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Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Speechwriting
Series/Staff Meinber:
Michael Waldman
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OA/ID Number:
FolderlD:
Folder Title:
Whitewater Clippings (through 1/2/94) [Binder] [3]
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92
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10
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�Copyright 1993 American Political Network, Inc.
The Hotline
December 20, 1993
SECTION: THE CLINTON ADMINISTRATION
LENGTH: 1427 words
HEADLINE: WHITEWATER WHITEWASH: THE CASE OF THE MISSING FILE
BODY:
"Federal investigators are trying to determine" whether a file relating to a failed
Madison S&L owner James McDougal and his investment firm was "taken" from the office
of the late Dep. WH Counsel Vincent Foster, after Foster committed suicide 7/93. Law
enforcement officials "have been told that Mr. Foster ... kept a file in his office" on McDougal.
Pres. Clinton's former business associate, "and on the Whitewater Development Corporation,
a real estate investment firm under scrutiny in a separate (DoJ) inquiry in (AR). But the
officials said no such file was listed in the inventory of items" in Foster's office conducted 7'22.
One law enforcement official said "it was possible that papers dealing with Mr. McDougal and
Whitewater had been turned over to Mr. Foster's widow in a box of personal property given
to James Hamilton, the family's lawyer." A senior WH official: "We are not aware that any
law-enforcement official is looking into the fact that a file relating to Whitewater or
McDougal disappeared or in any way was improperly handled. All the files in Vince 1 osier's
office were properly handled" (Johnston, N.Y. TIMES, 12/19). "One U.S Park Police
investigator has said he recalls seeing 'paperwork' related to McDougal in the pile of
documents inspected at Hamilton's office. Agency officials are considering whether thev should
notify department investigators in Little Rock. But there is no written record of this in the Park
Police report, and a senior White House official said (WH Counsel Bernard) Nussbaum lecaJls
seeing no such documents" (Isikoff, W. POST, 12/19).
ANOTHER DIARY? The DoJ is "quesdoning U.S. Park Police investigatoiV afsout *
"personal diary" kept by Foster before his suicide. The WH never disclosed a diary wa» round
in Foster's office, "and its existence was never publicly acknowledged by the Park Police
officials assigned to investigate the circumstances of Foster's death." Law-enforcement vource*
confirm the diary "was among a stack of papers that was removed from Foster's office* *v
Nussbaum and turned over to Hamilton. This week, the DoJ's Office of Prof. Responsibility
(OPR) "decided to seek access to the diary on the grounds that it was possibly relevant to its
own inquiry" into an allegation made in a note left by Foster that the FBI "lied" to AG lanei
Reno. Since OPR's inquiry is non-criminal, they have no subpoena power. So far. Hamilton
has "declined to cooperate." A WH official said Nussbaum "had no recollection of the durv
or any other documents that were placed in the 'personal pile.'" But the official "stress4cd) thai
there should be no mystery" about documents in that pile, which went to
�Hamilton: "Every piece of paper, including this diary, if it exists, that was given to Hamilton
was shown to the Park Police. Nothing personal was withheld from them" (Isikoff, W. POST,
12/19). "The file is likely to be more relevant than the diary" to the Madison probe under way
in Little Rock. "It is presumed to contain papers pertaining to Bill and Hillary Clinton's
finances, including tax returns for certain years and their investment in Whitewater" (Ingersoll.
W.S. JOURNAL, 12/20).
RELIVING OLD PROBLEMS: DoJ officials refused comment on the OPR probe. "But
some officials familiar with it say it is potentially sensitive, touching on matters relating to (WH)
contacts with the FBI during the (WH) travel office controversy. OPR has also begun
questioning about the (WH's) cooperation with the Park Police and FBI during the investigation
of Foster's death" (Isikoff, W. POST, 12/19). Law-enforcement officials "said that the inquiry
(into the existence of McDougal papers) was being hampered by a lack of cooperation from
the (WH). They said some Administration officials whom investigators sought to interview had
engaged in time-consuming negotiations about being represented by lawyers. They also said that
investigators strongly suspected that White House officials may have misled them." Probers
"have not ruled out the possibility that the file was removed to keep it out of the hands of
investigators." One senior law-enforcement official: "Nobody knows the answer yet. but ihai's
the direction it's headed in" (N.Y. TIMES, 12/19). W. TIMES' Seper reports two Park Police
investigators say there was a "clandestine search" of Foster's office on 7/20 "less than hree
hours after his body was found" by two Clinton "political operatives" - special asst. to the
president Patsy Thomasson (a "veteran" of AR Dem politics) and Hillary Rodham Clinton CoS
Maggie Williams. But investigators maintain "it is not clear who took the documents from Mr
Foster's office" (12/20).
CLINTON $ LOSSES DISPUTED: Chris Wade, an AR real-estate
agent who managed Whitewater throughout the '80s, "says he does not believe the venture *4s
a money loser that cost Clinton and his wife tens of thousands of dollars, as the preside™ and
his aides have said. W. POST'S Schneider & Babcock call Wade "one of the few mdividuaJs
with firsthand knowledge of Whitewater to discuss its affairs." Federal tax returns ' ^ . ^ the
Clintons eventurally claimed no losses" from Whitewater. Their '92 return shows J M >**)
capital gain from the venture. Clinton aide Bruce Lindsey, in a written statement ' v» .<HJ
know, in March, 1992, the Clinton Campaign released a report by an independent accounimj
firm which established that the Clintons lost at $68,900 on Whitewater ... They revenoj •*>
gain of any kind from their investment. ... We see no need to supplement the March. ;
report or to provide further documentation" (12/19).
�THE STORY'S GETTING LEGS: Tony Snow calls Whitewater a "scandal worth
investigating. ... It involves a mishmash of events that could entangle a president and many of
his closest advisers" (W. TIMES, 12/20). N.Y. TIMES editorial states the "mess, and the
Clintons' relationship to it, is not, as the White House keeps saying, an 'old' story that has no
relevance to Mr. Clinton or his present job. This is a man who rode into Washington on a
pledge to end politics as usual, and every time the White House dodges inquiries about the old
days in Arkansas, reasonable people begin to wonder about a cover-up and Mr. Clinton's
sincerity. ... Based on what is publicly known, there's probably not a crippling scandal here.
But the White House is behaving as if there were" (12/20). CS. MONITOR'S Boot: "The
burgeoning investigations may have important implications for President Clinton's political
future" (12/20).
�•
oot by eouuifti to covey,
Every doUar I Mr.
^
throes of tr
Pentagon is a dollar
for
bi hii pet Wamfl CbrtstoplterrafcfeWStMror*a
domestic programs. The reason is that larger share of the budget pie: The White foi^ati«H(p|^^the danger of setta
tM n
Congress has set an inflexible ceiling on House budget office allotted $19.6 bl o
for
95
total spending for defense, foreign aid and the 1 9 foreign affairs budget, which has not y« been dispelled. Democra
domestic spending other than govemment includes both foreign aid and operating the region is endangered by econc
expenses. That's nearly $ billion less than
4
benefits.
woes, with no prospect of relief un
"There will be give ori both sides," Mr. the S23.4 billion requested by the State
Department.
Bentsen asserted yesterday.
solid growth path has been establis
The federal Judiciary, meanwhile, is
The new Pentagon reductions would be
Yet despite the urgent need for ^
part of a larger package of budget cuts likely to seek an Increase in its $2.7 billion
em aid, attempts to coordinate ir
being prepared by the White House. That budget, though smaller than the 87 boost
.%
package probably will include nearly all it received this year. The courts' budget
national efforts have not been very
the specific spending cuts proposed this request is transmitted directly to Congress
cessful up to now. Large-scale fina
fall by Reps. Timothy Penny (D., Minn.) by the White House without amendment.
and John Kasich (R., Ohio). On top of that, To the consternation of the White House transfers along the lines of the Man
according to one member of the cabinet, budget office, the courts last year sought a
Plan for Western Europe 45 years a
the White House is looking for some high- 22^ increase.
profile, perhaps unanticipated, spendingcompletely out of the question.
-David Wessel md Carla Anne Robbins
cut proposals to help persuade the public contnbuted to this article.
Even in those Central European o
1
File on Business Dealings of Clintons
Is Being Sought in Foster Suicide Case
travel office.
Justice Department investigators are
WASHINGTON-Federal investigators also trying to obtain a personal diary that
are seeking a file that deputy White House Mr. Foster kept in the months before his
counsel Vincent Foster is believed to have suicide, law-enforcement officials said.
kept before his July 2 suicide. The file The White House never disclosed the exis0
is said to concern BiU and Hillary Rod- tence of a dairy, but on Saturday the
ham Clinton's business dealings with the Washington Post cited a confidential Part
owner of a failed Arkansas thrift
Police Department report as saying that
Law-enforcement officials said the in- two investigators had reviewed Mr. Poster's "personal diary" In the office of
vestigators have been told the file dealt
with Whitewater Development Corp., an James Hamilton, a Washington attorney
Ozark Mountainsreal-estatefirm that who is representing the Foster family. The
was jointly owned by the Gintons and Park Police have been investigating Mr.
Foster's death because it occurred on
James McDougal, owner of now-defunct
Madison Guaranty Savings & Loan Asso- federal parkland in Virginia.
ciation, and his wife, Susan. N such file
o
Mr. Hamilton, who couldn't be reached
was listed, however, in a July 2 inventory for a comment over the weekend, has re2
of papers, personal effects and other items fused to give the diary to investigators.
found in Mr. Foster's White House office, Officials described the diary as a small,
officials said.
store-bought notebook with about 1 pages
2
92
Investigators are trying to determine, of entries, mostly about the 1 9 presidenamong other things, whether the file was tial campaign.
removed from his office and, if so, by
White House officials, including senior
whom and for what reasons. Whatever
adviser Bruce Lindsey. couldn't be
they turn up will be of interest to a
reached for a comment.
special team of prosecutors who are pursuThe file is likely to be more relevant
ing a separate investigation of Madison
than the diary to the Madison Guaranty
Guaranty, which includes a possible diver- investigation under way in Little Rock.
sion of thrift funds to help pay off a 1 8 Ark. It is presumed to contain papers
94
re-election campaign debt of $50,000 for pertaining to Bill and Hillary Clinton's
which then-Gov. Clinton was personally
finances, including tax returns for certain
liable.
years and their investment in Whitewater
The search for the file - reported yes- Development.
terday by the New York Times - is part of a Mr. Foster acted as the Clinton's perJustice Department inquiry into a note
sonal attorney. Last year, among other
written by Mr. Foster before he shot
things, he handled the sale of their Whitehimself. The note, which was undated and water holdings to Mr. McDougal for $1,000.
torn into 2 pieces, was found in his
7
The Clintons have maintained all along
briefcase six days after his death. While that Whitewater - a 230-acre development
the note didn't mention Whitewater or the on the White River in northern Arkansas,
McDougals, it alleges that Federal Bureau launched in 1978- has been a money-losing
of Investigation officials had lied about the venture. Mr. Foster also oversaw the prepcircumstances of their inquiry last spring aration of delinquent Whitewater tax reinto possible abuses at the White House turns for the Clintons.
By BRUCE INGERSOLL
Sta// Reporter of T H E W A L L S T R E E T JOURNAL.
tries which have made most prog
with their reforms, a sustained
incomes and employment is
slow td materialize. In many
flation is still but of control, esj
the statell^lhe former Soviet^
Market-economy rules are worj
only a few individual sectors*
owned companies have to be soldi
a reliable legal framework has to 1
ated for economic activity. At tl
time, a modem banking system
ficient capital markets are indispet
Divergent interests
Given the prc*eni cnvironme|
nancial aid from outside woi
achieve very much. In any case,
nations are still hesitant to provu
amounts of fundi, as they have econ
problems of their imn and clear d
ences of interest prevail. The LJ
States and Japan consider that the
is on Western Europe >et even ar
VIEWPOINT it pf»w«!«u
ihe iniem»
Commcribiok ia
i * « r « * > . n n Ancncy. T«
Fax (213) 623-00)>» s ^ y ^ j J . . ^ . r«l (212)26
Fax (212) 432-0451. t
^...•>ii,onj| Capital
�Copyright 1993 The Houston Chronicle Publishing Company
The Houston Chronicle
December 20, 1993, Monday, 2 STAR Edition
SECTION: A; Pg. 2
LENGTH: 697 words
HEADLINE: Agent doubts losses claimed by Clintons
BYLINE: HOWARD SCHNEIDER. CHARLES R. BABCOCK; Washington Post
BODY: The Arkansas real estate agent who managed a land development company in which
then-Gov. Bill Clinton invested says he does not believe the venture was a money loser that
cost Clinton and his wife tens of thousands of dollars.
""I don't see where they would have lost money," said Chris Wade, who oversaw
Whitewater land company's lot sales and development, helped arrange itsfinancingand
collected monthly installment payments from buyers in the 1980s.
Wade's comments, coupled with a Washington Post analysis of public land records, campaign
documents, personal and corporate tax returns, and other interviews, add new complexits :o the
picture of Whitewater, a 14-year investment that was one of the Clintons' largest.
Bill and Hillary Clinton have said that their Whitewater investment lost them money Thev
have depicted themselves as passive investors, putdng up money when asked but leaving *il
control over Whitewater's affairs in the hands of their friends and partners, James and Suvan
McDougal.
Saturday, Bruce Lindsey, a senior assistant to the president, responded with a brief sutrmcnt
to questions submitted five weeks ago by the Washington Post. The written statement said. " Vi
you know, in March 1992, the Clinton Campaign released a report by an independent
accounting firm which established that the Clintons lost at least $ 68,900 on Whitr^atrr
Development Corporation. They received no gain of any kind from their investment r>*
Clintons were not involved in the management or operation of the company, nor did they ncp
its records. We see no need to supplement the March 1992 CPA report or to provide 'unhrr
documentation. "
Questions about the real estate venture recendy surfaced when the Justice Department. *.tmg
on a recommendation from the Resolution Trust Corp. opened an investigation of M.*di»wi
Guaranty Savings and Loan, the defunct thrift owned by McDougal. Madison's l^W •uiutr
cost taxpayers an estimated $ 47 million. The investigation is focusing on whether McIVugaJ
drained depositor funds from the thrift to support real estate projects - including Whur^ater
- or to benefit politicians, including Clinton.
Whitewater appeared to generate enough income from land sales to cover its openirv
Wade said he regularly deposited money from lot payments into Whitewater's account at a
Flippin, Ark., bank and was unaware of any serious financial problems faced by Whitewater
�Clinton has said repeatedly that he did nothing improper in his dealings with McDougal
or Whitewater. After a 1992 New York Times story said that McDougal and his thrift
subsidized the Clintons' investment in Whitewater, Clinton countered that he had lost $
25,000. The later report commissioned by the Clinton campaign said the Clintons advanced
Whitewater nearly $ 88,000 and stood to lose nearly $ 60,000 of that.
Federal tax returns show the Clintons eventually claimed no losses on their Whitewater
investment. Instead, their 1992 returns show that after selling their stock back to McDougal
last year for $ 1,000, they reported a small capital gain.
An aide said at the time they did not take the losses because ""not all the documentation was
available" to show the Clintons had made the advances that were reflected on the company's
books during the 1980s.
Experts retained by the Clintons disagree about the company's finances. Two sets of
consultants -- one hired to prepare overdue tax returns and one commissioned by the campaign
to respond to reporters' questions -- reviewed Whitewater's books over the last year. They
drew different conclusions about such questions as how much land the company owned, how
much it had sold and how much money lot purchasers owed to Whitewater in monthly
installments.
Both consulting groups said their work was hampered by missing or incomplete
documentation.
North Arkansas was booming when the project began in the late 1970s, according to w^dc
Wade showed McDougal a prime 230-acre parcel overlooking the White River and helped
arrange a $ 183,000 purchase loan at a bank in Flippin. Wade was on the bank's board
�Copyright 1993 National Journal Inc.
National Journal's CongressDaily
December 20, 1993
SECTION: BANKING
LENGTH: 360 words
HEADLINE: Gonzalez To Fund Republican Staff Trip To Little Rock
BODY:
House Banking Chairman Gonzalez -- in a move apparently at odds with statements
he made 10 days ago -- has agreed to allow use of Banking Committee resources to finance
travel by Republican panel staff members who are probing Madison Guaranty Savings and Loan,
a failed Arkansas thrift owned by a friend and one-dme business partner of then-Gov. Bill
Clinton and Hillary Rodham Clinton. On Dec. 10, Gonzalez called the Madison probe "a
political fishing expedition" and "a waste of the committee's resources" - and told Banking
ranking member Jim Leach, R-Iowa, that the facts surrounding the Madison case did not warrant
further bipartisan investigation. Leach submitted the travel vouchers Thursday and Gon/alez
approved them the next day, House sources said. Two Leach aides left for Little Rock Sunday
for a two-day trip to review Madison documents.
The Madison case is gaining broader attention mainly due to published allegations that :hnft
owner and former Clinton real estate investment partner James McDougal may have misused
the S&L's resources to help Clinton pay off a $35,000 1984 gubernatorial campaign debt In
addition, federal law enforcement officials are probing whether McDougal diverted Madivon's
funds to prop up an Ozark real estate venture with the Clintons. The White House has Jen ied
any wrongdoing in connecdon with the Whitewater land development deal with .VkiXHjgaJ.
saying a March 1992 audit showed they were passive investors who lost $68,900 on the
investment. However, the Washington Post Sunday reported the Clintons reported no io\Nes
from the deal on their federal taxes. It said the Clintons reported a $1,000 capital gam after
selling their stake back to McDougal in 1992.
�Copyright 1993 The Christian Science Publishing Society
The Christian Science Monitor
December 20, 1993, Monday
SECTION: THE U.S..; NATIONAL; Pg. 9
LENGTH: 938 words
HEADLINE: Savings and Loan Probe Extends From Arkansas to White House
BYLINE: Max Boot, Staff writer of The Christian Science Monitor
DATELINE: BOSTON
HIGHLIGHT: What is learned about president's connection to Arkansas firm may have
important implications for his proposed overhaul of banking regulators
-
BODY: THE long tentacles of the savings and loan crisis, after snaring the "Keating Five '
senators and former President Bush's son, Neil, may be reaching into the White House.
Federal investigators are probing connections between Bill and Hillary Rodham Clinton and
Madison Guaranty Savings & Loan, a bankrupt Arkansas institution run in the 1980s by < imton
friend James McDougal. The inquiries are part of a broader probe into alleged fraud at
Madison - whose 1989 bankruptcy cost the govemment $ 47.7 million - and related busmcssev
The burgeoning investigadons may have important implications for President Clmton's
political future and the administration's proposed overhaul of banking regulators.
K
The Clintons have firmly denied any wrongdoing. "We did nothing improper, and I .^e
nothing to say about it," Mr. Clinton told reporters after the story broke last month
But prosecutors are still probing the case. As the tale has unfolded, mainly in presj repurtv
the central player was Mr. McDougal. From small-town Arkansas, his rise to promincrwr m
the early 1980s sounds straight out of Horatio Alger; his fall from grace at decade's eno TAJS
more like a Stephen King novel.
Quickly became player
Madison S&L opened a Little Rock, Ark., branch in 1983 and quickly became a major piavcf
in state politics and finance. McDougal did business with many of the state's leaden, ^rxiuding
then-Governor Clinton and current Gov. Jim Guy Tucker (D). He became partnen •nft *v
Clintons in Whitewater Development Company, an unsuccessful real estate venture
By the late 1980s, McDougal had gone broke, and the S&L was insolvent. The cdmi
Resolution Trust Corporation seized control in 1989. When RTC investigators looked i>\eT ;ne
books, they found many dubious practices that sank a raft of other S&Ls in the 1980s, including
"sweetheart" loans to insiders and heavy compensation for executives. Although McDougaJ
was acquitted on one fraud charge in 1990, the RTC has forwarded several other concerns to
the United States Attorney's office for possible prosecution.
�One big question confronting prosecutors is: How did Madison stay in business for so long
despite warnings from federal and state banking regulators about its reckless ways?
"It would appear that Madison S&L was a rogue thrift perpetrating a fraud on the taxpayers
of the US," Rep. Jim Leach (R) of Iowa, the ranking Republican on the House Banking
Committee, said in a statement last month. "As a state-chartered enterprise, its creation and
prolonged existence in an insolvent condition depended on the acquiescence of state officials."
Some leads from Madison point to the Clintons, according to interviews and published
accounts.
McDougal has told reporters, for instance, that, at Clinton's request, he hired the Rose
Law Firm in 1984 to represent Madison for a $ 2,000-a-month retainer. Rose, whose partners
included Mrs. Clinton, successfully fought Clinton-appointed state banking regulators to keep
the firm open. Later, the firm represented the Federal Deposit Insurance Corporation in a suit
against Madison's accountants.
McDougal also actively supported Clinton's campaigns. Federal investigators reportedly
have found evidence that part of McDougal's contributions to help retire Clinton's 1984
campaign debt - which reportedly included a $ 50,000 personal loan from the candidate came
from overdrawn Madison checks and loans that were approved for other people. Clinton hai
admitted accepting contribudons from McDougal, but says he didn't know the source of the
funds.
The most controversial part of allegations against Clinton concerns the 1986 $ 300.000 loan
to Susan McDougal by Capital Management Services Inc., a federal Small Business InseMment
Company in Little Rock run by municipal Judge David Hale. The loan, which hasn t heen
repaid, is questionable because SBIC funds are intended to help "socially or economically
disadvantaged" people; the McDougals then had assets of $ 3 million-plus.
Mr. Hale, no longer a judge, was indicted in September on unrelated fraud chargn luu
before indictment, he sought a plea bargain by telling prosecutors he made the loan to Mn.
McDougal at the request of Clinton, who told him the money was needed to tide over
Madison and Whitewater. Prosecutors did not make a deal with Hale.
White House spokeswoman Dee Dee Myers said last month Clinton never met vmh Hale.
He "tried to make a deal on the eve of his indictment.... I think you have to quesuon the
motives of some people."
Federal investigators are still trying to get to the bottom of the story. "We're trying to trace
and collect the money from Mrs. McDougal, " says Martin Teckler, a senior offiaaJ at the
Small Business Administration.
GOP congressmen are also pressing for a fuller accounting. But they have been stymied by
the Democratic majority.
�Probe suddenly called off
Rep. Henry Gonzalez (D) of Texas, Banking Committee chairman, agreed in November to
launch a probe of Madison S&L, but on Dec. 10 he abruptly ended it without requesting any
relevant documents from banking regulators.
" I will not undertake a political fishing expedition not warranted by the facts," Mr. Gonzalez
said in a statement.
" I think it's wrong to prejudge a probe without seeking out the facts," Mr. Leach replies in
an interview. He adds that the GOP staff will continue digging because "it's the responsibility
of the minority party to hold the other party accountable when there are ethical lapses."
�Copyright 1993 The New York Times Company
The New York Times
December 20, 1993, Monday, Late Edition - Final
SECTION: Section A; Page 18; Column 1; Editorial Desk
LENGTH: 807 words
HEADLINE: Open Up on Madison Guaranty
BODY:
Much as President Clinton might wish, the curious saga of his and his wife's
dealings with the owner of a failed Arkansas savings and loan associauon just won't go away.
It keeps popping up in Congressional inquiries and newspaper accounts, each time with a new
and unsavory detail added to an already unflattering portrait of the cozy relationship between
money and politics in Arkansas.
An important detail, disclosed by The Times's Jeff Gerth and Stephen Engelberg, is that the
owner of Madison Guaranty Savings and Loan, James McDougal, helped Mr. and Mrs.
Clinton repay a $50,000 personal debt just when Mr. McDougal needed favorable treatment
from state banking officials to stay in business. Mr. McDougal did stay in business, his
problems got worse, and in 1989 the bank was taken over by the Federal Govemment, at a cost
to taxpayers of $60 million.
There is no irrefutable evidence of a quid pro quo. But the Arkansas savings and loan mess,
and the Clintons' reladonship to it, is not, as the White House keeps saying, an "old" story
that has no relevance to Mr. Clinton or his present job. This is a man who rode mto
Washington on a pledge to end polidcs as usual, and every time the White House dodges
inquiries about the old days in Arkansas, reasonable people begin to wonder about a co\er-up
and Mr. Clinton's sincerity.
The matter clearly needs vendladng, and if the White House won't do it, two other institutjons
can. One is the Justice Department, which is already looking into transacdons at Madison rhe
Clintons are not targets of the probe.
The other is the House Banking Committee, whose ranking minority member, Jim Leach,
believes that a full invesdgation of Madison could help the committee frame new rules to prevent
future banking disasters. His request has been rebuffed by the committee chairman. He*r>
Gonzalez, a Democrat who until now has been a tiger on the savings and loan issue Mr
Gonzalez accuses Mr. Leach of a Republican "fishing expedition."
Mr. Leach has also called Madison a "private piggy bank" for its owners and their infiuennal
Arkansas friends, and on this he is surely right. In addition to a string of dubious real rtfate
investments, Madison made large unsecured loans to executives and other insiders.
�Madison's practices attracted the attention of Federal auditors, whose 1984 review found
"unsafe and unsound lending practices" that could threaten to drive the bank under. Shortly
thereafter, Governor Clinton named Beverly Bassett Schaffer as head of the Arkansas agency
charged with overseeing state-chartered savings and loans. Ms. Schaffer had once done legal
work for Madison. For the next 18 months, up to the point where Federal regulators moved in,
she took no significant regulatory action.
Three months after Ms. Schaffer's appointment, Mr. Clinton went to Mr. McDougal with
a request to "knock out the deficit" - Mr. McDougal's words - left over from the Governor's
1984 campaign. It turns out that the deficit wasn't just an ordinary campaign debt, but $50,000
Mr. and Mrs. Clinton had borrowed from another bank to finance the campaign. Mr.
McDougal organized a fund-raiser and the debt was repaid. Federal auditors suspect that some
of the donations assembled by Mr. McDougal may have been improperly diverted from the
savings and loan.
Bruce Lindsey, the official wheeled out by the White House to answer questions, says the
Clinton-McDougal relationship was entirely above board. Others, however, are more than
mildly troubled by the fact that Mr. Clinton did not order his regulators to crack down on Mr.
McDougal even after he was advised by his own banking commissioner in 1983 that the sav mgs
and loan operator was engaged in imprudent banking practices.
Suspicions that Mr. Clinton was excessively kind to his friend - at great cost, esentually.
to the taxpayers - are further reinforced by the fact that Mr. McDougal had done other favors
for the Clintons, including making them 50-50 partners in Whitewater Development, a real
estate company for which Mr. McDougal put up most of the money. The venture ultimateiv
failed, and the Clintons lost money. But that doesn't make their financial ties to Mr
McDougal seem any more savory.
Based on what's publicly known, there's probably not a crippling scandal here. But the whue
House is behaving as if there were. For example. Federal investigators say they have rrveived
little cooperation in a search for files they suspect were taken from the office of Vincent hmer.
a White House aide who killed himself. Investigators want to know if one of those files dealt
with Mr. McDougal and Whitewater.
This defensiveness isn't helping anyone. Mr. Clinton - and Mr. Gonzalez - owes it to the
public to clear the air about Madison and its influential Arkansas friends.
�re states kick in just under half"
ill and federal funds pay the rest.
?. the federal funds going to
counties has declined to 4.7% of
revenues in 1991 from 1 % in
5
to
per em
file, on Clintons'Real-Estate Dealings amounted four$110,493the avera
more than
times
sation. Other companies, inclu
Co.,
Is With Their Lawyer, White House SaysColadrug use the lucrative cred
the
companies that tea
i ..ncials respond that states
was personally liable.
By BBUCE INGERSOLL
>ki how to spend their money in
In response to those news accounts, Mr.
And JEFFREY H. BIRNBAUM
0 uniform standards to Staff Reporter} of T H E W A L L S T R E E T JOURNAL Gearan said that the Clintons' tax returns.
^p.-ironment or rights for the
WASHINGTON - The White House, Whitewater's tax returns and documents
isabled are adequately funded. seeking to dispel suggestions of a coverup, dealing with the Clintons' sale last year of
a free-for-all among 50 states said that a file dealing with the Clintons' their stake in Whitewater, were all "prealt in many states either falling investment in an Arkansas real-estate de- served," and sent to Mr. Kendall.
or simply ignoring, broad na- velopment is in the hands of their personal
Last evening. Mr. Kendall, who also
idards.
represents major newspapers and other
attorney.
allowing the mandate - without
White House officials sought to squelch media clients, declined to comment.
federal funding to carry it talk that such a file-kept by Deputy White Inquiry Into Note Widens
is a bitter pill for local officials. A House Counsel Vincent Foster-had disapMeanwhile, the Justice Department's
legislation passes in Congress peared soon after his July 20 suicide.
office of professional responsibility apit fanfare - like the Americans
Communications
Director Mark pears to be expanding what began as a
bilities Act or the strengthening
Gearan confirmed that two White House narrow inquiry into a note written by Mr.
jan Water Act - and localities
Foster before he shot
note,
rs thanklessly scrambling to find aides, Margaret Williams and Patsy Tho- which was undated andhimself. The pieces,
torn into 27
masson, entered Mr. Foster's office the
build ramps or upgrade wastefound in his briefcase six days after
•atment facilities. A study re- night of his death to search for a note wasdeath. It alleges, among other things,
October by Price Waterhouse explaining why he took his life. But he said his the Federal Bureau of Investigation
that
that unfunded federal mandates they found none and took nothing from the lied to Attorney General Janet Reno about
office.
•calities $90 billion over the next
Two days later, on July 22, White House the circumstances of its inquiry last spring
lawyers, led by White House Counsel Ber- into possible abuses at the White House
residents have the privilege of nard Nussbaum, conducted an inventory of travel office.
,
billion to clean up Boston Har- documents and other Items in Mr. Foster's
Justice Department investigators are
portant national priority we get office, Mr. Gearan said. The inventory was
without any real national sup- done "in the presence" of law-enforcement questioning Park Police officers about
s Douglas MacDonald, executive officials, he said. But U.S. Park Police what they encountered-and uncovered)f Massachusetts Water Re- detectives have complained about being in their inyestigation of Mr. Foster's
uthority, which is building a kept outside the office much of the time. death. Park Police are involved because
Uie suicide occurred on federal parkland.
e treatment plant funded by a
Investigators are reviewing, among
Mr. Gearan explained that Mr. Foster's
'ase since 1986 for BostonJ. "Washington enjoys the files were divided by White House officials other things, the efforts of Park Police
and remoteness of setting a into three categories for distribution. detecUves to question White House staff
members and
1 passes it to us, and then White House files dealing with official other items in to examine documents and
Mr. Foster's office, accordbusiness were entrusted to Mr. Nussbaum.
.• for himself - sink or
Mr. Foster's personal files were given to ing to law-enforcement officials. Some
detectives say they were frustrated by
are slipping below the water the Foster family lawyer, James Hamilton. strict limits imposed by Mr. Nussbaum,
And personal legal files of Bill and Hillary
s and localities, in aggregate,
the White House counsel, on what they
erilously close to operating in Rodham Ointon, whom Mr. Foster had could peruse.
represented, were sent to the Clintons'
-nething that hasn't happened
"We were definitely shown just what
)urth quarter of 1970, according outside attorney. David Kendall of the
nmerce Department. For the Washington law firm Williams & Con- they wanted us to see," complained one
Park Police detective. "We couldn't copy
ter, the department's figures nolly.
anything."
; and local governments run- 'No Missing Files'
A White House official hotly disputed
nual surplus of only $1.1 billion
"We know of no missing files," said Mr.
• billion in estimated yearly Gearan. "The files were all handled appro- that Mr. Nussbaum had done anything
6
wrong. The official argued that Mr. NussThat cushion has been shrinking priately."
baum was merely protecting documents
i steadily since $50 billion anNewspapers have reported that the that were subject to the lawyer-client
ises were posted in the middle
Justice Department is looking into the privilege as well as the executive privilege
80s.
ors were hopeful that health- possibility that a file dealing with the of the president.
Justice Department investigators also
m would slay the Medicaid Clintons' investment In an Ozark Mountain
real-estate venture, Whitewater Develop- have begun questioning the detectives
nearly every state budget, but ment Corp..
taken
any papers or documents they may
usm has faded. The president's Mr. Foster's might have beendeath. from about examined in the office of James
office after his
Until have
• plan, delivered to Congress last year, the Clintons owned Whitewater Hamilton, a Washington attorney who is
>nth. would slow the fastrisein with James McDougaJ. owner of a now-de- representing the Foster family. Mr. HamilBut costs to the states will funct Little Rock thrift. Madison Guaranty ton has balked at turning over to the
ge: They are expected to con- Savings 4 Loan, and his wife, Susan. A Justice Department what a Park Police
ler the Clinton plan what they special team of federal prosecutors is report describes as a "personal diary"
to fund Medicaid, along with investigating Madison Guaranty, includ- kept by Mr. Foster. The diary is said to be
iome hard-to-measure costs for ing the possible diversion of thrift funds to a small, store-bought notebook with about
ing to a complex array of health help pay off a 1 8 re-election campaign
94
1 pages of entries, mostly about the 1992
2
: ^nces.
debt of $50,000 for which then-Gov. Ointon presidential campaign.
i
ilth-care debate has done,
s fully engage governors of both
nfunded-mandates battle
•rs and local officials,
j^on is out of money, they
*
out of the ideas business," says
in. a policy director for the
Governors' Association. "If the
ishington pass it, they'll have to
Continued From Page A3
suppliers and banks. While GE doesn't
. We're tired of paying their
break out GEnie's numbers, an individual
petition with Justice to drop the ban on
close to GE said the electronic-mail unit's
\ j L l 2 X f i l W£J
Inne distnnrp In -irtditinn Vmprifpch two
Ameritech and GE Are Planning
$472 Million Data Services Venture
benefits.
The drug firms counter that
produce relatively few jobs, tho
tend to be higher-tech and higt
"What we create is jobs for t
class, college-educated kids; ao
better jobs," says Dan Nichols,
president for taxes at Schert
"In my view, we are trying tt
economy, to build to a higher 1
In addition, he says, his andotl
nies have hundreds of mill
on the island. The companl«
Puerto Rican taxes.
Despite all the criticism, thi
and its forerunners have helped
the commonwealth from a
agrarian society to a more thit
trial one. Any country in then
love to have a 936." says Anto
Puerto Rico s former represi
Congress.
-'.
Anywhere from 200
p
Puerto Rico s 900.000 Jobs
credit The island's unemptojn
stuck abov* irv and per-cap
half that ot Miuusippt's, bef f
doubt thai wjceradng Se
make things f**n worse. "We
says Luu Danla-Coton, a P
poliucal analyst. In the scor
towns tcnmt tl* island w
plants are totaled, the fear of
credit is palpaMe. Bumper
read: fXW^dr La 9X."
At it» Tmtun Depart!
scorned th* rrmit through Reps
Democratic uimmistrations J
cials acfcnuvMtc* that Sectiot^
comp4*tH) puiifd from PuerW
night and pr«*My ought to 1
with tarw othrr 'arm of relief.It i not | u « tax policy,"
conredn Hut dramatically
he sayv —4 •hram Puertc
chaoa.
ImtMh • « » lobbyists
migtM iv** • "ntw over the
altoc'tfe'v *' • ;*2 meeting i
on thr <Ut tftm fhanksgivin.
lobbyi»tt
-.he Washir
Puerto KJTO \A FoundaUou
wimmo '^• > <m mon weal
>
that ?» - v a Atr a big hit in
Gintoa t>ucif»< mi'SA officia
own rrmum n ? » Clinton can
»
936 •mnja i r r m *vape. "Do
bet" »»a#<j * jwyer for theg
T V Owrtaai TVeat
Sur* f^.^n. •hen Presic
unvnied in ^.leet package,
to overiuui ^tiun 936. Sen.
a teikrm trtjnMi Democrat
drug nuaen nemesis, had
Mr Ointi* to «ttack the cred
dent KJuciM :o ptre its valu
over five »e»o - nearly half
the credit turn* that period
place it •Tti ne wage-based
Still, -nanir lobbyists th
fnends in I'.m^TTSs would ne
with ihe < "intun plan At the
and Means i ."mmittee, the ta
first iti*. New York ,{ep. Ch;
had been v pruvisicn's long
!
:
mn
T
-
�Copyright 1993 American Political Network, Inc.
The Hotline
December 21, 1993
SECTION: NATIONAL BRIEFING
LENGTH: 587 words
HEADLINE: WHITEWATER: WH SAYS FOSTER FILE IN CLINTON ATTY'S HAND
BODY:
W.S. JOURNAL'S Ingersoll & Bimbaum report, "seeking to dispel suggestions ot
a coverup," the WH said that the file dealing with the Clintons' investment in the Whitewater
real estate development is in the possession of the Clintons' personal atty, David Kendall. The
N.Y. Times 12/19 reported the file as "missing" (see HOTLINE 12/20). WH officials "sought
to squelch talk" that the file -- kept by Dep. WH Counsel Vincent Foster -- "had disappeared"
soon after his 7/20 suicide. WH Comm. Dir. Mark Gearan, in a written statement, said that
on 7/22, Foster's office files were divided three ways, with official WH files going to WH
Counsel Bemie Nussbaum, personal Foster files going to Foster atty James Hamilton, and
personal Clinton files going to Kendall, of the DC firm of Williams and Connelly < icaran
said that no files were taken on 7/20 when WH aides Maggie Williams and Patsy Thomasson
entered Foster's office. Gearan: "We know of no missing files. The files were handled
appropriately" (12/21). In saying a search took place before the room was "sealed." Gearan
"concedes now that he knew of the search when he briefed reporters on July 21 but chose his
words carefully to keep them truthful but unrevealing" (Murray, W. TIMES, 12/21)
THE FOSTER "DIARY": If a "diary" kept by Foster exists, it would be in Hamilton \ or
the Foster family's possession. Park Police Maj. Robert Hines said "that officials inveMigaimg
the suicide had read the diary and determined that there was nothing in it that shed anv iigm"
on Foster's suicide. "But Mr. Hines said he didn't know if the diary mentioned Whitewater"
or the Whitewater co-investors James & Susan McDougal "since police were unaware at
the time of its relevance" (Baer, Balto. SUN, 12/21). W. TIMES editonal spells out he
"Madison Guaranty/ Whitewater Development/Capital Management/Rose Law Firm Go*
Clinton affair." Noting again that the day Foster died, "he had received two phone caJIv one
from a man who had investigated Mr. McDougal for the Clinton campaign, one trom
someone (unknown) at Rose. That very moming, a search warrant had been issued toe the
records of ( McDougal's) Capital Management" (12/21).
THE "LOSS" ON THE INVESTMENT: Responding to the 12/19 W. Post repon thai :rv
Clintons did not incur a $68,000 loss on Whitewater, as claimed during the campaign. ^ t
rather claimed a $1,000 gain from the investment on their '92 tax return, a WH official said -he
Clintons were probably "erring on the side of caution to not report the loss" (Balto M N.
12/21). LANGUAGE: ENGLISH
�Copyright 1993 The Times Mirror Company
Los Angeles Times
December 21, 1993, Tuesday, Southland Edition
SECTION: Part A; Page 29; Column 1; National Desk
HEADLINE: CLINTON TAX FILES REMOVED AFTER AIDE'S SUICIDE
BYLINE: From Associated Press
BODY:
The White House said Monday that tax returns and records of business deals
involving President Clinton and his wife were intentionally removed from the office of deputy
counsel Vincent W. Foster Jr. after his suicide and that investigators were not given an
opportunity to review them.
Mark D. Gearan, the President's communications director, said the files -- including records
of the Clintons' dealings with an Arkansas partnership known as Whitewater Development
Corp. -- were sent to the President's personal attorney in Washington, David Kendall.
Gearan said law enforcement officials who were present when Foster's office was scarcheij
July 22 -- two days after he killed himself -- were not given an opportunity to review ( hntor's
papers. Instead, the documents were inspected and categorized by White House counsel Ucmaid
Nussbaum, Gearan said.
"All the files were handled appropriately. They (the Clintons) are not the subject ot .tm
investigation," Gearan said.
He issued a statement on the papers in Foster's office after a story in the Washington r..~ne\
quoted two unidentified U.S. Park Police investigators as saying Foster's office was scanfted
by Nussbaum and two Clinton political operatives less than three hours after Foster's ^*j> *A\
found in a Virginia park.
The story said the documents taken from Foster's office included files he mainumod •m
Whitewater and on James B. McDougal, a Whitewater partner and owner of * 'Aiieii
Arkansas savings and loan.
Questions about the Whitewater real estate venture emerged when the Justice Derurmmt
opened a criminal investigation of the failed Madison Guaranty Savings & Loan owned • >
>
McDougal. The probe is focusing on whether McDougal drained funds from the SAL ;o
real estate projects, including Whitewater, or to benefit politicians, including Clinton
Clinton's papers from Foster's office were sent to his attorney, and files pcruir.ing to
Foster's White House duties were kept in the counsel's offices and files personal to FoMer AHC
his family were sent to his family's personal attorney, Gearan said.
He said the Clinton's personal papers included their personal tax returns, the tiling of
Whitewater Development Corp. tax returns and the disposition of their interest in Whitewater
�Copyright 1993 News World Communicadons, Inc.
The Washington Times
December 21, 1993, Tuesday, Final Edition
SECTION: Part A; COMMENTARY; EDITORIALS; Pg. A24
LENGTH: 1049 words
HEADLINE: The Madison Guaranty- Whitewater mess
BODY:
Two principal factors have inhibited official inquiry into the Madison Guaranty /
Whitewater Development / Capital Management / Rose Law Firm / Gov. Clinton affair. The
first and foremost is partisan politics. The second, which has aided the partisans opposing a
senous investigation, is the complexity of the affair itself.
With Democrats in the White House and in control of Congress, it is possible by virtue of
sheer political muscle to suppress a congressional investigation. Rep. Jim Leach of Iowa, the
ranking Republican on the House Banking, Finance and Urban Affairs Committee, has made a
thoroughly persuasive, principled case for an inquiry. For weeks, he has been just as thoroughly
rebuffed. To say that this Democratic response was hypocritical in the extreme does not hegm
to do justice to what has transpired. It is inconceivable that the Democratic leadership ^ould
not be rushing to convene multiple investigations if similar disclosures had surfaced m a
Republican administration.
The popular example around town is the case of Neil Bush, the former president's brother,
who was called to account before Congress for his dealings in a failed savings and loans m a
rather open attempt to embarrass the White House. A better example, however, is ;nc
much-ballyhooed "October Surprise" affair. Independent analysts who investigated the < >ctofcer
Surprise theory thoroughly discredited allegations that the 1980 Reagan campaign nad met
secretly with Iranians to derail a hostage release prior to the November election Congress
nevertheless insisted on a complete investigation - which, after the political damage was done,
reached the same conclusion.
The possibility of wrongdoing in the Madison, etc., affair cannot even remotely be dismissed
Yet here, Congress, speaking largely through House banking committee Chairman Henry
Gonzalez, would prefer not to act.
Members should ask themselves a few questions: Do they really want a body m which
principle is meaningless, subject at all times to the exigencies of political power' ( an they
tolerate, forever, the speaking out of both sides of the mouth that that entails? Are those who
currently possess political power confident in their ability to keep it in perpetuity - or are they
comfortable with the possibility of one day being on the receiving end of the nnhlev*.
unprincipled application of such power?
1
�At the moment, the Democrats are in power, but "the Democrats" is a misnomer. Not ail
members of the Democratic caucus are untroubled by such questions as the ones above. Those
who are troubled really ought to reach across the aisle to their GOP colleagues who believe in
principled political combat - because there are more than a few on the Republican side who do
not. Some of those who don't never have; others once did but have since decided that the only
solution to this problem is a balance of terror, and they are looking forward to the day when
they can instill it. One place Democrats could start is in voicing support for a look into what
is going on in this case.
Indeed, perhaps such soundings are responsible for Chairman Gonzalez' rather dramatic
reversal of position Friday. He had previously maintained that he would permit no expenditure
of public money for a "partisan" fishing expedition. On Friday, however, he signed the required
authorization (only he can do so) for two minonty staff members of the Banking Committee to
travel to Little Rock in pursuit of relevant documents in the case. They are there now
The complexity of it all has been maddening: Madison Guaranty Savings and Loan, which
failed in 1987 at a cost to taxpayers of $50 million, was run by a man named James B
McDougal. Arkansas state thrift regulators, who were ultimately accountable to Gov Cimton.
had expressed concerns about Madison's solvency beginning in 1985. Mr. McDougal retained
Hillary Rodham Clinton and the Rose Law Firm; the state govemment took no action .uunst
Madison.
Meanwhile, the Clintons and Mr. McDougal, along with his wife Susan, were for :4
years co-owners of Whitewater Development, a concern trying to develop vacation pn«pers
in the Ozarks. There are allegations that Susan McDougal received a $300,000 loan tor *r^n
she was unqualified from Capital-Management, a firm run by David L. Hale that administers
a loan program of the Small Business Administration. There is evidence that some of the rn»ioe>
was diverted to a Madison account to buy land for Whitewater. And there are allegations -hat
Mr. McDougal obtained loans under questionable circumstances that were then disenni to
Arkansas politicians, including Mr. Clinton. And the Rose Law Firm, which had rrpre-wrtrti
Madison, subsequently represented the federal govemment against Madison and its accoununu
Vince Foster, the deputy White House Counsel and former Rose partner who killed 'Mmsrif
in July, handled the Clintons' interest in Whitewater and other personal legal matters TV
day he died, he had received two phone calls, one from a man who had investigated vtr
McDougal for the Clinton campaign, one from someone (unknown) at Rose. rh.*t >rr>
moming, a search warrant had been issued for the records of Capital-Management.
There is more, much more, already in the public record. No one, however, yet «<xm» to
know exactly where it is going or what it adds up to. That in turn has made it easier to dismiss
the whole thing along thefishing-expedidonlines that Chairman Gonzalez prefers (or r.iti^.s
preferred).
�No more. The issues in the case just got much simpler and the stakes much higher. As The
Washington Times' Jerry Seper reported, within hours of learning of Mr. Foster's suicide,
Clinton political aides Patsy L. Thomasson and Margaret A. Williams accompanied White
House Counsel Bernard Nussbaum in a search through Mr. Foster's office. Investigators say
they removed Mr. Foster's files on Mr. McDougal and Whitewater.
What's in those files? And what were White House political operatives doing ransacking Mr.
Foster's office to get them out? Those are basic questions. Let's have some answers.
�Copyright 1993 The New York Times Company
The New York Times
December 21, 1993, Tuesday, Late Edition - Final
SECTION: Section A; Page 1; Column 1; National Desk
LENGTH: 1131 words
HEADLINE: White House Took Clinton Files After a Top Aide Killed Himself
BYLINE: By JOHN O'NEIL, Special to The New York Times
DATELINE: WASHINGTON, Dec. 20
BODY: The White House said tonight that personal financial files of President Clinton and
his wife were removed from the office of Vincent W. Foster Jr. after his suicide before Federal
investigators had a chance to examine them.
Mark D. Gearan, the White House director of communications, said the files that were
removed included documents relating to the Clintons' personal tax returns and their investment
in an unsuccessful real estate company, the Whitewater Development Corporation, which is
a subject of the Federal investigadon into a failed savings and loan in Arkansas.
At the direction of the White House counsel, Bernard W. Nussbaum, Mr. Gearan said,
personal files of Mr. Foster, a deputy White House counsel who shot himself on July 20. were
also removed without being shown to invesdgators.
Files Sent to Lawyers
Mr. Gearan's statement provided a solid link between Mr. Foster, a longdme personal inend
of the Clintons who had handled many of their financial dealings, and Whitewater, itsixjt
which details of the Federal invesdgadon have become known in recent months. The disclovire
raised as many quesdons as it answered -- notably, why the White House waited so lung to
acknowledge the existence and the removal of the Whitewater files.
A Justice Department spokesman said tonight that the Department had not yet been otficuJIv
informed that the papers had been in Mr. Foster's possession. Invesdgators complained lay week
that the White House was being uncooperative in helping determine if the files even envied
A senior White House official who would speak only if not idendfied said tonight trui the
Clintons would "cooperate fully" with a Jusdce Department investigadon into the circum\u/vc»
surrounding the death of Mr. Foster. But the official added that "we would reserve the nght u
>
invoke certain principles if appropriate."
"The President and the First Lady are entitled to the same privileges as other citi/cns when
it comes to their personal records," he said. "Lawyer-client privilege sdll exists."
�Legally, several lawyers said, there is litde doubt about the applicability of that privilege,
although it would be difficult to withhold documents from a criminal investigation. And the
politics of the situation could make such an assertion of privilege difficult.
The Clinton files were sent to the Clintons' personal lawyer in Washington, David Kendall,
while the Foster files were sent to the Fosters lawyer, James Hamilton, Mr. Gearan said.
Whitewater Development was created in 1978 by James McDougal, who owned the failed
Madison Guaranty Savings and Loan; his wife, Susan; Mr. Clinton and his wife, Hillary
Rodham Clinton. The four had equal shares, but the Clintons have insisted that their role was
passive and that Mr. McDougal made all the investment decisions.
The intent, Mr. McDougal has said, was to buy lots in the Ozarks and sell them for second
homes. In interviews in 1992, Mr. McDougal asserted that he contributed a disproportionate
share of the money to a venture in which both couples were to share profits equally.
In an interview tonight, Mr. Nussbaum concurred with Mr. Gearan's account of the division
of the records in Mr. Foster's office.
" I acted like any lawyer worth his salt would act," Mr. Nussbaum said. "The ( Imtoni'
personal legal files went to their personal attorneys. The Fosters' personal files went to their
personal attorneys, and the files for Vince's White House work stayed in the counsel's office "
'They May Get Them'
White House officials insisted last night that the President had the right to maintain viTtrol
over his personal files and that investigators would have to direct their requests tor trui
information to Mr. Kendall.
Mr. Kendall could not be reached for comment tonight.
"If investigators want any of those files, they just go to the people who have those files '
official said. "They may get them, if there is no privilege attached to those files."
The Jusdce Department spokesman declined to say tonight if the department would seek A^CM
to the files. Invesdgators are looking separately into the circumstances surrounding Mr t OMTT
death and into the financial dealings of Mr. McDougal.
Ever since the initial sense of shock subsided at the White House over the death of Mr
Foster, Administration officials have insisted that everything relevant had been made known Ami
that the suicide stemmed from a case of depression.
On Aug. 12, Mr. Gearan said President Clinton was satisfied with the way the inveuitauon
had been handled.
�Nothing that has arisen since then has provided any suggestion of any other motive for Mr.
Foster's suicide. But the handling of Mr. Foster's documents has kept a Justice Department
inquiry alive and proved embarrassing for a number of White House officials, particularly Mr.
Foster's boss, Mr. Nussbaum.
The first White House official said Mr. Nussbaum made the decisions about what files to
provide investigators.
Acting under the assumption that the initial inquiry into Mr. Foster's suicide in a Virginia
park was concerned primanly with the narrow range of facts about his death, Mr. Nussbaum
set aside files that seemed to him to be irrelevant, the official said.
Among those papers Mr. Nussbaum set aside, Mr. Gearan said, were files pertaining to the
filing of the tax returns by the Clintons and by Whitewater and documents about the
disposition of the Clintons' interest in Whitewater. Mr. Geran's statement came after an
article today in The Washington Times, which asserted that papers concerning Whitewater had
been removed from Mr. Foster's office during two searches.
The Clintons assert that Whitewater was a money-losing corporation. A reconstruction
released last year by the Clinton campaign stated that Mr. McDougal and his wife put up
$92,000, and the Clintons $68,000. This document, released by the Clinton campaign in
response to a 1992 report in The New York Times, acknowledged that the calculations were
estimates and that some records were not available.
A Federal investigation into the failure of Madison Guaranty, Mr. McDougal's savings and
loan, focused new attention on Whitewater, Mr. Clinton's share of which was sold hack to
Mr. Mcdougal at the end of 1992. Federal officials said investigators found evidence thai Mr
McDougal was diverting money from Madison to several of his real estate ventures, including
Whitewater. Bank records show that Whitewater's checking account was permitted frequent
overdrafts, the Federal officials have said.
The Resolution Trust Corporation, the Govemment agency that disposes of failed savings and
loans, asked the Justice Department to examine whether any transaction violated FederaJ hanking
laws.
�Copyright 1993 Chicago Sun-Times, Inc.
Chicago Sun-Times
December 22, 1993, WEDNESDAY, Late Sports Final Edition
SECTION: EDITORIAL, Pg. 39
LENGTH: 412 words
HEADLINE: Release Clinton Files on Business Dealings
BYLINE: Editorials
BODY:
The White House suddenly is overwhelmed with problems, from new accusations about
Clinton's alleged womanizing to Defense Secretary nominee Bobby Inman's failure to pay
Social Security taxes. But even more troubling are the missing files pertaining to business
deals of the president and first lady.
The files could have a direct bearing on an investigation that could involve the Clinton*
in conflict of interest allegations. The White House acknowledges that a top Clinton tide
removed the files from the office of the president's deputy counsel Vincent Foster Jr aftw
Foster's suicide. But Hillary Rodham Clinton says the files will not be released and the
matter is closed.
It has all the makings of a stonewall.
The White House's handling of the aftermath of Foster's July 20 suicide has, from th«
outset, been a matter of contention. The latest round of criticism was set off after U S Pvk
Police investigators were quoted Monday in a Washington Times story saying that Whit«
House counsel Bernard Nussbaum and two political operatives searched Foster's offic* \*m
than three hours after Foster's body was found.
Among the files allegedly taken were documents pertaining to the Clintons' dealings »idi
Whitewater Development Corp., an Arkansas real estate partnership, and with James B
McDougal, a Whitewater partner and owner of a failed Arkansas savings and loan T m
b
Justice Department currently is investigating whether McDougal siphoned funds from th«
S&L to back Whitewater and other real estate projects or to benefit politicians, including
Clinton.
The White House says the Clintons' files were removed two days after Foster's suiod*
and sent to Clinton's lawyers. The first lady says the papers won't be made public bee
among other reasons, the Clintons lost $ 69,000 on the investment. Further, an anony
White House official said investigators might not be allowed to inspect the papers even if
they wanted to.
�They should. Contrary to thefirstlady's assertions, losing money on a deal that may
involve conflicts of interest does not close the book on the public's legitimate interest in the
matter.
Much needs to be learned about this whole affair - from the details of McDougal's
repayment of a Clinton campaign debt to White House personnel's conduct after Foster's
death. It is clear, though, that Justice Department investigators need to review those missing
papers to get to the bottom of these questions.
LANGUAGE: English
LOAD-DATE-MDC: December 22, 1993
�Copyright 1993 The Houston Chronicle Publishing Company
The Houston Chronicle
December 22, 1993, Wednesday, 2 STAR Edition
SECTION: A; Pg. 1
LENGTH: 772 words
HEADLINE: Clinton's fdes may be sought in fraud probe; Papers cover involvement in
Arkansas real estate deal
BYLINE: GREG McDONALD, Houston Chronicle Washington Bureau; Staff
DATELINE. WASHINGTON
BODY:
WASHINGTON — The Justice Department may take steps to obtain personal fdes
belonging to President Clinton to determine whether they can be of use in a federal fraud
investigadon into a failed savings and loan headed by a Clinton business partner, a Justice
Department spokesman said Tuesday.
""We're aware of the materials that are out there, and the only thing I can say is we will
take steps to get them if needed," said Justice Department spokesman John Russell.
White House officials revealed late Monday that the files having to do with the Clintons'
involvement in a real estate partnership known as the Whitewater Development Corp were
removed from White House Deputy Counsel Vince Foster's office shortly after he shot
himself on July 20.
The files were taken by White House Counsel Bernard Nussbaum and turned over to the
president's personal lawyer, David Kendall.
Jusdce Department officials said invesdgators looking into Foster's death and the haodltaf
of his materials were not allowed to examine the files to determine whether they haw m r
*
bearing on the invesdgation into the failure of Madison Guaranty Savings and Loan, a Litde
Rock bank headed by James McDougal, a Clinton friend and partner in Whitewater
The investigation is focusing on whether McDougal may have contributed to the
institurion's failure by using its deposits to back various ventures, including Whitewater, of
to help close friends and associates, such as the Clintons.
Russell declined to comment on whether federal authorities plan to subpoena the Clmioa
files or if the White House has been asked yet to turn them over. But he acknowledged that
there has been no outright refusal by the White House to release the materials or to cooperate
�in the probe of Madison.
""There has been no request" for the fdes. White House spokeswoman Dee Dee Myers said
Tuesday. But she said the Clintons ""would cooperate" with any law enforcement request as
long as it did not violate attorney-client privilege.
However,firstlady Hillary Rodham Clinton, in an interview with The Associated Press,
said she saw no reason to release the personal materials, which she said relate to tax returns
and a failed investment that she and the president made in the Whitewater company.
She said the material contained in the files had already been made public anyway dunng
the campaign when an independent accountant reported that the Clintons had lost $ 69,000
on Whitewater real estate deals.
""I am bewildered that a losing investment which for us was significant . . . is still a topic
of inquiry," Hillary Clinton said. " We just think that . . . what we've done is adequate,
especially with that independent accountant's report. "
M
Questions about the Clintons involvement in the Whitewater venture were raised eaxlier
this year when the Justice Department's fraud division opened a criminal invesdgation mto the
Madison Guaranty Savings and Loan owned by McDougal.
The probe was begun by the Justice Department in Little Rock, but was taken over by its
fraud division in Washington after U.S. Attorney Paula J.Casey, who was appointed to the
Little Rock job by Clinton in the spring, removed herself from the case citing her closeness
to some of the figures under investigation, including McDougal.
At the same time, the Justice Department is also conducting an investigation into the
handling by Nussbaum and other White House aides of documents belonging to Foster or
under Foster's charge at the time of his death.
Up until this week they had been trying to find out whether Foster, who handled a number
of Clinton's financial dealings when he was still governor of Arkansas, had any filet oa
Whitewater or McDougal's failed savings and loan.
Administration officials confirmed Monday that Foster apparently had kept at least r*o
files, one on McDougal and the other on the Clinton's Whitewater dealings, in hu Wh.te
House office.
The admission that Nussbaum had removed the documents from Foster's office before
federal authorities could see them touched off a call Tuesday by Sen. Alfonse D'Amato.
R-N.Y., for Senate hearings on the failed Arkansas savings and loan and its ties to the
Clintons.
The ranking minority member on the Senate Banking Committee called the allegations
involved in the inquiry ""serious and mounting. "
�""I believe we owe it to the American people to clear the president of any cloud of
suspicion," he said in a letter to Banking Committee Chairman Donald Riegle of Michigan
that was released by D'Amato's office.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 24, 1993
�Copyright 1993 The Atlanta Constitution
The Atlanta Journal and Constitution
December 22, 1993
SECTION: NATIONAL NEWS; Section A; Page 4
LENGTH: 642 words
HEADLINE: Feds seek late aide's files on Clintons' land deals White House may fight
disclosure
BYLINE: FROM OUR NEWS SERVICES
BODY:
Washington - Federal law enforcement officials will seek to examine files on Arkansas land
dealings of President Clinton and his wife, Hillary, that were removed from the office of
White House aide Vincent Foster Jr. shortly after he killed himself last summer, The New
York Times said today, citing unnamed officials.
The Times said the officials, speaking on condition they not be identified, said they were
studying how best to proceed in a highly charged political atmosphere in which the White
House, citing lawyer- client privilege, has suggested that the Clintons will try to keep the
documents to themselves.
The Times said it was not yet clear how far the investigators are prepared to go in their
quest for the files - whether, for instance, they will rely on persuasion and political pressure
on the White House or ultimately might try to vanquish the argument of lawyer-client
privilege by seeking a subpoena.
Because the Justice Department has had no official comment on the matter, it is not *v«a
clear that the department's chief, Attorney General Janet Reno, has approved the effort »
obtain the files, the Times said.
Aside from the issue of whether the files should be turned over to the federal investtgason
- who presumably would be under legal obligation to keep them secret, as is the norm ia
criminal inquiries - Mrs. Clinton said Tuesday that she saw no reason to make their contents
public in response to requests from news organizations.
Investigators said the documents - discovered in the office of Foster, the deputy White
House counsel, after his suicide and subsequendy removed at the direction of his superior.
White House Counsel Bernard Nussbaum - could be relevant to two inquiries under way at
the Justice Department.
One involves the circumstances of Foster's suicide, the other the collapse of a savings and
�loan association that was owned by James McDougal, the Clintons' partner in a
money-losing real estate venture in Arkansas. But the precise nature of the documents has not
been made public.
The real estate venture was Whitewater Development Corp., in which the Clintons were
equal partners with McDougal and his wife, Susan, although the McDougals put up a
disproportionate share of the capital: $ 92,000 compared with the Clintons' $ 68,000.
Federal investigators have turned up evidence that McDougal diverted money from his
collapsing savings and loan, Madison Guaranty, to several of his real estate ventures,
including Whitewater Development.
Madison Guaranty was seized by the govemment in 1989, at a cost to taxpayers of more
than $ 60 million, and among the issues investigators are examining is whether the thnft
institution received favorable state regulatory treatment in the years beforehand, when
Clinton was governor.
In a statement issued Monday evening, the White House confirmed that presidential aides
had removed records relating to the Clintons' investment in Whitewater after Foster's
suicide July 20 without telling federal authorities who were then investigating Foster's death
In the statement. White House communications director Mark Gearan said the matenals
involved the Clintons' land investments and their personal tax returns. The file was turned
over to David Kendall, a private Clinton family lawyer, who would not discuss the matter
Tuesday.
In disclosing Monday night that such documents existed and had been removed from
Foster's office at Nussbaum's direction, the White House said the Clintons would "cooperate
fully" but reserved the right to withhold privileged information from investigators.
White House press secretary Dee Dee Myers said the Clintons did not plan a public
disclosure of the files. "Being forthcoming, which I think the president and first lady haw
been, doesn't mean you have to turn over every single file," she said.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 23, 1993
�Copyright 1993 The Times Mirror Company
Los Angeles Times
December 22, 1993, Wednesday, Home Edition
SECTION: Part A; Page 1; Column 5; National Desk
LENGTH: 1088 words
HEADLINE: FIRST LADY ASSAILS CHARGES OF HER HUSBAND'S INFIDELITY,
PRESIDENCY: SHE SAYS ALLEGATIONS ARE MOTIVATED BY CLINTON
ENEMIES' DESIRE FOR FINANCIAL AND POLITICAL GAIN.
BYLINE: By JOHN M. BRODER, TIMES STAFF WRITER
DATELINE: WASHINGTON
Hillary Rodham Clinton assailed new allegations of her husband's marital infidelity as
outrageous Tuesday and charged that they were motivated by hope of financial and political
gain by enemies of the President.
In year-end interviews with two wire services, the First Lady called accounts from two
Arkansas state troopers about President Clinton's sexual activities before entering the White
House "sad and unfortunate" - especially coming shortly before Christmas.
The Los Angeles Times, American Spectator magazine and other news organizations this
week published the troopers' allegations that they facilitated sexual liaisons between then-Gov
Clinton and several women. The news organizations also related the troopers' accounts of
alleged efforts by the President to silence them.
President Clinton had no public reaction to the stories Tuesday, leaving to his wife the
task of defending his honor during previously scheduled interviews with the Associated Press
and Reuters, the two most widely read news services in the United States.
"I think my husband has proven that he's a man who really cares about this country deeply
. . . and, when it's all said and done, that's how most fair-minded Americans will judge my
husband, and all the rest of this stuff will end up in the garbage can where it deserves to be.'
she told Reuters.
Mrs. Clinton did not specifically deny the assertions in the story but merely denounced
the accounts as terrible.
She also commented on new revelations about the Clintons' investment in an Ozark
Mountain land deal, saying the couple would not release personal data about the investment
and its links to a failed savings and loan.
�"I am bewildered that a losing investment . . . is still a topic of inquiry," she said, referring
to the ongoing investigations into the Clintons' investment in the real estate venture,
Whitewater Development Corp.
The Clintons were co-investors in the deal with James B. McDougal, owner of a
now-defunct Little Rock thrift, Madison Guaranty Savings & Loan. Federal investigators are
looking into the collapse of Madison Guaranty and the possible diversion of funds from the
S&L to help cover then-Gov. Clinton's 1984 campaign debt.
A fde on the subject kept by Vincent W. Foster Jr., White House deputy counsel and a
close friend of the Clintons, was removed from Foster's office and given to the Clintons'
personal attorney after Foster killed himself last July.
Declaring that an audit commissioned by her husband's campaign found no irregularities,
Mrs. Clinton said: "I just think what we've said is adequate."
Referring to the latest eruption of charges of extramarital misconduct, Mrs. Clinton said
that the stories appeared timed to damage her husband just as his popularity was beginning to
rise after several important legislative victories.
"I find it not an accident that, every time he is on the verge of fulfilling his commitment to
the American people and they respond . . . out comes yet a new round of these outrageous,
terrible stories that people plant for political and financial reasons," she said.
She suggested that the two Arkansas state troopers - Larry G. Patterson and Roger L
Perry — had been paid for telling their story of late-night assignations at women's apartments,
hurried encounters between Clinton and women in parked govemment cars and high-levd
efforts to cover up the episodes.
"For me, it's pretty sad that we're still subjected to these kinds of attacks for poliocai and
financial gain from people and that it is sad that - especially here in the Christmas saMoa people for their own purposes would be attacking my family," she said.
Asked if she thought the troopers were being paid to make the allegations, she said thai
"seems to be the story."
The two troopers are represented by Cliff Jackson, a Litde Rock lawyer and longtime
political foe of Clinton's who said that the men would like to write a book about the
incidents but that they had not entered negotiations with any publishers.
The troopers have received no payments for telling their stories, either from The Times which has a policy against paying sources — or, they said, from any other publicadoo or
individual.
"I think sometimes everybody forgets that, even if public figures don't have any protection
from these kind of attacks, you still have feelings and families and reputations that ri>oui<*rt
�be so easily attacked by people who clearly have political and financial reasons for doing so,"
Mrs. Clinton said.
The only other Administration official to respond publicly to the charges was Ronald K.
Noble, who as assistant secretary of the Treasury for enforcement oversees the Secret Service,
which is assigned to protect the President. In response to a reporter's query, Noble said
Tuesday that the troopers' accounts "have the ring of falsity."
Specifically, Noble said he doubted a third trooper's account that he had escorted a woman
to the governor's mansion at least three times in the weeks after Clinton's election as
President in November, 1992.
This officer said he escorted the woman past the Secret Service at the mansion by using her
maiden name and saying that she was a member of Clinton's staff. He said the visits
occurred before dawn, usually about 5:15 a.m.
"The Arkansas State Police were treated just like members of President Clinton's personal
staff and they could come and go as they pleased," Noble said. "If they had someone
accompanying them, they had no reason to explain who that person was or to masquerade that
person. . . . So, when I read accounts of masquerading and such, it just doesn't have the ring
of truth."
Senior White House staff have been preoccupied for several days responding to the
infidelity stories and new accounts of problems with the Whitewater investment.
One aide complained that reporters were disguising their intention to write about the sex
revelations by inquiring about the "mood" of the White House.
The aide described such inquiries as simply "a way of covering the thing while pretending
to keep your hands clean."
The official said most White House aides expect the story to die down quickly as top tta/T
and many journalists take time off to celebrate Christmas.
"Actually, the mood over here is not bad," the aide said "We've been through
wrecks before and I think this one's all going to disappear under the Christmas tree."
Times staff writers Ronald J. Ostrow and David Lauter contributed to this story
GRAPHIC: Photo, President Clinton checks watch after a jog on Washington Mall
For the Defense: Hillary Rodham Clinton assailed new allegations of her husband's marital
infidelity as outrageous. She charged that they were motivated by hope offinancialand
political gain on the part of his enemies. President Clinton had no public reaction to the
stories, leaving to his wife the task of defending his honor in two previously scheduled
interviews. Above, the First Lady makes a point. Reuters
�Copyright 1993 The Dallas Moming News
THE DALLAS MORNING NEWS
December 22, 1993, Wednesday, HOME FINAL EDITION
SECTION: NEWS; Pg. 6A
LENGTH: 450 words
HEADLINE: Late Clinton aide's fdes sought;
Federal officials investigate president's Arkansas land dealings
BYLINE: New York Times News Service
DATELINE: WASHINGTON
BODY:
WASHINGTON - Federal law-enforcement officials said Tuesday that they would seek to
examine files removed from the office of White House aide Vincent Foster Jr. shortly after he
killed himself last summer.
The files pertain to Arkansas land dealings of President Clinton and his wife, Hillary
Rodham Clinton.
The officials, speaking on condidon that they not be identified, said they were studying
how best to proceed in the highly charged political atmosphere. The White House, cmng
lawyer-client privilege, has suggested that the Clintons will try to keep the documents to
themselves.
It is not yet clear how far the investigators are prepared to go in their quest - whedier they
will rely on persuasion and political pressure on the White House or might try to s«e4 a
subpoena.
Because the Justice Department has had no official comment on the matter, it is not clear
that the department's chief. Attorney General Janet Reno, has approved the effon to obmm the
files.
Mrs. Clinton said Tuesday that she saw no reason to make their contents public
Investigators said the documents were discovered in the office of Mr. Foster, the dcpury
White House counsel, after his suicide and subsequently removed at the direction of Wh.te
House counsel Bernard Nussbaum.
The files could be relevant to two inquiries under way at the Justice Department.
investigators said.
�One involves the circumstances of Mr. Foster's suicide, the other the collapse of a savings
and loan association that was owned by James McDougal, the Clintons' partner in a
money-losing real estate venture in Arkansas. But the precise nature of the documents has
not been made public, and the investigators acknowledged Tuesday that they had no way of
knowing the fdes' contents.
The real estate venture was Whitewater Development Corp., in which the Clintons were
equal partners with Mr. McDougal and his wife, Susan. The McDougals put up a larger
share of the capital - $ 92,000 - than the Clintons, who contributed $ 68,000.
Federal investigators have turned up evidence that Mr. McDougal diverted money from
his collapsing savings and loan, Madison Guaranty, to several of his real estate ventures,
including Whitewater Development.
The White House confirmed Monday evening that presidential aides had removed records
relating to the Clintons' investment in Whitewater after Mr. Foster's suicide July 20
without telling federal authorities who were investigating Mr. Foster's death.
In the statement. White House communications director Mark Gearan said the matenals
involved the Clintons' land investments and their personal tax returns. The file was turned
over to David Kendall, a family lawyer.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 26, 1993
�Copyright 1993 The New York Times Company
The New York Times
December 22, 1993, Wednesday, Late Edition - Final
SECTION: Section A; Page 1; Column 4; National Desk
LENGTH: 1219 words
HEADLINE: First Lady, Defending President, Denounces 'Outrageous Attack'
BYLINE: Special to The New York Times By GWEN IFILL,
DATELINE: WASHINGTON, Dec. 21
BODY:
The White House rolled out its second biggest gun today as Hillary Rodham Clinton rose
to defend her husband against new accusations about the state of their marriage and new
scrutiny of the suicide of Vincent W. Foster Jr., a senior aide and longtime friend.
Mrs. Clinton, in interviews with news agency reporters, suggested that a connection
existed between the rise of rumors about her husband and his newfound popularity in public
opinion polls. And she asserted that the White House was being subjected to "outrageous
attack" fueled by payoffs made to the people making the accusations.
Two Troublesome Issues
Mrs. Clinton's remarks were prompted by a series of reports on twomatters. First were
accusations, published and broadcast widely this week, that her husband had used the stat*
troopers who guarded him while he was Governor of Arkansas to arrange meetings with other
women and to hide those meetings from her. In addition there was the renewed interest m
fdes that the WTiite House removed from Mr. Foster's West Wing office shortly after he killed
himself in a Virginia park last summer.
Federal law-enforcement officials said today that they would seek to examinethose files
relating to the Clintons' private land dealings in Arkansas. [Page A20.]
Mrs. Clinton said she was "bewildered" by the continued interest in the investment »he
and her husband had made in an Arkansas development scheme that ultimately went bankrupt
and that tied them to a failed savings and loan institution and the business partners who
controlled it.
She said she saw no reason to make public any of the files on the Whitewater
Development Corporation that were retrieved from the office of Mr. Foster, who was deputy
White House counsel.
�" I just think what we've said is adequate," Mrs. Clinton told The Associated Press.
" I think my husband has proven that he's a man who really cares about this country deeply
and respects the Presidency and believes strongly that he's doing the right thing," Mrs.
Clinton told Reuters. "And when it's all said and done, that's how most fair-minded
Americans will judge my husband. And all the rest of this stuff will end up in the garbage
can where it deserves to be."
Mrs. Clinton's forceful defense of her husband, and the fact that she made it herself rather
than leaving it to aides, raised the two issues to a new level of visibility and contrasted
sharply with the cheerful holiday mood Mrs. Clinton has tried to develop at the White
House in recent weeks. While First Ladies have historically been fierce defenders of their
spouses in private and strongly supportive in general terms in public, Mrs. Clinton's very
specific counterattack was highly unusual.
The White House earlier strongly denied the accusations made by two troopers, Larry G.
Patterson and Roger L. Perry, in a magazine article in The American Spectator, which said
efforts to corroborate the men's statements were rebuffed by the women concerned. It has
acknowledged, however, that Mr. Clinton had telephoned other troopers to ask about the
reports and solicit their support in offering denials to journalists.
Dark Days Near Christmas
The Justice Department has begun separate investigations into thecircumstances
surrounding Mr. Foster's death and the failure of Madison Guaranty Savings and Loan, the
Arkansas thrift institution owned by James McDougal, the Clintons' partner in the real
estate venture.
The President has not spoken publicly about these issues recendy, and Mrs. Clinton s
remarks today were the most explicit part of a White House campaign to present the Fim
Family as victims of unwarranted attacks at a time when Mr. Clinton was posting some of
his highest approval ratings ever in published polls.
In the Reuters interview, Mrs. Clinton said it was "sad and unfortunate" that the rumors
would surface so aggressively "especially during the Christmas season."
"It also hurts," she said. "Even though you're a public figure, which means apparently ia
America anybody can say anything about you. Even public figures have feelings and families
and reputations."
Mrs. Clinton granted the interviews to The Associated Press, Reuters and United Press
International as part of a round of year-end discussions, her aides said.
But in another year-end encounter today, with reporters from major newspapers that
included The New York Times, Mrs. Clinton refused to allow any of her remarks to be
�made public.
'You're Going to Be Asked'
Mrs. Clinton spoke out in the wire service interviews today, aides to thePresident said,
because it was inevitable that one of the Clintons would have to face down some of the
questions.
"The alternative is worse," one official said. "At some point you're going to be asked."
Mr. Clinton's closest advisers have frequently complained that the negative reports about
the President have conspiratorial tones, and Mrs. Clinton echoed that complaint today.
"I find it not an accident that every time he is on the verge of fulfilling his commitment to
the American people and they are responding — whether it's forging ahead in the polls in New
Hampshire or now with very high popularity — out comes yet a new round of these
outrageous, temble stories that people plant for polidcal andfinancialreasons," Mrs. Clinton
told The A. P.
During the New Hampshire primary campaign, Mr. Clinton was forced to deny
accusations that he conducted a 12-year extramarital affair with Gennifer Flowers, a caba/et
singer who was later given a state job in Arkansas. Mr. and Mrs. Clinton appeared on the
CBS News program "60 Minutes" to acknowledge past troubles in their marriage and say they
were committed to each other.
Fallout From a Friendship
The Clintons have been unable to escape the rumors and reports about theirpersonaJ
lives, but Mr. Clinton has enjoyed good news of late. In a Washington Post/ABC News poll
published today, 58 percent of those surveyed said they approved of the job he was dotng. the
figure is among the highest Mr. Clinton has had since his earliest months in office
Mrs. Clinton attributed much of the latest spate of bad news to the determinadoo of one
Clinton enemy, Cliff Jackson, an Arkansas lawyer, to discredit the President.
Mr. Jackson has acted as a lawyer and media liaison for the two troopers who brought the
accusations to light in a lengthy article in the American Spectator this week. Dunng the
Presidential campaign last year Mr. Jackson also spent considerable time compiling evtdettce
for reporters concerning Mr. Clinton's efforts to avoid the draft during the Vietnam War
Mr. Jackson and Mr. Clinton attended Oxford University together in 1969 when Mr
Clinton was a Rhodes scholar and Mr. Jackson a Fulbright scholar, and the two men were
friendly. But Mrs. Clinton said today that Mr. Jackson had "become obsessed with the
President" and attacked him "every time he is on the verge of fulfilling his commitment to the
American people."
�"My husband's Presidency speaks for itself," Mrs. Clinton told Reuters. "And what he has
done in just one year for America, ultimately, that's how the American people are going to
judge. Not some story that somebody promotes for their ownfinancialgain or because they
have a political vendetta."
GRAPHIC: Photos: Hillary Rodham Clinton during an interview at the White House.
(Associated Press) (pg. Al); President Clinton and his wife, Hillary, listening to the World
Children's Choir during a ceremony for Unicef yesterday at the White House. (Paul
HosefrosAThe New York Times) (pg. A20)
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 22, 1993
�The New York Times
December 22, 1993, Wednesday, Late Edition - Final
SECTION: Section A; Page 20; Column 1; National Desk
HEADLINE: Investigator to Seek Ex-White House Aide's Files on Clinton Land Dealings
BYLINE: Special to The New York Times By DAVID JOHNSTON,
DATELINE: WASHINGTON, Dec 21
Federal law-enforcement officials said today that they would seek to examine files,
removed from the office of the deputy White House counsel shortly after he killed himself
last summer, concerning Arkansas land dealings of President Clinton and his wife, Hillary
These officials, speaking on condition that they not be identified, said they were studying
how best to proceed in a highly charged political atmosphere in which the White House,
citing lawyer-client privilege, has suggested that the Clintons will try to keep the documents
to themselves.
It is not yet clear how far the investigators are prepared to go in theirquest for the files -whether, for instance, they will rely on persuasion and political pressure on the White House
or might ultimately try to vanquish the argument of lawyer-client privilege by seeking a
subpoena.
Indeed, because the Justice Department has had no official comment on the matter, it it not
even clear that the department's chief, Attorney General Janet Reno, has approved any effon
to obtain the files.
The First Lady Speaks
Aside from the issue of whether the files should be turned over to theFederal investigators
- who would presumably be under legal obligation to keep them secret, as is the norm m
criminal inquiries -- Mrs. Clinton said today that she saw no reason to make their contents
public in response to requests of Washington reporters.
The White House communications director, Mark D. Gearan, on Monday night confirmed
investigators' suspicions that such documents had been discovered in the office of Vincent W
Foster Jr., the deputy White House counsel, soon after his suicide and had subsequently been
removed at the direction of his superior, Bernard W. Nussbaum, the White House cour**l
Mr. Gearan said law-enforcement agencies that were then looking into Mr. Foster's death
had never been shown the documents. Mr. Gearan did not describe the documents in detail,
saying only that they related in part to the Clintons' investment in an Arkansas real estate
venture and their personal tax returns.
�Today investigators said that although they had no way of knowing the precise nature of
the files, the documents contained in them could prove relevant to two inquiries under way at
the Justice Department.
One involves the circumstances of Mr. Foster's suicide, which the President has described
as a result of a profound depression whose nature had escaped the recognition of Mr. Foster's
colleagues and might never be fully understood.
The other inquiry concerns the collpase of an Arkansas savings and loan association that
was owned by James McDougal, who until late last year was the Clintons' partner in the
real estate venture, which proved unsuccessful.
Money Diverted
The real estate venture was the Whitewater Development Corporation, inwhich the
Clintons were equal partners with Mr. McDougal and his wife, Susan, although the
McDougals had put up a disproportionate share of the money and therefore eventually lost
more: $92,000, as against the Clintons' $69,000.
Federal investigators have turned up evidence that Mr. McDougal diverted money from
his collapsing savings and loan institution, Madison Guaranty, to several of his real esute
concerns, including Whitewater Development. The savings and loan was seized by the
Govemment in 1989, at a cost to taxpayers of more than $60 million, and among the issues
that investigators are examining is whether Madison Guaranty received favorable state
regulatory treatment in the years beforehand, when Mr. Clinton was Governor.
In his statement of Monday night, Mr. Gearan said the files on the Clintons' investment m
Whitewater Development and on their personal taxes had been turned over to their family
lawyer, David E. Kendall, who would not discuss the matter today.
Mr. Gearan said that these files were among one of three broad categories of documents
found in Mr. Foster's office and that each category had been handled in a way difTerent from
the others.
Files relating to Mr. Foster's White House duties remained in the office, Mr. Gearan **I<1
while those that were personal were sent to his family lawyer. But documents concerning the
Clintons' personal legal affairs, including their investment in Whitewater Development,
went to Mr. Kendall, Mr. Gearan said.
In confirming that such documents had been removed from Mr. Foster's office at Mr
Nussbaum's direction, the White House said the Clintons would "cooperate fully" with
investigators but reserved the right to withhold privileged information.
As for the matter of a full public disclosure of the files, Mrs. Clinton said in an interview
with The Associated Press today that neither she nor her husband saw any need for it
�"I am bewildered," she said, "that a losing investment which for us was significant $69,000, which is provable by the accountants -- is still a topic of inquiry."
The White House press secretary. Dee Dee Myers, affirmed that the Clintons did not plan
a public disclosure. "Being forthcoming, which I think the President and First Lady have
been, doesn't mean you have to turn over every single file," she said.
Prosecutors Silent
John Russell, a Justice Department spokesman, said today that John Keeney, asenior
prosecutor, had reminded his subordinates of the confidenriality of Federal inquiries and had
directed them not to discuss the matter.
But law-enforcement officials said Federal investigators would seek any evidence required
to complete their work, and left open the possibility that the documents would be subpoenaed
if necessary. In that event, the President might be pitted against his Justice Department.
It is not yet clear how quickly the investigators will act. They have been stymied in their
efforts to obtain access to Mr. Foster's diary, another newly disclosed record in the inquiry on
his suicide. Their informal request for the diary has been rejected by the Foster family lawyer
Jitters at Justice
All in all, recent developments related to Mr. Foster have created a jitteryatmosphere at
the Justice Department.
One source of tension has been the presence of close Clinton associates like Sheila
Anthony, Mr. Foster's sister, who heads the department's Congressional Affairs Office
In addition, Webster L. Hubbell, the President's golfing friend, who was a law partner of
Mrs. Clinton in Little Rock, is the department's No. 3 official. Mr. Hubbell, whose
father-in-law was a borrower from Madison Guaranty and whose law firm was once hired by
Federal regulators to help clean up the troubled institution, has recused himself from
investigative matters related to Mr. McDougal.
Mr. Gearan's statement of Monday night, apparendy issued in an effort to address news
reports that the Justice Department was investigating whether such files had been removed,
has revived lingering questions about the way the White House responded to Mr. Foster's
death and handled papers left in his office.
It has also brought a renewed focus to the conduct of the Justice Department, the United
States Park Police and the Federal Bureau of Investigation, the agencies that initially
investigated the suicide.
�In the days after Mr. Foster died of a single gunshot wound to the head in a park
overlooking the Potomac, Mr. Nussbaum supervised the White House's handling of the
inquiry into the death. At therime,Mr. Nussbaum and other aides would not publicly discuss
Mr. Foster's legal work for the Clintons and kept law-enforcement agencies from delving
deeply into Mr. Foster's professional life.
As a result, those agencies, although suspecting that the Arkansas land fdes had been in
Mr. Foster's office, did not know of them with certainty until the
White House statement on Monday night.
A Park Police official said today that investigators had never been told that Mr. Foster had
kept such a file, but added that it was unlikely that the documents would have aroused
interest of the investigators at the time anyway.
Counsel's Supervision
Two days after the suicide, Mr. Nussbaum arranged with Justice Departmentlawyers
working for Philip B. Heymann, the Deputy Attorney General, to conduct an inventory of Mr
Foster's office. Mr. Nussbaum examined Mr. Foster's papers in the presence of
law-enforcement investigators then, but he did not allow them to read any of those papers
Mr. Nussbaum determined that nothing in Mr. Foster's office was relevant to the
investigators' work except for a calendar and a partial log of incoming phone messages fo* the
weeks preceding Mr. Foster's death.
"I didn't have any problem with that," Maj. Robert Hines of the Park Police said today of
the way Mr. Nussbaum handled matters at the time. "They were in a state of shock "
But other senior law-enforcement officials have been privately critical of the White House
for so restricting the investigators and for the haphazard manner in which Mr. Foster's
Wing office was left unsealed for hours after his death.
Last summer. White House aides gave the impression that after Mr. Foster's death, his
secretary was the only person who was in his office for any extended period of time Bui they
have said in recent days that other people entered as well.
A White House official said today that two others who entered were Patsy Thomasaua. an
administrative aide and longtime Clinton associate, and Margaret Williams, Mrs. Clinton i
chief of staff. The official said they had looked unsuccessfully for a suicide note and h*d lert
without taking anything.
The Issue of Privilege
Several former White House officials said today that the if the Clintons insisted oa
invoking lawyer-client privilege to prevent examination of their papers found in Mr Foster's
�office, they would probably be successful.
Clifford L. Alexander Jr., who served as White House counsel for President Lyndon B.
Johnson, said the privilege continued after the lawyer's death. "It's up to the client to waive
the privilege," he said.
But invoking that privilege could prove a political problem, since much of the public might
infer that the Clintons had something to hide.
In addition, there is the issue of whether Mr. Foster should have been involved with the
Clintons' private business after he joined the Govemment. Prof. Geoffrey C. Hazard of Yale
Law School, an authority on legal ethics, said in an interview today that it would have been
improper for Mr. Foster to have any continuing involvement with the Whitewater matter
after taking office.
"It is improper to have a Govemment lawyer exercising any responsibility over the personal
property or private business affairs of a Govemment official," Professor Hazard said.
He said the matter should have been turned over to a private lawyer. Mr. Clinton's
allowing Mr. Foster to retain some control over the Whitewater matter while serving as a
Govemment lawyer could constitute the President's waiver of the lawyer-client privilege, the
professor said.
Foster Dealt With Sale
A year ago, just before Mr. Clinton and Mr. Foster entered the GovemmentJVlr Foster
represented the Clintons in the sale of their Whitewater holdings back to Mr. McDougal
After the stock transaction was completed, Mr. Foster was left to handle a lingenng issue.
Mr. McDougal's request for many Whitewater business records and tax returns.
Mr. McDougal has told associates that last June, a month before Mr. Foster's death, he
left a message with Mr. Foster's White House office regarding Whitewater. A few days
later, Whitewater's tax returns were sent to Mr. McDougal's lawyer.
The Clintons have long described their investment in Whitewater as a passive one,
saying that Mr. McDougal made all central decisions. Last year, when questions about the
company arose during the Presidential campaign, Mr. Clinton hired a friend, James Lyons, a
Denver lawyer, to look into its finances.
Mr. Lyons, relying on banking records provided by the Clintons and other data, publicly
reported that the Clintons had lost money in the joint venture.
White House aides have said that Mr. Lyons left a phone message for Mr. Foster the day
he died but that the two men never talked to each other that day. Mr. Lyons has not returned
reporters' telephone calls to his office.
�GRAPHIC: Photos: Vincent W. Foster Jr., deputy White House counsel, killed himself last
summer. (Mark Wilson/Arkansas Democrat-Gazette); The White House said fdes discovered
in the office of Mr. Foster were removed at the direction of his superior, Bernard W.
Nussbaum, the White House counsel.
Chart/Photos: "What the White House Has Siad"
How Administration officials have described what happened to the files ofVincent W
Foster, Jr., the deputy council to the President after Mr. Foster's suidice on July 20.
July 30, 1993 - Dee Dee Myers, White House Press Secretary, responding to questions about
how Bemie Nussbaum, White House counsel, handled the files, said:
"Bemie went through and sort of described the contents of each of his filesand what was
in his drawers while representatives of the Justice Department, the Secret Service, the FBI,
and other members of the counsel's office were present. . . . I think that Mr. Nussbaum
conducted a very thorough investigation, particularly in terms of what they were looking for I
mean, he went through the files and described what the issues were and what the contents of
the files were without having them read the specific documents."
December 18
Asked whether a file relating to James McDougal, owner of a failed Arkansas
savings-and-loan owner, and his investment company, Whitewater Development, was taken
from Mr. Foster's office, a senior White House official said:
"We are not aware that any law-enforcement official is looking into the factthat a file
relating to Whitewater or McDougal disappeared or in any way was improperly handled All
the files in Vince Foster's office were properly handled."
December 20
Statement by the White House Director of Communications, Mark Gearan:
"Following the death of Vincent Foster and following the examination of the files in his
office on July 22, 1993 by White House Counsel in the presence of representatives of vinous
law enforement agencies, Mr. Foster's files were distributed as follows: (1) those files
pertaining to his White House duties remained in the counsel's offices; (2) those files that
were personal to Mr. Foster and his family were sent to his family's personal attorney, and ( U
those files that pertained to the personal legal affairs of the President and Mrs. Clinton
(including documents relating to their personal tax returns, the filing of Whitewater
Development Corp, tax returns, and the disposition of their interest in Whitewater) - all of
which were preserved -- were sent to the Clinton's personal attorney."
�Copyright 1993 McClatchy Newspapers, Inc.
Sacramento Bee
December 22, 1993, METRO FINAL
HEADLINE: JUSTICE DEPARTMENT MAY SEEK CLINTON'S FILES IN S&L PROBE
BYLINE: Houston Chronicle
DATELINE: WASHINGTON
The Justice Department may seek personal files of President Clinton to determine their
value in a federal fraud investigadon into a failed savings and loan headed by a former
Clinton business partner, a department spokesman said Tuesday.
"We're aware of the materials that are out there, and . . . we will take steps to get them if
needed," said Justice Department spokesman John Russell.
White House officials revealed late Monday that the files relating to the Clintons'
involvement in a real estate partnership known as the Whitewater Development Corp were
removed from White House Deputy Counsel Vince Foster's office shortly after he shot
himself to death July 20.
The files were taken by White House Counsel Bernard Nussbaum and turned over to the
president's personal lawyer, David Kendall.
Justice Department officials said investigators looking into Foster's death and the handling
of his materials were not allowed to examine the files to determine whether they have tny
bearing on the investigation into the failure of Madison Guaranty Savings and Loan The
Little Rock, Ark., institution is headed by James McDougal, a Clinton friend and partner
in Whitewater.
The investigation is focusing on whether McDougal may have contributed to the
institution's failure by using its deposits to back various ventures, including Whitewater, or
to help close friends and associates, such as the Clintons.
Russell would not comment on whether authorities plan to subpoena the Clinton file* or if
the White House has been asked to turn them over. But he said there had been no refuaaJ by
the White House to cooperate.
First lady Hillary Rodham Clinton said she saw no reason to release the personal
materials, which, she said, relate to an investment that lost $ 69,000 and which had previouiJy
been made public.
"I am bewildered that a losing investment . . . is still a topic of inquiry," she said
�Copyright 1993 St. Louis Post-Dispatch, Inc.
St. Louis Post-Dispatch
December 22, 1993, WEDNESDAY, FIVE STAR Edition
SECTION: NEWS; Pg. IA
LENGTH: 1214 words
HEADLINE: HILLARY CLINTON BLASTS SEX CLAIMS; REPORTS ABOUT
PRESIDENT WILL 'END UP IN GARBAGE CAN,' SHE DECLARES
DATELINE: WASHINGTON
BODY:
Hillary Rodham Clinton assailed new allegations of her husband's marital infidelity as
"outrageous" Tuesday and charged that they were motivated by hope of financial and political
gain by enemies of the president.
In year-end interviews with two wire services, Mrs. Clinton called accounts from two
Arkansas state troopers about President Bill Clinton's sexual activities before entering the
White House "sad and unfortunate," especially coming shortly before Christmas.
The Los Angeles Times, the American Spectator magazine and other news organizations
this week published the troopers' on-the-record allegations that they facilitated sexual liaisons
between then-Gov. Clinton and several women. The White House has denied the troopers'
charges but has acknowledged that Clinton and other administration officials engaged m an
extensive effort in recent months to prevent publication of them.
Clinton had no public reaction to the stories Tuesday, leaving to Mrs. Clinton the task of
defending him in previously scheduled interviews with The Associated Press and Reuters, the
two most widely read news services in the United States.
"I think my husband has proven that he's a man who really cares about this country deeply,
. . . and when it's all said and done, that's how most fair-minded Americans will judge my
husband, and all the rest of this stuff will end up in the garbage can where it deserves to be,*
she told Reuters. Asked whether she stands behind her husband, Mrs. Clinton said,
"Absolutely."
Mrs. Clinton also commented on new disclosures about the Clintons' investment m an
Ozark Mountain land deal, saying the couple would not release personal data about the
investment and its links to a failed savings and loan.
"I am bewildered that a losing investment . . . is still a topic of inquiry," she said, referring
to the ongoing investigations into the Clintons' investment in the real estate venture.
�Whitewater Development Corp.
The Clintons were co-investors in the deal with James McDougal, owner of a
now-defunct Little Rock thrift, Madison Guaranty Savings & Loan. Federal investigators are
looking into the collapse of Madison Guaranty and the possible diversion of money from the
thrift to help cover then-Gov. Clinton's 1984 campaign debt.
A fde on the subject kept by Vincent Foster, White House deputy counsel and a close
friend of the Clintons, was removed from Foster's office and given to the Clintons'
attorney after Foster killed himself last July. Declaring that an audit commissioned by her
husband's campaign found no irregulanties, Mrs. Clinton said, "I just think what we've said
is adequate."
Referring to the troopers' charges, Mrs. Clinton said the stories appearedtimedto damage
her husband just as his popularity in the polls was beginning to rise after several important
legislative victories.
"I find it not an accident that every time he is on the verge of fulfilling his commitment to
the American people and they respond, . . . out comes yet a new round of these outrageous,
terrible stories that people plant for political and financial reasons," she said.
Mrs. Clinton suggested that the two Arkansas state troopers - Larry G. Patterson and
Roger L. Perry - had received payments for telling their story of late-night assignations al
women's apartments, hurried encounters between Clinton and women in parked govemmeni
cars and high-level efforts to cover up the episodes. "For me, it's pretty sad that we're ttill
subjected to these kind of attacks for political and financial gain from people, and thai it <
«
sad that - especially here in the Christmas season - people for their own purposes would be
attacking my family," she said.
Asked whether she thought they were being paid to make the allegations, she said thai
"seems to be the story."
The two troopers are represented by Cliff Jackson, a Litde Rock lawyer. Jackson is a
former Oxford classmate of Clinton who accused him of lying about his draft record ia a
series of interviews during the 1992 presidential race. Perry and Patterson were members oi
Clinton's security detail when he was Arkansas governor.
Jackson said that the men would like to write a book about the incidents but that the> had
not entered negotiations with any publishers. The troopers said they had received no pe* ments
for telling their stories.
GRAPHIC: PHOTO; Color Photo by AP - Hillary Rodham Clinton during an interMe** *ith
the Associated Press Tuesday at the White House. She discussed the year's events.
LANGUAGE: English
�Copyright 1993 The Washington Post
The Washington Post
December 22, 1993, Wednesday, Final Edition
SECTION: FIRST SECTION; PAGE A16
LENGTH: 703 words
HEADLINE: Whitewater Files Were Found in Foster's Office, White House Confirms
SERIES: Occasional
BYLINE: Michael Isikoff, Washington Post Staff Writer
BODY:
The White House has confirmed that files relating to the Clintons' investment in a
controversial Arkansas real estate development firm were found in the office of deputy White
House counsel Vincent Foster after his suicide on July 20 and turned over to the Clintons'
personal attorney.
In an interview with the Associated Press yesterday, Hillary Rodham Clinton said there
was no reason to release the material. " I am bewildered that a losing investment . . . is still s
topic of inquiry. . . . I just think what we've said is adequate."
The files regarding Whitewater Development Corp. were discovered during a July 22
search of Foster's office by White House counsel Bernard Nussbaum in the presence of FBI
agents and Park Police investigators. White House officials said the Whitewater file*, as
well as personal tax returns for the Clintons, were turned over to the Clintons' attorney.
David E. Kendall.
White House aides, who have consistendy denied that the Clintons had any knowledge of
wrongdoing related to Whitewater, said Foster naturally kept files on the real estate firoi As
lawyer for the Clintons, Foster had handled the sale of the Clintons' interest in
Whitewater last December to James McDougal, who was their partner in the land
development company and the former owner of the defunct Madison Guaranty Savings and
Loan. Foster had prepared delinquent tax returns for Whitewater that were sent to
McDougal in June for transmittal to the IRS.
Questions about the Whitewater files were raised over the weekend after The Washington
Post reported that a Park Police investigator recalled seeing files from Foster's office abend
McDougal. Allegations that Madison Savings and Loan misused depositors' funds in the
mid-1980s and that Whitewater was a potential beneficiary of these funds are now the
subject of a Justice Department investigation.
�A Justice Department official yesterday described the Whitewater files as "potential"
evidence in the department's investigation. But the official declined to say whether
investigators are seeking access to them. " I don't believe anything's been requested," said
White House communications director Mark Gearan. Kendall declined to comment about the
files.
At the same time, however, Justice Department officials are moving forward with two
separate inquiries that have been expanded to include the circumstances of Foster's death and
the later handling of his files by senior White House aides, according to law enforcement
sources. The sources said Nussbaum and other senior presidential aides have been questioned
in recent weeks in connection with those probes.
Department officials said the current investigations are an outgrowth of an inquiry begun
last spring into the White House travel office affair by the public integrity section. The travel
office investigation began when seven longtime workers were fired and replaced with a team
of political appointees headed by one of President Clinton's distant cousins. The White
House attributed the firings to financial mismanagement.
Later the Justice Department's Office of Professional Responsibility was asked to
investigate an allegation made by Foster in a tom-up note found after his death that the FBI
"lied" to Attorney General Janet Reno about the travel office matter.
Sources said this week that those two inquiries have now merged to include any
unanswered questions surrounding Foster's suicide. The U.S. Park Police, which initially
investigated the death, concluded last August that Foster shot himself because of depression
related to his White House work. But Park Police officials also complained that they were
obstructed in the course of their inquiry by senior White House aides.
Justice Department investigators are examining those allegations to determine if the White
House sought to conceal any matters relating to Foster, department sources said.
Meanwhile, Sen. Alfonse M. D'Amato (N.Y ), the ranking Republican on the Senate
Banking Committee, yesterday called on the committee's Democratic chairman to conduct
hearings on activities at Madison. Committee Chairman Donald W. Riegle Jr. (Mich.) waa out
of his office yesterday and unavailable for comment.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 22. 1993
�Copyright 1993 Cable News Network, Inc.
All rights reserved
CNN
SHOW: Crossfire 7:30 pm ET
December 22, 1993
Transcript U 991
TYPE: Show; Interview
SECTION: News; Domestic
LENGTH: 4613 words
BODY:
Pres. BILL CLINTON: Character is something that you have to demonstrate rather than try
to define, but you know, I think what the American people are seeing this year is that 1 love
this country and I believe in it, and I believe in its potential, and I am taking on a lot of
tough issues that have been long ignored.
ANNOUNCER: Live from Washington, Crossfire. On the left, Mike Kinsley. On the right,
John Sununu. Tonight, Clinton Responds. In the crossfire, RW. Apple, Washington Bureau
Chief of The New York Times; and Michael Barone of U.S. News and World Report
MIKE KINSLEY: Good evening. Welcome to Crossfire. In year-end interviews today
President Clinton refused to address those lurid stories from Arkansas state troopers about hu
and his wife's private life, but Mr. Clinton categorically denied offering federal jobs to the
troopers to shut them up about his alleged extramarital affairs. Meanwhile, another story it
brewing about Mr. and Mrs. Clinton's money-losing investment in an Arkansas real estate
deal. It came out today that files on the deal were removed from the White House deputy
counsel's office, Vincent Foster, shortly after Foster's suicide last July; and yesterday it came
out that Clinton's nominee for defense secretary. Republican Bobby Inman, has a so-caJled
Zoe Baird problem. He didn't play his cleaning lady's Social Security. Merry Christmas. Mr
President. John?
JOHN SUNUNU: Johnny Apple, there have been, as Michael pointed out, a number of tough
stories on the President this week. A lot of the focus has been on what Michael called the
lurid details, but isn't it real that the most critical questions are the ones involving the *bu*e
of power and in particular the Whitewater land deal?
R.W. APPLE, "The New York Times': It seems to me that it's only of great and significant
interest, as opposed to prurient interest, if we can show, not that he's a philanderer, but that
he has abused power, either by offering jobs to people who have damaging information on
�him - indeed that's a federal crime - or has threatened them in some way, such as, say, 'I'll put
the IRS on you if you don't stop this,' but we don't- we have allegations to that effect. We
don't have any corroborating evidence so far. On the Whitewater matter, I think the story is
considerably more difficult for the President, because it is clear that he was involved in quite
a spooky arrangement in Arkansas, the details of which we don't need to get intoSUNUNU: What do you mean by spooky?
Mr. APPLE: Well, he was- he made a deal, he and Mrs. Clinton made a deal with two friends
in which they stood to benefit far more than the partners, and they put in far less capital than
the partners, the kind of deal you and I need to pay for our retirement. The Clintons are
saying, 'Well, this doesn't matter, because, in effect, we lost money.'
KINSLEY: They lose $68,000.
Mr. APPLE: Right, right. There wereSUNUNU: Of course, that didn't show up on their tax returns.
Mr. APPLE: And there was also a very odd appointment, to say the least, of a woman, to be
a bank examiner, who had worked for Mr. McDougal and who took action against other
savings and loans that were in trouble but not against Mr. McDougal, and now we have the
matter of the files removed from Vince Foster's office, andSUNUNU: John, shouldn't they work to clear that up? Shouldn't they, in fact, be the ones
asking for an independent investigation?
Mr. APPLE: Well, at the minimum, it seems to me, they ought to say, 'Under the proper
circumstances, we will show this file to a properly constituted investigator.'
KINSLEY: They said that today, didn't they?
Mr. APPLE: Not quite, not as I understand it.
MICHAEL BARONE, 'U.S. News and World Report': They're certainly not turning those Ales
overrightnow. Those files- they've currently got files in the hands of Bill Clinton's personal
attorney David Kendall. They've got files in the hands of the Vincent Foster family attorney
The White House is doing nothing and not making those publicKINSLEY: Clinton saidMr. BARONE: Michael, the White House is doing nothingKINSLEY: Bill Clinton said he would cooperate with the investigation.
Mr. BARONE: That means if he gets a subpoena he will not disobey it. It doesn't mean- he
�could hand those fdes over to us tomorrow if he wanted to.
Mr. APPLE: Michael, Mrs. Clinton said yesterday, and I think we take it as written that she
is a person of a certain influence in the White House, that she saw no reason for handing over
the files, that they would cooperate with the invesdgadon but that they had already explained
it and it was bizarre that it was condnuing and that they wouldn't give over the files.
SUNUNU: How about the propriety of taking the files in the first place?
KINSLEY: Let meMr. BARONE: It was concealed from us, from the press by a deliberate misstatement for five
months that these papers were taken out of the office after the tragic suicide of Vincent
Foster, the deputy White House counsel. Now it is found out that these files exist, and they
won't turn them over to us. There's somethingKINSLEY: All right. Mike BaroneMr. BARONE: There's something reminiscent- they say they're not relevant. Richard Nnon
said the White House tapes weren't relevant.
KINSLEY: Well, look, we know about these files, and if they're called for, they're going to
have to turn them over, but what was wrongMr. BARONE: Let's call for themrightnow.
KINSLEY: Let's go back to last July. What was wrong with- Vince Foster commits IUICI<1#
He's a close friend of the Clintons, he's the deputy White House counsel. He has some of
their personal business files in his office. The White House counsel, Bemie Nussbaum. goes
in there and, not even in private, but with Justice Department officials there, I understand,
goes through and say. This is a private Clinton file, give it toSUNUNU: After it was sealedMr. APPLE: They're not allowed to look at it. They're sitting over here. He looks at n aid
says, 'You can- this one goes in this pile, this one goes in that pile.' They didn't look ai
of these documents.
SUNUNU: And they ordered that office sealed before Nussbaum went in there, and
Nussbaum went in anyway.
KINSLEY: Well, lefsMr. BARONE: Michael, this business-
�KINSLEY: If there's something- if there's nothing wrong, there certainly- the President's
private business files have a right- he has a right to have them after his lawyer commits
suicide.
SUNUNU: How about private diaries? How about private diaries for Senator Packwood?
KINSLEY: He's been subpoenaed.
Mr. BARONE: We also have had- you know, Richard Nixon told us that these were private
documents not relevant. The President has revealed his income taxes, and I would submit that
he has behaved as if- and I believe it should be the case that the President- private business
affairs are a matter of public interest, and, Michael, I think you've taken this position when
there have been
Republican administrations.
KINSLEY: I thinkMr. BARONE: I think it applies in a Democratic administration as well.
KINSLEY: Let me tell you, I think, absolutely- I think there should be a special prosecutor to
get this straightened out. This is a classic example of where a special prosecutor would serve
the interest of the President.
SUNUNU: MichaelMr. BARONE: Congressman Jim LeachKINSLEY: The problem isMr. BARONE: Michael, CongressmanKINSLEY: -Republicans killed the special prosecutor law last year.
Mr. BARONE: No, no, Michael, you're wrong about that. Michael, Congressman Jim Leadi
sent a letter to Attorney General Janet Reno today. Leach is a Republican, but he's also a fuy
that went hard against the S&L scandals when Republicans were in office. His bona fidua it
great. Leach said and pointed out that the attorney general has the power right now to appo*nt
a special counsel as was- as Archibald Cox was appointed without any special special counid
thing. The attorney general could do that tomorrow, and ISUNUNU: They've always had that power. They've always had that power.
Mr. BARONE: She has the power to do that tomorrow. So I hope you'll be criticizing th«
attorney general tomorrow if she does not call a special prosecutor-
�KINSLEY: Sure.
Mr. BARONE: -as you've just called for.
KINSLEY: I think a special prosecutor- the whole point of these special prosecutors is if the
President or the White House have done nothing wrong, they can be vindicated in a way that
is believed. NowMr. BARONE: What do you think the odds are she's going to call for one?
KINSLEY: I think the odds get better every minute.
SUNUNU: Johnny Apple, let's talk about, if this turns out to be a problem, how much of an
impact does it have on the power of this President to conrinue to funcdon? How much of an
impact does it have on the presidency?
Mr. APPLE: I don't think that it has a long-term impact on the power of the President to
functionSUNUNU: Whitewater doesn't?
Mr. APPLE: Wait a moment- if it is shown that he was philandering that when he wu
governor of Arkansas. I think most of the American people believe that he was, rightly or
wrongly. If however, (a) it's shown that he continued that when he was President-elect and
President and that he used the Secret Service, in the way he is alleged to have used the
Arkansas Police, I think that would hurt. I think furthermore any showing, which we don t
have yet, any credible and corroborated showing that he threatened people to hush thu story
up hurts him tremendously. He would then not have- not only have the high moral ground, he
wouldn't have anySUNUNU: How about the phone calls themselves that he madeMr. APPLE: There are possible benign explanationsSUNUNU: -to the troopers?
KINSLEY: Look, not only are there possible benign explanations, but if you heard. John, that
someone was going around spreading stories about you that you believed were untrue,
someone you had worked with before, wouldn't you pick up the phone, wouldn't you pick up
the phone, MikeSUNUNU: Oh, under the conditions that existKINSLEY: What the heck are you talking about?
SUNUNU: -you'd have somebody in the Justice Department or legal counsel's office do it
�KINSLEY: That's ridiculous.
Mr. APPLE: It does seem to me that there is a certain lack of nicety here, call it legal nicety
or call it public reladons nicety. I think that Bemie Nussbaum ought to have had somebody
else in the room with him.
KINSLEY: I agree with you about that.
Mr. APPLE: I also think that if the President wanted these people called and said, 'Come on,
stop it,' that he could have found someone other than himself.
KINSLEY: Wait a minute. Now, if he'd done that, if he'd had one of his aides do it, then that
would have been his consigliarious, trying to shut people up. You can't win these things He
heard they- these were people he knew wellMr. APPLE: Substitute Lyndon Johnson for Bill Clinton in thisKINSLEY: I don't- obviously if he called them up and threatened them or tried to bnbe them,
that is wrong, but the mere fact that he called them up, seems to me, entirely innocent
Mr. BARONE: Michael, let me go- let me disagree with JohnSUNUNU: If he called one for information, maybe; two for information, but there's a whole
bunch of them.
Mr. BARONE: I want to disagree with Johnny Apple on one point here with respect Fhebecause I think that there's damage here, and it's illustrated by your comment, 'What could he
do to get out of this?' I think the damage here on the stories of sexual allegations, whether
they're true or not, and also even more so this damage from this Whitewater thing,
depending on how this works out, is a diminishment of the President's moral authonty 1
mean. Bill Clinton told us, my colleagues in an interview with U.S. News this year, and h«
said it to other publications, one of the things he found out about the presidency was hu
power to transmit a moral message through the bully pulpit of the presidency. He did a
marvelous job of that, for example, in his speech in Memphis in November where he taJked
about carnage on the streets and trying to really do something to change it, and I think it i tad
but true that Bill Clinton's ability to mobilize the nation's moral feelings is going to be
diminished by what we've seen in the last couple of days.
KINSLEY: Well, we don't know what's going to come out about the Whitewater thing If
he's a crook, then he's a crook. If he's not a crook, he shouldn't be treated like a crook. t>ui
lefsMr. APPLE: I think people- I'll certainly agree with you, Michael, if I could just respond
briefly. This is going to give him a rough patch, all this stuff coming out, but he's been
through rough patches before. He has shown himself to be an astonishingly resilient man
Mr. BARONE: Well, he will continue to be President, sure.
�Mr. APPLE: If no more- no, he has gone through rough patches and functioned well as
President.
Mr. BARONE: Yes.
KINSLEY: LookMr. APPLE: But if thisMr. BARONE: And he will function.
Mr. APPLE: -stuff about Whitewater is proven to be as ripe as it smells, and if there is anyshowing down the road that he abused his power and the presidency, then I agree with you
SUNUNU: We'll be back in a minute, and we'll ask Johnny Apple who at The New York
Times made the decision not to mn the story on the troopers last week.
Sen. ROBERT DOLE (R-KS), Minority Leader: What I'd like to see is an independent
investigation of the Madison Guaranty, Whitewater Development matter, and I haven t said a
word of this all year long. It's been in and out of the papers. It involves the President tuid
Mrs. Clinton, and I think it's in their interest, if they say nothing is wrong, why not have the
independent investigation?
[Commercial break]
WHITE HOUSE STAFFER: I think there are those who clearly oppose this President and hu
efforts to change the direction of this country on a number of fronts. I don't think that *
anything new in politics or to a sitting presidency.
SUNUNU: Welcome back to Crossfire. The news this past week was filled with stone* thai
were clearly not very pleasing to President Clinton and the White House. Today he uied io
deal with some of the tougher issues and the allegations of misuse of power and invoKement
in a controversial land deal. Can this kind of tough news week impact the power or
effectiveness of the presidency? We have two of Washington's most respected observers to
help us examine those issues: Johnny Apple, the Washington Bureau Chief of The New Yixfc
Times and Michael Barone, senior- Senior Writer for the U.S. News and World Report
Michael, I made you a little old there. I'm sorry.
Mr. BARONE: That's OK.
KINSLEY: Michael Barone, let's drag this show into the slime. Having read all the stufT thai *
come out in the past few days, do you really believe that President- that Bill Clinton was \nl\
sneaking women into the governor's mansion after he was elected president?
Mr. BARONE: Well, I think the basis of the charges that have been in American Spevtator.
�Los Angeles Times, I think it's- I'm agnostic. I think it's quite possible for reasonable people
to believe those charges. I think it's quite possible for reasonable people to disbelieve those
charges, and Americans are making up their own mind basically without our assistance, but I
do think it's a relevant issue to bring before the public, because I think that Bill Clinton made
something in the nature of a solemn promise to the American people when he appeared on 60
Minutes with his wifeKINSLEY: I agree with you absolutely.
Mr. BARONE: -in January or February of 1992 that he said- he conceded, in effect, that he'd
been committing adultery beforeKINSLEY: Right, right.
Mr. BARONE: -and he said, in effect, in words that every adult at thattimeunderstood, 'I'm
not going to do it anymore.' These charges areKINSLEY: Absolutely, I absolutelyMr. BARONE: These charges are charges that he was doing it anymore, and if they're true,
he broke that promise.
KINSLEY: If they're true, it's absolutely relevant and newsworthy, I agree with you, but I
look at some of the things these troopers said which can be checked, and Ifindthem
incredible. Do you really believe that Bill Clinton said- chuckled, 'I never saw a tax I didn't
like'? Do you believe that Bill and Hillary Clinton, when they were in Arkansas, never went
out to dinner in restaurants with friends, 'cause they were too snobbish? They go out to dinner
with friends all the time.
Mr. APPLE: And they did in Arkansas.
KINSLEY: And they did in Arkansas. There are things- I read that piece, with a skeptical
eye, and I said, I just don't believe these troopers. They're not credible. Now, what waa your
reaction?
Mr. BARONE: Well, I found the story- the texture and the weave of the story closer to
something I could believe, but I really- you know, these are people who came forward who
said they were eye witnesses and saw certain things that I don't think were impossible to have
happened, although some of the detailsKINSLEY: Do you believe that Bill Clinton- do you, Mike Barone, an intelligent person,
really believe that Bill Clinton said, in front of a state trooper, 'You know, I never saw a tax I
didn't like'?
Mr. BARONE: Sure, you'd make that as a self-deprecating comment. Politicians-
�KINSLEY: That was not the way it was presented.
Mr. BARONE: Ronald Reagan saidMr. APPLE: State troopers are not the greatest readers of context in the history of the world.
Mr. BARONE: Michael, Ronald Reagan said on the- when he was doing a sound check, 'Next
thing, I'm going to bomb the Soviet Union' or something. People make these comments, the
sort of caricature of themselves from time to timeKINSLEY: But this was presentedMr. BARONE: So, yes, it's possible. I don't know if it's true.
Mr. APPLE: John, I want to point out that when you came to the phrase 'respected observers'
and you looked at Barone and me, you stumbled over the words. You couldn't bnng yourself
to saySUNUNU: You're confusing stumble with gag.
Mr. APPLE: Gag.
SUNUNU: John, let's go to the issue of the controversy amongst the press itself on what
should have been pnnted and what shouldn't have been printed. Los Angeles Times printed a
full detailed story that in essence supported the story in The American Spectator.
Mr. APPLE: It's important to note that The Los Angeles Times did indeed print a full and
detailed story, a very full story. That was not a story that was done overnight on the basn ofSUNUNU: Four months.
Mr. APPLE: It's four months of work.
SUNUNU: Right.
Mr. APPLE: So we should not be too quick to dismiss it out of hand. It was done by two
very good journalists over a very long period of time.
SUNUNU: You at The New York Times, not you personally, but The New York Times chose
not to run this until- it appears you chose not to run it until Hillary Clinton commented
Mr. APPLE. That's exactly the same thing that we did- we did not have material of our own
that in any way corroborated what was said in The Los Angeles Times or The Spectator We
have talked to some of these people, we have done reporting in this area Everybody has I'm
sure U.S. News has. We did not yet have material that corroborates it. So we decided-
�SUNUNU: Who made the decision, John?
Mr. APPLE: Well, this person who makes the decisions at The New York Times.
SUNUNU: Tell us who that is.
Mr. APPLE: That is Mr. Max Frankel, the Executive Editor. Several of us talk about it
everyday, but in the end, as on, I guess, all newspapers, the editor edits.
SUNUNU: It this an indirect indictment of those who did run the story on the part of The
New York Times?
Mr. APPLE: No, I don't think The New York Times is the regulator of American journalism.
SUNUNU: Nobody does.
Mr. APPLE: We did what- OK. Certainly not John Sununu, but we did what we thought was
best that day. When Mrs. Clinton talked about it, we ran it on page one. I might point out
that we did exactly the same thing with the Gennifer Flowers story. We ran small inside
stories until such time as the President and Mrs. Clinton took them on.
KINSLEY: What is The New York Times supposed to do if they read this stuff, they watch
CNN, they hear all these stories about these troopers and they react the way I reacted'' These
people are simply not trustworthy.' Are they supposed to publicize a story with sources- if
their- if one of their own reporters, if one of Johnny Apple's own reporters had come to him.
'Here's my story,' they would have read it. If it was that David Brock story, they would ha\e
said, you would have said, 'This stuff is not believable. This is unbelievable, that is
unbelievable. Why should I believe this other- the main, the big stuff?' Why should thev
rehashMr. APPLE: You mean Kinsley's doing my job for me tonight?
KINSLEY: Why should they rehash a story from some other publication that they wouiAi t
publish from their own reporters?
Mr. BARONE: Well, I don't- if The New York Times- I'm with Johnny Apple on this I
mean, each publication should make its own decision. I don't find the David Brock itorv
inherently unbelievable. Ifindit's one that reasonable people could believe or could
disbelieve, as you do, and I think it's entirely reasonable on either countKINSLEY: What aboutMr. BARONE: I don't think papers under any obligation. From my own judgment, if an>body
had asked me, I would have said that because I think that these stories, if true, show a
violation of something in the nature of a solemn promise, it is newsworthy and should run-
�KINSLEY: Does that mean any storyMr. BARONE: -and eye witness testimony by an Arkansas state trooper- you know, an
Arkansas state troopers is not a person that is like some stumblebum on the street, so far as I
know. They're accorded a certain respect, as should be the governor and first lady of
ArkansasKINSLEY: Even though other things these troopers say are patenUy, obviously wrong,
obviously wrong, not simply wrong, but obviously wrong? Like that business about going to
dinner.
Mr. APPLE: Well, there can be some stuff that's wrong in a story and some stuff that's right.
In fact, I would argue in quite a lot of stories I've read in my life and some that I've written
have had some stuff that wasrightand some that was wrong.
SUNUNU: John, let's go back to one of the other issues that has come up, and this is the
issue that's associated with the abuse of power, as governor and having the troopers assist in
the indiscrerions that he seems not to have denied. I think that's about the best way I can put
it. If he directedMr. APPLE: It seems to me that he didn't deny the indiscretions, but he did deny the abuse of
power.
SUNUNU: Now he's gone on the record in denying that abuse of power. If now it turns out
there was that, isn't this going to be a very difficult issue for the President to deal with"'
Mr. APPLE: Yes.
KINSLEY: Is it an abuse of power if you're the- I mean, whatever you think of mantal
infidelity, it's deplorable, but is it an abuse of power for a governor to use state cars and state
drivers to go about his personal business, whatever you think about that personal business^ If
he used it to go bowling, you wouldn't say it was an abuse of power.
Mr. APPLE: Michael, the problem is that if he offered the people a job to shut up, that's a
violation of the law.
KINSLEY: There's two issues.
Mr. BARONE: Let me answer Michael's question in this way. I'm not sure that it is an abuse
of power or certainly one thatrisesto the level of criminal misconduct, but you know, there s
a Republican U.S. senator down in Texas who is under indictment by a highly partisan
Democratic prosecutor in a highly partisan Democratic town with a partisan Democratic grand
juryKINSLEY: That's for you-
�Mr. BARONE: -on 51 years of jail for using public property for political purposes.
KINSLEY: For political purposes, not as governor going about your private business.
Mr. BARONE: I think it also includesMr. APPLE: Hold on a minute here. Hold on a minute.
Mr. BARONE: I think that that's out of lineMr. APPLE: I can recall a chief of staff at the White House who got in extremely senous
trouble for allegedly using airplanes for his private business. How- the carsSUNUNU: Never used them without compensaring for them, John.
KINSLEY: I think if the President had done what John had done, there wouldn't be any
trouble, and maybe John shouldn't have been in trouble. We'll see. Mike Barone, thank you
Johnny Apple, thank you.
SUNUNU: Thanks for coming, guys.
KINSLEY: John will be in a bit of trouble in just a moment.
[Commercial break]
KINSLEY: Coming up tonight on Larry King Live, Michael Jackson's legal defense team,
also Senator Sam Nunn of the Armed Services Committee. That's Larry King Live at ' 00
>
p.m. Eastern, 6:00 Pacific time on CNN. John?
SUNUNU: Mike, I think as much of the focus that has been on the issues of mantal
indiscretion, I think the point that was made here tonight isright.It's the Whitewater
investment issue that's going to be the most difficult for the President to deal with. I hope Se
deals with it quickly and credibly, because frankly there's no happiness in anybody seeing •
president under that discomfort.
KINSLEY: Well, I can do without those crocodile tearsSUNUNU: They're not crocodiles tears. They're not crocodile tears, Mike. That's important
KINSLEY: The facts will come out on Whitewater, and we'll either know or we > o t
*n
know. This sex stuff is much more disturbing because it's all innuendo, it's all stuff from
completely unreliable sources. Some of it may be true, but there's no proof, and if it doesn t-
SUNUNU: Even if you don't understand it, Mike, I am sincere. They've got to take care of
�these credibly and quickly or it really does damage the presidency.
KINSLEY: I agree with you completely. The Whitewater thing, we ought to find out the
facts. From the left, I'm Mike Kinsley. Good night for Crossfire.
SUNUNU: And from the right, I'm John Sununu. Join us again tomorrow night for another
edition of Crossfire.
KINSLEY: PrimeNews is next. Here's Bernard Shaw to give us a little preview. Bemie?
BERNARD SHAW, PrimeNews: Thank you, Michael. Coming up on PrimeNews, super star
Michael Jackson tries to- or takes to the airwaves to try to clear his name. While some people
are making travel plans for the holiday, winter weather slams into sections of the United
States. And just what is the protocol for tipping people at Christmastime?Those stones and
much more ahead on PrimeNews.
The preceding text has been professionally transcribed. However, although the text has
been checked against an audio track, in order to meet rigid distribution and transmission
deadlines, it has not yet been proofread against videotape.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: December 23, 1993
�CNN
SHOW: Crossfire 7:30 pm ET
December 22, 1993
Transcript # 991
TYPE: Show; Interview
SECTION: News, Domestic
LENGTH: 4613 words
BODY:
Pres BILL CLINTON: Character is something that you have to demonstrate rather than try
to define, but you know, I think what the American people are seeing this year is that I love
this country and I believe in it, and I believe in its potential, and I am taking on a lot of
tough issues that have been long ignored.
ANNOUNCER: Live from Washington, Crossfire. On the left, Mike Kinsley. On the right.
John Sununu. Tonight, Clinton Responds. In the crossfire, R.W. Apple, Washington Bureau
Chief of The New York Times; and Michael Barone of U.S. News and World Report
MIKE KINSLEY: Good evening Welcome to Crossfire. In year-end interviews toda\
President Clinton refused to address those lurid stories from Arkansas state troopers aK>ut his
and his wife's private life, but Mr. Clinton categorically denied offering federal jobs to ihe
troopers to shut them up about his alleged extramarital affairs. Meanwhile, another -.torv n
brewing about Mr and Mrs. Clinton's money-losing investment in an Arkansas real eMaie
deal. It came out today that files on the deal were removed from the White House depur*
counsel's office, Vincent Foster, shortly after Foster's suicide last July; and yesterday ii ^ame
out that Clinton's nominee for defense secretary. Republican Bobby Inman, has a so-vailed
Zoe Baird problem. He didn't play his cleaning lady's Social Security. Merry Christmas. Mr
President. John?
JOHN SUNUNU: Johnny Apple, there have been, as Michael pointed out, a number of tou^h
stories on the President this week A lot of the focus has been on what Michael called the
lurid details, but isn't it real that the most critical questions are the ones involving the Af-uve
of power and in particular the Whitewater land deal
9
R.W APPLE, 'The New York Times' It seems to me that it's only of great and sigmfuani
interest, as opposed to prurient interest, i f we can show, not that he's a philanderer, but thai
he has abused power, either by offering jobs to people who have damaging information on
him - indeed that's a federal crime - or has threatened them in some way, such as, sav. I'll put
the IRS on you i f you don't stop this,' but we don't- we have allegations to that effect We
�don't have any corroborating evidence so far. On the Whitewater matter, I think the story is
considerably more difficult for the President, because it is clear that he was involved in quite
a spooky arrangement in Arkansas, the details of which we don't need to get intoSUNUNU: What do you mean by spooky?
Mr. APPLE: Well, he was- he made a deal, he and Mrs Clinton made a deal with two friends
in which they stood to benefit far more than the partners, and they put in far less capital than
the partners, the kind of deal you and 1 need to pay for our retirement. The Clintons are
saying, 'Well, this doesn't matter, because, in effect, we lost money.'
KINSLEY: They lose $68,000
Mr. APPLE: Right, right There wereSUNUNU: Of course, that didn't show up on their tax returns.
Mr. APPLE: And there was also a very odd appointment, to say the least, of a woman, to be
a bank examiner, who had worked for Mr McDougal and who took action against other
savings and loans that were in trouble but not against Mr. McDougal, and now we have the
matter of the files removed from Vince Foster's office, andSUNUNU: John, shouldn't they work to clear that up? Shouldn't they, in fact, be the one*
asking for an independent investigation
9
Mr. APPLE: Well, at the minimum, it seems to me, they ought to say, 'Under the proper
circumstances, we will show this file to a properly constituted investigator.'
KINSLEY: They said that today, didn't they
9
Mr. APPLE: Not quite, not as I understand it.
MICHAEL BARONE, 'U S. News and World Report': They're certainly not turning th«.«« t'.ie*
over right now. Those files- they've currently got files in the hands of Bill Clinton » perroai
attorney David Kendall. They've got files in the hands of the Vincent Foster family »nnrn*>
The White House is doing nothing and not making those publicKINSLEY: Clinton saidMr. BARONE: Michael, the White House is doing nothmgKINSLEY Bill Clinton said he would cooperate with the investigation.
Mr BARONE: That means if he gets a subpoena he will not disobey it. It doesn't mean- he
could hand those files over to us tomorrow i f he wanted to.
�Mr. APPLE: Michael, Mrs. Clinton said yesterday, and I think we take it as written that she
is a person of a certain influence in the White House, that she saw no reason for handing over
the fdes, that they would cooperate with the investigation but that they had already explained
it and it was bizarre that it was continuing and that they wouldn't give over the files
SUNUNU: How about the propriety of taking the files in the first place?
KINSLEY: Let meMr. BARONE: It was concealed from us, from the press by a deliberate misstatement for five
months that these papers were taken out of the office after the tragic suicide of Vincent
Foster, the deputy White House counsel. Now it is found out that these files exist, and they
won't turn them over to us There's somethmgKINSLEY: All right Mike BaroneMr. BARONE: There's something reminiscent- they say they're not relevant. Richard Nnon
said the White House tapes weren't relevant.
KINSLEY: Well, look, we know about these files, and i f they're called for, they're going to
have to turn them over, but what was wrongMr. BARONE: Let's call for them right now.
KINSLEY: Let's go back to last July. What was wrong with- Vince Foster commits suicide
He's a close friend of the Clintons, he's the deputy White House counsel. He has some of
their personal business files in his office. The White House counsel, Bemie Nussbaum. goes
in there and, not even in private, but with Justice Department officials there, I understand,
goes through and say. This is a pnvate Clinton file, give it toSUNUNU: After it was sealedMr. APPLE: They're not allowed to look at it. They're sitting over here. He looks at it and
says, 'You can- this one goes in this pile, this one goes in that pile.' They didn't look ai «nv
of these documents.
SUNUNU: And they ordered that office sealed before Nussbaum went in there, and
Nussbaum went in anyway.
KINSLEY: Well, let'sMr BARONE: Michael, this busmessKINSLEY: If there's something- if there's nothing wrong, there certainly- the President *
private business files have a right- he has a right to have them after his lawyer commits
�suicide.
SUNUNU: How about private diaries? How about private diaries for Senator Packwood?
KINSLEY: He's been subpoenaed.
Mr. BARONE. We also have had- you know, Richard Nixon told us that these were private
documents not relevant. The President has revealed his income taxes, and I would submit that
he has behaved as if- and I believe it should be the case that the President- private business
affairs are a matter of public interest, and, Michael, I think you've taken this position when
there have been
Republican administrations.
KINSLEY: I thmkMr. BARONE: I think it applies in a Democratic administration as well.
KINSLEY: Let me tell you, I think, absolutely- I think there should be a special prosecutor to
get this straightened out This is a classic example of where a special prosecutor wouM serve
the interest of the President.
SUNUNU: MichaelMr BARONE: Congressman Jim LeachKINSLEY: The problem isMr BARONE: Michael, CongressmanKINSLEY: -Republicans killed the special prosecutor law last year.
Mr. BARONE: No, no, Michael, you're wrong about that. Michael, Congressman Jim I e^rt
sent a letter to Attorney General Janet Reno today. Leach is a Republican, but he's aiw • <w
that went hard against the S&L scandals when Republicans were in office. His bona f.j*** .«
great. Leach said and pointed out that the attorney general has the power right now io •rt»"n<
a special counsel as was- as Archibald Cox was appointed without any special speoaJ i>un%<l
thing. The attorney general could do that tomorrow, and Ik
SUNUNU: They've always had that power. They've always had that power.
Mr. BARONE: She has the power to do that tomorrow So I hope you'll be criticizing -.he
attorney general tomorrow if she does not call a special prosecutorKINSLEY: Sure.
�Mr. BARONE: -as you've just called for.
KINSLEY: I think a special prosecutor- the whole point of these special prosecutors is i f the
President or the White House have done nothing wrong, they can be vindicated in a way that
is believed. NowMr. BARONE What do you think the odds are she's going to call for one?
KINSLEY: I think the odds get better every minute.
SUNUNU: Johnny Apple, let's talk about, if this turns out to be a problem, how much of an
impact does it have on the power of this President to continue to function? How much of an
impact does it have on the presidency
9
Mr. APPLE: I don't think that it has a long-term impact on the power of the President to
function9
SUNUNU: Whitewater doesn't
Mr APPLE: Wait a moment- if it is shown that he was philandering that when he was
governor of Arkansas. I think most of the American people believe that he was, rightly or
wrongly. I f however, (a) it's shown that he continued that when he was President-elect and
President and that he used the Secret Service, in the way he is alleged to have used the
Arkansas Police, I think that would hurt I think furthermore any showing, which we don't
have yet, any credible and corroborated showing that he threatened people to hush this storv
up hurts him tremendously. He would then not have- not only have the high moral ground, he
wouldn't have anySUNUNU: How about the phone calls themselves that he madeMr APPLE: There are possible benign explanationsSUNUNU: -to the troopers?
KINSLEY: Look, not only are there possible benign explanations, but i f you heard, John, thai
someone was going around spreading stories about you that you believed were untrue,
someone you had worked with before, wouldn't you pick up the phone, wouldn't you puk up
the phone, MikeSUNUNU: Oh, under the conditions that existKINSLEY: What the heck are you talking about
9
SUNUNU: -you'd have somebody in the Justice Department or legal counsel's office do it
KINSLEY: That's ridiculous.
�Mr. APPLE: It does seem to me that there is a certain lack of nicety here, call it legal nicety
or call it public relations nicety. I think that Bernie Nussbaum ought to have had somebody
else in the room with him.
KINSLEY: I agree with you about that.
Mr. APPLE: I also think that i f the President wanted these people called and said, 'Come on,
stop it,' that he could have found someone other than himself.
KINSLEY: Wait a minute. Now, if he'd done that, i f he'd had one of his aides do it, then that
would have been his consigliarious, trying to shut people up. You can't win these things He
heard they- these were people he knew wellMr. APPLE: Substitute Lyndon Johnson for Bill Clinton in thisKINSLEY. I don't- obviously if he called them up and threatened them or tried to bribe them,
that is wrong, but the mere fact that he called them up, seems to me, entirely innocent
Mr. BARONE: Michael, let me go- let me disagree with JohnSUNUNU: I f he called one for information, maybe; two for information, but there's a v^hole
bunch of them.
Mr. BARONE: I want to disagree with Johnny Apple on one point here with respect Ihebecause I think that there's damage here, and it's illustrated by your comment, 'What could he
do to get out of this?' I think the damage here on the stories of sexual allegations, whether
they're true or not, and also even more so this damage from this Whitewater thing,
depending on how this works out, is a diminishment of the President's moral authontv I
mean. Bill Clinton told us, my colleagues in an interview with U S. News this year, and he
said it to other publications, one of the things he found out about the presidency was hu
power to transmit a moral message through the bully pulpit of the presidency He did a
marvelous job of that, for example, in his speech in Memphis in November where he laiked
about carnage on the streets and trying to really do something to change it, and I think it's vad
but true that Bill Clinton's ability to mobilize the nation's moral feelings is going to be
diminished by what we've seen in the last couple of days.
KINSLEY: Well, we don't know what's going to come out about the Whitewater thmg If
he's a crook, then he's a crook I f he's not a crook, he shouldn't be treated like a crook, but
let'sMr APPLE: I think people- I'll certainly agree with you, Michael, i f I could just respond
briefly This is going to give him a rough patch, all this stuff coming out, but he's been
through rough patches before He has shown himself to be an astonishingly resilient man
Mr BARONE: Well, he will continue to be President, sure.
Mr APPLE: I f no more- no, he has gone through rough patches and functioned well as
�President.
Mr. BARONE Yes
KINSLEY: LookMr. APPLE: But if thisMr BARONE: And he will function.
Mr. APPLE: -stuff about Whitewater is proven to be as ripe as it smells, and if there is any
showing down the road that he abused his power and the presidency, then I agree with you
SUNUNU: We'll be back in a minute, and we'll ask Johnny Apple who at The New York
Times made the decision not to run the story on the troopers last week.
Sen ROBERT DOLE (R-KS), Minority Leader: What I'd like to see is an independent
investigation of the Madison Guaranty, Whitewater Development matter, and I haven t vaij a
word of this all year long. It's been in and out of the papers. It involves the President .uid
Mrs. Clinton, and I think it's in their interest, if they say nothing is wrong, why not have the
independent investigation
0
[Commercial break]
WHITE HOUSE STAFFER: I think there are those who clearly oppose this President md - %
efforts to change the direction of this country on a number of fronts. I don't think thai %
anything new in politics or to a sitting presidency.
SUNUNU: Welcome back to Crossfire. The news this past week was filled with stone* snai
were clearly not very pleasing to President Clinton and the White House. Today he tned i <
>
deal with some of the tougher issues and the allegations of misuse of power and mvoKemmi
in a controversial land deal. Can this kind of tough news week impact the power or
effectiveness of the presidency? We have two of Washington's most respected obsener i "
help us examine those issues: Johnny Apple, the Washington Bureau Chief of The Ne* ^
Times and Michael Barone, senior- Senior Writer for the U.S. News and World Rep«>n
Michael, I made you a little old there I'm sorry.
Mr BARONE: That's OK
KINSLEY: Michael Barone. let's drag this show into the slime. Having read all the -.ii-it ^ i i \
come out in the past few days, do you really believe that President- that Bill Clinton - ^ ml
sneaking women into the governor's mansion after he was elected president?
Mr BARONE: Well, I think the basis of the charges that have been in American Spevumr.
Los Angeles Times, I think it's- I'm agnostic I think it's quite possible for reasonable
^T'e
to believe those charges I think it's quite possible for reasonable people to disbelieve ±o\*
�charges, and Americans are making up their own mind basically without our assistance, but I
do think it's a relevant issue to bring before the public, because I think that Bill Clinton made
something in the nature of a solemn promise to the American people when he appeared on 60
Minutes with his wifeKINSLEY: I agree with you absolutely.
Mr. BARONE: -in January or February of 1992 that he said- he conceded, in effect, that he'd
been committing adultery beforeKINSLEY: Right, right.
Mr. BARONE: -and he said, in effect, in words that every adult at that time understood. 'I'm
not going to do it anymore.' These charges areKINSLEY: Absolutely, I absolutelyMr. BARONE: These charges are charges that he was doing it anymore, and i f they're tru«,
he broke that promise
KINSLEY I f they're true, it's absolutely relevant and newsworthy, I agree with you, but I
look at some of the things these troopers said which can be checked, and I find them
incredible. Do you really believe that Bill Clinton said- chuckled, ' I never saw a tax I didn t
like' Do you believe that Bill and Hillary Clinton, when they were in Arkansas, never went
out to dinner in restaurants with friends, 'cause they were too snobbish? They go out to dinner
with friends all the time.
9
Mr. APPLE: And they did in Arkansas.
KINSLEY: And they did in Arkansas. There are things- I read that piece, with a skeptical
eye, and I said, I just don't believe these troopers They're not credible. Now, what was >ouf
reaction?
Mr. BARONE: Well, I found the story- the texture and the weave of the story closer to
something I could believe, but I really- you know, these are people who came forward who
said they were eye witnesses and saw certain things that I don't think were impossible to ha\e
happened, although some of the detailsKINSLEY Do you believe that Bill Clinton- do you, Mike Barone, an intelligent pervwi.
really believe that Bill Clinton said, in front of a state trooper, 'You know, I never saw a tax I
didn't like'
9
Mr. BARONE: Sure, you'd make that as a self-deprecating comment. PoliticiansKINSLEY: That was not the way it was presented.
�Mr BARONE: Ronald Reagan saidMr. APPLE: State troopers are not the greatest readers of context in the history of the world.
Mr. BARONE: Michael, Ronald Reagan said on the- when he was doing a sound check, 'Next
thing, I'm going to bomb the Soviet Union' or something. People make these comments, the
sort of caricature of themselves from time to timeKINSLEY: But this was presentedMr. BARONE: So, yes, it's possible. I don't know i f it's true.
Mr. APPLE: John, I want to point out that when you came to the phrase 'respected observers'
and you looked at Barone and me, you stumbled over the words You couldn't bring vourself
to saySUNUNU: You're confusing stumble with gag.
Mr APPLE Gag
SUNUNU: John, let's go to the issue of the controversy amongst the press itself on
should have been pnnted and what shouldn't have been printed. Los Angeles Times pnnted a
full detailed story that in essence supported the story in The American Spectator
Mr. APPLE: It's important to note that The Los Angeles Times did indeed print a full and
detailed story, a very full story. That was not a story that was done overnight on thc biMs ofSUNUNU: Four months
Mr APPLE: It's four months of work
SUNUNU: Right.
Mr APPLE: So we should not be too quick to dismiss it out of hand. It was done bv two
very good journalists over a very long period of time.
SUNUNU: You at The New York Times, not you personally, but The New York Tim<~\ .hove
not to run this until- it appears you chose not to run it until Hillary Clinton commented
Mr. APPLE: That's exactly the same thing that we did- we did not have material of out o*n
that in any way corroborated what was said in The Los Angeles Times or The Spectator We
have talked to some of these people, we have done reporting in this area. Everybody has I'm
sure U S News has We did not yet have material that corroborates it. So we decidedSUNUNU: Who made the decision, John
9
�
Dublin Core
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Title
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Michael Waldman
Description
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<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
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Michael Waldman
Office of Speechwriting
Date
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1993-1999
Identifier
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2006-0469-F
Extent
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Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Still Image
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Original Format
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paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Whitewater Clippings (through 1/2/94) [Binder] [3]
Creator
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Office of Speechwriting
Michael Waldman
Is Part Of
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Box 65
<a href="http://clinton.presidentiallibraries.us/items/show/36403"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F Segment 1
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Preservation-Reproduction-Reference
Date Created
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6/3/2015
Source
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7763296
42-t-7763296-20060469F-Seg1-065-014-2015