VIEWS
Minority views of Hon. Henry A. Waxman, Hon. Tom Lantos, Hon.
Major R. Owens, Hon. Edolphus Towns, Hon. Paul E. Kanjorski,
Hon. Carolyn B. Maloney, Hon. Eleanor Holmes Norton, Hon. Chaka
Fattah, Hon. Elijah E. Cummings, Hon. Dennis J. Kucinich, Hon.
Rod R. Blagojevich, Hon. Danny K. Davis, Hon. John F. Tierney,
Hon. Jim Turner, Hon. Harold E. Ford, Jr., and Hon. Janice D.
Schakowsky..................................................... 2008
Exhibits......................................................... 2034
FINDINGS OF THE COMMITTEE ON GOVERNMENT REFORM
The Attorney General of the United States has exhibited a
critical lack of judgment in her stewardship of the campaign
fundraising investigation. Furthermore, the reputation of the
Justice Department has suffered greatly during her tenure.
Given the evidence compiled by the committee, it is hard to
escape the conclusion that the Attorney General has acted
politically to benefit the President, the Vice President, and
her own political party. Specifically:
The Attorney General had a conflict of interest in
the Justice Department investigation of possible criminal
wrongdoing involving the President and Vice President. Any
investigation of the campaign fundraising scandal required a
detailed examination of the actions of the President and Vice
President. The Justice Department is wholly unsuited to conduct
such an investigation, and the repeated failures of the
Department during the last 4 years proves that the Attorney
General cannot investigate her superiors.
When investigative matters arose that touched upon
the President, the Vice President, or the Democratic party, the
Attorney General abandoned her expressed belief that an
appearance of conflict was to be avoided by the Nation's chief
law enforcement official. On May 14, 1993, Attorney General
Reno testified before Congress. She stated: ``It is absolutely
essential for the public to have confidence in the system and
you cannot do that when there is a conflict or an appearance of
conflict in the person who is, in effect, the chief
prosecutor.'' This belief gave way to an inexplicable
acceptance of the very appearance of conflict she sought to
avoid when she retained supervision of the campaign finance
investigation of the President, the Vice President and her own
political party.
The decision to retain control of the investigation
of the President and the Vice President showed an unacceptable
indifference to an appearance of impropriety. The principal
beneficiaries of the campaign finance scandal of 1996 were
President Clinton and Vice President Gore. In insisting that
she retain control of the investigation of the President and
Vice President, Attorney General Reno has failed to exercise a
minimally acceptable standard of judgment required of the
custodian of Federal law enforcement. If her investigation of
campaign fundraising matters had indeed been thorough and
vigorous, and if she had exhibited good faith cooperation with
legitimate congressional oversight of her investigation, there
would be less cause for concern. However, the decision to
retain supervision of the investigation of the President, the
Vice President, senior administration officials and her
political party--juxtaposed with numerous missteps, failures,
preferential treatment of political appointees, rejection of
the advice of senior advisors, combined with the obvious bad
faith exhibited toward congressional oversight--does not
instill confidence in the Department of Justice.
The decision to retain control of the investigation
of her own political party showed an unacceptable indifference
to an appearance of impropriety. For much of her adult life,
the Attorney General has been an elected public official. She
has, throughout that time, been elected on the Democratic party
ticket. Although there has been an effort to describe the 1996
campaign finance scandal as a matter of ``everybody does it,''
it is worth noting that Campaign Financing Task Force
supervisor Charles La Bella devoted approximately 65 pages to
possible Democratic misconduct and approximately 2 pages to
possible Republican misconduct. The Attorney General's
insistence on maintaining supervision of the investigation of
her own political party again showed indifference to the
appearance of evenhanded application of justice, and a critical
lack of judgment. An example of this is the Justice Department
failure to investigate an apparently illegal scheme by the DNC
to use conduit contributors to funnel over a third of a million
dollars to the Kansas Democratic party. The Department
conducted a 3 year investigation of contributions to
Republicans in Kansas but failed even to consider an illegal--
and successful--effort by her own party to use straw donors for
political benefit.
The failure to conduct a thorough investigation
promoted an appearance of favoritism. This reflected poorly on
the judgment of the Attorney General, particularly given
recommendations made in 1997, 1998, and 2000, that someone else
should supervise the investigation. Charles La Bella made the
following point in his first recommendation for an independent
counsel: ``[i]f these allegations involved anyone other than
the President, Vice President, senior White House, or DNC and
Clinton/Gore '96 officials, an appropriate investigation would
have commenced months ago without hesitation.''
LThe following failures bolster the conclusion that the
Justice Department has not lived up to its obligation to
conduct a thorough investigation of the campaign fundraising
scandal, and that the country would have been better served if
an independent counsel or special counsel had been appointed to
handle the investigation:
The President was not asked a single
question about foreign money until 2000.
The President was not asked a single
question about James Riady until 2000.
The President was not asked a single
question about John Huang, Charlie Trie, Mark
Middleton, and the Presidential Legal Expense Trust
until 2000.
The President was not asked a single
question about his 5 minute meeting with Korean
national John K.H. Lee, which resulted in a $250,000
illegal political contribution, until 2000.
The President and Vice President were not
asked a single question about White House coffee
fundraising events until 2000.
The Vice President was not asked a single
question about the Hsi Lai Temple fundraiser until
2000.
The Vice President was not asked a single
question about Maria Hsia until 2000, after she had
been convicted in Federal court. To make matters worse,
the Justice Department failed to subpoena the White
House for records regarding Hsia.
The Vice President was not asked a single
question about John Huang or James Riady until the year
2000.
The Justice Department should have been
aware of evidence that, on December 15, 1995, the Vice
President expressed an interest in showing political
advertisements to James Riady, who lived in Jakarta,
Indonesia. Not only did the Justice Department fail to
obtain the original evidence for over 6 months, at
least one unidentified source within the Department
sought to discredit the possible evidence before it was
even reviewed.
The Vice President's former Director of
Political Affairs appears to have never been
interviewed by the Justice Department. This comes in
spite of the fact that she authored such communications
as the recently produced e-mail that discusses a
``coffee list'' and states: ``these are FR coffees
right?'' \1\
---------------------------------------------------------------------------
\1\ When the White House released this document on Sept. 22, 2000,
White House staff anonymously suggested that ``FR'' could stand for
``finance-related,'' not fundraiser. Other documents authored by the
same individual, however, show that her use of the abbreviation ``FR''
refers to fundraisers.
The Vice President was not asked about the
September 27, 1993, fundraiser with John Huang and
---------------------------------------------------------------------------
China Resources Chairman Shen Jueren until 2000.
At a very sensitive time in the Department's
investigation of Charlie Trie, it became clear that
Trie's former bookkeeper was destroying evidence.
Although the FBI wanted to move swiftly and execute a
search warrant, Justice Department lawyers refused to
approve such a warrant.
The Justice Department failed to subpoena
the White House for records regarding Ernest Green and
Mark Middleton until 2000.
To date, the Justice Department has failed to advance an
investigative rationale for these significant failures. It
appears that the President and Vice President received
preferential treatment at the expense of the campaign finance
investigation.
The Attorney General has taken an active step to
assist the Vice President during his election campaign. On
August 23, 2000, the Attorney General announced that she would
not appoint a special counsel to investigate Vice President
Gore: ``I have concluded that there is no reasonable
possibility that further investigation could develop evidence
that would support the filing of charges for making a willful
false statement [in the Hsi Lai Temple or White House coffee
investigation].'' The Attorney General further explained her
position in a committee interview on October 5, 2000: ``[t]he
Vice President defined what he meant by a fund-raiser. . . .
Based on his definition of what a fund-raiser was and what he
said, I would not be able to prove, based on that, that he
believed it to be a fund-raiser and testified falsely.''
Minutes later, the Attorney General reinforced this point: ``I
think the whole statement clearly reflects what the Vice
President understood a fund-raiser to be, and within his
definition, I think he made it clear that his statement was not
inaccurate.''
There can be no more stark example of why the Attorney
General should refrain from acting as investigator, judge and
jury in a matter involving the Vice President. There are many
suspects of criminal inquiry or criminal defendants around the
country who would be eager to accept an offer from the
government to be allowed to insert their definition of a
factual matter in place of a jury's determination of a factual
matter. The Attorney General has made an extraordinary
accommodation to the Vice President--she effectively allowed
him the opportunity to define a material element of the
investigation and then said not only that she believed him, but
that there was no possibility of developing evidence that would
cast doubt on his definition.
The Attorney General has gone to extraordinary
lengths to cover up the failures of the Justice Department.
Examples of bad faith negotiation by the Justice Department
regarding document requests are legion. While the Department
has argued that turning over documents would harm ongoing
investigations or chill internal communications, these
explanations have almost universally turned out to be pretexts
to cover up embarrassment. For example:
On December 10, 1999, the Department of
Justice announced that it would not comply with a
committee subpoena for FBI interview summaries of the
President and Harold Ickes. One month prior to this
notification, committee staff had been told that the
documents would be produced, without fail, on a
specific date. After relying on Department
representations, the committee was disappointed to
learn of the Department's new position. Not
surprisingly, the change of position came the week
before John Huang was scheduled to testify before the
committee. It must be noted that the hypocrisy of the
Department's position was underscored by the fact that
when Democrat Senate Committee Chairman Donald Riegle
requested FBI interview summaries in 1994, 84 such
documents were produced by the Attorney General. It
appears that a special standard was developed for the
campaign finance investigation--one made more
understandable when the interviews of the President
were finally produced and it became clear that the
Justice Department had neglected to ask a single
question about foreign money or James Riady.
The hypocrisy of the Department's refusal was also
underscored by the assertion that ``[t]he Department
has observed what appears to be an increasing incidence
of public release of [FBI interviews].'' Chairman
Riegle released 84 FBI summaries in 1994. The Committee
on Government Reform, however, had released a grand
total of one FBI summary in the previous 3 years.
The Freeh and La Bella memoranda, and the
transcripts of the Justice Department interviews with
the President and Vice President, show an investigation
derailed. Thus, the committee believed it was prudent
to come to an understanding of what documents had been
subpoenaed by the Justice Department. This too proved
informative. For example, by obtaining subpoenas issued
to the White House, the committee now knows that the
Justice Department did not even ask the White House for
information about former Presidential advisor Mark
Middleton (who invoked his fifth amendment rights
before this committee) or about Vice Presidential
friend and fundraiser Maria Hsia. Unfortunately,
however, the Justice Department and DNC have gone to
extraordinary lengths to keep this committee from
obtaining the subpoena issued to the DNC. The DNC and
the Justice Department have worked hand-in-glove to
keep the committee from learning whether the Department
was thorough in making its document requests to the
DNC. As of October 10, 2000, the DNC continues to
refuse to comply with a congressional subpoena for the
document requests issued to it by the Justice
Department.
The Attorney General and her subordinates have made
false statements to obtain tactical advantage in different
negotiations. At various points in the committee's
investigation, the Justice Department relied upon obfuscation.
The Attorney General and her staff ignored truth when a
falsehood made one of their arguments stronger.
The Attorney General continued to rely on
Lee Radek's advice regarding campaign finance matters
even after he was rebuked within the Justice Department
for attempting to mislead his superiors about important
elements of the investigation.
After a Federal court ruling made it
permissible for the Justice Department to share most of
the Freeh and La Bella memoranda with Congress,
committee staff requested the opportunity to review the
memoranda and were rebuffed. Nevertheless, the Attorney
General stated in a letter, ``[w]e advised the
Committee staff last fall that the memorandum with
reduced redactions was available for review.'' The
Attorney General's statement was patently false. This
statement is typical of the deceptive, self-serving
statements made by the Justice Department throughout
the debate on the Freeh and La Bella memoranda.
After the committee subpoenaed the Freeh and
La Bella memoranda, the Attorney General and Director
Freeh signed a statement that the committee's subpoena
was ``unprecedented.'' This allowed the media and other
commentators to paint the committee in an unfavorable
light. The committee pointed out that this statement
was factually inaccurate, and the FBI Director withdrew
his statement. The Attorney General, however, persisted
in claiming that the subpoena was unprecedented until
the following year when one of her subordinates finally
admitted, in writing, that the subpoena was not
unprecedented. By then, of course, the Attorney General
had obtained the desired political benefit, and there
were no negative repercussions. While this admission
would have greatly harmed the Justice Department's
political position in August 1998 during the contempt
debate, by March 1999 few in the public cared.
Justice Department officials believed that a key
supervisor of the campaign finance investigation thought that
the Attorney General's political future hinged on her decisions
regarding her political superiors. The Attorney General's
decision to retain control of this investigation while there
was such a cloud over its stewardship shows a critical failure
of judgment. William Esposito, the former Deputy Director of
the FBI, testified before the committee that in November 1996,
Lee Radek, the head of the Public Integrity Section, told him
that he ``felt a lot of pressure,'' and that the Attorney
General's job might ``hang in the balance'' depending on his
decisions in the campaign finance investigation. This
testimony, which was corroborated by another senior FBI
official, Neil Gallagher, reinforced the committee's long-held
view that the Attorney General had a political conflict of
interest in trying to investigate the fundraising of the
President, the Vice President and the Democratic party.
The Justice Department's political support for the
President and Vice President was evident when its officials
publicly undermined prosecutors who recommended independent
investigations of the President, Vice President and Democratic
party. The Attorney General's failure to solve this problem by
appointing an independent counsel to conduct the investigation
was a significant failure of judgment. Justice Department
officials showed that they were acting in a political manner
when they publicly disparaged their colleagues on a number of
occasions. The Attorney General tolerated this conduct by
keeping the investigation under the purview of these same
individuals.
When Robert Conrad recommended that a
special counsel be appointed to investigate Vice
President Gore, the New York Times reported that
``Justice Department officials disparaged his
conclusions.'' The newspaper reported: ``[o]ne Justice
Department official said that Mr. Conrad was alone in
his recommendation. `No other prosecutor in this matter
thought that there should be a need for a special
counsel,' said the official, who spoke on the condition
of anonymity.'' This was such an egregious lie that
even the Attorney General could not allow it to go
unremarked. The same day, she stated that Conrad's
recommendation was supported by other prosecutors.
When Director Freeh recommended that an
independent counsel be appointed to look into
fundraising matters, he was savaged by both Justice
Department and White House officials. For example, the
New York Times reported the following in 1997:
``[a]lthough Mr. Clinton had pointedly avoided
answering questions about Mr. Freeh's disagreement with
Ms. Reno's decision, White House aides were not so
circumspect. They privately ripped into Mr. Freeh--once
lauded by the President as one of his best appointees--
and called him a disloyal subordinate.''
When Charles La Bella's recommendation for
an independent counsel was being openly discussed in
the media by the Attorney General's advisors, not only
was La Bella's legal acumen attacked. One Justice
Department official commented that some people were
wondering whether La Bella had a ``deep-seated
psychiatric problem,'' or whether he was unstable. One
can hardly imagine a clearer message to refrain from
making honest recommendations than having a government
official question your sanity.
The committee has been obstructed by the Justice
Department's failure to provide guidance regarding subjects of
investigation that would hamper ongoing criminal
investigations. While investigating the illegal fundraising
activities of John Huang, Charlie Trie and Johnny Chung, the
committee respected requests by the Justice Department not to
ask questions about certain individuals or subjects. For
example, on November 9, 1999, Chairman Burton informed Attorney
General Reno: ``I will respect the Department's wishes, and
avoid questioning Mr. Trie about these two individuals, as long
as they are under active investigation. I will also instruct
other members of the Committee to avoid questioning Mr. Trie
about those two individuals.'' Many months later, the committee
sought guidance as to whether it is permissible to go back and
revisit the unresolved subjects. The Justice Department has
simply refused to cooperate and respond to numerous committee
requests on these matters.
The Justice Department's failure to be vigorous in
pursuit of evidence indicates a lack of judgment and a
proclivity to take the side of the White House.
The Justice Department appears to be more
interested in defending the White House in the e-mail
matter than investigating it. The Justice Department
appears to be engaging in a vigorous defense of the
White House in the e-mail matter, rather than
investigating possible wrongdoing by the White House.
Although the Justice Department refuses to disclose
staffing levels of the e-mail investigation, it has
become known that the one part time lawyer handling the
e-mail investigation for the Department has recently
left government employment. This does not indicate an
aggressive allocation of resources. (For a detailed
discussion of this issue, please refer to the recently-
released committee report ``The Failure to Produce
White House E-Mails: Threats, Obstruction, and
Unanswered Questions.'')
Justice Department lawyers have taken
affirmative steps to mislead the public regarding key
matters that relate to document discovery in the
campaign finance investigation. This undermines
confidence in the Justice Department and shows an
extreme lack of judgment on the part of the Attorney
General. Department of Justice lawyers are taking
active steps to mislead a Federal court and the public
about essential elements of White House document
production. For example, Department lawyers stated that
the ``technical failure [to produce the e-mails] is a
long-standing matter of public record that has been
confirmed by the White House itself.'' This, of course
fails to disclose that the White House did not tell the
Justice Department investigators and Congress that it
had not fully complied with subpoenas. (For a detailed
discussion of this issue, please refer to the recently-
released committee report ``The Failure to Produce
White House E-Mails: Threats, Obstruction, and
Unanswered Questions.'')
The failure to investigate whether there has
been an obstruction of congressional investigations of
the campaign finance scandal indicates that the Justice
Department is giving the White House preferential
treatment. In an October 5, 2000, interview with the
committee, Attorney General Reno made it clear that she
would not take proactive steps to determine whether the
White House had obstructed congressional investigations
by failing to take steps to produce subpoenaed e-mail
records. (For a detailed discussion of this issue,
please refer to the recently-released committee report
``The Failure to Produce White House E-Mails: Threats,
Obstruction, and Unanswered Questions.'')
For reasons unexplained to date, the Attorney
General has been lenient in her treatment of major foreign
benefactors of the President, Vice President and DNC. There has
been a very lengthy delay in Justice Department efforts to
indict major DNC benefactors James Riady, Ji Shengde, Liu Chao-
ying and Tomy Winata. There is no acceptable explanation for
the lack of vigor in the investigations of these individuals.
Leaks from Justice Department personnel have harmed
the campaign finance investigation. The Attorney General has
exhibited poor judgment in leaving the investigation in the
hands of people who have demonstrated their interest in harming
the investigation. The Justice Department's campaign
fundraising investigation has been plagued by leaks. These
leaks, which were often made at strategic times, greatly harmed
the Justice Department's investigation, and strongly suggested
that certain officials in the Justice Department did not want
the investigation to succeed. These leaks provide a clear
example of why the Attorney General should have appointed an
independent counsel--to remove the investigation from
politically biased officials at the Justice Department.
While acting as the primary Main Justice supervisor
of the campaign finance investigation, Deputy Assistant
Attorney General Alan Gershel took time away from his
responsibilities to be the lead attorney in the trial of
Charles Bakaly. It is difficult to determine which is a greater
failure of judgment--Gershel agreeing to take on this
assignment, or the Attorney General and the head of the
Criminal Division allowing him to take on the assignment.
Charles Bakaly was the spokesman of Independent Counsel Kenneth
Starr during the Lewinsky investigation. For Gershel or the
Attorney General to have decided that he, and only he, out of
hundreds of lawyers qualified to work on the case, was
essential to the Bakaly prosecution, shows an astounding lack
of judgment. At a time when it was becoming clear that the
Justice Department had failed to ask the President and Vice
President questions about significant campaign finance
matters--and a whole new element of the investigation was
opening up with the disclosure that the White House had failed
to produce e-mail records to the Justice Department--Gershel
decided to take on additional responsibility. Perhaps more
important, he was oblivious to concerns that as the supervisor
of an investigation of the President and his election tactics,
he might look less than impartial if he prioritized his time so
that he was a lead prosecutor in a case urged by the President,
and designed to discredit Independent Counsel Starr.
Union Calendar No. 595
106th Congress Rept. 106-1027
HOUSE OF REPRESENTATIVES
2d Session Vol. 1 of 2
======================================================================
JANET RENO'S STEWARDSHIP OF THE JUSTICE DEPARTMENT: A FAILURE TO SERVE
THE ENDS OF JUSTICE
_______
December 13, 2000.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Burton, from the Committee on Government Reform submitted the
following
TENTH REPORT
On October 19, 2000, the Committee on Government Reform
approved and adopted a report entitled, ``Janet Reno's
Stewardship of the Justice Department: A Failure to Serve the
Ends of Justice.'' The chairman was directed to transmit a copy
to the Speaker of the House.
I. The Attorney General's Conflicted Investigation
Since the inception of the Department of Justice's Campaign
Financing Task Force, many people have believed that a conflict
or perceived conflict of interest existed for the Department of
Justice to investigate the fundraising issues surrounding the
Democratic party and the reelection of President Clinton and
Vice President Gore. This was because Attorney General Reno,
ostensibly the final decisionmaker in any Justice Department
investigation, was appointed by the President and answered only
to him. The Independent Counsel Act\1\ (``the Act'') was
enacted for just such situations. In order to avoid a conflict
or an appearance of a conflict when the Attorney General would
have to investigate the administration of which she is a part,
she was able to request the appointment of an independent
counsel. However, Attorney General Reno disregarded the Act and
insisted that she was able to conduct the campaign finance
investigation without conflict. This assertion was unfortunate
considering she had an inherent conflict in any investigation
involving the President, Vice President, and Democratic
National Committee as central figures. Her actions troubled the
committee and were the committee's impetus for conducting
oversight of the Department of Justice in this matter. Although
the Independent Counsel Act expired, and Reno would not have
been able to request the appointment of an independent counsel
in this matter after June 30, 1999, the committee believed it
was important to investigate because the Attorney General's
handling of the campaign finance investigation was tantamount
to obstructing her own investigation.
---------------------------------------------------------------------------
\1\ 28 U.S.C. Sec. Sec. 591-599 (expired 1999).
---------------------------------------------------------------------------
What the committee eventually came to discover was
alarming. Through various memoranda eventually produced to the
committee, it was learned that Reno engaged in a creative
analysis of the law in what appeared to be an effort to avoid
the implementation of the Independent Counsel Act. FBI Director
Louis J. Freeh and later, Task Force Supervising Attorney
Charles La Bella, took the position that under both the
discretionary and mandatory provisions of the independent
counsel statute, the Attorney General should request the
appointment of an independent counsel for the campaign finance
investigation. However, the Attorney General and her senior
advisers disagreed with the conclusions reached by Freeh and La
Bella. After each preliminary investigation of senior level
White House officials, including the President and Vice
President, opened by the Public Integrity Section (PIS), the
Attorney General determined that no independent counsel was
warranted. There are dozens of memoranda among senior level
Justice Department officials discussing whether an independent
counsel should be appointed to investigate campaign finance
matters. The Justice officials, in their memoranda, spend
hundreds of pages in an attempt to explain away the need for an
independent counsel. The committee was shocked to find that the
Chief of the Public Integrity Section, who was in charge of the
application of the Independent Counsel Act, frequently
misrepresented the facts and the law in memoranda for the
Attorney General. In retrospect, had an independent counsel
been appointed, thousands of hours could have been spent
investigating criminal and possible criminal conduct, rather
than fighting the recommendations of those that believed an
independent counsel was necessary.
The Attorney General was able to avoid the appointment of
an independent counsel through a disregard of the law and a
narrow view of the evidence. She did this by refusing to
consider all of the evidence, taken as a whole, to determine
whether there was sufficient information to appoint an
independent counsel. Instead, she would examine individual
pieces of information, as if in a vacuum, and disregard the
fact that nearly all of the allegations relating to campaign
finance violations led back to the overwhelming need for money
created by the President and Vice President themselves.
To make the appointment of an independent counsel more
unlikely, the Task Force was not able to seek out information
relating to covered persons under the Act. It seems that they
had to hope that specific information from a credible source
would simply appear. If this were to happen, the Department
would then be able to initiate a preliminary investigation.\2\
Ultimately, Attorney General Janet Reno chose to ignore the
facts, the political conflicts, and the trust placed in her by
the American people, by refusing to appoint an independent
counsel for the campaign finance matter.\3\
---------------------------------------------------------------------------
\2\ In nearly all of the preliminary investigations conducted by
the Department of Justice, the allegations investigated came from an
outside source. The press first reported on the President and Vice
President's fundraising phone calls from the White House. The Senate
Governmental Affairs Committee brought the issue of Ickes' alleged
perjury to the Task Force's attention. Common Cause first brought the
media fund allegations to the Department.
\3\ The Independent Counsel Act expired June 30, 1999. 28 U.S.C.
Sec. 599. However, soon after the expiration of the Act, the Department
of Justice enacted regulations allowing the Attorney General to appoint
a special counsel, who would be authorized to investigate and prosecute
matters when the Attorney General concludes that extraordinary
circumstances exist such that the public interest would be served by
removing a large degree of responsibility for a matter from the
Department of Justice. 28 C.F.R. Sec. 600 et. seq. (1999).
---------------------------------------------------------------------------
On June 30, 1999, the Attorney General and many senior
level political appointees at the Justice Department could
breathe a collective sigh of relief. On that day, the
Independent Counsel Act expired.\4\ After holding hearings,
Congress decided not to reauthorize the Act.\5\ Therefore, the
Department of Justice could no longer be called upon to
implement the Act in the campaign finance investigation. After
the Act expired, the Attorney General assured Congress and the
public that the Department had instituted regulations allowing
for a ``special counsel.'' A special counsel was supposed to be
similar to an independent counsel, but without the statutory
authority or independence. It came as no surprise that when
Reno's new Supervising Attorney, Robert Conrad, determined that
a special counsel should be appointed to investigate Vice
President Gore, Reno declined.
---------------------------------------------------------------------------
\4\ 28 U.S.C. Sec. 599 (1994).
\5\ See generally hearing on the ``Reauthorization of the
Independent Counsel Statute,'' before the subcommittee on Commercial
and Administrative Law of the House Committee on the Judiciary, 106th
Cong. (1999); hearings on the ``Independent Counsel Act,'' before the
Senate Committee on Governmental Affairs, 106th Cong. (1999).
---------------------------------------------------------------------------
A. Background on the Independent Counsel Act
The Independent Counsel Act allowed the Attorney General,
in certain situations, to remove an investigation from the
Department of Justice, and place it in the hands of a neutral
party who was empowered to investigate and prosecute Federal
crimes.\6\ That neutral party was the independent counsel. The
Office of Independent Counsel was entirely separate and
independent from Main Justice.\7\ What made the independent
counsel truly unique was that it had all of the power and
authority of the Department of Justice, but did not report to
the Attorney General or President.\8\ This was considered to be
the best manner in which to assure the public that a truly non-
partisan investigation, free from undue influence, would be
conducted.
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\6\ Because of the authority it conveyed upon an independent
entity, appointed by a three judge panel, many people charged that the
Independent Counsel Act was unconstitutional.
\7\ 28 U.S.C. Sec. 594(i).
\8\ 28 U.S.C. Sec. 594(a).
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1. Legislative History of the Act
The independent counsel statute was conceived in the
aftermath of the Watergate investigation. As a result of the
experiences of Watergate, Congress came to believe that the
Attorney General and political appointees at the Department of
Justice were not always able to conduct an impartial
investigation when Presidential and party politics were
involved. For instance, during the Senate Select Committee on
Presidential Campaign Activities' (Watergate Committee)
investigation, the committee uncovered evidence of impropriety
on the part of the Department of Justice.\9\ In particular, the
Watergate Committee concluded that the Chief of the
Department's Criminal Division, Henry Peterson, acted as a
conduit for information from the grand jury to the Counsel to
the President and the President himself.\10\ In addition,
Peterson gave the President tactical advice regarding the
manner in which the White House should respond to the Watergate
investigation.\11\ The committee also determined that Peterson
``attempted to insure that the Department of Justice
investigation of Watergate `was narrowed down' to avoid
investigating the President.'' \12\ After uncovering this
troubling conduct, at the completion of its investigation the
Watergate Committee recommended the establishment of a
permanent, independent prosecutor to handle ``criminal cases in
which there is a real or apparent conflict of interest in the
executive branch.'' \13\ In so doing, Congress wanted to ensure
that nothing similar could happen in the future.
---------------------------------------------------------------------------
\9\ CRS Rept. No. 87-192A, ``Legislative History and Purposes of
Enactment of the Independent Counsel Provisions of the Ethics in
Government Act of 1978,'' Mar. 4, 1987, at 2.
\10\ Id.
\11\ Id.
\12\ Id. (citing ``Final Report of the Senate Select Committee on
Presidential Campaign Activities,'' S. Rept. No. 93-981, at 80-81
(1974)).
\13\ Id. (citing ``Final Report of the Senate Select Committee on
Presidential Campaign Activities,'' S. Rept. No. 93-981, at 96 (1974)).
---------------------------------------------------------------------------
Between 1974 and the Act's passage in 1978, both the Senate
and House held numerous hearings on the various bills proposing
an independent prosecutor. The first Senate hearings focused on
the political and personal conflicts of interest in the
Attorney General investigating the President or high-level
administration officials. Whitney North Seymour, Jr., who was
later appointed as an independent counsel,\14\ testified in
1974, that, ``[l]oyalty to the political interests of the
administration may often require disloyalty to the goal of
impartial justice.'' \15\ Seymour illustrated the point that
the Office of Attorney General is a political one, and that the
Attorney General's loyalty often lies with the President who
appointed him. Therefore it would be presumed that the Attorney
General would want to shield the administration. Similarly,
Watergate Special Prosecutor Archibald Cox testified regarding
his belief in the need for independent counsel legislation. He
stated, ``[t]he pressures, the tensions of divided loyalty are
too much for any man, and as honorable and conscientious as any
individual might be, the public could never feel entirely easy
about the vigor and thoroughness with which the investigation
was pursued. Some outside person is absolutely essential.''
\16\ Cox recognized the importance of the public's confidence
in an investigation of a political figure. Likewise, the theory
of those advocating the legislation was that if someone
independent were to conduct the investigation, the public's
concerns would be allayed.
---------------------------------------------------------------------------
\14\ Whitney North Seymour, Jr. was appointed on May 29, 1986, to
investigate former aide to President Reagan, Michael Deaver. The
allegations involved post-employment conflict of interest laws relating
to Deaver's representation of certain foreign clients before the White
House after leaving government employment.
\15\ ``Removing Politics from the Administration of Justice,''
hearings on S. 2803 and S. 2987 before the Subcommittee on Separation
of Powers of the Senate Committee on the Judiciary, 93d Cong. 216
(1974).
\16\ Id. at 200.
---------------------------------------------------------------------------
In its reports on the independent counsel legislation,
Congress echoed the themes of conflicts of interest and public
confidence in investigations. The following rationales for
passage of the Act were highlighted:
The Department of Justice has difficulty
investigating alleged criminal activity by high-level
government officials.
It is too much to ask for any person that he
investigate his superior.
It is a basic tenet of our legal system that
a lawyer cannot act in a situation where he has a
conflict of interest or the appearance thereof. . . .
The Attorney General and his principal assistants are
appointees of the President and members of an elected
administration. It is a conflict of interest for them
to investigate their own campaign or, thereafter, any
allegations of criminal wrongdoing by high-level
officials of the executive branch. The appearance of
conflict is as dangerous to public confidence in the
administration of justice as true conflict itself.
Having men of integrity operate in the face of a
conflict is an insufficient protection for a system of
justice.\17\
---------------------------------------------------------------------------
\17\ S. Rept. No. 95-170 at 5-6 (1977).
Although there was a general consensus of why there was a
need for some type of independent prosecutor, at first there
was not agreement on how the entity should be structured. One
of the first bills proposed the establishment of an
``independent Department of Justice,'' or some other permanent
mechanism for appointing special prosecutors, rather than
relying on the Attorney General to make a request in each
instance.\18\ The Senate's reasoning behind such a proposal was
that ``[i]t is not sufficient to rely on the President or the
Attorney General to appoint a temporary special prosecutor the
next time the Attorney General or the President has a conflict
of interest or the appearance thereof. It is not at all obvious
that such an appointment will occur.'' \19\ Attorney General
Janet Reno was met with that same criticism for her refusal to
appoint an independent counsel in the campaign finance matter.
However, under the language of the Act as passed, the Attorney
General had the prerogative on whether or not to appoint an
independent counsel.
---------------------------------------------------------------------------
\18\ ``Legislative History and Purposes of Enactment of the
Independent Counsel (Special Prosecutor) Provisions of the Ethics in
Government Act of 1978,'' CRS Rept. No. 87-192A at 3, Mar. 4, 1987
(citing ``Removing Politics from the Administration of Justice,''
hearings on S. 2803 and S. 2978 before the Subcommittee on Separation
of Powers of the Senate Committee on the Judiciary, 93d Cong. (1974)).
\19\ Id. at 9 (citing S. Rept. No. 94-823, at 5).
---------------------------------------------------------------------------
2. Language of the Act
The Independent Counsel Act was not passed until 1978,
approximately 4 years after the Congress first began looking
into the concept.\20\ The proposed purpose of the Act was ``to
provide a mechanism to avoid the inherent or structural
conflicts of interest, or the appearances of conflicts or of
'conflicting loyalties,' which could arise where the Attorney
General or the President must supervise or conduct criminal
prosecutions of themselves, or of high level officials or
colleagues in the President's Administration.'' \21\ In order
to do so, certain individuals were automatically covered by the
Act:
---------------------------------------------------------------------------
\20\ The Independent Counsel Act was passed as Title VI of the
Ethics in Government Act of 1978, Public Law No. 95-521, as amended and
reauthorized by Public Law 97-409, Public Law 100-191, and Public Law
103-270 (codified at 28 U.S.C. Sec. Sec. 591-599 (1994)) (no longer in
effect June 30, 1999). The Act as first passed referred to a ``special
prosecutor.'' Id.
\21\ ``Independent Counsel Provisions: An Overview of the Operation
of the Law,'' CRS Rept. No. 98-283, at 3 (Mar. 20, 1998).
---------------------------------------------------------------------------
the President and Vice President;
Cabinet level officials;
an individual working in the Executive
Office of the President and compensated at a rate
equivalent to SES II;
any Assistant Attorney General, or DOJ
employee compensated at or above SES III;
the Director and Deputy Director of the CIA,
and the Commissioner of the IRS;
any person who held a position listed in
(1)-(5) for 1 year after the person leaves office;
the chairman and the treasurer of the
campaign committee seeking the election or reelection
of the President, and any officer of that committee
exercising authority at the national level, during the
incumbency of the President.\22\
---------------------------------------------------------------------------
\22\ 28 U.S.C. Sec. 591(b).
Congress also realized that situations would arise where
investigation by the Attorney General or Department of Justice
officials of an individual not identified in the statute would
create some type of conflict. Therefore, the Attorney General
was permitted to appoint an independent counsel for any person
if he determined that an investigation by him or other
Department of Justice officials might have resulted in a
``personal, financial, or political conflict of interest.''
\23\ This ``catch-all'' conflicts provision was not added to
the Act until 1982, when the Act was reauthorized.\24\ A
similar provision had been considered in 1977, but had been
dropped prior to the enactment of the Independent Counsel Act.
Although it did not remain in the final legislation, the House
report noted:
---------------------------------------------------------------------------
\23\ 28 U.S.C. Sec. 591(c)(1).
\24\ Public Law No. 97-409.
The mechanism recommended by the committee is triggered
by a conflict of interest. That conflict is defined to
occur in two situations. The first situation arises
when specified high-level executive branch officials
are accused of committing specified offenses. . . . The
second situation arises when an investigation or
prosecution directly and substantially affects the
political interests of the President or Attorney
General.\25\
---------------------------------------------------------------------------
\25\ ``Legislative History and Purposes of Enactment of the
Independent Counsel (Special Prosecutor) Provisions of the Ethics in
Government Act of 1978,'' CRS Rept. No. 87-192A, at 17 (Mar. 4, 1987)
(citing H. Rept. No. 95-1307, at 4-5 (1978)) (emphasis added).
The original report language demonstrates that there surely
would be a conflict were the Attorney General to investigate a
matter relevant to the political interests of the President and
their political party. During the 1982 reauthorization,
Congress determined that the ``catch-all'' provision was needed
in the Act because there were situations where serious
conflicts of interest could arise that were not covered by the
mandatory provision. The 1982 Senate report explained, ``[t]he
Committee recognizes that there may be instances when
investigations by the Attorney General of persons not covered
by the Act may create an actual or apparent conflict of
interest.'' \26\ At the time of consideration, Congress clearly
understood that perceived conflicts could be just as harmful to
the public's trust in a Department of Justice investigation as
actual conflicts.\27\
---------------------------------------------------------------------------
\26\ Id. at 17-18 (citing S. Rept. No. 97-469, at 9 (1981)
(emphasis added).
\27\ Attorney General Reno has recently interpreted the Act so as
to exclude perceived conflicts. See letter from Janet Reno, Attorney
General, U.S. Department of Justice, to Orrin G. Hatch, chairman,
Senate Judiciary Committee, (Apr. 14, 1997).
---------------------------------------------------------------------------
As a consequence of the amendments in 1982, the statute
could be triggered in one of two ways. The mandatory triggering
occurred when the Attorney General received information
alleging a violation of Federal law by a covered official.
Under the discretionary provision, the Attorney General could
determine that some other individual posed a conflict for him
or the Department. Thereafter, there were several steps the
Attorney General would take to determine whether an independent
counsel was necessary under the Act. The first step was the
threshold inquiry, in which the Attorney General examined the
sufficiency of the allegations presented to determine whether
there were grounds to investigate. In determining the
sufficiency of the allegations that a covered individual
violated a Federal law the Attorney General could only consider
the ``degree of specificity of the information'' and the
``credibility of the source of the information.'' \28\ The
Attorney General would have 30 days in which to make this
determination.\29\ If, within the 30 days, he decided that the
information received was specific and the source was credible,
or, if he were unable to make any determination within that
time, the investigation would move on to the ``preliminary
investigation'' stage.\30\ The Act required that the
preliminary investigation be completed within 90 days.\31\ In
addition, the Attorney General was able to request that the
Special Division grant a one time extension of 60 days in which
to complete the preliminary investigation.\32\ During this
phase, the Attorney General, after reviewing the matter, was to
determine whether there were ``reasonable grounds to believe
that further investigation is warranted.'' \33\
---------------------------------------------------------------------------
\28\ 28 U.S.C. Sec. 591(d)(1).
\29\ 28 U.S.C. Sec. 591(d)(2).
\30\ 28 U.S.C. Sec. 591 (a), (c).
\31\ 28 U.S.C. Sec. 592(a)(1).
\32\ 28 U.S.C. Sec. 592(a)(3).
\33\ 28 U.S.C. Sec. 592(a)(1).
---------------------------------------------------------------------------
The Act was drafted so that the Department of Justice would
have limited authority to conduct an investigation during the
threshold inquiry and preliminary investigation stages;
therefore the parameters of those inquiries were purposely
narrow. Similarly, there was no authority to ``convene grand
juries, plea bargain, grant immunity, or issue subpoenas''
during the preliminary investigation.\34\ The statute
intentionally limited the power of the Attorney General during
this period in order to prevent his extensive participation in
substantive decision making. Again, this is to avoid potential
conflicts of interest. If, at the completion of the preliminary
inquiry, the Attorney General determined that no further
investigation were warranted, he was required to notify the
Special Division of the Court of Appeals \35\ that handled
independent counsel matters.\36\ As a check on his discretion,
the Attorney General was not permitted to make a determination
that ``no further investigation was warranted'' based on a
finding that the official lacked the state of mind required for
the violation, unless there was ``clear and convincing
evidence.'' \37\ Congress believed that the Attorney General
would rarely base a determination on state of mind, noting:
``Congress believes that the Attorney General should rarely
close a matter under the independent counsel law based upon
finding a lack of criminal intent, due to the subjective
judgments required and the limited role accorded the Attorney
General in the independent counsel process.''\38\
---------------------------------------------------------------------------
\34\ 28 U.S.C. Sec. 592(a)(2)(A).
\35\ The Special Division is a division of the U.S. Court of
Appeals for the District of Columbia Circuit. The court consists of
three circuit court judges or justices appointed by the Chief Justice
of the United States. No two judges may be named to the Special
Division from the same court at the same time, and one of the judges
must be from the District of Columbia Circuit. The judges are appointed
for 2 year terms, with any vacancy being filled only for the remainder
of the 2-year period. 28 U.S.C. Sec. 49.
\36\ 28 U.S.C. Sec. 592(b).
\37\ 28 U.S.C. Sec. 592(a)(2)(B)(ii).
\38\ ``Independent Counsel Provisions: An Overview of the Operation
of the Law,'' CRS Rept. No. 98-283, at FN 22 (Mar. 20, 1998) (citing H.
Rept. No. 103-511, at 11 (1994)).
---------------------------------------------------------------------------
In considering whether further investigation was warranted,
the Attorney General was required to take into account the
written or other established policies of the Department of
Justice relating to the conduct and prosecution of criminal
investigations.\39\ Had the Attorney General found reasonable
grounds to believe that further investigation was warranted, or
after the specified period no determination was made, the
Attorney General was required to apply to the Special Division
for the appointment of an independent counsel.\40\ The Special
Division then was responsible for appointing an independent
counsel and defining his prosecutorial jurisdiction.\41\
---------------------------------------------------------------------------
\39\ 28 U.S.C. Sec. 592(c)(1)(B).
\40\ 28 U.S.C. Sec. 592(c).
\41\ 28 U.S.C. Sec. 593(b).
---------------------------------------------------------------------------
During the campaign finance investigation Attorney General
Reno initiated several preliminary investigations, including
two related to President Clinton and three related to Vice
President Gore.\42\ Independent of those investigations, FBI
Director Louis Freeh and Task Force Supervising Attorney
Charles La Bella recommended that the Attorney General request
the appointment of an independent counsel based on their
opinion that both the mandatory and discretionary provisions of
the Act had been triggered. Miss Reno declined to request the
appointment of an independent counsel in each instance.\43\
---------------------------------------------------------------------------
\42\ Attorney General Reno initiated a preliminary investigation of
President Clinton to examine whether he violated 18 U.S.C. section 607.
The investigation related to alleged fundraising telephone calls made
by President Clinton from the White House. The Attorney General also
initiated a preliminary investigation of President Clinton to examine
the Common Cause allegations of violations of election laws. Vice
President Gore was subject to the same preliminary investigation. Two
additional preliminary investigations were opened on Vice President
Gore relating to fundraising telephone calls he made from his White
House office. The first investigation was an inquiry into whether Gore
violated section 607. The second investigation looked into whether Gore
made false statements to investigators during the initial preliminary
inquiry.
\43\ In re William Jefferson Clinton, notification to the court
pursuant to 28 U.S.C. Sec. 592(b) of results of preliminary
investigation (Special Div. DC Cir. 1997); in re William Jefferson
Clinton, notification to the court pursuant to 28 U.S.C. Sec. 592(b) of
results of preliminary investigation (Special Div. DC Cir. 1998); in re
Albert Gore, Jr., notification to the court pursuant to 28 U.S.C.
Sec. 592(b) of results of preliminary investigation (Special Div. DC
Cir. 1997); in re Albert Gore, Jr., notification to the court pursuant
to 28 U.S.C. Sec. 592(b) of results of preliminary investigation
(Special Div. DC Cir. 1998); in re Albert Gore, Jr., notification to
the court pursuant to 28 U.S.C. Sec. 592(b) of results of preliminary
investigation (Special Div. DC Cir. 1998).
---------------------------------------------------------------------------
B. A Rocky Start: Early Conflicts in the Justice Department's Campaign
Finance Investigation
1. Reno's Job ``Hangs in the Balance''
After the November 1996 elections, Attorney General Reno
was called on to decide whether to appoint an independent
counsel to look into allegations of campaign finance abuses. As
early as October 9, 1996, public interest group Common Cause
requested that an independent counsel be appointed to
investigate allegations of abuses on the part of both
Republicans and Democrats.\44\ Common Cause also argued that
Attorney General Reno and the Department of Justice had a
conflict in conducting any criminal probe of campaign
fundraising.\45\ Soon thereafter, Attorney General Reno
received requests from the chairmen of four House committees
and Senator John McCain for her to appoint an independent
counsel.\46\ Pressure was building for a thorough investigation
into the allegations of campaign finance abuses that were
appearing daily in newspapers across the country. Many people
believed that because the investigation would necessarily focus
on political activities and the actions of President Clinton,
Vice President Gore, and other high-ranking administration
officials, the Attorney General would have a conflict were she
to conduct the investigation.
---------------------------------------------------------------------------
\44\ Common Cause (visited Sept. 9, 2000) . Common Cause alleged
that both the Clinton and Dole campaigns violated Federal election laws
by using their respective party committees to purchase TV
advertisements, while circumventing the spending limits imposed on the
candidates. Id.
\45\ Id.
\46\ Connie Cass, ``Democratic Committee Bows to Pressure and
Releases Financial Data,'' AP, Oct. 29, 1996. Chairman Bill Clinger,
Chairman Benjamin Gilman, Chairman Gerald Solomon, and Chairman Bill
Thomas all requested that the Attorney General appoint an independent
counsel to look into allegations of improprieties in Democrats'
fundraising, including allegations of illegal contributions from
foreign individuals and corporations. Id.
---------------------------------------------------------------------------
While Reno weighed whether to appoint an independent
counsel for campaign finance, President Clinton was determining
which members of his Cabinet would remain for his second term.
Attorney General Reno already had stated publicly that she
would like to remain in her position. However, the President
refused to comment on whether he would retain Reno as Attorney
General.\47\ In fact, the press reported that ``White House
aides, meanwhile, have privately said they wish Reno would
leave in part because of her readiness to send allegations of
official misconduct to independent counsels.''\48\ The White
House was making it clear, through the press, that the
President was contemplating appointing a new Attorney General,
in part because Reno had requested too many independent
counsels. The Attorney General serves at the pleasure of the
President, and the President made it clear that he did not want
an independent counsel appointed for the campaign finance
investigation.
---------------------------------------------------------------------------
\47\ President William J. Clinton, White House press conference
(Nov. 8, 1996).
\48\ Carolyn Skorneck, ``Attorney General Rejects Call for Special
Prosecutor,'' AP, Nov. 8, 1996.
---------------------------------------------------------------------------
Instead of appointing an independent counsel, in late
November 1996, Attorney General Reno created a ``Task Force''
to investigate the allegations of campaign finance abuses in
the 1996 election cycle. At the beginning of the investigation,
the Task Force was nothing more than a few attorneys in the
Public Integrity Section (PIS) of the Department of Justice.
PIS was headed by Lee Radek, who Attorney General Reno placed
in charge of the investigation.\49\ As Chief of PIS, Radek was
responsible for conducting preliminary investigations under the
Independent Counsel Act and making recommendations to the
Attorney General on its application.\50\ Radek made his views
on the Act very clear, stating in an interview that
``[i]nstitutionally, the independent counsel statute is an
insult.'' \51\ He added, ``[i]t's a clear enunciation by the
legislative branch that we cannot be trusted on certain species
of cases.'' \52\
---------------------------------------------------------------------------
\49\ GAO report at 20.
\50\ GAO report at 27.
\51\ Jeffrey Goldberg, ``What Is Janet Reno Thinking?,'' NY Times
Magazine, July 6, 1997, at 30.
\52\ Id.
---------------------------------------------------------------------------
FBI Director Louis Freeh expressed to Attorney General Reno
his reservations about Radek and PIS' involvement in the
campaign finance investigation. Director Freeh's concerns
stemmed from a conversation between Lee Radek and FBI Deputy
Director William J. Esposito prior to the integration of the
Department of Justice and FBI agents into a formal Task Force.
A meeting between Esposito and Radek took place on November 20,
1996, the same time that the media was reporting on the
precarious nature of Reno's position.\53\ They met to discuss,
among other things, the campaign finance investigation.\54\ Mr.
Esposito testified that at the end of his meeting with Radek
that, ``[Radek] made the statement that there is a lot of
pressure on him [Radek], and the Attorney General's job could
hang in the balance.'' \55\ Esposito further testified that
Radek linked the Attorney General's job status with the
pressure on Radek and PIS.\56\ Concerned about the statement,
Esposito reported the comment to Director Freeh.
---------------------------------------------------------------------------
\53\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong. 38 (2000) (testimony of William J. Esposito) (preliminary
transcript).
\54\ Id.
\55\ Id. at 39.
\56\ Id.
---------------------------------------------------------------------------
Radek's comment raised the question of whether he was able
to be an impartial decisionmaker in the campaign finance
investigation. Director Freeh also was troubled by the
statement, and raised the issue with the Attorney General.\57\
In a memorandum outlining his conversation with Attorney
General Reno, Director Freeh indicated that he told the
Attorney General that, ``those comments would be enough for me
to take [Radek] and the Criminal Division off the case
completely.'' \58\ Furthermore, Radek himself later
acknowledged that he was aware of rumors that the White House
might not retain Reno as Attorney General during the second
term. Radek stated, ``I recall press speculation that the
possibility of her being the Attorney General into the second
term might be being held up because the White House was
concerned about the way she was doing her job[,] including this
campaign finance investigation.'' \59\ Freeh's concerns
regarding Radek were justified considering the timing of the
comments and the position Radek assumed in the investigation.
---------------------------------------------------------------------------
\57\ Memorandum from Louis J. Freeh, Director, Federal Bureau of
Investigation, to William Esposito, Deputy Director, Federal Bureau of
Investigation (Dec. 9, 1996) (exhibit 1).
\58\ Id.
\59\ ``Oversight Hearing on 1996 Campaign Finance Investigation,''
hearing before the Senate Subcommittee on Administrative Oversight and
the Courts of the Senate Committee on the Judiciary, 106th Cong. 18
(2000) (Federal Document Clearing House transcript).
---------------------------------------------------------------------------
According to Director Freeh, the Attorney General said that
she would look into the matter of Radek's comment.\60\ However,
none of the individuals who were parties to the conversation
were contacted about the statement.\61\ In fact, after her
conversation with Director Freeh, the Attorney General formally
established the Campaign Financing Task Force and placed it
under the auspices of the PIS, making Radek the single most
important attorney in the campaign finance investigation.
---------------------------------------------------------------------------
\60\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong. 45 (2000) (testimony of William J. Esposito) (preliminary
transcript).
\61\ Id. at 46-48.
---------------------------------------------------------------------------
The only follow-up Attorney General Reno ever conducted on
Radek's comment occurred when the Freeh memo came to light,
3\1/2\ years after it was written. Once Director Freeh's
concerns were made public, in May 2000, Deputy Attorney General
Eric Holder and even Attorney General Reno herself, contacted
Esposito and Radek to determine what they recalled about the
meeting.\62\ Such attention from the highest levels appears to
indicate that the Attorney General realized that her disregard
for Director Freeh's concerns created the perception that the
Justice Department purposely ignored the conflict. As for the
Attorney General, she stated that she did not recall the
meeting to which Director Freeh referred in his memorandum, and
did not recall any concerns raised regarding PIS or Lee
Radek.\63\ Likewise, Radek did not recall his meeting with FBI
Deputy Director Esposito.\64\ When called before House and
Senate committees to testify about his alleged statement, Radek
insisted that he could not recall the meeting with Esposito,
but nevertheless said that he would not have made a statement
linking pressure and the Attorney General's job ``hanging in
the balance.'' \65\ It is difficult to understand how Radek was
able to both state affirmatively that he had no recollection of
the Esposito meeting and be certain that he did not make the
statement attributed to him in Director Freeh's memo.\66\
---------------------------------------------------------------------------
\62\ Id. at 46-48, 50.
\63\ Attorney General Janet Reno, press conference (May 19, 2000).
\64\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong. 42 (2000) (testimony of Lee Radek) (preliminary
transcript).
\65\ Id.; ``Oversight Hearing on 1996 Campaign Finance
Investigation,'' hearing before the Senate Subcommittee on
Administrative Oversight and the Courts of the Senate Committee on the
Judiciary, 106th Cong. 17 (2000) (Federal Document Clearing House
transcript).
\66\ ``Oversight Hearing on 1996 Campaign Finance Investigation,''
hearing before the Senate Subcommittee on Administrative Oversight and
the Courts of the Senate Committee on the Judiciary, 106th Cong. 22
(2000) (Federal Document Clearing House transcript).
---------------------------------------------------------------------------
2. PIS Control of the Task Force
Relations between the FBI and Department of Justice were
somewhat shaky in the beginning. Prior to any formalization of
the Task Force, the Department of Justice asserted to the
public and the media that the Federal Bureau of Investigation
(FBI) was the lead agency on the campaign finance
investigation.\67\ However, the FBI had yet to be contacted by
the Justice Department. Despite the assertions about the FBI,
PIS had been working with Commerce Department Inspector General
investigators on the campaign finance matter.\68\ FBI Director
Louis Freeh stated that he told the Attorney General, ``it
didn't make sense for PIS to call the FBI the `lead agency' in
this matter while operating a `Task Force' with DOC [Commerce]
IGs who were conducting interviews of key witnesses without the
knowledge or participation of the FBI.'' \69\ Freeh then
recommended that the FBI and ``hand-picked DOJ attorneys from
outside Main Justice'' conduct the investigation.\70\
---------------------------------------------------------------------------
\67\ Exhibit 1.
\68\ Id.
\69\ Id. See also Daniel Klaidman, ``Dodging A Bullet (Attorney
General Janet Reno and the Investigation into Allegedly Illicit
Fundraising by the Democratic Party),'' Newsweek, Dec. 9, 1996, at 24.
\70\ Exhibit 1.
---------------------------------------------------------------------------
Director Freeh also expressed general concern over the
prospect of PIS controlling the investigation. In his
memorandum, Director Freeh indicated that he told the Attorney
General that ``in [his] view, PIS was not capable of conducting
the thorough, aggressive kind of investigation which was
required.'' \71\ The Attorney General disregarded Director
Freeh's recommendation and formally installed the investigation
in PIS, headed by Radek. Although it was apparent that the
campaign finance investigation would be followed very closely
by the public, the media, and Congress, Radek appointed a
junior PIS trial attorney, Laura Ingersoll, to lead the
investigation. It appeared that the Justice Department was
setting the investigation up to fail.
---------------------------------------------------------------------------
\71\ Id.
---------------------------------------------------------------------------
A prime example of PIS' attitude toward the investigation
and the Independent Counsel Act is the early investigation of
Vice President Gore's fundraiser at the Hsi Lai Temple in Los
Angeles. After the media reported allegations of the Vice
President's involvement in the fundraiser at the Buddhist
temple, the local U.S. Attorney's Office in California
consulted with Main Justice and was given approval to
investigate the matter on October 17, 1996.\72\ In the
following 2 weeks Steve Mansfield, the Assistant U.S. Attorney
assigned to the matter, actively investigated it. However,
shortly before the election, Lee Radek informed the U.S.
Attorney's Office that Main Justice, through PIS, was taking
the case away from them.\73\ Radek indicated that PIS would
handle the case because the independent counsel statute had
been implicated.\74\ In an effort to continue his
investigation, Mansfield vainly objected to PIS' effort to take
the case away.\75\
---------------------------------------------------------------------------
\72\ See letter from Lee J. Radek, Chief, Public Integrity Section,
U.S. Department of Justice, to Steven E. Zipperstein, Chief Assistant
U.S. Attorney, U.S. Attorney's Office, Central District of California
(Nov. 1, 1996).
\73\ Memorandum from Craig C. Donsanto, Public Integrity Section,
U.S. Department of Justice, to Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice (Nov. 1, 1996).
\74\ Id.
\75\ Id.
---------------------------------------------------------------------------
What is even more troubling is that, after having taken the
case away from the Central District, under the pretext of an
investigation to determine whether the application of the
Independent Counsel Act was appropriate, PIS never conducted
the threshold inquiry. PIS' inaction gave the members of the
Hsi Lai Temple the opportunity to destroy documents central to
the investigation. Had they allowed the U.S. Attorney's Office
to conduct the investigation, they surely would have been able
to quickly subpoena documents and witnesses.
In order to determine whether PIS made any attempt to
investigate the matter, the committee subpoenaed the Justice
Department's file on the Hsi Lai preliminary investigation. In
response, the committee received a stack of news clippings.\76\
There was obviously no investigation. It appears that PIS took
the case away from the U.S. Attorney's office on a pretext.
Radek's misleading explanations were typical of his handling of
the fundraising investigation. He admittedly disliked the
Independent Counsel Act, and had already acknowledged that he
was under a lot of pressure regarding the Independent Counsel
Act provisions. His actions with regard to the Hsi Lai Temple
were representative of the manner in which Radek conducted
himself during the campaign finance investigation.
---------------------------------------------------------------------------
\76\ Subpoena from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General, U.S. Department of Justice
(June 26, 2000) (seeking all records relating to any possible
consideration of the appointment of an independent counsel in the Hsi
Lai Temple matter). All correspondence between and subpoenas to the
Department of Justice are contained in appendix I.
---------------------------------------------------------------------------
Radek's control over the campaign finance investigation
caused some friction with the FBI as well. From the beginning,
the working relationship between the Department of Justice and
FBI was strained.\77\ DOJ attorneys and FBI investigators
disagreed over the proper approach to the investigation, and an
atmosphere of mistrust developed.\78\ One of the problems was
that PIS did not have any plan for investigating the campaign
finance matter.\79\ Radek assumed that PIS could conduct the
campaign finance investigation as he would conduct any other
PIS investigation.\80\ In so doing, he underestimated the
nature and breadth of the investigation. Unfortunately for PIS,
its normal caseload did not compare with the campaign finance
investigation. It ultimately became clear that PIS and
Ingersoll were unable to handle such a complicated
investigation.
---------------------------------------------------------------------------
\77\ GAO report at 1.
\78\ Id. at 1.
\79\ Id. at 20.
\80\ Id. at 20.
---------------------------------------------------------------------------
Attorney General Reno eventually was forced to follow
Director Freeh's original recommendation. The Task Force under
PIS was failing and the structure had to be changed. The GAO
investigation of the management and oversight, operations, and
results of the Task Force reported:
In the fall of 1997, displeased with the
investigation's slow pace, disclosures in the press
about critical leads not being pursued, and internal
frictions, the Attorney General and the FBI Director
changed the Task Force's leadership. Subsequently, the
Task Force's oversight structure was streamlined by the
removal of [the Public Integrity Section] from its
leadership role and the commitment of additional staff
and information management resources to get the
investigation on track.\81\
---------------------------------------------------------------------------
\81\ Id. at 5.
In September 1997, Charles La Bella, first Assistant U.S.
Attorney in San Diego, and James DeSarno, a former Special
Agent-in-Charge of the FBI's New Orleans Field Office were
placed in charge of the Task Force. After La Bella's arrival,
Lee Radek and PIS were taken out of the direct chain of
command.\82\ However, Radek maintained primary responsibility
for threshold inquiries and preliminary investigations under
the Independent Counsel Act.\83\
---------------------------------------------------------------------------
\82\ Id. at 37.
\83\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong. 151-152 (2000) (testimony of Lee Radek) (preliminary
transcript). The GAO report indicated that, ``Mr. Radek continued a
direct role whenever Independent Counsel statute issues arose, as PI
maintained primary responsibility for initial inquiries and preliminary
investigations related to the statute.'' GAO report at 37.
---------------------------------------------------------------------------
It was the application of the independent counsel statute
that remained one of the main areas of contention between the
Department of Justice and FBI.\84\ Radek categorized the
conflict as disagreements over the threshold of information
required to trigger a recommendation for an independent
counsel.\85\ The FBI agreed, indicating that senior FBI
officials believed Radek's criteria for what information was
needed to trigger the seeking of an independent counsel were
too stringent.\86\ The FBI had been wary of its interaction
with the Department of Justice on independent counsel issues,
as it was excluded from the independent counsel decisionmaking
process previously.\87\ Director Freeh wrote, ``[i]t was
unfortunate that DOJ declined to allow the FBI to play any role
in the Independent Counsel referral deliberations.'' \88\ By
late-1997, Director Freeh made a formal recommendation that the
Attorney General appoint an independent counsel.
---------------------------------------------------------------------------
\84\ GAO report at 4.
\85\ Id. at 24.
\86\ Id. at 25.
\87\ Exhibit 1.
\88\ Id.
---------------------------------------------------------------------------
C. Attorney General Reno Changed Her Interpretation of the Independent
Counsel Act
To understand how the Attorney General was able to
consistently refuse to appoint an independent counsel in the
campaign financing investigation, it is necessary to understand
her interpretation of the Independent Counsel Act. In addition,
it has to be pointed out that her interpretation has not been
consistent. Attorney General Reno made numerous appointments
under the discretionary provision of the statute that she never
could have made under her present day interpretation. Her first
articulation of her revised analysis was in response to a March
1997, Senate Judiciary Committee request that she appoint an
independent counsel in the campaign finance matter.\89\ Reno
responded 1 month later, declining to request the appointment
of an independent counsel.\90\ In the response, she laid out
several points about the Independent Counsel Act itself, upon
which her refusal was based.\91\
---------------------------------------------------------------------------
\89\ Senate Judiciary Committee Chairman Orrin G. Hatch and nine
other Republican Members made the request. See letter from Janet Reno,
Attorney General, U.S. Department of Justice, to Orrin G. Hatch,
chairman, Senate Judiciary Committee (Apr. 14, 1997).
\90\ Id.
\91\ Id.
---------------------------------------------------------------------------
1. Appearance of a Conflict Versus Actual Conflict
The key to Reno's arguments was her interpretation of the
statute itself. If one were to follow the simple language of
the statute, it would have been difficult for Reno to explain
why she could not use the discretionary provision of the Act to
request an independent counsel. Reno needed to interpret the
statute in such a way that she could argue that the Act did not
permit her to invoke the discretionary clause. Breaking with
her own previous interpretations on the discretionary provision
of the Act, Attorney General Reno stated in her letter to the
Senate Judiciary Committee that ``[u]nder the Act, I must
conclude that there is a potential for an actual conflict of
interest, rather than merely an appearance of a conflict of
interest.'' \92\ In the past, she had requested the appointment
of independent counsels based on an appearance of a conflict.
---------------------------------------------------------------------------
\92\ Letter from Janet Reno, Attorney General, U.S. Department of
Justice, to Orrin G. Hatch, chairman, Senate Judiciary Committee (Apr.
14, 1997).
---------------------------------------------------------------------------
Reno repeated her new understanding of the discretionary
provision in her May 1997 testimony before the Senate Judiciary
Committee, where she was questioned about her
interpretation.\93\ In her testimony, she repeated her
conclusions regarding the discretionary provision, using the
exact words of her letter.\94\ Reno expressly relied on the
legislative history of a single proposed amendment to the
Independent Counsel Act for her interpretation.\95\ She
testified regarding her theory:
---------------------------------------------------------------------------
\93\ ``Oversight of the Department of Justice,'' hearing before the
Senate Committee on the Judiciary, 105th Cong. 12 (1997).
\94\ She stated that she ``must conclude that there is a potential
for an actual conflict of interest rather than merely an appearance of
a conflict of interest.'' ``Oversight of the Department of Justice,''
hearing before the Senate Committee on the Judiciary, 105th Cong. 12
(1997) (testimony of Attorney General Janet Reno).
\95\ Id.
The Congress in 1994, under the reauthorization,
considered a proposal for a more flexible standard for
invoking the discretionary clause which would have
permitted its use to refer any matter to an independent
counsel when the purposes of the Act would be served.
Congress rejected this suggestion, explaining that such
a standard would substantially lower the threshold for
use of the general discretionary provision.\96\
---------------------------------------------------------------------------
\96\ Id.
However, as support for her argument, Reno was relying on
negative legislative history.\97\ She attempted to define what
Congress intended by describing what it did not do, rather than
what it did. The Justice Department itself had rejected the
practice, noting that it is not useful as an interpretive
tool.\98\ In fact, a Justice Department report to the Attorney
General states, ``[r]ejection is doubtful evidence of the
legislative intent, let alone the meaning of the statute as
enacted.'' \99\ Furthermore, the Attorney General neglected to
mention the report language supporting the idea of an apparent
conflict of interest. The legislative history is replete with
statements of intent that completely contradict the Attorney
General's interpretation.\100\ For example, the Senate report
accompanying the 1982 amendments to the Act stated, ``[t]he
Committee recognizes that there may be instances when
investigations by the Attorney General of persons not covered
by the Act may create an actual or apparent conflict of
interest.'' \101\ Not only did Reno have a problem with her
interpretation of the Act's legislative history, she had her
own prior statements, as well as prior requests she had made
for the appointment of independent counsels to explain away.
---------------------------------------------------------------------------
\97\ Furthermore, Attorney General Reno was relying on the
statement of only one Congressman, Representative Hall, for her
argument.
\98\ ``Using and Misusing Legislative History: A Re-Evaluation of
the Status of Legislative History in Statutory Interpretation,'' report
to the Attorney General (Jan. 5, 1989). The report states:
---------------------------------------------------------------------------
Rejection of proposed language does not necessarily imply
an intent to reject its substance. Language may be rejected
because it is perceived to be superfluous and potentially
damaging to the prospects for passage of the bill. If the
perception that it is superfluous is correct, the actual
meaning of the statute is the same without the language as
it is with it; rejection of that language cannot imply that
the enacted statute should be interpreted to mean something
different. Id. at 107.
---------------------------------------------------------------------------
\99\ Id. at 108.
\100\ For examples of such statements, see section I.A. above.
\101\ ``Using and Misusing Legislative History: A Re-Evaluation of
the Status of Legislative History in Statutory Interpretation,'' report
to the Attorney General, at 17-18 (Jan. 5, 1989) (citing S. Rept. No.
97-469, at 9 (1981)) (emphasis added).
---------------------------------------------------------------------------
When called upon to testify before the Senate Governmental
Affairs Committee on May 14, 1993, regarding the
reauthorization of the Independent Counsel Act, Janet Reno
stated:
It is absolutely essential for the public to have
confidence in the system and you cannot do that when
there is conflict or an appearance of conflict in the
person who is, in effect, the Chief prosecutor. There
is an inherent conflict here, and I think that that is
why this Act is so important.
* * * * *
The Independent Counsel Act was designed to avoid even
the appearance of impropriety in the consideration of
allegations of misconduct by high-level Executive
Branch officials and to prevent, as I have said, the
actual or perceived conflicts of interest. The Act thus
served as a vehicle to further the public's perception
of fairness and thoroughness in such matters, and to
avert even the most subtle influences that may appear
in an investigation of highly placed Executive
officials.\102\
---------------------------------------------------------------------------
\102\ ``To Reauthorize the Independent Counsel Law for an
Additional 5 Years, and for Other Purposes,'' hearing before the Senate
Committee on Governmental Affairs, 103d Cong. 12 (1993) (statement of
Attorney General Reno).
After the reauthorization of the Independent Counsel Act on
June 30, 1994, the Attorney General, adhering to her original
interpretation, referred at least four matters to an
independent counsel that fell under the discretionary provision
of the Act. She first referred what has become known as the
Whitewater matter. In that case, she requested the independent
counsel under the political conflict of interest provision
because the individuals under investigation were friends and
former business partners of the President and Mrs. Clinton.
Similarly, under the discretionary provision, Attorney General
Reno asked that the jurisdiction of the Whitewater Independent
Counsel be expanded to include an investigation of former
Assistant to the President for Management and Administration
David Watkins for the Travel Office matter.\103\ David Watkins
did not satisfy any of the requirements for the mandatory
provision of the Act, and had left the White House's employ
several years earlier. Several months after the Watkins
referral, the Attorney General again requested that the
Whitewater Independent Counsel's jurisdiction be expanded to
include an investigation of Anthony Marceca, an investigator
with the U.S. Army Criminal Investigation Division who had been
detailed to the White House. The only political conflict of
interest Mr. Marceca, or any of these individuals, posed to the
Attorney General or the Justice Department were their
connection to the White House. Finally, the Attorney General
requested that the Whitewater Independent Counsel's
jurisdiction be expanded to include an investigation of a
perjury allegation against former Counsel to the President
Bernard Nussbaum. Nussbaum left the White House nearly 3 years
earlier. As with all of the prior investigations, Nussbaum did
not fall under the mandatory provision of the Act. The Attorney
General had to make the determination that there was a
political conflict of interest for her to investigate the
McDougals, David Watkins, Anthony Marceca, and Bernard
Nussbaum.
---------------------------------------------------------------------------
\103\ Prior to joining the White House staff, Watkins had also
worked on President Clinton's 1992 campaign.
---------------------------------------------------------------------------
It is obvious that the Attorney General was applying the
standard of an apparent conflict in these earlier independent
counsel appointments. Had she been applying the actual conflict
standard she surely would not have come to the conclusion that
she had an actual conflict of interest with individuals such as
the McDougals, David Watkins, Bernie Nussbaum, or Anthony
Marceca, but not with any of the individuals involved in the
campaign finance investigation. Her conflict, or perceived
conflict, with those individuals for whom she did recommend an
independent counsel was based on their relationship with
President Clinton or the White House generally. The most
glaring example is Anthony Marceca, a low-level detailee from
the Department of Defense. It is laughable that Reno would
determine that Marceca posed a conflict of interest for her
while fundraisers for the DNC and friends of the President,
such as John Huang and Charlie Trie, did not. By changing her
interpretation, Reno set the bar for appointing an independent
counsel even higher for the campaign finance investigation than
previous investigations.
2. Standard for Initiating a Preliminary Investigation
Reno also raised the bar by ignoring the statutory language
of the discretionary provision, and instead applying a higher
standard for initiating a preliminary investigation. In
interpreting the discretionary provision of the Independent
Counsel Act, the Attorney General stated, contrary to the
statutory language, that:
If, on the other hand, I receive specific and credible
evidence that a person not covered by the mandatory
provisions of the Act has committed a crime and I
determine that a conflict of interest exists with
respect to the investigation of that person, I may--but
need not--commence a preliminary investigation pursuant
to the provisions of the Act.\104\
---------------------------------------------------------------------------
\104\ Letter from Janet Reno, Attorney General, U.S. Department of
Justice, to Orrin G. Hatch, chairman, Senate Committee on the Judiciary
3 (Apr. 14, 1997) (emphasis added).
---------------------------------------------------------------------------
However, the statute reads:
When the Attorney General determines that an
investigation or prosecution of a person by the
Department of Justice may result in a personal,
financial, or political conflict of interest, the
Attorney General may conduct a preliminary
investigation of such person in accordance with section
592 if the Attorney General receives information
sufficient to constitute grounds to investigate whether
that person may have violated federal criminal law. . .
.\105\
---------------------------------------------------------------------------
\105\ 28 U.S.C. Sec. 591(c)(1) (emphasis added).
Under Reno's standard, before initiating a preliminary
investigation under the discretionary provision, she needed to
have specific and credible evidence that a crime was actually
committed. However, under the language of the statute,
information that a crime may have been committed was
sufficient.
The original independent counsel provisions of the Ethics
in Government Act of 1978, did require that in order to trigger
a preliminary investigation, ``the Attorney General receive[]
specific information that a person has committed a violation. .
. .'' \106\ However, in 1982, the independent counsel
provisions were reauthorized and amended.\107\ At that time,
Congress changed the name from special prosecutor to
independent counsel, and changed the requirement for triggering
a preliminary investigation to ``grounds to investigate whether
a person may have violated . . .'' \108\ The accompanying
Senate report clarified:
---------------------------------------------------------------------------
\106\ 28 U.S.C. Sec. 591 (1978).
\107\ Public Law 97-409.
\108\ Id.
It cannot be expected at this first step in the process
that the Attorney General could or should determine
that a criminal act has been committed. The purpose of
the change is to make it clear that the Attorney
General should proceed under the Act if the information
indicates that a violation of criminal law may have
taken place.\109\
---------------------------------------------------------------------------
\109\ S. Rept. No. 97-469 (1981).
The legislative history of the provision clearly shows that
Congress intended to create a lower threshold, and
intentionally replaced the language ``has committed'' with
``may have.''
Throughout the campaign finance investigation Reno used her
creative analysis of the statute to support her argument that
she did not create a conflict by investigating. However, both
FBI Director Freeh and Task Force Supervising Attorney Charles
La Bella wrote detailed memoranda to the Attorney General
explaining why they believed that she did have a conflict of
interest, and therefore must appoint an independent
counsel.\110\ They pointed out that the Task Force
investigation was leading to the highest levels of the White
House. Nevertheless, Attorney General Reno adopted a very
narrow view of the language of the independent counsel statute,
allowing her to claim that the campaign finance investigation
had not yet reached the legal threshold for applying the Act.
---------------------------------------------------------------------------
\110\ Memorandum from Louis J. Freeh, Director, Federal Bureau of
Investigation, to Janet Reno, Attorney General, U.S. Department of
Justice (Nov. 24, 1997); memorandum from Charles La Bella, Supervising
Attorney, U.S. Department of Justice Campaign Financing Task Force, and
James DeSarno, Assistant Director, Federal Bureau of Investigation, to
Janet Reno, Attorney General, U.S. Department of Justice, and Louis J.
Freeh, Director, Federal Bureau of Investigation, (July 16, 1998). Both
memoranda also recommend that the Attorney General recommend the
appointment of an independent counsel pursuant to the mandatory
provisions of the Act. Id.
---------------------------------------------------------------------------
D. Memoranda from FBI Director Louis J. Freeh and Task Force
Supervising Attorney Charles La Bella Recommending that an Independent
Counsel Be Appointed
Both FBI Director Freeh and Task Force Supervising Attorney
Charles La Bella believed that the Attorney General was
required, under the Independent Counsel Act, to request the
appointment of an independent counsel in the campaign finance
matter.\111\ In detailed memoranda, they applied the facts of
the case to the independent counsel statute and came to the
same conclusions. As the head of the FBI, Director Freeh was
the chief investigator for the campaign finance investigation,
and was familiar with both the facts and the law. Charles La
Bella was Reno's handpicked choice for the Supervising Attorney
position. La Bella coordinated the entire investigation, giving
him the benefit of a comprehensive view of the matter. Freeh
and La Bella were the two individuals with perhaps the best
grasp of the investigation as a whole. Nevertheless, Attorney
General Reno ignored their counsel. She insisted on
compartmentalizing the investigation, viewing from a vacuum
only one issue at a time and drawing no connections between the
massive illegal fundraising and the push on the part of the
administration to raise unprecedented amounts of money.
---------------------------------------------------------------------------
\111\ Id.
---------------------------------------------------------------------------
1. The Freeh Memorandum
In the fall of 1997, Attorney General Reno was confronted
with her first decisions under the Independent Counsel Act in
the campaign finance investigation. The initial question was
whether to initiate preliminary investigations of Vice
President Gore and President Clinton for fundraising telephone
calls made from the White House.\112\ Reno agreed to the
preliminary investigations, and was soon faced with making the
final decision on whether to request the appointment of an
independent counsel. Prior to her decision, FBI Director Freeh
forwarded her a memorandum offering his recommendation that an
independent counsel be appointed.\113\
---------------------------------------------------------------------------
\112\ See memorandum from Mark M. Richard, Acting Assistant
Attorney General, U.S. Department of Justice, to Janet Reno, Attorney
General, U.S. Department of Justice (Sept. 29, 1997) (recommending that
the Attorney General initiate a preliminary investigation into whether
Vice President Albert Gore, Jr., violated Federal criminal law, 18
U.S.C. Sec. 607, requiring that a preliminary investigation be
commenced); memorandum from Mark M. Richard, Acting Assistant Attorney
General, U.S. Department of Justice, to Janet Reno, Attorney General,
U.S. Department of Justice (Oct. 14, 1997) (recommending that the
Attorney General initiate a preliminary investigation into whether
President William Jefferson Clinton violated Federal criminal law, 18
U.S.C. Sec. 607, in soliciting contributions to the Democratic National
Committee from his office in the White House).
\113\ See memorandum from Louis J. Freeh, Director, Federal Bureau
of Investigation, to Janet Reno, Attorney General, U.S. Department of
Justice (Nov. 24, 1997) (exhibit 2).
---------------------------------------------------------------------------
The November 24, 1997, memorandum from FBI Director Louis
J. Freeh outlined his evaluation of the campaign finance
investigation to date.\114\ He recounted the purpose and
structure of the independent counsel statute, citing the
legislative history. He reviewed Congress' intent in passing
the legislation, outlining the justifications for the Act
itself.\115\ Freeh, quoting from the original Senate report on
the Act, repeated the reasons for the Act's enactment: the
Department of Justice has difficulty investigating alleged
criminal activity by high-level government officials; it is too
much to ask for any person that he investigate his superior;
and, the appearance of conflict is as dangerous to public
confidence in the administration of justice as true conflict
itself.\116\
---------------------------------------------------------------------------
\114\ Id.
\115\ Id.
\116\ Id. at 1 (quoting the Senate Governmental Affairs Committee
report upon the enactment of the Independent Counsel Act. S. Rept. No.
100-123, at 2 (1978)).
---------------------------------------------------------------------------
a. FBI's Investigative Plan
In order to explain the context in which the memorandum was
written, Freeh reviewed the Task Force's investigative plan,
which investigators had been following since early 1997.\117\
The Task Force had developed three distinct areas of
investigation, which they believed were interrelated.\118\ The
three matters were:
---------------------------------------------------------------------------
\117\ See id. at 7.
\118\ See id.
An aggressive campaign fundraising operation
developed and executed by a core group of individuals
from the DNC and the White House, including the
President, the Vice President, and a number of top
---------------------------------------------------------------------------
White House advisors.
Allegations of illegal conduct by a myriad
of opportunists and other individuals who gained White
House access in order to further their personal,
business, and political interests.
Efforts by the [People's Republic of China]
and other countries to gain foreign policy influence by
illegally contributing foreign money to U.S. political
campaigns and to the DNC through domestic
conduits.\119\
---------------------------------------------------------------------------
\119\ Id.
Director Freeh explained that, ``[t]he core group
investigative plan was based on a theory that most of the
alleged campaign abuses flowed, directly or indirectly from the
all-out effort by the White House and the DNC to raise money.''
One of the reasons for this was the President's decision to put
in place an early and expensive media campaign. In order to pay
for all of the television airtime and commercials they wanted
to run, Clinton/Gore '96 and the DNC had to raise huge sums of
money. Director Freeh pointed out that it was this need for
money that led to things such as the White House coffees,
overnights in the Lincoln bedroom, Presidential perks for large
donors, as well as the telephone solicitations by the President
and Vice President.\120\ Freeh asserted that nearly all of the
FBI investigators' ``investigative avenues'' were linked to the
initiatives of the core group.\121\ That was not to say that
Freeh believed that the core group members were necessarily
culpable for any criminal violations, but that they should not
be immune from investigation.\122\ Director Freeh's explanation
of the investigation, and acknowledgment that it led to the
``highest reaches of the White House,'' including the President
and Vice President, seemed exactly the type of situation for
which the Independent Counsel Act was drafted.\123\ Because of
where the campaign finance investigation was leading the Task
Force, the attorneys and investigators necessarily had to
consider whether the independent counsel statute should
apply.\124\
---------------------------------------------------------------------------
\120\ Id. at 8. See H. Rept. No. 105-829 (1998) (House Committee on
Government Reform's interim report into the campaign financing
investigation); S. Rept. No. 105-167 (1998) (Senate Governmental
Affairs Committee final report on its investigation of illegal or
improper activities in connection with 1996 Federal election
campaigns.)
\121\ Exhibit 2 at 8.
\122\ Id.
\123\ Id. at 2.
\124\ Id.
---------------------------------------------------------------------------
The Department of Justice conducted the investigation in a
manner that avoided looking into the actions of the core group
of individuals referred to in Freeh's memorandum.\125\ Freeh
explained that the FBI and Department of Justice had a
fundamental disagreement over the manner in which the
investigation should proceed.\126\ The FBI wanted to conduct a
top-down strategy, and focus on the core group of
individuals.\127\ The strategy followed from the working theory
that the majority of the abuses occurred as a result of the
core group's effort to raise vast sums of money.\128\ In
contrast, the Department of Justice wanted to focus on what
Freeh referred to as the ``opportunists.'' \129\ Freeh stated
that with such a ``bottom up'' strategy, the investigation may
or may not ever lead to the core group.\130\ In addition, by so
doing, the Department of Justice was assured that it most
likely would not need to address Independent Counsel Act
issues. Finally, in July 1997, Freeh became frustrated with the
Department of Justice's investigation and ordered FBI agents to
interview ``all relevant core group and DNC officials.'' \131\
At that time there still was no prosecutor assigned to handle
core group issues.\132\
---------------------------------------------------------------------------
\125\ See id. at 8.
\126\ See id.
\127\ Id.
\128\ Id.
\129\ Id.
\130\ Id.
\131\ Id.
\132\ Id.
---------------------------------------------------------------------------
b. The Department of Justice's Approach to Investigating
Covered Persons
Freeh indicated that the Department of Justice attorneys in
charge of the Task Force adopted a ``cautious approach to
investigating covered persons.'' \133\ The Department of
Justice attorneys were extremely reluctant to proceed into
areas of investigation where covered persons might be
implicated, whereas in a normal investigation, agents and
attorneys would follow all investigative leads.\134\ Freeh
asserted that this process led to a flawed investigation in the
following ways:
---------------------------------------------------------------------------
\133\ Id. at 9.
\134\ Id.
First, the Task Force has partitioned its
investigation, focusing on individual persons and
events without effectively analyzing their relationship
to the broader fundraising scheme. Second, the Task
Force attorneys sometimes have made dispositive factual
assumptions without investigating to see if those
assumptions are accurate. . . . Third, important
investigative areas, such as the serious allegations
raised by Common Cause, have never been pursued because
they have been tied up in lengthy threshold legal
analyses within the Department.\135\
---------------------------------------------------------------------------
\135\ Id.
Again, this manner of investigation appears to almost
intentionally skirt around the independent counsel process. It
was evident that Reno refused to invoke the discretionary
clause of the Independent Counsel Act, and the Task Force's
investigation made it very unlikely that she would have to
confront an allegation against a covered person.\136\
---------------------------------------------------------------------------
\136\ The Justice Department did have preliminary investigations
open on President Clinton and Vice President Gore at the time Director
Freeh wrote his memorandum, which Director Freeh readily acknowledges.
However, those investigations were in response to media reports that
both the President and Vice President had made telephone calls from
their White House offices soliciting campaign contributions.
Ultimately, Attorney General Reno declined to request the appointment
of an independent counsel in both cases.
---------------------------------------------------------------------------
In those instances where allegations were reviewed for the
application of the Independent Counsel Act, they were handled
by the Public Integrity Section.\137\ The PIS attorneys had
very limited involvement in the Task Force's work, and were
therefore unfamiliar with the broader investigation.\138\ Freeh
acknowledged that the issues should have been reviewed by PIS,
but believed that the front line investigators and attorneys
were being excluded unnecessarily.\139\ Freeh pointed out that
separation between PIS and the Task Force in the independent
counsel review process became even more apparent after Attorney
General Reno changed the Task Force leadership and took PIS out
of its leadership role.\140\ Accordingly, the new Task Force
leadership, Supervising Attorney Charles La Bella and Lead
Investigator James DeSarno, had ``no meaningful role'' in
independent counsel matters.\141\ Freeh added that the tenor of
the weekly meetings of the Task Force leadership changed
``markedly,'' explaining that there was no longer any
discussion of independent counsel related issues.\142\ Although
Freeh noted that ``the FBI has very recently received several
DOJ drafts on pending IC matters, FBI officials have not had
any significant role in the deliberative process.'' \143\
---------------------------------------------------------------------------
\137\ Exhibit 2 at 9.
\138\ Id.
\139\ Id.
\140\ Id.
\141\ Id.
\142\ Id. at 10.
\143\ Id.
---------------------------------------------------------------------------
c. Information Sufficient to Trigger the Independent
Counsel Statute in the Campaign Finance
Investigation
In his memorandum, Freeh laid out the argument for
appointing an independent counsel using the facts of the
campaign finance investigation. Freeh connected the various
pieces of the Task Force's investigation to what he referred to
as an ``overall funding scheme.'' \144\ The scheme was tied
back to the core group's fundraising, which Freeh believed had
never been investigated properly.\145\ Freeh stated: ``As a
starting point, the Campcon Task Force has failed to address an
overarching issue: whether the Clinton/Gore campaign (as well
as the Dole campaign) engaged in an illegal scheme to
circumvent the federal campaign financing laws.'' \146\
---------------------------------------------------------------------------
\144\ Id. at 13.
\145\ Id.
\146\ Id.
---------------------------------------------------------------------------
The allegations Freeh was referring to were based on
allegations set forth by the public interest group Common
Cause.\147\ In Freeh's memorandum, he focused on the manner in
which the Clinton/Gore campaign appeared to have violated
several election laws.\148\ He explained that in early 1995,
the Clinton/Gore campaign agreed to engage in an ``extremely
ambitious series of TV ads,'' which would be very expensive.
The problem for the campaign was that it was limited in the
amount of money it was able to spend during both the primary
and general elections.\149\ In exchange for receiving Federal
matching funds, a candidate for President is required to limit
his overall campaign spending, during both the primary and
general elections.\150\ The Federal Election Campaign Act
(FECA), Presidential Primary Matching Payment Account Act, and
the Presidential Election Campaign Fund Act set forth criminal
penalties for any knowing and willful violations of the
spending limits.\151\
---------------------------------------------------------------------------
\147\ Id. at 10.
\148\ Id.
\149\ Id. In 1996, there was a spending limit of approximately $62
million for the general election. Id.
\150\ Id.
\151\ 2 U.S.C. Sec. Sec. 431-455; 26 U.S.C. Sec. 9031 et. seq.; 26
U.S.C. Sec. 9001 et. seq.
---------------------------------------------------------------------------
The Clinton/Gore campaign worked out a plan to use the DNC
to purchase the advertising, effectively working around the
spending limits imposed by accepting matching funds.\152\ The
campaign actually controlled the advertising, from creation to
placement, while the President personally reviewed and approved
all of the ads.\153\ Common Cause alleged that all of the facts
put together led to a violation of the law.\154\ The Justice
Department's preliminary conclusion was that, ``this scheme was
simply an act of `coordination' between the Clinton/Gore
campaign and the DNC.'' \155\ Director Freeh argued that the
allegations presented unprecedented legal issues that led to
differences of opinion of the election law experts on whom the
Task Force relied.\156\ He added that because the law was
unclear, and that there were no established enforcement
policies to turn to at either the Department of Justice or the
Federal Election Commission (FEC), the case should be turned
over to an independent counsel to make the judgment of whether
there was a prosecutable offense.\157\ Freeh stated that,
``[a]ny case in which there is no clear policy against
prosecution or any arguably exceptional circumstances are
present should be sent to a special prosecutor.'' \158\ Freeh
believed that the two most important points that the Attorney
General should consider in deciding whether to seek the
appointment of an independent counsel for the Common Cause
allegations were: ``(1) the Department has had the allegations
for more than a year; and (2) there is virtually no chance that
the allegations could be resolved in the course of a limited
preliminary inquiry.'' \159\
---------------------------------------------------------------------------
\152\ Exhibit 2 at 11.
\153\ Id. at. 10.
\154\ Id. at 11.
\155\ Id. at 11-12.
\156\ Id. at 12.
\157\ Id.
\158\ Id.
\159\ Id. at 13.
---------------------------------------------------------------------------
i. Vice President Gore and President Clinton
Freeh believed that many of the other allegations of
criminal or potentially criminal activity were a result of the
overarching need for money to pay for the media campaign. He
explained, ``[i]n addition to allegations of a broad conspiracy
to circumvent the campaign contribution and spending limits,
many of the other allegations that have arisen in the course of
the investigations have a direct connection to the core group's
fundraising scheme.'' \160\ For instance, Freeh cited the
preliminary investigations into President Clinton and Vice
President Gore's fundraising telephone calls from the White
House.\161\ In the case of the Vice President, who admitted
that he made fundraising calls from his White House office, the
Attorney General was faced with three legal questions in
determining whether to request the appointment of an
independent counsel:
---------------------------------------------------------------------------
\160\ Id.
\161\ Id.
Does section 607 [of the criminal code]
\162\ apply to the Vice President's telephone
solicitations?
---------------------------------------------------------------------------
\162\ 18 U.S.C. section 607 makes it unlawful ``for any person to
solicit or receive any contribution within the meaning of section
301(8) of the FECA in any room or building occupied in the discharge of
official duties by any [officer or employee of the United States].
Assuming section 607 does apply, is there an
established DOJ policy of non prosecution of such
---------------------------------------------------------------------------
offenses?
Assuming section 607 applies and there is no
established policy of non-prosecution, is further
investigation warranted by an independent counsel?
\163\
---------------------------------------------------------------------------
\163\ Exhibit 2 at 14.
Freeh concluded that section 607 would apply under the fact
pattern presented by the Vice President's phone calls.\164\ He
also found that there was neither a written nor other
established policy of non-prosecution in section 607 cases,
primarily because the facts of the individual cases are
determinative.\165\ Finally, Freeh acknowledged that there was
a consensus among Department of Justice prosecutors that it was
likely that Justice would never prosecute a case such as
Gore's, even if there were a technical violation.\166\ However,
Freeh pointed out that the independent counsel statute did not
permit the Attorney General ``to simply dispose of a case
through an exercise of prosecutorial discretion.'' \167\
---------------------------------------------------------------------------
\164\ Id. at 15.
\165\ Id.
\166\ Id.
\167\ Id. at 16. Freeh also warned against closing the case based
on lack of intent. Freeh stated that based on the facts, one could not
come to the conclusion, beyond a reasonable doubt, that the Vice
President had no knowledge that the money he was raising would be used
for both ``hard'' and ``soft'' money accounts. An important distinction
to make the argument that a violation of 18 U.S.C. section 607
occurred. Id.
---------------------------------------------------------------------------
As to the Vice President, Freeh concluded:
The Attorney General should seek the appointment of an
Independent Counsel with respect to the Vice
President's telephone solicitations. Such an
appointment is warranted on two levels. The preferable
course of action would be to refer this matter as
simply one piece of a comprehensive Independent Counsel
investigation which focuses on the alleged scheme to
circumvent the campaign financing laws. . . . Viewed in
that context, it is essentially immaterial whether the
telephone solicitations sought ``hard'' money or
``soft'' money, or whether they were made from public
space or private space. Because they were a key
component of the overall fundraising scheme alleged by
Common Cause and others, these solicitations should be
referred for further investigation by an Independent
Counsel. Such a referral could be made under either the
mandatory clause or as a discretionary matter.\168\
---------------------------------------------------------------------------
\168\ Exhibit 2 a 17.
Director Freeh took a similar position in the investigation of
President Clinton's telephone solicitations from the White
House residence. He acknowledged that the calls most likely
were not a violation of section 607, however, considered them
to be part of a larger conspiracy to circumvent the campaign
finance laws.\169\ For this reason, Freeh believed that an
independent counsel should be appointed, and the President's
phone calls should be part of the investigation.\170\
---------------------------------------------------------------------------
\169\ Id. at 18.
\170\ Id.
---------------------------------------------------------------------------
ii. White House Coffees and Overnights
The Clinton administration regularly held fundraising
coffees with the President and Vice President in the White
House, invited large donors to stay overnight in the Lincoln
bedroom, or take trips on Air Force One.\171\ Again, there was
a question of whether the actions of the Clinton administration
violated section 607 for fundraising on Federal property.\172\
Freeh believed that the coffees, overnights in the Lincoln
bedroom, and other perks for big donors were part of the
overall scheme that he discussed, and that they should be part
of an independent counsel investigation.\173\
---------------------------------------------------------------------------
\171\ See H. Rept. No. 105-829 (1998) (House Committee on
Government Reform's interim report into the campaign financing
investigation); S. Rept. No. 105-167 (1998) (Senate Governmental
Affairs Committee final report on its investigation of illegal or
improper activities in connection with 1996 Federal election
campaigns.)
\172\ 18 U.S.C. Sec. 607. An Office of Legal Counsel opinion
concluded that certain rooms in the White House were not covered by
section 607 if they were used for ``personal entertaining where there
is a history of such use and where the cost of such use is not charged
against an account appropriating funds for official functions.''
Exhibit 2 at 19. Originally, the Department of Justice assumed that all
of the coffees took place in the White House residence, without ever
investigating whether that was the case. However, after the belated
production of White House videotapes, it became clear that the coffees
took place in several different rooms, including the Oval Office.
\173\ Exhibit 2 at 20.
---------------------------------------------------------------------------
iii. Solicitation of Foreign Nationals
In the course of the campaign finance investigation, the
Task Force ``developed substantial evidence that money from
foreign nationals flowed into the DNC as a result of the
massive fundraising effort coordinated by the DNC and the White
House.'' \174\ Freeh asserted that the Federal Election
Campaign Act (FECA) should apply to those contributions.\175\
However, early in the campaign finance investigation, the
Attorney General came to the opposite conclusion. She reasoned
that the foreign gifts given to the DNC were soft money, and
that soft money did not fall within the definition of
``contribution'' under the FECA.\176\ Freeh argued that Reno's
legal reasoning was intensely criticized by numerous election
law experts, and that at the very least, the issue was one of
unsettled law.\177\
---------------------------------------------------------------------------
\174\ Id.
\175\ Id. at 20. Section 441e of FECA states that:
It shall be unlawful for a foreign national directly or
through any other person to make any contribution of money
or other thing of value, or to promise expressly or
impliedly to make any such contribution, in connection with
an election to any political office or in connection with
any primary election, convention, or caucus held to select
candidates for any political office; or for any person to
solicit, accept, or receive any such contribution from a
---------------------------------------------------------------------------
foreign national. 2 U.S.C. Sec. 441e.
\176\ Exhibit 2 at 20. Contribution is defined as including, ``any
gift, subscription, loan, advance, or deposit of money or anything of
value made by any person for the purpose of influencing any election
for Federal office . . .'' 2 U.S.C. section 431(8)(A)(i) (emphasis
added).
\177\ Exhibit 2 at 20.
---------------------------------------------------------------------------
Soft money is neither defined nor specifically addressed in
the FECA, and therefore Freeh questioned whether the Department
of Justice should have engaged in ``elaborate legal analysis''
in the midst of determining whether an independent counsel
should be appointed.\178\ He also pointed out that it was
premature for Attorney General Reno to consider all foreign
gifts soft money.\179\ Freeh stated, ``[i]n light of the
evidence of nearly absolute control of DNC fundraising efforts
by the White House, there is a very real issue about whether
the `soft money' argument is largely a sham.'' \180\
---------------------------------------------------------------------------
\178\ Id. at 20 (quoting 1987 U.S.C.C.A.N. 2158).
\179\ Id. at 21.
\180\ Id. Freeh cited to a Jan. 6, 1997, statement of the FEC
general counsel, indicating that if money is ``used for a candidate's
election directly, then there is no question that 441e applies.'' Id.
---------------------------------------------------------------------------
d. Additional Reasons to Appoint an Independent Counsel
i. The DNC Was ``Commandeered'' by the White House
Freeh pointed out that the independent counsel statute was
established because of the campaign related abuses of
Watergate.\181\ Top campaign officials were the only non-
government officials to be included in the mandatory provision
of the Act because those individuals are so important to the
individual running for President.\182\ Freeh acknowledged that
under the statute, only the chairman and treasurer of Clinton/
Gore would be covered. However, he argued that in the campaign
finance case, the DNC itself should trigger the discretionary
provision of the Act:
---------------------------------------------------------------------------
\181\ Id. at 23.
\182\ Id.
It does not by its terms cover senior officers of the
Democratic National Committee. However, in deciding
whether to exercise her discretionary authority, the
Attorney General should consider how the DNC was used
during the 1996 election cycle. By essentially
commandeering the DNC for the purpose of getting the
President re-elected, the White House appears to have
erased the traditional lines between the President's
own campaign committee and the national party
committee. In fact, the DNC was in large part the
President's central re-election machine, under the
tight control of senior White House advisors.\183\
---------------------------------------------------------------------------
\183\ Id. at 24.
---------------------------------------------------------------------------
ii. The FBI Had a Conflict in Releasing National Security
Matters to the White House
The campaign finance investigation required the Task Force
to look into allegations of Chinese Government efforts to
influence the United States elections.\184\ This particular
portion of the investigation caused a conflict for both the FBI
and Department of Justice because they had ``conflicting duties
to (1) keep the President informed about significant national
security matters, and (2) simultaneously keep from the White
House certain national security information that may relate to
the ongoing criminal investigation.'' \185\ Freeh acknowledged
that the appointment of an independent counsel would not
entirely alleviate the problem, but would ease the perception
of a conflict.
---------------------------------------------------------------------------
\184\ Id. at 25.
\185\ Id.
---------------------------------------------------------------------------
e. Conclusions
Director Freeh found there was sufficient evidence under
both the mandatory and discretionary provisions of the Act for
Attorney General Reno to request the appointment of an
independent counsel. Freeh argued that the Attorney General's
interpretation of the Act, requiring an actual conflict of
interest, was not supported by the language or the legislative
history of the statute.\186\ Finally, he concluded by stating:
---------------------------------------------------------------------------
\186\ Id. at 27.
The Chief Campcon investigator, Director Freeh, has
concluded that the investigation presents the
Department with a political conflict of interest. This
by itself does not trigger the independent counsel
statute, since the ultimate resolution of the conflict
issue rests solely with the Attorney General. However,
the Director's view should be a significant factor in
the Attorney General's continued analysis of whether to
invoke the discretionary provision.\187\
---------------------------------------------------------------------------
\187\ Id.
Attorney General Reno ultimately disregarded the arguments set
forth in Director Freeh's memorandum. She steadfastly
maintained that she had no actual conflict of interest, despite
what appearances might have been.
2. The La Bella Memorandum
Shortly before Freeh submitted his memorandum to the
Attorney General, there was a major reorganization of the Task
Force. The Department of Justice realized that the established
structure of the Task Force, with PIS as the leader, was not
able to conduct the investigation in a productive manner.\188\
Therefore, in September 1997, Reno brought in Charles La Bella,
a prosecutor from outside of Main Justice, to lead the Task
Force.\189\ La Bella stayed with the Task Force for
approximately 1 year, leaving between July and August
1998.\190\
---------------------------------------------------------------------------
\188\ GAO report at 34.
\189\ The GAO report on the Campaign Finance Task Force found that
``[i]n the fall of 1997, displeased with the investigator's slow pace,
disclosures in the press that critical leads were not being pursued,
and internal frictions plaguing CFTF, the Attorney General and FBI
Director Freeh decided to replace CFTF's leaderhip.'' GAO report at 34.
\190\ GAO report at 41. La Bella returned to San Diego to become
Acting U.S. Attorney for the Southern District of California. However,
he was not nominated to fill the position permanently. Id.
---------------------------------------------------------------------------
Prior to leaving the Task Force, La Bella drafted a 94-page
memorandum outlining the facts surrounding several different
investigations that La Bella believed warranted the appointment
of an independent counsel.\191\ La Bella came to the same
conclusion as Director Freeh had nearly 8 months earlier, that
an independent counsel should have been appointed. He also
echoed the concepts of a ``core group'' and ``opportunists''
outlined in the Freeh memo. However, La Bella focused his
summary around individuals involved in the Task Force's
investigation, including: Harold Ickes; President Clinton; Vice
President Gore; Hillary Rodham Clinton; and, John Huang, Marvin
Rosen, David Mercer and the DNC.\192\ With respect to the
individual Task Force investigations, La Bella articulated
common themes running through each and tying them together:
---------------------------------------------------------------------------
\191\ Memorandum from Charles G. La Bella, Supervising Attorney,
Campaign Financing Task Force, and James DeSarno, Assistant Director,
Federal Bureau of Investigation, to Janet Reno, Attorney General, U.S.
Department of Justice, and Louis J. Freeh, Director, Federal Bureau of
Investigation (July 16, 1998) (exhibit 3).
\192\ Exhibit 3.
the desperate need to raise enormous sums of money to
finance a media campaign designed to bring the
Democratic party back from the brink after the
devastating Congressional losses during the 1994
election cycle, and the calculated use of access to the
White House and high level officials--including the
President and First Lady--by the White House, DNC and
Clinton/Gore '96, as leverage to extract contributions
from individuals who were themselves using access as a
means to enhance their business opportunities.\193\
---------------------------------------------------------------------------
\193\ Id. at 1.
La Bella, like Freeh, focused on the idea that the exploitation
of the campaign financing laws were a direct result of the
conditions established by the White House.
According to La Bella, as the pressure to raise money grew,
there was a blurring of lines between the campaign and the
DNC--there was an intermingling of funds, resources, and
personnel--that eventually led to violations of the campaign
contribution laws.\194\ La Bella explained:
---------------------------------------------------------------------------
\194\ Id. at 3.
The intentional conduct and the ``willful ignorance''
uncovered by our investigations, when combined with the
line blurring, resulted in a situation where abuse was
rampant, and indeed the norm. At some point the
campaign was so corrupted by bloated fundraising and
questionable ``contributions'' that the system became a
caricature of itself. It is hoped that this report will
place in context the abuses uncovered in our
investigation: a system designed to raise money by
whatever means, and from whomever would give it,
without meaningful attention to the lawfulness of the
contributions or the manner in which the money was
spent.\195\
---------------------------------------------------------------------------
\195\ Id. at 6.
La Bella did not reserve his criticism for only the Clinton
administration and the DNC; he was equally critical in his
evaluation of the manner in which the Department of Justice had
conducted the campaign finance investigation.
a. The Department of Justice's Investigative Approach
The Task Force as it was run by PIS operated under a method
of investigation which La Bella described as a ``stovepipe''
approach, conducting 30 to 40 investigations of individual
targets at any given time.\196\ Each investigation was assigned
an investigative team of agents and prosecutors who were solely
responsible for that particular investigation, and necessarily
focused on its own issue.\197\ La Bella expressed concern that
while each team might have been aware of other teams'
overlapping activities, there had never been an overall
review.\198\ Likewise, when the Attorney General and her
advisers viewed the results of the investigation, they too
focused on it one allegation at a time. Rather than viewing the
entire ``landscape'' of allegations against covered persons,
PIS, which had primary authority for the Act, viewed each
allegation independently, making it difficult to trigger the
application of the Act.\199\ La Bella recommended an approach
that looked at all of the allegations in a broader
context.\200\
---------------------------------------------------------------------------
\196\ Id. at 6. La Bella indicated that there were several
investigations where key players and themes were consistent, such as
the investigations of Johnny Chung, Maria Hsia, Charlie Trie, Mark
Jimenez, Howard Glicken, and John Huang. Id.
\197\ Id.
\198\ Id. at 7.
\199\ Id.
\200\ Id.
---------------------------------------------------------------------------
The memorandum was La Bella's attempt to bring all the
pieces of the investigation together to form a whole picture.
Upon doing so, he remarked that the information developed to
that point presented ``the earmarks of a loose enterprise
employing different actors at different levels who share a
common goal: bring in the money.'' \201\ La Bella believed that
such a situation should trigger the Independent Counsel Act.
However, in practical terms, nobody at the Task Force had ever
looked at the overall investigation to determine whether all
the pieces of information put together might trigger the Act.
That is, when viewed as a whole, whether there was specific
information from a credible source that a covered person may
have violated a Federal criminal law. La Bella asserted that
each time such an investigation was suggested, it was rejected
based on the claim that such an investigation could only be
conducted as a preliminary investigation under the Act.\202\
The Department of Justice then insisted that a preliminary
investigation could only be initiated if there were ``specific
and credible evidence that a potential criminal violation has
occurred.'' \203\ However, the Justice Department's argument
was circular. The Task Force was unable to look for information
on covered persons unless there was a preliminary
investigation, but could not initiate a preliminary
investigation without specific and credible evidence; and, in
order to find evidence one had to investigate. Obviously, with
those limitations placed on the Task Force, investigations
relating to covered persons would go nowhere. The Task Force
had to hope that information on covered individuals would just
appear.
---------------------------------------------------------------------------
\201\ Id.
\202\ Id. at 7-8.
\203\ Id. at 8. La Bella took issue with the Department of
Justice's use of the term ``evidence,'' which was not in the statutory
language. He believed it created a higher threshold for preliminary
investigations.
---------------------------------------------------------------------------
The information in the La Bella memo was information that
the Task Force already had. However, La Bella attempted to put
it in the context of the entire investigation.\204\ Having done
that, La Bella was able to distinguish alarming patterns
running through each investigation. Were he to have reviewed
the individual actions in an investigative vacuum, they might
have appeared innocuous.\205\ La Bella remarked:
---------------------------------------------------------------------------
\204\ Id.
\205\ Id.
This is especially true with respect to the conduct of
senior White House officials and key DNC and Clinton/
Gore officials. These individuals make brief, albeit
key, appearances in the individual investigations.
While their participation in a single investigation
generally falls short of a knowing participation in
potential criminal conduct, the sum of their
appearances results in a pattern of conduct worthy of
investigation.\206\
---------------------------------------------------------------------------
\206\ Id.
---------------------------------------------------------------------------
b. The Department of Justice Did Not Apply Thresholds of
Investigation Uniformly
i. Initiating a Preliminary Investigation
The Attorney General instructed the Task Force to ``leave
no stone unturned.'' \207\ The Task Force was able to open an
investigation on an uncovered person ``based upon a
determination that there is an allegation which, if true, may
present a violation of federal law.'' \208\ Although the
threshold was admittedly low, the Department of Justice had
articulated ``compelling'' reasons why it was the most
appropriate policy for the campaign finance investigation:
---------------------------------------------------------------------------
\207\ Id. at 9.
\208\ Id.
the shortened statue of limitations for election
violations; the rash of potential illegal activities
presented during the 1996 election cycle and the
resulting political crisis; the apparent injection of
foreign money into our political system; the widespread
circumvention of existing election law restrictions;
the exposure of gaps in the law which permitted
wholesale circumvention of federal election laws; and
the possible participation--or willful blindness--of
public officials, and high level party officials in
connection with these activities.\209\
---------------------------------------------------------------------------
\209\ Id. at 13.
The Justice Department had put forth strong justifications for
its position, but seemed to ignore that reasoning when it came
to certain individuals. La Bella contrasted the stated standard
for opening a Task Force investigation with the one that had
been imposed when dealing with covered persons under the
Independent Counsel Act. Particularly, when dealing with the
President, Vice President, and senior White House personnel,
the Justice Department required specific and credible evidence
that a crime had been committed in order for the Department,
through PIS, to commence an investigation.\210\ According to La
Bella, this structure made it nearly impossible to investigate
covered persons.
---------------------------------------------------------------------------
\210\ Id. at 9.
---------------------------------------------------------------------------
La Bella stated that ``the Department would not investigate
covered White House personnel nor open a preliminary inquiry
unless there was a critical mass of specific and credible
evidence of a federal violation.'' \211\ Again, the standard
the Attorney General mandated in cases of covered persons was
``specific and credible evidence that a potential criminal
violation has occurred.'' \212\ For La Bella, the use of the
word ``evidence'' instead of ``information,'' as is used in the
statute, also indicated a higher standard. He also explained
that when an allegation against a covered person was made, PIS
took over the investigation, taking it out of the Task Force's
jurisdiction. Therefore PIS controlled the standards used to
consider the allegations under the Act.\213\ In contrast, he
noted that the Task Force initiated criminal investigations of
individuals not covered by the Act on a ``wisp of
information.'' \214\ Furthermore, he pointed out that even when
the Department was conducting a preliminary investigation under
the Act, the President, Vice President, and senior White House
officials were treated more favorably than others were.\215\
For example, the matters involving Interior Secretary Bruce
Babbitt and Labor Secretary Alexis Herman illustrated La
Bella's contention.\216\ He observed that the amount of
information needed to trigger the Independent Counsel Act, and
subsequently warrant further investigation in those cases, was
extremely low in comparison to the standards set for the
President, Vice President, and senior White House
personnel.\217\
---------------------------------------------------------------------------
\211\ Id. at 11. La Bella also made the distinction between the
terms ``evidence'' and ``information.'' The Justice Department
consistently used the term evidence when referring to the standard in
the Independent Counsel Act, whereas the statutory language refers to
``specific information from a credible source.'' According to La Bella,
the term evidence suggests a higher burden of proof. To him, the
distinction, although subtle, was significant. Id. at 10-11.
\212\ Id. at 8 (emphasis added).
\213\ Id. at 10.
\214\ Id. at 11.
\215\ Id.
\216\ Id. Independent counsels were appointed for both Babbitt and
Herman. In re Bruce Edward Babbitt, application of the Attorney General
pursuant to 28 U.S.C. Sec. 592(c)(1) for the appointment of an
independent counsel (Special Div. D.C. Cir.) (Feb. 11, 1998); in re
Alexis M. Herman, application of the Attorney General pursuant to 28
U.S.C. Sec. 592(c)(1) for the appointment of an independent counsel
(Special Div. D.C. Cir.) (May 11, 1998).
\217\ Exhibit 3 at 11.
---------------------------------------------------------------------------
La Bella believed that the standard for initiating a
preliminary investigation under the Act should be the same as
the threshold applied when determining whether to open a Task
Force investigation.\218\ The Attorney General, La Bella
argued, was artificially raising the standard to determine
whether there were grounds sufficient to investigate. Looking
to the legislative history, La Bella stated that the reference
to ``the specificity of the information and the credibility of
the source for the information'' was intended to limit the
factors the Attorney General could consider when deciding
whether to proceed with a preliminary investigation. However,
Reno turned the language around to create some type of higher
threshold for even commencing an investigation that might
implicate a covered person.\219\ La Bella observed that the
Department of Justice engaged in ``unnecessary complication''
when applying the Independent Counsel Act standards, both in
commencing and conducting an investigation.\220\ La Bella
added:
---------------------------------------------------------------------------
\218\ Id.
\219\ Id. at 12
\220\ Id.
This is especially so where the President and White
House personnel are involved. Indeed, the continuing
and often heated debate involving the so-called Common
Cause allegations is an apt example. If these
allegations involved anyone other than the President,
Vice President, senior White House, or DNC and Clinton/
Gore '96 officials, an appropriate investigation would
have commenced months ago without hesitation. However,
simply because the subjects of the investigation are
covered persons, a heated debated [sic] has raged
within the Department as to whether to investigate at
all. The allegations remain unaddressed.\221\
---------------------------------------------------------------------------
\221\ Id. at 14.
Also with regard to the investigation of the Common Cause
allegations, La Bella charged that, ``[t]he contortions that
the Department has gone through to avoid investigating these
allegations are apparent.'' \222\ The standards for initiating
an investigation, La Bella argued, should be identical, and the
better standard to use was the general Task Force standard: a
determination that there is an allegation which, if true, may
present a violation of federal law.'' \223\
---------------------------------------------------------------------------
\222\ Id.
\223\ Id. at 9, 14. Of course, the requirement that the information
be specific and from a credible source would still be taken into
account. Id.
---------------------------------------------------------------------------
ii. Determining Whether Further Investigation Was
Warranted
Like the standard for commencing an investigation, La Bella
urged that the standard for determining whether further
investigation was warranted in a preliminary investigation be
similar to the standard the Task Force used in both conducting
and closing investigations.\224\ In the Task Force's
investigations, they adhered to the ``leave no stone unturned''
policy demanded by the Attorney General.\225\ Conversely, in
preliminary investigations, the Attorney General appeared to
search for reasons not to continue to investigate. For example,
during the campaign finance investigation, she often turned to
examining the intent of the individual under investigation in
order to close the investigation.\226\ The Independent Counsel
Act instructed the Attorney General to comply with the
``written or other established policies of the Department of
Justice with respect to the conduct of criminal
investigations.'' \227\ La Bella asserted that the ``leave no
stone unturned'' theory was the established policy of the Task
Force's investigation, as mandated by Reno.\228\ As such, the
Department of Justice should adhere to the same standard when
considering whether further investigation is warranted in a
preliminary investigation. That is, the Attorney General should
not have engaged in contortions to find a somewhat viable
reason not to investigate. Anything that might even be
considered prosecutorial discretion should have been left to an
independent counsel to decide.
---------------------------------------------------------------------------
\224\ Id. at 12.
\225\ Id.
\226\ The statute makes it clear that the Attorney General may not
base her recommendation on a finding that an official lacked the state
of mind required for the crime, unless there exists ``clear and
convincing evidence.'' ``Independent Counsel Provisions: An Overview of
the Operation of the Law,'' CRS Rept. No. 98-283, at 4 (Mar. 20, 1998)
(citing H. Rept. No. 103-511, at 11 (1994)). Furthermore, Congress, in
enacting the statute, believed that it would be a ``rare case'' in
which the Attorney General could come to such a conclusion. Id. The
House report notes: ``Congress believes that the Attorney General
should rarely close a matter under the Independent Counsel law based
upon finding a lack of criminal intent, due to the subjective judgments
required and the limited role accorded the Attorney General in the
independent counsel process.'' Id. However, that is precisely what Reno
did in the case of Vice President Gore.
\227\ 28 U.S.C. Sec. 592(c)(1) (emphasis added).
\228\ Exhibit 3 at 14. La Bella stated, ``[i]t has also been the
policy of the Task Force to continue to investigate allegations and to
decline prosecution and/or further investigation only after each and
every allegation has been fully investigated. This is true despite the
fact that some allegations approached what a reasonable investigator
might characterize as frivolous.'' Id. at n.2.
---------------------------------------------------------------------------
iii. La Bella's Interpretation of the Legislative History
La Bella supported his theories with the legislative
history of the Independent Counsel Act.\229\ He demonstrated
that Congress often corrected the manner in which the
Department of Justice was implementing the Act by amending the
language of the Act. At the outset, he stated that Congress
intended to create a system under which covered individuals
were treated in the same manner as other individuals being
investigated by the Justice Department, no more harshly or
leniently.\230\ The amendments in 1987 and 1994 made clear that
individuals covered by the Act should be treated the same as
non-covered individuals in determining whether an investigation
is initiated, and once initiated, whether further investigation
was warranted.\231\ This was established, according to La
Bella, by the language requiring the Department to follow
``established policies'' in making its determinations.\232\
---------------------------------------------------------------------------
\229\ Id. at 15.
\230\ Id.
\231\ Id.
\232\ Id.
---------------------------------------------------------------------------
La Bella cited numerous examples of the Congress
criticizing the Department for interpreting the Independent
Counsel Act in a manner that would serve Justice's own
purposes. By doing so, the Justice Department substituted its
own judgment for that of Congress.\233\ In order to demonstrate
his point that the Department had raised the bar for
investigating covered individuals, La Bella pointed to the
following passage to demonstrate Congress' intent on the
standards for investigation:
---------------------------------------------------------------------------
\233\ Id. at 18.
The purpose of allowing the Justice Department to
conduct a preliminary investigation is to allow an
opportunity for frivolous or totally groundless
allegations to be weeded out. . . . On the other hand,
as soon as there is any indication whatsoever that the
allegations. . . . involving a high-level official may
be serious or have any potential chance of
substantiation, a Special Prosecutor should be
appointed to take over the investigation.\234\
---------------------------------------------------------------------------
\234\ Id. (citing to 1978 U.S.C.C.A.N. at 4270).
La Bella acknowledged that the Independent Counsel Act was not
a ``model'' piece of legislation, but believed that people in
the Department of Justice were trying to substitute what they
thought to be the proper threshold for investigation.\235\
---------------------------------------------------------------------------
\235\ Id.
---------------------------------------------------------------------------
a. Information Sufficient to Warrant the Appointment of an
Independent Counsel
There were numerous fact patterns involving covered and
other individuals that the Task Force had looked into and that
La Bella believed were sufficient to warrant the appointment of
an independent counsel. Among those individuals implicated in
the investigation were: President Clinton; Vice President Gore;
Harold Ickes; Hillary Rodham Clinton; and, John Huang, Marvin
Rosen, David Mercer, and the DNC.\236\
---------------------------------------------------------------------------
\236\ See exhibit 3 at 20-79.
---------------------------------------------------------------------------
i. Harold Ickes
There were numerous allegations surrounding Harold Ickes,
President Clinton's Deputy Chief of Staff, during the campaign
finance investigation. Ickes was at the center of the Common
Cause allegations because he ran the DNC and Clinton/Gore
reelection efforts from the White House.\237\ Ickes was not a
``covered person'' under the mandatory provision of the Act
because his salary did not reach level II of the Executive
Schedule, a requirement under the Act.\238\ However, La Bella
believed that the mandatory provision should be applied to
Ickes. His argument was based on the theory that Ickes was a de
facto officer of Clinton/Gore '96, exercising authority at the
national level.\239\
---------------------------------------------------------------------------
\237\ Id. at 24.
\238\ 28 U.S.C. Sec. 591(b)(3). La Bella pointed out that the
President is authorized to pay 25 persons at level II, only 6
individuals in the Executive Office of the President are paid at that
level--none of whom are involved in the campaign finance investigation.
In prior administrations, the Deputy Chief of Staff had been covered by
the Act by virtue of his salary. Exhibit 3 at 20.
\239\ Exhibit 3 at 20. As de facto chairman of the re-elect, Ickes
would be subject to the Independent Counsel Act pursuant to section
591(b)(6).
---------------------------------------------------------------------------
In support of his argument, La Bella pointed to information
such as the DNC and Clinton/Gore '96 reporting to Ickes before
authorizing the disbursement of any funds or taking other
actions.\240\ In addition, individuals involved in the re-
election effort confirmed Ickes leadership role.\241\ La Bella
applied the facts of Ickes case to a two-part test developed by
PIS for determining whether an individual was a covered person
under section 591(b)(6) of the Act.\242\ The test relied upon
an analysis of title and function in order to determine whether
an individual was a covered person.\243\ La Bella argued that
when he reviewed the reality or function of Ickes' position
rather than just the title he was given, Ickes fell under the
mandatory provision because of his re-elect activities.\244\ In
the alternative, La Bella believed that Ickes fit within the
discretionary provision of the Act as well.\245\ La Bella cited
to the legislative history of the discretionary provision as
intending ``to include members of the President's family, and
lower level campaign and government officials who are perceived
to be close to the President.'' \246\ Due to Ickes role in the
campaign, the control he wielded, and his close relationship to
the President, La Bella argued that the circumstances fit the
type of political conflict that the Act envisioned.\247\
---------------------------------------------------------------------------
\240\ Exhibit 3 at 22.
\241\ Id. at 23. According to La Bella, Clinton campaign advisor
Dick Morris ``confirmed that Ickes was the sole person charged with
making financial decisions for the White House, DNC and the reelection
effort.'' Id. Morris also added that Ickes controlled ``every aspect of
DNC and Clinton/Gore fundraising and that Ickes was brought in by the
President.'' Id. Finally, in an interview with former White House Chief
of Staff Leon Panetta, Panetta told the Task Force that he personally
did not have the experience needed to run a national Presidential
campaign and he therefore ``relied heavily on Ickes to handle all
issues relating to the President's re-election.'' Id. at 24.
\242\ Id. at 21. The test was originally developed to determine
whether Clinton fundraiser Terry McAuliffe was a covered person under
the Act. Ultimately, PIS determined that he was not a covered person.
Id.
\243\ Id.
\244\ Id.
\245\ Id. at 25.
\246\ Id. at 25 (citing 1987 U.S.C.C.A.N. at 2165).
\247\ Id. Ultimately, the Attorney General decided to open a
preliminary investigation of Harold Ickes under the Independent Counsel
Act to investigate allegations of perjury before the Senate
Governmental Affairs Committee. No independent counsel was appointed.
---------------------------------------------------------------------------
Once La Bella established that the Independent Counsel Act
should cover Ickes, he turned to the fact patterns that
warranted the appointment of an independent counsel. The first
argument La Bella made was that Ickes ``knowingly permitted the
DNC and Clinton/Gore '96 to accept conduit contributions
collected by Charlie Trie \248\ and to file false and
misleading reports with the FEC.'' \249\ Ickes had a unique
knowledge of Trie's questionable contributions to another
entity associated with the Clintons, the Presidential Legal
Expense Trust (PLET).\250\ Ickes, along with several senior
White House staff, was briefed on the questionable source for
the funds.\251\ During the meeting, Deputy Counsel to the
President, Bruce Lindsey mentioned that he knew Trie from
Arkansas, and that Trie was involved with the Democratic
party.\252\ Ickes, who La Bella considered the de facto head of
Clinton/Gore '96 and the DNC, was the only individual at the
meeting who had regular contacts with those organizations.\253\
He concluded that Ickes therefore had a duty to warn both
organizations.
---------------------------------------------------------------------------
\248\ Trie was a close friend of President Clinton's from Arkansas
with wide-ranging access to the White House, Presidential advisors, and
Clinton administration officials. See H. Rept. No. 105-829 at 1347
(1998). Trie later plead guilty to knowingly causing the DNC to make a
false report to the FEC and knowingly causing a conduit contribution to
be made to the DNC.
\249\ Exhibit 3 at 26.
\250\ The PLET was established by and for the benefit of the
President and the First Lady for the purpose of paying their personal
legal bills. Contributions to the PLET were limited to $1,000 per
person. See S. Rept. No. 105-167, at 2711 (1998).
\251\ Exhibit 3 at 26. Michael Cardozo, the PLET Executive
Director, hired a private investigator to examine the Trie donations.
Cardozo briefed Ickes, the First Lady's Chief of Staff, and several of
the White House counsels regarding the private investigators findings.
In his prepared statement before the Senate Governmental Affairs
Committee, Cardozo explained what the investigators found and why
Trie's contributions were ultimately returned:
One, the unique circumstances under which the funds were
delivered to the Trust; Two, the fact that it now appeared
that most if not all of these contributions were raised at
meetings of a religious organization, the Ching Hai--
Buddhist sect which according to IGI had been described by
some as a ``cult'' and which raised concerns abut peer
pressure and coercion; and Three, concern over the ultimate
source of some of the contributions due to what appeared to
be the advancement of funds by the Ching Hai organization
---------------------------------------------------------------------------
to some contributors. Id. at 30.
\252\ Exhibit 3 at 29.
\253\ Id.
---------------------------------------------------------------------------
After the campaign finance scandal was reported in the
press, the Executive Director of the DNC, B.J. Thornberry,
asked Ickes about DNC fundraiser John Huang.\254\ Ickes
indicated that if the DNC were looking at John Huang, they
should also take a look at Charlie Trie.\255\ The comment, La
Bella believed, spoke volumes about Ickes knowledge of Trie and
his fundraising.\256\ La Bella summarized, ``[a]t best, Ickes
engineered an effort to consciously avoid learning the truth
about Trie. At worst, Ickes' failure to act was intended to
conceal the truth from those who would have protected the DNC
and Clinton/Gore from Trie's illegal solicitations/
contributions.'' \257\
---------------------------------------------------------------------------
\254\ Id. at 32.
\255\ Id.
\256\ Id.
\257\ Id. at 35.
---------------------------------------------------------------------------
La Bella also believed that Ickes' role in the Common Cause
allegations was troubling. He asserted that the information
uncovered to date warranted the appointment of an independent
counsel. He expressed frustration that the Department had not
taken any action whatsoever, even independent of Ickes, on the
Common Cause allegations.\258\ La Bella outlined the
Department's refusal to initiate an investigation and stated:
---------------------------------------------------------------------------
\258\ Id. at 37.
The alternative approach--a parochial and professorial
application of the [Independent Counsel Act]--is the
very approach that has gotten the Department into
trouble in the past. It is the same type of maneuvering
and practice that triggered the 1987 Amendments to the
ICA and the sharp criticism of the Department that
accompanied these amendments. Indeed, one could argue
that the Department's treatment of the Common Cause
allegations has been marked by gamesmanship rather than
an even-handed analysis of the issues.\259\
---------------------------------------------------------------------------
\259\ Id. at 38.
Ickes was intimately involved with the media efforts that were
central to the Common Cause allegations. The President
conferred the authority to run the re-election effort upon
Ickes, who did so. Therefore, La Bella concluded that ``[t]o
the extent that there was any effort to circumvent the
regulations outlined above, Ickes was at the heart of the
effort.''\260\
---------------------------------------------------------------------------
\260\ Id. at 40.
---------------------------------------------------------------------------
The final area of investigation relating to Ickes was the
Diamond Walnut matter.\261\ The allegations centered on whether
there was an effort to encourage teamster contributions and
support of the Democratic party through the use of the
administration's influence to attempt to settle an ongoing
labor dispute.\262\ Ickes testified about the matter before the
Senate Governmental Affairs Committee, and there were some
questions regarding the truthfulness of his testimony.\263\ La
Bella outlined the facts and information that the Task Force
had to date, and admitted that the investigation was in its
``infancy.'' \264\ However, he concluded that there was
sufficient specific information from a credible source to
commence an investigation. The Task Force had done so, however,
La Bella believed that, in light of the other information on
Ickes, a preliminary investigation should have been
initiated.\265\
---------------------------------------------------------------------------
\261\ Id. at 41.
\262\ Id.
\263\ Id. at 41-42.
\264\ Id. at 45.
\265\ Id.
---------------------------------------------------------------------------
ii. President Clinton
La Bella laid out his argument for appointing an
independent counsel to investigate the President, who is a
covered person under the Act. The main issues he addressed
were: Charlie Trie's PLET contributions and subsequent
appointment to a Presidential commission; the Common Cause
allegations and conspiracy to violate soft money regulations;
and, the President and senior White House officials' knowledge
of foreign contributions.\266\
---------------------------------------------------------------------------
\266\ Id. at 46-56.
---------------------------------------------------------------------------
As mentioned in the previous section, Charlie Trie, a close
friend of the President and DNC fundraiser and contributor,
delivered questionable contributions to the PLET totaling
$789,000. According to its own guidelines, the PLET only
accepted contributions from individual U.S. citizens using
their own funds; and, the contributions had to be voluntary.
Ultimately, it was discovered that the Trie contributions came
from the Supreme Master Suma Ching Hai of the Ching Hai
Buddhist sect, who offered to reimburse her followers if they
contributed $1,000 to the PLET.\267\
---------------------------------------------------------------------------
\267\ See S. Rept. No. 105-167, at 2722 (1998). The money orders
delivered to the PLET by Trie were sequentially numbered, meaning that
they were purchased at one location. However, they were written from
people living in different parts of the country. Many of the checks had
the identical spelling error of ``presidencial.'' In addition, some of
the checks were written by one person on behalf of another, in
violation of trust guidelines. Finally, the Supreme Master Suma Ching
Hai, who provided the reimbursement for the contributions, is based out
of Taiwan--a violation of the foreign money guideline. Id.
---------------------------------------------------------------------------
Not only were the contributions suspect, but the timing of
the contributions was suspect as well. Around the time of the
contributions, Trie was appointed to the Commission on U.S.
Trade and Investment Policy (Commission).\268\ The President
issued an Executive order expanding the size of the Commission
on January 31, 1996, while Trie had visited the President 2
days earlier.\269\ Trie delivered the first contributions on
March 21, 1996.\270\ Approximately a month later, Trie received
his formal appointment to the Commission.\271\ During the time
period between the delivery of the contributions and Trie's
appointment, the PLET Executive Director made the First Lady
and senior White House staff aware of the problems with the
contributions and Trie's delivery of them.\272\ Subsequently,
the President himself was made aware of the problems, as he
affirmed the decision to return the funds. La Bella concluded
that based on the President's knowledge of the contributions
and of the status of Charlie Trie as a fundraiser and
contributor to the DNC and Clinton/Gore '96, his involvement
should have been further investigated.\273\
---------------------------------------------------------------------------
\268\ The committee learned that the White House made the
appointment process for the Commission very political. Because he had
been instrumental in the creation of the commission, Senator Bingaman
and his staff were supposed to have had a great deal of input into the
creation of the Commission. Bingaman's staffer, Steve Clemons, found
that he had a great deal of trouble getting Bingaman's candidates for
the Commission approved. Charles Duncan, the Assistant Director of
Presidential Personnel told Clemons that he checked all candidates
names against a DNC donor list. When Trie's appointment was brought up,
Clemons objected based on lack of experience and quality of candidate.
However, the White House responded that Trie was a ``must appointment''
from the ``highest levels of the White House.'' See H. Rept. No. 105-
829, at 1374-1390 (1998).
\269\ Exhibit 3 at 46.
\270\ Id.
\271\ Id. at 48.
\272\ Id.
\273\ Id. at 50.
---------------------------------------------------------------------------
La Bella also believed that the President played a major
role in the Common Cause allegations.\274\ He pointed out that
the President was regularly briefed on the media fund and re-
election efforts.\275\ In addition, as Director Freeh pointed
out in his memorandum, the President was highly involved in the
creation and placement of the ads. It was the President who
entrusted Harold Ickes with running the media campaign that is
at the heart of the Common Cause allegations. Therefore, La
Bella imputes to the President knowledge of Ickes' control over
both the DNC and Clinton/Gore '96 in order to effect the media
campaign.\276\
---------------------------------------------------------------------------
\274\ Id.
\275\ Id.
\276\ Id.
---------------------------------------------------------------------------
In conjunction with the media fund and general re-election
efforts, there was an ongoing demand for more money to sustain
the campaign.\277\ La Bella described events that he believed
demonstrated a pattern of activity involving senior White House
officials. He added, ``[t]his pattern suggests a level of
knowledge within the White House--including the President's and
First Lady's offices--concerning the injection of foreign funds
into the reelection effort.'' \278\ The two examples La Bella
used were the White House's handling of major donors Johnny
Chung and Charlie Trie.
---------------------------------------------------------------------------
\277\Id. at 51.
\278\ Id.
---------------------------------------------------------------------------
Chung had a significant amount of contact with the First
Lady's office in order to make arrangements for his Chinese
associates to meet both the President and the First Lady. Chung
first made attempts to get meetings and perks through the
DNC.\279\ However, even the DNC was wary of Chung and his
Chinese business associates. Therefore, Chung went to the First
Lady's Chief of Staff, Maggie Williams. On two separate
occasions when the DNC would not deliver, Williams was able to
arrange a photo-op with the President or First Lady for Chung
and groups of Chinese businessmen.\280\ In one instance, Chung
offered the DNC $50,000 to arrange for him and a group of
Chinese businessmen to meet with President Clinton.\281\ When
the DNC would not do it, the First Lady's office did, using the
$50,000 to retire a portion of its debt to the DNC.\282\ Chung
explained in an interview with the Task Force that he informed
White House and DNC staff that ``the more access he could get,
the better his business would be and the more he could
contribute.'' \283\ It should have been clear to anyone who
dealt with Chung that he was using funds from the Chinese
businessmen he brought to meet the President to contribute to
the DNC.
---------------------------------------------------------------------------
\279\ Id. at 52.
\280\ Id.
\281\ Id.
\282\ Id.
\283\ Id. at 60.
---------------------------------------------------------------------------
At one point, the NSC stepped in to question whether photos
of the President in the White House with the Chinese
businessmen should be released.\284\ The NSC was told that the
individuals were major DNC donors and that the President's
office would like to release the photos.\285\ After reviewing
the Johnny Chung scenarios, La Bella concluded that the
connection between Chung's foreign business associates and his
DNC contributions was quite clear. He added, ``[i]t is
inconceivable that senior officials at the White House were
oblivious to these connections.'' \286\
---------------------------------------------------------------------------
\284\ Id. at 53.
\285\ Id.
\286\ Id. at 54.
---------------------------------------------------------------------------
White House officials should have drawn similar conclusions
about Charlie Trie and his contributions. Both the President
and First Lady, along with senior White House staff, were
warned about the possibility of problems with Trie's
fundraising through the PLET fiasco.\287\ Although they were
aware that Trie was an active fundraiser for the DNC, nobody
brought the problem to the attention of the DNC.\288\ La Bella
stated:
---------------------------------------------------------------------------
\287\ Id. at 54-55.
\288\ Id. at 55.
These actions (and inactions) involving the President,
First Lady, Ickes, White House Counsel and Bruce
Lindsey, suggest a conscious decision not to learn the
truth about Trie's fundraising activities. By not
alerting the DNC and Clinton/Gore and by directing IGI
not to confront Trie about the PLET ``donations,'' the
White House chose not to impede a potent fundraiser at
a time when funds were needed.\289\
---------------------------------------------------------------------------
\289\ Id.
La Bella was able to tie all of the issues relating to the
President together through the Common Cause allegations. For
instance, the need to raise astronomical amounts of cash
developed from the need to pay for the media campaign. Because
the re-election efforts needed to raise so much cash, they
turned a blind eye to problems such as foreign money coming
into the campaign. Finally, under La Bella's analysis, the
President was in the middle of it all. He approved the media
campaign and followed it closely, assisted in raising the cash,
and attending all of the fundraisers where he greeted the
numerous foreign attendees, many of whom were unable to even
speak English. La Bella argued that the President's role needed
to be investigated and therefore, an independent counsel should
have been appointed.
iii. Vice President Gore
The argument for an investigation of Vice President Gore
was nearly identical to that of the President.\290\ Like the
President, Vice President Gore participated in the
decisionmaking on the media campaign and approved the
efforts.\291\ Furthermore, La Bella believed that there should
be a close review of the Vice President's fundraising calls
from his White House office.\292\ The Department of Justice
already had concluded that Gore did believe that he was
soliciting ``hard'' money, a distinction that meant that there
would have been no violation of law. However, La Bella did not
want to rely solely on the Vice President's word, he believed
further investigation was warranted.\293\
---------------------------------------------------------------------------
\290\ Id. at 57.
\291\ Id.
\292\ Id.
\293\ Id. In fact, a subsequent preliminary investigation was
opened on the Vice President when his aide's handwritten notes of a
money meeting were discovered. The notes showed that hard and soft
money splits for the media fund were discussed at a meeting the Vice
President attended.
---------------------------------------------------------------------------
iv. Hillary Rodham Clinton
The First Lady is not covered under the mandatory provision
of the Independent Counsel Act. However, La Bella concluded
that she should be considered under the discretionary
provision.\294\ He believed that, like Ickes and the President,
her role in the Charlie Trie contributions and failure to warn
the DNC and Clinton/Gore about those contributions should be
further investigated. In addition, the First Lady's office also
had a close relationship with contributor Johnny Chung that La
Bella believed also should be investigated further.\295\ Chung
often made arrangements through the First Lady's office for his
Chinese business associates to meet with the President and
First Lady.\296\ La Bella summarized, ``[g]iven our threshold
for opening investigations, determination of what the First
Lady knew and what she did (or chose not to do) in connection
with the information detailed above, is something which
deserves further inquiry.'' \297\
---------------------------------------------------------------------------
\294\ Id. at 60.
\295\ Id.
\296\ Id.
\297\ Id.
---------------------------------------------------------------------------
v. Other Campaign Finance Figures
Central to the campaign finance investigation was the role
of the DNC, its officers, and fundraisers. Millions of dollars
in illegal or otherwise questionable contributions flowed into
the DNC's coffers during the 1996 Federal elections. It was the
discovery of a foreign contribution to the DNC that led to the
campaign finance investigation. John Huang, a DNC fundraiser,
brought foreign money into the DNC and became a major figure in
the investigation. La Bella focused on the events that brought
John Huang to the DNC, the individuals involved, as well as the
actions taken by the DNC that allowed them to cross the line of
legality.\298\ He stated, ``[t]hese incidents suggest that at
some level, certain DNC fundraisers were actively engaged in
conduct which had the effect of concealing questionable
fundraising conduct from the FEC and the public.'' \299\
---------------------------------------------------------------------------
\298\ Id. at 61-73.
\299\ Id. at 61.
---------------------------------------------------------------------------
Huang came to the DNC as a fundraiser through the
intervention of President Clinton, who enlisted White House
aides and personally spoke with the DNC to help Huang.\300\
Prior to that, Huang was a political appointee, subject to the
Hatch Act, at the Department of Commerce.\301\ While at the
Commerce Department, Huang had engaged in fundraising
activities, in violation of the Hatch Act, with the full
knowledge, and possibly at the prompting of the DNC.\302\ La
Bella described how David Mercer, DNC Deputy Finance Director,
credited Huang's wife Jane for funds raised in order to hide
the fact that Huang was violating the Hatch Act.\303\ The
committee later learned that while Huang was still working at
the Commerce Department, White House Deputy Chief of Staff
Harold Ickes actually asked Huang to raise money.\304\
---------------------------------------------------------------------------
\300\ Id. at 69. Several individuals were working on Huang's behalf
to get him a fundraising position with the DNC, including James Riady,
Mark Middleton, and Joe Giroir. Riady, Huang, and Giroir had a meeting
with the President at which they discussed Huang working at the DNC as
a fundraiser. The President enlisted the help of White House aides
Bruce Lindsey and Harold Ickes to pave the way for Huang with the DNC.
Ickes contacted the head of DNC fundraising Marvin Rosen and DNC
Chairman Don Fowler to recommend Huang. Huang's application did not
move forward until the President personally mentioned Huang to Rosen
during a fundraiser. Shortly thereafter, Huang was hired at the DNC.
See H. Rept. No. 105-829, at 1207-1208 (1998).
\301\ Exhibit 3 at 70.
\302\ Id. at 67.
\303\ Id.
\304\ Ickes asked Huang to raise funds for Jesse Jackson, Jr.'s
congressional campaign during Huang's ``interview'' process for the
DNC. Huang stated that Ickes said something like, ``can you help out
from the Asian American community, round-up ten to fifteen thousand
dollars for Jesse Jackson, Jr.?'' Ultimately, Huang did raise several
thousand dollars for Jackson. FBI summary of Huang interview, DOJ-
H000127-131.
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Although there are no criminal penalties for violating the
Hatch Act, La Bella believed that the disclosure of the
violation would have jeopardized both Huang's Commerce
Department employment and his move to the DNC, resulting in a
``public relations nightmare.'' \305\ Futhermore, La Bella
indicated that the actions taken by Huang and Mercer possibly
were in violation of section 371 of the criminal code. Such a
violation would have involved a scheme to defraud the United
States based on the Hatch Act violation.\306\ In light of the
other evidence, and the potential section 371 violation, La
Bella believed that a full investigation was warranted.
---------------------------------------------------------------------------
\305\ Exhibit 3 at 67.
\306\ Id. La Bella indicated that Justice Department Research
showed that, ``a scheme to defraud in connection with false statements
and active concealment relating to campaign funds solicited in
violation of the Hatch Act, does present a viable prosecutable theory.
Id.
---------------------------------------------------------------------------
La Bella also cited to miscellaneous events that raised
questions about whether DNC officials were aware of potential
irregularities and illegalities in fundraising. For instance,
by mid-1994, the DNC practically dismantled its procedures for
vetting all contributions of $10,000 or more.\307\ Without
vetting, the DNC would have no information on large
contributions. As further evidence he cited to Johnny Chung's
efforts to bring numerous Chinese businessmen to meet with the
President. For example, Chung wrote to DNC Finance Director
Richard Sullivan about a group of his Chinese associates who
were to meet with the President, stating that one of the group
would play ``an important role in our future party functions.''
\308\ Chung even wrote to Deputy Assistant to the President
Doris Matsui, ``[i]n the next two years I will be coordinating
a lot of visits from Asian business leaders to support DNC. I
look forward to working closely with you. . . .'' \309\ La
Bella believed that in light of these and other examples, a
thorough investigation of the DNC's practices was in order.
Such an investigation, he said, would be a political conflict
of interest for the Department of Justice.\310\ He bolstered
his assertion with the fact that the President and Harold Ickes
were instrumental in running the affairs of the DNC and
Clinton/Gore, meaning that any investigation would certainly
include their activities.
---------------------------------------------------------------------------
\307\ Id. at 71.
\308\ Id. Chung was referring to Chairman Chen of Haomen Beer, who
later used his photograph with President Clinton as a marketing tool in
China. Id.
\309\ Id. at 72.
\310\ Id.
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vi. The Loral Matter
Illustrating his assertion that there was a higher
threshold for initiating an investigation of the White House or
its senior officials, La Bella cited to the investigation of
the satellite communications company Loral.\311\ Shortly before
La Bella wrote his memorandum, there were allegations reported
in the media that the administration gave Loral an export
waiver for satellite technology in return for the campaign
contributions of its CEO Bernard Schwartz.\312\ According to La
Bella, nobody at the Department of Justice was able to provide
a sound premise upon which to base the initiation of a criminal
investigation.\313\ Rather, because of the media and political
pressure, Justice commenced an investigation.\314\ Therefore,
the standard used by the Justice Department in this case was
that ``allegations were made which, if true, suggested a
potential violation of federal law.'' \315\ In light of the
Loral investigation, La Bella believed that there was no
justification for the refusal to initiate an investigation into
the Common Cause allegations.\316\
---------------------------------------------------------------------------
\311\ Id. at 73.
\312\ Id.
\313\ Id.
\314\ Id. at 74.
\315\ Id. In comparison, the Justice Department imposed a higher
standard when considering allegations related to senior White House
officials: ``a determination that there is specific and credible
evidence of a federal violation.'' Id. at 10.
\316\ Id. at 74.
---------------------------------------------------------------------------
As the Justice Department already had decided to commence
an investigation, La Bella argued that the actual and potential
conflicts of interest were such that the appointment of an
independent counsel ought to be sought.\317\ For instance, one
of the areas of investigation was to determine whether
Schwartz' campaign contributions ``corruptly influenced''
President Clinton's 1998 decision to grant Loral a waiver over
the objections of the Department of Justice.\318\ At the time
of the waiver, the Department of Justice had an open criminal
investigation of Loral for the alleged transfer of technology
to China.\319\ The Department of Justice informed the White
House that a waiver would hinder its ongoing investigation of
Loral.\320\ In addition to investigating the decision of the
President, several high-level Justice Department officials were
involved in discussions with the White House prior to the
President's decision to grant the waiver.\321\ La Bella
indicated that these officials' conversations with White House
Counsel would be material to the investigation as well.\322\ In
the end, La Bella determined that the most important factor in
the investigation was that it would be an investigation of the
President. He concluded that ``if the matter is sufficiently
serious to commence a criminal investigation, it is
sufficiently serious to commence a preliminary inquiry under
the ICA since it is the president who is at the center of the
investigation.'' \323\
---------------------------------------------------------------------------
\317\ Id.
\318\ Id.
\319\ Id. at 75.
\320\ Id.
\321\ Id.
\322\ Id. Robert Litt and Mark Richard were the individuals in
contact with the White House regarding the Loral matter. Litt conveyed
the Department's concerns over the possible waiver to Counsel to the
President Charles Ruff. Id. at 75-76.
\323\ Id. at 79.
---------------------------------------------------------------------------
d. La Bella's Conclusions
La Bella argued that Justice Department officials were
waiting for some type of smoking gun that implicated, beyond a
doubt, a covered person in an act that violated Federal
law.\324\ However, in the campaign finance matter, the
information had to be gathered and reviewed as a whole, rather
than looking at each individual piece. La Bella explained:
---------------------------------------------------------------------------
\324\ Id. at 93.
[T]here are bits of information (and evidence) which
must be pieced together in order to put seemingly
innocent actions in perspective. While this may take
more work to accomplish, in our view it is no less
compelling than the proverbial smoking gun in the end.
. . . Indeed, were this quantum of information amassed
during a preliminary inquiry under the ICA, we would
have to conclude that there are reasonable grounds to
believe that further investigation is warranted.\325\
---------------------------------------------------------------------------
\325\ Id.
The report acknowledged that there were some areas of the
campaign finance investigation that as an experienced
prosecutor, La Bella would not pursue. Nevertheless, he made
clear that in the situation at hand, the prosecutorial
discretion belonged to an independent counsel.
3. Conclusion
Both Director Freeh and Supervising Attorney La Bella
believed that an independent counsel should be appointed to
investigate the campaign finance investigation. Furthermore,
they agreed that the Department of Justice was applying the
Independent Counsel Act in a manner that almost assured that
one would not be appointed. They both saw that the tunnel
vision of Reno and her senior political advisors allowed them
to ignore the big picture. Central to that big picture was what
both Freeh and La Bella believed was some type of broad
conspiracy centered around the need to raise vast sums of money
and the willingness to bend or break the campaign financing
laws to get it. The Common Cause allegations were a major part
of their theory, and they asserted that the Department of
Justice refused to investigate these allegations at any level.
The Common Cause allegations laid out a common theme in
both memoranda. The facts were that the President and Vice
President needed to run ads early and frequently to be re-
elected. In order to run the ads the campaign needed to raise
significant amounts of money. The White House, DNC, and
Clinton/Gore '96 all participated in the effort to raise the
money and pay for the ads. Once they began the operation, the
three entities became blurred and began to spend money as if
they were one. All of this happened under the watch and with
the knowledge of the President, Vice President, and senior
White House, DNC, and Clinton/Gore staff. As momentum started
building, they needed more money, and that left the door open
for people like John Huang, Charlie Trie, Johnny Chung, and
Pauline Kanchanalak to bring in questionable funds. Neither
Freeh nor La Bella definitively state that White House, DNC, or
Clinton/Gore officials knew about the illegal contributions.
However, in their memoranda they show that there was sufficient
information to further investigate. Because the President and
Vice President were so intimately involved in the areas being
investigated, it was nearly impossible for the Task Force to
conduct the investigation without looking into their conduct.
As Freeh noted, the Justice Department attorneys were extremely
reluctant to proceed into areas of investigation where covered
persons might be implicated, necessitating the appointment of
an independent counsel.
The Department of Justice was setting a very high standard
for appointing an independent counsel in the campaign finance
investigation. Although Attorney General Reno constantly
repeated that she would appoint an independent counsel when
presented with specific information from a credible source that
needed to be further investigated, she had not done so in
practice. As both La Bella and Freeh argued, any one piece of
information seen in a vacuum might not satisfy the standard,
rather, the pieces together created a pattern that could not be
ignored.
E. Department of Justice Rebuttal Memoranda
The Department of Justice circulated the La Bella
memorandum to senior level personnel for review and discussion.
In memoranda to the Attorney General, several senior level
personnel responded to the facts and issues raised in the
memorandum. The committee received the responses of Associate
Deputy Attorney General Robert Litt and Chief of the Public
Integrity Section Lee Radek, who both had negative reactions to
the La Bella memo.
1. Litt's Response to the La Bella Memorandum
In a July 20, 1998, memorandum to the Attorney General,
Litt sets forth his observations about the La Bella memo.\326\
He first denied that the Department had applied an artificially
high standard in applying the Independent Counsel Act. Litt
then summarily stated that the Department of Justice never
prohibited La Bella and the Task Force from conducting an
investigation of the entire campaign finance landscape in order
to determine whether specific information from a credible
source sufficient to trigger the Act existed.\327\ Litt
believed that the comprehensive nature of La Bella's memorandum
proved that the Task Force had not been impeded in its
investigation.\328\ In short, Litt concluded, ``it is not the
Independent Counsel Act that is blocking investigation of the
President and those around him; it is the lack of any specific
and credible information that they may have committed a
crime.'' \329\
---------------------------------------------------------------------------
\326\ Memorandum from Robert S. Litt, Associate Deputy Attorney
General, U.S. Department of Justice, to Janet Reno, Attorney General,
U.S. Department of Justice, and Eric Holder, Deputy Attorney General,
U.S. Department of Justice (July 20, 1998) (exhibit 4).
\327\ Id. at 1.
\328\ Id.
\329\ Id. at 2.
---------------------------------------------------------------------------
Litt's rebuttal of La Bella's allegations is unimpressive.
He never addressed the argument that the Attorney General would
look only at individual pieces of information in deciding
whether the Independent Counsel Act was triggered rather than
reviewing the investigation as a whole. Furthermore, he simply
denied that La Bella's statements about the artificially high
standard for the Independent Counsel Act were accurate.
Obviously, La Bella had a difference of opinion which Litt
never factually rebutted.
Litt then turned to the individual cases discussed by La
Bella, including the Common Cause allegations.\330\ Litt
criticized La Bella for bringing up the Common Cause
allegations, stating that the Department had already determined
that they did not warrant criminal investigation under the FECA
or Presidential Funding Acts.\331\ He also dismissed La Bella's
legal argument that the Common Cause allegations could be
prosecuted as a conspiracy to defraud the United States.\332\
Both Litt and PIS, headed by Radek, had rejected the Common
Cause allegations earlier, and recommended that the charges be
left to the FEC to investigate. Litt wrote:
---------------------------------------------------------------------------
\330\ Id. at 3.
\331\ Id.
\332\ Id.
It is unfortunate that the FEC is so weak, but we
should not use that as an excuse to disregard well-
established concepts of predication and well-
established procedures, to conjure up novel legal
theories of which political candidates had no notice,
and to take on the responsibility of primary regulator
of the political process. That is not an appropriate
function of the Department of Justice.\333\
---------------------------------------------------------------------------
\333\ Memorandum from Robert S. Litt, Associate Deputy Attorney
General, U.S. Department of Justice, to Janet Reno, Attorney General,
U.S. Department of Justice 4 (Feb. 6, 1998).
There was a difference of opinion between the Task Force
prosecutors and the FBI on the one side, and the Attorney
General's advisors and PIS on the other about whether there was
a violation of any laws in the scheme described by Common
Cause. La Bella wanted at a minimum, to investigate. The
Attorney General and her advisors decided that there was no
predication to investigate, and refused to allow a Task Force
investigation of the issue to go forward. Ultimately, La Bella
and other Common Cause advocates received belated support in a
FEC audit that found that the ``DNC media payments
($46,546,476) to have been an in-kind contribution to either
the primary or general campaign committee.'' \334\
---------------------------------------------------------------------------
\334\ Addendum to interim report from Charles G. La Bella,
Supervising Attorney, Campaign Financing Task Force, and James DeSarno,
Assistant Director, Federal Bureau of Investigation, for Janet Reno,
Attorney General, U.S. Department of Justice, and Louis J. Freeh,
Director, Federal Bureau of Investigation 5 (Aug. 12, 1998)
(paraphrasing finding of FEC audit) (exhibit 5).
---------------------------------------------------------------------------
Addressing another section of the LaBella memorandum, Litt
generally agreed that Harold Ickes and high-ranking DNC
officials ought to be investigated, but not by an independent
counsel.\335\ Although La Bella did advocate considering Ickes
under the mandatory provision, he also urged the Attorney
General to recognize the conflict of interest she and the
Department had in investigating Ickes and the DNC. Litt
neglected the argument that these matters ought to be
considered under the discretionary provision of the Independent
Counsel Act.
---------------------------------------------------------------------------
\335\ Exhibit 4 at 4.
---------------------------------------------------------------------------
2. Radek Response to the La Bella Memorandum and La Bella's Reply
Lee Radek, the Chief of the Public Integrity Section,
attacked La Bella's memorandum to the Attorney General in his
own August 5, 1998 response.\336\ Radek criticized La Bella's
recommendations as ``flawed and based on numerous
misinterpretations of the Independent Counsel Act.'' \337\ He
also complained bitterly about what he perceived as personal
digs:
---------------------------------------------------------------------------
\336\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice, to James K. Robinson, Assistant
Attorney General, Criminal Division, U.S. Department of Justice (Aug.
5, 1998) (exhibit 6) this memorandum was forwarded to the Attorney
General on Aug. 6, 1998.
\337\ Id. at 2.
I am, to put it directly, outraged by the personal
attacks and the suggestions contained in this Report,
some subtle, and some stunningly blunt, that the
motivations of those who have advised the attorney
General over the last two years concerning the
application of the Act with respect to campaign
financing matters have been colored by bad faith, a
deliberate twisting of the law, and an effort to
protect the White House.\338\
---------------------------------------------------------------------------
\338\ Id. at 1.
When La Bella's was confronted with Radek's charges, he
replied, ``such an approach lessens legitimate debate and
hampers the ability to reason to a result based on the
merits.'' \339\ La Bella, on the other hand, insisted on
replying to the substance of Radek's comments, rather than to
his attacks.
---------------------------------------------------------------------------
\339\ Exhibit 5 at 1.
---------------------------------------------------------------------------
i. Stovepipe Versus Landscape Analysis
Radek addressed La Bella's criticism that the Department
was conducting a ``stovepipe'' analysis rather than a
``landscape'' analysis. Radek contended that there had been no
previous investigation that was as carefully coordinated as the
Task Force.\340\ He argued that efforts had been made and,
``extensive steps have been taken to ensure that any
overlapping evidence or potentially interlocking cases is [sic]
not overlooked.'' \341\ Radek asserted that if the big picture
had been ignored it was the fault of La Bella himself.\342\ He
also denied, as ``simply untrue,'' La Bella's contention that
the Task Force had not been allowed to do a ``broad survey of
the entire campaign finance landscape.'' \343\
---------------------------------------------------------------------------
\340\ Exhibit 6 at 3.
\341\ Id.
\342\ Id.
\343\ Id.
---------------------------------------------------------------------------
As evidence that La Bella was wrong, Radek pointed to the
two examples that La Bella used in his memorandum. Radek first
brought up the Common Cause allegations, and stated that they
were ``thoroughly considered, analyzed at length, and closed on
their merits.'' \344\ He also stated that the Task Force was
told that they were free to investigate any of the facts
underlying the investigation.\345\ Similarly, Radek asserted
that the core group investigation was fully pursued by the FBI
and dropped because it was not fruitful.\346\
---------------------------------------------------------------------------
\344\ Id.
\345\ Id.
\346\ Id.
---------------------------------------------------------------------------
In response to Radek's assertions regarding the stovepipe
analysis, La Bella clarified that he had intended ``to
reference the natural tendency of investigators and prosecutors
to segment individual allegations and charges.'' \347\ La Bella
indicated that he was not criticizing the investigators,
rather, he had hoped that his memorandum would cause the
Attorney General and her advisors to see the matter from the
landscape view. He believed that the Common Cause allegations
and core group analysis would have forced the Department of
Justice to look at the investigation from the landscape view
sooner.\348\
---------------------------------------------------------------------------
\347\ Exhibit 5 at 1.
\348\ Id. La Bella acknowledged that the core group investigation
was closed before he arrived at the Task Force, and he had therefore
relied upon the representations of others who were present.
---------------------------------------------------------------------------
La Bella took issue with Radek's contention that the Common
Cause allegations had been ``closed on the merits.'' \349\ On
the contrary, he believed that the matter had been tabled,
pending a decision by the Attorney General. La Bella stated
that the Task Force had continually raised the Common Cause
issue in order to come to some type of conclusion. Each time
the issue was brought up, the Task Force was told that the
matter remained under consideration.\350\ La Bella pointed to
an August 4, 1998, memorandum from Criminal Appeals regarding
Common Cause in support of his contention that the matter was
very much open.\351\
---------------------------------------------------------------------------
\349\ Id. at 2.
\350\ Id.
\351\ Id.
---------------------------------------------------------------------------
ii. Independent Counsel Act Interpretation
Radek next turned to the Department's application and
interpretation of the Independent Counsel Act. He took issue
with the ``evidence'' versus ``information'' distinction
pointed out by La Bella. The Act itself refers to the
specificity of the information and the credibility of the
source.\352\ However, the PIS and Attorney General consistently
referred to the ``specific and credible evidence'' needed to
initiate a preliminary investigation. Radek insisted that he
used the words evidence and information interchangeably, and
did not mean for a higher threshold to apply.\353\ In response,
La Bella argued that the wording of the Act itself was crucial
as it could make a difference in whether the Act was
triggered.\354\
---------------------------------------------------------------------------
\352\ 28 U.S.C. Sec. 591(d)(1).
\353\ Exhibit 6 at 5.
\354\ Exhibit 5 at 8.
---------------------------------------------------------------------------
As described above, in his memorandum, La Bella criticized
the Department for having two standards for investigation, a
higher one for covered persons and a lower threshold for all
others. Radek argued that the Act itself imposed this higher
standard.\355\ He discussed how Congress, in contrast to La
Bella's argument, was worried that the threshold for
investigation might be too low, and therefore used the specific
and credible language to normalize the threshold.\356\ Radek
concluded that ``[t]he Report's conclusion that this minimal
standard should be set aside in this case has no support in the
Act, and indeed appears to us to be the very sort of strained,
result-oriented analysis of which it accuses those who disagree
with the authors.'' \357\ According to La Bella, the 1987 and
1994 amendments to the Independent Counsel Act rebutted Radek's
arguments which were based on the 1982 amendments.\358\ He
argued that after the 1982 amendments, it became clear that the
Justice Department was applying a higher threshold for the Act
rather than applying it too loosely.\359\ Therefore, Congress
changed the language to allow the Justice Department to take
into account its own established policies in making decisions
under the Act.
---------------------------------------------------------------------------
\355\ Exhibit 6 at 5.
\356\ Id.
\357\ Id.
\358\ Exhibit 5 at 9. See section C.2.b.iii. for La Bella's
analysis of the legislative history.
\359\ Id.
---------------------------------------------------------------------------
iii. Harold Ickes
Radek disagreed with La Bella's analysis of Ickes under the
Independent Counsel Act. Radek insisted that the law did not
permit the Attorney General to consider whether an individual
was a ``de facto'' officer of a campaign committee, as La Bella
argued that Harold Ickes was.\360\ However, he did acknowledge
that the argument that the Attorney General should consider
Ickes under the discretionary provision was persuasive.\361\ La
Bella defended the ``de facto'' analysis, comparing it to
liability in corporate law.\362\ For instance, Ickes would have
been considered an ``agent'' of Clinton/Gore '96 based on that
committee's own admissions. Therefore, Clinton/Gore '96 could
have been held liable for Ickes' actions, making him a de facto
officer in La Bella's view.
---------------------------------------------------------------------------
\360\ Exhibit 6 at 9.
\361\ Id. at 10. Radek quibbled with the manner in which La Bella
made his argument, stating that La Bella presumed to make the decision
for the Attorney General, whereas, the decision is discretionary. Id.
La Bella's response was that:
While we gather that it is Public Integrity's policy not to
give advice as to invocation of the discretionary clause,
[] we believe that as supervisors of the Task Force, it is
our responsibility to address this important issue. To do
otherwise is to ignore the facts and fail to provide a
framework in which they should be considered. After hearing
the various viewpoints, the decision, of course, is
---------------------------------------------------------------------------
entirely the Attorney General's to make.'' Exhibit 5 at 9.
\362\ Exhibit 6 at 11.
---------------------------------------------------------------------------
The issue relating to Charlie Trie's PLET contributions
encompassed Harold Ickes and the First Lady, as well as several
other individuals in La Bella's memorandum. Radek stated that
he could find no basis upon which to hold Ickes and the First
Lady, criminally liable for failing to warn the DNC and
Clinton/Gore about Trie's questionable fundraising.\363\ La
Bella responded that in Ickes' case, there was support in basic
agency law and statutes 18 U.S.C. sections 371 and 1341, among
others.\364\ As for the First Lady, La Bella stated that,
``[h]er potential criminal involvement tracks the conduct set
forth relating to the PLET incident.'' \365\ Therefore, he
concluded that her conduct warranted further inquiry. La Bella
made a novel legal argument that the Justice Department would
have to determine whether it could support. It should be noted
that the Task Force prosecuted several DNC fundraisers under a
similarly novel legal argument regarding causing false
statements to be made to the DNC. Those arguments were upheld
on appeal.
---------------------------------------------------------------------------
\363\ Id.
\364\ Exhibit 5 at 13. Section 317 deals with a conspiracy to
defraud the United States, and was discussed at great length in the La
Bella memorandum. 18 U.S.C. Sec. 371. Section 1341 relates to frauds
and swindles involving the mails. 18 U.S.C. Sec. 1341.
\365\ Exhibit 5 at 16.
---------------------------------------------------------------------------
iv. President Clinton
Radek also disagreed with the issues raised in the La Bella
memorandum regarding the President. First, he stated that there
was no evidence of a quid pro quo in which the President
appointed Charlie Trie to the Presidential Commission in
exchange for contributions to the PLET.\366\ Second, he states
that there is no evidence that the President knew any
contributions to the campaign were foreign.\367\ However, he
does not take into account the fact that it was nearly
impossible for the Task Force to develop any evidence on
covered individuals under the standards set by the Department
of Justice.
---------------------------------------------------------------------------
\366\ Exhibit 6 at 12.
\367\ Id. at 13.
---------------------------------------------------------------------------
Although La Bella raised numerous questions about the
President's actions, Radek asserted that ``there is absolutely
no specific and credible information suggesting that the
president committed a crime with respect to any of these
matters; the Report identifies none, but rather lists a series
of provocative and speculative hypothetical questions it
asserts should be answered.'' \368\ Radek added that La Bella
had fallen back on his argument that there should be one
standard for initiating an investigation, which was not
possible to do while still adhering to the standard of the
Independent Counsel Act.\369\ Radek seems to prove La Bella's
point through his argument. There are two standards for
investigating, as Radek acknowledges, and the Task Force was
prohibited from investigating the President or any other
covered person unless they uncovered a specific piece of
evidence that implicated a covered person in a violation of
criminal law.
---------------------------------------------------------------------------
\368\ Id. at 12.
\369\ Id. at 12.
---------------------------------------------------------------------------
v. The Vice President
Radek also rebuffed the arguments regarding the
investigation of Vice President Gore. However, by the time La
Bella wrote his reply, the Task Force had received a memorandum
of a White House ``money meeting'' with David Strauss'
handwritten notes referencing what was discussed at the meeting
and the comments of the Vice President.\370\ The notes showed
that hard and soft money splits required to pay for the media
fund were discussed, although the Vice President previously
stated that he had no knowledge that hard money would be used
for the media fund.\371\ Therefore, as noted by La Bella, the
discovery of the Strauss memo yet again raised the question of
the Vice President's knowledge.\372\ In fact, after the Strauss
memo came to light, the Attorney General did initiate a
preliminary investigation.\373\ However, she ultimately
declined to appoint an independent counsel.\374\
---------------------------------------------------------------------------
\370\ Exhibit 5 at 15.
\371\ Id.
\372\ Id.
\373\ See in re Albert Gore, Jr., notification to the court
pursuant to 28 U.S.C. Sec. 592(b) of results of preliminary
investigation (Special Div. DC Cir. 1998).
\374\ Id.
---------------------------------------------------------------------------
vi. The DNC and Its Officials
The La Bella memorandum also reintroduced the argument that
the Attorney General had a political conflict of interest in
investigating the DNC. The individuals involved were fundraiser
John Huang, Finance Chairman Marvin Rosen, and Deputy Finance
Director David Mercer, among others.\375\ Radek summarily
dismissed La Bella's arguments as having been rejected by the
Attorney General long ago.\376\ As long as no new information
or developments had arisen relating to a covered person, Radek
rejected the idea of an independent counsel.\377\ However, La
Bella again pointed out that the DNC had been under the control
of the White House and was used almost exclusively to re-elect
the President.\378\ Therefore, he concluded that the matter,
and the individuals being investigated, posed a political
conflict of interest.\379\
---------------------------------------------------------------------------
\375\ Exhibit 6 at 16.
\376\ Id.
\377\ Id.
\378\ Exhibit 5 at 16.
\379\ Id.
---------------------------------------------------------------------------
vii. The Common Cause Allegations
The Common Cause allegations were central to both Freeh and
La Bella's theories of the overall campaign finance
investigation, yet the Department of Justice refused to
investigate them. When La Bella was brought in to supervise the
Task Force, he assigned one attorney, Steve Clark, to work
solely on Common Cause. In late December 1997, Clark left the
Task Force out of frustration over the Department's handling of
Common Cause. Prior to his departure, Clark wrote in a December
23, 1997, memorandum:
That, to date, we have been unable to investigate the
Common Cause allegations in a straightforward way has
been a great personal and professional disappointment.
But, I believe the public has been most dis-served
[sic] by the way in which the ``whether to
investigate'' issue has been approached, debated, and
resolved. Never did I dream that the Task Force's
effort to air this issue would be met with so much
behind the scenes maneuvering, personal animosity,
distortions of fact, and contortions of law. (It also
is my impression that many involved have not read the
pertinent cases.) All this, not to forestall an ill-
conceived indictment, not to foreclose a report making
an independent counsel referral, but to prevent any
investigation of a matter involving a potential loss of
over $180 million to the Federal treasury.\380\
---------------------------------------------------------------------------
\380\ Memorandum from (name redacted), Assistant U.S. Attorney, to
Chuck La Bella, Supervising Attorney, Campaign Financing Task Force
(Dec. 23, 1997). (Exhibit 7). It has been made public that the author
of the memorandum was Steve Clark, AUSA.
It was not at all clear that Clark was referring to Radek in
the passage, in fact, more than one individual would appear to
be implicated. However, Radek's opinions match those that were
disputed by Clark. Furthermore, Radek stooped to pure
fabrication when he claimed that the Attorney General had
decided that it did not warrant the appointment of an
independent counsel. He was surely aware that there was never
any closing memo on the Common Cause allegations that was
approved by either the Attorney General or Director Freeh.\381\
---------------------------------------------------------------------------
\381\ Exhibit 6 at 16.
---------------------------------------------------------------------------
After insisting that the matter had been closed, Radek went
on to address the merits of the allegations. He claimed that
the FEC had primary responsibility for investigating and
interpreting the election laws and, under longstanding
agreements between the FEC and Department of Justice, it would
be inappropriate for Justice to investigate. Long before Radek
wrote his memo, Clark rebutted the arguments Radek put forward.
In his December 1997 memorandum, Clark stated:
While I recognize that there have been legitimate
disagreements, some positions urged in support of
avoiding any investigation have been so plainly wrong
as to be disheartening (e.g., the suggested referral to
the FEC, on the misapplication of the MOU with that
agency, with the claim that the FEC could refer the
case back after it checked out the ad content, but with
the unspoken reality that no criminal investigation
would ever happen--certainly not within the three year
statute of limitations; or the contention that an
independent counsel referral must be made immediately
if any investigation is even authorized).\382\
---------------------------------------------------------------------------
\382\ Exhibit 7.
La Bella agreed with Clark, stating that ``the MOU does not
mandate that initial responsibility be placed with the FEC. It
is clear that the Department can investigate independently.''
\383\
---------------------------------------------------------------------------
\383\ Exhibit 5 at 5.
---------------------------------------------------------------------------
Radek rejected the theory that the Common Cause allegations
could establish a section 371 conspiracy to defraud the United
States. He stated, ``[t]o the contrary, the Attorney General
has addressed the ultimate issue here squarely. She has decided
that no amount of coordination between the candidates and the
party can, by itself, constitute a violation. Only the content
of the ads can establish a civil violation of the FECA.'' \384\
In his memorandum, Clark had a better perspective on the
allegations generally. He pointed out that the Department could
not possibly know, without investigating further, whether or
not they could initiate criminal prosecutions.\385\
---------------------------------------------------------------------------
\384\ Exhibit 6 at 19.
\385\ Exhibit 7.
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In response, La Bella directly addressed the criminal
conspiracy argument, citing to the recent findings of a FEC
audit report stating that the payments made by the DNC for the
media campaign were in-kind contributions to either the primary
or general campaign.\386\ The FEC audit also found that the ads
contained an electioneering message.\387\ La Bella asserted
that the audit report added ``considerable, credible, and new
information supporting the Common Cause allegations.'' \388\
The finding specifically supported the allegations that the
President directed and controlled ads that were paid for by the
DNC pursuant to the President's request and that were intended
to effect the President's election.\389\ In addition, because
the auditors found ``electioneering content,'' meaning there
was some type of violation of the campaign laws, the theory of
a section 371 conspiracy was bolstered. Clinton/Gore's
exclusion of the funds used to pay for the media campaign from
its spending figures was therefore a potential criminal
violation of the Federal campaign financing laws, according to
La Bella.\390\
---------------------------------------------------------------------------
\386\ Exhibit 5 at 5.
\387\ Id.
\388\ Id. at 6.
\389\ Id. at 7.
\390\ Id.
---------------------------------------------------------------------------
After the Task Force received the FEC Audit memorandum
referred to by La Bella, the Attorney General could no longer
ignore the matter, and was forced to open a preliminary
investigation on the Common Cause allegations. Three months
after his stinging memorandum ridiculing the Common Cause
allegations, Radek, along with the new Task Force Supervising
Attorney David Vicinanzo, finally acknowledged that those
allegations were credible. Radek stated:
To the extent that these advertising expenditures did
constitute contributions to and expenditures by the
campaign committees, they were unlawful, in that they
would have violated among other things, (1) the FECA's
limits on contributions to candidates by multicandidate
political parties like the DNC, and (2) the PPMPAA's
and PECFA's expenditure limits on publicly financed
elections. Any such violations made knowingly and
willfully would potentially be criminal.\391\
---------------------------------------------------------------------------
\391\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice, and David A. Vicinanzo,
Supervising Attorney, Campaign Financing Task Force, to James K.
Robinson, Assistant Attorney General, U.S. Department of Justice, at 2
(Nov. 20, 1998).
Radek stated that he would take the FEC's findings at face
value for the purposes of the preliminary investigation. He
determined that the main focus of the preliminary investigation
was whether the President and Vice President had the requisite
intent, knowing and willful, to be criminally liable.\392\ It
is important to remember at this point that, as a check on the
Attorney General's discretion under the Independent Counsel
Act, she was not permitted to make a determination that ``no
further investigation was warranted'' based on a finding that
Clinton or Gore lacked the state of mind required for the
violation, unless there was ``clear and convincing evidence.''
\393\ When drafting the Act, Congress believed that the
Attorney General would rarely base a determination on state of
mind, noting that ``due to the subjective judgments required
and the limited role accorded the Attorney General in the
independent counsel process.'' \394\ Nevertheless, Radek,
accepting all of the other arguments that a criminal act
transpired, focused in on intent as a way to avoid invoking the
Independent Counsel Act. In fact, Radek concluded that the
President and Vice President met this extremely high standard
set by Congress, stating, ``in our view these facts establish
that the President and Vice President lacked the requisite
specific intent to violate the law.'' \395\
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\392\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice, and David A. Vicinanzo,
Supervising Attorney, Campaign Financing Task Force, to James K.
Robinson, Assistant Attorney General, U.S. Department of Justice, at 2
(Nov. 20, 1998).
\393\ 28 U.S.C. Sec. 592(a)(2)(B)(ii).
\394\ ``Independent Counsel Provisions: An Overview of the
Operation of the Law,'' CRS Rept. No. 98-283, at FN 22 (Mar. 20, 1998)
(citing H. Rept. No. 103-511, at 11 (1994)).
\395\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice, and David A. Vicinanzo,
Supervising Attorney, Campaign Financing Task Force, to James K.
Robinson, Assistant Attorney General, U.S. Department of Justice, at 4
(Nov. 20, 1998).
---------------------------------------------------------------------------
Radek determined that the President and Vice President did
not have the specific intent based upon their reliance on the
advice of counsel.\396\ That is, they relied upon the advice of
the DNC and Clinton/Gore attorneys who advised them. The
attorneys, Joe Sandler and Lyn Utrecht, reviewed all of the ads
before they were released and provided their opinion that the
ads did not contain an electioneering message.\397\ Radek
concludes that there was no evidence showing that the President
and Vice President had independent knowledge of the
electioneering standard or whether they might be violating
it.\398\ However, he had to determine whether no further
investigation was warranted. In this case, it is not at all
clear that there was clear and convincing evidence of a lack of
intent sufficient enough to overcome the need for further
investigation, certainly without having conducted a grand jury
investigation.
---------------------------------------------------------------------------
\396\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, U.S. Department of Justice, and David A. Vicinanzo,
Supervising Attorney, Campaign Financing Task Force, to James K.
Robinson, Assistant Attorney General, U.S. Department of Justice, at 37
(Nov. 20, 1998).
\397\ Id.
\398\ Id. at 40.
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The FBI found that the ``advice of counsel'' defense relied
upon by Radek and Vicinanzo was ``not strong enough to satisfy
the `clear and convincing' standard under the Independent
Counsel Act.'' \399\ FBI General Counsel Larry Parkinson
indicated in a memorandum to Director Freeh that there were
several reasons why the standard had not been met. First, while
relying on the advice of counsel defense, the President and
Vice President had no direct contact with the attorneys
providing the advice.\400\ Parkinson points out that all of the
advice was filtered through intermediaries and raised serious
questions as to whether the actual legal advice was provided to
the President and Vice President.\401\ In addition, the
attorneys in question, Sandler and Utrecht, were not
disinterested parties, both had a vested interest in ensuring
the re-election of Clinton and Gore. As Parkinson stated, had
they wanted a truly disinterested opinion they could have gone
to the FEC for advice.\402\
---------------------------------------------------------------------------
\399\ Memorandum from Larry Parkinson, general counsel, Federal
Bureau of Investigation, to Louis J. Freeh, Director, Federal Bureau of
Investigation, at 3 (Dec. 4, 1998) (exhibit 8).
\400\ Id.
\401\ Id.
\402\ Id. at 5.
---------------------------------------------------------------------------
Perhaps most important to whether further investigation was
warranted was that Sandler, one of the attorneys upon whom
Clinton and Gore were relying, wrote a memorandum indicating he
had doubts about whether the media campaign was violating
election law.\403\ The memo stated, ``Under [the FEC's legal]
test, the DNC is bumping up right against (and maybe a little
bit over) the line in running our media campaign about the
federal budget debate, praising the President's plan and
criticizing Dole by name.'' \404\ The Sandler memo was somehow
rewritten to soften the language by the time it was sent to the
White House.\405\ Sandler was interviewed about the memoranda,
and Parkinson stated that, ``Sandler gave a contorted
explanation which led our agents to believe he was lying.''
\406\ In addition, the FBI believed that the White House had
not produced all documents relevant to the preliminary
investigation.\407\
---------------------------------------------------------------------------
\403\ Id.
\404\ Id. (quoting memorandum written by Joe Sandler, general
counsel, DNC).
\405\ Id.
\406\ Id.
\407\ Id. at 6.
---------------------------------------------------------------------------
Parkinson also took issue generally with Radek's
application of the clear and convincing standard in the Vice
President's case. He pointed out that Congress intended to set
a very high threshold for the Attorney General to close a case
based on lack of intent to commit the crime.\408\ He cited to
the legislative history of the Act, wherein Congress stated
that, ``[t]he Justice Department's demand for proof of intent
to justify continuing independent counsel cases is disturbing,
because criminal intent is extremely difficult to assess,
especially in the early stages of an investigation. Further, it
often requires subjective judgments, which should ideally be
left to an independent decisionmaker.'' \409\ Parkinson framed
the question as whether the Attorney General could reasonably
conclude that the Vice President's case was one of those ``rare
cases'' in which she could reach the threshold of the clear and
convincing standard. Parkinson clearly concluded that it would
not be reasonable for the Attorney General to make that
determination.\410\
---------------------------------------------------------------------------
\408\ Memorandum from Larry Parkinson, general counsel, Federal
Bureau of Investigation, to James K. Robinson, Assistant Attorney
General, U.S. Department of Justice, at 7 (Nov. 20, 1998).
\409\ Id. (citing to 1987 U.S.C.C.A.N. at 2159-60).
\410\ Id. at 8.
---------------------------------------------------------------------------
The Parkinson memorandum should have been sufficient to
convince the Attorney General that further investigation into
the Common Cause allegations was warranted. Parkinson raised
numerous issues that were not addressed by the preliminary
investigation. In fact, Parkinson stated that the preliminary
investigation, ``consisted primarily (but not exclusively) of
an examination of an advice of counsel defense.'' \411\ That is
hardly a ringing endorsement of the Public Integrity Section's
preliminary investigation. Nevertheless, Attorney General Reno
embraced the advice of counsel defense, disregarded the glaring
problems with the investigation, and declined to appoint an
independent counsel.
---------------------------------------------------------------------------
\411\ Exhibit 8 at 8.
---------------------------------------------------------------------------
F. Department of Justice's Bad Faith in Its Application of the
Independent Counsel Act
1. The Chief of the Public Integrity Section Was Predisposed Against
the Act
The memoranda written by Freeh and La Bella made it clear
that they believed that an independent counsel should have been
appointed to investigate the campaign finance matter. However,
the Justice Department's legal interpretation and application
of the Act all but ensured that an independent counsel would
not be appointed. Even the head of the Criminal Division, James
Robinson, agreed that the Department had been applying too high
of a threshold to trigger the appointment of an independent
counsel in the case of the Common Cause allegations. He stated:
It occurs to me that Public Integrity, in insisting
upon a ``may have violated the law'' standard which
includes a consideration of the ``state of the law'' at
the time of the conduct in question, and which also
addresses the issue of ``willfulness,'' is applying a
higher trigger standard than the one called for by the
ICA.\412\
---------------------------------------------------------------------------
\412\ Memorandum from James K. Robinson, Assistant Attorney
General, U.S. Department of Justice, to Janet Reno, Attorney General,
U.S. Department of Justice, at 4 (Aug. 25, 1998). Robinson disagreed
with Lee Radek's analysis of the Common Cause allegations in Radek's
response to the La Bella memo, and recommended that the Attorney
General initiate a preliminary investigation. Id. at 11.
However, it should have come as no surprise to anyone that
Public Integrity would avoid the application of the independent
counsel statute. The Chief of the Public Integrity Section made
his views of the Act very clear when he told the New York
Times, ``[i]nstitutionally, the Independent Counsel statute is
an insult. It's a clear enunciation by the legislative branch
that we cannot be trusted on certain species of cases.'' \413\
Obviously, Radek, who was in charge of the application of the
statute, had a bias against the Act. He also had an additional
impetus for rejecting the Act early in the investigation, to
protect Reno's position at the Department. He told the Deputy
Director of the FBI that he was under pressure because of the
campaign finance investigation and that the Attorney General's
job might depend on the decisions he made in the
investigation.\414\
---------------------------------------------------------------------------
\413\ Jeffrey Goldberg, ``What Is Janet Reno Thinking?,'' NY Times
Magazine, July 6, 1997, at 30.
\414\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong. 38 (2000) (testimony of William J. Esposito) (preliminary
transcript).
---------------------------------------------------------------------------
Radek's subsequent recommendations regarding the initiation
of preliminary investigations or appointments of an independent
counsel demonstrate that he interpreted the Act as narrowly as
possible, or even misinterpreted the Act, in order to avoid its
invocation. In their memoranda, Director Freeh and Supervising
Attorney La Bella exhaustively analyzed the Public Integrity
Section's thresholds and standards of investigation. They both
came to the conclusion that PIS was applying a higher standard
of investigation for individuals covered by the Independent
Counsel Act.
2. The Chief of the Public Integrity Section Misrepresented Facts
There have been numerous other examples of problems with
Radek's interpretation of the Independent Counsel Act, some
already cited. One of the most egregious examples, according to
both the Freeh and La Bella memoranda, was Radek's refusal to
consider a preliminary investigation of the Common Cause
allegations until forced to do so by the FEC audit report.
However, Radek was also criticized for misleading statements he
made regarding the various investigations and the contortions
he sometimes went through to avoid invoking the Act. In one
instance, the Acting Assistant Attorney General for the Office
of Legal Counsel Dawn Johnsen rebuked Radek for misrepresenting
the opinions of her office in a memorandum to the head of the
Criminal Division. She stated:
[T]o the extent that the [Radek] memorandum attempts to
report remarks made by OLC lawyers at the meeting, it
does so incorrectly and incompletely. Thus, not only
did the memorandum leave the mistaken impression that
``OLC positions'' were expressed, it also
mischaracterized the comments that individual lawyers
offered in [sic] during the meeting.\415\
---------------------------------------------------------------------------
\415\ Memorandum from Dawn Johnsen, Acting Assistant Attorney
General, U.S. Department of Justice, to Lee J. Radek, Chief, Public
Integrity Section, U.S. Department of Justice, at 1 (Oct. 2, 1997).
In another example, Radek wrote an August 24, 1998,
memorandum recommending that the Attorney General not pursue a
preliminary inquiry into whether the Vice President may have
provided false statements regarding his fundraising telephone
calls from the White House.\416\ A line attorney, Judy Feigin,
took issue with many of the factual assertions made by Radek in
his recommendation, and wrote a memorandum clarifying the
facts.\417\ She stated that FBI agents' notes and recollections
of witness interviews were significantly different from what
Radek had written in his memorandum.\418\ In particular, Radek
characterized White House Chief of Staff Leon Panetta as having
an ``evolving memory,'' implying that he was not a credible
witness.\419\ Feigin stated that the agents viewed Panetta as a
very credible witness. Feigin cited numerous examples of
Radek's factual inaccuracies and blatant misrepresentations,
including:
---------------------------------------------------------------------------
\416\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, to James K. Robinson, Assistant Attorney General, U.S.
Department of Justice (Aug. 24, 1998) (transmitted to the Attorney
General by Robinson).
\417\ Memorandum from (name redacted), Assistant U.S. Attorney,
U.S. Department of Justice, to James K. Robinson, Assistant Attorney
General, U.S. Department of Justice (Aug. 25, 1998). (Exhibit 9). The
name of the Attorney, Judy Feigin, has been made public since the
Justice Department's production of the memorandum.
\418\ Id. at 2.
\419\ Id.
The memo (p. 11) says Panetta's
``impression'' was that the Vice President was
following the hard money discussion. The agents' notes
reflect that Panetta said the Vice President was
---------------------------------------------------------------------------
listening attentively.
Page 10, fn. 11 suggests that the media fund
was not an item in the DNC budget during the Spring and
Summer of 1995. However Watson recalled the agenda of
the June 8, 1995 meeting included the media fund.
Page 11, fn. 12 says that Panetta may have
contradicted himself. The agents' notes do not support
this. Panetta recalled the general topic discussed
though not the specific details.
Page 12: The memo suggests that Rosen
recalled the focus of the fundraising proposals
presented to the President and Vice President during
the November meeting was on raising soft money. The
agents' notes indicate that Rosen had no recall whether
the events were intended to raise soft or hard money.
Page 14, n. 15: The footnote concludes that
Panetta, among others, did not understand the statement
made by Pastrick at the top of the footnote. In fact,
Panetta understood clearly the first part of the
statement, i.e., that every DNC expenditure during a
federal campaign is required to have a hard money
component. The only thing Panetta did not know was the
$20,000 limit.
Page 15, n. 16: The memo quotes Ickes'
statement that Strauss was very sophisticated in
matters of soft money/hard money, and therefore may
have written notes of greater detail than actually
discussed. However, the memo does not mention Strauss'
own statement (reflected in agents' notes) that he was
not familiar with these issues as they pertained to the
White House and the DNC. Strauss was adamant that those
notations reflected comments made at the meeting.
Page 16: The memo says that Gore stated he
and the President did not often attend DNC budget
meetings like that held on Nov. 21. In fact, the agents
report that most witnesses indicated that the President
and Vice President generally did attend the DNC budget
meetings.
The memorandum at least twice refers to the
fact that the Vice President might well have left the
meeting at the point in which the hard money media fund
discussion took place. Not only is there no evidence
that this occurred (i.e., no witness recalls his
leaving) but the agents' notes reflect that Ickes told
them that when he conducted meetings (and he was
conducting the meeting on November 21), he would halt
the proceedings if the President or Vice President
stepped out of the room; the meeting would resume when
they returned. Therefore, rather than presume the Vice
President was not present, the presumption must be that
he was.\420\
---------------------------------------------------------------------------
\420\ Id.
The information mischaracterized or left out by Radek was
absolutely crucial to determining whether to initiate a
preliminary investigation of Vice President Gore. At issue was
whether the Vice President believed the media fund was financed
exclusively with soft money, as Gore originally stated during
the first investigation of his fundraising phone calls. What
was discussed and recalled by other individuals present at the
meeting would be a strong indication of the Vice President's
knowledge. In Feigin's memorandum, she points out that there
was specific evidence from a credible source suggesting that
the Vice President did know that the DNC media fund had a hard
money component, and that the only evidence to the contrary
were self-serving statements by the Vice President and his
counsel. Radek's flawed memorandum, on the other hand,
intentionally or unintentionally had the effect of tipping the
scales in Gore's favor and avoiding the initiation of a
preliminary investigation under the Independent Counsel Act.
A further example of Radek's tendency to discriminate
against the Act occurred during the initial November 1997,
investigation of the allegations that Gore made solicitations
for campaign contributions from his White House office. La
Bella raised a troubling issue regarding Radek's recommendation
against the appointment of an independent counsel, stating,
``[m]y overall concern is that at every point where two
inferences could be drawn from a set of facts, the inference
consistent with a lack of criminal intent/conduct was always
chosen.'' \421\ He added:
---------------------------------------------------------------------------
\421\ Memorandum from Charles G. La Bella, Supervising Attorney,
Campaign Financing Task Force, to Janet Reno, Attorney General, U.S.
Department of Justice, at 2 (Nov. 30, 1997).
By routinely embracing the most innocent inference at
every turn, even if the inferences are factually
defensible, the memorandum creates an appearance that
the Department is straining to avoid the appointment of
an Independent Counsel and foreclose what many would
characterize as an impartial review of the allegations.
When you look at the facts, the memos, the meetings,
and the DNC practice, it is hard to say, as the
memorandum does, that there is only one conclusion to
be reached.\422\
---------------------------------------------------------------------------
\422\ Id.at 7.
Perhaps if Radek had weighed the facts in favor of declining to
initiate a preliminary investigation or appoint an independent
counsel only on this one occasion, he would be more credible.
However, it appears to have been his pattern and practice in
nearly every Task Force investigation.\423\ This leads the
committee to believe that Radek was intentionally avoiding the
application of the Independent Counsel Act.
---------------------------------------------------------------------------
\423\ On one occasion, Radek recommended that the Attorney General
initiate a preliminary investigation. In a Sept. 29, 1997, memorandum,
Radek concluded that, with regard to the allegations that Vice
President Gore may have solicited campaign contributions from his White
House office in violation of 18 U.S.C. section 607, there was
information sufficiently specific and credible to warrant further
investigation. Radek had to come to this conclusion given the Vice
President admitted he made the fundraising telephone calls from his
office. Memorandum from Lee J. Radek, Chief, Public Integrity Section,
U.S. Department of Justice, to Mark M. Richard, Acting Assistant
Attorney General, U.S. Department of Justice (Sept. 29, 1997). After
the preliminary investigation, Radek concluded that there was
insufficient evidence that the Vice President may have violated section
607 to warrant further investigation. Therefore, he recommended against
the appointment of an independent counsel. Memorandum from Lee J.
Radek, Chief, Public Integrity Section, U.S. Department of Justice, to
Mark M. Richard, Acting Assitant Attorney General, U.S. Department of
Justice, at 41 (Nov. 21, 1997).
---------------------------------------------------------------------------
3. The Attorney General Avoided the Invocation of the Independent
Counsel Act
In the end, the decisions on independent counsels were left
to the Attorney General alone. She consistently failed to apply
the Act in the campaign finance investigation, and the blame
falls squarely on her. Although Public Integrity Chief Lee
Radek developed many of the theories upon which Reno relied, it
was the Attorney General who chose not to apply the Act
responsibly.
In defense of herself, Attorney General Reno often invoked
the numerous previous independent counsels she had appointed as
proof that she was doing the right thing. However, none of the
other independent counsels were a direct referral based on the
President or First Lady except for Whitewater. In the
Whitewater case, the Attorney General adamantly refused to
appoint a special prosecutor \424\ until the President ordered
her to do so.
---------------------------------------------------------------------------
\424\ At the time, the Independent Counsel Act had expired, and had
not yet been reauthorized.
---------------------------------------------------------------------------
Task force attorneys and FBI officials wrote numerous
memoranda to the Attorney General regarding her interpretation
of the statute or practical application of it. They often
explained why the standard she was applying was too high, or
the analysis was flawed. By intentionally ignoring the advice
given to her by people like Director Freeh and Supervising
Attorney La Bella, who were familiar with both the facts and
the law, Attorney General Reno crippled the campaign
fundraising investigation. It appeared from her actions
throughout the investigation, that that was her intent all
along.
G. The Failure To Appoint a Special Counsel for Vice President Gore
The committee learned in December 1999 that the President
and Vice President had never been interviewed about the vast
majority of their activities relating to the 1996 campaign
fundraising scandal. Shortly thereafter, in April 2000, the
head of the Campaign Financing Task Force, Robert Conrad,
requested interviews with President Clinton and Vice President
Gore. In these interviews, Conrad covered many of the subjects
that had been neglected by the Justice Department for the
preceding 3 years.
After his interview with Vice President Gore, Conrad made a
recommendation to the Attorney General that a special counsel
be appointed to investigate the Vice President for possible
false statements made during the course of the April 18, 2000,
interview. The details of Conrad's recommendation are not
available to the committee, given the Justice Department's
refusal to produce the Conrad memo to the committee.\425\
However, the facts that have been made public make it clear
that Conrad's recommendation was based in part on his opinion
that the Vice President may have made false statements about
the Hsi Lai Temple fundraiser and the White House coffees.\426\
---------------------------------------------------------------------------
\425\ The Attorney General's refusal to produce the Conrad
memorandum to the committee is discussed in detail later in this
report.
\426\ News conference with Attorney General Reno, Washington, DC.
(Aug. 23, 2000).
---------------------------------------------------------------------------
The central dispute in the Vice President's interview about
the Hsi Lai Temple event was whether or not the Vice President
knew that the event was a fundraiser. During his testimony, the
Vice President stated that:
There was no solicitation of money. I did not see any
money or checks change hands. I never heard it
discussed. Nor do I believe it took place,
incidentally. Perhaps you know that some money changed
hands there. But to this day, I don't think any did.
* * * * *
And subsequent disclosures in the press and subsequent
production of memoranda that I never saw at the time
showed that--showed what they showed. And the very
fact, for me, the very fact that the members of a
finance-related event were present at the event was the
only connection that I had to the possibility that it
was finance-related.
But I did not know that it was a fundraiser. And I do
not to this day know that it was a fundraiser.\427\
---------------------------------------------------------------------------
\427\ Interview of Vice President Gore 68-69 (Apr. 18, 2000).
After the Vice President made this statement, Conrad presented
him with a number of pieces of evidence suggesting that the Hsi
Lai Temple event was considered to be a fundraiser by the Vice
President's staff and the DNC staff. Nevertheless, the Vice
President continued to assert that the event was not a
fundraiser.
Conrad also asked the Vice President his understanding of
the nature of White House coffees. Again, the Vice President
insisted that the coffees were not intended to raise funds:
Mr. Conrad. What was the purpose of the coffees?
Vice President Gore. Well, they were for the President
to meet with people who were interested in supporting
his policies and his politics. But that was more or
less on his side of the house and I'm not the best
source of information about that.
Mr. Conrad. In terms of a fund-raising tool, what was
the purpose of the coffees?
Vice President Gore. I don't know. They were on his
side of the house. And I will give you my understanding
of what I thought they were. I thought they were events
that allowed the President to spend time with
influential people who wanted to talk about policy, who
would at some later time possibly be asked to
financially support the DNC. It was certainly not my
understanding that they were fund-raising events.
Mr. Conrad. Did you have any understanding, or do you
have any understanding that there was a price tag
associated with the coffees?
Vice President Gore. No, I do not and did not.\428\
---------------------------------------------------------------------------
\428\ Id. at 52-53.
Conrad then presented to the Vice President the evidence that
the coffees were used to raise funds for the DNC, but the Vice
President did not change his belief that the coffees were not
fundraisers.
On August 23, 2000, after a lengthy period of deliberation,
the Attorney General decided not to appoint a special counsel
to investigate false statements made by the Vice President. The
Attorney General explained her reasoning at a press conference:
Because further investigation is not likely to result
in a prosecutable case under applicable criminal law
and principles of federal prosecution, I have concluded
that a special counsel is not warranted.
The transcript reflects neither false statements nor
perjury, each of which requires proof of a willfully
false statement about a material matter. Rather, the
transcript reflects disagreements about labels. I have
concluded that there is no reasonable possibility that
further investigation could develop evidence that would
support the filing of charges for making a willful
false statement.
The Task Force will, of course, continue its ongoing
investigation into illegal fundraising activity and
will be free to pursue all avenues of investigation,
wherever they may lead.\429\
---------------------------------------------------------------------------
\429\ News conference with Attorney General Reno, Washington, DC.
(Aug. 23, 2000).
In her statement, the Attorney General said more than that she
simply would not appoint a special counsel. She stated that
there was no reasonable possibility of developing evidence
which could lead to charges that the Vice President made a
false statement during his interview. This definitive statement
effectively closed the door to any further investigation of
issues arising out of the Vice President's interview.
During the period leading up to the Attorney General's
announcement, a Justice Department source had leaked
information making it appear that Conrad was alone in
recommending a special counsel to the Attorney General, being
quoted in the New York Times as saying that ``no other
prosecutor in this matter thought that there should be a need
for a special counsel.'' \430\ At her press conference,
Attorney General Reno made it clear that the Justice Department
leak was false: ``today Bob Conrad has been tagged with being
the only person in the Justice Department who thought I should
appoint a special counsel. Although I'm not going to get into
who recommended what, I can tell you that that is not
correct.'' \431\ Later, Reno confirmed that at least two other
advisors of hers supported the appointment of a special counsel
for Vice President Gore.\432\ A false leak from a Justice
Department official about the level of support for Conrad's
special counsel decision should have given the Attorney General
pause. It appears that certain Justice Department officials are
willing to both leak information about ongoing cases, and to
lie about those cases, in order to create a public perception
that is favorable to the Vice President. If these types of
individuals are advising the Attorney General, how can she
possibly receive unbiased advice?
---------------------------------------------------------------------------
\430\ Neil A. Lewis and Don Van Natta, Jr., ``Reno, Rejecting
Aide's Recommendation, Declines to Name Counsel on Gore Fund-Raising,''
the New York Times at A19 (Aug. 23, 2000).
\431\ News conference with Attorney General Reno, Washington, DC.
(Aug. 23, 2000).
\432\ Id.
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Unsurprisingly, the Attorney General's broad decision not
to appoint a special counsel was not supported by the law, or
the facts of the Task Force investigation. In those respects,
it closely resembled the Attorney General's earlier decisions
not to appoint independent counsels. The Attorney General's
decision had a number of serious flaws.
The Attorney General did not have all of the relevant
evidence before her. In late August, when the Attorney General
made her decision, the Justice Department and FBI were in the
process of reconstructing the first batch of ``missing'' e-mail
which had not been produced to investigators by the White
House. When she made her decision on August 23, 2000, the
Attorney General had reviewed ``some of the e-mails, not all of
them.'' \433\ The e-mail reconstructed by the FBI had direct
relevance to the decisionmaking process that the Attorney
General was undertaking. One e-mail, from Gore's Political
Director, stated ``[t]hese are FR coffees right?'' \434\ Given
the fact that the e-mail reconstruction process was turning up
evidence relevant to the special counsel decision, it is
peculiar that the Attorney General would reach her decision
before having all of the evidence. In addition, the author of
the e-mail was Vice President Gore's former Political Director,
and she has yet to be interviewed by the Justice Department.
---------------------------------------------------------------------------
\433\ Interview of Attorney General Janet Reno 34 (Oct. 5, 2000)
(preliminary transcript).
\434\ E-mail message from Karen Skelton to Ellen Ochs (Apr. 23,
1996) (exhibit 10).
---------------------------------------------------------------------------
In fact, it appears that the Attorney General did not
believe that there could be any evidence which would undermine
the Vice President's statements. In her interview with the
committee on October 5, 2000, the Attorney General stated ``I
don't think that there is a reasonable possibility of finding
an e-mail or evidence that says, yes, I did it.'' \435\ Of
course, it would not be necessary for the Justice Department to
find an e-mail where the Vice President says ``yes, I did it''
in order to support the filing of false statements charges.
Rather, it would only be necessary to find an e-mail message
indicating that the Vice President contemporaneously believed
that the White House coffees or the Hsi Lai Temple event were
fundraisers. It is difficult to believe that the Attorney
General concluded that there was not a reasonable possibility
of uncovering such evidence through the e-mail reconstruction
process. While it might be appropriate for the Vice President's
lawyers or staff to have blind faith in his credibility, it is
unseemly and disturbing when the Attorney General makes a leap
of faith to clear the Vice President of wrongdoing.
---------------------------------------------------------------------------
\435\ Interview of Attorney General Janet Reno 39 (Oct. 5, 2000)
(preliminary transcript).
---------------------------------------------------------------------------
The Attorney General also based her decision on her belief
that ``the transcript reflects disagreements about labels.''
The Attorney General reiterated this belief in her October 5
interview:
The Vice President defined what he meant by fund-
raiser, and there is no information at this time that
there were funds raised that he knew about at the
Temple. Based on his definition of what a fund-raiser
was and what he said, I would not be able to prove,
based on that, that he believed it to be a fund-raiser
and testified falsely.
* * * * *
And if a man says this is my definition of a fund-
raiser and this is not my definition of a fund-raiser,
I've got to look at that and take it within the four
corners of this transcript and judge based on his
definition as to whether there is a false statement.
* * * * *
I think the whole statement clearly reflects what the
Vice President understood a fund-raiser to be, and
within his definition, I think he made it clear that
the statement was not inaccurate.\436\
---------------------------------------------------------------------------
\436\ Interview of Attorney General Janet Reno 42-43, 46-47 (Oct.
5, 2000) (preliminary transcript).
It is remarkable that the Attorney General would base her
decision not to appoint a special counsel on the fact that the
Vice President defined ``fundraiser'' in such a way as to
exclude all of the evidence suggesting that the Hsi Lai Temple
event and the White House coffees were fundraisers. The Vice
President's definition, which requires funds to actually change
hands at the event, differs from the definition used by the
DNC, under which the DNC assigned the Hsi Lai Temple event and
the White House coffees to raise certain amounts of money for
the DNC. The Vice President's definition also differs from that
of his staff, who considered both events to be fundraisers.
Given these facts, the Attorney General would be entitled, and
in fact, obligated, to consider whether the Vice President's
definition of ``fundraiser'' was reasonable and not simply a
post hoc defense to avoid prosecution.
The Attorney General's decision not to appoint a special
counsel to investigate Vice President Gore is, unfortunately,
consistent with her earlier decisions not to appoint
independent counsels to investigate the fundraising scandal.
The Attorney General ignored the facts and the law to reach a
strained conclusion which was favorable to the Vice President.
Unlike her other decisions, this one was made in the middle of
the Presidential election campaign, and provided the Vice
President with a valuable boost. Yet again, the Attorney
General placed politics over impartial enforcement of the laws.
II. Failures of the Justice Department Investigation
The Attorney General's failure to appoint an independent
counsel to head the campaign fundraising investigation had
unfortunate practical consequences. The investigation was
inadequate in many ways. Key documents were never subpoenaed.
Key witnesses were never interviewed. Guilty parties have yet
to be indicted. The Justice Department failed to pursue
evidence aggressively. The Department's investigation has been
extraordinarily passive, and appears designed more to provide
political cover to the administration than to find out what
happened in the 1996 elections.
The Justice Department did prosecute important individuals
whose actions were central to the scandal, namely John Huang
and Charlie Trie. Even in those prosecutions, however, where
the Justice Department gained the cooperation of Trie and
Huang, the Justice Department failed to follow significant
leads. Other individuals, particularly those at the White House
and the DNC, received a free pass from the Justice Department
regardless of the evidence against them. The end result was a
good cover story for an investigation derailed. The Justice
Department could point to 25 prosecutions as evidence of its
commitment to get to the truth. The White House and the DNC
could rest assured that they would not be next.
A. The Justice Department Failed to Pursue the December 15, 1995,
Coffee Videotape
1. The White House Production of Fundraising Videotapes
On March 4, 1997, the committee served a subpoena on the
White House for records, including any ``video or audio
recording,'' on various named individuals central to the
campaign finance investigation.\437\ In response, the White
House produced documents, but not videotapes. The Senate
Committee on Governmental Affairs specifically asked the White
House about recordings of fundraising events in August 1997.
However, the White House claimed that there were no video
recordings.\438\ Nevertheless, the Senate continued to question
whether the recordings existed. Finally, the White House
revealed in October 1997 that videotapes showing President
Clinton and Vice President Gore with many individuals then
under criminal investigation did indeed exist.\439\
---------------------------------------------------------------------------
\437\ Committee on Government Reform and Oversight subpoena to the
Executive Office of the President, Mar. 4, 1997, at 1, 3-4.
\438\ S. Rept. No. 105-167, at 4284-4285 (1998).
\439\ The White House's assertion that there were no responsive
videotapes was based on the fact that the White House Communications
Agency (WHCA) produced only six documents, and no videotapes, pursuant
to the White House Counsel Office's request for records to be searched.
However, the White House claimed that a proper search was not conducted
by WHCA. Steven Smith, WHCA's chief of operations, said that his office
was never asked for any videotapes or documents about the coffees until
around October 1997. George Lardner, Jr., ``Aide Says Agency Didn't Get
Request For Coffee Tapes,'' Washington Post, Oct. 13, 1997, at A1. The
committee received the first White House videotapes on Oct. 5, 1997.
---------------------------------------------------------------------------
Although the White House discovered the videotapes on
October 1, 1997, White House Counsel Charles Ruff did not
immediately inform the Justice Department about their existence
immediately. Despite the fact that he attended his weekly
meeting with Attorney General Janet Reno on October 2, 1997,
Ruff did not mention the videotapes. At the time of the
meeting, Ruff was aware that Reno would be making a decision on
whether or not to appoint an independent counsel within days.
The videotapes were important pieces of evidence showing who
attended and what occurred at numerous events. The next day,
October 3, 1997, Special Counsel to the President Lanny Breuer
informed the Senate of the existence of the videotapes, but
neglected to inform the Justice Department. Reno announced her
decision not to appoint an independent counsel on October
3.\440\ When Breuer informed the Justice Department of the
videotapes on October 4, 1997, it appeared as though the White
House had purposefully withheld the tapes until after Reno made
her decision.
---------------------------------------------------------------------------
\440\ Letter from Attorney General Janet Reno to Chairman Henry
Hyde, Oct. 3, 1997.
---------------------------------------------------------------------------
Once the Attorney General learned what had occurred, she
said: ``I was mad at the people responsible, but what I think
what's important now is that we move on.'' \441\ Despite her
anger, Reno quickly jumped to the defense of the White House.
Based on what could only have been a cursory review of the
tapes, Reno fully exonerated the White House of any wrongdoing
when she said ``we do not have any indication of criminal
activity by people covered under the Independent Counsel Act,
including the President.'' \442\
---------------------------------------------------------------------------
\441\ Jim Abrams, ``Reno Says She Will Not Resign, Will Not Stop
Investigation,'' Associated Press, quoting Meet the Press (NBC
television broadcast, Oct. 12, 1997).
\442\ Id.
---------------------------------------------------------------------------
2. The December 15, 1995, White House Coffee
The videotapes showed a number of events where the
President and Vice President were raising funds for the DNC.
One of the events, a December 15, 1995, coffee, was especially
relevant because the President and Vice President attended
along with Arief Wiriadinata, an Indonesian citizen living in
the United States. Wiriadinata and his wife, Soraya,
contributed $455,000 to the DNC after they received a $500,000
wire transfer from Indonesia from Soraya's father, Hashim Ning.
Ning was a former business partner of the Riady family. The
initial review of this tape showed that Arief Wiriadinata
greeted President Clinton and said ``James Riady sent me.''
\443\ When the committee analyzed the tape further, it became
apparent that the Vice President may have spoken with
Wiriadinata as well. Vice President Gore appears to say:
---------------------------------------------------------------------------
\443\ White House Communications Agency videotape, Dec. 15, 1995.
The committee subpoenaed the original WHCA Betacam tape of the event
from the White House.
We oughta, we oughta, we oughta show Mr. Riady the
tapes, some of the ad tapes.\444\
---------------------------------------------------------------------------
\444\ Id.
---------------------------------------------------------------------------
Another voice then adds:
I'll see if I can do that.\445\
---------------------------------------------------------------------------
\445\ Two DNC officials, DNC Finance Chairman Marvin Rosen and DNC
Finance Director Richard Sullivan, were in the vicinity of the Vice
President when the comments were made. However, it is unclear who made
the follow-up statement.
Vice President Gore was apparently referring to DNC issue
advertisements that were televised across the country from the
fall of 1995 until the election in 1996. President Clinton and
Vice President Gore had agreed to help raise millions of
dollars to finance the DNC's unprecedented advertisement blitz.
According to the Vice President, the ads were shown to
``individuals who would be willing to contribute to the DNC
media fund.'' \446\ The Vice President traveled to San
Francisco on October 13, 1995, to show a group of potential
contributors the DNC issue ads. Then, on December 11, 1995, 4
days prior to the coffee, Vice President Gore was in an airport
hangar in Chicago again showing the DNC issue ads to potential
donors in order to solicit contributions. Therefore, it was
clear that in December 1995, the Vice President was using the
presentation of the DNC issue ads as a fundraising tool. Four
days after the Chicago fundraiser, Vice President Gore attended
the December 15, 1995, White House coffee. Therefore, it is
reasonable to believe that the Vice President was thinking
about obtaining financial support from donors when he
apparently suggested that the DNC issue ads be shown to James
Riady.\447\
---------------------------------------------------------------------------
\446\ FBI interview of Vice President Gore, at 10 (Nov. 11, 1997).
\447\ Vice President Gore was scheduled to hold his own coffee for
DNC contributors in the Old Executive Office Building on Dec. 15, 1995.
The Vice President was not included on the guest list for the coffee
President Clinton held for DNC contributors in the Roosevelt Room of
the White House on the same day. Guest list for Dec. 15, 1995, White
House coffee (exhibit 11). It should also be noted that the Roosevelt
Room is an official room in the White House and political solicitations
there are illegal.
---------------------------------------------------------------------------
3. The December 15, 1995, Videotape is Relevant to the Investigation of
Vice President Gore
If Vice President Gore said that DNC advertisement tapes
should be shown to James Riady in December 1995, his comment
has far-reaching implications that could demonstrate the Vice
President's direct knowledge of criminal activity in the 1996
Presidential campaign. For the Vice President to have made the
comment, he would have to be aware of two significant facts:
(1) the Vice President understood that Arief Wiriadinata had a
connection to James Riady; and (2) the Vice President had to
know that James Riady was either raising or funneling
contributions into the 1996 campaign, or that he was important
enough to receive preferential treatment.
The Vice President first would have to know who Arief
Wiriadinata was and that Wiriadinata was connected to James
Riady. Arief Wiriadinata and his wife, Soraya, were Indonesians
who settled in Springfield, VA, where Arief was employed as a
gardener. The Wiriadinatas were able to become prominent DNC
donors enjoying the attention of the President and Vice
President because of Soraya's father, Hashim Ning. Ning was a
former business partner of the Riady family and a co-founder of
the Lippo Group. When Ning became ill during a visit to the
United States in June 1995, James Riady had his representative,
John Huang, visit Ning in the hospital.\448\ During Ning's
hospital stay, Riady and Huang arranged a ``get well'' card
from President Clinton and a visit from Mark Middleton, who had
worked in the White House chief of staff's office.\449\
---------------------------------------------------------------------------
\448\ The visit at the hospital was the first time Huang met Arief
and Soraya Wiriadinata. ``The Role of John Huang and the Riady Family
in Political Fundraising,'' hearings before the House Committee on
Government Reform, 106th Cong., 247 (Dec. 16, 1999) (preliminary
transcript).
\449\ Letter from President Clinton to Hasjim [sic] Ning, June 19,
1995, F 0033816 (exhibit 12).
---------------------------------------------------------------------------
By November 1995, while still employed by the Commerce
Department, Huang began soliciting contributions from Arief and
Soraya Wiriadinata on Riady's recommendation.\450\ Over the
next 6 months, the Wiriadinatas would give $455,000 to the DNC.
The Wiriadinatas' contributions all came from a $500,000 wire
transfer sent to them on November 7, 1995, by Hashim Ning. By
the time of the White House coffee on December 15, 1995, the
Wiriadinatas had already contributed $130,000. John Huang's
testimony before the committee in December 1999 revealed the
close link between the contributions and the Lippo Group.
First, Riady told Huang that he should ask the Wiriadinatas to
give. Second, the money given by the Wiriadinatas came from one
of the Riadys' long-time associates. Finally, and perhaps most
striking, Huang testified that when Ning died in late 1995 or
early 1996 and the Wiriadinatas had to return to Indonesia,
they gave him a series of blank checks to fulfill their
contribution commitment to him.\451\ Huang kept the blank
checks in his desk and used them as needed to make
contributions to the DNC on the Wiriadinatas' behalf.
---------------------------------------------------------------------------
\450\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 252 (Dec. 16, 1999) (preliminary transcript).
\451\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 13 (Dec. 17, 1999) (preliminary transcript).
---------------------------------------------------------------------------
On November 2, 1995, Arief and Soraya Wiriadinata attended
their first DNC fundraiser with Vice President Gore. At the
event, John Huang introduced the couple to the Vice President.
By this time, the Vice President had already begun the
solicitation of contributors for the DNC issue ad campaign. The
next known meeting between the Vice President and Arief
Wiriadinata occurred at the White House coffee on December 15,
1995.
The Vice President's comment to Wiriadinata begs the
question: why did the Vice President refer to James Riady? Was
the Vice President aware that Riady was the source of the
Wiriadinata contributions? Two possible explanations are
apparent: either the Vice President heard Wiriadinata say
``James Riady sent me'' to the President or the DNC officials
near the Vice President prompted his remark about the ad tapes.
The Vice President knew that Riady was an Indonesian
businessman.\452\ Therefore, the Vice President's comment is
troubling, as the showing of advertisement tapes to donors
appears to have been a device to encourage further
contributions and provide thanks for past contributions.
---------------------------------------------------------------------------
\452\ Testimony of Vice President Albert Gore Jr., at 111 (April
18, 2000).
---------------------------------------------------------------------------
Clearly, it would have been illegal for Riady to contribute
money to the 1996 Presidential campaign.\453\ Even John Huang,
the DNC fundraiser responsible for many of the illegal
contributions to the DNC in 1995 and 1996, acknowledged that it
would have been illegal for Riady to contribute:
---------------------------------------------------------------------------
\453\ The DNC's last officially recorded contribution from James
Riady occurred October 1992. The reason was because Riady had been
permanently moved back to Indonesia in 1990 at the latest, and
therefore, was ineligible even to make any political contributions in
1992.
Mr. Shays. Would it have been illegal for you to raise
---------------------------------------------------------------------------
money from the Riadys when you worked for the DNC?
Mr. Huang. I'm sorry, sir?
Mr. Shays. Would it have been illegal for you to have
raised money from the Riadys? You seem to want to make
clear to me that somehow during that time while you
worked at the DNC you did not raise money from the
Riadys but you raised money from people who had
business acquaintances and agreements with the Riadys.
Mr. Huang. Because I had the knowledge at that time Mr.
Riady has relinquished his green card status back to
the United States and he was no longer holding the PR,
so-called permanent resident status in the United
States, he was not eligible to take care of any
further.\454\
---------------------------------------------------------------------------
\454\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 111 (Dec. 15, 1999) (preliminary transcript).
Vice President Gore's statement about Riady is troubling in
light of his testimony concerning James Riady in his April 18,
2000, interview with the Task Force. In that testimony, the
Vice President created the impression he did not know Riady
---------------------------------------------------------------------------
well, and was not politically involved with Riady:
Mr. Conrad. When is the first time you ever met James
Riady?
Vice President Gore. To my knowledge, I have only seen
him twice in my life. I may be wrong about this. There
may be other times that I'm not thinking, that I'm not
remembering.
But the only times--I think the only times I've met him
were once when he was in Betty Currie's office
preparing to go in to see the President with a couple
of other people.
Mr. Conrad. Did you know who those people were?
Vice President Gore. No, I did not. I was on the way
out. And either he introduced himself or somebody
introduced him to me. The only other time I--
Mr. Conrad. Before you get to the other time, do you
recall the substance of any conversation with him at
that time?
Vice President Gore. Hello, how are you. I said, you
know, I've heard your name. That was it. The door was
open. It was one of those deals.
Mr. Conrad. What about the second time?
Vice President Gore. The second time was in Malaysia. I
filled in for the President at the last minute for a
trip to Kuala Lumpur for a meeting for the Asian
Pacific--
Mr. Conrad. Economic Council?
Vice President Gore. Yes, APEC.
Mr. Conrad. Right.
Vice President Gore. And in conjunction with that
event, which was hosted by Mahathir, the leader of
Malaysia, there was a cultural event where all of the
heads of state and their stand-in--of which I think I
was the only stand-in--all went to this big dinner and
they had a dance, kind of a show. And he came up to me
during that and said, introduced himself again, and
said, hello, how are you. I said, fine, hello, how are
you. It was just--that was the substance of it[.]
Mr. Conrad. Any substantive conversation with Mr.
Riady?
Vice President Gore. No.
Mr. Conrad. And no other meetings that you remember?
Vice President Gore. No, not that I remember? \455\
---------------------------------------------------------------------------
\455\ Testimony of Vice President Albert Gore, Jr., at 109-111
(Apr. 18, 2000).
In his testimony, the only personal information the Vice
President knew about James Riady was that Riady was a
businessman in Indonesia.\456\ The Vice President said he did
not learn of Riady's relationship to President Clinton until
after the scandal became public.\457\ The Vice President also
indicated that he had no direct knowledge of Riady's
involvement in politics or campaign contributions:
---------------------------------------------------------------------------
\456\ Id. at 111.
\457\ Id. at 114.
Mr. Conrad. Mr. Riady has been fairly active, some
would say aggressive, in his courting of other
political people. But I take it from your testimony
that you've provided today that you weren't one of
---------------------------------------------------------------------------
them?
Vice President Gore. No. I think that--no. Unless you
count his role evidently in the background of
organizing that trip to Taiwan, but I never saw him or
talked to him there.
* * * * *
Mr. Conrad. At least based on your previous testimony,
you had no knowledge of any financial sponsorship by
Mr. Riady of a portion of the '89 trip to Asia?
Vice President Gore. I don't think so . . .
* * * * *
Mr. Conrad. Also in August of 1992, Mr. Riady made
certain financial fund-raising commitments to the
President. Did you ever have any discussions with the
President about the fund-raising role of Mr. Riady in--
Vice President Gore. No.
Mr. Conrad. --The 1992 election cycle?
Vice President Gore. No.\458\
---------------------------------------------------------------------------
\458\ Id. at 113-114.
If the Vice President told Arief Wiriadinata that the DNC
issue advertisements should be shown to James Riady, it would
dramatically undermine the testimony given by Vice President
Gore to the Justice Department. The Vice President testified
that he was unaware of Riady's fundraising or contributions in
the 1992 election, and Riady was clearly unable to participate
in the 1996 election. Ostensibly, the only reason Vice
President Gore was showing the ad tapes was to solicit a
contribution, or to provide thanks for past contributions.
4. The Justice Department Failed to Obtain the Original Videotape After
the Apparent Remarks by Vice President Gore to Wiriadinata
Became Public
The Justice Department has had a copy of the videotape for
the December 15, 1995, White House coffee since October 5,
1997. Yet in five interviews with the Vice President, the
Justice Department did not ask any questions about Wiriadinata
or that particular White House coffee. Either the Justice
Department has not seriously examined the videotapes or they
are unwilling to ask Vice President Gore what he said.
The committee highlighted Vice President Gore's remarks at
the coffee on previous occasions. The Justice Department has
chosen not to take notice any of these times. On December 17,
1999, at a committee hearing, Congressman Souder asked John
Huang about the videotape:
Mr. Souder. And then so at one point Mr. Wiriadinata
says James Riady sent me, and then if you keep
listening to the tape, as he speaks to the President, a
voice can be heard saying we should show tapes of the
advertisements to Mr. Riady. This sounds like Vice
President Gore.
* * * * *
Mr. Souder. Thanks. Why would the Vice President have
said we should show tapes of the advertisements to Mr.
Riady?
Mr. Huang. I really don't know, Congressman, no.\459\
---------------------------------------------------------------------------
\459\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 9-11 (Dec. 17, 1999) (preliminary transcript).
Representatives of the Justice Department were present
throughout the 3 days of hearings with John Huang in December
1999. Nevertheless, the Justice Department did not follow up on
this issue after the committee's hearing.
After the Vice President released his April 18, 2000,
interview with the Task Force, the committee once again asked
the Justice Department why the Vice President was not
questioned about the Wiriadinata coffee.\460\ The Justice
Department was also informed that the committee had possession
of the original tape of the December 15, 1995, coffee, the best
possible source of the information. The Justice Department did
not respond.
---------------------------------------------------------------------------
\460\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (July 18, 2000) (correspondence
between the committee and the Justice Department is contained in
appendix 1).
---------------------------------------------------------------------------
At a hearing on July 20, 2000, the committee directly
questioned four top-level Justice Department officials about
the Vice President's comments at the December 15, 1995,
coffee.\461\ The Justice Department officials refused to
comment on any aspect of the tape:
---------------------------------------------------------------------------
\461\ The Justice Department witnesses were James Robinson,
Assistant Attorney General, Criminal Division; Alan Gershel, Deputy
Assistant Attorney General, Criminal Division; Robert Raben, Assistant
Attorney General, Office of Legislative Affairs; and Robert Conrad,
Supervising Attorney, Campaign Financing Task Force.
Mr. Barr. I ask again, is this tape, is this coffee,
are these individuals, is this language, of interest to
---------------------------------------------------------------------------
the Department of Justice?
Mr. Robinson. I cannot comment on the investigative
matter but obviously we are here, we have heard it and
we receive lots of information from Congress and other
sources. Whenever we get information, we look at it
carefully as a general proposition, but I can't comment
on the specifics of our investigations. It would be
inappropriate.\462\
---------------------------------------------------------------------------
\462\ ``Has the Department of Justice Given Preferential Treatment
to the President and Vice President,'' hearing before the House
Committee on Government Reform, 106th Cong., 41 (July 20, 2000)
(preliminary transcript).
In an attempt to assess how carefully the Justice
Department has reviewed this evidence, if at all, the committee
wrote to the Justice Department on August 1, 2000, and asked if
Justice Department lawyers had ever listened to the original
White House tape of the Wiriadinata coffee.\463\ The Justice
Department refused to answer the question, stating:
---------------------------------------------------------------------------
\463\ Letter from James C. Wilson, chief counsel, Committee on
Government Reform, to Robert Raben, Assistant Attorney General (Aug. 1,
2000).
[I]t would be inappropriate for this Department to
provide such information concerning an ongoing
investigation, both in terms of the ethical
responsibilities of federal prosecutors, and in terms
of our duty to avoid any appearance of undue external
influence on our investigations.\464\
---------------------------------------------------------------------------
\464\ Letter from Robert Raben, Assistant Attorney General, to
James C. Wilson, chief counsel, Committee on Government Reform (Aug. 4,
2000).
Apparently, the high-minded ideal which prevented the Justice
Department from discussing basic facts about the videotape with
the Congress does not apply to its relationship with the media.
On July 19, 2000, an unnamed Justice Department source leaked
the Department's interpretation of the substance of the tape by
telling the press that it was unclear what was said on the tape
because of ``poor audio.'' \465\
---------------------------------------------------------------------------
\465\ ``Justice Says White House Coffee Tape Unclear; Hearings
Scheduled Tuesday'' [sic] (viewed July 19, 2000) http://www.cnn.com/
2000/ALLPOLITICS/stories/07/19/burton.gore/index.html.
---------------------------------------------------------------------------
Vice President Gore and his White House surrogates have
been unwilling to explain the Vice President's remarks. The
Vice President himself admitted it was his voice, but deflected
questions by saying it was a political attack using news that
had been available for years.\466\ The White House offered,
off-the-record only, that the Vice President may have said
``Godfrey,'' rather than ``Riady,'' a reference to H. Lee
Godfrey, who also attended the December 15 coffee. Even the
White House refused to go on the record with this defense, and
the Vice President did not embrace it.\467\
---------------------------------------------------------------------------
\466\ ``Congressman Focuses on Gore Videotape Comment,'' Associated
Press, July 19, 2000.
\467\ Don Van Natta Jr., ``Questions Raised by House Panel About
Gore Remark at a 1995 Fund-Raiser,'' New York Times, July 19, 2000, at
A21.
---------------------------------------------------------------------------
If the Vice President told Arief Wiriadinata that the DNC
issue advertisements should be shown to James Riady, it would
constitute a significant piece of evidence that top White House
officials may have been aware of illegalities in the 1996
Presidential campaign. The Justice Department's purposeful
refusal to examine the evidence or to question the Vice
President on this matter clearly demonstrates its unwillingness
to pursue an honest and thorough investigation.
On September 25, 2000, 9 months after the committee first
highlighted the December 15, 1995, coffee tape, the Justice
Department finally informed the committee it would ask for the
videotape. As of October 10, 2000, though, it still had not
made a written request for the videotape.\468\
---------------------------------------------------------------------------
\468\ Letter from Robert Raben, Assistant Attorney General,
Department of Justice, to Dan Burton, chairman, Committee on Government
Reform (Sept. 25, 2000). Several days after the Sept. 25, 2000, letter,
an FBI agent called the committee staff and requested the videotape.
Committee staff informed the FBI agent that the committee would like to
receive a written request before it turned over the original evidence
to the FBI. The agent agreed to ask a Justice Department lawyer to send
a written request to the committee. As of Oct. 10, 2000, the committee
has not received the request.
---------------------------------------------------------------------------
B. The Justice Department Has Failed To Question the President and Vice
President Effectively
1. Delay in Asking Relevant Questions
From the beginning of the campaign finance scandal, it was
clear that President Clinton and Vice President Gore were
knowledgeable witnesses and possible participants in a scheme
to bring illegal money into the DNC to finance their re-
election. Accordingly, it was important for the Justice
Department to interview the President and Vice President--both
thoroughly and expeditiously. However, the Justice Department
waited over 3 years before asking the President or Vice
President about most aspects of the fundraising scandal.
The Justice Department interviewed President Clinton two
times and Vice President Gore four times in 1997 and 1998.\469\
The Justice Department purposefully restricted the topics
covered in the six interviews to the DNC issue advertisements
and telephone solicitations from the White House. The
justification for limiting the interviews to those two issues
was because they were the subjects of preliminary
investigations under the Independent Counsel Act. This
rationale, however, fails to explain why they could not have
been asked about other pertinent subjects.
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\469\ President Clinton was interviewed on Nov. 11, 1997, and Nov.
9, 1998. Vice President Gore was interviewed on Nov. 11, 1997, June 10,
1998, Aug. 8, 1998, and Nov. 11, 1998.
---------------------------------------------------------------------------
Under the Justice Department's self-imposed restriction,
the President and Vice President would not be interviewed about
their interaction with various criminals and questionable
individuals because those investigations were not part of a
preliminary investigation under the Independent Counsel Act.
However, the Justice Department ignored evidence that the
President and Vice President were possibly aware of illegal
activity. In addition, the Justice Department ignored the fact
that the President and Vice President were significant
witnesses in the investigation. In some instances, President
Clinton and Vice President Gore were the only available
witnesses. Thus, there was no acceptable investigative reason
for the failure to ask questions about important subjects. It
appears, moreover, that the President and Vice President
received preferential treatment at the expense of the campaign
finance investigation.
On April 25, 1999, due to concerns that the President and
Vice President were receiving preferential treatment, the
committee subpoenaed all Task Force interviews with President
Clinton and Vice President Gore. In response to the committee's
subpoena, the Justice Department, which previously supplied
interview summaries to the Congress, announced a new policy of
refusing to provide such summaries. The purported basis for the
new Justice Department policy was that the public release of
the interview summaries would have a chilling effect on future
witnesses' cooperation, thereby harming law enforcement
efforts.\470\
---------------------------------------------------------------------------
\470\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Dec. 14, 1999).
---------------------------------------------------------------------------
In December 1999, the Justice Department finally allowed
the committee to review the interview summaries of the
President and Vice President, but not to have copies.\471\ The
committee's review in December 1999 found that the Justice
Department had questioned the President and Vice President only
about DNC issue advertisements and telephone solicitations at
the White House. After 3 years of investigation, the Justice
Department had not asked President Clinton one question on the
following issues:
---------------------------------------------------------------------------
\471\ The Justice Department's attempt to withhold these interview
summaries from the committee is discussed in detail later in this
report.
The President's relationship with James
---------------------------------------------------------------------------
Riady.
John Huang's placement at the DNC.
White House coffees and other perks offered
in exchange for contributions.
The President's interactions with Johnny
Chung and the reasons Chung was given access to the
White House.
Charlie Trie's contributions to the
Presidential Legal Expense Trust.
Charlie Trie's appointment to the Bingaman
Commission.
The President's attendance at the July 30,
1996, fundraiser with James Riady and three of his
Asian business associates.
The February 6, 1996, White House coffee
with Charlie Trie and Wang Jun.
The June 18, 1996, White House coffee with
Huang, Pauline Kanchanalak and the CP Group from
Thailand.
The President's attendance at the February
19, 1996, May 13, 1996, and July 22, 1996, fundraisers,
where numerous foreign nationals attended and
contributed.
The President's 5-minute meeting with John
K.H. Lee, a Korean national, in exchange for $250,000.
Similarly, the Vice President was not questioned for 3 years
about the following topics:
The Hsi Lai Temple.
The Vice President's relationship with Maria
Hsia.
The Vice President's relationship with John
Huang.
The Vice President's relationship with
Howard Glicken.
White House coffees.
Senator Gore's 1990 trip to Asia with Hsia
and Huang.
The September 27, 1993, fundraiser with
Huang and China Resources Chairman Shen Jueren.
The February 19, 1996, fundraiser at the Hay
Adams.
On December 15, 1999, the Justice Department finally
produced the interview summaries of President Clinton and Vice
President Gore. The committee publicly announced the
deficiencies of the interviews on December 16, 1999. The
Justice Department's last interviews with the President and
Vice President were in November 1998, and there was no evidence
that the Justice Department intended to question them again.
Since the Justice Department unreasonably withheld the
interview summaries from the committee, the Justice Department
would not have publicly revealed them voluntarily. However,
once the committee announced the Justice Department's complete
failure to ask a single question of the President or Vice
President about foreign money or their knowledge of various
criminals in the campaign finance investigation, the President
and Vice President were re-interviewed in April 2000.
2. Favorable Circumstances of the April 2000 Interviews
The April 2000 interviews were conducted differently than
the previous six interviews with the President and Vice
President. This time, the President and Vice President were
both under oath and the interviews were transcribed. This
provided the Justice Department with the benefit of having a
clear record of what was discussed, but it also put the
President and Vice President in a position where they could
publicly release their interviews, theoretically compromising
the Department's investigation. In addition, the Task Force
afforded the President and Vice President an extraordinary
courtesy by supplying the exhibits that were to be used in the
interviews beforehand.\472\
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\472\ The Department was also under a time limit in its interview
of President Clinton. President Clinton and his attorneys agreed to an
interview with Robert Conrad by Apr. 7, 2000. However, 2 days before
the scheduled interview, and the day after the Vice President's
contentious interview with the Task Force, the President rescheduled
his weekly Saturday radio address to Friday, Apr. 21, 2000, the day of
the Task Force interview. Mr. Conrad, who had previously been given as
much time as necessary to complete the interview, then had to cover 43
topics in less than 4 hours. Letter from Robert J. Conrad, Jr., to Beth
Nolan, et al., Apr. 11, 2000; letter from Robert J. Conrad, Jr., to
Beth Nolan, et al., Apr. 20, 2000.
---------------------------------------------------------------------------
By prior agreement with the Task Force, both President
Clinton and Vice President Gore were given copies of their
April 2000 interview transcripts. The committee is unaware of
the President and Vice President or any other witness receiving
copies of any of their previous interviews. Task Force Chief
Robert Conrad explained that they were provided with a copy of
the transcripts as a result of negotiations with the President
and Vice President's counsels.\473\
---------------------------------------------------------------------------
\473\ ``Has the Department of Justice Given Preferential Treatment
to the President and Vice President,'' hearing before the House
Committee on Government Reform, 106th Cong., 49 (July 20, 2000)
(preliminary transcript).
---------------------------------------------------------------------------
The Justice Department had consistently told the committee
that any release of interview summaries or transcripts would
harm ongoing investigations. However, by allowing the President
and Vice President to have copies of the transcripts, they
contradicted their own argument. Again, it appears the
President and Vice President were accorded preferential
treatment. At the committee's July 20, 2000, hearing, all of
the Justice Department officials present agreed with Attorney
General Reno's statement to the committee that, ``significant
harm to ongoing investigations would result from the disclosure
of the records of the recent interviews.'' \474\ Disregarding
any harm that might come to the Justice Department's
investigation, Vice President Gore released his interview
transcript to blunt media reports that the Task Force had once
again recommended an outside prosecutor to investigate the Vice
President.\475\ President Clinton followed suit and released
his testimony on July 24, 2000.\476\
---------------------------------------------------------------------------
\474\ Id. at 112-113 (2000).
\475\ Id. at 107-109.
\476\ The committee subpoenaed the transcript of the President's
Apr. 21, 2000, interview after the Vice President publicly released his
transcript. When the President produced a copy of his transcript to the
committee, he also gave a copy to the media.
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C. The Justice Department Failed to Pursue Relevant Documents
1. Failure to Subpoena Relevant Records
The committee was concerned about the Justice Department's
ability to conduct a fair and impartial investigation,
particularly in light of its numerous missteps and failures. In
order to carry out its oversight investigation of the Justice
Department, the committee decided review document requests and
subpoenas sent by the Justice Department to the White House,
the Commerce Department, the State Department, and the DNC so
that it could determine how thorough the Justice Department
investigation had been.
After the committee obtained records from the White House
and Commerce Department which revealed how incomplete and
incompetent the Justice Department investigation had been, the
Justice Department began a concerted effort to keep the
committee from obtaining the subpoenas served upon both public
and private entities by the Justice Department. As a result of
the Justice Department's efforts, which are described in detail
below, the Justice Department has limited the committee's
oversight of the Justice Department investigation, and covered
up the Department's biased investigation from any further
public scrutiny.
a. The White House
On March 16, 2000, the committee subpoenaed the White House
to produce subpoenas and document requests it had received from
the Task Force. These records were received nearly 5 months
later on August 10, 2000. The White House obviously had
thousands of documents relating to numerous individuals
involved in the campaign finance investigation, and the Justice
Department subpoenaed many documents from the White House.
However, in certain crucial cases--Maria Hsia, Ernest Green,
and Mark Middleton--the Justice Department either failed to ask
the White House for documents or they requested the documents
only very recently, years after the individual's involvement in
the scandal became known.
The Task Force never asked the White House for records
concerning Maria Hsia. Hsia had a close relationship with Vice
President Gore spanning 10 years. The Justice Department
prosecuted Hsia for funneling illegal contributions to the DNC
in support of Vice President Gore's visit to the Hsi Lai Temple
in April 1996. Yet, the Justice Department never subpoenaed the
White House for records relating to Hsia. This failure meant
that the Justice Department brought a case against Hsia without
a full understanding of Hsia's interactions with White House
officials.\477\ The Justice Department did subpoena records on
Maria Hsia from Ann Lewis, the White House Communications
Director.\478\ However, that subpoena, sent to Lewis in her
personal capacity, in no way obligated the White House to
produce any records regarding Hsia.\479\
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\477\ The Vice President also was not questioned about his
relationship and interaction with Hsia until after her conviction.
\478\ Justice Department subpoena for documents to Ann Frank Lewis,
Aug. 13, 1997 (exhibit 13).
\479\ The subpoena was sent to Lewis on Aug. 15, 1997, immediately
after the Task Force interviewed Lewis, even though Lewis had no
substantive knowledge of the individuals or the White House's
involvement in campaign finance improprieties or illegalities.
---------------------------------------------------------------------------
The Justice Department did not subpoena the White House for
records on Ernest Green or Mark Middleton until March 2000.
Both Green and Middleton were key players in the campaign
finance scandal in that each could provide substantial amounts
of information about the fundraising activities of Charlie
Trie, John Huang, and their interaction with the Clinton
administration.
Green and Charlie Trie were fundraising and business
partners from 1994 to 1996. Green and Trie were frequent
visitors to the White House and each were friends of President
Clinton. Green used his influence in the DNC and Clinton
administration to help Trie, and Trie in return tried to find
business opportunities for Green in Asia. In 1998, Green became
the focus of a Justice Department investigation for perjury
relating to his testimony before Congress on Charlie Trie.
Unlike Green, Middleton invoked the fifth amendment against
self-incrimination and has refused to cooperate with the
committee. Mark Middleton is a key figure in the campaign
finance scandal. Middleton served as the principal White House
contact for both John Huang and Charlie Trie. Once Middleton
left the White House, he traveled to Asia with Trie and courted
many foreign businessmen. Middleton frequently brought his
foreign business clients to the White House. The White House
had numerous records of Middleton bringing his foreign business
clients to the White House, at times to meet the President,
First Lady, or the White House staff. Middleton's extensive
involvement in the campaign finance scandal all centers around
the White House. There cannot be any investigation of
Middleton, much less a serious one, without his White House
records.
In 1999, the committee obtained a document from the Justice
Department that indicated that the Department's investigation
of Middleton was ``reinvigorated'' in light of Charlie Trie's
cooperation with the Justice Department.\480\ In fact, when
Charlie Trie testified before the committee in March 2000, the
Justice Department requested that the committee refrain from
asking any questions about Middleton or Green because they were
part of ongoing investigations.
---------------------------------------------------------------------------
\480\ Listing of Task Force cases, June 4, 1999 (exhibit 14).
---------------------------------------------------------------------------
The Justice Department's subpoenas to the White House
reveal a great deal about the Department's investigation. While
the Attorney General has frequently stated that the Task Force
is free to follow any evidence, it is obvious that the Task
Force is avoiding gathering critical evidence. It is difficult
to believe that Justice Department prosecutors simply forgot to
ask for this crucial evidence. Rather, it is possible that the
Attorney General and her staff felt hesitant to pressure the
White House which they serve to produce documents. Furthermore,
as has become abundantly clear in the Justice Department
investigation of the e-mails that have been withheld by the
White House, it seems that the Justice Department is
subordinate to the White House where document requests are
concerned. An independent counsel would not experience this
same conflict, and likely would have obtained the necessary
documents.
b. The State Department
On August 4, 2000, the committee sent a subpoena to the
State Department for any requests or subpoenas it received from
the Justice Department in the course of the campaign finance
investigation. The Justice Department's requests to the State
Department were particularly critical due to the numerous
foreign nationals involved in the investigation and allegations
of foreign governments funneling illegal contributions into the
DNC. If the Justice Department was serious about its
investigation, it would ask the State Department to pressure
foreign governments to provide access to the necessary
documents and witnesses.
Rather than comply with the committee's subpoena, the State
Department turned to the Justice Department, to see whether it
should comply. The Justice Department directed the State
Department to redact from their submission to the committee any
information that related to ongoing investigations. The Justice
Department's position was more fully explained in a September
25, 2000, letter from Assistant Attorney General Robert Raben,
which claimed that the Justice Department had a right to redact
information that related to ongoing investigations from State
Department documents.\481\
---------------------------------------------------------------------------
\481\ Letter from Robert Raben to Chairman Dan Burton, Sept. 25,
2000.
---------------------------------------------------------------------------
The Justice Department's position is legally groundless,
and moreover, has in practice, been abused by the Justice
Department. When the committee did finally receive documents
from the State Department, they were redacted so that almost
every substantive piece of information was taken out. It is
difficult to believe that the Justice Department still has so
many ongoing investigations. If the Department's investigation
is as far-flung as its redactions suggest, it is not equipped
to handle such an investigation, having, as of December 31,
1999, only 13 attorneys and 12 agents, down from 24 attorneys
and 67 agents in 1997.\482\
---------------------------------------------------------------------------
\482\ Briefing report by the U.S. General Accounting Office,
``Campaign Finance Task Force: Problems and Disagreements Initially
Hampered Justice's Investigation,'' May 2000, at 48.
---------------------------------------------------------------------------
Moreover, one specific redaction by the Justice Department
suggests that the Department is acting in bad faith, and that
it is redacting material that does not relate to ongoing
investigations. The committee has been able to determine, by
comparison with the same subpoena from the White House that was
not redacted, at least two names redacted by the State
Department at the Justice Department's insistence: Liu Chao-
Ying and her father, General Liu Huaqing.\483\ Liu Chao-Ying, a
colonel in the Chinese military, gave $80,000 to the DNC
through DNC fundraiser Johnny Chung. Liu Chao-Ying also
introduced Chung to General Ji Shengde, the head of Chinese
military intelligence, who gave Chung an additional $300,000 to
funnel into the DNC. General Liu Huaqing, was the vice chairman
of the Central Military Commission, and reportedly oversaw the
Chinese army's modernization program. He was also a member of
the Standing Committee of the Politburo of the Communist party.
---------------------------------------------------------------------------
\483\ Subpoena to the Custodian of Records, Executive Office of the
President, May 26, 1998.
---------------------------------------------------------------------------
As late as June 4, 1999, the Task Force had already listed
Liu Chao-Ying as a ``Pending Inactive Investigation.'' \484\
The Task Force had not listed any investigation of General Liu
Huaqing as of June 1999. Both Liu Chao-Ying and General Liu
Huaqing are Chinese nationals living in China, and the
committee is unaware of any Justice Department or State
Department efforts to have Liu Chao-Ying or her father
extradited. Furthermore, the Justice Department presented no
objections to the committee's public hearings with Johnny Chung
where he extensively discussed his interactions with Liu. It is
troubling that they would allow their star witness against Liu
to testify publicly about his dealings with her, and then claim
that peripheral documents relating to her are part of an
ongoing investigation. The facts suggest that it is highly
unlikely Liu Chao-Ying or Liu Huaqing are the subjects of
active Justice Department investigations. Rather, it appears
that once again, the Justice Department is making a bad faith
effort to shield itself from congressional oversight.
---------------------------------------------------------------------------
\484\ Listing of Task Force cases, June 4, 1999 (exhibit 14).
---------------------------------------------------------------------------
c. The DNC
On August 3, 2000, the committee subpoenaed the DNC to
produce the subpoenas and document requests it received from
the Justice Department. For the next 6 weeks, the DNC failed to
comply with the subpoena. During this period of time, counsel
for the DNC informed the committee that they had concerns about
complying with the subpoena, based on warnings accompanying a
number of the subpoenas that they were not to be publicly
disclosed. Counsel for the DNC attempted to contact the Justice
Department during this 6 week period to determine whether the
Justice Department objected to the DNC's compliance with the
committee subpoena. DNC counsel claims that despite a number of
contacts with the Justice Department, he was unable to obtain a
definitive answer from the Department. Accordingly, as of
September 26, 2000, the committee's subpoena had still not been
satisfied. Therefore, when Deputy Assistant Attorney General
Alan Gershel appeared before the committee, he was asked about
the DNC subpoena:
Committee Counsel. We also subpoenaed the DNC. We asked
the DNC for subpoenas served upon it by the Task Force.
Now, despite the fact that the subpoena was served over
6 weeks ago, the DNC has failed to comply because the
Department of Justice has prevented it from doing so.
This was communicated to us today. The DNC, however, is
either a witness or a target of the Department in this
investigation.
Now I am going to read some words that your immediate
superior, Assistant Attorney General Robinson, spoke at
our last hearing. He testified under oath: ``although a
prosecutor may prefer that a witness not disclose
information about a pending case, the government does
not have any right to dictate who a witness can or
cannot talk to. Witnesses do not belong to either side
of a matter. As a matter of due process and
prosecutorial ethics, the government cannot threaten or
intimidate a witness for the purpose of preventing a
witness from talking to a subject or a target of
investigation or from exercising their First Amendment
rights.''
Now, isn't that what the Department of Justice is doing
now in terms of preventing the DNC from complying with
the congressional subpoena?
Mr. Gershel. Absolutely not. The DNC has never been
told not to comply with this committee's subpoena. To
the contrary, it's not my understanding. I have not had
contact with them. It's my understanding they were told
to fully comply with the subpoena.\485\
---------------------------------------------------------------------------
\485\ ``Contacts Between Northrop Grumman Corporation and the White
House Regarding Missing White House E-Mails,'' hearing before the
Committee on Government Reform, 106th Cong., 111-12 (Sept. 26, 2000)
(preliminary transcript).
Shortly after the hearing, Mr. Gershel attempted to clarify his
---------------------------------------------------------------------------
statement in a letter:
Some members of the committee had the misimpression
that the Department was preventing the DNC from
complying with its subpoena. I also may have
contributed to the confusion by offering my mistaken
understanding that the DNC had been told by the
Department to fully comply with the subpoena.
I want to clarify that the Department takes no position
on the issue of the DNC's rights and obligations
concerning compliance with a congressional subpoena.
That is an issue between the DNC and the congressional
committee. It certainly has never been the Department's
intent to prevent or discourage compliance with a
congressional subpoena.\486\
---------------------------------------------------------------------------
\486\ Letter from Alan Gershel, Deputy Assistant Attorney General,
to Judah Best, Debevoise & Plimpton (Sept. 29, 2000) (exhibit 15).
Leaving aside the dramatic difference between Gershel's initial
testimony that the DNC was told to ``fully comply'' with the
subpoena, and his later statement that the Department ``took no
position'' on the DNC's compliance, the effect of the
Department's actions was clear.\487\ Two months have passed
since the committee issued its subpoena, and the DNC has not
complied with the subpoena.
---------------------------------------------------------------------------
\487\ The Justice Department's position with respect to the DNC's
compliance with a lawful congressional subpoena--that it can take no
position--gives an indication of the Department's lack of respect for
Congress. Given this position, it is difficult to see how the
Department could prosecute any party for obstructing or failing to
comply with a congressional subpoena.
---------------------------------------------------------------------------
After the September 26, 2000, hearing, DNC counsel called
and then wrote to the committee to express their ``concern''
regarding committee's counsel's representations at the hearing.
DNC counsel took the position that the DNC was never
``prevented'' from complying with the committee's subpoena.
Rather, in their mind, the Justice Department had protested the
committee subpoena, and had raised ``admonitions'' with the DNC
about disclosing the subpoena.\488\ The DNC tried to resolve
these issues prior to the committee's hearing, and was
unsuccessful. In the mind of DNC counsel, such conduct by the
Justice Department did not ``prevent'' the DNC from complying
the with the committee's subpoena.
---------------------------------------------------------------------------
\488\ These comments were made by Judah Best, counsel for the DNC,
during a telephone conversation on Oct. 4, 2000.
---------------------------------------------------------------------------
However, there is ample evidence that the Justice
Department's actions have prevented timely compliance with the
committee's subpoena:
A number of Justice Department subpoenas to
the DNC warned the DNC that ``[b]ecause this subpoena
relates to an ongoing official criminal investigation
being conducted by the Federal Bureau of Investigation,
it is requested that you not disclose the existence of
the subpoena for an indefinite period of time.
Disclosure may impede the investigation and interfere
with the enforcement of the law.'' \489\ Such
directions are, however, contrary to the ethical
standards of prosecutors outlined by Assistant Attorney
General Robinson before the committee.
---------------------------------------------------------------------------
\489\ See, e.g., letter from Daniel O'Brien, Assistant U.S.
Attorney, to Custodian of Records, Democratic National Committee (Jan.
21, 2000) (exhibit 16).
In a letter to the committee, which was
copied to the DNC, Assistant Attorney General Raben
expressed concern about the committee's subpoena to the
DNC. In that letter, Raben stated that ``I am writing
to express the Department's serious concern about the
committee's recent practice of subpoenaing public and
private sector entities to produce copies of grand jury
subpoenas and other documents relating to evidence
gathered by the Campaign Financing Task Force,
including subpoenas and documents relating to ongoing
criminal investigations.'' \490\ The only private
sector entity to which the committee directed such a
subpoena was the DNC. The Justice Department's
expression of ``serious concern'' about the DNC
subpoena was in conflict with the Department's official
position that it could take no position on whether the
DNC should comply with the subpoena.
---------------------------------------------------------------------------
\490\ Letter from Robert Raben, Assistant Attorney General, to Dan
Burton, chairman, Committee on Government Reform (Sept. 25, 2000)
(emphasis added).
Indeed, these protests had their intended effect, as on
October 6, 2000, the DNC informed the committee that it would
not comply with the committee's subpoena.\491\ In his letter to
the committee, DNC counsel repeatedly cited the fact that the
Justice Department had ``protested'' the committee's subpoena,
and that the Department had concerns about the effect of
compliance with the subpoena on ongoing investigations.
Claiming that it wanted to protect these ongoing
investigations, as well as the reputations of individuals named
in the subpoenaed documents, the DNC refused to comply with the
committee's subpoena.\492\
---------------------------------------------------------------------------
\491\ Letter from Judah Best, Debevoise & Plimpton, to Dan Burton,
chairman, Committee on Government Reform (Oct. 6, 2000) (exhibit 17).
\492\ The mere fact that the DNC shows such interest in protecting
the integrity of the Justice Department investigation speaks volumes.
The DNC is at the center of the campaign fundraising scandal. The fact
that the DNC is working in tandem with the Justice Department to keep
information about the investigation out of Congress' hands suggests
that the DNC is trying to hide something about the investigation. If
the subpoenas to the DNC are anything like the subpoenas to the White
House, it is likely trying to hide the fact that the Justice Department
has conducted a weak and politically biased investigation.
---------------------------------------------------------------------------
At the conclusion of this matter, it is clear that both the
DNC and the Justice Department have worked together to keep the
committee from obtaining information which might be extremely
embarrassing to the Department of Justice and which might
expose the DNC to additional investigation, as happened to the
White House when it became clear the Justice Department had
failed to ask the President and Vice President so many
important questions. The Justice Department's admonitions and
protests regarding the committee's subpoena sent the clear
message to the DNC that it should not comply with the
committee's subpoena. At the same time, in his letter of
September 29, 2000, Mr. Gershel did state that the Department
took no position on the committee's subpoena. Therefore, in the
final analysis, it is the DNC that has decided to willfully
disobey a lawful congressional subpoena.\493\
---------------------------------------------------------------------------
\493\ The DNC and their counsel have a long history of
misrepresentations to the committee. These are detailed in chapter II
of the committee's interim report on the campaign fundraising
investigation.
---------------------------------------------------------------------------
2. The Justice Department Failed to Obtain a Timely Search Warrant for
Charlie Trie's Residence
In 1997, a serious dispute arose between Justice Department
attorneys and FBI agents regarding decisions made by the
Justice Department in the investigation of Charlie Trie. The
dispute concerned whether the Justice Department justifiably
rejected a FBI request for a search warrant for Trie's
residence after the FBI found documents discarded in the trash
that were responsive to a subpoena.\494\
---------------------------------------------------------------------------
\494\ Around 1996, Trie began to use his residence in Little Rock
as the office for his Arkansas companies, consequently most of his
business records were at that location.
---------------------------------------------------------------------------
On March 7, 1997, Maria Mapili, Charlie Trie's bookkeeper,
was served with a subpoena for documents by the Senate
Committee on Governmental Affairs.\495\ Mapili contacted Trie
in Asia and informed him that she had been served with a
subpoena from the Congress. According to Mapili, Trie told her
to throw away certain documents called for in the
subpoena.\496\ Mapili began to destroy documents specified by
Trie, but at some point, Mapili became nervous and hid
documents instead of destroying them. The FBI found in Trie and
Mapili's garbage a number of documents relevant to the
fundraising investigation, and which were responsive to the
Senate subpoena.
---------------------------------------------------------------------------
\495\ The committee requested records from Trie in a letter to
Trie's attorneys on Jan. 20, 1997. Trie's attorney said that because of
the Justice Department's criminal investigation, they would not comply
with the committee's document request. In February 1997, the committee
attempted to serve a subpoena on Trie's attorneys in Washington, DC,
but the attorneys refused to accept service.
\496\ Testimony of Maria Mapili at 21, U.S. v. Yah Lin ``Charlie''
Trie, No. LR-CR-98-239 (D. AR, May 18, 1999). Mapili received immunity
and testified against Trie during his trial in Little Rock, AR on
obstruction of justice charges in April 1999. Before the trial was
completed, Trie reached a plea agreement with the government.
---------------------------------------------------------------------------
FBI Special Agent Roberta Parker and her partner, FBI
Special Agent Kevin Sheridan requested search warrants for
Trie's residence because they believed that Mapili was
obstructing justice by destroying evidence. The agents were
told by Task Force chief, Laura Ingersoll, that grand jury
subpoenas had to be served before probable cause for search
warrants would exist.\497\ A grand jury subpoena was served on
Mapili on June 27, 1997.\498\
---------------------------------------------------------------------------
\497\ Id.
\498\ The FBI charged that the timing of the grand jury subpoena
cost them a valuable investigative lead. The Justice Department and the
FBI had already agreed to place a pen register on Mapili's telephones
to record the telephone numbers of incoming and outgoing calls made
after Mapili was served with the grand jury subpoena. Before the pen
register was in place, FBI Special Agent Daniel Wehr, in Little Rock,
AR, was ordered to serve the grand jury subpoena on Mapili. Both Agent
Wehr and FBI Special Agent in Charge in Arkansas Ivian Smith complained
that the decision to prematurely serve the subpoena before the pen
register was installed cost them a valuable lead. ``The Justice
Department's Handling of the Yah Lin ``Charlie'' Trie Case,'' hearing
before the Senate Committee on Governmental Affairs, 106th Cong., 52-53
(Sept. 22, 1999).
---------------------------------------------------------------------------
In the search of the trash after the grand jury subpoena
was served, the FBI found discarded financial statements and a
check register for Daihatsu, along with a fax cover sheet to
Antonio Pan. Agent Sheridan's understanding from Laura
Ingersoll was that finding additional discarded documents after
the grand jury subpoena was served would be sufficient evidence
to allow the FBI to obtain the search warrant.\499\ Agents
Parker and Sheridan began drafting an affidavit for search
warrants for the residences of Trie and Mapili on July 1, 1997,
and gave a copy to the Justice Department attorneys. Agents
Parker and Sheridan had not heard of any opposition to the
search warrants up to this point.\500\
---------------------------------------------------------------------------
\499\ Interview of Kevin Sheridan, Committee on Government Reform,
at 2-3 (Sept. 13, 1999).
\500\ Interview of Roberta Parker, Committee on Government Reform,
4 (Aug. 27, 1999); interview of Kevin Sheridan, Committee on Government
Reform, at 3 (Sept. 13, 1999).
---------------------------------------------------------------------------
On July 2, 1997, Justice Department Attorneys Jonathan
Biran and William Corcoran had a telephone conference with Lee
Radek, and during this discussion, the three Department lawyers
decided that there was no probable cause for the warrants.\501\
This decision contradicted everything the FBI had been told up
to this point. While Ingersoll conceded that the discarded
documents were relevant, she said that before a warrant could
be obtained, there also needed to be proof that Mapili was
knowingly destroying the documents to avoid producing
them.\502\
---------------------------------------------------------------------------
\501\ During the telephone conference, Lee Radek acknowledged the
deteriorating relationship between the Task Force and the FBI when he
advised William Corcoran that they were not to seek a search warrant in
Little Rock without his personal approval. Radek's purpose behind this
decision was to inject himself between the FBI and Ingersoll, who was a
frequent target of FBI attacks and criticisms. Interview of Lee Radek,
Committee on Government Reform, at 2 (Sept. 17, 1999). Radek's move
added another bureaucratic layer to an already cumbersome process and
required the approval of the Chief of the Public Integrity Section on
routine matters.
\502\ Interview of Laura Ingersoll, Committee on Government Reform,
at 6 (Sept. 17, 1999).
---------------------------------------------------------------------------
Ingersoll told FBI agents Kevin Sheridan and Laura Laughlin
that the search warrants were rejected, but she could not give
a good answer as to why there was no probable cause.\503\
Ingersoll sent an e-mail to her superiors on July 7, 1997,
stating that the ``case agent'' and Laughlin conceded that
there was no probable cause for the search warrants.\504\ In
her testimony before the Senate, Ingersoll admitted she was
referring to Agent Sheridan, but Agent Sheridan denied that he
ever conceded that there was no probable cause for the
warrants.\505\ Both Agents Parker and Sheridan found the
refusal to pursue search warrants in this case to be abnormal
compared to their other experiences.\506\
---------------------------------------------------------------------------
\503\ Interview of Kevin Sheridan, Committee on Government Reform,
at 3 (Sept. 13, 1999). Ingersoll met with Agents Sheridan and Laughlin
in the afternoon of July 2, 1997, after the telephone conference with
Lee Radek. Ingersoll did not specifically recall meeting with Sheridan
and Laughlin, while Laughlin recalled the meeting, but could not
remember what was said. Interview of Laura Ingersoll, Committee on
Government Reform, at 5 (Sept. 17, 1999); interview of Laura Laughlin,
Committee on Government Reform, at 2 (Oct. 1, 1999).
\504\ Ingersoll e-mail to Mark Richard, Bob Litt, and Lee Radek,
July 7, 1997 (exhibit 18).
\505\ ``The Justice Department's Handling of the Yah Lin
``Charlie'' Trie Case,'' hearing before the Senate Committee on
Governmental Affairs, 106th Cong., 1st Sess., 78 (Sept. 22, 1999);
interview of Kevin Sheridan, Committee on Government Reform, at 3
(Sept. 13, 1999).
\506\ Sheridan said they had done searches before with a lot less
probable cause than there was in the Trie case. Interview of Kevin
Sheridan, Committee on Government Reform, at 5 (Sept. 13, 1999); Parker
said she had never seen a warrant be rejected like this. Interview of
Roberta Parker, Committee on Government Reform, at 8 (Aug. 27, 1999).
---------------------------------------------------------------------------
The Justice Department imposed a higher standard than
necessary for a search warrant. A search warrant needs to be
supported by probable cause. Probable cause exists ``where the
known facts and circumstances are sufficient to warrant a man
of reasonable prudence in the belief that contraband or
evidence of a crime will be found.'' \507\ The question was
simply whether it was reasonable to believe, given the known
facts and circumstances, that Mapili was obstructing the
subpoenas, not whether it could be proven.
---------------------------------------------------------------------------
\507\ See Illinois v. Gates, 462 U.S. 213, 238 (1983); Beck v.
Ohio, 379 U.S. 89, 91(1964); Brinegar v. U.S., 338 U.S. 160, 176
(1949); Wong Sun v. U.S., 371 U.S. 471, 479 (1963).
---------------------------------------------------------------------------
After the search warrant request was denied, the FBI agents
continued to investigate the matter. Agent Parker spoke with
Agent Daniel Wehr in Little Rock and they listed documents
found in the trash covers that were not produced pursuant to
the grand jury subpoena.\508\ Task Force Attorney Jonathan
Biran and Agent Parker then traveled to Little Rock to compare
the documents recovered in the trash with the documents
produced pursuant to the grand jury subpoena. After the review,
Biran advised Ingersoll that there was no basis for an
obstruction prosecution against Mapili.\509\ Agent Parker had a
different assessment of the document review. It was clear to
Agent Parker that folders marked ``President Clinton'' and
``Vice President Gore'' that contained only one or two
documents were not complete as was a fax cover sheet indicating
five pages when only one was produced.\510\
---------------------------------------------------------------------------
\508\ Roberta Parker memorandum to ``Criminal Investigative'', July
25, 1997.
\509\ Interview of Laura Ingersoll, Committee on Government Reform,
at 7 (Sept. 17, 1999). Biran told Ingersoll that some of the documents
were produced pursuant to the grand jury subpoena were incriminating
and some other documents that were destroyed were copies of documents
that had been produced.
\510\ Interview of Roberta Parker, Committee on Government Reform,
7-8 (Aug. 27, 1999).
---------------------------------------------------------------------------
The FBI agents were proven correct. On October 21 and 22,
1997, Mapili was interviewed by the Task Force and FBI agents
in anticipation of her testimony before the grand jury. During
the interviews, Mapili admitted that she had destroyed
documents and stashed other documents that still remained
hidden. Mapili had not informed her attorney or Trie's
attorneys about the hidden documents. In addition, Mapili
admitted that she did this at the direction of Charlie Trie,
who told her to destroy certain documents after she received
the Senate subpoena in March 1997. On October 23, 1997, the FBI
conducted simultaneous searches of Trie's residence and office
in Little Rock and his office at the Watergate in Washington,
DC, uncovering many responsive documents that had never been
produced to investigators. On November 9, 1998, Charlie Trie
was indicted in Arkansas for obstructing the campaign finance
investigation of the Senate Committee on Governmental
Affairs.\511\
---------------------------------------------------------------------------
\511\ Indictment of Yah Lin ``Charlie'' Trie, U.S. v. Trie, No. LR-
CR-98-239 (D. AR., Nov. 9, 1998).
---------------------------------------------------------------------------
The Senate was not informed that Mapili was destroying
records in response to their March 1997 subpoena. The FBI
agents were told not to have contact with the Senate
investigation.\512\ Although Agents Parker and Sheridan were
under the impression that Ingersoll could contact the Senate
should the need arise, Ingersoll denied it was her
responsibility. Ingersoll's superior, Lee Radek, said Ingersoll
was free to contact the Senate with any pertinent
information.\513\ The explanation given by Ingersoll and
Corcoran for not contacting the Senate was that since they had
not seen the Senate subpoena, they did not know what it
subpoenaed, and thus they were not in a position to determine
if the documents found in the trash were responsive to it.\514\
---------------------------------------------------------------------------
\512\ Sheridan said they were told in writing not to contact the
Senate. Interview of Kevin Sheridan, Committee on Government Reform, at
4 (Sept. 13, 1999). Parker said Ingersoll told them she would handle
all liaison with the Senate, and Parker took that to mean they should
not contact the Senate. Interview of Roberta Parker, Committee on
Government Reform, at 8 (Aug. 27, 1999).
\513\ Radek said there were no special restrictions on Task Force
attorneys, but the usual procedures were to be followed--informing
superiors after the fact or going through the Congressional Affairs
Office. Interview of Lee Radek, Committee on Government Reform, at 3
(Sept. 17, 1999).
\514\ Corcoran memos, attachment to memorandum of Sept. 29, 1997,
at A-046; interview of Laura Ingersoll, Committee on Government Reform,
at 3 (Sept. 17, 1999).
---------------------------------------------------------------------------
Although Justice Department attorneys and FBI agents
differed on their recollection of the facts and the application
of the law, one area of general agreement was the degree of
control top-level Justice Department officials exercised over
the campaign finance investigation. Lee Radek, Chief of the
Public Integrity Section and a 28-year veteran of the Justice
Department, stated: ``we had the Attorney General regularly
wanting to know how the investigation was progressing. We had
supervision of the Acting Assistant Attorney General on a daily
basis, something that usually does not happen.'' \515\ Laura
Ingersoll, former chief of the Task Force and a 11-year veteran
of the Justice Department, said the degree of control exercised
by the Justice Department was ``unprecedented.'' \516\ For the
FBI agents in the field, the Justice Department's control of
the investigation caused, ``problems of aggressiveness and
timeliness of investigative avenues [and] . . . investigative
decisionmaking [that] was slow, if at all.'' \517\
---------------------------------------------------------------------------
\515\ ``The Justice Department's Handling of the Yah Lin
``Charlie'' Trie Case,'' hearing before the Senate Committee on
Governmental Affairs, 106th Cong., 99 (1999).
\516\ Id. at 98. Ingersoll was the first chief of the Task Force.
She was appointed to head the Task Force by Lee Radek on Nov. 1, 1996.
When it became apparent that the Task Force was not doing its job
properly, Attorney General Reno replaced Ingersoll with Charles LaBella
in September 1997.
\517\ Id. at 12 (statement of Special Agent-in-Charge Ivian Smith).
Agent Smith is a 25-year veteran of the FBI.
---------------------------------------------------------------------------
The Justice Department's decisionmaking process caused a
substantial delay in the Charlie Trie investigation. Even when
it did finally issue a grand jury subpoena to Mapili, its
purpose was to scare Mapili into preserving the documents and
not to investigate Trie's criminal activity, even though many
of Trie's illegal activities had been publicly documented.
Without the FBI's insistence that something be done to preserve
evidence, there was no indication that the Justice Department
intended to subpoena documents that proved very useful in the
investigation of Trie.\518\
---------------------------------------------------------------------------
\518\ The Justice Department collected 13 boxes worth of documents
from Trie. The committee examined the documents and found a great deal
of significant information that could not have been obtained from any
other source.
---------------------------------------------------------------------------
D. The Justice Department Failed to Pursue Key Individuals and Entities
1. Failure to Pursue the DNC
While the White House was the focal point for favors and
access, the DNC served as the collection point for the illegal
foreign and conduit contributions. In that capacity, officials
at the DNC worked closely with the individuals bringing in
foreign conduit contributions, John Huang and Charlie Trie.
Huang and Trie both began their associations with the DNC as
outsiders, giving illegal foreign and conduit contributions in
exchange for favors and access. By 1996, the DNC had brought
Huang and Trie inside the operation. Huang was a fundraiser
working for the DNC and Trie spent a large amount of time
soliciting contributions for Huang's events. No one voiced any
concerns about allowing Huang or Trie to work on the DNC's
behalf.
There is evidence, however, that at least four officials at
the DNC may have known of, encouraged or even participated in,
illegal activities by Huang and Trie. Their knowledge of
illegal acts by Huang and Trie began at the very early stages
of Huang and Trie's association with the DNC. In interviews and
depositions with the Justice Department and Congress, the DNC
officials gave very misleading and potentially perjurious
testimony to protect the DNC and to cover up their own
involvement in the illegal activity.
Despite the fact that the Justice Department has all of the
information about the DNC officials' involvement in the
fundraising scandal, the committee is not aware of any DNC
official who has been under serious scrutiny by the Task Force.
In several instances, DNC officials were questioned about their
knowledge or participation in Huang and Trie's illegal acts,
but there is no evidence that the Justice Department intended
to investigate thoroughly or prosecute possible criminal acts
by officials of the DNC. At other times, the Justice Department
completely ignored evidence of wrongdoing by DNC officials.
a. Melinda Yee, DNC Director of Constituencies
Melinda Yee was a key figure in the campaign fundraising
investigation, as she had contacts with John Huang and the
Riadys in the 1992 election all the way through the 1996
election. Yee met Huang in the late 1980s when she worked as
the executive director of the Organization for Chinese
Americans, and Huang was just beginning his political
involvement. Melinda Yee joined the DNC in 1990 as the Director
of Constituencies. When Yee worked for both the DNC and
Clinton/Gore '92 during the 1992 campaign, she would
occasionally see Huang in Los Angeles. After the election, Yee
worked briefly for the Office of Presidential Personnel before
joining the Commerce Department in May 1993.\519\
---------------------------------------------------------------------------
\519\ Deposition of Melinda Yee, Senate Committee on Governmental
Affairs, May 9, 1997, at 14.
---------------------------------------------------------------------------
In deposition testimony before the Senate, Yee was asked to
recite the times she saw Huang between their initial meeting
and his employment with the Commerce Department in July 1994.
Yee stated that she saw him whenever the 1992 campaign went to
Los Angeles, but she could not recall any other specific
meetings.\520\ Yee failed to mention her interaction with Huang
in relation to the DNC's trip to Asia between December 4-13,
1991, for DNC Chairman Ron Brown. To ensure that the
fundraising portion of the trip was successful, Yee recruited
John Huang to raise money in Hong Kong. Yee also explained
Huang's role on the trip to Chairman Ron Brown:
---------------------------------------------------------------------------
\520\ Id. at 198.
John Huang is our key to Hong Kong. He is also
interested in renewing his trusteeship to us on this
trip through his Asian banking connections. He has
agreed to host a high dollar event for us in Hong Kong
with wealthy Asian bankers who are either U.S.
permanent residents or with U.S. corporate ties. He
will make sure that all of the hotel accommodations,
meals, and transportation are paid for by his bank. He
should be invited to be part of our delegation.\521\
---------------------------------------------------------------------------
\521\ Memorandum from Melinda Yee to RHB [Ronald H. Brown], Oct.
15, 1991, DNC 0828866-67 (exhibit 19).
Yee said John Huang agreed to host an event in Hong Kong with a
goal of $50,000.\522\ The schedule for Chairman Brown shows
dollar signs next to a lunch and a dinner on December 10, 1991,
hosted by the Lippo Group.\523\
---------------------------------------------------------------------------
\522\ Memorandum from Melinda Yee to RHB [Ronald H. Brown], Oct.
22, 1991, DNC 0828865 (exhibit 20).
\523\ Memorandum from Melinda Yee to Alexis Herman, et al., Dec. 2,
1991, DNC 0828853-58 (exhibit 21).
---------------------------------------------------------------------------
Huang testified that Yee invited him to go on the trip and
that he did arrange for Lippo to pay the DNC's expenses. Huang
gathered individuals together for a lunch and dinner hosted by
Lippo, but he flatly denied that he ever promised to raise
money or did raise any money in Hong Kong:
Mr. Burton. Exhibit No. 109. That exhibit is a memo
from Melinda Yee to DNC Chairman Ron Brown. Ms. Yee
said you offered to host an event in Hong Kong with a
goal of $50,000; is that correct?
Mr. Huang. The memo indicated that way. I did not
really offer that $50,000.
* * * * *
Mr. Burton. You never promised that. Did you say that
you would consider it? Did you say you would do it?
Mr. Huang. She has proposed that I could do that.\524\
---------------------------------------------------------------------------
\524\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the Committee on Government Reform,
106th Cong., 192-195 (Dec. 17, 1999) (preliminary transcript).
Less than 1 year later, Huang and Yee were again discussing
fundraising for the DNC. In August 1992, Huang asked Yee to
arrange a private limousine ride between James Riady and then-
Governor Clinton.\525\ Yee made the arrangements and drafted a
briefing memo to Clinton. Huang provided her with the
information for the memo. Yee wrote that Riady gave $100,000
for the August 14, 1992, fundraiser and that he had, ``the
potential to give much more.'' \526\ Although Huang denied
talking to Yee about future contributions, after Riady's
limousine ride with Governor Clinton, Riady funneled over
$640,000 to the 1992 campaign through his employees.
---------------------------------------------------------------------------
\525\ Id. at part I, 73.
\526\ Memorandum from Melinda Yee to Governor Clinton, Aug. 14,
1992, CG92B-00543 (exhibit 22).
---------------------------------------------------------------------------
Yee invoked her fifth amendment right against self-
incrimination with the committee and refused to appear at a
deposition.\527\ She had previously given deposition testimony
to the Senate Committee on Governmental Affairs in May 1997. In
her testimony to the Senate, Yee directly contradicted her own
DNC documents and Huang's testimony on the subject of
fundraising with Huang:
---------------------------------------------------------------------------
\527\ Letter from Nancy Luque to Barbara Comstock, chief counsel,
Committee on Government Reform and Oversight, July 17, 1998 (exhibit
23).
---------------------------------------------------------------------------
Q. Did you ever talk to John Huang about fundraising?
A. No.
Q. When I say ever, I mean at any time. Did you talk to
John Huang about fund raising, political or campaign
fund raising?
A. Well, I know he did fundraising, but I was, again,
in the political division and he worked with the
finance people on fundraising matters, specific
fundraising.
Q. Did you discuss fund raising matters with him?
A. Not--I was working--I talked to him about political
issues. I mean, if he had a fund raising, it could have
been mentioned, but if he ad [sic] to actually do fund
raising, he worked with finance. I mean, I just didn't,
I wasn't--that wasn't my job.
Q. When are you talking about? You said, you talked to
John Huang when he worked with finance at DNC.
A. No, no, I'm saying he worked with--I'm not staff
forwarding. I'm just saying, when I was at the DNC or
during the campaign, I would work with him on these
issues and campaign organizing. If he had finance
issues, he didn't work with me. He worked with whoever
he worked with and I don't know who in the finance
division. This was in 1992. I'm not talking about when
he actually worked there.\528\
---------------------------------------------------------------------------
\528\ Deposition of Melinda Yee, Senate Committee on Governmental
Affairs, May 9, 1997, at 198-99 (emphasis added).
Yee's testimony before the Senate cannot be reconciled with
documents or the testimony of John Huang. Yee asked Huang to
raise $50,000 for the DNC in Hong Kong and they discussed
Riady's $100,000 and ``potential to give much more'' during the
1992 campaign.
The Justice Department should investigate Melinda Yee about
her relationship with John Huang, her interaction with Huang
for the DNC's 1991 trip to Asia, the 1992 limousine ride, and
the contributions that resulted from the ride.\529\ There is
evidence that Yee may have misled the Senate about the nature
of her relationship with Huang. Despite this evidence, the
committee has seen no indication that Yee is under active
investigation.
---------------------------------------------------------------------------
\529\ The Justice Department should also investigate Yee's
statements about APAC-Vote, an Asian American organization set up for
the 1992 campaign by Nora Lum. Yee denied that APAC-Vote was affiliated
with the DNC, but Yee wrote to Lum stating that APAC-Vote was very
important to the DNC and the DNC agreed to fund the organization. In
addition, Yee wrote a letter authorizing Nora Lum of the ``DNC's APAC-
Vote Project to open an account under the name of `DNC/APAC'.''
---------------------------------------------------------------------------
b. David Mercer, DNC Deputy Finance Director
There is substantial evidence that DNC fundraiser David
Mercer conspired with John Huang to violate the Hatch Act, and
then lied about his actions when questioned by this committee.
While he worked as a Commerce Department employee, Huang was
constrained in the political activities he could perform.
Although Mercer was ``mindful of the Hatch Act,'' it did not
stop him from asking Huang repeatedly to violate the
statute.\530\ Mercer placed numerous calls to Huang at the
Commerce Department and asked at least once to meet him across
the street from the Commerce Department so Mercer could ask
Huang to solicit contributions. At one point, Huang even asked
Mercer not to get him involved in fundraising while he worked
at the Commerce Department.\531\ Mercer did not stop.
---------------------------------------------------------------------------
\530\ FBI interview of David Lawrence Mercer, at 9 (Apr. 27, 1998).
\531\ FBI interview of John Huang, at 57 (Jan. 19-Feb. 10, 1999).
---------------------------------------------------------------------------
In June 1995, Mi Ryu Ahn contributed $10,000 to the DNC.
Ahn made the contribution after she received four or five
telephone calls from John Huang, who was working at the
Commerce Department.\532\ Although Huang stated that he did not
solicit Ahn for her contribution, Huang clearly referred her to
Mercer.\533\ Four days before receiving Ahn's $10,000, Mercer
left a message for Huang at the Commerce Department that read:
``Have talked to Mi. Thank you very much.'' \534\ On the check
tracking form used by the DNC to record both internal and
required information for the FEC, Mercer listed Jane Huang,
John Huang's wife, as the solicitor of the contribution from
Ahn.\535\ Mercer stated that he listed Jane Huang as the
solicitor because she was an active trustee and there was a
connection between the Huangs and Ahn.\536\ Statements from
both John Huang and Mi Ryu Ahn contradict Mercer's contention.
Huang stated that Jane Huang most likely did not know Ahn and
that Jane did not solicit contributions while John worked at
the Commerce Department.\537\ Ahn could not recall ever talking
to Jane Huang, but she did remember that John Huang asked her
to get involved with the DNC.\538\
---------------------------------------------------------------------------
\532\ S. Rept. No. 105-167, at 1189 (1998).
\533\ FBI interview of John Huang, at 26 (Feb. 23-Mar. 26, 1999).
\534\ S. Rept. No. 105-167, at 1189 (1998).
\535\ Id. at 1189-1190.
\536\ FBI interview of David Lawrence Mercer, at 7 (Apr. 27, 1998).
\537\ FBI interview of John Huang, at 27 (Feb. 23-Mar. 26, 1999).
\538\ S. Rept. No. 105-167, at 1190 (1998).
---------------------------------------------------------------------------
John Huang also introduced Mercer to Arief and Soraya
Wiriadinata. In November 1995, while Huang still worked at the
Commerce Department, Arief and Soraya Wiriadinata each
contributed $15,000 to the DNC. David Mercer was the DNC
contact for those two contributions and he filled out their
check tracking forms for the DNC. Mercer again recorded Jane
Huang, John's wife, as the solicitor of the contributions.\539\
Mercer was asked why he listed Jane Huang, instead of John
Huang, as the solicitor the contributions from the
Wiriadinatas:
---------------------------------------------------------------------------
\539\ DNC check tracking forms for Arief Wiriadinata and Soraya
Wiriadinata, DNC 1276337 and DNC 1276338.
Q. How did you know to credit this to Jane Huang as
---------------------------------------------------------------------------
solicitor?
A. Through an understanding prior of the Wiriadinatas
having association with the Huangs.
Q. How did that understanding come about?
A. I don't know.
Q. But you understood that the Wiriadinatas and the
Huangs were associated. How did you understand they
were associated?
A. I don't recall.
Q. Why didn't you put John Huang down as solicitor?
A. I don't recall why I--you know, I don't recall. I
didn't, you know--I don't . . . I don't recall. Jane
could have--I could have been told that Jane was the
one that brought these checks in. I don't know.\540\
---------------------------------------------------------------------------
\540\ Deposition of David L. Mercer, Senate Committee on
Governmental Affairs, May 27, 1997, at 33-34.
Mercer could not explain his own actions because to do so would
uncover Mercer's role in encouraging Huang to violate the Hatch
Act.
John Huang and Arief and Soraya Wiriadinata all directly
contradict Mercer's testimony. Not only did Arief say that John
Huang solicited the November 1995 contributions, but both Arief
and Soraya denied ever speaking to or meeting with Jane
Huang.\541\ Huang also stated that Mercer testified falsely:
---------------------------------------------------------------------------
\541\ S. Rept. No. 105-167, at 1191 (1998).
Mr. Wilson. But you do recall, and I may be wrong on
the complete number, but on some of the DNC check
tracking forms your wife was listed as the solicitor of
---------------------------------------------------------------------------
contributions from the Wiriadinatas.
Mr. Huang. I've learned that since I saw the documents.
Mr. Wilson. Now, that was not correct you've testified,
is that right?
Mr. Huang. That was not correct. My wife did not
solicit those contributions, no.\542\
---------------------------------------------------------------------------
\542\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 280 (Dec. 17, 1999) (preliminary transcript).
The Justice Department should investigate David Mercer for
knowingly giving false testimony to the Congress by stating
that Jane Huang solicited the contributions from Mi Ryu Ahn and
the Wiriadinatas. Mercer's fundraising activities with Huang,
while Huang was at the Commerce Department, points to a greater
concern: Mercer knew that the DNC was hiring someone who was
willing to break the law in return for contributions to the
DNC.
c. Richard Sullivan, DNC Finance Director
In 1994, Charlie Trie and his foreign financier, Ng Lap
Seng, contributed $15,000 to the DNC in illegal foreign money
through the San Kin Yip International Trading Co. Documents
show that DNC officials knew the money came from Ng Lap Seng
and may have attempted to hide that fact. There is no evidence
that the Justice Department has pursued these issues.
On October 10, 1994, Charlie Trie received a fundraising
letter from Richard Sullivan, Director of the BLF, and Tim
Collins of the Business Leadership Forum (BLF), a DNC donor
council for business leaders to interact with officials in the
Clinton administration and the Democratic party.\543\ Trie was
invited to recruit a guest to join the BLF and attend a small
October 20, 1994, BLF event with Vice President Gore and senior
administration officials in Washington, DC. Trie recruited his
foreign benefactor Ng Lap Seng to join the BLF.\544\
---------------------------------------------------------------------------
\543\ Letter from Richard Sullivan, director, Business Leadership
Forum, and Timothy C. Collins, chairman, Business Leadership Forum, to
Charlie Trie, Oct. 10, 1994 (exhibit 24).
\544\ Interview of Yah Lin ``Charlie'' Trie, Committee on
Government Reform, at 2-3 (Feb. 29, 2000).
---------------------------------------------------------------------------
To pay for Ng's membership in the BLF, a company newly
incorporated by Trie, San Kin Yip International Trading Co.,
gave a $15,000 check to the DNC. Sullivan filled out the DNC
check tracking form for the $15,000 San Kin Yip contribution.
The check was signed by Ng Lap Seng in Chinese.\545\ On the
check tracking form, Sullivan listed Charlie Trie as the
contact for the contribution. Following the event, though,
Sullivan sent a letter to Ng Lap Seng, not Trie, thanking him
for his contribution and for joining the BLF.\546\ There was no
documentary evidence other than the Chinese signature that
would have told Sullivan that the contribution came from Ng and
not Trie, who Sullivan listed on the check tracking form.
---------------------------------------------------------------------------
\545\ Id. at 3.
\546\ Letter from Richard Sullivan to Ng Lap Seng, Oct. 24, 1994
(exhibit 25).
---------------------------------------------------------------------------
In deposition testimony, Sullivan distanced himself from
Trie. In fact, Sullivan said that he specifically told David
Mercer to instruct Trie that conduit contributions were
unacceptable.\547\ Sullivan said he also gave a general warning
to DNC fundraisers that if there was any chance of illegal
contributions, Trie might be involved.\548\ Sullivan stated he
did not solicit any contributions from Trie and that Deputy
Finance Director David Mercer was Trie's primary contact.\549\
Sullivan did describe to the Justice Department a September
1994 event Trie attended at Mercer's invitation where Trie
agreed to serve as a chairman of the DNC Business Council.\550\
Sullivan said about 30 people attended and they went to hear
the Vice President speak at the Old Executive Office Building.
However, Sullivan neglected to tell the Justice Department
about his involvement with Trie and Ng at the October 20, 1994,
event and Ng's contribution to the DNC.
---------------------------------------------------------------------------
\547\ FBI interview of Richard Lyles Sullivan, at 14 (Aug. 13,
1997).
\548\ FBI interview of Richard Lyles Sullivan, at 14 (Aug. 13,
1997).
\549\ Deposition of Richard Sullivan, Senate Committee on
Governmental Affairs, June 4, 1997, at 101-102.
\550\ FBI interview of Richard Sullivan, at 2 (Nov. 21, 1997). The
Business Council was the earlier name for the BLF.
---------------------------------------------------------------------------
The Justice Department did not confront Sullivan with the
documents evidencing his own involvement with the illegal
contribution from Ng. The Justice Department has had possession
of Richard Sullivan's thank you letter to Ng Lap Seng since
October 1997.\551\ The Justice Department interviewed Sullivan
seven times after it seized the letter from Charlie Trie's
residence in Little Rock and not once did the Justice
Department ask Sullivan about it.\552\ The Justice Department
did manage to ask Trie whether he sponsored Ng for membership
in the BLF. When Trie could not recall, there were no further
questions on the subject.\553\
---------------------------------------------------------------------------
\551\ The only known copy of Sullivan's letter was seized by the
Justice Department and the FBI after a search warrant was executed on
Charlie Trie's residence in Little Rock in October 1997.
\552\ Sullivan was interviewed by the Justice Department two times
prior to the search warrant in October 1997. After the letter was
seized, the Justice Department interviewed Sullivan Nov. 21, 1997, Dec.
1, 1997, May 14, 1998, Sept. 17, 1998, Sept. 18, 1998, Nov. 23, 1998,
and Mar. 15, 1999.
\553\ FBI interview of Charlie Trie, at 7 (June-October 1999).
---------------------------------------------------------------------------
d. Fran Wakem, Deputy Director, DNC Business Leadership
Forum
Fran Wakem was the Deputy Director of the Business
Leadership Forum. In late 1994, Wakem arranged for an
invitation to Lin Ruo Qing, a former colonel in the People's
Liberation Army who was associated with Charlie Trie, to come
to the United States and attend a DNC fundraiser.
In 1994, Trie was introduced to Lin Ruo Qing when she
served as the chairwoman of the San You Scientific and
Technology Industry Group in Beijing, which was a Chinese
Government-controlled entity. Trie started his own company
called Sanyou Science & Technology Enterprises USA, Inc. in
hopes of creating a joint venture with Lin's company in
Beijing.
As part of his efforts to enter a joint venture with Lin,
Trie invited Lin to attend a DNC fundraiser in December 1994.
Trie's employee, Jennifer Russell, contacted Richard Sullivan,
Director of the DNC's Business Leadership Forum, and was told
that a new member needs to pay $10,000 in order to attend a BLF
event.\554\ Since Trie was already a member of the BLF,
Sullivan's reference applied to Trie's efforts to get Lin into
the BLF event.
---------------------------------------------------------------------------
\554\ Note from Jennifer Russell to Charlie Trie (exhibit 26).
Attached to the letter is the committee's translation of the letter.
---------------------------------------------------------------------------
In order to facilitate Lin's entry into the United States,
Trie, through his employee Jennifer Russell, asked Fran Wakem,
deputy director of the BLF, to invite Lin to a BLF event in the
United States. In a letter dated November 9, 1994, Fran Wakem
invited Lin to join the BLF and attend one of several upcoming
BLF events.\555\ Wakem signed the letter and addressed it to
Lin's business address in Beijing. Wakem's letter apparently
was not specific enough to enable Lin to receive a United
States entry visa. On November 16, 1994, Russell sent a copy of
the letter back to Wakem with suggested revisions.\556\ Wakem
quickly changed the letter, signed it, and sent the revised
letter, still with the Beijing address, back to Russell.\557\
---------------------------------------------------------------------------
\555\ Letter from Francessa Wakem to Miss Lin Rou Qing, Nov. 9,
1994 (exhibit 27).
\556\ Facsimile from Jennifer Russell to Fran Wakem, Nov. 16, 1994
(exhibit 28). The draft letter from Fran Wakem to Lin Ruo Qing is
attached.
\557\ Letter from Fran Wakem to Lin Ruo Qing, Nov. 16, 1994
(exhibit 29).
---------------------------------------------------------------------------
The FBI interviewed Wakem about her involvement in inviting
a former military officer from Beijing to join the BLF and
attend a BLF event. Although Wakem verified her signatures,
Wakem had no recollection of her letters to Lin.\558\ Wakem
knew that foreign nationals could not join the BLF because they
could not contribute, and she could not think of any situation
where a foreign national was invited to join the BLF.\559\
Richard Sullivan, director of the BLF, said that Wakem's
letters to Lin were prepared at Charlie Trie's request.\560\
Sullivan, though, said he authorized Wakem to invite Lin to
attend BLF events, but not to invite Lin to join the BLF.\561\
Sullivan surmised that Wakem sent letters inviting Lin to join
the BLF because it was easier than drafting a new letter.\562\
Wakem's letter to Lin contained two references about traveling
to the United States. Wakem admitted that such references were
not contained in BLF form letters inviting someone to join the
donor program.\563\
---------------------------------------------------------------------------
\558\ FBI interview of Francessa J. Wakem, at 2 (Oct. 6, 1998).
\559\ Id.
\560\ FBI interview of Richard Sullivan, at 2 (Sept. 18, 1998).
\561\ Id.
\562\ Id.
\563\ Interview of Fran Wakem, Committee on Government Reform, at 3
(Sept. 13, 2000).
---------------------------------------------------------------------------
In an interview with the committee, Wakem stated that she
did not recall any of her dealings with Russell or the Lin
letters. Wakem did admit, though, that the letters she signed
to Lin were not ``form letters.'' \564\ As such, they were
required to be approved by the DNC's general counsel's office
before being sent out, but Wakem could not specifically recall
whether the letter to Lin was approved by the general counsel's
office.\565\ In addition, since the letters referencing visits
to the United States were clearly not form letters, Sullivan's
speculation that Wakem sent out a form letter inviting Lin to
join cannot be correct. Wakem could not explain why it would
not have occurred to her that the letters were inappropriate
when she added two sentences inviting Lin to the United States.
In her interview with the committee, Wakem characterized her
letter as ``wacky'' and asked rhetorically, ``why in the hell
was I doing that?'' \566\ Wakem's memory loss this year in no
way effects the fact that in 1994, she knowingly invited a
foreign national living in Beijing to join the BLF.
---------------------------------------------------------------------------
\564\ Id. at 3.
\565\ Id. at 3.
\566\ Id. at 4.
---------------------------------------------------------------------------
2. Failure to Pursue Foreign Kingpins
The campaign finance investigation revealed that three
major participants in the scandal--John Huang, Charlie Trie,
and Johnny Chung--each had wealthy and powerful foreign
patrons. Documentary and testimonial evidence revealed that the
foreign patrons had indeed funneled illegal foreign
contributions into the DNC. Four foreign nationals in
particular attracted investigative scrutiny: James Riady, Ng
Lap Seng, General Ji Shengde, and Tomy Winata. These foreign
nationals attracted attention not just because of the hundreds
of thousands of dollars they provided in illegal political
contributions, but also because they all had strong ties to the
People's Republic of China (PRC) and other foreign governments.
In March 1997, it was reported that United States intelligence
had learned in 1996 that the PRC had discussed a plan to
influence United States policy through lobbying and
funding.\567\ Despite these alarming allegations, it appears
that the Justice Department has done little to investigate or
prosecute the foreign kingpins who were the source of much of
the illegal money in the 1996 elections.
---------------------------------------------------------------------------
\567\ Brian Duffy and Bob Woodward, ``FBI Warned 6 on Hill About
China Money; Officials Say Lawmakers, Others Targeted in $2 Million
Plan to Buy Influence,'' Washington Post, Mar. 9, 1997, at A1.
---------------------------------------------------------------------------
a. James Riady
James Riady's family runs the Lippo Group, a $12 billion
business empire based in Jakarta, Indonesia. Although the
ethnic Chinese Riady family had close ties to the regime of
President Soeharto in Indonesia, it also maintained very close
business relationships with PRC Government interests and
participated in major investments in China. One Lippo link in
particular merits scrutiny--its multiple partnerships with
China Resources. China Resources was owned entirely by the PRC
Government and has been identified as an intelligence-gathering
arm of the People's Liberation Army (PLA). According to John
Huang, China Resources' parent company is the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC).\568\ MOFTEC is
responsible for ensuring MFN status for China and reducing or
eliminating United States-imposed restrictions on technical
exports.\569\
---------------------------------------------------------------------------
\568\ FBI interview of John Huang, at 133 (Feb. 23-Mar. 26, 1999).
\569\ Id.
---------------------------------------------------------------------------
The Justice Department and the committee received extensive
evidence and testimony documenting James Riady's involvement in
funneling illegal contributions to the DNC and State Democratic
parties. In August 1992, Huang arranged for Riady to have a
private limousine ride with then-Governor Bill Clinton, so
Riady could tell Governor Clinton that he would raise $1
million for the Governor's Presidential campaign. Riady and
Huang then identified Lippo employees and their spouses who
could contribute to fulfill Riady's promise. At least $750,000
in illegal contributions from Lippo Group employees and their
spouses were sent to the DNC in the 1992 election.\570\ Huang
gave Riady a detailed listing of Lippo employees' contributions
and some of the employees bank accounts numbers so they could
be reimbursed.\571\ Huang was personally told by some of the
Lippo employees that they received reimbursements.\572\ The
committee has bank records which show that the Lippo employees
received reimbursements from various companies in amounts
equaling their political contributions.
---------------------------------------------------------------------------
\570\ At the direction of the DNC, some of the Lippo contributions
were sent to State Democratic parties.
\571\ FBI interview of John Huang, at 20 (Oct. 25-26, 1999).
\572\ FBI interview of John Huang, at 22-25 (Jan. 19-Feb. 10,
1999).
---------------------------------------------------------------------------
After the 1992 election, Riady continued to remain involved
in U.S. politics. In 1995, he appealed directly to President
Clinton to have his long-time aide John Huang hired at the DNC.
During his year at the DNC, Huang would raise at least $1.6
million in illegal contributions, a substantial amount of it
from individuals with ties to the Lippo Group. For example,
Huang raised over $450,000 from Arief and Soraya Wiriadinata,
an Indonesian gardener and his wife, who received the entire
sum that they gave to the DNC from Hashim Ning, a long-time
Indonesian business partner of the Riadys.
Despite the ample documentary and testimonial evidence
implicating James Riady in illegal conduct, the Justice
Department has failed to indict Riady. The department obtained
John Huang's cooperation over a year ago, and gave Huang a
reduced sentence in exchange for his testimony against Riady.
Yet a year later, the Department still has not brought charges
against Riady.
The Justice Department's failure to bring charges against
Riady certainly does not spring from any lack of evidence
against Riady. It is possible that the Department has been
dissuaded from pursuing Riady because of his close relationship
with President Clinton. President Clinton has never denounced
James Riady since his role in the fundraising scandal was
uncovered, and he has never demanded that Riady return to the
United States to face charges. Rather, he has continued to
embrace a man who has been caught trying to illegally subvert
U.S. elections.
In September 1999, shortly after Huang finished providing
evidence against Riady to the Justice Department, President
Clinton saw Riady at an APEC conference in New Zealand. After
he finished giving a speech, the President went down a
ropeline, where Riady was prominently placed. When he saw
Riady, the President stopped, and they exchanged extended
pleasantries.\573\ The President apparently expressed little
hesitation about meeting with Riady, who was a central target
of one of the largest investigations in the history of the
Justice Department.\574\
---------------------------------------------------------------------------
\573\ After learning of the Clinton-Riady encounter, the committee
requested any WHCA videotapes of the New Zealand event. Two WHCA
videotapes filmed the event, but remarkably, both missed the encounter
between the President and Riady. One camera stopped filming as soon as
the President reached Riady's place in line. The other WHCA cameraman
was focused on his WHCA colleague rather than the President meeting
Riady. The committee obtained a third tape of the event from a private
source which captured the entire encounter between Riady and Clinton.
This tape showed that the President greeted Riady warmly.
\574\ Notwithstanding the President's warm embrace of Riady, the
White House refuses to produce any documents related to recent contacts
between Riady and the White House. The committee asked the White House
to produce documents about this meeting on Oct. 5, 1999, but the White
House has failed to produce any such records.
---------------------------------------------------------------------------
Recent news reports suggest that the relationship between
James Riady and Bill Clinton is alive and well, and not limited
to one friendly handshake in New Zealand. The Far Eastern
Economic Review reported on October 5, 2000, that Riady has
been telling associates that he has invited President Clinton
to join the Lippo Board of Directors after he leaves office in
2001, and expects the President to accept his offer. While this
report has not been confirmed, it would be a shocking
development if the President went to work for a man who is the
target of a massive Federal investigation, who has close ties
to the PRC, and who has been caught trying to funnel illegal
foreign money to United States political campaigns. It would be
a sad commentary on the Attorney General's judgment if she
clung to her supervision of the investigation of the President
and Riady while, at the same time, Riady was planning to
involve the President in business ventures--as he had done with
Webster Hubbell and Jim Guy Tucker after both came under
investigation.\575\
---------------------------------------------------------------------------
\575\ It should be noted that Riady has a history of providing
money and jobs to his allies and the allies of President Clinton when
they are under investigation. He provided $100,000 to Webster Hubbell
when he was under investigation by the Office of the Independent
Counsel, he has hired former Arkansas Governor Jim Guy Tucker to work
for him in Jakarta, and he provided John Huang with $20,000 in cash
during the same period of time that Huang was ``cooperating'' with the
Justice Department.
---------------------------------------------------------------------------
President Clinton's continued warm relationship with James
Riady sends the wrong message to the Justice Department. When
one looks at the videotape of President Clinton and Riady
exchanging warm greetings in September 1999, it is easy to see
why the Justice Department has not indicted him. This problem
provides a clear example of why the Justice Department is
entirely unsuited to conduct this investigation, and why an
independent counsel was necessary.\576\
---------------------------------------------------------------------------
\576\ Attorney General Reno appointed an independent counsel for
Whitewater because Jim McDougal was involved. There is every indication
that Riady is just as close to President Clinton as McDougal. Why did
the Attorney General not employ the same rationale in this case?
---------------------------------------------------------------------------
b. General Ji Shengde and Colonel Liu Chao-Ying
For almost 2 years, the committee's critics claimed that
there was no evidence of a Chinese plan to influence United
States elections. For these critics, it was not enough to show
that John Huang and Charlie Trie had funneled hundreds of
thousands of dollars into the elections from foreign
businessmen with close ties to China. However, in May 1999,
when Johnny Chung testified before the committee, he provided
clear evidence that Chinese military officers had funneled
money into United States elections. Despite this clear
evidence, the Justice Department has also failed to bring
charges against either Chinese military officer involved.
When he appeared before the committee, Chung testified that
in August 1996, a business associate, Colonel Liu Chao-Ying,
introduced him to General Ji Shengde, the head of Chinese
military intelligence. Chung testified that General Ji told
him:
We like your President very much. We would like to see
him reelected. I will give you $300,000 U.S. dollars.
You can give it to the President and the Democrat
party.\577\
---------------------------------------------------------------------------
\577\ ``Johnny Chung: Foreign Connections, Foreign Contributions,''
hearing before the House Committee on Government Reform, 106th Cong.,
283 (May 11, 1999).
Shortly after this meeting, General Ji provided Chung with
$300,000 through his subordinate, Liu Chao-Ying. Chung funneled
$35,000 of this money to the DNC.\578\
---------------------------------------------------------------------------
\578\ Id.
---------------------------------------------------------------------------
If the Justice Department was interested in determining the
scope of the effort by the PRC to influence United States
elections, the obvious first step would be to pursue General Ji
Shengde and Colonel Liu Chao-Ying. However, there is little
evidence that the Department has taken any firm steps to
prosecute them. A list of Justice Department Task Force cases
as of June 4, 1999, listed Liu Chao-Ying as a ``Pending
Inactive Investigation.'' \579\ Consistent with the inactive
state of the Department's investigation is that the
administration has never called upon the Chinese Government to
provide Liu or Ji to United States law enforcement.
---------------------------------------------------------------------------
\579\ Listing of Task Force cases, June 4, 1999 (exhibit 14). It
should be noted that the Justice Department recently attempted to
withhold documents relating to Liu from the committee, claiming that
she was part of an active investigation.
---------------------------------------------------------------------------
Johnny Chung was one of the only witnesses to provide full
and honest cooperation to the committee after he pled guilty.
Chung provided clear evidence implicating high-level Chinese
Government officials in illegal activity. It is inexplicable
that the Department has not actively pursued this evidence. The
failure, while one of many, is one of the most serious, and it
sends a dangerous message China, and other governments that
might seek to exercise improper influence in the United States
electoral process.
c. Ng Lap Seng
Ng Lap Seng is an ethnic Chinese businessman who became
wealthy through real estate ventures in Macau. According to one
of Ng's business partners, Ng's success was due to the fact
that he was chosen to be a ``front man'' in different
investment projects for city and provincial governments in
China.\580\ Ng was also a member of the Chinese People's
Political Consultative Conference (CPPCC), a Communist
political group populated by some of the most powerful people
in Asia, including Stanley Ho, Li Ka Shing, Henry Fok, and Hong
Kong's Chief Executive Tung Chee Hua.\581\ Ng also conducts
business with Wang Jun, chairman of CITIC, and son of the
former Vice President of China, Wang Zhen. Ng's largest project
is the Nam Van Lakes development, a $600 million hotel and
casino development co-owned by Edmund Ho Wah Hau, chosen by
Beijing as the first chief executive of Macau, and Stanley Ho
Hung Sun, who holds the monopoly on gambling rights in Macau.
Barry Gold, senior vice president and head of the Asian project
finance group in Hong Kong for Lehman Brothers, when told of
details of the project by Trie, said it consisted of casinos
and ``well-known Chinese interests.'' \582\
---------------------------------------------------------------------------
\580\ Interview of George Johnson, Committee on Government Reform,
at 2 (Feb. 13, 1998).
\581\ Li Ka Shing is one of the wealthiest individuals in Asia.
Henry Fok, who is very wealthy, endeared himself to the Communist
Chinese by running guns into China during the Korean War.
\582\ Interview of Barry Gold, Committee on Government Reform and
Oversight, at 1-2 (Mar. 26, 1998).
---------------------------------------------------------------------------
In 1994, Ng and Trie formed a partnership in which Ng would
give Trie money, and Trie would find investors for the Nam Van
Lakes development. Over the next 2 years, Ng wired over $1
million to Trie. Trie used the money for all of his expenses,
including making illegal contributions to the DNC and
reimbursing the contributions of others. Ng obviously
understood that Trie was using the wire transfers for political
contributions because Ng attended a number of fundraising
events with Trie. In October 1994, Ng was even credited by the
DNC for giving a contribution, even though he was ineligible to
give and he signed the check in Chinese. In October 1995, Ng
had Charlie Trie and Ernie Green set up a dinner with Commerce
Secretary Ron Brown and Ng's Asian business colleagues in Hong
Kong. At the dinner, Secretary Brown told the crowd that they
should do business with Trie in the United States and that Trie
had a close relationship with President Clinton. Trie told the
Asian businessmen to help the Democratic party with
contributions.\583\
---------------------------------------------------------------------------
\583\ Interview of Yah Lin ``Charlie'' Trie, Committee on
Government Reform, at 6 (Feb. 29, 2000).
---------------------------------------------------------------------------
There was not even a pretense of an investigation of Ng Lap
Seng by the Justice Department. In January 1998, the Justice
Department indicted Charlie Trie and Antonio Pan, while both
were hiding in Asia, for funneling Ng's money into the DNC. If
the Justice Department was truly following a ``bottom up''
approach to the campaign finance investigation, Ng would
naturally be the next target after Trie and Pan. However, in
June 1999, the Task Force identified all of its investigations
and Ng Lap Seng was not even mentioned. However, there is no
indication that the Justice Department is actively pursuing
Ng.\584\ The fact that a foreign national could knowingly
provide hundreds of thousands of dollars for illegal
contributions in a U.S. Presidential campaign and completely
escape scrutiny is unconscionable.
---------------------------------------------------------------------------
\584\ When Trie testified before the committee, the Department
identified three active investigations relating to Trie: Ernie Green,
Mark Middleton, and Jude Kearney. The committee was prevented from
questioning Trie about these matters. The committee questioned Trie
extensively about his dealings with Ng.
---------------------------------------------------------------------------
There is no excuse for the Justice Department's failure to
investigate or indict Ng Lap Seng. Ng is in the same situation
as James Riady. Both were wealthy overseas businessmen who used
individuals in President Clinton's inner circle to funnel
hundreds of thousands of dollars in illegal campaign
contributions to the DNC. Press reports indicate that the
Justice Department is at least working on an investigation of
James Riady. There has been no indication that the Justice
Department will ever investigate Ng Lap Seng for his illegal
actions.
d. Tomy Winata
Tomy Winata is a fourth foreign national who illegally
funneled money into U.S. elections, but there has not been any
indication that the Justice Department intends to pursue his
illegal conduct. Winata is an Indonesian billionaire with close
ties to both the Chinese and Indonesian Governments. Winata
served as the main business partner of the PLA and the largest
shareholder in Satelindo, a major Indonesian telecommunications
company. Winata was also a former business partner of the Riady
family and Colonel Liu Chao-Ying. Winata gave Trie a total of
$120,000 in wire transfers and between $10,000 and $20,000 in
cash each time Winata visited the United States.
In late 1995, Winata told Trie he wanted a private, one-on-
one meeting with President Clinton. Trie could not obtain a
private meeting, but as an alternative, Trie invited Winata to
sit next to President Clinton at the February 19, 1996,
fundraiser at the Hay Adams Hotel in Washington, DC. Winata
declined the invitation but sent two of his employees instead.
Trie requested that Winata send money for the event, so Winata
sent $200,000 in Bank Central Asia travelers checks with his
employees.\585\ Trie used a portion of the $200,000 to
reimburse contributors illegally for the February 19, 1996,
event.\586\ Trie testified that Winata knew he was going to use
the travelers checks to pay for tickets to the fundraiser.\587\
---------------------------------------------------------------------------
\585\ Hearing on ``The Role of Yah Lin ``Charlie'' Trie in Illegal
Political Fundraising, Part I,'' hearing before the Committee on
Government Reform, 106th Cong., 37-39 (Mar. 1, 2000) (preliminary
transcript).
\586\ Id. at 39-40.
\587\ Id. at 39.
---------------------------------------------------------------------------
Although Winata's true involvement in illegal political
contributions was not known until Trie began cooperating,
Winata's name had already surfaced through the wire transfers
sent to Trie's bank accounts. Despite Trie's testimony, though,
there is no indication that the Justice Department intends to
indict Winata for knowingly funneling illegal contributions to
the DNC.
3. Mark Middleton, Assistant to the White House Chief of Staff
Mark Middleton is the highest-ranking Clinton
administration official to invoke his fifth amendment right
against self-incrimination in the fundraising scandal. The
committee found that Middleton was heavily involved with
several of the central figures under investigation. No other
White House official had as much contact with John Huang, James
Riady, and Charlie Trie as Mark Middleton. Their contacts
continued after Middleton left the White House. While on his
own, Middleton courted wealthy foreign businessmen and offered
access to the White House and the DNC.
During the time Middleton worked in the White House, he
served as a key contact with Huang and Riady. White House
records showed numerous visits and telephone calls between
Huang, Riady, and Middleton. Middleton also served as a conduit
of information between the White House and Huang and Riady.
Middleton met with Huang and Riady three times in the week
before Riady paid Hubbell $100,000. Middleton also hand-
delivered a ``get well'' note from President Clinton to Hashim
Ning when he fell ill in the United States. In gratitude,
Ning's daughter, Soraya Wiriadinata, and her husband Arief gave
$455,000 to the DNC. After leaving the White House, Middleton
was paid $12,500 a month by a Riady company.
Middleton also served as Charlie Trie's main White House
contact. Trie and Ng Lap Seng would regularly meet with
Middleton in the White House when they came to Washington. When
Middleton left the White House, he traveled to Asia twice with
Trie. Middleton openly used his former position in the White
House to impress potential Asian clients. During the second
trip with Trie, Middleton discussed getting $15 million for
President Clinton's re-election with the treasurer of Taiwan's
ruling party.\588\
---------------------------------------------------------------------------
\588\ John Huang said Middleton told him about the $15 million
offer and Huang told Middleton to be ``very careful.'' FBI interview of
John Huang, at 30 (Feb. 23-Mar. 26, 1999).
---------------------------------------------------------------------------
After leaving the White House, Middleton amassed an
impressive array of wealthy foreign clients. However, there is
no evidence that Middleton provided any work for his clients
beyond facilitating White House visits, meetings with Clinton
administration officials, or meetings with the chairman of the
DNC. On several occasions, Middleton made it blatantly clear to
White House and DNC officials that his foreign clients were
prepared to make substantial political contributions or trade
access for cash.
The Justice Department has been investigating Middleton for
4 years. It has had Charlie Trie's cooperation with the
investigation for over a year. Nevertheless, it has still
failed to bring charges against Mark Middleton, one of the
central figures in the scandal. Moreover, there is every
indication that the Department is not even conducting a
thorough or aggressive investigation of Middleton.\589\ Such
failures indicate that the Department is not interested in
learning what happened in the 1996 elections.
---------------------------------------------------------------------------
\589\ As explained above, the Department did not even obtain the
records on Middleton from the White House, where he worked for 2 years,
until March 2000.
---------------------------------------------------------------------------
4. Ernie Green
The committee's investigation of the activities of Charlie
Trie involved a review of Trie's relationship with Ernest G.
Green, who is also a close friend of President Clinton. Green
and Trie had a close personal and business relationship, and
they used their political contacts in order to further their
business goals. They also made two trips to Asia, ostensibly
for business reasons, to court prospective clients with
invitations to events and fundraisers with top administration
officials. In October 1995, in Hong Kong, Green, Trie, and Ng
Lap Seng hosted a dinner of Asian businessmen with Commerce
Secretary Ron Brown.\590\ In February 1996, Trie accompanied
Wang Jun, one of the most prominent Chinese businessmen, to a
White House coffee.\591\ On the same day, Green contributed
$50,000 to the DNC, the precise amount Trie was instructed to
pay to attend a coffee.\592\ Green and Trie accompanied Wang to
meetings in Washington and New York. Green also used his White
House contacts to help Trie land a Presidential appointment on
an international trade commission.\593\
---------------------------------------------------------------------------
\590\ See H. Rept. No. 105-829, at 1370-1373.
\591\ Guest list for Feb. 6, 1996, White House coffee.
\592\ DNC check tracking form for Ernie Green, DNC 3064259; hearing
on ``The Role of Yah Lin ``Charlie'' Trie in Illegal Political
Fundraising, Part I,'' hearing before the House Committee on Government
Reform, 106th Cong., 266 (2000) (preliminary transcript).
\593\ Memorandum for the President from Bob J. Nash, Nov. 22, 1995,
EOP 002216-002223. Ernie Green was listed as Trie's sponsor for
appointment to the Commission.
---------------------------------------------------------------------------
Green was deposed by the House Government Reform Committee
and the Senate Committee on Governmental Affairs. When new
evidence contradicting Green's testimony was discovered, Green
was deposed a second time by this committee. On March 12, 1999,
the committee referred Green's case to the Justice Department,
asking the Department to determine whether Green perjured
himself in his depositions.
In his depositions, Green attempted to minimize his
relationship with Trie. Green also denied that he made any
conduit contributions or that his $50,000 contribution was
connected in any way to Trie and Wang Jun's attendance at the
White House coffee.\594\ Perhaps more significantly, Green
claimed that he never received any money from Trie.\595\ The
committee discovered irrefutable evidence that Green did
receive at least $2,000 in travelers checks from Trie. In
addition, Green's bank records showed numerous cash deposits
into separate bank accounts at the time of Green's major
contributions to the DNC.\596\ Green could not explain the
source for the over $30,000 in cash he deposited.\597\ Green
also denied that two cash deposits of $3,500 and $2,500 were
connected to his $6,000 contribution to the DNC around the same
time.\598\ The committee's referral clearly spelled out that,
at a minimum, Green gave false statements about whether he
received any money from Trie, and perhaps, misled the committee
about his other contributions to the DNC.
---------------------------------------------------------------------------
\594\ Deposition of Ernest G. Green, Committee on Government Reform
and Oversight, Dec. 17, 1997, at 210-214.
\595\ Deposition of Ernest Green, Senate Committee on Governmental
Affairs, June 18, 1997, at 191-192.
\596\ In fact, the $2,000 in travelers checks that Green received
from Trie was right in the middle of the time that Green was making all
of these cash deposits, February and March 1996.
\597\ Deposition of Ernest G. Green, Committee on Government Reform
and Oversight, Sept. 25, 1998, at 20-30.
\598\ Id. at 12-14.
---------------------------------------------------------------------------
Shortly after the committee's referral, around May 1999,
Trie began cooperating with the Justice Department. The Justice
Department attempted to shield from the committee or the public
any information Trie gave about Green under the guise that
Green was the subject or target of an ongoing criminal
investigation. In November 1999, the committee immunized Trie,
but was told by the Justice Department that questions relating
to Green, along with Mark Middleton and Jude Kearney, were off
limits. The basis for the Department's decision was that their
investigation of Green was very serious and would be resolved
in the near future. The committee was told that if Trie
testified publicly about Green, it could jeopardize any case
against Green.
Through disclosures by the Justice Department and Trie, the
committee subsequently learned that Trie did indeed provide
incriminating information about Green. Not only did Trie's
statements affirm the validity of the committee's referral
against Green, but Trie also provided additional information
that contradicted other sworn statements by Green regarding
both his political contributions and his role in arranging
high-level political meetings for Trie.
The committee recently discovered that the Justice
Department had not even requested Green's records from either
the White House or the Commerce Department until March 24,
2000, 1 full year after the committee's referral.\599\
Therefore, in February 2000, when the Justice Department told
the committee that it was about to take action on Green, and
prevented the committee from questioning Trie about Green, it
had not even taken the basic first step of getting Green's
documents from the White House or the Commerce Department. At a
hearing on July 20, 2000, the Justice Department was asked to
explain the anomaly between their words and their actions:
---------------------------------------------------------------------------
\599\ Subpoena to the Custodian of Records, Executive Office of the
President, Mar. 24, 2000 (exhibit 30); subpoena to the Custodian of
Records, U.S. Department of Commerce, Mar. 24, 2000 (exhibit 31).
Mr. LaTourette. Let me ask you this, and I think I
already know the answer, but you know what? I'm going
to ask it anyway. Are Mark Middleton and Ernie Green
under active investigation by the Department of
---------------------------------------------------------------------------
Justice?
Mr. Conrad. I couldn't comment on that.
Mr. LaTourette. Well, the reason I ask you that
question, we were specifically asked by the Department
of Justice to avoid talking about Ernie Green during
the Charlie Trie hearing, if I remember correctly.
Because we were advised that there was an ongoing
criminal investigation that the Justice Department was
very excited about.
But I have to tell you that the level of excitement is
puzzling to me, and I assume to my colleagues, when we
find out that what you're so excited about you're not
even requesting records about from the White House. And
again, I don't like this backseat driving business. It
makes me very uncomfortable, because I'm sure as career
prosecutors, you do an excellent job . . . Mr.
Robinson, do you want to say something?
Mr. Robinson. I would like to make one comment that I
hope will continue to be the case in our interaction on
parallel matters with the Congress. To the extent that
we have conversations with counsel for committees about
the appropriate scope of inquiry into witnesses, we
don't make those, we don't have those conversations
with the expectation that they will be publicly
disseminated. And the Code of Professional
Responsibility prohibits us from doing that.
Mr. LaTourette. Yes, and I appreciate that
chastisement, but I will tell you that the committee
also has an oversight responsibility. And what you're
asking us to do is say, trust us. But then when we get
documents from the White House, we find out that stuff
we gave you a year and a half ago, you haven't acted
on[.] \600\
---------------------------------------------------------------------------
\600\ ``Has the Justice Department Given Preferential Treatment to
the President and Vice President,'' hearing before the House Committee
on Government Reform, 106th Cong., 121-123 (July 20, 2000) (preliminary
transcript).
The comments by Congressman LaTourette summarize the
committee's conclusions about the Justice Department's handling
of the Green case. The committee referred the matter to the
Justice Department in March 1999, and it is clear that the
Justice Department took little action on the referral, failing
to subpoena records on Green from the White House or the
Commerce Department until the following year. The Department's
failure to act quickly on the referral is puzzling, given the
clear evidence of perjury prepared by the committee. Even more
puzzling though, is the fact that the Justice Department
continued to delay action on Green, even after Charlie Trie
presented them with substantial evidence of perjury and other
crimes committed by Green. The Justice Department's failure to
pursue the case against Green vigorously creates the appearance
that the Justice Department is hesitant to pursue ever the
clearest criminal case against individuals who are prominent
Democrats and friends of President Clinton.
5. Keshi Zhan
The Justice Department lost another investigative
opportunity by failing to do a thorough investigation of Keshi
Zhan, an associate of Charlie Trie. Zhan was initially thought
to have been merely Trie's assistant and hostess in Washington,
DC. She initially gained notoriety in the campaign fundraising
investigation for having made a $12,500 contribution to the DNC
on her annual salary of $22,408 as an Arlington County records
clerk. However, as the investigation developed, it became clear
that Zhan had a serious role in illegal activity.
As the committee developed documentary and testimonial
evidence, it became clear that Zhan was close to Ng Lap Seng,
Charlie Trie's benefactor, who provided Trie with over $1
million, much of which was directed into political campaigns.
In addition, Zhan's father was a high-ranking professor of
linguistics at a Chinese university, suggesting that her family
had some political influence in China. Finally, Zhan was
implicated in facilitating conduit contributions on behalf of
Trie.\601\ This activity was significant, because the Justice
Department has a policy of refusing to prosecute mere conduit
contributors. However, it does prosecute individuals who
facilitate conduit contributions.
---------------------------------------------------------------------------
\601\ In his interview with committee staff and his testimony
before the committee, Trie cited a number of cases where Zhan arranged
conduit contributions with individuals he did not even know.
---------------------------------------------------------------------------
The Justice Department has failed to prosecute Zhan,
despite a surfeit of evidence against her. The Senate Committee
on Governmental Affairs immunized Zhan in 1997, and attempted
to take her deposition. However, it soon became clear that Zhan
was lying about even the simplest matters. Therefore, the
committee closed her deposition. Zhan could be prosecuted for
false statements made during the course of this deposition.
However, the Department has declined to do so. Moreover, it
appears that the Justice Department is failing to pursue Zhan
for any of her illegal activities. A list of the status of
Justice Department campaign fundraising investigations, which
was inadvertently released by the Justice Department, listed
the following information about Zhan: ``Keshi Zhan (subfile of
Trie, not being actively pursued).'' \602\
---------------------------------------------------------------------------
\602\ Listing of Task Force cases, June 4, 1999 (exhibit 14).
---------------------------------------------------------------------------
By failing to pursue the Zhan investigation, the Justice
Department has missed an opportunity to uncover valuable
information about the campaign fundraising scandal. There is
ample evidence to prosecute Zhan for a number of felonies, but
the Department has simply decided, without explanation, not to
investigate her.
6. The Justice Department Failed to Ask Key Questions of John Huang
The Justice Department approved plea agreements with John
Huang and Charlie Trie in 1999. The plea agreements allowed
Huang and Trie to plead guilty to lesser offenses than their
conduct warranted in return for full cooperation with the Task
Force's investigation. The benefit to the Justice Department
was to learn the details of Huang and Trie's activities and to
gain information about the involvement of others, particularly
those above Huang and Trie.
By obtaining the summaries of the Justice Department
interviews of Huang and Trie, and by questioning them
extensively, the committee has learned that the Justice
Department failed to question Huang and Trie about a number of
significant matters. Most importantly, the Justice Department
failed to question either Huang or Trie extensively about a
number of connections between Trie, Huang, Riady, and Lippo
Group employees. By failing to examine sufficiently the ties
between them, the Justice Department allowed Huang and Trie to
both claim that they were ignorant of each other's criminal
activities.
a. The Justice Department Did Not Investigate Ties Between
Trie, Huang, and the Lippo Group
Trie and Huang both state that they met around the summer
of 1994.\603\ When Huang moved to the DNC in late 1995, Huang
and Trie began working together to solicit contributions. Both
claim that since they had met after both were established with
the Democratic party, they did not discuss the rules of
fundraising.\604\ Their claims are difficult to believe, in
light of the evidence to the contrary. There is substantial
evidence linking Trie to the Lippo Group and James Riady. This
evidence may suggest that Trie was not acting on his own in
funneling money to the DNC, but rather, like John Huang, was
acting as an agent of the Lippo Group.
---------------------------------------------------------------------------
\603\ FBI interview of John Huang, at 41 (Jan. 19-Feb. 10, 1999);
FBI interview of Charlie Trie, at 50 (June-October 1999).
\604\ FBI interview of John Huang, at 4 (Feb. 5, 1999); FBI
interview of Charlie Trie, at 51 (June-October 1999).
---------------------------------------------------------------------------
The money for Trie's first illegal contributions to the DNC
in May 1994 came from Lucky Port Investments Ltd.\605\ The
owner of Lucky Port, Peter Chen, was a longtime Lippo employee
and good friend of the Riady family patriarch, Mochtar
Riady.\606\ While at Lucky Port, the Riadys accepted Chen's
offer to invest in a shopping mall in China with a former
member of the PLA.\607\ At the time of the wire transfer, Chen
was still a Lippo employee as well. Antonio Pan, another
longtime Lippo employee and future Trie assistant also worked
at Lucky Port. Trie testified that this was the only money he
received from either Lippo or anyone associated with the
Riadys.\608\ The Justice Department did not question Trie about
the $100,000 from Lucky Port. While he admitted that this money
came from the Lippo Group, Trie could not explain why he
received this money, and denied that he was acting on behalf of
the Lippo Group when he funneled the $100,000 from Lucky Port
into the U.S. elections. In failing to question Trie about the
$100,000 from Lucky Port, the Justice Department missed a
valuable piece of evidence linking Trie and the Lippo Group.
---------------------------------------------------------------------------
\605\ Wire transfer from Lucky Port Investments Ltd. to Yah Lin or
Wang Mei Trie, May 6, 1994.
\606\ Interview of Yah Lin ``Charlie'' Trie, Committee on
Government Reform, at 13 (Feb. 29, 2000).
\607\ Interview of Carol Pan, Committee on Government Reform, at 1
(Dec. 1, 1998). Carol Pan, Antonio's ex-wife, worked at Lucky Port with
Antonio and Chen.
\608\ Hearing on ``The Role of Yah Lin ``Charlie'' Trie in Illegal
Political Fundraising, Part I,'' hearing before the House Committee on
Government Reform, 106th Cong., 236 (Mar. 1, 2000) (preliminary
transcript).
---------------------------------------------------------------------------
The Justice Department missed other important leads linking
Trie and Lippo. In documents seized from Trie's home by the
FBI, one undated document, in Chinese, was entitled,
``Cooperation Opportunities with James Riady.'' The document
lists five separate business ventures involving Lippo and the
Riadys. Trie strongly denied his own involvement in any of the
projects listed in the document, which he said was authored by
either Peter Chen or Antonio Pan.\609\ However, Trie admitted
that one of the Lippo business projects in the documents did
involve him:
---------------------------------------------------------------------------
\609\ Id. at 228-235.
5. L.A. Bank Stocks: Maybe a part of the L.A. bank
stock can be sold to Wang Jun. Knowing you have good
relations with Wang Jun, hoping you can be the
intermediary. Proposing that Wang Jun buy the Lippo
bank stocks with money as reinforcement to enter the
U.S. market. You may also plan to get a part of the
stocks and a director position. James is a fair person.
He knows especially the long-term strategy and the
advantage of using business partners. He knows you have
good relations with China. Hope you may be able to help
realize the above suggestions. He agrees with my
proposal and is willing to work with you on the above
items.\610\
---------------------------------------------------------------------------
\610\ Undated document entitled, ``Cooperation Opportunities with
James Riady'' (exhibit 32).
Trie admitted that Lippo was asking him to contact Wang Jun,
CITIC chairman, to invest with Lippo.\611\ Although Trie denied
any involvement with Lippo, he was clearly involved in
negotiations of various business deals with James Riady. The
Justice Department did not ask Trie about this document.
---------------------------------------------------------------------------
\611\ Hearing on ``The Role of Yah Lin ``Charlie'' Trie in Illegal
Political Fundraising, Part I,'' hearing before the Committee on
Government Reform, 106th Cong., 231-235 (Mar. 1, 2000) (preliminary
transcript).
---------------------------------------------------------------------------
These pieces of evidence are important in determining the
extent and nature of the relationship between John Huang and
Charlie Trie. Considering Huang's claim that he was unaware of
the fact that most of the contributions raised by Trie were
illegal, it is important to obtain independent proof of the
nature of the relationship between Huang and Trie. These pieces
of evidence, which the Department did not question Trie about,
suggest that the relationship between Trie and Huang was close,
and raise the possibility that they were working together to
raise illegal funds in 1996.
b. The Justice Department Did Not Investigate the 1991 DNC
Trip to Asia
The Justice Department did not ask Huang any questions
about a DNC trip to Asia in December 1991. This was an
important area to explore because in 1996, the DNC claimed the
two main fundraisers on the 1991 Asia trip, John Huang and
Maria Hsia, duped them in 1996 by funneling illegal conduit and
foreign contributions into the DNC. But in 1991, the DNC asked
both Huang and Hsia to solicit political contributions in Asia.
A review of the DNC documents for the trip show that the
only purpose of the trip was fundraising. DNC documents about
the trip focus almost exclusively on fundraising and whether
enough money would be raised to justify the trip. Melinda Yee,
who asserted her fifth amendment privilege against self-
incrimination before the committee, wrote, ``our goal is to
bring $100,000 out of Taiwan and thus far, $50,000 is
pledged.'' \612\ Chairman Ron Brown commented that the planning
for the trip, ``looked good pending confirmation ($) from
Waihee, Hsia, Huang.'' \613\ Linda Rotunno, from the Finance
Division of the DNC, summed up the DNC's view by saying, ``as
far as our goals are concerned, it would be a wasted trip if we
could not finesse these new relationships into real money.''
\614\
---------------------------------------------------------------------------
\612\ Memo from Melinda Yee to Brian Foucart, Nov. 15, 1991, DNC
0828876 (exhibit 33).
\613\ Memo from Melinda Yee to RHB [Ronald H. Brown], Oct. 22,
1991, DNC 0828865 (exhibit 20).
\614\ Memo from Linda Rotunno to Cheri Carter, Oct. 25, 1991
(exhibit 34).
---------------------------------------------------------------------------
The DNC recruited two fundraisers whose later tactics would
haunt the DNC, John Huang and Maria Hsia, to bring in the money
from Asia.\615\ Maria Hsia's job was to identify contributors
who were going to give the money to the DNC while they were in
Taiwan.\616\ John Huang agreed to host a high dollar event for
the DNC where $50,000 would be collected from wealthy Asian
bankers in Hong Kong who were either United States permanent
residents or with United States corporate ties and even more
money would be received when they returned to the United
States.\617\ According to Huang's resume, however, his only
contacts with wealthy Asian bankers were the Salim Group and
the Riady family, both of which were ineligible to contribute
to the DNC.\618\ The DNC noted Huang's commitment with dollar
sign notations next to a lunch and dinner sponsored by the
Lippo Group in Hong Kong.\619\
---------------------------------------------------------------------------
\615\ It should be noted that the DNC was very familiar with Huang,
Hsia, and James Riady by this point because of their high-profile as
fundraisers in California for the DSCC.
\616\ Id.
\617\ Id.; memo from Melinda Yee to RHB [Ronald H. Brown], Oct. 15,
1991 (exhibit 19).
\618\ The Riady family also paid all of the DNC's hotel, meal, and
transportation expenses in Hong Kong.
\619\ Schedule for Asia/Hawaii, DNC 0828853-58 (exhibit 21).
---------------------------------------------------------------------------
The DNC and its officials have not been forthcoming about
what happened on the 1991 Asia trip. Although the DNC was able
to produce many documents on planning the trip, it could not
produce a single document detailing what actually occurred in
Asia. The DNC officials involved in the trip refused to
cooperate. Maria Hsia and Melinda Yee exercised their fifth
amendment privilege against self-incrimination and have refused
to cooperate with the committee. Alexis Herman, who documents
show was very involved in the trip, cannot even recall it
happening.\620\ Linda Rotunno does not recall writing the
memorandum which stated that the trip would be a waste unless
the DNC got contributions from it.\621\ John Huang disavowed
any involvement in the DNC's expectation that he would solicit
contributions in Hong Kong. Huang testified before the
committee that despite all of the DNC documents showing that he
committed to raising money in Hong Kong, he did not ask for any
money or contributions from anyone. Huang did admit that
Melinda Yee proposed that Huang would raise $50,000 in Hong
Kong, but Huang denied he did so.\622\ Huang claimed that he
told the DNC that he could gather businessmen to greet Chairman
Brown in Hong Kong, but Huang denied that the dollar signs next
to the Lippo Group lunch and dinner signified a fundraising
event.\623\
---------------------------------------------------------------------------
\620\ Interrogatories to Secretary Alexis Herman, May 7, 1998.
\621\ Deposition of Linda Rotunno, Mar. 19, 1998, at 70.
\622\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before Committee on Government Reform, 106th
Cong., 194 (Dec. 17, 1999) (preliminary transcript).
\623\ Id. at 194-197.
---------------------------------------------------------------------------
The 1991 DNC trip to Asia was the first chapter in the
DNC's long and sordid relationship with foreign money. By
investigating this trip, the Justice Department could have
learned more about the relationship between Huang, Maria Hsia,
and the DNC. However, it apparently failed to ask Huang any
questions about this matter. This failure cannot be explained.
c. The Justice Department Did Not Investigate Huang's
Demands for Political Jobs in Exchange for
Contributions
The Justice Department did not question Huang about his
role in a September 27, 1993, fundraiser in Los Angeles with
Vice President Gore. By 1993, Huang had established himself as
one of the dominant players in the California Asian American
fundraising community. The DNC, cognizant of Huang's
importance, arranged to meet with Huang, who was described as
the Chair of the local fundraising committee.\624\ DNC staff
went to Huang's office at the Lippobank, and Huang agreed to
raise $200,000 for the September fundraiser with Vice President
Gore.\625\ During the meeting, several others on Huang's
fundraising committee stated that they felt hesitant about
committing to contribute without a guarantee that there would
be political appointments of Asian Americans by the time of the
fundraiser.\626\ For example, the DNC was told that March Fong
Eu, who was later appointed Ambassador to Micronesia, was
concerned that she had not yet been contacted about her
appointment.
---------------------------------------------------------------------------
\624\ Undated memorandum from Vida Benavides to Laura Hartigan
(exhibit 35).
\625\ Id.; interview of Darius Anderson, Committee on Government
Reform, Jan. 21, 2000, at 1.
\626\ Undated memorandum from Vida Benavides to Laura Hartigan
(exhibit 35).
---------------------------------------------------------------------------
After the meeting, Huang contacted the DNC with a
compromise offer and the reasons for his concessions in
exchange for his cooperation with the fundraiser:
John Huang's Proposal
(1) downpayment commitment of $100,000.
* * * * *
(3) commit 300-400,000 dollars at a later event once
significant appointments are named and if the
administration are useful of APA's during the APEC
Conference in Seattle.
* * * * *
Reasons:
* * * * *
(3) Since John Huang himself is up for an appointment,
his early commitment of 200,000 would be perceived as a
buy-off.
(4) These fundraisers would like to help in the future
by going back to their fundraising base but would look
foolish if they themselves commit to give without a
guarantee of a possible appointment. Their own
credibility will be questioned . . . regardless if
their [sic] ``activist'' or not. WE should not assume
that APA fundraisers lack political integrity.
SOLUTIONS
(1) Accept John Huang's proposal, on the condition that
the next fundraiser will raise $900,000 to a total of
$1 million dollars when Clinton comes to LA in December
* * * * *
These must happen:
(1) appointments by December.\627\
---------------------------------------------------------------------------
\627\ Undated memorandum from Vida Benavides to Martha Phipps, et
al., (exhibit 36).
One month after Huang laid out his proposal, the White House
signaled their acceptance of his terms. March Fong Eu wrote
Huang to inform him that she learned the White House was set to
announce her ambassadorship to Micronesia.\628\ On the top of
the letter, it says, ``copy to JTR,'' meaning James Tjahaja
Riady. Huang admitted that this was the sign he was waiting for
from the administration.\629\
---------------------------------------------------------------------------
\628\ Letter from March Fong Eu to John Huang, Sept. 23, 1993, HHH
3164 (exhibit 37).
\629\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 208-209 (Dec. 17, 1999) (preliminary transcript).
---------------------------------------------------------------------------
Huang kept his promise and funneled over $120,000 in
illegal foreign and conduit contributions through Lippo
employees and Lippo companies to the September 27, 1993,
fundraiser after receiving March Fong Eu's letter. In December
1993, Huang funneled another $156,000 to the DNC for a
fundraiser with President Clinton in furtherance of Huang's
promise for additional money.
The Justice Department never asked Huang about his
negotiations with the DNC for the September 27, 1993,
fundraiser. In his testimony before the committee, Huang
admitted that he offered to exchange contributions for
political appointments with the DNC, although Huang denied that
he said his commitment of $200,000 could be perceived as a
payoff for his own appointment.\630\
---------------------------------------------------------------------------
\630\ Id. at 207-208 (1999).
---------------------------------------------------------------------------
E. The Justice Department Failed To Pursue the Kansas Conduit
Contribution Scheme
I believe there was a very orchestrated campaign from a
high level to move money from Washington to
Topeka.\631\--Henry Helgerson, D-Wichita.
---------------------------------------------------------------------------
\631\ Dave Seaton, ``Local Demos say they felt need to repay state
party: Legality of transfers questioned,'' Winfield Daily Courier, Oct.
9, 1997 at 39 (exhibit 38).
One of the more interesting episodes in the 1996 election
cycle involved an apparently illegal conduit contribution
scheme by the Democratic National Committee to funnel more than
a third of a million dollars to the Kansas Democratic
party.\632\ The motivating factor for this scheme appears to
have been a Kansas statute that limited the amount of out-of-
state non-Federal (soft) money that could legally be
contributed to Kansas political parties.\633\ In order for the
national party to contribute large amounts of soft money to
influence the two Senate and four House races in 1996, the
Kansas statute had to be circumvented. This resulted in a
particularly clever--but relatively transparent--effort to
funnel money to the State Democratic party through a number of
State political parties, Kansas County parties, and individual
Kansas legislators. According to then-DNC General Counsel
Joseph Sandler, ``[p]robably people from the White House would
have been involved[.]'' \634\
---------------------------------------------------------------------------
\632\ The chart at the end of this section provides a one-page
overview of the DNC's conduit contribution scheme.
\633\ Kan Stat. Ann. Sec. 25-4153 (1999).
\634\ Transcript of deposition of Joseph E. Sandler, former general
counsel, Democratic National Committee, by Committee on Government
Reform at 150 (May 14, 1998) (deposition on file with committee).
Sandler also indicates that ``Harold Ickes, Doug Sosnik, Karen Hancox
would have reviewed the budget.'' Id.
---------------------------------------------------------------------------
Although these apparent violations of law \635\ by the DNC
were reported in the media, and although the committee brought
these violations to the attention of the Department of Justice,
the Attorney General made no effort to look into the
allegations. It is troubling that while Attorney General Reno's
Justice Department conducted a 3 year investigation of
contributions to Republicans in Kansas that originated with the
Triad organization,\636\ she took no steps to look at the
obvious pattern of conduit contributions that originated with
the DNC and that ended up in Topeka. This uneven enforcement of
the law provides further indication that Attorney General Reno
should not have retained supervision of the investigation of
her own political party. Her failure to conduct even a cursory
investigation pursuant to laws currently on the books also
provides support to political efforts to make campaign finance
reform more of an issue than it might otherwise be.
---------------------------------------------------------------------------
\635\ Under Federal law, the treasurer of a political committee is
required to file reports that disclose ``the total amount of all
disbursements, and all disbursements [including] . . . transfers to
affiliated committees and, where the reporting committee is a political
party committee, transfers to other political party committees,
regardless of whether they are affiliated[.]'' See 2 U.S.C.
Sec. 434(b)(4)(C). National party committees are further required under
11 CFR 104.9(e) to ``report in a memo Schedule B each transfer from
their non-federal account(s) to the non-federal account(s) of a state
or local party committee.'' In other words, non-Federal or ``soft''
money is clearly covered by the Federal regulations governing
disclosure. Also, 18 U.S.C. Sec. 1001 prohibits false reports to the
Federal Election Commission.
\636\ The committee was provided a list of Justice Department
campaign finance cases. As of the date of the list, June 4, 1999, the
Triad investigation was listed as ``ongoing,'' even though there
appears to be no serious suggestion that the Triad organization did
anything illegal with respect to Kansas political contributions. The
Justice Department list contains no reference to the DNC scheme to
funnel soft money to Kansas, and the witnesses interviewed by this
committee had not been contacted by the Justice Department at the time
of their interview. See listing of Task Force cases (June 4, 1999)
(exhibit 14).
---------------------------------------------------------------------------
The decision by the Justice Department not to investigate
the Kansas matter is particularly troubling because a line
appears to have been drawn by the Attorney General and her
staff: conduit schemes involving the likes of Charlie Trie,
John Huang and Johnny Chung were to be investigated, but a
conduit scheme involving the Democratic party was to be
ignored. In many respects, one would think that a scheme to
circumvent campaign financing laws by one of the two major
political parties would be accorded at least as much--if not
more--importance than efforts by individuals who might be
acting at their own behest. The Justice Department's decision
is even more curious because the individual who appeared to be
the DNC's liaison in Kansas came to Washington immediately
after the 1996 election and was given a job on the staff of
Democratic Senate Minority Leader Tom Daschle.\637\
---------------------------------------------------------------------------
\637\ The Justice Department appears to have provided great
deference to Senator Daschle. Not only did they avoid investigating the
Kansas matter when it was clear that a member of his staff would need
to be questioned, they also avoided referring to the conduit
contributions made to him in the Charlie Trie indictment. There
appeared to be no rationale for the omission of these particular
contributions.
---------------------------------------------------------------------------
1. The Elements of the Conduit Contribution Scheme
In a 2 month period prior to the 1996 election, the Kansas
Democratic party or its affiliates received over a third of a
million dollars in contributions that appear to have originated
in Washington, DC, with the DNC or affiliated organizations.
The contributions were derived from the following sources:
A total of $254,950 was received during the months
of September and October from 17 State political parties. Each
State gave either $14,990 or $15,000, the limit permitted
according to Kansas statute. Prior to making these
contributions, many of these States had an influx of funds from
the national Democratic party in Washington, DC.
A total of $56,900 was contributed to the State
Democratic party or its affiliates by Kansas County Democratic
parties. On September 30, 1998, 17 county parties were sent
$5,000 by the Democratic Congressional Campaign Committee in
Washington, DC. Within a matter of days, 13 of these counties
had passed along most of this money to the State party.
Kansas State Senate and House candidates also
received money from the Democratic National Committee or its
affiliates in Washington, DC and passed much of the money on to
the State party. During the first week of August, for example,
State Senate candidate Donald Biggs received a check for $1,000
from the Democratic Senatorial Campaign Committee in
Washington, DC.\638\ Biggs later received a memorandum dated
September 3, 1996, from the Office of the Senate Democratic
Leader in Kansas, Jerry Karr. It stated:
---------------------------------------------------------------------------
\638\ Letter from the Honorable J. Robert Kerrey, chairman,
Democratic Senatorial Campaign Committee, to Donald Biggs, Kansas State
Senate candidate (Aug. 1, 1996) (exhibit 39).
The DSCC, in an effort to support state senate
candidates, the Democratic Party, and their own
candidates, will contribute $1,000 to each state Senate
campaign our office designates. You may keep $200 but
then must turn around and contribute $800 to the Senate
Victory Fund, P.O. Box 1811, Topeka, KS 66601.
* * * * *
This money will help you (the $200) and it will help
the Kansas Coordinated Campaign and all Democratic
candidates as well.\639\
---------------------------------------------------------------------------
\639\ Memorandum from Tressie Hurley to Donald Biggs, Kansas State
Senate candidate (Sept. 3, 1996) (exhibit 40) (emphasis added).
LAs this instruction indicates, there was a very clear and
specific intent to use Kansas citizens as conduits to funnel
money from Washington, DC to the State party.
a. Contributions from the DSCC Using States as Conduits
Why did States--particularly traditionally campaign cash-
poor States like Maine, New Hampshire, Idaho, Wyoming and South
Dakota--make large political contributions to Kansas? Tino
Monaldo, who in 1996 was a lawyer for the Kansas Democratic
party, would have the public believe Kansas ``attracted these
contributions from other DSPs [Democratic State Parties]
because of the excellence of its coordinated campaign efforts,
and the quality of its candidates.'' \640\ The more honest
answer, however, was provided by then-DNC General Counsel:
``I'm aware that the DSCC requested State parties to make--
other State parties to make political contributions to the
Kansas Democratic Party.'' \641\ Thus it was not the
effectiveness of the Kansas Democratic party that drew
unsolicited contributions; rather, it was on order from
Washington, DC.
---------------------------------------------------------------------------
\640\ Letter from Tino Monaldo to Carol Williams, executive
director, Kansas Commission on Governmental Standards and Conduct (Nov.
13, 1997) (exhibit 41).
\641\ Transcript of deposition of Joseph E. Sandler, former general
counsel, Democratic National Committee, by Committee on Government
Reform at 152 (May 14, 1998) (deposition on file with committee).
---------------------------------------------------------------------------
The following chart provides an overview of which States
contributed to Kansas, when they received funds from
Washington, and when the money was sent on to Kansas: \642\
---------------------------------------------------------------------------
\642\ Appendix 2 provides supporting documentation for the charts
that follow.
----------------------------------------------------------------------------------------------------------------
Amount sent by the
Date State received money DSCC to States
States responsible for sending $15,000 or from DSCC and date received near in time to Entity
$14,990 to Kansas by Kansas the contribution
to Kansas
----------------------------------------------------------------------------------------------------------------
Idaho.................................... 9/10/96 9/17/96... $64,464 DSCC
Florida.................................. 9/29/96 9/27/96... 40,000 DSCC
Nebraska................................. 10/8/96 9/30/96... 50,000 DSCC
Arkansas................................. \643\ 10/3/96.....
Maine.................................... 10/2/96 10/4/96... 15,000 DSCC
Colorado................................. \644\ 10/4/96.....
Georgia.................................. \645\ 10/7/96.....
Louisiana................................ \646\ 10/16/96....
Alabama.................................. 10/15/96 10/16/96. 15,000 DSCC
Wyoming.................................. 10/15/96 10/18/96. 15,000 DSCC
South Carolina........................... \647\ 10/18/96....
California............................... 10/18/96 10/18/96. 35,000 DSCC
South Dakota............................. \648\ 10/18/96....
New Hampshire............................ 10/17/96 10/21/96. 18,750 DSCC
Minnesota................................ 10/23/96 10/25/96. 17,500 DSCC
Michigan................................. 10/29/96 10/25/96. 16,500 DSCC
Montana.................................. 10/25/96 10/30/96. 25,000 DSCC
----------------------------------------------------------------------------------------------------------------
As seems fairly clear from the above chart, it would be
very surprising indeed if the contributions to Kansas were not
coordinated. It takes a significant suspension of credulity to
conclude that 17 States suddenly took it upon themselves to
make large contributions to Kansas.
---------------------------------------------------------------------------
\643\ Arkansas reporting requirements are such that this
information was not recorded.
\644\ The committee was unable to obtain information for Colorado
filings after June 28, 1996.
\645\ The committee was unable to obtain information for Georgia
filings after May 9, 1996.
\646\ There were numerous large donations from the DNC during the
relevant time period.
\647\ Records show that South Carolina received only $1,140 from
the DNC in 1996.
\648\ South Dakota's records provided no dates for contributions
received from the DNC.
---------------------------------------------------------------------------
Furthermore, there are other indications that these
contributions were unusual. For example, the Maine Democratic
party amended an earlier financial disclosure report required
by Maine and communicated the following to the State Commission
on Government Ethics: ``The committee mistakenly did not report
a contribution to the Kansas Democratic party. The disbursement
was made from an account that is normally inactive. In fact,
this was the only disbursement from the account this year.''
\649\
---------------------------------------------------------------------------
\649\ Letter from Kevin J. Mattson, executive director, the Maine
Democratic party, to Marilyn Canavan, Commission on Governmental Ethics
(Nov. 4, 1996) (exhibit 42).
---------------------------------------------------------------------------
b. Contributions from the DCCC Using Kansas Counties as
Conduits
Seventeen county parties were sent $5,000 by the Democratic
Congressional Campaign Committee (DCCC) on September 31, 1996.
Within days, 13 of the recipients made substantial
contributions to the Kansas Democratic party. Most of these
contributions were for the same amount. This is remarkable,
given that the average total annual receipt for the 13 counties
was $19,816. The following chart provides an overview of which
Kansas counties received contributions from Washington, and
what they did with the money:
----------------------------------------------------------------------------------------------------------------
Total county receipts for
1996 & percentage of
Amount sent Date sent income derived from the
County * to State to State DCCC
party party --------------------------
Receipts Percentage
----------------------------------------------------------------------------------------------------------------
Cowley..................................................... $4,750 10/8/96 $6,001 83
Douglas.................................................... $4,500 10/7/96 $28,081 17
Ellis...................................................... $4,500 10/4/96 $18,387.27 27
Harvey..................................................... $4,500 10/13/96 $7,463 70
Leavenworth................................................ $4,500 10/9/96 $7,322 68
Marshall................................................... $4,750 10/9/96 $5,590 89
Miami...................................................... $4,500 10/17/96 $5,500 91
Osage...................................................... $4,750 10/7/96 $5,200.98 96
Reno....................................................... $4,500 10/3/96 $18,435 27
Riley...................................................... $4,500 10/2/96 $10,216 49
Sedgwick................................................... $4,250 10/4/96 $98,208 5
Shawnee.................................................... $4,500 10/3/96 $34,182 14
Wyandotte.................................................. $2,400 10/30/96 $13,031 38
----------------------------------------------------------------------------------------------------------------
* Thirteen county parties were sent $5,000 by the DCCC on September 31, 1996, and passed money on.
It is interesting to note that at least one of the counties
appears not to have even asked for money from Washington. When
asked why the Democratic Congressional Campaign Committee
contributed $5,000 to Sedgwick county, former chairman of the
Sedgwick County Democratic Central Committee Jim Lawing
answered: ``No we never solicited that gift . . . it never
occurred to me or anybody else with the Sedgwick County
Democratic Central Committee to go look for that source of
funding at the national level.\650\ In fact, prior to the 1996
election, records indicate that county parties provided almost
no money to the State party. In 1992, $1,924.88 was passed
along to the State party by all county parties combined. In
1994, $1,200 was passed along. In 1996, $60,650 was passed from
county parties to the State party.
---------------------------------------------------------------------------
\650\ Transcript of deposition of Jim Lawing, former chairman,
Sedgwick County Democratic Central Committee by Committee on Government
Reform at 22-23 (Feb. 18, 1998) (deposition on file with committee).
---------------------------------------------------------------------------
An invoice prepared by the Reno County Democratic Committee
is illustrative of the close coordination between Washington
and Kansas:
9-30-96 (Monday)--DCCC sends Reno County $5,000 \651\
---------------------------------------------------------------------------
\651\ Reno County Democratic Central Committee's disclosure forms
of disbursements (schedule C) (Aug. 10, 1996-Oct. 8, 1996) (exhibit
43).
---------------------------------------------------------------------------
Date Unknown--$5,000 arrives
10-3-96 (Thursday)--KCCC bills Reno County for $4,500
\652\
---------------------------------------------------------------------------
\652\ ``KCCC'' is the Kansas Coordinated Campaign Committee. See
Invoice from Reno County Democratic Committee to KCCC (exhibit 44).
10-3-96 (Thursday)--Reno sends check to Kansas Dem.
party for $4,500 \653\
---------------------------------------------------------------------------
\653\ Check from Reno County Democratic Central Committee to Kansas
Democratic party (exhibit 45).
Other Kansas Counties had so few financial transactions in
1996 that the DCCC contribution provided most of the county's
annual revenue. For example, Osage County received a $5,000
check on September 30, 1996, and 7 days later sent $4,750 to
the State party. Interestingly enough, Osage County revenue for
the entire year--excluding the $5,000 from Washington--was
$200.98. Miami County revenue for the entire year, excluding
the $5,000 from Washington, was $500, and it passed $4,500 to
the State party. But for the out-of-State benevolence, Marshall
County revenue was only $590 for 1996, and Marshall County
passed almost all of its windfall on to the State party.
Although the DNC's then-General Counsel was aware that States
were being asked to give money to Kansas, he was unaware of the
arrangements with the counties. Indeed, in 1998 he testified
``that comes as a surprise to me even today.'' \654\
---------------------------------------------------------------------------
\654\ Transcript of deposition of Joseph E. Sandler, former general
counsel, Democratic National Committee, by Committee on Government
Reform at 155 (May 14, 1998) (deposition on file with committee).
---------------------------------------------------------------------------
c. Contributions from Washington Using Kansas Citizens as
Conduits
In addition to the Memorandum from Tressie Hurley to Don
Biggs that explains ``[y]ou may keep $200 but then must turn
around and contribute $800 to the Senate Victory Fund,'' the
committee obtained a document titled, ``Contribution Plan from
DSCC in Washington.'' It states: ``The DSCC, in an effort to
support state senate candidates, the Democratic Party, and
their own candidates, will contribute $500 to each state Senate
campaign we designate. The campaign may keep $100 but then must
turn around and contribute $400 to either the Kansas
Coordinated Campaign or the Senate Victory Fund. . . . It will
help the candidate ($100) but it will help the Kansas
Coordinated Campaign and all Democratic candidates as well.''
\655\
---------------------------------------------------------------------------
\655\ Document entitled, ``Contribution Plan from DSCC in
Washington--July 22, 1996'' (exhibit 46).
---------------------------------------------------------------------------
The following chart details contributions received from
Washington by State candidates and the amount they in turn
forwarded to the State party:
----------------------------------------------------------------------------------------------------------------
Amount passed
Received on Date received and date disbursed
----------------------------------------------------------------------------------------------------------------
Senate Candidate:
Don Biggs................................. $1,000 $800 8/5/96 9/5/96
Glenn Braun............................... $1,000 $800 8/1/96 8/6/96
Micheline Burger.......................... $1,000 $800 8/5/96 8/29/96
Bill Campsey.............................. $1,000 $500 8/1/96 8/5/96
Dana Crietz............................... $1,000 $800 8/8/96 8/8/96
Larry Daniels............................. $1,000 $800 8/1/96 8/9/96
Diana Dierks.............................. $1,000 $800 8/6/96 8/6/96
Christine Downey.......................... $1,000 $800 8/5/96 8/20/96
Paul Feliciano............................ $1,000 $800 8/3/96 8/12/96
Wade Garrett.............................. $1,000 $800 8/6/96 8/9/96
Rip Gooch................................. $1,000 $800 7/30/96 9/11/96
Greta Goodwin............................. $1,000 $800 8/6/96 8/9/96
Richard Hazell............................ $1,000 $800 8/1/96 8/22/96
Anthony Hensley........................... $1,000 $800 8/20/96 9/24/96
Gerald Karr............................... $1,000 $800 8/6/96 8/13/96
Janis Lee................................. $1,000 $800 8/1/96 8/13/96
Janice McIntyre........................... $1,000 $800 8/30/96 8/5/96
Marge Petty............................... $1,000 $800 8/1/96 8/6/96
Pat Huggins Pettey........................ $1,000 $800 8/5/96 8/7/96
John Sears................................ $1,000 $800 8/1/96 9/1/96
Chris Steineger........................... $1,000 $800 8/12/96 8/12/96
Arthur Tannahill.......................... $1,000 $800 8/1/96 8/5/96
Doug Walker............................... $1,000 $800 8/1/96 8/9/96
Allan White............................... $1,000 $800 8/1/96 9/8/96
Sherman Jones (In his Schedule C $1,000 $800 8/5/96 8/5/96
Expenditures and Disbursements, it is
clear that Jones gave the money on the
day he received it. He also sent the
money to the Kansas Senate Victory Fund,
care of the ``DSCC.'' The address is
Topeka, but it is strange that DSCC is
mentioned.).
-----------------------------------------------------------------
Total Senate............................ $25,000 $19,700
=================================================================
House Candidate:
Judy Showalter............................ $500 $400 8/7/96 8/9/96
Joe Shriver............................... $500 $250 8/6/96 10/16/96
Troy Findley.............................. $500 $400 8/5/96 8/14/96
Chris Gallaway............................ $500 $400 8/5/96 8/8/96
Jim Garner................................ $500 $250 8/6/96 8/8/96
Bob Grant................................. $500 $400 8/5/96 8/13/96
Jerry Henry............................... $500 $250 8/1/96 8/9/96
Tom Platis................................ $500 $250 8/5/96 8/20/96
Harry Stephens............................ $500 $375 8/6/96 8/20/96
Vince Wetta............................... $500 $500 8/1/96 8/14/96
-----------------------------------------------------------------
Total House............................. $5,000 $3,475
=================================================================
Total Senate and House.................. $30,000 $23,175
----------------------------------------------------------------------------------------------------------------
One recipient of a check from Washington provided a rather
odd answer to a relatively straightforward question. When
asked: ``[i]s it fair to say that no one told you that your
receipt of this money was conditioned on your sending part or
all of it to the Kansas Democratic Party or an affiliate,''
State senate candidate Doug Walker replied: ``I'm not sure if
the answer is yes or no.'' \656\
---------------------------------------------------------------------------
\656\ Transcript of deposition of Douglas Walker, former Kansas
State Senator, by the Committee on Government Reform at 40 (Feb. 23,
1998) (deposition on file with committee).
---------------------------------------------------------------------------
When State Representative Henry Helgerson was deposed by
this committee, he indicated that his initial concern arose
because ``I was asked to accept money and then pass it on.''
\657\ He testified: ``I was asked to receive the check and to
give $400 prior to receiving the check. That occurred before I
received it. And then I received the check shortly after
that.'' \658\ When it was first suggested that he would receive
money, and that he should pass it on after it arrived,
Helgerson told the committee that he said to staff at the State
legislature: ``I think that's illegal, because I helped write
the campaign finance law a few years ago. And I said that it
sounded to me like it violated state law.'' \659\ The concern
over the legality of the contribution scheme was also expressed
in a local Kansas newspaper:
---------------------------------------------------------------------------
\657\ Transcript of deposition of Henry Helgerson, member, Kansas
State House, by the Committee on Government Reform at 22 (Feb. 19,
1998) (deposition on file with committee).
\658\ Id. at 54-55.
\659\ Id. at 22-23.
Brad Russell, an Olathe attorney who also ran for a
Kansas Senate seat in 1996, confirmed that he was asked
to pass part of a DNC donation along for use by the
state party. Russell said he was contacted by a staffer
in the Kansas Senate Minority Leader's Office, who
indicated he would be receiving a check from the
Democratic Senatorial Campaign Committee. Russell said
the staffer encouraged him to send 20 percent of the
donation along to the state party. ``It sounded to me
like that would be running afoul of the spirit, if not
the out and out letter of the law,'' Russell said.\660\
---------------------------------------------------------------------------
\660\ Phil LaCerte, ``Democrat party chair doubts any role in fund-
raising scheme,'' Johnson County Sun, Sept. 26, 1997, at 69 (exhibit
47).
As Helgerson and Russell's statements make clear, there were
contemporaneous concerns about the instructions to act as a
conduit for money that originated in Washington and was
intended to go to the State party. When all the contributions
are considered together, it is clear that the DNC and its
affiliates were attempting to avoid Federal disclosure
requirements.
2. By Funneling Money to the State Party, the DNC in Washington Was
Able to Benefit Statewide Candidates and Get More for Each
Dollar than if it had Simply Contributed to Candidates
Conduit contribution schemes are generally designed to
circumvent disclosure requirements. The ultimate goals are
usually to enable contributions in excess of those legally
permitted, or to hide the true identity of the contributor.
Often, these two goals coexist. In Kansas, State statute
prohibited contributions of out-of-state soft money above
certain levels. Therefore, a conduit scheme was necessary to
allow any one donor to make sizable soft money contributions.
The purpose of the Kansas conduit scheme appeared to be
twofold: (1) when re-directed to the State party, the money
could be used for statewide candidates; and (2) by effecting an
economy of scale at the State level, more could be obtained for
a lesser expenditure.
a. The Money from Washington Benefited Statewide Candidates
Unfortunately, most Kansas Democratic party officials would
not cooperate with the committee's investigation. Therefore, it
was difficult to obtain straight answers to questions about how
money that originated in Washington was used. However, it
appears that once the money was funneled to the State party, it
was not used exclusively for the benefit of the original
recipient. For example, the State disclosure of the Reno County
Democratic Central Committee stated that it was contributing
$4,500 to the State party for ``electoral targeting data, Voter
data base and software survey research--Voter contact services
GOTV.'' \661\
---------------------------------------------------------------------------
\661\ Reno County Democratic Central Committee's disclosure forms
of receipts and disbursements (schedules A and C) (Aug. 10, 1996-Oct.
8, 1996) (exhibit 48).
---------------------------------------------------------------------------
Another statewide Democratic party official provided an
additional rationale for why it was important for the money
from Washington to be redirected to the State party. He
suggested:
As you are aware, the Kansas Democratic Party through
the KCCC is providing generic voter contact/GOTV
activities on behalf of Democratic candidates all the
way down the ticket. In addition we have provided field
organizers and a state wide voter file.\662\
---------------------------------------------------------------------------
\662\ Memorandum from Tom Beal, Democratic Coordination Campaign,
to Doug Johnston (Sept. 24, 1996) (exhibit 49).
As this communication makes clear, if money sent to the county
by the DNC in Washington was re-directed to the State party,
the State party would be able to undertake initiatives that
would be of benefit to candidates outside of the particular
county that had initially received the money.
It is interesting to follow the paper trail that
accompanied some of the individual contributions. For example,
on September 30, 1996, DCCC Chairman Martin Frost sent $5,000
to Sedgwick County and said that he was pleased to support
``your 1996 nonfederal general election activities in the state
of Kansas.'' \663\ Two days after the check is dated, the
County Chair thanked Representative Frost, remarking ``please
let the members of the DCCC know how helpful the $5,000
contribution will be in getting our base of support to the
polls.'' \664\ Four days after the DCCC check was dated in
Washington, the Sedgwick County Democratic Central Committee
sent a check for $4,250 to the Kansas Coordinated
Campaign.\665\ The person who signed the letter is the same
person who recognized that the money would go further if spent
by the State party, as opposed to the county party. The only
possible conclusion that follows from this tortured series of
exchanges is that the conduit scheme had been set up to achieve
something that would not have been legal if the money had been
initially sent to its ultimate destination.
---------------------------------------------------------------------------
\663\ Letter from the Honorable Martin Frost, chairman, Democratic
Congressional Campaign Committee, to treasurer, Sedgwick County
Democratic Committee (Sept. 30, 1996) (exhibit 50).
\664\ Letter from Jim Lawing, county chair, Sedgwick County
Democratic Central Committee, to the Honorable Martin Frost, chairman,
Democratic Congressional Campaign Committee (Oct. 2, 1996) (exhibit
51).
\665\ Letter from Jim Lawing, county chair, Sedgwick County
Democratic Central Committee, to Tom Beal, Democratic Coordination
Campaign (Oct. 4, 1996) (exhibit 52).
---------------------------------------------------------------------------
b. The Kansas State Party Could Obtain a Greater Level of
Services for the Same Expenditure than if
Individual Counties or Candidates Spent the Money
that They Received from Washington
One Kansas county official provided an insight into why
there was benefit attached to taking the money sent by
Washington to counties and individuals and funneling it to the
State party. He suggested that the State party would be able to
take care of responsibilities for mailing campaign-related
information, and ``do so on the state's mailing permit which
apparently allowed for a little cheaper rate than we would get
here.'' \666\ State party executives refused to cooperate with
the committee, and therefore did not answer questions about the
precise benefits derived from bundling smaller sums of money
for use in larger spending campaigns. Nevertheless, it is
reasonable to infer that the very type on conduct referenced by
Mr. Lawing is in fact the type of conduct that did take place.
---------------------------------------------------------------------------
\666\ Transcript of deposition of Jim Lawing, former chairman,
Sedgwick County Democratic Central Committee by Committee on Government
Reform at 30 (Feb. 18, 1998) (deposition on file with committee). There
was also a suggestion that the ``State Committee would do all of the
necessary printing . . . at its own expense'' Id. This, too, would
permit an economy of scale unavailable without the subterfuge of the
conduit contribution scheme.
Kansas State Democratic Party--Contributions Originating with the
Democratic National Committee or its Affiliates in Washington, DC
------------------------------------------------------------------------
Local candidates
(29 candidates
County parties (Seventeen for the Kansas
State parties (Democratic county parties were sent Senate received
parties in 17 states gave $5,000 on 9/30/98 by the $1,000 each. 41
to the Kansas Democratic DCCC. Thirteen sent the candidates for
Party.) following amounts to the the Kansas House
State party.) received $500
each.)
------------------------------------------------------------------------
Idaho: $15,000 Cowley: $4,750 Senate
Florida: $15,000 Douglas: $4,500 24 Senate
candidates sent
$800 on.
Nebraska: $14,990 Ellis: $4,500 1 Senate
candidate sent
$500 on.
Arkansas: $15,000 Harvey: $4,500
Maine: $15,000 Leavenworth: $4,500 House
Colorado: $14,990 Marshall: $4,750 10 House
candidates sent
a total of
$3,475 to the
State Dem.
Party.
Georgia: $15,000 Miami: $4,500
Louisiana: $15,000 Osage: $4,750
Alabama: $14,990 Reno: $4,500
Wyoming: $14,990 Riley: $4,500
South Carolina: $15,000 Sedgwick: $4,250
California: $14,990 Shawnee: $4,500
South Dakota: $15,000 Wyandotte: $2,400
New Hampshire: $15,000
Minnesota: $15,000
Michigan: $15,000
Montana: $15,000
------------------------------------------------------------------------
Total: $254,950 Total: $56,900 Total: $23,175
------------------------------------------------------------------------
Total = $335,025 .................
------------------------------------------------------------------------
F. The Justice Department Failed To Investigate Leaks Harmful to the
Campaign Fundraising Investigation
The Justice Department's frequent and harmful leaks about
the campaign fundraising investigation provided another clear
sign of the investigation's failure. These leaks, which were
often made at strategic times, greatly harmed the Justice
Department's investigation, and strongly suggested that certain
officials in the Justice Department did not want the
investigation to succeed. The Attorney General has failed to
investigate the vast majority of these leaks, and they have
continued unabated, up to the present time. These leaks provide
a clear example of why the Attorney General should have
appointed an independent counsel--to remove the investigation
from the politically biased officials at the Justice
Department.
1. Leaks Regarding DNC Issue Ads
The day after Justice Department lawyers interviewed
President Clinton regarding his role in crafting DNC ``issue
ads'' promoting his Presidency, a senior official in the
Justice Department leaked information relating to that
interview. Judging from the quote provided to the Washington
Post, that senior official clearly gave the reporter the
impression that it was unlikely that the Attorney General would
appoint an independent counsel:
``Because this involves political speech, which clearly
falls under the protection of the First Amendment,
there is a relatively high threshold for determining
what constitutes criminal behavior,'' said a senior
Justice Department official. ``There are not a lot of
mysteries surrounding how the DNC ads were produced and
financed, but whether anything crossed that threshold
is another matter.'' \667\
---------------------------------------------------------------------------
\667\ John F. Harris and Roberto Suro, ``Clinton: 1996 `Issue Ads'
Passed Legal Test,'' the Washington Post, Nov. 10, 1998, at A6.
The willingness of Justice Department staff to discuss ongoing
investigations with the press should be contrasted to the
Attorney General's repeated refusals to answer questions from
this body--which is Constitutionally charged with overseeing
the Justice Department. These types of leaks demonstrate that
the Justice Department relies on the ``open case''
justification to keep damaging information from Congress, but
casts that rationale aside when it wants to spread information
favorable to the administration in the press.
2. Leaks Regarding the La Bella Memorandum
In July 1998, shortly after Charles La Bella, the head of
the Campaign Finance Task Force, gave the Attorney General his
memorandum concluding that she was required by law to appoint
an independent counsel, details of that memorandum were leaked
to the press. Again, unnamed ``senior Justice Department
officials'' released sensitive investigative materials to
several newspapers:
Government sources, even those speaking anonymously,
declined to provide specifics on La Bella's report,
which runs more than 100 pages. But one source who had
read the report said it represents ``a fresh approach
to everything he [La Bella] has seen'' and called for
legal conclusions and steps that had not been advanced
earlier.\668\
---------------------------------------------------------------------------
\668\ Ronald J. Ostrow, ``Report to Reno Urges Independent Counsel
on Fund-Raising,'' Los Angeles Times, July 24, 1998, at A6.
Officials familiar with Freeh's memo last winter and La
Bella's current report said that La Bella's includes a
much more extensive review of the evidence and makes a
firmer conclusion that there are sufficient indications
of wrongdoing by top officials to oblige Reno to seek
an outside prosecutor. As with the Freeh memo, the
basic argument is that top Democratic and White House
officials conducted a systematic and deliberate effort
to circumvent campaign finance laws setting limits on
fund-raising and defining what constitutes a legal
contribution.\669\
---------------------------------------------------------------------------
\669\ Roberto Suro and Michael Grunwald, ``Independent Probe of '96
Funds Urged; Reno Noncommittal on Campaign Report,'' the Washington
Post, July 24, 1998, at A21.
Another leak of the La Bella memorandum occurred in the pages
of the Wall Street Journal. There, it was reported that the La
Bella memorandum focused on potential wrongdoing by Harold
---------------------------------------------------------------------------
Ickes:
Charles La Bella's findings, presented in a lengthy
memorandum to Ms. Reno, focus sharply on the fund-
raising efforts of Harold Ickes, the former deputy
White House chief of staff. They form the basis of Mr.
La Bella's recommendation that Ms. Reno seek the
appointment of an independent counsel.\670\
---------------------------------------------------------------------------
\670\ Brian Duffy, ``Campaign Probe Looked at Ickes, Says La
Bella,'' the Wall Street Journal, Aug. 3, 1998.
While the Attorney General apparently tolerated public
release of details from the La Bella memorandum by her senior
staff, for almost 2 years she refused to provide the same
memorandum to Members of Congress charged with oversight of the
Justice Department.
3. Leaks Regarding the Gore Independent Counsel Decision
The Attorney General was also steadfast in refusing to
comment on her decisionmaking process in concluding that an
independent counsel was not necessary to investigate the
fundraising scandal. However, her aides did not show similar
reticence. Before the Attorney General reached a decision on
appointing an independent counsel to investigate Vice President
Gore's fundraising telephone calls, her aides were discussing
her decisionmaking process with reporters, saying ``they
believe the Attorney General will reject accusations that there
is specific and credible evidence of criminal wrongdoing[.]''
\671\ These types of leaks again show that Department officials
did not hesitate to spread information favorable to the
administration in the press.
---------------------------------------------------------------------------
\671\ Jerry Seper, ``No Outside Counsel Likely in Probe of Gore
Campaign Calls,'' the Washington Times, Nov. 24, 1998, at A3. See also
David Johnston, ``Reno's Aides Split on Merits of Need for Gore
Prosecutor,'' the New York Times, Nov. 24, 1998, at A1.
---------------------------------------------------------------------------
4. Leaks Regarding the Huang Investigation
Justice Department staff also leaked information regarding
the investigation of former DNC Finance vice-chair and
Presidential appointee John Huang. On October 2, 1998, the
Washington Post reported that the Justice Department was no
longer seeking to prosecute John Huang:
Now, instead of pressuring Huang to say what he knows
about White House officials in exchange for immunity
from prosecution, federal prosecutors are bargaining to
get his testimony against Maria Hsia, a California
fundraiser already under indictment who played a minor
though controversial role in 1996, according to lawyers
close to the case.
* * * * *
And a senior Justice Department official said that some
investigators have concluded that Huang does not have
information that would support the prosecution of the
Democratic officials who received and spent the funds
he raised or the White House officials who promoted his
career in Washington.
As a result, attention has turned to the possibility
that Huang might be able to bolster the endangered case
against Hsia.\672\
---------------------------------------------------------------------------
\672\ Roberto Suro, ``Prosecutors' Approach to Huang Signals Shift
in Campaign Probe,'' the Washington Post, Oct. 2, 1998, at A17.
This leak must be contrasted with the Attorney General's
refusal to produce subpoenaed documents to this committee
because she feared that the members of the committee would
publicly disclose a ``roadmap'' to the investigation. Justice
Department staff, however, felt free to disclose the
Department's investigative roadmap regarding John Huang.
5. Leaks Regarding Johnny Chung
One of the most disturbing leaks to come from the Justice
Department concerned the testimony of DNC fundraiser Johnny
Chung. After Mr. Chung pled guilty to criminal charges and
began cooperating with the Justice Department, details of his
testimony were on the pages of the New York Times:
A Democratic fund-raiser has told Federal investigators
he funneled tens of thousands of dollars from a Chinese
military officer to the Democrats during President
Clinton's 1996 re-election campaign, according to
lawyers and officials with knowledge of the Justice
Department's campaign finance inquiry.
The fund-raiser, Johnny Chung, told investigators that
a large part of the nearly $100,000 he gave to
Democratic causes in the summer of 1996--including
$80,000 to the Democratic National Committee--came from
China's People's Liberation Army through a Chinese
lieutenant colonel and aerospace executive whose father
was Gen. Liu Huaqing, the official and lawyers said.
* * * * *
A lawyer for Mr. Chung, Brian A. Sun, declined to
comment on his client's conversations with
investigators, citing his client's sealed plea
agreement with the Justice Department. ``I'm shocked
that sources at the Justice Department would attribute
anything like that to my client.'' \673\
---------------------------------------------------------------------------
\673\ Jeff Gerth, ``Democrat Fund-Raiser Said to Detail China
Tie,'' the New York Times, May 15, 1998, at A1.
---------------------------------------------------------------------------
Similar leaks appeared in the Washington Post:
Democratic fund-raiser Johnny Chung has told Justice
Department investigators that a Chinese military
officer who is an executive with a state-owned
aerospace company gave him $300,000 to donate to the
Democrats' 1996 campaign, according to federal
officials[.] \674\
---------------------------------------------------------------------------
\674\ Roberto Suro and Bob Woodward, ``Chung Ties China Money to
DNC,'' the Washington Post, May 16, 1998, at A1.
These leaks proved extraordinarily harmful to Johnny Chung.
First, they were used by certain members of the Committee on
Government Reform to attack Chung, and undermine his
credibility at the very time that he was offering evidence
tying senior Chinese officials to efforts to influence United
States elections.
Second, and more importantly, these leaks led to threats to
Chung's life. In May 1998, when these articles appeared, Chung
was cooperating with the Justice Department investigation, and
had recently been contacted by Robert Luu. Luu claimed to be an
associate of Liu Chao-Ying, and suggested to Chung that if he
refused to cooperate with the Justice Department, he and Liu
would compensate Chung. Luu also subtly suggested that if Chung
did cooperate with the Justice Department, Chung and his family
could be in danger. Chung cooperated with the FBI in an effort
to get a tape of Luu offering money in exchange for Chung's
silence. The investigation was at its most delicate phase at
the time the leaks appeared in the New York Times. Chung
described the events that followed in his testimony before the
committee:
In the first week of May, I learned that the New York
Times was doing a story that involved Liu Chao Ying and
the $300,000. The FBI and I were very concerned that
the news story would scare Mr. Luu off. My attorney and
I tried to get the New York Times to kill the story.
They refused. On the day before the story came out (May
15, 1998), I ended up going forward with a meeting with
Luu and his attorney. I consulted with the FBI before I
proceeded.\675\
---------------------------------------------------------------------------
\675\ ``Johnny Chung: Foreign Connections, Foreign Contributions,''
hearing Before the House Committee on Government Reform, 106th Cong.
266 (May 11, 1999) (statement of Johnny Chung).
After the article appeared, though, Chung and the FBI were not
able to get Luu on tape threatening Chung, and it appeared that
Luu had grown more cautious, and tried to distance himself from
his earlier statements to Chung. However, Chung made it clear
that the leaks from the Justice Department posed a serious
---------------------------------------------------------------------------
threat to him:
Mr. Barr. Do you consider that your life was in danger
in 1998 because of the leaked story that appeared in
the New York Times?
Mr. Chung. That is correct, and I am still looking out
my back every day.
Mr. Barr. Did you leak that information in any way,
shape or form to the New York Times?
Mr. Chung. No. I don't leak that information to the New
York Times.
Mr. Barr. And would it also be accurate that your
attorneys didn't leak that information to the New York
Times?
Mr. Chung. We tried to stop them.
* * * * *
Mr. Barr. Well, we would like the Department of Justice
to find that out. It would be very interesting to find
out, one, if they are concerned about it, because this
is a very damaging leak that endangered a very
important witness, yourself; and it may very well have
come from the Department of Justice. So we would be
very interested in that, as I am sure you would be.
Mr. Chung. Mr. Congressman, that night, I had to go to
a meeting with those people. My attorney told me, don't
go. Maybe you are in trouble, in danger. I talked to my
wife, I talked to my attorney again, and I talked to
the FBI. I want to go forward because I want the truth
to come out.\676\
---------------------------------------------------------------------------
\676\ Id. at 319-20.
The seriousness of this leak was apparent to the Justice
Department as soon as it happened. However, it appears that the
Justice Department has not undertaken any steps to determine
where this information came from. Committee staff interviewed
staff of the Justice Department Office of Professional
Responsibility, who confirmed that as of October 27, 1999, this
leak had not come under investigation by the Department.\677\
While most of the leaks from the Justice Department simply send
the message that the Department is politically biased and not
interested in a thorough investigation, this leak sent an even
more dangerous message. This leak showed that someone involved
in the Chung investigation thought that press coverage in the
New York Times was more important than Chung's well-being, or
the success of a significant sting operation. It is deeply
disturbing that the Justice Department has not investigated
this leak.
---------------------------------------------------------------------------
\677\ In December 1998, and again in August 1999, the committee
drew the attention of the Justice Department to many of the leaks
discussed in this section of the report. Committee staff met with
Justice Department staff on Oct. 27, 1999, to discuss the Justice
Department leak investigations. In that meeting, the Justice Department
confirmed that of all of the leaks brought to their attention, they had
only investigated the leaks of the Freeh memo and the decisionmaking
relating to John Huang. In addition, the Department disclosed a leak of
information relating to Charlie Trie.
---------------------------------------------------------------------------
6. Leaks Regarding the December 15, 1995, White House Coffee Videotape
In July 2000, the committee brought the December 15, 1995,
White House coffee videotape to the attention of the Justice
Department. The committee had subpoenaed the original White
House videotape of the event, and with the superior audio
quality of that tape, was able to confirm that on the tape Vice
President Gore said ``we oughta, we oughta, we oughta show Mr.
Riady the tapes, some of the ad tapes.'' In a letter dated July
18, 2000, the chairman asked the Attorney General to
investigate these statements by the Vice President. A CNN
article the following day captured the response of the Justice
Department: ``a Justice Department source said it was unclear
what was on the tape because of poor audio.'' \678\
---------------------------------------------------------------------------
\678\ ``Justice Says White House Coffee Tape Unclear; Hearings
Scheduled Tuesday'' (published July 19, 2000) .
---------------------------------------------------------------------------
This particular leak was troubling for two reasons. First,
it constituted a comment on an ongoing investigation by a
Justice Department staffer. When the committee called a number
of Justice Department officials before the committee, and asked
them questions about the tape, they refused to comment in any
way. It is troubling that Justice Department staff would
observe Departmental policy when called before Congress and
presented with serious evidence, and then disregard that same
policy when denigrating the evidence in the press. But even
more telling, is that the leak makes the very point the
committee was trying to impress upon the Justice Department.
The committee possessed the original White House tape of the
event, and only using that original tape could the Justice
Department reach a justifiable conclusion about the contents of
the tape.
7. Leaks Regarding the Vice President Gore Special Counsel Decision
The most recent leak in the Justice Department's campaign
fundraising investigation came in August 2000, when the
Attorney General was considering whether to appoint a special
counsel to investigate Vice President Gore. The day of the
Attorney General's announcement, the New York Times reported
that ``[o]ne Justice Department official said that Mr. Conrad
was alone in his recommendation. `No other prosecutor in this
matter thought that there should be a special counsel,' said
the official, who spoke on the condition of anonymity.'' \679\
However, just hours later, the Attorney General came forward to
state that the ``Justice Department official'' cited in the
Times had been lying: ``today Bob Conrad has been tagged with
being the only person in the Justice Department who thought
that I should appoint a special counsel. Although I'm not going
to get into who recommended what, I can tell you that that is
not correct.'' \680\
---------------------------------------------------------------------------
\679\ Neil A. Lewis and Don Van Natta, Jr., ``Reno, Rejecting
Aide's Recommendation, Declines to Name Counsel on Gore Fund-Raising,''
the New York Times, Aug. 23, 2000, at A19.
\680\ News conference with Attorney General Janet Reno, Washington,
DC, (Aug. 23, 2000).
---------------------------------------------------------------------------
The false leak regarding Robert Conrad's recommendation
follows the pattern of Justice Department leaks. Information
was spread by Justice Department staff, in contravention of
Department policy, to minimize the seriousness of the
investigation and to benefit the Clinton-Gore administration.
The Attorney General did take the unusual step of making it
clear that the leak was untrue. However, there is no sign that
the Justice Department has taken any steps to find the source
of this leak.
The leaks from the Justice Department's campaign
fundraising investigation are harmful on many levels. First,
they harm the Department's investigation. The leak of
information about Johnny Chung endangered the investigation and
Chung's life. The leak of information about John Huang provided
him a signal that he was not a serious target of the
Department's investigation. Second, the leaks have been made to
minimize the investigation and support the Clinton
administration. Recommendations for independent and special
counsels have been trivialized, as has evidence of potential
wrongdoing. Finally, these leaks have proven that the Justice
Department cannot be trusted to carry out the campaign
fundraising investigation. By keeping the investigation in the
Department, where political appointees have had tight control
over the investigation, the Attorney General has created an
atmosphere where Department officials have the opportunity to
undermine the case. By failing to investigate and punish the
individuals responsible for the leaks, the Attorney General has
sent the message that these kinds of leaks are permissible.
III. The Justice Department's Political Interference with Congressional
Oversight
A. Failure To Comply With the Committee's Subpoena for the Freeh and La
Bella Memoranda
For 2\1/2\ years, the committee struggled to obtain copies
of the Freeh and La Bella memoranda from the Justice
Department. During that period of time, the committee issued
four different subpoenas for the memos, in addition to a number
of additional formal requests for the documents. Throughout the
process, the Justice Department raised countless objections to
complying with the committee's demands. The Justice
Department's recalcitrance culminated in the committee's August
6, 1998, vote to hold the Attorney General in contempt of
Congress. In May 2000, the Justice Department finally relented,
and provided copies of the Freeh and La Bella memos, and a
number of other memoranda relating to the Attorney General's
independent counsel decisionmaking process, to the committee.
The committee released those documents to the public a short
time later, on June 6, 2000.
When the committee subpoenaed the Freeh and La Bella
memoranda, the Justice Department raised a number of different
objections to complying with the subpoenas. First, the
Department claimed that the committee's demand would harm the
campaign fundraising investigation. Then it claimed that the
committee's action would harm the effective functioning of the
Justice Department. Finally, it claimed that there was no legal
precedent for the committee's action. However, when the Justice
Department finally turned the documents over to the committee,
it was clear that the Justice Department's objections had been
utterly false and baseless. Indeed, the fact that the Campaign
Financing Task Force supervisor Robert Conrad later wrote a
memorandum suggesting a special counsel to investigate whether
the Vice President committed perjury, lays to rest the argument
that honestly held opinion is ``chilled'' by congressional
oversight.\681\
---------------------------------------------------------------------------
\681\ The Attorney General, in her opposition to disclosure of the
Freeh and La Bella memoranda, fails to understand that the only
recommendations chilled by oversight are dishonest or malicious
recommendations. A review of honestly held opinions will never prevent
anyone from acting in good faith in the future.
---------------------------------------------------------------------------
The contents of the Freeh and La Bella memoranda were
highly informative, and pointed out a number of shortcomings in
the Task Force's investigation. However, almost as revealing as
the memoranda was the way that the Justice Department handled
the committee's demands for the memoranda. When the Justice
Department was faced with a situation that was embarrassing and
that pointed out the Attorney General's abysmal handling of the
campaign fundraising investigation, it turned to mistruths,
obfuscation, and outright obstruction of the committee's
demands.
1. Why the Committee Needed the Freeh and La Bella Memoranda
In December 1997, the committee learned from press reports
that the Director of the FBI had drafted a memorandum to the
Attorney General recommending the appointment of an independent
counsel to investigate potential violations of law relating to
the 1996 Democratic election campaign.\682\ Similarly, in July
1998, the committee learned from press reports that Charles La
Bella, the Supervising Attorney of the Justice Department
Campaign Financing Task Force, had recommended that the
Attorney General appoint an independent counsel to lead the
investigation.\683\ In both cases, it appeared that the
investigators with the greatest knowledge of the campaign
fundraising scandal had decided that the Justice Department
could not conduct the investigation without a conflict of
interest.
---------------------------------------------------------------------------
\682\ See, e.g., David Johnston, ``F.B.I.'s Chief Tries to
Influence Reno, Memo Argues for Appointment of Independent
Prosecutor,'' N.Y. Times, Dec. 2, 1997, at A1.
\683\ See, e.g., David Johnston, ``Report to Reno urges a Counsel
Over Donations,'' N.Y. Times, July 23, 1998, at A1.
---------------------------------------------------------------------------
The failure of the Attorney General to follow the advice of
her advisors to appoint an independent counsel was a strange
departure for the Attorney General. Indeed, she had appointed
independent counsels for a number of cabinet officials, and had
strongly supported the reauthorization of the Independent
Counsel Act in 1994. At a hearing in 1994, the Attorney General
stated:
The Independent Counsel Act was designed to avoid even
the appearance of impropriety in the consideration of
allegations of misconduct by high-level Executive
Branch officials and to prevent, as I have said, the
actual or perceived conflicts of interest. The Act thus
served as a vehicle to further the public's perception
of fairness and thoroughness in such matters, and to
avert even the most subtle influences that may appear
in an investigation of highly placed Executive
officials.\684\
---------------------------------------------------------------------------
\684\ ``S. 24, the Independent Counsel Reauthorization Act of
1993,'' hearing before the Senate Committee on Governmental Affairs,
103d Cong., 12 (1993).
As the Attorney General correctly observed in 1994, the proper
application of the Independent Counsel Act was crucial in
assuring American citizens that allegations of wrongdoing by
senior government officials were being investigated thoroughly
and free of political bias. Yet, when the time came that the
Attorney General was faced with allegations of criminal
wrongdoing by the President, Vice President, and senior
officials of her political party that went to the heart of the
Nation's political process, she steadfastly refused to appoint
an independent investigator.
Fueling the committee's concern that the Justice Department
simply was not able to investigate the President, Vice
President, and senior DNC officials were the Justice
Department's numerous fumbles and failures in the investigation
by that point. By December 1997, the time that word of Director
Freeh's memorandum first leaked to the press, the Justice
Department had already began to lose control of its
investigation:
The first lead prosecutor in charge of the
investigation, Laura Ingersoll, had to be removed by
Attorney General Reno, and replaced with Charles La
Bella.
The White House delayed the production of a
number of records to the Justice Department, including
crucial videotapes of Presidential fundraising events.
In addition, the White House often preceded document
productions with Friday night ``document dumps'' to the
media.
Specific and credible allegations of
criminal wrongdoing had already been made against
senior DNC and administration officials, and yet, no
independent counsel had been appointed, and few
indictments had been brought.
In addition, a number of other problems had developed
inside the investigation, and had not yet become known to the
outside world. For example, at the beginning of the
investigation, Lee Radek, who was then in charge of the
investigation, told William Esposito, a senior FBI official,
that he felt ``that there was a lot of pressure on him, and the
Attorney General's job could hang in the balance based on the
decision that he would make.'' \685\ Several months later, FBI
agents discovered Charlie Trie's employees destroying documents
responsive to congressional and Justice Department subpoenas.
They asked for a search warrant to stop the destruction, and to
determine what documents Trie had in his possession that he had
not yet turned over. Laura Ingersoll, the head of the Task
Force, refused to let the Task Force agents get the search
warrant, claiming that they did not have adequate probable
cause. Also, by December 1997, despite the fact that the
fundraising investigation had been underway for over a year,
the Justice Department had failed to subpoena critical
documents from the White House, including documents relating to
Maria Hsia.
---------------------------------------------------------------------------
\685\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the House Committee on Government Reform,
106th Cong., 39 (2000) (preliminary transcript).
---------------------------------------------------------------------------
By the time that word of Charles La Bella's recommendation
leaked in July 1998, the committee's skepticism of the Justice
Department investigation had grown. Despite 19 months of
investigation, the Justice Department still had not taken any
significant action against the foreign kingpins of the
fundraising scandal, like James Riady or Ng Lap Seng.
Similarly, the Task Force had failed to take any action against
officials in the administration and DNC who had made the
scandal possible, like Harold Ickes, Richard Sullivan, or David
Mercer. Rather, the Task Force had brought charges only against
the low-level fundraisers who had solicited much of the illegal
money, like Charlie Trie, John Huang, and Maria Hsia.
Accordingly, when the committee demanded the Freeh and La
Bella memoranda, it was attempting to discover the reasons why
the Attorney General was failing to trigger the Independent
Counsel Act, and whether the inherent conflict of the Attorney
General's investigation of the President, Vice President, and
her own political party, had adversely impacted even-handed
enforcement of the law. In each case, it appeared to the
committee that there was significant cause to trigger the Act,
and that the Attorney General had not explained her failure to
do so. Moreover, it appeared at the time that the failure of
the Attorney General to trigger the Act was causing
significant, irreversible harm to the investigation.
2. The Committee's December 1997 Subpoena for the Freeh Memorandum
On December 2, 1997, press reports emerged indicating that
FBI Director Louis Freeh had drafted a memorandum to the
Attorney General asking her to appoint an independent counsel
to conduct the campaign fundraising investigation.\686\ The
reports indicated that Director Freeh believed that the Justice
Department had a political conflict of interest which
prohibited it from conducting an investigation of the Clinton
administration.\687\ That same day, the committee scheduled a
hearing into the matter, and sent Director Freeh a letter
requesting him to produce his memorandum to the committee by
December 4, 1997.\688\ On December 4, 1997, Attorney General
Reno wrote to the chairman, explaining why she would not comply
with the chairman's request. In her letter, the Attorney
General identified two reasons for her refusal to comply with
the chairman's request: first, that longstanding Justice
Department policy prohibited the Department from sharing with
Congress deliberative material relating to open criminal cases;
and second, that to provide this kind of deliberative material
to Congress would chill Justice Department personnel from
providing their frank advice to the Attorney General in future
investigations.\689\
---------------------------------------------------------------------------
\686\ David Johnston, ``F.B.I.'s Chief Tries to Influence Reno,
Memo Argues for Appointment of Independent Prosecutor,'' N.Y. Times,
Dec. 2, 1997, at A1.
\687\ Id.
\688\ Letter from Dan Burton, chairman, Committee on Government
Reform and Oversight, to Louis Freeh, Director, Federal Bureau of
Investigation (Dec. 2, 1997) (all committee correspondence with and
subpoenas to the Justice Department are printed in the appendix
accompanying this report).
\689\ Letter from Janet Reno, Attorney General, to Dan Burton,
chairman, Committee on Government Reform and Oversight 1-2 (Dec. 4,
1997).
---------------------------------------------------------------------------
As the Attorney General refused to produce the memorandum
voluntarily, on December 5, 1997, Chairman Burton issued a
subpoena to the Justice Department, requiring the production of
the Freeh memorandum.\690\ In a letter accompanying the
subpoena, Chairman Burton pointed out that it was critical to
the committee's oversight responsibility to review the Freeh
memorandum.\691\ He also pointed out that the committee's
demand was consistent with a number of subpoenas and requests
issued by congressional committees over the past decade.\692\
In those cases, the Justice Department complied with
congressional requests.
---------------------------------------------------------------------------
\690\ Subpoena duces tecum issued by the Committee on Government
Reform and Oversight (Dec. 5, 1997).
\691\ Letter from Dan Burton, chairman, Committee on Government
Reform and Oversight, to Janet Reno, Attorney General 1 (Dec. 5, 1997).
\692\ Id. at 2.
---------------------------------------------------------------------------
On December 8, 1997, Attorney General Reno and Director
Freeh responded to the subpoena, again refusing to comply. The
Attorney General and Director Freeh reiterated the two reasons
that Ms. Reno gave for refusing to comply in her December 4,
1997, letter.\693\ In addition, they enunciated several new
reasons for refusing to comply: first, that public and judicial
confidence in the Department's investigation would be
undermined by congressional intrusion into the investigative
process; second, that disclosure of the memorandum would
provide a ``road map'' of the Department's investigation; and
third, that the reputations of individuals mentioned in the
memorandum could be damaged by the disclosure of the
memorandum.\694\ In addition, Attorney General Reno and
Director Freeh claimed that the precedents for the committee's
action, which had been cited in the chairman's letter of
December 5, 1997, were inapplicable to this case.
---------------------------------------------------------------------------
\693\ Letter from Janet Reno, Attorney General, and Louis Freeh,
Director, Federal Bureau of Investigation, to Dan Burton, chairman,
Committee on Government Reform and Oversight (Dec. 8, 1997).
\694\ Id. at 1-2.
---------------------------------------------------------------------------
The committee accepted at face value a number of the
arguments that had been forwarded by the Justice Department.
The committee hoped that the Attorney General was operating in
good faith when she made these points, and that she was not
using these arguments simply as pretext to avoid compliance
with the committee's subpoena. Accordingly, the committee
sought to reach an accommodation with the Justice Department to
avoid enforcement of the committee's subpoena. Such an
accommodation was reached in December 1997, when the Department
agreed to allow Chairman Burton, Congressman Waxman, and three
committee staff to review a heavily-redacted copy of the Freeh
memorandum. The small portion of the memo that the chairman was
allowed to review confirmed the committee's view that the law
required the Attorney General to appoint an independent counsel
to investigate the campaign fundraising scandal.
3. The Committee's July 1998 Subpoena for the La Bella Memorandum
On July 23, 1998, a number of newspapers reported that the
supervising attorney of the Campaign Financing Task Force,
Charles La Bella, had drafted a report to the Attorney General
recommending that she appoint an independent counsel to take
over the investigation.\695\ According to these press reports,
like Director Freeh, Mr. La Bella had concluded that the law
required the appointment of an independent counsel, both
because of the high-level administration officials who were
being investigated, as well as the conflict of interest that
the Attorney General had in conducting the investigation.
---------------------------------------------------------------------------
\695\ David Johnston, ``Report to Reno urges a Counsel Over
Donations,'' N.Y. Times, July 23, 1998, at A1.
---------------------------------------------------------------------------
That same day, July 23, 1998, Chairman Burton sent a formal
request to the Attorney General, asking her to produce to the
committee both the Freeh and La Bella memoranda.\696\ The
following day, committee staff were informed by telephone that
the Justice Department would not comply with the chairman's
request. Accordingly, on July 24, 1998, the chairman issued a
subpoena to the Justice Department, requiring the production of
the Freeh and La Bella memoranda.\697\ On July 28, 1998,
Attorney General Reno and Director Freeh wrote to the chairman,
informing him that they would not comply with the committee's
subpoena.\698\ In the letter, the Attorney General and the
Director repeated many of the arguments made when they refused
to comply with the committee's subpoena for the Freeh
memorandum in December 1997. The Attorney General and Director
laid out five arguments against compliance with the committee's
subpoena: (1) that longstanding Justice Department policy
prohibited the Department from sharing open law enforcement
files with Congress; (2) that disclosure of the memoranda could
provide a ``road map'' of the Department's investigation; (3)
the reputations of individuals mentioned in the memoranda could
be harmed by public disclosure of the documents; (4) that
disclosure of the memoranda would create the perception that
Congress was putting political pressure on the Justice
Department, and consequently, would undermine public confidence
in the results of the investigation; and (5) the memoranda
reflected the personal view of their authors, and the public
disclosure of the memoranda could create a ``chilling effect''
on candid advice in the future.\699\
---------------------------------------------------------------------------
\696\ Letter from Dan Burton, chairman, Committee on Government
Reform and Oversight, to Janet Reno, Attorney General 1 (July 23,
1998).
\697\ Subpoena duces tecum issued by the Committee on Government
Reform and Oversight (July 24, 1998).
\698\ Letter from Janet Reno, Attorney General, and Louis Freeh,
Director, Federal Bureau of Investigation, to Dan Burton, chairman,
Committee on Government Reform and Oversight 1 (July 28, 1998).
\699\ Id. at 1-3.
---------------------------------------------------------------------------
The chairman responded on August 3, 1998, to inform the
Attorney General that he would not accept her explanation, and
would move to enforce the committee's subpoena.\700\ In this
letter, and throughout his correspondence with the Justice
Department on this matter, the chairman explained why the
objections raised by the Department had no merit:
---------------------------------------------------------------------------
\700\ Letter from Dan Burton, chairman, Committee on Government
Reform and Oversight, to Janet Reno, Attorney General (Aug. 3, 1998).
First, the ``longstanding policy'' of
refusing to share open law enforcement files with
Congress, referred to by Attorney General Reno, was
never intended to be used as a way of refusing to
comply with a congressional subpoena. Rather, the only
valid basis for refusing to comply with the committee's
subpoena would be to cite executive privilege, or some
other constitutional privilege. The committee provided
the Attorney General with a number of precedents for
the committee's action, where Congress obtained records
relating to open Justice Department cases.\701\
---------------------------------------------------------------------------
\701\ Id. at 3-4.
Second, the Attorney General's claim that
the memoranda provided a ``road map'' that would harm
the Task Force's investigation was misleading. Much of
the content of the memoranda had already been leaked to
the press. In addition, the facts discussed in the
memoranda were all publicly known through the
investigations conducted by the Government Reform
Committee and the Senate Committee on Governmental
---------------------------------------------------------------------------
Affairs.
Third, the complaint that the reputations of
innocent persons could be harmed by disclosure of the
memoranda was similarly hollow. The vast majority of
individuals discussed in the memoranda were individuals
who had been discussed extensively in the public
record, been deposed, or testified at public hearings.
Fourth, the Attorney General's complaint
that the disclosure of the memoranda would create the
impression that Congress was placing political pressure
on the Justice Department to prosecute certain matters
was completely untenable. In the summer of 1998, there
was already a widespread perception that the Attorney
General was refusing to investigate certain matters
because of her political bias. This committee was
simply calling on the Attorney General to appoint an
independent counsel, not to indict certain individuals.
It is a testament to the doublespeak of this Attorney
General that she can claim to be acting in an
apolitical and principled fashion by conducting an
investigation of her boss and political party, and that
it would be ``politically motivated'' if she turned the
investigation over to an independent counsel.
Finally, the Attorney General's claims that
the release of the memoranda would create a chilling
effect was similarly baseless. As previously noted,
many of the memoranda's conclusions had already been
shared with the press by Justice Department personnel.
Despite the overwhelming weight of the committee's
arguments, the Attorney General refused to comply with the
committee's subpoena. Accordingly, the chairman scheduled a
vote on a report citing the Attorney General for contempt of
Congress. The members of the committee were subjected to an
intensive lobbying campaign by the Justice Department to vote
against the report. Two members of the committee were even
invited by President Clinton to attend a ceremony at the White
House at the time that the report was scheduled for a vote.
Despite the lobbying campaign, the committee's Republican
members voted unanimously in favor of the report. On August 6,
1998, the Attorney General was cited for contempt of
Congress.\702\ However, the contempt report was not taken up on
the House floor prior to the end of the 105th Congress.
---------------------------------------------------------------------------
\702\ See H. Rept. No. 105-728 (1998).
---------------------------------------------------------------------------
4. The Committee's October 1999 Request to Review the Freeh and La
Bella Memoranda
Despite the committee's contempt vote, the Justice
Department still made no effort to accommodate the committee's
interests. Committee staff were allowed only several
opportunities to review heavily-redacted copies of the lengthy
memoranda. In the summer of 1999, a new ruling from the Court
of Appeals for the District of Columbia Circuit narrowed an
earlier interpretation of Rule 6(e) of the Federal Rules of
Criminal Procedure.\703\ This new ruling cleared the way for
the Justice Department to share a great deal of information
with the committee that was previously thought to be covered by
Federal grand jury secrecy rules. Accordingly, on September 17,
1999, committee staff asked Justice Department staff to make
the Freeh and La Bella memoranda available for review by
committee staff, in light of the new 6(e) ruling.\704\ By
October 12, 1999, the Justice Department had still failed to
reply to the committee's request. On October 12, Chairman
Burton wrote to the Attorney General and formally requested
that she make the memoranda available for review in their less-
redacted format.\705\
---------------------------------------------------------------------------
\703\ Rule 6(e) establishes the secrecy of grand jury proceedings.
\704\ See letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General 3 (Oct. 12, 1999). The request
to review the memoranda was made by the committee's chief counsel,
James C. Wilson, to Craig Iscoe, Associate Deputy Attorney General, at
the conclusion of a staff interview of Lee Radek.
\705\ Id.
---------------------------------------------------------------------------
The Justice Department never responded to the chairman's
October 12, 1999, request to provide the memoranda for the
committee's review in the less-redacted format. On March 21,
2000, in a letter responding to a later subpoena for the
memoranda, the Attorney General stated ``as a result of the
Court decision, a large portion of the previously redacted
information was no longer subject to redaction. We advised the
Committee staff last fall that the memorandum with reduced
redactions was available for review.'' \706\ The Attorney
General's statement was patently false. At no time in 1999 did
Justice Department personnel make the Freeh or La Bella
memoranda available for the committee's review.\707\ The
statement in the Attorney General's letter is typical of the
deceptive, self-serving statements made by the Justice
Department throughout the debate on the Freeh and La Bella
memoranda.
---------------------------------------------------------------------------
\706\ Letter from Janet Reno, Attorney General, to Dan Burton,
chairman, Committee on Government Reform 3 (Mar. 21, 2000).
\707\ If such an offer had been made, the committee would have
accepted the offer, as it accepted the offer when it was made in March
2000.
---------------------------------------------------------------------------
5. The Committee's March 2000 Subpoena for the Freeh and La Bella
Memoranda
On March 10, 2000, the Los Angeles Times published an
article on the La Bella memorandum which included extensive
quotes from the memorandum.\708\ The Los Angeles Times
apparently obtained a copy of the memoranda, despite the fact
that it had never been provided to the committee, which had
subpoenaed it almost 2 years earlier. Therefore, on March 10,
2000, the committee subpoenaed the Freeh and La Bella
memoranda, as well as all other Justice Department memoranda
responding to the Freeh and La Bella memoranda.\709\ In a
letter accompanying the subpoena, the chairman noted that the
leak of the La Bella memorandum undermined all of the arguments
that the Attorney General had made to the committee in the
preceding year and a half.\710\ The Attorney General had argued
that the release of the memoranda would give the targets of the
investigation a ``road map'' of the prosecutors' plans; she
said that the release of the documents would create a
``chilling effect'' on her senior advisors; and she stated that
the memoranda were so sensitive that she could not even let all
of the members of the committee look at them. However, while
she was using these arguments to avoid complying with a lawful
subpoena, she was careless enough to let her staff leak the La
Bella memorandum to the Los Angeles Times. Given the fact that
the entire memorandum was in the possession of the Los Angeles
Times, and that large portions of it had been reported, the
chairman again asked the Attorney General to now comply with
the subpoena by March 14, 2000.
---------------------------------------------------------------------------
\708\ William C. Rempel and Alan C. Miller, ``Funds Probe Unfairly
Spared White House, '98 Report Says; Donations: Revelations from Long-
Sealed Report Show Internal Dissension on Reno's Refusal to Appoint
Counsel,'' L.A. Times, Mar. 10, 2000, A1.
\709\ Subpoena duces tecum issued by the Committee on Government
Reform (Mar. 10, 2000).
\710\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Mar. 10, 2000).
---------------------------------------------------------------------------
Amazingly, the Attorney General still refused to comply. In
a letter dated March 21, 2000, she recited many of the
arguments that she made in previous letters to the
committee.\711\ She also acknowledged that the Justice
Department had leaked the La Bella memorandum to the Los
Angeles Times:
---------------------------------------------------------------------------
\711\ Letter from Janet Reno, Attorney General, to Dan Burton,
chairman, Committee on Government Reform (Mar. 21, 2000).
There have apparently been disclosures from one or more
memoranda to the media. It is not clear whether the
entire memoranda or only portions were disclosed to the
media, or whether additional materials were disclosed
as well. In any event, whatever disclosure was made was
wholly unauthorized.\712\
---------------------------------------------------------------------------
\712\ Id. at 2.
While it was comforting to know that the Attorney General did
not authorize the release of the La Bella memorandum to the
press, the endless parade of leaks of information relating to
the campaign fundraising investigation was disturbing. By March
2000, the chairman had repeatedly brought the Attorney
General's attention to the fact that her subordinates were
leaking highly sensitive information relating to the
investigation. Yet, she apparently took no action to identify
and discipline these individuals. Nor did she understand the
appearance problems derived from her refusal to endorse an
independent investigation while her subordinates were
undermining the Department's own efforts.
Despite the leak of the memorandum to the press, the
Attorney General still refused to provide the memorandum to the
committee. She did offer to allow committee staff to review the
Freeh and La Bella memoranda, in their less-redacted form.\713\
However, as a condition of that review, staff were not allowed
to take any notes. The Attorney General's conditions were
somewhat troubling, given that she had allowed the staff of
another committee to review the memoranda while taking
notes.\714\ In addition, the Attorney General's condition
rendered a review of the memoranda difficult, given the fact
that the major memoranda (including the reply memorandum of Lee
Radek, the response of Charles La Bella, and the summary
memorandum of James Robinson) totaled over 180 pages.\715\
---------------------------------------------------------------------------
\713\ Id. at 3-4.
\714\ Committee staff learned that staff of the House Judiciary
Committee were allowed to take extensive notes while reviewing the La
Bella memorandum.
\715\ On May 3, 2000, the committee issued a new subpoena to the
Justice Department for all ``formal memoranda that were sent to the
Attorney General or senior Justice Department officials in connection
with decisions involving the application of the Independent Counsel Act
to campaign finance-related matters, including memos that address the
Independent Counsel Act-related aspects of the Freeh and La Bella
memoranda.'' Subpoena duces tecum issued by the Committee on Government
Reform (May 3, 2000). The Justice Department's production of the
various campaign fundraising memoranda was formally made in response to
this subpoena.
---------------------------------------------------------------------------
a. The Committee's Attempts to Reach Agreement with the
Justice Department
Despite the Attorney General's unsatisfactory response to
the committee's March 10 subpoena, committee staff began to
review the responsive memoranda on March 31, 2000. Over the
next 2 months, committee staff reviewed the memoranda a number
of times. During this period, the committee also negotiated
with the Justice Department regarding the Department's refusal
to comply with the committee's subpoena. The Department
repeatedly asked the committee to agree to a ``protocol'' under
which the committee would receive and handle the subpoenaed
memoranda. While the Department was never specific about how it
wanted the committee to handle the memoranda, it identified two
major concerns: (1) protecting the identity of line attorneys
mentioned in the memoranda; and (2) ``keeping internal,
deliberative documents out of the campaign season.'' \716\
---------------------------------------------------------------------------
\716\ This statement was made initially by John Tanner of the
Justice Department's Office of Legislative Affairs at a meeting on May
16, 2000, between Mr. Tanner, Alan Gershel, Deputy Assistant Attorney
General, James C. Wilson, majority chief counsel, Committee on
Government Reform, David A. Kass, majority deputy counsel, Committee on
Government Reform, Phil Schiliro, minority staff director, Committee on
Government Reform, and Phil Barnett, minority chief counsel, Committee
on Government Reform.
---------------------------------------------------------------------------
The Justice Department's candor on this point was
refreshing, but it revealed the central motive in the Justice
Department's actions throughout the debate over the Freeh and
La Bella memoranda--protecting the Clinton administration from
political embarrassment. It is illustrative that at the end of
the day, after all of the posturing, the Justice Department
identified only these two concerns when turning the documents
over to the committee. No longer did the Department raise
arguments about ``chilling effects'' or ``prosecutorial
roadmaps.'' Rather, now it was focused on the negative
political impact that the release of the documents would have
on the Democratic party. Indeed, the Freeh and La Bella
memoranda overwhelming discuss potentially illegal conduct by
Democratic officials and donors.\717\ Therefore, when the
Justice Department stated that it wanted to keep these
documents out of the campaign season, it was saying that it did
not want documents embarrassing to Democrats to come out during
the campaign.
---------------------------------------------------------------------------
\717\ Indeed, approximately 65 pages of the La Bella memorandum are
devoted to discussions of Democrat wrongdoing, while approximately 2
pages are devoted to Republican wrongdoing.
---------------------------------------------------------------------------
b. The Justice Department's Production of the Memoranda to
the Committee
Other developments quickly superseded the committee's
negotiations with the Justice Department. On May 18, 2000, the
Associated Press reported that in December 1996, Lee Radek, the
head of the Public Integrity Section, which was then conducting
the campaign fundraising investigation, told William Esposito,
the Deputy FBI Director, that Radek felt ``a lot of pressure''
and that the Attorney General's job might ``hang in the
balance'' with respect to the campaign fundraising
investigation.\718\ This report reinforced the committee's
long-held view that the Attorney General had a political
conflict of interest in trying to investigate the fundraising
of the President, Vice President and Democratic party.
Therefore, on May 19, the chairman wrote to the Attorney
General informing her that the committee had scheduled a
hearing on this matter, and requesting the production of the
Freeh, La Bella, and related memoranda before that
hearing.\719\ On May 23, the chairman wrote again, demanding
production of the memoranda, and informing the Attorney General
that the memoranda would be treated as any other committee
record, subject to release by a vote of the committee.\720\
---------------------------------------------------------------------------
\718\ John Solomon, ``Freeh: Justice Felt Pressure Not to Proceed
with Probe to Save Reno,'' Associated Press, (May 18, 2000).
\719\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (May 19, 2000).
\720\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (May 23, 2000).
---------------------------------------------------------------------------
On May 24, 2000, Robert Raben, the Assistant Attorney
General for Legislative Affairs responded to the chairman,
stating that the Justice Department was ``pleased to agree to
your Committee's proposal as set forth in your May 23 letter
and as elaborated in subsequent discussions with your staff.''
\721\ Under the agreement reached with the Justice Department,
all of the memoranda responsive to the committee's May 3
subpoena were to be produced to the committee. The documents
were to be kept in a secured facility, and access was to be
restricted to six staff from each side of the committee. In
addition, the committee was to provide the Department with
notice of any plan to release the documents, and also gave the
Justice Department the opportunity to explain why the release
should not take place.\722\
---------------------------------------------------------------------------
\721\ Letter from Robert Raben, Assistant Attorney General, to Dan
Burton, chairman, Committee on Government Reform (May 24, 2000).
\722\ Id. at 1.
---------------------------------------------------------------------------
On May 31, 2000, the chairman wrote to the Attorney General
and informed her of the plan to release the Freeh and La Bella
memoranda, as well as other related memoranda, at the
committee's June 6, 2000, hearing.\723\ On June 2, 2000, the
Justice Department wrote to object to the committee's release
of the documents.\724\ In this, the final objection prior to
the release of the documents, the Justice Department only
identified two concerns: first, the chilling effect that the
release of the memoranda might have on the ability of Justice
Department lawyers to render full and frank advice; and second,
the way that the memos infringed upon the ``privacy interests''
of individuals mentioned in the memoranda.\725\
---------------------------------------------------------------------------
\723\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (May 31, 2000).
\724\ Letter from Robert Raben, Assistant Attorney General, to Dan
Burton, chairman, Committee on Government Reform (June 2, 2000).
\725\ Id.
---------------------------------------------------------------------------
On June 6, 2000, at a hearing of the committee on the
Department's implementation of the Independent Counsel Act, the
chairman asked unanimous consent to release the Freeh, La
Bella, and a number of related memoranda.\726\ Representative
Lantos then amended the unanimous consent request to release
all of the documents received from the Justice Department in
response to the May 3, 2000, subpoena.\727\ All of the records
were then released by unanimous consent.
---------------------------------------------------------------------------
\726\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the Committee on Government Reform, 106th
Cong. 5, (June 6, 2000) (preliminary transcript).
\727\ Id. at 9.
---------------------------------------------------------------------------
6. The Justice Department's Misleading Arguments
It is understandable that the Justice Department resisted
giving the committee the Freeh and La Bella memoranda. The
Justice Department did have legitimate institutional interests
at stake that it was entitled to protect. However, once the
committee served its subpoena upon the Justice Department, it
was legally obligated to produce the memoranda to the
committee. Rather than follow the legally obligated course of
action, the Justice Department used misleading arguments for
over 2 years to avoid complying with its legal duty. Few of the
arguments were true, and none constituted a valid basis for a
subpoena. Now that the Justice Department has complied with the
committee's subpoenas, it appears that the Justice Department
did not even believe the arguments that it was making.
a. The Justice Department's Shifting Arguments
When the committee first subpoenaed the Freeh memorandum in
December 1997, the Justice Department presented four main
arguments: (1) the Justice Department had a policy against
discussing investigative strategies of open cases (and that it
was unprecedented for a congressional committee to demand such
records); (2) the release of the memoranda could create a
``chilling effect'' on Justice Department employees; (3) the
memorandum could provide a ``road map'' of the investigation;
and (4) the reputations of individuals mentioned in the
memoranda could be harmed by the release of the documents.\728\
---------------------------------------------------------------------------
\728\ Letter from Janet Reno, Attorney General, to Dan Burton,
chairman, Committee on Government Reform and Oversight (Dec. 4, 1997);
letter from Janet Reno, Attorney General, and Louis Freeh, Director,
Federal Bureau of Investigation, to Dan Burton, chairman, Committee on
Government Reform and Oversight (Dec. 8, 1997).
---------------------------------------------------------------------------
When the committee subpoenaed the Freeh and La Bella
memoranda in July 1998, the Department reiterated its earlier
concerns, and made an additional argument, that compliance with
the committee's demand would create the perception of political
influence in the prosecutorial process, undermining public
confidence in the investigation.\729\
---------------------------------------------------------------------------
\729\ Letter from Janet Reno, Attorney General, and Louis Freeh,
Director, Federal Bureau of Investigation, to Dan Burton, chairman,
Committee on Government Reform (July 28, 1998).
---------------------------------------------------------------------------
When the committee subpoenaed the memoranda in March 2000,
the Attorney General made only three arguments: (1) the
campaign fundraising investigation remained open, and
therefore, the release of the memoranda could have an impact on
the investigation; (2) the release of the memoranda could
create a chilling effect inside the Justice Department; and (3)
the memoranda were available for review by committee staff, and
therefore, it was unnecessary to provide the memoranda to the
committee.\730\ As explained above, the Attorney General's
statement in the March 21, 2000, letter that committee staff
were offered the opportunity to review the memoranda in the
fall of 1999 was false.
---------------------------------------------------------------------------
\730\ Letter from Janet Reno, Attorney General, to Dan Burton,
chairman, Committee on Government Reform (Mar. 21, 2000).
---------------------------------------------------------------------------
However, when the committee actually received the memoranda
in May 2000, the Justice Department made four arguments, two of
which were made in the three earlier rounds of discussion: (1)
the release of the memoranda would create a chilling effect;
(2) the memoranda would infringe privacy interests of
individuals mentioned in the documents, and (3) the memoranda
contained the identity of line attorneys; and (4) the memoranda
should not be released during the campaign season.
b. The Justice Department's False Arguments
i. The Justice Department's Nonexistent ``Policy''
Against Providing Deliberative Documents
The argument repeated most often by the Justice Department
throughout the debate on the Freeh and La Bella memoranda was
that the Justice Department had a longstanding policy against
providing deliberative documents about ongoing investigations
to Congress. In fact, in a December 8, 1997, letter to Chairman
Burton, Attorney General Reno and FBI Director Freeh stated
that ``[i]t is unprecedented for a congressional committee to
demand internal decisionmaking memoranda generated during an
ongoing criminal investigation.'' \731\ As was pointed out by
the committee in its correspondence with the Justice
Department, this claim was not true: congressional committees
had demanded and received internal decisionmaking memoranda and
other investigative materials during ongoing investigations.
---------------------------------------------------------------------------
\731\ Letter from Janet Reno, Attorney General, and Louis Freeh,
Director, Federal Bureau of Investigation, to Dan Burton, chairman,
Committee on Government Reform and Oversight 2 (Dec. 8, 1997).
---------------------------------------------------------------------------
Palmer Raids Investigation: In the early 1920s, the Senate
and the House held hearings into the raids and arrests of
suspected communists conducted by the Department of Justice
under Attorney General A. Mitchell Palmer. During the course of
their investigation, the committees received a number of
Department records relating to the raids. Included in the
documents provided to the committees was a ``memorandum of
comments and analysis'' prepared by a Department lawyer,
responding to a District Court opinion, which was under appeal,
and which criticized the Department's actions.\732\ This
document was provided to the committee even though it contained
facts and the Department's legal reasoning regarding an open
case.
---------------------------------------------------------------------------
\732\ ``Charges of Illegal Practices of the Department of
Justice,'' hearings before a subcommittee of the Senate Committee on
the Judiciary, 66th Cong. 484-538 (1921).
---------------------------------------------------------------------------
Teapot Dome Scandal: Later in the 1920s, the Senate
conducted an investigation into the Department of Justice's
handling of the Teapot Dome scandal, specifically, charges of
``misfeasance and nonfeasance in the Department of Justice.''
\733\ The Senate committee heard from Justice Department
attorneys and agents who offered extensive testimony about the
Department's failure to pursue cases. Likewise, the Senate
committee also received documentary evidence from the
Department about its nonfeasance. Testimony and documents were
received from a number of cases, some of which were still
open.\734\ In one notable example, the Attorney General
permitted an accountant with the Department to testify and
produce documents relating to an investigation that he
conducted. The accountant produced his confidential reports in
which he had described his factual findings and made
recommendations for further action. The Department had failed
to act upon his recommendations, although the case was still
open.\735\ In a letter to the committee on March 12, 1999,
Acting Assistant Attorney General Dennis Burke acknowledged
that this case did provide a precedent for the committee's
request, but attempted to distinguish the case because the
Senate committee was not asking for a prosecutorial
decisionmaking document like the Freeh or La Bella memoranda.
---------------------------------------------------------------------------
\733\ McGrain v. Daugherty, 273 U.S. 135, 151 (1927).
\734\ See, e.g., hearings before the Senate Select Committee on
``Investigation of the Attorney General,'' vols. 1-3, 68th Cong. 1495-
1503, 1529-30, 2295-96 (1924).
\735\ Id. at 1495-1547.
---------------------------------------------------------------------------
White Collar Crime in the Oil Industry: In 1979, the House
Committee on Interstate and Foreign Commerce and the House
Committee on the Judiciary held joint hearings on allegations
of fraudulent pricing in the oil industry. As part of that
inquiry, the committees examined the failure of the Justice
Department to investigate properly and prosecute related cases.
As part of their hearings, the committees held closed sessions
where they received evidence regarding open cases in which
indictments were pending.\736\ In open session, the committees
called a Justice Department staff attorney who testified as to
the reasons for not proceeding with a certain criminal case,
despite the fact that a civil prosecution of the same case was
pending. The Department similarly provided the committees with
documentary evidence relating to this case.\737\
---------------------------------------------------------------------------
\736\ See ``White Collar Crime in the Oil Industry,'' joint
hearings before the Subcommittee on Energy and Power of the House
Committee on Interstate and Foreign Commerce and the Subcommittee on
Crime of the House Committee on the Judiciary, 96th Cong. (1979).
\737\ Id. at 156-57.
---------------------------------------------------------------------------
Gorsuch/EPA Investigation: In the early 1980's the
Subcommittee on Oversight and Investigations of the House
Committee on Public Works and Transportation investigated the
enforcement policy of the Environmental Protection Agency (EPA)
with regard to the Superfund program. The subcommittee
investigated the EPA's enforcement policy with respect to both
criminal and civil matters.\738\ In response to the committee's
document requests, the EPA, with the advice and assistance of
the Justice Department, objected to the request on the basis
that ``[i]nternal enforcement documents which form the basis
for ongoing or anticipated civil or criminal prosecutions are
extremely sensitive. These documents include, for example,
memoranda by Agency or Department of Justice attorneys
containing litigation and negotiation strategy, settlement
positions, names of informants in criminal cases, and other
similar material.'' \739\ After the committee's issuance of a
subpoena for the documents, President Reagan asserted executive
privilege over the documents, stating that ``a controversy has
arisen . . . over the EPA's unwillingness to permit copying of
a number of documents generated by attorneys and other
enforcement personnel within the EPA in the development of
potential civil or criminal enforcement actions against private
parties.'' \740\ The Department of Justice took the position in
the case that the policy against providing Congress with access
to open law enforcement files applied to both civil and
criminal matters.\741\ Despite the President's invocation of
executive privilege in the Gorsuch matter, the committee and
the House of Representatives voted to hold Administrator
Gorsuch in contempt of Congress for refusing to produce the
subpoenaed documents. Ultimately the documents were produced,
and the contempt citation was withdrawn.
---------------------------------------------------------------------------
\738\ ``Contempt of Congress,'' report of the Committee on Public
Works and Transportation, H. Rept. No. 97-968 at 10 (1982).
\739\ Id. at 28 (letter from Robert M. Perry, associate
administrator and general counsel to Chairman Elliott H. Levitas, Oct.
7, 1982).
\740\ Id. at 42 (memorandum from President Ronald Reagan to the
Administrator of the Environmental Protection Agency).
\741\ Id. at 87-88 (memorandum from Assistant Attorney General
Theodore B. Olson to Attorney General William French Smith).
---------------------------------------------------------------------------
Iran-Contra: The most well-known example of congressional
oversight of the Justice Department involving the demand and
receipt of information from open case files in the
investigation of the Iran-Contra affair. As part of their work,
the Iran-Contra committees investigated the nature of the
Department of Justice's initial inquiry into the affair. The
investigating committees demanded the production of the
Department's files regarding their initial inquiry. The House
committee requested, inter alia:
(b) All records relating to Justice Department
consideration of, or action in response to, the request
of October 17, 1986, by members of the House Committee
on the Judiciary for an application for appointment of
an independent counsel.
(c) All records relating to the consideration of, and
ultimate preparation and submission of, an application
for appointment of an Independent Counsel on the Iran
matter.
(d) All records from January 1, 1984, to December 15,
1986, relating to requests to, by, or through the
Department of Justice to stop or delay ongoing
investigations relating to the anti-government forces
in Nicaragua and assistance being provided to them[.]
\742\
---------------------------------------------------------------------------
\742\ Letter from Chairman Lee Hamilton to Attorney General Edwin
Meese III, Jan. 14, 1987.
The Department resisted, making claims similar to those
Attorney General Reno is making now. The Department claimed
that the production of documents to the committees would
prejudice the upcoming prosecutions by the independent counsel.
The committees overruled this objection, and received all
requested documents, despite the fact that the independent
counsel was pursuing the prosecution of a number of open cases.
The committees obtained both documentary evidence and the
testimonial evidence of a number of high-level Department
officials, including Attorney General Meese.\743\
---------------------------------------------------------------------------
\743\ See ``Report of the Congressional Committees Investigating
the Iran-Contra Affair,'' H. Rept. No. 433 and S. Rept. No. 216, 100th
Cong. 310, 317, 314, 647 (1987).
---------------------------------------------------------------------------
Other Cases: In other cases where congressional oversight
committees sought access to Department of Justice records
relating to prosecution of cases, the cases at issue were
closed. However, those committees were investigating the fact
that the cases were closed, because they were closed through
alleged malfeasance on the part of the Department. For example,
in the Rocky Flats case, and in the case of Congressman
Dingell's investigation of the Department's environmental
crimes prosecutions, there were allegations that the Department
was allowing guilty parties out of criminal prosecutions with
only minimal punishment. In the Rocky Flats matter, Congressman
Dingell described the Department's objections to disclosure,
which are similar to those asserted here, as ``misguided and
legally unjustifiable.'' Ultimately, over the objection of the
Department, investigating committees obtained a number of
sensitive internal documents. In the Rocky Flats case, the
committee even obtained testimony from line attorneys at the
Department. It also obtained documents, witness interviews, and
other records submitted to the grand jury, but not subject to
Rule 6(e).\744\
---------------------------------------------------------------------------
\744\ Another notable example of the scope and need for
congressional oversight of the Justice Department can be found in
Watergate. In his testimony in the House Judiciary Committee's INSLAW
hearings, House Counsel Steven R. Ross addressed the nature of
congressional oversight in the Watergate scandal:
The Impeachment Report concluded, ``Unknown to Congress,
the efforts of the President, through Dean, his counsel''--
specifically, having the Assistant Attorney General tell
Congress to hold off its investigation because of pending
---------------------------------------------------------------------------
proceedings--``had effectively cut off the investigation.''
Of course, the excuse of pending proceedings did not keep
Congress out of investigating Watergate forever; it only
delayed that Congressional investigation. By Spring of
1973, Congressional committees were no longer accepting the
claim of parallel proceedings as an excuse for withholding
evidence. Ultimately, Watergate and its cover-up, including
the role of Attorney General Mitchell, the role of Attorney
General Kleindienst in related matters, and the
manipulation of the Justice Department and the FBI, were
thoroughly probed by the Senate Watergate Committee and the
House Judiciary Committee. This probing occurred at the
same time as the pending investigations and proceedings of
Special Prosecutors Cox and Jaworski.
* * * * * * *
Watergate was a dramatic instance where the House and
Senate investigations had to overcome, not mere claims of
pendency of civil proceedings--let alone, as here, mere
pendency of the appeal from such proceedings--but claims of
impact on soon-to-be-tried criminal cases. It was up to the
committees to determine what evidence they needed, not to
the Justice Department to measure whether to block those
committees. History reflects that it was only because this
Committee insisted on obtaining all the documents and other
evidence from the Justice Department, despite any claims
about pending proceedings, that the depths of the scandal
were ultimately plumbed.
It is an appropriate note to this period that two Attorneys
General--Kleindienst and Mitchell--were eventually
convicted of perjury before Congressional investigations.
``The Attorney General's Refusal to Provide Congressional Access to
``Privileged'' INSLAW Documents,'' hearing before the House Committee
on the Judiciary, 101st Congress 88-90 (Dec. 5, 1990) (statement of
Steven R. Ross) (emphasis added). Based on his review of this and the
other precedents discussed above, Ross concluded that the Justice
Department's policy of refusing access to open civil or criminal law
enforcement files has been consistently rejected by the courts and by
Congress. Id. at 84, 94.
Shortly after he signed a letter claiming that the
committee's subpoena was ``unprecedented,'' \745\ FBI director
Louis Freeh reversed course, and admitted that ``your subpoena
is not an unprecedented one, but it is an extraordinary one.''
\746\ However, the Attorney General persisted in claiming that
the committee's subpoena was unprecedented until the following
year. In March 1999, after the threat of contempt had subsided,
Acting Assistant Attorney General Dennis Burke admitted that
the committee's subpoena was not unprecedented.\747\ While this
admission would have greatly harmed the Justice Department's
political position in August 1998, during the contempt debate,
by March 1999, few in the public cared.
---------------------------------------------------------------------------
\745\ Letter from Janet Reno, Attorney General, and Louis Freeh,
Director, Federal Bureau of Investigation, to Dan Burton, chairman,
Committee on Government Reform and Oversight (Dec. 8, 1997).
\746\ ``The Need for an Independent Counsel in the Campaign Finance
Investigation,'' hearing before the Committee on Government Reform and
Oversight, 105th Cong. 70 (Aug. 4, 1998).
\747\ Letter from Dennis K. Burke, Acting Assistant Attorney
General, to Dan Burton, chairman, Committee on Government Reform 2-3
(Mar. 12, 1999).
---------------------------------------------------------------------------
ii. The Chilling Effect of the Release of the Memoranda
The Attorney General claimed that if the Justice Department
complied with the committee's subpoena, it would create a
``chilling effect'' that would discourage Justice Department
personnel from providing the Attorney General with candid and
thorough advice. By its very nature, the Attorney General's
argument was highly speculative, and difficult to prove. There
is no evidence that the public release of the Freeh and La
Bella memoranda has had any such chilling effect. Indeed, the
evidence shows that the Attorney General's advisors continue to
offer their candid, written advice, despite the intense public
scrutiny given to the Freeh and La Bella memoranda. Charles La
Bella drafted his memorandum after all of the attention given
to the Freeh memorandum in December 1997. In the middle of the
debate over whether to hold the Attorney General in contempt
for her failure to turn over the Freeh and La Bella memoranda,
her advisors continued to draft lengthy reports reviewing the
evidence in the campaign fundraising investigation. This
practice continued even after the Justice Department turned the
memoranda over to the committee in May 2000. In the spring of
2000, the new head of the Task Force, Robert Conrad, prepared a
report recommending the appointment of a special counsel to
investigate Vice President Gore. Indeed, the only practical
consequence of the committee's release of the Freeh and La
Bella memoranda is probably the message that one should not
commit dishonest views to paper. The committee does not feel
the need to protect dishonest or malign advice.
Also undermining the Attorney General's claim of a chilling
effect was the fact that some of her advisors contemplated the
publication of their memoranda. In addition, once the memoranda
were turned over to the committee, it became clear that at
least one Charles La Bella's critics, Lee Radek, contemplated
that the memos would be made public: ``[i]t is inexcusable, and
I believe clearly calculated, that they [La Bella and De Sarno]
have chosen to communicate their views about others within the
Department in a memorandum that is the subject of such intense
public interest, and is therefore likely to be leaked or become
public through some other route.'' \748\
---------------------------------------------------------------------------
\748\ Memorandum from Lee J. Radek, Chief, Public Integrity
Section, to James K. Robinson, Assistant Attorney General 2 (Aug. 6,
1998) (exhibit 6).
---------------------------------------------------------------------------
It appears that this committee's interest in the Freeh and
La Bella memoranda has not had any chilling effect on Justice
Department personnel. The more serious chilling effect on those
personnel may come from the Attorney General's apparent
disinterest in the advice of her advisors. She disregarded
calls from seven different career law enforcement professionals
to appoint an independent or special counsel to investigate
Democratic fundraising in 1996. At the same time she appeared
to be oblivious to failures to ask important questions and
interview significant witnesses, and the reality that
subordinates were leaking material in a way that undermined the
Justice Department investigations. It is surprising that
advisors like Robert Conrad still make recommendations to
appoint a special counsel when the Attorney General routinely
disregards such recommendations.
Another more likely source of a chilling effect upon the
Attorney General's advisors is the fact that their
recommendations are selectively leaked to the media after they
are made. The recommendations of Director Freeh, Charles La
Bella, and Robert Conrad were all leaked to the press shortly
after they were made. Often, these leaks were made in such a
way to disparage the authors of the documents. For example, as
one ABC reporter noted:
I vividly recall talking to officials back then who
were amazed at the language employed in the report.
This week, they remembered their shock. One senior aide
who is no fan of Public Integrity and had generally
supported La Bella's efforts, said in his report La
Bella had gone ``over the top'' and ``out of bounds.''
He said La Bella had become ``too emotionally involved
to be able to present a cogent legal argument;'' it was
more a rant, a tirade, than an argument. The so-called
evidence was really just new wine in old bottles. And
this official noted that in ensuing days the vitriol
became remarkable on both sides. He recalled that some
people were actually wondering whether La Bella had a
``deep-seated psychiatric problem,'' or whether he was
unstable.
* * * * *
I asked, well, did his argument make sense? ``It made
sense, it was just wrong.'' He said parts of it
contained ``horrendous inferences'' and were ``not
persuasive.'' \749\
---------------------------------------------------------------------------
\749\ Beverly Lumpkin, ``Waco, Yet Again,'' (published Mar. 17,
2000) .
Similarly, when Robert Conrad recommended that a special
counsel be appointed to investigate Vice President Gore, senior
---------------------------------------------------------------------------
``Justice Department officials'' disparaged his conclusions:
One Justice Department official said that Mr. Conrad
was alone in his recommendation. ``No other prosecutor
in this matter thought that there should be a need for
a special counsel,'' said the official, who spoke on
the condition of anonymity.\750\
---------------------------------------------------------------------------
\750\ Neil A. Lewis and Don Van Natta, Jr., ``Reno, Rejecting
Aide's Recommendation, Declines to Name Counsel on Gore Fund-Raising,''
N.Y. Times (Aug. 23, 2000) at A19.
The following day, the Attorney General was forced to admit
that this statement, given by one of her own Justice Department
staff, was false, and that Mr. Conrad had been supported in his
recommendation by two other Task Force prosecutors.\751\
---------------------------------------------------------------------------
\751\ Attorney General Reno, remarks at press conference,
Washington, DC (Aug. 23, 2000).
---------------------------------------------------------------------------
Even worse than the criticism in the press aimed at Justice
Department officials who dared speak their mind was the
treatment that Director Freeh received at the hands of the
White House after his recommendation that an independent
counsel be appointed. The New York Times reported the White
House's reaction to his recommendation in December 1997:
Although Mr. Clinton had pointedly avoided answering
questions about Mr. Freeh's disagreement with Ms.
Reno's decision, White House aides were not so
circumspect. They privately ripped into Mr. Freeh--once
lauded by the President as one of his best appointees--
and called him a disloyal subordinate.\752\
---------------------------------------------------------------------------
\752\ David Johnston, ``Reno Decision Bares Rifts on Clinton
Team,'' N.Y. Times (Dec. 4, 1997) at A28.
It is difficult to believe that the committee's subpoena for
the Freeh memorandum could have had a greater chilling effect
upon Director Freeh's actions than criticism leveled at him by
staff of the President of the United States. Yet, while
Attorney General Reno defended Director Freeh against the
committee's advances, she did not afford him the same
protection from the White House.
iii. The Memoranda Did Not Contain a ``Road Map'' of the
Investigation
The Attorney General claimed that the subpoenaed memoranda
contained a ``road map'' of her investigation, and that the
information in the documents, if it came into the possession of
the targets of the investigation, could seriously prejudice the
investigation. Now that the committee has received the
documents, we can see that the Attorney General's claim was not
true. None of the matters discussed in these memoranda was ever
prosecuted. As Chairman Burton observed when the committee
released the memoranda, ``if this is a road map, it's a road
map of a car going around in circles.'' \753\
---------------------------------------------------------------------------
\753\ ``The Justice Department's Implementation of the Independent
Counsel Act,'' hearing before the Committee on Government Reform, 106th
Cong. 15 (June 6, 2000) (preliminary transcript).
---------------------------------------------------------------------------
The Freeh memorandum discusses only seven substantive
investigative matters: (1) the ``Common Cause Allegations;''
(2) Vice President Gore's fundraising phone calls; (3)
President Clinton's fundraising phone calls; (4) allegations
made against Secretary O'Leary by Johnny Chung; (5) White House
coffees and overnights; (6) solicitation of money from foreign
nationals; (7) the White House Database. Of these investigative
areas, the Justice Department brought charges in only one
area--solicitation of funds from foreign nationals. This
section of Director Freeh's memorandum is four paragraphs long,
and discusses only general legal issues, and does not even name
any of the individuals under investigation. Given these facts,
it is difficult to understand the Attorney General's reference
to a ``road map.'' There is no information in the Freeh
memorandum that related to any criminal charges ever brought in
the campaign fundraising investigation.
The La Bella memorandum discussed a wide range of subject
areas, six in all: (1) Harold Ickes; (2) President Clinton; (3)
Vice President Gore; (4) First Lady Hillary Clinton; (5) John
Huang, Marvin Rosen, David Mercer and the DNC; and (6) Loral.
Of all of these individuals and entities, charges were brought
only against one individual, John Huang, and for conduct not
discussed in the La Bella memorandum.
iv. The Memoranda Did Not Infringe on Privacy Interests
On several occasions, the Attorney General asserted that
the release of the memoranda would infringe upon the privacy
interests of individuals who were named in the documents, but
who were never charged with any crimes. This argument, like the
others, was specious. Once the committee received the
memoranda, it was able to see that there were very few facts
discussed in the documents that had not already been
extensively discussed in public.\754\ Indeed, when the
committee was releasing the memoranda, the Justice Department
was given an opportunity to protect privacy interests by
suggesting redactions. It failed to identify one substantive
area, or the name of any suspect or witness that should be
redacted from the documents prepared for release by the
majority staff.\755\
---------------------------------------------------------------------------
\754\ One example of an issue in the La Bella memorandum that was
not public prior to the release of the La Bella memorandum was the role
of Robert Litt, a senior Department staffer, in the Loral
investigation. In his memorandum, Charles La Bella took issue with what
he saw as Mr. Litt assisting the White House with its ``damage
control'' at the same time that the Department was investigating the
White House's handling of the Loral matter. As Mr. Litt was a senior
Justice Department official, it is difficult to believe he has a strong
privacy interest in keeping this matter out of the public record.
\755\ At one point, Justice Department staff recommended that the
committee redact from the La Bella memorandum the discussion of the
``Gina Ratliff'' incident, wherein Johnny Chung alleged that he was
threatened by the First Lady's Chief of Staff, Margaret Williams, to
repay debts he owed to a former employee, Gina Ratliff.
In addition, when the chairman proposed releasing the binders of
selected memoranda, Representative Lantos amended the unanimous consent
request to release all of the documents received by the committee in
response to its May 3 subpoena. Among these documents was a memorandum
referring to an investigation of CIA Director Tenet which contained
various personal information about the Director. This information was
redacted from the memorandum, and in addition, that memorandum was
never released or disseminated by the committee majority.
---------------------------------------------------------------------------
v. The Release of the Memoranda Does Not Create the
Perception of Political Influence in the Task Force
Investigation
The Attorney General's claim that the release of the
memorandum would create the perception that her investigation
was politically influenced is, like many other of her claims,
speculative. However, the committee's interest in this matter,
from the beginning, has not been to dictate any certain outcome
in the campaign fundraising investigation, but rather, to
ensure that a thorough and unbiased investigation is conducted.
It has been the Attorney General's continued refusal to appoint
an outside investigator to conduct the investigation, not the
efforts of this committee, that have undermined public trust in
the Attorney General's investigation. The editorial board of
the New York Times observed that:
[The memoranda] are further evidence of Ms. Reno's
politicized handling of the campaign fund-raising issue
and of her dedication to protecting Democratic Party
interests from start to finish. . . . These latest
documents, however, cast further doubt on her wisdom
and add to the evidence that she has run a Justice
Department that often puts politics ahead of impartial
law enforcement.\756\
---------------------------------------------------------------------------
\756\ ``The Justice Department Memos,'' N.Y. Times (Mar. 11, 2000)
at A14.
Given observations like that, and from a number of other
editorial boards, it may be that the release of the memoranda
did undermine confidence in the Justice Department's
investigation--not because it raised some specter of political
influence--but because it showed how political the Department's
investigation had been.
vi. The Justice Department's Request to Keep the
Memoranda Out of the Campaign Season
Shortly before the Justice Department produced the
subpoenaed memoranda to the committee, Justice Department staff
and committee staff negotiated terms for the handling of the
documents. During those negotiations, Justice Department staff
identified one of their central concerns as ``keeping the
memoranda out of the campaign season.'' This request had never
been raised in the earlier debates over the Freeh and La Bella
memoranda. Indeed, one can only imagine the reaction if the
Attorney General had stated in a letter that she was refusing
to comply with the committee's subpoena because she feared that
the memoranda would be used to attack Vice President Gore.
However, that is precisely what her subordinates suggested in
their negotiations with committee staff. Again, it is
understandable that the Attorney General wanted these memoranda
out of the public's hands. The documents do not portray the
subjects of the Justice Department's investigation in a
positive light. However, the Attorney General is not entitled
to use political fallout as a reason to avoid complying with a
congressional subpoena. That her staff even recommended such a
thing speaks volumes about the Justice Department's motives
throughout this matter.
B. The Justice Department's Failure To Produce the Conrad Memorandum
The committee had hoped that the Justice Department's
damaging, and ultimately unsuccessful experience in trying to
keep the Freeh and La Bella memoranda from the committee would
keep it from repeating such efforts in the future. The Justice
Department's misleading arguments and bad faith in trying keep
the Freeh and La Bella memoranda from the committee were fully
exposed when the committee obtained the documents in May 2000.
However, the committee's recent efforts in trying to obtain the
Conrad memorandum has shown that the Justice Department has
learned nothing from its experiences. It has continued to deal
with the committee in bad faith, trying to keep information
embarrassing to the administration from becoming public.
After the Attorney General announced her decision not to
seek a special counsel for Vice President Gore on August 23,
2000, the committee subpoenaed the Conrad memorandum and all
related memoranda, from the Justice Department. The committee
believed that Attorney General Reno's announcement on August
23, 2000, gave every indication that the investigation of false
statements by Vice President Gore had been closed, and
accordingly, that the Conrad memorandum could be produced to
the committee:
The transcript reflects neither false statements nor
perjury, each of which requires proof of a willfully
false statement about a material matter. Rather, the
transcript reflects disagreements about labels. I have
concluded that there is no reasonable possibility that
further investigation could develop evidence that would
support the filing of charges for making a willful
false statement.
The Task Force will, of course, continue its ongoing
investigation into illegal fundraising activity and
will be free to pursue all avenues of investigation,
wherever they may lead.\757\
---------------------------------------------------------------------------
\757\ News conference with Attorney General Reno, Washington, DC
(Aug. 23, 2000).
In this statement, the Attorney General clearly indicated that
there was no reasonable possibility that the Justice Department
would ever turn up evidence supporting the filing of charges
against Vice President Gore for making a false statement. Given
the basis of the Attorney General's efforts to frustrate
congressional oversight of the Justice Department--that she did
not want to interfere with ongoing investigations--she would
hardly have made such a pronouncement unless she believed this
matter to be closed. Therefore, she should not flout a valid
congressional subpoena. Her willingness to do so, given her
strong conclusion, is indicative of the extreme bad faith
currently being exercised by the Justice Department.
The deadline for compliance with the subpoena, August 31,
2000, passed without any action by the Justice Department. On
September 6, 2000, committee staff discussed the subpoena with
Justice Department staff.\758\ During that discussion, Justice
Department staff could not provide a cogent explanation for the
failure to produce the Conrad memorandum. The Department did
suggest that it was possible that the Conrad memorandum did
still pertain to an open case. However, the discussion gave
every indication that the Justice Department had decided that
it was not going to produce the Conrad memorandum to the
committee, but was still groping for the rationale for its
refusal. As the experience with the Freeh and La Bella
memoranda had shown, it was not unusual for the Reno Justice
Department to reach its conclusion first, and attempt to
develop a rationale later.
---------------------------------------------------------------------------
\758\ See letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Sept. 7, 2000).
---------------------------------------------------------------------------
The Justice Department refused to provide any further
information regarding its refusal to comply with the
committee's subpoena for the Conrad memorandum until the
committee's October 5, 2000, interview with the Attorney
General. During that interview, the Attorney General was
questioned about her failure to comply with the committee's
subpoena:
Committee Counsel. Moving on to the Conrad--Mr.
Conrad's recommendation to appoint a special counsel.
Is it fair to say that you have absolutely refused to
comply with the Committee's subpoena for us to receive
Mr. Conrad's recommendation to you to appoint a special
counsel?
Attorney General Reno. I don't think Mr. Conrad's memo
should be produced. I think it is part of a pending
investigation.
Chairman Burton. Is that--that is pretty much the same
reason you gave for not giving us the La Bella memo?
Attorney General Reno. What I indicated for the La
Bella memo was that it was--been a part of the
investigation. Much of it has been made public now, and
the matter is behind. The issues in the Conrad memo, as
I told them, could still be pursued, any lead could be
followed; and I want to make sure that we don't do
anything that interferes with that.
* * * * *
Chairman Burton. It is not a matter of whether the
issues in the Conrad memo can be pursued. It is whether
they are being pursued. Are the issues raised in the
Conrad memo still under active investigation?
Attorney General Reno. I cannot comment.
Chairman Burton: You can't tell us whether or not they
are under active investigation? The reason we can't see
the memo, according to you, is because there is an
ongoing criminal investigation. If there is no
investigation going on, then there should be no reason
why we can't see the memo. And so all we are asking is,
simply, are the issues raised in his memo still under
investigation?
Attorney General Reno. I can't tell you that.
Chairman Burton. You are not telling us about any
specific investigation; you are not talking about
anything like that. All we are asking generically is,
are the issues raised in his memo--and you don't have
to go into the specifics--are those being pursued in an
investigation, criminal investigation?
Attorney General Reno. Mr. Chairman, I respectfully
suggest to you that if I start answering questions like
that, I am going to continue to run into the situation
that I am faced with now where people are beginning to
question whether we are being pushed around by Congress
inappropriately in pending criminal matters.\759\
---------------------------------------------------------------------------
\759\ Interview of Attorney General Reno 47-50 (Oct. 5, 2000)
(preliminary transcript).
The Attorney General's responses to Chairman Burton are
facially absurd. In her announcement on August 23, 2000, she
stated that she was not appointing a special counsel to
investigate the Vice President because there was no reasonable
possibility that further investigation would produce evidence
that would support the filing of charges. This statement sent
the clear message that Vice President Gore had been cleared,
and that he was no longer under investigation for making false
statements. This message was warmly welcomed by the Gore
campaign. However, when the committee subpoenaed the Conrad
memorandum, the Attorney General tried to manufacture a reason
why the committee could not receive the document. When she was
squarely asked whether Conrad was still investigating false
statement charges against Vice President Gore, Attorney General
Reno refused to answer the question. In the past, the Justice
Department has rarely hesitated to tell the committee that it
could not receive certain documents because they pertained to
an open case. The fact that the Attorney General refused to
state whether the Conrad investigation of Vice President Gore
is still open suggests one of two possibilities: (1) that the
case is in fact closed, or (2) that the Attorney General's
statement that there was ``no reasonable possibility that
further investigation could develop evidence'' was made to
benefit the Vice President. If the former is true, the Attorney
General is withholding the Conrad memo from the committee with
no proper justification. If the latter is true, the Attorney
General has misled the public about the nature of the Task
Force's investigation to benefit the Presidential nominee of
her political party.
The Justice Department has also refused to provide the
committee with any opportunity to review the Conrad memorandum.
When asked why the Justice Department had not provided the
committee the opportunity to review the memorandum, Reno
provided the following answer:
I think it is important, based on the experience that
we are having now and the questions that have been
raised, that we do everything we can to ensure that
there is not an inappropriate outside influence on a
pending matter.\760\
---------------------------------------------------------------------------
\760\ Interview of Attorney General Reno 53 (Oct. 5, 2000)
(preliminary transcript).
However, the refusal to provide any review of the Conrad
memorandum stands in contrast to the Department's willingness
to allow the committee to review the Freeh and La Bella
memoranda. The Department allowed the committee to review those
memos in 1998, despite the fact that information in those
documents still conceivably was linked to open cases.
The Justice Department's refusal to provide the Conrad
memorandum to the committee provides further evidence of the
politicization of the Justice Department. Without any legal or
factual basis, the Justice Department has refused to comply
with a lawful congressional subpoena. It appears that the
Justice Department's motive for keeping the Conrad memo out of
Congress' hands is the same motive that has guided it for the
past 4 years--protecting the Clinton-Gore administration from
criminal jeopardy and public embarrassment.
C. The Justice Department's Political Gamesmanship
The Justice Department's refusal to cooperate with the
committee was also manifested in its willingness to engage in
political gamesmanship to try to embarrass the administration's
critics. There were two notable instances of this behavior
during the campaign fundraising investigation: first, the
release of the FBI interview summary of former Congressman
Gerald Solomon; and second, the attempted release of
investigative material relating to Chairman Burton.
1. The Release of the Solomon Interview Summary
a. The Justice Department Refuses to Provide the Clinton
and Gore Interview Summaries
On November 9, 1999, the committee subpoenaed the FBI
interview summaries of President Clinton and Harold Ickes.\761\
The committee was seeking the records as part of its oversight
of the Justice Department's campaign fundraising investigation,
to ensure that the Justice Department conducted thorough
interviews of Mr. Ickes and Mr. Clinton before declining to
appoint an independent counsel to investigate their fundraising
activities. The committee did not expect to receive any
resistance to this subpoena, as it had already received FBI
interview summaries for John Huang. Before the committee
received a response to the subpoena from the Justice
Department, the chairman sent another request to the Department
on November 17, 1999, requesting 25 additional FBI interview
summaries relating to the campaign fundraising investigation,
including the interview summaries for Vice President Gore.\762\
---------------------------------------------------------------------------
\761\ Subpoena duces tecum issued by the Committee on Government
Reform (Nov. 9, 1999) (all committee correspondence with and subpoenas
to the Justice Department are printed in the appendix accompanying this
report).
\762\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Nov. 17, 1999). This request
was made pursuant to the committee's subpoena of July 29, 1999, which
required the Justice Department to produce all records relating to the
investigations of John Huang and Yah Lin ``Charlie'' Trie. On several
occasions, the chairman sent specific narrow requests to the Department
for records covered by this subpoena.
---------------------------------------------------------------------------
Committee staff asked Justice Department staff about the
production of these interview summaries on a number of
occasions during the following weeks. As Chairman Burton noted
in a November 30, 1999, letter to the Attorney General, the
Justice Department failed to produce the records, and provided
no explanation for the failure to produce them.\763\ At the
time, the committee was planning to hold a major hearing on
John Huang from December 15-17, 1999. On December 10, 1999, the
committee finally received an answer to its requests. In a
letter to Chairman Burton, Assistant Attorney General Robert
Raben explained that the Justice Department was formulating a
new policy against the release of FBI interview summaries to
Congress:
---------------------------------------------------------------------------
\763\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Nov. 30, 1999).
The decision by the Department and its FBI component to
permit the Committee to review the 302s, but not to
provide copies, is based upon the chilling effect that
public disclosure of the 302s can have on law
enforcement. Historically, witnesses who have been
interviewed by the FBI have understood that their
interviews, and the information that they provided,
would not be made public unless the witness were to
testify at a public trial or the prosecutor were to use
the information as the factual basis for a guilty plea.
. . . A witness who believes that it is likely that his
or her interview will become public may become less
---------------------------------------------------------------------------
willing to cooperate fully with the FBI.
The Department has observed what appears to be an
increasing incidence of public release of 302s. The
widespread public disclosure of 302s is likely to make
it more difficult for the FBI to conduct its
investigations in the future, especially in cases in
which witnesses may become reluctant to cooperate out
of a desire to avoid becoming publicly involved in a
high-profile matter.\764\
---------------------------------------------------------------------------
\764\ Letter from Robert Raben, Assistant Attorney General, to Dan
Burton, chairman, Committee on Government Reform 1-2 (Dec. 10, 1999).
The Justice Department's position was further elaborated by
Craig Iscoe, Associate Deputy Attorney General, and Larry
Parkinson, General Counsel of the FBI, in a meeting on December
13, 1999. In that meeting, Mr. Iscoe and Mr. Parkinson
expounded on the Justice Department's concern that the release
of FBI interview summaries to the committee would harm the
Department's ability to conduct investigations in the future.
Committee staff pointed out to Mr. Iscoe and Mr. Parkinson that
the Department had produced interview summaries on a number of
other occasions, and had never expressed this concern until the
committee sought the interview summaries of President Clinton,
Vice President Gore, and Harold Ickes.
The chairman protested the Department's decision not to
provide the interview summaries in a letter on December 14,
1999.\765\ First, the chairman pointed out the suspicious
timing of the Department's decision. The Department was
subpoenaed to produce the interview summaries of President
Clinton and Harold Ickes over a month earlier, and was
requested to produce Vice President Gore summaries almost a
month earlier.\766\ Despite numerous requests during that
period of time, the Department announced its decision not to
provide the documents to the committee only several days before
the John Huang hearing. The subpoenaed documents were needed
for the hearing, and indeed, ended up being discussed
extensively at the hearing.
---------------------------------------------------------------------------
\765\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Dec. 14, 1999).
\766\ Id. at 1.
---------------------------------------------------------------------------
The chairman also pointed out the Justice Department's
apparent double standard. In the 103rd Congress, Chairman Don
Riegle requested a number of FBI interview summaries, which he
received, and subsequently published in a Senate report.\767\
In the 104th Congress, the Department provided Chairman Bill
Clinger with 183 FBI interview summaries pertaining to the
White House Travel Office investigation.\768\ In addition,
throughout the fall and winter of 1999, the Justice Department
was producing scores of interview summaries pertaining to the
Waco investigation, even as it was trying to prevent the
committee from obtaining interview summaries from the
fundraising investigation. Moreover, by December 10, the
committee had received three FBI 302s relating to the campaign
fundraising investigation--John Huang, Charlie Trie, and Johnny
Chung--without the committee even requesting the 302 for Johnny
Chung. Therefore, the Justice Department's newly-found
hesitance seemed to be linked to the fact that the committee
was now requesting the 302s for the President, Vice President
and Harold Ickes.
---------------------------------------------------------------------------
\767\ Id.
\768\ Id.
---------------------------------------------------------------------------
Finally, the chairman took issue with the statement by
Assistant Attorney General Raben in his December 10, 1999,
letter in which he stated that ``[t]he Department has observed
what appears to be an increasing incidence of public release of
302s.'' \769\ The chairman then pointed out that Chairman
Riegle released 84 FBI interview summaries in a Democrat-
controlled Congress in 1994, and that the Government Reform
Committee had released just 1 such interview summary in the
preceding 3 years.\770\ The chairman also noted the fact that
the Department's concerns about the release of 302s harming
ongoing investigations seemed to be misplaced. When the
committee received the 302s for Charlie Trie, they had
supposedly redacted all information from the summary that could
harm ongoing investigations. However, the Department failed to
redact from the Trie 302 information relating to Ernest Green,
information which strongly indicated that Green had perjured
himself in a committee deposition.\771\ At the time, Green was
under active investigation by the Justice Department for
perjury, and the release of this information could have
theoretically harmed the Department's investigation. The
committee identified the Justice Department's error, and on its
own initiative, redacted the information relating to
Green.\772\
---------------------------------------------------------------------------
\769\ Letter from Robert Raben, Assistant Attorney General, to Dan
Burton, chairman, Committee on Government Reform 1-2 (Dec. 10, 1999).
\770\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (Dec. 14, 1999).
\771\ Id. at 2.
\772\ Id.
---------------------------------------------------------------------------
After receiving the chairman's letter, the Department
finally relented, and provided the requested 302s for President
Clinton, Vice President Gore, and Harold Ickes on December 15,
1999. When the committee was able to review these 302s, it
learned that the Justice Department had failed to ask the
President and Vice President about central matters involved in
the campaign fundraising scandal: the President had not been
asked about James Riady or Charlie Trie; and the Vice President
had not been asked about the Hsi Lai Temple fundraiser or Maria
Hsia. Once the committee received these 302s, it became evident
why the Justice Department had gone through such contortions to
keep them out of the public domain. However, if the content of
the 302s was not enough to confirm that the Justice
Department's posturing of the past month had been purely
political, the Department's actions in the following 2 days
would confirm that fact.
b. The Justice Department Releases the Interview Summary of
Representative Gerald Solomon
When John Huang appeared before the committee on December
15, 1999, he made the following statement:
People seeking publicity have lied about me repeatedly
in the press and even before this committee without
consequence. For example, a former Member of this body,
Mr. Solomon, in attacking the administration, accused
me of economic espionage on the basis of what I am
advised was an anonymous source at a cocktail party,
with whom, it turned out, did not even mention my name
or do anything other than perpetuate a rumor against an
unidentified Asian-American, a rumor which Mr. Solomon
was only too eager to embrace and capitalize upon.\773\
---------------------------------------------------------------------------
\773\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 55 (1999) (preliminary transcript).
At the time that Mr. Huang made his statement, it was unclear
where he had obtained this information. Therefore, Chairman
Burton asked John Huang to identify the source of his knowledge
about Representative Solomon's comments.\774\ Huang told the
chairman that he had been told this by his attorneys.\775\
Chairman Burton then asked Ty Cobb, Huang's counsel, where he
had obtained this information, and Mr. Cobb stated that he had
learned this information from one of the prosecutors on the
Campaign Financing Task Force.\776\ As Chairman Burton noted in
a letter to the Justice Department after the Huang hearing, it
was highly irregular that the Department would share this kind
of information with the target of a criminal
investigation.\777\ As the chairman noted, the disclosure to
Huang's attorneys ``could have no legitimate investigative
purpose, and seemed to be designed only to give Mr. Huang a
sympathetic anecdote for his opening statement.'' \778\
Moreover, the Department's willingness to provide details from
FBI interview summaries certainly undermined the arguments it
had so forcefully made just days earlier, when it claimed that
releasing 302s would chill witnesses from giving interviews to
law enforcement, or that it would jeopardize investigations.
Indeed, it is hard to conceive of a situation that would chill
a witness from giving an interview more than turning the
details of the interview over to an admitted felon who then
used that information to attack the witness in the press and on
national television.
---------------------------------------------------------------------------
\774\ Id. at 166.
\775\ Id.
\776\ Id. at 167.
\777\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General 2 (Apr. 18, 2000).
\778\ Id.
---------------------------------------------------------------------------
However, the Justice Department's hypocrisy was only
beginning to emerge. During the first day of the Huang hearing,
in response to Huang's opening statement, Congressman Waxman
asked Chairman Burton to request the FBI interview summary of
Congressman Solomon from the Justice Department.\779\ Chairman
Burton agreed that he would do so.\780\ The following day,
Associate Deputy Attorney General Craig Iscoe appeared at the
committee offices with a copy of the Solomon 302. The chairman
had not even formally requested the Solomon 302, but the
Justice Department had produced it nonetheless in under 24
hours. There were several facts about this chronology that were
especially troubling:
---------------------------------------------------------------------------
\779\ ``The Role of John Huang and the Riady Family in Political
Fundraising,'' hearings before the House Committee on Government
Reform, 106th Cong., 97 (1999) (preliminary transcript).
\780\ Id. at 97-98.
The Justice Department produced the 302
without a formal request of any type, much less a
subpoena. Justice Department staff explained that it
views an oral request made by a chairman during a
committee hearing the same way that it would view a
written request or a subpoena.\781\ This was the first
time that this policy was ever enunciated for this
committee, and it seemed to be a post hoc justification
for the Department's actions.
---------------------------------------------------------------------------
\781\ This information was related by Craig Iscoe, Associate Deputy
Attorney General, to committee staff when he brought the Solomon 302 to
committee offices on Dec. 16, 1999.
The Justice Department produced the Solomon
302 in under 24 hours. Craig Iscoe, the Associate
Deputy Attorney General who brought the 302 to the
committee, explained that the 302 was relatively short,
and was easy to prepare for production.\782\ However,
when the Reno Justice Department's track record of
document productions is closely scrutinized, the rapid
production of the Solomon 302 appears suspicious.
During the committee's investigation, there were
occasions where the Justice Department: lost committee
document requests; failed to produce documents for days
because they could not find a messenger to bring the
documents to committee offices; failed to produce
documents for days because they had to be personally
Bates-stamped by the Associate Deputy Attorney General;
or simply took months to produce documents because of
vacations, illness, or difficulty in locating
responsive documents.\783\ Yet, when the Department had
a 302 that was potentially embarrassing to
Representative Solomon, a critic of the Justice
Department, they produced it in less than 24 hours.
---------------------------------------------------------------------------
\782\ This information was related by Craig Iscoe, Associate Deputy
Attorney General, to committee staff when he brought the Solomon 302 to
committee offices on Dec. 16, 1999.
\783\ See, e.g., letter from Dan Burton, chairman, Committee on
Government Reform, to Janet Reno, Attorney General (Feb. 11, 1999)
(regarding failure of Justice Department to respond in timely fashion
to requests for documents relating to Orlando Castro); letter from Dan
Burton, chairman, Committee on Government Reform, to Janet Reno,
Attorney General (June 14, 1999) (regarding failure of Justice
Department to respond in timely fashion to requests for documents
relating to search warrant of Trie residence).
The Solomon 302 was produced rapidly, and
without a formal request, despite the Justice
Department's impassioned arguments of several days
earlier. The Department had been arguing that the
committee was receiving and releasing too many 302s.
The Department was even willing to argue that it should
not obey a congressional subpoena because of the harm
that the committee was doing by requesting and
releasing 302s. Yet, scarcely days after those
arguments had been made, the Department provided a 302
to the committee without a formal request. Moreover,
Department staff had made the information in that 302
available to a convicted felon so that he could paint
himself in a more favorable light in his congressional
testimony. The speed with which this document was
produced made a mockery of the apparently earnest
entreaties made just days earlier by Associate Deputy
Attorney General Iscoe and FBI General Counsel
Parkinson.\784\
---------------------------------------------------------------------------
\784\ It is only fair to point out that Mr. Parkinson did not
appear to be involved in the Justice Department's efforts to get the
Solomon 302 out to the committee and the media.
The Department's release of the Solomon 302 served as a
stark example of the politicization of the Justice Department.
The Department was willing to disobey lawful subpoenas when the
committee was seeking information pertaining to the President
and Vice President that was embarrassing to the Justice
Department because it indicated a serious failure in the
campaign fundraising investigation. Yet, when the Justice
Department had the opportunity to spread information that
harmed a widely respected Republican Member of Congress, it
abandoned all of its principled arguments and seized the
opportunity. Faced with an example like this, it is difficult
to believe that the actions of the Reno Justice Department were
motivated by anything other than crass political self-interest.
2. Attempted Release of Information Relating to Chairman Burton
Six months later, the Justice Department again tried to
release information that was harmful to one of its critics.
This time, on the eve of the committee's release of the Freeh
and La Bella memoranda, the Justice Department attempted to
force the committee to release information relating to the
Justice Department's investigation of Chairman Burton.\785\
---------------------------------------------------------------------------
\785\ Shortly after Chairman Burton announced his plans to conduct
an investigation of the 1996 campaign fundraising scandal, Mark Siegel,
a former DNC officer and active DNC fundraiser, alleged that he had
been ``shaken down'' to make political contributions by Chairman
Burton. Given Mr. Siegel's political affiliation, and the timing of his
charges, his allegations could scarcely be taken seriously.
Nevertheless, the Justice Department launched a grand jury
investigation of the allegations, issuing subpoenas to the Burton
campaign shortly after the Government Reform Committee issued its first
subpoena to the Justice Department.
---------------------------------------------------------------------------
Throughout the month of May 2000, the Justice Department
located and made available to the committee various memoranda
responsive to the committee's May 3, 2000, subpoena for the
Freeh and La Bella memoranda, as well as other memoranda
written in response to those two reports. After the responsive
documents were produced to the committee on May 24, 2000, the
committee continued to receive additional documents. In most
cases, these were memoranda that were missed in earlier
searches. In most of these cases, these documents pertained to
the Attorney General's decision not to appoint an independent
counsel to investigate the 1996 campaign fundraising scandal.
In late May, the committee scheduled a hearing to take
place on June 6, 2000. At this hearing, the committee was
scheduled to release the Freeh and La Bella memoranda and
related documents, and it was also scheduled to question Public
Integrity Section Chief Lee Radek about those documents.
However, on the evening of June 5, 2000, a staff attorney in
the Department's Office of Legislative Affairs contacted
committee staff to tell them that the Department would be
producing to the committee that evening a document relating to
the investigation of Chairman Burton. Chairman Burton responded
almost immediately with a letter refusing to accept production
of the records, and questioning the Department's attempt to
send the documents to the committee.\786\ The Department's
attempted production of records relating to Chairman Burton
raised several troubling questions: (1) how were the Burton
records related to the committee's subpoena; (2) why did the
Justice Department attempt to produce records relating to what
purported to be an open investigation; and (3) why did the
Justice Department attempt to provide these records to the
committee at 5:10 p.m., on the evening before a hearing.
---------------------------------------------------------------------------
\786\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (June 6, 2000).
---------------------------------------------------------------------------
First, the committee's May 3, 2000, subpoena called for
``[a]ll formal memoranda that were sent to the Attorney General
or senior Justice Department officials in connection with
decisions involving the application of the Independent Counsel
Act to campaign finance-related matters, including memos that
address the Independent Counsel Act-related aspects of the
Freeh and La Bella memoranda.'' \787\ When they told committee
staff that they intended to produce the documents relating to
the Burton investigation, Justice Department staff were unable
to provide any explanation of how the records related to the
committee's subpoena. While there was a provision of the
Independent Counsel Act that allowed the Attorney General to
request an independent counsel for Members of Congress, there
had been no indication that such a request had been made for
Chairman Burton. Indeed, the Justice Department has
investigated many Members of Congress in the past several
years, and of all of those investigations, the Department
proposed producing documents only from the Burton
investigation.\788\
---------------------------------------------------------------------------
\787\ Subpoena duces tecum issued by the Committee on Government
Reform (May 3, 2000).
\788\ After the committee refused to accept records relating to the
investigation of Chairman Burton, the Justice Department did attempt to
explain the production of records relating to Chairman Burton. In a
letter dated June 9, 2000, Robert Raben, the Assistant Attorney
General, stated that ``[w]e have confirmed that the allegations that
are discussed in the memorandum were the subject of a decision under
the Independent Counsel Act and therefore that the memorandum is
responsive to your subpoena. We have further confirmed that production
of the memorandum would not harm any pending investigation--which is
the standard we have applied to all other documents responsive to the
Committee's subpoena for Independent Counsel-related memoranda.''
Letter from Robert Raben, Assistant Attorney General, to Dan Burton,
chairman, Committee on Government Reform (June 9, 2000). Taking the
significant step of accepting all of these representations as true, the
timing of the Department's decision still raises serious questions
about the Department's motivations. The Department attempted to produce
the memorandum to the committee on the eve of the release of the Freeh
and La Bella memoranda (and the wholesale release of all independent
counsel memoranda, which was proposed by the committee minority).
---------------------------------------------------------------------------
Second, the Justice Department had frequently refused to
produce records to the committee on the basis that the
subpoenaed records related to an open investigation. A
memorandum improperly released by a senior Justice Department
staffer in 1999 listed the allegation against Chairman Burton
as ``not yet closed, but likely to be shortly.'' \789\ Despite
this designation in June 1999, neither Chairman Burton nor his
private counsel have ever been informed that the investigation
against him was closed. Therefore, it appears that as of the
Department's attempted release of the information regarding
Chairman Burton in June 2000, the investigation of Chairman
Burton was still technically open. Leaving aside the
significant issue of why the Burton investigation was left open
for so long after all investigative work had ceased,\790\ the
Justice Department appeared to be deviating from its policy of
refusing to release records relating to open cases, so that it
could release records relating to Chairman Burton.
---------------------------------------------------------------------------
\789\ Memorandum titled Task Force cases (June 4, 1999) (exhibit
14).
\790\ Chairman Burton has often questioned the apparent Justice
Department practice of leaving cases open long after investigative
activity in that case has ceased. The Justice Department has often
refused to produce records about a matter to the committee, claiming
that the matter is open. However, in many of these cases, it is
apparent that all activity in the case has stopped. The June 4, 1999,
list of Task Force cases seems to confirm the chairman's criticisms.
For example, there are 27 cases listed under the heading
``Investigations Which FBI and the Task Force have closed (awaiting AG
determination).'' Id. There are another 14 cases listed under the
heading ``Investigations Not yet Closed but Likely to be Shortly.'' Id.
Chairman Burton's case is listed under this heading, with the
additional notation ``closing memo sent to Public Integrity.'' Id.
---------------------------------------------------------------------------
Third, the timing of the Department's decision was
especially suspicious. The Department had had over 2 months to
locate records responsive to the committee's subpoena. Yet, it
waited until the evening before the committee's release of the
Freeh and La Bella memoranda to attempt to produce these
records to the committee. When committee staff asked Justice
Department staff to describe the process that led to this
document being discovered, Justice Department staff described
it as ``people rooting through boxes and pulling out
documents.'' \791\ As part of an effort to better understand
this process, and identify the staffer who was ``rooting
through'' boxes relating to the Burton investigation, the
chairman asked the Justice Department to identify the staffers
responsible for proposing the production of the Burton
records.\792\ The Department never responded to this request.
---------------------------------------------------------------------------
\791\ Letter from Dan Burton, chairman, Committee on Government
Reform, to Janet Reno, Attorney General (June 6, 2000).
\792\ Id.
---------------------------------------------------------------------------
The Justice Department's attempt to produce records
relating to the investigation of Chairman Burton appeared to be
a maneuver, much like the release of the Solomon 302, designed
to draw attention away from committee hearings which were
embarrassing to the Clinton administration. It also appeared to
be designed to intimidate Chairman Burton, and to discourage
him from subpoenaing documents from the Justice Department.
Like the Department's release of the Solomon 302, the
Department's attempted release of information about Chairman
Burton was done in contravention of Department policy, and
under highly irregular circumstances.
IV. Favorable Treatment of the Attorney General's Friends
A. The Justice Department's Handling of the Soka Gakkai Matter
The committee investigated the efforts of Rebekah Poston, a
prominent Miami lawyer and a friend of the Attorney General, to
obtain confidential law enforcement information from the
Justice Department. The committee has learned the following:
Rebekah Poston was hired by Soka Gakkai, a
large Japanese Buddhist sect, to obtain criminal
justice records on a man named Nobuo Abe, the head of a
rival Buddhist sect. Soka Gakkai hoped to use these
records in a defamation lawsuit against Abe.
Poston hired private investigators who
illegally obtained confidential National Crime
Information Center (NCIC) records on Nobuo Abe.
Poston then filed a Freedom of Information
Act (FOIA) request to legally obtain this same
information on Abe. Long-standing Justice Department
policy prohibited the Department from releasing this
type of information pursuant to a FOIA request.
Moreover, long-standing Department policy prohibited
even confirming or denying the existence of a criminal
record. Accordingly, Poston's FOIA request was
rejected, as was her appeal.
Poston used her influence with the Attorney
General's Chief of Staff to obtain a reversal of the
Justice Department's position. Poston had at least 22
contacts with senior Justice Department staff regarding
her FOIA request. Her contacts resulted in a meeting
between her and Associate Attorney General John
Schmidt, the third-ranking official in the Justice
Department. Schmidt reversed the earlier decision of
Richard Huff, the head of the Office of Information and
Privacy, who had rejected Poston's FOIA appeal. Huff
could recall no other meetings like this in his 25 year
career.
When the Department of Justice responded to
Poston's FOIA request, it stated that it had no records
on Nobuo Abe. Poston's investigators believed that the
record they had earlier obtained had been deleted by
government officials. This deletion, as well as other
evidence regarding the record, led a number of
individuals involved in the case to speculate that the
Abe record had been planted in the NCIC system by
individuals associated with Soka Gakkai.
The evidence that Abe's NCIC record was
illegally accessed was provided to lawyers at the FBI's
Office of Professional Responsibility on at least four
different occasions. Yet, the FBI and the Justice
Department failed to conduct a thorough investigation
of these allegations.
There are two deeply troubling aspects to the facts
uncovered by the committee. First, a prominent Florida
attorney, a close friend of the Attorney General, was involved
in criminal activity. This criminal activity has gone without
any investigation or punishment for nearly 6 years. Now that
the committee has brought these facts to light, Rebekah Poston
has refused to answer any questions regarding her activities.
Poston refused to answer a number of questions in a private
interview, citing both attorney-client privilege, and concerns
regarding possible criminal exposure. Then, when called to a
public hearing, Poston repeatedly cited attorney-client
privilege.\793\ Second, this same friend of the Attorney
General used her influence within the Justice Department to
obtain a one-time reversal of long-standing Department policy.
The implications of the Justice Department's failures in this
case are severe: (1) it appears that the Department does not
want to investigate allegations of improper access to its law
enforcement databases; (2) it appears that the Department does
not want to investigate allegations of wrongdoing by a friend
of the Attorney General; (3) it appears that the Department
applies a more lenient legal standard to FOIA requests made by
a friend of the Attorney General than other FOIA requesters;
and (4) the long-standing Justice Department policy of neither
confirming nor denying the existence of criminal records
relating to non-citizens is in doubt.
---------------------------------------------------------------------------
\793\ Both during and after the committee's July 27, 2000, hearing,
Ms. Poston and her counsel denied that she ever intended to invoke her
fifth amendment rights. However, during the committee's interview of
Ms. Poston on June 29, 2000, Ms. Poston's counsel, Eduardo Palmer,
informed committee staff that Ms. Poston would not answer any questions
about her efforts to obtain information through private investigators
because of attorney-client privilege issues and because of her possible
criminal exposure. These issues were raised in a letter to Chairman
Burton after the committee's hearing. See letter from C. Boyden Gray,
Wilmer Cutler & Pickering, to Chairman Dan Burton (Sept. 21, 2000)
(exhibit 53). Ms. Poston's--and her counsel's--expressions that she
would be unable to answer questions because of ``possible criminal
exposure,'' and her baseless invocation of attorney-client privilege
are discussed in detail below.
---------------------------------------------------------------------------
1. Background
a. Background on Soka Gakkai
Soka Gakkai was formed in 1930 as an organization espousing
the reform of Japanese schools. After World War II, Soka Gakkai
became affiliated with the Nichiren Shoshu Buddhist sect.
Between 1951 and 1991, Soka Gakkai operated as a lay
organization affiliated with the Nichiren Shoshu Buddhist sect.
During that period of time, Soka Gakkai grew to have
approximately 10 million members and assets over $100
billion.\794\ Soka Gakkai also controls Komeito, which is the
fourth-largest political party in Japan.
---------------------------------------------------------------------------
\794\ Bob Whitby, ``The Buddha Brotherhood,'' Miami New Times (Nov.
11, 1999).
---------------------------------------------------------------------------
In 1991, after years of tension between Nobuo Abe (also
known as Nikken Abe), leader of Nichiren Shoshu, and Daisaku
Ikeda, leader of Soka Gakkai, the leaders of Nichiren Shoshu
expelled Soka Gakkai members from their sect, and severed all
ties between the groups. This action sparked extended
litigation between the groups that continues to this day. This
litigation reached American shores, as Nichiren Shoshu and Soka
Gakkai both had extensive United States assets and membership.
In June 1992, two Soka Gakkai publications published a
controversial allegation by Hiroe Clow, a Soka Gakkai member.
Clow stated that in 1963, she traveled to the United States
with Nobuo Abe, and was called by Mr. Abe late at night after
he was detained by the Seattle police for being involved in an
altercation with prostitutes. Ms. Clow stated that she picked
Mr. Abe up at the police station, and that no charges were
filed against Abe. Clow's charges against Abe were a major
embarrassment for Abe and Nichiren Shoshu, and they responded
by filing a lawsuit for libel against Clow and Soka Gakkai in
Japan. This lawsuit, as well as counterclaims, and related
litigation in the United States, was pursued by both sides with
little regard for expense, and both sides employed large teams
of lawyers and investigators in the United States and Japan.
Soka Gakkai International-USA had extensive real estate
holdings in the United States, including a 120-acre compound
outside of Miami, FL. Steel Hector & Davis, a leading Miami law
firm, represented Soka Gakkai in connection with its Florida
real estate projects, and considered Soka Gakkai a major
client.\795\ In late 1994, Soka Gakkai apparently asked Steel
Hector if it could assist in connection with the Abe lawsuit.
---------------------------------------------------------------------------
\795\ Memorandum from Rich [Lucas] to Phil [Manuel] (Nov. 4, 1994)
(exhibit 58).
---------------------------------------------------------------------------
b. Background on Steel Hector & Davis
Steel Hector & Davis was formed in 1925, and is now one of
Florida's largest and best known law firms. The current
Attorney General of the United States, Janet Reno, served as a
partner at the firm prior to her service as Florida State
Attorney. When Soka Gakkai was seeking help in getting
information from the Justice Department, Steel Hector was a
good choice for other reasons as well. John Edward Smith, a
senior partner in the firm, was a long-time friend of the
Attorney General, and was one of only two lawyers to help her
prepare for her confirmation hearings.\796\ Rebekah Poston also
made Steel Hector a good choice for Soka Gakkai. Poston had
just joined Steel Hector as counsel, but she was an experienced
white collar defense lawyer, and more importantly, was also a
friend of the Attorney General. Poston's sister, Roberta
Forrest, served as the campaign manager for Reno when she ran
for State Attorney. Poston's sister also worked as a secretary
in the State Attorney's office where both Reno and her future
Chief of Staff at the Justice Department, John Hogan,
worked.\797\ Poston describes herself as a friend of the
Attorney General, and describes her sister as a close personal
friend of the Attorney General.\798\
---------------------------------------------------------------------------
\796\ Interview of John Hogan at 2 (June 23, 2000) (Hogan
interview).
\797\ Interview of Rebekah Poston at 1 (June 29, 2000) (Poston
interview); Hogan interview at 1.
\798\ Poston interview at 1.
---------------------------------------------------------------------------
2. Rebekah Poston Illegally Obtains Information from the Department of
Justice
In 1992, Soka Gakkai printed the account of Hiroe Clow, a
member of Soka Gakkai. Clow stated that in 1963, she witnessed
the arrest of Nobuo Abe, the leader of Nichiren Shoshu, for
soliciting prostitutes. Litigation in the United States and
Japan commenced soon thereafter. Nichiren Shoshu argued that
Nobuo Abe, its High Priest, had been defamed by the charges
printed by Soka Gakkai. In response, Soka Gakkai argued that
Mrs. Clow had been defamed by Abe's repeated statements that
Clow's accusations were false. Central to these lawsuits was
whether there was any proof that Abe had actually been arrested
for soliciting prostitutes in Seattle in 1963. Soka Gakkai's
lawyers faced two major problems. First, the incident occurred
30 years earlier, and few records remained, especially since
charges were never brought against Mr. Abe. Second, if records
did exist, they may have resided in non-public files or
databases.
a. Soka Gakkai Illegally Obtains Information on Nobuo Abe
Through Jack Palladino
According to one cooperating witness, Soka Gakkai's main
lawyer in the United States, Barry Langberg, hired Jack
Palladino, a well-known private investigator, to determine
whether Abe was arrested in Seattle in 1963.\799\ Palladino
then apparently contacted a source in the Bureau of Prisons who
had access to the National Crime Information Center (NCIC)
database. This source accessed the database, and noted the
following information:
---------------------------------------------------------------------------
\799\ Interview of Richard Lucas at 1 (July 11, 2000) (Lucas
interview).
3/63, NCIC-NATF, Complaint by four females of possible
pandering and solicitation by a bald Oriental, male, no
english at 12:40 AM, taken in for questioning, at 1:30
AM, no english. detained [sic] and released at 3:30 AM,
forwarded by teletype.\800\
---------------------------------------------------------------------------
\800\ Memorandum from Rich Lucas to Phil Manuel (Dec. 28, 1994)
(exhibit 72).
This information was then apparently provided to other
attorneys working on the case. If this information on Abe was
taken from the NCIC database and provided to private parties
like Langberg or Palladino, the source at the Bureau of Prisons
(BOP) broke the law, as did possibly Langberg and
Palladino.\801\ Federal law prohibits the theft, conversion, or
unauthorized conveyance of government records, and individuals
have been prosecuted for the theft of NCIC records
specifically.\802\
---------------------------------------------------------------------------
\801\ After the committee's July 27, 2000, hearing regarding this
subject, committee staff was contacted by counsel for Mr. Langberg, who
denied that Mr. Langberg had hired Palladino to obtain any information
on Abe. He also denied that Mr. Langberg was involved in any illegal
activity. The committee intends to subpoena information from Mr.
Langberg and Mr. Palladino to confirm the extent of their involvement
in this matter.
\802\ 18 U.S.C. Sec. 641; see also facsimile from John Sebastian to
Phillip Manual (sic) (Feb. 15, 1995) (attaching two newspaper articles
about prosecutions for theft of NCIC records) (exhibit 80).
---------------------------------------------------------------------------
Soka Gakkai would later attempt to confirm this record
through other sources, and would have great difficulty in doing
so. First, it received confirmation through Rebekah Poston and
her investigators that there was a record on Abe in the NCIC
system, but that it was different from the record viewed by the
source at the Bureau of Prisons. Then, subsequently, when
Poston tried to access the record through the FOIA process, she
was told that no record existed. These later problems, which
are discussed in detail below, have led individuals involved in
the case to speculate that the NCIC information on Abe was
planted there by the initial source at the Bureau of Prisons.
This speculation is supported by several factors:
It is unlikely that a computer record would
have existed for Abe if he was detained and released in
1963 on a minor charge.
Indeed, in his interview with committee
staff, Phil Manuel, the main investigator who worked
for Poston, noted that he believed that the BOP source
was a member of Soka Gakkai, and a friend or associate
of Hiroe Clow.\803\ If that information is true, she
would have had the motive to fabricate evidence against
Abe.
---------------------------------------------------------------------------
\803\ Interview of Philip Manuel at 3 (July 18, 2000) (Manuel
interview).
Other private investigators were unable to
---------------------------------------------------------------------------
verify the information provided by the BOP source.
When conducting a search for records in
response to Poston's FOIA request, the Justice
Department was unable to find any records on Abe.
If indeed this information on Abe was planted in the NCIC
system, it raises serious questions about the stewardship of
the NCIC database, and makes the subsequent failure by the
Justice Department to investigate this matter even more
troublesome.
b. Poston Requests Her Private Investigators to Break the
Law
While Soka Gakkai already had gained access to what
purported to be Abe's arrest record, they chose to confirm its
existence through another source. It is unclear why Soka Gakkai
chose to hire another set of lawyers and investigators to
access Abe's record a second time. Perhaps they were concerned
with the reliability of Mr. Palladino's work, or perhaps they
simply wanted a high degree of confidence in their information
before they used it in court in Japan.
Billing records subpoenaed by the committee indicate that
Poston's work for Soka Gakkai began in early November
1994.\804\ Poston was one of a number of lawyers hired by Soka
Gakkai through their main California-based lawyer, Barry
Langberg. While the circumstances of Poston's hiring are not
entirely clear, at least one document prepared by individuals
working with Poston states that ``Steel Hector was hired due to
the relationship with the Attorney General.'' \805\ Indeed,
Poston confirmed to investigators working for her that she
believed that the only reason Steel Hector & Davis was working
on this matter was because of the firm's influence in
Washington.\806\
---------------------------------------------------------------------------
\804\ See Steel Hector & Davis billing records at 0000143, 0000154
(exhibit 100).
\805\ Memorandum from Mike Wilson to John Gibbons at 1 (Nov. 27,
1996) (exhibit 98).
\806\ Lucas interview at 3.
---------------------------------------------------------------------------
Poston had her initial client meeting on the Abe matter on
November 2, 1994.\807\ Due to an invocation of privilege by
Soka Gakkai, the committee has not learned who met with Poston,
or what was discussed. However, immediately after her client
meeting, Poston apparently contacted Richard Lucas, a private
investigator in Florida who worked with the Philip Manuel
Resource Group (PMRG), an investigative firm based in
Washington, DC. Poston retained PMRG to work on the case, and
specifically, to determine whether Abe had a record in the NCIC
system. Lucas explained Poston's request in a memo to Phil
Manuel, the principal in PRMG:
---------------------------------------------------------------------------
\807\ Steel Hector & Davis billing records at 0000154 (exhibit
100).
[Poston] called this afternoon asking for assistance on
a government inquiry. Her request is unusual and came
with the usual promises that it will lead to bigger and
---------------------------------------------------------------------------
better things.
She is attempting to obtain a March 1963 document that
substantiates an individual was arrested 30 years ago
in Seattle for prostitution. It was confirmed,
according to her, through the Federal Bureau of Prisons
that they have in there [sic] files a reference of this
arrest.\808\
---------------------------------------------------------------------------
\808\ Memorandum from Rich Lucas to Phil Manual (Nov. 2, 1994)
(exhibit 54).
This task, though, proved difficult for Lucas and Manuel to
accomplish. Poston's billing records indicate that she had four
telephone calls with ``investigators'' over the next 2
days.\809\ On November 4, 1994, Lucas sent another memo to
Manuel:
---------------------------------------------------------------------------
\809\ Steel Hector & Davis billing records at 0000154.
As you know we received an assignment from Poston and
now I am in a precarious position.
* * * * *
It appears the two alternatives are to use a
confidential source or tell Poston that we do not want
the case. The latter will cause ill feelings since we
should have informed her on Wednesday but it is better
to be up front now than to incur expenses, not get the
information, and burn bridges with the our [sic] only
inroad at Steel Hector Davis.\810\
---------------------------------------------------------------------------
\810\ Memorandum from Rich Lucas to Phil Manuel (Nov. 4, 1994)
(exhibit 55).
Manuel responded by saying ``Poston must realize that SUPERMAN
does not exist. There is no confidential source who will give
documentary evidence which is not released through proper
channels. . . . If the document exists we can get it but it
will take time--that's it. She'll have to take it or leave
it.'' \811\ After an additional memo from Lucas asking him to
reconsider, Manuel wrote ``I do not know a confidential source
in Seattle which has the authority to hand search criminal
files that are not on a computer--remember we have no
identifiers like DOB or SSN only a name therefore NCIC sources
are useless. Computer files do not go back to 1963. The files
must be hand searched by someone with access.'' \812\ Later on
November 4, Poston obtained Abe's date of birth, and provided
it to Manuel and Lucas to assist them in their search.
---------------------------------------------------------------------------
\811\ Memorandum from Rich Lucas to Phil Manuel (Nov. 4, 1994),
(with handwritten notations of Phil Manuel) (exhibit 56).
\812\ Memorandum from Rich [Lucas] to Phil [Manuel] (with
handwritten notations by Phil Manuel) (exhibit 57).
---------------------------------------------------------------------------
c. Poston Obtains the Information
Using the information provided by Poston, Manuel and Lucas
each contacted confidential sources to determine whether Abe
had an arrest record. Manuel contacted Ben Brewer, the manager
of the Program Support Section within the Administration
Division at the FBI.\813\ According to Richard Lucas, Brewer
accessed the NCIC database, and told Manuel the information on
Abe contained in the database.\814\ Lucas contacted a friend,
Tony Gonzalez, a retired IRS investigator, to ask for help in
obtaining criminal history information on Abe. Gonzalez in turn
contacted a confidential source who provided him with
information regarding Abe's purported 1963 arrest in
Seattle.\815\ Several days later, on November 11, 1994, Lucas
sent a memo to Poston containing the information that Manuel
and Lucas had been able to obtain from their confidential law
enforcement sources:
---------------------------------------------------------------------------
\813\ Lucas interview at 1. In an interview with committee staff,
Philip Manuel denied that he ever obtained NCIC information, or any
other proprietary government information on Abe. Manuel interview at 2-
3. However, Manuel's interview statement is contradicted not only by
Lucas, but also by Manuel's own sworn affidavit, in which he states ``I
contacted a confidential and highly reliable source'' and ``my source
told me that there was a federal government record for Nobuo Abe which
referred to `Suspicion of Solicitation of Prostitution, Seattle Police
Department, March 1963.' ''
\814\ Lucas interview at 1.
\815\ Id.
A source was contacted and provided the following
---------------------------------------------------------------------------
information:
1. The source was provided with the identifiers of
Nobuo Abe and Noburo Abbe, and the date of birth of
December 19, 1922. The source was also told there was
no social security number due to the subject not being
a U.S. citizen.
2. The source relayed that under the data provided
there was a reference to ``Solicitation of
Prostitution, Seattle Police Department, March 1963''.
The charge was abbreviated and not spelled out.\816\
---------------------------------------------------------------------------
\816\ Memorandum from Richard Lucas to Rebekah Poston (Nov. 11,
1994) (exhibit 61).
The memo then contained a detailed explanation of the NCIC
database, as well as an explanation of why information like
---------------------------------------------------------------------------
this would be in the NCIC:
6. The source theorized that if Abe was a Japanese
citizen with no U.S. residence or forms of
identification, other than a passport, an inquiry might
have been made with NCIC to determine if he was wanted
on other charges or had previous encounters with law
enforcement.\817\
---------------------------------------------------------------------------
\817\ Id.
After receiving this information, Poston and Soka Gakkai
came back with a number of questions. George Odano, the Soka
Gakkai representative dealing with Poston, posed a number of
questions to Poston, seeking more detail on the information
that the investigators had obtained, as well as confirmation
that the information obtained by Manuel and Lucas was
accurate.\818\ Apparently, one concern was that the information
that Soka Gakkai had previously obtained from the Federal
Bureau of Prisons was more detailed than the information
obtained by Manuel and Lucas. Poston forwarded these questions
to Lucas, ordering him to ``please get answers to as many of
these as you can and be specific. This is a matter of serious
importance.'' \819\
---------------------------------------------------------------------------
\818\ Facsimile from Rebekah Poston to Richard Lucas (Nov. 11,
1994) (attaching Nov. 10, 1994 letter from George Odano to Rebekah
Poston) (exhibit 62).
\819\ Id.
---------------------------------------------------------------------------
Lucas provided these follow-up questions to Phil Manuel,
and Manuel worked to obtain the requested information. Six days
later, on November 17, 1994, Lucas wrote another memo to Poston
to address Odano's follow-up questions:
A source within the U.S. government in Washington D.C.
was contacted and provided the following information:
1. There is no record or information on Hiroe Clow.
2. There is a record for Nobuo Abe. The record refers
to ``Suspicion of Solicitation of Prostitution, Seattle
Police Department, March 1963''. There is no reference
to Abe's date of birth nor the exact date of the
incident. There was no other significant date as to the
facts and circumstances surrounding the incident.
3. The confidential source stated that the information
on Mr. Abe was an inquiry for information by the
Seattle Police Dept. not a recording of an arrest or
conviction.
4. The source in Washington D.C. has access to any
inquiries made by third parties on Mr. Abe. According
to the computer tracking system there have been more
than six inquiries on Mr. Abe from various U.S. cities
over the last two weeks.
5. The various inquiries by the different government
entities has caused concern in the Washington D.C.
central office. The source stated the recorded
information should never have been entered on Mr. Abe.
The source also stated that if Mr. Abe made an official
request, the entry under his name would be removed from
the record. In addition, it is under consideration that
the entire record be removed due to the obvious recent
interest by numerous third parties, the date of the
alleged incident and the fact it is a ``questionable
entry''.
6. It is our opinion that any effort to obtain the
information on Nobuo Abe through an official request be
done expeditiously.\820\
---------------------------------------------------------------------------
\820\ Memorandum from Richard Lucas to Rebekah Poston (Nov. 17,
1994) (exhibit 63).
Lucas informed committee staff that Manuel obtained this
information from Ben Brewer, his confidential source in the
FBI.\821\
---------------------------------------------------------------------------
\821\ Lucas interview at 2. Again, Manuel denied in his committee
interview that he obtained NCIC information on Abe. However, Manuel's
denials are contradicted by his own sworn affidavit, and are not
credible.
---------------------------------------------------------------------------
At this point, both Lucas and Manuel were becoming quite
concerned with their involvement in the Soka Gakkai matter.
Both were under the impression that this would be a small
project when they accepted it.\822\ In fact, the only reason
they accepted it was because Poston was a senior lawyer with a
prominent firm with close connections to the Justice
Department. Otherwise, PMRG never would have accepted a case so
small.\823\ However, shortly after they started working on the
project, Lucas and Manuel realized that the project was more
complicated, and exposed them to significant risks. Lucas told
the committee that it was clear that ``essentially you were
breaking the law'' by doing what Poston had asked.\824\ In sum,
Lucas and Manuel became convinced that Poston had asked them to
expose themselves to a major risk for very little financial
reward.\825\
---------------------------------------------------------------------------
\822\ Lucas interview at 2.
\823\ Id.
\824\ Id. When questioned by minority staff at the committee's July
27, 2000, hearing, Lucas qualified the statement he had given to
majority staff on an earlier occasion. When asked if he felt that his
actions broke the law, Mr. Lucas first stated that he could not reach a
legal conclusion determining whether or not he broke the law.
``Felonies and Favors: A Friend of the Attorney General Gathers
Information from the Justice Department,'' 106th Cong. 52 (July 27,
2000) (preliminary transcript). Then, he stated that ``I do not believe
my contact with Mr. Gonzalez was breaking the law.'' Id. at 53. Mr.
Lucas' conclusion that he was not breaking the law was based upon the
fact that he claims that he did not have specific knowledge that
Gonzalez would be accessing the NCIC database, and that he did not
specifically request Gonzalez to access to NCIC database. The fact that
Lucas, and for that matter, Manuel, did not specifically ask their
sources to access NCIC is legally irrelevant. Rather, the fact is that
they were asked to confirm the existence of information in NCIC, and
asked their sources to confirm the existence of the information. Their
sources then did so, by accessing NCIC. Such activity is illegal.
\825\ Id.
---------------------------------------------------------------------------
d. The Information on Abe is Deleted
By December 1994, Manuel and Lucas became concerned that
the NCIC record on Abe was going to be deleted. Apparently, Ben
Brewer, Manuel's source within the FBI, told Manuel that there
was concern in the FBI about the origin of the Abe record, and
that it might be deleted.\826\ By early December 1994, Lucas
was discussing with Poston actions that Soka Gakkai could take
to secure the Abe NCIC record before it was deleted. They
discussed seeking a court injunction preserving the Abe record,
but apparently decided not to.\827\
---------------------------------------------------------------------------
\826\ Id.
\827\ Memorandum from Richard Lucas to Rebekah Poston (Dec. 9,
1994) (exhibit 67).
---------------------------------------------------------------------------
By late December 1994, Abe's NCIC record had been deleted.
On December 22, 1994, Manuel wrote a memo to Poston in which he
described his contacts with a confidential source who accessed
NCIC on his behalf (Richard Lucas informed the committee that
this source was again Ben Brewer of the FBI):
This is to report that a highly confidential and
reliable source has advised as follows regarding the
subject of your inquiry:
(1) Whatever files of references, either in data base
[sic] form or hard copy form, which were available
previously have apparently been purged. There are
currently no derogatory references to the subject of
your inquiry in any files maintained by or under the
control of the Department of Justice or any of its
investigative agencies. Specifically, there is no
information in NCIC.\828\
---------------------------------------------------------------------------
\828\ Memorandum from Philip R. Manuel to Rebekah Poston (Dec. 22,
1994) (exhibit 71).
Because of the confusion surrounding Abe's NCIC record at
this point, Poston apparently went back to the original source
of the information on Abe--Jack Palladino's source at the
Bureau of Prisons. Poston apparently learned exactly what
information the BOP source extracted from the NCIC, and passed
this information on to PMRG.\829\ Poston asked Lucas and Manuel
to determine whether the BOP source's notes were legitimate,
and whether that kind of information could have come from
databases accessible at the BOP.\830\
---------------------------------------------------------------------------
\829\ Memorandum from Rich Lucas to Phil Manuel (exhibit 71).
\830\ Id.
---------------------------------------------------------------------------
It is unclear what, if any, answers Manuel and Lucas were
able to provide to Poston. A number of records show that Poston
was hiring still more private investigators as late as 1996 to
determine what happened to the NCIC records on Abe.\831\ It
appears that Poston decided that it was crucial to her case to
determine where the original BOP source got the information on
Abe. It also appears that Poston's desire to get information
from the BOP source may have even led her to offer a bribe to
the BOP employee. As one memo from 1996 notes:
---------------------------------------------------------------------------
\831\ Memorandum from Michael Wilson to John Gibbons (Nov. 19,
1996) (exhibit 97).
Poston stated she was told the Bureau of Prison [sic]
employee would not come forward due to her pension may
be at risk if she was exposed. She added an offer may
have been made as to severance pay by the client if
that resulted.\832\
---------------------------------------------------------------------------
\832\ Memorandum from Michael Wilson to John Gibbons (Nov. 27,
1996) (exhibit 98).
Due to barriers raised by Poston and her attorneys, namely the
invocation of the fifth amendment and attorney-client
privileges, the committee has not been able to learn whether
Poston or Soka Gakkai ever made good on this payment to their
confidential source.
e. The Actions Taken Were Illegal
There is no question that the actions taken by Rebekah
Poston, Philip Manuel, Richard Lucas, and their confidential
sources, were illegal. 18 U.S.C. Sec. 641 provides for felony
or misdemeanor penalties for anyone who ``embezzles, steals,
purloins, or knowingly converts to his use or the use of
another, or without authority, sells, conveys or disposes of
any record . . . or whoever receives, conceals, or retains the
same with intent to convert it to his use or gain, knowing it
to have been embezzled, stolen, purloined or converted[.]''
\833\ This statute has been used to prosecute individuals who
sell or give away government information.\834\ It appears that
both Poston and the private investigators at PMRG were aware of
their legal exposure. Richard Lucas stated that ``in direct
conversations with Ms. Poston, she commented about her concern
that the activities of the unknown Bureau of Prisons employee
and the actions taken by PMRG on her behalf could be
illegal[.]'' \835\ There is also a document indicating that
Phil Manuel was aware of the risks involved in improperly
obtaining NCIC information. On February 15, 1995, an individual
named John Sebastian sent Manuel a fax of two newspaper
articles with the handwritten note ``TITLE: OUT ON THE LIMB.''
Sebastian then wrote on top of each article a caption stating
``THEFT OF NCIC RECORDS.'' \836\ The articles describe police
officers prosecuted for selling NCIC printouts.
---------------------------------------------------------------------------
\833\ 18 U.S.C. Sec. 641.
\834\ See, e.g., United States v. Elefant, 999 F.2d 674 (2d Cir.
1993).
\835\ Letter from John C. Gibbons to David V. Ries, Deputy Chief,
Office of Professional Responsibility, Federal Bureau of Investigation,
May 28, 1997 (exhibit 103).
\836\ Facsimile from John Sebastian to Philip Manuel (Feb. 15,
1995) (attaching articles regarding the theft of NCIC records) (exhibit
80).
---------------------------------------------------------------------------
In addition, the 1996 memo describing Poston's efforts to
obtain information from Jack Palladino's source at the BOP
raises additional questions about illegal conduct by the Soka
Gakkai lawyers and investigators. The memo indicates that
Poston may have made an offer that Soka Gakkai would reimburse
the BOP source if she lost her pension as a result of coming
forward with her confidential information.\837\ If these
allegations are true, they could constitute a bribe or
solicitation for bribery, in violation of 18 U.S.C. Sec. 201.
---------------------------------------------------------------------------
\837\ Memorandum from Michael Wilson to John Gibbons (Nov. 27,
1996) (exhibit 98).
---------------------------------------------------------------------------
3. Poston Requests Information on Nobuo Abe Through FOIA
a. Poston Places FOIA Requests for Information on Abe
On November 21, 1994, Poston submitted FOIA requests to the
Justice Department, the Federal Bureau of Investigation, the
Immigration and Naturalization Service, and a number of other
agencies, requesting information on Abe's alleged detention in
Seattle. Given the claims of attorney-client privilege made by
parties involved in the investigation, all of Poston's reasons
for pursuing the information through FOIA are unknown. However,
it appears that information obtained through legal means would
be easier to use in the ongoing litigation in Japan. In
addition, it appears that Poston had a concern that the Abe
record might be deleted from the NCIC database, given the
concern within the FBI that it was not a legitimate record.
b. Poston Publicly Confirms that She Already Has the
Information
While her FOIA requests were still pending, in December
1994 and January 1995, Poston took steps that publicly
acknowledged the receipt of confidential NCIC records from
Manuel and Lucas. First, on December 9, 1994, Poston wrote a
letter to Soka Gakkai confirming that she had obtained the NCIC
information on Abe:
Your organization has requested us to investigate
whether the United States government has maintained any
records of an investigation concerning an individual
known as Nobuo Abe, a foreign national, born December
19, 1922.
Subsequent to this request, we engaged the Philip
Manuel Resource Group, Ltd. (PMRG), a highly
prestigious private investigations firm based in
Washington, D.C[.]
PMRG reported to us on November 17, 1994, that a source
within the U.S. government in Washington, D.C. was
contacted and the source confirmed to PMRG that there
is a record for Nobuo Abe. According to PMRG's report
to us, the record refers to:
Suspicion of Solicitation of Prostitution
Seattle Police Department
March, 1963
* * * * *
I am able to testify as to the truthfulness and
accuracy of my statements in this letter.\838\
---------------------------------------------------------------------------
\838\ Letter from Rebekah Poston to Soka Gakkai (Dec. 9, 1994)
(exhibit 68).
Poston repeated the same information in a letter sent to
Hiroe Clow on January 4, 1995.\839\ Shortly thereafter, in a
SGI-USA newsletter dated January 9, 1995, Barry Langberg, Hiroe
Clow's lawyer, publicly disclosed Poston's letter to Clow.\840\
Langberg included the letter in an interview in which he was
explaining the progress of Clow's lawsuit against Abe.
---------------------------------------------------------------------------
\839\ Letter from Rebekah Poston to Hiroe Clow (Jan. 4, 1995)
(exhibit 73).
\840\ The SGI-USA Newsletter (Jan. 9, 1995) (exhibit 74).
---------------------------------------------------------------------------
Poston's disclosure of the information that PMRG had
obtained for her is surprising, given that her activities had
been cloaked in secrecy to that point. Moreover, the disclosure
by Poston constitutes a public admission that she had hired
individuals who broke the law to obtain Abe's NCIC information,
with Poston's apparent knowledge and consent. In addition,
Poston's disclosure of the information obtained by PMRG
constitutes a waiver of any attorney-client privilege or work
product protection that she could invoke over those subjects.
c. Negative Responses to Poston's FOIA Requests
When Poston made her FOIA requests for NCIC information on
Nobuo Abe, she was taking on a long-standing Justice Department
policy against the release of that kind of information.
According to Richard Huff, the Co-Director of the Office of
Information and Privacy, the Department has a policy against
releasing any criminal justice information to a third party
without permission of the party involved.\841\ Moreover, in
cases where they cannot release records, the Department has a
policy against even confirming or denying the existence of
criminal justice records within the Department.\842\ According
to Huff, this policy ensures that individuals who have arrest
records, and other records, have those records kept private. As
Huff explained to committee staff, if the Department confirmed
when individuals did not have arrest records, and simply said
``no comment'' when they did have records, any person would be
able to determine who had arrest records in the Justice
Department.\843\ Therefore, according to Huff, the Justice
Department's policy of refusing to confirm or deny whether
criminal justice records exist is integral to a system that
attempts to protect the privacy of individuals involved.\844\
---------------------------------------------------------------------------
\841\ Interview of Richard L. Huff at 1 (June 16, 2000) (Huff
interview).
\842\ Id.
\843\ Id. at 1-2.
\844\ Id. at 2.
---------------------------------------------------------------------------
Poston apparently recognized the fact that she was
attempting to obtain information in the face of long-standing
Justice Department policy. She informed the committee that she
viewed her FOIA request as a long-shot, because she was
requesting information on a person that she did not
represent.\845\ Poston's client, Hiroe Clow, also seemed to
recognize that the FOIA request would not be granted, stating
in a letter to Janet Reno: ``[m]y lawyers tell me that things
don't look so good on the F.O.I.A. request if decided in
accordance with previous practices.'' \846\ And, as expected,
Poston's FOIA requests were rejected. The FBI informed Poston
that she could not receive any information on Abe unless she
provided either proof of death, or a notarized waiver from
Abe.\847\ Similarly, the Executive Office of United States
Attorneys told Poston that she must provide a notarized waiver
by Abe.\848\
---------------------------------------------------------------------------
\845\ Poston interview at 3.
\846\ Letter from Hiroe Clow to Janet Reno, Attorney General,
Department of Justice (Mar. 21, 1995) (exhibit 110).
\847\ Letter from J. Kevin O'Brien, Chief, Freedom of Information--
Privacy Acts Section, Information Resources Division, Federal Bureau of
Investigation, to Rebekah Poston (Dec. 8, 1994) (exhibit 66).
\848\ Letter from Bonnie L. Gay, Attorney-in-Charge, FOIA/PA Unit,
Executive Office for U.S. Attorneys, to Rebekah Poston (Jan. 12, 1995)
(exhibit 75).
---------------------------------------------------------------------------
Poston met with the FBI to discuss their handling of the
FOIA request, and according to Poston, the FBI was receptive to
her arguments, but informed her that their general policy was
not to release, or even confirm or deny the existence of
records about third parties in NCIC without the permission of
the third party.\849\ According to Poston, the FBI told her
that they would like to help her, but that any decision on the
release of Abe's NCIC information would have to be made by the
Attorney General, not the FBI.\850\
---------------------------------------------------------------------------
\849\ Poston interview at 2.
\850\ Id.
---------------------------------------------------------------------------
After she received negative responses to her FOIA requests,
on February 3, 1995, Poston submitted an appeal to the Justice
Department. In her appeal, she argued that the Justice
Department should release NCIC records on Abe, based on the
fact that there was a significant public interest in whether
Abe was arrested in Seattle in 1963; and that as a non-citizen,
Abe was not protected by the Privacy Act.\851\ However, Poston
was aware that her arguments would not likely be accepted by
the Justice Department.\852\ The Justice Department had an
established policy that it would not confirm or deny the
existence of the records that Poston was seeking. This policy
had been in place for a significant period of time, and
Poston's arguments did not change that fact.
---------------------------------------------------------------------------
\851\ Letter from Rebekah Poston to Attorney General Janet Reno
(Feb. 3, 1995) (exhibit 77).
\852\ Poston interview at 3.
---------------------------------------------------------------------------
4. Rebekah Poston's Lobbying Campaign
After her unsuccessful meeting with the FBI, Poston began a
remarkable series of contacts with the Justice Department, in
an effort to reverse the existing Justice Department policy,
and obtain whatever information existed on Nobuo Abe in the
NCIC system. Between January and June 1995, Poston contacted
high-level Justice Department officials at least 22 times
regarding her FOIA request.\853\ These contacts were made with
senior staff in the Office of the Attorney General, the Office
of the Associate Attorney General, and the Office of
Information and Privacy. Poston began this lobbying campaign
even before her FOIA appeal had been rejected by the Justice
Department. As she explained in her interview with committee
staff, she understood that her legal arguments were a long-
shot, and she believed that she needed to raise this matter at
the highest levels of the Justice Department.\854\
---------------------------------------------------------------------------
\853\ See Steel Hector & Davis billing records (exhibit 100).
\854\ Poston interview at 3.
---------------------------------------------------------------------------
a. Poston's Contacts with John Hogan
Over the next several months, Poston would be in frequent
contact with John Hogan, the Chief of Staff to the Attorney
General. According to Poston, Hogan is a good friend of hers,
and a great friend of her sister.\855\ As an example of her
family's friendship with Hogan, Poston informed the committee
that at the time of Hurricane Andrew, Hogan invited Poston's
sister and Poston to stay with him in his house.\856\ Poston
initially told Hogan that she was in a ``FOIA situation,'' and
wanted to meet with the decisionmakers face-to-face to make her
case.\857\ Poston explained to Hogan that she wanted him to
make an introduction to the relevant individuals who could help
her.\858\ According to Poston, Hogan told her that ``he didn't
do FOIA, but would be happy to help her,'' and he told her that
he would check into the matter.\859\
---------------------------------------------------------------------------
\855\ Id.
\856\ Id.
\857\ Id.
\858\ Id.
\859\ Id.
---------------------------------------------------------------------------
Hogan's account differs in some significant respects from
Poston's. First, he downplayed his relationship with Poston. He
acknowledged that he knows Poston, but did not describe her as
a friend.\860\ He similarly downplayed Poston's relationship
with the Attorney General, merely acknowledging that Roberta
Forrest was a secretary for the State Attorney's Office,
failing to mention that she managed Ms. Reno's campaigns for
office.\861\ Hogan acknowledged that he was contacted by
Poston, and that Poston asked him for help with her FOIA
appeal. However, he stated that he ``did not pay much attention
to what she was saying after he heard that it was a FOIA
case,'' and that he generally suggested that she needed to talk
to people in the DOJ FOIA office.\862\
---------------------------------------------------------------------------
\860\ See Hogan interview.
\861\ Id. at 1.
\862\ Id.
---------------------------------------------------------------------------
Hogan informed the committee that he believed that he spoke
with Poston on less than five occasions.\863\ Similarly, Poston
estimated that she spoke with Hogan on two to four
occasions.\864\ However, records subpoenaed by the committee
reveal a remarkable volume of contacts between Poston and
Hogan. Between January 26, 1995, and June 2, 1995, Poston
contacted John Hogan at least 18 times on the Soka Gakkai
matter.\865\ While it is possible that some of these contacts
were occasions when Poston merely left a message with Hogan,
they clearly indicate that Hogan did more than suggest that
Poston speak with officials in the Justice Department FOIA
office.
---------------------------------------------------------------------------
\863\ Id.
\864\ Poston interview at 3.
\865\ See Steel Hector & Davis billing records. A number of the
cited pages refer to contact between Poston and the Attorney General's
Office. However, in her interview, Poston acknowledged that her sole
contact in the Attorney General's Office was Hogan. Similarly, in his
interview, Hogan stated that he believed that other than the Attorney
General, he was the only person in the Attorney General's Office who
knew Poston.
---------------------------------------------------------------------------
b. Poston's FOIA Appeal is Rejected
During the time that Poston was making these contacts with
Hogan, her appeal was rejected by the Justice Department's FOIA
office. In a letter dated April 25, 1995, Richard Huff, the Co-
Director of the Office of Information and Privacy, rejected
Poston's arguments. Huff informed the committee that he did not
spend much time deliberating Poston's appeal, and viewed it as
a clear-cut decision.\866\ In Huff's mind, the Supreme Court
directly addressed this issue:
---------------------------------------------------------------------------
\866\ Huff interview at 2.
I find the Supreme Court's holding in United States
Department of Justice v. Reporter's Committee for
Freedom of the Press, 489 U.S. 749 (1989) to be
controlling in this case. Thus, in the absence of such
authorization [from Mr. Abe], and after careful
consideration of your appeals from the actions of the
EOUSA and the FBI, I have decided to affirm the initial
actions of these components in refusing to confirm or
deny the existence of records responsive to your
request. Lacking an individual's consent, proof of
death, official acknowledgment of an investigation, or
an overriding public interest, even to acknowledge the
existence of law enforcement records pertaining to an
individual could reasonably be expected to constitute
an unwarranted invasion of personal privacy.\867\
---------------------------------------------------------------------------
\867\ Letter from Richard L. Huff to Rebekah J. Poston (Apr. 25,
1995) (exhibit 83).
At this point, the Office of Information and Privacy, which
served as the highest office deciding FOIA appeals within the
Justice Department, had spoken. To obtain a reversal would
require the intervention of a high-level appointee at the
Justice Department.
c. Attorney General Reno Recuses Herself
On April 28, 1995, only 3 days after Huff rejected Poston's
FOIA appeal, the Attorney General recused herself from the Soka
Gakkai matter. In a memorandum to her staff, copied to the
Associate Attorney General, Ms. Reno stated:
This is to inform you that I have recused myself from
participation in the FOIA appeal made to the Department
concerning requests for information relating to Nobuo
Abe, a prominent religious leader, on behalf of Mrs.
Hiroe Clow.
Apparently, an attorney, who is a close personal friend
of mine and participated in my confirmation hearing
preparation has requested my intervention in the matter
and I want to make it very clear that I have chosen to
disqualify myself from any participation and request
that no information regarding this matter be brought to
my attention.\868\
---------------------------------------------------------------------------
\868\ Memorandum from Attorney General Janet Reno to staff of the
Attorney General (Apr. 28, 1995) (exhibit 84).
Poston was asked about the recusal memo, and stated that
the memo clearly refers to a contact from John Edward Smith, a
close friend of the Attorney General, and a senior partner at
Steel Hector who worked on the Abe matter.\869\ However, Poston
denied having any knowledge that Smith contacted Reno on the
Abe matter.\870\ In addition, the Steel Hector billing records
do not show that Smith billed any time on the Abe matter.\871\
John Hogan, the Attorney General's Chief of Staff, similarly
believed that the memo referred to Smith.\872\ In his interview
with committee staff, Hogan claimed that he was unaware that
Reno had recused herself from this matter.\873\ However, at the
committee's July 27, 2000, hearing, Hogan offered a new
explanation of Reno's recusal:
---------------------------------------------------------------------------
\869\ Poston interview at 4.
\870\ Id.
\871\ See Steel Hector & Davis billing records (exhibit 100).
\872\ Hogan interview at 2.
\873\ Id.
I had a conversation with her [Poston] at one point,
and she clearly was frustrated with the fact that her
position was not gaining momentum within the
Department, and she mentioned to me that she was
handling the matter with a man by the name of John
Edward Smith. I knew him to be a friend of the Attorney
General. Again, I have worked with the Attorney General
since 1979 and knew her before that. He had been at
Steel Hector & Davis when the Attorney General was
there, as opposed to Ms. Poston, who joined the firm
after Ms. Reno left. He was someone--when she was
nominated to be Attorney General, he took a leave of
absence from the firm and actually came up here to
Washington to help her prepare for her confirmation
hearings. He came up here and helped her prepare for
---------------------------------------------------------------------------
those hearings.
So when Ms. Poston mentioned John Edward Smith's name
to me, I became concerned. I went to the Attorney
General and said, there is this FOIA matter that
Rebekah Poston had called me on, and I sent it off to
the career people. And the Attorney General just said,
I am recusing myself from the matter. Make sure nothing
else comes to me.
Although Ms. Poston I would not characterize as a
friend or social acquaintance of the Attorney General,
Mr. Smith was, and that was my notice that he was more
involved, and so I brought it to her attention.\874\
---------------------------------------------------------------------------
\874\ ``Felonies and Favors: A Friend of the Attorney General
Gathers Information from the Justice Department,'' 106th Cong. 147-48
(July 27, 2000) (preliminary transcript).
However, Hogan's hearing testimony is in some tension with
the text of Reno's recusal memo, which states that
``[a]pparently, an attorney, who is a close personal friend of
mine and participated in my confirmation hearing preparation
has requested my intervention in the matter[.]'' This statement
is considerably different from what Hogan supposedly relayed to
the Attorney General. Given the fact that Poston is unaware of
Smith's contacts with Reno, the two versions of Hogan's
recollection, and the text of Reno's own recusal memo, the
---------------------------------------------------------------------------
committee is left with a number of questions:
Did anyone representing Soka Gakkai contact
Attorney General Reno? If it was John Smith, why didn't
he either inform Poston, who was overseeing the case,
or bill his time?
If Smith contacted Reno, why does Rebekah
Poston claim to be unaware of the contact? Smith was
not the main attorney on the case, and it is difficult
to believe that he would contact the Attorney General
about the case without informing Poston.
Why did Reno recuse herself from the case?
Richard Huff, who has directed the Office of
Information and Privacy for almost 20 years, stated
that he has never heard of the Attorney General, Deputy
Attorney General, or Associate Attorney General ever
recusing themselves from a FOIA appeal.
The manner of Reno's recusal raises
significant questions about the contacts that led to
the recusal. What did Smith ask Reno to do? Hogan
stated that in his experience, Reno would ``not receive
it well if [someone like Smith] asked her for special
treatment on behalf of a client.'' \875\ that is the
case, why did Smith, a long time friend of the Attorney
General, contact her?
---------------------------------------------------------------------------
\875\ Id.
---------------------------------------------------------------------------
d. John Hogan Arranges a Meeting with the Associate
Attorney General
After the rejection of her FOIA appeal, Rebekah Poston
continued her contacts with John Hogan, requesting a meeting
with the Associate Attorney General. On May 12, 1995, she wrote
to Hogan, and specifically requested a meeting. In a letter
marked ``PERSONAL AND CONFIDENTIAL,'' Poston stated that she
was ``rather disappointed'' with the Justice Department's
rejection of her FOIA appeal.\876\ She then requested the
meeting with Schmidt:
---------------------------------------------------------------------------
\876\ Letter from Rebekah Poston to John Hogan (May 12, 1995)
(exhibit 85).
Consequently, John Smith, Russell Bruemmer and I
believe we must take one last step before deciding
whether to initiate litigation on these issues. Believe
me, we do not want to bring unnecessary or senseless
litigation. Unfortunately, however, we are lacking an
understanding, given our arguments and the failure of
anyone in the Office of Information and Privacy to
address them head on, as to why our appeal has been
denied. If you could assist the three of us in
scheduling a meeting with Mr. Schmidt, we would like to
address our concerns with him. We have not yet
---------------------------------------------------------------------------
attempted to contact Mr. Schmidt.
We trust that Mr. Schmidt will agree to one final
conference on this matter; we will of course work with
his schedule on a convenient date and time.
I harken [sic] back to the beginning of this matter
when you and I first spoke. You commented that you
didn't understand why they could not tell whether they
have a record or not. Frankly, we would be satisfied
with such a response.\877\
---------------------------------------------------------------------------
\877\ Id.
Steel Hector & Davis billing records also indicate that
Poston called Hogan at least four times in late May and early
June, apparently the time when the meeting with Schmidt was
scheduled.\878\ In her interview with committee staff, Poston
stated that she was asking Hogan to help set up the meeting
with Schmidt.\879\ Poston stated that Hogan was responsive, and
said he would contact Schmidt, and help set up the
meeting.\880\ When he was interviewed by committee staff
though, Hogan had a different recollection. He stated that he
did not even recall Poston asking for help in setting up a
meeting with Schmidt.\881\ Hogan stated that ``I cannot imagine
that I would be so presumptuous as to ask Schmidt to meet with
anyone.'' \882\ Hogan did allow that it was possible that he
forwarded Poston's May 12 letter to Schmidt's office, but does
not believe that he ever spoke with Schmidt about this
matter.\883\
---------------------------------------------------------------------------
\878\ Steel Hector & Davis billing records at 0000146 (exhibit
100).
\879\ Poston interview at 3.
\880\ Id.
\881\ Hogan interview at 1.
\882\ Id. at 2.
\883\ Id.
---------------------------------------------------------------------------
Hogan's account of how the Schmidt meeting was arranged is
troubling. Poston clearly stated that Hogan helped arrange the
meeting. The timing and volume of the telephone calls between
Poston and Hogan supports the conclusion that Hogan was
involved in scheduling the meeting with Schmidt. Under Hogan's
account, the 18 contacts from Rebekah Poston go unexplained.
Poston continued to contact him, despite the fact that in their
initial conversation, Hogan told her that he did not ``do
FOIA,'' and directed her to the Office of Information and
Privacy. The fact that there were so many more contacts,
including contacts shortly before the meeting with Schmidt,
supports the conclusion that Hogan was involved in scheduling
the meeting. Finally, common sense supports the conclusion that
Poston received some assistance in arranging a meeting with the
Associate Attorney General on a matter so small as a FOIA
appeal. It would be unlikely that the Associate Attorney
General would meet with a party on this kind of matter unless
there was some special request.
e. The Justice Department ``Reverses its Policy''
Rebekah Poston, John Smith, and Russell Bruemmer met with
John Schmidt on June 15, 1995, at 3:30 p.m.\884\ Before their
meeting with Schmidt, John Smith arranged for the group to
visit Attorney General Reno in her office. In her interview,
Poston confirmed that John Smith had made this appointment with
the Attorney General.\885\ Poston stated that this was a social
call, and that the group exchanged pleasantries with the
Attorney General.\886\ For example, Poston stated that the
Attorney General asked her how her sister and her children were
doing.\887\ Poston denied that she, Smith, or Bruemmer
discussed the Soka Gakkai matter with the Attorney
General.\888\ When the Attorney General asked them what brought
them to the Justice Department, Smith stated that ``we have
other business in the Department.'' \889\
---------------------------------------------------------------------------
\884\ Calendar of Rebekah Poston for June 15, 1995, Steel Hector &
Davis document 000028 (exhibit 99).
\885\ Poston interview at 5.
\886\ Id.
\887\ Id.
\888\ Id.
\889\ Id.
---------------------------------------------------------------------------
After their meeting with the Attorney General, Poston,
Smith and Bruemmer met with Schmidt. According to Poston,
Schmidt started the meeting by informing them that he had not
yet discussed the matter with Richard Huff.\890\ Poston took
this as a positive sign, because it meant that Schmidt had an
open mind on the subject.\891\ On the other hand, it is
slightly troubling that Schmidt would not take any steps to
educate himself on the Department's FOIA policy before he met
with a party who was seeking the reversal of long-standing
Department policy. Poston commented on another troubling aspect
of the meeting with Schmidt--Schmidt had no staff present at
the meeting with Poston.\892\ It is strange enough that
Schmidt, the third-highest official in the Department of
Justice, would even attend a meeting on a FOIA request. It is
even more odd that he would attend this meeting by himself, and
not seek to delegate this matter to a staffer. Due to Schmidt's
failure to recall even the most basic facts about this matter,
we cannot determine whether Schmidt recognized that Poston's
request was irregular, or whether he simply wanted to work on
this matter himself.
---------------------------------------------------------------------------
\890\ Id.
\891\ Id.
\892\ Id.
---------------------------------------------------------------------------
Poston informed the committee that she, Smith and Bruemmer
made their points with Schmidt, and he stated that he would
take their arguments under advisement.\893\ When he was
interviewed by committee staff, Schmidt could recall almost
nothing about the entire Soka Gakkai matter. Schmidt did recall
that he asked Huff to find out what information the Department
had on Abe, and that when he discovered that there were no
records, that he decided they could tell that to Poston.\894\
According to Schmidt, ``it was hard to see the adverse
consequences'' of confirming that there were no NCIC records on
Abe.\895\ Schmidt told committee staff that ``Dick [Huff] said
he would be comfortable with that.'' \896\
---------------------------------------------------------------------------
\893\ Id.
\894\ Interview of John R. Schmidt (June 16, 2000).
\895\ Id.
\896\ Id.
---------------------------------------------------------------------------
Richard Huff, though, tells a dramatically different story.
Huff stated that Schmidt called him in mid-June to ask about
the Poston FOIA appeal.\897\ They arranged a meeting for June
22, 1995. At the meeting, Schmidt asked Huff what the
Department policy was on releasing this kind of
information.\898\ Huff told Schmidt that Abe, as a foreign
national, was not covered by the Privacy Act.\899\ Huff also
explained, however, that there was a Department policy against
even confirming or denying the existence of criminal justice
information on third parties, whether they were U.S. citizens
or not.\900\ Schmidt asked Huff if they could make a disclosure
in this case.\901\ Huff responded by saying that they should
not vary Justice Department policy in this case.\902\ Huff
believes that Schmidt also mentioned the fact that Poston was
threatening to litigate if she did not receive the information
that she had requested. Huff responded by telling Schmidt that
the odds were ``spectacular'' that the Justice Department would
prevail in such litigation, given that the Supreme Court had
already addressed this precise issue.\903\ Schmidt resolved the
meeting by asking Huff to find out whether the Department had
any NCIC records on Abe.\904\
---------------------------------------------------------------------------
\897\ Huff interview at 2-3.
\898\ Id. at 3.
\899\ Id.
\900\ Id.
\901\ Id.
\902\ Id.
\903\ Id.
\904\ Id.
---------------------------------------------------------------------------
After his meeting with Schmidt, Huff requested the FBI and
the Executive Office of U.S. Attorneys to search for the
requested information on Abe, and they confirmed that they had
no information on Abe.\905\ Huff communicated this fact to
Schmidt.\906\ Schmidt asked Huff if the Department could tell
Poston that they had no NCIC records on Abe.\907\ Huff told
Schmidt that they legally could do so.\908\ Schmidt then
directed Huff to reverse his earlier decision, and confirm in a
letter to Poston that they did not have any NCIC records on
Abe.\909\ Accordingly, on July 11, 1995, Huff wrote to Poston
to tell her that:
---------------------------------------------------------------------------
\905\ Id.
\906\ Id.
\907\ Id.
\908\ Id. Huff informed Schmidt that the Privacy Act did not apply
to Nobuo Abe, since he was not a U.S. citizen or permanent resident.
Therefore, the Justice Department's confirmation that Abe had no
records at DOJ was not a violation of the Privacy Act. Despite the fact
that the Privacy Act was inapplicable in this case, Huff still believed
that Justice Department policy not to confirm or deny the existence of
any criminal justice records should apply.
\909\ Id.
After considering your Freedom of Information Act
request under Attorney General Reno's policy of
undertaking discretionary disclosure of information
whenever no foreseeable harm would result, Associate
Attorney General John R. Schmidt has determined that it
is appropriate to disclose the fact that neither the
Federal Bureau of Investigation nor the Executive
Office for United States Attorneys maintains, or has
any evidence of ever maintaining, any record within the
scope of your request.\910\
---------------------------------------------------------------------------
\910\ Letter from Richard L. Huff to Rebekah J. Poston (July 11,
1995) (exhibit 90).
While Schmidt told committee staff that Huff was
``comfortable'' with this decision, Huff told a different
story, and pointed out a series of remarkable facts about this
---------------------------------------------------------------------------
matter.
First, Huff made it clear to Schmidt that he
disagreed with the decision.\911\ He told Schmidt that
it wouldn't be illegal to release this information, but
that he disagreed with the discretionary disclosure. In
addition, Huff characterized Schmidt's decision as
``unusual.'' \912\
---------------------------------------------------------------------------
\911\ Huff interview at 3.
\912\ Id.
In his 25 years at the Justice Department,
Huff had never had any one-on-one meetings with
Schmidt, or any other Associate Attorney General.\913\
---------------------------------------------------------------------------
\913\ Id.
When asked how much senior political
appointees were involved in FOIA appeals, Huff stated
that ``typically, there is none.'' \914\
---------------------------------------------------------------------------
\914\ Id. at 1.
Huff is aware of involvement of senior
political appointees in FOIA appeals in only two other
cases. The first case involved a request for notes
taken by a Justice Department lawyer relating to an
interview of Sandra Day O'Connor before she was
appointed to the Supreme Court. The Office of
Information and Privacy initially made a decision to
grant the request, and this decision was then
overturned by a political appointee.\915\ The second
case involved a request by Terry Anderson, who had been
held captive in Lebanon, for criminal justice
information possessed by the government on the
individuals who had held him captive. The Office of
Information and Privacy had denied his request,
consistent with Justice Department policy, and then,
after significant media attention, political appointees
at the Department directed Huff to reverse the
decision.\916\ Both cases stand in obvious contrast to
this case.
---------------------------------------------------------------------------
\915\ Id.
\916\ Id.
It is unclear what effect the Schmidt
decision had on Justice Department policy. Huff was
asked whether this decision was a change of DOJ policy,
or whether it was a one-time departure from existing
policy. Huff stated that he believed that it was a one-
time departure.\917\ When asked if Schmidt offered Huff
any reason why this case would be treated differently
from any other FOIA case coming to the Department, Huff
stated that Schmidt offered no such rationale.\918\
---------------------------------------------------------------------------
\917\ Id. at 3.
\918\ Id.
---------------------------------------------------------------------------
5. Aftermath
a. Poston ``Wins the Battle, but Loses the War''
When Poston received the July 11, 1995, letter from Huff
informing her that Schmidt had decided to disclose the fact DOJ
had no NCIC records on Nobuo Abe, she felt like she had ``won
the battle, but lost the war.'' \919\ When asked to explain why
she felt that way, she declined, based on her lawyers' concerns
that such an explanation would cause her to disclose the
illegal activities conducted on her behalf by PMRG.\920\
However, documents obtained by the committee show how disturbed
Poston was to find out that the Justice Department did not have
any records on Abe. Huff's letter conflicted with the
information that Phil Manuel, Richard Lucas, and Jack Palladino
had extracted from confidential sources within the Justice
Department. On July 19, 1995, shortly after she got the Huff
letter, Poston wrote to Manuel and Lucas to ask them to follow
up with their confidential sources:
---------------------------------------------------------------------------
\919\ Poston interview at 5.
\920\ Id.
I need your assistance in helping me explain to my
clients the apparent inconsistencies between the letter
we received from Richard L. Huff, dated July 11, 1995
and your investigative reports of November 11 and 17,
---------------------------------------------------------------------------
1994.
Our personal meeting with Deputy [sic] Associate
Attorney General John Schmidt resulted in a policy
decision by the Attorney General to reverse the
original position of the Department of Justice by
authorizing the release of the requested record or a
statement as to whether it existed in the past. That is
a major accomplishment and victory. The result,
however, is quite perplexing.
I can only conclude that since a record existed, which
your two independent sources verified, the places
searched enumerated in Huff's letter must not have been
the proper locations. Any other conclusion means that
the sources are either not telling the truth or that
the record was deleted (a real possibility according to
the source in the November 17, 1994 report) without a
trace, an impossibility according to former, FBI, S/A
Lawler, if the record was ever in NCIC. That is part of
the problem.
Our client views this letter as an absolute defeat for
them in Japan.
* * * * *
Our client is requesting that each of you ask your
sources for an explanation or [sic] where they found
the record. The Attorney General's position is clear--
its existence and/or its deletion is authorized to be
disclosed.
I have the utmost confidence in your reports. We must
try our best to resolve this critical issue for our
client. Please give this matter your immediate
attention. Leave no stone unturned.\921\
---------------------------------------------------------------------------
\921\ Letter from Rebekah Poston to Philip Manuel and Richard Lucas
at 2 (July 19, 1995) (exhibit 92).
Poston and Schmidt were questioned about this letter at the
committee's hearing. When questioned about the statement that
the Attorney General had decided to reverse the Justice
Department's position, Schmidt stated that it was ``obviously
wrong'' and ``lawyer's puffery.'' \922\ However, Poston stood
by the statement in her letter, saying ``it could have been
more artfully written to say the `office of,' but I don't
believe it's puffery.'' \923\ Poston's insistence that the
Office of the Attorney General was responsible for her success
in obtaining the information on Abe continues to raise
questions about the involvement of John Hogan in this matter.
---------------------------------------------------------------------------
\922\ ``Felonies and Favors: A Friend of the Attorney General
Gathers Information from the Justice Department,'' 106th Cong. 155
(July 27, 2000) (preliminary transcript).
\923\ Id.
---------------------------------------------------------------------------
Lucas informed the committee that he took no action in
response to Poston's requests.\924\ He believes that Phil
Manuel's confidential source, Ben Brewer, told Manuel that he
believed that Abe's NCIC record was erased, and that there was
no evidence of its erasure.\925\
---------------------------------------------------------------------------
\924\ Lucas interview at 3.
\925\ Id.
---------------------------------------------------------------------------
After Lucas and Manuel failed to produce any further
information, Poston threatened to make both of them testify at
trial in Japan, where apparently, Poston's earlier
representations about the existence of an NCIC record on Abe
were coming under considerable scrutiny.\926\ Lucas refused to
go to Japan and instead, Poston drafted an affidavit for Lucas
to sign.\927\ Lucas refused to sign the affidavit unless Manuel
signed one as well.\928\ The surprising result was that in
September 1995, Manuel and Lucas both executed sworn affidavits
regarding their activities in the Abe case, including their
illegal conduct in obtaining the information on Abe. Manuel
admitted:
---------------------------------------------------------------------------
\926\ Id.
\927\ Id.
\928\ Id.
11. As part of PMRG's investigation, I contacted a
confidential and highly reliable source who I believed
would be able to determine whether the federal
---------------------------------------------------------------------------
government had documentary evidence.
12. My source told me that there was a federal
government record for Nobuo Abe which referred to
``Suspicion of Solicitation of Prostitution, Seattle
Police Department, March 1963.''
13. My source further told me that the record
concerning Mr. Abe reflected that the Seattle Police
Department had made an inquiry for information.
14. My source also told me that if Mr. Abe made an
official request for the information under his name to
be removed from the record, it could be removed.
15. Sometime later, my source informed me that the
record concerning Mr. Abe apparently had been purged.
16. I am confident that the information provided to me
by the source is accurate and reliable.\929\
---------------------------------------------------------------------------
\929\ Affidavit of Philip R. Manuel at 2-3 (Sept. 20, 1975)
(exhibit 95).
---------------------------------------------------------------------------
Lucas made similar admissions in his affidavit:
9. As part of my investigation for PMRG, I contacted a
highly reliable source and advised the source that I
was attempting to confirm the existence and the
whereabouts of documents in the possession of the
federal government related to Mr. Abe. I told this
source that Mr. Abe's name is ``Nobuo Abe'' and that
his date of birth is December 19, 1922. I also told the
source that Mr. Abe had no social security number
because he was not a U.S. citizen.
10. The source later reported to me that he had
determined that the federal government did have a
record regarding a Nobuo Abe which referred to
solicitation of prostitution, Seattle Police
Department, March 1963.
11. I am confident that the information provided to me
by the source is accurate and reliable.\930\
---------------------------------------------------------------------------
\930\ Affidavit of Richard Lucas at 2 (Sept. 22, 1995) (exhibit
96).
---------------------------------------------------------------------------
b. Justice Department Fails to Prosecute Poston or Manuel
One of the committee's greatest concerns is that the
Justice Department has shown no interest in prosecuting the
clearly illegal conduct evident in this case. The actions by
Poston, Manuel, and Lucas clearly implicate 18 U.S.C. Sec. 641.
Any case brought against Poston or Manuel would be exceedingly
strong, as it would be bolstered by extensive documentary
evidence, as well as the testimony of Richard Lucas. Indeed,
Poston and Manuel admit to their illegal actions, in writing,
and in Manuel's case, even under oath.
The Justice Department has been provided with this
information on a number of occasions. In February 1997, counsel
for Nichiren Shoshu, John Gibbons, sent a set of documents to
the FBI Washington Field Office.\931\ Those documents detailed
the fact that NCIC information on Abe had been illegally
obtained by Poston, Manuel, and Lucas. Those records were
forwarded to the FBI Office of Professional Responsibility
(OPR). On February 19, 1997, David Ries, the Deputy Chief of
OPR, wrote to Gibbons, stating that the charges ``have no
merit.'' \932\ However, Ries did state that the FBI OPR would
consider revisiting the issue if it obtained a detailed
statement from Richard Lucas. Gibbons provided a detailed
accounting of Lucas's testimony in May 1997.\933\ In September
1997, Ries responded, stating that ``the allegations presented
by you and others have been repeatedly brought to the attention
of the FBI by numerous individuals in various communications
and in various meetings, for a number of years. . . . This
review indicates the allegations remain without merit.'' \934\
Gibbons wrote back on September 26, 1997, to ask Ries to at
least interview Lucas before he reached any conclusions that
the Abe matter was without merit.\935\ Ries wrote back one
final time on October 16, 1997, to tell Gibbons that OPR would
not conduct any further investigation into the Abe matter, and
that his ``allegations remain without merit.'' \936\
---------------------------------------------------------------------------
\931\ See letter from David V. Ries, Deputy Assistant Director,
Office of Professional Responsibility, Federal Bureau of Investigation,
to the OSO Group, Ltd. (Feb. 19, 1997) (exhibit 102).
\932\ Id.
\933\ Letter from John C. Gibbons to David V. Ries, Deputy
Assistant Director, Office of Professional Responsibility, Federal
Bureau of Investigation (May 28, 1997) (exhibit 103).
\934\ Letter from David V. Ries, Deputy Assistant Director, Office
of Professional Responsibility, Federal Bureau of Investigation, to the
OSO Group, Ltd. (Sept. 4, 1997) (exhibit 105).
\935\ Letter from John C. Gibbons to David V. Ries, Deputy
Assistant Director, Office of Professional Responsibility, Federal
Bureau of Investigation (Sept. 26, 1977) (exhibit 106).
\936\ Letter from David V. Ries, Deputy Assistant Director, Office
of Professional Responsibility, Federal Bureau of Investigation, to the
OSO Group, Ltd. (Oct. 16, 1997) (exhibit 107).
---------------------------------------------------------------------------
In addition to numerous attempts made by counsel for
Nichiren Shoshu, the committee has referred this matter to the
Justice Department. In 1998, committee staff met with FBI
personnel to explain this matter, and request the FBI to
investigate the potentially illegal actions taken by Poston and
PMRG.
It is astounding that the Justice Department has refused to
take action on this matter. The Department has been provided on
repeated occasions with clear-cut evidence of illegal activity.
There is both documentary and testimonial evidence that Rebekah
Poston, Philip Manuel, and Richard Lucas penetrated
confidential law enforcement databases to obtain information on
Nobuo Abe. However, the Department has concluded on three
separate occasions, without explanation, that these charges are
``without merit.'' Apparently, though, they have not attempted
to interview any of the witnesses in this case, including
Richard Lucas, who offered repeatedly to be interviewed,
against his own legal interests.\937\
---------------------------------------------------------------------------
\937\ Although there is no doubt that Richard Lucas' conduct was
unlawful, it must be pointed out that he was the only witness involved
in the illegal efforts to obtain information on Abe to cooperate fully
with the committee. As important, his offer of cooperation to the
Justice Department indicates a willingness to atone for his part in
improper conduct. By comparison, Poston and Manuel have taken no steps
to cooperate with law enforcement.
---------------------------------------------------------------------------
6. Poston's Appearance Before the Committee on July 27, 2000
On July 27, 2000, the committee held a hearing at which
Rebekah Poston, Philip Manuel, Richard Lucas, John Schmidt,
Richard Huff, and John Hogan testified.
a. Poston Refused to Invoke the Fifth Amendment
When Poston was interviewed by committee staff on June 29,
2000, her counsel informed committee staff that she would not
answer questions about her efforts to obtain information about
Nobuo Abe through private investigators. Her counsel, Eduardo
Palmer, stated that Poston would not answer these questions
because of the attorney-client privilege and Poston's possible
criminal exposure. Therefore, committee staff asked few
questions about those subjects.
When Poston was informed in early July that she would be
called to a hearing of the committee, her counsel strenuously
objected. In a conference call on July 12, 2000, her counsel,
Eduardo Palmer, C. Boyden Gray, and Jane Sherburne, explained
the reasons why they believed Poston should not be called to
the committee's hearing. During this telephone call, Palmer and
Gray repeatedly stated that they believed that Poston would be
forced to take the fifth if called to a hearing. Palmer
repeatedly stated that he did not want Poston to be forced to
take the fifth publicly, and argued that in light of this fact,
it would be more appropriate to hold a closed hearing, to spare
Poston the embarrassment of taking the fifth publicly.
Once at the hearing, Poston and her counsel did not invoke
the fifth amendment, and even attempted to deny that they ever
stated that they would if called to a hearing. When asked about
her contacts with private investigators, and her requests that
they illegally obtain NCIC information, Poston claimed
attorney-client privilege. Chairman Burton then questioned her
about her counsel's representations:
Chairman Burton. Let me just inform Ms. Poston, first
of all, that you are directed by the committee to
answer the question and you do run the risk of being
held in contempt of Congress if you do not.
The second thing is, I'd like to ask the question, when
you appeared before Mr. Wilson and his colleague and
were discussing these issues, did you indicate that you
would take the fifth amendment before this committee?
Ms. Poston. I did not, nor do I intend to do so.
* * * * *
Chairman Burton. Did your legal counsel, your lawyers,
indicate that you might take the fifth amendment?
* * * * *
Mr. Palmer. I had discussions with a member of your
committee who spoke with me about these matters over
the course of the last year and a half.
Chairman Burton. I'm talking about when you were here,
what, a few weeks ago.
Mr. Palmer. Three weeks ago.
Chairman Burton. Yes.
Mr. Palmer. No, sir.
Chairman Burton. When you discussed with them on the
phone the issues in the last week did you indicate that
she might take the fifth amendment?
Mr. Palmer. Members of your committee indicated to me
that, in their view, the conduct at issue here could
constitute a criminal violation; and we discussed all
the privileges that would be applicable in that
situation. I advised them that if that were the
situation that, first and foremost, the information the
committee sought would be protected by the attorney-
client privilege and the work product doctrine.
I also told them that if they believed that a witness
had committed a criminal offense and they knew that
from the outset, that it would be improper for--to
force the witness to come before this committee merely
to assert a fifth amendment privilege.
Chairman Burton. So you did indicate that Ms. Poston
might under these circumstances assert her fifth
amendment privilege.
Mr. Palmer. I indicated exactly what I just expressed
to you.\938\
---------------------------------------------------------------------------
\938\ ``Felonies and Favors: A Friend of the Attorney General
Gathers Information from the Justice Department,'' 106th Cong. 39-40
(July 27, 2000) (preliminary transcript).
Palmer's characterization of his discussions with committee
staff varied substantially from reality. Palmer's discussions
with staff were not an abstract discussion of the propriety of
forcing a witness to invoke the fifth amendment. Rather, he
made an extended plea to have Poston appear in a closed
session, based upon the fact that it would be improper and
embarrassing to force her to take the fifth in public. Indeed,
if Palmer never intended to have Poston take the fifth, as he
claimed at the hearing, the plea made in his July 12 conference
call was highly misleading. In retrospect, it appears as though
the positions taken by Poston and her counsel evolved.
Initially they believed that they would be compelled by the
facts of this particular case to invoke the fifth amendment.
Later, they decided--improperly, from the perspective of the
committee--to use the attorney-client privilege as an all-
purpose prophylactic against appearing to admit guilt to any
possible crime.
b. Poston Refused to Answer Questions Which She Was Legally
Obligated to Answer
A number of times during the committee's hearing, Poston
was asked about her contacts with Philip Manuel Resource Group,
and her efforts to obtain criminal history information about
Nobuo Abe. Any time that Poston was asked substantive
information about those efforts, she invoked attorney-client
privilege. Poston invoked the privilege despite the fact that
she was informed that the privilege did not apply. As explained
to her during the hearing, many of the subjects being discussed
in the committee's hearing were not privileged in any way, for
the following reasons:
A number of details about Poston's contacts
with PMRG were published by her client in the Soka
Gakkai newsletter. The publication of these matters
would waive the privilege.
Many of the contacts between Poston and her
investigators took place prior to the establishment of
a formal agency relationship between Steel Hector &
Davis and PMRG.
Many of the activities undertaken by PMRG
were illegal, and cannot be the subject of a claim of
privilege, because of the crime/fraud exception to the
privilege.
Finally, Congress need not recognize the
attorney-client privilege, and the committee does not
in the Poston case, given the clear indicia that Poston
and her investigators were engaged in illegal activity.
Despite a clear instruction from the chairman that she answer
questions put to her, Poston refused to answer questions about
her attempts to gather criminal history information on Nobuo
Abe.\939\
---------------------------------------------------------------------------
\939\ Poston's refusal to comply with the chairman's order should
be contrasted with Richard Lucas's compliance with the chairman's
order. Lucas answered all questions put to him, understanding that the
committee had considered and rejected all claims of privilege.
``Felonies and Favors: A Friend of the Attorney General Gathers
Information from the Justice Department,'' 106th Cong. 45-46 (July 27,
2000) (preliminary transcript).
---------------------------------------------------------------------------
Improper access to law enforcement databases is a serious
and pervasive problem. While it is not uncommon for
investigators to access databases like NCIC without permission,
such activity is illegal. The Department of Justice and FBI
should take seriously their responsibility to guard the privacy
and integrity of the information in law enforcement databases.
When confronted with clear evidence that a team of lawyers,
private investigators, and law enforcement personnel were
improperly accessing the NCIC record of Nobuo Abe, the Justice
Department should have taken action, and prosecuted the
responsible parties. By failing to investigate this case, the
Justice Department and FBI have sent the clear message that
they do not value the sanctity of law enforcement databases.
Similarly, Justice Department's handling of Rebekah
Poston's FOIA request raises serious questions. Justice
Department policy called for Poston's FOIA request to be
rejected, without confirming or denying the existence of any
record. However, through her contacts in the Office of the
Attorney General, Poston was able to obtain special treatment.
While the disclosure made by the Justice Department in response
to Poston's FOIA request was not criminal, it was an unseemly
favor for a friend of the Attorney General. This disclosure
makes it appear that the Justice Department places the Attorney
General's personal friendships above the judgment of career
Justice Department staff and long-standing Justice Department
policy.
B. Robert Bratt
Robert K. Bratt, who had a 21 year career with the
Department of Justice, retired on August 1, 2000. From August
1995 to July 2000, he was the Criminal Division Executive
Officer for the Office of Administration (OA).\940\ From March
1995 until his retirement, Bratt also held the following posts:
---------------------------------------------------------------------------
\940\ ``An Investigation of Misconduct and Mismanagement at ICITAP,
OPDAT, and the Criminal Division's Office of Administration,'' U.S.
Department of Justice, Office of the Inspector General, at xiii (Sept.
2000).
March 1995-August 1996: Acting Director of
the International Criminal Investigative Training
Assistance Program (ICITAP)\941\
---------------------------------------------------------------------------
\941\ Created in 1986, ICITAP's mission includes ``two principal
types of projects: (1) developing police forces in the context of
international peacekeeping operations, and (2) enhancing the
capabilities of existing policing forces in emerging democracies based
on internationally recognized principles of human rights, the rule of
law, and modern police practices.'' Id. at 23.
September 1996-April 1997: Coordinator of
ICITAP and Office of Overseas Prosecutorial
Development, Assistance and Training (OPDAT)\942\
---------------------------------------------------------------------------
\942\ Created in 1991, OPDAT ``works with United States embassies
and other United States government agencies to coordinate training for
judges and prosecutors in South and Central America, the Caribbean,
Russia, other Newly Independent States, and Central and Eastern Europe.
The office also serves as the Department of Justice's liaison between
private and public agencies that sponsor visits to the United States
for foreign officials interested in learning about his country's legal
system.'' Id. at 24-25. In 1997, ``OPDAT's mission shifted exclusively
to international training issues.'' Id. at 23 n.1.
April 1997-March 1998: Detailed as Executive
Director for Naturalization Operation of the
Immigration and Naturalization Service (INS)\943\
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\943\ ``Hearing on the Immigration and Naturalization Service,''
hearing before the Senate Judiciary Subcommittee on Immigration, 105th
Cong. (testimony of Doris Meissner, Commissioner, Immigration and
Naturalization Service) (May 1, 1997).
March 1998-July 2000: Detailed as Acting
Director of Information Management Narrowband
Communications Wireless Offices of Justice Management
Division (JMD) \944\
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\944\ Id. at xiii.
Bratt, a onetime Reno favorite, served as one of the Attorney
General's top troubleshooters.\945\ In a committee interview,
Attorney General Reno stated that ``Mr. Bratt was first
introduced to me as somebody in the [C]riminal [D]ivision who
was a very good administrator, and I saw him in that context.''
\946\
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\945\ See, e.g., ``Hearing on the Immigration and Naturalization
Service,'' hearing before the Senate Judiciary Subcommittee on
Immigration, 105th Cong. (testimony of Doris Meissner, Commissioner,
Immigration and Naturalization Service) (May 1, 1997); Michael Isikoff,
``The Perils of Romance,'' Newsweek Online (Sept. 12, 2000)
; Jerry Seper, ``Top Justice Officials
Being Probed About Security Violations,'' the Washington Times, Sept.
22, 2000, at A10; and Jamie Dettmer, ``Internal Probe to Embarrass
Justice Department,'' Insight on the News, Jan. 3, 2000, at 6.
\946\ Transcript of interview of Attorney General Janet Reno,
Department of Justice, in Washington, DC, at 62 (Oct. 5, 2000)
(preliminary transcript). Because of Reno's confidence in Bratt, she
personally asked him to be detailed to INS. Id. and ``Hearing on the
Immigration and Naturalization Service,'' hearing before the Senate
Judiciary Subcommittee on Immigration, 105th Cong. (testimony of Doris
Meissner, Commissioner, Immigration and Naturalization Service) (May 1,
1997).
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In March 1997, the Department of Justice Office of
Inspector General (OIG) initiated an investigation into
``allegations of misconduct, security violations, financial
mismanagement, travel violations, and favoritism in ICITAP,
OPDAT, and [OA].'' \947\ Bratt was one of the main subjects of
this investigation. As a safeguard measure, in March 1998,
after OIG briefed Attorney General Reno on the ongoing
investigation, the Department of Justice suspended Bratt's
security clearance.\948\ In September 2000, OIG released its
findings in the report: An Investigation of Misconduct and
Mismanagement at ICITAP, OPDAT, and the Criminal Division's
Office of Administration.
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\947\ ``An Investigation of Misconduct and Mismanagement at ICITAP,
OPDAT, and the Criminal Division's Office of Administration,'' U.S.
Department of Justice, Office of the Inspector General, at 27
(September 2000).
\948\ Id. at 27 n.4.
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In its report, the OIG determined that ``Bratt repeatedly
engaged in substantial misconduct while serving as the
Executive Officer of the Criminal Division and while he was
responsible for overseeing ICITAP and OPDAT.'' \949\ In
particular, the OIG concluded the following:
---------------------------------------------------------------------------
\949\ Id. at 401.
Bratt committed egregious misconduct by
using his government position to improperly procure
visas for two Russian citizens[.] \950\
---------------------------------------------------------------------------
\950\ Id. at 402.
Bratt attempted to provide his former
assistant ``with a false scenario that she would then
provide to the OIG'' in its investigation.\951\
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\951\ Id. at 205.
Bratt ``was engaged in an effort to alert
and probe witnesses, to dissemble to them that he had
never knowingly done anything wrong, and to seek
reassurance from them that they would not say
otherwise'' to the OIG.\952\
---------------------------------------------------------------------------
\952\ Id.
ICITAP employees under Bratt's supervision
failed ``to observe fundamental security practices,''
\953\ failed to ``enforce the government's security
regulations,'' \954\ resisted continual ``advice and
warnings of ICITAP's security officers,'' \955\ and
``violated security regulations by disclosing
classified information to uncleared parties and by
removing documents.'' \956\
---------------------------------------------------------------------------
\953\ Id. at 21 (regarding Associate Deputy ICITAP Director Joseph
Trincellito's conduct).
\954\ Id. at 405 (regarding ICITAP Director Janice Stromsem's
conduct).
\955\ Id. at 21 (regarding Associate Deputy ICITAP Director Joseph
Trincellito's conduct).
\956\ Id. (regarding Special Assistant to the ICITAP Director Cary
Hoover's conduct).
Bratt committed serious misconduct in
connection with his government travel.\957\
---------------------------------------------------------------------------
\957\ Id. at 402.
Bratt ``put his staff in a position where
following his instructions left them with no other
option [but to violate Department of Justice rules.]''
\958\
---------------------------------------------------------------------------
\958\ Id. at 180.
Bratt had a pattern of ``blaming his staff
for his own misconduct and failures to abide by the
rules'' during the OIG investigation.\959\
---------------------------------------------------------------------------
\959\ Id. at 403.
Bratt was not forthcoming and honest during
his interviews with [the OIG].\960\
---------------------------------------------------------------------------
\960\ Id. at 402.
Bratt's [romantic] involvement with [a
female Russian citizen] also raised significant
security concerns.\961\
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\961\ Id. at 403.
In the end, Attorney General Reno's ``successful, effective
troubleshooter and adviser'' was found to be ``a supervisor who
willfully violated government regulations, who was recklessly
indifferent to the security interests of the government, who
induced subordinates to aid and abet his misconduct, and who
made false statements to the OIG.'' \962\
---------------------------------------------------------------------------
\962\ Id.
---------------------------------------------------------------------------
Building upon the OIG's alarming evidence, this committee
is concerned about several instances of possible Department of
Justice favoritism toward Bratt and its effects. Despite
Bratt's egregious conduct, the Department offered and Bratt
accepted early retirement, which included employment benefits
and an annuity. The OIG determined that, in effect, this option
allowed Bratt to be ``no longer subject to discipline by the
Department'' because he is no longer a Federal employee.\963\
Deputy Attorney General Eric Holder testified that ``Bratt was
not awarded any special arrangements'' regarding early
retirement.\964\ However, the committee believes that Bratt
took advantage of this offer to escape discipline. The timing
of the OIG's release of a draft copy of its report to Bratt and
Bratt's application for early retirement, which comes within a
few days of each other, is suspect.\965\ Bratt's early
retirement took effect 1 month before the OIG released its
report.\966\
---------------------------------------------------------------------------
\963\ Id. at 402.
\964\ Hearing on the Department of Justice Office of the Inspector
General's September 2000 report titled: ``An Investigation of
Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal
Division's Office of Administration,'' hearing before the House
Judiciary Committee, 106th Cong. (testimony of Eric Holder, Deputy
Attorney General, Department of Justice) (Sept. 21, 2000).
\965\ On July 10, 2000, Bratt was provided a copy of the draft IG
report and asked to respond. On July 19, 2000, Bratt submitted an
application for early retirement.
\966\ On August 1, 2000, Bratt's early retirement took effect. In
mid-September, the OIG report was released to Congress. The Judiciary
Committee made the report available to the public on its Web site.
---------------------------------------------------------------------------
The committee also believes that Bratt's senior position
within the Department of Justice had a chilling effect on
whistleblowers. Denise Turcotte, Bratt's former assistant, was
co-opted to make improper travel arrangements for Bratt.\967\
In her initial interview with OIG, Turcotte denied doing
anything improper. Several months after that interview, she
voluntarily asked the OIG to reinterview her. During the
interview, Turcotte explained that Bratt had tried to influence
her testimony, and get her to lie about her activities:
---------------------------------------------------------------------------
\967\ The OIG found that Turcotte's conduct did not warrant
discipline. ``An Investigation of Misconduct and Mismanagement at
ICITAP, OPDAT, and the Criminal Division's Office of Administration,''
U.S. Department of Justice, Office of the Inspector General, at 407
(September 2000).
Ms. Turcotte. He said that he had had like a full day
of talking with you folks about travel and that he
wanted to talk to me about it, and could we go for a
walk, so we went for a walk. We went, he got a bagel
and I was very uncomfortable. He started talking about,
you know, basically, I turned all the travel over to
you and, you know, I--I expressed, you know, you made
the final decisions, basically. If I made any
---------------------------------------------------------------------------
preference, you had the final decision.
OIG: Is this Mr. Bratt saying this to you?
Ms. Turcotte. This is Mr. Bratt saying this. And I am
going--I am in shock, first of all, and I just
continued to listen to him because I couldn't quite
tell where he was going with it. But he also said that,
first of all, he didn't want anyone to know about this
conversation. He made that very clear, we never had
this conversation. And, again, I didn't say yes or no
about keeping any, you know.
He--he said that--something to the effect, and I can't
recall the exact words, but I never asked you to juggle
my travel hours so that I could qualify for business
class, did I? \968\
---------------------------------------------------------------------------
\968\ Transcript of Office of the Inspector General, U.S.
Department of Justice, investigative interview of Denise Turcotte (Feb.
24, 1999) at 20.
Also in this interview, Turcotte was asked why she had been
---------------------------------------------------------------------------
afraid of coming forward.
Ms. Turcotte. [Bratt] is a powerful guy, yeah. He knows
a lot of high level people. And I was hoping that, gee,
if I get bored with this position in the Criminal
Division, you know,--am I thinking the OIG had better
hire me? I mean I am--you know, I am--there's that part
of it, too. You know, please, you know, I can be
trusted. I don't know where I--you know, I just don't
know.
Mr. Nassikas.\969\ And he is a powerful, as I
understand, personality. I mean there's a----
---------------------------------------------------------------------------
\969\ John Nassikas represented Denise Turcotte as counsel.
Ms. Turcotte. Yeah, he is very charismatic. He has done
a lot of pet projects for Reno. He has been tasked to
do the INS thing, for instance. Now it is the wireless
thing. Of course, the circumstances are different,
but---- \970\
---------------------------------------------------------------------------
\970\ Transcript of Office of the Inspector General, U.S.
Department of Justice, investigative interview of Denise Turcotte (Feb.
24, 1999) at 47-48.
It is clear that Turcotte believed she could not come forward
because of Bratt's relationship with Attorney General Reno and
other high-level Department of Justice officials. Turcotte also
indicated that whistleblower protections were not enough to
protect her against retaliation.\971\
---------------------------------------------------------------------------
\971\ Id. at 46.
---------------------------------------------------------------------------
The actions of another senior Justice Department official
may also have had a chilling effect upon whistleblowers.
Shortly after the allegations against Bratt surfaced, Stephen
Colgate, Assistant Attorney General for Administration, Justice
Management Division, who was a close friend of Bratt, told the
Legal Times: ``Believe me, when the dust settles, Bratt will be
vindicated . . . [the allegations are] an outrage, an absolute
outrage.'' \972\
---------------------------------------------------------------------------
\972\ Sam Skolnik, ``Charges of Fraud, Waste Prompt Probe of
Justice Department Training Programs,'' Legal Times, Sept. 21, 1998, at
2.
---------------------------------------------------------------------------
Colgate's comments are troubling because he is commenting
about an open case. More important, such comments by a senior
Justice Department official like Colgate condemning
whistleblowers' allegations sends a clear message that
whistleblowers are not welcome at the Department. Much to the
dismay of this committee, when the Attorney General was asked
about the effects of Colgate's comment, she only defended his
actions and refused to admit the potential negative
implications.
Committee Counsel. And it would not be mysterious, I
think, but our concern would be that if senior
Department of Justice officials are commenting about
what is a pending case, something that we have so much
communication back and forth with with [sic] the
Department, that that communicates to employees in the
Department of Justice something very negative. Do you
think Mr. Colgate should have made a statement like
that back in 1998?
Attorney General Reno. My understanding is that he was
recused from this matter and that he feels that the
questions and the answer--and that the answer was taken
out of context. So I would have to check on that.
Committee Counsel. But is it just he feels it was taken
out of context or do you think it was appropriate or
inappropriate for him to go on the record and make a
comment about what was at that point a pending matter
that was just starting to be investigated by the
Inspector General's office?
Attorney General Reno. I would have to understand the
context.
Committee Counsel. But even without the context, just
the comment on the pending investigation, is that
something you would condone or not condone?
Attorney General Reno. I would look at it in terms of
the context and how it was said and what was asked and
where the occasion took place.
Committee Counsel. Do you personally have any reaction
to the effect that a statement like that would have on
a low level employee like Ms. Turcotte?
Attorney General Reno. Counsel, I may not have--be as
far along in my review of the matter to understand all
the details I need to properly respond to your
question, but I just think it is important before I do
that, I understand all the issues and that I don't
spout off without being fully informed.\973\
---------------------------------------------------------------------------
\973\ Transcript of interview with Attorney General Janet Reno,
Department of Justice, in Washington, DC at 71-73 (Oct. 5, 2000)
(preliminary transcript).
During the October 5, 2000, committee interview, there were
many more examples of Attorney General Reno's unwillingness to
answer questions about Mr. Bratt. As the transcript shows,
Attorney General Reno was either unwilling or unable to answer
---------------------------------------------------------------------------
many of the questions directed to her:
Committee Counsel. Have you read the Office of
Inspector General report about Mr. Bratt?
Attorney General Reno. I have read it but not in
detail.\974\
---------------------------------------------------------------------------
\974\ Id. at 63
* * * * *
---------------------------------------------------------------------------
Committee Counsel. [W]ere you aware the Inspector
General concluded Mr. Bratt had asked his former
assistant to lie for him?
Attorney General Reno. Because the disciplinary and
remedial matters are pending, we are limited, as I am
sure the committee understands, in what we can say
about them[.]\975\
---------------------------------------------------------------------------
\975\ Id. at 64-65.
* * * * *
---------------------------------------------------------------------------
Committee Counsel. But my question is, if [Bratt]
doesn't work for the Department of Justice, short of a
prosecution, is there any avenue of discipline that the
Department of Justice can effect at this point?
Attorney General Reno. There are matters relating to a
number of issues within the report, and I think it
would be inappropriate to comment until all those
matters are resolved.\976\
---------------------------------------------------------------------------
\976\ Id. at 65-66.
* * * * *
---------------------------------------------------------------------------
Committee Counsel. [D]o you at this point think that
Mr. Bratt did receive any preferential treatment by the
Department of Justice thus far?
Attorney General Reno. I think the important thing for
me, before I answer specific questions, would be to
review the whole record. And I think that is something
Dr. Hawk Sawyer should do.\977\
---------------------------------------------------------------------------
\977\ Id. at 70-71.
These exchanges did nothing to resolve the committee's serious
questions about this case.\978\
---------------------------------------------------------------------------
\978\ The OIG also concluded that senior level Department of
Justice employees were failing to doing their jobs:
Even if Bratt had been an exemplary manager, ICITAP and
OPDAT would have benefited from attention and guidance by
senior Criminal Division managers[.] [T]he failure to
adequately supervise [Bratt's] conduct added fuel to
ICITAP's preexisting problems. We do not believe that all
of ICITAP's difficulties and Bratt's and other managers'
improprieties could only have been ferreted out by an OIG
investigation. Some of them, particularly security and
travel issues, should have been apparent to anyone taking
the time to look. The fact that the Criminal Division did
not follow up to ensure that recommendations from other OIG
or internal investigations had been implemented is an
---------------------------------------------------------------------------
example of the lack of adequate oversight.
``An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT,
and the Criminal Division's Office of Administration,'' U.S. Department
of Justice, Office of the Inspector General, at 413 (September 2000).
Representative Howard Coble recently expressed concern at a
Judiciary Committee hearing about the OIG report that, when it
came to security issues, the ``fox may be guarding the henhouse
down at Justice.'' \979\ Noting the Department of Justice's
favorable treatment toward Bratt and inaction toward Colgate's
intimidating statements to the press, this committee also must
conclude that the Department's embarrassing instances of
security breaches by top officials are being contained--not
discouraged--with a ``fox guarding the henhouse'' approach. The
Bratt case provides just one more example of an Attorney
General more interested in providing unfair advantages to her
friends and political allies than in doing her job.
---------------------------------------------------------------------------
\979\ Hearing on the Department of Justice Office of the Inspector
General's September 2000 report titled: ``An Investigation of
Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal
Division's Office of Administration,'' hearing before the House
Judiciary Committee, 106th Cong. (statement of Representative Howard
Coble) (Sept. 21, 2000).
---------------------------------------------------------------------------
[The exhibits referred to follow:]