[Senate Report 104-280]
[From the U.S. Government Printing Office]




104th Congress                                                   Report
                                SENATE 
 2d Session                                                     104-280
_______________________________________________________________________


 
INVESTIGATION OF WHITEWATER DEVELOPMENT CORPORATION AND RELATED MATTERS

                               ----------                              

                         F I N A L  R E P O R T

                                 OF THE

                    SPECIAL COMMITTEE TO INVESTIGATE
                   WHITEWATER DEVELOPMENT CORPORATION
                          AND RELATED MATTERS

                             together with

                     ADDITIONAL AND MINORITY VIEWS




                 June 17, 1996.--Ordered to be printed


   Filed under authority of the order of the Senate of June 13, 1996


    INVESTIGATION OF WHITEWATER DEVELOPMENT CORPORATION AND RELATED 
                         MATTERS --FINAL REPORT



104th Congress                                                   Report
                              SENATE
 2d Session                                                     104-280
_______________________________________________________________________



                      INVESTIGATION OF WHITEWATER

                        DEVELOPMENT CORPORATION

                          AND RELATED MATTERS

                               __________

                         F I N A L  R E P O R T

                                 OF THE

                    SPECIAL COMMITTEE TO INVESTIGATE
                   WHITEWATER DEVELOPMENT CORPORATION
                          AND RELATED MATTERS

                             together with

                     ADDITIONAL AND MINORITY VIEWS




                 June 17, 1996.--Ordered to be printed

   Filed under authority of the order of the Senate of June 13, 1996


SPECIAL COMMITTEE TO INVESTIGATE WHITEWATER DEVELOPMENT CORPORATION AND 
                            RELATED MATTERS

  ALFONSE M. D'AMATO, New York, 
             Chairman
PAUL S. SARBANES, Maryland           RICHARD C. SHELBY, Alabama
CHRISTOPHER J. DODD, Connecticut     CHRISTOPHER S. BOND, Missouri
JOHN F. KERRY, Massachusetts         CONNIE MACK, Florida
RICHARD H. BRYAN, Nevada             LAUCH FAIRCLOTH, North Carolina
BARBARA BOXER, California            ROBERT F. BENNETT, Utah
CAROL MOSELEY-BRAUN, Illinois        ROD GRAMS, Minnesota
PATTY MURRAY, Washington             PETE V. DOMENICI,* New Mexico
PAUL SIMON, Illinois                 ORRIN G. HATCH, Utah
                                     FRANK H. MURKOWSKI, Alaska

 Howard A. Menell, Staff Director
  Robert J. Giuffra, Jr., Chief 
              Counsel
 Philip E. Bechtel, Deputy Staff 
             Director
Steven B. Harris, Democratic Staff 
    Director and Chief Counsel

 Michael Chertoff, Special Counsel
 Richard Ben-Veniste, Democratic 
          Special Counsel
 Alice S. Fisher, Deputy Special 
              Counsel
 Louis J. Gicale, Deputy Special 
              Counsel
 Everett C. Johnson, Jr., Deputy 
          Special Counsel
  James B. Comey, Deputy Special 
              Counsel
   Neal E. Kravitz, Democratic 
 Principal Deputy Special Counsel
  Lance Cole, Democratic Deputy 
          Special Counsel

  Steven Bankler, Investigative 
            Accountant
   H. Christopher Bartolomucci, 
     Associate Special Counsel
  Gabriel Berg, Democratic Legal 
              Intern
  Julius J. Bonavolanta, Special 
           Investigator
Mark J. Brenner, Assistant Special 
              Counsel
 Robert H. Buchanan, Staff Intern
  David Carle, Democratic Press 
             Secretary
    William S. Castle, Senior 
           Investigator
  Lori A. Conlon, Administrative 
             Assistant
    Vincenzo A. DeLeo, Special 
           Investigator
 Viet D. Dinh, Associate Special 
              Counsel
  Douglas A. Epstein, Democratic 
              Counsel
  Christopher Farro, Staff Intern
 Steven H. Fromewick, Democratic 
     Assistant Special Counsel
  Sophia Hardy, Democratic Intern
  Nguyen-Hong Hoang, Democratic 
           Legal Intern
    David Kaufman, Staff Intern
  David M. Luna, Democratic Law 
               Clerk
   Joseph Mitchell, Staff Intern
 Timothy P. Mitchell, Democratic 
     Professional Staff Member
Michael P. O'Callaghan, Associate 
          Special Counsel
  Richard J. O'Connell, Special 
           Investigator
   James S. Portnoy, Democratic 
     Associate Special Counsel
    James F. Redfern, Special 
           Investigator
  Andrew M. Schauer, Democratic 
     Assistant Special Counsel
    Jennifer M. Swartz, Senior 
           Investigator
     Megan H. Tinker, Senior 
           Investigator
  Amy R. Wendt, Democratic Staff 
             Assistant
  Jeffrey H. Winter, Democratic 
         Special Assistant
 Stephanie H. Womack, Democratic 
         Special Assistant

----------
* Appointed to replace Senator Bill Frist pursuant to S. Res. 184 
(October 12, 1995).
 Peter C. Barrett, Staff Assistant
  Yael Belkind, Democratic Staff 
             Assistant
   Sloan Deerin, Staff Assistant
Mitchell Feuer, Democratic Counsel
 Emily L. Frydrych, Assistant to 
   the Democratic Staff Director
 Martin J. Gruenberg, Democratic 
          Senior Counsel
    Mark D. Hoffman, Executive 
  Assistant to the Staff Director
  Glenn Ivey, Democratic Counsel
   Joseph A. Jiampietro, Counsel
 Joseph R. Kolinski, Chief Clerk/
  Computer Systems Administrator
   Andrew Lowenthal, Democratic 
     Professional Staff Member
   Doris R. Mahoney, Executive 
             Assistant
     Charles Marr, Democratic 
     Professional Staff Member
 E. Richard Mills, Press Secretary
 Joseph N. Mondello, Jr., Counsel
  Patrick A. Mulloy, Democratic 
    Chief International Counsel
     Douglas R. Nappi, Counsel
  Lendel Porterfield, Financial 
 Institutions Subcommittee Staff 
             Director
 Amy C. Randel, Democratic Staff 
             Assistant
  Sarah Bloom Raskin, Democratic 
              Counsel
  Madelyn Simmons, Professional 
           Staff Member
  Paul Weech, Professional Staff 
              Member

      Edward M. Malan, Editor
     George E. Whittle, Editor
 Irene C. Whiston, GPO Editorial 
             Assistant
 Donna Lee Krause, GPO Editorial 
             Assistant


                            C O N T E N T S
                              ----------                              
                                                                   Page
Preface..........................................................     1
Phase ------The Foster Phase.....................................     6
    Conclusions of the Special Committee.........................     8
        1. By the time of Vincent Foster's death in July 1993, 
            the Clinton's had established a pattern of concealing 
            their involvement with Whitewater and the McDougals' 
            Madison Guaranty S&L.................................    10
        2. The Clintons and their associates were aware, at the 
            time of Mr. Foster's death, that the Clintons' 
            involvement with Whitewater and the Madison Guaranty 
            S&L might subject them to liability..................    12
        3. At the time of his death, Mr. Foster's office 
            contained damaging evidence about the Whitewater and 
            Travelgate affairs...................................    13
        4. White House officials engaged in highly improper 
            conduct in handling documents in Vincent Foster's 
            office following his death...........................    14
        5. Mrs. Clinton was closely involved in the handling of 
            documents in Mr. Foster's office following his death 
            and directed that investigators be denied 
            ``unfettered access'' to Mr. Foster's office.........    17
        6. Senior White House officials and other Clinton 
            associates provided incomplete and inaccurate 
            testimony to the Special Committee...................    20
        7. The Office of the White House Counsel was misused to 
            impede ongoing investigations and to serve the purely 
            personal legal interests of the President, Mrs. 
            Clinton and their associates.........................    21
    Background...................................................    22
        I.  Mr. Foster's Involvement in the Clintons' Personal 
            Matters..............................................    23
        II.  The Traditional Independence of the White House 
            Counsel's Office.....................................    33
    Summary of the Evidence......................................    36
        I. The Contents of Vincent Foster's Office at the Time of 
            his Death............................................    36
        II. July 20, 1993........................................    42
            A. The Discovery of Mr. Foster's Body................    42
            B. The Park Police Notify the White House and the 
                Foster Family....................................    44
            C. The White House Ignores Repeated Park Police 
                Requests to Seal Mr. Foster's Office.............    44
            D. Mrs. Clinton Learns of Mr. Foster's Death and 
                Begins to Contact Close Associates...............    46
            E. Mrs. Clinton Calls the White House on an Unlisted 
                Trunk Line.......................................    47
            F. Helen Dickey's Telephone Call to the Arkansas 
                Governor's Mansion...............................    48
            G. The Handling of Trash and Burn Bags in Mr. 
                Foster's Office..................................    50
            H. Senior White House Officials Conduct a Late-Night 
                Search of Mr. Foster's Office....................    51
            I. Secret Service Officer Henry O'Neill Observes 
                Margaret Williams Remove Documents from Mr. 
                Foster's Office..................................    53
        III. July 21, 1993.......................................    55
            A. Mr. Foster's Office is Finally Sealed.............    55
            B. The White House Impedes Initial Park Police 
                Efforts to Search Mr. Foster's Office............    57
            C. The White House Counsel and Deputy Attorney 
                General agree on a Search Protocol for the 
                Documents in Mr. Foster's office.................    58
            D. The White House Finalizes the Agreement on the 
                Search Protocol..................................    60
        IV. July 22, 1993........................................    63
            A. The White House Counsel's Office Interferes with 
                Park Police Interviews of White House Staff......    63
            B. The First Lady, Margaret Williams, Susan Thomases 
                and Bernard Nussbaum Conduct a Series of Early 
                Morning Telephone Calls..........................    64
            C. The White House Breaks its Agreement with the 
                Justice Department: ``A Terrible Mistake''.......    67
            D. The Window Dressing Review of the Documents in Mr. 
                Foster's Office..................................    70
            E. Mr. Nussbaum's Failure to Search Properly Mr. 
                Foster's Briefcase...............................    74
            F. The Foster Family Lawyer Overhears Discussion of 
                the Scraps of Paper in Mr. Foster's Briefcase....    77
            G. The Secretive, Real Review of the Contents of Mr. 
                Foster's Office..................................    78
            H. The Transfer of Clinton Personal Files to the 
                First Family's Residence.........................    79
            I. The Reaction of Law Enforcement Officials to Mr. 
                Nussbaum's Search................................    82
        V. July 26, 1995.........................................    83
            A. The Existence of the Torn-Up Note is Finally 
                Revealed to Law Enforcement......................    83
            B. The White House's Decision Not to Disclose the 
                Note Immediately to Law Enforcement..............    87
            C. Mrs. Clinton and Susan Thomases Are Told of the 
                Discovery of the Note............................    88
        VI. July 27, 1993........................................    90
            A. The Review and Transfer of the Clinton Personal 
                Files From the White House Residence to Williams 
                & Connolly.......................................    90
            B. White House Deliberations About the Handling of 
                the Note.........................................    93
            C. The President is Told of the Note.................    95
            D. The White House Finally Turns the Note Over to Law 
                Enforcement......................................    95
    Findings of the Special Committee............................    98
         1. At the time of his death, Vincent Foster was 
            intimately involved in two brewing scandals--
            Travelgate and Whitewater--touching on President and 
            Mrs. Clinton.........................................    99
         2. Senior White House officials were aware that the 
            President and Mrs. Clinton faced potential liability 
            over Whitewater and their relationship with the 
            McDougals............................................   100
         3. Senior White House officials ignored repeated 
            requests by law enforcement officials to seal Mr. 
            Foster's office on the night of his death............   101
         4. White House officials conducted an improper search of 
            Mr. Foster's office on the night of his death........   102
         5. Margaret Williams may have removed files from the 
            White House Counsel suite on the night of his death..   103
         6. Bernard Nussbaum agreed with the Justice Department 
            officials on July 21, 1993, to allow law enforcement 
            officials to review documents in Mr. Foster's office.   104
         7. Margaret Williams and Susan Thomases, in consultation 
            with Mrs. Clinton, took part in formulating the 
            procedure for reviewing documents in Mr. Foster's 
            office on July 22, 1993..............................   105
         8. Bernard Nussbaum failed to conduct a meaningful 
            review of Mr. Foster's office and did not describe to 
            law enforcement officials sensitive files pertaining 
            to the Clintons and the Administration...............   107
         9. An index of documents in Mr. Foster's office is 
            missing and other indices were revised following his 
            death to conceal possible references to Whitewater...   108
        10. Bernard Nussbaum knew about yellow scraps of paper in 
            Mr. Foster's briefcase prior to Stephen Neuwirth's 
            apparent discovery on July 26, 1993..................   109
        11. Margaret Williams, in consultation with Mrs. Clinton, 
            removed files from Mr. Foster's office to the White 
            House residence to be reviewed by the Clintons.......   110
        12. Senior White House officials did not provide complete 
            and accurate information to the Park Police and FBI 
            with respect to the handling of Mr. Foster's note....   111
        13. Mr. Hubbell probably knew about the discovery of Mr. 
            Foster's note on July 27, 1993.......................   112
        14. Margaret Williams provided inaccurate and incomplete 
            testimony to the Special Committee in order to 
            conceal Mrs. Clinton's role in the handling of 
            documents in Mr. Foster's office following his death.   113
        15. Susan Thomases provided inaccurate and incomplete 
            testimony to the Special Committee in order to 
            conceal Mrs. Clinton's role in the handling of 
            documents in Mr. Foster's office following his death.   115
        16. Bernard Nussbaum provided inaccurate and incomplete 
            testimony to the Special Committee concerning the 
            handling of documents in Mr. Foster's office 
            following his death..................................   117
Phase 2.--The Washington Phase...................................   135
    Conclusions of the Special Committee.........................   137
         1. By mid-1993, the Clintons and their associates had 
            already taken steps to minimize their potential 
            liability from investigations of Whitewater and 
            Madison Guaranty.....................................   139
         2. The White House concealed damaging evidence about 
            Whitewater and Travelgate from career law enforcement 
            officials investigating Vincent Foster's death.......   140
         3. Senior White House officials improperly gathered 
            confidential information about investigations 
            involving Whitewater and Madison Guaranty............   140
         4. A pivotal event: Senior White House officials and 
            private counsel for the Clintons participate in an 
            improper Whitewater defense meeting..................   142
         5. Senior White House officials did not pass the torch 
            to the Clintons' new private counsel, but continued 
            to take highly improper steps to advance the 
            Clintons' private interests..........................   143
         6. Senior White House officials held formal ``Whitewater 
            Response Team'' meetings to protect the Clintons' 
            private interests in ongoing federal investigations..   143
         7. In early 1994, senior White House officials sought to 
            manipulate the RTC investigation of Madison Guaranty 
            and the Rose Law Firm................................   145
         8. Jay Stephens was removed from the investigation of 
            possible civil claims against parties associated with 
            Madison Guaranty, including the Clintons.............   146
         9. Senior RTC officials sought to impede the criminal 
            investigation of Madison.............................   147
        10. U.S. Attorney Paula Casey mishandled the RTC criminal 
            referral referencing the President and Mrs. Clinton..   148
        11. Senior Administration officials improperly sought to 
            manipulate the investigation of the RTC and Treasury 
            Inspectors General into the propriety of White House-
            Treasury contacts....................................   149
        12. The White House delayed in producing documents to the 
            Special Committee....................................   150
        13. Senior Administration officials provided inaccurate 
            and incomplete testimony to the Senate...............   152
        14. The Office of the White House Counsel was frequently 
            and improperly put in the service of the personal 
            legal interests of the President and Mrs. Clinton....   153
    Conclusions of the Special Committee on the Discovery of the 
      Rose Law Firm Billing Records..............................   155
        1. The Rose billing records provide the best evidence of 
            the legal services performed by Mrs. Clinton for 
            Madison Guaranty.....................................   155
        2. The disappearance and mysterious reappearance of the 
            Rose Law Firm billing records was part of a larger 
            patten of removal, concealment and, at times, 
            destruction of records concerning Mrs. Clinton's 
            representation of Madison............................   158
        3. Vincent Foster is the last person known to have the 
            billing records in his possession....................   159
        4. The billing records mysteriously reappear in the Book 
            Room of the White House Residence in August 1995.....   159
        5. Only a limited number of people had access to the Book 
            Room of the White House Residence....................   160
        6. Very few people had motive to be handling or reading 
            the Rose billing records in August 1995..............   160
        7. Only a limited number of people were definitely within 
            the chain of custody of the billing records..........   160
        8. Mrs. Clinton is more likely than any other known 
            individual to have placed the billing records in the 
            Book Room in August 1995.............................   161
    Background...................................................   161
        I. Whitewater Development Corporation and Madison 
            Guaranty S&L.........................................   161
        II. Capital Management Services and David Hale...........   163
    Summary of the Evidence......................................   164
    Part I: The Handling of Federal Investigations...............   164
        I. Mrs. Clinton Learns of the RTC Criminal Referral on 
            Madison..............................................   164
            A. The RTC begins its criminal investigation of 
                Madison..........................................   165
            B. The first RTC criminal referral: C0004............   166
            C. Betsey Wright informs Mrs. Clinton of the RTC 
                criminal referral................................   167
        II. Criminal Referral C0004 Languishes at the Justice 
            Department...........................................   168
            A. The U.S. Attorney sends Criminal Referral C0004 to 
                the main Justice Department......................   168
            B. Criminal Referral C0004 gets lost at the Justice 
                Department.......................................   170
        III. Interference with the RTC's Ongoing Investigation of 
            Madison..............................................   172
        IV. Paula Casey Delays her Recusal from Madison, Handles 
            the Hale Pleas Negotiations, and Declines to 
            Prosecute Criminal Referral C0004....................   181
            A. Investigations of Capital Management and David 
                Hale.............................................   181
            B. Plea Negotiations with David Hale.................   183
            C. Ms. Casey's declination of Criminal Referral 
                C0004............................................   189
    Part II: White House Intervention in Federal Investigations..   192
        I. White House Contacts Relating to Investigations of 
            Madison and David Hale...............................   192
            A. The White House receives information on the 
                ongoing SBA investigation of Mr. Hale............   192
            B. Mr. Hale's lawyers contact the White House about 
                Mr. Hale's ``mutual interest'' with President 
                Clinton..........................................   195
            C. The White House obtains more information about the 
                Hale investigation...............................   199
        II. After Treasury and RTC Officials improperly advised 
            the White House about RTC Referrals mentioning 
            President Clinton and Governor Tucker, President 
            Clinton meets with Governor Tucker at the White 
            House................................................   201
        III. A Pivotal Event: The November 5, 1993 Meeting 
            Between White House Officials and the Clintons' 
            Private Lawyers......................................   204
        IV. The White House Obtains Confidential SBA Documents 
            Relating to Mr. Hale and Capital Management..........   208
        V. The White House Begins to Hold Whitewater Defense 
            Meetings.............................................   212
            A. Senior White House officials debated the 
                appointment of a Special Counsel.................   213
            B. White House contacts with former Arkansas 
                Securities Commissioner Beverly Bassett Schaffer.   216
            C. The Whitewater Response Team assigns defense tasks 
                to White House officials.........................   220
        VI. The Retention and Investigation of Pillsbury Madison 
            & Sutro..............................................   220
            A. The White House expresses concern over the 
                retention of Jay Stephens........................   221
            B. Mr. Stephens is removed from the RTC investigation   221
            C. The White House makes inaccurate claims about the 
                Pillsbury report.................................   222
    Part III. White House Interference with Congressional 
      Inquiries..................................................   224
        I. Mr. Ickes Provided Incomplete and Inaccurate Testimony 
            to the Senate Banking Committee......................   224
        II. The White House Interfered with Treasury IG and RTC 
            IG Investigations into White House-Treasury Contacts.   227
            A. Independence of IG investigation is compromised...   227
            B. Confidential information is provided to the White 
                House............................................   231
        III. The White House Interfered with the Special 
            Committee's 1995-96 Investigation....................   236
            A. The refusal of William Kennedy to comply with the 
                Special Committee's subpoena for his notes of the 
                pivotal November 5, 1993 White House defense 
                meeting..........................................   237
            B. White House delays in producing highly relevant 
                documents to the Special Committee...............   238
    Part IV. The Rose Law Firm Billing Records...................   239
        I. The Destruction and Mishandling of Rose Law Firm 
            Files................................................   240
        II. The ``Disappearance'' and ``Discovery'' of the Rose 
            Law Firm Billing Records.............................   240
        III. Mrs. Clinton's Statements in Light of the Rose Law 
            Firm Billing Records.................................   245
            A. Madison's retention of the Rose Law Firm..........   245
            B. Mrs. Clinton's contacts with regulator Beverly 
                Bassett Schaffer.................................   248
            C. Mrs. Clinton's role in Madison's proposed 
                preferred stock deal.............................   249
            D. Mrs. Clinton's role in the Castle Grande 
                transaction......................................   250
        IV. The Federal Investigations into the Rose Law Firm's 
            Representation of Madison............................   253
        V. The Special Committee's Investigation into the 
            Circumstances Surrounding the Discovery of the Rose 
            Law Firm Billing Records.............................   258
Phase 3--The Arkansas Phase......................................   286
    Conclusions of the Special Committee.........................   287
        1. Mrs. Clinton's legal work on Castle Grande related to 
            an effort to conceal the true nature of the 
            activities at Madison Guaranty.......................   289
        2. Webster Hubbell was significantly more involved in 
            Castle Grande than he admitted in his Senate 
            testimony............................................   292
        3. In 1985, Mr. McDougal retained Hillary Clinton to 
            represent Madison Guaranty; the work was not brought 
            in by a young associate..............................   293
        4. Mrs. Clinton had a substantive contact with Beverly 
            Bassett Schaffer about Madison Guaranty's proposal to 
            issue preferred stock................................   295
        5. Governor Clinton's official and personal dealings with 
            James McDougal raised an apparent, if not an actual, 
            improper conflict of interest........................   296
        6. The Clintons took an active role in obtaining and 
            extending Whitewater-related loans; they were not 
            ``passive'' investors in Whitewater..................   296
        7. Governor Clinton's office steered state bond work to 
            Dan Lasater..........................................   297
        8. The Clintons took a series of erroneous tax deductions 
            related to Whitewater................................   299
    Summary of the Evidence......................................   299
    Part I: Whitewater Development Corporation...................   299
        I. Whitewater: The Early Years...........................   301
            A. The Clintons' Previously Undisclosed Land Deal 
                with James McDougal..............................   301
            B. Whitewater: A ``No Cash'' Deal....................   302
            C. Lot 13: Irregularities in Madison Bank's loan to 
                Mrs. Clinton.....................................   304
        II. The Clintons' Continued Involvement in Whitewater: 
            1987--1992...........................................   306
            A. The Clintons' Active Involvement in the Management 
                of Whitewater After 1986.........................   306
            B. Governor Clinton's Approval of Special Legislation 
                Benefitting his Whitewater Banker................   307
        III. The Clintons' Handling of Whitewater During the 1992 
            Presidential Campaign................................   312
            A. The Focus on Whitewater During the 1992 Campaign..   312
            B. The Lyons Report..................................   314
            C. The Clintons Finally Get Out of Whitewater........   317
        IV. The Clintons' Questionable Tax Treatment of 
            Whitewater: A History of Unreportable Income and 
            Improper Deductions..................................   319
            A. 1978: The Clintons' Unreported Income of $5,405 
                from 15-Acre Installment Sale....................   320
            B. 1979: The Clintons' Improper Interest Deduction of 
                $2,400...........................................   321
            C. 1980: The Clintons' Improper Interest Deduction of 
                $9,000...........................................   322
            D. 1980: The Clintons' Unreported Income of $10,000 
                from Whitewater payment of the $20,000 Union Bank 
                Note.............................................   323
            E. 1982: The Clintons' Unreported Income of $5,691 
                for Whitewater Payment of Citizens Bank of 
                Jonesboro Note...................................   325
            F. 1984: The Clintons' Improper Deduction of $144 for 
                Real Estate Taxes................................   326
            G. 1984 and 1985: The Clintons' Improper Interest 
                Deductions of $2,811 and $2,322..................   326
            H. 1987: The Clintons' Improper Interest Deduction of 
                $2,561...........................................   326
            I. 1988: The Clintons' Improper Deduction of $1,275 
                for Real Estate Taxes............................   327
            J. 1988: The Clintons' Unreported Income of $1,673 
                from the Sale of Lot 13..........................   327
    Part II: Governor Clinton's Questionable Relationship With 
      James McDougal.............................................   328
        I. James McDougal's Madison Guaranty: A Corrupt Savings & 
            Loan.................................................   328
            A. Madison's Fraudulent Land Deals...................   329
            B. Madison's Phony Books and Records.................   330
            C. Federal Regulators Oust Mr. McDougal from Madison.   330
        II. Governor Clinton Provides Benefits to James McDougal 
            and Madison S&L......................................   332
            A. Governor Clinton Steers Valuable State Leases to 
                Madison..........................................   332
            B. McDougal Holds a Questionable 1985 Fundraiser for 
                Clinton..........................................   333
            C. Governor Clinton Vetoes Legislation For McDougal 
                Business Partners................................   337
            D. Clinton's Promises to McDougal on Brewery 
                Legislation......................................   340
            E. McDougal Asks Governor Clinton to Fire Tough State 
                Regulators.......................................   341
            F. McDougal Helps Select S&L Regulators..............   343
            G. McDougal Hires Mrs. Clinton and Her Law Firm......   344
                1. The Questionable Retention of the Rose Law 
                    Firm.........................................   344
                2. Mrs. Clinton Asks the Arkansas S&L Regulator 
                    to Approve a Novel Stock Issue...............   346
        III. The Castle Grande Land Deal: A Series of Fraudulent 
            Loans................................................   348
            A. Structuring of the Acquisition of the Castle 
                Grande Property to Evade State Regulations.......   349
            B. The Fraudulent Nature of the Castle Grande 
                Purchase.........................................   350
            C. The September 24, 1985 Letters....................   353
            D. The May 1 Option Disguises the Questionable 
                Payments to Seth Ward............................   354
            E. Mrs. Clinton's Previously Unknown Legal Work for 
                Questionable Castle Grande Transactions..........   356
            F. Webster Hubbell's Mysterious Role in Structuring 
                Questionable Castle Grande Transactions..........   359
    Part III: Governor Clinton's Questionable Relationship with 
      Dan Lasater................................................   361
        I. Governor Clinton's Close Personal Relationship With 
            Dan Lasater..........................................   361
        II. Governor Clinton Provides Favors to Dan Lasater......   363
            A. Dan Lasater's Special Access to Governor Clinton..   363
            B. The Governor's Office Steers Valuable State Bond 
                Business to Dan Lasater..........................   364
    Part IV: David Hale and Capital Management Services, Inc.....   371
        I. The Special Committee's Attempts To Obtain Hale 
            Testimony............................................   371
        II. Mr. Hale's Testimony in the McDougal Trial: What was 
            Governor Clinton's Role in the Making of the $300,000 
            Master Marketing Loan?...............................   372
    Part V: The Lending Activities of Perry County Bank in the 
      1990 Clinton Gubernatorial Campaign........................   375
Additional views of Senator Faircloth............................   392
Minority Views of Senators Sarbanes, Dodd, Kerry, Bryan, Boxer, 
  Mosely-Braun, Murray and Simon.................................   395
Summary of Conclusions...........................................   395
 I. Preface.........................................................395
II. Washington Phase................................................419
        A. Jean Lewis's 1992 Referrals...........................   419
             1. Introduction.....................................   419
             2. RTC Criminal Investigator L. Jean Lewis Set Aside 
                Higher Priority Investigations to Focus on 
                Madison Guaranty Following the Publication of 
                Jeff Gerth's March 8, 1992 Article in The New 
                York Times.......................................   420
             3. Lewis Rushed to Complete a Criminal Referral 
                Prior to a Self-Imposed Pre-Election Deadline....   421
             4. Lewis' 1992 Referral Failed to Allege Evidence of 
                a Federal Crime and Gratuitously Named the 
                Clintons as Witnesses............................   422
             5. Lewis Pressured the United States Attorneys 
                Office and the FBI to Open a Formal Investigation 
                Before the Presidential Election.................   423
             6. United States Attorney Charles Banks Resisted 
                Lewis' Pressure and Declined to Commence a Grand 
                Jury Investigation Before the 1992 Presidential 
                Election.........................................   425
             7. The Bush White House and Justice Department 
                Showed an Interest in Lewis' Referral Before the 
                1992 Presidential Election.......................   427
                a. The White House...............................   427
                b. The Department of Justice.....................   427
                c. The Passport Controversy......................   428
             8. The Clinton Justice Department Properly Handled 
                Lewis' 1992 Referral.............................   429
             9. Webster Hubbell Had No Involvement in the 
                Handling of Lewis' 1992 Referral.................   429
            10. Other Failed S&Ls in Arkansas Went Uninvestigated 
                Due to Lewis' Focus on Madison Guaranty..........   430
        B. The Investigations of David Hale......................   430
            1. The SBA uncovers Hale's Fraudulent Activity.......   430
            2. The White House does not Interfere with the 
                Investigation....................................   432
            3. The SBA provides the White House with copies of 
                documents already sent to Congress...............   432
        C. The RTC's Handling of the 1993 Referrals..............   434
            1. The legal review was consistent with RTC policy...   434
            2. The poor quality of previous referrals made legal 
                review essential.................................   435
            3. The legal review was not an attempt to impede the 
                Madison investigation............................   436
            4. Lewis was not a credible witness and her 
                allegations are therefore suspect................   437
        D. The Justice Department's Handling of the 1993 
            Referrals............................................   439
            1. The U.S. Attorney's Office handled the 1993 
                referrals properly...............................   439
            2. Plea negotiations with Hale were handled 
                appropriately....................................   441
            3. Casey's recusal was handled properly..............   442
            4. The White House did not influence the 
                investigation....................................   443
        E. The Clinton Administration's Contacts with Beverly 
            Bassett Schaffer in 1993 and 1994 Were Proper and 
            Appropriate..........................................   443
            1. Background........................................   444
            2. There were no improper contacts between the 
                Clinton Administration and Beverly Bassett 
                Schaffer.........................................   446
            3. Conclusion........................................   447
        F. The OGE Report and the Transmission of Investigative 
            Materials to the White House and Secretary Bentsen...   447
            1. OGE'S Investigation Was Thorough and Complete, and 
                Received the Full Cooperation of the 
                Administration...................................   447
                a. The Inspectors General's investigation was 
                    thorough and complete........................   448
                b. The IGs had sufficient time to conduct the 
                    investigation................................   448
                c. The Administration cooperated fully with the 
                    investigation................................   449
                d. No one in the Administration tried to 
                    influence the IG's investigation or OGE's 
                    conclusions in any way.......................   450
                e. Conclusion....................................   450
            2. It was Entirely Proper for the White House 
                Counsel's Office to Receive Transcripts of the 
                Depositions Taken by the Inspectors General......   451
                a. The White House had a legitimate and pressing 
                    need for the Deposition transcripts..........   451
                b. There is no evidence that OGE's investigation 
                    was affected by the release of the deposition 
                    transcripts to the White House...............   453
                c. There is no evidence that the White House 
                    Counsel's Office used the deposition 
                    transcripts or the information contained in 
                    the transcripts to influence the 
                    congressional testimony of White House 
                    officials....................................   453
                d. The deposition transcripts did not contain 
                    material, confidential RTC information.......   455
                e. Conclusion....................................   456
            3. There Is No Evidence that the Treasury Department 
                Exerted Undue Influence On OGE's Investigation...   457
                a. It was entirely proper for Secretary Bentsen 
                    and his representatives to receive a draft 
                    version of the IG's report and the deposition 
                    transcripts..................................   457
                b. No harm resulted from the release of the 
                    deposition transcripts and draft report to 
                    the Treasury Department......................   458
                c. Francine Kerner's participation in the 
                    investigation was proper and appropriate.....   458
            4. Roger Altman Did Not Receive a Transcript of 
                Harold Ickes' Deposition Prior to his Senate 
                Banking Committee Testimony on August 2, 1994....   459
III.The Arkansas Phase..............................................466

        A. The Initial Whitewater Loans..........................   466
            1. Background........................................   466
            2. The Citizens Bank Loan............................   466
            3. The Union National Bank Loan......................   468
            4. The Clintons were passive Investors...............   470
        B. The 1987 and 1988 Whitewater Extensions...............   471
            1. The Whitewater Loan...............................   471
            2. Branch Banking Legislation........................   478
        C. Subsequent events related to the Whitewater property..   480
            1. The Lot 13 Loan...................................   480
            2. The Clintons Sell their interest in WWDC..........   481
        D. Whitewater Tax Issues.................................   481
            1. Background........................................   482
            2. The Clintons Properly Claimed Interest Deductions 
                on their personal tax returns for interest 
                payments they made on the Whitewater Loans with 
                personal funds...................................   482
            3. The Clintons have corrected past errors in their 
                personal tax returns that resulted from 
                inadequate information about the Whitewater 
                investment.......................................   484
            4. The Clintons had no reason to report any personal 
                income from the Whitewater investment............   486
            5. The Clintons have sought to take advantage of 
                Whitewater losses that they have claimed on their 
                personal tax returns.............................   488
        E. Madison Guaranty Savings and Loan Association.........   489
            1. Reports on Madison Guaranty & Savings and Loan 
                Association make no finding of improper or 
                illegal activity by President or Mrs. Clinton....   489
            2. Madison Guaranty in the context of the nationwide 
                S&L crisis.......................................   492
        F. The Treatment of the McDougals's and their business 
            enterprises by Arkansas State agencies...............   494
            1. Whitewater Investment.............................   494
            2. The Arkansas State Agency Leases of Offices from 
                Madison Guaranty were proper, appropriate and in 
                the normal course of business....................   494
                a. State leases involving Madison Guaranty.......   495
                b. The April 5, 1985 Madison Fundraiser..........   505
                c. Conclusion....................................   511
            3. There is no evidence that McDougal received 
                special treatment from the Alcoholic Beverage 
                Commission.......................................   511
                a. McDougal did not receive special treatment in 
                    connection with his efforts to develop a 
                    brewery on the IDC property..................   512
                b. Governor Clinton had no involvement in the 
                    ABC's approval of a regulation permitting 
                    breweries to operate tasting rooms...........   513
            4. The Sewer Legislation.............................   514
                a. The Impact on Small Utilities.................   515
                b. Potential Litigation Involving the Rose Law 
                    Firm.........................................   517
            5. McDougal's Maple Creek Farms Development and the 
                Reassignment of the Arkansas Health Department 
                Sanitarians......................................   518
                a. Background....................................   518
                b. McDougal's worsening relations with the health 
                    department...................................   520
                c. McDougal Requests a meeting with Governor 
                    Clinton......................................   521
                d. McDougal meets with Governor Clinton and 
                    Health Department Officials..................   523
                e. The Reassignment of the Sanitarians...........   524
                f. Conclusions...................................   526
            6. There was no impropriety in connection with 
                William Lyons appointment to the Banking Board or 
                his subsequent resignation.......................   526
                a. Background....................................   527
                b. Lyon's testimony conflicts with the evidence..   527
                c. There is no evidence that Governor Clinton had 
                    knowledge of Lyon's conversation with 
                    McDougal or did anything improper............   528
            7. Regulation of Madison Bank and Trust by the 
                Arkansas State Banking Department................   529
        G. Dan Lasater and Bond Underwriting contracts involving 
            Lasater & Company....................................   530
            1. Background........................................   531
                a. Dan Lasater...................................   531
                b. Lasater & Company.............................   531
                c. The Arkansas Housing Development Agency and 
                    the Arkansas Development Finance Authority...   531
                d. The Arkansas State Police Commission..........   532
            2. Under Clinton Administration Policy, Arkansas 
                firms were encouraged to participate in state 
                bond underwriting................................   532
            3. Lasater & Company received no special treatment in 
                connection with AHDA/ADFA bond underwriting 
                contracts........................................   534
            4. Neither Governor Clinton nor his staff pressured 
                AHDA/ADFA to include Lasater's firm in bond 
                underwritings....................................   536
            5. Lasater had no influence over AHDA/ADFA 
                appointments.....................................   539
            6. The Raney/Hutton/Lasater Team was awarded the 
                state police commission bond underwriting 
                contract on the merits...........................   540
                a. Background....................................   540
                b. The formation of the Raney/Hutton/Lasater 
                    group........................................   540
                c. The awarding of the underwriting contract.....   542
                d. Legislative review of the underwriting 
                    contract.....................................   544
                e. The Clinton Administration properly 
                    investigated rumors that Lasater was under 
                    investigation for drug use and was advised 
                    that no investigation was underway...........   544
            7. Neither Governor Clinton nor his staff pressured 
                the Arkansas State Police to award bond 
                underwriting contracts with Lasater's firm.......   545
            8. Dan Lasater's relationship with Bill Clinton and 
                Roger Clinton....................................   547
        H. The Rose Law Firm's representation of Madison Guaranty   548
            1. Retention of the Rose Law Firm by Madison Guaranty 
                Savings & Loan...................................   549
                a. Madison Guaranty's proposal to issue preferred 
                    stock........................................   549
                b. Mrs. Clinton's role in the retention of the 
                    Rose Law Firm by Madison Guaranty............   551
                c. Conclusion....................................   555
            2. The Arkansas Securities Department's regulation of 
                Madison Guaranty Savings & Loan..................   555
                a. The proposal to issue preferred stock.........   555
                b. The proposal to operate a broker-dealer 
                    subsidiary...................................   557
                c. Beverly Bassett Schaffer's efforts to close 
                    Madison Guaranty.............................   560
                d. Conclusions...................................   563
            3. The IDC real estate transactions..................   564
                a. The Rose Law Firm and Mrs. Clinton played no 
                    role in the alleged ``Straw Buyer'' 
                    arrangement between Seth Ward and James 
                    McDougal.....................................   565
                b. The Rose Law Firm and Mrs. Clinton played no 
                    role in the resales of IDC parcels that 
                    federal regulators have called ``Sham 
                    Transactions''...............................   574
            4. The Rose Law Firm's work for Madison Guaranty on 
                IDC matters was legitimate, well-documented, and 
                appropriately billed.............................   576
                a. Introduction..................................   576
                b. The liquor license issue......................   577
                c. The utility service issue.....................   580
                d. Conclusions...................................   581
        I. David Hale's false allegation against Governor Clinton   583
             1. Introduction.....................................   583
             2. Hale's personal circumstances changed 
                dramatically in 1993 when he learned that law 
                enforcement officials had detected his criminal 
                conduct and were about to indict him on numerous 
                felonies.........................................   584
             3. Hale tried to extract an offer of blanket 
                immunity from federal prosecutors by offering to 
                provide undefined information about high ranking 
                Arkansas politicians.............................   586
             4. Hale eventually reached a plea bargain with the 
                Independent Counsel that required him to plead 
                guilty to two felonies...........................   588
             5. Hale's history of fraud and duplicity............   590
             6. Hale's unsubstantiated assertion about Governor 
                Clinton..........................................   593
             7. Hale's allegation that Governor Clinton showed 
                interest in the Master Marketing Loan is riddled 
                with internal inconsistencies....................   593
             8. Hale cannot keep his story straight..............   594
             9. President Clinton testified that he never spoke 
                with Hale about a loan for Susan McDougal........   595
            10. The jurors in the Tucker/McDougal trial believed 
                President Clinton's testimony and concluded that 
                Hale committed perjury...........................   596
            11. Hale's technique of embellishment................   597
            12. Hale's refusal to testify before the Special 
                Committee without a grant of blanket use immunity   598
        J. The Pillsbury Madison & Sutro investigation...........   604
            1. Introduction......................................   604
            2. The PM&S investigation was conducted by a capable, 
                experienced lawyers who were not subject to any 
                outside influence................................   604
            3. PM&S's investigation and findings on the 
                Whitewater investment............................   606
            4. PM&S findings on the Rose Law Firm's legal work 
                for Madison Guaranty.............................   606
            5. PM&S key findings on conspiracy theories involving 
                the Rose Law Firm................................   608
            6. The Role of Jay Stephens..........................   609
            7. Questions concerning the thoroughness of PM&S's 
                investigation and the validity of the conclusions 
                in the PM&S reports..............................   611
IV. Foster Phase....................................................624
        A. Introduction..........................................   624
            1. Events at Foster's Office the Night of His Death..   625
                a. David Watkins Asked Patsy Thomasson to Look in 
                    Foster's Office for a Suicide Note...........   625
                b. Patsy Thomasson Briefly looked in Foster's 
                    Office for a Suicide Note....................   627
                c. Bernard Nussbaum Also Entered Foster's Office 
                    to Look for a Suicide Note...................   628
                d. Margaret Williams Went to Foster's Office out 
                    of a Sense of Grief..........................   628
                e. Officer O'Neill's Testimony...................   630
                f. Contradictions in Officer O'Neill's testimony.   631
                g. White House Officials Told Law Enforcement 
                    About the Search for the Suicide Note........   633
            2. White House Officials Did Not Receive a Request 
                from the Park Police to Seal Foster's Office.....   634
            3. Park Police Had No Authority to Review All 
                Documents in Foster's Office.....................   635
                a. Park Police Were Interested Only In Documents 
                    Relevant to Foster's State of Mind...........   636
            4. Recollections Differ as to Whether Bernard 
                Nussbaum Agreed that Department of Justice 
                Attorneys Would Review Foster's Documents........   637
            5. The Difference of Opinion Between Senior Justice 
                Department Officials and White House Counsel 
                Reflected Differing Judgments about Appearances 
                Rather than about Legal Rights...................   642
            6. Park Police Expressed No Interest in Retrieving 
                Foster's Substantive Files.......................   644
                a. No Instructions Were Conveyed to Bernard 
                    Nussbaum Regarding Documents in Foster's 
                    Office.......................................   646
            7. Park Police Investigation Was Not Hindered by 
                Nussbaum's Review of Foster Documents............   649
            8. The Torn Note is Found in Foster's Briefcase......   651
                a. Nussbaum Overlooked the Note in Foster's 
                    Briefcase on July 22.........................   651
                b. The Note Was Given to the Department of 
                    Justice after it was Found...................   653
            9.  Removing the Clintons' Personal Files from the 
                White House Counsel's Office Was Appropriate.....   655
                a. Documents Were Transferred to Williams & 
                    Connolly on July 27..........................   658
        B. Introduction to Rose Law Firm Billing Records.........   659
            1. Billing Records Were Produced by the White House..   659
                a. Billing Records Do Not Contradict Mrs. 
                    Clinton's Statements Regarding Representation 
                    of Madison Guaranty..........................   661
                b. Chain of Custody of Billing Records Before 
                    Discovery in January 1996....................   664



104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-280
_______________________________________________________________________


INVESTIGATION OF WHITEWATER DEVELOPMENT CORPORATION AND RELATED MATTERS

                                _______


                 June 17, 1996.--Ordered to be printed

   Filed under authority of the order of the Senate of June 13, 1996

_______________________________________________________________________


   Mr. D'Amato, from the Special Committee to Investigate Whitewater 
  Development Corporation and Related Matters, submitted the following

                         F I N A L R E P O R T

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                                Preface

    On May 17, 1995, the United States Senate, by a vote of 96-
3, adopted Senate Resolution 120, which established the Special 
Committee to Investigate Whitewater Development Corporation and 
Related Matters (hereinafter the ``Special Committee''), to be 
administered by the Committee on Banking, Housing, and Urban 
Affairs (the ``Banking Committee''). Resolution 120 charged the 
Special Committee with the responsibility to conduct an 
extensive investigation into and to hold public hearings on 
specified matters relating to the President's and Mrs. 
Clinton's investment in Whitewater Development Corporation 
(``Whitewater'') along with James and Susan McDougal, Madison 
Guaranty Savings and Loan Association (``Madison Guaranty''), 
and related matters.
    In discharging its responsibilities under Resolution 120, 
the Special Committee deposed 274 witnesses and held 60 days of 
public hearings, during which 136 witnesses testified. The 
Committee also reviewed approximately 1 million pages of 
documents produced by the President and Mrs. Clinton, the White 
House, various federal agencies, and a number of individual 
witnesses.
    Resolution 120 authorized the Committee to investigate and 
to hold public hearings into three general subject areas. 
Section 1(b)(1) authorized investigation into whether White 
House officials engaged in improper conduct in handling papers 
in Deputy White House Counsel Vincent Foster's office following 
his death on July 20, 1993--the so-called Foster Phase of the 
Special Committee's inquiry.
    With respect to the Washington Phase of the inquiry, 
Section 1(b)(2) authorized investigation into whether the White 
House improperly interfered with any investigations or 
prosecutions by various federal agencies relating to, among 
other things, Whitewater, Madison Guaranty related entities, 
and Capital Management Services, Inc. (``CMS'').
    Finally, in the Arkansas Phase, Sec. 1(b)(3) of Resolution 
120 authorized the Special Committee to investigate, among 
other things, the activities of Whitewater, Madison Guaranty, 
CMS, Lasater & Co., and the work and billing practices of the 
Rose Law Firm relating to Madison Guaranty.

                          1. the foster phase

    During the 103d Congress, the Banking Committee, pursuant 
to Senate Resolution 229, conducted an inquiry into the cause 
of Mr. Foster's death and the conduct of the subsequent 
investigation of his death by the United States Park Police. On 
July 15, 1994, Special Counsel Robert B. Fiske, Jr. advised the 
Banking Committee that ``public hearings on the subject of the 
handling of documents in Mr. Foster's office while this 
investigation is continuing could prejudice our 
investigation.'' 1 Accordingly, the Banking Committee's 
public hearings on July 29, 1994 into the cause of Mr. Foster's 
death excluded inquiry into the handling of documents in Mr. 
Foster's office.
    At the conclusion of the Banking Committee's hearings in 
the summer of 1994, the following matters, among others, were 
identified for future inquiry relating to Mr. Foster's death:
         the White House interference into the Park Police 
        search of Mr. Foster's office;
         the presence of White House counsel staff during 
        standard Park Police investigatory interviews;
         the White House insistence that the Park Police 
        investigation proceed with Department of Justice 
        involvement to the extent that DOJ was ``calling the 
        shots'' and ``setting up protocol'' and the Park Police 
        were ``stand[ing] and waiting for permission to do our 
        job''; and
         the late delivery of the note in Mr. Foster's office 
        to Park Police, discovered by White House counsel. 
        2
    On April 22, 1995, Independent Counsel Kenneth W. Starr 
advised the Chairman and Ranking Member of the Banking 
Committee that his investigation would not be hindered or 
impeded by a Senate inquiry into the way in which White House 
officials handled documents in Mr. Foster's office following 
his death.
    Accordingly, the Special Committee commenced its 
investigation and public hearings into whether White House 
officials engaged in improper conduct in handling documents in 
Mr. Foster's office at the time of his death. The Special 
Committee recognizes that Mr. Foster's death remains a source 
of much grief to his family and friends. In conducting its 
inquiry under section 1(b)(1) of Resolution 120, the Committee 
sought to balance carefully the need to protect the privacy of 
the Foster family and its duty to carry out fully the mandate 
of the Senate.

                        2. the washington phase

    Resolution 120 directed the Special Committee to review the 
handling of several federal investigations relating to the 
Whitewater real estate venture; Madison Guaranty McDougal's 
S&L, the failure of which cost American taxpayers more than $60 
million; and CMS, a small business investment company owned by 
David Hale, who made illegal loans to James and Susan McDougal 
in part to finance the Whitewater investment. Specifically, 
section 1(b)(2) of the Resolution authorized the Special 
Committee to conduct an investigation and public hearings into 
the following matters:
          (A) whether any person has improperly handled 
        confidential Resolution Trust Corporation (``RTC'') 
        information relating to Madison Guaranty or Whitewater, 
        including whether any person has improperly 
        communicated such information to individuals referenced 
        therein;
          (B) whether the White House has engaged in improper 
        contacts with any other agency or department in the 
        Government with regard to confidential RTC information 
        relating to Madison Guaranty or Whitewater;
          (C) whether the Department of Justice has improperly 
        handled RTC criminal referrals relating to Madison 
        Guaranty or Whitewater;
          (D) whether RTC employees have been improperly 
        importuned, prevented, restrained, or deterred in 
        conducting investigations or making enforcement 
        recommendations relating to Madison Guaranty or 
        Whitewater; and
          (E) whether the report issued by the Office of 
        Government Ethics on July 31, 1994, or related 
        transcripts of deposition testimony--
                  (i) were improperly released to White House 
                officials or others prior to their testimony 
                before the Committee on Banking, Housing, and 
                Urban Affairs pursuant to Senate Resolution 229 
                (103d Congress); or
                  (ii) were used to communicate to White House 
                officials or to others confidential RTC 
                information relating to Madison Guaranty or 
                Whitewater.3
    In conducting the inquiry mandated during this so-called 
``Washington Phase'' of the investigation, the Special 
Committee examined whether the President and Mrs. Clinton--or 
their agents--misused the power of the presidency in responding 
to a series of investigations of the Whitewater matter. As in 
the past, the Senate sought to serve as the public's watchdog, 
to expose abuses of the public trust.
    Of necessity, the Special Committee inquired into the 
investigative and prosecutorial processes of Executive Branch 
agencies to determine whether the laws were properly and 
faithfully executed. Congress has a duty to investigate 
allegations that the normal investigative and prosecutorial 
processes of the Executive Branch have been compromised.4 
More important, Congress has the constitutional obligation to 
ensure that the President's private interests have not been 
elevated above the public good.

                         3. the arkansas phase

    This is the beginning of the Whitewater matter. In this 
phase of its inquiry, the Senate charged the Special Committee 
with investigating the complex web of intermingled funds, 
fraudulent transactions, political favors, and conflicted 
relationships which comprise the ``20 years of public life in 
Arkansas'' that Mrs. Clinton did not want an independent 
counsel, among others, to look into.5
    Specifically, Section 1(b)(3) of Resolution 120 authorized 
an investigation and public hearings into the following 
matters:
          (A) the operations, solvency, and regulation of 
        Madison Guaranty Savings & Loan Association, and any 
        subsidiary, affiliate, or other entity owned or 
        controlled by Madison Guaranty Savings and Loan 
        Association;
          (B) the activities, investments, and tax liability of 
        Whitewater Development Corporation and, as related to 
        Whitewater Development Corporation, of its officers, 
        directors, and shareholders;
          (C) the policies and practices of the RTC and the 
        Federal banking agencies (as that term is defined in 
        section 3 of the Federal Deposit Insurance Act) 
        regarding the legal representation of such agencies 
        with respect to Madison Guaranty Savings and Loan 
        Association;
          (D) the handling by the RTC, the Office of Thrift 
        Supervision, the Federal Deposit Insurance Corporation, 
        and the Federal Savings and Loan Insurance Corporation 
        of civil or administrative actions against parties 
        regarding Madison Guaranty Savings & Loan Association.
          (E) the sources of funding and the lending practices 
        of Capital Management Services, Inc., and its 
        supervision and regulation by the Small Business 
        Administration, including any alleged diversion of 
        funds to Whitewater Development Corporation;
          (F) the bond underwriting contracts between Arkansas 
        Development Finance Authority and Lasater & Company; 
        and
          (G) the lending activities of Perry County Bank, 
        Perryville, Arkansas, in connection with the 1990 
        Arkansas gubernatorial election.
    These various subjects, seemingly disparate, are 
nevertheless woven together by common and recurring themes of 
abuse of power, fraud on federal institutions and theft of 
public funds, and frequent neglect, if not deliberate 
disregard, of professional, ethical, and, at times, legal 
standards.
    The Special Committee completed its task under Resolution 
120 in a bipartisan manner. With few notable exceptions, the 
Special Committee conducted its investigation and public 
hearings by mutual consent between the Chairman and Ranking 
Member, thus obviating the need for votes by the Special 
Committee.
    Because the testimony of witnesses before the Special 
Committee was often contradictory, incomplete, or inaccurate as 
to important events and actions, the Committee placed 
particular emphasis on available documentary evidence. 
Unfortunately, throughout its inquiry, the Committee was 
hindered by parties unduly delaying the production of, or 
withholding outright, documents critical to its investigation. 
Although the White House was most often and most notably 
engaged in this course of action, the pattern of noncooperation 
extended to other parties, as this Report lays out more fully 
in the Washington Phase of the Special Committee's inquiry.
    This Report of the Special Committee is divided into three 
separate but interrelated parts. Part 1 focuses on the Foster 
Phase of the inquiry, into whether White House officials 
engaged in improper conduct in the handling of documents in Mr. 
Foster's office at the time of his death. Part 2 summarizes the 
Special Committee's investigation into the Washington Phase and 
discusses the handling of federal investigations into 
Whitewater and related matters, the Administration's attempts 
to interfere with these investigations, and the White House's 
attempts to interfere with Congressional inquiries into the 
Administration's alleged improprieties. Part 3 centers on the 
Arkansas Phase and details the transactions and activities that 
comprise Governor Clinton's web of political, personal, and 
business relationships--a web that includes, among others, 
Whitewater, Madison, CMS, James McDougal, David Hale, and Danny 
Ray Lasater. Each Part begins with a separate, detailed outline 
and concludes with respective endnotes.
    These three parts are interrelated because the entire story 
of Whitewater is not simply the sum of its parts. Rather, 
seeping through the pages that follow are clearly identifiable 
patterns of motivation, conduct, and, at times, concealment. 
Beyond discrete judgments of impropriety in particular 
instances, therefore, the Special Committee has examined the 
evidence and reached conclusions that transcend any individual 
persons, actions, or events but rather illuminate patterns of 
conduct behind the Whitewater affair.
    The Conclusions of the Special Committee are summarized at 
the beginning of each Part. They do not answer all questions 
and allegations that have surfaced, but, taken together, they 
provide a comprehensive survey of the facts uncovered by the 
Special Committee in its 13 months of investigation. And they 
offer a full, fair, and often troubling picture of the inner 
workings of government that the Senate, by an overwhelming 
mandate, charged the Special Committee to present to the 
American people.
                        Part I--The Foster Phase

                                CONTENTS

                                                                   Page
Conclusions of the Special Committee.............................     8
        1. By the time of Vincent Foster's death in July 1993, 
            the Clinton's had established a pattern of concealing 
            their involvement with Whitewater and the McDougals' 
            Madison Guaranty S&L.................................    10
        2. The Clintons and their associates were aware, at the 
            time of Mr. Foster's death, that the Clintons' 
            involvement with Whitewater and the Madison Guaranty 
            S&L might subject them to liability..................    12
        3. At the time of his death, Mr. Foster's office 
            contained damaging evidence about the Whitewater and 
            Travelgate affairs...................................    13
        4. White House officials engaged in highly improper 
            conduct in handling documents in Vincent Foster's 
            office following his death...........................    14
        5. Mrs. Clinton was closely involved in the handling of 
            documents in Mr. Foster's office following his death 
            and directed that investigators be denied 
            ``unfettered access'' to Mr. Foster's office.........    17
        6. Senior White House officials and other Clinton 
            associates provided incomplete and inaccurate 
            testimony to the Special Committee...................    20
        7. The Office of the White House Counsel was misused to 
            impede ongoing investigations and to serve the purely 
            personal legal interests of the President, Mrs. 
            Clinton and their associates.........................    21
Background.......................................................    22
 I. Mr. Foster's Involvement in the Clintons' Personal Matters.......23
II. The Traditional Independence of the White House Counsel's Office.33
Summary of the Evidence..........................................    36
 I. The Contents of Vincent Foster's Office at the Time of his Death.36
II. July 20, 1993....................................................42
        A. The Discovery of Mr. Foster's Body....................    42
        B. The Park Police Notify the White House and the Foster 
            Family...............................................    44
        C. The White House Ignores Repeated Park Police Requests 
            to Seal Mr. Foster's Office..........................    44
        D. Mrs. Clinton Learns of Mr. Foster's Death and Begins 
            to Contact Close Associates..........................    46
        E. Mrs. Clinton Calls the White House on an Unlisted 
            Trunk Line...........................................    47
        F. Helen Dickey's Telephone Call to the Arkansas 
            Governor's Mansion...................................    48
        G. The Handling of Trash and Burn Bags in Mr. Foster's 
            Office...............................................    50
        H. Senior White House Officials Conduct a Late-Night 
            Search of Mr. Foster's Office........................    51
        I. Secret Service Officer Henry O'Neill Observes Margaret 
            Williams Remove Documents from Mr. Foster's Office...    53
III.July 21, 1993....................................................55

        A. Mr. Foster's Office is Finally Sealed.................    55
        B. The White House Impedes Initial Park Police Efforts to 
            Search Mr. Foster's Office...........................    57
        C. The White House Counsel and Deputy Attorney General 
            Agree on a Search Protocol for the Documents in Mr. 
            Foster's office......................................    58
        D. The White House Finalizes the Agreement on the Search 
            Protocol.............................................    60
IV. July 22, 1993....................................................63
        A. The White House Counsel's Office Interferes with Park 
            Police Interviews of White House Staff...............    63
        B. The First Lady, Margaret Williams, Susan Thomases and 
            Bernard Nussbaum Conduct a Series of Early Morning 
            Telephone Calls......................................    64
        C. The White House Breaks its Agreement with the Justice 
            Department: ``A Terrible Mistake''...................    67
        D. The Window Dressing Review of the Documents in Mr. 
            Foster's Office......................................    70
        E. Mr. Nussbaum's Failure to Search Properly Mr. Foster's 
            Briefcase............................................    74
        F. The Foster Family Lawyer Overhears Discussion of the 
            Scraps of Paper in Mr. Foster's Briefcase............    77
        G. The Secretive, Real Review of the Contents of Mr. 
            Foster's Office......................................    78
        H. The Transfer of Clinton Personal Files to the First 
            Family's Residence...................................    79
        I. The Reaction of Law Enforcement Officials to Mr. 
            Nussbaum's Search....................................    82
 V. July 26, 1995....................................................83
        A. The Existence of the Torn-Up Note is Finally Revealed 
            to Law Enforcement...................................    83
        B. The White House's Decision Not to Disclose the Note 
            Immediately to Law Enforcement.......................    87
        C. Mrs. Clinton and Susan Thomases Are Told of the 
            Discovery of the Note................................    88
VI. July 27, 1993....................................................90
        A. The Review and Transfer of the Clinton Personal Files 
            From the White House Residence to Williams & Connolly    90
        B. White House Deliberations About the Handling of the 
            Note.................................................    93
        C. The President is Told of the Note.....................    95
        D. The White House Finally Turns the Note Over to Law 
            Enforcement..........................................    95
Findings of the Special Committee................................    98
         1.  At the time of his death, Vincent Foster was 
            intimately involved in two brewing scandals--
            Travelgate and Whitewater--touching on President and 
            Mrs. Clinton.........................................    99
         2. Senior White House officials were aware that the 
            President and Mrs. Clinton faced potential liability 
            over Whitewater and their relationship with the 
            McDougals............................................   100
         3. Senior White House officials ignored repeated 
            requests by law enforcement officials to seal Mr. 
            Foster's office on the night of his death............   101
         4. White House officials conducted an improper search of 
            Mr. Foster's office on the night of his death........   102
         5. Margaret Williams may have removed files from the 
            White House Counsel suite on the night of his death..   103
         6. Bernard Nussbaum agreed with the Justice Department 
            officials on July 21, 1993, to allow law enforcement 
            officials to review documents in Mr. Foster's office.   104
         7. Margaret Williams and Susan Thomases, in consultation 
            with Mrs. Clinton, took part in formulating the 
            procedure for reviewing documents in Mr. Foster's 
            office on July 22, 1993..............................   105
         8. Bernard Nussbaum failed to conduct a meaningful 
            review of Mr. Foster's office and did not describe to 
            law enforcement officials sensitive files pertaining 
            to the Clintons and the Administration...............   107
         9. An index of documents in Mr. Foster's office is 
            missing and other indices were revised following his 
            death to conceal possible references to Whitewater...   108
        10. Bernard Nussbaum knew about yellow scraps of paper in 
            Mr. Foster's briefcase prior to Stephen Neuwirth's 
            apparent discovery on July 26, 1993..................   109
        11. Margaret Williams, in consultation with Mrs. Clinton, 
            removed files from Mr. Foster's office to the White 
            House residence to be reviewed by the Clintons.......   110
        12. Senior White House officials did not provide complete 
            and accurate information to the Park Police and FBI 
            with respect to the handling of Mr. Foster's note....   111
        13. Mr. Hubbell probably knew about the discovery of Mr. 
            Foster's note on July 27, 1993.......................   112
        14. Margaret Williams provided inaccurate and incomplete 
            testimony to the Special Committee in order to 
            conceal Mrs. Clinton's role in the handling of 
            documents in Mr. Foster's office following his death.   113
        15. Susan Thomases provided inaccurate and incomplete 
            testimony to the Special Committee in order to 
            conceal Mrs. Clinton's role in the handling of 
            documents in Mr. Foster's office following his death.   115
        16. Bernard Nussbaum provided inaccurate and incomplete 
            testimony to the Special Committee concerning the 
            handling of documents in Mr. Foster's office 
            following his death..................................   117

                  Conclusions of the Special Committee

    ``Bernie, are you hiding something?''--Philip Heymann, 
former Deputy Attorney General.6
    Whitewater is a ``can of worms you shouldn't open.''--
Vincent Foster's handwritten notes.7
    ``HRC `doesn't want [an independent counsel] poking into 20 
years of public life in Arkansas.' ''--Diary of Roger Altman, 
former Deputy Secretary of Treasury, quoting Margaret Williams, 
Chief of Staff to the First Lady.8
    ``Ms. Thomases and the First Lady may have been concerned 
about anyone having unfettered access to Mr. Foster's 
office.''--Associate White House Counsel Stephen 
Neuwirth.9
    The death of White House Deputy Counsel Vincent W. Foster, 
Jr. on July 20, 1993 marked the first time since the death of 
Secretary of Defense James Forrestal in 1949 that a high-
ranking U.S. official took his own life.10 Now, almost 
three years later, the circumstances surrounding Mr. Foster's 
tragic death remain the subject of much speculation and even 
suspicion. Against the backdrop of the death of a high-ranking 
U.S. official, this controversy has been fueled by a series of 
misguided actions taken by senior White House officials to 
shield the documents in Mr. Foster's office from independent 
career law enforcement investigators and to spirit the 
documents to the White House Residence.
    As Deputy Counsel to the President, Mr. Foster was the 
number two lawyer in the White House. He worked on the most 
important public issues faced by the new Clinton 
Administration. At the time of his death, Mr. Foster also was 
one of the Clintons' key advisors on Whitewater and Travelgate. 
These matters are now the subject of criminal investigations by 
Independent Counsel Kenneth Starr. In fact, by July 20, 1993, 
federal investigators already were examining Madison Guaranty 
Savings and Loan Association, the S&L at the center of the 
Whitewater affair, as well as the controversial firing in May 
1993 of seven career White House Travel Office employees. Mr. 
Foster's office contained important evidence of actions that 
the Clintons and senior White House officials took with respect 
to Whitewater and Travelgate.
    The Special Committee's investigation into the handling of 
Mr. Foster's documents was among the most important matters of 
inquiry under Resolution 120. It raised the question, once 
again in our nation's history, whether the power of the White 
House was misused to serve the purely private ends of the 
President and his associates: specifically, whether senior 
officials took improper steps, in their handling of Mr. 
Foster's documents, to cover up embarrassing revelations or 
even crimes relating to Whitewater and Travelgate.
    Often, the successful prosecution of financial crimes and 
public corruption depends on the documentary trail left by the 
perpetrators of such wrongdoing. For example, Independent 
Counsel Starr recently obtained the convictions of Arkansas 
Governor Jim Guy Tucker and James and Susan McDougal, the 
owners of Madison Guaranty and the Clintons' partners in the 
Whitewater real estate development, in part on the basis of 
more than 600 documents introduced into evidence. By the same 
token, the concealment or removal of documents can seriously 
delay or derail investigation of financial malfeasance.
    The White House undeniably mishandled the review of 
documents in Mr. Foster's office following his death. 
Department of Justice and Park Police investigators told the 
Special Committee that their investigations were hindered and 
impeded by the refusal of senior White House officials to allow 
them to review Mr. Foster's documents. The question before the 
Committee, then, is whether senior White House officials simply 
committed an inexplicable series of blunders and misjudgments 
or whether these officials deliberately interfered with the 
investigations into Mr. Foster's death and, perhaps, into the 
Whitewater and Travelgate affairs.
    After careful review of all the evidence, the Special 
Committee concludes that senior White House officials, 
particularly members of the Office of the White House Counsel, 
engaged in a pattern of highly improper conduct in their 
handling of the documents in Mr. Foster's office following his 
death. These senior White House officials deliberately 
prevented career law enforcement officers from the Department 
of Justice and Park Police from fully investigating the 
circumstances surrounding Mr. Foster's death, including whether 
he took his own life because of troubling matters involving the 
President and Mrs. Clinton. At every turn, senior White House 
officials prevented Justice Department and Park Police 
investigators from examining the documents in Mr. Foster's 
office, particularly those relating to the Whitewater and 
Travelgate affairs then under investigation.
    This pattern of concealment and obstruction continues even 
to the present day. The Special Committee concludes that senior 
White House officials and other close Clinton associates were 
not candid in their testimony before the Committee. 
Specifically, the Committee concludes that Margaret Williams, 
Chief of Staff to the First Lady, Susan Thomases, a New York 
attorney and close advisor to Mrs. Clinton, Bernard Nussbaum, 
then-White House Counsel, and Webster Hubbell, former Associate 
Attorney General and now-convicted felon, all provided 
inaccurate and incomplete testimony to the Committee in order 
to conceal Mrs. Clinton's pivotal role in the decisions 
surrounding the handling of Mr. Foster's documents following 
his death.
    Finally, the Special Committee concludes that the 
misconduct surrounding the handling of Mr. Foster's documents 
is part of a larger and more troubling pattern, that began in 
Arkansas in the 1980s and has continued in Washington during 
the Clinton Administration, in which the Clintons and their 
associates have sought to hinder, impede and control 
investigations into Madison Guaranty S&L and the Whitewater 
real estate investment. Parts of this larger pattern include 
(i) Mrs. Clinton's decision in 1988--when federal investigators 
were examining possible misconduct leading to Madison 
Guaranty's failure just two years before--to order the 
destruction of records relating to her representation of this 
S&L; (ii) Mr. Foster's and Mr. Hubbell's improper and 
unauthorized 1992 removal of Rose Law Firm records and files 
relating to Mrs. Clinton's representation of this corrupt S&L; 
and (iii) and the improper communication to White House 
officials during the fall of 1993 of confidential information 
relating to ongoing criminal investigations of Madison Guaranty 
and of Capital Management Services, Inc., a small business 
investment company also central to the Whitewater affair.

By the time of Vincent Foster's death in July 1993, the Clintons had 
        established a pattern of concealing their involvement with 
        Whitewater and the McDougals' Madison Guaranty S&L

    The actions of senior White House officials and other close 
Clinton associates in the days and weeks following Mr. Foster's 
death cannot be viewed in a vacuum. Their actions were but part 
of a pattern that began in 1988 of concealing, controlling and 
even destroying damaging information concerning the Whitewater 
real estate investment and the Clintons' ties to James and 
Susan McDougal and the Madison S&L. Indeed, at the time of Mr. 
Foster's death, the Clintons and their associates were aware 
that the Clintons' involvement with Whitewater land deal, the 
McDougals, and the Madison S&L might subject them to civil 
liability and even criminal investigation.
    In 1988, Mrs. Clinton ordered the destruction of records 
relating to her representation of Mr. McDougal's Madison 
S&L.11 This was not a routine destruction of records. At 
the time, federal regulators were investigating the operation 
and solvency of Madison in anticipation of taking it over. 
These Rose Law Firm records, which after Madison's failure 
would have belonged to the Resolution Trust Corporation 
(``RTC''),12 were directly relevant to that investigation.
    By ordering their destruction, Mrs. Clinton eliminated 
pertinent records and also exposed her firm to potential 
liability with respect to her representation. Indeed, if such 
representation was proper, as Mrs. Clinton has claimed, her 
document destruction deprived the law firm of the records 
necessary to defend itself in a suit by federal investigators. 
Moreover, in 1988, Seth Ward, a former associate of Mr. 
McDougal and Webster Hubbell's father-in-law, was actually 
suing Madison Guaranty over a land deal that federal regulators 
have described as a fraud.13 Mrs. Clinton had performed 
work on the project, including having numerous telephones calls 
and meetings with Mr. Ward, and the law firm record of her work 
and the transactions surrounding this land deal certainly would 
have been highly relevant to the conduct of that suit.
    Accordingly, Mrs. Clinton's destruction of documents could 
constitute a breach of legal ethics and, possibly, a violation 
of law if done with the knowledge that the documents are 
material to investigations or ongoing litigation.14 
Professor Stephen Gillers of New York University, a noted 
ethics expert, has recently stated: ``I don't know how it could 
be that these files were destroyed. . . . It makes it stranger 
that they were destroyed, not only so soon after they were 
created but also at a time when this lawsuit was about to go to 
trial. . . . It certainly could lead to suspicion that she has 
something to hide because one possible inference from the 
destruction is that there was something in those files that she 
did not want to have made public.'' 15
    The pattern further continued during the 1992 presidential 
campaign, after questions arose about the Clintons' investment 
with the McDougals in Whitewater and Mrs. Clinton's 
representation of Madison Guaranty before a state agency. In an 
effort to respond to inquiries from the press and charges from 
other candidates, Mrs. Clinton's then-law partner, Vincent 
Foster, collected all the information he could on the Madison 
representation. At the conclusion of the campaign, the Madison 
files, which were by now the property of the RTC as conservator 
of Madison, as well as the files of other Rose clients for whom 
Mrs. Clinton had performed legal services, were secretly 
removed from the firm by another then-Rose Law Firm partner, 
Webster Hubbell. Mr. Hubbell removed these files, at times 
taking the firm's only copies,16 without obtaining the 
consent of the firm or client.17 Given that Mr. Hubbell 
was about to assume a position of great public trust as 
Associate Attorney General, his unauthorized decision to remove 
these files is especially troubling.
    Also during the 1992 presidential campaign, Mr. Foster or 
Mr. Hubbell ordered the printing of billing records relating to 
the Rose Law Firm's representation of Madison Guaranty. These 
important records revealed the extent of Mrs. Clinton's legal 
work for McDougal's S&L, including her telephone call to 
Beverly Bassett Schaffer, the Arkansas Securities Commissioner 
appointed by Governor Clinton, about the troubled thrift's 
controversial proposal to raise capital by issuing preferred 
stock. The records also reflected Mrs. Clinton's work on the 
IDC or Castle Grande transaction, which federal regulators 
described as a series of fraudulent land flips.18 The 
records contain the handwritten questions of Mr. Foster to Mrs. 
Clinton and notations by Mr. Hubbell.19 Mrs. Clinton has 
recently stated through her lawyer that she may have reviewed 
them during the 1992 presidential campaign.
    After federal investigators began to look into matters 
relating to Madison Guaranty and Whitewater, a number of 
subpoenas were issued for these Rose Law Firm billing records. 
By then, however, the records were nowhere to be found. Despite 
extensive searches conducted by the law firm, neither the 
originals nor copies were discovered.20 They were not in 
the firm computers, its client files, or the firm's storage 
facility.21
    Apparently, at some point, someone removed these billing 
records from the Rose Law Firm. In August 1995, Carolyn Huber, 
an assistant to Mrs. Clinton, discovered them in the book room 
of the White House Residence, next to Mrs. Clinton's 
office.22 At the time, Mrs. Huber did not realize the 
records were under subpoena, and she placed them in a box in 
her office. In January 1996,23 Mrs. Huber identified these 
records, and personal counsel for the President and Mrs. 
Clinton turned them over investigators. Mr. Hubbell testified 
that he last saw the records during the 1992 presidential 
campaign in the possession of Mr. Foster.24
    By July 1993, the Clintons and their associates had 
established a pattern of concealment with respect to the 
Clintons' involvement with Whitewater and the Madison S&L. 
Because of the complexity of the allegations of misdeeds 
involving these institutions, documents and files are critical 
to any inquiries into the matter. Yet, at every important turn, 
crucial files and documents ``disappeared'' or were withheld 
from scrutiny whenever questions were raised.

The Clintons and their associates were aware, at the time of Mr. 
        Foster's death, that the Clintons' involvement with Whitewater 
        and the Madison Guaranty S&L might subject them to liability

    In late fall 1992, Betsey Wright, the coordinator of 
``damage control'' efforts during the presidential campaign and 
a former chief of staff to Governor Clinton, learned of a 
``criminal referral regarding a savings and loan official in 
Arkansas and . . . involv[ing] the Clintons.'' 25 Ms. 
Wright testified that she learned this information from a 
Clinton supporter from California who had a friend who heard it 
at a cocktail party in Kansas City.26 At the cocktail 
party, an RTC official informed someone, whose friend reported 
it to Ms. Wright, that the RTC had just sent a ``criminal 
referral up to the prosecutor in Little Rock.'' 27 Upon 
hearing the news, Ms. Wright tried to gather more information 
about the referral.28 She then told Mrs. Clinton about the 
referral directly. Ms. Wright testified: ``I remember I asked 
Hillary if she was aware of any friend of theirs who was in a 
savings and loan business who might be under criminal 
investigation, and we couldn't think of anybody.'' 29
    It is with this knowledge that the Clintons and their 
advisers came to Washington, taking with them the important 
documents relating to Whitewater and Madison. The documents 
(including documents improperly taken from the law firm) were 
entrusted only to close associates of the Clintons, chiefly 
Messrs. Foster and Hubbell.
    By March 1993, senior Clinton Administration officials 
confirmed that the RTC had sent a criminal referral mentioning 
the Clintons to the Justice Department.30 Specifically, 
RTC Senior Vice President William H. Roelle testified that, 
after taking office, Roger Altman, then Deputy Treasury 
Secretary, directed the staff to inform him of all important or 
potentially high-visibility issues.31 According to Mr. 
Roelle, on or about March 23, 1993, he told Mr. Altman of an 
RTC referral involving the Clintons.32
    Powerful documentary evidence strongly indicates that Mr. 
Altman immediately passed this important information on to 
White House Counsel Bernard Nussbaum. On March 23, Mr. Altman 
sent Mr. Nussbaum a facsimile with a handwritten cover sheet, 
forwarding an ``RTC Clip Sheet'' of a March 9, 1992 New York 
Times article with the headline, ``Clinton Defends Real-Estate 
Deal.'' 33 This article reported the responses of 
presidential candidate, Bill Clinton, to an earlier Times 
report on the Clintons' Whitewater investment. The next day, 
Mr. Altman faxed to Mr. Nussbaum the same article that he sent 
the day before and portions of the earlier Times report on 
Whitewater, dated March 8, 1992, entitled ``Clintons Joined S&L 
Operator in an Ozark Real-Estate Venture.'' 34
    In addition, SBA Associate Administrator Wayne Foren 
testified that, in early May 1993, he briefed Erskine Bowles, 
the new SBA Administrator about the agency's ongoing 
investigation of David Hale's Capital Management Services 
because the case involved President Clinton.35 Shortly 
thereafter, Mr. Bowles told Mr. Foren that he had briefed White 
House Chief of Staff Mack McLarty about the case.36 
Although Mr. Bowles did not recall being briefed by Mr. Foren 
about Capital Management 37 or talking to Mr. McLarty 
about the case,38 Mr. Foren's account was corroborated by 
his deputy, Charles Shepperson.39 Mr. McLarty's calendar 
indicated that Mr. Bowles had two meetings with Mr. McLarty at 
the White House in early May 1993.40
    As of July 1993, therefore, Mrs. Clinton and others in the 
Administration were on notice that there was an ongoing federal 
investigation to which Madison-related documents could be 
relevant.

At the time of his death, Mr. Foster's office contained damaging 
        evidence about the Whitewater and Travelgate affairs

    After he became Deputy White House Counsel, Mr. Foster 
continued to play a key role in controlling potential damage to 
the Clintons from Whitewater. He was given the responsibility 
for overseeing the preparation of Clintons' tax returns for 
1992 to reflect properly the sale of their shares in 
Whitewater.41 Mr. Foster worked with other White House 
officials in the Spring of 1993 in preparing a response to 
expected Whitewater questions.42 And, most interestingly, 
Mr. McDougal had left a message for Mr. Foster on June 16, 
1993, ``re tax returns of HRC, VWF and McDougal.'' 43 The 
documents in Mr. Foster's office at the time of death included 
a file on Whitewater and his notes of conversations with the 
Clintons' accountant, Yoly Redden, concerning the tax treatment 
of the sale of Whitewater.44 The notes identified the tax 
problem as a ``can of worms you shouldn't open'' 45 and 
further warned: ``Don't want to go back into that box Was McD 
trying to circumvent bank loss--why HRC getting loan from 
other.'' 46
    Mr. Foster also played a central role in both the firing of 
seven career employees of the Travel Office on May 19, 1993 and 
subsequent attempts to conceal Mrs. Clinton's true role in the 
controversial firings. Harry Thomason, a close Clinton 
confidant, reportedly instigated the firings after the career 
employees rejected his plan to obtain the White House's charter 
business for a company he partly owned.47 With public 
criticism growing, the White House circumvented normal 
procedures and directly asked the FBI (not the Department of 
Justice) to investigate allegation so possible criminal 
misconduct by the career employees of the Travel Office.48 
Although Mr. Foster was not formally reprimanded for his role 
in the firings, he felt personally responsible.49
    Other senior White House officials implicated in Travelgate 
include David Watkins and Patsy Thomasson. The Special 
Committee belatedly obtained a memorandum of Mr. Watkins 
outlining Mr. Foster's extensive involvement as Mrs. Clinton's 
conduit to the firings.50 Indeed, Mr. Watkins fingered Mr. 
Foster as the person who directly communicated to him Mrs. 
Clinton's order that the Travel Office staff be fired: ``Foster 
regularly informed me that the First Lady was concerned and 
desired action--the action desired was the firing of the Travel 
Office staff.'' 51 Notwithstanding Mrs. Clinton's clear 
involvement in the firing of the staff, Mr. Foster and other 
White House officials did nod disclose her true role to 
investigators probing the affair.
    Significantly, at the time of his death, Mr. Foster's 
briefcase contained files, a personal notebook and a torn-up 
note, all concerning the controversial Travel Office matter.
    Thus, when Mr. Foster committed suicide in July 1993, White 
House officials were aware that a danger existed that the law 
enforcement officials might discover documents concerning 
Whitewater or Travelgate in his office. In fact, David 
Margolis, one of the Justice Department officials who attended 
the search of Mr. Foster's office two days after his death, was 
aware of an RTC criminal referral concerning Madison that 
mentioned the Clintons.52 This risk of discovery provides 
the backdrop against which the story of Mr. Foster's death and 
the White House's subsequent scramble must be viewed.

White House officials engaged in highly improper conduct in handling 
        documents in Vincent Foster's office following his death

    The evidence before the Special Committee established that 
White House officials engaged in a pattern of deliberate 
obstruction, and interference with, efforts by law enforcement 
authorities to conduct their several investigations into Mr. 
Foster's death.
    This White House interference began immediately following 
Mr. Foster's death on the night of July 20. Senior White House 
officials ignored specific requests by the Park Police to seal 
Mr. Foster's office on the night of his death.53 Instead, 
White House Counsel Bernard Nussbaum, Chief of Staff to the 
First Lady Margaret Williams and Deputy Assistant to the 
President Patsy Thomasson entered Mr. Foster's office 
purportedly to search for a suicide note.
    According to career Secret Service Office Henry O'Neill, 
and corroborated by Secret Service records, Ms. Williams 
removed file folders from Mr. Foster's office that night. Even 
assuming, contrary to the testimony of Officer O'Neill, that no 
files were removed from the office that night, the multiple 
entries into Mr. Foster's office plainly compromised the 
integrity of evidence the Park Police considered to be 
valuable.54 Beyond this, Mr. Nussbaum not only ignored 
instructions to seal Mr. Foster's office, but also allowed Ms. 
Thomasson, a staffer without a security clearance who was 
involved in the Travel Office matter, to conduct an improper 
search of Mr. Foster's office. For reasons unknown--but to a 
large extent illuminated by Officer O'Neill's testimony--
Margaret Williams also participated in the late night foray 
through Mr. Foster's office.
    The next morning, on July 21, Mr. Nussbaum's personal 
secretary, Betsy Pond, also rummaged through Mr. Foster's 
office--ostensibly to straighten it up--thereby disturbing 
important evidence.55 Stephen Neuwirth, Mr. Nussbaum's 
associate, immediately recognized the impropriety: ``I didn't 
think it was appropriate for an assistant to Mr. Nussbaum to be 
in the office at that time.'' 56 Thomas Castleton, a staff 
assistant, also entered Mr. Foster's office in the morning of 
July 21.57 Only the Park Police investigators were impeded 
in their attempt to enter Mr. Foster's office to search for 
evidence. They waited in vain all day ``for approval from Mr. 
Nussbaum'' to conduct their investigation.58
    In addition, members of the White House Counsel's office 
participated in the Park Police interviews of White House 
staffers, not to protect the legal interests of the staffers 
but, in the words of Park Police Detective Peter Markland, to 
``report back to Mr. Nussbaum what was being said in the 
interviews.'' 59 The White House Counsel's office coached 
the staffers about their testimony during a meeting on 
``comportment and interrogation.'' 60 The Park Police left 
with the impression that their interviews had been 
rehearsed.61
    The pattern of obstruction continued with the White House 
dealings with the Justice Department. Mr. Nussbaum agreed with 
Deputy Attorney General Heymann on the procedures for reviewing 
documents in Mr. Foster's office.62 The next day, when 
Susan Thomases, a close advisor to Mrs. Clinton and a member of 
the Whitewater defense team during the 1992 presidential 
campaign,63 complained about the review procedures after a 
conversation with Mrs. Clinton, Mr. Nussbaum broke the 
agreement and changed the procedures.64 In explaining this 
about-face, Mr. Nussbaum told his associate, Stephen Neuwirth, 
that Ms. Thomases and Mrs. Clinton were ``concerned about 
anyone having unfettered access to Mr. Foster's office.'' 
65 Contrary to his promise to the Deputy Attorney General, 
Mr. Nussbaum proceeded to review the documents by himself and 
did not afford Mr. Heymann an opportunity to decide whether 
Justice Department officials should be present for the 
review.66
    The Special Committee concludes that Mr. Nussbaum engaged 
in highly improper conduct in braking the White House agreement 
with the Justice Department. Mr. Nussbaum, in effect, 
interposed himself between the investigators and the matters 
under investigation. Prompted by Mrs. Clinton, Susan Thomases, 
and senior White House officials, he made a conscious decision 
to interfere with a federal investigation.
    Beyond this, the Special Committee concludes that the 
``review'' of documents in Mr. Foster's office on July 22 was a 
sham. Law enforcement authorities did not review any documents; 
Mr. Nussbaum relied on their presence simply to ``dress up'' 
the review.67 Mr. Nussbaum ignored repeated complaints by 
Justice Department officials that they had no meaningful role 
in the review, and that Mr. Nussbaum was providing only a 
``generic description'' 68 of the files in the 
office.69 He carefully glossed over sensitive documents 
that he knew could embarrass the President and the 
Administration, including those related to Whitewater and 
Travelgate.
    Almost immediately after law enforcement offices left Mr. 
Foster's office, Mr. Nussbaum went to work to conduct the real 
search in secret. Michael Spafford, an attorney for the Foster 
family, testified that he overhead Mr. Nussbaum tell Mr. Sloan 
at the end of the meeting that they would look through the 
materials again later.70 Associate White House Counsel 
Clifford Sloan's notes of the meeting ended with the following: 
``get Maggie--go through office--get HRC, WJC stuff.'' 71
    Ms. Williams and Mr. Nussbaum collected the files, 
including at least one marked Whitewater. Ms. Williams then 
consulted with Mrs. Clinton, and transferred one or two boxes 
of documents to the White House Residence for further review by 
the President and Mrs. Clinton. In the case of Mr. Foster's 
highly sensitive Travelgate files, Mr. Nussbaum took the 
records to his office.72 There is also evidence that 
indices of files in Mr. Foster's officer were altered or 
destroyed after his death.73 These indices were the only 
means of securing a chain of custody for Mr. Foster's 
documents.
    In short, senior White House officials deliberately 
disrupted the critical chain of custody of Mr. Foster's 
documents and may have lost or destroyed evidence now highly 
relevant to ongoing criminal investigations of Whitewater and 
Travelgate.
    During the July 22 search, Mr. Nussbaum also failed to 
inform law enforcement officials that scraps of paper were at 
the bottom of Mr. Foster's briefcase. He was told by both 
Clifford Sloan \74\ and Deborah Gorham \75\ that papers 
remained in Mr. Foster's briefcase after his search, but did 
not inform law enforcement. When Mr. Neuwirth finally 
``discovered'' Mr. Foster's torn-up note on July 26, the White 
House waited a further 26 hours before notifying the 
authorities. Although the ostensible reason for the delay was 
to permit the President and Mrs. Foster to review the note, 
White House officials conducted a series of meetings during 
this period to discuss the consequences of turning the note 
over to the authorities.
    Even without the benefit of all the facts uncovered by the 
Special committee within the last year, Deputy Attorney General 
Philip Heymann aptly summed up the pattern of troubling 
behavior by the White House as it appeared to him on July 27, 
when he finally saw the note:

          I'm trying to describe a collection of little things, 
        each of which I'm prepared to believe is just a 
        difference of opinion, and in my view, a clumsy and 
        foolish way to handle the matter on the part of the 
        White House staff and Mr. Nussbaum.
          But they're starting to collect, and as they're 
        collecting too much, and the last one's quite dramatic.
          I mean, first of all, we had a sensible system for 
        reviewing the documents, and that's changed to a system 
        that doesn't have any law enforcement input into it at 
        all. It's changed without notifying me.
          I'm vaguely worried about the Park Police feeling 
        that they're not wholly able to investigate those 
        messages are not too clear.
          And then along comes a note that should have been 
        found on the 22nd, if they really went through all the 
        documents. I never looked at the briefcase but it at 
        least worries me that perhaps it should have been 
        found, and we learn about it 27 hours later.\76\

    Mr. Heymann then ordered the Justice Department to 
investigate the discovery of the note and Mr. Foster's 
assertions made therein.
    Amazingly, the White House did not cooperate fully even 
with the new investigations ordered by Mr. Heymann. During 
official FBI interviews, where they were under an obligation to 
tell the truth, senior White House officials did not tell the 
FBI that Mrs. Clinton saw the note, and that Susan Thomases was 
told about it by Mr. Nussbaum, before it was disclosed to the 
authorities. At Mr. Heymann's request, the Justice Department's 
Office of Professional Responsibility investigated Mr. Foster's 
assertion that the FBI lied in their report to the Attorney 
General on the Travelgate controversy. Mr. Foster's notebook on 
that matter, which Mr. Nussbaum found in Mr. Foster's 
briefcase, was critical evidence to that investigation. 
Nevertheless, instead of disclosing its existence to Justice 
Department officials, Mr. Nussbaum tucked away in his office 
Mr. Foster's notebook and other Travelgate materials.\77\
    In July 1995, when he found out about Mr. Nussbaum's 
concealment of Mr. Foster's Travelgate notebook, the Director 
of the Office of Professional Responsibility at the Justice 
Department, Michael Shaheen, wrote an angry memorandum to 
Associate Attorney General David Margolis. After outlining 
specific instances of noncooperation by the White House, Mr. 
Shaheen concluded: ``The fact that we have just now learned of 
the existence of obviously relevant notes written by Mr. Foster 
on the subject of the FBI report is yet another example of the 
lack of cooperation and candor we received from the White House 
throughout our inquiry.\78\
    Viewed in the aggregate, then, these numerous instances of 
White House interference with several ongoing law enforcement 
investigations amounted to far more than just aggressive 
lawyering or political naivete. Rather, the Special Committee 
concludes that the actions of these senior White House 
officials constitute a highly improper pattern of deliberate 
misconduct.

Mrs. Clinton was closely involved in the handling of documents in Mr. 
        Foster's office following his death and directed that 
        investigators be denied ``unfettered access'' to his office

    From the moment that she was notified of Mr. Foster's 
death, Mrs. Clinton and her key agents--Margaret Williams and 
Susan Thomases--were engaged in the subsequent handling of 
documents in Mr. Foster's office. Telephone records indicate 
that upon learning the news, Mrs. Clinton first called her 
Chief of Staff, Margaret Williams.\79\ After talking with Mrs. 
Clinton, Ms. Williams and her assistant, Evelyn Lieberman, 
drove to the White House and searched Mr. Foster's office. The 
second call Mrs. Clinton made on the night of Mr. Foster's 
death was to the residence of Harry Thomason,\80\ a key player 
in the Travelgate scandal. Mrs. Clinton then called Susan 
Thomases, who handled Whitewater damage control during the 1992 
presidential campaign, and talked for 20 minutes.\81\
    This series of telephone calls in the hours immediately 
following Mr. Foster's death established a communications 
triangle among Mrs. Clinton, Ms. Thomases, and Ms. Williams 
that would surface frequently in the handling of documents in 
Mr. Foster's office. The evidence strongly suggests that Mrs. 
Clinton, upon learning of Mr. Foster's death, at least realized 
its connection to Mr. Thomason's Travelgate scandal, and 
perhaps to the Whitewater matter, and dispatched her trusted 
lieutenants to contain any potential embarrassment or political 
damage.
    After speaking with Mrs. Clinton, Ms. Thomases paged Ms. 
Williams, while Ms. Williams was searching Mr. Foster's office 
at the White House,\82\ presumably to monitor the progress of 
the search. After the completion of her search, Ms. Williams 
returned home and called Mrs. Clinton at 12:56 a.m. on the 
morning of July 21.\83\ Upon the conclusion of her eleven 
minute conversation with Mrs. Clinton, Ms. Williams called Ms. 
Thomases at 1:10 a.m. and spoke for fourteen minutes.\84\
    These telephone calls illustrated a pattern that would be 
repeated at each critical event in the handling of papers in 
Mr. Foster's office: discussions among Mrs. Clinton, Ms. 
Thomases, and Ms. Williams; subsequent implementation by Ms. 
Williams, monitored by Ms. Thomases; and, finally, reporting by 
Ms. Williams to Mrs. Clinton and Ms. Thomases.
    The operation of the Clinton-Thomases-Williams triangle was 
best illustrated on July 22, when White House officials and 
Justice Department officials were scheduled to review documents 
in Mr. Foster's office. Ms. Williams called Mrs. Clinton at 
6:44 a.m. Central Daylight Time.\85\ Mrs. Clinton then called 
Ms. Thomases in Washington,\86\ who immediately paged Bernard 
Nussbaum at the White House.\87\ When Mr. Nussbaum called back, 
Ms. Thomases asked him about the upcoming review of Mr. 
Foster's office and, by Mr. Nussbaum's own account, said that 
``people are concerned'' about the procedures to be employed 
for conducting the review.\88\
    Later that morning, Mr. Nussbaum told Mr. Neuwirth that the 
First Lady and Ms. Thomases were concerned about law 
enforcement officials having ``unfettered access'' to documents 
in Mr. Foster's office.\89\
    At 10:00 a.m., when the document review was scheduled to 
begin, Mr. Nussbaum told Justice Department officials that he 
alone would review the documents, breaking a prior agreement 
with the law enforcement officials. Throughout the day, while 
White House officials were meeting with Mr. Nussbaum to discuss 
procedures for reviewing documents in Mr. Foster's office, Ms. 
Thomases made repeated phone calls to the White House, in an 
apparent effort to monitor, and perhaps to affect, the progress 
of those discussions. Telephone records indicated that, between 
10:48 a.m. and 11:54 a.m., Ms. Thomases called the office of 
the Chief of Staff, Mack McLarty, three times and the office of 
the Chief of Staff to the first Lady, Margaret Williams, three 
times.\90\ At 12:55 p.m., Ms. Williams called the Rodham 
residence in Little Rock, apparently in response to a page from 
Mrs. Clinton's personal assistant.\91\ And records indicated 
that, at 1:25 p.m., approximately the time when Mr. Nussbaum 
told law enforcement officials that he alone would review 
documents in Mr. Foster's office, a telephone call was placed 
from the White House to the Rodham residence.\92\
    After Mr. Nussbaum finished his review of documents in Mr. 
Foster's office, he and Ms. Williams conducted a second review 
to segregate and remove the Clintons' personal files.\93\ Ms. 
Williams called Mrs. Clinton from Mr. Foster's office to seek 
instructions concerning where to place the files, and Carolyn 
Huber recalled that Ms. Williams said that ``Mrs. Clinton had 
asked her to call me'' \94\ about transferring the files to the 
residence. Ms. Williams told Thomas Castleton that she was 
taking the files to the residence so that the Clintons could 
review them before they were handed over to Williams & 
Connolly.\95\ After the documents were transferred, Ms. 
Williams and Ms. Thomases again talked on the telephone at 5:13 
p.m.\96\ At 7:12 p.m., Ms. Thomases called Mrs. Clinton in 
Little Rock.\97\
    The evidence leads to the inescapable conclusion that, 
early in the morning of July 22, Mrs. Clinton, Susan Thomases 
and Margaret Williams discussed the procedures for conducting 
the review of documents in Mr. Foster's office. Ms. Thomases 
then communicated their ``concern[s]'' \98\ to Mr. Nussbaum 
about his prior agreement with senior Justice Department 
officials. In place of that agreement, which would have 
permitted those officials to review jointly Mr. Foster's 
documents with Mr. Nussbaum,\99\ the White House adopted a new 
procedure under which he alone would review the documents. 
Thus, as Mrs. Clinton wished, law enforcement would not have 
``unfettered access', to Mr. Foster's documents. Ms. Williams 
called Mrs. Clinton from Mr. Foster's office to ask where to 
take the Clintons' personal documents that she had segregated 
with Mr. Nussbaum. After getting instructions from Mrs. 
Clinton, Ms. Williams transferred the files to the White House 
Residence for the Clintons to review. After the new plan was 
fully executed, Ms. Thomases again talked to Ms. Williams and, 
according to telephone records, called Mrs. Clinton.
    On July 27, the day after a note in Mr. Foster's hand was 
discovered and the day that documents from Mr. Foster's office 
was transferred from the White House Residence to Williams and 
Connolly, Mrs. Clinton summoned Susan Thomases and Webster 
Hubbell to the White House.\100\ The three were in the White 
House Residence alone together, and Mr. Hubbell and Ms. 
Thomases left at the same time.\101\ Ms. Thomases and Mr. 
Hubbell studiously avoided testifying about this meeting in 
early appearances before the Special Committee. However, when 
eventually confronted with clear documentary evidence, in the 
form of Secret Service logs,\102\ Ms. Thomases finally admitted 
that she recalled the three being together at the White House 
in the week following Mr. Foster's death.\103\ Ms Thomases 
maintained that they did no more than exchange condolences with 
Mrs. Clinton, \104\ and that there was no discussion of the 
handling of documents in Mr. Foster's office. Mr. Hubbell 
stated that he went to the White House to give Mrs. Clinton an 
account of Mr. Foster's funeral after Mrs. Clinton left.\105\ 
He claimed that he did not see Ms. Thomases or discuss the Mr. 
Foster's note, which had been discovered but not disclosed to 
the authorities, with Mrs. Clinton.\106\
    The Special Committee concludes that this testimony of Ms. 
Thomases and Mr. Hubbell about their simultaneous visits to the 
second floor of the White House residence is highly 
implausible. White House officials, investigators, and the 
media \107\ were all speculating about and searching for a note 
following Mr. Foster's death. Yet both Ms. Thomases and Mr. 
Hubbell persist with their unbelievable story that the note was 
not discussed less than one day after it was discovered in Mr. 
Foster's briefcase.
    In sum, the Special Committee concludes senior 
Administration officials and Ms. Thomases have sought to 
conceal the true involvement of Mrs. Clinton in the handling of 
documents in Mr. Foster's office, an involvement that is 
unmistakably established by Mr. Neuwirth's admission, and by 
documentary records, all of which shatter the wall of denial 
erected by close Clinton associates.

Senior White House Officials and other Clinton Associates provided 
        incomplete and inaccurate testimony to the Special Committee

    The Special Committee concludes that its effort to find the 
truth about the events of July 20-27, 1993 was impeded by what 
appeared to be a disturbing pattern of incomplete and 
inaccurate testimony by senior White House officials and close 
Clinton associates. Time and again, the testimony of career law 
enforcement officials and others without a motive to lie, as 
well as documentary evidence, told one consistent story, while 
senior White House officials and close Clinton associates 
offered a contradictory version of the facts.
    Three Park Police officers testified that on the night of 
Mr. Foster's death, July 20, they told White House officials to 
take steps to seal his office--requests the White House 
officials denied. A Secret Service Officer testified that later 
that night he observed the First Lady's Chief of Staff, 
Margaret Williams, remove files from Mr. Foster's office;\108\ 
Ms. Williams denied that she removed anything from the office.
    This pattern continued on the next day, July 21. Justice 
Department officials testified that they had reached an 
agreement with the White House concerning the procedures for 
searching Mr. Foster's office.\109\ Even though the 
contemporaneous documentary evidence supported the testimony of 
the Deputy Attorney General and career Justice Department 
officials,\110\ White House Counsel Bernard Nussbaum and his 
associates denied the existence of any such agreement allowing 
law enforcement to examine the documents in Mr. Foster's 
office.\111\
    The Special Committee heard more of the same concerning the 
events of July 22. Ignoring a peculiar pattern of early morning 
telephone calls involving the First Lady, Ms. Williams and 
Susan Thomases denied that Mrs. Clinton played any role 
whatsoever in the decision to bar law enforcement from looking 
at the documents in Mr. Foster's office. Breaking ranks 
somewhat, Mr. Nussbaum admitted that he was told by Ms. 
Thomases that unspecified ``people'' were concerned about the 
upcoming search--presumably, the First Lady, since Ms. Thomases 
was widely known for speaking with Mrs. Clinton's authority. 
Finally, Stephen Neuwirth, a lower level counsel, admitted that 
Mr. Nussbaum told him that Mrs. Clinton and Ms. Thomases were 
concerned about giving law enforcement ``unfettered access'' to 
Mr. Foster's office.\112\
    This pattern continued later in the day on July 22, when 
Ms. Williams denied that she was bringing documents from Mr. 
Foster's office to the White House Residence for the Clintons 
to review. Instead, she offered an implausible story to explain 
her decision to bring the documents to the Residence.\113\ Ms. 
Williams' account was contradicted by a young White House 
staffer, Thomas Castleton, who testified that Ms. Williams told 
him that ``the President or the First Lady had to review the 
contents of the boxes to determine what was in them.''\114\
    Beyond this, there is the curious discovery of Mr. Foster's 
note on July 26. Thomas Spafford, a lawyer for the Foster 
family, testified that, on July 22, he overheard Clifford Sloan 
tell Mr. Nussbaum on July 22 that there were scraps at the 
bottom of the briefcase. Messrs. Sloan and Nussbaum denied 
this.\115\
    As set forth below in the Findings of this Report, the 
Committee concludes that four persons--Margaret Williams, Susan 
Thomases, Bernard Nussbaum and Webster Hubbell--provided 
incomplete and inaccurate testimony to the Committee in an 
apparent effort to conceal the intimate involvement of Mrs. 
Clinton in the events following Mr. Foster's death.

The Office of the White House Counsel was misused to impede ongoing 
        investigations and to serve the purely personal legal interests 
        of the President, Mrs. Clinton and their associates

    Every citizen is entitled to mount a defense to civil and 
criminal charges. The President is no different. He is not 
entitled, however, to use the power of his office to gain a 
defense of his private legal affairs not available to other 
Americans. The White House Counsel's Office is supposed to 
serve the President in his official executive capacity. These 
lawyer are paid by the taxpayers to serve the public interest.
    In the matter of Mr. Foster's death, the Office of the 
White House counsel served, in effect, as the Clintons' 
personal defense law firm. This service extended beyond Mr. 
Foster's employment as the Clinton's personal attorney to the 
use of the White House Counsel's Office in the days following 
his death to interfere with and hinder several ongoing federal 
investigations into Mr. Foster's death and the handling of 
documents in Mr. Foster's office at the time of his death. 
Instead of cooperating with law enforcement officials, the 
Office of the White House Counsel impeded the investigations of 
the Park Police and the Department of Justice. The White House 
lawyers ignored and, in some cases, intentionally violated 
established procedures that would have ensured the proper 
handling of documents in Mr. Foster's office.
    The impropriety of these and other actions--actions that 
prompted the Deputy Attorney General to ask Mr. Nussbaum, 
``Bernie, are you hiding something?''--is compounded when one 
recognizes that these actions were taken by members of the 
Office of the White House Counsel. These were government 
lawyers who were supposed to protect the public interest in 
proper investigations and faithful execution of the laws, not 
to do the private bidding of the President and First Lady.
    The Special Committee concludes that the White House 
Counsel's Office was misused in the aftermath of Mr. Foster's 
death to interfere with and to obstruct various federal 
investigations. This pattern of abuse by the White House 
Counsel's Office is not limited in time or scope, but rather 
has recurred throughout the Special Committee's investigation 
into other matters authorized by Senate Resolution 120. These 
include efforts to obtain improperly confidential law 
enforcement information from the RTC and from the Small 
Business Administration, all while coordinating with private 
attorneys representing the Clintons as subjects of 
investigation.
    The Special Committee recommends that steps be taken to 
insure that such misuse of the White House Counsel's Office 
does not recur in this, or any future, Administration.
    Taken as a whole, the events described in this Report and 
summarized in this conclusion, reveal a concerted effort by 
senior White House officials to block career law enforcement 
investigators from conducting a thorough investigation of a 
unique and disturbing event--the first suicide of a very senior 
U.S. official in almost fifty years. Unquestionably, the 
Department of Justice and Park Police were authorized to 
conduct this investigation, and White House officials owed them 
a duty to cooperate. Instead, law enforcement officials were 
confronted at every turn with concerted efforts to deny them 
access to evidence in Mr. Foster's office. Strikingly, the 
Counsel to the President carried out the wishes of the First 
Lady by breaking his earlier agreement with the Deputy Attorney 
General of the United States. And law enforcement officials 
were forced to sit still as White House lawyers conducted a 
charade of a search. Only after the duly appointed 
investigators had departed, did the White House Counsel and the 
First Lady's Chief of Staff begin the real search, which 
resulted in the transfer of documents to the White House 
Residence; the removal of Mr. Foster's Travel Office notebook; 
and the disappearance of important document indices that would 
have reflected the full contents of his files.
    The actions of the White House are especially serious 
because the Special Committee has discovered that the files 
shielded from the Department of Justice contained evidence 
relevant to two investigations that touched on the Clintons' 
personal interests: the criminal referral into Madison S&L, and 
the anticipated investigation, by Congress and others, into the 
Travel Office firings. As demonstrated in this Report, the 
White House, including Mrs. Clinton, were on notice that these 
investigations were either ongoing or imminent. As it happens, 
both of these investigations were of sufficient weight to be 
now under the jurisdiction of an Independent Counsel.
    Against this background, the actions of the White House 
during the week after Mr. Foster's death must be judged. These 
White House actions were highly improper; they were deliberate; 
and they adversely affected ongoing investigations by career 
law enforcement officials. The American people will never be 
sure of the contents of Vincent Foster's office at the time of 
his death. Their uncertainty and doubts, however, clearly are 
the direct result of the wrongful action by the White House.

                               Background

    The death of any senior U.S. official is sure to be a 
matter of public concern. But Mr. Foster's death swelled into a 
substantial controversy because of two additional factors. 
First, Mr. Foster had a very close and long-standing personal 
and professional relationship with the President and Mrs. 
Clinton. As a prominent lawyer in Arkansas and then as Deputy 
White House Counsel, he provided legal counsel to them on a 
number of sensitive personal matters. Questions therefore arose 
as to whether concerns about any of these matters, including 
the Whitewater and Travelgate affairs, contributed to Mr. 
Foster's death. Second, senior White House officials, 
particularly members of the Office of the White House Counsel, 
took actions in the days following Mr. Foster's death to search 
and to review the contents of Mr. Foster's office while 
preventing law enforcement officials from doing the same. These 
actions raised serious questions about whether, in the wake of 
Mr. Foster's death, the Office of the White House Counsel was 
misused to serve the purely personal legal and political 
interests of the President, the First Lady and their 
associates.

     i. mr. foster's involvement in the clintons' personal matters

    Vincent Foster was born on January 15, 1945 in Hope, 
Arkansas. He attended kindergarten with future President 
William Jefferson Clinton and future White House Chief of Staff 
Thomas ``Mack'' McLarty. Mr. Foster graduated from Hope High 
School in 1963 and from Davidson College in 1967. Mr. Foster 
graduated first in his class from the University of Arkansas 
School of Law in 1971, and passed the bar exam later that year 
with the highest score in the state. He then joined the Rose 
Law Firm in Little Rock, Arkansas, and became a full partner 
two years later, in 1973. Mr. Foster's partners included future 
First Lady Hillary Rodham Clinton, future Associate Attorney 
General Webster Hubbell, and future Associate White House 
Counsel William Kennedy.
    Messrs. Foster and Hubbell participated in efforts during 
the 1992 presidential campaign to control damage arising from 
the Whitewater matter and, specifically, to Mrs. Clinton's 
representation of the Madison Guaranty Savings and Loan 
Association. James and Susan McDougal, the Clinton's partners 
in the real estate venture at the heart of the whitewater 
affair, owned and controlled Madison. On May 28, 1996, James 
McDougal was convicted of eighteen federal felonies and Susan 
McDougal was convicted of four federal felonies. These 
convictions related both to the operations of Madison and the 
Whitewater real estate investment. During the 1992 campaign, 
Mr. Hubbell improperly removed from the Rose Law Firm its files 
concerning its representation of Madison. Messrs. Hubbell and 
Foster also reviewed Rose Law Firm billing records relating to 
Rose's representation of Madison.\116\ These records were found 
in the White House Residence in August 1995 and finally turned 
over to investigators in January 1996, more than two years 
after they were first subpoenaed. The records contain 
handwritten questions from Mr. Foster to Mrs. Clinton; it is 
not possible to date when these questions were put to Mrs. 
Clinton.
    In January 1993, President-elect Clinton asked Mr. Foster 
to become White House Deputy Counsel. Mr. Foster's office on 
the second floor of the West Wing of the White House was in the 
same suite as that of White House Counsel Bernard Nussbaum. The 
Counsel's suite was located right next to the West Wing office 
suite of the First Lady.
    As Deputy Counsel, Mr. Foster worked on many sensitive 
legal and political matters for the Clintons. In May 1993, Mr. 
Foster assigned his former law partner, Associate White House 
Counsel William Kennedy, to investigate allegations of 
mismanagement and misappropriation of funds in the White House 
Travel Office. On May 19, 1993, the White House fired seven 
career employees of the Travel Office. Almost immediately, the 
White House came under intense criticism for its handling of 
these firings. According to press reports, less than a month 
after President Clinton's inauguration, Catherine Cornelius, 
the President's cousin, wrote a memorandum proposing that the 
White House dismiss the career employees of the Travel Office 
and that she run the operation.\117\ The memorandum cast doubts 
on the administration's claim that the seven career employees 
were fired for financial misconduct. In addition, Harry 
Thomason, a close friend of the Clintons, reportedly had 
attempted to steer the White House's lucrative charter business 
to an aviation company that he partly owned.\118\ Rebuffed by 
the career employees of the Travel Office, Mr. Thomason 
reportedly accused them of wrongdoing.\119\
    As public criticism mounted, the White House asked a senior 
FBI official, John Collingwood, to attend a ``political 
strategy session'' with senior presidential advisers on how to 
deal with the growing scandal.\120\ On the same day, the White 
House took the highly unusual step of releasing a confidential 
FBI statement confirming that the bureau was investigating 
possible criminal misconduct in the Travel Office.\121\
    Thus, in addition to allegations of cronyism underlying the 
firing of the career employees, the White House came under fire 
for misusing the FBI, an independent investigative agency, for 
its own political ends, a charge that would surface time and 
again as the White House attempted to contain and manage 
embarrassing and potentially incriminating information through 
contacts with federal investigative agencies. Protocols 
required that White House contacts with the FBI go through the 
Department of Justice, and ``[b]y calling on the FBI to help 
save the Administration from embarrassment, the White House 
appeared to be deviating from two decades of efforts to 
insulate the law-enforcement agency from even the appearance of 
Presidential manipulation.'' \122\ The FBI conducted an 
internal inquiry into contacts between its agents and the White 
House, and the White House initiated its own investigation into 
the matter. On July 2, 1993, the White House released the 
report of its internal review, which sharply reprimanded Mr. 
Kennedy and others. Although Mr. Foster was not formally 
reprimanded, he felt personally responsible for the affair and 
insisted that Mr. Nussbaum allow him to shoulder the 
blame.\123\ Mr. Foster's secretive files on the Travel Office 
controversy were in his briefcase at the time of Mr. Foster's 
death, together with a torn-up note purportedly discovered six 
days later. The note listed Mr. Foster's troubles and concerns, 
many of which dealt with the Travel Office controversy.
    The Travel Office affair apparently weighed heavily on Mr. 
Foster's mind at the time of his death.124 Many 
colleagues, confidantes, and friends of Mr. Foster stated to 
investigators that ``the single greatest source of his distress 
was the criticism he and others within the Counsel's office 
received following the firing of seven employees from the White 
House Travel Office.'' 124 However, according to a FBI 
report of an interview with Susan Thomases, who ``got to know 
Vince Foster fairly well'' from her work with the Clinton 
campaign, transition, and administration,126 ``[h]is death 
came as a complete shock to her and she can offer no reason or 
speculation as to why he may have taken his life.'' 126 
According to the FBI report, Ms. Thomases last saw Mr. Foster 
on ``Wednesday or Thursday before his death,'' when ``they had 
lunch together with some people in Washington.'' 128
    Ms. Thomases has made subsequent statements that contradict 
the FBI report of her interview. In Blood Sport, an account of 
the Whitewater affair, author James Stewart reported that Ms. 
Thomases last saw Mr. Foster on the Wednesday evening before 
his death.129 Their last meeting was not a public 
luncheon, as the FBI report recorded, but was at the Mansion on 
O Street, a private hotel frequented by Ms. Thomases. Ms. 
Thomases had suggested the location after Mr. Foster asked to 
speak to her ``off the campus.'' 130 According to Blood 
Sport, Mr. Foster confided in Ms. Thomases during that last 
meeting, telling her about his personal and professional 
troubles. Mr. Foster reportedly did not want to ``let the 
president and Hillary down'' and, in particular, referred to 
the Travel Office affair. Mr. Foster reportedly stated to Ms. 
Thomases that ``he didn't trust David Watkins, who he feared 
might fabricate or embellish the facts to cover himself--
possibly at the expense of the first lady.'' 131
    When asked about the apparent discrepancy between her FBI 
statement and her interview with Mr. Stewart, Ms. Thomases told 
the Committee that she told the FBI agent about her last 
meeting with Mr. Foster at the Mansion on O Street.132 She 
offered no explanation as to why the agent failed to record 
this significant fact. Ms. Thomases admitted that she spoke to 
Mr. Stewart in connection with Blood Sport, but claimed, ``I 
don't believe that I said that that's what happened with [Mr. 
Foster] that night. I think [Mr. Stewart] probably put together 
different pieces of a different conversation.'' 133 Ms. 
Thomases maintains that her statement to the FBI that ``she can 
offer no reason or speculation as to why he may have taken his 
life,'' 134 was correct, because ``I still do not feel 
that I'm ready to speculate on why he took his life.'' 135
    During his brief tenure as Deputy White House Counsel, Mr. 
Foster handled a number of sensitive personal matters for the 
President and the First Lady--continuing, even though he was 
now on the public payroll, his Arkansas role as personal lawyer 
to the Clintons.136 For example, among the files in Mr. 
Foster's office at the time of his death were the following:
          1. Whitewater Development 137
          2. Clinton Exploratory Committee 138
          3. Clinton Fund Raiser ``Dream Team'' Reception 
        139
          4. Clinton Physician 140
          5. Arkansas Home 141
          6. HRC: Personal & Confidential 142
          7. HRC: Financial 143
          8. Clinton Financial Statements 144
          9. 1992 Income Tax Returns 145
          10. First Family--1993 Income Tax Returns 146
          11. Clintons: 1992 and 1993 Projected Income Taxes 
        147
          12. WJC Passport 148
          13. Personal--Clinton Campaign '92 Correspondence 
        149
          14. Personal--Clinton Papers 150
          15. Personal--Clinton--Legal 151
          16. First Family--1994 Income Tax Returns. 152
          17. First Family--General 153
          18. HRC--CLE/Arkansas Law License 154
          19. First Couple--Blind Trust 155
          20. First Family--Arkansas Home 156
    Perhaps the most sensitive matter that Mr. Foster handled 
for the Clintons concerned their investment in Whitewater. In 
1978, the Clintons and James and Susan McDougal jointly 
purchased 233 acres in the Arkansas Ozarks. Neither the 
Clintons nor the McDougals contributed any equity into the 
purchase. Instead, Jim McDougal and Bill Clinton, then Attorney 
General and the Governor-elect of Arkansas, borrowed $20,000 
from Union National Bank. Mr. McDougal's loan officer at Union 
National Bank, Harry Denton, would later become the chief 
lending officer at Mr. McDougal's Madison Guaranty S&L. The 
rest of the purchase money was financed by a mortgage of 
$182,611.20 from Citizens Bank of Flippin, a loan in which 
Union National Bank took a 50 percent participation.
    In June 1979, the Clintons and McDougals formed Whitewater 
Development Company, Inc. (``Whitewater'') and eventually 
transferred ownership of the land to the new corporation. The 
Clintons and McDougals intended to subdivide the property into 
lots for sale as vacation property. Slow sales at lower than 
anticipated prices, however, resulted in a cumulative loss of 
$193,189 for Whitewater by the end of 1986. Although the 
McDougals and the Clintons purportedly were equal partners in 
the project, their contributions to the company to cover its 
losses were greatly disproportionate. Of the $194,493 that the 
shareholders contributed to Whitewater, the McDougals and their 
companies contributed $158,523, while the Clintons advanced 
only $35,970.
    When Bill Clinton ran for President in 1992, the Whitewater 
investment and his relationship with James McDougal became a 
source of political embarrassment. Over the years, the Clintons 
took a series of questionable deductions on their federal 
income tax returns related to their investment in 
Whitewater.157 And, in March 1989, federal regulators 
closed Madison Guaranty S&L. Madison's insolvency ultimately 
cost federal taxpayers over $60 million.158
    On March 8, 1992, the front page of the New York Times 
carried this headline: ``Clintons Joined S&L Operator In An 
Ozark Real-Estate Venture.'' The article, written by Jeff 
Gerth, reported the ties between the Clintons and the 
McDougals, focusing attention on their investment in Whitewater 
and the questionable tax deductions taken by the Clintons in 
1984 and 1985. The Times report suggested that Whitewater may 
have been used as a conduit to funnel money to the Clintons or 
to Bill Clinton's political campaigns.
    Ms. Thomases played a key role in responding to the Times 
inquiries about Whitewater. She and Loretta Lynch, another 
attorney working for the Clinton campaign, gathered information 
relating to Whitewater and, specifically, to Mrs. Clinton's 
representation of McDougal's Madison Guaranty before state 
regulators.
    Mr. Hubbell and Mr. Foster compiled information from the 
Rose Law Firm to help the response effort. According to Mr. 
Hubbell, ``the issue then, way back when, was did Mrs. Clinton 
ever have any contact with the Arkansas Securities Department. 
When we went back to the bills, that was the only, I believe, 
indication on the bills of a direct contact with the Arkansas 
Securities Department, so I underlined that--probably gave that 
to Vince.'' 159
    Indeed, in notes taken during the 1992 campaign, Susan 
Thomases recorded a February 24, 1993 conversation with Webster 
Hubbell about the Rose Law Firm's representation of Madison. 
According to the notes, Mr. Hubbell told Ms. Thomases that Mrs. 
Clinton did all the billing for the Rose Law Firm to Madison, 
and that she had numerous conferences with Jim McDougal, 
Madison President John Latham, and Rick Massey, then a junior 
associate at the firm.160 The notes also indicated that 
Mrs. Clinton had reviewed some documents and that she had one 
telephone conversation with Beverly Bassett Schaffer in April 
1985.161 Ms. Thomases recorded in the margin of her notes 
at this point: ``Acc. to time Rec.'' She testified that 
``[t]his is my notation for according to time records,'' 
162 which is what Mr. Hubbell had indicated to 
her.163 Ms. Lynch confirmed that Mr. Hubbell reviewed 
timesheets and billing records relating to the Rose Law Firm's 
representation of Madison.164
    The billing records mysteriously disappeared after the 1992 
campaign. Despite four subpoenas from separate federal 
investigations for over two years, the billing records were not 
disclosed until they were ``discovered'' in the third floor of 
the White House Residence, next to Mrs. Clinton's office in the 
private quarters.
    Eventually, the Clinton campaign released a report on the 
Whitewater investment authored by James Lyons, a Colorado 
attorney retained by the campaign. The Lyon's report stated 
that, rather than gaining an illicit profit from their 
association with Mr. McDougal, the Clintons actually lost 
$68,900 on their investment in Whitewater. Mr. Lyons apparently 
prepared two versions of his report. In a confidential letter 
to the Clintons on April 10, 1992, he enclosed a ``complete 
report'' on Whitewater by Patten, McCarthy & Associates, an 
accounting firm he had retained to study Whitewater. Mr. Lyons 
wrote:

          Please note the enclosed complete report discusses 
        such things as the $9,000 interest deduction taken by 
        you in 1980 (paragraph 4, page 5), lot 13 and 
        borrowings associated with it (paragraph 5, page 5), 
        and the sale of 24 lots in 1985 to Ozark Air for 
        assumption of the mortgage and an airplane (paragraph 
        6, page 6). None of these items is set out in the 
        summary report which was released to the press.165

    Mr. Lyons advised the Clintons that there are only three 
copies of the complete report, and wrote that ``it is my 
recommendation to you that you maintain the complete report in 
strictest confidence and do not waive either the attorney/
client or accountant/client privilege which attaches to the 
enclosed report.'' 166 Mr. Foster assisted Mr. Lyons in 
preparing the report.167
    The Lyons report temporarily quelled the media interest in 
the Whitewater story, but Clinton advisors remained worried 
over legal and political implications of this investment. Among 
the documents in Mr. Foster's office at the time of his death 
was his handwritten note: ``Get out of White Water.'' 168 
To that end, Mr. Foster, Mr. Hubbell and others in the Clinton 
organization met with Mr. Lyons on November 24, 1992, two weeks 
after Mr. Clinton was elected President.169
    The point man for the Clinton team in this effort was James 
Blair, General Counsel of Tyson Foods and a longtime friend and 
advisor to the Clintons. Mr. Blair had also known Mr. McDougal 
for over 30 years and had contacted Mr. McDougal in early 1992 
when questions arose about Whitewater.170 Mr. Blair called 
Mr. McDougal's attorney, Sam Heuer, and told him that ``the 
Clintons and the McDougals needed to be totally separated over 
the Whitewater thing.'' 171 According to Mr. Blair, he 
suggested that Mr. McDougal pay a nominal amount to buy the 
Clintons' interest in Whitewater.172 ``I think we settled 
on a thousand dollars as an appropriate nominal amount.'' 
173 There was one problem: ``McDougal doesn't have a 
thousand dollars.'' 174 Mr. Blair then told Mr. Heuer, 
``[W]ell, what the heck, I will loan him the thousand dollars. 
I'll just Fed Ex you a check to your trust account. And I 
believe that's what I did.'' 175 Mr. McDougal has never 
repaid Mr. Blair.176
    On December 22, 1993, Mr. McDougal and the Clintons 
executed the transaction to get the Clintons out of Whitewater. 
Mr. Blair then assigned Mr. Foster the task of contacting the 
accountants and preparing the Clintons' tax returns.177 
The issue facing Mr. Foster in the months preceding his death 
was how to treat the $1000 sale on the Clintons' 1992 tax 
returns. The basic dilemma stemmed from the Clintons' claim, 
bolstered by the publicly released Lyons report, that they had 
incurred significant losses on their investment in Whitewater. 
The problem with declaring the loss on the Clintons' tax return 
was the lack of a proper basis with which to calculate the cost 
of the venture to the Clintons. Despite their claim that they 
were 50% partners in the venture, the Clintons had contributed 
less than 25% of the funds used to cover Whitewater's losses.
    Among the documents in Mr. Foster's office at the time of 
death were his notes of conversations with the Clintons' 
accountant, Yoly Redden.178 The notes, in Mr. Foster's 
hand, identified the tax problem as a ``can of worms you 
shouldn't open.'' 179 His notes in the file outlined the 
basic tax issues the Clintons faced in connection with 
Whitewater:
          ``(1) What was nature of deductions: A. How deduct 
        interest/principal payments for corp?
          (2) Can you use contribution which predated 
        incorporation?
          (3) Contribution/advancements of $68,900 to the McD
          (4) Inability to utilize $8000 capital loss'' 
        180
    Mr. Foster's objective was to avoid calling attention to 
Whitewater during the annual audit of the President and Mrs. 
Clinton's tax returns by the Internal Revenue Service 
audit.181 One approach was simply to report a wash, that 
is, to show no loss and no gain from the venture, thereby 
obviating the need for any tax treatment. The problem with such 
treatment, however, was that it would have bolstered the 
allegation that the Clintons were insulated from Whitewater 
losses and thus the company was a vehicle for Mr. McDougal to 
channel funds to the Clintons. In notes titled ``Discussion 
Points,'' Mr. Foster wrote:

          (1) An argument that they were protected against 
        loss: A) wash is consistent with this theory 182

    But Mr. Foster did not a have a proper cost basis with 
which to calculate the Clintons' true losses or gains. His 
discussion points continued:

          (2) Improper to reduce basis by improper tax benefit.
          (3) Computation of economic loss was based, in part, 
        on assumptions Whereas computation of tax gain or loss 
        must be defensible in audit.183

    Therein lay the problem. To claim a loss based on economic 
assumptions, as the Lyons' report did, was one thing.1 But 
to claim a loss on the Clintons' 1992 tax returns without 
proper support and documentation increased the likelihood of 
calling attention to Whitewater during the IRS audit--of 
opening the can of worms that Mr. Foster and the Clintons' 
accountant wished to keep sealed.184 Mr. Foster's notes 
summarized the options as follows: ``10 Options $1000 basis so 
no tax effect but is arbitrary & still risks audit vs. 0. basis 
w/$1000 gain avoids any audit of issue.'' 185
---------------------------------------------------------------------------
    \1\ Elsewhere in his notes, Mr. Foster wrote:
    A. Colo analysis was of economic loss
    (1) did not take into account interest deductions
    (2) calculation included some items for which there were no 
canceled cks.Williams & Connolly Document DKSN000517. ``Colo analysis'' 
was an apparent reference to the Lyons report.
---------------------------------------------------------------------------
    In a letter to Mr. Foster days before the tax returns were 
due, Ms. Redden, the accountant the Clintons hired to handle 
Whitewater tax issues, wrote: ``Because of the numerous 
problems with Whitewater records and the commingling of funds 
with other companies and individuals, I believe many 
explanations may have to be made if we claim a loss.'' 186 
This letter, addressed to Mr. Foster, was not among the 
documents in Mr. Foster's office that the White House produced 
to the Special Committee. It was obtained by the Special 
Committee through another source.187 Ms. Redden testified 
that after the Clintons were in the White House she had a 
number of discussions with Mr. Foster concerning tax issues 
related to Whitewater.188 The main focus of these numerous 
communications was the tax basis for the Clintons' 
contributions to Whitewater and how to treat the $1000 
payment.189
    The Clintons' final tax returns for 1992 reported a capital 
gain of $1000 from the sale of stock to Mr. McDougal.190 
According to Ms. Redden, ``I think we need to claim no gain or 
a loss.'' 191 Mr. Foster did not follow her advice, 
however, because he was also consulting with another 
accountant, and ``[a]t the end we compromised what we were 
going to put in the return in connection with Whitewater.'' 
192
    For reasons unknown, on June 16, 1993, Mr. McDougal called 
Mr. Foster at the White House. Unable to reach Mr. Foster, he 
left a message with his secretary: ``re tax returns of HRC, VWF 
and McDougal.'' 193 It is unclear whether Mr. Foster 
returned Mr. McDougal's telephone call, and it is unclear why 
Mr. McDougal contacted Mr. Foster about Mr. Foster's tax 
returns.
    Mr. Foster also worked with Ricki Seidman, then Deputy 
Assistant to the President and Deputy Director of 
Communications, on the Whitewater matter in the first half of 
1993. In June 1994, Ms. Seidman told the FBI the following 
about her relationship with Mr. Foster and her involvement in 
Whitewater:

          Seidman was asked about FOSTER's involvement with 
        Whitewater. She said the only Whitewater issue she 
        could recall was in April, 1993 in connection with the 
        CLINTONs tax returns. The tax returns show that the 
        CLINTONs had divested themselves of their interest in 
        Whitewater. SEIDMAN's involvement was from a 
        ``communications perspective''. The Whitewater issue 
        had surfaced during the campaign, interest had then 
        ended, and it was believed the tax returns would bring 
        the Whitewater issue into the ``public domain again''. 
        SEIDMAN said there was discussion regarding the 
        ``soundest way'' to seek closure to the issue. The 
        options considered were (1) declare a loss; (2) declare 
        an even split; and (3) declare the Clintons received a 
        $1000 gain. SEIDMAN said she and FOSTER were discussing 
        these options. She remembered attending meetings at 
        WILLIAMS and CONNOLY [sic] on the issue.194

    The Clintons' Whitewater investment created other problems 
that occupied Mr. Foster's time as Deputy White House Counsel. 
Among the documents found in Mr. Foster's office following his 
death were campaign disclosure forms, required by law, 
accounting the personal finances of the Clintons and of their 
campaign organization.195 On January 10, 1992, the Clinton 
for President campaign filed a disclosure form that failed to 
disclose that the Clintons had personally guaranteed a loan to 
the Whitewater Development Corporation.196 Yoly Redden, 
the Clintons' accountant, testified that she assisted the 
campaign in preparing the disclosure statements.197 
According to Ms. Redden, there were discussions about the 
Clintons' Whitewater investment, and a decision was made to 
omit it from the statements. ``We were told, it was our 
understanding that the Whitewater investment was worthless, 
they were not going to get anything out of it at that point in 
time.'' 198
    On April 6, 1992, after the New York Times article 
detailing the Clintons' Whitewater investment, the campaign 
revised the statement to disclose the Clintons' personal 
liability for the Whitewater loan.199 The revision, 
however, did not deal with the more troublesome issue 
concerning disclosure: how to treat the McDougals' 
disproportionate share of Whitewater losses? By assuming more 
than 50 percent of Whitewater losses, the McDougals had in 
effect given money to the Clintons, their supposed equal 
partners in Whitewater. This transfer could be treated as a 
gift, a loan, or income. Although the Clintons would incur a 
tax liability only if the transfer was considered income, 
campaign laws required disclosure of all three categories, a 
requirement that had not been met with respect to the 
McDougals' contributions to Whitewater. At one point, Mr. 
Foster complained to his friend and the Clintons' confidant, 
Susan Thomases, about the poor condition of the Clintons' 
Whitewater records.200
    Mr. Foster was working on another matter involving the 
Clintons' financial investments in the months and days 
preceding his death. On June 18, 1993, USA Today published an 
article on Hillary Clinton's investment in a limited 
partnership named Value Partners, managed by Smith Capital 
Management of Little Rock, Arkansas.201 The article noted 
the success of the investment for Mrs. Clinton, but erroneously 
reported that Mrs. Clinton's ``investments are now held in a 
blind trust.'' 202 A copy of the article was found in Mr. 
Foster's office following his death. Mr. Foster personally 
circled two places where the article asserted that Mrs. 
Clinton's assets had been placed in a blind trust. He sent 
copies of the article to Lisa Caputo, Mrs. Clinton's press 
secretary, Ricki Seidman, White House Deputy Communications 
Director,2 and Margaret Williams, Mrs. Clinton's Chief of 
Staff. His handwritten comments identified a problem: ``The 
assets are not yet in a blind trust. The document has been 
approved but is not signed yet, pending working out some 
details.'' 203 The article apparently bothered Mr. Foster 
enough to prompt him to complain immediately to Bill Smith, the 
head of Smith Capital Management. Smith replied apologetically 
that his company does not talk to the press about the First 
Lady's investment, ``particularly during the recent flurry of 
articles and interviews regarding the holdings of health care 
stocks in Value Partners.'' 204
---------------------------------------------------------------------------
    \2\ In a later interview with the FBI, Ms. Seidman acknowledged 
that she worked with Foster on ``accusations concerning shorted health 
positions taken by HILLARY CLINTON in connection with Value Partners.'' 
II Hearings, p. 1794.
---------------------------------------------------------------------------
    The ``flurry of articles'' concerned the strategy of Value 
Partners to profit by selling stocks ``short.'' A short-seller 
borrows stocks from his broker to sell at current market price, 
anticipating that the value of the stock will fall. When the 
price does fall, the short-seller buys the lower-priced stock 
to return to his broker, profiting from the difference in 
price. On May 31, 1993, the Wall Street Journal disclosed that 
Value Partners actively sold short several health care 
stocks.205 At this time, Mrs. Clinton was directing the 
administration's efforts to reform the nation's health care 
system. The Administration's proposal depressed the value of 
health care stocks.3 Value Partners was structured as a 
limited partnership, and no evidence exists that Mrs. Clinton 
directed or reviewed the fund's investment decisions. However, 
Mrs. Clinton's investment amounted to nearly $100,000 in a fund 
that dedicated 13% of its $1.3 million portfolio to short 
positions in health care stocks.206 Mrs. Clinton thus came 
under media criticism for personally benefiting from her high-
profile public campaign.
---------------------------------------------------------------------------
    \3\ See, e.g., Stefan Fatsis, Stocks Sink on Clinton Economic Plan, 
Associated Press, Feb. 16, 1993 (``Pharmaceutical stocks led 
yesterday's decline. Clinton week accused drug companies of price 
gouging and made them a prime target of health care reform efforts''). 
A detailed University of Michigan study concluded that the public 
pronouncements of the Clintons criticizing pharmaceutical firms 
depressed stock prices of those firms by as much as 27 percent. S. 
Craig Pirrong, Political Rhetoric and Stock Price Volatility: A Case 
Study, Catalyst Institute Research Project, University of Michigan, 
November 1993.
---------------------------------------------------------------------------
    In addition to an appearance of impropriety, the investment 
in Value Partner posed a potential legal problem. Title 18, 
Section 208 of the United States Code exposes an executive 
officer or employee to felony liability for participating 
``personally and substantially'' in a ``particular matter'' in 
which he is aware of a financial interest. Mr. Foster 
apparently had advised Mrs. Clinton that she need not be 
concerned by this criminal statute because she was not an 
officer or employee of the executive branch.207 In 
reaching this conclusion, Mr. Foster apparently did not consult 
with the Office of Legal Counsel of the Department of Justice, 
and ignored a contrary opinion issued by that office 17 years 
earlier.208
    Mr. Foster's conclusion that the First Lady was not covered 
by government ethics laws also conflicted with the position of 
the White House in Association of American Physicians and 
Surgeons v. Clinton.209 That litigation sought to compel 
the White House to release the documents and deliberations of 
Mrs. Clinton's health care task force. The Federal Advisory 
Committee Act (``FACA'') compels such public disclosure if a 
government agency, like the health care task force, consults 
advisers who are not government employees.210 The 
plaintiffs alleged that Mrs. Clinton is such a nongovernmental 
adviser and thus the records of the task force were covered by 
FACA. In order to avoid disclosure, the White House argued that 
Mrs. Clinton was indeed a federal official and therefore FACA 
did not apply to the task force. The United States Court of 
Appeals for the D.C. Circuit agreed with the White House. 
Recognizing the potential spillover effect of the holding, 
however, the court cautioned in a footnote: ``We do not need to 
consider whether Mrs. Clinton's presence on the Task Force 
violates . . . any conflict of interest statutes.'' 211
    The matter apparently weighed heavily in Mr. Foster's mind. 
The Wall Street Journal, in a series of editorials, criticized 
Mr. Foster for his role with respect to the Health Care Task 
Force.212 Mr. Foster complained to James Lyons, a Foster 
friend and former legal adviser to the Clinton campaign, that 
``the press had been particular vicious in their attacks on 
members of the Rose Law Firm.'' 213 In particular, Mr. 
Foster complained about criticisms for his handling of the 
Association of American Physicians and Surgeons v. Clinton 
litigation.214 Mr. Lyons told the FBI in an interview:

          FOSTER won a victory for the Task Force (and by 
        association, for HILLARY RODHAM CLINTON) on that matter 
        and the Wall Street Journal accused him of ``sharp 
        tactics''. LYONS advised that the allegation really 
        bothered Foster.215

    In the note apparently discovered in Mr. Foster's briefcase 
six days after his death, Mr. Foster wrote, ``The Wall Street 
Journal editors lie without consequence.'' 216
    Just before his suicide, Mr. Foster concentrated on 
finalizing plans to place the First Family's investments in a 
blind trust, which would have remedied the ethical and legal 
problems posed by the Value Partners investment. In Mr. 
Foster's papers was a facsimile from Brantly Buck, a partner of 
the Rose Law Firm, who had been retained to assist in the 
creation of the blind trust. The facsimile, dated July 19, 
1993, the day before Mr. Foster's suicide, forwarded draft 
statements of financial objectives for the blind trust. White 
House phone records indicated that Mr. Buck called Mr. Foster 
twice on the morning of his suicide.217
    Mr. Foster's phone log also showed that he received a call 
from James Lyons, the author of the Whitewater report for the 
Clinton campaign, at 11:11 a.m. on July 20, 1993, the morning 
of Mr. Foster's death.218 When contacted by the Park 
Police, Mr. Lyons said that he had spoken with Mr. Foster on 
July 18, and they had agreed to meet for dinner on July 21. 
According to a Park Police report, ``Lyons had told Foster he 
would call him and let him know when he would leave Denver and 
arrive in Washington. This is the reason for the phone message 
on the morning of July 20, 1993.'' 219 In a later 
interview with the FBI, Mr. Lyons provided more detail into his 
scheduled dinner with Mr. Foster. Mr. Foster was very concerned 
about the Travelgate affair and regarded himself and Bill 
Kennedy as potential witnesses in the matter. According to the 
FBI report, Mr. Foster ``felt strongly that White House should 
hire outside counsel to be handling the Travelgate matter for 
this reason. He also believed that he would be needing a 
personal attorney to represent him in the matter.'' 220 It 
was to seek personal representation that Mr. Foster purportedly 
scheduled dinner with Mr. Lyons. Mr. Foster, however, also 
complained to Mr. Lyons about the extent to which he and other 
members of the Counsel's office were handling personal matters 
for the Clintons:

          FOSTER believed that private sector attorneys should 
        be handling many of the matters they [White House 
        Counsel's office] were handling, both for ethical and 
        workload reasons. The CLINTON administration had called 
        for a 25 percent cut. Under the BUSH administration the 
        Counsel's office had 18 to 20 lawyers at its peak and 
        when CLINTON took office there were only 6 or 7.4 
        There were many discussions about the composition and 
        character of the associates in the Counsel's office and 
        everybody was spread incredibly thin.221
---------------------------------------------------------------------------
    \4\ In reality, the number of lawyers in the Bush administration 
was about 14, the same as under President Reagan. Jeremy Rabkin, ``At 
the President's Side: The Role of the White House Counsel in 
Constitutional Policy,'' Law and Contemporary Problems, Volume 56, 
Autumn 1993, at 63, 71 n. 39. Although the official directory of the 
Clinton White House lists, in addition to the Counsel and his deputy, 
only several Associate Counsels, the staff actually includes about 13 
lawyers. Id. at 71, n. 39. According to one commentator, ``Official 
listings of the White House staff never give the full number of lawyers 
because extra lawyers are usually `detailed' from departments to 
circumvent congressional restrictions or concerns about excessive size 
of the full time staff.'' Ibid.

    Linda Tripp, Mr. Nussbaum's executive assistant, testified 
that she approached Mr. Nussbaum and questioned him, based on 
her experience in the previous administration, about the 
inordinate amount of time that Mr. Foster seemed to spend on 
the Clintons' personal matters. Ms. Tripp believed that Mr. 
Foster worked mostly on personal matters for the Clintons. 
According to Ms. Tripp, ``I questioned the role of the deputy 
counsel in the Clinton Administration as opposed to what I had 
perceived it to be in the Bush Administration.'' 222 
Indeed, C. Boyden Gray, President Bush's White House Counsel 
testified that, under President Bush, ``[p]ersonal, what I 
would call personal work, taxes, blind trusts, problems 
involving his residence, his house in Maine, for example, those 
matters would be handled by his private counsel. How to deal 
with the book royalties from Mrs. Bush's book, for example; 
they would be handled by his personal lawyer.'' 223 When 
asked why, Gray explained that ``I don't think the taxpayers 
should pay for personal matters, I suppose, is the short way to 
answer it.'' 224

  II. The Traditional Independence of the White House Counsel's Office

    The Office of the White House Counsel originated from 
presidential custom. The Reorganization Act of 1939,225 
which authorized the modern White House staff, did not mention 
a legal adviser to the President. The first such legal adviser 
came to the White House under President Franklin Delano 
Roosevelt. When Roosevelt was governor of New York, he had a 
close personal adviser in Samuel Rosenman, who held the title 
of ``Counsel to the Governor.''226 Upon his election as 
President, Roosevelt prevailed on Mr. Rosenman, then a judge on 
New York's highest court, to join his staff. President 
Roosevelt wanted to give Mr. Rosenman the title of ``Counsel to 
the President,'' the Washington equivalent of his title in 
Albany. However, Attorney General Francis Biddle objected, `` 
`on the grounds that such a title would undercut the role of 
the Attorney General as the President's chief legal adviser.' 
'' 227 Consequently, Mr. Rosenman was given the title of 
``Special Counsel to the President.''
    Despite its origins in the personal, rather than 
institutional, needs of the President, the Counsel's office has 
become firmly established within the White House.228 The 
role of this office has varied from administration to 
administration. Mr. Rosenman, consistent with the practice in 
Albany, served not just as President Roosevelt's legal 
counselor, but as one of his key advisers. He was the principal 
speech writer and spent most of his time drafting the 
President's public statements--a task for which he recruited 
Clark Clifford as his assistant.
    Mr. Clifford continued the tradition as special counsel to 
President Truman. He later recounted that his job was to do 
``[w]hatever the President wanted.'' Mr. Clifford saw his role 
``as an adviser or counselor, and not as an administrator or 
bureaucrat.'' 229 His advice to President Truman was not 
strictly legal, but often political. Secretary of State 
Marshall complained to President Truman about Mr. Clifford's 
participation in White House discussions on U.S policy toward 
Palestine: ``I fear that the only reason Clifford is here is 
that he is pressing a political consideration with regard to 
this issue. I don't think politics should play any part in 
this.'' 230
    Similarly, Theodore Sorenson, special counsel to President 
Kennedy, and Harry McPherson, special counsel to President 
Johnson, were among the principal policy and political advisers 
to each president. Both participated fully in the major 
deliberations of their administrations. In 1985, when 
organizers of a conference of presidential chiefs of staff 
discovered that no such position existed in the White House 
under Presidents Kennedy and Johnson, they invited the two 
advisers who most closely approximated that role, Mr. Sorenson 
and Mr. McPherson.231 Myer Feldman held the post, with the 
title of ``Counsel to the President,'' for one year between Mr. 
Sorenson and Mr. McPherson. For reasons unknown, Mr. McPherson 
retained the old title of Special Counsel. When Richard Nixon 
became President, he appointed John Ehrlichman as ``Counsel to 
the President.'' A year later, however, the title was discarded 
again and three top advisers--Murray Chotiner, Harry Dent, and 
Charles Colson--held the title of ``Special Counsel'' 
simultaneously.
    In 1971, President Nixon appointed John Dean as White House 
Counsel and relied on Mr. Dean primarily for legal advice on 
particular matters. While Lloyd Cutler, President Carter's 
White House Counsel, noted that his job primarily concerned the 
legal aspects of matters that came to the President's 
attention,232 he also played a ``Clark Clifford role'' in 
the White House.233 That means that ``I can dispense 
advice and get involved in any question that interests me.'' 
234 Even with Mr. Cutler, however, it was clear that the 
modern White House counsel was no longer the equivalent of the 
chief of staff, as Mr. Sorensen was under President Kennedy. In 
the Reagan White House, each of the three successive counsels--
Fred Fielding, Peter Wallison, and A.B. Culvahouse--reported to 
the President's respective chiefs of staff--James Baker, Donald 
Regan, and Howard Baker. Although C. Boyden Gray reportedly 
enjoyed special influence in the Bush White House stemming from 
his long-standing relationship with the President, he generally 
viewed himself not as a political adviser, but as counsel on 
legal problems.235
    Against this historical background, President Clinton 
appointed Bernard Nussbaum to head the Counsel's office. In 
addition to being Counsel, Mr. Nussbaum held the honorific 
``Assistant to the President,'' a title not given to any 
previous holder of the office. Mr. Nussbaum had worked with 
Mrs. Clinton--he as the senior lawyer, she as a young law 
school graduate--on the staff of the House Judiciary Committee 
Impeachment Inquiry, the Watergate Committee.236 By his 
own account, Mr. Nussbaum was among the President's inner 
circle of advisers and enjoyed free access to the President. 
``I see the President any time I think it's reasonably 
necessary. Unfortunately, it's been necessary too many times.'' 
237
    Mr. Nussbaum's background as a private lawyer defined where 
his loyalty laid as White House Counsel. ``When you're down to 
one client--the President--the only thing that counts is your 
relationship with that client.'' 238 5 When Mr. Nussbaum 
resigned from his office, he wrote to the President:
---------------------------------------------------------------------------
    \5\ It is illustrative to compare Mr. Nussbaum's vision of the 
White House Counsel with that of his successor, Lloyd Cutler, who said 
upon his appointment: The Counsel is supposed to be counsel for the 
President in office and for the Office of the Presidency. . . . When it 
comes to a President's private affairs, particularly private affairs 
that occurred before he took office, those should be handled by his own 
personal private counsel and, in my view, not by the White House 
Counsel.''
    Remarks Announcing the Appointment of Lloyd Cutler as Special 
Counsel to the President and an Exchange with Reporter, 30 Wkly Comp. 
Pres. Document 462, 465 (Mar. 8, 1994).

          As I know you know, from the day I became Counsel, my 
        sole objective was to serve you well as effectively as 
        I could, consistent with the rules of law, standards of 
        ethics, and the highest traditions of the Bar . . . 
        Unfortunately, as a result of controversy generated by 
        those who do not understand, nor wish to understand the 
        role and obligations of a lawyer, even one active as 
        White House Counsel, I now believe I can best serve you 
---------------------------------------------------------------------------
        by returning to private life. 239

    Mr. Nussbaum has explained elsewhere that ``[t]he principal 
source of that misunderstanding, I think, is the failure to 
appreciate . . . that fact that the president's lawyer is a 
lawyer, and that every lawyer--even one representing the 
president in his official capacity--has an obligation to 
represent his client faithfully and zealously.'' 240 Those 
who criticized his conduct in office ``have it exactly 
backward: The problem is not that lawyers who are in the public 
arena are too zealous in representing their clients; it is that 
they--and others in the public arena--are often not zealous 
enough, because of a fear of appearances, of negative publicity 
and, consequently, of unpopularity, of loss of position.'' 
241
    Whether or not Mr. Nussbaum is correct in his ethical 
vision or his assessment of the public interest, the mandate of 
Resolution 120 requires the Special Committee to answer a more 
immediate question: whether, in their zeal to serve and protect 
their clients, President and Mrs. Clinton, Mr. Nussbaum and 
other White House officials engaged in any improper conduct in 
handling the papers in Mr. Foster's office following his death.

                        Summary of the Evidence

  i. the contents of vincent foster's office at the time of his death

    The full contents of Mr. Foster's office at the time of his 
death will perhaps never be known. That is so because Mr. 
Nussbaum, in cleaning out the files in Mr. Foster's office 
following his death, did not prepare an inventory of materials 
reviewed or removed. Stephen Neuwirth did prepare an inventory 
of certain files in Mr. Foster's office, but only after Mr. 
Nussbaum and Margaret Williams had removed certain files to 
President and Mrs. Clinton's private quarters on the third 
floor of the White House Residence.
    Deborah Gorham, Mr. Foster's secretary, testified that, in 
her first trip into Mr. Foster's office after his death, she 
opened the drawer containing the Clintons' personal documents. 
``I saw Pendaflex folders and file folders, and I did not see 
an index that normally would have been there listing the names 
of the files.'' 242 According to Ms. Gorham, she 
maintained ``indexes for all file drawers, that I recall, and 
it listed the content, the names of each of the folders in each 
drawer.'' 243 She did not see the index in the drawer, 
where she normally kept it.
    The Special Committee took steps to locate this missing 
index. The White House produced three indices of files in 
Foster's office. A six-page index is dated July 22, 1993, on 
the first page. The final page of the index contained the 
following listing: 6
---------------------------------------------------------------------------
    \6\ The remainder of the index was redacted.
---------------------------------------------------------------------------
          First Family--SF 278
          First Family--1994 Income Tax Returns
          First Family--General
          HRC--CLE/Arkansas Law License
          First Couple--Blind Trust
          First Family--Arkansas Home
          POTUS--Arkansas Office
          WJC--Passport
          WJC--Papers
          First Family--SF 278 pre-POTUS 244
    The White House represented to the Special Committee that 
this index ``was in a box identified by Tom Castleton as 
containing documents from Cabinet I of Mr. Foster's office.'' 
245 Ms. Gorham, however, testified that the document is 
not one that she would have created. ``Certainly the typeface, 
the font and the style and the names of the subjects are 
familiar, but on your first entry where it reads `First Family 
1994 Income Tax,' the word `Returns,' which should be, I 
believe, a part of that sentence after `Tax,' has been returned 
to the left margin.'' 246 Raising the specter that the 
index had been altered, Ms. Gorham testified that she would not 
have formatted her document in such a fashion.247
    The White House produced yet another six-page index, which 
was found apparently ``in a box identified by Mr. Castleton as 
containing materials from Ms. Gorham's desk.'' 248 The 
last page of this index contained the same list of files as in 
the first index described above.249 7 However, the format 
of the list is different. ``First Family 1994 Income Tax 
Returns'' and ``HRC--CLE/Arkansas Law License'' are each typed 
on one line, without left returns breaking up the entries--a 
format consistent with the way Ms. Gorham would have maintained 
the document. Although the index ``is consistent with the 
typeface and certainly the names of the subjects and the type 
font that was used,'' Ms. Gorham was not sure if she had 
prepared the document.250 This second index, like the 
first, was dated July 22, 1993, on the first page. Ms. Gorham 
testified that ``on the White House system, that date would 
have had to have been manually entered.'' 251 Ms. Gorham 
also testified that she would not have revised the index after 
Mr. Foster's death,252 and that she did not revise the 
index on July 22, 1993.253
---------------------------------------------------------------------------
    \7\ All the other materials on the index, as in the first index, 
had been redacted.
---------------------------------------------------------------------------
    Neither index contained any reference to a file on 
Whitewater Development Corporation. According to Ms. Gorham, 
she created her index file in the first two weeks of April, 
several months prior to Mr. Foster's death,254 and the 
index listed all the files in the drawer containing the First 
Family's personal documents.255 She also remembered that 
the Whitewater file was among those in Foster's office at that 
time.256 8
---------------------------------------------------------------------------
    \8\ A file labelled ``WHITEWATER DEVELOPMENT, Personal and 
Confidential VWF'' was transferred from Foster's office to the 
Clintons' personal lawyers.
---------------------------------------------------------------------------
    The third index 257 produced by the White House 
listed, among other things, the same ten files contained in the 
other two indices, but in a slightly different order and with 
an additional notation for certain files:
          POTUS--SF 278
          First Family--1994 Income Tax Returns (removed)
          HRC--CLE/Arkansas Law License (removed)
          First Couple--Blind Trust (removed)
          First Family--Arkansas Home (removed)
          WJC--Papers (removed)
          First Family--SF278 pre-POTUS (removed)
          Clinton Mansion (removed)
          POTUS--Arkansas Office
          WJC--Passport 258
    This index, labelled ``VWF--Existing Files'' on the first 
page, contained the following line on the last page: ``Updated 
10/25/93''. Like the other two indices, it did not contain any 
reference to a Whitewater file. At the Special Committee's 
request, the White House conducted a search of the back-up 
disks and tapes of Ms. Gorham's files, downloaded when she left 
the White House in late 1993. The third index was among the 
files contained in those disks and tapes, and the file 
directory information indicated that it was last updated on 10/
25/93 at 2:14 p.m. The first and second indices, however, were 
not among the files in Ms. Gorham's computer at the time it was 
downloaded. An analysis of latent data on the computer's hard 
drive by an FBI expert yielded no additional useful 
information.259
    Ms. Gorham testified that she did not see the index she 
maintained for the Clintons' personal files in Foster's office 
on July 22, nor anytime thereafter.260 The Committee was 
never able to ascertain what happened to this index--a critical 
piece of evidence concerning the contents of Mr. Foster's 
office at the time of his death.
    When Mr. Nussbaum reviewed documents in Mr. Foster's office 
on July 22 before Justice Department officials, he did not 
identify every document in the office, even generically, for 
the law enforcement officers. His scatter-shot identification 
process frustrated the officers.
    The following colloquy occurred at the Special Committee's 
August 1, 1995, hearing:

          Mr. Giuffra: Do you believe that Ms. Nussbaum 
        described every document in Mr. Foster's office?
          Mr. Markland: No, sir, I don't.
          Mr. Giuffra: So he only identified some of the 
        documents that were contained in Mr. Foster's office?
          Mr. Markland: Yes. Or he would go through a file 
        drawer and just broadly say that they were strictly 
        White House business.261

    Agent Salter corroborated Mr. Markland's testimony, telling 
the Special Committee: ``No, I don't believe he had looked at 
everything in the office.'' 262 Mr. Nussbaum maintained, 
however, that he described every file in the office, including 
the Clintons' personal files. ``I said these were Clinton 
personal files. I said these involve investments, taxes, other 
financial matters and the like. Included was a file on the 
Clintons' Whitewater real estate investment.'' 263
    Two persons kept careful notes of the document review on 
July 22. Michael Spafford took nine pages of handwritten notes 
apparently listing the files and documents that Mr. Nussbaum 
called out during the meeting. His meticulous notes listed, for 
example, paper clips and scotch tape from Vince Foster's left 
drawers, and the contents of Mr. Foster's trash bag.264 
Likewise, Cliff Sloan took 16 pages of notes during the 
meeting.265 The notes taken by Mr. Sloan, which he later 
typed up,266 tracked Mr. Spafford's notes, but at times 
provided some more detail both in the number of items listed 
and in the description of each item. Neither set of notes 
recorded the specific name of the files or any description of 
the documents eventually transferred to the White House 
residence and later to Williams & Connolly.
    Senator Kerry specifically questioned Mr. Nussbaum about 
files located in Mr. Foster's credenza. Mr. Nussbaum testified 
that he reviewed all of the files in the credenza and described 
them to the law enforcement officials. ``I said this is a tax 
file, or this is an investment file, like that. I didn't 
describe every piece of paper in the file. I would flip through 
the file to see if there's a suicide note or extortion note, 
but I would give a general description of the file and I would 
flip through the file.'' 267
    Mr. Spafford's and Mr. Sloan's notes of Mr. Nussbaum's 
review, however, cast doubt on Mr. Nussbaum's testimony. Mr. 
Nussbaum provided detailed descriptions of a number of items in 
the credenza, while identifying the Clinton personal files--
apparently the bulk of the files in the credenza--generally as 
``matters re First Family.'' 268 Following are Mr. 
Spafford's handwritten notes of what Mr. Nussbaum described in 
the credenza:
          
    Credensa: on R
                  matters re First Family
                  mostly files re GC matters
                  notebooks on prospective nominees.
                  supplies
                  candlesticks
                  notebook re jud nominees
                  notebk re St. Justice
                  magazines
                  copy of foreword to bk Ron Kennedy
                  Fed rules of Civ Pro
                  Bk on Mkt Liberalism
                  3/18 letter re posters of Pres.
                  card from friend 269
    Although Mr. Sloan's typed notes did not identify the 
various locations, the listing was similar to Mr. Spafford's:
          Work Orders
                  Financ disclosure
                  Various investments matters re: First Family
                  Judic. Nominations
                  List of people--prepare book of prospective 
                nominees
                  Treas. Regs.
                  WH Mess
                  Marine Helicopter
                  ``State Justice Institute''
                  Q____________
                  Book Pres, would write foreword to
                  Book on Civ. Pro.
                  Market Liberalism
                  WH mil. office
                  Judic. selection
                  3/18--letter re: posters--using Pres. 
                likeness next (?) WH
                  Card 270
    The files transferred to the White House Residence and 
eventually taken to Williams & Connolly included a file 
labelled ``WHITEWATER DEVELOPMENT, Personal and Confidential 
VWF.'' Law enforcement officials did not recall Mr. Nussbaum 
mentioning Whitewater during the review of documents in Mr. 
Foster's office on July 22,271 and the notes taken by Mr. 
Sloan and Mr. Spafford contained no reference to a Whitewater 
file.9
---------------------------------------------------------------------------
    \9\ Likewise, neither Mr. Spafford's nor Mr. Sloan's notes listed 
Mr. Foster's personal diary during the transition period--which Park 
Police investigator John Rolla later reviewed, Rolla, 6/20/95 Dep. p. 
96--or Foster's notebook on the Travelgate scandal, White House 
Documents F000002-F000162, which Mr. Nussbaum apparently removed from 
Mr. Foster's briefcase on July 22, 1993, and kept in a safe until 
March, 1994. Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 1.
---------------------------------------------------------------------------
    Mr. Nussbaum claimed that he had no knowledge that Mr. 
Foster was working on any matter involving Whitewater.272 
Mr. Nussbaum emphasized that ``[t]he Whitewater matter, which 
subsequently became the focus of so much attention, was not on 
our minds or even in our consciousness in July 1993.'' 273 
He repeated that although Whitewater had surfaced briefly 
during the 1992 campaign, ``in 1993, Whitewater was not on my 
screen, nor, as far as I know, was it the subject of discussion 
in the White House. And if it was, it was something I would 
have known.'' 274
    Evidence obtained by the Banking Committee during the 
summer of 1994 flatly contradicts Mr. Nussbaum's testimony. 
Resolution Trust Corporation (``RTC'') Senior Vice President 
William H. Roelle testified that, upon taking office, former 
Deputy Secretary of the Treasury Roger Altman directed the 
staff to inform him of all important or potentially high-
visibility issues.275 According to Mr. Roelle, on or about 
March 23, 1993, he told Mr. Altman that the RTC had sent a 
criminal referral mentioning the Clintons to the Justice 
Department.276
    The White House produced files to the Banking Committee 
showing that Mr. Altman immediately sent Mr. Nussbaum two 
facsimiles about Whitewater. The first facsimile, sent on March 
23, 1993 with a handwritten cover sheet, forwarded an ``RTC 
Clip Sheet'' of a March 9, 1992 New York Times article with the 
headline, ``Clinton Defends Real-Estate Deal.'' 277 The 
article reported the responses that Bill Clinton, then a 
presidential candidate, offered to an earlier Times report 
detailing the Clintons' investment in Whitewater and their ties 
to Jim and Susan McDougal.
    The second facsimile from Mr. Altman to Mr. Nussbaum, sent 
the next day, March 24, 1993, forwarded the same article that 
was sent the day before and portions of the earlier Times 
report--an article dated March 8, 1992, by Jeff Gerth entitled 
``Clintons Joined S&L Operator in an Ozark Real-Estate 
Venture,'' which originally broke the story in the news 
media.278
    According to the report of the Banking Committee on the 
communications between officials of the White House and the 
Treasury Department:

          Mr. Altman testified that he did not recall having 
        sent either facsimile to Mr. Nussbaum. Mr. Nussbaum 
        testified that he did not recall having received either 
        facsimile from Mr. Altman. Mr. Altman and Mr. Nussbaum 
        both testified that they had no recollection of having 
        spoken to one another during March 1993 about the 
        articles contained in the facsimiles or the subject of 
        those articles. Nevertheless, Mr. Altman and Mr. 
        Nussbaum both testified that the facsimiles were 
        apparently sent and received by their respective 
        offices.279

    Before the Special Committee, Senator Bond asked Mr. 
Nussbaum specifically about the apparent contradiction between 
his assertion that he had no knowledge of Whitewater at the 
time of Mr. Foster's death and the existence of Mr. Altman's 
facsimiles. Mr. Nussbaum maintained that he did not know of the 
facsimiles.280 He testified that he first heard of 
Whitewater in late September 1993.281 ``So, in July of 
1993, I had no knowledge and no memory of receiving a fax from 
Roger Altman, and Whitewater, as I said in my statement, was 
not on my mind nor, do I believe, on anyone else's mind in the 
White House in July of 1993.'' 282
    There is further evidence, however, that Mr. Foster was not 
the only White House official working on personal matters for 
the Clintons involving Whitewater. Until July of 1993, Ricki 
Seidman was Deputy Assistant to the President and Deputy 
Director of Communications. She reported to the FBI in 1994 
that she and Mr. Foster had worked together on Whitewater 
issues before his death:

          Seidman was asked about FOSTER's involvement with 
        Whitewater. She said the only Whitewater issue she 
        could recall was in April, 1993 in connection with the 
        CLINTONs tax returns. The tax returns show that the 
        CLINTONs had divested themselves of their interest in 
        Whitewater. SEIDMAN's involvement was from a 
        ``communications perspective''.283

    Ms. Seidman explained that she discussed various options 
with Mr. Foster for treating the transaction on the Clintons' 
1992 tax returns. Ms. Seidman confirmed notes found in Mr. 
Foster's office at the time of his death summarizing the three 
options under consideration: (1) report a loss on the 
Whitewater investment; (2) not report any gains or losses; or 
(3) declare a $1000 gain to the Clintons from their transfer of 
all Whitewater stock to Jim McDougal in December, 1992.284
    In addition, SBA Associate Administrator Wayne Foren 
testified that, in early May 1993, he briefed Erskine Bowles, 
the new SBA Administrator about the agency's ongoing 
investigation of David Hale's Capital Management Services 
because the case involved President Clinton.285 Shortly 
thereafter, Mr. Bowles told Mr. Foren that he had briefed White 
House Chief of Staff Mack McLarty about the case.286 
Although Mr. Bowles did not recall being briefed by Mr. Foren 
about Capital Management 287 or talking to Mr. McLarty 
about the case,288 Mr. Foren's account was corroborated by 
his deputy, Charles Shepperson.289 Mr. McLarty's calendar 
indicated that Mr. Bowles had two meetings with Mr. McLarty at 
the White House in early May 1993.290
    When asked why Mr. Nussbaum prevented law enforcement 
officials from looking at documents in Mr. Foster's office on 
July 22, Detective Markland replied: ``In my mind, at this 
time, I believe he was afraid we would have uncovered some 
indication of the Whitewater situation and other things that 
Mr. Foster was involved with that are just now coming to 
light.'' 291
    Mr. Nussbaum claimed that he did not seek to conceal 
damaging information about the Whitewater matter. In his view, 
the groundswell of interest in the handling of documents after 
Mr. Foster's death resulted from ``the unfair linkage of two 
separate, disparate events,'' 292 the way he reviewed and 
handled documents in Mr. Foster's office and the emergence of 
the Whitewater investigation in late 1993.293
    Yet, as early as the spring 1993, White House officials 
expected the then-dormant Whitewater issue to reemerge in the 
media. According to the FBI report of Ms. Seidman's interview, 
in April 1993, ``it was believed the tax returns would bring 
the Whitewater issue into the `public domain again'. SEIDMAN 
said there was discussion regarding the `soundest way' to seek 
closure to the issue.'' 294 10 In addition to Ms. 
Seidman's sworn statement, common sense casts doubt on Mr. 
Nussbaum's testimony that Whitewater was not on the White 
House's radar screen in 1993. Whitewater was a major issue in 
the 1992 campaign, and the Clintons went to the extraordinary 
step of retaining an outside attorney to issue a report on the 
matter. The ``unfair linkage,'' in Mr. Nussbaum's words, so 
obvious when investigations relating to Whitewater were 
reported later in 1993, was never made in the weeks following 
Mr. Foster's death precisely because Mr. Nussbaum concealed any 
mention of Whitewater from law enforcement officials. There is 
little doubt that Mr. Nussbaum foresaw the embarrassment and 
political liability of such a linkage between Mr. Foster's 
death and Whitewater when he examined the documents in Mr. 
Foster's office. It is against this backdrop of motive that the 
events and actions following Mr. Foster's death must be 
examined.
---------------------------------------------------------------------------
    \10\ Like Mr. Nussbaum, the President and Mrs. Clinton have denied 
knowledge of Foster's work involving Whitewater. Following are excerpts 
from a deposition of President Clinton by former Special Counsel Robert 
Fiske:
    Q: Was he [Foster] during this period of time working on any 
matters for you personally?
    A: Yes, I believe that he was trying to handle the transition of 
our assets into a blind trust. I think that's all he was doing.
    Q: Were you aware that he was also doing some work in connection 
with the preparation and filing of the tax returns for Whitewater for 
'90, '91, and '92?
    A: I don't recall that I was aware of that, no.
    Fiske received the same testimony from the First Lady:
    Q: Was he [Foster] doing any personal work for you or the President 
other than the blind trust?
    A: Not that I'm aware of, no. Oh, wait. The only thing I would add 
to that is I think he also did some personal advising, or at least was 
in some way involved in the tax returns when they were being finalized 
for '93, but that was part of the blind trust work, as I recall.
    Q: Your own tax returns?
    A: Yes.
    Q: Was he doing work, to your knowledge, with respect to the filing 
of the Whitewater tax returns?
    A: Not that I know of, no.
    It is unclear whether Mrs. Clinton's answer to Mr. Fiske's question 
encompassed Mr. Foster's work on the Clintons' personal returns 
relating to their tax liability for Whitewater. In her interview with 
the FBI, Ms. Seidman reported that she attended meetings with the 
Clintons' personal lawyers at Williams & Connolly on the treatment of 
the 1992 sale of Whitewater on the Clintons' 1993 tax returns.
---------------------------------------------------------------------------

                           II. July 20, 1993

A. The discovery of Mr. Foster's body

    At about 5:30 p.m. on July 20, 1993, the driver of a white 
utility van stopped at Fort Marcy Park off the George 
Washington Parkway in Virginia to relieve himself.295 The 
man parked his car next to a white two-door Honda with a blue 
interior and Arkansas plates.296 He walked about 200 yards 
away from the parking lot. As he was urinating, the man noticed 
the body of a white male wearing a white dress shirt and grey 
pants.297 Traces of blood were visible on the man's face, 
and the right shoulder was stained light purple.298
    The man then returned to his van to find a 
telephone.299 He drove to nearby Turkey Run Park, where he 
found two uniformed Park Service employees.300 He told the 
Park Service employees that he had found a body and asked one 
of them to call the police.301 One of the Park Service 
employees walked to a nearby telephone and called the 
police.302
    The Fairfax County Public Safety Communications Center 
received a 911 call at approximately 6:00 p.m. on July 20, 
1993, reporting a dead body lying near a cannon in Fort Marcy 
Park.303 The dispatcher relayed this information to the 
Park Police and the Fairfax County Emergency Response 
Team.304 Park Police Officer Kevin Forshill responded to 
the call from his post in Langley, Virginia.305 Officer 
Forshill and two medical technicians searched the area near the 
two cannons, while another group of medical technicians 
searched elsewhere in the park.306 Near the second cannon, 
Officer Forshill found the body.307 He then notified the 
dispatcher and requested detectives to be at the scene.
    Park Police investigators Renee Apt, Cheryl Braun, and John 
Rolla responded to Officer Forshill's call at 6:35 p.m.308 
Sergeant Braun, the senior investigator, assigned Detective 
Rolla to investigate the death scene while she examined the 
parking lot. Their preliminary view was that Mr. Foster's death 
was a suicide.309 Under standard procedure, however, the 
Park Police treated the investigation as a possible homicide. 
The Park Police continued to treat the investigation as a 
possible homicide until August 10, 1993, when the Park Police 
officially ruled Mr. Foster's death a suicide.310
    In a death investigation, standard procedures called for 
investigators to define the crime scene and to prevent any 
unauthorized access to the area.311 In the case of a 
suspected suicide, the investigators considered relevant ``the 
person's home, their office, their car, places where they 
frequent would be relevant; any place where they would leave 
information about them, their state of mind, a place for them 
to leave their note, if they leave a note.'' 312 As a 
necessary precaution, such places should be preserved ``as a 
matter of routine police procedure'' in order to ensure the 
integrity of the evidence.313 Sergeant Braun thus 
immediately requested that the main gate of the fort be closed 
to prevent entries into the area.314
    When Detective Rolla arrived at the death scene, the area 
around Mr. Foster's body was taped off.315 The officers 
who first arrived on the scene briefed Detective Rolla and gave 
him several Polaroid photographs of the scene.316 
Detective Rolla then made a careful visual examination of the 
body and conducted a thorough inventory of the physical 
evidence on the body.317 Detective Rolla then took his own 
Polaroid pictures of the crime scene and, when the Fairfax 
County Medical Examiner arrived, helped him move the body for a 
preliminary examination.318
    Sergeant Braun interviewed a couple whose car was parked 
near Mr. Foster's Honda, and another officer canvassed the area 
for other witnesses.319 All the items in Mr. Foster's car 
were catalogued: a wallet with $300 in cash, his White House 
identification, and a piece of paper with the names and 
telephone numbers of three doctors; two empty beer bottles, a 
canvas bag, a folded map of Washington D.C., and cassette tapes 
in the car interior; Mr. Foster's daughter's college papers and 
textbooks in the trunk; and sunglasses and empty cigarette 
boxes in the glove compartment.320 With the discovery of 
Mr. Foster's White House identification, Sergeant Braun 
considered the case a high priority investigation and proceeded 
with heightened caution.321 After Sergeant Braun finished 
examining Mr. Foster's car, it was sealed with tape and towed 
to the Anacostia Station of the Park Police.322 A Park 
Police officer accompanied the car to the station to ensure 
that its contents would not be disturbed.323

B. The Park Police notify the White House and the Foster family

    After Sergeant Braun and Detective Rolla finished their 
investigation at the scene, the shift commander asked them to 
call the White House. The investigators contacted White House 
Security Chief Craig Livingstone and White House Associate 
Counsel William Kennedy, both of whom went to the hospital to 
identify Mr. Foster's body. After Mr. Kennedy confirmed Mr. 
Foster's identity at the hospital, he called White House Chief 
of Staff Mack McLarty, Counsel Bernard Nussbaum, and Associate 
Attorney General Webster Hubbell.324
    Sergeant Braun and Detective Rolla made plans to notify the 
Foster family and were requested to pick up David Watkins, 
Assistant to the President for Management and Administration, 
to assist in the notification.325 They arrived at the 
Foster residence between 10:00 p.m. and 10:30 p.m.326 A 
few minutes later, Webster Hubbell, his wife, and Mr. Foster's 
sisters, Sharon Foster and Sheila Anthony, arrived at the 
Foster home.327 While the friends and relatives waited on 
the lawn, Sergeant Braun and Detective Rolla informed Mrs. 
Foster and her daughter Laura of Mr. Foster's death.328 
The friends rushed to console the visibly upset family.
    Park Police investigators were still attempting to continue 
their investigation. Typically, the death notification involves 
an attempt to determine whether there was evidence of foul play 
and to ask the family about the victim's finances, mental 
state, domestic relations, health problems, and use of 
medication.329 After a brief interview yielded no useful 
information,330 Detective Rolla asked Mrs. Foster to look 
for a note or anything out of the ordinary and to contact the 
police if she found anything.331 At approximately 11:00 
p.m., President Clinton arrived at the Foster residence. 
Feeling that they would get no further information from the 
family, Sergeant Braun and Detective Rolla left shortly 
thereafter, at about 11:10 p.m.332

C. The White House ignores repeated Park Police requests to seal Mr. 
        Foster's office

    As Sergeant Braun was leaving the Foster residence after 
the President arrived on July 20, she pulled David Watkins 
aside and asked him to seal Mr. Foster's office. Because the 
investigators did not find, at Fort Marcy or at the Foster 
home, a note or any other evidence indicating why Mr. Foster 
might have taken his own life, they considered Mr. Foster's 
White House office, the last known place where he was seen 
alive, to be a part of the overall crime scene.333 
Sergeant Braun testified that, from the investigation of the 
death scene and the interviews with the Foster family, the Park 
Police ``did not get any information that would confirm that 
Mr. Foster was depressed or had even discussed the possibility 
of committing suicide with any of his friends or relatives.'' 
334 Mr. Foster's office, therefore, became highly relevant 
to the investigation. ``So I felt that that may be a place 
where Mr. Foster may have left a note, would be at his office, 
maybe for his co-workers to find rather than for his wife.'' 
335 Detective Rolla agreed with Sergeant Braun: ``And 
then, having not been able to get any information as to his 
state of mind from the family, no knowledge that they had found 
a note or anything, his place of business becomes the next 
logical place to go, as I said earlier.'' 336 The Park 
Police believed that Mr. Watkins, who had provided the officers 
with a White House business card indicating that he was 
``Assistant to the President for Management and 
Administration,'' 337 possessed the authority to direct 
that Mr. Foster's office be sealed.338
    Once the Park Police determined that the focus of their 
investigation should shift to Mr. Foster's office, the police 
sought ``to preserve [the office] in the condition that he left 
it.'' 339 According to Sergeant Braun, Mr. Watkins agreed 
to secure Mr. Foster's office. 340 Detective Rolla 
corroborated Sergeant Braun's recollection:

        She asked him to secure the office because we knew the 
        situation was that we weren't going to be able to be in 
        there that night. And just to have things maintained, 
        we wanted it secured until such time as higher 
        officials could get in there and be gone through 
        properly.341

    Mr. Watkins denied that the Park Police asked him to take 
steps to seal Mr. Foster's office.342
    Major Robert Hines of the Park Police learned of Mr. 
Foster's death at approximately 9:45 p.m. on July 20.343 
Lieutenant Gavin, the shift commander, called to request that 
Major Hines contact Deputy Assistant to the President William 
Burton.344 Major Hines then called Mr. Burton and 
requested that he seal Mr. Foster's office. ``We needed to go 
into the office and look for any kind of reasons or intention 
that Mr. Foster may have to commit suicide.'' 345 To 
ensure that such a search would be fruitful, the office should 
not be contaminated. ``I would expect when we said seal the 
office, that the office would be closed, it would be secured 
and no one would be entering the office.'' 346 Sylvia 
Mathews, a White House aide, confirmed that she overheard a 
conversation between Mr. Burton and the Park Police that 
evening.347 Following the conversation, Mr. Burton asked 
Mr. Nussbaum to seal Mr. Foster's office. 348 Ms. Mathews' 
contemporaneous notes of the evening stated: ``At that point, 
Bill said we should get Bernie and lock the office. I am 
uncertain what time that was, but probably after 10:00 p.m. I 
don't remember who told Bernie, but he went up and locked the 
office.'' 349
    Notwithstanding the testimony of Major Hines and Ms. 
Mathews, Mr. Burton and Mr. Nussbaum denied that they had been 
asked to seal Mr. Foster's office.350
    Both Webster Hubbell's wife and Marsha Scott, a White House 
official and a friend of the Hubbells, remembered that Mr. 
Hubbell called either David Watkins or Mack McLarty on the 
night of Mr. Foster's death to request that his office be 
sealed.351 In a press briefing several days later, Dee Dee 
Myers identified Mr. McLarty as the person who directed that 
Mr. Foster's office be sealed.352
    David Gergen testified that, after leaving the Foster 
residence, he went to the White House at around 
midnight.353 In the White House kitchen, he and Mr. 
McLarty discussed sealing Mr. Foster's office.354 Mr. 
Gergen then spoke by telephone with Mark Gearan, the White 
House Communications Director. He asked Mr. Gearan, who was in 
his office on the first floor of the West Wing, whether the 
office had been sealed. According to Mr. Gergen, Mr. Gearan 
checked, and ``[h]e came back to me and said, yes, the office 
has been sealed.'' 355 Mr. Gearan testified that, when Mr. 
Gergen asked him whether Mr. Foster's office was locked, he 
asked Mr. Burton about it. Mr. Burton told Mr. Gearan that the 
office was locked, and Mr. Gearan relayed this information to 
Mr. Gergen.356
    Mr. Burton did not recall this conversation.357
    Even though White House officials had received several 
requests from law enforcement and an internal White House 
request, Mr. Foster's office was not sealed on the evening of 
July 20.

D. Mrs. Clinton learns of Mr. Foster's death and begins to contact 
        close associates

    After learning of Mr. Foster's death, Mr. McLarty called 
Hillary Clinton, who was travelling from Los Angeles to 
Arkansas that evening. Mrs. Clinton's plane landed in Little 
Rock at approximately 8:30 p.m. Eastern Daylight Time.358 
Mrs. Clinton then proceeded to her mother's home in Little 
Rock. Between 9:00 p.m. and 10:00 p.m., a Secret Service agent 
told Lisa Caputo, Mrs. Clinton's press secretary, that Mr. 
McLarty was calling by telephone.359 Mr. McLarty then told 
Ms. Caputo that he needed to speak privately to Mrs. Clinton. 
When Mrs. Clinton came on the line, Mr. McLarty informed her of 
Mr. Foster's death.360 Mr. McLarty confirmed that he 
notified Mrs. Clinton some time after 9:00 p.m., after her 
plane landed in Arkansas.361
    Margaret Williams, Mrs. Clinton's chief of staff, testified 
that she received two phone calls from Mrs. Clinton on the 
evening of July 20. ``The first call she was on the plane and 
said that--she must have called through Signal because I 
thought she said are you at home. And she said are you going to 
be there, and I said yes. And she said I will call you when I 
land.'' 362 After the plane landed, Mrs. Clinton called 
Ms. Williams again and informed her of Mr. Foster's 
death.363 Telephone records from the Rodham residence 
confirm that Mrs. Clinton called Ms. Williams on July 20 at 
10:13 p.m. Eastern Daylight Time and spoke for 16 
minutes.364 It was the first telephone call that Mrs. 
Clinton made after learning of Mr. Foster's death.
    The Rodham residence telephone records indicate that, after 
talking with Ms. Williams, Mrs. Clinton called the residence of 
Harry Thomason and Susan Bloodworth-Thomason in Carpinteria, 
California, for four minutes.365 Mr. Thomason, a long-time 
friend of the Clintons, was involved in the Travel Office 
affair that apparently weighed heavily on Mr. Foster's mind at 
the time of his death. Mrs. Clinton next called Susan Thomases 
in New York and spoke for 20 minutes. Ms. Thomases, who had 
played a key role in Whitewater damage control during the 1992 
presidential campaign, testified that she and Mrs. Clinton 
commiserated each other about Mr. Foster's death, and that they 
did not discuss the handling of papers in Mr. Foster's 
office.366

E. Mrs. Clinton calls the White House on an unlisted trunk line

    Mrs. Clinton next called the number 202-628-7087 and spoke 
for 10 minutes.367 The Committee was forced to go to 
considerable lengths to identify to whom Mrs. Clinton placed 
this call. Counsel for Mrs. Clinton and the White House 
represented to the Special Committee that, despite undertaking 
every effort available, they were unable to determine the 
identity of the person whom Mrs. Clinton called at 202-628-
7087. The telephone company also could not identify the person 
or entity registered to that number.11
---------------------------------------------------------------------------
    \11\ The Special Committee on September 15, 1995, issued a subpoena 
to Bell Atlantic requesting identification of the person or entity 
registered to that number. On September 27, 1995, the phone company 
replied with records indicating that the number was not registered as 
in service on July 20, 1993. After additional review, Bell Atlantic 
advised the Special Committee on November 28, 1995, that it was unable 
to determine to whom 202-628-7087 was registered in July 1993. 
Representatives of the telephone company speculated that the number may 
have been an auxiliary number for which it did not maintain separate 
billing records, or that the number may have been confidentially 
assigned to the White House for secured use. Similarly, the White House 
advised the Special Committee on November 15 and November 28, 1995, 
that it was unable to identify the person whom Mrs. Clinton called on 
July 20, 1993.
---------------------------------------------------------------------------
    On November 30, 1995, the Special Committee then issued a 
set of interrogatories to Mrs. Clinton, exploring her knowledge 
and recollection of the identity of the person or persons she 
called at 202-628-7087.12 On December 7, 1995, Mrs. 
Clinton submitted a sworn affidavit to the Special Committee, 
attesting that ``I do not remember calling the number 202-628-
7087 that evening. I understand that the number is an auxiliary 
White House switchboard number. It would not surprise me to 
learn that I had placed a call to the White House that 
evening.''
---------------------------------------------------------------------------
    \12\ On December 5, 1995, Chairman D'Amato wrote to the White House 
that ``[t]he Special Committee now has reason to believe that the 
number may have been used by the White House Communications Agency as a 
secure telephone line.''
---------------------------------------------------------------------------
    On December 7, 1995, the White House advised the Special 
Committee that ``the telephone number (202) 628-7087 was an 
unlisted trunk line that rang on the White House switchboard. . 
. . The number was also used as a means to get through to the 
White House when the switchboard was overloaded, and may have 
been provided to certain individuals for the purpose.''
    The White House further advised that ``we understand that 
Bill Burton remembers receiving a call in the Chief of Staff's 
office from Mrs. Clinton on the evening of July 20 and speaking 
with her about Vincent Foster's death.'' Tellingly, Mr. Burton 
had omitted this conversation when he first testified before 
the Committee. In his second appearance, Mr. Burton testified 
with a refreshed recollection:

          I was in Mr. McLarty's private office most of the 
        evening, and at some point that night I received a call 
        from the First Lady. I don't remember if I answered the 
        phone or if Ms. Mathews answered the phone and 
        transferred the call in to me or if someone else 
        answered the phone and transferred the call into me. I 
        don't remember who called.
          It was the First Lady, and we had a personal 
        conversation about Mr. Foster's death, and it lasted 
        about 10 or 15 minutes to the best of my 
        recollection.368

    Sylvia Mathews, who was in the Chief of Staff's office with 
Mr. Burton, did not recall observing Mr. Burton speaking on the 
telephone with Mrs. Clinton, nor did he discuss with her at any 
time about his conversation with Mrs. Clinton. She testified 
that ``I was away from the desk, as we discussed previously, 
several times.'' 369
    After calling the White House, Mrs. Clinton called Carolyn 
Huber.370 Ms. Huber, Assistant to the First Lady and 
Director of White House Correspondence, was the former 
administrator of the Rose Law Firm and would later discover in 
the White House Residence the long-missing Rose Law Firm 
billing records reflecting its work for James McDougal's 
Madison Guaranty. Mrs. Clinton spoke with Mrs. Huber for four 
minutes, and then called a family member in Washington, 
D.C.371 In her seventh and final call of the night, Mrs. 
Clinton called the President at 1:09 a.m. in the White House 
Residence and spoke to him for 13 minutes.372

F. Helen Dickey's telephone call to the Arkansas governor's mansion

    Helen Dickey worked for Governor Clinton in Arkansas as the 
assistant to the governor's mansion administrator.373 She 
became staff assistant to the White House Social 
Secretary.374 Between January 1993 and November 1994, Ms. 
Dickey lived in a suite of rooms in the northeast corner of the 
third floor of the White House Residence.
    Ms. Dickey testified that, on July 20, 1993, she returned 
to the White House Residence some time between 6:00 p.m. and 
8:00 p.m. and went to her rooms.375 Records maintained by 
the Secret Service indicate that Ms. Dickey entered the White 
House Residence at 7:32 p.m.376 She left her suite at some 
point to go to the solarium, also on the third floor, to watch 
the President's appearance on Larry King Live. The show started 
at 9:00 p.m.377 At some point during the show, John 
Fanning, a White House doorman, entered the solarium and told 
Ms. Dickey that Mr. Foster had committed suicide.378
    Ms. Dickey, visibly shaken, went to the second floor 
kitchen and called her mother from the kitchen telephone. After 
talking with her mother for two to three minutes, Ms. Dickey 
called her father, who lived in a suburb of Atlanta, 
Georgia.379 She then went back up to the third floor and, 
at some point, returned to the second floor kitchen to find the 
President, who had finished his interview with Larry 
King.380 The President told Ms. Dickey that ``Vince Foster 
had shot himself in a park.'' 381 After her two to three 
minute conversation with the President, Ms. Dickey returned to 
the third floor. Ms. Dickey made three calls from the telephone 
in the hallway of the third floor of the Residence. One call 
went to Ann Stock, Ms. Dickey's former supervisor as the 
Arkansas Governor's Mansion administrator, and another went to 
Ann McCoy, her supervisor as the White House Social 
Secretary.382 She talked to each for no more than five 
minutes.383
    Ms. Dickey then placed the third telephone call to the 
Arkansas Governor's Mansion at 501-376-6884.384 Roger 
Perry, an Arkansas State Trooper on duty at the mansion, 
answered the telephone. Ms. Dickey testified that she stated to 
Trooper Perry: ``I called just to let you know that Vince 
Foster has committed suicide. I just wanted you all to know 
before you heard it on the news.'' 385 According to Ms. 
Dickey, Trooper Perry ``showed signs of being shocked and being 
very sad.'' 386 The entire conversation lasted 
approximately two to three minutes.387 Her best estimate 
of the time of the call to the Governor's Mansion was 10:30 
p.m. Eastern Daylight Time.388
    During its investigation, the Special Committee received an 
affidavit from Roger Perry. In relevant part, the affidavit 
stated:

          On the 20th day of July, 1993, I received a telephone 
        call from a person known to me as Helen Dickey. I was 
        working in the security detail at the Arkansas 
        Governor's mansion in Little Rock, Arkansas at that 
        time. Dickey advised me that Vincent Foster, well knew 
        [sic] to me had gotten off work and had gone out to his 
        car in the parking lot and had shot himself in the 
        head. I do not recall the exact time of this telephone 
        call but am fairly certain it was some time from about 
        4:30 p.m. to no later than 7:00 p.m. [Central Daylight 
        Time]

    The Special Committee also received affidavits from Larry 
Patterson and Lynn Davis, also of the Arkansas State Police. 
Trooper Patterson stated that he had received a telephone call 
from Trooper Perry on July 20, 1993. Trooper Perry told him 
that Ms. Dickey had called and said Vincent Foster ``had gotten 
off work and had gone out to his car in the parking lot and 
shot himself in the head.'' Trooper Patterson did not recall 
the exact time of Trooper Perry's telephone call but was 
``fairly certain it was some time before 6:00 p.m.'' Central 
Daylight Time. Captain Davis likewise stated in his affidavit 
that Trooper Perry called him on July 20, 1993, to say that Ms. 
Dickey had called him and said that Vincent Foster ``had gone 
to his car on the parking lot and had shot himself in the 
head.'' According to Captain Davis, ``I estimate the time as 
being no later than six o'clock, Central Standard [sic] Time.''
    To resolve the discrepancy between Ms. Dickey's testimony 
and the sworn affidavits of Messrs. Perry, Patterson and Davis, 
the Special Committee attempted to obtain records of telephone 
communications between the White House and the Arkansas 
Governor's Mansion on July 20, 1993. The White House advised 
that ``no such call was made from the private telephone lines 
in the Executive Residence.'' 389 The call may have been 
placed, however, through the White House or Signal switchboard. 
Ms. Dickey testified that she recalled placing the call through 
the White House operator.390 On October 13, 1995, White 
House advised that ``[w]e have obtained records of long-
distance calls placed through the Signal switchboard, and have 
confirmed that no call to the Governor's Mansion was made 
through the Signal switchboard on July 20, 1993.'' 391 The 
White House also advised that Sprint, the provider of long 
distance service through the White House switchboard, did not 
retain records of individual long-distance telephone 
calls.392
    After additional inquiries, the Special Committee 
discovered that the White House was mistaken. Sprint indeed 
retained some records of individual telephone calls placed 
through the White House switchboard. The Special Committee thus 
issued a subpoena on November 20, 1995, to obtain such records 
and was initially advised that the records reflected the 
destination number to which a telephone call was placed, but 
not the extension in the White House from which the call 
originated.393 Sprint subsequently advised that its 
records only reflect the first six digits of the destination 
number, that is, the area code and prefix, and not the last 
four digits of the destination number.394 Because the 
Governor's mansion does not have an exclusive prefix, it is not 
possible to determine from the records produced by Sprint to 
the Special Committee when Ms. Dickey placed the phone call.
    After further inquiry by the Special Committee, however, 
the White House advised that ``[w]e have confirmed that a call 
to Ms. Dickey's father's telephone number in Georgia was made 
at 10:06 p.m. on July 20, 1993, from one of the private lines 
in the Residence.'' 395 Ms. Dickey testified that she 
called her father before calling the Arkansas Governor's 
mansion.396 Ms. Dickey also denied that she told the 
troopers that Vincent Foster had gone to his car in the parking 
lot and shot himself in the head. According to Ms. Dickey: 
``That's absolutely not true. . . . I never heard that, I never 
would have said that because that's not the facts as I knew 
them at that time. I'm absolutely positive of the timing of 
this.'' 397

G. The handling of trash and burn bags in Mr. Foster's office

    During the course of the evening, Sylvia Mathews determined 
that she should retrieve the trash from Mr. Foster's office in 
case it contained evidence relevant to his death. According to 
Ms. Mathews, ``I consulted with senior staff around and said 
should we examine the contents and was told--I don't remember 
the exact words or who said what, but generally encouraged to 
go ahead and look through the trash.'' 398 Ms. Mathews 
specifically recalled Bill Burton being present for this 
discussion.399 The trash had already been collected by the 
cleaning staff, but Ms. Mathews retrieved it. After locating 
what she believed to be Mr. Foster's trash, Ms. Mathews 
prepared an inventory and found nothing significant.400 At 
Bill Burton's request, she placed the trash in the office of 
Roy Neel, the Deputy White House Chief of Staff.401 Mr. 
Nussbaum testified that Ms. Mathews asked him if she should 
recover the trash from Mr. Foster's office. He then told her to 
go ahead and to store the trash in Roy Neel's office.402
    Ms. Mathews also wanted to recover Mr. Foster's burn bag. 
The burn bag, a receptacle used for sensitive materials to be 
destroyed, is collected daily by the Secret Service. Secret 
Service officer Henry P. O'Neill was responsible for emptying 
the individual burn bags into a larger burn bag to be 
processed.403 Officer O'Neill testified that he brought 
this co-mingled burn bag, which contained the papers of several 
offices, to the Chief of Staff's suite and gave it to Ms. 
Mathews. Officer O'Neill believed that this bag did not contain 
anything from the White House Counsel's suite or from Vincent 
Foster's office.404 When he had gone to empty the burn 
bags in the counsel's suite with the cleaning staff earlier 
that evening, he had been interrupted by Bernard Nussbaum 
entering the suite.405 Officer O'Neill never had a chance 
to empty the burn bags, because the suite was occupied that 
evening.
    Bill Burton then instructed Ms. Mathews to check with Mr. 
Nussbaum before examining the contents of the co-mingled burn 
bags.406 Mr. Nussbaum told Ms. Mathews that Mr. Foster's 
office did not have a burn bag.407 Mr. Nussbaum instructed 
Ms. Mathews to return the burn bag because it contained 
materials co-mingled from other offices in the White 
House.408 Ms. Mathews then returned the bag to Officer 
O'Neill and told him to proceed as usual.409 Mr. Nussbaum 
did not recall discussing the burn bag with Ms. 
Mathews.410

H. Senior White House officials conduct a late-night search of Mr. 
        Foster's office

    Even though the Park Police made two requests to seal Mr. 
Foster's office, three White House senior officials conducted a 
search of his office on the night of July 20.
    Patsy Thomasson, David Watkins' deputy, received the 
following message on her pager at 10:34 p.m. on July 20: 
``PLEASE PAGE DAVID WATSKINS [sic] WITH YOUR 
LOCATION''.411 Ms. Thomasson was at Sequoia Restaurant, 
minutes from the Foster residence in Georgetown. When Ms. 
Thomasson reached Mr. Watkins, he told her that Mr. Foster was 
dead.412 Ms. Thomasson then asked him, ``[I]s there 
anything I can do to help? Do I need to be where you are? What 
do I need to do?'' 413 Rather than asking Ms. Thomasson to 
take steps to seal Mr. Foster's office, as the Park Police had 
specifically requested Mr. Watkins to do, he instructed Ms. 
Thomasson to go into Mr. Foster's office at the White House to 
look for a suicide note.414 Ms. Thomasson arrived at the 
White House at 10:48 p.m.415
    White House Counsel Bernard Nussbaum was finishing dinner 
at Galileo's, a restaurant several minutes from the White 
House, when he was paged by the White House on July 20. When he 
returned the page, Mark Gearan told him that Mr. Foster was 
dead.416 Mr. Nussbaum went directly to the White 
House,417 where he encountered the President and Mack 
McLarty on their way to the Foster residence.418 According 
to Mr. Nussbaum, he then went to his office to make telephone 
calls to notify his staff of Mr. Foster's death. At about 10:45 
p.m., Mr. Nussbaum reached the White House Counsel's suite, 
where both his office and Mr. Foster's office are located. On 
his way there, ``it occurred to me that perhaps Vince left a 
note telling us why he had taken his life.'' 419
    Margaret Williams, Chief of Staff to the First Lady, 
testified that she received the news of Mr. Foster's death from 
Mrs. Clinton. Telephone records indicated that this call came 
at 10:13 p.m. Eastern Daylight Time and lasted 16 minutes. When 
she hung up with Mrs. Clinton, Ms. Williams called her mother 
420 and Evelyn Lieberman, her assistant.421 Ms. 
Lieberman, who lived near Ms. Williams, went to Ms. Williams' 
house and drove her to the White House. Ms. Williams did not 
recall why she went to the White House beyond the fact that ``I 
just knew everybody else would be there.'' 422 When the 
two arrived at the White House, Ms. Williams asked Ms. 
Lieberman to remain in the foyer of Mrs. Clinton's office to 
answer the phones. Ms. Williams went to Mr. Gearan's office to 
review a press statement and then went to her own office, which 
was down the hall from Mr. Foster's office, to get a copy of 
Mrs. Clinton's schedule.

          All evening, I had been avoiding looking in the 
        direction of Vince's office as I entered and left the 
        First Lady's suite. But in a strange way, when I saw 
        the light on in his office, I had this hope, albeit 
        irrational, that I would walk in and I would find Vince 
        Foster there and we would have a chat sitting on his 
        couch, as we have done so many times before.423

    Ms. Thomasson, Mr. Nussbaum, and Ms. Williams all admitted 
that they entered Mr. Foster's office on the evening of July 
20. Their stories fall apart after that. Each provided 
testimony that was inconsistent with the other two. And, their 
testimony was contradicted the testimony of career Secret 
Service officer Henry P. O'Neill, the watch officer for that 
evening, and contemporaneous Secret Service records.
    Ms. Thomasson testified that, after placing her personal 
belongings in her office, she went to the second floor on the 
West Wing of the White House.424 There, she encountered 
Mr. Nussbaum in the hallway and told him that Mr. Watkins had 
asked her to look for a suicide note in Mr. Foster's 
office.425 She and Mr. Nussbaum then walked together into 
Mr. Foster's unsecured office.426 The cleaning lady was 
leaving the suite as Mr. Nussbaum and Ms. Thomasson 
entered.427 Ms. Thomasson then did a quick search for a 
note. ``I sat at Vince's desk, opened the drawers to the desk 
to see if there was anything that looked like a suicide note. I 
looked in the top of his briefcase, which was sitting on the 
floor. I didn't see anything.'' 428 According to Ms. 
Thomasson, Mr. Nussbaum walked out for a moment, and Ms. 
Williams came in and began to cry on the couch.429 After a 
few minutes Ms. Williams left the office. Mr. Nussbaum then 
came back in the office and suggested that they ``probably 
should get out of here at that point.'' 430 Ms. Thomasson 
and Mr. Nussbaum then left Mr. Foster's office 
together.431 She then paged Mr. Watkins, at 11:36 p.m., to 
report that she had found no note in Mr. Foster's 
office.432
    Mr. Nussbaum offered a markedly different recollection. 
When he reached the Counsel's suite at around 10:45 p.m., the 
door was open. He did not arrive with Ms. Thomasson, as Mr. 
Thomasson has claimed. Instead, Ms. Thomasson and Mr. Williams 
were already in Mr. Foster's office. Ms. Williams was sitting 
on the sofa crying, and Ms. Thomasson was sitting behind Mr. 
Foster's desk. They told Nussbaum that they had just arrived, 
and Ms. Thomasson told Mr. Nussbaum that she was searching for 
a suicide note. According to Mr. Nussbaum, ``Patsy and I 
checked the surfaces in Vince's office. We opened a drawer or 
two looking for a note. . . . The three of us then left the 
office.433 He claimed that the search lasted no more than 
ten minutes,434 13 and that the three then left Mr. 
Foster's office together.435 Mr. Nussbaum then went next 
door to his office to make some phone calls.14 When he 
left about an hour later, he locked and alarmed the Counsel's 
suite.436
---------------------------------------------------------------------------
    \13\ However, a Park Police report of an interview with Mr. 
Nussbaum on July 22, 1993, noted that Mr. Nussbaum stated the search 
for a suicide note with Patsy Thomasson lasted from 2200 hours to 2400 
hours. Park Police Document 29.
    \14\ Mr. Nussbaum testified that although he does not remember, he 
``might have gotten up and walked out and come back.'' Nussbaum, 7/12/
95 Dep. p. 38.
---------------------------------------------------------------------------
    Ms. Williams contradicted the testimony of both Ms. 
Thomasson and Mr. Nussbaum. She testified that when she entered 
Mr. Foster's office, Ms. Thomasson was already sitting at Mr. 
Foster's desk. Ms. Williams sat on the couch and commiserated 
with Ms. Thomasson. Mr. Nussbaum entered the office later, 
obviously upset. 437 After a brief time in the office, Mr. 
Nussbaum left, and Ms. Williams followed shortly 
thereafter.438 According to Ms. Williams, Ms. Thomasson 
remained in the office after both Mr. Nussbaum and Ms. Williams 
left.439
    Ms. Thomasson, Mr. Nussbaum, and Ms. Williams thus differed 
as to the critical sequence of entries into and exits from Mr. 
Foster's office on the evening of July 20. Ms. Thomasson 
testified that she entered and exited Mr. Foster's office 
together with Mr. Nussbaum and suggested that at no time was 
she alone in the office.15 Mr. Nussbaum testified that he 
entered Mr. Foster's office after Ms. Thomasson and Ms. 
Williams; the three left the office together; and, after 
stopping by his office to make some phone calls, Mr. Nussbaum 
locked and alarmed the suite. Ms. Williams testified that she 
entered after Ms. Thomasson and before Mr. Nussbaum, and that 
she exited shortly after Mr. Nussbaum, leaving Ms. Thomasson 
alone again in the office.
---------------------------------------------------------------------------
    \15\ The only possible exception may be the brief moment when, 
according to Ms. Thomasson, Ms. Williams left and Mr. Nussbaum entered 
the office for the second time.
---------------------------------------------------------------------------

I. Secret Service Officer Harry O'Neill observes Margaret Williams 
        remove documents from Mr. Foster's office

    Henry P. O'Neill joined the Secret Service Uniformed 
Division in 1977 and has been assigned to the White House since 
May of that year. On the evening of July 20, 1993, he arrived 
at work at 6:30 p.m., several hours before his scheduled shift 
at 10:30 p.m., in anticipation of some voluntary overtime 
hours. He made his regular rounds with the cleaning 
staff.440 He accompanied the cleaning staff to the White 
House Counsel's suite and disarmed the alarm at 10:42 
p.m.441 As he reached the door of the suite, Officer 
O'Neill made a radio call to the uniformed division control 
center. The center acknowledged the call, and Officer O'Neill 
unlocked the door and entered.442 ``I flip the light 
switch on in the reception area. Then I walk to the right into 
Mr. Foster's--at that time, the deputy counsel's office, and 
behind the doorway there's an alarm switch, and you just flip 
the switch into access or open.'' 443 He then let the 
cleaning crew in.
    Officer O'Neill proceeded into Mr. Nussbaum's office and 
checked the burn bag.444 He did not check Mr. Foster's 
office for a burn bag because as he walked back into the 
reception area, ``I recognized Mr. Nussbaum as I turned to the 
right. He walked into his office, and just about the same time 
I noticed other figures walk in behind him and I heard women's 
voices. And so I directed the cleaning ladies to exit the 
suite, and I left the suite also.'' 445 16 Officer O'Neill 
could not identify exactly who, or how many people were 
accompanying Mr. Nussbaum into the suite. He was certain, 
however, that he heard women's voices and that Mr. Nussbaum was 
not alone as he entered the suite. The Secret Service officer 
then left the Counsel's suite and walked to the legislative 
affairs office. He was on his way back to alarm the Chief 
Counsel's suite when he ran into Howard Pastor, the Assistant 
to the President for Legislative Affairs, who informed him of 
Mr. Foster's death. As Officer O'Neill approached the Counsel's 
suite he saw Ms. Lieberman, Ms. Williams' assistant, leaving 
the suite.446 She asked Officer O'Neill to lock up the 
office. He replied that he would take care of it.447 
Officer O'Neill then rode the elevator with Ms. Lieberman down 
to the ground floor to inform his supervisor of Mr. Foster's 
death. While he was on the phone, he overheard Ms. Lieberman 
asking Officer James Shea to ensure that the Counsel's suite 
was locked.448 Officer O'Neill told Shea that he knew of 
the request and would secure the office.449
---------------------------------------------------------------------------
    \16\ The standard procedure for the cleaning staff was to exit 
whenever a White House staff member enters his or her office. S. Hrg. 
7/26/95 p. 13.
---------------------------------------------------------------------------
    When Officer O'Neill returned to secure the White House 
counsel's suite, he found Patsy Thomasson sitting behind Vince 
Foster's desk.17 He ``stopped in the doorway immediately 
walking into the office because as I looked to the left there 
was a woman sitting at the desk.'' 450 Officer O'Neill 
went back to the first floor. He returned to the Counsel's 
suite for a third time and again saw Ms. Lieberman coming out 
of the counsel's suite. She asked him again to lock Mr. 
Foster's office. According to Officer O'Neill:

    \17\ Officer O'Neill initially did not know who Ms. Thomasson was, 
but later identified her. O'Neill, 7/26/95 Hrg. p. 19.
---------------------------------------------------------------------------
        And then a few seconds after I saw her [Lieberman] come 
        out, Mr. Nussbaum walked out behind her and walked 
        through the hallway towards the stairs, past the 
        elevator, and within a few more seconds I saw Maggie 
        Williams walk out of the suite and turn to the right in 
        the direction that I was standing.451

    As Ms. Williams walked past Officer O'Neill to her office 
Ms. Lieberman told him `` `that's Maggie Williams; she's the 
First Lady's chief of staff.' '' 452
    Officer O'Neill observed Ms. Williams carrying file folders 
out of the Counsel's suite when he saw her on the night of Mr. 
Foster's death:

          She was carrying what I would describe in her arms 
        and hands, as folders. She had them down in front of 
        her as she walked down to her--in the direction of 
        where I was standing.
          She walked past me, and she continued on down the 
        hallway. It's only about 20 feet at the most. And she 
        started to enter her office, and she had to brace the 
        folders in her arm on a cabinet, and then she entered 
        the office and came out within a few seconds and locked 
        the door.453

    The folders were of ``some weight, 3 to 5 inches.''454 
Officer O'Neill was certain that he saw Ms. Williams carrying 
folders out of the Counsel's suite that evening.455 After 
leaving the folders in her office, Ms. Williams joined Ms. 
Lieberman outside of the counsel's suite.456 Officer 
O'Neill then locked and alarmed the suite and joined the two 
women on the elevator.457
    Ms. Lieberman, Ms. Williams and Mr. Nussbaum each denied 
removing any documents, or seeing anyone removing documents, 
from Mr. Foster's office on the night of his death.18
---------------------------------------------------------------------------
    \18\ Ms. Williams' attorney submitted an affidavit stating that he 
``arranged to have Ms. Williams polygraphed'' by a private polygrapher. 
Anderson, 7/31/95 Dep. Exh. 1. The affidavit represented that this 
private ``examination confirmed that Ms. Williams was truthful in her 
assertion that she did not remove any documents from Mr. Foster's 
office on the night of his death.'' Anderson, 7/31/95 Dep. Exh. 1. 
After receiving the favorable results from her private polygrapher, Ms. 
Williams then offered to submit to a polygraph examination on the same 
subject by the Office of the Independent Counsel. According to Ms. 
Williams' attorney, the Independent Counsel's polygrapher advised him 
at the conclusion of the test that ``Ms. Williams was truthful in her 
assertion that she did not remove any documents from Mr. Foster's 
office on the night of his death.'' Anderson, 7/31/95 Dep. Exh. 1.
---------------------------------------------------------------------------
    Mr. Nussbaum testified that after he left Mr. Foster's 
office together with both Ms. Thomasson and Ms. Williams, he 
proceeded to his office to make some telephone calls and then 
locked and alarmed the Counsel's suite when he left. This 
testimony was contradicted by the White House alarm logs 
maintained by the Secret Service for July 20, 1993, which 
showed that Officer O'Neill alarmed the counsel's suite at 
11:41 p.m.458 19
---------------------------------------------------------------------------
    \19\ Mr. Nussbaum explained that, although he locked and alarmed 
the suite, he did not remember calling the Secret Service to report 
that he had done so. Thus, ``you can lock the office and turn on the 
alarm without making that call. And if you do it without making that 
call, they may get, the Secret Service log may get the wrong name.'' 
Nussbaum, 8/10/95 Hrg. p. 125. This explanation is unpersuasive. It 
fails to explain why Officer O'Neill was identified on Secret Service 
logs as the person who set the alarm in the Counsel's suite--a position 
consistent with Officer O'Neill's testimony.
---------------------------------------------------------------------------
    Curiously, after Ms. Williams left the White House, she 
called Mrs. Clinton in Little Rock at 12:56 a.m. on the morning 
of July 21, and they spoke for 11 minutes. Ms. Williams claimed 
that she did not tell Mrs. Clinton about her search of Mr. 
Foster's office.459 Although Ms. Williams testified that 
she did not recall talking to Susan Thomases on the evening of 
Mr. Foster's death,460 telephone records obtained by the 
Special Committee indicated that, upon ending her conversation 
with Mrs. Clinton, Ms. Williams called Ms. Thomases at 1:10 
a.m., and they spoke for 14 minutes.461 Of her 
conversation with Ms. Williams, Ms. Thomases testified: ``I 
don't recollect speaking with her that night. That's not to say 
that she didn't call me back and I didn't speak to her, but I 
have no independent recollection of having spoken with her that 
night.''462

                          III. July 21, 1993.

A. Mr. Foster's office is finally sealed

    When Associate Attorney General Webster Hubbell woke up on 
July 21, 1993, he immediately called William Burton, Deputy 
Assistant to the President, and asked him to lock Mr. Foster's 
office.463 In the middle of the night, ``one of the things 
that kept me awake is saying we ought to make sure Vince's 
office is locked.'' 464 Mr. Hubbell wanted to make sure 
that the office was secured and that its contents were 
documented and handled in a ``professional'' manner.465 
When Mr. Hubbell reached Mr. Burton at the White House, some 
time between 7:00 a.m. and 8:00 a.m., Mr. Burton assured Mr. 
Hubbell that White House Chief of Staff Mack McLarty had taken 
steps to seal the office on the previous night.466 Mr. 
Burton did not recall discussing sealing the office with Mr. 
Hubbell,467 although his undated, handwritten notes listed 
``1) Secure office'' near the notation ``Webb'' and Mr. 
Hubbell's home and office phone numbers.468
    Betsy Pond, Bernard Nussbaum's secretary, arrived at the 
White House early in the morning of July 21, at around 7:00 
a.m.469 She then entered Mr. Foster's office, which had 
not been sealed. She followed the routine procedure to disarm 
the alarm for the Counsel's suite.470 Once inside Mr. 
Foster's office, she looked at documents on the coffee table 
and the desk, turned the documents over, and ``smushed them 
together in a pile.''471
    Associate Counsel to the President Stephen Neuwirth 
testified that when he arrived at the White House Counsel's 
suite on July 21, he saw Ms. Pond in Mr. Foster's office. Ms. 
Pond told him that she was straightening out the office, and 
Mr. Neuwirth told her that she should not be in Mr. Foster's 
office.472 Mr. Neuwirth testified that he ``didn't think 
it was appropriate for an assistant to Mr. Nussbaum to be in 
the office at that time.'' 473 Ms. Pond then left Mr. 
Foster's office and called Mr. Nussbaum at home. According to 
Ms. Pond, she told Mr. Nussbaum that she had been in Mr. 
Foster's office, and Mr. Nussbaum told her not to let anyone in 
the office.474 Mr. Nussbaum confirmed this 
conversation.475
    Linda Tripp, Mr. Nussbaum's executive assistant, testified 
that Ms. Pond told her that she went into Mr. Foster's office 
to search for a note:

          She said, ``Well, I just went in there but just to 
        straighten papers.'' And, I said, ``Betsy, why would 
        you have gone in there to straighten papers? We never 
        go into Vince's office to straighten anything.'' She 
        then admitted that she was hysterical, and she was 
        very, very overwrought, and that she had actually been 
        in there looking for a note but that no one was to go 
        in there; and, those were Bernie's strict 
        instructions.476

    At 8:00 a.m., the White House senior staff, which included, 
among others, Messrs. Burton, Gergen, and Nussbaum, attended a 
daily meeting in Mr. McLarty's office.477 Although those 
present at the meeting were fairly certain that they discussed 
Mr. Foster's death,478 none could recall the specifics of 
the discussion. Nor could anyone remember a discussion of the 
investigation into their colleague's death,479 other than 
``that the Park Police would be looking into it.''480 And, 
no one recalled any discussion of sealing Mr. Foster's office 
and preserving its contents.481
    Instead, Mr. Nussbaum testified that, after the daily 
meeting of the White House Counsel's Office at 9:00 a.m., he 
talked with Mr. Neuwirth and Associate Counsel to the President 
Clifford Sloan about securing Mr. Foster's office. Mr. Nussbaum 
realized that ``there would be investigations obviously with 
respect to Vince's death. And under those circumstances, it 
would be best to make sure that the office was secure in 
connection with those investigations.''482 According to 
Mr. Nussbaum, Mr. Neuwirth and Mr. Sloan, the three lawyers 
concluded that Mr. Foster's office should be sealed,483 
and they proceeded to call the Secret Service.484
    While the lawyers deliberated, Linda Tripp had 
independently contacted the Secret Service to arrange for the 
office to be sealed. ``When I first came in the morning and saw 
that it was not secured and Betsy was reacting to her 
situation, I said, `Why is this not secure? Why is there no 
tape? Why is there no guard?' She said, `No one has done that 
yet?' ''485 Ms. Tripp testified that her professional 
background led her to recognize the need to seal the office. 
``I've worked on the covert side of the Department of Defense. 
. . . And, instantly, to me, that made--it made little sense to 
do anything else but ensure that we were not violating--I mean, 
it was obvious a history-making situation that would come to if 
not this end then at least a very visible end. It just didn't 
occur to me not to do that.''486
    So when one of the lawyers emerged from the meeting in Mr. 
Nussbaum's office and said, ` ``Someone better arrange to have 
an agent posted,' '' Ms. Tripp had already made such 
arrangements.487 Donald Flynn, a Secret Service 
supervisor, confirmed that Ms. Tripp had called the 
Presidential Protective Division to request that an officer be 
posted outside Mr. Foster's office.488 Mr. Flynn forwarded 
the request to the uniformed division of the Secret Service 
and, at about 10:10 a.m., took up position outside Mr. Foster's 
office until he was relieved by the uniformed officer.489
    Even after a uniformed officer was posted at the door, 
White House personnel still had access to Mr. Foster's office. 
As Detective Markland testified, ``I came to find out that it 
wasn't exactly sealed but posted, which meant that people had 
access to the office but their comings and goings would be 
recorded by a Secret Service agent.''490 Because the White 
House Counsel's office did not specify that access should be 
limited, Secret Service Agent Flynn instructed the uniformed 
officers not to impede access but simply to record entries into 
the office.

          There really was no understanding as to whether or 
        not people could enter the office or not. I mean, I'll 
        offer this on my own and that was that I instructed the 
        officer that came up there to relieve me that if anyone 
        did enter the office, to jot down the time and the name 
        of who it was and what the purpose was for them going 
        in the office, and then to relay the information to 
        me.491

Thus, the log indicated that at 11:10 a.m., Mr. Nussbaum 
entered the office and removed a small black and white 
photograph.492 Although Thomas Castleton, an intern in the 
White House Counsel's office, testified that he entered Mr. 
Foster's office with Mr. Nussbaum, Castleton's entry was not 
recorded in the log book.493

B. The White House impedes initial Park Police efforts to search Mr. 
        Foster's office

    Based on their various requests the previous night, the 
Park Police assumed that Mr. Foster's office had been sealed. 
Sergeant Braun was under the impression that the office had in 
fact been sealed.494 Similarly, Major Robert Hines had 
spoken with Mr. Burton on the night of July 20 and requested 
that he seal the office, following ``a normal procedure that 
our investigators would ask the Secret Service to do.''495 
Thus, when Major Hines and Park Police Chief Robert Langston 
briefed White House officials on their investigation at a 10:00 
a.m. meeting on July 21, both Major Hines and Chief Langston 
thought that Mr. Foster's office had already been 
sealed.496 In fact, Chief Langston testified that, during 
the 10:00 a.m. briefing, White House officials assured him that 
the office had been sealed the night before, even though it was 
not.497 ``There was acknowledgement, somewhere in that 
meeting, that the office had been sealed and that investigators 
would be conducting interviews of the staff up there that 
morning.''498
    The two Park Police investigators, Captain Hume and 
Detective Peter Markland, arrived at the White House just as 
Major Hines and Chief Langston finished briefing White House 
officials. Detective Markland, who replaced Sergeant Cheryl 
Braun on the case, found out upon his arrival at the White 
House that a uniformed officer had not been posted at Mr. 
Foster's office until the morning following Mr. Foster's death, 
despite contrary assurances to the Park Police. He had a brief 
discussion with Secret Service Inspector Dennis Martin and Mr. 
Nussbaum, and ``even though they were different times and there 
was confusion as to what time somebody was posted and who 
ordered it posted, both of them agreed they had not been posted 
until that morning at some point.'' 499 Given the 
importance of the office to his investigation, Detective 
Markland was upset at the news. ``I was under the impression 
that it was posted the night before, after Mr. Foster was 
identified. So I was upset about that.'' 500 Detective 
Markland and Captain Hume complained to Chief Langston about 
the White House's failure to secure the office. ``[T]hose were 
comments that were just made by Hume or Markland at the time 
that it had not been sealed or wasn't sealed properly, or 
people had been allowed access, or something like that; that 
they had great concerns at the time.'' 501 Those concerns 
prompted Chief Langston to call Robert Bryant, the special 
agent in charge of the Washington field office for the FBI, to 
request an FBI agent to assist the Park Police 
investigators.502
    The Park Police investigators were not permitted to enter 
Mr. Foster's office to search for evidence on July 21. 
According to Secret Service Agent Flynn, he understood that 
Captain Hume and Detective Markland ``were coming over with the 
intent of going into Mr. Foster's office to look for a suicide 
note.'' 503 Secret Service Inspector Martin was assigned 
to escort the investigators ``wherever they needed to go.'' 
504 However, when Agent Flynn encountered the trio later 
in the day, Agent Martin appeared to be ``baby-sitting'' the 
Park Police investigators.505 ``They were waiting with him 
for a time to determine when they could go in Mr. Foster's 
office.'' 506 The investigators had not been allowed 
access to Mr. Foster's office to search for evidence because 
``[t]hey were waiting for approval from Mr. Nussbaum.'' 
507 They waited through the afternoon.508

C. The White House Counsel and Deputy Attorney General agree on a 
        search protocol for the documents in Mr. Foster's office

    Associate Attorney General Webster Hubbell was among those 
who attended the Park Police briefing at the White House in the 
morning of July 21. As they were walking out of the meeting, 
Mr. Hubbell told Mr. Nussbaum that ``he ought to think about 
staying out of this.'' 509 Mr. Hubbell testified that he 
advised Mr. Nussbaum to recuse himself from the investigation 
because ``I knew that there had been issues regarding the 
travel office and whether there should be an independent 
counsel to represent the White House with regard to the travel 
office investigation.'' 510 Mr. Nussbaum replied that he 
wanted to talk to Mr. Hubbell about that later.511 They 
never talked.512
    Some time that afternoon, Mr. Nussbaum spoke with other 
senior officials at the Justice Department. Shortly after the 
Park Police briefing, Mr. Nussbaum decided to ask the Justice 
Department to coordinate the investigation into Mr. Foster's 
death.513 He then called either Attorney General Janet 
Reno or Deputy Attorney General Philip Heymann to make the 
request. According to Mr. Nussbaum, the Justice Department 
replied that the FBI would assist with the investigation. For a 
coordinating function, however, ``they may get other people 
involved.'' 514 Other than this quick response to Mr. 
Nussbaum's request for assistance, Mr. Nussbaum did not recall 
any conversation with anyone about documents in Mr. Foster's 
office until officials from the Justice Department arrived at 
the White House later in the afternoon.515
    Mr. Heymann had a more detailed and markedly different 
recollection of the conversation. Mr. Heymann did not remember 
who initiated this conversation, but suspected that he 
telephoned Mr. Nussbaum after the White House contacted 
Attorney General Reno and she delegated the matter to Mr. 
Heymann. He was immediately aware of the sensitive nature of 
the investigation, based on his experience in the Justice 
Department.516
    According to Mr. Heymann, important legal, political and 
ethical considerations must be balanced in an investigation 
into the death of a senior administration official:

          Number one is I know there's going to be a serious 
        problem with documents because there are serious issues 
        of executive privilege and there are serious issues of 
        law enforcement and they aren't easily reconciled. 
        Number two, I know that there are going to be political 
        attacks and political allegations of cover-up and I 
        know that there's going to be conspiracy theorists. 
        I've been through that regularly and I know that 
        they're out there. . . . That difficulty of reconciling 
        the three, number one and number two, leads to the 
        third, and that is I worry a lot about the Department 
        of Justice retaining the appearance and the reality of 
        absolutely unbiased law enforcement.517

Because of these competing considerations, Mr. Heymann believed 
that any review of documents had to be undertaken jointly by 
law enforcement officials and the White House. ``So we can't 
make the judgment completely ourselves as to what's relevant. 
On the other hand, I don't think it's wise or desirable for the 
White House counsel to decide on his own what is executive 
privilege and what isn't.'' 518
    On the afternoon of July 21, Mr. Heymann and Mr. Nussbaum 
agreed on an appropriate procedure to review the documents in 
Mr. Foster's office. ``I agreed with Mr. Nussbaum on what I 
think, and continue to think, is an entirely sensible plan for 
reconciling these competing interests.'' 519 Career 
Department of Justice officials would review the documents 
jointly with Mr. Nussbaum, but the officials would be allowed 
to see each document to determine its relevance to the ongoing 
investigation:

          I would send over career prosecutors of unimpeachable 
        reputation and rectitude and they would, with him, look 
        at every document in the office. They would look at the 
        heading of its and maybe the first couple of lines, in 
        order to see whether it had any likely relevance or any 
        possible relevance, to Vince Foster's death.520

Although ``agreed'' did not mean that he and Mr. Nussbaum 
entered into a binding contract, Mr. Heymann was certain that 
he and Mr. Nussbaum had reached a meeting of minds on July 21 
on the appropriate review procedure.521 ``I understood it 
to be that we both thought that this was the right way to 
handle what would otherwise be a very difficult and sensitive 
problem.'' 522 He described this procedure to Captain 
Charles Hume of the Park Police that afternoon. According to 
Captain Hume: ``My first impression was that the documents 
would be looked at by the Justice Department attorneys.'' 
523
    Mr. Heymann selected two respected career prosecutors to go 
to the White House to review the documents--Roger Adams, 
Counsel to the Deputy Attorney General, and David Margolis, 
Associate Deputy Attorney General. Mr. Adams, who had been the 
principal ethics official for the criminal division, was, in 
Mr. Heymann's words, ``unbiasable.'' 524 Mr. Margolis, who 
had been chief of the Department's organized crime section, 
``sort of epitomizes the most highly respected career 
prosecutor at this time. There's no more highly respected 
career prosecutor at this time.'' 525
    That afternoon, Mr. Heymann sent Mr. Adams and Mr. Margolis 
to the White House to begin to carry out the document review 
procedure to which he and Mr. Nussbaum had just agreed. ``I 
know we agreed and I know that because I know I sent Adams and 
Margolis over and I even thought the process was going to start 
that afternoon.'' 526 Mr. Margolis corroborated Mr. 
Heymann's recollection:

          To give it the full background, he had called me up 
        from a meeting, and he said, ``I want you to go over to 
        the White House with Roger Adams.'' He said, ``Vince 
        Foster is dead. There's an investigation of it.'' I had 
        seen the headline of that in the newspaper that 
        morning. He said he had reached a tentative agreement 
        with Mr. Nussbaum that Roger and I were to go through 
        at least the first page or two of each document in 
        order to determine whether they were relevant to our 
        investigation. . . . Phil told me that he believed he'd 
        had an agreement in principle with Bernie Nussbaum to 
        do it that way, so I should go finalize it and then 
        begin the search process.527

D. The White House finalizes the agreement on the search protocol

    When Messrs. Adams and Margolis arrived at the White House 
in the late afternoon, at around 5:00 p.m., they went to the 
White House Counsel's suite. There, they met with Mr. Nussbaum, 
other members of the White House Counsel's office, an attorney 
for the Foster family, and officials of the FBI, Park Police, 
and Secret Service.528 The purpose of the meeting was to 
discuss the procedures for the review of documents in Mr. 
Foster's office.
    Mr. Margolis testified that, at the meeting, he and Mr. 
Nussbaum finalized the agreement on how to conduct the search 
the following morning. ``When I got there, I discussed it with 
Mr. Nussbaum. And I believed then and I believe today that we 
finalized that agreement and that we both agreed to it.'' 
529 Roger Adams confirmed that Mr. Nussbaum agreed that 
the Justice Department officials would review the documents for 
relevance and, if the documents were relevant, for possible 
claims of privilege.530 Mr. Adams was certain that an 
agreement had been reached. ``I am not sure how the 
conversation went, but the procedure that I have just outlined 
was what was clearly agreed upon at that meeting on Wednesday 
the 21st.'' 531
    The recollection of the Justice Department officials was 
corroborated by a contemporaneous FBI report.20 After 
summarizing how the FBI became involved in the investigation on 
July 21, the report stated:
---------------------------------------------------------------------------
    \20\ The report was written and submitted to the Director of the 
FBI on July 22, 1993. Although it is not possible from the time stamp 
on the document to determine whether the report was received at around 
9:00 in the morning or in the evening of July 22, the text of the 
report makes clear that it was written prior to any FBI activity at the 
White House on July 22.

          An initial meeting was held with the White House 
        Counsel Bernard Nussbaum at which time it was agreed 
        that the Victim's office, which is located adjacent to 
        Mr. Nussbaum's would continue to be sealed by the U.S. 
        Secret Service (USSS) until 10:00 A.M. on 7/22/93, at 
        which time Margolis and Adams would conduct a 
        preliminary examination of documents within the 
---------------------------------------------------------------------------
        office.532

    When, near the end of the meeting, Mr. Neuwirth stated that 
Mr. Nussbaum alone would review each document for relevance, 
Mr. Adams and Mr. Margolis immediately objected. Mr. Nussbaum 
then intervened, correcting Mr. Neuwirth and stating that the 
Justice Department attorneys would review the documents. 
According to Mr. Margolis:

          When we finished, Mr. Neuwirth on his staff, as I 
        recall, attempted to restate the agreement, and got it 
        what I believe was exactly wrong, and said, ``The way 
        we're going to do it is that Bernie will go through the 
        documents, and he'll give you what is both relevant and 
        non-privileged to review.'' I said that's exactly 
        wrong. We just agreed to the other procedure. And it 
        was my recollection then, and it's my recollection 
        today, that Mr. Nussbaum agreed with me that Mr. 
        Neuwirth was wrong, and that we had that other 
        agreement.533

Mr. Adams recollected the same incident.534
    At Mr. Heymann's request, Roger Adams typed up notes 
summarizing the activities of the Justice Department in 
connection with the Foster investigation. Those notes, prepared 
the following week, confirmed Mr. Margolis' recollection:

          At the Wednesday meeting there was agreement that the 
        Justice Department attorneys would look at each 
        document or at least each file to determine if it 
        contained privileged material, in which case it would 
        not be examined by the Park Police or FBI. We would not 
        read the documents or make notes, but merely examine 
        them long enough to determine if they were covered by 
        the attorney-client privilege or possibly executive 
        privilege. As an example of the clarity of this 
        agreement, Mr. Neuwirth at one point, apparently trying 
        to summarize it, said that ``Bernie would look at each 
        document and determine privilege. If he determined no 
        privilege, it could be shown to the law enforcement 
        officers.'' He was immediately corrected and Mr. 
        Nussbaum agreed that the Justice Department 
        representatives would see the documents to determine 
        privilege.535

    The recollection of Mr. Nussbaum and his associates 
contradicts the testimony of the career Justice Department 
officials and, most importantly, the only contemporaneous 
document--an FBI report--recording what occurred at the 
meeting.
    Mr. Nussbaum conceded that the search of Mr. Foster's 
office was discussed, 536 but maintains that no agreement 
was reached as to the procedure for reviewing documents. ``In 
my--to the best of my recollection, and I do have a 
recollection about this, there was no agreement. I think my 
recollection is supported by Mr. Neuwirth of my office who was 
there, by Mr. Sloan of my office who was there.'' 537 Mr. 
Nussbaum acknowledged, however, that a misunderstanding may 
have occurred:

          If the Justice Department officials believe that we 
        reached an agreement after our July 21 meeting, then a 
        misunderstanding and a miscommunication occurred, and I 
        may be responsible for that. But I do not believe, nor, 
        as you have heard, do my colleagues in the White House 
        counsel's office believe, who were present at those 
        meetings, that we reached any agreement on July 21 or 
        that we in any way misused the Department of 
        Justice.538

Mr. Neuwirth and Mr. Sloan corroborated Mr. Nussbaum's 
testimony that the exact protocol for the search was not 
resolved at the end of the July 21 meeting.539
    When Mr. Adams and Mr. Margolis returned to the Justice 
Department after the meeting, Mr. Margolis reported to Mr. 
Heymann that Mr. Margolis had finalized Mr. Heymann's agreement 
with Mr. Nussbaum.

          I told him along the lines that he had thought that 
        he had reached a tentative agreement with Bernie 
        Nussbaum; that Roger and I would review at least the 
        first couple, first page or two of each document, to 
        determine whether it might contain something along the 
        lines of an extortion note or a suicide note. So it was 
        the agreement that he had reached.540

Mr. Heymann confirmed this testimony:

          Mr. Heymann: That is what they reported to me when 
        Mr. Margolis and Mr. Adams returned that evening, the 
        evening of Wednesday the 21st, to the Justice 
        Department.
          Senator Shelby: What do your notes reflect, I was 
        paraphrasing them?
          Mr. Heymann: It said they discussed the system that 
        had been agreed upon, I just described to you. BN, that 
        stands for Mr. Nussbaum, agreed. SN, that stands for 
        Neuwirth, said no. We shouldn't do it that way. The 
        Justice Department attorneys shouldn't have direct 
        access to the files. David Margolis, the Justice 
        Department attorney, said it's a done deal and Mr. 
        Nussbaum at that point said yes, we've agreed to 
        that.541

    During the meeting, everyone agreed that, given the 
lateness of the hour, the search of Mr. Foster's office would 
not take place until the following day.542 It was then 
decided that the Secret Service would place a secure lock on 
Mr. Foster's office door, the keys to which would be kept by 
agent Flynn of the Secret Service.543 The lock was 
installed at approximately 8:00 p.m. on July 21.544

                           IV. July 22, 1993

A. The White House Counsel's office interferes with Park Police 
        interviews of White House staff

    The next morning, July 22, at about 9:00 a.m., Detective 
Markland and Captain Hume of the Park Police returned to the 
White House to interview White House staff. Two Associate White 
House Counsels attended each of the interviews. Deborah Gorham, 
Mr. Foster's secretary, testified that members of the White 
House staff attended a meeting on the afternoon of July 21 with 
Mr. Sloan, Mr. Neuwirth, and Mr. Nussbaum. Mr. Neuwirth, 
according to an electronic mail message from Linda Tripp to Ms. 
Gorham, ``briefed us on comportment and interrogation.'' 
545
    During this meeting on July 21, Ms. Gorham told Mr. 
Nussbaum that Mr. Foster had ``placed shredded remnants of 
personal documents'' 546 in his briefcase. Ms. Gorham 
wrote to Ms. Tripp in an e-mail that ``I told Bernie in front 
of everybody that shredded remnants were in the bag,'' 547 
an exchange that Ms. Tripp recalled.548
    Captain Hume and FBI special agent Dennis Condon 
interviewed Betsy Pond, Mr. Nussbaum's secretary, in Mr. 
Sloan's presence. According to Captain Hume's report of the 
interview, Mr. Sloan took notes during the entire interview. At 
one point, ``Bernard Nussbaum burst into the room and demanded, 
``is everything all right?'' 549 After being reassured, 
Mr. Nussbaum left. Captain Hume asked Ms. Ponds whether she had 
been coached:

          When I questioned her if she had been told how to 
        respond to our questions, she stated that Clifford 
        Sloan (who was present during our interview) and Steve 
        Neuwirth, both associate counselors, had called them 
        all together on Wednesday evening and told them they 
        would be questioned by the police and for them to tell 
        the truth.550

    While Captain Hume and Agent Condon interviewed Ms. Pond, 
Detective Markland and FBI agent Scott Salter interviewed 
Deborah Gorham in the presence of Mr. Neuwirth.551 Mr. 
Neuwirth interjected at the end of the interview and ``took Ms. 
Gorham out of the room to speak to her.'' 552 They 
returned a short time later, ``and Ms. Gorham stated that there 
was one thing she thought may be important that she recalled.'' 
553 Ms. Gorham then told the investigators that in the 
previous week, Ms. Gorham had, at Mrs. Foster's request, asked 
the White House credit union to credit Mr. Foster's pay on a 
weekly, rather than biweekly, basis to avoid overdrawing the 
family account.
    A similar incident occurred later in the day, after the 
Park Police had completed their interview with Ms. Gorham:

          At approximately 1450 hours, immediately after the 
        inventory of Mr. Foster's Office by White House Counsel 
        (reference report under this case file number by Capt. 
        Hume), Detective Markland and S/A Salter were asked to 
        remain and were ushered into Mr. Nussbaum's office by 
        Mr. Neuwirth. Ms. Gorham was brought in and she stated 
        that she had just remembered some conversations that 
        she thought were important to our 
        investigation.554

Ms. Gorham then told the investigators that Mr. Foster's son 
and wife had called within the last two weeks to ask about Mr. 
Foster's mood.555
    Detective Markland testified that he believed the attorneys 
from the White House counsel's office attended the interviews 
in order to ``report back to Mr. Nussbaum what was being said 
in the interviews.'' 556 Because the White House lawyers 
were present, ``[t]he atmosphere of those interviews made it 
impossible to establish any kind of relationship with the 
people being interviewed.'' 557 The lawyers created an 
``intimidating situation'' and therefore the interviews were 
not very productive.558 According to Detective Markland: 
``It was my belief that the staff members that we were 
interviewing had been briefed beforehand and would say no more 
than what they were told they should tell us.'' 559 
``Everyone I interviewed on this day up there I felt had been 
talked to by Mr. Nussbaum or his staff and knew exactly what 
they were going to say, nothing more, nothing less. And that 
was it. They all came off very rehearsed.'' 560

B. The First Lady, Margaret Williams, Susan Thomases and Bernard 
        Nussbaum conduct a series of early morning telephone calls

    At 7:44 a.m. Eastern Daylight Time (EDT) on July 22, 
Margaret Williams, the Chief of Staff to the First Lady, called 
Mrs. Clinton at her mother's house in Little Rock.561 They 
talked for seven minutes. This call set off a chain reaction of 
further calls.
    At 6:57 a.m. Central Daylight Time, or 7:57 a.m. EDT, Mrs. 
Clinton called the Mansion on O Street,562 a small hotel 
where Susan Thomases usually stayed in Washington, D.C.563 
The call lasted three minutes.564 Ms. Thomases, a New York 
lawyer, is a close personal friend of President and Mrs. 
Clinton. She has known the President for 25 years and Mrs. 
Clinton for almost 20 years.565 She was an adviser to the 
Clinton 1992 presidential campaign on the Whitewater issue, and 
remained in a close circle of confidants to the Clintons after 
the election.566 Susan Thomases was the third person Mrs. 
Clinton called after she learned of Mr. Foster's death, and 
they talked for 20 minutes.567
    After her conversation with Mrs. Clinton, at 8:01 a.m. EDT, 
Ms. Thomases paged Bernard Nussbaum at the White House, leaving 
her number at the Mansion on O Street.568 After Mr. 
Nussbaum answered the page, Ms. Thomases and Mr. Nussbaum both 
agree that they talked about the upcoming review of documents 
in Mr. Foster's office.569
    Associate White House Counsel Stephen Neuwirth, who was 
formerly an associate at Mr. Nussbaum's law firm in New York 
City, testified that Mr. Nussbaum told him that Ms. Thomases 
and Mrs. Clinton were concerned about investigators having 
``unfettered access'' to Mr. Foster's office. ``Again, while I 
don't remember his exact words, in a very brief discussion, my 
understanding was that Ms. Thomases and the First Lady may have 
been concerned about anyone having unfettered access to Mr. 
Foster's office.'' 570 Mr. Neuwirth thought that the 
conversation occurred on July 22, before the scheduled document 
review with law enforcement officials.571
    Ms. Williams initially did not tell the Special Committee 
about her early morning phone call to the Rodham 
residence.572 After obtaining her residential telephone 
records documenting the call, the Special Committee voted 
unanimously to call Ms. Williams back for further testimony. 
When presented with these records, Ms. Williams testified: ``If 
I was calling the residence, it is likely that I was trying to 
reach Mrs. Clinton. If it was 6:44 in Arkansas, there's a 
possibility that she was not up. I don't remember who I talked 
to, but I don't find it unusual that the Chief of Staff to the 
First Lady might want to call her early in the morning for a 
number of reasons.'' 573
    Ms. Thomases testified that she did not give instructions 
to anyone about the search of Mr. Foster's office:

          While my memory is not perfect--I just don't remember 
        every person that I spoke to during those days. But I 
        do know that I never, I say never, received from anyone 
        or gave to anyone any instructions about how the review 
        of Vince Foster's office was to be conducted or how the 
        files in Vince's office were to be handled. I want to 
        repeat that. I never received from anyone or gave to 
        anyone any instructions about how the review of Vince 
        Foster's office was to be conducted or how the files in 
        Vince's office were to be handled.574

She acknowledged paging Mr. Nussbaum on the morning of July 22, 
but maintained that ``I was not looking for Bernie to talk 
about the review of documents in Vince Foster's office. I was 
really trying to reach him to talk to about how he was feeling 
and how he was doing.'' 575
    Ms. Thomases did offer that she talked to Mr. Nussbaum 
about the review of documents in Mr. Foster's office, but only 
because Mr. Nussbaum initiated the subject:

          He obviously was very focused on the documents at 
        that time, where I was not, and he proceeded to tell me 
        not to worry, that he had a plan, that he was going to 
        take care of him. He was kind of, as I said in my 
        deposition, he was sort of venting. He seemed to have a 
        very clear sense that he was on top of it; he was going 
        to handle it; he was going to give Vince's documents to 
        the Clinton's lawyers, and that he was going to protect 
        all the Presidential papers.576

She told Mr. Nussbaum that his procedure ``sounds good to me.'' 
577 Ms. Thomases testified that she did not express any 
view to Mr. Nussbaum that the police should not have unfettered 
access to Mr. Foster's office.578 Ms. Thomases maintained: 
``I don't remember ever having a conversation with Hillary 
Clinton during the period after Vince Foster's death about the 
documents in Vince Foster's office.'' 579
    After Ms. Thomases' initial testimony, the Special 
Committee obtained telephone records documenting that she 
talked with Mrs. Clinton for three minutes immediately prior to 
paging Mr. Nussbaum on July 22. The Special Committee voted 
unanimously to call Ms. Thomases back for further testimony. 
When presented with the new records, Ms. Thomases testified 
that ``I know you think there is a relationship between those 
two calls.'' 580 She maintained, however, that the two 
calls were not related. She testified that her early-morning 
conversation with Mrs. Clinton was about ``the possibility that 
I didn't feel well enough to go to Little Rock'' for Mr. 
Foster's funeral.581 According to Ms. Thomases, she called 
Mr. Nussbaum because ``I was worried about my friend Bernie, 
and I was just about to go into a very, very busy day in my 
work, and I wanted to make sure that I got to talk to Bernie 
that day since I had not been lucky enough to speak to him the 
day before.'' 582
    Mr. Nussbaum had a markedly different recollection of his 
conversation with Ms. Thomases on July 22. He testified that 
Ms. Thomases--not he--initiated the discussion about the 
procedures that he intended to employ in reviewing documents in 
Mr. Foster's office. ``The conversation on the 22nd was that 
she asked me what was going on with respect to--what was going 
on with respect to the investigation or the examination--the 
examination of Mr. Foster's office.'' 583
    Beyond this, Mr. Nussbaum testified that Ms. Thomases 
``said people are concerned about whether I was using the 
correct procedure or whether the procedure was--people were 
concerned or disagreeing, something like that, whether a 
correct procedure was being followed, whether I was using the 
correct procedure, whether it was proper to give people access 
to the office at all something like that.'' 584 According 
to Mr. Nussbaum, Ms. Thomases never specified who the 
mysterious ``people'' were to whom she was referring,585 
nor did Mr. Nussbaum understand who they were.586
    Mr. Nussbaum claimed that he resisted the overtures of the 
First Lady's close advisor:

          But I said Susan--she wasn't in the White House--at 
        least I didn't know she was in the White House--I said 
        I'm having discussions with various people. As far as 
        the White House is concerned, I will make a decision as 
        to how this is going to be conducted. It's going to be 
        done the right way. It will balance out the various 
        interests. It's going to be done the way I think it 
        should be done.587

    And, Mr. Nussbaum further testified that Mrs. Clinton did 
not convey to him, directly or indirectly, her views on how to 
conduct the search of Mr. Foster's office.588 Mr. Nussbaum 
did not recall telling Mr. Neuwirth that Ms. Thomases and Mrs. 
Clinton were concerned about the police having unfettered 
access to Mr. Foster's office.589
    Apparently, Ms. Thomases did not give up easily. In the 
late morning of July 22, senior White House officials, 
including Mr. Nussbaum and Mr. Neuwirth, met in the office of 
Chief of Staff Thomas McLarty to discuss the upcoming review of 
Mr. Foster's office.590 At about the time of this meeting, 
between 10:48 a.m. and 11:54 a.m., Ms. Thomases called Mr. 
McLarty's office three times and Ms. Williams' office three 
times.591
    When asked about the coincidence of these telephone calls, 
Ms. Thomases testified that she ``never actually remember[ed] 
speaking with Mack McLarty at his number during this period.'' 
592 With respect to the repeated calls to the office of 
the Chief of Staff to the First Lady, Ms. Thomases testified 
that she probably was attempting not to reach Ms. Williams but 
rather to be transferred to someone else in the White 
House.593 Although she testified that July 22 was ``a 
very, very busy day in my work,'' 594 Ms. Thomases 
suggested that she also may have been put on hold during these 
lengthy calls, for as long as nine minutes.595
    Ms. Williams testified that she could not recall talking 
with Ms. Thomases and suggested that she was at home in the 
morning of July 22.596 This explanation was contradicted 
by Secret Service records indicating that Ms. Williams had 
entered the White House at 8:10 a.m. that morning.597

C. The White House breaks its agreement with the Justice Department: 
        ``A terrible mistake''

    By the time senior Justice Department attorneys David 
Margolis and Roger Adams arrived at the White House at 10:00 
a.m. on July 22, 1994, Mr. Nussbaum had a change of heart. He 
``announced that he had decided to change the procedure for the 
search or inventory of the office. He said that he alone would 
look at each document to determine relevance and privilege, and 
that we would not be doing that.'' 598
    According to Roger Adams, the Justice Department officials 
``pointed out that that was completely inconsistent with the 
agreement of the day before, and we argued with Mr. Nussbaum. 
We said this was not what we had agreed to, that he was making 
a mistake, and we were going to have to call our boss, the 
Deputy Attorney General.'' 599 According to Mr. Margolis, 
Mr. Nussbaum said that there had been a change of plans, ``that 
he would look at the materials to determine whether they were 
relevant, make the first cut, and determine the privilege 
issues and the sensitivity issues. And then anything that met 
all his standards along those lines, if we still wanted to see, 
he would show us.'' 600
    Upset, Mr. Margolis immediately called Mr. Heymann from Mr. 
Nussbaum's office phone.601 ``I called Mr. Heymann and 
explained this change to him. And we discussed it. We were both 
dead set against it.'' 602 Both were surprised by Mr. 
Nussbaum's new plan, which they thought was wrong. According to 
Mr. Margolis, ``We were very concerned as to how this would 
appear to the public in terms of law enforcement, and in terms 
of whether we were running a credible investigation.'' 603 
Mr. Heymann testified that ``Mr. Margolis told me that Mr. 
Nussbaum had said to me that they had changed the plan, that 
only the White House counsel's office would see the actual 
documents.'' 604 Mr. Heymann then asked to speak to Mr. 
Nussbaum.
    When Mr. Nussbaum got on the telephone, Mr. Heymann warned 
him sternly that ``this was a terrible mistake'': 605

          I remember very clearly sitting in the Deputy 
        Attorney General's conference room picking up the phone 
        in that very big room. I remember very clearly being 
        very angry and very adamant and saying this is a bad--
        this is a bad mistake, this is not the right way to do 
        it, and I don't think I'm going to let Margolis and 
        Adams stay there if you are going to do it that way 
        because they would have no useful function. It would 
        simply look like they were performing a useful 
        function, and I don't want that to happen.606

    According to Mr. Heymann, Mr. Nussbaum was surprised at Mr. 
Heymann's reaction and wanted to check with unspecified others 
before making a final decision. ``[H]e was taken aback by my 
anger and by the idea that I might pull out the Justice 
Department attorneys and he said I'll have to talk to somebody 
else about this or other people about this, and I'll get back 
to you, Phil.'' 607
    Mr. Nussbaum feared that the Justice Department officials 
would not attend the document review. He specifically told Mr. 
Heymann: ``don't call Adams and Margolis back to the Justice 
Department. I'll get back to you.'' 608 Notwithstanding 
this explicit promise, Mr. Nussbaum never called Mr. Heymann 
back.609
    The nearly contemporaneous notes 21 of Cynthia Monaco, 
Special Assistant to the Deputy Attorney General, confirmed Mr. 
Heymann's testimony:
---------------------------------------------------------------------------
    \21\ The notes were dictated in July 1993 and typed up later. 
Monaco, 7/6/95 Dep. pp. 26-27.

          The next day [July 22] was a disaster. I first 
        realized there was a problem when I saw Phil Heymann on 
        the phone with Bernie Nussbaum. I walked into the 
        conference room and sat down. This was probably about 
        10:30 or 11 in the morning when he should have been in 
        the Crime Bill pre-meeting in room 4118. Phil was on 
        the phone with Bernie Nussbaum and he said: ``you are 
        messing this up very badly. I think you are making a 
        terrible mistake.'' And what I took it to mean, in the 
        context of the general conversation was that Bernie had 
        refused to let David and Roger take a look at the 
---------------------------------------------------------------------------
        documents.610

Mr. Nussbaum denied having this conversation with Mr. 
Heymann.611
    After Mr. Heymann and Mr. Nussbaum finished their 
conversation, Mr. Margolis returned to Mr. Nussbaum's office 
and spoke with Mr. Heymann.612 Mr. Margolis thought that 
even if Mr. Nussbaum did not change his mind, the Justice 
Department attorneys should remain at the White House because 
``we really had no choice. Walking away was not really an 
option, because we had no sense of when the search would be 
conducted by Mr. Nussbaum, and what the parameters would be, 
and just what would happen, although we agreed we had to push 
with all our might to try to change it around. And that's what 
we did.'' 613 Mr. Margolis thought that Mr. Heymann agreed 
with this course of action.614
    Mr. Heymann, however, assumed from his conversation with 
Mr. Nussbaum that Mr. Nussbaum, after his consultations, would 
call Mr. Heymann back to let him decide what to do. ``And I 
also thought that I had an understanding that nothing would 
happen without my at least being informed and having an 
opportunity to react.'' 615 Mr. Heymann believed that the 
search would not go forward until Mr. Nussbaum called him 
back.616
    After he got off the telephone with Mr. Heymann, Mr. 
Margolis tried again in vain to convince Mr. Nussbaum that the 
new procedures were ``a big mistake.''

          I explained to Mr. Nussbaum that to do it his way 
        would be a big mistake. I said, ``It was your mistake 
        if you do it this way, but it is a big mistake.'' I 
        think it was at that point when I also said to him, 
        ``You know, if this were IBM that we were talking 
        about, I would have a subpoena duces tecum returnable 
        forthwith with these documents. But I recognize this is 
        not IBM.'' And he made a facetious comment about, if 
        this were IBM rather than the White House counsel's 
        office, a smart lawyer would have removed the documents 
        before the subpoena ever got there. That I took as a 
        facetious comment. Anyway, he wasn't talking about what 
        he would do.617

    Mr. Margolis stressed the importance of maintaining the 
public perception of a credible and thorough 
investigation.618 He believed that law enforcement 
officials must have a substantive role in the review process 
and not be ``excess baggage,'' as they would be under Mr. 
Nussbaum's new plan; ``I might as well go back to my office, 
and he could mail the results of the search back to me.'' 
619
    According to Mr. Margolis, Mr. Nussbaum conceded that 
having the investigators attend the review was mostly out of 
concern for ``show and appearances.'' 620 Fearing that the 
lawyers would leave, Mr. Nussbaum insisted that they wait in 
the White House lobby:

          He made it very apparent that he would be really 
        appreciative if we didn't leave in the interim. I think 
        I have said something about, ``Maybe in any event I'll 
        go back to the office while you're thinking about it, 
        and I can always get back here in 15 minutes if I 
        decide to and I want to and if I have to.'' But he very 
        much requested that we just wait.621

    Mr. Adams and Mr. Margolis then waited in the lobby of the 
White House.622 At one point, the Justice Department 
attorneys went outside. Believing that Mr. Adams and Mr. 
Margolis had left the White House, the White House lawyers went 
out to look for them. ``Bernie had said he had thought, when he 
couldn't find us in the lobby, that we might have left and he 
was concerned about that.'' 623 Mr. Nussbaum did not 
remember Mr. Margolis threatening to leave the White 
House.624
    The notes of Adams of the morning's events confirmed Mr. 
Margolis' recollection:

          The next morning [July 22], however, Mr. Nussbaum had 
        changed his mind and said he would look at the 
        documents and decide privilege issues himself. The 
        Justice Department attorneys pointed out that that was 
        inconsistent with the previous day's agreement and 
        would cause problems. We stated that the Counsel's 
        Office would be better off to allow the Department 
        attorneys to decide or at least help decide privilege 
        issues, because that would allow the White House to say 
        that the issue was considered independently. Moreover, 
        we stated that we had been asked to undertake this 
        particular assignment in part because we had 
        reputations of not talking to the press or ``leaking.'' 
        Mr. Nussbaum did not immediately begin the search but 
        waited for about two and one half hours--during which 
        time he said he was considering whether to allow us to 
        see the documents--before deciding that only he and 
        Associate Counsels Neuwirth and Sloan would see the 
        documents.625

    Mr. Nussbaum admitted that he discussed with various people 
how to conduct the search on July 22.626 But he did not 
recall a specific discussion with Mr. Margolis in the morning 
during which Mr. Margolis and Mr. Adams objected to his 
proposed procedure.627 And, he did not recall Mr. Margolis 
or Mr. Heymann telling him that he was making a 
mistake.628 Although Mr. Nussbaum could not remember 
speaking with the Justice Department officials, he did 
acknowledge conversations with a number of senior White House 
officials who were concerned about the search.629
    In particular, John Quinn, then Chief of Staff and 
Counselor to the Vice President and now Counsel to the 
President, advised Mr. Nussbaum that only White House officials 
should be allowed access to Mr. Foster's office.630 ``He 
thought it was a terrible mistake and stressed it very 
firmly.'' 631 According to Mr. Quinn:

          I wanted to be sure that somebody with the 
        appropriate level of security clearance and who was 
        privy to the attorney-client relationship first went 
        through the office in order to ascertain if national 
        security materials or privileged communications were 
        present and, if so, to take steps to segregate 
        them.632

D. The window-dressing review of the documents in Mr. Foster's office

    After lunch, at about 1:15 p.m., Mr. Nussbaum summoned the 
law enforcement officials to attend the review of the contents 
of Mr. Foster's office.633 Mr. Nussbaum then announced 
that he alone--and no law enforcement official--would review 
the documents in his now deceased deputy's office. According to 
Mr. Margolis:

          So we ate, we came back in, and that's when Bernie 
        told us he had given due consideration to our 
        arguments, he thought they were good arguments, but he 
        was sticking with doing it his way, which was he would 
        review the documents, tell us generically what they 
        were, if there wasn't a problem with them and if they 
        had any sense of being germane, let us look at 
        them.634

    Mr. Nussbaum testified that the career law enforcement 
officials initially resisted his plan, but then ``went along.'' 
635 After Mr. Nussbaum indicated that law enforcement 
officials would not be allowed to review Mr. Foster's papers, 
Mr. Margolis said, ```It's a mistake * * *. But it's your 
mistake. So, okay.''' 636 Mr. Margolis also told Mr. 
Nussbaum, ``You know, if this were IBM that we were talking 
about, I would have a subpoena duces tecum returnable forthwith 
for these documents. But I recognize this is not IBM.'' 
637
    The group entered Mr. Foster's office to observe Mr. 
Nussbaum conduct the review. Present were Mr. Nussbaum, Mr. 
Burton, Mr. Sloan, and Mr. Neuwirth from the White House; 
Captain Hume and Detective Markland from the Park Police; 
Agents Salter and Condon from the FBI; Messrs. Margolis and 
Adams from the Justice Department; Paul Imbordino and Paul 
Flynn from the Secret Service; and Michael Spafford, a private 
attorney who represented the Foster family. 638
    During the document review, according to Mr. Adams, ``Mr. 
Nussbaum was seated at Vince Foster's desk. Standing behind him 
were Steve Neuwirth and Cliff Sloan. Mr. Margolis and myself 
and the law enforcement officers were seated in what I describe 
as a rough semicircle around the desk in sort of rough rows. 
Standing off to one side was the Foster family's attorney Mr. 
Spafford.'' 639
    According to Captain Hume's report of the review: ``The 
eight law enforcement officers were gathered on the opposite 
side of the desk and room in a position where we couldn't 
examine any documents.'' 640 Detective Markland confirmed 
that the law enforcement officers were specifically placed 
where they could not see the documents as Mr. Nussbaum was 
reviewing them. 641
    Mr. Nussbaum then reviewed the documents in Mr. Foster's 
office. He briefly described the documents and placed them into 
three categories. Mr. Margolis and FBI agent Adams believed 
that one pile consisted of personal materials that were going 
to the Foster family; the second pile consisted of official 
White House documents that were to be distributed to other 
White House attorneys; and the third consisted of the Clintons' 
personal documents, which were to be sent to the Clintons' 
personal lawyer. 642 The Park Police detectives described 
the three categories as follows: (1) documents of potential 
interest to law enforcement; (2) documents concerning White 
House business with no relevance to the investigation; and (3) 
personal papers of either the Clintons or the Foster family. 
643 Mr. Spafford, the Foster family attorney, wrote in a 
contemporaneous memorandum: ``The documents were separated into 
three groups: personal matters, documents of potential interest 
to the investigators, and matters of no apparent interest.'' 
644
    Mr. Nussbaum provided a brief and generic description of 
the documents he reviewed. 645 Captain Hume reported that 
``Bernard Nussbaum did the actual review of the documents in a 
very hurried and casual fashion.'' 646 According to Mr. 
Adams:

          As best I can recall, with most of the documents he 
        made just sort of a generic description, something like 
        this is personal; this is going to the family of the--
        this is something that Vince has been working on; it's 
        relevant to work of the White House counsel's office; 
        it's going to be distributed to other lawyers in the 
        office.
          Another thing he would say is this is something he 
        had been working on for the President personally. This 
        is going to the President's outside attorney. Now, 
        there were occasions where some documents he would 
        describe a little bit more--a little bit more 
        definitely than that, but it's my recollection that, in 
        general, it was just a generic description of them. 
        647

    Mr. Margolis recalled essentially the same rushed 
procedure:

          [Nussbaum] went through the items on and in and 
        around Mr. Foster's desk and announced what they were, 
        generically, like, ``This file is a file of nominations 
        that Vince was working on for the President. It's not 
        germane. This is a matter that Vince was working on for 
        the first family in their nonofficial capacity. It's 
        not germane.'' Things like that. 648

    At different times during the review, Mr. Margolis renewed 
his objections to Mr. Nussbaum's review. In fact, Mr. Margolis 
specifically objected to the fact that Mr. Nussbaum's 
descriptions were so generic that they were of little 
assistance to the investigators. 649 He remarked that ``it 
gave me a bit of deja vu all over again of dealing with the CIA 
* * * .'' 650 FBI Agent Salter had a similar view: ``At 
one point, I recall that Mr. Nussbaum described documents as he 
went through, and declared that they were not pertinent to the 
investigation, and I know Mr. Margolis responded by saying how 
do we know if they're pertinent or not if we don't get to look 
at the documents.'' 651 Mr. Adams recalled that, at some 
point, ``Mr. Margolis again interposed an objection to the 
procedure. He said, the best I can recall, that this was a 
mistake and that Mr. Nussbaum might as well conduct the review 
himself and mail us the results or mail Mr. Margolis the 
results.'' 652
    Mr. Nussbaum took what the law enforcement officials 
thought were ``extreme'' positions to shield documents from 
their review. According to the Park Police report:

          There was some conversation between Nussbaum and 
        Margolis as to what constituted privileged 
        communication. Nussbaum carried his interpretation of 
        what was considered privileged to the extreme; one 
        example was when he picked up a xeroxed copy of a 
        newspaper article and declared that it was privileged 
        communication even though it had been in the 
        newspapers. 653

At no time during the approximately one-and-one-half hour 
period of the review did Mr. Nussbaum allow the law enforcement 
officials to examine any documents. 654
    The White House lawyers expressed concern--to an 
unreasonable degree--that the law enforcement officials might 
sneak a peak at Mr. Foster's documents. According to the Park 
Police report: ``At one point Special Agent Scott Salter got up 
to stretch and Clifford Sloan challenged him and asked him if 
he was standing up in an attempt to get a look at the 
documents.'' 655 Agent Salter described the incident as 
follows:

          I was seated at the end of the sofa next to detective 
        Pete Markland from the Park Police, and I think there 
        was a third person seated at the opposite end from me. 
        And I think the review of documents had been going on 
        for about 30 minutes with the three of us seated on the 
        couch. There wasn't a lot of room. After about 30 
        minutes, I stood up and stood at the end of the couch, 
        and in front of me was Mr. Margolis and then the desk.
          After standing there for just a few minutes, Mr. 
        Cliff Sloan looked at me and said, excuse me, agent, 
        you aren't standing there so you can see the documents 
        on Mr. Nussbaum's desk, are you? And at that point I 
        merely said that--I told Mr. Sloan that I think he's 
        getting carried away, and then Mr. Nussbaum interjected 
        and said of course, we're all on the same side here, 
        words to that effect. And that was the end of the 
        incident. 656

Mr. Adams indicated that ``the remark was (to put it 
charitably) extremely offensive.'' 657 Mr. Margolis 
testified that he may have muttered an expletive after Mr. 
Sloan's remark. 658 ``I was bothered by that. So, a minute 
later when Cliff was looking over Bernie's shoulder at some 
document that Bernie was looking at, I said, `Hey, Cliff, 
you're not looking over Bernie's shoulder so you can read the 
documents that he is looking at, are you?' '' 659 Mr. 
Sloan acknowledged the incident and apologized before the 
Special Committee, stating that his comment ``was the wrong 
thing to say to a law enforcement official, or any person 
trying to do his or her job.'' 660
    Toward the end of the review, Mr. Nussbaum announced that 
he would give Mr. Foster's personal papers and effects to Mr. 
Spafford, the Fosters' personal attorney. Mr. Margolis 
objected, wanting to maintain the chain of custody within the 
government. 661 The Park Police officers later told Mr. 
Margolis: ``we feel strongly that we would rather have the 
files go to Mr. Spafford and Mr. Hamilton because we would 
rather deal with them in the future than with White House 
counsel's office.'' 662 Agent Salter confirmed Mr. 
Margolis' testimony: ``I think we all agreed it would be easier 
for the Park Police to have access to them if the family's 
attorney took them and they could be reviewed outside of the 
west wing of the White House.'' 663
    During the review, the law enforcement officials requested 
that Mr. Nussbaum turn on the computer in Mr. Foster's office 
and examine its contents. 664 According to Mr. Adams, Mr. 
Nussbaum refused because the computer might contain privileged 
information. 665 Mr. Adams' memorandum about the review 
described the incident as follows:

          We asked to have the computer in Mr. Foster's office 
        turned on. Mr. Nussbaum said he did not know how to do 
        so and, in any event, he would not do so in our 
        presence in case there were privileged documents on the 
        computer. He said he would have a staff member examine 
        the contents of the computer later after we left. 
        (Press reports in the morning newspapers of that day 
        had stated, without attribution, that no suicide note 
        had been found on his computer.) 666

Mr. Spafford's handwritten notes of the meeting confirmed that 
Mr. Margolis asked Mr. Nussbaum to review the computer. 
667 Mr. Sloan's notes of the meeting listed the computer 
with an asterisk next to it. 668
    Mr. Foster's burn bag was also in the office at the time of 
the search. According to Agent Salter, Mr. Nussbaum looked in 
the burn bag and ``said that there was nothing that was 
pertinent to the investigation.'' 669 Mr. Spafford's notes 
listed the burn bag and indicated that it was picked up 
everyday. Its contents were described as ``h/w notes re GC 
[General Counsel] issues/all wk related''. Mr. Sloan's notes, 
however, contained a more detailed inventory of the contents of 
the burn bag:
        Burn bag
        --lists
        --background investigations [?]
        --references to jobs
        --arbitration of claims
        --nothing personal
        --campaign stuff 670
    On July 27, after Mr. Neuwirth apparently discovered a 
handwritten note in Mr. Foster's briefcase, Linda Tripp sent 
the following electronic mail message to Deborah Gorham:

        it seems that whatever was uncovered by [Neuwirth], who 
        summoned our boss, who then summoned BB, who then 
        summoned H--and whatever it was provoked a need for 
        notetaking--and had to do I presume with the burn bag--
        I can't imagine that anyone as meticulous as this 
        individual was, would have left anything he did not 
        intend to be found. 671

Ms. Tripp testified that ``this individual'' referred to Mr. 
Foster. 672 Ms. Gorham replied to Ms. Tripp's message with 
the following: ``What provoked COS [Neuwirth 673] to call 
BWN [Nussbaum] was the briefcase. Once BWN arrived, I forgot 
who went into VWF's office to get the Burn Bag. But they must 
feel like a slapstick comedy by not returning the burn bag 
along with the briefcase.'' 674 In another message on the 
same day, Ms. Gorham wrote to Ms. Tripp: ``On Wednesday, I told 
Bernie that VWF had placed shredded remnants of personal 
documents in the bag. On Thursday, I told Bernie in front of 
everybody that shredded remnants were in the bag.'' 675 
Ms. Tripp replied: ``I recalled the shredded talk, because when 
we spoke to [Neuwirth] and he briefed us on comportment and 
interrogation, you mentioned that--that was on Wednesday 
evening, right? So it took until MONDAY to figure out it should 
be looked at? Christ. And we're the support staff.'' 676

E. Mr. Nussbaum's failure to search properly Mr. Foster's briefcase

    Under any view, Mr. Nussbaum's effort to search Mr. 
Foster's briefcase was seriously deficient. At the time of Mr. 
Nussbaum's review, the briefcase was located on the floor next 
to Mr. Foster's desk. 677 Mr. Adams testified that Mr. 
Nussbaum ``picked up the briefcase, announced that this was 
Vince's briefcase and he would proceed to inventory the items 
in the briefcase in the same manner as he had inventoried the 
items on the desk and credenza, and he proceeded to take files 
and documents from the briefcase and describe them as he 
described the other documents in the office.'' 678 Agent 
Salter confirmed Mr. Adams' description. 679
    Although notes taken by Mr. Spafford and Mr. Sloan 
indicated that the briefcase contained a copy of the White 
House Travel Office Management Review, Mr. Nussbaum did not 
disclose to investigators that most of the contents of the 
briefcase pertained to the Travelgate controversy. 680 
Among the contents was a notebook in Mr. Foster's hand relating 
to the entire Travel Office matter. According to Mr. Spafford's 
notes, Mr. Nussbaum described the notebook as ``Notebook of 
notes of meetings, GC [General Counsel] issues''; Mr. Sloan's 
notes similarly identified the notebook simply as ``Notes re: 
meeting''. 681 After the review, Mr. Nussbaum removed Mr. 
Foster's notebook and other Travelgate files from the briefcase 
and kept it in his office until his resignation in March 1994. 
682 The notebook and documents in Mr. Foster's briefcase 
were not turned over to the Independent Counsel until April 5, 
1995. 683
    The notebook and documents were never disclosed to Justice 
Department officials and FBI agents then investigating 
Travelgate and the handling of documents in Mr. Foster's 
office. In fact, the Justice Department official responsible 
for the investigation, Office of Professional Responsibility 
Counsel Michael E. Shaheen, Jr., found out about the existence 
of Mr. Foster's notebook through a press report in July 1995. 
Mr. Shaheen, enraged at Mr. Nussbaum's concealment of the 
notebook, wrote a memo to Mr. Margolis on the subject. It 
stated in part:

          We were stunned to learn of the existence of this 
        document since it so obviously bears directly on the 
        inquiry we were directed to undertake in late July and 
        August 1993, by then DAG Philip Heymann--that is, to 
        review the conduct of the FBI in connection with its 
        contacts with the White House on the Travel Office 
        matter and to determine what Vince Foster meant by the 
        statement in his note that ``the FBI lied in their 
        report to the AG.''
          In a July 13, 1993 letter, President Clinton informed 
        then Congressman Jack Brooks that the Attorney General 
        was in the process of reviewing matters relating to the 
        Travel Office, ``and you can be assured that [she] will 
        have the Administration's full cooperation in 
        investigating those matters which the Department wishes 
        to review.'' While these may have been Mr. Clintons' 
        views, the White House personnel with whom we dealt 
        apparently did not share his commitment to full 
        cooperation with respect to our investigation. The 
        recent disclosure of the Foster notebook confirms this. 
        684

Mr. Shaheen, after outlining specific instances of 
noncooperation by the White House, concluded, ``The fact that 
we have just now learned of the existence of obviously relevant 
notes written by Mr. Foster on the subject of the FBI report is 
yet another example of the lack of cooperation and candor we 
received from the White House throughout our inquiry.'' 
685
    Mr. Nussbaum testified that he did not recall, during the 
course of his review on July 22, ever picking the briefcase up 
off the floor 686 or looking into the briefcase as he was 
pulling out the files. 687 Agent Salter testified, 
however, that Mr. Nussbaum picked up the bag, opened it by the 
handles, tilted it, and looked inside. 688 Mr. Adams, 
689 Agent Condon, 690 Agent Flynn, 691 Captain 
Hume, 692 Detective Markland 693, and Mr. Spafford 
694 all confirmed that Mr. Nussbaum picked up the bag.
    Detective Markland testified that Mr. Nussbaum told the law 
enforcement officials that the briefcase was empty:

          He would reach down, take papers out of the 
        briefcase, put them on the desk, go through them, put 
        them in the appropriate piles. When he got done, he 
        said that's it, it's empty. After that he picked up the 
        briefcase with both hands, spread it apart a little 
        bit, tilted it, put it back down and shoved it to the 
        back of the room. I could see the briefcase lifted off 
        the floor by him and tilted, put it down, said it was 
        empty two times and moved it back. 695

Detective Markland was certain that Mr. Nussbaum had looked in 
the bottom of the briefcase. ``He had a clear view of the 
briefcase on the floor so that he had it spread open with both 
hands and was looking down into the briefcase.'' 696
    Agent Salter similarly confirmed that Mr. Nussbaum ``stated 
that it was empty and he turned and placed it behind him 
against the wall.'' Mr. Margolis likewise testified that ``he 
did take files out of it, a number of files out of it, and then 
he told us, I don't remember the exact language, but told us 
that that was it, that there was nothing more.'' 697
    Mr. Nussbaum contended that he did not recall the process 
described by Detective Markland, 698 and his White House 
colleagues concurred in Mr. Nussbaum's testimony that he did 
not state that the briefcase was empty. 699
    The general impression of those at the review was that the 
briefcase was empty when Mr. Nussbaum was finished. Thus, when 
Mr. Burton found out that Mr. Neuwirth had discovered a note in 
the briefcase, he said, ``Well, you've really got to explain 
this because I saw Bernie empty it. How could it have been in 
that briefcase?'' 700
    The law enforcement officials present at the review agreed 
with Mr. Burton's assessment. After the note was discovered, 
Captain Hume was skeptical that Mr. Nussbaum would not have 
seen a note in the briefcase on July 22. Major Hines agreed 
with Captain Hume that ``our oldest, blindest detective would 
have found the note.'' 701 Detective Markland likewise 
testified that it was impossible for Mr. Nussbaum to miss a 
torn up note in the briefcase because ``he is looking for 
documents, he has a co-worker and friend who is dead. One of 
the things he may be looking for could presumably be ripped up, 
he is not a stupid person. And he physically picked up the 
briefcase at one point and tilted it and I saw it come off the 
floor and tilt, and then he put it down and said it is empty.'' 
702 Detective Markland was blunt in his testimony:

          Q: Do you think he [Nussbaum] was lying?
          A: Yes, I think it would have been impossible for him 
        to miss that many torn scraps of yellow paper out of a 
        briefcase that he was searching on the 22nd. 703

F. The Foster Family lawyer overhears discussion of the scraps of paper 
        in Mr. Foster's briefcase

    Michael Spafford testified that, at the end of the review, 
he remained in the room as the law enforcement officials were 
leaving. He and Mr. Nussbaum discussed the details of the 
transfer of Mr. Foster's personal effects to the family. Mr. 
Sloan then approached Mr. Nussbaum with the briefcase open in 
his hands:

          At some point in time I was talking to Mr. Nussbaum, 
        and at some point in time Mr. Sloan had the briefcase 
        in his hand. So I didn't see him pick it up. And he 
        made the comment at that point in time that there 
        appeared to be scraps in the bottom of the briefcase.
          * * * * * * *
          He was standing, and he had it by the handles. And he 
        had it open like this, and he was looking into the 
        briefcase. 704

    According to Mr. Spafford, Mr. Nussbaum's response was 
dismissive. ``Mr. Nussbaum was sitting on the couch or sofa at 
the time, and his comment was something to the effect that we 
will get to all that later; we have to look through the 
materials and we will look through that later.'' 705 Mr. 
Spafford had put away his materials and was gathering up Mr. 
Foster's personal effects at this point, so he was no longer 
taking notes of the meeting. 706 The following week, right 
after he found out that Mr. Neuwirth had discovered a note in 
the briefcase, Mr. Spafford recounted the incident in a 
privileged conversation. 707
    Mr. Nussbaum and his associate Mr. Sloan both testified 
that they did not recall this incident. According to Mr. Sloan, 
``I have no recollection of anything remotely like that 
incident, and I think that I would recall it if it had 
happened. Mr. Spafford and I have an honest difference in 
recollection on this point.'' 708
    Mr. Spafford's testimony casts a cloud of doubt on the 
White House's assertions that the note in Mr. Foster's hand was 
actually ``discovered'' on July 26. As Mr. Margolis testified 
to the Special Committee:

          I thought I had this figured out, that the torn-up 
        scraps of paper were not in the briefcase the day that 
        Mr. Nussbaum did the search in our presence. That's 
        what--that was the explanation I came up with, and that 
        somebody--that it had never been there before and 
        somebody put it in afterward or it had been there, 
        somebody took it out and then decided they better put 
        it back because there was public speculation of, you 
        know, where is the suicide note.
          So, in my own mind, I speculated that must be what 
        happened. But then, when I picked up the paper one day 
        and saw that Mr. Spafford said that the note had been 
        in there when the search was conducted, I am at a loss 
        now. I just have no explanation. I don't know. 709

The Justice Department and the FBI did not have the information 
Mr. Spafford provided to the Special Committee when the FBI 
closed its investigation into the circumstances surrounding the 
discovery of the note.

G. The secretive, real review of the contents of Mr. Foster's office

    At the conclusion of Mr. Nussbaum's review of the contents 
of Mr. Foster's office, the office was again locked, and the 
key given to Mr. Nussbaum. 710 Detective Markland thought 
that the office would remain sealed: ``It was my understanding 
that the office would be again posted and left undisturbed.'' 
711
    Although the law enforcement officials understood that Mr. 
Nussbaum would go through some of the documents again, 712 
Mr. Nussbaum did not notify them that he intended to conduct a 
second search of the office, almost as soon as they left, with 
Margaret Williams, Chief of Staff to the First Lady. 713
    The circumstances surrounding this second search remained 
mysterious for some time. The White House did not disclose that 
Ms. Williams was involved in the review and removal of 
documents from Foster's office. At a press conference on April 
22, 1994, Mrs. Clinton was asked whether Ms. Williams was among 
those who removed documents from Mr. Foster's office. Mrs. 
Clinton replied, ``I don't think that she did remove any 
documents.'' 714 On August 2, 1994, Press Secretary Dee 
Dee Myers echoed Mrs. Clinton's statement: ``I think that it is 
true that Maggie didn't remove any documents from Vince's 
office; they were removed by Bernie Nussbaum.'' 715
    The evidence demonstrates that the foregoing White House 
statements were false. Mr. Spafford testified that Mr. Nussbaum 
told Mr. Sloan at the end of the meeting that they would look 
through the materials again later. 716 Mr. Sloan's notes 
of the meeting ended with the following: ``get Maggie--go 
through office--get HRC, WJC stuff,'' 717 but he testified 
that ``I did not have contemporaneous knowledge of anything 
beyond what's in my notes on this.'' 718
    At 3:05 p.m. on July 22, William Burton called Ms. Williams 
and left a message for her to call back.719 Twenty minutes 
later, Stephen Neuwirth called Ms. Williams and left the same 
message.720 Ms. Williams testified that she had no 
independent recollection of these calls other than from the 
message slips produced to the Special Committee.721
    Mr. Nussbaum testified that ``[s]hortly after the search of 
Vince's office was completed, I asked Maggie Williams the First 
Lady's chief of staff, to help me transfer these files to the 
Clintons and to their personal lawyers.'' 722 When Ms. 
Williams got there, ``Maggie and I started looking to try to 
select--making sure we took Clinton personal files rather than 
any other files.'' 723 Mr. Nussbaum stated that he and Ms. 
Williams went through Mr. Foster's office together. ``This is 
Maggie walks in. Let's do this, Maggie. We start doing it. I 
may walk out to take a call. We complete doing it, but it was 
done relatively promptly.'' 724
    Margaret Williams, however, testified that she took no part 
in the review of the files, that ``it seemed pretty much 
settled'' when she entered Mr. Foster's office.725 Mr. 
Nussbaum had already selected which files were to be 
removed.726 ``I can't recall if he had the files boxed 
that he pointed to or designated as the files that he wanted me 
to get to Barnett or whether or not they were just in a stack 
on the table. But it seemed like whatever he was doing, it was 
done.'' 727 She acknowledged, however, that Mr. Nussbaum 
asked her to ``eyeball'' the room and see if he had missed 
something. In this cursory look, Ms. Williams saw a file marked 
``taxes,'' picked it up, and placed it among the materials to 
be removed from Mr. Foster's office.728
    During this second review, Mr. Nussbaum asked Mr. Foster's 
secretary, Deborah Gorham, to help locate certain files. 
Curiously, he specifically asked Ms. Gorham about ``the file 
drawer that contained the President's and First Lady's personal 
and financial documents.'' 729 When Ms. Gorham entered, 
Ms. Williams was in the office with Mr. Nussbaum.730 22 
Ms. Gorham then opened a drawer in Mr. Foster's desk and 
started reading the names of the file folders. Mr. Nussbaum 
interrupted her and said that he would take care of this 
ministerial task himself.731 She left the office and was 
called back a bit later.732 In her second time in the 
office, she sat down at Mr. Foster's desk and opened his middle 
desk drawer, where she found Mr. Foster's personal items, 
``such as checks that were written to Mr. Foster and his life 
insurance policy.'' 733
---------------------------------------------------------------------------
    \22\ Ms. Gorham actually testified that, to the best of her 
recollection, this incident occurred the week after Mr. Foster's 
funeral. Gorham, 8/1/95 Hrg. p. 16.
---------------------------------------------------------------------------
    Mr. Nussbaum testified that he had no recollection of 
asking Ms. Gorham to point out the Clintons' personal 
files.734 Ms. Williams testified that Ms. Gorham was in 
and out of the office, but that Ms. Gorham did not assist in 
the review process.735

H. The transfer of Clinton personal files to the first family's 
        residence

    When Ms. Gorham went into Foster's office at Mr. Nussbaum's 
request, she saw boxes in the office.736 Mr. Nussbaum 
later asked her to have the boxes moved out of Foster's office, 
and she asked Thomas Castleton, Special Assistant to the White 
House Counsel, to carry them.737 According to Ms. Gorham, 
``Mr. Castleton picked them up and carried them out behind Ms. 
Williams. The last that I saw of them, noticed them, was in the 
door just outside of our suite.'' 738
    Linda Tripp, whose desk was in the same area as Ms. Gorham, 
testified that she saw Mr. Castleton carry the boxes out of the 
office. She later learned from Ms. Gorham and Mr. Castleton 
that the boxes were delivered to the White House 
residence.739
    Margaret Williams testified that when Mr. Nussbaum called 
her earlier in the afternoon, he instructed her to deliver the 
files to the Clintons' personal lawyers. ``[H]e asked me if I 
would be responsible for getting the personal documents of the 
President and Mrs. Clinton, which he was compiling, as I 
understood it, and get them to their personal lawyer, who was 
at the time Bob Barnett of Williams & Connolly.'' 740
    Ms. Williams made three calls that afternoon that 
ultimately determined where the files were moved to. ``I called 
Mrs. Clinton--well, I had three calls. I called Bob Barnett's 
office. I don't know if I spoke to Bob Barnett or if I spoke to 
the person who works with him in his office. I called Mrs. 
Clinton, who was in Arkansas, and then I called Carolyn Huber, 
an assistant to the President who was working in the White 
House.'' 741
    In the first call, to Williams & Connolly, Mr. Barnett told 
her that he would send someone over to pick up the files. 
``When I had talked to Mr. Barnett after speaking to Mr. 
Nussbaum, I had indicated that I was going to send some files 
over as soon as they got together, and he said that he would 
send someone to get them.'' 742
    Later in the day, however, Ms. Williams shifted course--
for, as she now claims, an innocent reason. She was simply too 
tired to wait for the messenger to come from a law firm located 
near the White House:

          And, quite frankly, I was tired. And when I thought 
        about the time it would take--if anyone has tried to 
        get into the White House complex, the time it would 
        take, both to get a messenger, clear them in and 
        actually have them get in and collect the box, I 
        decided I could be at home in that time, and I decided 
        at that point that the sending and the waiting for 
        someone to pick up the documents would have to wait 
        until later.743

She then asked Mr. Barnett not to send the messenger.744
    Claiming to be unsure where to put the Clintons' personal 
files, Ms. Williams made her second phone call, to Mrs. Clinton 
in Arkansas:

          I told her that there were personal files that 
        weren't going to get to the lawyer because I was just 
        tired, and I was going to put them in the White House, 
        in the residence, and where did she want them.
           * * * * * * *
          It was a very short conversation. I know I had three 
        points that I wanted to make. I was tired, the files 
        weren't going, I was going to put them in the 
        residence, where did she want them--four 
        points.745

Ms. Williams claimed implausibly not to have previously spoken 
to Mrs. Clinton about the files. She testified that she did not 
tell Mrs. Clinton where she was or the contents of the 
files.746 According to Ms. Williams, Mrs. Clinton did not 
ask any questions--not even one, but instead merely told her to 
call Carolyn Huber.747 This may seem strange, as it 
clearly did to the Committee, ``but let me suggest to you that 
I could have told Mrs. Clinton that I was going to put 44 
elephants in the White House the day after Vince died and she 
probably would have said okay.'' 748
    Ms. Williams then made her third and final telephone call, 
to Ms. Huber, in order to arrange the transfer of the files to 
the residence.749
    Thus, Ms. Williams testified that, because she was tired, 
she made the independent determination to transfer the files to 
the residence. ``I had determined that I was going to take the 
files to the residence if they weren't going to the personal 
lawyer. I made that determination.'' 750 She claimed to 
have received no instructions to move the files to the 
residence, and she called Mrs. Clinton only to ask where the 
files should be placed.751
    Mr. Nussbaum had a different--and less convoluted and more 
plausible--recollection on this key point. He testified that he 
and Ms. Williams discussed moving the files to the White House 
residence. ``Obviously, I presumed they were going to the 
residence, and I think Maggie and I probably discussed that. 
That's the most likely, send them to the residence, and talk to 
the Clintons and they will be sent from the residence on to 
their personal attorneys.'' 752 According to Mr. Nussbaum, 
he told Ms. Williams to take the files to the residence:

          Simply take the files, give them to the Clintons, 
        which means give them to the Clintons in their 
        residence. . . . And when you get instructions from 
        them as to which personal attorney, although it's 
        probably going to be Williams & Connolly, we'll send it 
        over to Williams & Connolly.753

Ms. Williams said okay.754
    Mr. Castleton had worked on the 1992 Clinton campaign and 
was serving as a special assistant in the White House Counsel's 
Office in July 1993.755 His best recollection is that he 
picked up ``a box or possibly two boxes'' 756 in either 
Margaret William's office or Mrs. Clinton's office.757 ``I 
believe that the office in which I picked up the box had some 
dresses, and my recollection is based on having seen her 
physically carrying them inside the office.'' 758
    Mr. Castleton and Ms. Williams then took the elevator down 
to the passage way connecting the offices of the West Wing with 
the White House residence.759 They walked through the Palm 
Room into the residence.760 They ``stopped off for a brief 
time to pick up a set of keys or a key and proceeded up to the 
living quarters area of the residence.'' 761 When they got 
to the living quarters on the third floor, Mr. Castleton put 
the box or boxes ``in a room off of a passageway'' near the 
elevator.762
    Ms. Huber had long ties to the Clintons. She served as 
office administrator for the Rose Law Firm for twelve years and 
administrator of the Governor's Mansion. Since February 1993, 
she has been Special Assistant to the President for 
Correspondence, a position that also called for her to maintain 
records and files in the residence.763 She testified that, 
in the late afternoon on July 22, Ms. Williams ``called and 
said that Mrs. Clinton had asked her to call me to take her to 
the residence to put this box in our third floor office. We 
call it an office. And we have a little closet in there where I 
keep their financial records, so she asked that I would take it 
up and put it there.'' 764 Ms. Williams had not previously 
spoken to Ms. Huber about storing records in the 
residence.765
    Ms. Huber told Ms. Williams to call her when she was ready 
to come over to the residence:

          I would meet them at the elevator that goes up into 
        the residence. I met her and this young man--I do not 
        remember him--Mr. Castleton. We went to the third 
        floor. We went into the room where we have our office. 
        There's a little closet in there. I got the key out of 
        the desk drawer, unlocked the closet and he put the box 
        in.766

Ms. Huber then locked the door. She put the key back into the 
drawer, went downstairs, and left for home.767 She did not 
see any dresses.768
    Although Ms. Huber testified that the boxes were 
transported between 4:00 p.m. to 6:00 p.m., 769 records 
maintained by the Secret Service indicate that Ms. Huber, Ms. 
Williams, and Mr. Castleton went up to the third floor of the 
Residence at 7:25 p.m. and came down at 7:32 p.m.770

I. The reaction of law enforcement officials to Mr. Nussbaum's search

    When Mr. Adams and Mr. Margolis returned to the Justice 
Department after Mr. Nussbaum's search of Mr. Foster's office, 
they were angry. Phil Heymann remembered that ``they were hurt 
and felt a little bit less than degraded, but almost degraded 
by the way it was done. And they were angry. And I remember 
their telling it to me in a way that they must have known was 
calculated to make me angry.'' 771 Mr. Margolis and Mr. 
Adams complained to Mr. Heymann that the law enforcement 
officials were not permitted to look at the documents and that 
they did not have ``any role at all to play with regard to 
decisions made about the documents.'' 772 Cynthia Monaco's 
notes confirmed Mr. Heymann's recollection:

          I later heard from David that in fact what had 
        happened was that Bernie looked at the documents and 
        told him that a privilege was asserted or not asserted. 
        This was in contrast to what Phil and Bernie had 
        decided the day before.773

    Mr. Heymann recalled a specific complaint that Mr. Nussbaum 
had asserted executive privilege ``in a fairly casual way.'' 
774 Because Mr. Nussbaum alone saw the documents, ``nobody 
knows what documents it is that Executive privilege is being 
asserted as to.'' 775 Mr. Margolis testified that Mr. 
Nussbaum would not show him a clipping of a newspaper article 
on the grounds that it would be ``an invasion of the 
President's deliberative process.'' 776
    In any event, Mr. Heymann questioned the validity of Mr. 
Nussbaum's assertion of executive privilege against the Justice 
Department, the executive agency supervising the Office of the 
Legal Counsel, which had a primary function in protecting 
executive privilege. ``[T]he people who were going to have 
access to the documents would be officials of the Department of 
Justice. . . . It wasn't like this was an outside body to whom 
there might be more reason to assert Executive 
privilege.''777 23
---------------------------------------------------------------------------
    \23\ Mr. Heymann's view finds support from independent 
commentators. See, e.g., Jeffrey K. Shapiro, Bernard Nussbaum's Novel 
View of Privilege, Washington Times, August 30, 1995, p. A15; Lester 
Brickman, Foster's Paper: What Executive Privilege? New York Times, 
August 2, 1995, p. A19.
---------------------------------------------------------------------------
    The Justice Department officials thought that they had been 
used by the White House to dress up Mr. Nussbaum's search of 
the office,778 and they wanted to minimize the perception 
that law enforcement had actually participated in the search. 
According to Mr. Margolis: ``Phil was troubled by that, and I 
think that's part of what he was talking about, that the 
impression was created that the Department of Justice did play 
a far larger role in the search than in fact it did.'' 779
    After the search, the press reported that Mr. Foster's 
office had been searched under the ``supervision'' of the 
Justice Department. This report prompted the Justice Department 
to issue a correction. According to Mr. Margolis: ``I worried 
about something like that, and I remember with Mr. Heymann's 
permission, telling our press office to correct that, that the 
search was conducted in the presence of the Justice 
Department.'' 780 Mr. Heymann testified that ``I directed 
that the Department of Justice put out a correction that we had 
not supervised, that we had simply been there as observers 
while the investigation was carried out--while the search was 
carried out by the White House counsel.'' 781
    After talking to Mr. Margolis and Mr. Adams on the evening 
of July 22 about Mr. Nussbaum's search, Mr. Heymann became very 
angry. He said to Mr. Margolis, ``You know, Bernie was supposed 
to call me back and he didn't, and I am going to talk to him.'' 
782 Mr. Heymann then went home and called Mr. Nussbaum. 
``I told him that I couldn't imagine why he would have treated 
me that way. How could he have told me that he was going to 
call back before he made any decision on how the search would 
be done and then not call back?'' 783 Mr. Heymann said to 
Mr. Nussbaum, ``You misused us.'' 784 ``I meant that he 
had used Justice Department attorneys in a way that suggested 
that the Justice Department was playing a significant role in 
reviewing documents when they had come back and told me they 
felt like they were not playing any useful role there.'' 
785
    Exasperated with Mr. Nussbaum's handling of the search, Mr. 
Heymann asked him: ``Bernie, are you hiding something?'' 
786 According to Mr. Heymann, Mr. Nussbaum assured him 
that ``no, Phil, I promise you we're not hiding something.'' 
787
    Incredibly, Mr. Nussbaum denies recalling this heated 
conversation with Mr. Heymann.788

                            v. july 26, 1995

A. The existence of the torn-up note is finally revealed to law 
        enforcement

    The President, Mrs. Clinton, and most of the senior White 
House staff traveled to Arkansas for Mr. Foster's funeral on 
Friday, July 23, 1993. On Monday, July 26, 1993, Mr. Nussbaum 
asked Mr. Neuwirth to prepare an inventory of the remaining 
contents of Mr. Foster's office.
    In the course of preparing the inventory, according to Mr. 
Neuwirth, he made an unexpected discovery in Mr. Foster's 
briefcase:

          On Monday the 26th at Mr. Nussbaum's request I was 
        preparing an inventory of the contents of Mr. Foster's 
        office. One of the things that I did in connection with 
        that inventory was to put into a box toward the latter 
        part of my inventory process items that belonged to Mr. 
        Foster personally, like photographs. And in the process 
        of putting materials in that box I saw the brief bag 
        leaning against the back wall of Mr. Foster's office. I 
        understood it to be empty. I knew that it belonged to 
        Mr. Foster. I picked it up and brought it to put into 
        the box. I had laid two large--one or two or maybe even 
        three large black and white photographs of Mr. Foster 
        and his daughter with the President on the top of the 
        box, and in an effort to avoid damaging those 
        photographs, I turned the briefcase to fit it or the 
        brief bag to fit it into the box, and in the process of 
        turning it, scraps of paper fell out of the brief 
        bag.789

    Mr. Neuwirth testified that, after he saw the pieces of 
paper falling out of the briefcase, he picked them up. At that 
point, he recognized that ``there was handwriting on them that 
looked like Mr. Foster's handwriting, with which I was 
familiar.'' 790 He then looked in the bag for more pieces 
of paper. Mr. Neuwirth then went to Mr. Nussbaum's office, 
which was adjacent to Mr. Foster's, and attempted to reassemble 
the torn up note on Mr. Nussbaum's conference table.791
    Mr. Neuwirth testified that, after he assembled the note, 
he went out to the secretarial area of the White House 
Counsel's suite and asked for Mr. Nussbaum.792
    Mr. Nussbaum testified that he came back to his office at 
about 3:00 p.m. and found Mr. Neuwirth sitting at the 
conference table putting scraps of paper together.\793\ Mr. 
Nussbaum said, ``What are you doing?'' Mr. Neuwirth replied, 
``I just found these. I was packing Vince's briefcase to send 
back along with his other personal effects and I turn over the 
briefcase and these things floated out. And I looked down and 
saw handwriting on them so I picked them up to see if I could 
put them together, and I'm putting them together.'' \794\ When 
Mr. Neuwirth was done, he told Mr. Nussbaum to look at the 
assembled note. ``[W]e saw that it was in Vince's handwriting, 
and it was a list of things, reflecting things that were 
troubling Vince.'' \795\
    Mr. Neuwirth discovered 27 pieces of a single sheet of 
yellow lined paper, 3-hole punched, which had been torn into 28 
pieces.\796\ One piece was missing from the bottom third of the 
page, which appeared to be blank. On the top approximate two-
third of the page were written the following:

          I made mistakes from ignorance, inexperience and 
        overwork
          I did not knowingly violate any law or standard of 
        conduct
          No one in the White House, to my knowledge, violated 
        any law or standard of conduct, including any action in 
        the travel office. There was no intent to benefit any 
        individual or any group.
          The FBI lied in their report to the AG
          The press is covering up the illegal benefits they 
        received from the travel staff
          The GOP has lied and misrepresented its knowledge and 
        role and covered up a prior investigation
          The Ushers Office plotted to have excessive costs 
        incurred, taking advantage of Kaki and HRC
          The public will never believe the innocence of the 
        Clintons and their loyal staff
          The WSJ editors lie without consequence
          I was not meant for the job or the spotlight of 
        public life in Washington. Here ruining people is 
        considered sport.\797\

Although the note was not signed, the FBI determined that it 
was written in Mr. Foster's hand.\798\ \24\
---------------------------------------------------------------------------
    \24\ It has been reported, however, that a panel of experts--
including a forensics authority from Oxford University--concluded that 
the note was not in Mr. Foster's hand. See, e.g., Christopher Ruddy, 
``Experts Say Foster `Suicide' Note Forged,'' Pittsburgh Tribune-
Review, Oct. 25, 1995. Because the White House and the Foster family's 
attorney did not provide the Special Committee with obtain original 
samples of Mr. Foster's handwriting, the Special Committee was not able 
to conduct an investigation into this matter.
---------------------------------------------------------------------------
    Mr. Nussbaum then went to White House Chief of Staff Mack 
McLarty's office to tell him about the note, but realized that 
Mr. McLarty was not there; he was in Chicago with the 
President. ``So I saw Burton, who was a logical person to talk 
to in any event because he was the one who had been dealing 
with me, and I said look, Steve Neuwirth found something, and 
you should see it and let's go up and see it. And we walked up, 
and he went over to read it.'' \799\ According to Mr. B: ``Mr. 
Nussbaum came into the chief of staff's reception area asking 
for Mr. McLarty. We informed him that he was out of town. Mr. 
Nussbaum asked me to accompany him to his office, and I did 
that.'' \800\ Mr. Burton went to Mr. Nussbaum's office and read 
the note in front of Mr. Nussbaum and Mr. Neuwirth.\801\
    Deborah Gorham and Linda Tripp were at their desks in the 
secretarial area of the White House Counsel's suite, right 
outside Mr. Nussbaum's office, on the afternoon of July 26. Ms. 
Gorham testified that Mr. Neuwirth came out of Mr. Foster's 
office with Mr. Foster's briefcase and went into Mr. Nussbaum's 
office. After Mr. Nussbaum returned with Mr. Burton, according 
to Ms. Gorham, others came into Mr. Nussbaum's office. ``And 
then I believe Mr. Burton, Bill Burton might have appeared next 
going into Mr. Nussbaum's office, and then other people, I 
think, came in straggling, but I don't recall who they were.'' 
\802\
    Ms. Tripp recalled that she later saw Clifford Sloan in Mr. 
Nussbaum's office. ``It was later in the evening; I was in the 
reception area. The door to Bernie's office was closed. At one 
point in time Cliff Sloan came out of Bernie's office and asked 
me if it was possible to remove one of the typewriters to bring 
back into Bernie's office.'' \803\ Ms. Tripp asked him why he 
wanted a typewriter when there were five computers in the 
suite, and Mr. Sloan replied that he needed a typewriter.\804\ 
There were two typewriters in the office, but Ms. Tripp 
explained to Mr. Sloan that ``the way they were configured and 
plugged in under all the massive furniture with the taping to 
the carpet and the commingling of all the myriad cable 
underneath, that it would be a very difficult endeavor, and 
then I offered to get him a typewriter--excuse me, from 
elsewhere.'' \805\ Mr. Sloan then said that he didn't want her 
to do that, and walked back into Mr. Nussbaum's office. Mr. 
Nussbaum did not recall wanting a typewriter in his office, 
although he remembered wanting to transcribe the note.\806\ Mr. 
Sloan testified that he was sure that Ms. Tripp was mistaken, 
since he did not know of the note until the next day, July 
27.\807\
    The next morning, on July 27, Ms. Gorham and Ms. Tripp 
exchanged a series of electronic mail messages about the 
peculiar circumstances surrounding the discovery of the note. 
Ms. Gorham wrote to Ms. Tripp: ``Everything from his briefcase 
is missing. . . . I do not know what else was in there but the 
bag is totally cleaned out except for one collar stay.'' \808\ 
In another message to Ms. Tripp, Ms. Gorham wrote: ``On 
Wednesday, I told Bernie that VWF had placed shredded remnants 
of personal documents in the bag. On Thursday, I told Bernie in 
front of everybody that shredded remnants were in the bag.'' 
(\809\) Ms. Tripp replied that she remembered Ms. Gorham 
telling Mr. Nussbaum about the shredded pieces at the meeting 
on Wednesday, July 21, when the White House Counsel's office 
briefed the staff about the Park Police interviews. Ms. Tripp's 
message ended on a note of exasperation: ``So it took until 
MONDAY to figure out it should be looked at? Christ. And we're 
the support staff.'' \810\
    Ms. Gorham testified that, some time in the evening of July 
26 or the morning of July 27, Mr. Nussbaum grilled her about 
what she had seen in Mr. Foster's briefcase in the previous 
week:
    Ms. Gorham. Mr. Nussbaum asked me to sit at the chair on 
the opposite side of his table and asked me if I had seen 
anything in the bottom of Vince's briefcase. And I told him 
that I had only seen the color yellow, and I had seen the top 
of the Goldcraft third cut folder, and that was all I had seen.
    Mr. Chertoff. When you say a Goldcraft third cut folder, 
you mean a folder like this, a manila-type folder?
    Ms. Gorham. Yes, sir.
    Mr. Chertoff. And you told Mr. Nussbaum you had seen that 
in Mr. Foster's briefcase at an earlier time?
    Ms. Gorham. I told him I had seen the top of that cut of 
the folder.
    Mr. Chertoff. And what did Mr. Nussbaum say to you?
    Ms. Gorham. He asked me repeatedly what I had seen. He 
asked me if the yellow could have been paper. Could it have 
been lined paper? Could it have been--what it could have been? 
And I told him repeatedly, numerous times, that all that I had 
seen out of the corner of my eye was the color yellow and the 
top of a Goldcraft third cut folder such as you have.
    Mr. Chertoff. Was there anybody else in the room during 
this discussion with Mr. Nussbaum?
    Ms. Gorham. Not that I recall.
    Mr. Chertoff. Have you previously described this as an 
interrogation?
    Ms. Gorham. That is exactly how I have described and that 
is how--that is what took place.
    Mr. Chertoff. And would you agree that he was adamant and 
very forceful in putting his questions to you?
    Ms. Gorham. Indeed I would.
    Mr. Chertoff. I take it this experience is still very vivid 
in your mind?
    Ms. Gorham. Absolutely.\811\
    Mr. Nussbaum testified that he had ``some kind of a 
recollection'' of questioning Ms. Gorham, but he denies 
grilling or interrogating her.\812\ He did not recall the 
specifics of his conversation with Ms. Gorham. He did not 
recall her mentioning that she saw file folders or yellow paper 
in the briefcase.\813\

B. The White House's decision not to disclose the note immediately to 
        law enforcement

    At one point in the afternoon, Mr. Nussbaum talked with Mr. 
Sloan and Mr. Neuwirth about what to do with the note. They 
agreed that the note was not a suicide note, but Mr. Nussbaum 
knew it was the type of document in which the law enforcement 
officials would have a strong interest. ``So it was not clearly 
a suicide note and therefore, the issue was raised, is this the 
kind of thing that we were searching for that day. That was--to 
me it was clear it was the kind of thing.'' \814\ Mr. Burton 
suggested that the note was possibly shielded from disclosure 
by the attorney-client privilege, or other privacy interests.
    According to Mr. Nussbaum, Mr. Burton argued that they 
should research these issues before deciding whether to turn 
the note over to the authorities.\815\ Mr. Burton testified 
that, although he did not initiate the discussion, he recalled 
that ``an issue of privilege came up with respect to the note 
in that it was my understanding that counsel's office was going 
to look to see if there was anything in the note that gave rise 
to privilege.'' \816\ Although Mr. Nussbaum testified that Mr. 
Burton wanted to know whether there would be ``an obstruction 
of justice issue'' if they did not disclose the note to the 
authorities, \817\ Mr. Burton testified that ``[i]t was never 
considered seriously or trivially or any other way that the 
note would not be turned over. From the time the note was 
found, certainly from the time I knew of the existence of the 
note, that was never in doubt.'' \818\
    Mr. Nussbaum testified that, out of concern for the privacy 
of Mrs. Foster and respect for the President, he decided to 
wait until the next day, July 27, before advising the police of 
the existence of the note. ``I don't want Lisa Foster to hear 
about this on the radio or on TV:'' \819\

          Now, I know I can call her up and read it to her on 
        the phone, but I wanted her to see this thing. I wanted 
        her to be able to digest it. And she's in Arkansas. I 
        called Jim Hamilton. I had a concern about Lisa Foster. 
        That was really my primary concern. I had a concern 
        about Lisa Foster, so I called Hamilton, and I 
        discovered--I believe I called Hamilton. I discovered 
        shortly thereafter that Lisa was going to be in the 
        next day. She was coming in to Washington the next day 
        in connection with--she's returning to Washington after 
        the funeral. She's going to be in the next day on the 
        22nd. The President was out of town. He was to come in 
        late that night. He would be available the next day.
          I thought it was common decency, before I turn this 
        over to law enforcement, to let Lisa see it and digest 
        it and let the President see it and digest it, and I 
        didn't see any harm in letting them have that. In the 
        meantime, we could do the research that Burton was 
        talking about, although I didn't expect that research 
        was going to produce anything that would change my 
        decision. So I made the decision to show the note the 
        next day to Lisa and to show it to the President if he 
        wanted to see it when he came in the next day.\820\

    Mr. Nussbaum and Mr. Burton then called Mack McLarty, who 
was in Chicago with the President. Mr. McLarty told David 
Gergen, who recommended that Mr. McLarty tell the President and 
then promptly turn the note over to the authorities.\821\ Mr. 
McLarty decided, however, to wait until the next day, when the 
President returned to Washington, D.C., to take any action, 
including informing the President of the existence of the 
note.\822\
    Mr. Nussbaum assumed, on July 26, that Mr. McLarty would 
tell President Clinton about the note. 823 Senator Grams 
questioned Mr. McLarty's decision to wait, even though Mr. 
Foster was a personal friend of the President and the 
``apparent suicide of the White House deputy counsel was big 
news at the time.'' 824 Mr. McLarty replied:

          When the note or scraps of paper were reported to me 
        by telephone, I was perplexed when I heard of it. We 
        had just put, had the funeral for Vince and were moving 
        forward, and I was perplexed by it. I was in a hotel 
        room in Chicago. I didn't understand it. It did not 
        refer to suicide. Did not have a salutation or a 
        signature. At that point there were issues--there were 
        legal issues that were raised with me that I took 
        seriously, that were raised in a serious way, that Mr. 
        Nussbaum and others wanted to reflect on. There was the 
        issue of notifying the family. And because I was 
        perplexed by the note, I did want to see it, and I 
        simply felt that it was not the correct course at that 
        time to tell the President of a situation that was 
        really not complete, that had not been reviewed and we 
        had no plan of action. 825

Mr. Gergen took a commercial flight back from Chicago on July 
26. The President and Mr. McLarty flew back to Washington 
together, but Mr. McLarty claims that he did not tell the 
President about the note during the entire flight. 826 Mr. 
Nussbaum did not wait at the White House on July 26 for the 
President's return. 827

C. Mrs. Clinton and Susan Thomases are told of the ``discovery'' of the 
        Note

    In the afternoon of July 26, while Mr. Burton was still in 
Mr. Nussbaum's office, Mr. Nussbaum left to get Mrs. Clinton. 
Mr. Nussbaum recalled Mrs. Clinton's having an emotional 
reaction when she saw the note. ``She walked over and glanced--
looked at it. I may have told her--this is the thing. I may 
have told her look, we found something Vince wrote. I'm not 
positive of it. I don't have a specific memory of it, but it's 
something Vince wrote. It's something you should read. So my 
best memory is she sort of knew what she was going to look at, 
and she just--[S]he looked at it, and all of a sudden she had 
some sort of an emotional--she began to read it but she didn't 
read it. She didn't appear to read it. When she sat down and 
looked at it, she just said--she had an emotional reaction and 
she said I just can't deal with this. This is like--I just 
can't deal with this. Bernie, you deal with this. And she 
walked out of my office.'' 828
    In Mr. Burton's view, however, Mrs. Clinton had a different 
reaction to the note. According to Mr. Burton, as Mr. Nussbaum 
was reading her the note, ``she interrupted him and questioned 
her having been brought into the room and left the room.'' 
829 ``She explained that she did not understand why she 
had been brought into the room, that the decisions to be made 
concerning the privilege issues, notifying the Foster family 
were other people's decision to make and she left the room.'' 
830
    Mr. Nussbaum testified that Mrs. Clinton did not discuss 
with him at all the handling of the note. 831
    Susan Thomases testified that, at some point on July 26 and 
before even the President, the Foster family, the Park Police, 
or the Department of Justice were notified, 832 Mr. 
Nussbaum called and told her about the note. ``The substance is 
that a writing had been found and that he was going to wait 
until the President got back to show it to the President.'' 
833 Mr. Nussbaum denied contacting Ms. Thomases on July 26 
about the note. 834
    The Park Police and the FBI later interviewed, among 
others, Mr. Burton, Mr. Gergen, Mr. McLarty, Mr. Neuwirth, Mr. 
Nussbaum, and Mr. Sloan about the circumstances surrounding the 
discovery of the note. None of the reports of these interviews 
mentioned the fact that Mrs. Clinton and Ms. Thomases were 
among those who saw or knew of the note before it was disclosed 
to the law enforcement officials. 835
    Mr. Neuwirth testified that, although he was not asked 
about it, he told the FBI during his interviews that the Mrs. 
Clinton had been made aware of the note:

          I remember being asked questions. I remember being 
        conscious of the fact that when they asked me questions 
        about what happened on that night, I had not been asked 
        questions that would have covered the period when the 
        First Lady was present, but I went out of my way at the 
        conclusion of the interview to tell them--when they 
        asked me who else I knew had been told about the note, 
        I went out of my way to point out that the First Lady 
        was one of the people that I knew had been made aware 
        of the note prior to the time that I understood it had 
        been given to law enforcement officials. And I'm very 
        conscious of the fact that I made that effort precisely 
        because I didn't think I had been asked a question 
        earlier in which there would have been an opportunity 
        to talk about the fact that the First Lady had come to 
        look at it that night. 836

    However, the FBI report of Mr. Neuwirth's interview, which 
summarized his account of the time between the discovery of the 
note and its disclosure to law enforcement, did not mention 
that Mrs. Clinton had been told of the note--an important fact 
that a trained agent would almost certainly include in such a 
report. 837 The handwritten notes of that interview, taken 
by Agent Salter, recorded a lengthy narrative by Mr. Neuwirth 
of the events on July 26 and July 27. But nowhere in the 
narrative, according to the notes, did Mr. Neuwirth refer to 
either Mrs. Clinton or Ms. Thomases. 838
    Mrs. Clinton's schedule for July 27, the day after the 
discovery of the note, indicated that Mrs. Clinton had a 
private meeting in her office with Mr. Nussbaum and Mr. 
Neuwirth from 2:30 p.m. to 3:00 p.m.--several hours before the 
note was turned over to the authorities. 839 The schedule, 
however, did not specify the topic of the meeting.
    Mr. Burton testified that he does not recall any 
discussions in the White House about whether the law 
enforcement authorities should be told that Mrs. Clinton had 
seen the note. 840 Curiously, Mr. Burton's notes of a 
staff meeting on July 28, the day after the note was disclosed 
to the authorities, listed ``HRC'' with a telling arrow 
pointing to an adjacent letter ``n''. 841 Mr. Burton 
testified that he did not know what his own notes--particularly 
the reference to the letter ``n''--meant. 842

                            vi. july 27,1993

A. The review and transfer of Clinton personal files from the White 
        House residence to Williams & Connolly

    On the afternoon of July 22, and after Mr. Nussbaum's real 
search, Thomas Castleton, an assistant in the White House 
Counsel's office, helped Margaret Williams remove boxes from 
Mr. Foster's office to the White House Residence. As they were 
walking, Ms. Williams told Mr. Castleton that the boxes had to 
be taken to the residence for an important purpose: the 
President or Mrs. Clinton needed to review their contents. 
843 According to Mr. Castleton: ``What [Ms. Williams] said 
was that the boxes contained personal and financial records 
pertaining to the First Family and that we were moving the 
boxes to the residence for them to be reviewed.'' 844 Ms. 
Williams said that the files needed to be reviewed because 
``they did not know what was in these files and needed to 
determine whether there was something of a personal nature or 
not.'' 845 ``She said that the President or the First Lady 
had to review the contents of the boxes to determine what was 
in them.'' 846
    Ms. Williams did not recall any such conversation with Mr. 
Castleton. Ms. Williams testified that such a conversation 
would be out of character for her because ``it is highly 
unlikely I would have this kind of discussion with an intern:'' 
847

          Well, I would like to say affirmatively I did not say 
        it because I can't imagine why I would have that 
        discussion with an intern about the files going to the 
        President and the First Lady. I know that I told him we 
        were going to the residence because I figured he needed 
        to know where he was going, but I can't imagine that I 
        said more than that. So I do not recall having that 
        discussion with him. 848

    Mr. Castleton took exception with Ms. Williams' 
characterization of his role at the White House: he was not an 
intern, but a special assistant to the White House Counsel. 
849
    Ms. Williams claimed that no one reviewed the Clintons' 
personal files while they were stored in the residence. 
According to Ms. Williams, Carolyn Huber gave Ms. Williams the 
key after Ms. Huber locked the closet on Thursday, July 22. 
850 Ms. Williams put the key on her key chain and held it 
through the weekend, taking it with her to Mr. Foster's funeral 
in Arkansas. 851
    Ms. Huber, however, testified that, after she locked the 
closet on July 22, she returned the key to its usual keeping 
place, in an envelope in the desk drawer of the office in the 
residence. 852 The envelope was marked clearly: ``It said 
`key to the closet.'' 853 The drawer was not locked, 
according to Ms. Huber, and therefore the key was readily 
available to anyone with access to the residence. 854
    The plot thickens. Although Ms. Williams testified that the 
files remained undisturbed until she transferred them to 
Williams & Connolly on July 27, Mr. Nussbaum testified that, a 
couple of days after the files were removed from Mr. Foster's 
office on July 22, Ms. Williams returned a Mr. Foster file to 
him because it should not have been among the Clintons' 
personal documents. ``I'm not quite sure Ms. Williams returned 
the document. I believe Ms. Williams returned the document. A 
residence file was returned. There was a file that was returned 
because we were making an effort to send over solely personal 
documents which had been used--yes--which were in the White 
House counsel's office because there was an official purpose.'' 
855 25
---------------------------------------------------------------------------
    \25\ After providing this testimony, Mr. Nussbaum consulted with 
counsel. When the deposition resumed, Mr. Nussbaum revised his 
testimony: ``As I indicated in my testimony, look back at the record, 
I'm not certain I even had this discussion with Ms. Williams. I'm not 
positive. It's either Ms. Williams or Mr. Neuwirth I had a discussion 
with.'' Nussbaum, 7/13/95 Dep. p. 409.
---------------------------------------------------------------------------
    Mrs. Clinton's official schedule showed that she had two 
private meetings with Ms. Williams on July 27, one from 9:15 
a.m. to 9:30 a.m. and another from 10:30 a.m. to 11:30 a.m. 
856 Although the schedule listed Mrs. Clinton's office as 
the location of the meetings, records of movements within the 
White House maintained by the Secret Service and the White 
House Usher's Office indicate that Mrs. Clinton did not leave 
the White House Residence at all that day. 857 Records 
maintained by the Secret Service and the White House Usher's 
office indicated that Ms. Williams was in the White House 
Residence on July 27 from 10:31 a.m. to 12:05 p.m., 1:35 p.m. 
to 2:25 p.m., and 3:20 p.m. to 4:43 p.m. 858
    Ms. Williams testified that on July 27, Robert Barnett, a 
partner at the law firm Williams & Connolly and the Clintons' 
personal attorney, came to the White House to see Mrs. Clinton. 
By chance, Ms. Williams claims that she ran into Mr. Barnett 
while he was on the second floor of the White House Residence 
talking to Mrs. Clinton. 859 According to Ms. Williams, 
Mr. Barnett said, ``you know what? It would make sense to get 
those documents over to the office,'' 860 referring to the 
documents that Ms. Williams had moved from Mr. Foster's office 
to the Residence on July 22. Mr. Barnett then called from the 
residence for another person from Williams & Connolly to come 
for the documents. When that person arrived, according to Ms. 
Williams, she accompanied him to the residence, unlocked the 
closet with the key on her keyring, and pointed the documents 
out to him. 861
    Mr. Barnett had a far different and more believable 
recollection of Ms. Williams' role in the transfer of the 
files. He testified that Ms. Williams called him specifically 
to arrange a transfer of the files, and ``I spoke with her 
about picking up the documents.'' 862 On July 27, he went 
to the White House to pick up the documents. Capricia Marshall, 
Ms. Clinton's assistant, met him at the gate, signed him in 
with the Secret Service, and escorted him to the Second Floor 
to wait for Ms. Williams. 863 Records show that Mr. 
Barnett arrived at the White House at 2:57 p.m. 864, 
registering ``First Lady'' as his visitee with Secret Service, 
and entered the White House Residence at 3:03 p.m. 865 
About 20 minutes later, Ms. Williams came and escorted Mr. 
Barnett up to the third floor closet where the files were kept. 
866 The box was open, and Mr. Barnett went through the 
files, briefly examining their contents. 867 When he 
finished the review, Mr. Barnett asked Ms. Williams for tape 
and sealed the box. 868
    Mr. Barnett then called Ingram P. Barlow, the comptroller 
of Williams & Connolly, to come over and pick up the box from 
the White House. 869 Mr. Barnett gave Ms. Williams Mr. 
Barlow's name and social security number for her to clear him 
in with the Secret Service, and left at 4:30 p.m. 870 Mr. 
Barnett denied seeing Mrs. Clinton while he was in the White 
House Residence. 871
    Mr. Barlow of Williams & Connolly arrived at the White 
House Residence at 4:38 p.m. 872 He was escorted to the 
third floor closet, where he took possession of the box. 
Consistent with Mr. Barnett's testimony, the box was sealed in 
packing tape when Mr. Barlow saw it in the closet. 873
    Mr. Barnett called Susan Thomases at her office on July 26, 
1993 and left a message. 874 Ms. Thomases did not recall 
returning Mr. Barnett's call, nor did she recall making plans 
to go to the White House on July 27. 875 Secret Service 
records, however, indicate that Susan Thomases entered the 
White House at 2:50 p.m. on July 27. 876 Because Ms. 
Thomases had a White House pass at that time, the Secret 
Service entry records did not list the purpose of her visit or 
her intended destination. Records maintained at the White House 
Residence, however, indicated that she entered the Residence at 
3:08 p.m., five minutes after Mr. Barnett. Records maintained 
by the White House Residence Usher's Office further indicate 
that Mr. Barnett and Ms. Thomases exited the White House 
Residence together. 877 Mr. Barnett testified, however, 
that he did not recall seeing Ms. Thomases in the White House 
Residence.
    Although Mr. Barnett testified that he did not recall 
seeing Mrs. Clinton during his visit on July 27, Ms. Williams 
testified that she recalled seeing Mr. Barnett talking with 
Mrs. Clinton when she ran into him in the Residence that 
afternoon.
    Telephone records produced by Ms. Thomases indicate that 
she called Patricia Solis Doyle, Mrs. Clinton's scheduler, on 
the evening of July 26, 1993. 878 Ms. Thomases does not 
recall why she spoke with Ms. Solis, and does not recall 
whether she called Ms. Solis to schedule an appointment to see 
Mrs. Clinton. 879
    On the morning of July 27, Ms. Solis called Ms. Thomases in 
her New York office and left a message. The message read, ``HRC 
wants to see you today.'' 880 The message contained a 
check mark, which, according to Ms. Thomases, signified that 
she had returned the call. Indeed, telephone records indicate 
that, at 11:33 a.m. on July 27, Ms. Thomases called Ms. Solis 
from her Washington office and spoke for 10 minutes. 881 
Her telephone records further indicate that, in the 40 minutes 
between 12:20 p.m. and 1:00 p.m. on July 27, Ms. Thomases 
called the White House four times. Later that afternoon, at 
1:30 p.m., Ms. Thomases received another message from Evelyn 
Lieberman in the First Lady's office. It stated, ``Please call 
Hillary.'' 882
    Ms. Thomases testified that as of the end of the day on 
July 26, she did not have any firm plan or compelling reason to 
come to Washington the next day, July 27.883 Her normal 
day to be in Washington was Wednesday. According to Ms. Solis, 
it was not customary for Mrs. Clinton to summon Ms. Thomases to 
Washington on a particular day. ``That's not normally the way 
it works. If Mrs. Clinton wanted to see Susan, she'd ask is she 
in town, do you know what her schedule is, can she come by.'' 
884
    Interestingly, Ms. Thomases professed that she could not 
explain why she went to Washington on July 27. Ms. Thomases did 
not recall scheduling a meeting with or seeing Mrs. Clinton on 
July 27.885 Indeed, Ms. Thomases testified that she did 
not even have a specific recollection of even being in the 
White House Residence that day. Secret Service records and the 
White House Residence Usher's logs indicate, however, that Ms. 
Thomases arrived at the White House at 2:50 p.m. on July 27, 
and went up to the second floor of the White House Residence at 
3:08 p.m.886 In addition, records indicate that Ms. 
Thomases made two telephone calls from the White House 
Residence on July 27, 1993, and charged them to her telephone 
calling card.887

B. White House deliberations about the handling of the note

    In the morning of July 27th, after the regular White House 
staff meeting, Mr. Nussbaum met with Mr. McLarty, Mr. Burton, 
and Mr. Gergen to discuss how Mr. Foster's note should be 
handled.888 Mr. McLarty thought ``the note would need to 
be provided to the authorities, and it eventually would become 
public knowledge; either we would disclose it or it would 
become public knowledge.'' However, there were ``issues 
outstanding'' that he wanted to discuss with the other White 
House officials.889 According to Mr. Gergen:, the meeting 
was resolved in favor of disclosing the note to the authorities 
as soon as possible. ``[T]here was a unanimous agreement that 
the issues that had been raised the night before had been 
resolved in the minds of those who had raised them, and it was 
a unanimous agreement to go forward.'' 890 Mr. McLarty 
confirmed that at the meeting the ``concerns over executive 
privilege had been settled.'' 891
    Jim Hamilton, an attorney representing the Foster family, 
joined the meeting halfway through, at about 11:00 a.m. He 
introduced a concern that was new to Mr. Gergen:

          He took the position--I do not know whether, I do not 
        know whether he knew about the existence of the note 
        prior to coming in the room, or whether he was told, 
        but he was very strongly of the view that before 
        anything was done with the note, Mrs. Foster needed to 
        be informed of the contents and needed to be informed 
        that there was a note, and he needed to sit down with 
        her and talk about it.892

Mr. Hamilton told those at the meeting that Mrs. Foster was 
flying from Arkansas, and would arrive early in the afternoon, 
at about 2:30 p.m.893 Mr. Hamilton said that he agreed 
that the note should be turned over to the authorities, but he 
did not know what Mrs. Foster's reaction would be to the 
note.894 After consulting with Mrs. Foster, Mr. Hamilton 
returned to the White House and said that Mrs. Foster assented 
to turning the note over to the authorities.895
    White House officials also discussed how to disclose the 
note to the authorities. ``I think there'd been some discussion 
in our staff meetings about whether it ought to go to the 
Justice Department or the Park Police,'' Mr. Gergen said. 
``There was some uncertainty on the part of the White House 
about what the appropriate channel was to make sure it got 
there.'' 896 The officials discussed whether the Park 
Police could be trusted not to leak the existence or contents 
of the note to the press.897 They also feared that 
disclosure of Mr. Foster's note might prompt the authorities to 
reopen investigations into the matters spelled out in the note. 
``I recall there was some speculation about whether the 
contents of the note might prompt legal authorities to look 
further in to the issues raised by the note. In other words, to 
go beyond the scope of the immediate investigation over his 
mental state.'' 898
    The controversy over the White House Travel Office was 
specifically mentioned.899 According to Mr. Gergen:

          I believe with regard to the Travelgate matter [he] 
        said the FBI lied. He accused the FBI of lying, I 
        believe--I can't--I don't remember the exact details of 
        this, but there was a discussion within the White House 
        of whether upon receipt of that or once the note was 
        turned over to the authorities--this was discussions I 
        recall we had on Tuesday, on the day when the note was 
        turned over--whether that would prompt or the Attorney 
        General would feel forced, having received that, to 
        launch an investigation about what he was talking 
        about. You know, did the FBI lie? That was the point 
        that I was trying to make in the deposition. 
        Inevitably, there were points raised in the note that 
        were clearly going to prompt a lot of attention by the 
        press and by others, and that particular point was on 
        the one about the FBI lying.900 26

    \26\ After the note was turned over to law enforcement authorities, 
Mr. Heymann referred it to the Office of Professional Responsibility 
(OPR) and the Criminal Division of the Justice Department with the 
following directive:
    I would like OPR to review the assertion in the notes dealing with 
the FBI and to give me its recommendation as to what, if any, further 
inquiry is necessary and appropriate. I would like the Criminal 
Division to review the other assertions in the notes and to give me its 
recommendation as to what, if any, further inquiry is necessary and 
appropriate.
    Justice Department Document D 000057.
---------------------------------------------------------------------------
    The documents produced by the White House to the Special 
Committee included two pages of undated, handwritten notes by 
Bill Burton. At the top the first page, Mr. Burton listed the 
names of the persons present at the meeting on July 27: Jim 
Hamilton, Bernard Nussbaum, Bill Burton, David Gergen, Mack 
McLarty.901 Further down in his notes, Mr. Burton wrote 
``2 pts'' with an arrow pointing to the following:

          far happier if disc.
          if someone other than Bernie
          if worried about usher's office discuss with 
        me.902

On the second page, Mr. Burton wrote the following: ``We have 
disc a personal writing of Mr. Foster reflecting his depressed 
state. In deference to the family, no further commt.'' 903 
Mr. Burton testified that ``disc.'' on the first page meant 
``discussed'' or ``disclosed'', and the same notation of the 
second page was shorthand for ``discovered''. Senator Grams 
noted the inconsistency in Mr. Burton's answer and pointed out 
further that, on the first page, when Mr. Burton meant 
``discussed'' in the last line of the notes, he wrote out the 
entire word. Mr. Burton explained that he used a variety of 
abbreviations. ``I use some standard Associated Press 
abbreviations; I use some of my own shorthand. Sometimes d-i-s-
c means discussed. Sometimes it means discovered. Sometimes it 
means disclosed.'' 904

C. The President is told of the note

    Mr. McLarty called Mrs. Foster's house after the morning 
meeting and then learned that Mrs. Foster was traveling back 
from Arkansas to Washington.905 She arrived in Washington 
in the afternoon, at about 2:30 p.m. She was then taken to the 
White House to view the note and agreed to disclose the note to 
the authorities.906
     Even though it had been agreed at the morning meeting that 
the President would be notified as soon as possible so that the 
note could be turned over to the authorities, Mr. McLarty 
claims that he did not notify the President until late in the 
afternoon because the President had a full schedule and because 
Mrs. Foster had not been notified.907 At 6:00 
p.m.,908 Mr. McLarty, Mr. Gergen, and Mr. Nussbaum went 
into the Oval Office to tell the President about the note. 
According to Mr. McLarty, Mr. Nussbaum explained to the 
President the existence of the note and either ``read him the 
note or outlined what was in the contents.'' The three men 
explained to the President that Mrs. Foster had already been 
notified, or would be shortly, and that they intended to turn 
the note over to the authorities. Mr. McLarty testified that 
the President accepted their report, and ``he said do with it 
as you think is right, give it to the authorities; and that was 
about it.'' 909
    Mr. Gergen testified that the President did not indicate 
that he knew about the note before the 6:00 p.m. meeting, 
although Mr. Gergen ``couldn't tell from his reaction whether 
he knew.'' 910 By then, Mrs. Clinton had known of the note 
for over 24 hours. Senator Grams observed that ``[i]t seems 
kind of strange knowing that this was one of his best friends 
and all of the speculation surrounding looking for a suicide 
note that night, and then finally when something was found, he 
didn't--wasn't inquisitive; he didn't inquire about it; he 
didn't seem to want to know more information except for to say 
you handle it the best way you know how.'' 911

D. The White House finally turns the note over to law enforcement

    Some time in the afternoon, Mr. McLarty called Attorney 
General Janet Reno and asked her to come to the White House 
that evening, at about 7:00 p.m.912 Deputy Attorney 
General Heymann recalled accompanying Attorney General Reno to 
the White House:

          I rode over with the Attorney General on the evening 
        of Tuesday the 27th. We had a 7:00 meeting. We had not 
        been told what it was about, though. I thought it was 
        probably about the Foster matter. We were shown into 
        Mr. McLarty's office. The only--I think at first only 
        Mr. Gergen, David Gergen was there. Then Mr. Nussbaum 
        came in and Mr. Burton, I believe, and certainly Mr. 
        McLarty. There had been some small talk before 
        that.913

    Mr. Nussbaum began the meeting by informing Attorney 
General Reno and Mr. Heymann of the existence of the note, 
producing the note, and reading them a transcript of the note. 
Mr. Nussbaum then asked the Justice Department Officials what 
``should be done with it.'' Attorney General Reno told Mr. 
Nussbaum to ``turn it over to the Park Police immediately.'' 
914
    Attorney General Reno questioned Mr. Nussbaum about the 
long delay in disclosing the note to the proper authorities:

          She then asked why are we just getting it now if it 
        was found I guess it's 30 hours--it was 30 hours before 
        then. The White House people, I don't know whether it 
        was Mr. Nussbaum or who, said that there was--they 
        wanted first to show it to Mrs. Foster and they wanted 
        to show it to the President who might, if he had wanted 
        to, have asserted executive privilege, they said. They 
        said they were not able to get to the President until 
        late on the 27th and as soon as they got to the 
        President and made the President aware of the note, 
        they had called us.915

Attorney General Reno, who had to leave, asked Mr. Heymann to 
stay and take care of the matter. Mr. Heymann then called Mr. 
Margolis and asked him to call the Park Police 
immediately.916
    Apparently unbeknownst to Attorney General Reno and Deputy 
Attorney General Heymann, Webster Hubbell, the Associate 
Attorney General, was in the White House Residence while Ms. 
Reno and Mr. Heymann were in the White House to receive the 
note. Mr. Hubbell's records indicate that Mrs. Clinton had 
called his office and left a message at 2:30 p.m. that 
afternoon.917 White House logs indicate that Mr. Hubbell 
arrived at the Residence at 6:29 p.m. and remained there until 
8:19 p.m.918 Ms. Thomases, who was in the Residence at the 
same time as Mrs. Clinton and Mr. Hubbell, exited the White 
House at approximately the same time.919 Neither Ms. 
Thomases nor Mr. Hubbell recalled discussing the note with each 
other or with Mrs. Clinton on that day. Ms. Thomases testified, 
``I don't know that Hillary Clinton and I have ever discussed 
that writing.'' 920
    Ms. Thomases acknowledged that she met with Mr. Hubbell and 
Mrs. Clinton in the Residence following Mr. Foster's death, but 
she did not recall whether the gathering occurred on July 27: 
921 27 She claimed that the three shared only memories of 
Mr. Foster:

    \27\ Entry and exit records for the White House and the Residence 
indicate that July 27 was the only day in the week following Mr. 
Foster's death when Mrs. Clinton, Ms. Thomases, and Mr. Hubbell were in 
the White House or the Residence together.
---------------------------------------------------------------------------
          We just talked about the tragedy of Vince's death and 
        we talked about how sad it was, and I remember that the 
        first time the three of us were together, we talked a 
        little bit about some of the good times that we had had 
        together and old times before Bill Clinton was elected 
        President, and in the days in which I used to see 
        them.922
    Mr. Hubbell testified that he learned about the note when 
he ``read it in the newspaper.'' 923 When asked about his 
trip to the White House on July 27, Mr. Hubbell testified that 
he went to the White House to give Mrs. Clinton an account of 
Mr. Foster's funeral after Mrs. Clinton left. ``I remember that 
I had to go to the White House to tell Hillary about what had 
gone on after they left the funeral, but I don't have any 
memory of doing it.'' 924 He testified that it was part of 
the grieving process: ``We, as Southerners, we have large long 
funerals and we get together and drink and eat and talk and do 
it for days. And Hillary had missed that grieving process, and 
I remember my wife saying, Hillary needs to talk to you. She 
needs to understand who was there and things of that sort.'' 
925 Implausibly, he did not recall seeing Ms. Thomases or 
discuss Mr. Foster's note with Mrs. Clinton.926
    After Mr. Heymann called the Park Police, Officer Joseph 
Megby of the Park Police went to the White House. Mr. Nussbaum 
began to assemble the note.927 Some of the pieces fell, 
and Mr. Nussbaum and others picked them up. Mr. Heymann 
testified that ``the note fell down, a number of the pieces of 
the note fell down on the floor and there was a scramble to 
pick them up.'' 928 He noted at the time that ``by the 
time it had been reassembled, the fingerprints of everybody in 
the White House were on it. So if anybody wanted fingerprints, 
they had all the fingerprints in the world.'' 929 28
---------------------------------------------------------------------------
    \28\ A later FBI analysis of the pieces of the note concluded: 
``The specimens were examined and one latent palm print of value was 
developed on one piece of paper, part of Q1.'' Justice Department 
Document FBI-00000079. The latent palm print is unidentified.
---------------------------------------------------------------------------
    Mr. Nussbaum then gave the note to Officer Megby and 
concluded the meeting. Heymann urged Officer Megby to ask any 
questions that he might have, but the officer declined. It was 
not until later that Mr. Heymann learned that Officer Megby 
``was simply a duty officer. This was probably all new to 
him.'' 930
    The circumstances surrounding the discovery of the note and 
the delay in turning it over to the authorities disturbed Mr. 
Heymann and caused him to question the level of cooperation 
that the White House provided to the investigation into Mr. 
Foster's death. The next day, July 28, 1993, Mr. Heymann met 
with Mr. Margolis and instructed him to ask the FBI to conduct 
a thorough investigation into the discovery of the note. Mr. 
Heymann specifically told them to be ``very aggressive,'' 
931 and Mr. Margolis described the investigation as an 
``800-pound gorilla.'' 932 Mr. Heymann and Mr. Margolis 
identified the jurisdictional predicate for the investigation 
as obstruction of justice, 933 and FBI documents confirmed 
that the subject matter was ``possible obstruction of justice 
of U.S. Park Police investigation of death of Vincent Foster, 
Counsel to the President.'' 934
    This sentiment was shared by the Park Police, who 
complained about the lack of White House cooperation to number 
two official of the Interior Department. Mr. Heymann testified 
that, on July 29, 1993, he received a call from Thomas Collier, 
the Chief of Staff to the Secretary of Interior, asking for 
help. Mr. Collier told Mr. Heymann that ``the Park Police are 
very, very upset about the investigation* * *. He said that 
they really couldn't get the cooperation that they wanted, and 
he said that he wanted to pull the Park Police out and he'd 
like me to substitute the FBI for the Park Police.'' 935 
Mr. Heymann did not want to pull the Park Police from the 
investigation, but told Mr. Collier that the FBI, at Mr. 
Heymann's request, were already involved in the White House 
investigation. Mr. Heymann also assured Mr. Collier that he 
would intervene with the White House to ensure future 
cooperation.
    Mr. Heymann then called David Gergen at the White House and 
explained the problems that the Park Police investigators were 
encountering. Mr. Gergen told Mr. Heymann that he would call 
back in a few minutes so that Mr. Gergen could assemble a 
number of White House personnel in his office.936 When Mr. 
Gergen called back, he was on a speakerphone with a number of 
White House officials, ``eight or nine or ten people.'' 
937 Mr. Gergen does not have a clear memory of the 
conversation, but he testified that Mr. Heymann ``may have 
conveyed to me a sense of, not a precise x, y, z, here's what 
you guys are doing, but a sense of watch it, you know, an 
alert. Make sure the White House was doing this, to remind me 
in effect, these are very highly charged kinds of 
investigations and they can be misunderstood very easily.'' 
938
    Mr. Heymann's recollection is clearer:

          I read them the riot act in unmistakable terms, 
        telling them that this was a disaster very near to 
        occur, that I was sending, I had sent the FBI in to 
        interview on the note. That I wanted all interviews to 
        take place without White House counsel there. That I 
        wanted full cooperation. That there was a very good 
        chance that nothing could avoid sort of a major failure 
        of credibility and sense of biased investigation, but 
        that only the most vigorous of steps, at this point, 
        could do that, and I wanted a complete 
        turnaround.939

According to Mr. Heymann, he deliberately delivered a ``very 
strong message'' seeking to change the White House attitude 
toward the investigation.940 He received some, but not 
much, argument from the White House officials involved in the 
conference call. After the conversation, according to Mr. 
Heymann, ``the cooperation with the Park Police and with the 
FBI turned around immediately and completely.'' 941

                   Findings of the Special Committee

    In the course of its investigation, the Special Committee 
was confronted with witnesses who provided conflicting 
testimony about events highly relevant to the Special 
Committee's inquiry. To resolve these conflicts in testimony, 
Senate Resolution 120 authorized the Special Committee to make 
factual findings based on the available evidence. In doing so, 
the Special Committee placed primary emphasis on documentary or 
other physical evidence whenever such evidence was available 
and when there was no indication that such evidence had been 
altered or otherwise compromised. When judgments of credibility 
had to be made, the Special Committee focused on the factors 
that, from common sense and logic, contribute to the 
reliability of a person's testimony--factors such as a motive 
to lie or embellish, the detail and vividness of memory, and 
the internal and external consistency of a person's overall 
testimony. The Special Committee summarizes its factual 
findings below.

Finding 1. At the time of his death, Vincent Foster was intimately 
        involved in two brewing scandals--Travelgate and Whitewater--
        touching on President and Mrs. Clinton

    Mr. Foster played a central role in both the firing of the 
Travel Office staff and subsequent attempts to conceal Mrs. 
Clinton's true role in the firings. Mr. Foster participated in 
the May 12, 1993 meeting with Harry Thomasson, Catherine 
Cornelius, and David Watkins where the replacement of the 
Travel Office staff was first discussed.942 Mr. Foster 
then assigned his former law partner, William Kennedy, to 
investigate alleged financial mismanagement in the Travel 
Office. When the July 2, 1993 report of an internal White House 
review into the matter sharply reprimanded Mr. Kennedy, Mr. 
Foster felt personally responsible and insisted that Mr. 
Nussbaum allow him to shoulder the blame.943
    Mr. Watkins' belatedly disclosed memorandum concerning the 
Travel Office affair clearly outlined Mr. Foster's extensive 
involvement as Mrs. Clinton's conduit to the firings. Mr. 
Kennedy wrote, for example, ``Once this made it on the First 
Lady's agenda, Vince Foster became involved, and he and Harry 
Thomasson regularly informed me of her attention to the Travel 
Office situation--as well as her insistence that the situation 
be resolved immediately by replacing the Travel Office staff.'' 
944 Indeed, Mr. Watkins fingered Mr. Foster as the person 
who directly communicated to him Mrs. Clinton's order that the 
Travel Office staff be fired. ``Foster regularly informed me 
that the First Lady was concerned and desired action--the 
action desired was the firing of the Travel Office staff.'' 
945 Despite Mrs. Clinton's obvious and extensive 
involvement in the firing of the staff, Mr. Foster and other 
White House officials did not disclose to investigators probing 
the affair about her true role.
    It is also undisputed that Mr. Foster played a central role 
in the effort to respond to and manage the brewing Whitewater 
scandal. When questions first arose in the 1992 campaign about 
Whitewater and Mrs. Clinton's representation of Mr. McDougal's 
Madison Guaranty, Mr. Foster compiled the files and billing 
records of the Rose Law Firm relating to that 
representation.946 He and Mr. Hubbell improperly removed 
the files from the Rose Law Firm without authorization and 
transported them to Washington after the campaign. In order to 
``[g]et out of White Water,'' 947 Mr. Foster also 
perfected the sale of the Clintons' interest in Whitewater to 
Mr. McDougal.948
    After becoming Deputy White House Counsel, Mr. Foster 
continued his role as the Clintons' personal counsel on 
Whitewater. He was assigned the task of preparing the Clintons' 
tax returns for 1992 in order to reflect properly the sale of 
their shares in Whitewater,949 a problem that his notes 
described as a ``can of worms you shouldn't open.'' 950 
Mr. Foster worked with other White House officials in the 
Spring of 1993 in coordinating a response to questions about 
Whitewater.951 And Mr. Foster's telephone log indicated an 
inexplicable message from Mr. McDougal on June 16, 1993, ``re 
tax returns of HRC, VWF and McDougal.'' 952

Finding 2. Senior White House officials were aware that the President 
        and Mrs. Clinton faced potential liability over Whitewater and 
        their relationship with the McDougals

    Before the Special Committee, Mr. Nussbaum boldly 
announced: ``The Whitewater matter, which subsequently became 
the focus of so much attention, was not on our minds or even in 
our consciousness in July 1993.'' 953 The testimonial and 
evidentiary record belies Mr. Nussbaum's exculpatory 
declaration.
    Questions about Whitewater and Mrs. Clinton's 
representation of Madison were a major campaign issue in 1992, 
so much so that the Clintons took the extraordinary step of 
retaining Jame Lyons, an ``outside attorney,'' to issue a 
report on the matter. Mr. Foster and Mr. Hubbell at that time 
compiled the files and billing records of the Rose Law Firm 
relating to Mrs. Clinton's representation of Madison,954 
and transported the files to Washington after the campaign. And 
Mr. Foster was specifically asked to prepare the Clintons' 
personal tax returns as they relate to Whitewater,955 a 
project which consumed his time in the White House.
    More important, as early as 1992, the Clintons and their 
advisors were aware that questions about Whitewater would again 
resurface, this time in a criminal investigation. In the fall 
of 1992, Betsey Wright heard of a ``criminal referral regarding 
a savings and loan official in Arkansas and . . . involv[ing] 
the Clintons.'' 956 Ms. Wright learned specifically that 
the RTC had just sent a ``criminal referral up to the 
prosecutor in Little Rock.'' 957 She passed this news onto 
Mrs. Clinton.958
    According to RTC Senior Vice President William H. Roelle, 
former Deputy Secretary of the Treasury Roger Altman, upon 
taking office, directed the staff to inform him of all 
important or potentially high-visibility issues.959 Mr. 
Roelle testified that, on or about March 23, 1993, he told Mr. 
Altman that the RTC had sent a criminal referral mentioning the 
Clintons to the Justice Department.960 Mr. Altman 
immediately sent Mr. Nussbaum two facsimiles about Whitewater. 
The first facsimile, sent on March 23, 1993 with a handwritten 
cover sheet, forwarded an ``RTC Clip Sheet'' of a March 9, 1992 
New York Times article with the headline, ``Clinton Defends 
Real-Estate Deal.'' 961 The article reported the responses 
that Bill Clinton, then a presidential candidate, offered to an 
earlier Times report detailing the Clintons' investment in 
Whitewater and their ties to Jim and Susan McDougal. The second 
facsimile from Mr. Altman to Mr. Nussbaum, sent the next day, 
March 24, 1993, forwarded the same article that was sent the 
day before and portions of the earlier Times report--an article 
dated March 8, 1992, by Jeff Gerth entitled ``Clintons Joined 
S&L Operator in an Ozark Real-Estate Venture,'' which 
originally broke the story in the news media.962
    In addition, SBA Associate Administrator Wayne Foren 
testified that, in early May 1993, he briefed Erskine Bowles, 
the new SBA Administrator about the agency's ongoing 
investigation of David Hale's Capital Management Services 
because the case involved President Clinton.963 Shortly 
thereafter, Mr. Bowles told Mr. Foren that he had briefed White 
House Chief of Staff Mack McLarty about the case.964 
Although Mr. Bowles did not recall being briefed by Mr. Foren 
about Capital Management 965 or talking to Mr. McLarty 
about the case,966 Mr. Foren's account was corroborated by 
his deputy, Charles Shepperson.967 Mr. McLarty's calendar 
indicated that Mr. Bowles had two meetings with Mr. McLarty at 
the White House in early May 1993.968
    Mr. Foster's role in response to Whitewater was known in 
the White House. Ricki Seidman, former Deputy Director of 
Communications in the White House, reported to the FBI that she 
and Mr. Foster had worked together on Whitewater issues before 
his death. Specifically, she recalled that she worked with Mr. 
Foster in April 1993 in connection with the Clintons' tax 
returns.969 Seidman participated in the discussions from a 
``communications perspective,'' 970 thus indicating the 
White House's identification of Whitewater as a potential issue 
in the spring of 1993. Indeed, according to the FBI report of 
Ms. Seidman's interview, ``it was believed the tax returns 
would bring the Whitewater issue into the `public domain 
again.' '' 971 And Ms. Seidman stated that there was 
discussion in the White House regarding ``the `soundest way' to 
seek closure to the issue.'' 972
    Given this overwhelming evidence, the Special Committee 
finds that White House officials knew about Mr. Foster's work 
for the Clintons on Whitewater, and that, at the time of his 
death, the Clinton White House was acutely aware that 
Whitewater was a potential political and criminal matter.

Finding 3. Senior White House officials ignored repeated requests by 
        law enforcement officials to seal Mr. Foster's office on the 
        night of his death

    Nine different persons recalled four separate requests to 
White House officials to seal Vincent Foster's office on the 
evening of July 20. Park Police investigator Sergeant Cheryl 
Braun testified that, as she left the Foster residence, she 
asked Assistant to the President David Watkins to seal Mr. 
Foster's office.973 Detective John Rolla expressly 
corroborated her testimony.974 Park Police Major Robert 
Hines testified that he called and asked another senior White 
House official, Bill Burton, to seal Mr. Foster's 
office.975 Another White House official, Sylvia Mathews, 
testified that she overheard Mr. Burton's conversation with the 
Park Police 976 and that right after the telephone call, 
Mr. Burton asked Counsel to the President Bernard Nussbaum to 
seal the office.977
    Counselor to the President David Gergen testified that he 
asked Director of Communications Mark Gearan whether Mr. 
Foster's office was sealed.978 Mr. Gearan then asked Mr. 
Burton, who assured Mr. Gearan that the office had been 
sealed.979 Associate Attorney General Webster Hubbell 
testified that both his wife and Marsha Scott remembered him 
calling Chief of Staff Mack McLarty on the night of Mr. 
Foster's death to ask that Mr. Foster's office be 
sealed.980 All the persons who received these requests to 
seal Mr. Foster's office denied having been asked to do so.
    Mr. Watkins was the critical person in the failure to seal 
Mr. Foster's office on the night of his death. He received a 
specific request from the Park Police to seal Mr. Foster's 
office. Instead of doing so, he directed his assistant, Patsy 
Thomasson, to search the office. Mr. Watkins was intimately 
involved, along with Mr. Foster, in firing the career Travel 
Office staff and in the apparent subsequent cover up before 
investigators. In a memorandum drafted in the Fall of 1993, Mr. 
Watkins described in detail Mr. Foster's and Mrs. Clinton's 
role in the Travelgate affair. He wrote that ``Foster regularly 
informed me that the First Lady was concerned and desired 
action--the action desired was the firing of the Travel Office 
staff.'' 981 The memorandum also revealed that, right 
before the firing of the Travel Office staff, White House Chief 
of Staff Mack McLarty met with Mr. Watkins and Ms. Thomasson 
and explained that the issue was on Mrs. Clinton's ``radar 
screen'' and that ``immediate action must be taken.'' 982 
At all times, however, the White House had maintained that Mrs. 
Clinton was not involved in the Travel Office matter; Mrs. 
Clinton and numerous other White House officials had made 
public statements that she had ``no role'' in the firing of the 
staff. Mr. Watkins' knowledge of Mrs. Clinton's true 
involvement in Travelgate, efforts by White House officials to 
conceal that involvement, and Mr. Foster's direct role in both 
the firing and the cover-up provides an obvious and powerful 
motive to violate the instructions of the Park Police to seal 
Mr. Foster's office. Instead, Mr. Watkins directed his trusted 
assistant, Patsy Thomasson, to search Mr. Foster's office.
    The Special Committee finds that the overwhelming weight of 
the evidence established that senior White House officials 
received multiple requests to seal Mr. Foster's office on the 
night of his death. The testimony of Sylvia Mathews, a White 
House official with absolutely no motivation to mislead the 
Special Committee, was corroborated by notes that she prepared 
within one week of Mr. Foster's death. 983 And Bill 
Burton's undated notes listed Webster Hubbell's name and 
telephone numbers next to the reminder ``(1) Secure Office''. 
984 This testimonial and documentary evidence is 
uncontradicted; the White House officials have testified simply 
that they did not recall the requests to seal Mr. Foster's 
office.
    It is undisputed that, contrary to the requests of law 
enforcement, Mr. Foster's office was not sealed the night of 
his death.

Finding 4. White House officials conducted an improper search of Mr. 
        Foster's office on the night of his death

    The Special Committee received testimony that David Watkins 
and Bernard Nussbaum both received requests to seal Mr. 
Foster's office. Instead of taking steps to seal Mr. Foster's 
office, however, Mr. Watkins paged Patsy Thomasson and 
instructed her to go to into Mr. Foster's office to search for 
a note. 985 Ms. Thomasson was aware of Mr. Foster's role 
in the Travel Office matter. 986 Mr. Nussbaum then joined 
Ms. Thomasson in that search. 987 It is unclear what 
motivated, or whether anyone instructed, Margaret Williams to 
go into Mr. Foster's office, but the Special Committee finds 
improbable Ms. Williams' testimony that she went to Mr. 
Foster's office in the hope that ``I would walk in and I would 
find Vince Foster there and we would have a chat sitting on his 
couch, as we have done so many times before.'' 988
    Following are the sequence of telephone calls established 
by records obtained by the Special Committee:

                                     LATE NIGHT PHONE CALLS, JULY 20th-21st                                     
----------------------------------------------------------------------------------------------------------------
                 Time                            From                       To                     Length       
----------------------------------------------------------------------------------------------------------------
10:13 p.m. EDT.......................  Rodham Residence........  Margaret Williams.......  16 min.              
11:19 p.m. EDT.......................  Rodham Residence........  Susan Thomases..........  20 min.              
12:15 a.m. EDT.......................  Susan Thomases..........  Margaret Williams.......  pager.               
12:56 a.m. EDT.......................  Margaret Williams.......  Rodham Residence........  11 min.              
1:10 a.m. EDT........................  Margaret Williams.......  Susan Thomases..........  14 min.              
----------------------------------------------------------------------------------------------------------------

Ms. Williams testified that she did not even mention to Mrs. 
Clinton the search of Mr. Foster's office in her telephone call 
at 12:56 a.m. on July 21--for example, that no note was found 
possibly explaining Mr. Foster's decision to take his own 
life.989 They had already spoken earlier in the night 
about the fact of Mr. Foster's death.
    Ms. Williams did not recall talking to Ms. Thomases on the 
evening of Mr. Foster's death.990 Of her conversation with 
Ms. Williams that night, Ms. Thomases testified: ``I don't 
recollect speaking with her that night. That's not to say that 
she didn't call me back and I didn't speak to her, but I have 
no independent recollection of having spoken with her that 
night.'' 991
    In the end, the documentary evidence showing the sequence 
of phone calls in the early hours of July 21, after Ms. 
Williams had entered Mr. Foster's office, reasonably leads to 
the conclusion that Ms. Williams called Ms. Thomases and Mrs. 
Clinton to report the results of the search of Mr. Foster's 
office.

Finding 5. Margaret Williams may have removed files from the White 
        House Counsel suite on the night of his death

    Secret Service Officer Henry O'Neill testified that, on the 
night of Mr. Foster's death, he specifically saw Margaret 
Williams remove file folders, three to five inches thick, from 
the White House Counsel suite and placed them in her 
office.992 As Ms. Williams walked past Officer O'Neill to 
her office, her assistant, Evelyn Lieberman, said to Officer 
O'Neill: ``that's Maggie Williams; she's the First Lady's chief 
of staff.'' 993 Ms. Williams denied removing any files and 
her attorney submitted the results of polygraph tests 
indicating that she was truthful in her denial.994
    The Special Committee finds the testimony of Officer 
O'Neill to be credible. Officer O'Neill, a career officer with 
the Secret Service Uniformed Division, has no motive to lie. He 
has a clear recollection of the critical events on the evening 
of Mr. Foster's death, and he is certain that he saw Ms. 
Williams remove the documents. He was situated in an excellent 
position in the narrow hall between the White House Counsel 
suite and Ms. Williams' office, and his memory is punctuated by 
Evelyn Lieberman's introduction of Ms. Williams.
    Although the results of Ms. Williams' polygraph 
examinations should be given some weight, there are reasons to 
question the probative value of those examinations. First, 
polygraph tests are generally unreliable--a recognition that in 
part led to the adoption of the Polygraph Protection Act of 
1987.29 Second, Ms. Williams was given three and probably 
four examinations by her private polygrapher before submitting 
to a test by the Independent Counsel.995 A person may 
increase her chances of being found ``truthful'' by taking 
multiple polygraph examinations. Subjects are approximately 25 
percent more likely to pass polygraph examinations with two 
practice exams, according to one study.30
---------------------------------------------------------------------------
    \29\ During debates on the bill, sponsored by Senators Hatch, 
Simon, and Dodd, one senator noted that polygraph tests are ``not much 
better than a toss of the coin in many instances.'' (134 Cong. Rec. 
S1794, S1800 (March 3, 1988)). Others observed that ``[l]ie detectors 
are inherently unreliable,'' (134 Cong. Rec. S1713, S1737 (March 2, 
1988)) and that ``polygraph tests cannot accurately distinguish 
truthful statement from lies.'' (134 Cong. Rec. S1638, S1647 (March 1, 
1988)).
    \30\ Louis I. Rovner, ``The Accuracy of Physiological Detection of 
Deception for Subjects with Prior Knowledge,'' 15 Polygraph p. 1 
(1986).
---------------------------------------------------------------------------

Finding 6. Bernard Nussbaum agreed with Justice Department officials on 
        July 21, 1993, to allow law enforcement officials to review 
        documents in Mr. Foster's office

    Philip Heymann testified that he and Mr. Nussbaum agreed on 
July 21, 1993, as to the procedures for reviewing the documents 
in Mr. Foster's office.996 David Margolis and Roger Adams, 
whom Mr. Heymann sent to the White House to conduct the review 
as agreed, corroborated Mr. Heymann's recollection.997 Mr. 
Nussbaum does not recall discussing procedures for reviewing 
Mr. Foster's office with Mr. Heymann on July 21. Mr. Margolis 
and Mr. Adams testified that, in Mr. Nussbaum's office that 
evening, they finalized the agreement between Mr. Heymann and 
Mr. Nussbaum.998 Mr. Nussbaum and his associates in the 
White House counsel's office denied reaching any 
agreement.999
    The Special Committee finds that the evidence 
overwhelmingly demonstrates that Mr. Nussbaum agreed with the 
Justice Department on July 21 with respect to the procedures 
for reviewing the documents in Mr. Foster's office. Mr. 
Heymann's specific and detailed recollection of his afternoon 
conversation with Mr. Nussbaum stands in stark contrast to Mr. 
Nussbaum's very hazy recollection that Mr. Heymann may ``get 
other people involved'' in the investigation. Mr. Margolis and 
Mr. Adams finalized Mr. Heymann's agreement when they met with 
Mr. Nussbaum, Mr. Sloan and Mr. Neuwirth later in the 
afternoon.1000 The testimony of Mr. Margolis and Mr. Adams 
is corroborated by notes made by Mr. Adams within one week of 
the meeting and by Cynthia Monaco's dictated diaries 1001 
and a contemporaneous FBI teletype describing the 
meeting.1002
    There is independent evidence confirming that Mr. Nussbaum 
agreed with the Justice Department on the procedures for 
reviewing documents in Mr. Foster's office. Mr. Margolis and 
Mr. Adams testified that, during the later afternoon meeting, 
Mr. Nussbaum overruled and corrected Mr. Neuwirth when Mr. 
Neuwirth stated that Mr. Nussbaum alone would review the 
documents in Mr. Foster's office.1003 The Special 
Committee finds simply not credible the testimony of Mr. 
Nussbaum, Mr. Neuwirth, and Mr. Sloan that they do not recall 
any such incident, given their vivid and specific denial of any 
such agreement with the Justice Department.

Finding 7. Margaret Williams and Susan Thomases, in consultation with 
        Mrs. Clinton, took part in formulating the procedure for 
        reviewing documents in Mr. Foster's office on July 22, 1993

    Mr. Nussbaum agreed with Justice Department officials on 
July 21, 1993, to an ``entirely sensible plan'' 1004 to 
review jointly documents in Mr. Foster's office. The next day, 
however, he broke the agreement, reviewed the documents 
himself, and permitted Margaret Williams, Mrs. Clinton's Chief 
of Staff, to participate in a second review and to remove 
documents from Mr. Foster's office. Given this sequence of 
events, which fundamentally changed the manner in which 
documents in Mr. Foster's office were handled, the obvious 
question that the Special Committee faced was, why?
    Records obtained by the Special Committee 1005 showed 
the following sequence of telephone calls in the early hours of 
July 22:

                                      EARLY MORNING PHONE CALLS, JULY 22nd                                      
----------------------------------------------------------------------------------------------------------------
                 Time                            From                       To                     Length       
----------------------------------------------------------------------------------------------------------------
7:44 a.m. EDT........................  Margaret Williams.......  Rodham Residence........  7 min.               
6:57 a.m. CDT (7:57 a.m. EDT)........  Rodham Residence........  Susan Thomases..........  3 min.               
8:01 a.m. EDT........................  Susan Thomases..........  Bernard Nussbaum........  pager.               
----------------------------------------------------------------------------------------------------------------

    Mr. Nussbaum testified that, when he answered Ms. Thomases' 
page, Ms. Thomases asked him about the upcoming review of Mr. 
Foster's office and said that unspecified ``people are 
concerned'' about Mr. Nussbaum's plan to allow law enforcement 
officials to participate in the review.1006
    Later in the day, according to Associate Counsel to the 
President Stephen Neuwirth, Mr. Nussbaum told Mr. Neuwirth that 
Mrs. Clinton and Ms. Thomases were concerned about the law 
enforcement authorities having ``unfettered access'' to Mr. 
Foster's office.1007
    Ms. Thomases acknowledged that she talked with Mr. Nussbaum 
about the review, but only at his instigation, and she denied 
expressing any concern or reservation about the review 
procedures.1008 She testified that she had no 
conversations with Mrs. Clinton about the review of documents 
in Mr. Foster's office.1009
    Ms. Williams did not recall having any conversations about 
the document review.
    The Special Committee finds that there is substantial, 
indeed compelling, evidence indicating that Ms. Williams and 
Ms. Thomases, in consultation with Mrs. Clinton, participated 
in formulating the procedure for reviewing documents in Mr. 
Foster's office on July 22, 1993. Although Ms. Williams and Ms. 
Thomases both denied speaking with Mrs. Clinton about the 
review of documents, the sequence of contiguous telephone calls 
from Ms. Williams to Mrs. Clinton, from Mrs. Clinton to Ms. 
Thomases, and from Ms. Thomases to Mr. Nussbaum leads to the 
unmistakable conclusion that these early morning phone calls 
precipitated Mr. Nussbaum's change of procedure.
    The testimony of White House lawyers directly support this 
finding. According to Mr. Neuwirth's important testimony, Mr. 
Nussbaum understood, from a prior conversation with Ms. 
Thomases, that Mrs. Clinton and Ms. Thomases were concerned 
about the prospect of unfettered access to Mr. Foster's papers. 
Although Ms. Thomases denied that she intervened in the 
formulation of the search procedure, Mr. Nussbaum testified 
that Ms. Thomases attempted to impose her views on how to 
conduct the review, an attempt that he claimed to have 
rebuffed.
    By breaking his agreement with law enforcement over the 
terms of the search of Mr. Foster's office, Mr. Nussbaum 
demonstrated that he clearly took the concerns of Mrs. Clinton 
and Ms. Thomases into account. Mrs. Clinton, however, persists 
in her story that she had no involvement in the handling of 
documents in Mr. Foster's office. In public statements, she 
maintained that ``[t]here were no documents taken out of Vince 
Foster's office on the night he died. And I did not direct 
anyone to interfere in any investigation.'' 1010 Although 
this statement may be technically correct, that Mrs. Clinton 
did not ``direct'' anyone to ``interfere'' with investigations, 
the evidence established that she communicated concerns about 
the handling of documents in Mr. Foster's office. Those 
concerns were passed on, in Mrs. Clinton's name and by someone 
known to have her authority, to White House officials.1011 
Here, as in Travelgate, that is enough. The invocation of Mrs. 
Clinton's interest in the matter commands a ``clear'' message: 
``immediate action must be taken.'' 1012 And the action 
taken, denying investigators access to documents in Mr. 
Foster's office, had the effect of interfering with the 
investigation. The Special Committee and the American people 
deserves candor, not lawyerly word games.
    The documentary evidence establishes that Ms. Thomases and 
Ms. Williams remained directly involved in the process of 
reviewing the documents. Tellingly, throughout July 22, Ms. 
Thomases made repeated phone calls to the offices of Mack 
McLarty and Ms. Williams. 31 Records produced to the 
Special Committee showed the following calls by Ms. Thomases to 
the White House on July 22, 1993:
---------------------------------------------------------------------------
    \31\ The White House identified the telephone extension which 
Thomases called as that of Margaret Williams and her assistant, Evelyn 
Lieberman. Ms. Williams, however, testified that the extension is the 
general number for her office, to which a number of other individuals 
had access. Williams, 7/26/95 Hrg. p. 233. The White House later 
advised the Special Committee that all individuals who had access to 
that extension did not recall talking to Thomases on July 22, 1993. 
Letter from Jane Sherburne to Michael Chertoff and Richard Ben-Veniste, 
August 4, 1995; Letter from Jane Sherburne to Robert Giuffra, August 6, 
1995; Letter from Jane Sherburne to Robert Giuffra, August 8, 1995. 
Both Ms. Lieberman and Ms. Williams testified that they likewise did 
not recall talking with Ms. Thomases. Williams, 7/7/95 Dep. p. 58. Ms. 
Thomases, however, testified that she recalled having conversations 
with Ms. Williams on July 21 and 22. Thomases, 7/17/95 Dep. p. 109.

                                  THOMASES CALLS TO THE WHITE HOUSE, JULY 22nd                                  
----------------------------------------------------------------------------------------------------------------
                 Time                            From                       To                     Length       
----------------------------------------------------------------------------------------------------------------
8:01 a.m.............................  Susan Thomases..........  Bernard Nussbaum........  pager.               
9:00 a.m.............................  Susan Thomases..........  Margaret Williams.......  message              
10:48 a.m............................  Susan Thomases..........  Mack McLarty............  3 min.               
11:04 a.m............................  Susan Thomases..........  Margaret Williams.......  6 min.               
11:11 a.m............................  Susan Thomases..........  Mack McLarty............  3 min.               
11:16 a.m............................  Susan Thomases..........  Mack McLarty............  1 min.               
11:37 a.m............................  Susan Thomases..........  Margaret Williams.......  9 min.               
11:50 a.m............................  Susan Thomases..........  Margaret Williams.......  4 min.               
5:13 p.m.............................  Susan Thomases..........  Margaret Williams.......  9 min.               
5:23 p.m.............................  Susan Thomases..........  Bruce Lindsey...........  3 min.               
----------------------------------------------------------------------------------------------------------------

Ms. Thomases thus remained in close touch with the White House 
while Mr. Nussbaum finalized the search procedures and 
announced to the law enforcement officials, at about 1:00 p.m., 
the decision that he alone would review the documents in Mr. 
Foster's office.
    Contrary to certain public statements by the White House, 
Ms. Williams clearly was involved in the actual review and 
removal of documents from Mr. Foster's office on July 22. 
32 After Mr. Nussbaum reviewed the documents in Mr. 
Foster's office in front of law enforcement, he and Margaret 
Williams conducted a second review--the real review. Ms. 
Williams then removed the Clintons' personal documents from Mr. 
Foster's office and transferred them to the residence, telling 
Thomas Castleton that ``the President or the First Lady had to 
review the contents of the boxes to determine what was in 
them.'' 1013 Ms. Williams called Mrs. Clinton before 
putting the files in the residence, and, at 5:13 p.m., 
apparently after Ms. Williams had completed the transfer of 
files, Ms. Thomases called Ms. Williams' office and talked for 
nine minutes. At 7:12 p.m., Ms. Thomases put in a final call, 
one-minute call to Mrs. Clinton at the Rodham residence. 
1014
---------------------------------------------------------------------------
    \32\ At a press conference on April 22, 1994, Mrs. Clinton was 
asked whether Margaret Williams was among those who removed documents 
from Foster's office. She replied: ``I don't think that she did remove 
any documents.'' White House Document Z 000107. On August 2, 1994, 
Press Secretary Dee Dee Myers affirmed Mrs. Clintons's statement: ``I 
think that it is true that Maggie didn't remove any documents from 
Vince's office; they were removed by Bernie Nussbaum.'' White House 
Document Z 000578.
---------------------------------------------------------------------------
    The sequence of documented telephone calls and their 
correlation to activities surrounding the review and removal of 
documents from Mr. Foster's office on July 22 leads to the 
inescapable conclusion that Ms. Thomases and Ms. Williams, in 
consultation with, or acting at the direction of, Mrs. Clinton, 
prevailed upon Mr. Nussbaum to abandon his procedure for 
reviewing documents in Mr. Foster's office and to replace it 
with one that prevented law enforcement officials from having 
access to Mr. Foster's papers and that permitted Ms. Williams 
to review and remove documents from Mr. Foster's office.

Finding 8. Bernard Nussbaum failed to conduct a meaningful review of 
        Mr. Foster's office and did not describe to law enforcement 
        officials sensitive files pertaining to the Clintons and the 
        administration

    Mr. Nussbaum testified that he conducted a comprehensive 
review and described each file in Mr. Foster's office--
including all the files in Mr. Foster's credenza, where a 
number of the Clintons' personal files were kept. Notes taken 
by Mr. Spafford of the review demonstrate, however, that he 
provided only a very generic description, ``matters re First 
Family'' 1015; Mr. Sloan's notes are similar: ``Various 
investment matters re: First Family.'' 1016 This single 
general description by Mr. Nussbaum identified a number of 
files that Margaret Williams later transferred to the White 
House residence and eventually to the Clinton's personal 
lawyers at Williams & Connolly. Among these files was Mr. 
Foster's Whitewater file; no one at the review recalled Mr. 
Nussbaum making any reference whatsoever to Whitewater.
    Although Mr. Nussbaum testified that Whitewater was not the 
subject of discussion in the White House at the time of Mr. 
Foster's death, the Special Committee finds that there was 
ample evidence indicating that in early 1993, the White House, 
and particularly Mrs. Clinton, knew that Whitewater was a 
potential public issue. Whitewater had been an issue during the 
1992 presidential campaign. In late 1992, Betsey Wright, the 
coordinator of the Arkansas defense effort and former chief of 
staff to Governor Clinton, learned of a ``criminal referral 
regarding a savings and loan official in Arkansas and * * * 
involv[ing] the Clintons.'' 1017 Upon hearing the news, 
she attempted to gather more information and directly told Mrs. 
Clinton about the referral. 1018 And the information was 
circulated within the campaign. Jim Lyons, author of the 
Whitewater report, testified that someone in the Clinton 
campaign notified him of the criminal referral.
    Whitewater remained a live issue when the Clintons moved 
into the White House. Ricki Seidman, then Deputy Director of 
Communications for the White House, told the FBI that she 
discussed and attended meetings with Mr. Foster and the 
Clintons' outside counsel in April 1993 about the tax treatment 
of the Clinton's Whitewater investment because ``it was 
believed the tax returns would bring the Whitewater issue into 
the `public domain' again.'' 1019 In addition, records 
that the White House produced to the Special Committee after 
the conclusion of its public hearings indicate that James 
McDougal, the Clintons' Whitewater partner, called Mr. Foster 
at the White House just prior to his death.
    The Special Committee also finds that Mr. Nussbaum failed 
to describe adequately the contents of Mr. Foster's briefcase. 
Although notes taken by Mr. Spafford and Mr. Sloan indicated 
that the briefcase contained a copy of the White House Travel 
Office Management Review, Mr. Nussbaum did not disclose that 
most of the contents of the briefcase pertained to the 
Travelgate controversy. 1020 Specifically, Mr. Nussbaum 
removed Mr. Foster's notebook on the Travel Office matter from 
the briefcase and kept it in his office until Mr. Nussbaum's 
resignation in March 1994. 1021 According to Mr. 
Spafford's notes, Mr. Nussbaum described the notebook as 
``Notebook of notes of meetings, GC [General Counsel] issues''; 
Mr. Sloan's notes similarly identified the notebook simply as 
``Notes re: meeting''. 1022 The notebook and other Travel 
Office documents in Mr. Foster's briefcase were not turned over 
to the Independent Counsel until April 5, 1995. 1023

Finding 9. An index of documents in Mr. Foster's office is missing and 
        other indices were revised following his death to conceal 
        possible references to Whitewater

    Mr. Foster's secretary, Deborah Gorham, testified that, on 
July 22, she entered Mr. Foster's office and opened the drawer 
containing the Clintons' personal documents. ``I saw Pendaflex 
folders and file folders, and I did not see an index that 
normally would have been there listing the names of the 
files.'' 1024 Ms. Gorham maintained an index for every 
drawer; this one was missing.
    The Special Committee received three indices from the White 
House reflecting all the files in Mr. Foster's office. Two are 
dated July 22, 1993. 1025 One is shown to be last revised 
on October 25, 1993. 1026 It is thus undisputed that the 
indices were compiled or revised after Mr. Foster's death. None 
makes any reference to a Whitewater file known to be in Mr. 
Foster's office at the time of his death.
    The evidence before the Special Committee indicates that 
the indices were revised in order to remove an earlier 
reference to the Whitewater file. Deborah Gorham testified that 
she made an index in the Spring of 1993, probably late April, 
and that the index reflected all the files in Mr. Foster's 
office at the time. 1027 She also testified that the 
Whitewater file was among the files in Mr. Foster's office at 
the time she prepared the index. 1028
    The Special Committee finds Ms. Gorham's testimony highly 
credible. Ms. Gorham was careful and meticulous, identifying 
with certainty to the Special Committee particular 
characteristics of indices she maintained. Moreover, 
independent evidence corroborates Ms. Gorham's recollection 
that Whitewater was among the files in Mr. Foster's office in 
April 1993. Mr. Foster prepared the Clintons' 1992 tax returns, 
and one of the key issues in those returns was how to treat the 
Clintons' investment in Whitewater. It is therefore highly 
likely that the Whitewater file was in Mr. Foster's office in 
April 1993, when the tax returns were due, instead of being 
brought into the office at a later date.

Finding 10. Bernard Nussbaum knew about yellow scraps of paper in Mr. 
        Foster's briefcase prior to Stephen Neuwirth's apparent 
        discovery on July 26, 1993 

    The Special Committee finds that the evidence demonstrates 
that Mr. Nussbaum knew about yellow scraps of paper in Mr. 
Foster's briefcase before Mr. Neuwirth allegedly discovered the 
scraps on July 26. Mr. Spafford testified that he overheard Mr. 
Sloan tell Mr. Nussbaum on July 22 that there were scraps at 
the bottom of the briefcase. 1029 Although neither Mr. 
Sloan nor Mr. Nussbaum recalled the exchange, Mr. Spafford 
testified that he remembered and had a privileged conversation 
about the incident the following week, right after he learned 
that Mr. Neuwirth had discovered the note in Mr. Foster's 
briefcase. 1030
    In addition, Deborah Gorham testified that in the days 
after Mr. Foster's death, she told Mr. Nussbaum that she saw a 
file folder and something yellow, possibly ``Post-it'' notes in 
Mr. Foster's briefcase. 1031 Ms. Gorham further testified 
that after Mr. Neuwirth discovered the note, Mr. Nussbaum 
grilled her at length about what she saw in Mr. Foster's 
briefcase the previous week. 1032 Although Mr. Nussbaum 
testified that he did not recall grilling Ms. Gorham, 1033 
the Special Committee finds her vivid recollection of Mr. 
Nussbaum's interrogation to be highly credible. Mr. Nussbaum's 
interrogation, described by Ms. Gorham as ``forceful'' and 
``adamant'', 1034 leads to the obvious inference that he 
was concerned about what Ms. Gorham had seen the previous week 
and how it would undercut his story about the discovery of the 
note.
    The Special Committee finds that Mr. Nussbaum must have 
known on July 22 that scraps of paper were in Mr. Foster's 
briefcase. The briefcase has no flaps or inside seams that 
could conceal 27 pieces of yellow paper. Captain Charles Hume 
remarked that the ``oldest and blindest'' Park Police officer 
would have found the note on July 22, 1035 and Sergeant 
Peter Markland testified that he thought Mr. Nussbaum lied when 
he said the note was discovered in the briefcase. 1036 
Even White House official, Bill Burton, testified that he was 
incredulous when he learned that Mr. Neuwirth discovered the 
note in Mr. Foster's briefcase. 1037
    David Margolis, the career Justice Department official 
coordinating the investigation, offered this testimony:

        I thought I had this figured out, that the torn-up 
        scraps of paper were not in the briefcase the day that 
        Mr. Nussbaum did the search in our presence. That's 
        what--that was the explanation I came up with, and that 
        somebody--that it had never been there before and 
        somebody put it in afterward or it had been there, 
        somebody took it out and then decided they better put 
        it back because there was public speculation of, you 
        know, where is the suicide note.
         So, in my own mind, I speculated that must be what 
        happened. But then, when I picked up the paper one day 
        and saw that Mr. Spafford said that the note had been 
        in there when the search was conducted, I am at a loss 
        now. I just have no explanation. I don't know. 
        1038

The Justice Department and the FBI did not have the information 
Mr. Spafford provided to the Special Committee when the FBI 
closed its investigation into the circumstances surrounding the 
discovery of the note.
    Mr. Nussbaum's conduct may be explained by the fact that 
law enforcement officials and Mr. Spafford were still at the 
White House when the existence of the scraps of paper was 
called to his attention by Mr. Sloan. Rather than examining the 
scraps then and there, Mr. Nussbaum chose to put off such an 
examination until such time as he could be sure that he could 
do so in private.

Finding 11. Margaret Williams, in consultation with Mrs. Clinton, 
        removed files from Mr. Foster's office to the White House 
        residence to be reviewed by the Clintons

    Thomas Castleton testified that, as he helped Margaret 
Williams transport the Clintons' personal files to the White 
House residence on July 22, Ms. Williams told Mr. Castleton 
that she was taking the files to the residence so that the 
Clintons could review them. 1039 Mr. Nussbaum testified 
that he discussed taking the files to the residence with Ms. 
Williams so that the Clintons could decide which lawyer to send 
them to. 1040 Ms. Williams, however, testified that she 
alone made the independent determination to place the files in 
the residence. 1041 Although Ms. Williams admitted calling 
Mrs. Clinton, Ms. Williams claimed that their discussion was 
limited simply to where to place the files in the residence. 
1042
    The Special Committee finds that the evidence 
overwhelmingly demonstrates that Ms. Williams did not, as she 
asserted, make an independent decision to transfer the 
Clintons' personal files to the White House residence.
    Ms. Williams' story is not credible given Mr. Nussbaum's 
testimony that they had discussed taking the files to the 
residence before Ms. Williams left Mr. Foster's office. Carolyn 
Huber testified that July 22 was the first time ever that Ms. 
Williams had placed files in the White House Residence. 
1043 Ms. Williams did not plausibly explain why she 
thought the residence--and not her office or somewhere else in 
the West Wing--was the appropriate place for the files or how 
personally transferring files to the residence was less taxing 
than having them picked up by a Williams & Connolly 
representative.
    Ms. Williams testified that, despite having never discussed 
the files with Ms. Williams, Mrs. Clinton did not ask any 
questions--even one--but simply told her to arrange the details 
with Ms. Huber. Ms. Williams explained this seemingly odd 
response by suggesting that ``I could have told Mrs. Clinton 
that I was going to put 44 elephants in the White House the day 
after Vince died and she probably would have said okay'' 
1044--a suggestion that the Special Committee finds to 
border on the contemptuous. Moreover, Ms. Huber testified that 
Ms. Williams ``called and said that Mrs. Clinton had asked her 
to call me to take her to the residence to put this box in our 
third floor office.'' 1045 The Special Committee finds 
that Ms. Williams intended the files to be reviewed by the 
Clintons and that, in fact, someone reviewed the files before 
they were turned over to Williams & Connolly. When confronted 
with Mr. Castleton's testimony that she said the Clintons were 
to review the files, Ms. Williams asked rhetorically, ``Why 
would I tell an intern that?'' 1046 The Special Committee 
finds it natural that Ms. Williams would have told Mr. 
Castleton why the files were going to the residence--especially 
because, as Ms. Huber testified, Ms. Williams had never moved 
files to the residence. Mr. Nussbaum testified that Ms. 
Williams returned a file, one dealing with White House 
decorations, before the Clinton personal files were transferred 
to Williams & Connolly. Although, after consulting with 
counsel, Mr. Nussbaum stated that he was not sure that it was 
Ms. Williams who returned the file, he acknowledged that a file 
was indeed returned from the residence because it was not a 
Clinton personal file. 1047 The inevitable conclusion from 
this testimony is that someone reviewed the files to determine 
which files should be returned to Mr. Nussbaum.

Finding 12. Senior White House officials did not provide complete and 
        accurate information to the Park Police and FBI with respect to 
        the handling of Mr. Foster's note

    It is undisputed that Mrs. Clinton saw the note within 
hours of its discovery on July 26. 1048 In addition, Susan 
Thomases testified that Mr. Nussbaum called and told her about 
the note the same afternoon. 1049 Neither Mrs. Clinton nor 
Ms. Thomases were identified in the reports by the FBI or Park 
Police as among those who saw or knew about the note before it 
was turned over to the authorities. 1050 Although Mr. 
Neuwirth testified that he told FBI Special Agent Salter that 
Mrs. Clinton was made aware of the note, his testimony is 
inconsistent with written records of the interview. Neither 
Agent Salter's report nor his handwritten notes of the 
interview (later obtained by the Committee) indicated that Mr. 
Neuwirth told him that Mrs. Clinton was among those who saw the 
note. 1051 Instead, Agent Salter's notes recorded Mr. 
Neuwirth's continuous narrative of the chain of events after 
Mr. Neuwirth discovered the note. The narrative, however, 
omitted any mention of Mrs. Clinton as the second person Mr. 
Nussbaum brought into his office to view the note. 1052
    The Special Committee finds that Mr. Neuwirth's omission of 
Mrs. Clinton may have been willful. Bill Burton's handwritten 
record of a meeting about Mr. Foster's note on July 28, the day 
after the note was turned over to the authorities, listed 
``HRC'' with an arrow pointing to an adjacent letter ``n''. 
1053 Because Mr. Burton testified that he did not know 
what his own notes meant, the Special Committee adopts the most 
reasonable interpretation of his notations--that those present 
at the meeting discussed the matter and decided not to disclose 
that Mrs. Clinton saw the note.

Finding 13. Mr. Hubbell probably knew about the discovery of Mr. 
        Foster's note on July 27, 1993

    In the hours and days following Mr. Foster's death, there 
was overwhelming interest in whether Mr. Foster left a note 
explaining the reasons for his apparent suicide. By their own 
admission, Mr. Nussbaum, Ms. Thomasson, Ms. Williams, and Ms. 
Lieberman, testified that they conducted an improper search of 
Mr. Foster's office on the night of his death in order to look 
for a note. Because of the seeming inexplicable nature of Mr. 
Foster's death and the speculations of foul play, there was a 
groundswell of interest in whether Mr. Foster had left a note 
prior to his death. The White House released an official 
statement stating that ``no suicide note or other document 
bearing on'' Mr. Foster's death had been found. 1054 And 
news articles in the week following Mr. Foster's death 
generally mentioned the anomaly that a note had not been found. 
1055
    On July 27, approximately 26 hours after a note in Mr. 
Foster's hand was discovered by White House officials, White 
House Counsel Bernard Nussbaum finally contacted Attorney 
General Reno and Deputy Attorney General Heymann to turn over 
the note. Apparently unbeknownst to Ms. Reno and Mr. Heymann, 
Associate Attorney General Webster Hubbell was upstairs in the 
White House Residence with Mrs. Clinton and Ms. Thomases while 
they were downstairs receiving news of the note. Mr. Hubbell's 
records indicate that Mrs. Clinton had called his office and 
left a message at 2:30 p.m. that afternoon. 1056 White 
House logs indicate that Mr. Hubbell arrived at the Residence 
at 6:29 p.m. and remained there until 8:19 p.m. 1057 Ms. 
Thomases, who was in the Residence at the same time as Mrs. 
Clinton and Mr. Hubbell, exited the White House at the same 
time. 1058 Neither Ms. Thomases nor Mr. Hubbell recalled 
discussing the note with each other or with Mrs. Clinton on 
that day. Ms. Thomases testified, ``I don't know that Hillary 
Clinton and I have ever discussed that writing.'' 1059
    When presented with the entry and exit logs, Ms. Thomases 
acknowledged that she met with Mr. Hubbell and Mrs. Clinton in 
the Residence following Mr. Foster's death. 1060 Secret 
Service records indicate that July 27 was the only time in the 
week following Mr. Foster's death that Mrs. Clinton, Ms. 
Thomases, and Mr. Hubbell were together in the White House. Ms. 
Thomases implausibly testified, however, that during their 
meeting the three only reminisced about Mr. Foster and their 
friendship. 1061
    For his part, Mr. Hubbell testified that he did not recall 
even seeing Ms. Thomases on July 27. 1062 He testified 
that he came to the White House on July 27 in order to give 
Mrs. Clinton an account of Mr. Foster's funeral after Mrs. 
Clinton left. ``I remember that I had to go to the White House 
to tell Hillary about what had gone on after they left the 
funeral, but I don't have any memory of doing it.'' 1063 
He testified that it was part of the grieving process: ``We, as 
Southerners, we have large long funerals and we get together 
and drink and eat and talk and do it for days. And Hillary had 
missed that grieving process, and I remember my wife saying, 
Hillary needs to talk to you. She needs to understand who was 
there and things of that sort.'' 1064
    Mr. Hubbell testified that he learned about the note when 
he ``read it in the newspaper,'' 1065 and that he did not 
discuss the note with Mrs. Clinton during his post-funeral 
visit to the White House. 1066 The Special Committee finds 
Mr. Hubbell's testimony incredible. Whether there was a note 
was the topic of interest, inquiry, and speculation for all 
involved in the story of Mr. Foster's death. White House 
officials conducted an improper search of Mr. Foster's office 
on the night of his death specifically, according to their own 
testimony, to look for a note. The Park Police had specifically 
asked about the existence of a note on the night of his death, 
and continued to look for indications of why Mr. Foster took 
his life during its investigation. Mr. Hubbell's high-ranking 
colleagues at the Justice Department were at the White House at 
the same time as Mr. Hubbell to receive the note from Mr. 
Nussbaum. Mrs. Clinton had called Ms. Thomases repeatedly to 
summon her to Washington for a meeting on July 27, and Mrs. 
Clinton had called Mr. Hubbell on the afternoon of July 27. 
Given all these events, there is little possibility that three 
of the persons closest to Mr. Foster--Mrs. Clinton, Ms. 
Thomases, and Mr. Hubbell--two of whom knew about the existence 
of the note, were in the private quarters of the White House 
together for two hours without any mention of the note.
    The Special Committee adopts the most reasonable finding in 
light of the circumstances, that Mr. Hubbell most likely 
learned of the existence of the note either before or during 
his meeting with Mrs. Clinton and Ms. Thomases on July 27, 
1993.

Finding 14. Margaret Williams provided inaccurate and incomplete 
        testimony to the Special Committee in order to conceal Mrs. 
        Clinton's role in the handling of documents in Mr. Foster's 
        office following his death

    The testimony of Margaret Williams, the First Lady's Chief 
of Staff, to the Special Committee was frequently inconsistent 
with her prior statements and contradicted by the testimony of 
other witnesses. These numerous and varied contradictions in 
Ms. Williams's testimony followed one predictable pattern: they 
diminished Ms. Williams' role in the events surrounding the 
handling of the documents in Mr. Foster's office and, more 
important, concealed Mrs. Clinton's involvement in this now 
controversial matter. Although Ms. Williams's testimony may not 
necessarily be untruthful with respect to each and every 
contradiction, the obvious pattern of the contradictions and 
inconsistencies leads inexorably to the conclusion that she did 
not provide complete and accurate testimony to the Special 
Committee.
    Ms. Williams testified implausibly that she entered Mr. 
Foster's office on the night of his death in the vain hope of 
finding Mr. Foster there.1067 She claimed that she did not 
remove any files from the White House Counsel's suite and that 
her assistant, Evelyn Lieberman, did not even enter the suite 
on July 20. Officer Henry O'Neill testified, however, that he 
saw Ms. Williams remove files, three to five inches thick, from 
the suite and place them in her office.1068 According to 
Officer O'Neill, Ms. Lieberman was there and introduced Ms. 
Williams to Officer O'Neill.1069
    After searching Mr. Foster's office, Ms. Williams went home 
and called Mrs. Clinton and Ms. Thomases. When asked about 
these late-night telephone calls, Ms. Williams testified to the 
Special Committee that she did not talk to Mrs. Clinton about 
the search of Mr. Foster's office. Ms. Williams also denied 
talking with Susan Thomases.1070 After being confronted 
with records indicating that she called Ms. Thomases at 1:10 
a.m. on July 21, Ms. Williams insisted that her earlier 
testimony was only that she did not recall talking to Ms. 
Thomases.1071 When reminded that she actually said, ``I 
didn't talk to her,'' 1072 Ms. Williams replied, ``I'm not 
going to argue with you. I think this is exactly what I said.'' 
1073
    With respect to Mrs. Clinton's involvement in the much 
criticized decision to keep law enforcement from reviewing 
documents in Mr. Foster's office on July 22, Ms. Williams did 
not tell the Special Committee initially about her early 
morning phone call to the Rodham residence.1074 When 
presented with records documenting the telephone call made at 
7:44 EDT, Ms. Williams replied, ``I don't remember who I talked 
to.'' 1075
    Ms. Williams initially testified that she did not speak to 
Susan Thomases on the telephone on July 22.1076 Telephone 
records indicated, however, that Susan Thomases called Ms. 
Williams' office twice on July 21 and five times on July 
22.1077 Ms. Thomases made these repeated telephone calls 
to Ms. Williams' office on July 22 at the same time that White 
House officials were meeting to discuss the procedures for 
searching Mr. Foster's office.1078 When questioned about 
these calls, Ms. Williams suggested that she was at home on the 
morning of July 22.1079 Records from the U.S. Secret 
Service established, however, that Ms. Williams entered the 
White House at 8:10 a.m. on July 22.1080
    Ms. Williams testified that she did not review files in Mr. 
Foster's office on the afternoon of July 22, but Mr. Nussbaum 
testified that Ms. Williams helped him pick out the Clintons' 
personal files.1081 Deborah Gorham also testified that Ms. 
Williams was in Mr. Foster's office when Mr. Nussbaum asked Ms. 
Gorham to point out the location of the Clintons' personal 
files.1082 Ms. Williams claimed that she made a completely 
independent decision to have the Clintons' personal files 
transferred to the White House residence en route to Williams & 
Connolly.1083 Mr. Nussbaum testified, however, that he and 
Ms. Williams discussed the matter and decided to remove the 
files to the residence, and then the Clintons would decide 
where the files should go.1084 While she was in Mr. 
Foster's office, Ms. Williams called Mrs. Clinton. Although the 
two had not talked previously about any transfer of files, Ms. 
Williams testified that she, improbably, asked Mrs. Clinton 
simply where the files should go in the residence, and had no 
other discussions with Mrs. Clinton about what the files 
contained or where they came from.1085
    Ms. Williams asserted that she did not intend for the 
Clintons to review the files after they were placed in the 
residence. Thomas Castleton testified, however, that Ms. 
Williams expressly told him that she was taking the files to 
the residence so the Clintons could review them.1086 Ms. 
Williams denies saying this to Mr. Castleton.1087 Carolyn 
Huber testified that, after Ms. Williams placed the files in 
the residence closet, Ms. Huber returned the key to its usual 
place, in a marked envelope in the desk drawer.1088 Ms. 
Williams, however, testified that Ms. Huber gave her the key, 
which Ms. Williams kept on her key chain until she had to open 
the closet for a Williams & Connolly representative.1089 
Ms. Williams testified that no one reviewed the files while 
they were in the residence, but Mr. Nussbaum testified that 
someone, probably Ms. Williams, returned a residence file 
because it was determined not to be a Clinton personal 
file.1090

Finding 15. Susan Thomases provided inaccurate and incomplete testimony 
        to the Special Committee in order to conceal Mrs. Clinton's 
        role in the handling of documents in Mr. Foster's office 
        following his death

    Susan Thomases, a prominent New York attorney, was Mrs. 
Clinton's conduit to the White House staff. She was in close 
contact with Mrs. Clinton and the White House staff throughout 
the week following Mr. Foster's death. Although the documentary 
and other evidence before the Special Committee established 
that Ms. Thomases was involved in every key event relating to 
the handling of documents in Mr. Foster's office following his 
death, her testimony to the Special Committee with respect to 
these key events was often implausible, incomplete or 
inaccurate.
    When Ms. Thomases first appeared before the Special 
Committee, on August 8, 1995, she was asked whether she had 
discussed her appearance with Mrs. Clinton. Ms. Thomases 
testified, ``I did not discuss my opinion--my appearance here 
today with Hillary Clinton.'' 1091 On December 18, 1995, 
however, Ms. Thomases contradicted herself by admitting that 
she had actually talked with Mrs. Clinton about her appearance 
``way back when, before the first hearing.'' According to Ms. 
Thomases, she and Mrs. Clinton discussed ``that I was going to 
have to come down, and that I didn't think that I had very much 
interesting to tell you, that you were still going to ask me 
the questions because you felt the need to ask me the 
questions.'' 1092
    On the night of Mr. Foster's death, Ms. Thomases paged Ms. 
Williams at 12:15 a.m., while Ms. Williams was at the White 
House. When asked whether she talked to Margaret Williams after 
Ms. Williams searched Mr. Foster's office, Ms. Thomases claimed 
that she did not ``recollect speaking with [Ms. Williams] that 
night. That's not to say that she didn't call me back and I 
didn't speak to her, but I have no independent recollection of 
having spoken with her that night.'' 1093 The Committee 
later obtained telephone records, however, indicating that Ms. 
Williams, right after speaking with Mrs. Clinton, called Ms. 
Thomases at 1:10 a.m. and spoke for 14 minutes.1094
    With respect to her role in changing the procedures for 
reviewing documents in Mr. Foster's office, Ms. Thomases 
acknowledged that she spoke with Bernard Nussbaum on July 22. 
According to Ms. Thomases, Mr. Nussbaum brought up the subject 
of reviewing documents in Mr. Foster's office and described his 
plan of action, to which Ms. Thomases replied simply that it 
``sounds good to me.'' 1095 Mr. Nussbaum, however, 
testified that Ms. Thomases initiated the discussion, said that 
``people were concerned'' about the review, and attempted to 
impose her views on the proper procedures.1096 Even more 
importantly, Associate White House Counsel Stephen Neuwirth 
testified that Mr. Nussbaum understood from the conversation 
that Ms. Thomases and Mrs. Clinton were concerned about law 
enforcement officials having ``unfettered access'' to Mr. 
Foster's office.1097
    Ms. Thomases testified that ``I don't remember ever having 
a conversation with Hillary Clinton during the period after 
Vince Foster's death about the documents in Vince Foster's 
office.'' 1098 Telephone records, however, established 
that, after receiving the early morning call from Ms. Williams, 
Mrs. Clinton called Ms. Thomases at 6:57 a.m. CDT on July 22, 
and talked for three minutes.1099 Ms. Thomases then 
immediately paged Mr. Nussbaum at the White House and 
subsequently expressed her concerns about the search 
procedures.1100 Even after confronted with these telephone 
records, Ms. Thomases maintained that she called Mr. Nussbaum 
merely to commiserate because she was ``worried about my friend 
Bernie.'' 1101 Ms. Thomases testified that her early-
morning conversation with Mrs. Clinton was about ``the 
possibility that I didn't feel well enough to go to Little 
Rock'' for Mr. Foster's funeral.1102
    When questioned about the repeated telephone calls she made 
to Ms. Williams's office on July 22 at the same time that White 
House officials were meeting to discuss the procedures for 
searching Mr. Foster's office, Ms. Thomases claimed that she 
probably was attempting not to reach Ms. Williams but rather to 
be transferred to someone else in the White House.1103 Ms. 
Thomases also implausibly suggested that she may have been put 
on hold during these lengthy calls, for as long as nine 
minutes, 1104 despite her earlier testimony that July 22 
was ``a very, very busy day in my work.'' 1105
    Finally, U.S. Secret Service records established that Ms. 
Thomases entered the White House at 2:50 p.m. on July 
27.1106 Within ten minutes of her entry, Robert Barnett 
arrived at the White House to meet with Mrs. Clinton.1107 
During this visit, Mr. Barnett reviewed the Clintons' personal 
files, previously in Mr. Foster's office, and transferred them 
from the White House residence to Williams & Connolly.1108 
Ms. Thomases left the White House at 8:20 p.m., after Mr. 
Nussbaum had turned the note apparently in Mr. Foster's 
handwriting over to Attorney General Janet Reno. When asked 
about this unusual visit to the White House--Ms. Thomases is 
normally in Washington on Wednesdays 1109--Ms. Thomases 
testified that she implausibly had ``no specific recollection 
of being at the White House on the 27th.'' 1110

Finding 16. Bernard Nussbaum provided inaccurate and incomplete 
        testimony to the Special Committee concerning the handling of 
        documents in Mr. Foster's office following his death

    As members of the Special Committee recognized previously, 
``a witness' response of `I don't recall' or `I don't remember' 
may also be a false statement to the Committee.'' 1111
    Bernard Nussbaum did not recall Bill Burton asking him to 
seal Mr. Foster's office on the night of Mr. Foster's 
death.1112 Sylvia Mathews testified that she overheard the 
conversation, 1113 and her notes supported the 
testimony.1114
    Mr. Nussbaum did not recall talking to Philip Heymann on 
July 21 about the procedures for reviewing documents in Mr. 
Foster's office.1115 Mr. Heymann testified that he and Mr. 
Nussbaum agreed that Justice Department lawyers would review 
the documents; 1116 David Margolis, 1117 Roger Adams, 
1118 and Charles Hume 1119 testified that Mr. Heymann 
so described the procedure to them on July 21.
    Mr. Nussbaum did not recall overruling Mr. Neuwirth when 
Mr. Neuwirth stated in the evening of July 21 that Mr. Nussbaum 
would review the documents.1120 Mr. Adams and Mr. Margolis 
described the incident in detail at the time to other Justice 
Department officials and later to the Special 
Committee.1121
    Mr. Nussbaum did not recall telling Mr. Neuwirth that Ms. 
Thomases and Mrs. Clinton were concerned about investigators 
having ``unfettered access'' to Mr. Foster's office.1122
    Mr. Nussbaum did not recall telling Mr. Heymann on July 22 
that he would call Mr. Heymann back before conducting the 
search.1123
    Mr. Nussbaum did not recall Mr. Margolis or Mr. Heymann 
telling him on July 22 that he was making a ``terrible 
mistake'' by changing the procedures.1124
    Mr. Nussbaum did not recall Mr. Heymann calling him in the 
evening and asking him, ``Bernie, are you hiding something?'' 
1125
    Mr. Nussbaum did not recall telling Susan Thomases about 
the note on July 26.\1126\
    The frequency of these memory lapses contrasted with Mr. 
Nussbaum's very definite recollection of other purported 
facts--facts that put his conduct in a more favorable light. 
Mr. Nussbaum was sure that no one removed any files from Mr. 
Foster's office on the night of his death. He was sure that 
there was no agreement with the Justice Department with respect 
to procedures to review documents in Mr. Foster's office. He 
was sure that there was no discussions in the White House about 
Whitewater at the time of Mr. Foster's death.
    Whether a product of deliberate deception or selective 
memory, Mr. Nussbaum's frequent and convenient assertions that 
he did not recall important, often damaging, events lead the 
Special Committee to the obvious conclusion that Mr. Nussbaum 
provided incomplete and inaccurate testimony to the Special 
Committee.
    The Committee's ability to investigate fully the true facts 
concerning the handling of documents in Mr. Foster's office 
following his death has been hindered by the often incomplete 
and inaccurate testimony of key witnesses. In conjunction with 
this report of findings, the Special Committee has voted to 
refer the matter, including the testimony of specific 
witnesses, to the Office of Independent Counsel for 
investigation of possible criminal violations.
    In sum, notwithstanding the pattern of stonewalling by the 
White House and other witnesses, the Special Committee 
uncovered evidence that clearly established a pattern of highly 
improper conduct by senior White House officials in the days 
following Mr. Foster's death. The Committee and the American 
people will never know exactly what happened in Mr. Foster's 
office in the days after his death--what documents were 
removed, whether any documents were destroyed, and whether any 
evidence of ethical or even criminal misconduct was covered up. 
The misguided actions of senior White House officials raise not 
only questions of impropriety, but also raise the specter that 
investigations were impeded and justice thwarted.

                                Endnotes

    \1\ Letter from Independent Counsel Robert Fiske to the Chairman 
and Ranking Member of the Committee, July 15, 1994, quoted in the 
Report of the Senate Banking Committee, Inquiry into the U.S. Park 
Police Investigation of the Death of White House Deputy Counsel Vincent 
W. Foster, Jr., January 3, 1995 [hereinafter ``Foster Report''], p. 2.
    \2\ Foster Report, January 3, 1995, p. 51 (Additional Views of 
Senators D'Amato, Faircloth, Bond, Hatch, Shelby, Mack, Domenici) 
(quoting Hume, Trans. pp. 48-49).
    \3\ S. Res. 120 Sec. 1(b)(2), p. 4.
    \4\ See Watkins v. United States, 354 U.S. 178, 194-95 (1957); 
McGrain v. Daugherty, 272 U.S. 135 (1927).
    \5\ Treasury Document 2987 (1994 Production).
    \6\ Heymann, 8/2/95 Hrg. p. 50.
    \7\ Williams & Connolly Document DKSN000518.
    \8\ Treasury Document 2987 (1994 Production).
    \9\ Neuwirth, 8/3/95 Hrg. p. 71.
    \10\ Foster Report, p. 4.
    \11\ Vinson & Elkins Document RS237A
    \12\ Clark 1/18/96 Hrg. p. 163.
    \13\ Hubbell, 2/7/96 Hrg. p. 101
    \14\ Model Rules of Professional Conduct Rule 3.4(a); 18 U.S.C. 
Sec. 1510.
    \15\ The Hotline, Whitewater: CBS Looks at Hillary and Her 
Shredder, June 7, 1996.
    \16\ Hubbell, 2/7/96 Hrg. p. 169.
    \17\ Clark, 1/18/96 Hrg. pp. 162-164
    \18\ Black, 2/6/96 Hrg. p. 89.
    \19\ Hubbell, 2/7/96 pp. 20, 50-51
    \20\ Clark, 1/18/96 Hrg. p. 90
    \21\ Clark, 1/18/96 Hrg. p. 90.
    \22\ Huber, 1/18/95 Hrg. p. 5.
    \23\ Huber 1/18/96 Hrg. p. 9
    \24\ Hubbell, 2/7/96 Hrg. p. 56
    \25\ Wright, 1/26/96 Dep. p. 157-159.
    \26\ Wright, 1/26/96 Dep. p. 157-159.
    \27\ Wright, 1/26/96 Dep. p. 157-159.
    \28\ Wright, 1/26/96 Dep. p. 160-161.
    \29\ Wright, 1/26/96 Dep. p. 164.
    \30\ Madison Guaranty S&L and the White Water Development 
Corporation: Washington, DC, Phase, Report of the Committee on Banking, 
Housing, and Urban Affairs on the Communications between Officials of 
the White House and the U.S. Department of the Treasury or the 
Resolution Trust Corporation, S. Rep. 103-433, Jan. 3, 1995, p. 3 & n. 
7.
    \31\ Report of the Committee on Banking, Housing, and Urban 
Affairs, United States Senate, on the Communications between Officials 
of the White House and the U.S. Department of the Treasury or the 
Resolution Trust Corporation, January 3, 1995, [hereinafter Treasury 
Contacts Report], p. 3.
    \32\ Treasury Contacts Report, p. 3 & n. 7.
    \33\ IX Hearing before the Committee on Banking, Housing, and Urban 
Affairs, White House Production, pp. 1447-1449.
    \34\ IX Hearing before the Committee on Banking, Housing, and Urban 
Affairs, White House Production, pp. 1450-1455.
    \35\ Foren, 11/28/95 Hrg. p. 20.
    \36\ Foren, 11/28/95 Hrg. p. 23.
    \37\ Bowles, 11/28/95 Hrg. p. 24.
    \38\ Bowles, 11/28/95 Hrg. p. 24.
    \39\ Shepperson, 11/28/95 Hrg. pp. 23-24.
    \40\ White House Document S12334.
    \41\ Blair, 2/19/96 Dep. p. 79.
    \42\ Seidman, II Foster Hearings, p. 1794.
    \43\ White House Document S9210.
    \44\ Redden, 5/30/96 Dep. p. 237.
    \45\ Williams & Connolly Document DKSN000518.
    \46\ Williams & Connolly Document DKSN000516.
    \47\ Paul Bedard, GOP Says Thomason May Have Broken Law, Washington 
Times, July 9, 1993, p. Al, produced to the Special Committee as White 
House Document F 000274.
    \48\ Id.
    \49\ Report of the Independent Counsel In Re Vincent W. Foster Jr., 
June 30, 1994 [hereinafter ``Fiske Report''], p. 12, reprinted in I 
Hearings before the Committee Banking, Housing, and Urban Affairs on 
the Death of Vincent W. Foster, Jr. [hereinafter ``Foster Hearings''], 
p. 187.
    \50\ House document CGE12287.
    \51\ House document CGE12287.
    \52\ Justice Department Document 6675
    \53\ Braun, 6/19/95 Dep. pp. 24-25, 121; Rolla, 6/20/95 pp. 54-55; 
Hines, 7/20/95 Hrg. p. 25; Mathews, 7/25/95 Hrg. pp. 73-74; Gergen, 7/
12/95 Dep. pp. 29-30; Gearan, 7/6/95 Dep. p. 48; Hubbel, 7/13/95 Dep. 
pp. 49-51.
    \54\ Hines, 7/20/95 Hrg. p. 25.
    \55\ Pond, 6/26/95 Dep. p. 81.
    \56\ Neuwirth, 7/10/95 Dep. p. 49.
    \57\ Castleton, 6/27/95 Dep. p. 75-76.
    \58\ Flynn, 7/21/95 Dep. p. 48.
    \59\ Markland, 8/1/95 Hrg. p. 164.
    \60\ White House Document Z001214.
    \61\ Markland, 6/28/95 Dep. p. 165.
    \62\ Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 42.
    \63\ Thomases, 11/2/95 Hrg. p. 52.
    \64\ Adams, 7/27/95 Hrg. pp. 96-97.
    \65\ Neuwirth, 8/3/95 Hrg. p. 71.
    \66\ Heymann, 7/21/95 Dep. p. 62.
    \67\ Margolis, 8/10/95 Hrg. p. 233.
    \68\ Markland, 8/1/95 Hrg. pp. 167-68.
    \69\ Markland, 8/1/95 Hrg. pp. 167-168.
    \70\ Spafford, 7/27/95 Hrg. p. 20.
    \71\ White House Document Z 000354.
    \72\ Letter from Abner J. Mikva, Counsel to the President, to Hon. 
William F. Clinger, Chairman, House Committee on Government Reform & 
Oversight, August 30, 1995, p.1.
    \73\ White House Documents Z1109, Z1123, Z1110-1117; Gorham, 8/1/95 
Hrg. pp. 69-70.
    \74\ Spafford, 7/27/95 Hrg. p. 19.
    \75\ White House Document Z 001213.
    \76\ Heymann, 7/21/95 Dep. pp. 113-114.
    \77\ Letter from Abner J. Mikva, Counsel to the President, to Hon. 
William F. Clinger, Chairman, House Committee on Government Reform & 
Oversight, August 30, 1995, p. 1.
    \78\ Memorandum from Michael E. Shaheen Jr to David Margolis, July 
24, 1995, pp. 2-3.
    \79\ Williams & Connolly Document 001.
    \80\ Williams & Connolly Document 001.
    \81\ Williams & Connolly Document 001.
    \82\ White house Document Z 000655.
    \83\ Bell Atlantic Document (unnumbered).
    \84\ Bell Atlantic Document (unnumbered).
    \85\ Bell Atlantic Document (unnumbered).
    \86\ Williams & Connolly Document 001.
    \87\ White House Document Z 000647.
    \88\ Nussbaum, 7/12/95 Dep. p. 142.
    \89\ Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    \90\ Willkie Farr & Gallagher Document ST 000001-000006
    \91\ Bell Atlantic Document (unnumbered).
    \92\ White House Document Z001243.
    \93\ Nussbaum, 8/9/95 Hrg.p. 25; Williams, 7/7/95 Dep. pp. 122-123; 
Gorham, 8/1/95 Hrg. pp. 16-18.
    \94\ Huber, 8/3/95 Hrg. pp. 14-15.
    \95\ Castleton, 8/3/95 Hrg. pp. 13-14.
    \96\ Willkie Farr & Gallagher Document ST000001.
    \97\ Willkie Farr & Gallagher Document ST 00002.
    \98\ Nussbaum, 7/12/95 Dep. p. 142.
    \99\ Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 42.
    \100\ Department of Justice Document GRO466.
    \101\ White House Document S020921; Department of Treasury 
Document, 12/07/95 (not numbered).
    \102\ White House Document S020921; Department of Treasury 
Document, 12/07/95 (not numbered).
    \103\ Thomases, 5/14/96 Hrg., p.28-30.
    \104\ Thomases, 5/14/96 Hrg., p. 30.
    \105\ Hubbell 6/4/96 Dep. p. 22.
    \106\ Hubbell, 6/4/96 Dep. pp. 32-33.
    \107\ See, e.g., Frank J. Murray, White House Plays Down Suicide 
Probe, Wash. Times, July 23, 1993,p. A7; Ann Devroy, Clinton Finds No 
Explanation to Aide's Death; Probes Continuing on Apparent Suicide, 
Wash. Post, July 23, 1993, p. A4; Thomas L. Friedman, White House Aide 
Leaves No Clue About Suicide, N.Y. Times, July 22, 1993, p. A1; Ruth 
Marcus, Ann Devroy, Clintons Mystified by Aide's Death; Staff Shaken by 
Apparent Suicide, Wash. Post, July 22, 1993.
    \108\ O'Neill, 7/26/95 Hrg. p. 22.
    \109\ Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 42; Margolis, 8/
10/95 Hrg. pp. 178-179; Adams, 6/29/95 Dep. p. 32.
    \110\ Justice Department Document F000166; Justice Department 
Document FBI-129.
    \111\ Nussbaum, 8/9/95 Hrg. pp. 39-41; Neuwirth, 8/3/95 Hrg. p. 
132.
    \112\ Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    \113\ Williams, 7/26/95 Hrg. p. 220-221.
    \114\ Castleton, 6/27/95 Dep. pp. 139-140.
    \115\ Nussbaum, 8/9/95 Hrg. p. 27; Sloan, 8/3/95 Hrg. p. 67.
    \116\ Hubbell, 2/7/96 Hrg. p. 20.
    \117\ Thomas L. Friedman, ``White House Asked Aid of F.B.I. in 
Dismissals,'' New York Times, May 25, 1993, at A18.
    \118\ Paul Bedard, GOP Says Thomason May Have Broken Law, 
Washington Times, July 9, 1993, p. A1, produced to the Special 
Committee as White House Document F 000274.
    \119\ Paul Bedard, GOP Says Thomas May Have Broken Law,Washington 
Times, July 9, 1993, p. A1, produced to the Special Committee as White 
House Document F 000274.
    \120\ Id.
    \121\ Id.
    \122\ Id.
    \123\ Report of the Independent Counsel In Re Vincent W. Foster 
Jr., June 30, 1994 [hereinafter ``Fiske Report''], p. 12, reprinted in 
I Hearings before the Committee Banking, Housing, and Urban Affairs on 
the Death of Vincent W. Foster, Jr. [hereinafter ``Foster Hearings''], 
p. 187
    \124\ Fiske Report, at pp 10-14, reprinted in Foster Hearings, p. 
186-189.
    \125\ Fiske Report, p. 10, reprinted in Foster Hearings, p. 186
    \126\ Department of Justice Document OIC000417-418.
    \127\ Department of Justice Document OIC000418.
    \128\ Department of Justice Document OIC000418.
    \129\ James Stewart, Blood Sport (1996), p. 285.
    \130\ Id.
    \131\ Id.
    \132\ Thomases, 5/14/96 Hrg. p. 14
    \133\ Thomases, 5/14/96 Hrg., p. 17.
    \134\ Department of Justice Document OIC000418.
    \135\ Thomases, 5/16/96 Hrg. p. 15.
    \136\ Nussbaum, 8/9/95 Hrg. p. 254.
    \137\ June 20, 1995 privilege log from Williams & Connolly.
    \138\ June 20, 1995 privilege log from Williams & Connolly.
    \139\ June 20, 1995 privilege log from Williams & Connolly.
    \140\ June 20, 1995 privilege log from Williams & Connolly.
    \141\ June 20, 1995 privilege log from Williams & Connolly.
    \142\ June 20, 1995 privilege log from Williams & connolly.
    143 June 20, 1995 privilege log from Williams & Connolly.
    144 June 20, 1995 privilege log from Williams & Connolly.
    145 June 20, 1995 privilege log from Williams & Connolly.
    146 June 20, 1995 privilege log from Williams & Connolly.
    147 June 20, 1995 privilege log from Williams & Connolly.
    148 White House Documents Z000004, Z001109.
    149 White House Document Z000004.
    150 White House Document Z000004.
    151 White House Document Z000005.
    152 White House Document Z001109.
    153 White House Document Z001109.
    154 White House Document Z001109.
    155 White House Document Z001109.
    156 White House Document Z001109.
    157 Teresa Tritch, The Clintons May Owe Tax of $82,989 on 
Whitewater, Money, Oct. 1995, p. 22.
    158 Susan Schmidt, ``Hearing Puts Focus on Rose Law Practice; 
Conflict of Interest Cases Cited By GOP,'' Washington Post, August 11, 
1995, at A1.
    159 Hubbell, 2/7/96 Hrg. p. 46.
    160 Willkie Farr & Gallagher Document ST32.
    161 Willkie Farr & Gallagher Document ST32.
    162 Thomases, 12/18/95 Hrg. p. 53.
    163 Thomases, 12/18/95 Hrg. p. 53.
    164 Lynch, 5/14/96 Dep. p. 104.
    165 Lyons Document JML140.
    166 Lyons Document JML140
    167 FD-302 Interview with Lyons, 7/5/94, I Foster Hearings, p. 
176.
    168 Williams & Connolly Document DKSN000481.
    169 Hearings before the Special Committee to Investigate 
Whitewater Development Corporation and Related Matters, administered by 
the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on 
the Inquiry into whether Improper Conduct Occurred Regarding the Way in 
which White House Officials Handled Documents in the Office of White 
House Deputy Counsel Vincent W. Foster, Jr., 104th Cong., 1st Sess., 
July 18, 1995-August 10, 1995 [hereinafter ``S. Hrg.''], 8/8/95 p. 28; 
Williams & Connolly Document DKSN000482.
    170 Blair, 2/19/96 Dep. p. 25.
    171 Blair, 2/19/96 Dep. p. 62.
    172 Blair, 2/19/96 Dep. p. 67.
    173 Blair, 2/19/96 Dep. p. 67.
    174 Blair, 2/19/96 Dep. p. 69.
    175 Blair, 2/19/96 Dep. p. 70.
    176 Blair, 2/19/96 Dep. p. 72.
    177 Blair, 2/19/96 Dep. p. 79.
    178 Redden, 5/30/96 Dep. p. 237.
    179 Williams & Connolly Document DKSN000518.
    180 Williams & Connolly Document DKSN000514.
    181 Jeff Gerth and Stephen Engleberg, ``Documents Show 
Clintons Enjoyed Far Vaster Protection from Whitewater Losses,'' New 
York Times, July 15 1995, at A18.
    182 Williams & Connolly Document DKSN000515.
    183 Williams & Connolly Document DKSN000515.
    184 Williams & Connolly Document DKSN000518.
    185 Williams & Connolly Document DKSN000519.
    186 Letter from Yoly Redden to Vince Foster, April 12, 1993. 
James Blair Document 0000185.
    187 James Blair Document 0000185.
    188 Redden, 5/30/96 dep., p. 228.
    189 Redden, 5/30/96 Dep. pp. 230-231.
    190 Jeff Gerth and Stephen Engleberg, ``Documents Show 
Clintons Enjoyed Far Vaster Protection from Whitewater Losses,'' New 
York Times, July 15, 1995, at A18.
    191 Redden, 5/30/96 Dep. p. 234.
    192 Redden, 5/30/96 Dep. p, 234.
    193 White House Document S9210.
    194 II Foster Hearings, p. 1794.
    195 White House Documents F3158-F3261.
    196 Williams & Connolly Documents DSKN000178-DSKN000179
    197 Redden, 5/30/96 Dep. p. 239.
    198 Redden, 5/30/96 Dep. pp. 241-242.
    199 Williams & Connolly Documents DSKN000180, DSKN000181.
    200 Thomases, 8/8/95 Hrg. p. 38.
    201 Dan Dorfin, ``Short Seller Boosted First Lady's 
Portfolio,'' USA Today, June 18, 1993, at 4B.
    202 Id.
    203 Williams & Connolly Document DKSN000081.
    204 Williams & Connolly Document DKSN000077.
    205 Fred R. Bleakley, ``Investment Fund for Hillary Clinton 
Sold Short Several Health Care Stocks,'' Wall Street Journal, May 13, 
1993, at A12.
    206 Id.
    207 William Safire, First Lady or Top Government Official?, 
Houston Chronicle, Aug. 17, 1993, p. 12.
    208 1 Op. O.L.C. 20, 2/24/76, Harmon, at 22-23.
    209 997 F.2d 898 (D.C. Cir. 1993).
    210 Federal Advisory Committee Act. Pub. L. No. 92-463, 86 
Stat. 770 (1972) (codified at 5 U.S.C. App. (1988)).
    211 Association of American Physicians & Surgs., Inc. v. 
Clinton, 997 F.2d 898, 911, n.10 (D.C. Cir. 1993).
    212 See ``Who is Vincent Foster?'' Wall Street Journal, June 
17, 1993, at A10, reprinted in I Foster Hearings, pp. 354-355.
    213 FD-302 Interview with Jim Lyons, 5/12/94, I Foster 
Hearings, p. 172.
    214 See ``Vince Foster's Victory,'' Wall Street Journal, June 
24, 1993, at A12, reprinted I Foster Hearings, pp. 356-357.
    215 FD-302 Interview with Jim Lyons, 5/12/94, I Foster 
Hearings, p. 172.
    216 I Foster Hearings, p. 353.
    217 White House Document Z001217.
    218 White House Document Z001217.
    219 Park Police Document 52.
    220 I Foster Hearings, p. 173.
    221 I Foster Hearings, p. 174.
    222 S. Hrg. 8/1/95 p. 123.
    223 Gray, 10/20/95 Dep., p. 8.
    224 Gray, 10/20/95 Dep., p. 10.
    225 53 Stat. 561 (1939)
    226 Jeremy Rabkin, ``At the President's Side: The Role of the 
White House Counsel in Constitutional Policy,'' Law and Contemporary 
Problems, Volume 56, Autumn 1993, at 65.
    227 Id. at 66, quoting Clark Clifford & Richard Holbrooke, 
Counsel to the President, A Memoir, p. 54 (1991).
    228 Id. at 64.
    229 Id. at 66 n.14, quoting Clark Clifford & Richard 
Holbrooke, Counsel to the President, A Memoir, p. 75 (1991).
    230 Id. at 67, quoting Clark Clifford & Richard Holbrooke, 
Counsel to the President, A Memoir, p. 12 (1991).
    231 Samuel Kernell, The Creed and Reality of Modern White 
House Management, in Chief of Staff: Twenty-five Years of Managing the 
Presidency, pp. 193-222 (Kernell & Popkin eds., 1986).
    232 Lloyd Cutler, ``The Role of the Counsel to the President 
of the United States,'' Record of the Bar Association of New York, 
November, 1980, at 470, 472.
    233 Id. at 470.
    234 Id.
    235 Philip Combs, ``The Distant Drum of C. Boyden Gray,'' 
Washington Post, March 31, 1989, at D1.
    236 Nussbaum, 8/9/95 Hrg. p. 102.
    237 David Margolick, ``An All-Star New York Lawyer Disputes 
the Idea that He's Become a White House Bumbler,'' New York Times, June 
11, 1993, at A26.
    238 Id.
    239 ''Text of Resignation and Clinton Reply,'' New York Times, 
March 6, 1994, at A23.
    240 Bernard Nussbaum, ``Nussbaum Defends Conduct as Counsel,'' 
New Jersey Law Journal, December 5, 1994, at 23.
    241 Id.
    242 Gorham, 8/1/95 Hrg. p. 17.
    243 Gorham, 8/1/95 Hrg. p. 18.
    244 White House Document Z 001109.
    245 Letter from Jane Sherburne, Special Counsel to the 
President, to Robert Giuffra, Chief Counsel, Special Committee to 
Investigate Whitewater Development Corporation and Related Matters, 
August 6, 1995, p. 2.
    246 Gorham, 8/1/95 Hrg. p. 59.
    247 Gorham, 8/1/95 Hrg. p. 59.
    248 Letter from Jane Sherburne, Special Counsel to the 
President, to Robert Giuffra, Chief Counsel, Special Committee to 
Investigate Whitewater Development Corporation and Related Matters, 
August 6, 1995, p. 2.
    249 White House Document Z 001123.
    250 Gorham, 8/1/95 Hrg. p. 60.
    251 Gorham, 8/1/95 Hrg. p. 72.
    252 Gorham, 8/1/95 Hrg. p. 65.
    253 Gorham, 8/1/95 Hrg. p. 62.
    254 Gorham, 8/1/95 Hrg. p. 60.
    255 Gorham, 8/1/95 Hrg. p. 71.
    256 Gorham 8/1/95 Hrg. p. 70.
    257 White House Documents Z 001110--Z 001117.
    258 White House Document Z 001115.
    259 Letter from Jane Sherburne, Special Counsel to the 
President, to Robert Giuffra, Chief Counsel, Special Committee to 
Investigate Whitewater Development Corporation and Related Matters, 
September 1, 1995.
    260 Gorham, 8/1/95 Hrg. pp. 18, 67.
    261 8/1/95 Hrg., p. 168.
    262 Salter, 7/27/95 Hrg. p. 113.
    263 Nussbaum, 8/9/95 Hrg. p. 23.
    264 Swidler & Berlin Document (unnumbered).
    265 White House Documents Z 000364--Z 000379.
    266 White House Documents Z 000340--Z 000355.
    267 Nussbaum, 8/9/95 Hrg. p. 92.
    268 Swidler & Berlin Document (unnumbered); White House 
Document Z000350.
    269 Swidler & Berlin Document (unnumbered).
    270 White House Documents Z000350-Z000351.
    271 Markland, 8/1/95 Hrg. p. 168.
    272 Nussbaum, 7/12/95 Dep. p. 23.
    273 Nussbaum, 8/9/95 Hrg. p. 10.
    274 Nussbaum, 8/9/95 Hrg. p. 26.
    275 Report of the Committee on Banking, Housing, and Urban 
Affairs, United States Senate, on the Communications between Officials 
of the White House and the U.S. Department of the Treasury or the 
Resolution Trust Corporation, January 3, 1995, [hereinafter Treasury 
Contacts Report], p. 3.
    276 Treasury Contacts Report, p. 3 & n. 7.
    277 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Production, pp. 1447-1449.
    278 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Production, pp. 1450-1455.
    279 Treasury Contacts Report, p. 4.
    280 Nussbaum, 8/9/95 Hrg. p. 166.
    281 Nussbaum, 8/9/95 Hrg. p. 166.
    282 Nussbaum, 8/9/95 Hrg. p. 166.
    283 II Foster Hearings, p. 1794.
    284 II Foster Hearings, p. 1794.
    285 Foren, 11/28/95 Hrg. p. 20.
    286 Foren, 11/28/95 Hrg. p. 23.
    287 Bowles, 11/28/95 Hrg. p. 24.
    288 Bowles, 11/28/95 Hrg. p. 24.
    289 Shepperson, 11/28/95 Hrg. pp. 23-24.
    290 White House Document S12334.
    291 Markland, 8/195/ Hrg. pp. 168-169.
    292 Nussbaum, 8/9/95 Hrg. p. 30.
    293 Nussbaum, 8/9/95 Hrg. p. 31.
    294 II Foster Hearings p. 1794.
    295 Foster Report p. 10.
    296 Foster Report p. 10.
    297 Foster Report p. 10.
    298 Foster Report p. 10.
    299 Foster Report p. 11.
    300 Foster Report p. 11.
    301 Foster Report p. 11.
    302 Foster Report p. 11.
    303 Foster Report p. 11.
    304 Foster Report pp. 11-12.
    305 Foster Report p. 12.
    306 Foster Report p. 12.
    307 Foster Report p. 13.
    308 Foster Report p. 15.
    309 Braun, 7/20/95 Hrg. p. 16.
    310 Foster Report, p. 35. Rolla, 7/20/95 Hrg. p. 43; Rolla, 6/
20/95 Dep. pp. 19-20, 23, 25; Braun, 6/19/95 Dep. pp. 18-20.
    311 Braun, 6/19/95 Dep. p. 17.
    312 Braun, 6/19/95 Dep. p. 18.
    313 Markland, 6/28/95 Dep. pp. 71-72; Hines, 6/21/95 Dep. pp. 
30-32.
    314 Braun, 7/20/95 Hrg. p. 35.
    315 Foster Report p. 15.
    316 Foster Report p. 15.
    317 Foster Report p. 16.
    318 Foster Report p. 18.
    319 Foster Report p. 18.
    320 Foster Report pp. 18-19.
    321 Braun, 6/19/95 Dep. p. 22.
    322 Foster Report p. 19; Braun, 6/19/95 Dep. pp. 25-26; Rolla, 
6/20/95 Dep. pp. 31-32.
    323 Foster Report p. 19.
    324 Kennedy, 7/11/95 Dep. p. 35.
    325 S. Hrg., 7/20/95 pp. 13-14; S. Hrg., 7/25/95 pp. 59-60.
    326 S. Hrg., 7/20/95 p. 14.
    327 Hubbell, 7/18/95 Hrg. pp. 133-34; S. Hrg., 7/20/95 pp. 16-
17.
    328 S. Hrg., 7/20/94 p. 17.
    329 Foster Report p. 21, n. 72, quoting Hines Deposition.
    330 S. Hrg., 7/20/95 p. 18.
    331 S. Hrg., 7/20/95 p. 51.
    332 S. Hrg., 7/20/95 pp. 38, 49.
    333 Markland, 6/28/95 Dep. pp. 75-76; Hines, 6/21/95 Dep. p. 
33; Braun, 6/19/95 p. 18.
    334 Braun, 7/20/95 Hrg. p. 18.
    335 Braun, 7/20/95 Hrg. p. 18.
    336 Rolla, 7/20/95 Hrg. pp. 35-36.
    337 Department of Interior Document 111.
    338 Braun, 6/19/95 Dep. p. 42.
    339 Rolla, 7/20/95 Hrg. pp. 35-36.
    340 S. Hrg., 7/20/95 p. 20; Braun, 6/19/95 Dep. pp. 24-25, 
121; Rolla, 6/20/95 Dep. pp. 54-55.
    341 Rolla, 7/20/95 Hrg. pp. 31-32.
    342 S. Hrg., 7/25/95 p. 63; Watkins, 7/14/95 Dep. p. 41-42.
    343 S. Hrg., 7/20/95 Hrg. p. 24; Hines, 6/21/95 Dep. p. 23.
    344 S. Hrg., 7/20/95 Hrg. pp. 24-25; Hines, 6/21/95 Dep. pp. 
23-24.
    345 Hines, 7/20/95 Hrg. p. 25; Hines, 6/21/95 Dep. pp. 28-29, 
35.
    346 Hines, 7/20/95 Hrg. p. 39.
    347 Mathews, 7/25/95 Hrg. pp. 73-74; Mathews, 6/27/95 Dep. pp. 
41-42; White House Document Z000139.
    348 Mathews, 7/25/95 Hrg. pp. 73-74; Mathews, 6/27/95 Dep. p. 
67.
    349 White House Document Z000139.
    350 Burton, 7/5/95 Dep. pp. 44-46; Nussbaum, 7/12/95 Dep. p. 
40.
    351 Hubbell, 7/13/95 Dep. pp. 49-51.
    352 Transcript of White House Press Briefing with Press 
Secretary Dee Dee Myers, U.S. Newswire, August 2, 1993.
    353 Gergen, 7/12/95 Dep. p. 25.
    354 Gergen, 7/12/95 Dep. p. 29.
    355 Gergen, 7/12/95 Dep. p. 30.
    356 Gearan, 7/6/95 Dep. p. 48.
    357 Burton, 7/5/95 Dep. p. 44.
    358 Caputo, 7/10/95 Dep. p. 20.
    359 Caputo, 7/10/95 Dep. p. 20.
    360 Caputo, 7/10/95 Dep. pp. 23-24.
    361 McLarty, 8/7/95 Hrg. pp. 58-59.
    362 Williams, 7/7/95 Dep. pp. 23-24; Williams, 7/26/95 Hrg. 
pp. 290-291.
    363 Williams, 7/7/95 Dep. p. 25; Williams, 7/26/95 Hrg. p. 
291.
    364 Williams & Connolly Document 001.
    365 Williams & Connolly Document 001.
    366 Thomases, 8/8/95 Hrg., p. 116.
    367 Williams & Connolly Document 001.
    368 Burton, 12/13/95 Hrg., p. 42.
    369 Mathews, 12/13/95 Hrg. pp. 61-62.
    370 Williams & Connolly Document 001.
    371 Williams & Connolly Document 001.
    372 Williams & Connolly Document 001.
    373 Dickey, 2/12/96 Dep., p. 11.
    374 Dickey, 2/12/96 Dep. p. 12.
    375 Dickey, 2/12/96 Dep. p. 27.
    376 White House Document S020913.
    377 Dickey, 2/12/96 Dep. p. 37.
    378 Dickey, 2/12/96 Dep. p. 39.
    379 Dickey, 2/12/96 Dep. p. 49; 2/14/96 Hrg. p. 59.
    380 Dickey, 2/12/96 Dep. p. 50.
    381 Dickey, 2/12/96 Dep. p. 51.
    382 Dickey, 2/12/96 Dep. p. 54.
    383 Dickey, 2/12/95 Dep., p. 56.
    384 Dickey, 2/12/96 Dep. p. 67.
    385 Dickey, 2/12/96 Dep. p. 60.
    386 Dickey, 2/12/96 Dep., p. 61.
    387 Dickey, 2/12/96 Dep. p. 60.
    388 Dickey, 2/14/96 Hrg. p. 60.
    389 Letter from Jane Sherburne to Robert Giuffra, September 
30, 1995.
    390 Dickey, 2/12/96 Dep. p. 65.
    391 Letter from Jane Sherburne to Robert Giuffra, October 13, 
1995.
    392 Letter from Jane Sherburne to Robert Giuffra, October 13, 
1995.
    393 Letter from Viet Dinh to Sally Smith, November 21, 1995 
(confirming conversation).
    394 Letter from Viet Dinh to Sally Smith, November 22, 1995 
(confirming conversation).
    395 Letter from Jane Sherburne to Viet Dinh, February 27, 
1996.
    396 Dickey, 2/14/96 Hrg. pp. 59-60.
    397 Dickey, 2/14/96 Hrg. p. 61.
    398 Mathews, 7/25/95 Hrg. p. 50.
    399 Mathews, 6/27/95 Dep. p. 56.
    400 Mathews, 7/25/95 Hrg. p. 50; White House Document 
Z0000140.
    401 Mathews, 7/25/95 Hrg. p. 51; Mathews, 6/27/95 Dep. pp. 
103-104.
    402 S. Hrg. 8/9/95 p. 238; Nussbaum 7/12/95 Dep. pp. 50-52.
    403 S. Hrg. 7/25/95 p. 56.
    404 O'Neill, 6/23/95 Dep. pp. 115-120.
    405 O'Neill, 7/26/95 Hrg. p. 12.
    406 Mathews, 7/25/95 Hrg. p. 57.
    407 Mathews, 7/25/95 Hrg. p. 58.
    408 Mathews, 6/27/95 Dep. pp. 52-55, 77.
    409 Mathews, 7/25/95 Hrg. p. 59; O'Neill, 6/23/95 Dep. pp. 
120-122.
    410 Nussbaum, 7/12/95 Dep. p. 54.
    411 White House Document Z000651; S. Hrg., 7/25/95 p. 60.
    412 Thomasson, 7/25/95 Hrg. p. 196-198.
    413 Thomasson, 7/25/95 Hrg. p. 199.
    414 Thomasson, 7/25/95 Hrg. p. 199.
    415 Treasury Department Document 6495.
    416 Nussbaum, 7/13/95 Dep. p. 29.
    417 Nussbaum, 8/9/95 Hrg. p. 11; Nussbaum, 7/12/95 Dep. p. 30.
    418 Nussbaum, 8/9/95 Hrg. p. 11.
    419 Nussbaum, 8/9/95 Hrg. p. 11.
    420 Williams, 7/7/95 Dep. p. 26.
    421 Lieberman, 7/6/95 Dep. p. 38.
    422 Williams, 7/7/95 Dep. p. 26.
    423 Williams, 7/26/95 Hrg. p. 154.
    424 Thomasson, 7/25/95 Hrg. p. 194.
    425 S. Hrg., 7/25/95 pp. 194, 204.
    426 Thomasson, 7/25/95 Hrg. p. 205.
    427 Thomasson, 7/25/95 Hrg. p. 194.
    428 Thomasson, 7/25/95 Hrg. p. 194.
    429 Thomasson, 7/25/95 Hrg. p. 208; Thomasson, 7/11/95 Dep. 
pp. 46-48.
    430 Thomasson, 7/25/95 Hrg. p. 210.
    431 Thomasson, 7/25/95 Hrg. p. 195; Thomasson, 7/11/95 Dep. 
pp. 46-48.
    432 Thomasson, 7/25/95 Hrg. p. 195.
    433 Nussbaum, 8/9/95 Hrg. pp. 11-12.
    434 Nussbaum, 8/9/95 Hrg. p. 12.
    435 Nussbaum, 7/12/95 Dep. p. 35.
    436 Nussbaum, 7/13/95 Dep. p. 40; S. Hrg. 8/10/95 pp. 125.
    437 Williams 7/26/95 Hrg. p. 278; Williams, 7/7/95 Dep. p. 32.
    438 Williams, 7/26/95 Hrg. p. 279.
    439 Williams, 7/26/95 Hrg. p. 279; Williams, 7/7/95 Dep. p. 
32.
    440 O'Neill, 7/26/95 Hrg. p. 7; O'Neill, 6/23/95 Dep. p. 45.
    441 O'Neill, 7/26/95 Hrg. p. 11; White House Document 
Z0000598.
    442 O'Neill, 7/26/95 Hrg. p. 11.
    443 O'Neill, 7/26/95 Hrg. p. 11.
    444 O'Neill, 7/26/95 Hrg. p. 12.
    445 O'Neill, 7/26/95 Hrg. pp. 12-13.
    446 O'Neill, 7/26/95 Hrg. p. 16.
    447 O'Neill, 7/26/95 Hrg. p. 17; O'Neill, 6/23/95 Dep. p. 61.
    448 O'Neill, 7/26/95 Hrg. p. 17.
    449 O'Neill, 7/26/95 Hrg. p. 17-18.
    450 O'Neill, 7/26/94 Hrg. pp. 18-19.
    451 S. Hrg. 7/26/95 p. 22.
    452 O'Neill, 7/26/95 Hrg. p. 23.
    453 O'Neill, 7/26/95 Hrg. p. 22.
    454 O'Neill, 7/26/95 Hrg. p. 112.
    455 S. Hrg. 7/26/95 p. 95.
    456 O'Neill, 7/26/95 Hrg. p. 22; O'Neill, 6/23/95 Dep. pp. 48, 
54-55, 38-39, 81-83, 86-87.
    457 O'Neill, 7/26/95 Hrg. p. 23.
    458 White House Document Z0000598.
    459 Williams, 7/7/95 Dep. p. 56.
    460 Williams, 7/7/95 Dep. pp. 57-58.
    461 Bell Atlantic Document (unnumbered).
    462 Thomases, 7/17/95 Dep. p. 60.
    463 Hubbell, 7/13/95 Dep. p. 72.
    464 Hubbell, 7/13/95 1995 Dep. 73.
    465 Hubbell, 7/13/95 1995 Dep. p. 87.
    466 Hubbell, 7/13/95 1995 Dep. pp. 74-75.
    467 Burton, 7/5/95 Dep. p. 78.
    468 White House Document Z000450.
    469 Pond, 6/26/95 Dep. pp. 74, 77.
    470 Flynn, 6/21/95 Dep. pp.25-26.
    471 Pond, 6/26/95 Dep. pp. 81.
    472 Neuwirth, 7/10/95 Dep. p. 47.
    473 Neuwirth, 7/10/95 Dep. p. 49.
    474 Pond, 6/26/95 Dep. p. 84.
    475 Nussbaum, 7/12/95 Dep. p. 65.
    476 Tripp, 7/12/95 Dep. p. 67.
    477 Burton, 7/5/95 Dep. p. 72. Burton testified that ``there 
weren't three days when I lived in Washington that I didn't make the 
8:00 senior staff meeting.'' Burton, 7/5/95 Dep. p. 79.
    478 Burton, 7/5/95 Dep. p. 72, McLarty, 7/6/95 Dep. pp. 37-38.
    479 Gergen, 7/12/95 Dep. pp. 40-41; McLarty, 7/6/95 Dep. p. 
38, Burton, 7/5/95 Dep. p. 72.
    480 Gergen, 7/12/95 Dep. p. 41.
    481 Burton, 7/5/95 Dep. p. 72.
    482 Nussbaum, 7/12/95 Dep. p. 70.
    483 Nussbaum, 7/12/95 Dep. pp. 69-70; Neuwirth, 7/10/95 Dep. 
p. 58; Sloan, 7/7/95 Dep. pp. 90-91.
    484 Nussbaum, 7/12/95 Dep. pp. 69-70.
    485 Tripp 7/11/95 Dep. p. 87.
    486 Tripp 7/11/95 Dep. p. 87.
    487 Tripp 7/11/95 Dep. pp. 88-89.
    488 Flynn, 6/21/95 Dep. p. 25.
    489 Flynn, 6/21/95 Dep. pp. 41-42.
    490 Markland, 6/28/95 Dep. p. 39.
    491 Flynn, 6/21/95 Dep. p. 43.
    492 Treasury Document 6233.
    493 Castleton, 6/27/95 Dep. p. 76.
    494 Braun, 6/19/95 Dep. pp. 50, 51.
    495 Hines, 6/21/95 Dep. pp. 50-51.
    496 Hines, 6/21/95 Dep. p. 50; Langston, 6/27/95 Dep. p. 24.
    497 Langston, 6/27/95 Dep. p. 35.
    498 Langston, 6/27/95 Dep. p. 33.
    499 Markland, 6/28/95 Dep. p. 43.
    500 Markland, 6/28/95 Dep. p. 43.
    501 Langston, 6/27/95 Dep. p. 43.
    502 Langston, 6/27/95 Dep. pp. 42, 44.
    503 Flynn, 6/21/95 Dep. p. 46.
    504 Flynn, 6/21/95 Dep. p. 47.
    505 Flynn, 6/21/95 Dep. p. 47.
    506 Flynn, 7/21/95 Dep. p. 47.
    507 Flynn, 7/21/95 Dep. p. 48.
    508 Flynn, 6/21/95 Dep. p. 49; Markland, 6/28/95 Dep. p. 97.
    509 Hubbell, 7/18/95 Hrg. p. 142.
    510 Hubbell, 7/18/95 Hrg. p. 142.
    511 Hubbell, 7/18/95 Hrg. p. 142.
    512 Hubbell, 7/18/95 Hrg. p. 143.
    513 Nussbaum, 7/12/95 Dep. p. 85.
    514 Nussbaum, 7/12/95 Dep. p. 87.
    515 Nussbaum, 7/12/95 Dep. p. 94.
    516 Heymann, 7/21/95 Dep. p. 22.
    517 Heymann, 7/21/95 Dep. pp. 23-24.
    518 Heymann, 7/21/95 Dep. p. 24.
    519 Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 42.
    520 Heymann, 7/21/95 Dep. pp. 24-25.
    521 Heymann, 7/21/95 Dep. p. 26.
    522 Heymann, 7/21/95 Dep. p. 26.
    523 Hume, 6/29/95 Dep. p. 68.
    524 Heymann, 7/21/95 Dep. p. 21.
    525 Heymann, 7/21/95 Dep. p. 17.
    526 Heymann, 7/21/95 Dep. p. 41.
    527 Margolis, 8/10/95 Hrg. pp. 178-179.
    528 Adams, 6/29/95 Dep. p. 34; Flynn, 6/21/95 Dep. pp. 27-30;
    529 Margolis, 8/10/95 Hrg. p. 179.
    530 Adams, 7/27/95 Hrg. p. 94; Adams, 6/29/95 Dep. p. 35 (``I 
think as I have just described, the agreement was that David and I 
would look at each file and determine relevance or--or determine 
relevance first of all.'')
    531 Adams, 6/29/95 Dep. pp. 35-36; Adams, 7/27/95 Hrg. p. 94.
    532 Justice Document FBI-129.
    533 Margolis, 8/10/95 Hrg. p. 179.
    534 Adams, 7/27/95 Hrg. p. 95.
    535 Justice Department Document F 000149.
    536 Nussbaum, 8/9/95 Hrg. pp. 39-40.
    537 Nussbaum, 8/9/95 Hrg. p. 41.
    538 Nussbaum, 8/9/95 Hrg. p. 21.
    539 S. Hrg. 8/3/95 p. 118: Mr. Neuwirth: ``It was left without 
resolution with the understanding that there would be further 
discussion about it.'' Mr. Ben-Veniste: ``Mr. Sloan?'' Mr. Sloan: ``I 
don't recall a clear resolution on the 21st, Mr. Ben-Veniste.''
    540 Margolis, 8/10/95 Hrg. p. 181.
    541 Heymann, 9/2/95 Hrg. pp. 44-45.
    542 Adams, 6/29/95 Dep. p. 34.
    543 Flynn, 6/21/95 Dep. pp. 72-73.
    544 Flynn, 6/21/95 Dep. pp. 75-76.
    545 White House Document Z 001214.
    546 White House Document Z 001213.
    547 White House Document Z 001213.
    548 White House Document Z 001214.
    549 Park Police Document No. 30.
    550 Park Police Document 31.
    551 Park Police Document 32.
    552 Park Police Document 32.
    553 Park Police Document 32.
    554 Park Police Document 33.
    555 Park Police Document 33.
    556 Markland, 8/1/95 Hrg. p. 164.
    557 Markland, 8/1/95 Hrg. p. 164-165.
    558 8/1/95 Hrg. pp. 165-166.
    559 8/1/95 Hrg. pp. 165-166.
    560 Markland, 6/28/95 Dep. p. 165.
    561 Bell Atlantic Document (not numbered).
    562 Williams & Connolly Document 001.
    563 Thomases, 8/8/95 Hrg. p. 63.
    564 Williams & Connolly Document 001.
    565 Thomases, 8/8/95 Hrg. p. 9.
    566 Thomases, 8/8/95 Hrg. p. 10.
    567 Williams & Connolly Document 001.
    568 White House Document Z 000647.
    569 Thomases, 8/8/95 Hrg. p. 64; Nussbaum, 7/12/95 Dep. p. 
139.
    570 Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    571 Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    572 Williams, 7/7/95 Dep. p. 88.
    573 Williams, 11/2/95 Hrg. p. 21.
    574 Thomases, 8/8/95 Hrg. pp.12-13.
    575 Thomases, 8/8/95 Hrg. p. 64.
    576 Thomases, 8/8/95 Hrg. p. 64.
    577 Thomases, 8/8/95 Hrg. p. 64.
    578 Thomases, 8/8/95 Hrg. p. 68.
    579 Thomases, 8/8/95 Hrg. p. 68.
    580 Thomases, 11/2/95 Hrg. p. 51.
    581 Thomases, 11/2/95 Hrg. p. 57.
    582 Thomases, 11/2/95 Hrg. p. 52.
    583 Nussbaum, 7/12/95 Dep. p. 139.
    584 Nussbaum, 7/12/95 Dep. p. 142.
    585 Nussbaum, 8/9/95 Hrg. p. 58.; Nussbaum, 7/12/95 Dep. p. 
144.
    586 Nussbaum, 7/12/95 Dep. pp. 144-145.
    587 Nussbaum, 7/12/95 Dep. p. 142.
    588 Nussbaum, 8/9/95 Hrg. p. 17.
    589 Nussbaum, 8/9/95 Hrg. p. 60.
    590 Quinn, 7/14/95 Dep., p. 7; Nussbaum, 7/12/95 Dep., p. 177.
    591 Willkie, Farr & Gallagher Document ST000001-ST000006.
    592 Thomases, 8/8/95 Hrg. p. 102.
    593 Thomases, 11/2/95 Hrg. p. 95.
    594 Thomases, 11/2/95 Hrg. p. 52.
    595 Thomases, 11/2/95 Hrg. p. 99.
    596 Williams, 11/2/95 Hrg. p. 25.
    597 Treasury Document (unnumbered).
    598 Adams, 7/27/95 Hrg. pp. 96-97.
    599 Adams, 7/27/95 Hrg., p. 97.
    600 8/10/95 Hrg., pp. 182-183.
    601 Adams, 7/27/95 Hrg. p. 97; Margolis, 8/10/95 Hrg. p. 183.
    602 Margolis, 8/10/95 Hrg. p. 183.
    603 Margolis, 8/10/95 Hrg. p. 184.
    604 Heymann, 8/2/95 Hrg. p. 46.
    605 Heymann, 8/2/95 Hrg. p. 46.
    606 Heymann, 8/2/95 Hrg. pp. 46-47.
    607 Heymann, 8/2/95 Hrg. p. 47.
    608 Heymann, 8/2/95 Hrg. p. 48.
    609 Heymann, 8/2/95 Hrg. p. 48.
    610 Justice Department Document F000166.
    611 Nussbaum, 7/12/95 Dep. p. 174.
    612 Margolis, 8/10/95 Hrg. p. 188.
    613 Margolis, 8/10/95 Hrg. pp. 183-184.
    614 Margolis, 8/10/95 Hrg. pp. 183-184.
    615 Heymann, 7/21/95 Dep. p. 62.
    616 Heymann, 7/21/95 Dep. p. 62.
    617 Margolis, 8/10/95 Hrg. p. 185.
    618 Margolis, 8/10/95 Hrg. p. 185.
    619 Margolis, 8/10/95 Hrg. p. 186.
    620 Margolis, 8/10/95 Hrg. p. 186.
    621 Margolis, 8/10/95 Hrg. p. 186.
    622 Margolis, 8/10/95 Hrg. p. 186, p. 188.
    623 Margolis, 8/10/95 Hrg. p. 189.
    624 Nussbaum, 7/12/95 Dep. 175.
    625 Justice Department Document F 000149.
    626 Nussbaum, 7/12/95 Dep. pp. 176-177.
    627 Nussbaum 7/12/95 Dep. p. 176.
    628 Nussbaum, 7/12/95 Dep. p. 175.
    629 Nussbaum, 7/12/95 Dep. p. 177.
    630 Nussbaum, 7/12/95 Dep. p. 180.
    631 Nussbaum, 7/12/95 Dep. p. 180.
    632 Quinn, 8/7/95 Hrg. p. 45.
    633 Park Police Document 36.
    634 Margolis, 8/10/95 Hrg. p. 189.
    635 Nussbaum, 7/12/95 Dep. p. 172.
    636 Margolis, 8/10/95 Hrg. p. 189.
    637 Margolis, 8/10/95 Hrg. p. 185.
    638 Park Police Document 36; White House Document Z 000354.
    639 Adams, 7/27/95 Hrg. p. 102.
    640 Park Police Document 36.
    641 Markland, 8/1/95 Hrg. p. 167.
    642 Adams, 7/27/95 Hrg. p. 102; Margolis, 8/10/95 Hrg., pp. 
194-195.
    643 Markland, 8/1/95 Hrg pp. 167-168; Park Police Document 37.
    644 Swidler & Berlin Document (not numbered).
    645 Markland, 8/1/95 Hrg pp. 167-168.
    646 Park Police Document 37.
    647 Adams, 7/27/95 Hrg. p. 103.
    648 Margolis, 8/10/95 Hrg. p. 190.
    649 Margolis, 8/10/95 Hrg. p. 191.
    650 Margolis, 8/10/95 Hrg. p. 219.
    651 Salter, 7/27/95 Hrg. p. 105.
    652 Adams, 7/27/95 Hrg. p. 105.
    653 Park Police Document 37.
    654 Park Police Document 37.
    655 Park Police Document 37.
    656 Salter, 7/27/95 Hrg. pp. 106-107.
    657 Justice Department Document F 000150.
    658 Margolis, 8/10/95 Hrg. pp. 191-192
    659 Margolis, 8/10/95 Hrg. pp. 191-192
    660 Sloan, 8/3/95 Hrg. p. 66.
    661 Margolis, 8/10/95 Hrg. p. 195.
    662 Margolis, 8/10/95 Hrg. p. 109.
    663 Salter, 7/27/95 Hrg. p. 110.
    664 Adams, 7/27/95 Hrg. p. 106.
    665 Adams, 7/27/95 Hrg. p. 106.
    666 Justice Department Document F 000150.
    667 The notes state: ``M= what @ computer? Please review''. 
Swidler & Berlin Doc (not numbered).
    668 White House Document Z 000353.
    669 Salter, 7/27/95 Hrg. p. 107.
    670 White House Document Z000353.
    671 White House Document Z 001209.
    672 Tripp, 8/1/95 Hrg p. 35.
    673 Gorham, 8/1/95 Hrg. pp. 35-36.
    674 White House Documents Z 001210-Z001211.
    675 White House Document Z 001213.
    676 White House Document Z 001214.
    677 Adams, 7/17/95 Hrg. p. 107.
    678 Adams, 7/17/95 Hrg. p. 107.
    679 Salter, 7/17/95 Hrg. p. 108.
    680 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 1.
    681 Swidler & Berlin Document (unnumbered)
    682 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 1.
    683 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 2.
    684 Memorandum from Michael E. Shaheen Jr to David Margolis, 
July 24, 1995, p. 1.
    685 Memorandum from Michael E. Shaheen Jr to David Margolis, 
July 24, 1995, pp. 2-3.
    686 Nussbaum, 8/10/95 Hrg. p. 59.
    687 Nussbaum, 8/10/95 Hrg. p. 59.
    688 Salter, 7/27/95 Hrg. pp 108-109.
    689 Adams, 7/27/95 Hrg. p. 107.
    690 Condon, 6/28/95 Dep. p. 56.
    691 Flynn, 6/21/95 Dep. p. 89.
    692 Hume, 8/1/95 Hrg. p. 218.
    693 Markland, 6/30/95 Dep. p. 213.
    694 Spafford, 7/11/95 Dep. p. 70.
    695 Markland, 6/28/95 Dep. p. 213; 8/1/Hrg. p. 172.
    696 Markland, 8/1/95 Hrg p. 172.
    697 Margolis, 8/10/95 Hrg. pp. 192-193.
    698 Nussbaum, 8/10/95 Hrg. p. 62.
    699 Burton, 7/5/95 Dep. p. 109; Neuwirth, 7/10/95 Dep. p. 187; 
Sloan, 7/7/95 Dep., p. 187. Sloan did testify that he had the 
impression on July 22 that the briefcase was empty, but he could not 
recall how he got that impression. Sloan, 7/7/95, Dep. p. 188.
    700 Burton, 7/5/95 Dep. p. 184.
    701 Hines, 6/21/95 Dep. p. 83.
    702 Markland Dep. p. 218.
    703 Markland, 6/28/95 Dep. pp. 251-252.
    704 Spafford, 7/27/95 Hrg. p. 19.
    705 Spafford, 7/27/95 Hrg. p. 20.
    706 Spafford, 7/27/95 Hrg. p. 18.
    707 Spafford, 7/27/95 Hrg. p. 22.
    708 Sloan, 8/3/95 Hrg. p. 67.
    709 Margolis, 8/10/95 Hrg. pp. 230-231.
    710 Salter, 7/27/95 Hrg. p. 112.
    711 Markland, 8/1/95 Hrg. p. 170.
    712 Margolis, 8/10/95 Hrg. p. 170.
    713 7/27/95 Hrg. p. 113.
    714 White House Document Z 000107.
    715 White House Document Z 000578.
    716 Spafford, 7/27/95 Hrg. p. 20.
    717 White House Document Z 000354.
    718 Sloan, 8/3/95 Hrg. p. 85.
    719 White House Document Z 000851.
    720 White House Document Z 000953.
    721 Williams, 7/26/95 Hrg. pp. 165.
    722 Nussbaum, 8/9/95 Hrg. p. 25.
    723 Nussbaum, 7/12/95 Dep. pp. 237-238.
    724 Nussbaum, 7/12/95 Dep. p. 240.
    725 Williams, Dep. p. 119.
    726 Williams, 7/26/95 Hrg. pp. 170-171.
    727 Williams, 7/7/95 Dep. p. 119.
    728 Williams, 7/7/95 Dep. pp. 122-123.
    729 Gorham, 8/1/95 Hrg. pp. 16-17.
    730 Gorham, 8/1/95 Hrg. pp. 16-17.
    731 Gorham, 8/1/96 Hrg. p. 18.
    732 Gorham, 8/1/96 Hrg. p. 18.
    733 Gorham, 8/1/96 Hrg. p. 18.
    734 Nussbaum, 7/12/95 Hrg. pp. 258-259.
    735 Williams, 7/26/95 Hrg. pp. 176-177.
    736 Gorham, 8/1/95 Hrg. p. 20.
    737 Gorham, 8/1/95 Hrg. p. 20.
    738 Gorham, 8/1/95 Hrg. p. 20.
    739 Tripp, 8/1/95 Hrg. p. 21.
    740 Williams, 7/26/95 Hrg. p. 167.
    741 Williams, 7/26/95 Hrg. pp. 179-180.
    742 Williams, 7/26/95 Hrg. p. 180.
    743 Williams, 7/26/95 Hrg. p. 181.
    744 Williams, 7/26/95 Hrg. p. 181.
    745 Williams, 7/26/95 Hrg. p. 182.
    746 Williams, 7/26/95 Hrg. pp. 183-184.
    747 Williams, 7/26/95 Hrg. p. 184.
    748 Williams, 7/26/95 Hrg. p. 184.
    749 Williams, 7/26/95 Hrg. p. 180.
    750 Williams, 7/26/95 Hrg. p. 221.
    751 Williams, 7/26/95 Hrg. p. 221.
    752 Nussbaum, 9/16/95 Dep. p. 238.
    753 Nussbaum, 7/12/95 Dep. p. 239.
    754 Nussbaum, 7/12/95 Dep. p. 239.
    755 Castleton, 8/3/95 Hrg. p. 33
    756 Castleton, 6/27/95 Dep. p. 132.
    757 Castleton, 8/3/95 Hrg. p. 8.
    758 Castleton, 8/3/95 Hrg. p. 11.
    759 Castleton, 8/3/95 Hrg. p. 12.
    760 Castleton, 8/3/95 Hrg. p. 12.
    761 Castleton, 8/3/95 Hrg. p. 12.
    762 Castleton, 8/3/95 Hrg. p. 13.
    763 Huber, 8/3/95 Hrg. p. 5.
    764 Huber, 8/3/95 Hrg. pp. 14-15.
    765 Huber, 8/3/95 Hrg. p. 15.
    766 Huber, 8/3/95 Hrg. p. 16.
    767 Huber, 8/3/95 Hrg. p. 17.
    768 Huber, 8/3/95 Hrg. p. 17.
    769 Huber, 6/29/95 Dep., p. 36.
    770 White House Document S 020915.
    771 Heymann, 7/21/95 Dep. pp. 85-86.
    772 Heymann, 7/21/95 Dep. pp. 85-86.
    773 Justice Department Document F 000166.
    774 Heymann, 7/21/95 Dep. pp. 170.
    775 Heymann, 7/21/95 Dep. pp. 170.
    776 Margolis, 8/10/95 Hrg. p. 212.
    777 Heymann, 7/21/95 Dep. pp. 154-155.
    778 Margolis, 8/10/95 Hrg. p. 233.
    779 Margolis, 8/10/95 Hrg. p. 233.
    780 Margolis, 8/10/95 Hrg. p. 232.
    781 Heymann, 8/2/95 Hrg. p. 51.
    782 Margolis, 8/10/95 Hrg. p. 230.
    783 Heymann, 8/2/95 Hrg. pp. 49-50.
    784 Justice Department Document F 000163.
    785 Heymann, 8/2/95 Hrg. p. 50.
    786 Heymann, 8/2/95 Hrg. p. 50.
    787 Heymann, 8/2/95 Hrg. p. 50.
    788 Nussbaum, 8/9/95 Hrg. p. 127.
    789 Neuwirth, 8/3/95 Hrg. pp. 121-122.
    790 Neuwirth, 8/3/95 Hrg. pp. 121-122.
    791 Neuwirth, 8/3/95 Hrg. pp. 121-122.
    792 Neuwirth, 8/3/95 Hrg. p. 124.
    793 Nussbaum, 7/12/95 Dep. pp. 278-279.
    794 Nussbaum, 7/12/95 Dep. pp. 278-279.
    795 Nussbaum, 7/12/95 Dep. pp. 278-279.
    796 Park Police Document 43.
    797 Park Police Document 68.
    798 The FBI conducted a comparison of the handwriting on the 
note and that of Vince Foster in various personal documents, and 
concluded that Foster wrote the note. I Foster Hearings, p. 257-258.
    799 Nussbaum, 7/12/95 Dep. pp. 282-283.
    800 Burton, 8/7/95 Hrg. p. 8.
    801 Burton, 8/7/95 Hrg. p. 9.
    802 Gorham, 8/1/95 Hrg. p. 27.
    803 Tripp, 8/1/95 Hrg. p. 29.
    804 Tripp, 8/1/95 Hrg. p. 29.
    805 Tripp, 8/1/95 Hrg. p. 29.
    806 Nussbaum, 8/10/95 Hrg. p. 19.
    807 Sloan, 8/3/95 Hrg. p. 97.
    808 White House Document Z 001206, Z 001208.
    809 White House Document Z 001213.
    810 White House Document Z 001214.
    811 Gorham, 8/1/95 Hrg. p. 31.
    812 Nussbaum, 8/10/95 Hrg. p. 12.
    813 Nussbaum, 8/9/95 Hrg. p. 18.
    814 Nussbaum, 7/12/95 Dep. p. 302.
    815 Nussbaum, 7/12/95 Dep. p. 303.
    816 Burton, 8/7/95 Hrg. pp. 49-49.
    817 Nussbaum, 7/12/95 Dep. p. 303.
    818 Burton, 8/7/95 Hrg. p. 51.
    819 Nussbaum, 7/12/95 Dep. pp. 303-305.
    820 Nussbaum, 7/12/95 Dep. pp. 303-305.
    821 Gergen, 7/12/95 Hrg. pp. 116-117.
    822 Gergen, 7/12/95 Dep. p. 137.
    823 Nussbaum, 7/12/95 Dep. pp. 298-299.
    824 S. Hrg., 8/7/95, p. 122.
    825 McLarty, 8/7/95 Hrg. p. 122-123.
    826 McLarty, 8/7/95 Hrg. p. 23.
    827 Nussbaum, 7/12/95 Dep. p. 299.
    828 Nussbaum, 7/12/95 Dep. pp. 287-288.
    829 Burton, 8/7/95 Hrg. p. 13.
    830 Burton, 8/7/95 Hrg. p. 13.
    831 Nussbaum, 7/12/95 Dep. p. 288.
    832 Thomases, 8/8/95 Hrg. p. 174.
    833 Thomases, 8/8/95 Hrg. p. 174.
    834 Nussbaum, 8/9/95 Hrg. p. 19.
    835 FBI Documents FBI-00000018--FBI 00000044.
    836 Neuwirth, 8/3/95 Hrg. pp. 102-103.
    837 Justice Department Document FBI-00000018--FBI-00000020.
    838 Justice Department Documents A139-A141.
    839 White House Document S 020562.
    840 Burton, 8/7/95 Hrg. p. 20.
    841 White House Document Z 001148.
    842 Burton, 8/7/95 Hrg. p. 19.
    843 Castleton, 8/3/95 Hrg. pp. 13-14.
    844 Castleton, 8/3/95 Hrg. p. 21.
    845 Castleton, 6/27/95 Dep. pp. 139-140.
    846 Castleton, 6/27/95 Dep. pp. 139-140.
    847 Williams, 7/26/95 Hrg. p 307.
    848 Williams, 7/26/95 Hrg. pp. 306.
    849 Castleton, 6/27/95 Dep., p. 21.
    850 Williams, 7/7/95 Dep. p. 150.
    851 Williams, 7/7/95 Dep. pp. 150-151, 170.
    852 Huber, 8/3/95 Hrg. pp. 18-19.
    853 Huber, 8/3/95 Hrg. p. 23.
    854 Huber, 8/3/95 Hrg. p. 23.
    855 Nussbaum, 7/13/95 Dep. p. 407-408.
    856 White House Document S 020562.
    857 Letter from Jane Sherburne to Robert Giuffra, February 12, 
1996.
    858 White House Documents S020921, S020927.
    859 Williams, 12/11/95 Hrg., p. 8.
    860 Williams, 7/7/95 Dep. p. 145.
    861 Williams, 7/7/95 Dep. p. 147.
    862 Barnett, 12/11/95 Hrg., p. 1.
    863 Barnett, 12/11/95 Hrg., p. 12.
    864 White House Document S012482
    865 White House Document S020921.
    866 Barnett, 12/11/95 Hrg., p. 17.
    867 Barnett, 12/11/95 Hrg., p. 15.
    868 Barnett, 12/11/95 Hrg., p. 19.
    869 Barnett, 12/11/95 Hrg., p. 20.
    870 White House Documents S020921, S020927, S020935.
    871 Barnett, 12/11/95 Hrg., pp. 12-23.
    872 White House Document S020921.
    873 Ingram, 12/11/95 Hrg., p. 28.
    874 Willkie, Farr & Gallagher document ST125.
    875 Thomases, 12/18/95 Hrg., p. 25.
    876 Treasury Document (unnumbered).
    877 White House document S020921.
    878 Willkie Farr & Gallagher Document No. ST120.
    879 Thomases, 12/18/95 Hrg., p. 27.
    880 Willkie Farr & Gallagher Document No. ST126.
    881 Willkie Farr & Gallagher Document ST 123.
    882 Willkie Farr & Gallagher Document No. ST131.
    883 Thomases, 12/18/95 Hrg., p. 31, 34.
    884 Solis, 5/14/96 Hrg., p. 28.
    885 Thomases, 12/18/95 Hrg., p. 41.
    886 12/07/95 Treasury fax; S020921.
    887 Willkie, Farr & Gallagher Document ST128.
    888 Gergen, 8/7/95 Hrg. p. 112.
    889 McLarty, 8/7/95 Hrg. p. 114.
    890 Gergen, 8/7/95 Hrg. p. 113.
    891 Hearings, August 7, p.114.
    892 Gergen, 7/12/95 Dep. p. 62.
    893 Gergen, 7/12/95 Dep. p. 62.
    894 Gergen, 7/12/95 Dep. p. 63.
    895 Gergen, 7/12/95 Dep. p. 63.
    896 Gergen, 7/12/95 Dep. p. 68.
    897 Gergen, 7/12/95 Dep. p. 68.
    898 Gergen, 7/12/95 Dep. p. 69.
    899 Gergen, 7/12/95 Dep. p. 69.
    900 Hearings, August 7, 145-146
    901 White House Document Z 000514.
    902 White House Document Z 000514.
    903 White House Document Z 000515.
    904 Burton, 8/7/95 Hrg. pp. 107-108.
    905 McLarty, 8/7/95 Hrg. p. 123.
    906 McLarty, 8/7/95 Hrg. p. 53; Gergen, 7/12/95 Dep. p. 63.
    907 McLarty, 8/7/95 Hrg. p. 126.
    908 Gergen, 7/12/95 Dep. p. 52.
    909 McLarty, 8/7/95 Hrg. pp. 126-127.
    910 Gergen, 7/12/95 Dep. p. 53.
    911 S. Hrg. 8/7/95, p.128.
    912 Gergen, 7/12/95 Dep. p. 117.
    913 Heymann, 8/2/95 Hrg. p. 53.
    914 Heymann, 8/2/95 Hrg. p. 53.
    915 Heymann, 8/2/95 Hrg. pp. 56-57.
    916 Heymann, 8/2/95 Hrg. p. 54.
    917 Department of Justice Document GRO466.
    918 White House document S020921.
    919 Department of the Treasury document dated 12/07/95.
    920 Thomases, 12/18/95 Hrg., p. 80.
    921 Thomases, 5/14/96 Hrg., p. 28-30.
    922 Thomases, 5/14/96 Hrg., p. 30.
    923 Hubbell, 7/13/95 Dep. p. 123.
    924 Hubbell 6/4/96 Dep. p. 22.
    925 Hubbell, 6/4/96 Dep. p. 23.
    926 Hubbell, 6/4/96 Dep. pp. 32-33.
    927 Heymann, 8/2/95 Hrg. pp. 54-55.
    928 Heymann, 8/2/95 Hrg. p. 55.
    929 Heymann, 7/21/95 Dep. p. 107.
    930 Heymann, 8/2/95 Hrg. p. 55.
    931 Heymann, 8/2/95 Hrg. p. 56.
    932 Margolis, 8/10/95 Hrg. p. 248.
    933 Heymann, 8/2/95 Hrg. p. 148.; Margolis, 8/10/95 Hrg. pp. 
252-253.
    934 Justice Department Document FBI-0000009.
    935 Heymann, 8/2/95 Hrg. pp. 56-57.
    936 Heymann, 8/2/95 Hrg. p. 58.
    937 Heymann, 7/21/95 Dep. p. 128.
    938 Gergen, 7/12/95 Dep. p. 101.
    939 Heymann, 7/21/95 Dep. pp. 128-129.
    940 Heymann, 7/21/95 Dep. pp. 128-129.
    941 Heymann, 7/21/95 Dep. pp. 128-129.
    942 House Document CGEPR0563.
    943 Report of the Independent Counsel In Re Vincent W. Foster 
Jr., June 30, 1994 [hereinafter ``Fiske Report''], p. 12, reprinted in 
I Hearings before the Committee on Banking, Housing, and Urban Affairs 
on the Death of Vincent W. Foster, Jr. [hereinafter ``Foster 
Hearings''], p. 187.
    944 House document CGE12287.
    945 House document CGE12287.
    946 Hubbell, 2/7/96 Hrg. p. 46.
    947 Williams & Connolly Document DKSN000481.
    948 Hearings before the Special Committee to Investigate 
Whitewater Development Corporation and Related Matters, administered by 
the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on 
the Inquiry into whether Improper Conduct Occurred Regarding the Way in 
which White House Officials Handled Documents in the Office of White 
House Deputy Counsel Vincent W. Foster, Jr., 104th Cong., 1st Sess., 
July 18, 1995--August 10, 1995 [hereinafter ``S. Hrg.''], 8/8/95 p. 28; 
Williams & Connolly Document DKSN000482.
    949 Blair, 2/19/96 Dep. p. 79.
    950 Williams & Connolly Document DKSN000518.
    951 Seidman, II Foster Hearings, p. 1794.
    952 White House Document S9210.
    953 Nussbaum, 8/9/95 Hrg. p. 10.
    954 Hubbell, 2/7/96 Hrg. p. 46.
    955 Blair, 2/19/96 Dep. p. 79.
    956 Wright, 1/26/96 Dep. p. 157-159.
    957 Wright, 1/26/96 Dep. p. 157-159.
    958 Wright, 1/26/96 Dep. p. 164.
    959 Report of the Committee on Banking, Housing, and Urban 
Affairs, United States Senate, on the Communications between Officials 
of the White House and the U.S. Department of the Treasury or the 
Resolution Trust Corporation, January 3, 1995, [hereinafter Treasury 
Contacts Report], p. 3.
    960 Treasury Contacts Report, p. 3 & n. 7.
    961 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Production, pp. 1447-1449.
    962 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Production, pp. 1450-1455.
    963 Foren, 11/28/95 Hrg. p. 20.
    964 Foren, 11/28/95 Hrg. p. 23.
    965 Bowles, 11/28/95 Hrg. p. 24.
    966 Bowles, 11/28/95 Hrg. p. 24.
    967 Shepperson, 11/28/95 Hrg. pp. 23-24.
    968 White House Document S12334.
    969 II Foster Hearings, p. 1794.
    970 II Foster Hearings, p. 1794.
    971 II Foster Hearings p. 1794.
    972 II Foster Hearings p. 1794.
    973 S. Hrg., 7/20/95 p. 20; Braun, 6/19/95 Dep. pp. 24-25, 
121; Rolla, 6/20/95 Dep. pp. 54-55.
    974 Rolla, 7/20/95 Hrg. pp. 31-32.
    975 Hines, 7/20/95 Hrg. p. 25; Hines, 6/21/95 Dep. pp. 28-29, 
33.
    976 Mathews, 7/25/95 Hrg. pp. 73-74; Mathews, 6/27/95 Dep. pp. 
41-42; See also, White House Document Z000139.
    977 Mathews, 7/25/95 Hrg. pp. 73-74; Mathews, 6/27/95 Dep. p. 
67.
    978 Gergen, 7/12/95 Dep. p. 29-30.
    979 Gearan, 7/6/95 Dep. p. 48.
    980 Hubbell, 7/13/95 Dep. pp. 49-51.
    981 House Document CGE 12287.
    982 House Document CGE 12287.
    983 White House Document Z000139.
    984 White House Document Z000450.
    985 Thomasson, 7/25/95 Hrg. p. 199.
    986 House Document CGE 12287.
    987 Thomasson, 7/25/95 Hrg. p. 205.
    988 Williams, 7/26/95 Hrg. p. 154.
    989 Williams, 7/7/95 Dep. p. 56.
    990 Williams, 7/7/95 Dep. pp. 57-58.
    991 Thomases, 7/17/95 Dep. p. 60.
    992 O'Neill, 7/26/95 Hrg. p. 22.
    993 O'Neill, 7/26/95 Hrg. p. 23.
    994 Anderson, 7/31/95 Dep. Exh. 1.
    995 Anderson, 7/24/95 Dep. pp. 63, 77.
    996 Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 42.
    997 Margolis, 8/10/95 Hrg. pp. 178-179; Adams, 6/29/95 Dep. p. 
32
    998 Adams, 6/29/95 Dep. p. 34-35; Margolis 8/10/95 Hrg. p. 
179.
    999 Nussbaum, 8/9/95 Hrg. pp. 39-41; Neuwirth, 8/3/95 Hrg. p. 
132.
    1000 Margolis, 8/10/95 Hrg. p. 179.
    1001 Justice Department Document F000166.
    1002 Justice Department Document FBI-129.
    1003 Margolis, 8/10/95 Hrg. p. 179.
    1004 Heymann, 7/21/95 Dep. p. 24.
    1005 Bell Atlantic Document (not numbered); Williams & 
Connolly Document 001; White House Document Z 000647.
    1006 Nussbaum, 7/12/95 Dep. p. 142.
    1007 Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    1008 Thomases, 8/8/95 Hrg. p. 64.
    1009 Thomases, 8/8/95 Hrg. p. 68.
    1010 Transcript of Interview, ABC News 20/20, 1/12/96.
    1011 Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    1012 House Document CGE12287.
    1013 Castleton, 6/27/95 Dep. pp. 139-140.
    1014 Willkie Farr & Gallagher Document ST 000002.
    1015 Swidler & Berlin Document (unnumbered).
    1016 White House Documents Z000350--Z000351.
    1017 Wright, 1/26/96 Dep. p. 157-159.
    1018 Wright, 1/26/96 Dep. p. 164.
    1019 II Foster Hearings p. 1794.
    1020 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 1.
    1021 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 1.
    1022 Swidler & Berlin Document (unnumbered)
    1023 Letter from Abner J. Mikva, Counsel to the President, to 
Hon. William F. Clinger, Chairman, House Committee on Government Reform 
& Oversight, August 30, 1995, p. 2.
    1024 Gorham, 8/1/95 Hrg. p. 17.
    1025 White House Document Z 001109; White House Document Z 
001123.
    1026 White House Documents Z 001110--Z 001117.
    1027 Gorham, 8/1/95 Hrg. p. 60.
    1028 Gorham, 8/1/95 Hrg. p. 70.
    1029 Spafford, 7/27/95 Hrg. p. 19.
    1030 Spafford, 7/27/95 Hrg. p. 22-23.
    1031 Gorham, 8/1/95 Hrg. p. 30-31.
    1032 Gorham, 8/1/95 Hrg. p. 31.
    1033 Nussbaum, 8/10/95 Hrg. p. 12.
    1034 S. Hrg. 8/1/95 p. 31.
    1035 Hines, 6/21/95 Dep. p. 83.
    1036 Markland, 6/28/95 Dep. pp. 251-252.
    1037 Burton, 7/5/95 Dep. p. 184.
    1038 Margolis, 8/10/95 Hrg. pp. 230-231.
    1039 Castleton, 8/3/95 Hrg. pp. 13-14.
    1040 Nussbaum, 7/12/95 Dep. p. 237.
    1041 Williams, 7/26/95 Hrg. p. 220-221.
    1042 Williams, 7/26/95 Hrg. p. 182.
    1043 Huber, 8/3/95 Hrg. p. 15.
    1044 Williams, 7/26/95 Hrg. p. 184.
    1045 Huber, 8/3/95 Hrg. pp. 14-15.
    1046 Williams, 7/7/95 Dep. p. 141.
    1047 Nussbaum, 7/13/95 Dep. p. 407-408.
    1048 Nussbaum, 7/12/95 Dep. pp. 287-288.
    1049 Thomases, 8/8/95 Hrg. p. 174.
    1050 FBI Documents FBI-00000018--FBI 00000044.
    1051 Neuwirth, 8/3/95 Hrg. pp. 102-103.
    1052 Justice Department Documents A139-A141.
    1053 White House Document Z 1148.
    1054 See, e.g. Ann Devroy, Clinton Finds No Explanation to 
Aide's Death; Probes Continuing on Apparent Suicide, Wash. Post, July 
23, 1993, p. A4.
    1055 See, e.g., Frank J. Murray, White House Plays Down 
Suicide Probe, Wash. Times, July 23, 1993, p. A7; Ann Devroy, Clinton 
Finds No Explanation to Aide's Death; Probes Continuing on Apparent 
Suicide, Wash. Post, July 23, 1993, p. A4; Thomas L. Friedman, White 
House Aide Leaves No Clue About Suicide, N.Y. Times, July 22, 1993, p. 
A1; Ruth Marcus, Ann Devroy, Clintons Mystified by Aide's Death; Staff 
Shaken by Apparent Suicide, Wash. Post, July 22, 1993.
    1056 Department of Justice Document GRO466.
    1057 White House document S020921.
    1058 Department of Treasury document dated 12/07/95.
    1059 Thomases, 12/18/95 Hrg., p. 80.
    1060 Thomases, 5/14/96 Hrg., p. 28-30.
    1061 Thomases, 5/14/96 Hrg., p. 30.
    1062 Hubbell, 6/4/96 Dep. pp. 32-33.
    1063 Hubbell, 6/4/96 Dep. p. 22.
    1064 Hubbell, 6/4/96 Dep. p. 23.
    1065 Hubbell, 7/13/95 Dep. p. 123.
    1066 Hubbell, 6/4/96 Dep. pp. 32-33.
    1067 Williams, 7/26/95 Hrg. p. 154.
    1068 O'Neill, 7/26/95 Hrg. p. 112.
    1069 O'Neill, 7/26/95 Hrg. p. 23-24.
    1070 Williams, 7/7/95 Dep. p. 57.
    1071 Williams, 11/2/95 Hrg. p. 16.
    1072 Williams, 7/7/95 Dep. p. 57.
    1073 Williams, 11/2/95 Hrg. p. 17.
    1074 Williams, 7/7/95 Dep. p. 88.
    1075 Williams, 11/2/95 Hrg. p. 21.
    1076 Williams, 7/7/95 Dep. p. 58.
    1077 Willkie Farr & Gallagher Document 000001-000006.
    1078 Quinn, 7/15/95 Dep. p. 7; Nussbaum, 7/12/95 Dep. p. 177.
    1079 Williams, 11/2/95 Hrg. p. 25.
    1080 Treasury Document (unnumbered).
    1081 Nussbaum, 7/12/95 Dep. p. 240.
    1082 Gorham, 8/1/95 Hrg. pp. 16-17.
    1083 Williams, 7/26/95 Hrg. p. 220-221.
    1084 Nussbaum, 9/16/95 Dep. p. 238.
    1085 Williams, 7/26/95 Hrg. pp. 183-184.
    1086 Castleton, 8/3/95 Hrg. pp. 13-14.
    1087 Williams, 7/26/95 Hrg. pp. 306.
    1088 Huber, 8/3/95 Hrg. p. 23.
    1089 Williams, 7/7/95 Dep. pp. 150-151, 170.
    1090 Nussbaum, 7/13/95 Dep. p. 407-408.
    1091 Thomases, 8/8/95 Hrg., p. 132.
    1092 Thomases, 12/18/95 Hrg. pp. 46-47.
    1093 Thomases, 7/17/95 Dep. p. 60.
    1094 Bell Atlantic Records (unnumbered).
    1095 Thomases, 8/8/95 Hrg. p. 64.
    1096 Nussbaum, 7/12/95 Dep. p. 142.
    1097 Neuwirth, 7/10/95 Dep. p. 112; 8/3/95 Hrg. p. 75.
    1098 Thomases, 8/8/95 Hrg. p. 68.
    1099 Williams & Connolly Document 001.
    1100 White House Document Z 000647.
    1101 Thomases, 11/2/95 Hrg. p. 52.
    1102 Thomases, 11/2/95 Hrg. p. 57.
    1103 Thomases, 11/2/95 Hrg. p. 95.
    1104 Thomases, 11/2/95 Hrg. p. 99.
    1105 Thomases, 11/2/95 Hrg. p. 52.
    1106 Treasury Document (unnumbered).
    1107 White House Document Z001247.
    1108 Williams, 7/7/95 Dep. p. 145.
    1109 Thomases, 8/8/95 Hrg. p. 193.
    1110 Thomases, 11/2/95 Hrg. p. 72.
    1111 Treasury Contacts Report, p. 206.
    1112 Nussbaum, 7/12/95 Dep. p. 57.
    1113 Mathews, 7/25/95 Hrg. pp. 73-74; Mathews, 6/27/95 Dep. p. 
67.
    1114 White House Document Z000139.
    1115 Nussbaum, 7/12/95 Dep. p. 128-129, 174.
    1116 Heymann, 7/21/95 Dep. p. 24; 8/2/95 Hrg. p. 41-42.
    1117 Margolis, 8/10/95 Hrg. pp. 178-179.
    1118 Adams, 7/27/95 Hrg. p. 94; Adams, 6/29/95 Dep. p. 35 (``I 
think as I have just described, the agreement was that David and I 
would look at each file and determine relevance or--or determine 
relevance first of all.'')
    1119 Hume, 6/29/95 Dep. p. 68.
    1120 Nussbaum, 7/12/95 Dep. pp. 120-121.
    1121 Margolis, 8/10/95 Hrg. p. 179; Adams, 7/27/95 Hrg. p. 95.
    1122 Nussbaum, 8/9/95 Hrg. p. 60.
    1123 Nussbaum, 7/12/95 Dep. p. 174.
    1124 Nussbaum, 7/12/95 Dep. p. 174-175.
    1125 Nussbaum, 8/9/95 Hrg. p. 127-128.
    1126 Nussbaum, 8/10/95 Hrg. p. 19.
                     Phase 2--The Washington Phase

                                CONTENTS

                                                                   Page
Conclusions of the Special Committee.............................   137
     1.  By mid-1993, the Clintons and their associates had 
        already taken steps to minimize their potential liability 
        from investigations of Whitewater and Madison Guaranty...   139
     2.  The White House concealed damaging evidence about 
        Whitewater and Travelgate from career law enforcement 
        officials investigating Vincent Foster's death...........   140
     3.  Senior White House officials improperly gathered 
        confidential information about investigations involving 
        Whitewater and Madison Guaranty..........................   140
     4.  A pivotal event: senior White House officials and 
        private counsel for the Clintons participate in an 
        improper Whitewater defense meeting......................   142
     5.  Senior White House officials did not pass the torch to 
        the Clintons' new private counsel, but continued to take 
        highly improper steps to advance the Clintons' private 
        interests................................................   143
     6.  Senior White House officials held formal ``Whitewater 
        Response Team'' meetings to protect the Clintons' private 
        interests in ongoing federal investigations..............   143
     7.  In early 1994, senior White House officials sought to 
        manipulate the RTC investigation of Madison Guaranty and 
        the Rose Law Firm........................................   145
     8.  Jay Stephens was removed from the investigation of 
        possible civil claims against parties associated with 
        Madison Guaranty, including the Clintons.................   146
     9.  Senior RTC officials sought to impede the criminal 
        investigation of Madison.................................   147
    10.  U.S. Attorney Paula Casey mishandled the RTC criminal 
        referral referencing the President and Mrs. Clinton......   148
    11.  Senior Administration officials improperly sought to 
        manipulate the investigation of the RTC and Treasury 
        Inspectors General into the propriety of White House-
        Treasury contacts........................................   149
    12.  The White House delayed in producing documents to the 
        Special Committee........................................   150
    13.  Senior Administration officials provided inaccurate and 
        incomplete testimony to the Senate.......................   152
    14.  The Office of the White House Counsel was frequently and 
        improperly put in the service of the personal legal 
        interests of the President and Mrs. Clinton..............   153
Conclusions of the Special Committee on the Discovery of the Rose 
  Law Firm Billing Records.......................................   155
    1.  The Rose billing records provide the best evidence of the 
        legal services performed by Mrs. Clinton for Madison 
        Guaranty.................................................   155
    2.  The disappearance and mysterious reappearance of the Rose 
        Law Firm billing records was part of a larger pattern of 
        removal, concealment and, at times, destruction of 
        records concerning Mrs. Clinton's representation of 
        Madison..................................................   158
    3.  Vincent Foster is the last person known to have the 
        billing records in his possession........................   159
    4.  The billing records mysteriously reappear in the Book 
        Room of the White House Residence in August 1995.........   159
    5.  Only a limited number of people had access to the Book 
        Room of the White House Residence........................   160
    6.  Very few people had motive to be handling or reading the 
        Rose billing records in August 1995......................   160
    7.  Only a limited number of people were definitely within 
        the chain of custody of the billing records..............   160
    8.  Mrs. Clinton is more likely than any other known 
        individual to have placed the billing records in the Book 
        Room in August 1995......................................   161
Background.......................................................   161
 I. Whitewater Development Corporation and Madison Guaranty S&L.....161
II.  Capital Management Services and David Hale.....................163
Summary of the Evidence..........................................   164
Part I: The Handling of Federal Investigations...................   164
 I. Mrs. Clinton Learns of the RTC Criminal Referral on Madison.....164
        A.  The RTC begins its criminal investigation of Madison.   165
        B.  The first RTC criminal referral: C0004...............   166
        C.  Betsey Wright informs Mrs. Clinton of the RTC 
            criminal referral....................................   167
II. Criminal Referral C0004 Languishes at the Justice Department....168
        A.  The U.S. Attorney sends Criminal Referral C0004 to 
            the main Justice Department .........................   168
        B. Criminal Referral C0004 gets lost at the Justice 
            Department...........................................   170
III.Interference with the RTC's Ongoing Investigation of Madison....172

IV. Paula Casey Delays her Recusal from Madison, Handles the Hale Pleas 
    Negotiations, and Declines to Prosecute Criminal Referral C0004.181
        A. Investigations of Capital Management and David Hale...   181
        B. Plea Negotiations with David Hale.....................   183
        C. Ms. Casey's declination of Criminal Referral C0004....   189
Part II: White House Intervention in Federal Investigations......   192
 I. White House Contacts Relating to Investigations of Madison and 
    David Hale......................................................192
        A. The White House receives information on the ongoing 
            SBA investigation of Mr. Hale........................   192
        B. Mr. Hale's lawyers contact the White House about Mr. 
            Hale's ``mutual interest'' with President Clinton....   195
        C. The White House obtains more information about the 
            Hale investigation...................................   199
II. After Treasury and RTC Officials improperly advised the White House 
    about RTC Referrals mentioning President Clinton and Governor 
    Tucker, President Clinton meets with Governor Tucker at the White 
    House...........................................................201
III.A Pivotal Event: The November 5, 1993 Meeting Between White House 
    Officials and the Clintons' Private Lawyers.....................204
IV. The White House Obtains Confidential SBA Documents Relating to Mr. 
    Hale and Capital Management.....................................208
 V. The White House Begins to Hold Whitewater Defense Meetings......212
        A. Senior White House officials debated the appointment 
            of a Special Counsel.................................   213
        B. White House contacts with former Arkansas Securities 
            Commissioner Beverly Bassett Schaffer................   216
        C. The Whitewater Response Team assigns defense tasks to 
            White House officials................................   220
VI. The Retention and Investigation of Pillsbury Madison & Sutro....220
         A. The White House expresses concern over the retention 
            of Jay Stephens......................................   221
        B. Mr. Stephens is removed from the RTC investigation....   221
        C. The White House makes inaccurate claims about the 
            Pillsbury report.....................................   222
Part III. White House Interference With Congressional Inquiries..   224
 I. Mr. Ickes Provided Incomplete and Inaccurate Testimony to the 
    Senate Banking Committee........................................224
II. The White House Interfered with Treasury IG and RTC IG 
    Investigations into White House-Treasury Contacts...............227
        A. Independence of IG investigation is compromised.......   227
        B. Confidential information is provided to the White 
            House................................................   231
III.The White House Interfered with the Special Committee's 1995-96 
    Investigation...................................................236
        A. The refusal of William Kennedy to comply with the 
            Special Committee's subpoena for his notes of the 
            pivotal November 5, 1993 White House defense meeting.   237
        B. White House delays in producing highly relevant 
            documents to the Special Committee...................   238
Part IV. The Rose Law Firm Billing Records.......................   239
 I. The Destruction and Mishandling of Rose Law Firm Files..........240
II. The ``Disappearance'' and ``Discovery'' of the Rose Law Firm 
    Billing Records.................................................240
III.Mrs. Clinton's Statements in Light of the Rose Law Firm Billing 
    Records.........................................................245
        A. Madison's retention of the Rose Law Firm..............   245
        B. Mrs. Clinton's contacts with regulator Beverly Bassett 
            Schaffer.............................................   248
        C. Mrs. Clinton's role in Madison's proposed preferred 
            stock deal...........................................   249
        D. Mrs. Clinton's role in the Castle Grande transaction..   250
IV. The Federal Investigations into the Rose Law Firm's Representation 
    of Madison......................................................253
 V. The Special Committee's Investigation into the Circumstances 
    Surrounding the Discovery of the Rose Law Firm Billing Records..258

                  Conclusions of the Special Committee

    ``Try to find out what's going on in Investigation''
    ``Vacuum Rose Law files WWDC docs-subpoena
     *Documents--> Never know go out quietly'' 1

          Handwritten notes of William Kennedy, former White 
        House Associate Counsel

    ``HRC `doesn't want [an independent counsel] poking into 20 
years of public life in Arkansas' ''

          Diary of Roger Altman, former Deputy Secretary of 
        Treasury, quoting Margaret Williams, Chief of Staff to 
        the First Lady

    ``HI  Spcl Counsel-3 major problems: (1) HRC adamantly 
opposed (2) Reno has shut the door (3) if we ask looks like we 
ducked.''
          Handwritten notes of Mark Gearan, former Director of 
        White House Communications.

    Our nation rests on the principle that all Americans are 
equal under the law. No one, including the President, is 
entitled to special treatment in a civil or criminal 
investigation of their conduct. The power of the presidency may 
not be used to obtain a legal defense for the President and his 
associates unavailable to other citizens.
    During the 1992 presidential campaign, questions surfaced 
about the relationship of then-Governor Clinton and Mrs. 
Clinton and James McDougal, the owner of Madison Guaranty 
Savings and Loan Association (``Madison Guaranty'') and the 
Clintons' partner in the Whitewater Development Corporation, 
Inc. (``Whitewater''). Within the past month, a jury in Little 
Rock, Arkansas convicted Mr. McDougal, his former wife, Susan, 
and Arkansas Governor Jim Guy Tucker of numerous federal crimes 
relating to the activities of Madison Guaranty and, in part, 
the operation of Whitewater.
    The McDougal-Tucker convictions grew out of an 
investigation begun during the 1992 presidential campaign by 
investigators of the Resolution Trust Corporation (``RTC''). 
This RTC investigation culminated in a series of criminal 
referrals to the United States Attorney's Office in Little Rock 
naming the Clintons as witnesses to suspected criminal 
activity. These significant convictions also rested on a 
parallel inquiry begun in 1992 by the Small Business 
Administration (``SBA'') of Capital Management Services, Inc. 
(``CMS''), a small business investment company.
    Within months of the inauguration of President Clinton, 
senior Administration officials began to take steps to minimize 
the legal and political damage to the Clintons arising from 
these investigations. These officials seriously misused their 
public offices for the Clintons' private benefit, obtained 
confidential law enforcement information from the RTC and SBA 
relating to investigations touching on the Clintons, and they 
attempted to interfere in ongoing law enforcement 
investigations.
    During hearings in the summer of 1994, the Senate Banking 
Committee examined--in deference to the investigation of 
Special Counsel Robert Fiske--only the propriety of certain 
communications in late 1993 and early 1994 between senior 
officials of the White House and the Treasury Department 
concerning confidential RTC criminal referrals involving 
Madison and Whitewater. The White House then claimed that its 
receipt of this confidential law enforcement information was 
appropriate to allow the President to respond to press 
inquiries and to protect the President from inadvertently 
engaging in meetings that later could prove embarrassing. No 
one--and certainly no member of the Banking Committee-- 
asserted that the President was entitled to use such 
information to further his personal legal interests.
    Rather than being limited to the narrow question before the 
Banking Committee in the 103rd Congress, and without objection 
by Independent Counsel Kenneth Starr, the Special Committee 
examined all aspects of the Clinton Administration's response 
to ongoing investigations of Whitewater and related matters. 
This broader inquiry revealed that in 1993 and 1994, senior 
Administration officials took steps that went far beyond what 
was necessary to respond to press inquiries. Indeed, when the 
full picture is examined, the claim that Administration 
officials were innocently gathering information so they could 
respond to press inquiries collapses entirely.
     After careful review of all the evidence, including 
evidence obtained by the Banking Committee during the summer of 
1994, the Special Committee concludes that senior 
Administration officials--in the White House, the Treasury and 
Justice Departments, the RTC and the SBA--engaged in a pattern 
of highly improper conduct in responding to investigations of 
the Clintons' involvement in Whitewater and related matters.
    This pattern cannot be explained as the result of a series 
of lapses in judgment. The Committee concludes that these 
Administration officials deliberately misused their public 
offices to advance the purely private interests of the 
President and Mrs. Clinton. Raising the possibility of 
obstruction of justice, they repeatedly attempted to hinder, 
impede and control investigations of Whitewater and related 
matters by the RTC, the Justice Department, the Inspectors 
General of the RTC and Treasury Departments, and even the 
Senate.
    Because of misdeeds of the White House, perhaps the 
American people will never know the full extent to which the 
highly improper actions of Administration officials prejudiced 
the outcome of inquiries involving Whitewater, Madison Guaranty 
and related matters. But the available facts clearly 
demonstrate that Administration officials improperly used the 
power of their offices in a wrongful attempt to ensure that 
ongoing federal investigations resulted in the least amount of 
legal and political damage to the President and Mrs. Clinton.
          * * * * * * *

1. By mid-1993, the Clintons and their associates had already taken 
        steps to minimize their potential liability from investigations 
        of Whitewater and Madison Guaranty

    The pattern of concealment, interference and abuse of power 
surrounding the Clintons' response to federal investigations of 
Whitewater and Madison Guaranty began in the mid-1980s.
    On July 2, 1986, the Arkansas Securities Commissioner, 
Beverly Bassett Schaffer, warned Governor Clinton that federal 
regulators were about to remove James McDougal from the 
management of Madison Guaranty. Specifically, she wrote to the 
Governor's chief counsel that the S&L was in ``serious 
trouble.'' 2
    On July 14, just four days after the Federal Home Loan Bank 
Board removed Mr. McDougal from Madison, Mrs. Clinton 
terminated her law firm's relationship with Madison Guaranty 
and returned the unused portion of the S&L's retainer. 3 
That same day, Governor Clinton erroneously advised his Chief 
of Staff, Betsey Wright, that he and Mrs. Clinton were no 
longer partners of Mr. McDougal in the Whitewater real estate 
investment. 4
    In 1988, after federal regulators had taken over Madison 
Guaranty and were investigating insider dealing that 
contributed to the S&L's collapse, Mrs. Clinton took the 
questionable step of ordering the destruction of records 
reflecting her and her law firm's work for Madison. 5 At 
the time, Seth Ward, a former associate of Mr. McDougal, was 
suing Madison Guaranty over a land deal that federal regulators 
have described as a fraud. The Committee has recently obtained 
evidence indicating that Mrs. Clinton herself may have had 
greater involvement in creating documents that concealed 
irregular loans between Mr. Ward and Madison than her own 
statements admit. 6
    In late fall 1992, Mrs. Clinton learned of an RTC 
``criminal referral regarding a savings and loan official in 
Arkansas and * * * involv[ing] the Clintons.'' 7 After the 
election, her law partner and Mr. Ward's son-in-law, Webster 
Hubbell secretly and improperly removed the firm's client files 
for Madison without obtaining the approval of the firm or the 
RTC, which at this point owned them in its capacity as 
conservator of Madison Guaranty. 8 In anticipation of the 
possibility that the Clintons might need the Madison files (as 
well as other client files) to respond to an inquiry, Mr. 
Hubbell brought the records from Little Rock to Washington--
storing them in his basement for almost a year. In some 
instances, Mr. Hubbell left the firm with no copies of the 
relevant files, including billing records.
    By March 1993, senior Clinton Administration officials 
confirmed that the RTC had sent a criminal referral mentioning 
the Clintons to the Justice Department. Specifically, RTC 
Senior Vice President William Roelle advised Roger Altman, then 
Deputy Treasury Secretary and a close associate of the 
President, of the existence of the RTC referral involving the 
Clintons. 9
    In a pattern that would be repeated, Mr. Altman signaled 
the White House about this confidential RTC information which 
was not yet the subject of any press inquiries. On March 23 and 
24, Mr. Altman sent Mr. Nussbaum, by facsimile, two news 
articles, written the year before, concerning the Clintons' 
Whitewater investment. 10
    In early May 1993, again prior to any press inquiries, the 
White House learned of another investigation relating to 
President Clinton. Former SBA Associate Administrator Wayne 
Foren testified that David Hale, who was a key prosecution 
witness in the recently concluded McDougal-Tucker trial, told 
him that he had access and influence with Governor Tucker and 
President Clinton. 11 On May 5, Mr. Foren briefed Erskine 
Bowles, the new SBA Administrator, on the agency's 
investigation of CMS and Mr. Hale. 12 Mr. Foren and his 
deputy understood that Mr. Bowles passed this confidential 
information to White House Chief of Staff Mack McLarty. 13

2. The White House concealed damaging evidence about Whitewater and 
        Travelgate from career law enforcement officials investigating 
        Vincent Foster's death

    In July 1993, as described in Part I of this Report, senior 
White House officials engaged in highly improper conduct in 
handling the documents in the office of former White House 
Deputy Counsel Vincent Foster following his death. By the time 
of Mr. Foster's death, the Clintons and their associates were 
aware that the Clintons' involvement with Whitewater and 
Madison Guaranty might subject them to liability, and that Mr. 
Foster's office might contain damaging evidence about the 
Whitewater and Travelgate affairs. Over the objection of the 
Deputy Attorney General and at the direction of Mrs. Clinton, 
senior White House officials prevented law enforcement 
officials from examining Mr. Foster's records. Mrs. Clinton's 
Chief of Staff, Margaret Williams, then transferred damaging 
Whitewater files to the White House Residence for review by the 
President and Mrs. Clinton.

3. Senior White House officials improperly gathered confidential 
        information about investigations involving Whitewater and 
        Madison Guaranty

    By the summer of 1993, the White House began to obtain 
information about the looming Whitewater investigation. On 
August 17, Randy Coleman, David Hale's attorney, told Associate 
White House Counsel William Kennedy that Mr. Hale was under 
investigation by the Federal Bureau of Investigation, that he 
expected to be indicted soon, and that the investigation could 
affect the President. 14
    Several days later, Mr. Kennedy--not the Clintons' private 
counsel--called Mr. Coleman, who commented that if Heidi Fleiss 
``was madam to the stars, David Hale was the lender to the 
political elite in Arkansas.'' 15 Mr. Coleman told Mr. 
Kennedy that Mr. Hale's firm had made a number of improper 
loans involving politicians, including Governor Clinton. 
16 Mr. Kennedy advised Counsel to the President Bernard 
Nussbaum of Hale's allegations against the President. 17
    Sometime in September, the White House apparently obtained 
confidential information from the U.S. Attorney's Office in 
Little Rock, through Mr. McDougal's counsel, regarding the 
likelihood that Mr. McDougal would be indicted imminently. 
18
     By late September 1993, the RTC Office of Investigations 
in Kansas City prepared nine criminal referrals related to 
Madison Guaranty. The submission of the referrals to the 
Justice Department was, however, delayed by a week due to a 
demand by lawyers in the RTC's Professional Liability Section 
to perform a ``legal review'' of the referrals.
    During that week, Jean Hanson, the General Counsel of the 
Department of Treasury, which oversaw the RTC and its 
investigations, informed White House Counsel Bernard Nussbaum 
and Associate White House Counsel Clifford Sloan that there 
were several RTC referrals involving Madison, Whitewater, and 
the Clintons. 19 Ms. Hanson told Mr. Nussbaum that the 
President and Mrs. Clinton were identified as possible 
witnesses to the suspected crimes at issue in the referrals. 
20 Ms. Hanson also told Mr. Nussbaum that the referrals 
referenced possible improper campaign contributions from 
Madison to one of Mr. Clinton's gubernatorial campaign. 21 
Mr. Nussbaum admitted that Ms. Hanson provided him with 
nonpublic information about the referrals. 22
    This improper transmittal of confidential RTC information 
was a violation of clearly established RTC procedures as 
criminal referrals derived from records of financial 
institutions are subject to the restrictions of the Right to 
Financial Privacy Act. 23
    The day after this private conversation, on September 30, 
Ms. Hanson called Mr. Sloan to amplify on the confidential 
information she had provided 24 and informed him that the 
nine referrals, among other things, referred to Governor Jim 
Guy Tucker,25 named a Clinton gubernatorial campaign as a 
``co-conspirator,'' 26 and mentioned the Clintons as 
potential witnesses.27 In accordance with instructions 
from Mr. Nussbaum, Mr. Sloan relayed this information to Bruce 
Lindsey on or about September 30.28
    On October 4 or 5, 1993, Mr. Lindsey apprised President 
Clinton of the criminal referrals.29 It is highly likely 
that Mr. Lindsey told the President, a former Governor of 
Arkansas, that his immediate successor was mentioned in a 
criminal referral. When asked about President Clinton's 
response, Mr. Lindsey testified that ``it was certainly nothing 
other than just sort of, ' '' 30
    Two days later, President Clinton and Mack McLarty had 
meetings at the White House with Governor Tucker.31 
Although the President and Mr. McLarty have denied briefing 
Governor Tucker on the criminal referrals, senior White House 
officials undeniably put the President in the position where a 
legitimate question can be raised that such a briefing 
occurred. This fact wholly undermines the White House's claim 
that it was entitled to receive confidential information about 
the RTC criminal referrals to protect the President from 
embarrassing meetings with persons named in those referrals.
    On October 14, 1993, senior White House officials met again 
in Mr. Nussbaum's office with senior officials from the 
Treasury Department about the criminal referrals.32 The 
discussion included a detailed description of the referrals 
33 including the fact that one of the referrals ``involved 
four cashiers checks--each for $3,000, two made payable to the 
Clinton for Governor Campaign and two made payable to Bill 
Clinton.'' 34

4. A pivotal event: senior White House officials and private counsel 
        for the Clintons participate in an improper Whitewater defense 
        meeting

    On November 5, 1993, armed with details of the confidential 
RTC criminal referrals obtained from the Treasury Department--
as well as information on Mr. Hale's allegations obtained from 
the SBA--White House officials met with the Clintons' private 
lawyers, ``to impart information to the Clinton's personal 
lawyers,'' 35 and to arrange ``a division of labor between 
personal and White House counsel for handling future Whitewater 
issues.'' 36
    When asked whether the gathering was a legal defense 
meeting, Mr. Lindsey testified that ``that would accurately 
characterize the meeting.'' 37 The meeting was not, 
according to Mr. Lindsey, for the official purpose of 
responding to press inquiries.38 The participants, for 
example, discussed either ``vacuum[ing],'' or a ``vacuum'' in, 
the Rose Law Firm's files on Madison. In any event, members of 
the White House Counsel's office were clearly being employed in 
the service of the Clintons' private legal defense effort.
    Mr. Kennedy's contemporaneous notes of this meeting, which 
the Special Committee finally obtained after the full Senate 
voted to authorize the Senate Legal Counsel to institute a 
civil enforcement proceeding, indicate that a significant 
portion of the discussion was related to the confidential 
criminal referrals and the ongoing RTC investigation of 
Madison. Among the principal topics of the meeting was the 
referral related to illegal contributions to Mr. Clinton's 
gubernatorial campaigns.39
    The Kennedy notes indicate that the White House officials 
imparted to the private lawyers much of the knowledge they 
possessed with respect to Whitewater, including confidential 
information. As of November 5, the RTC considered the 
information about the referrals confidential and had not 
officially confirmed the accuracy of any press accounts about 
the referrals.40
    It was improper for White House officials to communicate 
confidential RTC or other law enforcement information to the 
Clintons' private lawyers to assist them in defending the 
Clintons against the RTC or any other potential civil or 
criminal enforcement actions. The investigations of Madison 
raised the possibility that the President or Mrs. Clinton 
personally could be held liable, financially or otherwise, in 
connection with Rose Law Firm's representation or the 
activities of Whitewater.
    The Special Committee concludes that the decision, as 
reflected in the November 5 meeting of White House officials 
and the Clintons' private counsel to cooperate in their 
response to the Whitewater investigations facing the Clintons 
represented a fundamental and disturbing turning point in the 
investigation. Although the Clintons faced adverse legal 
actions by the United States, they were relying on United 
States officials at the highest levels to defeat or avoid such 
actions. After the November 5 meeting, senior White House 
officials could no longer assert that their Whitewater efforts 
were solely intended to serve the government's official 
interests. The White House had completely obliterated the 
distinction between the public interest and the Clintons' 
private good.

5. Senior White House officials did not pass the torch to the Clintons' 
        new private counsel, but continued to take highly improper 
        steps to advance the Clintons' private interests

    Although the White House has claimed that the purpose of 
the November 5 meeting was to ``pass the torch between White 
House lawyers who had been handling Whitewater to the newly 
hired attorney, David Kendall,'' 41 that clearly proved 
not to be the case. After the meeting, members of the White 
House Counsel's Office undeniably took affirmative steps to 
collect confidential information about the federal 
investigations into Whitewater--information that private 
counsel could not obtain.
    For example, on November 16, 1993, Mr. Eggleston obtained 
confidential information in the form of a stack of documents 
``approximately one foot high''--from the SBA about criminal 
referrals involving Mr. Hale.42 Mr. Eggleston reviewed 
these confidential documents for any references to President or 
Mrs. Clinton. The Justice Department later demanded that Mr. 
Eggleston return the documents to the SBA. Fraud Section Chief 
Gerald McDowell remarked: ``I've got to believe the WH counsel 
have done an incredibly stupid thing!'' 43 Contrary to Mr. 
Eggleston's denial, the Special Committee concludes that the 
evidence, particularly the documentary evidence, indicates that 
he shared this information with Bruce Lindsey, then the chief 
White House advisor on Whitewater.

6. Senior White House officials held formal ``Whitewater Response 
        Team'' meetings to protect the Clintons' private interests in 
        ongoing federal investigations

    In January 1994, a group of senior White House officials 
frequently met twice daily as a ``Whitewater Response Team.'' 
44 These meetings must be viewed in context. They went far 
beyond what was necessary to respond to press inquiries or to 
address other official matters. The meetings were held after 
the critical November 5 defense meeting with the Clintons' 
personal counsel. And, the Clintons' private defense counsel, 
Mr. Kendall, directly or indirectly participated in these 
meetings.
    During the initial Whitewater Response Meetings, senior 
White House officials debated the appointment of a special 
counsel to investigate Whitewater. Normally, the decision 
whether to ask for the appointment of a special counsel would 
be an official matter. The appropriateness of members of the 
Whitewater Response Team debating this matter, however, was 
fatally compromised by their earlier participation in the 
November 5 defense meeting. Thus, in discussions over the 
wisdom of appointing a special counsel, the assembled group 
undeniably considered matters relevant to the Clintons' 
personally--for example, whether the Clinton associates could 
be pressured into cooperating with the special counsel.
    Mrs. Clinton opposed the appointment of a special counsel, 
and her opposition was the source of considerable concern 
within the White House. 45 Notes taken by Communications 
Director Mark Gearan of a January 4, 1994 meeting reflect that 
Mrs. Clinton attended a meeting, then in progress, and said 
``this looks like a meeting I might be interested in.'' 46 
Mr. Gearan testified that Mrs. Clinton stayed for approximately 
15 minutes, 47 and expressed her view that no special 
counsel be appointed. 48
    Senior White House officials, and Mrs. Clinton in 
particular, feared that persons close to President Clinton 
might be indicted. At a January 7, 1993 meeting, Mr. Nussbaum 
curiously said, ``Indictments will be Betsey Wright.'' 49 
Ms. Wright was Governor Clinton's former Chief of Staff in the 
1980s and handled Whitewater and other Arkansas-related matters 
for the 1992 Clinton Presidential campaign. 50 A White 
House document marked ``Confidential: Second Draft, Summary of 
Arguments Re: Whitewater,'' dated January 10, 1994, listed 
reasons against the appointment of a prosecutor, 51 
including that a special counsel investigation ``may result in 
focus on friends and associates of the President, begin to 
squeeze them and may subject some to indictment.'' 52
    On January 8, 1994, Deputy Chief of Staff Harold Ickes 
expressed discontent with the manner in which career Justice 
Department prosecutors--Donald MacKay and Alan Carver--were 
then handling the ongoing federal investigations of the 
Clintons. 53 Mr. Ickes described Mr. Carver as a ``bad 
guy'' and actually said of Messrs. MacKay and Carver: ``Those 
guys are f------ us blue.'' 54
    The Whitewater Response Team assigned tasks to White House 
attorneys that should have been handled solely by the Clintons' 
private attorneys. For example, Mr. Eggleston prepared a legal 
analysis on the statute of limitations applicable to claims 
brought by the RTC and on the potential civil liability faced 
by the Clintons arising from their involvement with Madison 
Guaranty. 55 Another White House official was assigned the 
task of contacting Christopher Wade, the realtor of the 
Whitewater property, to gather information from him. 56
    The Whitewater Response Team was particularly concerned 
about the potentially adverse testimony of Beverly Bassett 
Schaffer, the former Arkansas Securities Commissioner who 
oversaw the regulation of Madison Guaranty in the mid-1980s. An 
RTC criminal referral expressly referenced Ms. Schaffer, and 
her contact with Mrs. Clinton in connection with Mrs. Clinton's 
representation of Madison Guaranty. At a January 7 meeting, Mr. 
Ickes exclaimed, ``[Beverly] Bassett [Schaffer] is so f----- 
important. [I]f we f--- this up, we're done.'' 57
    Even the President worried about Ms. Schaffer. In late 
December, he directed Messrs. Lindsey and McLarty: ``This is 
important to be on top of. Bassett did a good job in [campaign] 
on this--can she now?'' 58 In an effort to conceal the 
White House's involvement, the Response Team debated sending 
outside emissaries to speak with Ms. Schaffer. 59 Shortly 
thereafter, Mr. Lindsey's former law partner, John Tisdale, and 
another Clinton confidant, Skip Rutherford, contacted Ms. 
Schaffer. Mr. Tisdale reported back to Mr. Lindsey by 
memoranda, 60 and Mr. Rutherford discussed Ms. Schaffer 
with the White House. 61 Ms. Schaffer further testified 
that although Mr. Rutherford did not specifically indicate he 
was calling on behalf of the White House, she was aware that 
Mr. Rutherford was ``helping'' Mr. McLarty in some capacity. 
62

7. In early 1994, senior White House officials sought to manipulate the 
        RTC investigation of Madison Guaranty and the Rose Law Firm

    In early 1994, while the Whitewater Response Team was, in 
effect, plotting the Clintons' legal defense, there were 
substantial additional contacts between the Treasury Department 
and senior White House officials concerning RTC matters. In 
view of the totality of the White House's involvement in 
defending the Clintons' private interests in this period, the 
impropriety of these contacts can no longer be seriously 
debated. The Special Committee concludes that the contacts were 
improper, wrong and never should have occurred. In reaching 
this conclusion, the Special Committee places particular weight 
on the fact that as of the time of these additional contacts, 
the White House participants were members of the Whitewater 
Response Team and had discussed the concern that the 
investigators might pressure Clinton associates into 
cooperating.
    At a February 2 meeting, Deputy Treasury Secretary and 
Acting RTC CEO Roger Altman briefed key members of the 
Whitewater Response Team, who, by then, were in regular contact 
with the Clintons' private counsel on the status of the RTC's 
investigation into civil claims against the Clintons. 
Specifically, Mr. Altman provided the critical confidential 
information that the RTC investigation probably would not be 
finished prior to the expiration of the statute of limitations. 
Armed with this inside information, the Clintons could safely 
reject any RTC request for a tolling agreement.
    Also on February 2, having been told that the RTC would 
have to decide quickly, and with very incomplete information 
whether to bring civil claims against the Clintons, senior 
White House officials pressured Mr. Altman, a friend of the 
President, not to recuse himself. The White House feared that 
RTC General Counsel Ellen Kulka would be too tough and 
unreasonable. She could not be controlled, and the stakes were 
too high. Ultimately, Mr. Altman gave in to the pressure; his 
so-called ``de facto'' recusal was no recusal at all.
    The Special Committee concludes that this February 2 
meeting is indefensible. It never should have occurred. At the 
time, Mr. Nussbaum had functioned as a critical part of the 
Whitewater Response Team. He worked with private counsel for 
the Clintons. He was no longer in a position to provide 
dispassionate policy advice to Mr. Altman about recusal. 
Ironically, at this point, Mr. Nussbaum's conflict exceeded 
that of Mr. Altman. The Special Committee notes that RTC 
General Counsel Ellen Kulka, when asked to provide confidential 
information to Mr. Kendall, strongly objected. 63 At that 
time, senior White House officials failed to advise Ms. Kulka 
that they were already engaged in joint defense efforts with 
Mr. Kendall.
    The importance to the White House of keeping the friendly 
Mr. Altman in the loop on the Madison case is illuminated by 
the mysterious discovery of the Rose Law Firm billing records 
in the Book Room of the White House Residence. These records 
may explain why, as Mrs. Clinton's chief of staff, Margaret 
Williams, told Mr. Altman in early January 1994, ``HRC was 
`paralyzed' by [Whitewater].'' 64 The records may also 
explain why Deputy White House Chief of Staff Ickes and the 
White House Counsel's office prepared a memorandum on the Rose 
Law Firm's and the Clintons' potential civil liability relating 
to the failure of Madison.
    The billing records indicate that Mrs. Clinton--contrary to 
her previous statements--represented Mr. McDougal's S&L in 
connection with the Castle Grande project, which federal 
regulators have criticized as a series of sham land sales and 
insider transactions.65 In fact, after reviewing the 
records, former Madison chief loan officer, Harry Don Denton, 
recently told the federal investigators that he warned Mrs. 
Clinton in 1986 that loan transactions she was handling 
involving the Castle Grande project could be irregular, but he 
said she ``summarily dismissed'' his concern.66

8. Jay Stephens was removed from the investigation of possible civil 
        claims against parties associated with Madison Guaranty, 
        including the Clintons

    Early in February 1994, the RTC retained the law firm of 
Pillsbury, Madison & Sutro, (``Pillsbury'') including former 
Republican U.S. Attorney Jay Stephens, to investigate possible 
civil actions against parties associated with Madison Guaranty.
    On February 25, 1994, George Stephanopoulos, Senior Advisor 
to the President, and Josh Steiner, Chief of Staff to Secretary 
of the Treasury Lloyd Bentsen, discussed the RTC's decision to 
hire Mr. Stephens.67 Mr. Steiner testified that Mr. 
Stephanopoulos was ``angry'' and thought that Mr. Stephens 
should be disqualified from handling the matter because he had 
been a critic of the Clinton administration.68
    Treasury Department General Counsel Jean Hanson recalled 
that during one conversation Mr. Steiner told her: ``Do you 
believe those guys? They want to see if they can get rid of Jay 
Stephens.'' Ms. Hanson understood that ``those guys'' referred 
to various White House officials.69 Ms. Hanson further 
testified that on a separate occasion Mr. Steiner, himself, 
expressed the opinion that Ms. Kulka should be fired for hiring 
Mr. Stephens.70 Moreover, Mr. Steiner wrote in his diary 
about his conversation with Mr. Stephanopoulos:

          Simply outrageous that RTC had hired him [Stephens], 
        but even more amazing when George then suggested to me 
        that we needed to find a way to get rid of him. 
        Persuaded George that firing him would be incredibly 
        stupid and improper.71

    In hearings before the Senate Banking Committee, Mr. 
Steiner implausibly claimed that he lied in his diary.72 
In the weeks following this contact, Mr. Stephens' role in the 
civil investigation of Madison Guaranty came to a halt. The 
White House succeeded in what Mr. Steiner described as being 
``incredibly stupid and improper.'' 73
    Mr. Stephens' name was included in Pillsbury's initial 
proposal to the RTC as one of the three partners in charge of 
the matter.74 And during the early stages of the 
investigation in February 1994, Mr. Stephens attended meetings 
and was in daily contact with the RTC.75 After press 
reports about Mr. Steiner's conversation with Mr. 
Stephanopoulos appeared in the third week of March 1994, 
however, Mr. Stephens' role ``diminished substantially,'' and 
by the summer of 1994, he was ``virtually disengaged from the 
matter.'' 76 Mr. Stephens had no involvement in drafting 
the Pillsbury reports.77 He declined the RTC's request 
that he place his imprimatur on the final reports. Curiously, 
the RTC subsequently refused to authorize Pillsbury to correct 
the public misconception that Mr. Stephens authored these 
reports.
    Although the RTC ultimately concluded that it would not be 
cost effective to bring civil claims against the Clintons or 
Mrs. Clinton's law firm, the RTC was left to rely upon 
Pillsbury's incomplete analyses. In fact, Mr. Stephens himself 
was critical of the initial draft of the Pillsbury's report on 
Whitewater, and his criticisms were ignored.

9. Senior RTC officials sought to impede the criminal investigation of 
        Madison

    In March 1992, RTC criminal investigators based in Kansas 
City commenced an investigation into the failed Madison 
Guaranty Savings & Loan. The RTC subsequently produced 10 
criminal referrals related to Madison, one in 1992 and nine in 
1993. The lead criminal investigator on the case was Jean 
Lewis. Ms. Lewis and her two supervisors, Richard Iorio and Lee 
Ausen, signed all 10 referrals.
    The Special Committee concludes that the Kansas City RTC 
investigators were obstructed in their investigation and were 
forced to contend with an environment hostile to their inquiry. 
Ms. Lewis, testified that she ``believe[d] there was a 
concerted effort to obstruct, hamper and manipulate the results 
of our investigation of Madison.'' 78 The evidence 
suggests that Ms. Lewis' belief was well founded.
    The submission of the nine 1993 referrals to the Justice 
Department was delayed when attorneys in the RTC Professional 
Liability Section (``PLS'') demanded time to perform a ``legal 
review of them.'' During the week long delay that ensued, the 
White House learned about the referrals and some of the 
confidential information they contained. Shortly after this 
event, Ms. Lewis was removed as the lead criminal investigator 
on the Madison Guaranty case at the urging of PLS.
    On August 15, 1994, the three Madison investigators were 
placed on ``administrative leave'' by RTC upper 
management.79 The three were provided with no warning or 
explanation whatsoever for this action. Two weeks later, the 
three investigators were told to return to work.
    The Special Committee concludes that the most plausible 
explanation for this action is that it was taken in retaliation 
for the investigators' work on the Madison Guaranty case. An 
internal investigation by the Inspector General of the Federal 
Deposit Insurance Corporation (``FDIC'') (the successor to the 
RTC) is ongoing.
    The Special Committee also concludes that April Breslaw 
improperly intervened in, and attempted to affect, the outcome 
of investigations into Madison Guaranty.
    In 1989, Ms. Breslaw while an attorney with the FDIC hired 
the Rose Law Firm to handle a malpractice suit against Madison 
Guaranty's former accountants. Her decision came under fire 
when it was reported that Rose's representation of the 
government was fraught with conflicts of interest. By 1994, 
both the FDIC and the RTC had commenced investigations into the 
Rose conflicts issue. That year, Ms. Breslaw sought to 
discourage RTC employees from investigating issues related to 
Madison Guaranty and informed RTC investigators that senior RTC 
officials would prefer a certain outcome to any such 
investigation.
    In January 1994, Ms. Breslaw warned RTC civil fraud 
investigator Gary Davidson that certain RTC managers would take 
a ``dim view'' of him investigating Madison. Then, in February 
1994, Ms. Breslaw told Ms. Lewis in a tape recorded 
conversation that the ``head people'' at the RTC ``would like 
to be able to say Whitewater did not cause a loss to Madison.'' 
80
    Ms. Breslaw's testimony before the Special Committee 
regarding her statement to Ms. Lewis was wholly incredible. Ms. 
Breslaw refused to admit that she had said the comment 
attributed to her and implausibly claimed that she could not 
recognize her own voice on the tape.
    It is unclear who, if anyone, instructed Ms. Breslaw to 
``send these messages'' to the RTC investigators working on the 
Madison Guaranty and Rose Law Firm matters, although the 
telephone message pads of Webster Hubbell indicate that Ms. 
Breslaw and Mr. Hubbell were in contact on or about September 
29, 1993. Both Mr. Hubbell and Ms. Breslaw admit that they 
spoke about the investigation into the Rose Law Firm conflicts 
of interest relating to Madison. They deny, however, that they 
discussed the ``substance'' of the RTC investigations.
    Viewed cumulatively, the Special Committee concludes that 
Ms. Breslaw's actions, coupled with the improper actions taken 
toward the RTC investigators, illustrate a concerted effort to 
improperly obstruct the investigations relating to Madison 
Guaranty and Whitewater.

10. U.S. Attorney Paula Casey mishandled the RTC criminal referral 
        referencing the President and Mrs. Clinton

    The first criminal referral, Referral No. C0004, was made 
to Charles Banks, then U.S. Attorney, in September 1992. Mr. 
Banks did not take action on the referral, but on January 27, 
1993, he sent a recusal letter to the Executive Office of U.S. 
Attorneys, to which he never received a response.81 
Although a decision on a criminal referral is usually issued 
within 60-90 days after submission, the U.S. Attorney's Office 
did not render a prosecutorial opinion on Referral C0004 until 
October 27, 1993--over one year after its submission.82
    Senior Justice Department officials believed that Paula 
Casey, Mr. Banks' successor and a former student of President 
Clinton, should have recused herself because of her ties to the 
Clintons and to Governor Jim Guy Tucker. They communicated this 
view to her on several occasions. The director and agents of 
the FBI similarly expressed concern that U.S. Attorney Casey 
should recuse herself from Madison-related matters.
    Moreover, contrary to Justice Department policy, Ms. Casey 
did not notify Main Justice with an Urgent Memorandum when she 
learned that the case against David Hale might involve 
allegations against Governor Tucker and President Clinton. 
Senior officials were ``surprised'' that Ms. Casey had not 
alerted Main Justice to Mr. Hale's allegations about the 
President, and believed that Main Justice should have been 
involved in the case sooner.83
    Even after agreeing to recuse herself, Ms. Casey continued 
to participate actively in the Hale and Madison investigations. 
She attended FBI briefings involving the investigation of 
Madison Guaranty and Mr. Hale.84 She continued to 
correspond with Mr. Hale's attorney about a possible plea 
agreement and reject the efforts of Mr. Hale to negotiate with 
the government. Sometime between the middle and the end of 
October, she reviewed the nine new RTC criminal referrals 
relating to Madison Guaranty.85
    Finally, for reasons unknown, Ms. Casey formally declined 
prosecution on Referral C0004, even though she claimed that she 
already knew that she was going to recuse herself. Justice 
Department officials testified that this declination was a 
``substantive decision'' that someone who supposedly had 
recused herself from the matter should not have made.86
    No one in charge of handling Referral C0004 in the U.S. 
Attorney's office in Little Rock ever reviewed or analyzed the 
hundreds of pages of documentary exhibits attached to it. 
Indeed, neither Ms. Casey nor her First Assistant ever reviewed 
the exhibits to the referral prior to declining 
prosecution.87 Senior Justice Department officials 
testified that Ms. Casey should have conducted an independent 
review of the evidence prior to declining Referral C0004.
    Even after his recusal from the case in November 1993, 
88 Associate Attorney General Webster Hubbell, a close 
associate of the Clintons and now a convicted felon, 
possessed--in his basement--the Clintons' personal and campaign 
files on Whitewater, as well as Rose Law Firm client files on 
Madison that he improperly took from the firm. He was involved 
in the review and transfer of those files to the Clintons' 
personal attorney in November and December 1993.89 
Although Mr. Hubbell was in virtually daily contact with senior 
White House officials, he implausibly claimed that he was kept 
out of the loop on the Whitewater defense effort.
    The Special Counsel and then Office of the Independent 
Counsel took over responsibility for the investigations in 
1994. The work of the Independent Counsel is ongoing, and 
therefore, it is unknown whether the actions of the U.S. 
Attorney's Office or Ms. Casey ultimately tainted the 
investigations in any way. The Special Committee concludes, 
however, that the U.S. Attorney's Office mishandled the RTC 
criminal referrals and the Hale plea negotiations.

11. Senior administration officials improperly sought to manipulate the 
        investigation of the RTC and Treasury Inspectors General into 
        the propriety of White House-Treasury contacts

    During its hearings in the summer of 1994, the Banking 
Committee learned that the Treasury Inspector General (``IG'') 
furnished to the White House--at the White House's request and 
a full week before the Office of Government Ethics (``OGE'') 
opinion was publicly released--transcripts of all depositions 
conducted by the RTC and Treasury IGs in the course of their 
investigation into the propriety of White House-Treasury 
contacts.
    The Special Committee concludes that senior Administration 
officials improperly sought to manipulate this investigation of 
the Treasury and RTC IGs. This interference is particularly 
troubling given that the Treasury and RTC IGs were 
investigating the Administration's efforts to interfere in the 
underlying Whitewater/Madison investigation.
    Despite the fact that Department of Treasury General 
Counsel Jean Hanson was a subject of investigation, Francine 
Kerner, a member of the General Counsel's office, provided 
advance copies of the investigation transcripts to Ms. Hanson's 
staff. The transcripts were then disseminated to other senior 
Treasury Department officials.90 The transcripts contained 
confidential information about RTC criminal investigations and 
referrals that even Treasury Secretary Lloyd Bentsen should not 
have been permitted to review. RTC IG John Adair testified that 
the transcripts contained 90% of the substance of the criminal 
referrals.91
    Ms. Kerner also provided Ms. Hanson's staff with draft 
copies of the RTC-IG's conclusions and asked Ms. Hanson's staff 
to edit the proposed OGE report. 92 The Treasury IG's 
chief investigator, James Cottos, objected to Ms. Kerner's 
attempts to alter the draft investigative report. He told Ms. 
Kerner ``we were not the Jean Hanson defense team.'' In 
addition, according to Mr. Cottos, ``I felt they were slanting 
the facts or attempting to slant the facts.'' 93 Clark 
Blight, the chief investigator for the RTC IG, similarly 
testified that he was under the impression that Ms. Kerner was 
``an advocate for the White House.'' 94
    The Special Committee is deeply concerned that Treasury 
Department officials caused the transfer of confidential 
transcripts of investigative depositions to the White House. 
This disturbing action was taken without the knowledge or 
consent of the RTC IG. In fact, members of the RTC IG's office 
had voiced their opposition to such a transfer when the idea 
was raised. When they learned of the transfer, after the fact, 
they were ``shocked'' by the communication of this confidential 
information to the White House. 95
    During the Banking Committee's hearings, senior White House 
officials relied repeatedly on the OGE opinion as evidence that 
White House personnel had not engaged in improper conduct. 
96 The Special Committee discovered that this reliance was 
entirely misplaced.
    In particular, Stephen Potts, Director of OGE, testified 
that, contrary to statements made by White House Special 
Counsel Lloyd Cutler to the Banking Committee in August 1994, 
the OGE did not ``informally concur'' in Mr. Cutler's 
conclusion that White House officials did not violate ethical 
standards with regard to the communication of confidential RTC 
information from the Treasury Department to the White House. 
97
    Mr. Cutler admitted to the Special Committee that he may 
have ``transgressed'' and ``may have gone too far when he 
testified'' before the Banking Committee in August 1994. 
98

12. The White House delayed in producing documents to the Special 
        Committee

    The Special Committee confronted a number of obstacles that 
hindered the progress of its investigation. Among the most 
notable, certainly the most time-consuming, of these obstacles 
were (1) the withholding and delay in the production of 
documents directly relevant to the Committee's investigation 
and the noncooperation and resistance of a number of witnesses.
    Because the testimony of witnesses before the Special 
Committee was often contradictory as to important events and 
actions, the Special Committee placed particular emphasis on 
available documentary evidence. Unfortunately, throughout the 
course of its inquiry, the Special Committee had been hindered 
by parties unduly delaying the production of, or withholding 
outright, documents critical to its investigation.
    The White House did not live up to its repeated promise to 
cooperate with the Special Committee's investigation into 
Whitewater, Madison Guaranty and related matters. The White 
House and various individuals associated with the White House 
engaged in a pattern of activity designed to hinder the Special 
Committee's investigation.
    The White House withheld documents from the Special 
Committee or produced highly relevant documents very late in 
the Committee's investigation. For example, the White House 
failed to produce until January and February 1996 various notes 
taken by high level White House officials relating to the 
January 1994 Whitewater Response Team meetings.
    On January 29, 1996 the White House produced the notes of 
former White House Director of Communications Mark 
Gearan,99 and claimed that the notes ``were inadvertently 
moved to the Peace Corps with other personal effects in 
boxes.'' 100 On February 13, 1996, the White House 
produced the documents from the files of Mr. Waldman, Special 
Assistant to the President that Mr. Waldman discovered these 
documents in his office in a file marked ``WWDC'', Whitewater 
Development Corporation, in the course of an office 
move.101 Then, on February 20, 1996 the Special Committee 
received memoranda from the White House which were prepared by 
Harold Ickes, White House Deputy Chief of Staff and the leader 
of the Whitewater Response Team meetings. The White House 
represented that some were ``mistakenly overlooked.'' 102 
Finally, on March 1, 1996, lawyers for Deputy White House 
Counsel Bruce Lindsey ``which inadvertently were not produced'' 
previously.103
    The White House withheld notes of the November 5, 1993 
meeting of White House officials and the Clintons' private 
attorneys relating to Whitewater taken by Associate Counsel 
William Kennedy. Although President Clinton had made numerous 
statements that he would not claim executive privilege for 
matters relating to Whitewater, the White House withheld these 
notes based on an assertion of ``the attorney-client component 
of executive privilege.'' On December 20, 1995, the full Senate 
adopted Senate Resolution 199, directing the Senate Legal 
Counsel to initiate a civil action in federal District Court 
under 28 U.S.C. Sec. 1365 (1994). On December 22, 1995, before 
the Senate Legal Counsel initiated such action, the White House 
reversed its position, and Mr. Kennedy produced his notes to 
the Special Committee. The notes turned out to be highly 
relevant to the Special Committee's investigation. They 
provided evidence that the White House Counsel's office and the 
Clintons' private attorneys had joined forces and clearly were 
working as agents of the private counsel in a joint and wholly 
improper effort to serve the private interests of the Clintons.

13. Senior administration officials provided inaccurate and incomplete 
        testimony to the Senate

    The Special Committee concludes that senior Administration 
officials provided inaccurate and incomplete testimony to the 
Senate on a number of occasions.
    Most notably, Roger Altman, former Deputy Treasury 
Secretary and Acting CEO of the RTC, intentionally misled the 
Senate when he testified before the Banking Committee on 
February 24, 1994. Mr. Altman was specifically asked about 
contacts with the White House and whether the RTC briefed the 
White House about the criminal referrals. Mr. Altman's response 
was that there was only one substantive contact, and that it 
dealt with the procedure relating to the expiring statute of 
limitations. As detailed in the Banking Committee's report on 
Treasury-White House contacts, he failed to mention his other 
communications with the White House.104
    In addition, as set forth in the discussion of Foster Phase 
of its inquiry, the Special Committee believes that other 
senior Administration officials provided inaccurate and 
incomplete testimony to the Senate.
    With respect to matters bearing upon the Washington Phase 
of the Committee's inquiry, the Special Committee believes that 
Deputy White House Chief of Staff Harold Ickes repeatedly 
provided inaccurate and incomplete testimony.
    Mr. Ickes testified under oath to the Senate and to the 
Inspectors General of the Treasury Department and the RTC that 
he and other White House officials had no discussions about, or 
knowledge of, the statute of limitations for Madison-related 
civil claims prior to February 2, 1994. In light of newly 
discovered evidence, the Special Committee believes that this 
testimony was inaccurate.
    In January 1994, considerable public interest existed in 
issues relating to Whitewater and Madison. The statute of 
limitations for Madison-related civil claims involving fraud or 
intentional misconduct was scheduled to expire on February 28, 
1994. There was considerable congressional attention focused on 
the approaching expiration date. Prior to enactment of the law 
extending the statute of limitations, however, the RTC had to 
decide by February 28, 1994, whether to bring suit, to seek 
tolling agreements, or to allow the statute to expire without 
action. Because President and Mrs. Clinton faced potential 
liability relating to the failure of Madison, inside 
information regarding the status of the RTC investigation and 
its deliberations with respect to the statute of limitations 
was valuable to the White House and the Clintons in 
coordinating a defense strategy.
    During its 1994 investigation, counsel to the Banking 
Committee asked Mr. Ickes about his knowledge of issues 
surrounding the statute of limitations prior to its 
extension.105 Specifically, Mr. Ickes testified about a 
meeting on February 2, 1994, between senior White House 
officials and Roger Altman, then Deputy Secretary of the 
Treasury and Acting Chief Executive Officer of the RTC, and 
Jean Hanson, General Counsel to the Department of the Treasury. 
With respect to discussions about the statute of limitations at 
that meeting, Mr. Ickes testified, ``I, for one, had little 
knowledge, if any knowledge, about the situation,'' 106 
and that ``all this was new to me.'' 107 1
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    \1\ Similarly, when asked by the RTC-IG about this same February 2, 
1994, meeting, Mr. Ickes testified: ``Mr. Altman, as I recall, raised 
the issue of the upcoming--the possible--well, not the possible, but 
the fact that the statute of limitations, which I knew nothing about at 
the time, of the RTC in connection with an investigation that was 
apparently being conducted by the RTC on Madison Whitewater was about 
to expire.'' (Ickes, 7/15/94 RTC Dep. p. 7). Mr. Ickes emphasized that 
White House officials had no knowledge of the statute of limitations 
issue: ``There were questions about the statute of limitations, when it 
expired, under what conditions it expired. I don't think anybody in the 
room other than Mr. Altman and Ms. Hanson had a clear picture of what 
the statute of limitations situation was.'' (Ickes, 7/15/94 RTC Dep. p. 
8).
---------------------------------------------------------------------------
    Evidence newly uncovered by the Special Committee, however, 
strongly suggests that these statements were untrue when Mr. 
Ickes made them under oath. The evidence indicates that Mr. 
Ickes specifically assigned a subordinate to prepare, and later 
received, a memorandum on the statute of limitations for 
Madison-related civil claims and that he discussed the issue 
with other White House officials in January 1994, prior to the 
February 2 meeting with Mr. Altman and Ms. Hanson.
    On November 2, 1995, for example, the White House produced 
to the Special Committee a memorandum to Mr. Ickes from 
Associate Counsel to the President Neil Eggleston entitled 
``Statute of Limitations in Actions Brought by the Conservators 
of a Financial Institution.'' 108 The memorandum, which 
was dated January 17, 1994, discussed the statute of 
limitations generally applicable to claims filed by the RTC on 
behalf of failed thrift institutions. More important, Mr. 
Eggleston's memorandum discussed the statute of limitations as 
applied specifically to Madison and identified March 2, 1994, 
as the final date for the RTC to file civil tort claims on 
behalf of Madison, the type of action usually brought against 
outsiders in financial institution cases.109
    Beyond this, the Special Committee believes that Mr. Ickes 
provided inaccurate testimony under oath about Mrs. Clinton's 
knowledge in 1994 of her potential liability to the RTC arising 
from her representation of Madison. Mr. Ickes testified under 
oath to the Senate Banking Committee in July and August 1994 
that he did not know whether two memoranda detailing the 
potential liability of the President and Mrs. Clinton to the 
RTC had been sent to Mrs. Clinton. However, the Special 
Committee has discovered evidence indicating that, at about the 
same time of Mr. Ickes' testimony, his attorney transmitted 
information to the White House Counsel's Office that Mr. Ickes 
had specifically remembered sending the memoranda to Mrs. 
Clinton in response to repeated questions from the Clintons 
about their possible exposure in the RTC investigation. The 
foregoing, to be sure, do not exhaust the instances in which 
the Committee believes that Mr. Ickes was less than candid, but 
it amply demonstrates that Mr. Ickes provided inaccurate and 
incomplete testimony to the Senate.

14. The Office of the White House Counsel was frequently and improperly 
        put in the service of the personal legal interests of the 
        President and Mrs. Clinton

    The Special Committee concludes that the use of the White 
House Counsel's Office to serve the private legal interests of 
the President and Mrs. Clinton was highly improper. As 
government lawyers, the attorneys in the White House Counsel's 
Office have a duty to represent the public interest. That duty 
is incompatible with the representation of any private 
parties--even the President or First Lady. Here, the interest 
of the United States with respect to these investigations in 
establishing civil and/or criminal liability was potentially 
adverse to the private interests of the Clintons in avoiding 
any such liability.
    The provision of legal services by government lawyers 
relating to the President's personal matters is contrary to the 
``Standards of Ethical Conduct'' promulgated by the Office of 
Government Ethics (``OGE''). The Standards of Ethical Conduct, 
which were issued pursuant to Executive Order 12674 and apply 
to all Executive Branch employees, establish that it is a 
misuse of government position to make ``[u]se of public office 
for private gain.'' 110 More specifically, a government 
employee ``shall not use his public office for his own private 
gain, . . . or for the private gain of friends, relatives, or 
persons with whom the employee is affiliated in a 
nongovernmental capacity.'' 111
    The underlying issues related to Whitewater and Madison 
arose prior to the inauguration of President Clinton. The only 
Whitewater issues arising after the inauguration of the 
President involve the improper contacts between the White House 
and various other government agencies that were investigating 
Madison and Whitewater, including the Treasury Department, the 
RTC, and the SBA. If such contacts had not taken place, there 
would be no investigation into events occurring after the 
President's inauguration. The Office of the White House Counsel 
cannot bootstrap its improper handling of information about 
Whitewater and Madison into a justification for its 
participation in underlying Whitewater matters.
    When he was appointed Special Counsel to the President by 
President Clinton, Lloyd Cutler explained the proper sphere of 
the White House Counsel's representation of the President: 
``When it comes to a President's private affairs, particularly 
private affairs that occurred before he took office, those 
should be handled by his own personal private counsel, and in 
my view not by the White House Counsel.'' 112
    The attempt of White House lawyers to obtain information 
and to communicate with witnesses is inconsistent with the need 
to maintain both the perceived or actual integrity of the 
ongoing federal investigations into Whitewater. It is also 
contrary to the OGE's Standards of Ethical Conduct for a public 
employee to misuse nonpublic information.113 Finally, it 
contravenes a regulation promulgated by the Executive Office of 
the President, which provides: ``For the purpose of furthering 
a private interest, an employee shall not . . . directly or 
indirectly, use, or allow the use of, official information 
obtained through or in connection with his Government 
employment which has not been made available to the general 
public.'' 114
    In sum, the Special Committee concludes that White House 
officials, in particular the Office of the White House Counsel, 
violated ethical standards and abused their official positions 
of public trust to assist in the Clintons' private legal 
defense effort. The Special Committee recommends that steps be 
taken to prevent such future abuses.

 Conclusions of the Special Committee on the Discovery of the Rose Law 
                          Firm Billing Records

    On January 5, 1996, the Special Committee received computer 
printouts of the Rose Law Firm's billings to Madison Guaranty. 
These records were discovered under mysterious circumstances in 
the Book Room of the White House Residence.
    The billing records constitute the best, and therefore most 
important, evidence concerning Mrs. Clinton's representation of 
Mr. McDougal's S&L in the mid-1980s--a relationship that was 
being investigated by at least three separate federal agencies. 
The records had been subject to several different federal 
subpoenas, besides that of the Special Committee, for nearly 
two years. When federal investigators served their subpoenas, 
some more than two years ago, the billing records were nowhere 
to be found. Despite extensive searches conducted by the Rose 
Law Firm, neither the originals nor copies were 
discovered.115 They were not in the firm's computers, its 
client files, or its storage facility.116

1. The Rose billing records provide the best evidence of the legal 
        services performed by Mrs. Clinton for Madison Guaranty

    The billing records provide the best evidence of the legal 
services performed by Mrs. Clinton for Madison Guaranty and, as 
a result of the failed memories of many Rose Law Firm 
attorneys, are the only source of detailed information about 
the services that the Rose Law Firm provided to Madison 
Guaranty. The computerized billing records are thus an 
invaluable asset in reconstructing Mrs. Clinton's actual 
involvement in the matter. In total, Mrs. Clinton billed 
Madison Guaranty for 89 tasks, including 33 conferences with 
Madison Guaranty officials, on 53 separate days.117
    Among the significant facts established by the billing 
records are the following, the significance of which are 
discussed more fully in the Special Committee's conclusions 
regarding the Arkansas Phase of its investigation:
     Mrs. Clinton, and others on her behalf, repeatedly 
made statements that Richard Massey brought in Madison Guaranty 
as a client and, even though she was the billing partner on the 
matter, she was merely a ``backstop'' because the firm did not 
permit associates to bill clients directly.118 Mr. Massey, 
however, directly contradicted Mrs. Clinton's account in sworn 
testimony before the Special Committee. The president of the 
S&L, John Latham, and a partner at the Rose law firm, David 
Knight, also contradicted Mrs. Clinton's account.
    The billing records substantially resolve this dispute in 
favor of the testimony of Messrs. Massey, Latham and Knight.
     During the 1992 campaign, allegations surfaced 
that Beverly Bassett Schaffer, who Governor Clinton appointed 
as Arkansas Securities Commissioner, gave preferential 
treatment to Madison Guaranty because of her relationship with 
the Governor and Mrs. Clinton. The Clinton campaign denied that 
Mrs. Clinton attempted to influence Commissioner Bassett.
    The billing records show that Mrs. Clinton called Ms. 
Schaffer the day before the Rose Law Firm submitted Madison's 
proposal for its preferred stock offering to the Arkansas 
Securities Department.119 The records reflect that Mrs. 
Clinton billed as much as one hour to the call.120 Ms. 
Schaffer notified Mrs. Clinton of the approval of the proposal 
two weeks later in a letter addressed, ``Dear Hillary.'' 
121
    In testimony before the Special Committee, former 
Commissioner Schaffer directly contradicted Mrs. Clinton and 
stated that the proposal was discussed during the telephone 
call. Mr. Massey similarly disputed Mrs. Clinton's account for 
the telephone call to Ms. Schaffer.122
     Mrs. Clinton has minimized her role in the Rose 
Law Firm's representation of Madison before the Arkansas 
Securities Department in connection with Madison's proposed 
stock offering. The billing records and Mr. Massey's testimony 
directly contradict Mrs. Clinton's claim that her role on the 
matter was merely to serve as a ``backstop.''
    The billing records show that Mrs. Clinton billed Madison 
for a total of approximately 60 hours of work. Mrs. Clinton 
billed 6.2 hours on the preferred stock deal for conferences 
alone that she had with Mr. McDougal, with Mr. Latham and Davis 
Fitzhugh, two other Madison S&L officers involved in the stock 
offering.123
    Mrs. Clinton had at least six conferences with Mr. Massey, 
the young Rose Law Firm attorney responsible for performing the 
associate type tasks on the matter.124 Mrs. Clinton also 
reviewed the amendments to the application submitted to the 
Arkansas Securities Department.125 Mr. Massey testified 
that he did his work under the supervision of Mrs. 
Clinton.126 According to Mr. Massey: ``Mrs. Clinton was 
the billing attorney and had a relationship with me such that 
she needed to know what I was doing so she could be prepared to 
update the client at any time.'' 127 When asked whether 
Mrs. Clinton's work on the stock proposal deal was ``minimal,'' 
Mr. Massey responded, ``In my own mind it's a significant 
amount of time.'' 128
     The billing records indicate that Mrs. Clinton's 
involvement in Castle Grande was much more extensive than she 
has thus far owned up to. Before the billing records were 
discovered, little was known about the nature of the Rose Law 
Firm's representation of Madison Guaranty in connection with 
the Castle Grande land transaction. Perhaps because Mrs. 
Clinton had ordered the destruction of Madison-related records 
in 1988, the Rose Law Firm no longer possessed any file related 
to the Castle Grande deal.
    Federal investigators described the Castle Grande 
transactions as a series of land flips and transactions that 
cost the American taxpayers $4 million.129 In 1995, when 
the RTC asked about her knowledge of Castle Grande, Mrs. 
Clinton stated ``I do not believe I knew anything about any of 
these real estate parcels and projects.'' 130
    The billing records identify Mrs. Clinton as the billing 
partner on the matter--even though Mrs. Clinton claimed that 
she has no idea how the Rose Law Firm became involved in the 
matter.131 These records indicate that Mrs. Clinton billed 
more time on the Castle Grande matter--29.5 hours, or 54 
percent of total billings on the matter--than any other lawyer 
at the Rose Law Firm. Indeed, nearly half of Mrs. Clinton's 
total billings to Madison were for work on Castle Grande. In 
the months following the initial transaction, Mrs. Clinton had 
at least 12 conferences with Mr. Ward and numerous meetings 
with Madison officials in connection with the subsequent sales 
that she billed to the IDC/Castle Grande matter.
    More important, the billing records were perhaps most 
illuminating with respect to the nature of Mrs. Clinton's work 
on Castle Grande. For his role as the ``straw man'' and other 
related services to the project, Mr. Ward was owed a 
commission. On March 31, 1986, Madison Guaranty loaned Mr. Ward 
$400,000.132 One week later, on April 7, 1986, Madison 
Financial executed two promissory notes, for $300,000 and 
$70,943, purporting to reflect loans from Mr. Ward to Madison 
Financial Corporation, Madison Guaranty's subsidiary service 
corporation.133 At about this time, bank examiners were 
scrutinizing Madison Guaranty's books. Mr. James Clark, the 
chief examiner, asked whether the three notes were 
related.134 He was assured by a Madison Guaranty official, 
probably Don Denton, that the notes were not related.135 
In fact, according to Madison official John Latham, the three 
notes were related, and the $400,000 March 31 loan from Madison 
Guaranty was intended to pay Mr. Ward's commissions.136
    The Rose Law Firm billing records revealed that on April 7, 
1986, the day the Madison Financial notes were executed, Mrs. 
Clinton billed 12 minutes to the IDC/Castle Grande matter for 
``Telephone conference with Don Denton.'' 137 A message 
slip produced by Mr. Denton reflects that Mrs. Clinton called 
him from the Rose Law Firm on April 7, 1986.138 On a June 
11, 1996 interview with FDIC investigators, Mr. Denton stated 
that Mrs. Clinton called seeking copies of the notes between 
Mr. Ward, Madison Financial, and Madison Guaranty.139 Mr. 
Denton told investigators that during the conversation he 
cautioned Mrs. Clinton that a problem might exist with respect 
to the April 7 notes to Mr. Ward because ``they constituted in 
effect a parent entity fulfilling the obligation of a 
subsidiary,'' 140 a violation of the so-called direct 
investment rule. Mrs. Clinton, however, ``summarily dismissed'' 
that concern in a way that he took to mean that ``he would take 
care of savings and loan matters, and she would take care of 
legal matters.'' 141
    And she did. The billing records showed that on May 1, 
1986, Mrs. Clinton billed Madison Guaranty for two hours of 
time for the following work: ``Conference with Seth Ward; 
telephone conference with Seth Ward regarding option; telephone 
conference with Mike Shauffler; prepare option.'' 142 
Indeed, a May 1 option agreement between Mr. Ward and Madison 
Financial bore a word processing code (``0190g'') that, 
according to the Rose Law Firm's counsel, indicates the 
document was created at the Rose Law Firm by or for Mrs. 
Clinton.143
    Mr. Clark, the bank examiner told investigators that, after 
reviewing the records and in light of Mr. Denton's testimony, 
he believed that the May 1 option prepared by Mrs. Clinton 
``was created `in order to conceal the connection--whatever it 
was--between' '' the March 31 and April 7 notes.144
    On June 13, 1996, the Special Committee requested that the 
First Lady attempt to refresh her recollection regarding the 
matters discussed by Mr. Denton and to inform the Committee of 
what she recalls about them.145 On June 17, 1996 the 
Special Committee received an affidavit from Mrs. Clinton 
accompanied by a letter from Mr. Kendall. In the affidavit, 
Mrs. Clinton gave no answer to the question posed by the 
Special Committee; instead, she simply referred to Mr. 
Kendall's letter ``addressing certain allegations recently made 
by Mr. Don Denton.'' 146 In his letter, Mr. Kendall 
maintained that Mr. Denton's recollection is ``wholly 
unreliable'' 2 but gave no indication as to the 
recollection of the First Lady.147 The First Lady 
therefore has neither confirmed nor denied Mr. Denton's 
testimony.
---------------------------------------------------------------------------
    \2\ Mr. Kendall based this assertion on the fact that Mr. Denton 
testified at two trials, Ward v. Madison Guaranty, and United States v. 
McDougal et al., yet did not mention his April 7, 1986 telephone 
conversation with Mrs. Clinton. Mr. Kendall, however, offered no 
indication whether Mr. Denton was asked questions about his 
conversations with Mrs. Clinton or, for that matter, whether such 
conversations and Mrs. Clinton's work for Madison were within the scope 
of the trials. (Letter from David Kendall to Senator Alfonse D'Amato, 
6/17/96 p. 2)
    What is clear, however, is that Mr. Denton recalled the 
conversation only after being shown Mrs. Clinton's billing records 
reflecting the 12 minute telephone call on April 7. When he was shown 
this record, on June 3, 1996, he did not recall the conversation. 
However, after the interview, he reviewed his files and discovered the 
April 7 message slip from Mrs. Clinton. His memory thus refreshed, he 
provided additional testimony to the FDIC-IG, all under a legal 
obligation of truthfulness, 18 U.S.C. Sec. 1001. (Denton, FDIC-IG 
Report of Interview, June 11, 1996.) Mr. Denton has no reason to 
mislead investigators, much less to go out of his way to give 
inaccurate testimony.
---------------------------------------------------------------------------
    The significance of the billing records as they relate to 
Castle Grande is perhaps best illustrated by the activities of 
Mrs. Clinton's legal defense team immediately after the 
discovery of the records. A message slip from John Tisdale, the 
Clintons' Arkansas lawyer to Alston Jennings, Seth Ward's 
former attorney on Castle Grande, indicate that, on June 5, 
1996, the day after Ms. Huber discovered the records in her 
White House office, Mr. Kendall called Mr. Tisdale and Mr. 
Jennings to arrange a meeting.148 One week after the 
records were discovered, on January 11, 1996, Mr. Kendall flew 
to Little Rock and met first with Mr. Jennings and then with 
Mr. Ward.149 The meeting with Mr. Ward lasted 30-40 
minutes.150 Curiously, Mr. Kendall had also contacted Mr. 
Jennings in August 1995. Subsequent to that contact, Mrs. 
Clinton summoned Mr. Jennings to the White House for a personal 
meeting on August 10, 1995, around the time that the billing 
records were placed in the Book Room of the White House 
residence.

2. The disappearance and mysterious reappearance of the Rose Law Firm 
        billing records was part of a larger pattern of removal, 
        concealment and, at times, destruction of records concerning 
        Mrs. Clinton's representation of Madison

    The mysterious discovery of the Rose billing records must 
be viewed in the context of the destruction and mishandling of 
other Rose Law Firm files concerning Madison between 1988 and 
1992. In 1988, Mrs. Clinton ordered the Rose Law Firm to 
destroy records relating to her representation of Mr. 
McDougal's Madison S&L.151 As described above, this was 
not a routine destruction of records because there was pending 
litigation relating to Castle Grande and federal regulators 
were investigating the operation and solvency of Madison in 
anticipation of taking over the troubled S&L.
    The mishandling of Madison documents continued after the 
1992 presidential campaign, when the firm's files on Madison, 
which were by now the property of the RTC as conservator of 
Madison, and files of other Rose clients for whom Mrs. Clinton 
had performed legal services, were secretly removed from the 
firm by another then-Rose Law Firm partner, Webster Hubbell. 
Mr. Hubbell removed these files, at times taking the firm's 
only copies,152 without obtaining the consent of the firm 
or the client.153

3. Vincent Foster is the last person known to have the billing records 
        in his possession

    During the 1992 presidential campaign, on February 12, 
1992, an unknown person printed out a set of the Rose Law 
Firm's computerized records of billings to Madison 
Guaranty.154 Mr. Hubbell asserted that either he or former 
Deputy White House Counsel Vincent Foster, also a Rose partner, 
directed the Rose accounting department to print the billing 
records for Madison.155 In addition to obtaining the 
computerized billing records, Mr. Hubbell also retrieved other 
files and documents relating to Mrs. Clinton's work for 
Madison.
    According to Mr. Hubbell, Mr. Foster was the last person he 
saw handling the billing records.156 Mr. Hubbell did not 
know who removed the records from the Rose Law Firm,157 or 
how they came to be left in the White House Residence.158 
He claimed not to have spoken with anyone about the billing 
records since the 1992 presidential campaign.159

4. The billing records mysteriously reappear in the Book Room of the 
        White House Residence in August 1995

    During the first two weeks of August 1995, Carolyn Huber, 
Special Assistant to the President and Special Director of 
Correspondence for the White House, saw the Rose Law Firm 
billing records for the first time.160 The billing records 
were in the Book Room, a small room on the third floor of the 
First Family's private quarters in the White House 
Residence.161
    In early August 1995, Ms. Huber was gathering newspaper and 
magazine clippings in the Book Room when she noticed the 
records in clear view on the edge of a table.162 The 
records were folded in half, and Ms. Huber recognized the 
records, from her experience at the Rose Law Firm, to be 
billing records.163
    For several months, Ms. Huber gave little thought to the 
records, which were moved in a box to her office. On the 
morning of January 4, 1996, Ms. Huber discovered the records 
when the table was removed that had concealed the box with the 
billing records for five months.164
    Immediately, Ms. Huber realized the billing records were 
related to Madison Guaranty.165 She was horrified because 
she understood their significance; she had seen several 
subpoenas calling for the production of Madison Guaranty 
records, including these very records.166

5. Only a limited number of people had access to Book Room of the White 
        House Residence

    The Special Committee's inquiry discovered that only a 
limited number of people had access to the Book Room, and no 
one admitted to placing the billing records in the Book Room of 
the White House Residence. Only a limited number of people had 
access. Moreover, it is highly unlikely that those with access 
would be leaving or disturbing documents in that private area 
of the White House.
    The Special Committee rejects as fanciful the suggestion 
that construction workers or residence staff were somehow 
responsible for leaving the records in the Book Room. 
Similarly, the denials by overnight guests are highly credible 
because none of them would have been likely to be carrying 
records into the Book Room or to disturb materials in the Book 
Room.
    Accordingly, the Special Committee concludes that most 
persons with access to the Book Room during the relevant period 
truthfully denied leaving the Rose billing records in the Book 
Room. They had neither the opportunity to possess the billing 
records nor the motive to conceal them from investigators for 
nearly two years.

6. Very few people had motive to be handling or reading the Rose 
        billing records in August 1995

    Few lay people would have understood the significance or 
content of the Rose billing records in August 1995. In fact, 
based on the evidence received by the Special Committee, only 
three people had previously shown an interest in and handled 
the billing records--Mrs. Clinton, Mr. Foster and Mr. Hubbell. 
Of these, Mr. Foster passed away on July 20, 1993, and Mr. 
Hubbell reported to federal prison on August 7, 1995.167
    Moreover, as discussed earlier in these Conclusions, the 
principal relevance of the billing records was to disclose the 
nature and extent of the legal work performed by Rose Law Firm 
partners for Madison Guaranty. As noted above, these records 
were particularly significant in evaluating work done by Mrs. 
Clinton. Again, this is an important factor in evaluating who 
would have had an interest in reviewing the records in August 
1995. Finally, the Committee is impressed by the fact that 
these records appeared on the table of the Book Room within 
days after the RTC-IG issued its report critical of the Rose 
Law Firm and its conflict of interest over Madison. As 
evidenced by the memorandum of March 1, 1994 from Mr. Ickes to 
Mrs. Clinton, this particular issue was of concern to Mrs. 
Clinton in connection with her possible exposure to personal 
liability.

7. Only a limited number of people were definitely within the chain of 
        custody of the billing records

    Although the absence of fingerprints does not rule out that 
a person handled documents, the presence of fingerprints 
positively establishes that someone was in the chain of 
custody. Of individuals positively within the chain of custody 
on these documents, only Mrs. Clinton and Mr. Foster are likely 
to have been interested in reading the billing records. Indeed, 
in an affidavit submitted to the Special Committee on June 17, 
1996, Mrs. Clinton stated: ``I recall discussing some of this 
legal work in 1992 with Mr. Vincent Foster and Mr. Webster 
Hubbell, as I sought to answer press questions about the 
Madison Guaranty representation during the Presidential 
Campaign. Prior to the recent release of FBI fingerprint 
information, I had stated that I might have been shown billing 
records in 1992.'' 168

8. Mrs. Clinton is more likely than any other known individual to have 
        placed the billing records in the Book Room in August 1995

    The Special Committee is mindful that the question of 
possession of the long lost and much sought Rose billing 
records has grave legal implications. Not surprisingly, no one 
has admitted to putting the documents in the Book Room. On the 
current state of the record, the Special Committee cannot state 
with certainty who put the records in the Book Room.
    Nevertheless, the pattern of past behavior in handling 
documents, the limited number of persons with access to the 
Book Room, the question of motive, and the chain of custody 
evidence, taken together, suggest that very few people were 
likely to have placed the Rose billing records in the Book Room 
in August 1995. With these factors in mind, the Special 
Committee concludes that Mrs. Clinton is more likely than any 
other known individual to have placed the records in the Book 
Room. Certainly, Mrs. Clinton fits the above criteria most 
closely.3
---------------------------------------------------------------------------
    \3\ On June 13, 1996, the Special Committee requested that Mrs. 
Clinton respond in writing, under oath, about ``any knowledge she may 
have concerning the Rose Law Firm billing records bearing Bates Stamp 
numbers DKSN028928 through DKSN029043, including whether she has 
reviewed, handled, or discussed (other than with counsel) these 
records, and her knowledge relating to the disappearance or discovery 
of the records.''
    On June 17, 1996, Mrs. Clinton responded: ``I do not know how the 
billing records (DKSN028928 through DKSN029043) came to be identified 
by Mrs. Huber at the White House on January 4, 1996, although I have 
read various media accounts.'' In light of the Special Committee's 
request for detailed and specific information relating to any knowledge 
she had concerning their disappearance or discovery, Mrs. Clinton's 
answer is incomplete. For example, she does not state whether she has 
any knowledge as to how the billing records were removed from the Rose 
Law Firm; who possessed the billing records between February 1992 and 
August 1995; where they were stored between February 1992 and August 
1995; and, most importantly, who placed them in the Book Room of the 
White House in August 1995. There is no mystery as to how Ms. Huber 
came to identify the records on January 4, 1996. These other, more 
important questions, however, remain to be answered.
    Mrs. Clinton's incomplete response, therefore, does not alter the 
Special Committee's conclusion.
---------------------------------------------------------------------------

                               Background

     I. Whitewater Development Corporation and Madison Guaranty S&L

    In August 1978, the Clintons and the McDougals purchased 
230 acres of land in Marion County, Arkansas for $202,000 with 
the intention of dividing the land into lots and selling them 
for a profit.169 At the time, Mr. Clinton was the Attorney 
General of Arkansas, and Mrs. Clinton was a young associate 
with the Rose Law Firm of Little Rock.170 In June 1979, 
the Clintons and the McDougals formed Whitewater Development 
Corporation and subsequently transferred the land to the 
company.171
    In October 1980, the year after Whitewater was formed, Mr. 
McDougal and others purchased a controlling interest in the 
Bank of Kingston, a small commercial bank located in Kingston, 
Arkansas, 172 and changed its name to Madison Bank and 
Trust.173 In January 1982, the McDougals purchased an 
interest in Woodruff County Savings and Loan, which they 
renamed Madison Guaranty Savings and Loan Association.174 
Madison Guaranty thereafter formed a service corporation, 
Madison Financial Corporation, to facilitate Madison Guaranty's 
investment in real estate development projects.175 In 
November 1983, the McDougals obtained a controlling interest in 
Madison Guaranty.176
    Madison Guaranty's financial condition was poor when the 
McDougals purchased it and only became worse in later years. In 
January 1984, the Federal Home Loan Bank Board (``FHLBB'') 
commenced a special examination of Madison Guaranty that 
culminated in a supervisory agreement to which Madison's Board 
of Directors consented in July 1984.177 In October 1984, 
Mr. and Mrs. McDougal resigned as directors and officers of 
Madison Guaranty, but Mr. McDougal remained as Chairman and 
President of Madison Financial.178 Mr. McDougal, however, 
retained control of Madison Guaranty and maintained his office 
there.179
    In March 1986, the FHLBB began another examination of 
Madison Guaranty which revealed that the thrift's problems had 
grown worse.180 At a meeting in Dallas, Texas on July 11, 
1986, the FHLBB instructed Madison Guaranty's Board of 
Directors to remove John Latham, the Chairman of Madison 
Guaranty, and Mr. McDougal from their positions at Madison 
Financial.181 The next month, the FHLBB entered a cease 
and desist order against the S&L.182 The FHLBB took over 
Madison Guaranty in February 1989 and, in November of that 
year, the RTC was appointed receiver.183
    The failure of Madison Guaranty cost American taxpayers in 
excess of $60 million. While Mr. McDougal was running Madison 
Guaranty between 1982-86, the Clintons made no payments toward 
the Whitewater debt.184
    In 1992, the RTC began to investigate improper activities 
at Madison Guaranty and, on September 1, 1992, sent a criminal 
referral to the U.S. Attorney's office highlighting possible 
criminal violations. The referral described ``numerous 
questionable cash flow and `loan' transactions'' between 
Madison and a dozen companies owned or controlled by the 
McDougals, including Whitewater.185 The referral named, 
among others, the Clintons and future Arkansas Governor Jim Guy 
Tucker as persons who stood to benefit from, and as potential 
witnesses to, the suspected criminal activity.186
    The Clintons, in a pattern that would recur, received 
advance notice of the confidential RTC referral. In late fall 
1992, Betsey Wright, former chief of staff to Governor Clinton, 
learned of a ``criminal referral regarding a savings and loan 
official in Arkansas and . . . involv[ing] the Clintons'' 
187 which had been sent ``to the prosecutor in Little 
Rock.'' 188 Upon learning the news, Ms. Wright told Mrs. 
Clinton about the referral.189 It is with this knowledge 
of the confidential referral that the Clintons and their 
advisors came to Washington.
    By March 1993, senior Clinton Administration officials 
confirmed that the RTC had sent a criminal referral mentioning 
the Clintons to the Justice Department.190 Specifically, 
RTC Senior Vice President William H. Roelle, on or about March 
23, 1993, told Roger Altman, then Deputy Treasury Secretary, of 
the RTC referral involving the Clintons.191 Mr. Altman 
immediately passed this important information on to White House 
Counsel Bernard Nussbaum. On March 23, Mr. Altman sent Mr. 
Nussbaum a facsimile with a handwritten cover sheet, forwarding 
an ``RTC Clip Sheet'' of a March 9, 1992 New York Times article 
with the headline, ``Clinton Defends Real-Estate Deal.'' 
192 The next day, Mr. Altman faxed to Mr. Nussbaum the 
same article and another Times report on Whitewater, dated 
March 8, 1992, entitled ``Clintons Joined S&L Operator in an 
Ozark Real-Estate Venture.'' 193 The link thus had been 
made between the RTC criminal referral and the Clintons' 
investment in Whitewater and their relationship with Mr. 
McDougal. This knowledge of the link between Whitewater and 
possible criminal investigations provides the subtext for a 
pattern of misconduct in the White House and elsewhere in the 
Clinton administration in an effort to contain potential damage 
from Whitewater and Madison.

             II. Capital Management Services and David Hale

    Whitewater was not the Clintons' only link to criminal 
investigations. In September 1978, David Hale, a former 
prosecutor and municipal court judge, formed Capital Management 
Services Inc., (``CMS'').194 In March 1979, the SBA 
licensed CMS as a Specialized Small Business Investment Company 
(``SSBIC'').195 On September 15, 1993, the SBA placed CMS 
into receivership after ``the company's accumulated losses 
exceeded its private capital by 171 percent.'' 196
    A SSBIC is a company that the SBA licenses to lend money to 
disadvantaged small businesses.197 SSBICs may not provide 
assistance to businesses that are not at least 50 percent 
owned, controlled, and managed by ``disadvantaged 
individuals.'' 198 To ensure that SSBICs comply with these 
requirements, the SBA requires firms to document that they 
qualify for SBA assistance.199
    Mr. Hale and his associates perpetrated a fraud on the SBA 
by using CMS to make loans to political insiders rather than 
``disadvantaged'' individuals.200 After the SBA would 
advance federal funds to CMS, Mr. Hale and his business 
associates would falsify loan applications in order to receive 
funds for their personal needs.201 Mr. McDougal and Jim 
Guy Tucker were among associates of Mr. Hale who participated 
in and benefitted from this fraud.202
    On April 3, 1986, Mr. Hale loaned $300,000 to Susan 
McDougal for the stated purpose of capitalizing Mrs. McDougal's 
new advertising firm, Master Marketing.203
    Wayne Foren, then Associate Administrator for Investment at 
the SBA and the program director for the SSBIC program, learned 
of the $300,000 loan.204 Mr. Foren also learned that some 
of the proceeds of the loan to Mrs. McDougal's Master Marketing 
benefitted Whitewater.205 Mr. Foren stated that records 
suggest that of the original $300,000 loan, $111,500 was 
diverted to make payments on the Flowerwood Farms account and 
another $25,000 was used to replace money, either directly or 
indirectly, that went into Whitewater.206
    At the McDougal and Tucker trial, Mr. Hale testified that 
he made these loans to Mr. McDougal as a favor to then-Governor 
Clinton and Mr. McDougal.207 After Mr. Hale's allegations 
implicating the President became public in September 1993, this 
$300,000 loan quickly became the center of the controversy 
surrounding CMS and its connections to Mr. McDougal and 
Whitewater. Although the accounts of Mr. McDougal and Mr. Hale 
differ regarding why the loan was made and the use of the 
proceeds, records clearly indicate that the money was used for 
purposes other than those stated on the loan application filed 
with the SBA.208 Mr. Hale's allegations concerning 
President Clinton have been refuted by Mr. McDougal's version 
of the events and President Clinton's own testimony at Mr. 
McDougal's trial, but neither has been verified by any outside 
source.209
    Mr. Foren testified that he became concerned about CMS when 
Mr. Hale attempted to obtain matching government funds for what 
Mr. Hale claimed was an increase in his capital resulting from 
a gift.210 Mr. Hale told Mr. Foren that people would give 
him money for his SSBIC because they knew he had ties to Jim 
Guy Tucker and then-Governor Clinton.211 These statements 
aroused Mr. Foren's suspicion and, after a discussion with Mr. 
Hale, he sent a referral to investigate Mr. Hale's SSBIC to the 
Inspector General's office.212
    In early 1993, the SBA began an internal inquiry into Mr. 
Hale and questionable activities at CMS, an inquiry which 
touched upon Mr. Hale's relationship with the Clintons.213 
Again, by the time the inquiry ripened into a referral for 
further investigative action, the White House received word. 
SBA Associate Administrator Wayne Foren testified that, in 
early May 1993, he briefed Erskine Bowles, the new SBA 
Administrator, about the agency's investigation of Mr. Hale and 
CMS because the case involved President Clinton.214 
Shortly thereafter, Mr. Bowles told Mr. Foren that he had 
briefed White House Chief of Staff Thomas (``Mack'') McLarty 
about the case.215
    On March 22, 1994, Mr. Hale pleaded guilty to two felony 
counts in connection to the granting of illegal loans.216 
In 1996, James McDougal, Susan McDougal, and Governor Jim Guy 
Tucker were indicted on charges stemming from dealings 
associated with Madison Guaranty and Capital Management 
Services.217 On May 28, 1996 all three were convicted; Mr. 
and Mrs. McDougal were both convicted of eight charges directly 
related to the illegal $300,000 loan from Mr. Hale.218

                        Summary of the Evidence

             part i: the handling of federal investigations

I. Mrs. Clinton learns of the RTC criminal referral on Madison Guaranty

    Before its charter expired at the end of 1995, the RTC was 
charged with investigating the cause of the failure of savings 
and loans under its control and to determine what civil claims, 
if any, should be pursued. The RTC, however, lacked the 
authority to initiate criminal prosecution of the failed S&Ls. 
Thus, it was the RTC's practice to notify the Justice 
Department--typically, the U.S. Attorney's office and the FBI 
Bureau for the jurisdiction in which the failed thrift was 
located--of any suspected crimes discovered by the agency. A 
``criminal referral'' is the formal document that the RTC and 
other federal agencies use to report suspected criminal 
activity to the Justice Department.219
    In 1992 and 1993, RTC investigators in Kansas City 
submitted to the U.S. Attorney for the Eastern District of 
Arkansas ten criminal referrals concerning the activities of 
Madison Guaranty. Several of the referrals identified Mr. and 
Mrs. McDougal, the Clintons' Whitewater partners, and Mr. 
Tucker, who succeeded Mr. Clinton as Governor of Arkansas, as 
targets. Two of the referrals specifically involved Whitewater 
Development Corporation, which maintained a checking account at 
Madison Guaranty. One of the referrals alleged that Madison 
Guaranty funds were used to make illegal contributions to then-
Governor Clinton's gubernatorial campaigns in the mid-1980s. 
Finally, the Clintons were named in three of the referrals as 
possible witnesses to suspected criminal activities.
            A. The RTC begins its criminal investigation of Madison 
                    Guaranty
    The RTC began its investigation of criminal activities 
related to Madison Guaranty after the publication of an article 
on the front page of the New York Times on March 8, 
1992.220 The article, written by investigative reporter 
Jeff Gerth, reported that Governor Clinton, then a leading 
Democratic candidate for president, and his wife were partners 
with Mr. McDougal in the Whitewater real estate venture.
    Mr. Gerth's article caused several RTC officials to 
question whether Whitewater had caused any of the financial 
losses suffered by the failed Madison Guaranty S&L. Mr. Gerth 
had written that ``at times money from Mr. McDougal's savings 
and loan was used to subsidize'' Whitewater. Mr. Gerth also 
wrote:

          It was during the period that Whitewater was making 
        the Clintons' loan payments that Madison Guaranty was 
        putting money into Whitewater.
          For example, Whitewater's check ledger shows that 
        Whitewater's account at Madison was overdrawn in 1984, 
        when the corporation was making payments on the 
        Clintons' loan. Money was deposited to make up the 
        shortage from Madison Marketing, an affiliate of the 
        savings and loan that derived its revenue from the 
        institution, records also show.221

    After publication of the article, the criminal 
investigations unit in the RTC's office in Tulsa, Oklahoma--the 
office responsible for investigating possible crimes involving 
failed savings and loans in Arkansas--received requests to 
investigate Madison Guaranty and Whitewater from both the 
Office of Investigations in the RTC Washington, D.C. office and 
from the director of the Tulsa office.222 In any event, a 
criminal examination of Madison Guaranty had already been 
slated to commence in December, 1992.223
    In March 1992, Mike Van Valkenberg, the head of 
investigations in the Tulsa office, assigned Laura Jean Lewis 
to be the lead RTC criminal investigator on the case.224 
At the time, Ms. Lewis was the RTC's only criminal investigator 
with responsibility for savings and loans in Arkansas.225
    From March through August 1992, Ms. Lewis examined Madison 
Guaranty records stored in a warehouse in Little Rock. 226 
She retraced and analyzed the flow of funds between several 
checking accounts at Madison Guaranty, including the Whitewater 
account, the McDougals' personal account, and the accounts of 
several other McDougal-related companies. 227
    Ms. Lewis testified that the investigation uncovered 
``substantial evidence of bank fraud.'' 228 Specifically, 
Ms. Lewis found numerous instances in which the McDougals would 
write a check on the Madison Guaranty account of one of their 
various enterprises with insufficient funds to satisfy the 
draft and then deposit another check in that account, also 
written on insufficient funds, from another Madison Guaranty 
account. 229 Ms. Lewis observed that although many of 
checks had the word ``loan'' written on them, they were written 
on accounts lacking sufficient funds. 230 Ms. Lewis 
testified that through this ``elaborate check kiting scheme'' 
the McDougals ``float[ed] worthless checks among specific 
accounts [so as] to create the appearance of legitimate 
balances.'' 231
            B. The first RTC criminal referral: C0004
    In July 1992, the investigation was interrupted briefly 
when the RTC office in Tulsa was closed and its investigations 
unit merged with the Kansas City office. 232 Ms. Lewis 
accepted an offer to transfer to the Kansas City office. 
233
    By early August 1992, Ms. Lewis had begun to draft a 
criminal referral based upon her investigation of Madison 
Guaranty. 234 On August 31, 1992, the referral was 
completed and assigned the number C0004. 235 The referral 
was signed by Ms. Lewis, and her two immediate supervisors in 
the Kansas City office: Lee O. Ausen, the head of the Criminal 
Investigations Department, and L. Richard Iorio, the Director 
of Investigations. 236
    On September 1, 1992, Mr. Iorio sent Criminal Referral 
C0004 to Charles Banks, the U.S. Attorney for the Eastern 
District of Arkansas, 237 and to Steven Irons, Supervisory 
Special Agent (``SSA'') of the FBI Little Rock Field Office. 
238 In the accompanying transmittal letter to Mr. Banks, 
Mr. Iorio wrote that ``[c]ertain matters have come to our 
attention which may constitute criminal offenses under Federal 
law. Enclosed is a report of Apparent Criminal Irregularity.'' 
239 The referral was accompanied by several hundred pages 
of documentary exhibits consisting of copies of checks, account 
statements, and other bank records.
    Prior to its submission to the Justice Department, Criminal 
Referral C0004 was reviewed not only by Mr. Iorio and Mr. 
Ausen, but also by James Thompson, the Deputy Regional Director 
of the RTC's Kansas City office. 240 James Dudine, the 
Director of the Office of Investigations in the RTC's 
Washington, D.C. office, also reviewed the referral after it 
was submitted to the Justice Department. 241 Both Thompson 
and Dudine testified that they thought C0004 met the standard 
for issuance of a criminal referral--i.e., that there was a 
reasonable basis for believing that a crime has been committed 
or attempted. 242 Mr. Iorio, who signed the referral, 
testified that he thought the referral met and exceeded the 
prescribed standard. 243
    Criminal Referral C0004 was a 20-page, single-spaced 
description of ``numerous questionable cash flow and `loan' 
transactions'' occurring in 1984 and 1985 among a dozen 
companies controlled by the McDougals, including Whitewater 
Development Corporation. 244 The referral alleged that 
crimes may have been committed in the course of these 
transactions; that some of the McDougal's business associates 
may have been aware of the criminal activity; and that the 
suspected criminal activity may have cumulatively contributed 
to the failure of Madison Guaranty:

          The transactions reviewed and discussed herein will 
        allege excessive overdrafts resulting in unauthorized 
        loans, check kiting, possible forgery (or at the very 
        least, extensive use of unauthorized signatures), 
        potential misappropriation of funds, possible illicit 
        campaign contributions, diversion of loan proceeds, and 
        potential bank fraud; each of these actions, compounded 
        by the extended time frame during which they occurred, 
        lends [credence] to the probability that some or all of 
        the McDougal's business associates and partners, the 
        collective principals of these combined companies, had 
        knowledge of these activities. The extensive nature of 
        these activities could allegedly constitute ongoing 
        criminal and regulatory violations which lasted for a 
        period of three or more years, and could have 
        ultimately contributed to the failure of the 
        Association. 245

    The referral alleged that the McDougals and Lisa Aunspaugh 
(an employee of Susan McDougal's), had committed, among other 
crimes, bank fraud, in violation of 18 U.S.C. 1344, and 
conspiracy, in violation of 18 U.S.C. 371. 246 The 
referral named the President and Mrs. Clinton, Governor Jim Guy 
Tucker, former U.S. Senator J.W. Fulbright, Stephen Smith, and 
Greg Young, as potential witnesses to suspected criminal 
activity. 247 The referral also identified the Clintons, 
Mr. Tucker, and Mr. Smith as persons who had stood to benefit 
from the suspected criminal activity. 248
    Ms. Lewis identified the Clintons as possible witnesses 
because they ``were business associates and involved in the 
Whitewater Corporation with Mr. McDougal, and as such, I think 
I would have been imprudent in my job had I not listed them as 
witnesses because they were part of Whitewater and could have 
easily had knowledge of what Mr. McDougal was doing with those 
funds.'' 249 Mr. Iorio agreed with Ms. Lewis' decision to 
list the Clintons as possible witnesses. 250
    The referral indicated that, during the mid-1980s, at least 
10 checks were written on the Whitewater's account at Madison 
Guaranty and that five of the checks totalling over $60,000 
were written on insufficient funds.251 The referral also 
noted that these overdrafts were cured by funds supplied by 
other McDougal entities, and that Madison Guaranty did not 
impose any service charges or fees in connection with the 
overdrafts.252
            C. Betsey Wright informs Mrs. Clinton of the RTC criminal 
                    referral
    At about the time when Ms. Lewis was preparing Criminal 
Referral C0004, Mrs. Clinton learned of its existence. Betsey 
Wright, the former Chief of Staff to Governor Clinton, 
testified that in the fall of 1992, while she was working on 
the Clinton presidential campaign, she was informed, from a 
person she could not remember, of an RTC Criminal ``Referral 
about an S&L officer which would implicate the Clintons in 
Arkansas.'' 253 Ms. Wright testified that ``she went 
scrambling trying to find out what on earth they were talking 
about.'' 254 Ms. Wright called Bob Wilson, a criminal 
defense attorney in Little Rock, to determine whether she could 
obtain information about the referral but was told that such 
information would be confidential.255
    Ms. Wright testified that she spoke with Mrs. Clinton and 
asked ``if she was aware of any friend of theirs in the savings 
and loan business who might be under criminal investigation, 
and we couldn't think of anybody.'' 256 Although national 
media attention was focused on the McDougals, Madison Guaranty, 
and Whitewater during the 1992 campaign, Ms. Wright claimed 
that Mr. McDougal's name was not discussed during her 
conversation with Mrs. Clinton.257

II. Criminal referral C0004 languishes at the Justice Department

    After a criminal referral is submitted to the U.S. 
Attorney, he or she must determine whether it warrants further 
investigation or the initiation of criminal 
proceedings.258 When the U.S. Attorney declines to proceed 
with a criminal referral, a ``declination letter'' is sent to 
the RTC.259
    Although RTC Criminal Referral C0004 was submitted to the 
U.S. Attorney's Office in Little Rock on September 1, 
1992,260 no action was taken on the referral for more than 
one year. Finally, in October 1993, the new U.S Attorney in 
Little Rock, Paula Casey, a former student and campaign worker 
for President Clinton, declined this referral.261 The 
referral was also reviewed by Justice Department officials in 
Washington, D.C., where the President's close friend, Webster 
Hubbell, was the Associate Attorney General, the third-highest 
position in the Justice Department.
            A. The U.S. Attorney sends Criminal Referral C0004 to the 
                    main Justice Department
    On September 2, 1992, the U.S. Attorney's Office in Little 
Rock received Criminal Referral C0004.262 The U.S. 
Attorney's Manual directs that a U.S. Attorney send an ``Urgent 
Memorandum'' to the attention of the Attorney General whenever 
a sensitive matter arises.263 Although Criminal Referral 
C0004 identified Governor Clinton, then the Democratic nominee 
for President, his wife, and Jim Guy Tucker, then the 
Lieutenant Governor, as potential witnesses, Mr. Banks did not 
send an ``Urgent Memorandum'' or even report the receipt of the 
referral to the Justice Department in Washington, D.C. (``Main 
Justice'').264 Mr. Banks claimed that he did not notify 
Main Justice of the referral immediately because he lacked 
``confidence'' in the referral and wanted more evidence before 
notifying persons outside of Little Rock.265
    At about the same time, on September 17, 1992, White House 
Cabinet Secretary Edie Holliday asked Attorney General William 
Barr whether he was aware of any matter involving one of the 
presidential candidates.266 Ms. Holiday later told Mr. 
Barr that the matter she had heard about involved a failed 
savings and loan and the Clintons. Mr. Barr asked Ira 
Raphaelson, then-Special Counsel for Financial Institutions 
Crimes,267 to ascertain whether the Justice Department was 
handling such an investigation.268 Mr. Raphaelson 
initially informed the Attorney General that no such case 
existed within the Department.269
    After Mr. Barr made a second request, however, Mr. 
Raphaelson discovered that ``there had been a referral down in 
Arkansas, but it had not been reported. In fact, it appeared 
that the office had withheld it from [Justice Department] 
headquarters.'' 270 Mr. Barr testified that he was angry 
that the U.S. Attorney's Office in Little Rock had deliberately 
failed to inform him of the matter:

          I basically said I was very angry that a matter which 
        I viewed as a sensitive matter, that should have been 
        reported to the Attorney General, was deliberately 
        withheld from the Attorney General. So I was angry, and 
        expressed my displeasure, and said that I'd be 
        interested in knowing why an urgent report was not 
        prepared for me and why I was not advised of this case, 
        and why it had been deliberately withheld.271

    Mr. Barr testified that Criminal Referral C0004 definitely 
met the criteria for the issuance of an Urgent Report:

          The criteria is really anything which involves--well, 
        includes anything that involves a public personage, a 
        celebrity or any kind of sensitive case that can 
        involve, for example, public officials in the state, 
        those kinds of things. It's inconceivable to me that 
        any U.S. Attorney would not immediately understand that 
        this case would require an Urgent Report.272

 Mr. Barr instructed Mr. Raphaelson to ensure that the matter 
was kept in the strictest confidence to prevent any leaks and 
was handled solely based on its merits.273
    On October 7, 1992, Floyd Mac Dodson, First Assistant to 
Mr. Banks, informed Lawrence McWhorter, Director of the 
Executive Office of United States Attorneys, that the U.S. 
Attorney's Office had been ``sitting on the referral for six 
weeks,'' and that he ``thought some further investigation was 
needed.'' 274 The next day, Mr. McWhorter transmitted an 
Urgent Memorandum, along with a copy of Criminal Referral 
C0004, to Attorney General Barr, stating that ``[i]t is the 
belief of the U.S. Attorney's Office that further investigation 
into this matter is warranted.'' 275
    On the same day, SSA Irons also sent a teletype to SSA 
Kevin Kendrick at FBI headquarters in Washington informing him 
about Criminal Referral C0004.276 The FBI teletype listed 
then-Governor and Mrs. Clinton and then-Lieutenant Governor Jim 
Guy Tucker among the possible witnesses.277 The teletype 
explained the reason for identifying the Clintons as potential 
witnesses:

          The activities of McDougal as they may have involved 
        Bill or Hillary Clinton are related to Whitewater 
        Development Corporation, Inc. (WWD) James and Susan 
        McDougal and Bill and Hillary Clinton were partners in 
        WWD . . .. [Pages of the referral] discuss the check 
        kiting activity involving the WWD account at 
        MGSL.278

According to the teletype, Mr. Banks had informed the FBI that 
he intended to research the referral and analyze the 300 
documentary exhibits submitted by the RTC.279
    On October 8, 1992, officials from FBI Headquarters and 
Main Justice met to discuss Criminal Referral C0004.280 
Present at the meeting were Mr. Raphaelson; Robert Mueller, 
Assistant Attorney General, Criminal Division; 281 Fred 
Verinder, Deputy Assistant Director, Criminal Division, at FBI 
Headquarters; 282 Mr. Kendrick; and Thomas Kubic, Section 
Chief, Banking Crimes Unit. Mr. Mueller indicated that even 
though the referral on its face did not contain enough 
information for the Justice Department to render an opinion, 
the FBI should investigate the matter to determine whether the 
case had merit.283 As a result of the meeting, FBI 
Headquarters instructed its Little Rock Field Office to conduct 
a limited investigation into the matters described in the 
Criminal Referral C0004 and specifically directed the office to 
review the exhibits.284
    Although Mr. Bank assured the FBI that he would review the 
300 exhibits, neither he nor Mr. Dodson ever reviewed 
them.285 On October 16, 1992, Mr. Banks wrote to Donald 
Pettus, Special Agent in Charge of the FBI Little Rock Field 
Office, to inform him that the U.S. Attorney's Office would not 
participate in any investigation regarding Criminal Referral 
C0004 until after the 1992 presidential election.286 Mr. 
Banks indicated that he believed no prosecutable case existed 
against any of the witnesses, and that ``the only allegations 
having any credibility are against the McDougals and 
Anspaugh.'' 287
    On the same day, the FBI Little Rock Field Office also 
notified Mr. Kendrick at FBI Headquarters by teletype that the 
limited data ``may indicate criminal activity on the part of 
the captioned subjects, James and Susan McDougal, and Lisa 
Anspaugh. However, USA is holding opinion of prosecutive 
opinion regarding these subjects in abeyance.'' 288
    Based on the decision of the U.S. Attorney's Office to 
defer any prosecutorial consideration, the Field Office also 
adopted a non-investigative posture on Criminal Referral 
C0004.289
            B. Criminal Referral C0004 gets lost at the Justice 
                    Department
    Criminal Referral C0004 remained in the U.S. Attorney's 
Office until January 27, 1993, when Mr. Banks requested, in a 
letter to Donna Henneman, Ethics Program Manager at the 
Executive Office for U.S. Attorneys, that Main Justice assume 
responsibility for any further action.290 Mr. Banks 
believed that his office had a conflict of interest because of 
its unsuccessful criminal prosecution of Mr. McDougal in 
1990.291 Mr. Banks concluded that ``[a] limited 
preliminary investigation of allegations pertinent to Mr. and 
Mrs. McDougal and Ms. Anspaugh should be considered,'' and that 
interviews of these individuals should determine whether there 
is merit to further investigation.292
    On February 9, 1993, Anthony Moscato, Director of the 
Executive Office of United States Attorneys, forwarded Mr. 
Banks' request to Stuart Gerson, then Acting Attorney General, 
through Douglas Frazier, Principal Associate Deputy Attorney 
General.293 Mr. Frazier prepared a recusal package and 
sent it to the Criminal Division for its 
recommendation.294
    On February 22, 1993, Gerald McDowell, Chief of the Frauds 
Section at Main Justice, directed a young trial attorney, Mark 
MacDougall, to analyze the criminal referral.295 Just one 
day later, on February 23, 1993, without even reviewing the 300 
exhibits, Mr. MacDougal prepared a memorandum in which he 
concluded that Criminal Referral C0004 did not appear to 
warrant any criminal investigation.296
     Main Justice officials decided against rendering an 
opinion on the merits of the referral. Instead, Main Justice 
rejected Mr. Banks' request for recusal and returned the 
referral to Mr. Banks to let his office decide whether to 
investigate further or to decline prosecution.297
    On March 19, 1993, Acting Assistant Attorney General John 
Keeney prepared a memorandum for Mr. Frazier rejecting recusal:

          We have reviewed the material in the package and have 
        concluded that there is no identifiable basis for 
        recusal by the United States Attorney. Further, we 
        would not question a decision by the United States 
        Attorney to decline further substantive action on the 
        referral.298

Main Justice wanted Mr. Banks to make the ultimate decision on 
the referral. Allen Carver, Deputy Chief of the Fraud Section, 
Criminal Division, testified that the memorandum prepared by 
Mr. MacDougall did not constitute a conclusion by Main Justice 
not to prosecute the case,299 and that the matter was sent 
to the U.S. Attorney's Office for a determinative 
opinion.300
    Although Mr. Frazier believed that he should have received 
Mr. Keeney's memorandum in March, he did not receive it until 
the end of May or June, when it suddenly ``appeared out of 
nowhere.'' 301 Thus, for more than two months, Mr. Banks 
was not advised of Main Justice's decision to reject his 
request for recusal.302
    By May 1993, the U.S. Attorney's Office still had not sent 
a response to Ms. Lewis on whether a decision had been made to 
decline or prosecute Criminal Referral C0004. After Mr. Banks' 
resignation in March 1993,303 Ms. Lewis wrote to Acting 
U.S. Attorney Richard Pence in Little Rock to inquire about the 
status of the referral. Mr. Pence notified Ms. Lewis that the 
matter had been referred to Main Justice.304
    Ms. Lewis then contacted Ms. Henneman of the Executive 
Office for U.S. Attorneys to ask about the status of Criminal 
Referral C0004. After a number of inquiries, Ms. Henneman 
located, within the Fraud Section at Main Justice, the March 19 
memorandum declining Mr. Banks' request for recusal. Ms. 
Henneman then forwarded a copy of the memorandum to Mr. 
Frazier.305 Finally, in July 1993, Main Justice sent a 
package of materials, including the March 19 memorandum, to the 
U.S. Attorney's Office in Little Rock.306
    Mr. Pence discussed Criminal Referral C0004 with Assistant 
United States Attorney Fletcher Jackson.307 He took no 
other action. Mr. Jackson advised Mr. Pence that he wanted to 
review the referral exhibits to determine whether any of the 
Madison Guaranty transactions were related to his ongoing 
investigation of David Hale and Capital Management Services, 
Inc.308
    Although a decision on a criminal referral is usually 
issued within 60-90 days after submission, the U.S. Attorney's 
Office did not render a prosecutorial opinion on Criminal 
Referral C0004 until October 27, 1993--over one year after its 
submission--when Ms. Casey formally declined the 
referral.309 The length of time that it took for the 
referral to be acted upon was unusually long in the experience 
of Mr. Iorio and Ms. Lewis. Mr. Iorio testified that the normal 
time period for a United States Attorney to act on an RTC 
criminal referral was around 60 days;310 Ms. Lewis 
testified that she generally received responses within 30 to 45 
days.311
    The final decision to decline prosecution was made without 
anyone having reviewed the exhibits. Indeed, no one at the U.S. 
Attorney's office in charge of handling Criminal Referral C0004 
ever reviewed or analyzed the 300 exhibits.312

III. Interference with the RTC's ongoing investigation of Madison

    From May through August 1993, while Crminal Referral C0004 
was in the hands of the Justice Department, Ms. Lewis, at the 
express direction of her supervisors--Mr. Ausen and Mr. Iorio--
continued to investigate Madison Guaranty.313 RTC Kansas 
City investigators Mike Caron, Ed Noyes, and Randy Knight 
joined Ms. Lewis in this effort.314

      According to Ms. Lewis, this phase of the RTC's 
investigation uncovered:

          several transactions involving insider abuse, self-
        dealing, money laundering, embezzlement, diversion of 
        loan proceeds, payments of excessive commissions, 
        misappropriation of funds, land flips, inflated 
        appraisals, falsification of loan records and board 
        minutes, chronic overdraft status of various 
        subsidiaries, joint ventures and real estate 
        investments, regulatory violations of investments in 
        subsidiaries, wire fraud, and illegal campaign 
        contributions.315

As a result, the RTC prepared nine new criminal referrals 
concerning Madison Guaranty.316 These referrals were 
completed on September 24, 1993.317
    The 1993 referrals alleged the commission of crimes 
involving, among other things, bank fraud, conspiracy, false 
statements, false documents, wire fraud, aiding and abetting, 
and misuse of position.318 The nine referrals identified 
multiple suspects of criminal wrongdoing--including Mr. and 
Mrs. McDougal, several former Madison Guaranty officers and 
borrowers, Mr. Tucker, and the Bill Clinton Political Committee 
Fund.319 President and Mrs. Clinton were listed as 
witnesses in three referrals,320; Beverly Bassett 
Schaffer, the former Commissioner of the Arkansas Securities 
Department, was listed in one referral;321
    Criminal Referral #730CR0192 alleged that Mr. McDougal 
embezzled money from Madison Guaranty, by channelling it 
through the Whitewater account.322 In April 1985, Mr. 
McDougal transferred $30,000 from the Whitewater account at 
Madison Guaranty to former Senator J.W. Fulbright.323 As 
the balance of the Whitewater account was $270, this transfer 
caused the account to be overdrawn.324 Later that month, 
the overdraft was cured when Madison Financial deposited 
$30,000 into the Whitewater account.325 According to 
minutes of a Madison Financial Board of Directors' meeting, the 
$30,000 was supposedly a prepayment of Mr. McDougal's annual 
bonus.326
    The referral stated that ``the unauthorized prepayment of 
McDougal's annual bonus was simply a method to allow McDougal 
to embezzle funds through manipulation of the accounts which he 
controlled. He clearly used the White Water account to pay his 
unknown obligation to J.W. Fulbright and schemed to deprive 
Madison Financial Corporation of funds to reimburse the White 
Water account.'' 327
    President and Mrs. Clinton were listed as potential 
witnesses to suspected criminal activity.328 Ms. Lewis 
testified that the Clintons were included as potential 
witnesses because, as owners of the closely-held Whitewater 
corporation, they might ``have had knowledge of what was going 
on with the finances of their corporation.'' 329
    A second referral, number 730CR0196, alleged that ``James 
B. McDougal, and MGS&L shareholder and former Director, Charles 
Peacock III, . . . conspired to misappropriate thrift funds for 
the purpose of making illegal campaign contributions to the 
benefit of Arkansas Governor Bill Clinton.'' 330 The 
referral named Mr. McDougal, Mr. Peacock, and the Bill Clinton 
Political Committee Fund as criminal suspects.331
    The referral identified four $3,000 checks, all of which 
were dated April 4, 1985, drawn on Madison Guaranty accounts, 
and deposited in the Bill Clinton Political Committee account 
at the Bank of Cherry Valley.332 The first check was 
written by Mrs. McDougal on the McDougals' personal checking 
account at Madison Guaranty and made payable to the ``Bill 
Clinton Political Committee.'' 333 The second check, a 
Madison Guaranty cashier's check purchased in the name of J.W. 
Fulbright, was also made payable to the ``Bill Clinton 
Political Committee.'' 334 The referral alleged that this 
check was funded by a check issued by Flowerwood Farms, one of 
the McDougals' companies.335
    The third and fourth checks were each $3,000 cashier's 
checks drawn on Madison Guaranty. The checks were purchased in 
the names of Ken Peacock and Dean Landrum, respectively, and 
made payable to Bill Clinton.336 The referral alleged that 
former Madison Guaranty director Charles Peacock III, the 
father of Ken Peacock and the business partner of Mr. Landrum, 
purchased these checks by diverting part of the proceeds of a 
$50,000 Madison Guaranty loan.337 The three cashier's 
checks were numbered sequentially--Q2496, Q2497 and Q2498--
338, and Mr. Landrum's first name, Dene, was misspelled on 
the check.339
    The referral further suggested that Mr. McDougal may have 
received benefits from then-Governor Clinton in exchange for 
$6,000 in campaign contributions. The referral observed that 
during the month the $3,000 checks were written, Mrs. Clinton, 
then a partner in the Rose Law Firm, had sent a letter to the 
Arkansas Securities Department seeking approval of Madison 
Guaranty's plan to issue a class of preferred stock.340 
The referral noted that the plan was approved the next month by 
the Arkansas Securities Commissioner, Beverly Bassett Schaffer, 
who had been appointed to her post by then-Governor 
Clinton.341 The referral also remarked that Madison 
Guaranty's request for approval to issue preferred stock came 
at a time when Madison Guaranty was badly in need of additional 
capital.342
    The referral named both Mrs. Clinton and Ms. Schaffer as 
possible witnesses.343
    Ms. Lewis believed that ``there was a very strong 
possibility of a quid pro quo in the selection of Ms. Bassett 
into [her] position'' 344 and that ``there was a 
possibility of a quid pro quo situation'' with respect to 
``Mrs. Clinton and the Rose firm representing Madison.'' 
345
    The nine referrals were submitted to the Justice Department 
on October 8, 1993. 346
    The verdicts in the McDougal and Tucker trial prove that 
actual criminal activity was identified in the RTC referrals. 
On August 17, 1995, a federal grand jury convened in the 
Eastern District of Arkansas returned a twenty-one count 
indictment against Mr. and Mrs. McDougal, and Governor Tucker 
alleging conspiracy, bank fraud, mail fraud, wire fraud, 
misapplication of funds, and the making of false statements and 
false entries.347 The Office of the Independent Counsel 
(``OIC'') prosecuted the three defendants and, on May 28, 1996, 
after a lengthy trial, a jury in Little Rock convicted Mr. 
McDougal on 18 of 19 counts in the indictment, Mrs. McDougal on 
four counts, and Governor Tucker on two counts.348
    Many of the felony counts on which the defendants were 
convicted were based on suspected criminal activity identified 
in the RTC referrals. Count one of the indictment, a criminal 
conspiracy charge on which both Mr. McDougal and Governor 
Tucker were convicted, involved a $260,000 loan obtained by Mr. 
Tucker from Madison Guaranty and the ``flip'' of property at 
1308 Main Street in Little Rock. This count closely tracked 
allegations made in RTC Criminal Referrals #730CR0190 and 
#730CR0198.349 The jury also convicted Mr. McDougal on 
charges of misapplication of funds (counts 17 and 18) and 
making false record entries (count 19) related to the land flip 
at 1308 Main Street--the suspected crime described in Criminal 
Referral #730CR0198.350
    Three additional charges on which Mr. McDougal was 
convicted--count 5 (mail fraud), count 6 (fraud), and count 7 
(false statement), tracked the suspected criminal activity 
identified in Criminal Referral #730CR0199. That referral 
outlined suspected crimes committed by Mr. McDougal in 
connection with his development of resort property on 
Campobello Island, off the coast of New Brunswick, 
Canada.4
---------------------------------------------------------------------------
    \4\ Another suspect identified in the referral, Larry Kuca, pleaded 
guilty to a misdemeanor charge of conspiracy to misapply funds.
---------------------------------------------------------------------------
    Finally, five of the counts on which the jury returned 
guilty verdicts--counts 1, 13, 14, 15, and 16--related to a 
fraudulent $300,000 loan made to Mrs. McDougal's company, 
Master Marketing, from Capital Management Services.351 The 
proceeds of that loan were tracked in the first Madison 
Guaranty referral, Criminal Referral C0004.
    Despite the proven success of the Kansas City 
investigators' efforts, they encountered a concerted effort to 
hamper their investigative efforts. Both Ms. Lewis and Mr. 
Iorio testified that obstacles were placed in the way of the 
RTC's investigation into Madison Guaranty and Whitewater. Ms. 
Lewis ``believe[d] there was a concerted effort to obstruct, 
hamper and manipulate the results of our investigation of 
Madison.'' 352
    Mr. Iorio shared that view.353 He also described as 
``unprecedented'' the ``scrutiny that had been focused on the 
efforts of preparing the referrals and the subsequent review of 
the referrals.'' 354 He explained:

          Through this arduous process, the Kansas City office 
        of investigations has been subjected to an alteration 
        of the work environment that included instigation of 
        special procedures, a new review critique mechanism, a 
        slow down of information flow, information leaks, and 
        for us, Jean Lewis, Lee Ausen, and myself, the 
        uncertainty of being placed on administrative leave, 
        without prior notification to RTC investigations 
        management in Washington, D.C. At that point, the 
        review of our work appeared to be more than an effort 
        to confirm or deny our findings. Instead, it appeared 
        that three of us had become the messengers of unwanted 
        news, and if history serves as a guide, are often the 
        targets of attack meant to deflect attention from the 
        information the messengers bring.355

    Part of the pattern of intimidation, interference, and 
outright obstruction was the subjecting of the second set of 
criminal referrals to an unprecedented written ``legal review'' 
by the Professional Liability Section (``PLS'') of the RTC. The 
second set of nine criminal referrals related to Madison 
Guaranty were completed and signed by September 24, 1993, and 
the Kansas City RTC investigators had planned to send the 
referrals to the Justice Department on October 1, 1993.356
    On September 30, 1993, however, Julie Yanda, the Chief of 
the Professional Liability Section 5 in the RTC Kansas 
City office, demanded that her staff be given the opportunity 
to conduct a ``legal review'' of the referrals.357 Ms. 
Lewis was concerned that the review was ``a delay tactic,'' 
358 and, on October 4, 1993, she shared her concerns with 
RTC Regional Inspector General Dan Sherry.359
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    \5\ The RTC's Professional Liability Section was responsible for 
handling civil claims relating to the legal liability of professionals, 
such as accountants, appraisers, and attorneys. (Lewis, 10/30/95 Dep. 
p. 125.)
---------------------------------------------------------------------------
    Two senior RTC PLS attorneys, Karen Carmichael and Philip 
Adams, prepared this so-called ``legal review''--a 13-page 
memorandum, dated October 7, 1993, and addressed to Ms. 
Yanda.360 For each referral, the memorandum posed between 
six and 12 brief questions stemming from the authors' 
``concerns'' about the referrals.361 The memorandum did 
not answer or analyze the questions it raised. And, it offered 
no suggestions for revising the referrals, gave no conclusions 
about the referrals, and contained no recommendations with 
respect to what action the RTC should take.362
    On October 8, 1993, PLS provided its legal review to the 
criminal investigators,363 and the nine referrals were 
submitted to the United States Attorney's Office.364 Thus, 
the only effect of this legal review was to delay the 
submission of the referrals by one week. The referrals were 
submitted exactly as they had been written prior to the PLS 
review.365
    Ms. Lewis and Mr. Iorio both described PLS's request to 
delay the submission of criminal referrals for a legal review 
as ``unprecedented.'' 366 According to Ms. Lewis, PLS had 
never before reviewed any other criminal referrals prepared by 
the Kansas City criminal investigations unit.367 Mr. Iorio 
similarly testified that ``[t]he request to do a critique of 
the referrals, that was the first time this had happened and it 
was with regard to the nine Madison criminal referrals.'' 
368 He also stated that subsequent referrals were not 
reviewed prior to their submission in all cases.369
    Ms. Yanda claimed that her request for a legal review of 
the Madison Guaranty referrals was based on a June 17, 1993 RTC 
memorandum on the handling of criminal referrals.370 That 
memorandum stated: ``[e]xcept in rare circumstances, criminal 
referrals shall be reviewed by RTC Investigations and Legal 
Division Criminal Coordinators before they are delivered to the 
U.S. Attorney and the FBI or any other investigative agency.'' 
371
    Other RTC officials had a different view of the June 17, 
1993 memorandum than Ms. Yanda. Mr. Iorio did not read the 
memorandum to require that the submission of criminal referrals 
be delayed pending PLS's review. According to Mr. Iorio, under 
the June 17 memorandum, PLS was ``to be provided with a copy of 
any outgoing criminal referrals for their review as a means to 
exchange information, but you are not dependent upon them 
critiquing your referrals and telling you it's all right to 
send them.'' 372 Mr. Iorio's understanding was based on 
conversations with Mr. Dudine and Carl Gamble, the criminal 
coordinator in the RTC Washington, D.C. office, who he 
understood to have authored the memorandum.373 Also, 
Kenneth Donahue of the RTC Office of Investigations in 
Washington, D.C., told Ms. Yanda that he helped draft the June 
17, 1993 memorandum, and that it had not been intended that PLS 
would prepare legal reviews of all referrals prior to their 
submission to the Justice Department.374
    Soon after the nine new criminal referrals were sent to the 
U.S. Attorney's Office, Ms. Lewis began to encounter more 
difficulties in conducting the Madison Guaranty investigation. 
In October 1993, Ms. Lewis was removed from the Madison 
Guaranty ``communications loop'' by the PLS criminal 
coordinator. 375 That same month, Mr. Iorio advised Ms. 
Lewis that PLS personnel had complained that she communicated 
directly with the U.S. Attorney's Office and the FBI in Little 
Rock, concerning Madison Guaranty. 376
    On November 9, 1993, at the direction of Ms. Yanda, Ms. 
Lewis was removed from the position as lead investigator on the 
Madison Guaranty criminal case. 377 According to Mr. 
Iorio, ``[t]here was some friction between Jean and Julie's 
criminal coordinator, Karen Carmichael, and Julie came to me 
and asked me to remove Jean.'' 378 When asked about this 
meeting, Ms. Yanda claimed that she ``laid out for Mr. Iorio a 
series of events that had troubled me greatly concerning Ms. 
Lewis and her failure to act as a team member and work with the 
legal division in concert to try to move matters along 
successfully to the benefit of the RTC.'' 379
    Mr. Iorio and Mr. Ausen told Ms. Lewis that she was being 
removed from the Madison Guaranty investigation ``to avoid me 
taking a bullet I didn't deserve.'' 380 On November 10, 
1993, Ms. Lewis wrote in an e-mail, ``[j]ust a heads up to let 
you know that Mike Caron, Senior Criminal Investigator, is now 
the lead investigator on Madison . . . The Powers that Be have 
decided that I'm better off out of the line of fire (and I 
ain't arguing).'' 381
    The removal of Ms. Lewis from the Madison Guaranty 
investigation was only part of a larger pattern of interference 
by senior officials in the RTC's investigation. April Breslaw, 
a PLS attorney, was at the center of this effort. Throughout 
1994, Ms. Breslaw sought to discourage RTC employees from 
investigating Madison Guaranty and informed RTC investigators 
that senior RTC officials preferred that any such investigation 
reach a certain outcome.
    Ms. Breslaw's first contact with Madison Guaranty was in 
1989. In March 1989, Ms. Breslaw--then an attorney in the FDIC 
Directors and Officers Liability Section--retained the Rose Law 
Firm to handle a malpractice suit against Madison Guaranty's 
former independent accountants, Frost & Company. 382 In 
January 1990, Ms. Breslaw was detailed to the RTC's 
Professional Liability Section. 383 In April 1991, the 
Frost case was settled. 384 In January 1994, Ms. Breslaw 
was put on a team of RTC attorneys reviewing Madison civil 
claims. 385 In March 1994, Ms. Breslaw recused herself 
from the Madison case. 386
    In late 1993 and early 1994, after public allegations arose 
that the Rose Law Firm had a conflict of interest, Ms. 
Breslaw's decision to hire the Rose Law Firm to represent the 
FDIC (and later the RTC) came under considerable scrutiny. 
387 In September 1993, Sue Schmidt, a Washington Post 
reporter, contacted Ms. Breslaw about Rose's representation of 
the RTC. 388 Later that fall, the FDIC Legal Division 
commenced a review of the hiring of the Rose Law Firm for the 
Frost case. 389 The Office of Investigations in the Kansas 
City RTC office also began that fall to examine Madison civil 
issues, including Rose Law Firm conflicts issues. 390 In 
January 1994, the RTC Office of Contractor Oversight and 
Surveillance also started to investigate Rose conflicts issues. 
391
    On January 12, 1994, Ms. Breslaw sent an e-mail message to 
Mr. Iorio and James Thompson, the Vice President of the Kansas 
City RTC office responsible for investigations. 392 In the 
e-mail, Ms. Breslaw stated that ``[i]t's my understanding that 
Kansas Investigations has attempted to evaluate the decision to 
hire the Rose Law Firm to represent the government against 
Frost & Co.'' 393 She then attempted to persuade Mr. 
Thompson and Mr. Iorio to call off the investigation:

          [Y]ou should be aware that the FDIC is conducting its 
        own investigation of this matter. Trial attorneys from 
        their Special Litigation unit are in the process of 
        both evaluating relevant documents and interviewing 
        witnesses. By all indications, this project is being 
        handled in a professional manner. . . . In light of all 
        of this, I suggest that Investigations discontinue its 
        inquiry into this matter. 394

    Within days of sending this e-mail, Ms. Breslaw warned RTC 
investigator Gary Davidson against pursuing an investigation of 
Madison, saying that certain RTC managers would take a ``dim 
view'' of such an investigation.395 In a February 18, 1994 
memorandum addressed to Mr. Iorio, Mr. Davidson recounted his 
conversation with Ms. Breslaw:

          On January 11, 1994, you requested that I conduct a 
        preliminary investigation into Madison Guaranty, for 
        possible Civil Fraud claims. . . . On January 13th or 
        14th, I called the assigned PLS attorney, April 
        Breslaw, for the purpose of asking whether she knew of 
        any fraudulent activity that was not addressed in the 
        Criminal Referrals.
          Before I could ask my intended question, April asked 
        if I was conducting an investigation into Madison 
        Guaranty. After acknowledging that I was, she indicated 
        that what she was about to tell me was being stated as 
        politely as she could. April felt that I should know 
        there are some RTC people in management positions that 
        would take a ``dim view'' of me investigating Madison 
        Guaranty. She also advised that I should be very 
        careful of who I talk to and what I say, because of the 
        people associated with Madison Guaranty.396

    Mr. Davidson came to Mr. Iorio within a few days after he 
had received Ms. Breslaw's warning that RTC management ``would 
take a `dim view' of [him] investigating Madison Guaranty.'' 
397 Mr. Iorio told Mr. Davidson to memorialize what Ms. 
Breslaw had said because he ``thought it was very unusual.'' 
398 Mr. Davidson interpreted Ms. Breslaw's comments as 
``definitely a threat.'' 399
    Ms. Breslaw recalled a conversation with Mr. Davidson but 
denied telling him that some RTC managers would take a ``dim 
view'' of him investigating Madison.400 She remembered 
only cautioning Mr. Davidson about speaking to the 
press.401 But Ms. Breslaw's testimony is contradicted by a 
July 12, 1994 memorandum she wrote to RTC Deputy General 
Counsel Andrew Tomback. In that memorandum, Ms. Breslaw 
admitted that she had told Mr. Davidson that some people 
``would take a dim view'' of an investigation in Rose Law Firm 
conflicts issues:

          Gary called me in 1994 to quiz me about the Rose Law 
        Firm. In response, I reminded Gary that the FDIC had 
        taken responsibility for evaluating Rose Firm conflicts 
        and that it was not appropriate for RTC Kansas 
        investigations to go further into that matter. I 
        believe I told Gary that the senior people would take a 
        dim view of further Kansas inquiry into Rose Law Firm 
        conflicts issues.402

    On February 2, 1994, at the direction of Mark Gabrellian, 
Counsel for the Legal Division of the RTC, Ms. Breslaw traveled 
to the Kansas City RTC Office of Investigations to review 
Madison documents in connection with the RTC's recently 
reopened Madison civil investigation.403 That afternoon, 
Ms. Breslaw and Ms. Lewis spoke for approximately 40 
minutes.404 Ms. Lewis recorded their conversation.6 
On the tape, a speaker who Ms. Lewis identified as Ms. Breslaw 
stated:

    \6\ Ms. Lewis testified that she did not intend to record the 
conversation initially. She testified that the tape recorder turned 
itself on, and that at some point during the conversation she noticed 
that it was on but chose to continue the recording. (Lewis, 10/30/95 
Dep. pp. 157-158, 196-197.)
    Ms. Breslaw was unaware that the conversation was being recorded. 
(Breslaw, 11/30/95 Hrg. p. 69.)
    Ms. Lewis turned the original tape over to the Office of the 
Independent Counsel (``OIC'') on March 31, 1994. (Lewis, 10/30/95 Dep. 
p. 241.) The OIC produced a copy of the tape to the Special Committee 
on November 20, 1995.
---------------------------------------------------------------------------
          I think if they can say it honestly, the head 
        people--Jack Ryan and Ellen Kulka, would like to be 
        able to say ``Whitewater did not cause a loss to 
        Madison.'' We don't know, you know, what Fiske is going 
        to find and we don't offer any opinion on it. But the 
        problem is nobody has been able to say to Ryan and 
        Kulka, ``Sure say that, that's fine.'' 405

At the time, Mr. Ryan was the RTC's CEO and Ms. Kulka was its 
General Counsel.
    Ms. Breslaw also was recorded saying:

          Well, you know, as I say--I feel self-conscious 
        asking that, because in some ways it is kind of a silly 
        question. But it's the kind of thing, they're looking 
        for what they can say, and I do believe they want to 
        say something honest, but I don't believe at all, and I 
        don't want to suggest at all, that they want us to move 
        to certain conclusions. I really don't get that 
        feeling. But there are answers they would be happier 
        about, you know, because it would get them, you know, 
        off the hook, you know, and that would sense 
        Whitewater. So that is why we keep getting asked the 
        same things.406

In Ms. Lewis's view, ``it is clear that Ms. Breslaw was there 
to deliver a message that `the people at the top would like to 
be able to say Whitewater did not cause a loss to Madison.' '' 
407
    Ms. Breslaw initially denied having made this statement to 
Ms. Lewis. On March 24, 1994, Representative James A Leach 
stated on the floor of the House of Representatives that ``[o]n 
February 2, 1994, the day Roger Altman briefed the White House 
on Madison Guaranty, April Breslaw, RTC Senior Attorney, 
visited the Kansas City office and said that Washington would 
like to say that Whitewater caused no losses to Madison.'' 
408 7 That same day, Ms. Breslaw sent an e-mail to several 
persons within the RTC, saying ``[a]s you may know, Congressman 
Leach made a statement regarding the so-called `Whitewater' 
affair on the floor of the Congress today. At one point he made 
specific reference to me. I want you to know that I 
categorically deny making the statement which he attributed to 
me. . . . I did not say that anyone from Washington `would like 
to say ' anything.'' 409
---------------------------------------------------------------------------
    \7\ Ms. Lewis testified that because she believed ``there was an 
effort underway to control, manipulate and even obstruct the Madison 
investigation,'' she met with Rep. Leach on February 18, 1994, and 
played the tape for him. (Lewis, 11/29/95 Hrg. p. 23); (Lewis, 10/30/95 
Dep. p. 236.)
---------------------------------------------------------------------------
    On March 25, 1994, the day after Representative Leach made 
his statement, Ms. Breslaw met with Ms. Kulka and Assistant 
General Counsel Thomas Hindes to discuss Representative Leach's 
statement. The notes of Ms. Kulka's secretary, Wilma 
Lekan,410 reflect that at the meeting Ms. Breslaw stated 
that she had discussed Whitewater with Ms. Lewis and mentioned 
both Ms. Kulka and Mr. Ryan but denied saying that the two 
wanted a particular outcome:

          April said that she told Jean that we had been 
        getting inquiri[es] in Washington about Whitewater. She 
        said she told her that Ellen and Jack Ryan had been 
        getting inquiries (she said that she was thinking of 
        the tolling agreements and the D'Amato letter.) April 
        said that this was the only point where she mentioned 
        Ellen Kulka and Jack Ryan.
          April says that she denies saying that Ellen Kulka or 
        Jack Ryan wanted a particular outcome or wanted the 
        loss numbers to be anything.411

    Before the Special Committee, Ms. Breslaw recalled speaking 
to Ms. Lewis on February 2, 1994,412 but she claimed that 
she did not recall making the statement that ``if they can say 
it honestly, the head people, Jack Ryan and Ellen Kulka, would 
like to be able to say Whitewater did not cause a loss to 
Madison.'' 413 8
---------------------------------------------------------------------------
    \8\ In prior testimony, Mr. Ryan has stated that he has no 
recollection of indicating to anyone at the RTC that he would prefer to 
be able to say that Whitewater did not cause losses to Madison. (Ryan, 
6/21/95 Dep. p. 42.) Ms. Kulka has also testified that she never 
indicated to Ms. Breslaw that she would prefer to be able to say that 
Whitewater did not cause a loss to Madison. (Kulka, 6/23/95 Dep. p. 
31.)
---------------------------------------------------------------------------
    Ms. Breslaw claimed that she was ``not sure'' whether it 
was her the voice on the tape recording.414 She 
implausibly testified that ``I don't know what my voice sounds 
like on the tape, or on a tape,'' 415 and that ``I guess 
all I can say is that I don't know what I sound like on tape.'' 
416 She finally admitted ``I have no reason to think that 
this is not my voice.'' 417
    In an e-mail dated June 28, 1994, Ms. Breslaw expressed 
concern about any production of documents to the Senate related 
to her conversation with Ms. Lewis:

          I have the impression that we're in the midst of 
        producing doc's to the Senate banking committee in 
        anticipation of the hearing scheduled for the end of 
        July. If anybody is considering producing anything that 
        has anything to do with my conversation with Jean 
        Lewis, I'd like to talk about whether its responsive to 
        the committee's request. It's my understanding that the 
        Senate rejected amendments which might have brought 
        this incident into the scope of the hearings.418

    On August 15, 1994, the three Madison investigators were 
placed on administrative leave for two weeks.419 The RTC 
took this action without any warning or explanation. On that 
fateful day, after Mr. Ausen and Mr. Iorio arrived at work, 
they were summoned to an office and told that they had been 
placed on administrative leave.420 The three investigators 
then were escorted to their offices and finally out of the 
building.421 They were told to stay off RTC 
property.422 Their offices were locked and sealed.
    On the night of August 15, Ms. Lewis, then in the hospital, 
received a call from Edward Noyes, a member of the Madison 
investigative team, who advised her Mr. Iorio and Mr. Ausen had 
been placed on administrative leave.423 Mr. Noyes told her 
that ``the purge has begun.'' 424 He telephoned later to 
let Ms. Lewis know that she had also been placed on 
leave.425
    The three Madison investigators each received an identical 
one-page memorandum, dated August 12, 1994, from Mr. 
Hindes.426 The memorandum stated ``[y]ou are hereby placed 
on Administrative Leave to be effective immediately upon 
receipt on August 15, 1994'' but offered no explanation for the 
adverse employment action.427 Although the August 12th 
memorandum indicated that ``[i]f you have any questions you may 
contact Randi L. Mendelsohn, Chief, Employee Relations, OHRM 
[Office of Human Resource Management],'' Ms. Mendelsohn refused 
to advise Mr. Iorio's counsel why he had been placed on 
administrative leave.428 Ms. Mendelsohn refused offers to 
have Mr. Iorio answer questions, provide documents, answer 
charges, or otherwise provide assistance.429 According to 
Ms. Lewis, the three were not contacted for interviews or 
information.430
    On August 29, 1994, Mr. Iorio, Mr. Ausen, and Ms. Lewis 
were told to return to work.431 The three still did not 
receive any explanation for why they were put on administrative 
leave.432
    The RTC never provided an explanation to Ms. Lewis, Mr. 
Ausen and Mr. Iorio, although Mr. Iorio believed the action was 
related to the Madison investigation.433
    In August 1994, Mr. Iorio and Ms. Lewis through counsel 
requested that the RTC OIG investigate the matter.434 John 
J. Adair, the Inspector General of the RTC, testified that in 
August 1994 his office received requests from attorneys for two 
or three of the Madison investigators and from Mr. Ryan to 
investigate the matter.435
    On the Friday before the administrative leave of the three 
Madison investigators was to end, Mr. Adair, received a 
telephone call from Andrew Tomback, Assistant General Counsel, 
and RTC attorney Erica Cooper, 436 who ``indicated to me 
that perhaps my office would want to, my agents would want to 
search the offices of the three individuals.'' 437 Mr. 
Adair told Mr. Tomback and Ms. Cooper that such a search 
``didn't seem to be an appropriate thing for us to do absent 
any really good reason to do that.'' 9 438
---------------------------------------------------------------------------
    \9\ Patrick I. Noble, the former Deputy Assistant Inspector General 
for the RTC, testified that Mr. Adair advised him of this conversation. 
(Noble, 10/20/95 Dep. pp. 33-34.) Mr. Noble recalled that Mr. Adair had 
said that ``it was not appropriate for the Inspector General's office 
to search those offices, and I believe he said he didn't believe there 
was any basis for that.'' (Noble, 10/20/95 Dep. p. 28.) Mr. Noble added 
that Mr. Adair's response was that a search would have been 
``[i]nappropriate in the sense [that] there was no legal basis for 
it.'' (Noble, 10/20/95 p.28).
---------------------------------------------------------------------------
    Before the RTC OIG could proceed with the investigation, 
the OIC advised that inquiry by the RTC IG into the 
administrative leave matter would interfere with the his 
work.439 Accordingly, the RTC OIG suspended its 
investigation.

IV. Paula Casey delays her recusal from Madison, handles the Hale pleas 
        negotiations, and declines to prosecute Criminal Referral C0004

            A. Investigations of Capital Management and David Hale
    During the summer of 1993, even before the RTC submitted 
its second set of criminal referrals relating to Madison 
Guaranty, the U.S. Attorney's Office for the Eastern District 
of Arkansas began investigating David Hale, a Little Rock 
municipal judge who owned a Small Business Investment 
Corporation (``SBIC'') called Capital Management Services, Inc. 
(``CMS''). Mr. Hale was accused of fraudulently obtaining SBA 
loans.
    On July 20, 1993, the date of Vincent Foster's death, the 
FBI obtained a search warrant and seized loan documents from 
Mr. Hale's CMS offices. Some of the documents contained 
references to Mr. Tucker, as well as a $300,000 loan to Mrs. 
McDougal d/b/a Master Marketing.440 As a result of 
information obtained in its investigation of Mr. Hale, by 
August 20, 1993, the Little Rock FBI had opened a separate 
fraud investigation of Mr. Hale and Mr. McDougal.441
    The SBA certified CMS as a Specialized SBIC on March 14, 
1979.442 Over the next 14 years, the SBA examined CMS 
eleven times.443 Although five examinations found no 
improprieties, six identified various areas of regulatory 
concern. Specifically, the SBA raised concerns about CMS's 
financing of businesses that did not qualify as socially or 
economically disadvantaged.444 The SBA also faulted CMS 
for lending to businesses that were controlled by Mr. Hale's 
associates.445
    In late 1992, despite its spotty compliance record, CMS and 
Mr. Hale applied for $6 million in additional leverage from the 
SBA.446 Mr. Hale represented to the SBA that he had a 
$13.8 million increase in CMS assets 447 in the form of 
non-cash assets that investors had provided to CMS.448 On 
October 28, 1992, the SBA rejected Mr. Hale's application for 
financing, and requested additional information relating to 
donated assets. Mr. Hale then informed the SBA that the donated 
assets consisted of $11.5 million in medical receivables of an 
investment pool and $2.3 million in stock of a company named 
National Building Supply.449 On December 8, 1992, the SBA 
gave Mr. Hale conditional approval for the capital increase--
that is, to accept the donated assets.450 The SBA, 
however, informed Mr. Hale that the assets could only be used 
for regulatory purposes--i.e, to support the $6 million in 
additional financing--until the assets were converted to cash 
and their value had been validated.451
    On February 19, 1993, at Mr. Hale's request, Wayne Foren, 
then the SBA's Associate Administrator for Investment, met with 
Mr. Hale in Washington, D.C. to withdraw his application for 
additional SBA financing for CMS.452 According to Mr. 
Foren: ``In other words, he wanted the problem to go away. He 
didn't want to answer the questions of where did the assets 
come from.'' 453 But Mr. Foren persisted in questioning 
Mr. Hale about the donated assets: ``And I said David, why 
would anybody give you tens of millions of dollars worth of 
assets? Doesn't make sense. . . . Either these assets are not 
worth the represented value, in which case you are perpetrating 
a fraud on SBA, or you are being bribed.'' 454
    Mr. Hale told Mr. Foren that he was close to the current 
governor of Arkansas, Jim Guy Tucker, and to President Clinton, 
455 and ``[t]hat he had access to both.'' 456 ``His 
answer was people gave him the money, would give him the money 
because he could do things for them in Arkansas.'' 457 Mr. 
Hale elaborated that an individual, who was interested in 
starting an insurance company in Arkansas, had put money into 
CMS by routing the funds through the Central Arkansas Community 
Development Corporation, a non-profit corporation.458 The 
money was given to Mr. Hale for ``[g]etting things done in 
Arkansas'' and to ``solve problems.'' 459 When Mr. Foren 
expressed concern over the arrangement, Mr. Hale replied, 
``well, Wayne, you have to understand this is the way we do 
business in Arkansas.'' 460
    Mr. Foren found Mr. Hale's statements regarding his 
relationship with Governor Tucker and President Clinton to be 
credible.461 Indeed, in May 1993, after Mr. Foren had 
referred the case to the SBA Inspector General (``SBA IG'') for 
further investigation, Mr. Hale called Mr. Foren and requested 
that he attend a meeting with Governor Tucker and a 
representative of the Arkansas Development Finance 
Authority.462 Mr. Foren declined to attend the meeting 
because ``[i]t is inappropriate for me to attend a meeting on 
this kind of a subject called by David Hale while we're--we 
have made a referral for investigation of his company.'' 
463
    On March 11, 1993, the SBA issued a regulatory compliance 
report on CMS that ``raised questions relative to the donated 
assets and the values'' on those assets.464 Specifically, 
the report identified the source of the $11.5 million 
investment pool certificate as an offshore company incorporated 
in the Grand Cayman Islands.465 According to Mr. Foren, 
the mysterious source of the assets raised ``another red flag'' 
for regulators.466 In addition, the SBA determined from 
documents that National Building Supply filed with the 
Securities and Exchange Commission that the stock donated to 
CMS was worthless; National Building Supply was 
bankrupt.467 On March 26, 1993, as a result of the 
examination report, the SBA sent Mr. Hale an examination letter 
468 disclosing the results of the examination and 
requiring Mr. Hale to provide additional information and/or 
take corrective action.469 On April 20, 1993, Mr. Hale 
responded that he disagreed with the conclusions and findings 
of the examination.
    On May 5, 1993, Mr. Foren referred the matter to the SBA IG 
for investigation.470 Arnold Hawkins, the SBA's Regional 
Inspector General, 471 determined that the case would 
require considerable investigative resources.472 Because 
the SBA IG did not have an office in Little Rock, Mr. Hawkins 
and other SBA officials decided to refer the matter directly to 
the FBI on May 20, 1993.473
    The FBI then proceeded to investigate CMS and Mr. Hale. On 
June 14, 1993, the FBI requested that the SBA provide documents 
concerning CMS and Mr. Hale.474 On July 20, 1993, the FBI 
obtained a search warrant for CMS records.475 The next 
day, the subpoena was served and loan documents were seized 
from the CMS offices.476 Some of the documents contained 
references to Mr. Tucker, while others referred to the $300,000 
CMS loan to Susan McDougal d/b/a Master Marketing.477
    On September 23, 1993, a grand jury indicted Mr. Hale on 
various federal charges relating to the operation of CMS. Mr. 
Hale has since pleaded guilty to two federal charges and he 
cooperated with the investigation by the OIC into alleged 
criminal conduct arising from the operation of CMS, Whitewater, 
and Madison. 478
            B. Plea negotiations with David Hale
    In May 1993, while the SBA and FBI were investigating Mr. 
Hale, President Clinton nominated Ms. Casey to be the new U.S. 
Attorney for the Eastern District of Arkansas. Ms. Casey had no 
prior prosecutorial experience, 479 but she had close ties 
to the President and Mrs. Clinton. She worked on Clinton 
gubernatorial campaigns 480, attended a law school class 
taught by President Clinton, and participated in a law clinic 
with Mrs. Clinton. 481 Governor Clinton also had appointed 
Ms. Casey to a special commission along with Mrs. Clinton, for 
the development of a new court system and a new juvenile law 
code, and to a separate juvenile advisory group. 482
    In addition, Ms. Casey was a longtime personal friend of 
Mr. and Mrs. Tucker. She had lobbied Governor Tucker's office 
in 1993 on behalf of the Arkansas Bar Association. 483 Ms. 
Casey's husband also had worked on Governor Tucker's political 
campaigns and had donated money to him. 484
    A short time before Ms. Casey took office on August 16, 
1993, 485 Randy Coleman, a Little Rock attorney 
representing Mr. Hale, met with Assistant U.S. Attorney 
Fletcher Jackson. 486 Mr. Coleman testified that he met 
with Mr. Jackson ``to try to determine what was happening since 
I didn't know at that point in time. I'd had very little 
opportunity to visit with my client to educate myself at that 
point.'' 487
    Several days later, Mr. Coleman met with Mr. Jackson again. 
488 Mr. Coleman expressed concern about the timing of the 
indictment of Mr. Hale and whether there would be any time for 
negotiations. 489 At this second meeting, Mr. Coleman told 
Mr. Jackson that Mr. Hale could offer the government 
information that might lead the U.S. Attorney's Office to Mr. 
McDougal and possibly to Governor Tucker and President Clinton. 
490 Mr. Coleman recalled that he specifically identified 
potential areas for cooperation: Madison Guaranty Savings & 
Loan, James McDougal, Susan McDougal, Master Marketing, 
President Clinton, Governor Tucker, Castle Water & Sewer, 
Southloop Construction Company and Campobello Realty. 491 
Mr. Coleman was also certain that he mentioned Whitewater to 
Mr. Jackson. 492
    Mr. Jackson recalled that Mr. Coleman told him that Mr. 
Hale could help him ``get Tucker,'' and that President Clinton 
might have some involvement in the Hale transactions. 493 
Based on his investigation of the CMS loan files, Mr. Jackson 
was aware that the Hale investigation might lead to Governor 
Tucker and President Clinton:

        [I]f I recall the correct words were--that I used were 
        that, from Hale, the path would lead to Mr. McDougal, 
        and then the road would divide, one branch would 
        possibly go over to Mr. Tucker, and the other branch 
        would go over possibly to Whitewater and the Clintons. 
        494


Mr. Jackson refused, however, to enter into any plea 
negotiations until Ms. Casey took office. 495
    After Ms. Casey was confirmed, Mr. Jackson briefed her on 
the Hale investigation. 496 He advised her that he planned 
to continue his investigation of other matters involving Mr. 
Hale that might ultimately lead to Madison Guaranty, the 
subject of the first RTC criminal referral. Mr. Jackson also 
informed Ms. Casey that Mr. Tucker might be a target or a 
witness in that investigation, 497 and that the RTC 
expected to make additional criminal referrals relating to 
Madison Guaranty. 498
    Ms. Casey admitted that ``Fletcher told me that his 
continued investigation of the David Hale matter could possibly 
involve Governor Tucker. I don't know that he told me 
specifically what that involvement might be.'' 499 But, 
Ms. Casey denied that Mr. Jackson advised her of the specific 
list of persons about whom Mr. Hale might offer evidence. 
500
    On September 7, 1993, Mr. Coleman met with Ms. Casey to 
discuss a possible plea negotiation for Mr. Hale. 501 In 
exchange for his cooperation, Mr. Coleman initially requested 
that Mr. Hale be granted immunity or charged with a 
misdemeanor. 502 Ms. Casey insisted that Mr. Hale enter a 
plea to an unspecified felony in exchange for a possible 
sentence reduction depending on the nature of the information 
offered. 503
    Mr. Coleman testified that he informed Ms. Casey that Mr. 
Hale had information regarding important Arkansas political 
figures. 504 According to Mr. Coleman, he specifically 
provided Ms. Casey with the names of President Clinton, 
Governor Tucker, Madison Guaranty, James McDougal, Susan 
McDougal, Castle Sewer & Water, Southloop Construction Company, 
Campobello Realty and Whitewater. 505 Mr. Coleman 
understood that Ms. Casey and Mr. Johnson ``had already talked 
with Fletcher and they were aware of some of these things 
[names of areas of possible cooperation] before I got there * * 
*.'' 506
    Mr. Coleman further testified that he also offered to make 
an informal or an ``attorney'' proffer. 507 In an 
``attorney proffer,'' Mr. Coleman would essentially provide a 
more detailed summary of evidence Mr. Hale might offer. 
508 Mr. Coleman testified that the government could have 
accepted his informal proffer without granting immunity to Mr. 
Hale: ``If I make an informal proffer to you through counsel 
and give you an idea of what is available, the negotiation can 
carry forward in some form from this point. I'm trying to get a 
dialogue started with these people, and I'm not getting 
anywhere.'' 509 Ms. Casey nonetheless gave no response to 
Mr. Coleman's offer for an informal proffer at the meeting or 
during the following week. 510
     Ms. Casey had a markedly different recollection of the 
September 7 conversation. She claimed that Mr. Coleman provided 
no names or concrete information,10 but merely 
``insinuated that Mr. Hale could give information about people 
who were too big for me to prosecute.'' 511 She did not 
inquire further about the ``big people'' because ``[i]t may 
have piqued my interest but my understanding of the way the 
process works is that his client should proffer his testimony 
to an agent for evaluation.'' 512 Ms. Casey claimed that 
even though she met with Mr. Jackson several times after her 
meeting with Mr. Coleman, she still never inquired about the 
``big people.'' 513
---------------------------------------------------------------------------
    \10\ On August 17 and 19, 1993, approximately two weeks before his 
meeting with Ms. Casey, Mr. Coleman discussed with Associate White 
House Counsel William Kennedy the federal investigation of Mr. Hale. 
(Coleman, 11/9/95 Dep. pp. 63-65; Coleman, 12/1/95 Hrg. pp. 10-16; 
Kennedy, 12/05/95 Hrg. pp. 11-16).
    Mr. Kennedy's contemporaneous notes of the two conversations 
clearly indicate that Mr. Coleman mentioned President Clinton, Mr. 
Tucker, Madison Guaranty, Whitewater, Southloop and Castle Grande. This 
documentary evidence adds further credibility to Mr. Coleman's version 
of the September 7, 1993 meeting.
---------------------------------------------------------------------------
    On September 15, 1993, after not hearing from Ms. Casey for 
a week, Mr. Coleman wrote to her to confirm that he had 
received no response to his offer of an informal 
proffer.514 The letter stated:

          I have offered an informal proffer of Mr. Hale's 
        information for evaluation of its quality and content, 
        but have reached absolutely no interest in the 
        process.515

Ms. Casey sent back a letter stating that plea negotiations 
were at ``an impasse''--reiterating the government's insistence 
that Mr. Hale plead guilty to a felony.516
    On September 20, 1993, Mr. Coleman sent another letter to 
Ms. Casey, in which he reiterated that he had provided a list 
of names to Mr. Jackson.517 When asked about this letter, 
Ms. Casey denied again that she ever received any specific 
names from Mr. Coleman, and claimed that the letter did not 
prompt her to discuss the matter with Mr. Jackson.518 Mr. 
Johnson similarly claimed that Mr. Coleman never offered any 
specific information during plea negotiations.519
    Thus, according to Mr. Coleman, he (1) provided specific 
names to Mr. Jackson and Ms. Casey--including the President and 
Governor Tucker--as areas of cooperation; (2) offered Ms. Casey 
an informal or attorney proffer; and (3) reiterated in writing 
that he had offered an informal proffer and given specific 
areas of cooperation. Yet, Ms. Casey did not notify Main 
Justice of, or express any interest in Mr. Coleman's overtures.
    Because of Ms. Casey's unwillingness to enter into plea 
negotiations, Mr. Coleman suggested in his September 15th 
letter that Ms. Casey recuse herself from the case: 520

          I cannot help but sense the reluctance in the U.S. 
        Attorney's office to enter into plea negotiations in 
        this case. . . I cannot help but believe that this 
        reluctance is borne out of the potential political 
        sensitivity and fallout regarding the information which 
        Mr. Hale would provide to your office, but at the same 
        time it is information which would be of substantial 
        assistance in investigating the banking and borrowing 
        practices of some individuals in the elite political 
        circles of the State of Arkansas, past and present. . .
          Would it not be appropriate at this point for your 
        office to consider terminating participation in this 
        investigation and to bring in an independent 
        prosecutorial staff, who are not so involved with the 
        histories and personalities and circumstances of this 
        case? 521

Mr. Coleman believed that Ms. Casey's recusal was appropriate 
because of her extensive involvement in Arkansas politics:

          I knew Paula had been active in the political arena 
        over the years. I knew her husband had. I think, at 
        least it was my impression, that all of us were fairly 
        aware at that point in time that there were some 
        substantially prominent folks involved here.
          You could look at the receipt on the search warrant 
        and the nature of the records that the FBI seized from 
        Mr. Hale's office and certainly gather at least that 
        Mr. Tucker's name was prominently displayed. 522

However, according to Ms. Casey, she did not need to recuse 
herself because Mr. Coleman did not proffer any specific 
information.523 Mr. Johnson seconded Ms. Casey's 
position.524
    By this time, Ms. Casey knew that Governor Tucker was 
referenced in both the Hale investigation and the ongoing 
Madison investigation.525 In addition, as early as August, 
Ms. Casey told Mr. Jackson that if the U.S. Attorney's Office 
prosecuted Governor Tucker or if the anticipated set of RTC 
referrals named Governor Tucker, she would have to recuse 
herself.526
    Ms. Casey never discussed Mr. Coleman's request for plea 
negotiations or immunity with Main Justice or notified Main 
Justice of information that Mr. Coleman said Mr. Hale could 
proffer.527 Even though Mr. Jackson told her that ``there 
was the potential that [Hale] could lead to some people,'' Ms. 
Casey claimed that ``for that matter I suppose every loan file 
at SBIC was a potential defendant.'' 528
    On September 17, 1993, New York Times reporter Jeff Gerth 
contacted a high ranking Justice Department official, Irv 
Nathan, Associate Deputy Attorney General,529 and an FBI 
Little Rock Field Agent, Robert M. Satowski, to inform them of 
his interview with Mr. Hale.530 Mr. Gerth told them that 
Mr. Hale was prepared to furnish specific information about 
sensitive matters, possibly involving the Clintons, including 
information about a $300,000 loan to Mrs. McDougal that was 
funneled to Whitewater Development Corporation.531
    On the same day, FBI Little Rock sent a teletype to FBI 
Director Louis Freeh about Mr. Hale's allegations. The teletype 
indicated that ``Gerth alluded that this was why the United 
States Attorney Casey would not deal with Coleman when he was 
attempting to work out a suitable deal for his client.'' 
532 In a separate memorandum, dated September 21, 1993, to 
FBI Director Freeh, Mr. Keeney outlined the substance of Mr. 
Hale's allegations that Mr. McDougal and then-Governor Clinton 
``encouraged Hale to provide funds to Madison Guaranty, prior 
to the audit, to bring the Whitewater loans acceptably up to 
date. Thereafter Hale, through his Small Business Investment 
Corporation, lent $300,000 to Susan McDougal, dba Madison 
Marketing.'' 533
    Meanwhile, on September 20, 1993, after learning of Mr. 
Hale's allegations about President Clinton, Mr. Keeney met with 
other high ranking officials at Main Justice to discuss the 
need for Ms. Casey to recuse herself from both the SBA fraud 
case against Mr. Hale and the investigation into Mr. Hale's 
allegations about Governor Tucker, the McDougals and President 
Clinton, as well as Criminal Referral C0004 relating to Madison 
Guaranty.534 Mr. Keeney, Principal Deputy Attorney 
General, Gerald McDowell, Chief of Frauds Section, and Joseph 
Gangloff, Chief of the Public Integrity Section, all agreed 
that Ms. Casey should recuse herself from the matter.535
    According to Mr. Gangloff, the criteria for recusal include 
past personal, political or financial relationships between the 
United States Attorney and the subject of an investigation. In 
fact, the mere appearance of a conflict justifies 
recusal.536 According to Mr. Gangloff, Main Justice 
officials knew Ms. Casey was close to President Clinton and, 
thus, she ``obviously'' should recuse herself under the 
circumstances.537 Mr. Gangloff was ``surprised'' that Ms. 
Casey had not advised Main Justice of Mr. Hale's allegations 
about the President, and believed that Main Justice should have 
been involved in the case sooner.538
    Mr. Keeney also believed Ms. Casey ``certainly should not 
be involved in the matter'' because ``she was the U.S. Attorney 
in Little Rock, Arkansas. She was appointed by the Clinton 
Administration. And we had a situation where somebody who was 
under investigation was suggesting . . . that he had 
information which would implicate the President who appointed 
her.'' 539 Mr. Keeney testified that it was important to 
him that ``she would in fact recuse herself, and that she would 
not be involved in taking any sort of proffer from David Hale'' 
or make any more substantive decisions on the case.540 Mr. 
Carver and Mr. McDowell also agreed.541
    At the time, Mr. Keeney based his opinion solely on the 
fact that Ms. Casey was appointed by President Clinton.542 
Mr. Keeney testified that although Ms. Casey may have ``said 
something'' about her relationship with Governor Tucker, she 
did not disclose the nature of her relationship with President 
Clinton.543 Ms. Casey did not disclose her August 
conversation with Mr. Jackson about the expected set of new 
referrals that might involve Governor Tucker or the fact that 
the Hale investigation would likely involve Madison 
Guaranty.544
    Mr. Keeney called Ms. Casey and told her that she should 
recuse herself from the Hale and Madison matters.545 Mr. 
Keeney expressed his opinion in ``strong terms.'' 546 Even 
though Mr. Keeney was Acting Assistant Attorney General and Ms. 
Casey was a newly appointed U.S. Attorney with no prior 
prosecutorial experience, she refused his advice to recuse 
herself.547 Mr. Keeney recalled that Ms. Casey told him: 
``Well, she said, in essence, I'm a fair person, I'm a person 
of integrity, I can handle this, this matter as my oath of 
office requires me to do so.'' 548
    According to Mr. Keeney, Ms. Casey told him that she 
``would have to think about'' recusal.549 Ms. Casey did 
not recall that she was considering recusing herself at the end 
of the conversation.550 Mr. Johnson opposed recusal by the 
office.551 Ms. Casey never contacted Mr. Keeney again to 
discuss the recusal matter.552
    During the same September 20th conversation with Mr. 
Keeney, Ms. Casey ``indicated that Coleman refused to make a 
proffer to the office in Little Rock because he didn't trust 
them.'' 553 Accordingly, Mr. Keeney thus advised Ms. Casey 
to convey to Mr. Coleman that he could make the proffer to Main 
Justice.554 Mr. Gangloff similarly testified that he 
understood that Ms. Casey would send a letter to Mr. Coleman to 
inform him that he had ``recourse to Washington'' and could 
make a proffer to Main Justice; he recalled ``detailed 
discussions'' about ensuring that Mr. Coleman knew about this 
option.555
    Ms. Casey did not recall any such request by Mr. Keeney. 
Although Ms. Casey did not dispute Mr. Keeney's recollection, 
she claimed that Mr. Keeney may have directed Mr. Johnson, not 
her, to relay this information to Mr. Coleman.556 Mr. 
Johnson also believed that Mr. Keeney may have suggested that 
he advise Mr. Coleman of Mr. Hale's recourse to Main Justice.
    Neither Ms. Casey nor Mr. Johnson followed Mr. Keeney's 
direction to inform Mr. Coleman that he had the option of 
dealing with Main Justice. None of the letters that Ms. Casey 
or Mr. Johnson sent to Mr. Coleman on September 20 or 21, 1993 
advised Mr. Coleman that he could contact directly Main Justice 
if he did not trust the U.S. Attorney's Office.557
    Ms. Casey and Mr. Johnson both admitted that they did not 
convey Mr. Keeney's message to Mr. Coleman.558 Mr. Coleman 
similarly testified that no one from the U.S. Attorney's Office 
ever informed him that he could speak to someone at Main 
Justice.559
    On September 23, 1993, the Arkansas Democrat-Gazette 
published Hale's allegations involving President Clinton, Mr. 
McDougal and Governor Tucker.560 That same day, the grand 
jury indicted Mr. Hale on two counts of conspiracy and two 
counts relating to the submission of false statements to the 
SBA.561
            C. Ms. Casey's declination of Criminal Referral C0004
    Even after her September 20, 1993 discussion with Mr. 
Keeney, Ms. Casey continued to participate actively in the Hale 
and Madison Guaranty investigations. By August 20, 1993, the 
FBI Little Rock Field Office had opened an investigation of Mr. 
McDougal and Mr. Hale as a result of information developed 
during the investigation of Mr. Hale.562 In July or August 
of 1993, an investigation was launched involving Dean Paul, 
Ltd. and Castle Grande and touching on Madison Guaranty and Mr. 
McDougal.563
    On September 24, 1993, only four days after Mr. Keeney 
advised Ms. Casey to recuse herself, FBI agents met with Ms. 
Casey to discuss the investigation of Madison Guaranty and Mr. 
Hale, as well as whether Ms. Casey should recuse herself from 
these matters because of her close ties to Governor Tucker, 
Seth Ward and Stephen Smith.564 According to SSA Irons, he 
and Mr. Jackson told Ms. Casey that her ``good friends'' were 
either subjects or material witnesses of the ongoing 
investigations.565 Ms. Casey admitted that they discussed 
allegations involving President Clinton and the 
McDougals.566 SSA Irons indicated in a memorandum, 
memorializing the meeting, that Ms. Casey stated that she would 
need to recuse herself from the matter because of her close 
friendship with Governor Tucker, Mr. Ward and Mr. 
Smith.567
    Ms. Casey agreed with SSA Irons' account except with 
respect to Mr. Ward. She testified, ``I told them that if the 
investigations led to Governor Tucker, that I would recuse. I 
don't know Seth Ward. I am an acquaintance of Steve Smith's.'' 
568
    Yet, once again, Ms. Casey did not provide the Special 
Committee with any real reason for her sudden change of mind 
regarding her recusal. Ms. Casey claimed that at the time of 
this meeting, she ``realized'' that the investigation had 
progressed to a point that ``there was a real'' possibility 
that Governor Tucker would become a subject of the 
investigation.569 Ms. Casey claimed that even though she 
knew that she had to recuse herself, she still had to decide 
the ``best time'' to do so.570 Mr. Johnson continued to 
urge Ms. Casey against recusal.571
    For some unknown reason, despite her conversation with Mr. 
Keeney only four days before, Ms. Casey did not advise 
officials at Main Justice that she had changed her position on 
recusal.572
    In addition, on October 5, 1993, after a briefing on the 
Hale investigation, the Director of the FBI indicated to senior 
FBI officials that he wanted Ms. Casey to recuse 
herself.573
    For the balance of September and October, Ms. Casey took no 
steps to recuse herself from the Hale or Madison investigations 
or her office.574 Rather, Ms. Casey continued to 
participate in the investigation and, amazingly, even attended 
a plea negotiation meeting with Mr. Coleman on October 21, 
1993.575 Mr. Keeney testified that once Ms. Casey had 
decided to recuse herself, ``she should not be making any 
decisions with respect to the matter.'' 576 Thus, as of 
September 24, 1993, Ms. Casey should not have participated in 
any way in the Hale and Madison investigations.
    When pressed about her continued involvement in such 
matters, Ms. Casey claimed that even though she ``knew I was 
going to recuse myself,'' she still wanted to wait for the 
receipt of the new referrals. She explained: ``If there was a 
case against--if there was a case against Tucker or Steve 
Smith, that's what I was going to do. And I expected those 
referrals to give me that.'' 577
    On October 8, 1993, the RTC forwarded nine new criminal 
referrals concerning Madison Guaranty to the U.S. Attorney's 
Office in Little Rock.578 Ms. Casey reviewed the second 
set of referrals.579 According to Ms. Casey, ``when the 
referrals came in, I probably talked with Michael again about 
the fact that they were there, that the names were there and I 
needed to recuse.'' 580 Mr. Johnson still advised Ms. 
Casey not to recuse herself from the case.581
    Again, Ms. Casey did not contact any official at Main 
Justice either to notify them that Governor Tucker was a target 
of an investigation or to inform them of her ``recusal.'' 
582 Ms. Casey offered no coherent reason for not advising 
Main Justice immediately, claiming only, ``I was waiting to 
talk--I was going to the orientation in November. I wanted to 
talk to someone at the Department of Justice whose opinion I 
could also trust.'' 583
    In September and October 1993, while Main Justice and FBI 
were urging Ms. Casey to recuse herself, the Little Rock U.S. 
Attorney's Office took no action on the first RTC Referral, 
number C0004. Ms. Casey testified that when she first read 
Criminal Referral C0004 in late August or September of 1993, 
she probably noticed Governor Tucker, Mr. McDougal and 
President Clinton were mentioned. But, the only action she took 
was to place the referral back into ``the vault.'' 584
    On October 27, 1993--over a year after the RTC had sent the 
referral to the U.S. Attorney's Office and at least two months 
after she first read it--Ms. Casey formally declined 
prosecution on Criminal Referral C0004.585 It is unclear 
why Ms. Casey believed that it was appropriate for her to make 
a substantive decision on the referral when she knew that she 
was going to recuse herself. Mr. Keeney testified that issuing 
the declination letter was a ``substantive decision'' that 
someone who supposedly had recused herself from the case should 
not have made.586
    Ms. Casey could not explain why she did not defer action on 
the first referral until after she had recused herself from the 
new set of referrals--which either had already arrived at the 
U.S. Attorney's Office or would arrive shortly thereafter: ``It 
was just a question of closing the books on the particular 
referral. Because, in my opinion, the books had already been 
closed on it. It was just a matter of relating that decision to 
the RTC.'' 587
    Even more peculiar, Ms. Casey's declination letter gave the 
impression that Main Justice had decided to decline the 
referral: ``I concur with the opinion of the Department 
attorneys (emphasis added) that there is insufficient 
information in the referral to sustain many of the allegations 
made by the investigators or to warrant the initiation of a 
criminal investigation.'' 588 In fact, Main Justice had 
not made any decision on the referral, but had returned it to 
the Little Rock office.
    When confronted with the fact that she reviewed the March 
19, 1993 memorandum from Mr. Keeney to Mr. Frazier prior to 
sending the declination letter, Ms. Casey admitted that she 
made the ``decision'' to decline prosecution on the 
referral.58911 Mr. Carver, Principal Deputy Chief of Fraud 
Section, Criminal Division, was ``amazed'' when he read a press 
article stating ``Paula Casey didn't participate in the 
decision making with regard to C0004'' because he knew she had 
been involved in the decision to decline the referral.590 
Moreover, Justice Department officials testified that the 
referral was returned to the U.S. Attorney's Office earlier in 
1993 for a decision,591 and that Main Justice never 
reviewed the declination letter before Ms. Casey sent 
it.592
---------------------------------------------------------------------------
    \11\ Q: Well, when you pulled the referral, you saw that the 
referral, in fact, had not been acted upon in Washington but had been 
returned to Little Rock for purposes of a final decision; correct?
    A: No, that's not the way I look at it--my view of that at the time 
was that it had been acted upon in the sense that it had been reviewed 
and that the opinion of the Department was it was not a good referral 
and should not be prosecuted. But that decision had never been relayed 
to RTC.
    Q: Didn't the memo actually indicate that although there would be 
no objection if the Little Rock office declined prosecution, it was to 
be a decision left in the hands of the Little Rock U.S. Attorney's 
office?
    A: That's what--that was--after I pulled Keeney's memo back out 
that was what I saw in his memo.
    Q: So you understood?
    A: Would not question the decision to decline, but there was no 
reason for the office to be recused.
    Q: So it became your decision; right?
    A: Yes.(Casey, 11/01/95 Dep. p. 183).
---------------------------------------------------------------------------
    Neither Ms. Casey nor Mr. Johnson, her First Assistant, 
ever reviewed the exhibits to the referral prior to declining 
prosecution. 593 Mr. Carver believed that Ms. Casey should 
have conducted an independent review of the evidence prior to 
declining Criminal Referral C0004.
    As of early November 1993, as Main Justice was 
``vigorously'' pursuing allegations about Mr. Hale, the 
McDougals and Mr. Ward 594, Ms. Casey still had not 
contacted Main Justice about her recusal.
    On November 3, 1993, Philip Heymann, Deputy Attorney 
General, called Ms. Casey to a meeting with other high ranking 
DOJ officials for the purpose of persuading Ms. Casey that she 
should recuse herself. 595 Mr. Heymann told Ms. Casey that 
she should recuse herself. This view was expressed by all 
Justice Department officials in attendance. 596
    Even though Ms. Casey earlier explained that her reason for 
not recusing herself immediately after reviewing the second set 
of referrals was that she needed to receive advice from a 
Justice Department official whom she could trust, Ms. Casey 
told Mr. Heymann that she would ``think it over'' and get back 
to them. 597 As of the end of the meeting, Ms. Casey still 
had not committed to recusal. 598
    Thus, notwithstanding the advice of the Deputy Attorney 
General and other high-ranking Justice Department officials, 
Ms. Casey still waited another two days before she finally 
recused herself on November 5, 1993. 599
    On November 9, 1993, the day after Ms. Casey's formal 
recusal, Mr. Keeney announced that Donald Mackay, a career 
prosecutor for the Justice Department, would lead the 
investigation of Mr. Hale and Madison Guaranty. 600 Mr. 
Mackay subsequently entered into plea negotiations with David 
Hale. 601 On January 3, 1993, Mr. Mackay sent a letter to 
Mr. Coleman outlining what the Justice Department would require 
as the terms of a proffer agreement. 602 After Special 
Counsel Fiske was appointed in January 1994, he entered into 
negotiations with Mr. Hale, and Mr. Hale entered a plea 
agreement on March 19, 1994.603

      Part II: White House Intervention in Federal Investigations

    Throughout the conduct of the various inquiries relating to 
Whitewater, Madison, and other matters relating to the 
Clintons, the White House engaged in a clearly discernible 
pattern of improper contacts, undue interference and, at times, 
outright obstruction with respect to the federal 
investigations.
    The pattern of abuse began with attempts to use the 
resources of the White House, especially the White House 
Counsel's Office, to gather as much information as possible on 
the pending investigations. The Office of the White House 
Counsel, in effect, served as Clintons' private law firm 
defending their personal interests. Beyond the impropriety of 
such diversion of public resources, attempts by White House 
lawyers to obtain information compromised the integrity of the 
federal investigations.
    The interests of the United States with respect to these 
investigations were potentially adverse to the private 
interests of the Clintons as witnesses or potential targets. 
Yet, whenever possible, White House lawyers obtained 
confidential information relating to the progress of the 
investigations and prospects for prosecution. The White House 
lawyers not only used the information to defend the private 
interests of the Clintons, but also shared the improperly 
obtained confidential information with the Clintons' private 
lawyers directly to assist in the coordinated defense effort.

I. White House Contacts Relating to Investigations of Madison and David 
        Hale

            A. The White House receives information on the ongoing SBA 
                    investigation of Mr. Hale
    In early May 1993, SBA Associate Administrator Wayne Foren, 
a career SBA employee, contacted Erskine Bowles, President 
Clinton's nominee for SBA Administrator, to discuss the 
agency's ongoing investigation of Capital Management Services 
and David Hale.604 According to Mr. Foren, he called Mr. 
Bowles on May 3, 4 or 5--right before Mr. Bowles' 
confirmation.605 Mr. Foren contacted Mr. Bowles because 
Mr. Hale, the president of CMS, had claimed to have access to 
President Clinton, Governor Jim Guy Tucker, and Arkansas 
Senator Dale Bumpers, then the chairman of the Senate Small 
Business Committee.606
    Mr. Foren realized the sensitivity of the matter and, 
accordingly, concluded that the only means to answer questions 
he had about the operations of CMS was to make ``a referral to 
the Office of the Inspector General so that they could proceed 
on an investigation and in an attempt to obtain the 
information.'' 607 According to Mr. Foren, ``[k]nowing 
that Erskine's confirmation hearing was imminent, I felt it was 
appropriate that he be briefed on this issue.'' 608 After 
Mr. Foren told Mr. Bowles about the case, Mr. Bowles ``agreed 
that the transfer [of the case to the Inspector General] should 
occur prior to the confirmation and that he wanted a briefing 
paper.'' 609 Mr. Foren referred the matter to the 
Inspector General on May 5, 1993.610
    At Mr. Bowles' instruction, Mr. Foren then prepared a 
briefing paper entitled ``Capital Management Services, Inc, 
Little Rock, Arkansas, License No. 06/06-5207.'' 611 The 
document outlined David Hale's 1992 application for additional 
funds from the SBA and stated that the value of the donated 
assets Mr. Hale used to justify additional funds from the SBA 
was ``questionable.'' 612 The briefing paper noted that 
``the matter has been referred to the Inspector General for 
investigation.'' 613 Mr. Foren provided the briefing paper 
to Kris Swedin, the SBA's Assistant Administrator for 
Congressional Relations.614 In Mr. Foren's view, the Hale 
investigation was ``very sensitive'' and ``very important.'' 
615
    On May 7, 1993, Mr. Bowles was confirmed as SBA 
Administrator.616 After Mr. Bowles' confirmation, Mr. 
Bowles advised Mr. Foren that he had briefed White House Chief 
of Staff, Thomas ``Mack'' McLarty, a longtime friend of the 
President, on the status of the CMS case.617 Mr. Foren 
advised his deputy, Charles Shepperson, of Mr. Bowles' 
communication of information to Mr. McLarty.618 Mr. 
Shepperson confirmed this account:

          My recollection was that Wayne had come back from a 
        meeting with Mr. Bowles on a subject I can't remember, 
        he had come back and said that Erskine had taken him 
        aside and indicated that he had spoken to Mr. McLarty, 
        and that Mr. McLarty had indicated that we should just 
        do what you normally do in situations like 
        this.619

    Mr. Bowles testified that he could not specifically deny 
Mr. Foren's and Mr. Shepperson's account, although Mr. Bowles 
could not recall Mr. Foren briefing him on CMS in May 
1993.620 He recalled that Mr. Foren and others briefed him 
at the Old Executive Office Building on SBA programs; he was 
not certain of the date, but believed that the briefing did not 
occur between May 4 and May 7.621 He remembered at some 
point being told that the Hale/CMS matter had been referred to 
the Inspector General or the Justice Department.622 He did 
not recall seeing the briefing paper that Mr. Foren used to 
brief him in May 1993.623
    In addition, Mr. Bowles did not recall advising Mr. Foren 
that he had spoken with Mr. McLarty about the CMS 
referral.624 Mr. Bowles recalled, however, that he saw Mr. 
McLarty on the morning of his confirmation hearing, when he 
visited the White House.625 Indeed, Mr. McLarty's schedule 
for May 6, 1993, contained the following entry: ``Erskine 
Bowles & his family will be touring the West Wing and will be 
stopping in very briefly to say hello some time around 8:45-
9:00 a.m.'' 626
    More important, Mr. Bowles saw Mr. McLarty on May 7, 1993, 
the date of his confirmation. According to Mr. Bowles, ``I saw 
Mack again, I believe on the 7th, the day I was actually 
confirmed by the Senate. And at that time, I went over there to 
get my marching orders, how should I go forward, how should I 
report, what do I do.'' 627 Mr. McLarty's schedule for May 
7, 1993 confirmed that, at 1:00 p.m., he had a meeting with Mr. 
Bowles.628 Yet, Mr. Bowles denied that he discussed not 
discuss CMS with Mr. McLarty. ``I don't believe I've ever 
discussed Capital Management with Mack McLarty.'' 629
    On May 19, 1993, Mr. Foren again briefed Mr. Bowles on CMS, 
when the SBA initiated foreclosure and liquidation proceedings 
against Capital Management.630 According to Mr. Foren, 
``[t]he event that occurred between the 5th and the 19th was an 
event where Capital Management defaulted on debentures, and we 
were then going to proceed to foreclose collateral and throw 
the company into liquidation.'' 631 Mr. Foren provided Mr. 
Bowles with a revised version of his earlier briefing paper, 
entitled ``Capital Management Services, Inc, Little Rock, 
Arkansas, License No. 06/06-5207, May 19, 1993.'' 632
    On August 5, 1993, Mr. Shepperson received a copy of a 
draft indictment of Mr. Hale from the U.S. Attorney's Office in 
Little Rock.633 He sent the draft indictment to Mr. 
Foren.634 On August 9, Mr. Foren sent yet another 
memorandum to Mr. Bowles on the progress of the investigation 
and attached a copy of the draft indictment to the 
memorandum.635 The memorandum, designated ``Privileged and 
Confidential,'' was signed by Mr. Foren and Deputy General 
Counsel Martin D. Teckler and addressed to Erskine 
Bowles.636
    Mr. Bowles did not recall receiving Mr. Foren's August 9 
memorandum,637 although ``Wayne very well could have sent 
it to me.'' 638
    In September 1993, Mr. Foren provided another briefing to 
Mr. Bowles about the Hale/CMS investigation, this time to 
advise him that Mr. Hale's indictment was imminent.639 Mr. 
Foren also provided Mr. Bowles with a memorandum,640 dated 
September 21, 1993, advising that on September 20, 1993, the 
SBA had closed CMS's bank accounts and seized its 
assets.641 The memorandum further advised that the U.S. 
Attorney's office is ``scheduled to make a presentation to the 
Grand Jury on Tuesday, September 21, 1993, at 3:00 p.m. and 
[is] expecting indictments to be returned on Tuesday or 
Wednesday, September 21 or September 22, 1993 against Judge 
Hale and two other individuals.'' 642
    Mr. Bowles did not recall receiving multiple briefings or 
memoranda from Mr. Foren on the Hale/CMS investigation, 
although he admitted to receiving the May 1993 briefing and a 
later briefing by Martin Teckler, the Deputy General Counsel of 
the SBA.643 According to Mr. Bowles, in September 1993, 
Mr. Teckler ``told me that we were getting ready to indict 
Judge Hale down in Arkansas for defrauding the SBA, and said 
that I might want to call the White House and give them a 
heads-up.'' 644 Mr. Bowles asked Mr. Teckler to describe a 
``heads-up,'' 645 and Mr. Teckler told him ``it was simply 
notification in case they got some inquiries.'' 646 Mr. 
Bowles claimed that he questioned the propriety of such 
notification, and Mr. Teckler replied that ``it was standard.'' 
647 Although Mr. Bowles told Mr. Teckler he would give a 
``heads up'' to the White House, Mr. Bowles maintained that he 
never called the ``White House'' about the case. He explained:
    I was often asked to take things to the White House. I 
often said I'll take care of it. Sometimes I felt the right way 
to take care of it was to throw it in the trash can. Sometimes 
it was to call somebody lower down. Sometimes it was to call 
somebody higher up. Sometimes I did it, sometimes I didn't. I 
just made a judgment.648
    In November 1993, Mr. Bowles claimed that he learned from 
news accounts that Mr. Hale alleged that, in 1986, then-
Governor Clinton had pressured Mr. Hale into making an illegal 
SBA loan to Susan McDougal.649 After hearing of this 
allegation, Mr. Bowles decided to recuse himself from the case. 
He communicated this decision orally to General Counsel John 
Spotila, but did not memorialize his recusal in writing until 
months later, on March 3, 1994.650 In fact, Mr. Spotila 
continued to provide Mr. Bowles with information concerning the 
Hale/CMS investigation in the weekly SBA Administrator's report 
through June 27, 1994, more than six months after Mr. Bowles 
purportedly decided to recuse himself from the CMS/Hale 
matter.651
    On April 11, 1994, Mr. Bowles responded to an inquiry by 
Congresswoman Jan Meyers, then the Ranking Member of the House 
Committee on Small Business, about his recusal from the CMS 
investigation.652 Mr. Bowles advised that he had verbally 
recused himself from the matter in late fall 1993, and had 
memorialized this decision in writing on March 4, 1994.653 
Mr. Bowles specifically claimed: ``I have never reviewed the 
Capital Management file.'' 654 The assertion was 
contradicted by Mr. Bowles' own admission that he was 
occasionally briefed on the CMS/Hale investigation.655 Mr. 
Foren believed that Mr. Bowles, as a practical matter, was 
knowledgeable about what was in the file.656 When asked 
about the seeming discrepancy between his letter to 
Congresswoman Meyers and his testimony, Mr. Bowles maintained 
that his statement to Congresswoman Meyers was accurate: ``I 
hadn't reviewed the file. I hadn't studied the file. I hadn't 
spent a long time going over it.'' 657
            B. Mr. Hale's lawyers contact the White House about Mr. 
                    Hale's ``mutual interest'' with President Clinton.
    On August 20, 1993, the Little Rock Field Office notified 
FBI Headquarters that the RTC planned to submit new referrals 
on Madison Guaranty.658 Special Agent Steven Irons advised 
Headquarters that ``Assistant United States Attorney assigned 
to the matter reported being told a Little Rock Attorney had 
traveled to Washington instant date to meet with unknown 
officials to attempt to have the investigation quashed.'' 
659 Mr. Irons testified that Fletcher Jackson told him 
that Richard Mayes, a Little Rock attorney had traveled to 
Washington to get the Hale investigation quashed.660 Mr. 
Irons advised FBI Headquarters to ``be alert if someone within 
the Department asked some questions about the Hale case or the 
upcoming Madison referrals,'' and in particular a close 
associate of President Clinton, Webster Hubbell, now the third 
highest official in the Department.661
    Mr. Hubbell had lunch or dinner with Mr. Mayes once or 
twice between January and September 1993.662 Mr. Mayes 
denied that he talked to Mr. Hubbell about the David Hale 
investigation or indictment.663
    On August 17, 1993, in the middle of the SBA's and the 
Justice Department's investigations into Capital Management and 
David Hale, Randy Coleman, Mr. Hale's attorney, called 
Associate Counsel to the President William Kennedy to advise 
the White House that the ongoing federal investigations might 
pose problems for President Clinton.664 Mr. Coleman told 
Mr. Kennedy that he wanted to talk about ``the mutual interests 
of our clients.'' 665
    The conversation was brief.666 Mr. Coleman told Mr. 
Kennedy that the FBI had raided Mr. Hale's CMS office and 
confiscated records containing information on the Clintons, 
Governor Tucker, the McDougals, Whitewater and Madison.667 
Mr. Coleman told Mr. Kennedy that if Heidi Fleiss was the 
``madam to the stars, David Hale was the lender to the 
political elite in Arkansas.'' 668
    Mr. Kennedy's notes indicate that Mr. Coleman mentioned 
President Clinton and Governor Tucker.12
---------------------------------------------------------------------------
    \12\ (White House Document S7375-S7377).
    A. David Hale--SBIC
    B. Investigation: Place raided and records seized, Loan 
Transactions
    Governor Tucker
    Heidi Fleiss Back door lender to the politicians
    Corollary:
    President--Governor Tucker
    David Hale criminal allegations not been indicted
    Feds: U.S. Attorney
    SBIC:
    Regulations:
    Seizure two weeks Ago
    * Asking for Anything.
---------------------------------------------------------------------------
    Mr. Kennedy was familiar with Madison and Whitewater from 
his work at Rose Law Firm and from his understanding of the 
Clintons' circle of friends.669
    Mr. Coleman and Mr. Kennedy had different recollections of 
the conclusion of the conversation. Mr. Coleman testified that 
after outlining some of the names contained in Mr. Hale's 
files,670 he informed Mr. Kennedy that he would be meeting 
with SBA officials in Washington, D.C., the next week and could 
also meet with Mr. Kennedy to discuss the matter 
further.671 According to Mr. Coleman, Mr. Kennedy then 
asked him whether there was anything that he wanted him to 
do.672 Mr. Coleman responded, ``I said I'm just trying to 
figure out where everybody is on this matter, and he said that 
he would visit with his clients and get back to me.673
    Mr. Coleman did not expect Mr. Kennedy to do anything 
``helpful'' for Mr. Hale.674 Instead, Mr. Coleman 
contacted Mr. Kennedy because the investigation might involve 
``folks other than just my client, and where that was the case 
it was always my habit to start making contact with attorneys 
for other people who might be involved to see where everybody 
stood and what the landscape looked like.'' 675 Mr. 
Coleman also believed that he might be able to confirm Mr. 
Hale's suspicion that ``there were some folks in the executive 
branch that wouldn't be, oh, looking out for his best 
interests.'' 676 Mr. Coleman wanted to make a 
``provocative phone'' call because White House officials ``had 
shown a propensity to make an ill-advised phone call or two in 
times past.'' 677
    Mr. Kennedy had a different recollection of key elements of 
the phone call. First, he denied offering to do anything for 
Mr. Coleman.678 Instead, he claimed that he was 
``uncomfortable'' talking to Mr. Coleman because he thought 
that Mr. Coleman might be seeking improper involvement on the 
part of the White House.679 Mr. Kennedy said that ``I told 
him I wasn't sure I could talk to him, but I would inquire and 
get back to him.'' 680
    The last entry in Mr. Kennedy's notes of the telephone 
call, however, appears to corroborate Mr. Coleman's testimony: 
``*Ask for anything.'' 681 Mr. Kennedy claimed that he did 
not know what he meant by this entry.682 Mr. Kennedy's 
notes do not indicate that Mr. Coleman was ``looking'' for 
something or expected Mr. Kennedy to do something ``helpful'' 
for Mr. Hale.683
    Second, Mr. Kennedy denied saying that he had to get back 
to his ``clients''--presumably President and Mrs. 
Clinton.684 But Mr. Coleman vividly remembered that Mr. 
Kennedy said ``clients'' in the plural because the reference 
struck him as odd since the entire discussion up to that point 
had been in terms of their respective individual 
clients.685
    After the telephone call, Mr. Kennedy spoke to Mr. 
Nussbaum.686 Mr. Kennedy claimed that he was concerned 
that it would be inappropriate for him to engage in any 
substantive discussion with Mr. Coleman.687 Mr. Nussbaum 
agreed,688 and instructed Mr. Kennedy to tell Mr. Coleman 
that the White House could not help him--but, somewhat 
inconsistently, also to find out ``a little more about what was 
going on.'' 689
    Two days later, on August 19, 1993, Mr. Kennedy contacted 
Mr. Coleman.690 Mr. Kennedy asked Associate White House 
Counsel Beth Nolan to listen to the conversation.691 
According to Mr. Coleman, this conversation lasted five or ten 
minutes.692 Mr. Coleman testified that Mr. Kennedy wanted 
to know more specific information about the 
investigation.693 Mr. Coleman recalled that Mr. Kennedy 
particularly wanted to know whether Mr. Hale was trying to 
``negotiate'' with the U.S. Attorney's Office 694 and 
would allege any ``face-to-face meetings'' with the 
President.695
    Mr. Kennedy claimed that he essentially told Mr. Coleman at 
the beginning of the call that he could not assist him.696
    But Mr. Kennedy's and Ms. Nolan's respective notes of the 
conversation clearly indicate that Mr. Kennedy was ``engaged in 
a discussion during which [Kennedy] asked [Coleman] a series of 
questions including, among other things, what was the 
anticipation of what David Hale would be charged with, where 
was this going to go, a conversation in which among other names 
mentioned were Whitewater Development and Jim Guy Tucker with 
which were familiar.'' 697 Mr. Kennedy also admitted that 
he sought to obtain information about the extent to which Mr. 
Hale was connected to Madison.698
    The notes of Ms. Nolan and Mr. Kennedy both indicate that 
Madison and Whitewater were discussed in detail.699 Mr. 
Kennedy's notes appear as the following:

          ``Nature of Investigation--propriety of loans made 
        past few years
          Informed that are loan transactions that relate to 
        Madison Guaranty
          All records liquidation of SBIC
          Both of them's names cropped up
          Whitewater Development Corp.: not stopping w/David/ 
        Hale
          Xactions: Southloop Castle Grande Water.'' 700

Mr. Kennedy claimed that he did not know at the time that 
Southloop and Castle Grande were Tucker real estate projects 
financed by Madison.701 Ms. Nolan's notes also indicate 
that Mr. Kennedy asked Mr. Coleman whether bad loans were 
``parked'' at Madison:

          BK: You mean Madison have parked bad loans w/ David?
          RC: Yep. You bet . . . The Madison deal is coming 
        back to life.702

Ms. Nolan's notes indicate that Mr. Coleman told Mr. Kennedy 
that ``they're not stopping at Whitewater, I can guarantee you 
that.'' 703
    Mr. Kennedy offered no explanation for his returned call to 
Mr. Coleman other than to admit that he sought ``to know a 
little bit more before'' he definitively could decide the 
propriety of other discussions.704 Mr. Kennedy explained, 
``I didn't think we would be able to help him, but I couldn't 
respond sort of fully until I knew a little bit more about what 
he was talking about, and he opened up a little bit.'' 705
    Although Mr. Kennedy claimed that he did not ask Mr. 
Coleman about plea negotiations or whether Mr. Hale would 
allege any ``face-to-face meetings'' with President 
Clinton,706 Ms. Nolan's notes indicate that the U.S. 
Attorney's office is ``going to know about mtgs. taking 
place.'' 707
    Mr. Kennedy's notes indicate that he discussed the 
President and Mrs. Clinton with Mr. Coleman: ``All records 
liquidation w/SBIC [arrow] both of them's names cropped up 
Whitewater Development Corp.: Not stopping w/David Hale.'' 
708 Ms. Nolan's notes also contain the following entry: 
``your C's name has cropped up [arrow] both of 'em, Whitewater 
Develop. Corp.'' 709 Mr. Kennedy denied that ``both'' 
refers to the President and Mrs. Clinton.710
    Ms. Nolan's notes specifically indicate that at the end of 
the conversation Mr. Kennedy thanked Mr. Coleman for the 
``head's up.'' 711
    After the second telephone conversation, Mr. Kennedy again 
briefed Mr. Nussbaum.712 Mr. Kennedy claimed that he told 
Mr. Nussbaum that he had never heard of ``the stuff'' in 
connection with Whitewater during the campaign and that, as a 
result, Hale's allegations were not credible.713 Mr. 
Kennedy claimed that he did nothing other than to report Mr. 
Coleman's information to Mr. Nussbaum.714 Mr. Kennedy 
maintained that Mr. Nussbaum took no further action.715 
Mr. Kennedy denied that he ever told President Clinton or Mrs. 
Clinton or anyone else at the White House.716
    Bruce Lindsey, then Director of Presidential Personnel, 
claimed that he first learned of Mr. Kennedy's conversations 
with Mr. Coleman from New York Times reporter Jeff 
Gerth.717 Mr. Lindsey then sought confirmation,718 
and Mr. Kennedy told Mr. Lindsey that Mr. Coleman had told him 
that he ``had a client who had mutual interests'' and suggested 
that they discuss the matter.719 Mr. Lindsey understood 
the ``client'' to be President Clinton.720
            C. The White House Obtains More Information About the Hale 
                    Investigation
    In late August or early September, Mr. Kennedy advised 
then-Associate Attorney General Webster Hubbell of the Coleman 
phone call.721 Mr. Hubbell's phone log indicates he had a 
ten-minute conversation with Mr. Kennedy on August 
18th.722 According to Mr. Hubbell, Mr. Kennedy wanted to 
know whether he had learned of any connection between Mr. Hale 
and Madison and James McDougal.723 Mr. Hubbell mistakenly 
told Mr. Kennedy there was no connection; Mr. Hubbell later 
remembered that he had become aware of such a connection in the 
course of representing the RTC in litigation against Madison's 
former accountants.724
    Mr. Kennedy claimed that in the course of a conversation 
with Mr. Hubbell about another matter, ``I simply asked him had 
he heard the name David Hale in connection with Whitewater, and 
he said no, and that was the sum and source of it.'' 725 
Mr. Kennedy claimed that he asked Mr. Hubbell about the Hale 
matter because he knew that Mr. Hubbell was familiar with the 
Whitewater issue from the 1992 presidential campaign.726 
13
---------------------------------------------------------------------------
    \13\ Mr. Kennedy claimed that Mr. Nussbaum did not instruct him to 
speak with Mr. Hubbell, and that he did not report back to Mr. Nussbaum 
his conversation with Mr. Hubbell. (Kennedy, 12/5/95 Hrg. p. 104.)
---------------------------------------------------------------------------
    On September 20, 1993, Jeff Gerth met with Senior White 
House officials Bruce Lindsey and Mark Gearan, and conveyed the 
same information.727 Mr. Gerth told Mr. Lindsey and Mr. 
Gearan that Mr. Hale alleged that he had three meetings with 
then-Governor Clinton in 1985 and 1986. According to Mr. Gerth, 
prior to meeting with Governor Clinton, Mr. Hale had several 
meetings with Mr. Tucker and Mr. McDougal.728 Mr. McDougal 
told Mr. Hale that Madison Guaranty was strapped for cash and 
scheduled to be audited, and that ``friends in the political 
family needed help.'' 729
    At the first meeting, on the steps of the Arkansas Capitol, 
Governor Clinton allegedly approached Mr. Hale and said 
something like ``are you going to be able to help Jim and I 
out? . . . I would really appreciate it.'' 730
    The second meeting allegedly took place at Mr. McDougal's 
trailer office at the Castle Grande land development.731 
Governor Clinton, who was dressed in a jogging outfit, and Mr. 
McDougal asked Mr. Hale to make a loan from CMS to ``clean up 
the books'' at Madison Guaranty.732 Governor Clinton 
warned Mr. Hale that his name could not ``show up anywhere,'' 
but that he might be able to provide security for the loan with 
some property in Marion County--the county where Whitewater was 
located.733
    Mr. Gerth then explained that Mr. Hale subsequently made a 
$300,000 SBA loan to Susan McDougal d/b/a Master Marketing on 
April 3, 1986.734 Mr. Hale understood that some of the 
money would be advanced to Whitewater. Indeed, records show 
that a portion of the proceeds from the loan was used by 
Whitewater to purchase land from International Paper 
Corporation in 1986.735
    At the third meeting, then-Governor Clinton allegedly saw 
Mr. Hale at a Little Rock shopping mall and asked him ``Have 
you heard what that f -- -- --  -- -w -- -- -- Susan has done 
with the money?'' 736 Mr. Gearan and Mr. Lindsey both 
claimed that Mr. Gerth was the first to tell them of Mr. Hale's 
allegations against President Clinton.737 Both senior 
White House officials further asserted that they learned for 
the first time of Mr. Kennedy's telephone calls with Mr. 
Coleman a month earlier.738
    After the meeting with Mr. Gerth, Mr. Lindsey asked 
President Clinton about Mr. Hale's allegations. The President 
denied that any of the meetings occurred.739
    On the same day, Mr. Lindsey called James Blair, the 
General Counsel of Tyson Food and a close associate of the 
President, twice to discuss Whitewater.740 Mr. Lindsey's 
contemporaneous notes of the first conversation indicate that 
Mr. Blair had previously contacted Mr. Heuer, Mr. McDougal's 
attorney, to discuss whether Mr. McDougal would be implicated 
in any case against Mr. Hale. Specifically, the notes indicate 
that Mr. Heuer ``asked Brent Bumpers [Assistant United States 
Attorney for EDAR] ...whether indictment against Hale, not 
McDougal.'' 741 Mr. Lindsey's notes of the second 
conversation shows: ``Fletcher Jackson-in charge of case-
immunity leaked. McDougal might become target. Blair Heard that 
$300,000 had been deposited in McDougal's account, jumped 
pretty high.'' 742 Mr. Lindsey could not interpret these 
entries in his notes, and particularly the notation ``jumped 
pretty high.'' 743
    Mr. Blair had no recollection of speaking with Mr. Lindsey, 
but admitted that they may have discussed David Hale.744 
14 He also could not recall any conversation with Mr. Heuer 
about whether Mr. McDougal would be indicted along with Mr. 
Hale, but admitted ``[t]hat's certainly a possibility. I have 
discussed with Heuer at times whether McDougal was actually 
going to be reindicted after his first acquittal.'' 745 
When asked whether he relayed the results of any conversation 
with Mr. Heuer back to the White House or elsewhere, Mr. Blair 
carefully claimed, ``I don't have any recollection of that. I'm 
not saying if I didn't hear something interesting, I might not 
have passed it on to Bruce Lindsey, but I have no specific 
recollection of that.'' 746
---------------------------------------------------------------------------
    \14\ Mr. Blair's memory lapse, however, appeared to be selective 
because he did recall other portions of his alleged conversation with 
Mr. Heuer. (Blair, 11/20/95 Dep. 11-14.) Mr. Blair also recalled 
another conversation with Mr. Heuer, most likely prior to Mr. Hale's 
indictment, in which Mr. Heuer informed him that ``Hale had supposedly 
been to see McDougal and tried to get McDougal to lie about various 
things that Hale wanted to claim was reality.'' (Blair, 11/20/95 Dep. 
p. 13) This other conversation between Mr. Blair and Mr. Heuer 
corresponds to a separate entry in the same page of Mr. Lindsey's 
notes. (Hogan & Hartson Document BL011718-011722.)
---------------------------------------------------------------------------
    When asked about any conversation between Mr. Heuer and 
Assistant U.S. Attorney Bumpers about the indictment of Hale, 
Mr. Blair professed that he did not ``know anything about any 
conversations between Mr. Heuer and Mr. Bumpers.'' 747 Mr. 
Blair claimed that Mr. Lindsey's notes did not refresh his 
recollection.748
    Although Mr. Bumpers did not recall Mr. Heuer asking 
whether Mr. McDougal would be indicted with Mr. Hale,749 
Mr. Bumpers may have had a brief conversation with another 
Assistant U.S. Attorney, Fletcher Jackson about Mr. Hale 
investigation prior to Mr. Hale's indictment.750 Mr. 
Bumpers also may have learned of the imminent indictment at a 
staff meeting.751
    The Special Committee was not able to depose Mr. Heuer 
because he was preparing for Mr. McDougal's criminal trial. 
Messrs. Blair and Bumpers could neither confirm nor deny that 
any of these conversations occurred. Mr. Lindsey's 
contemporaneous notes of his conversation with Mr. Blair 
immediately following Mr. Lindsey's conversation with Mr. Gerth 
about Mr. Hale's allegations against President Clinton indicate 
that Mr. Heuer received confidential information about the 
ongoing federal investigation of Mr. Hale, and that this 
confidential information was passed on to Mr. Blair and Mr. 
Lindsey.752

II. After Treasury and RTC Officials improperly advised the White House 
        about RTC Referrals mentioning President Clinton and Governor 
        Tucker, President Clinton meets with Governor Tucker at the 
        White House

    Attempts by senior White House officials to gather 
information about investigations touching on the Clintons went 
beyond contacts with potentially adverse counsel (Mr. Coleman) 
or with close associates (Mr. Blair). Senior White House 
officials undertook a concerted and highly improper effort to 
contact investigative agencies about the ongoing investigations 
into Madison and Whitewater.
    During the period when the submission of the additional RTC 
referrals on Madison prepared by Ms. Lewis was being held up by 
the ``legal review'' by the RTC's Professional Liability 
Section, the White House received advance information on these 
referrals. At about the same time that the White House learned 
of Mr. Hale's allegations against President Clinton, on 
September 29, 1993, Jean Hanson, the General Counsel of the 
Department of the Treasury, which oversaw the RTC and its 
investigations, informed White House Counsel Bernard Nussbaum 
and Associate White House Counsel Clifford Sloan of the 
existence of several RTC referrals involving Madison, 
Whitewater, and the Clintons.753
    This improper transmittal of confidential RTC information 
to the White House violated clearly established RTC procedures. 
In a June 17, 1993 memorandum to all RTC attorneys and 
investigative staff on the handling of criminal referrals, RTC 
Director of Investigations James Dudine wrote: ``All criminal 
referrals are sensitive and must be handled with appropriate 
confidentiality and care.'' 754 Mr. Dudine advised that 
criminal referrals derived from records of financial 
institutions are also subject to the restrictions of the Right 
to Financial Privacy Act, 12 U.S.C Sec. 3412.755 William 
H. Roelle, the RTC Senior Vice President in charge of the 
Investigations Division,756 testified that, based on his 
25-years of experience with the FDIC and RTC, both the 
substance and the fact of a criminal referral are 
confidential.757 There is no exception for press 
inquiries.758
    The Treasury General Counsel, Jean Hanson, improperly 
conveyed the confidential RTC information about the Madison 
criminal referrals to the White House.759 Specifically, 
Ms. Hanson advised Mr. Nussbaum that the President and Mrs. 
Clinton were identified as possible witnesses to the suspected 
criminal activities described in the referrals.760 She 
further told Mr. Nussbaum that the referrals referenced 
possible improper campaign contributions from Madison to one of 
Mr. Clinton's gubernatorial campaigns.761 Mr. Nussbaum 
admitted that Ms. Hanson provided him with nonpublic 
information about the referrals.762
    The next day, on September 30, Ms. Hanson called Mr. Sloan 
to amplify on the confidential information she had provided to 
Mr. Nussbaum.763 Mr. Sloan's notes of this conversation 
recorded the following:

          ``9 referrals--allegations re: Fulbright--

         Jim Guy Tucker
         attempt to divert funds.''764

Mr. Sloan's notes further stated that the charges of conspiracy 
to divert funds were the ``most serious allegation[s],'' 
765 that the referrals named the Clinton 1985 campaign as 
``co-conspirators,'' 766 and, most important, that the 
``Clintons [were] mentioned in other charges as potential 
witnesses.'' 767
    Mr. Nussbaum instructed Mr. Sloan to relay Ms. Hanson's 
information to then Director of Presidential Personnel Bruce 
Lindsey, who was not a member of the press office, but rather a 
``damage control'' specialist.768 Mr. Sloan did so on the 
same day, September 30, or shortly thereafter.769 
Inexplicably, Mr. Lindsey claimed that Mr. Sloan did not advise 
him that Governor Tucker was named in the referrals as a 
target.770 Instead, Mr. Lindsey asserted that he did not 
learn that Governor Tucker was mentioned in the referrals until 
October 7 or 8, 1993.771
    On October 4 or 5, 1993, Mr. Lindsey passed the 
confidential RTC information directly to the President.772 
When asked about the President's response, Mr. Lindsey claimed 
implausibly that ``it was certainly nothing other than just 
sort of, `hmmmmmmm.''' 773
    Curiously, on October 6, 1993, President Clinton had a 
meeting at the White House with Governor Jim Guy 
Tucker.774 Former Deputy Assistant to the President Keith 
Mason testified that he attended this meeting,775 which 
was held late in the afternoon and lasted 30 to 45 
minutes.776 Mr. Mason asserted that no discussions 
occurred at the meeting about Whitewater, Madison or RTC 
criminal referrals.777 Prior to the meeting, Mr. Mason 
escorted Governor Tucker to the office of White House Chief of 
Staff Mack McLarty.778 Mr. Mason was present during part, 
but not all, of a meeting between Governor Tucker and Mr. 
McLarty.779 Mr. Mason claimed that at least while he was 
present Governor Tucker and Mr. McLarty did not discuss Madison 
Guaranty, the RTC criminal referrals or Whitewater.780
    Although Mr. Lindsey testified that he did not know that 
the criminal referrals mentioned Governor Tucker as of October 
6 and therefore did not pass this information onto the 
President, such information hardly would have been necessary. 
Notes taken by Susan Thomases during the 1992 campaign indicate 
that President Clinton had clear knowledge of the link between 
Whitewater and Governor Tucker. In notes taken of a February 
22, 1992 conversation relating to Whitewater, Ms. Thomases 
wrote:

          ``Have Gerth call Tucker
          BC tell me to call Tucker'' 781

On March 9, 1992, Jeff Gerth of the New York Times wrote to Ms. 
Thomases seeking additional information for his article on 
Whitewater and Madison. In the margin of the letter, Ms. 
Thomases had taken notes, apparently of a conversation with 
Bill Clinton.15 In one such note, next to Mr. Gerth's 
allegation that Mr. McDougal was subsidizing the Clintons' 
interest in the Whitewater investment, Ms. Thomases wrote: 
``Call Jim Guy Tucker.'' 782 Tellingly, as of the date of 
Ms. Thomases' notes, there had been no public allegation 
suggesting any link between Mr. Tucker and Whitewater, Madison, 
or Mr. McDougal.
---------------------------------------------------------------------------
    \15\ One margin note stated: ``BC has no recollection.'' Willkie, 
Farr & Gallagher Document ST000047.
---------------------------------------------------------------------------
    The Special Committee did not obtain testimony from 
Governor Tucker because he, along with James and Susan 
McDougal, was a defendant in a federal criminal proceeding. The 
Whitewater-related charges prosecuted by Independent Counsel 
Kenneth Starr in the Tucker-McDougal trial stemmed directly 
from the RTC criminal referrals prepared by Ms. Lewis--the 
substance of which was conveyed from Ms. Hanson, through Mr. 
Sloan and Mr. Lindsey, to President Clinton. On May 28, 1996, 
an Arkansas jury convicted Governor Tucker of conspiracy and 
mail fraud in connection with transactions involving Mr. 
McDougal and Mr. Hale; President Clinton testified as a defense 
witness in the trial.783
    On October 8, 1993, the RTC Professional Liability Section 
completed its legal review of the criminal referrals.784 
On the same day, the criminal referrals were transmitted to the 
U.S. Attorney's Office in Little Rock without any change from 
their original versions prepared by Ms. Lewis.785
    On October 14, 1993, senior White House officials met again 
in Mr. Nussbaum's office with senior officials from the 
Department of the Treasury to discuss the criminal 
referrals.786 Mr. Lindsey, Mr. Nussbaum, Mr. Sloan, 
Associate White House Counsel Neil Eggleston and White House 
Director of Communications Mark Gearan met with Ms. Hanson, 
Department of the Treasury Chief of Staff Joshua Steiner and 
Assistant Secretary of Treasury for Public Affairs Jack 
DeVore.787 Mr. Devore testified that it ``appear[ed] that 
someone in either Nussbaum's or Hanson's office called my 
secretary and asked her to schedule this meeting.'' 788 
During the meeting, Mr. DeVore explained to the group that he 
had received press inquiries about the criminal referrals, and 
a detailed description of the criminal referrals ensued. In a 
memorandum to file, entitled ``Whitewater Development 
Corporation,'' 789 Mr. Lindsey indicated that one of the 
referrals ``involved four cashiers checks--each for $3,000, two 
made payable to the Clinton for Governor Campaign and two made 
payable to Bill Clinton.'' 790 Mr. Lindsey further wrote 
that ``DeVore confirmed with the RTC that the referrals had 
been received in the Washington office, but had already 
forwarded on to the Little Rock U.S. Attorney's office.'' 
791

III. A Pivotal Event: The November 5, 1993 Meeting Between White House 
        Officials and the Clintons' Private Lawyers

    On November 5, 1993, armed with details of the confidential 
RTC criminal referrals and Mr. Hale's allegations against 
President Clinton, senior White House officials met with the 
Clintons' private lawyers. The stated purpose of this meeting 
was ``to impart information to the Clinton's personal 
lawyers.'' 792 The White House officials in attendance 
were Mr. Eggleston, Mr. Lindsey, Mr. Nussbaum, and Associate 
White House Counsel William Kennedy.793 The private 
lawyers were David Kendall of Williams & Connolly, Little Rock 
attorney Steven Engstrom, and James Lyons, the author of the 
Clinton campaign's 1992 Whitewater report.794 According to 
Mr. Lindsey, who characterized the gathering as a legal defense 
meeting, ``[t]he purpose of the meeting was Whitewater 
Development Corporation.'' 795
    Mr. Kennedy's notes of the meeting, which the Committee 
obtained after a protracted dispute with the White 
House,796 indicated that the White House officials 
provided the Clintons' private lawyers with much of the 
information they possessed concerning Whitewater, including 
confidential information relating to ongoing investigations by 
the SBA, RTC, and Justice Department.797 In essence, the 
White House officials used confidential information they gained 
by virtue of their positions of public trust to further the 
Clintons' private legal defense.
    A significant part of the discussion related to the ongoing 
RTC investigation of Madison.798 Among the principal 
topics of the meeting was the referral related to illegal 
contributions to Mr. Clinton's gubernatorial campaign.799 
16 Coincidentally, Mr. Lindsey, in his October 20 memorandum, 
appeared to be particularly concerned about one of the 
referrals, which ``involved four cashier checks--each for 
$3,000, two made payable to the Clinton for Governor Campaign 
and two made to Bill Clinton.'' Mr. Kennedy claimed, however, 
that Mr. Lindsey indicated during the meeting that the source 
of the information was press accounts: ``Basically, that Bruce 
is outlining, sort of the allegations, that the press was 
reporting wherein the referrals.'' 800
---------------------------------------------------------------------------
    \16\ The notes appear as follows in the White House's typed version 
of Mr. Kennedy's notes:
    ``III. RTC referral w/r/t McDougal
    Included a reference to 4 campaign checks 4/85 BC personally
    Campaign Committee
    3 checks written on Madison--all $3,000 4th check on McDougal 
personally--signed by Susan McDougal.'' (White House Document S12530).
    Later, his notes reflect the following entry:
    ``Charles Peacock--proceeds went from Charles for Clinton 
campaign--85
    made a donation (?)
    $3,000-$12,000 * Could all come from Charles Peacock
    Loan--$ siphoned off from the Loan
    Charles Peacock (Ken Peacock?)
    $1500 per election--$3,000
    Primary and general.'' (White House Document S12534).
---------------------------------------------------------------------------
    White House officials also discussed the fact that Governor 
Tucker was a target of the referrals. In two separate entries, 
Mr. Kennedy wrote ``Could be that JGT is target of RTC 
referral'' 801 and ``RTC-people trying to get BC and 
JGT.'' 802 Mr. Lindsey testified that he first learned 
that Mr. Tucker was a target in the RTC investigation during 
the October 14 meeting with RTC officials: ``I believe in the 
October 14th meeting that we had with certain people from the 
Treasury Department, that they indicated that Jeff Gerth had 
indicated that to them.'' 803 Notes taken by Susan 
Thomases indicate, however, that at least President Clinton 
identified Mr. Tucker with Whitewater in February and March 
1992. In notes taken from a February 22, 1992 conversation 
relating to Whitewater, Ms. Thomases wrote:

          ``Have Gerth call Tucker
          BC tell me to call Tucker'' 804

Likewise, Ms. Thomases' notes, apparently of a conversation 
with then-Governor Clinton, taken on a March 9, 1992 letter 
from Mr. Gerth seeking information on Whitewater recorded: 
``Call Jim Guy Tucker.'' 805 Mr. Tucker's ties to the 
McDougal and to Madison had not been publicized at the time.
    Another principal topic of discussion raised by Mr. Lindsey 
was Madison's retention of the Rose Law Firm and Mrs. Clinton's 
representation of Madison in connection with Madison's proposal 
for a preferred stock offering.806 17 Mr. Kennedy 
testified that Mr. Lindsey ``[i]s giving history, and it's 
basically that she has given authority for Madison to do both 
things, and Bruce is talking about, you know, the perception 
about Beverly Bassett.'' G5807 Under ``Beverly Basset,'' Mr. 
Kennedy wrote: ``too much coziness.'' G5808
---------------------------------------------------------------------------
    \17\ At the very beginning of Mr. Kennedy's notes appears the 
following entry:
    ``HRC representation of Madison--not much activity representing 
people before agencies
    2 RLF letters Beverly Bassett
    1. Madison
    2. PP of pfd stock
    Beverly Basset--Responded w/auth to do both
    Recently appointed BB as Sec Cer
    Brother early supported
    Too much coziness
    RLF--answered questions
    Did reconstruction.'' (White House Document S12529).
    Later, in his notes, there is an entry related to the Rose Law 
Firm's retainer:
    ``+ RLF--Madison Guaranty--Retainer at $2,000 per month
    ANN + Check drawn on WWDC--payable to HRC
    Bernie + Believe that it believes prob. represents confirmed 
payment of $2,000 # of months for 17 months
    [15 months for $2,000 per month--Retainer] Webb Hubbell.'' (White 
House Document S12533)
---------------------------------------------------------------------------
    Although senior White House officials' claimed that they 
communicated only general background information concerning 
Whitewater and Madison during the November 5th meeting, Mr. 
Kennedy's notes detail the financing of the Clintons' 
investment in Whitewater. Almost four pages of Mr. Kennedy's 
notes relate to the reconstruction of the Whitewater loans and 
transactions.809 The attendees were particularly 
interested, according to Mr. Kennedy's notes, in James Blair's 
involvement in the sale of the Clintons' interest in Whitewater 
in 1992,18 as well as Mr. Blair's possible involvement in 
Christopher Wade's payment of the outstanding bank loan on 
which the Clintons were guarantors.19 Mr. Blair had 
provided James McDougal with the $1000 to purchase the 
Clintons' Whitewater stock on December 22, 1992.810 The 
senior White House officials and the Clintons' private lawyers 
also discussed tax issues related to the Clintons' investment 
in Whitewater,20 and the chain of custody of certain 
Whitewater records that were used during the 1992 campaign to 
piece together specifics of the Clintons' investment.21
---------------------------------------------------------------------------
    \18\ Mr. Kennedy's notes show:
    ``Blair could have knowledge Could be source of money to allow McD 
to purchase stock.'' (White House Document S12531.)
    On the same page, the following entry appears:
    ``\3/4\ Times Heuer Blair contact
    Heuer
    \2/3\, 1992 Have 1
    Involved w/VF
    Try to arrange sale.'' (White House Document S12531.)
    \19\ Mr. Kennedy's notes read:
    ``Not Reconstruction--
    $11,000--
    Clinton not released until Fall of 1992
    Blair up--Chris Wade.'' (White House Document S12537).
    Although Mr. Wade assumed the McDougal's interest in Whitewater in 
1985, the Clintons were not released from their obligation until the 
balance of the debt was paid off.
    \20\ The following entry appears in Mr. Kennedy's notes:
    ``Report: Clinton had taken the deductions that WWDC had not taken
    Tax advantage of $2500
    Not repay government yet promise.'' (White House Document S12529).
    \21\ Mr. Kennedy's notes indicate the following discussion:
    ``End of '86--asked for records
    --McDougals say that all of
    Corp records to HRC
    Issue in campaign--86--Records to HRC
    RLF--Campaign Jim Lyons
    Loretta Lynch
    --Betsy Wright had those records--Took em home
    --Betsy Wright
    WH retrieved--records from BW
    Been at WH--Sent files related to WW
    Make a more complete reconstruction.'' (White House Document 
S012533-S012534.)
---------------------------------------------------------------------------
    Curiously, a notation at the bottom of the first page of 
Mr. Kennedy's notes suggested a possible link between the FBI's 
investigation of CMS, which allegedly made an illegal loan to 
James and Susan McDougal in 1986 at the request of then-
Governor Clinton, and the death of President Clinton's friend 
and counsel, Vincent Foster. Mr. Kennedy wrote:

          ``July 20th: FBI issued subpena & took records of 
        municipal judge named Hale
          Also the day that VF killed himself Factor'' 811

Mr. Kennedy claimed that ``by factor'' he meant: ``Simply that 
the coincidence had become a factor in all of the intense 
speculation surrounding Vince's suicide.'' 812
    The November 5th meeting also concerned ``a division of 
labor between personal and White House counsel for handling 
future Whitewater issues.'' 813
    In the middle of Mr. Kennedy's notes appears a cryptic 
reference to a remark by Mr. Kennedy that suggests the 
possibility of an effort to suppress critical evidence 
concerning Whitewater. 814 Mr. Kennedy wrote:

          ``Vacuum  Rose law Files  WWDC Docs--subpoena
          *Documents--never know go out
          Quietly(?)'' 815

    Mr. Kennedy claimed to the Special Committee that 
``vacuum'' was used in this meeting as a noun, not a verb:

          We were referring to at the meeting that there was an 
        information vacuum, that when you tried [to] get your 
        arms around Whitewater, in this case referring to the 
        real estate investment, it is impossible to do. The 
        records were a shambles. I had personal knowledge of 
        that. You are dealing with an information vacuum. The 
        Rose Law files, as they related to Whitewater 
        documents, would--if you had gotten you hands on them, 
        they would not have meant anything to you because of 
        the condition of the records.'' 816

    Mr. Kennedy denied that the entry ``WWDC Docs--subpoena'' 
reflected the concern of senior White House officials over the 
possibility that Whitewater records might be 
subpoenaed.817 Instead, Mr. Kennedy claimed:``The 
discussion was that if a subpoena were issued, files that had 
once been at the Rose Law Firm would no longer be there, with 
regard to Whitewater.'' 818 Mr. Kennedy asserted that `` 
*Documents--never go out/Quietly(?)'' actually referred to the 
handling of Rose Law Firm files during the campaign: ``It 
relates to the fact that there is--as far as I know, still is--
a mystery about how the Whitewater documents--again I wish to 
stress these are the corporate records and real estate records 
relating to Whitewater as an investment--got from the Rose Law 
Firm to the campaign in 1992.'' 819
    Regardless of whether ``vacuum'' is a verb or noun, records 
relating to Whitewater and Madison had been systematically 
removed from the Rose Law Firm during and after the 1992 
campaign. After questions arose about the Clintons' investment 
with the McDougals in Whitewater and Mrs. Clinton's 
representation of Madison Guaranty before a state agency, 
Vincent Foster collected all the information he could on the 
Madison representation. At the conclusion of the campaign, the 
Madison files, which were by now the property of the RTC as 
conservator of Madison, as well as the files of other Rose 
clients for whom Mrs. Clinton had performed legal services, 
were secretly removed from the firm by Webster Hubbell. Mr. 
Hubbell removed these files, at times taking the firm's only 
copies,820 without obtaining the consent of the firm or 
client.821
    Also during the 1992 presidential campaign, Mr. Foster or 
Mr. Hubbell ordered the printing of billing records relating to 
the Rose Law Firm's representation of Madison Guaranty. These 
important records revealed the extent of Mrs. Clinton's legal 
work for Mr. McDougal's S&L, including her telephone call to 
Beverly Bassett Schaffer, the Arkansas Securities Commissioner 
appointed by Governor Clinton, about the troubled thrift's 
controversial proposal to raise capital by issuing preferred 
stock. The records also reflected Mrs. Clinton's work on the 
IDC or Castle Grande transaction, which federal regulators 
described as a series of fraudulent land flips. 822 The 
records contained the handwritten questions of Mr. Foster to 
Mrs. Clinton and notations by Mr. Hubbell. 823 Mrs. 
Clinton has recently stated through her lawyer that she may 
have reviewed the records during the 1992 presidential 
campaign.
    After federal investigators began to look into matters 
relating to Madison Guaranty and Whitewater, a number of 
subpoenas were issued for these Rose Law Firm billing records. 
By then, however, the records were nowhere to be found. Despite 
extensive searches conducted by the law firm, neither the 
originals nor copies were discovered.824 They were not in 
the firm computers, its client files, or the firm's storage 
facility. 825 The billing records, long lost, finally 
turned up in August 1995 in the Book Room of the White House 
Residence.
    When asked about Mr. Foster's removal of documents from the 
Rose Law Firm, Mr. Kennedy admitted that he knew Mr. Foster had 
searched for Madison files during the 1992 campaign,826 
but claimed that he was not aware of whether Mr. Foster had 
removed the files from the Rose Law Firm.827
    Mr. Kennedy also claimed that he wrote ``quality,'' not 
``Quietly,'' in his notes, and was talking about the condition 
of ``the Whitewater records that I once had in my possession, 
received from Ms. Clinton.'' 828 Mr. Kennedy admitted that 
the Rose Law Firm did not have custody of any Whitewater 
documents, but claimed that, ``The Whitewater files were Rose 
files when they were in my possession when I was performing 
legal work for Ms. Clinton.'' 829
    Finally, Mr. Kennedy's notes recorded the following 
command: ``Try to find out what's going on in Investigation,'' 
830 a directive that would inform the actions of White 
House officials throughout the Whitewater defense effort.

IV. The White House Obtains Confidential SBA Documents Relating to Mr. 
        Hale and Capital Management

    At the November 5 meeting, senior White House officials and 
the Clintons' private lawyers discussed David Hale and his 
allegations against President Clinton. For example, under the 
heading ``David Hale,'' Mr. Kennedy's notes reflect the 
following notations:

          ``Tunnel at Capitol--Clinton says McD will call you--
        DH--hope you'll help em
          145 Street Trailer--Jogging Shorts
          Shopping Malls--Clinton says do you know what bitch 
        Susan did with money-sed.'' 831

The notations reflect Mr. Hale's allegation that he saw then-
Governor Clinton three times in 1986. At the first meeting, on 
the steps of the Arkansas Capitol, Governor Clinton allegedly 
approached Mr. Hale and said that James McDougal would call Mr. 
Hale; Governor Clinton allegedly hoped that Mr. Hale would help 
Mr. McDougal. 832 The second meeting allegedly took place 
at Mr. McDougal's trailer office on 145th Street in Little 
Rock. 833 Governor Clinton, wearing a jogging outfit, 
asked Mr. Hale to make a loan to Mr. McDougal. Finally, in the 
third meeting, at a Little Rock shopping mall, Governor 
Clinton, agitated, allegedly asked Mr. Hale: ``Do you know what 
that bitch Susan did with the money?'' 834 Mr. Kennedy's 
notes recorded that:

          ``David Hale did make a $300,000 loan to Susan McD. 
        Jim McD says purchase land in Pulaski Co from IP 
        purchased in name of WW in 10/86.'' 835

    Three days after the November 5 Whitewater defense meeting, 
on November 8, Mr. Nussbaum directed Mr. Eggleston to a 
November 6 Washington Post story about a request from John 
LaFalce, Chairman of the House Committee on Small Business, to 
Mr. Bowles for information relating to CMS. 22 836 The 
report, according to Mr. Eggleston, noted that Chairman LaFalce 
asked for the requested information by November 15, 1995. 
837
---------------------------------------------------------------------------
    \22\ After Mr. Hale's allegations against the President was made 
public, the Capital Management investigation predictably attracted 
considerable attention. On November 4, 1993, Congressman John LaFalce, 
the Chairman of the House Committee on Small Business, wrote to Mr. 
Bowles and requested ``a full written report on Capital Management 
Services, Inc., including its licensing, private capital, ownership, 
SBA leverage, and individual financings made, including profit and loss 
statements.'' (SBA Document Not numbered). In addition, Chairman 
LaFalce asked that the SBA provide, under section 10(e) of the Small 
Business Act, the staff director and counsel of the Committee on Small 
Business with copies of the SBA's files on Capital Management. (SBA 
Document Not numbered).
---------------------------------------------------------------------------
    Mr. Bowles responded to Chairman LaFalce's inquiry on 
November 15, 1993 in a four-page letter that provided a 
detailed summary of the investigation into CMS and responded to 
the specific questions set forth in Chairman LaFalce's November 
4, 1993 letter. 838 More importantly, Mr. Bowles' letter 
was accompanied by twelve sets of attachments, which included, 
among other things, lists of all loans provided by CMS, all 
portfolio financing reports submitted by CMS in connection with 
its SBA loans, all eleven reports of SBA audits of Capital 
Management, Mr. Foren's May 5, 1993 referral of the case to the 
Inspector General, and the September 23, 1993 criminal 
indictment against David Hale. 839 In short, the 
attachments, ``approximately a foot high,'' 840 
essentially comprised the entire SBA file on the operation, 
regulation, and investigation of CMS and David Hale.
    On the morning of November 16, 1993, the day after Mr. 
Bowles replied to Chairman LaFalce, Mr. Eggleston called the 
SBA and spoke with the Office of Legislative Affairs. 841 
The SBA directed Mr. Eggleston's inquiry to John Spotila, the 
SBA General Counsel. Mr. Spotila advised that the SBA had 
responded to Chairman LaFalce's request late the night before. 
842 According to Mr. Eggleston, Mr. Spotila sent Mr. 
Eggleston via facsimile a copy of Mr. Bowles' letter to 
Chairman LaFalce at 11:20 a.m. 843 Mr. Spotila followed up 
with another facsimile at 3:20 p.m., enclosing an SBA press 
release about Mr. Bowles' response. 844 According to Mr. 
Eggleston, he then asked Mr. Spotila ``whether it would be 
appropriate for the White House to have whatever had been 
provided to Congress.'' 845
    John Spotila was a classmate of President Clinton at 
Georgetown. According to Mr. Spotila, ``I have known the 
President for quite a while. I was a classmate of his at 
Georgetown, and briefly at Yale, although my third year was his 
first year at the [law] school.'' 846 He also knew Mrs. 
Clinton. 847 Mr. Bowles testified that he selected Mr. 
Spotila as general counsel partly on Mrs. Clinton's 
recommendation. 848
    On November 16, 1993, Mr. Spotila testified that he ``faxed 
a copy of the press release that had been done and then the 
cover letter.'' 849 After receiving the facsimiles, Mr. 
Eggleston asked Mr. Spotila whether he could have the 
attachments that accompanied Mr. Bowles' letter. 850 Mr. 
Spotila testified that he consulted with Mark Stephens of his 
staff, who erroneously told Mr. Spotila that ``all of the 
documents were entirely routine and nonsensitive.'' 851
    In fact, at the top of the first page, Mr. Bowles' letter 
to Chairman LaFalce in bold type, contained the following 
notice:

          The information contained herein has been determined 
        to be confidential in nature and therefore not 
        releasable to unauthorized parties. Disclosure of this 
        information may violate Federal law (e.g., Privacy Act 
        of 1974, the Right to Financial Privacy Act of 1978, 
        and 18 U.S.C. Sec. 1905). Utmost discretion should be 
        exercised. 852

Beyond this, Mr. Spotila's one sentence transmittal letter to 
Mr. Eggleston also specified that the information was 
confidential: ``Enclosed is a copy of Erskine's letter 
yesterday to Chairman LaFalce (with confidential 
attachments).'' 853
    While Mr. Eggleston was seeking this confidential SBA 
information, he was also speaking with other senior White House 
officials. He left a message for Bruce Lindsey advising him of 
the confidential documents attached to the LaFalce letter:

          Neil Eggleston said the additional information is at 
        SBA and is approximately a foot high. He has a call in 
        to SBA to find out if it contains reference to either 
        the President or Hillary. He can obtain a copy of the 
        documents if it appears necessary but does not believe 
        it is problematic.854

Mr. Eggleston did not recall talking with Mr. Lindsey on 
November 16 about the SBA documents. Indeed, Mr. Eggleston 
implausibly claimed the message he left for Mr. Lindsey message 
led him to believe that he did not talk to Mr. Lindsey: ``I 
don't remember actually doing it, and this document leads me to 
conclude that I probably didn't, and that I communicated with 
Mr. Lindsey through his secretary, which happened fairly 
frequently because Mr. Lindsey is extremely difficult to get in 
touch with.'' 855 This testimony leaves open the obvious 
question of how Mr. Lindsey would have known what ``additional 
documents'' Mr. Eggleston was referring to in his message, if 
the two had not communicated previously about obtaining 
documents from the SBA.
    That afternoon, November 16, Associate White House Counsel 
Eggleston personally went over to the SBA offices and picked up 
the ``approximately a foot high'' 856 set of attachments 
from Mr. Spotila. When he returned to the White House, he 
curiously left another message for Mr. Lindsey, at 4:58 p.m. 
The message--captioned ``important'' by Mr. Lindsey's 
secretary--stated: ``Has some Whitewater documents to go over 
with you. Will come by about 6:00 p.m.'' 857
    Mr. Eggleston did not recall talking with Mr. Lindsey. ``As 
I've said repeatedly, I don't actually remember that happening. 
This would certainly make it seem as if I had two 
communications with his secretary on that day with regard to 
these documents, and that makes a lot of sense. I mean, that's 
the reason I was getting these.'' 858 Mr. Eggleston 
claimed that he did not show documents to Mr. Lindsey:

          I did not, as I recall, I never got to him with these 
        documents. I don't remember whether he got back to me 
        himself or through his secretary, but I recollect--and 
        again I don't know what Mr. Lindsey's recollection is--
        but I recollect that I never showed him these 
        documents.859

Mr. Lindsey did not believe that he saw the records.860
    Back at the SBA, Mr. Spotila met with Mr. Bowles and told 
him that he had provided the confidential documents to the 
White House.861 Immediately, Mr. Bowles said, ``I don't 
know if this is right or wrong, good or bad, up or down, but 
you better check with somebody with the Justice Department to 
see if it's okay.'' 862 Mr. Spotila instructed Mark 
Stephens to contact the Justice Department.863
    The next day, November 17, 1993, Allen Carver, Principal 
Deputy Chief of the Justice Department's Fraud Section, called 
Mr. Stephens to obtain a copy of Mr. Bowles' November 15 
response to Chairman LaFalce.864 Mr. Stephens advised Mr. 
Carver of the transfer of the confidential SBA 
documents.865 Mr. Carver and Mr. Stephens agreed to meet 
on November 18 at Mr. Carver's office with another attorney 
from the Fraud Section and an FBI agent working on the matter 
to discuss both Mr. Bowles report to Chairman LaFalce and the 
SBA's transfer of documents to the White House.866
    At that time, the Justice Department instructed the SBA to 
retrieve from the White House the confidential documents and 
any White House materials analyzing those documents: ``Carver 
said get docs back + get their notations as well as all copies 
+ list of people w/access to docs.'' 867 The notes also 
explained the reason for the Justice Department's objection: 
``Due to scope, they--part of investigative body of material 
related to allegedly naming Pres. WH should not get docs or 
apprised of investigation.'' 868
    The next day, November 19, Mr. Carver talked with Mr. 
Stephens to ascertain the progress of the document retrieval. 
According to Mr. Carver's contemporaneous memorandum about the 
call, Mr. Stephens said that ``he called and spoke with Neal 
Eggleston earlier in the day, about 1:55 p.m., and Mr. 
Eggleston said that he would discuss the matter with the Deputy 
Attorney General and would discuss the matter further with Mr. 
Stephens early the next week.'' 869
    Immediately, Mr. Carver called his supervisor, Fraud 
Section Chief Gerry McDowell, to advise him of Mr. Eggleston's 
conversation with Mr. Stephens. According to contemporaneous 
notes of the conversation, Mr. McDowell said, ``I've got to 
believe the WH counsel have done an incredibly stupid thing!'' 
870 Mr. McDowell immediately notified the Associate Deputy 
Attorney General David Margolis.871 Mr. McDowell also 
talked directly with the Deputy Attorney General Phillip 
Heymann, who agreed with Mr. McDowell that this ``could be an 
influence type situation.'' 872
    According to contemporaneous notes, Mr. Eggleston called 
Mr. Heymann that day and talked to Mr. Nathan, Mr. Heymann's 
deputy. Mr. Nathan apparently conveyed Mr. Heymann's strong 
sentiment to Mr. Eggleston, who, after the conversation, 
``wanted to get the documents back to the SBA as soon as 
possible.'' 873 Curiously, White House Counsel Bernard 
Nussbaum, Mr. Eggleston's supervisor, called Associate Attorney 
General Webster Hubbell at 10:29 a.m. on November 19.874
    Although Mr. Eggleston was instructed specifically by the 
Justice Department to return the confidential documents 
immediately, he inexplicably waited for several days.875 
Mr. Eggleston claimed that ``[b]y that time, it was obvious 
that we would return the documents, but I had to talk to my 
supervisor before agreeing to do so.'' 876 After speaking 
with the Justice Department, Mr. Eggleston stated that he 
became ``quite concerned, and spoke fairly quickly thereafter 
to Mr. Nussbaum and then worked hard to get the documents back 
as soon as I could.'' 877
    On May 21, Mr. Eggleston finally reached Mr. Stephens, and 
arranged for the return of the documents.878 Mr. Stephens 
met Mr. Eggleston at the street corner in front of the SBA, 
where Stephens took back the box of SBA documents.879
    Mr. Eggleston reviewed the SBA documents. He did not, 
however, ``see any documents that I thought were particularly 
sensitive or that would have alerted me to the notion that 
Department of Justice might have had a problem.'' 880 The 
career Justice Department prosecutors, however, had a different 
view of the matter. Because the documents concerned a case 
involving allegations against the President, Mr. Carver 
believed that the White House had no right to any confidential 
documents or to be apprised of facts relating to the ongoing 
investigation.881
    The Justice Department immediately commenced an 
investigation into the transfer of confidential information to 
the White House. On November 19, Mr. Carver discussed the 
investigation with the FBI. The FBI Chief of the Governmental 
Fraud Unit, Richard Wade, ``expressed concern over the 
possibility that the White House-SBA action, however, well-
intended, could look like White House intervention.'' 882 
Mr. Carver recommended that the FBI interview Mr. 
Eggleston,883 and also interview Mr. Kennedy concerning 
his conversations and contacts with Mr. Hale's attorney, Mr. 
Coleman, about the case.884
    This matter is still under investigation by the Office of 
the Independent Counsel.

V. The White House Begins to Hold Whitewater Defense Meetings

    By late 1993, in the wake of new revelations, members of 
Congress and the national press began to call for the 
appointment of a special counsel to investigate Whitewater and 
Madison Guaranty. At that time, although the statute governing 
a judicial appointment of an Independent Counsel had lapsed, 
the Attorney General could appoint a special counsel to 
investigate the matter.
    During the first weeks of January 1994, senior officials of 
the White House met twice daily in Whitewater Response Team 
meetings.885 Present were Deputy Chief of Staff Harold 
Ickes, who was hired in part to coordinate the Whitewater 
defense effort; Chief of Staff Thomas Mack McLarty; White House 
Counsel Bernard Nussbaum; Deputy White House Counsel Joel 
Klein; Senior Advisor to the President George Stephanopoulos; 
Counselor to the President David Gergen; Associate White House 
Counsel Neil Eggleston; and Director of White House 
Communications Mark Gearan.886 Significantly, Mrs. Clinton 
and her Chief of Staff, Margaret Williams, attended some of the 
meetings.887
    During the Banking Committee hearings in the summer of 
1994, senior White House officials provided evasive answers 
when asked to describe the purpose of the meetings.888 Mr. 
Lindsey and Mr. Nussbaum both failed to mention any specific 
subject discussed other than the handling of press inquiries 
related to Whitewater.889
    The Special Committee, however, obtained evidence this year 
that White House officials discussed far more than press 
inquiries at these twice daily meetings.890 
Contemporaneous and detailed notes of these meetings, prepared 
by Mr. Gearan reflect an extensive debate over whether an 
independent or special prosecutor should be appointed, and, if 
so, the scope and duration of such an independent 
investigation.891 The notes also reflect the willingness 
of senior White House officials to attempt to interfere in 
ongoing investigations, particularly regarding former Arkansas 
Securities Commissioner Beverly Bassett Schaffer's regulation 
of Madison.892 Finally, the notes indicate yet another 
instance of government lawyers providing private legal services 
to the President and Mrs. Clinton.
            A. Senior White House officials debated the appointment of 
                    a Special Counsel
    Mr. Gearan's notes reflect considerable debate within the 
White House on the appointment of a special counsel versus 
independent counsel. At a January 4, 1993 meeting, Mr. Gergen 
observed that the difference between independent counsels, 
appointed by a panel of federal judges, and special 
prosecutors, appointed by the Attorney General, is that 
independent counsels ``take on a life of their own.'' 893
    The next day, January 5, 1993, the debate continued. Mr. 
Nussbaum argued strenuously that no substantive difference 
existed between an independent counsel and a special 
prosecutor.894 In Mr. Nussbaum's view, both an independent 
counsel and a prosecutor are ``subject to no control [and] come 
[with the] desire to get someone.'' 895 Mr. Nussbaum 
expressed his ``adamant'' opposition to the appointment of any 
independent prosecutor.896
    Mr. Gearan recalled that Mr. Nussbaum, again continuing to 
exhibit his concern about control, compared an independent or 
special prosecutor to ``somewhat of an unguided missile.'' 
897 To illustrate his point, Mr. Nussbaum envisioned two 
scenarios--the ``good-hearted'' prosecutor and the ``bad-
hearted prosecutor.'' 898 The ``good hearted'' prosecutor 
would conduct an investigation and simply document his 
findings.899 In contrast, the ``bad-hearted'' prosecutor 
``goes in & decides a smell of corruption & can show some 
things of those people close around the principal.'' 900 
According to Mr. Gearan, the ``principal'' was President 
Clinton.901
    A significant, if not dominating, concern of the White 
House officials during the Whitewater defense meetings was Mrs. 
Clinton's opposition to the appointment of either an 
independent or a special prosecutor. Mr. Gearan's notes of 
January 4, 1994 show that Mrs. Clinton joined the meeting--
already in progress--and said ``this looks like a meeting I 
might be interested in.'' 902 Mrs. Clinton stayed for 
approximately 15 minutes,903 and opposed the appointment 
of a special counsel.904 After she left several officials 
expressed the view that it was pointless to debate the merits 
of an independent counsel versus a special counsel given Mrs. 
Clinton's steadfast opposition to the appointment of either 
type of prosecutor.905
    On January 5, Mr. McLarty and Mr. Ickes both supported Mrs. 
Clinton's position.906 Mr. McLarty advised that the group 
move off the discussion of a special prosecutor or counsel 
because ``HRC and BC don't want it.'' 907 Harold Ickes 
stated that the discussion ``was the biggest f------ waste of 
time.'' 908 Before the Special Committee, Mr. Ickes 
testified that, although he could not recall the specific 
meeting, ``it was well known that Mrs. Clinton had very, very 
grave reservations'' about the appointment of any type of 
prosecutor.909
    On January 7, senior White House officials discussed 
attempting to persuade Mrs. Clinton to reverse her position on 
the appointment of a special counsel.910 Mr. Ickes advised 
that Secretary of State Warren Christopher or attorney Robert 
Barnett might attempt to convince Mrs. Clinton that a 
prosecutor should be appointed.911
    Ultimately, however, Mr. Ickes thought that it was 
``impossible'' to ``reopen'' the discussion with Mrs. 
Clinton.912 Mr. Gearan recalled that everyone in 
attendance at the meeting agreed that it would be 
``impossible'' for anyone, including the President, to change 
Mrs. Clinton's mind.913
    Later that day, Mr. Ickes again stated Mrs. Clinton's 
strong opposition to the appointment of any prosecutor.914 
Mr. Gearan's notes of this second meeting indicate that Mr. 
Ickes regarded Mrs. Clinton's ``adamant[] oppos[ition]'' as one 
of the major problems with calling for a special 
counsel.915
    Senior White House officials and Mrs. Clinton feared that a 
special counsel might indict persons close to President 
Clinton. According to Mr. Gearan's notes of a January 7, 1993 
meeting, Mr. Nussbaum said, ``Indictments will be Betsy 
Wright.'' 916 Ms. Wright was Governor Clinton's former 
Chief of Staff in the 1980s and handled damage control for 
Whitewater and other Arkansas-related matters during the 1992 
Clinton presidential campaign.917 Mr. Gearan implausibly 
denied that any concern was expressed that Ms. Wright would be 
indicted: ``[A]t no time was I present in any conversation 
where Mr. Nussbaum suggested that there is any basis for Ms. 
Wright to be charged with anything like this.'' 918 Mr. 
Gearan claimed that Mr. Nussbaum identified Ms. Wright as an 
extreme example of someone who might face prosecution by a 
special counsel investigating Madison Guaranty and 
Whitewater.919
    In any event, senior White House officials were concerned 
about possible indictments. A White House document, entitled 
``Confidential: Second Draft, Summary of Arguments Re: 
Whitewater,'' dated January 10, 1994, lists reasons against the 
appointment of a prosecutor.920 The memorandum 
specifically states that a special counsel investigation ``may 
result in focus on friends and associates of the President, 
begin to squeeze them and may subject some to indictment.'' 
921 Mr. Ickes admitted that there ``may well have been'' 
concern among White House officials over possible 
indictments,922 and ``a lot of names came up'' in the 
discussion of persons who might be ``squeezed'' or ``hurt'' by 
an investigation.923
    Evidently Mr. Nussbaum, too, believed that associates of 
the Clintons might be vulnerable to criminal 
prosecution.924 Mr. Gearan's notes of a January 5, 1993 
meeting indicate that Mr. Nussbaum believed it would be 
possible for a criminal prosecutor to detect ``a smell of 
corruption and can show some things of those people close 
around the principal.'' 925 Mr. Gearan recalled this 
statement and admitted that ``principal'' referred to President 
Clinton.926
    During the debate over the appointment of a special 
counsel, senior White House officials apparently attempted both 
to influence Attorney General Reno's decision on the matter and 
to negotiate the scope of an impending investigation. As early 
as the January 4 meeting, White House officials feared that 
Attorney General Reno would appoint an independent prosecutor 
without the White House's input on the matter.927 Mr. 
Gearan's notes of the January 7 meeting indicate discussion 
about Attorney General Reno's decision,928 and preference 
for ``fewer [questions] to lessen the exposure.'' 929
    Later, that day, Mr. Gearan noted that all meeting 
participants agreed, except for Bernard Nussbaum, that ``Reno 
is boxed once Ind[ependent] C[ounsel] starts.'' 930 Mr. 
Gearan confirmed that senior White House officials feared that 
after the Attorney General appointed an independent counsel, 
the matter would be ``out of her hands'' with regard to the 
duration and scope of the investigation.931 The notes 
suggest that a problem with calling for a special counsel is 
that ``Reno has shut the door.'' 932 Mr. Gearan denied 
that this entry referred to any rejection by Ms. Reno of 
attempts by the White House to influence her decision on the 
support of a special counsel.933
    On January 8, 1994, Mr. Ickes expressed displeasure with 
regard to how career Justice Department prosecutors--Donald 
Mackay and Alan Carver--were handling the ongoing federal 
investigations of Madison Guaranty and Whitewater.934 Mr. 
Ickes described Mr. Carver as a ``bad guy'' because he put the 
Clintons' private counsel, Mr. Kendall, on a speaker phone with 
two FBI agents and another prosecutor, Jim Nixon, on the other 
end.935 Mr. Ickes believed that the career Justice 
Department prosecutors ``are f---------- us blue.'' 936
    Mr. Gearan claimed that Mr. Ickes' strong remarks were 
actually complimentary. Mr. Gearan asserted that his reference 
to ``Those guys are f---------- us blue'' meant that the 
Justice Department officials were ``tough'' on the White House 
and had acted ``independent[ly].'' 937
    Mr. Ickes similarly claimed that ``Those guys are f--------
-- us blue'' meant that ``they were probably doing an effective 
job.'' 938 Mr. Ickes denied that his remarks reflected 
White House irritation with Justice Department officials for 
spurning White House attempts to influence their 
investigation.939
    This testimony is contradicted, however, by handwritten 
notes of Roger Altman, Deputy Treasury Secretary and Interim 
CEO of the RTC. In fact, Mr. Altman's support the inference 
that certain White House officials sought to negotiate the 
scope of any investigation of Madison Guaranty and Whitewater, 
but that Attorney General Reno rebuffed their efforts.940
    Mr. Altman's notes record two conversations that he had 
with Mrs. Clinton's Chief of Staff Margaret Williams during the 
same period in which the Whitewater Response Team meetings were 
taking place. According to Mr. Altman's notes, dated January 6, 
1994, at or about that time, ``Maggie's strong inference was 
that the White House was trying to negotiate scope of an 
independent counsel with Reno and having enormous difficulty.'' 
941 Indeed, Ms. Williams told Mr. Altman that Mrs. Clinton 
herself did not want investigators ``poking into 20 years of 
public life in Arkansas.'' 942 According to notes of 
January 11, 1994, Ms. Williams told Mr. Altman: ``On 
Whitewater, HRC was paralyzed by it. If we don't solve this 
matter within the next two days, we don't have to worry about 
her schedule on Health Care.'' 943
    David Kendall, the Clintons' personal attorney, also 
participated in the White House discussions over the 
appointment of a special counsel, including whether the 
desirability of ``attempting to impose limitations'' on the 
investigation.944 In fact, Mr. Kendall drafted the very 
letter that Mr. Nussbaum ultimately sent to the Attorney 
General Reno requesting the appointment of a special 
counsel.945
    On January 12, 1994, after the President called for a 
special counsel, Attorney General Reno appointed Robert B. 
Fiske, Jr., to conduct the investigation into ``whether any 
individuals or entities [had] committed a violation of any 
federal criminal or civil law relating to [the Clintons'] 
relationship with Madison Guaranty Savings & Loan Association, 
the Whitewater Development Corporation, or Capital Management 
Services, Inc.'' 946
            B. White House contacts with former Arkansas Securities 
                    Commissioner Beverly Bassett Schaffer
    Senior White House officials feared that Beverly Bassett 
Schaffer, the Arkansas Securities Commissioner who regulated 
Madison Guaranty in the mid-1980s, would contradict Mrs. 
Clinton's statements concerning the nature and extent of Mrs. 
Clinton's representation of Madison Guaranty before the state 
regulator--as Ms. Schaffer did in testimony before the Special 
Committee. During the January 1994 Whitewater Response Team 
meetings, for example, senior White House officials recognized 
the importance of Ms. Schaffer's ``story'' and considered 
measures to ensure that she would continue to do a ``good job'' 
telling it.947
    During the 1992 presidential campaign, Ms. Schaffer's 
regulation of Madison became an issue.948 Ms. Schaffer 
allegedly ignored evidence of the S&L's insolvency and failed 
to close down Madison Guaranty.949 News reports also 
claimed that Ms. Schaffer approved a novel proposal submitted 
by Mrs. Clinton and her law firm on behalf of Madison Guaranty 
to raise needed capital by issuing preferred stock.950
    Questions also arose about whether Mrs. Clinton improperly 
benefitted from her representation of Madison.951 Mrs. 
Clinton wrote to Ms. Schaffer on behalf of Madison Guaranty on 
the novel preferred stock issue.952 Only two weeks later, 
in a letter to Mrs. Clinton addressed, ``Dear Hillary,'' Ms. 
Schaffer approved the proposal.953 Mrs. Clinton forwarded 
Ms. Schaffers' letter of approval to James McDougal, the 
Clintons' Whitewater business partner and the owner and 
operator of Madison Guaranty.954
    These contacts between Mrs. Clinton and Ms. Schaffer, and 
Mrs. Clinton and Mr. McDougal, raised the issue of the 
propriety of the Governor's spouse attempting to influence a 
state regulator appointed by her husband on behalf of a client 
and business partner.
    Mrs. Clinton and Ms. Schaffer both denied allegations that 
Madison Guaranty had received any special treatment. The 
Clinton campaign issued statements, attributed to Mrs. Clinton, 
expressly claiming that ``she had done legal work for Madison 
Guaranty, but that it was not related to the Savings & Loan's 
dealings with state regulators.'' 955 Ms. Schaffer, with 
the assistance of the Clinton campaign, composed statements, 
including two memoranda to the New York Times, denying any 
special treatment for Madison Guaranty.956
    In October 1993, the RTC sent a criminal referral to the 
U.S. Attorney's Office in Little Rock suggesting a connection 
between the preferred stock issue and campaign contributions to 
Governor Clinton.957 The referral noted that during the 
same month that Mrs. Clinton wrote to Ms. Schaffer, several 
questionable $3,000 Madison Guaranty cashier checks were 
written to the Bill Clinton Campaign.958 The referral 
stressed that Madison's preferred stock plan was approved 
quickly, and that Madison Guaranty's request to issue preferred 
stock occurred when Madison badly needed additional 
capital.959 The referral identified both Hillary Rodham 
Clinton and Beverly Bassett Schaffer as possible witnesses to 
criminal misconduct.960
    On September 29, 1993, the White House received a ``heads 
up'' about the substance of these referrals.961 At the 
November 5, 1993 meeting at Williams & Connolly, senior White 
House officials and private attorneys for the Clintons 
discussed Mrs. Clinton's representation of Madison Guaranty 
before the Arkansas Securities Department,962 particularly 
the ``coziness'' of the relationship.963
    On December 20, 1993, the New York Times published an 
editorial, entitled ``Open up on Madison Guaranty.'' 964 
The editorial described the close relationship between the 
McDougals and the Clintons and stated: ``Others, however, are 
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 
savings & loan operator was engaged in imprudent banking 
practices.965 In the margin of the editorial, the 
President wrote: ``This is important to be on top of. Bassett 
did a good job in [campaign] on this--can she now?'' 966 
The President then forwarded copies of the editorial containing 
his handwritten marginalia to Messrs. Lindsey and 
McLarty.967
    One week later, President Clinton and Mr. Lindsey attended 
a basketball game at the University of Arkansas with Ms. 
Schaffer and her husband.968 At the game, Mr. Lindsey 
asked Mr. Schaffer if she would be willing to answer press 
inquiries ``with respect to her role and what she did and get 
that story out.'' 969 Mr. Lindsey could not recall whether 
the President participated in the conversation.970
    On January 6, 1994, senior White House officials discussed 
Ms. Schaffer's role in connection with Madison's issuance of 
preferred stock.971 Associate White House Counsel Neil 
Eggleston recalled discussions about the importance to the 
President and Mrs. Clinton of Ms. Schaffer's statements ``about 
her role'' during the mid-1980s in regulating Madison 
Guaranty.972
    The next day, January 7, senior White House officials again 
discussed Ms. Schaffer. This time, White House officials 
considered sending Mr. Lindsey, Washington lawyer Michael 
Waldman, and Paul Berry, a former roommate of President 
Clinton, ``to [Arkansas] to meet [with] Beverly Bassett.'' 
973 Mr. Waldman recalled that the officials discussed 
``sending people down to talk to'' Ms. Schaffer.974 Mr. 
Berry, a lobbyist for Union National Bank of Little Rock, had 
instructed Harry Don Denton, the Bank's loan officer, to make a 
$20,000 Whitewater loan to Bill Clinton in 1978 because he was 
``an up and coming political star;'' 975 Mr. Denton 
testified that he would not have made the loan absent Mr. 
Berry's urging.976
    At a second January 7 meeting, senior White House officials 
expressed a sense of urgency about Ms. Schaffer's story beyond 
simple concern over a misperception in the press.977 
According to Mr. Gearan's notes, Mr. Ickes exclaimed: 
``[Beverly] Bassett is so f---- important. [I]f we f--- this 
up, we're done.'' 978 Mr. Ickes added, ``[L]et's not talk 
it to death-let's just get it done.'' 979
    Mr. Ickes and Mr. Gearan both claimed that Ms. Schaffer's 
story ``was so f------ important'' because the White House did 
not want ``to misstate anything.'' 980 Neither could 
recall the meaning of Mr. Ickes' comment ``let's get it done.'' 
981 Mr. Eggelston recalled, however, that ``people 
recognize[d] that if [Ms. Schaffer] were suddenly to change 
what she had said publicly . . . and change her story about it, 
that would be a bad development.'' 982 Mr. Eggleston 
confirmed that senior White House officials were concerned that 
Ms. Schaffer would ``change'' her ``story.'' 983
    After the discussion of Ms. Schaffer's importance, the 
senior White House officials again discussed sending an 
emissary to Ms. Schaffer. 984 Although Mr. Ickes rejected 
the earlier idea to send Messrs. Berry, Waldman, and Lindsey 
because ``it will come out,'' 985 he still wanted someone 
to go over her statement ``item by item'' to ``make sure her 
story is [okay].'' 23 986
---------------------------------------------------------------------------
    \23\ Instead of sending someone connected with the White House, the 
defense team discussed sending John Tisdale, Mr. Lindsey's former law 
partner; Skip Rutherford, a 1992 Clinton presidential official who 
continued to informally assist the White House regarding public 
relations aspects of Whitewater; a New York lawyer friend of Paul 
Begala; and Jack Quinn, Chief of Staff to Vice President Gore. 
(Rutherford, 2/29/96 Dep., pp. 5-10, 21-23; White House Document 
S020577.)
---------------------------------------------------------------------------
    The senior White House officials feared that the press 
might discover that the White House had dispatched operatives 
to contact Ms. Schaffer and the appearance of impropriety. 
987 Mr. Ickes was concerned that such a contact could 
``create an appearance that there was an effort to influence 
her.'' 988
    Both Mr. Ickes and Mr. Gearan denied that a decision was 
made to send someone to see Ms. Schaffer to ``make sure her 
story is ok.'' 24 989 In the end, the White House decided 
not to ``send people who were connected with the White House to 
talk to Ms. Schaffer.'' 990 Mr. Ickes claimed: ``As far as 
I know, no one was sent from the White House to talk to Ms. 
Schaffer.'' 991
---------------------------------------------------------------------------
    \24\ Mr. Ickes notes of the Whitewater Response Team tasking 
memorandum included the task of researching whether the President used 
pressure to aid Madison Guaranty--one of the issues involving Ms. 
Schaffer's actions. (Ickes, 2/22/96, Hrg. pp. 86-87.)
---------------------------------------------------------------------------
    Within a week of the January 9, 1994 meeting, however, at 
least two attendees reached out to Ms. Schaffer. 25 
According to an Associated Press article, Ms. Schaffer resisted 
pressure from Messrs. Lindsey, Begala, and Rutherford to hold a 
press conference in 1994 concerning her contacts on Madison's 
preferred stock offering. 992
---------------------------------------------------------------------------
    \25\ In addition to contacts with persons from Arkansas, the 
Schaffers attended a movie at the White House on January 28, 1994 at 
8:30 p.m. Attendees included, among others, the President, the First 
Lady, Mr. Lindsey, and Paul Berry, a close friend and confidant of the 
President. Mr. Berry was also a close friend of the Schaffers and has 
known the Bassett family since the early 1950s. (Berry, 5/10/96, Dep. 
p. 59.)
---------------------------------------------------------------------------
    In January 1994, Ms. Schaffer spoke to John Tisdale, the 
Clintons' attorney in Little Rock, and he suggested that she 
help prepare a chronology for the White House. 993 In the 
second week of January 1994, Mr. Tisdale forwarded a series of 
memoranda to Mr. Lindsey. 994 It is unclear whether Mr. 
Lindsey had requested that these memoranda be prepared. A 
January 13, 1994 memorandum reflects communications between Mr. 
Tisdale's firm and Ms. Schaffer. 995 It includes the 
background of Ms. Schaffer's dealings with Mrs. Clinton and 
``is based on our discussions with [Ms.] Schaffer.'' 996
    Also in January 1994, Skip Rutherford, a public relations 
advisor to the White House on Whitewater-related matters, 
contacted Ms. Schaffer and her husband, Archie, to discuss the 
possibility that Ms. Schaffer might hold a press conference. 
997 Ms. Schaffer stated that while Mr. Rutherford did not 
specifically indicate he was calling on behalf of the White 
House, she was aware that Mr. Rutherford was ``helping'' Chief 
of Staff McLarty in some capacity. 998 Deputy Chief of 
Staff Ickes denied knowledge of Mr. Tisdale's or Mr. 
Rutherford's contacts with Ms. Schaffer. 999
    At the same time that White House officials were meeting 
twice daily to coordinate the Whitewater defense effort, Betsey 
Wright, the 1992 Deputy Campaign Director and longtime 
associate of the President, travelled to Little Rock from 
Washington, D.C. Although Ms. Wright testified that she went to 
Little Rock to collect documents, she claimed that she was not 
asked by anyone at the White House to travel to Little Rock. 
Rather, Ms. Wright testified that she took it upon herself to 
collect these documents.
    Ms. Wright contacted Mr. Lindsey, Mr. Podesta, and Mr. 
Kendall and informed them of her intention to travel to Little 
Rock, 1000 and that the purpose of her trip was to collect 
campaign finance records. 1001
    When asked why she went to Little Rock, Ms. Wright said, 
``I was trying to pull together--we kept getting the--the White 
House and I kept getting press questions about some campaign 
finance questions.'' 1002 Ms. Wright testified that the 
documents would be a ``handy reference'' and could be used in 
Washington to ensure that she was speaking with a higher degree 
of factual understanding. 1003
    While in Arkansas searching through the documents, which 
were under the control of the Democratic National Committee, 
she ``located a box that when I opened it up it was Whitewater 
documents, and I brought it back to DC and gave it to Mr. 
Kendall.'' 1004 Ms. Wright also retrieved and made copies 
of the appointment files for Ms. Schaffer and gave those files 
to Mr. Kendall. 1005 In total, Ms. Wright testified that 
she had thirteen or fourteen boxes of documents shipped to her 
from Little Rock. 1006
    On January 6, after locating the documents at the storage 
facility, Ms. Wright called Mr. Lindsey. 1007 On January 6 
or 7, Ms. Wright spoke with Mrs. Clinton. 1008 The First 
Lady said to Ms. Wright, ``there is going to be an independent 
or special counsel. You need to get a lawyer. And that's how 
you should handle these documents.'' 1009
            C. The Whitewater Response Team assigns defense tasks to 
                    White House officials
    Records of the January Whitewater Response Team meetings 
reflected specific tasks assigned to the various members of the 
team. 1010
    Many of these assignments focused on the possible 
appointment of a special counsel, including the legal, 
historical, and practical aspects of appointing a special 
counsel. For example, a memorandum to the ``Whitewater Group'' 
from Mr. Ickes, dated January 10, 1994, assigned ``2-3 page 
argument why no special counsel'' to the White House Counsel's 
Office and Michael Waldman. 1011 In addition, however, 
there were a number of assignments related to the factual and 
legal issues involving Whitewater. Mr. Ickes claimed that this 
was all part of the White House effort to respond to press 
inquiries, but many of the tasks involved the Clintons' private 
legal defense issues. For example, ``synopsis of Whitewater/
Madison Guaranty matter'' was assigned to the White House 
Counsel's office, Bruce Lindsey and Mr. Waldman, and ``Memo re 
failure to take deduction on tax return for Whitewater losses'' 
was assigned to Mr. Waldman. 1012 Mr. Ickes also tasked 
Mr. Waldman to contact Chris Wade, the Whitewater real estate 
agent, to obtain Whitewater documents. 26
---------------------------------------------------------------------------
    \26\ Mr. Wade produced documents to the Special Committee, but 
exercised his Fifth Amendment right against self-incrimination when the 
Special Committee sent him a subpoena ad testificandum.
---------------------------------------------------------------------------
    Finally, Mr. Ickes assigned to the White House Counsel's 
Office a legal memorandum on the statute of limitation for 
civil actions to be brought against Mrs. Clinton or the Rose 
Law Firm in relation to the legal representation of Madison 
Guaranty. Obviously, this legal memorandum did not relate to 
press inquiries nor did it relate to the White House Counsel's 
appropriate role in representing the United States Government. 
Rather, it was legal analysis to assist President and Mrs. 
Clinton. After Mr. Eggelston drafted the memorandum, Mr. Ickes 
forwarded it to Mrs. Clinton.

VI: The Retention and Investigation of Pillsbury Madison & Sutro

    In November 1993, Congress enacted the RTC Completion Act 
of 1993, 1013 which extended the statute of limitations 
period for the RTC to initiate civil suits against failed 
savings and loans to February 1994. The statute extended the 
limitations period only for claims arising from fraud, or from 
intentional misconduct resulting in unjust enrichment or in 
substantial losses to the institution. 1014
    On February 4, 1994, the RTC issued an Order of 
Investigation into potential civil claims against Madison 
Guaranty. This investigation was intended to determine whether 
the RTC could bring civil claims against ``former officers, 
directors or others who provided services to, or otherwise 
dealt with, Madison Guaranty.'' 1015
     In January 1994, the RTC's General Counsel, Ellen Kulka, 
decided that the RTC should retain outside counsel to 
investigate any potential civil claims against Madison 
Guaranty, 1016 and she selected the law firm of Pillsbury, 
Madison & Sutro (the ``Pillsbury Firm'') as outside counsel. 
1017 RTC Counsel told Ms. Kulka that Charles E. Patterson 
and Jay Stephens, former United States Attorney for the 
District of Columbia, were two of the three partners at the 
Pillsbury Firm whom they anticipated would handle the 
investigation. 1018
             A. The White House expresses concern over the retention of 
                    Jay Stephens
    By February 1994, senior White House learned that the RTC 
had hired the Pillsbury Firm and Mr. Stephens to investigate 
Madison Guaranty. On February 25, 1994, George Stephanopoulos, 
Senior Advisor to the President, and Joshua Steiner, Chief of 
Staff to Treasury Lloyd Bentsen, discussed the RTC's decision 
to hire Mr. Stephens. 1019 According to Mr. Steiner, Mr. 
Stephanopoulos was ``angry'' and raised his voice during the 
conversation. 1020 Mr. Stephanopolous told Mr. Steiner 
that Mr. Stephens should be disqualified from handling the 
matter because Mr. Stephens had been a critic of the Clinton 
Administration. 1021
    Jean Hanson, General Counsel to the Department of Treasury, 
testified that Mr. Steiner subsequently told her: ``[D]o you 
believe those guys, they want to see if they can get rid of Jay 
Stephens.'' 1022 Ms. Hanson understood that ``those guys'' 
referred to various senior White House officials. 1023 Ms. 
Hanson further testified that on a separate occasion Mr. 
Steiner expressed the view that Ms. Kulka should be fired for 
hiring Mr. Stephens. 1024

          In his diary, Mr. Steiner described his conversation 
        with Mr. Stephanopolous:
          Simply outrageous that RTC had hired him [Stephens], 
        but even more amazing when George then suggested to me 
        that we needed to find a way to get rid of him. 
        Persuaded George that firing him would be incredibly 
        stupid and improper. 1025

Subsequently, Mr. Steiner disavowed his diary entry, claiming 
that he merged two conversations in one entry. 1026
            B. Mr. Stephens is removed from the RTC investigation
    Mr. Stephens was included in Pillsbury's initial proposal 
to the RTC as one of the three partners in charge of the 
matter. 1027 During the early stages of the investigation 
in February 1994, Mr. Stephens attended meetings and was in 
daily contact with the RTC. 1028
    However, after numerous press reports describing Mr. 
Steiner's conversation with Mr. Stephanopolous appeared in the 
third week of March 1994, Mr. Stephens' role ``diminished 
substantially and probably by the summer of '94, [he] was 
virtually disengaged from the matter.'' 1029 Billing 
records of the Pillsbury Firm confirm that Mr. Stephens' work 
on the matter dropped off significantly.
    After March 1994, Mr. Stephens was told that it was no 
longer necessary for him to attend meetings with the RTC in 
Washington, D.C. 1030 In addition, the documents relating 
to the investigation were moved from the Pillsbury Firm's 
Washington D.C. office, where Mr. Stephens resided, to its West 
Coast offices in Los Angeles and San Francisco. 1031
     After March 1994, Mr. Patterson, the partner in charge of 
managing the Madison Guaranty investigation, did not assign any 
further work to Mr. Stephens. 1032 Mr. Stephens did not 
draft the reports eventually submitted to the RTC and has no 
basis for either agreeing or disagreeing with any of the 
conclusions of the reports. 1033 Mr. Stephens did not 
attend any presentations to the RTC about the findings in the 
reports. 1034 Mr. Stephens conducted no depositions and no 
witness interviews, except for one interview relating to a 
request for documents. 1035
    Mr. Patterson spoke to Mark Gabrellian, Counsel to the RTC 
Legal Division, about Mr. Stephens' diminished role, but denied 
that anyone at the RTC asked him to remove Mr. Stephens from 
the case.1036 He did, however, advise Bruce Ericson, the 
billing partner on the Madison investigation, that Ms. Kulka 
had disliked something that Mr. Stephens had said during a 
meeting. Mr. Patterson had the impression that ``there was a 
personality conflict'' between Mr. Stephens and Ms. 
Kulka.1037 Mr. Gabrellian similarly testified that Ms. 
Kulka and Mr. Stephens ``were not getting along all that 
well.'' 1038 Ms. Kulka admitted that she discussed Mr. 
Stephens with Mr. Patterson, but claimed that her only concern 
was with the quality of Mr. Stephens' work.1039
            C. The White House makes inaccurate claims about the 
                    Pillsbury report
    Although Mr. Stephens was removed from the Madison Guaranty 
investigation, the RTC still wanted Mr. Stephens to review and 
approve the final version of the reports in December 1995. Mr. 
Stephens, however, refused to do so:

          Well in fact the RTC asked me to read the reports 
        when the reports were filed in December, I declined to 
        do that because I had not been involved in the 
        engagement, I thought it was improper and inappropriate 
        for me to review those reports simply so the RTC could 
        have my imprimatur on those reports.1040

Mr. Ericson confirmed that Mr. Stephens had no involvement in 
the handling of the matter after the summer or at the latest 
fall 1994--over one year prior to the completion of the final 
reports.1041
    Moreover, on May 17, 1996, in a hearing before the Special 
Committee, Mr. Patterson and Mr. Ericson both admitted that Mr. 
Stephens did not ``head the inquiry.'' 1042 Both partners 
also agreed that statements indicating that the report was 
``written by Republican Jay Stephens'' are entirely baseless 
and inaccurate.1043 The following exchange occurred at the 
Special Committee's hearings with lawyers from the Pillsbury 
firm:

          Senator D'Amato: Let me read to you from the Chicago 
        Sun Times. . . . Dated January 21st [1996] . . . 
        Headline: Facts Fight Fiction Over Whitewater.
          Mr. Patterson: Yes.
          Senator D'Amato: What's the byline?
          Mr. Patterson: Hillary Clinton.
          Senator D'Amato: Let me take you down to the last 
        sentence in the first page. You want to start reading 
        that?
          Mr. Patterson: Would you like me to read it Senator?
          Senator D'Amato: Yes, please.
          Mr. Patterson: Since most Americans never heard about 
        this report, let me fill you in.
          Senator D'Amato: This is referring to the report that 
        your, this is the Pillsbury, Madison & Sutro report. Go 
        ahead.
          Mr. Patterson: It was conducted by the RTC by one of 
        the nation's leading law firms, Pillsbury, Madison & 
        Sutro. It took more than two years to complete and cost 
        nearly $4 million. A prominent republican, former U.S. 
        Attorney, Jay Stephens, headed the inquiry.
          Senator D'Amato: Mr. Stephens, did you head this 
        inquiry?
          Mr. Stephens: No, I did not.
          Senator D'Amato: Mr. Patterson, did he head the 
        inquiry?
          Mr. Patterson: No, he did not Senator.
          Senator D'Amato: Mr. Ericson, did he head the 
        inquiry?
          Mr. Ericson: No.1044

Indeed, after Mr. Stephens was identified in public statements 
as the author of the reports, he raised the following concern:

          On one or two occasions, I probably raised I believe 
        most likely with Mr. Ericson, some concern that I had 
        that the factual record wasn't clear or that I felt it 
        was a little inappropriate that somehow or other either 
        I was getting the credit or the blame for the reports, 
        since I hadn't written the reports.1045

However, ``the sense was the client [the RTC] did not want to 
get involved in making public statements about the firm's 
involvement.'' 1046
    Contrary to White House claims, the final report of the 
Pillsbury firm did not exonerate the Clintons. The Pillsbury 
investigation focused only on the narrow question whether it 
would be cost-effective for the RTC to bring any civil lawsuits 
against Madison to recover damages arising from the S&L's 
failure.1047 The authors of the Pillsbury report--Mr. 
Patterson and Mr. Ericson--testified that the reports do not 
exonerate anyone.1048 As Mr. Ericson put it, ``I don't 
think our reports exonerated anybody of anything.'' 1049
    After reviewing a draft of the supplemental Whitewater 
Report in November 1994,1050 Mr. Stephens told Mr. Ericson 
that the report did not consider the ``totality of the issues 
related to Madison because it was looking at Whitewater in 
isolation rather than looking at sort of the mosaic of real 
estate transactions that Madison was involved in and how 
Whitewater might tie in or relate to that.'' 1051

          I believe I made some general comment that in my 
        reading through the report that it either didn't 
        highlight or didn't focus on the potential liability 
        that might arise from a difference of equity 
        participation by the partners in the Whitewater 
        venture. . . . And in doing that, the partners still 
        maintain the same general equitable interest in the, or 
        legal interest in the partnership, and as a 
        consequence, one partner was benefitting substantially 
        by the financial contributions of the other, and that 
        there may be some issue that really raised a question 
        about liability.1052

Mr. Stephens further told Mr. Ericson the Pillsbury Firm should 
interview more witnesses who ``might have added perspective or 
input in trying to understand those transactions.'' 1053 
According to Mr. Stephens, the report was essentially ``an 
accounting analysis.'' 1054
    Pillsbury never examined many witness. Some asserted their 
Fifth Amendment right not to testify: James and Susan McDougal, 
the Clintons' Whitewater business partners, Jim Guy Tucker, 
Chris and Rosalee Wade, Whitewater real estate agents.1055 
The OIC asked Pillsbury not to interview John Latham, President 
and CEO of Madison Guaranty, or David Hale, President of 
Capital Management Services, Inc.1056
    Other witnesses who provided important testimony to the 
Special Committee, however, were simply not contacted by the 
Pillsbury firm.1057 Because of the limited scope of 
Pillsbury's representation, there were a number of areas that 
they did not explore, and therefore a number of witnesses that 
the Pillsbury Firm did not interview. For example, the 
Pillsbury Firm did not interview many of the bankers involved 
in making or extending the Whitewater loans.27
---------------------------------------------------------------------------
    \27\ Meanwhile, Frank Burge, James Patterson, and Robert Ritter, 
all of whom were Presidents of Citizen's Bank of Flippin (``Citizen's 
Bank'') at one time during the existence of the Whitewater loan, 
provided substantial testimony to the Special Committee on the initial 
Whitewater loan made by Citizen's Bank. Mr. Burge testified that the 
Clintons and the McDougals never notified Citizen's Bank that the 
$20,000 down payment on the Whitewater loan was borrowed from another 
bank, Union National Bank, and, thus, Citizen's Bank was not aware that 
the Clintons and McDougals invested no money into the original 
mortgage. (Burge, 5/8/96 Hrg. pp. 19-20.)
    Mr. Ritter testified that he had two meetings with Mrs. Clinton 
between 1979 and 1982 about the Whitewater mortgage. Mr. Ritter 
testified that Mrs. Clinton asked several questions about the loans and 
interest rates and seemed quite knowledgeable about the transaction. 
(Ritter, 5/8/96 Hrg. pp. 34-35.)
    Paul Berry and Donald Denton, Senior Vice Presidents of Union 
National Bank, also provided illuminating testimony to the Special 
Committee. Mr. Berry testified that President Clinton approached him 
about making the $20,000 loan for the down payment on the Whitewater 
property. Mr. Denton testified that either Mr. Berry, or another bank 
official, instructed him to make the $20,000 unsecured loan--against 
his better judgment. (Denton, 5/8/96 Hrg. p. 66.)
    After the discovery of the Rose Law Firm billing records in the 
White House Residence in January 1996, the FDIC Inspector General 
reexamined Mr. Denton. His memory refreshed, Mr. Denton specifically 
recalled an April 7, 1986 telephone conversation with Mrs. Clinton 
relating to Castle Grande, a sham transaction. During the conversation, 
Mr. Denton cautioned Mrs. Clinton that the transaction may pose a 
problem because they could violate an Arkansas banking regulation. 
According to Mr. Denton, Mrs. Clinton ``summarily dismissed'' Mr. 
Denton's warning. She replied in a manner he took to mean that ``he 
would take care of savings and loan matters, and she would take care of 
legal matters.'' (Denton, 6/11/96 FDIC-OIG Interview, p. 3.)
---------------------------------------------------------------------------

    Part III. White House Interference With Congressional Inquiries

I. Mr. Ickes Provided Incomplete and Inaccurate Testimony to the Senate 
        Banking Committee

    Before the Senate Banking Committee in summer 1994, Mr. 
Ickes testified that he and other senior White House officials 
did not discuss the statute of limitations for Madison-related 
civil claims prior to February 2, 1994. Documentary evidence 
obtained by the Special Committee indicates, however, that, in 
January 1994, Mr. Ickes and other White House officials were 
concerned about and discussioned when the statute of 
limitations would run on possible civil claims the RTC might 
bring against the Mrs. Clinton and the Rose Law Firm.1058
    In January 1994, considerable public interest existed in 
issues relating to Whitewater and Madison. The RTC was 
investigating possible civil claims arising from the $60 
million failure of Madison, and on January 20, 1994, a Special 
Counsel was appointed to investigate possible criminal conduct 
relating to Whitewater and Madison. The statute of limitations 
for Madison-related civil claims involving fraud or intentional 
misconduct was scheduled to expire on February 28, 1994. On 
February 12, 1994, Congress enacted Public Law 103-211, which 
extended the statute of limitations to December 31, 1995.
    Prior to the extension of the statute of limitations, the 
RTC had to decide by February 28, 1994, whether to bring suit, 
to seek tolling agreements, or to allow the statute to expire 
without action. Because President and Mrs. Clinton faced 
potential liability relating to the failure of Madison, 
information regarding the status of the RTC investigation and 
its deliberations with respect to the statute of limitations 
was valuable to the Clintons in their defense effort.1059
    During its 1994 investigation, the Senate Banking Committee 
examined the state of knowledge of White House officials in 
January 1994 with respect to the statute of limitations for 
Madison-related civil claims.1060 Mr. Ickes testified 
about a meeting on February 2, 1994, between senior White House 
officials and Roger Altman, then Deputy Secretary of the 
Treasury and Acting Chief Executive Officer of the RTC, and 
Jean Hanson, General Counsel to the Department of the 
Treasury.1061 With respect to discussions about the 
statute of limitations at that meeting, Mr. Ickes testified: 
``I, for one, had little knowledge, if any knowledge, about the 
situation.'' 1062
    Similarly, when asked by the Inspectors General of the 
Treasury Department and the RTC about this same February 2, 
1994, meeting, Mr. Ickes testified: ``Mr. Altman, as I recall, 
raised the issue of the upcoming--the possible--well, not the 
possible, but the fact that the statute of limitations, which I 
knew nothing about at the time, of the RTC in connection with 
an investigation that was apparently being conducted by the RTC 
on Madison Whitewater was about to expire.'' 1063 Mr. 
Ickes emphasized that White House officials had no knowledge of 
the statute of limitations issue: ``There were questions about 
the statute of limitations, when it expired, under what 
conditions it expired. I don't think anybody in the room other 
than Mr. Altman and Ms. Hanson had a clear picture of what the 
statute of limitations situation was.'' 1064
    Evidence uncovered by the Special Committee shows, however, 
that in January 1994, Mr. Ickes assigned and received a 
memorandum on the statute of limitations for Madison-related 
civil claims. Moreover, he discussed the issue with other 
senior White House officials prior to the February 2 meeting 
with Mr. Altman and Ms. Hanson.
    Among the evidence newly uncovered by the Special Committee 
is a memorandum to Mr. Ickes from W. Neil Eggleston, Associate 
Counsel to the President, entitled ``Statute of Limitations in 
Actions Brought by the Conservators of a Financial 
Institution.'' 1065 The memorandum, dated January 17, 
1994, discussed the statute of limitations generally applicable 
to claims filed by the RTC on behalf of failed thrift 
institutions. More important, Mr. Eggleston's memorandum 
discussed the statute of limitations as applied specifically to 
Madison and identified March 2, 1994,28 as the final date 
for the RTC to file civil tort claims on behalf of Madison, the 
type of action usually brought against outsiders in financial 
institution cases.1066
---------------------------------------------------------------------------
    \28\ Mr. Eggleston incorrectly identified March 2, 1989, as the 
date on which the statute of limitations began to run for Madison-
related civil claims. The RTC was appointed conservator of Madison on 
February 28, 1989, and actual intervention occurred on March 2, 1989. 
The statute of limitations began to run on ``the date of the 
appointment of the Corporation as conservator or receiver.'' 12 U.S.C. 
Sec. 1821(d)(14)(B)(i) (1995).
---------------------------------------------------------------------------
    On February 20, 1996, the White House produced to the 
Special Committee memoranda from Mr. Ickes to the ``Whitewater 
group,'' dated January 9 and January 10, 1994. Both memoranda, 
which recorded assignments for various White House officials on 
matters related to Whitewater, listed the following item:

          ``11. Memo re statute of limitations for civil 
        actions (counsel--assigned 1/8)'' 1067

These documents thus indicate that Mr. Ickes assigned Mr. 
Eggleston to research and write a memorandum on the statute of 
limitations issue, which Mr. Eggleston completed and submitted 
to Mr. Ickes on January 17, 1994.

    Also on February 20, 1996, the White House produced to the 
Special Committee notes taken by Mr. Ickes of a Whitewater 
meeting at the home of Vernon Jordan.1068 This meeting 
took place on January 16, 1994, proximate to Mr. Eggleston's 
memorandum to Mr. Ickes and before the February 2, 1994, 
meeting with Mr. Altman and Ms. Hanson.
    Although Mr. Ickes testified that ``I can only recall what 
I have on my notes,'' 1069 the notes indicate that the 
statute of limitations was one of three topics of discussion at 
the meeting. Those notes read in relevant part:

          ``(2) Statute of limitations
          --no allegation that Clintons have broken any law & 
        therefore
          --we don't know what civil refers to
        --always exception for fraud'' 1070
          

The documentary evidence thus contradicts Mr. Ickes' prior 
testimony that he did not discuss the statute of limitations 
issue prior to February 2, 1994.
    In addition, Mr. Ickes testified to Senate Banking 
Committee in July and August 1994 that he did not know whether 
two memoranda detailing the potential liability of the 
President and Mrs. Clinton to the RTC had been sent to Mrs. 
Clinton. The Special Committee has discovered, however, 
evidence indicating that, at about the same time of Mr. Ickes' 
testimony, his attorney, presumably based on information from 
Mr. Ickes, informed the White House Counsel's office that Mr. 
Ickes had indeed sent the memoranda to Mrs. Clinton and that 
Mrs. Clinton had asked him questions about the 
memoranda.1071

II. The White House Interfered with Treasury IG and RTC IG 
        Investigations into White House-Treasury Contacts

    On March 3, 1994, in response to the public disclosure of 
possible improper contacts between Treasury and White House 
officials concerning the RTC criminal referrals, Treasury 
Secretary Lloyd Bentsen publicly announced that he would seek 
an opinion from the Office of Government Ethics (``OGE'') about 
the propriety of those contacts.1072 When Secretary 
Bentsen contacted the OGE about conducting an investigation, 
the OGE informed him that the agency had no investigation 
capability, but could opine on the propriety of certain conduct 
if provided with the factual background.1073 The OGE 
suggested that an investigation into the relevant facts be 
conducted by the RTC's Office of Inspector General (``RTC-IG'') 
and the Treasury Department's Office of Inspector General 
(``Treasury IG'') (collectively ``IGs'').1074 Secretary 
Bentsen then requested that the IGs conduct an ``independent'' 
investigation of contacts.
    Thus, on July 1, 1994, the RTC-IG and the Treasury IG 
commenced a joint investigation of the White House-Treasury 
contacts.1075 The joint IG investigation included 
examining White House, Treasury Department and RTC officials to 
determine ``what the purpose of these contacts between the 
Treasury officials was, whether or not the purpose of the 
contact was to further some public interest or some private 
interest.'' 1076
            A. Independence of IG investigation is compromised
    On June 22, 1994, prior to the commencement of the joint IG 
investigation, James Cottos, the Assistant Treasury IG in 
charge of the investigation, expressed concerns to the Acting 
Treasury IG Robert Cesca about involvement in the investigation 
by Francine Kerner, the Treasury IG Counsel.1077 
Specifically, Mr. Cottos indicated that there might be a 
conflict because Ms. Kerner, a member of the Treasury's Office 
General Counsel (``Treasury OGC''), reported to Deputy Treasury 
General Counsel Dennis Foreman and to Treasury General Counsel 
Jean Hanson--the persons whose actions were at issue in the 
investigation.1078 Mr. Cottos believed that because Ms. 
Kerner's overall evaluation would be performed by the Treasury 
OGC's--the very office being investigated--she might have 
divided loyalties.1079
    Others involved in the investigation shared Mr. Cottos' 
concerns about Ms. Kerner's independence. Clark Blight, the 
chief investigator for the RTC-IG, testified that, ``[e]arly on 
it seemed like she was an advocate for the White House.'' 
1080 Patricia Black, Counsel to the RTC-IG, testified that 
she ``had concerns because she [Kerner] was located 
organizationally within the Office of General Counsel, and this 
was an investigation of the highest ranking members of that 
office.1081 And John Adair, the RTC Inspector General, was 
sufficiently concerned about Ms. Kerner's involvement in the 
investigation that on or around June 2, 1995, he called Acting 
Treasury IG Robert Cesca, to suggest that Ms. Kerner be removed 
from the case. Mr. Adair suggested that Ms. Black act as 
counsel for both offices.1082 Because, unlike Ms. Kerner, 
Ms. Black had no potential conflicts of interests since she was 
not in a reporting chain with anyone whose conduct was a 
subject of the investigation.
    Although Mr. Cesca refused to remove Ms. Kerner from the 
investigation, he recognized the need to insulate the 
investigation from the influence of the Treasury OGC. On June 
27, 1994, Mr. Cesca sent a memorandum to Ms. Hanson stating 
that Ms. Kerner and her staff would ``report solely to the 
Inspector General on any matters relating to the 
investigation.'' 1083 In addition, neither Ms. Kerner nor 
her staff were to ``communicate any information about the 
substance of this inquiry without specific authorization from 
the Inspector General.'' 1084 Assistant Treasury IG James 
Cottos was not satisfied, however, that the terms of the June 
27, 1994 memorandum would protect against actual or perceived 
conflicts of interest related to Ms. Kerner's participation in 
the investigation, because her overall evaluation ``would still 
be done by the general counsel's office.'' 1085
    Mr. Cottos became even more concerned about Ms. Kerner's 
participation in the investigation when he learned that during 
the course of ``three or four'' witness interviews, attorneys 
for witnesses told the IG investigators that they had reached 
agreements with Ms. Kerner limiting the scope of 
interviews.1086
    Ms. Kerner's interaction with witnesses' attorneys raised 
questions. For example, on July 11, 1994, at 10:44 p.m. the 
night before the deposition of Treasury Chief of Staff Joshua 
Steiner, a central figure in the investigation, Ms. Kerner sent 
an e-mail to Mr. Cottos with proposed questions for the 
interview.1087 Ms. Kerner was scheduled to meet with Mr. 
Steiner's attorney, Reid Weingarten, 15 minutes later, at 11:00 
p.m. that same night.1088 Ms. Kerner did not specifically 
recall meeting with Mr. Weingarten on the night of July 11th, 
but she testified that she did have two meetings with 
him.1089 Ms. Kerner could not explain why she met with Mr. 
Weingarten at 11:00 p.m. the night before Mr. Steiner's 
deposition.
    Mr. Cottos knew that Ms. Kerner had met with Mr. Steiner's 
attorney but he was not aware that she had met with him after 
she had suggested deposition questions to him by e-mail. When 
he was informed about the timing of the meeting, Mr. Cesca 
admitted that if she had met with Mr. Weingarten shortly after 
sending the e-mail, ``there is a perception that there could be 
a compromise.'' 1090
    Meanwhile, on June 30, 1994, the Assistant Treasury IG 
James Cottos, Chief Investigator for RTC-IG Clark Blight and 
their respective investigative staffs learned that Treasury OGC 
officials wanted to obtain copies of witness interview 
transcripts to assist in preparing Treasury witnesses prepare 
for upcoming congressional hearings. According to Mr. Blight, 
there was ``a general agreement on the investigative side that 
the transcripts would be kept with the investigators, would not 
be released. And that it is my recollection that Cottos was 
supportive of that.'' 1091
    Despite this agreement the Treasury OGC began to receive 
deposition transcripts form Ms. Kerner in early July. According 
to Assistant General Counsel Kenneth Schmalzbach, Ms. Kerner 
provided deposition transcripts to him sometime between July 8, 
1994 and July 13, 1994.1092
    This exchange took place even though Mr. Schmalzbach and 
Ms. Kerner both knew that the June 27, 1994 memorandum had 
erected a ``wall'' with respect to Ms. Kerner's communication 
to the Treasury OGC.1093 According to Mr. Cottos, Ms. 
Kerner was not supposed to communicate with members of the 
Treasury OGC about the transcripts.1094.
    Because the transcripts contained information about the 
``substance'' of the investigation, this transfer of 
information from Ms. Kerner to Treasury OGC directly violated 
the terms of the June 27 memorandum. According to RTC-IG John 
Adair, the transcripts contained 90% of the substance of the 
investigation 1095, including sensitive information about 
the ongoing investigation.1096
    Ms. Kerner made this prohibited exchange of confidential 
RTC information without asking any of the other investigators, 
including Acting Treasury Inspector General Cesca, who only 
learned that the transcripts were forwarded to the Treasury OGC 
on July 18, 1994, when Ms. Kerner transferred the transcripts 
to Mr. Schmalzbach.1097 Mr. Cottos similarly was not 
informed about the transfer until July 18.1098 Neither Mr. 
Cottos nor Mr. Cesca recalled any conversation with Ms. Kerner 
about transferring transcripts to the Treasury OGC prior to 
July 18,1099 and Mr. Cottos testified that he had objected 
to providing any transcripts to the Treasury OGC.1100 This 
transfer violated the terms of the June 27th memorandum.
    Members of the RTC-IG's office working on this ``joint'' 
and ``independent'' investigation were not consulted about Ms. 
Kerner's surrender of the confidential deposition transcripts 
to Ms. Hanson's staff.1101 The RTC-IG was not told about 
the transfer of the transcripts to the Treasury OGC until they 
were delivered.1102 In fact, RTC-IG John Adair had a 
conversation with Ms. Kerner on July 19, 1994 and she failed to 
mention the previous day's release of the transcripts to the 
Treasury OGC.1103 Mr. Blight, Chief Investigator for the 
RTC-IG, was surprised that the Treasury OGC had received copies 
of the transcripts, because he thought that the investigative 
staffs had agreed during the June 30, 1994 meeting that 
``nothing would be released until we had a final report.'' 
1104 According to Ms. Black, transferring transcripts to 
the office that was under investigation violated standard 
investigatory procedures 1105: ``One the investigation was 
not complete and as everybody has said, was still open, and the 
second concern that I had was that the transcripts had 
privileged information in them . . . information concerning the 
underlying RTC criminal investigation.'' 1106
    Mr. Schmalzbach and other members of the Treasury OGC 
prepared Treasury Secretary Bentsen and other Treasury 
witnesses, including Mr. Altman and Ms. Hanson, for 
Congressional testimony.1107 Mr. Schmalzbach first gained 
access to Ms. Hanson's deposition transcript ``sometime after 
July 8 but before July 13.'' 1108 The Senate Banking 
Committee deposed Ms. Hanson on July 14, 16 and 17, 1994.
    Mr. Schmalzbach admitted that he attempted to obtain 
information from the IGs' investigation and fact finding, and 
to provide that information to the Treasury witnesses so they 
could prepare for Congressional testimony.1109 He further 
admitted that he knew Mr. Foreman and Ms. Hanson were to be 
``walled off,'' but believed he could use the transcripts to 
prepare Mr. Foreman and Ms. Hanson without advising them of the 
source of his information.1110 Mr. Altman's testimony as 
to whether he was told that President Clinton was upset about 
the manner of his recusal changed between the time of his 
deposition and his hearing testimony.1111
    The supposedly ``independent report'' submitted by the IGs 
to the OGE was edited by Treasury OGC. On July 22, 1995, Acting 
Treasury Inspector General Cesca sent an initial draft of the 
joint IG report--the report that would provide the factual 
basis for the OGE opinion--to Treasury Secretary 
Bentsen.1112
    During the drafting process, Mr. Cottos identified signs of 
bias on the part of Ms. Kerner toward the investigation of Ms. 
Hanson and others in the Treasury OGC.51113 Ms. Kerner edited 
the draft IGs report.1114 Mr. Cottos felt that Ms. 
Kerner's proposed edits ``were slanting the facts or attempting 
to slant the facts that we had gathered in the initial draft.'' 
1115 Mr. Cottos explained to Ms. Kerner ``that we were not 
the Jean Hanson defense team.'' 1116 After the OGC 
obtained a draft of the IGs report, Stephen McHale, Deputy 
Assistant General Counsel, and two other OGC members sent 
suggested changes to Ms. Kerner,1117 and she then sent 
them to the IGs.1118
    The suggested edits of the Treasury OGC were offered at a 
drafting session held by the IGs on July 28, 1995.1119 Ms. 
Kerner claimed that at the meeting she identified these as 
``some suggested edits from Mr. Schmalzbach's office.'' 
1120 According to Mr. Cottos, Ms. Kerner did not state 
that the suggestions were made by the OGC, but rather that the 
suggested changes were her own.1121
    Counsel to the RTC-IG Black was disturbed when she learned 
what had happened because, ``again information had gone outside 
the investigation.'' Ms. Black stated that the IGs do not 
normally give a report to a general counsel's office for 
commentary.1122
    Treasury Secretary Bentsen was not aware that members of 
the Treasury OGC took advance copies of the transcripts or the 
draft report, or made substantive changes to the draft report 
that the IGs sent to the OGE.1123
    At the July 28 meeting, the IGs also agreed that, although 
the transcripts would be appended to the final report submitted 
to the OGE, all confidential information concerning the RTC 
criminal referrals would be redacted.1124 During the 
meeting, Ms. Kerner left twice to call Mr. Schmalzbach to 
inform him that the RTC-IG was insisting that the transcripts 
be redacted before any public release.
    Ms. Kerner also called Mr. Schmalzbach to warn him that Ms. 
Kulka, General Counsel to the RTC, was threatening to testify 
that the investigation had come under the sway of the Treasury 
Secretary's office. In an e-mail to Edward Knight, Secretary 
Bentsen's Executive Secretary, at 10:44 a.m. on July 28, Mr. 
Schmalzbach reported:

          I just heard from IG Counsel Francine Kerner, who is 
        meeting with RTC IG people to determine final changes 
        in the IG's chronology. At 11:30, that group will meet 
        with Ellen Kulka, who is expected to argue that the 
        transcripts of the IG's interviews should not be 
        released at all with the IG's report . . . Accordingly 
        you need to place the call to Jack Ryan, the deputy CEO 
        at RTC, and not to Jack Adair . . . You also need to be 
        aware of a piece of background. Counsel to RTC's IG, 
        Pat Black, is telling the morning's gathering of the IG 
        people working on the report that if Kulka fails to win 
        on the issue of not making the transcripts public, she 
        is prepared to testify at the hearings that the IGs 
        group has been under the sway of the Secretary in 
        performing their investigation.1125

    Ms. Kerner admitted that Ms. Black advised her of Ms. 
Kulka's threat to reveal that the joint IG investigation was 
under the Treasury Secretary's sway, but she claimed that she 
did not recall contacting Mr. Schmalzbach to warn him.1126
            B. Confidential information is provided to the White House
    Meanwhile, President Clinton named Lloyd Cutler as Special 
Counsel to the President to replace Bernard Nussbaum, who had 
resigned from the position of White House Counsel. The 
President and White House Chief of Staff Mack McLarty 
instructed Mr. Cutler to conduct an internal investigation of 
the propriety of the conduct of White House personnel in 
connection with the White House-Treasury contacts. 1127
    On June 21, 1994, Secretary Bentsen met with Mr. Cutler and 
agreed to share information gathered during the joint IG 
investigation with the White House. 1128 Mr. Cutler 
indicated to Treasury Secretary Bentsen that the White House 
would like to obtain all of the IGs' interview transcripts, not 
just the transcripts of witnesses that the White House did not 
interview. 1129 Mr. Cutler would coordinate the exchange 
of transcripts through Mr. Knight or by other members of Mr. 
Cutler's staff with Treasury Secretary Bentsen's staff. 
1130 Although Secretary Bentsen admitted that he had 
ordered the investigation to be under the control of the IGs, 
he had two or three meetings with Mr. Cutler about providing 
transcripts, and he ``assured'' Mr. Cutler that the Treasury 
would provide the transcripts to the White House in an 
expedited manner. 1131
    Mr. Knight testified that he was not aware that Mr. Cutler 
made a request to Secretary Bentsen to receive copies of the 
transcripts. 1132 Mr. Knight specifically stated that ``as 
far as requests [for transcripts] coming to me or the 
Secretary, I am aware of none.'' 1133 Mr. Knight also 
denied that he had any discussions with anyone in the White 
House Counsel's Office about the transcripts in July of 1994. 
1134 He went as far to say that, ``I think I have a fairly 
good recollection of when I talked to the counsel to the 
President of the United States. I have no recollection of 
talking to him during the month of July. Absolutely none.'' 
1135
    Mr. Knight's testimony, however, was contradicted both by 
the documentary evidence and the testimony of Mr. Cutler. 
29 When asked about a July 5, 1994 meeting between the 
White House Counsel's Office, OGE, RTC-IG and Treasury IG--a 
meeting at which White House Special Associate Counsel Jane 
Sherburne asked to receive copies of the transcripts and was 
rebuffed--Mr. Cutler stated: ``I remember calling Mr. Knight on 
a number of occasions in this time period on the issue of when 
we were going to receive the transcripts.'' 1136 Mr. 
Cutler's calendar indicated that on July 6, 1994 he met with 
Mr. Knight and Treasury Assistant General Counsel Robert 
McNamara. Mr. Cutler recalled that the meeting involved a 
discussion of the White House's ``need to get transcripts and 
the fact that we had an understanding to that effect.'' 
1137 Mr. Cutler stated that the meeting resulted from a 
previous conversation he had with Mr. Knight about the RTC's 
objection to providing transcripts to the White House. 
1138
---------------------------------------------------------------------------
    \29\  Phone logs kept by Mr. Cutler's office indicate that Mr. 
Knight called Mr. Cutler on July 15, 1994 and that Mr. Cutler spoke 
with Mr. Knight on July 18, July 20, July 21 and July 22. (White House 
Documents S007922, S007923, S007924, S007928 and S007929.)
---------------------------------------------------------------------------
    Mr. Cutler stated that his plan in conducting the White 
House investigation rested on the Treasury's stated willingness 
to provide its deposition transcripts. Indeed, by early July, 
officials in the White House Counsel's Office decided not to 
interview certain witnesses because they would obtain 
transcripts of those witnesses' depositions from Treasury. 
1139
    When asked about any restrictions that may have been put on 
the use of the transcripts at the beginning of the 
investigation, Mr. Cutler once again referred to substantive 
conversations he had with Mr. Knight: ``My recollection is I 
had discussions with Mr. Knight about the timing of when we 
would receive the transcripts in which he indicated to me that 
there were some objections from within the Treasury at lower 
levels as to delivering us the transcripts on a seriatim basis. 
1140 Mr. Cutler testified that at the time he began the 
White House internal investigation in early July, he understood 
that there was an agreement that the White House would be 
getting all the transcripts of the all the IGs depositions. 
1141
    Secretary Bentsen did not recall whether he consulted 
either the RTC-IG Adair or the Acting Treasury IG Cesca about 
his decision to release the transcripts. 1142 Mr. Cesca 
testified that he was not aware that Secretary Bentsen had 
agreed to provide the White House with the confidential 
transcripts. 1143
    During the July 5, 1994, Ms. Black told Ms. Sherburne that 
the White House could not have the transcripts. 30 1144 
Ms. Black explained that ``we were adamantly opposed to the 
transcripts going outside of the investigatory circle.'' 
1145 Ms. Black testified that handing over the transcripts 
to either the Treasury OGC or the White House would have 
``violated our processes, it was not a normal investigative 
technique and of course, it can affect other witnesses' 
testimonies if they know what other witnesses have said.'' 
1146
---------------------------------------------------------------------------
    \30\ In addition, Ms. Sherburne first requested that White House 
attorneys be able to sit in on OIG depositions. Ms. Black strongly 
opposed this suggestion, because she wanted to keep the investigation 
independent, and she stated, ``if we agreed to have them (the White 
House Counsel) sitting in on the interviews, that would be contrary to 
our standard method of conducting investigations.'' (Black, 10/12/95 
Dep. 77.) Ms. Black stated that ``although we conduct all 
investigations by the book, this one, above all other investigations, 
had to be conducted by the book in order to give any validity to 
whatever we found. (Black, 10/12/95 Dep. p. 62.)
---------------------------------------------------------------------------
    Mr. Cottos expressed similar concerns stating, ``I objected 
from the beginning about transcripts being given to anyone.'' 
1147 He worried about ``other witnesses being able to read 
someone's testimony and possibly tailoring their own'' 
testimony before the Senate Banking Committee.1148
    Ms. Black informed RTC Inspector General Jack Adair that 
the White House made a request for transcripts, and that Ms. 
Sherburne's request had been rebuffed. Mr. Adair believed that 
the issue had been settled.1149 Neither Mr. Adair nor Ms. 
Black were consulted prior to the surrender of the transcripts 
to the White House.1150
    On July 18, 1994, Ms. Kerner sent Mr. Cottos an e-mail 
informing him that Ms. Sherburne had requested again to see 
IGs' transcripts to determine ``whether there are 
inconsistencies with White House interviews.'' 1151 On 
July 19, Mr. Cottos stated his opposition to Ms. Sherburne's 
request, and noted that, if anything, the IGs should be given 
copies of the White House's interviews.1152 Thus, as of at 
least July 19, 1995, Ms. Kerner was on notice that Mr. Cottos 
opposed providing the White House with deposition transcripts.
    Nevertheless, on July 23, 1994, Treasury OGC delivered 
copies of IG transcripts to members of the White House 
Counsel's Office.1153 On July 23, 1994, Mr. McHale of 
Treasury OGC sent a transmittal letter to Ms. Sherburne that 
documented that the Treasury OGC provided the White House 
copies of transcripts of depositions taken by the IGs' 
investigators. pursuant to certain restrictions placed on the 
use of the transcripts.1154 These transcripts contained 
confidential information related to the RTC criminal 
investigation of Madison Guaranty.1155
    Secretary Bentsen testified that he ``made the final 
judgment'' to send the transcripts to the White House.1156
    Acting Treasury IG Cesca, testified that on July 23, 1994, 
he learned that Mr. Cutler had requested the transcripts, and 
that this request came to him via the Treasury Secretary's 
office.1157 Mr. Cesca decided that it was not appropriate 
to release the transcripts to the White House. As he put it, 
``[m]y concern centered around the fact that that was the 
essence of what we were investigating'' 1158 and would 
raise the ``same issue that we were investigating in terms of 
contacts between the Treasury and the White House.'' 1159
    Shortly thereafter, Mr. Cesca had a conference call with 
Ms. Kerner and Mr. McHale, who told him that Mr. Knight had 
called to inform him of ``the [Treasury] Secretary's desire to 
release the transcripts to Lloyd Cutler.'' 1160 Following 
this conversation, Mr. Cesca agreed to release the transcripts 
with certain restrictions.1161
    Whether or not the Acting Treasury IG's approval was needed 
is unclear in light of the testimony given by Mr. Cutler and 
Treasury Secretary Bentsen that they had already reached an 
agreement that the White House would receive the transcripts. 
According to Mr. Knight, he did not know about the agreement to 
provide the transcripts until November 7, 1995,1162 the 
day before his testimony before the Special Committee. Mr. 
Knight claimed that he was approached by the Acting Treasury IG 
to ask Secretary Bentsen's opinion as to whether the 
transcripts should be released,1163 and that the Secretary 
then told him that he thought it would be reasonable to 
cooperate with Mr. Cutler.1164
    Although Mr. Cottos was the Treasury IG investigator 
responsible for investigation, and despite his previous 
objections to releasing the transcripts, he was not told about 
the transfer until two days after it occurred.1165 Mr. 
Cottos was ``not very happy about'' the transfer, and asked why 
he had not been consulted.1166 Mr. Cottos was still of the 
opinion that the transcripts should not have been released to 
anyone outside the investigation, ``whether it be the White 
House, the Secretary, anyone else.'' 1167
    The RTC-IG officials testified that they were ``shocked'' 
when they learned that the transcripts had been turned over to 
the White House.1168 Ms. Black was ``astounded'' and 
``angry'' when she was told of the transfer.1169 According 
to Ms. Black:

          We had vehemently objected to that, and it was done 
        over our expressed objections without any consultation. 
        And this was--again, to go back to the fundamentals, 
        this was an investigation that we were doing into 
        Treasury's leak of information to the White House, and 
        they had done it again.1170

Similarly, Mr. Blight was ``shocked that it happened . . . It 
is not something you do . . . The investigation was still open. 
I mean the investigation was about the Treasury giving 
information to the White House, and here it goes again, the 
same thing.'' 1171 Mr. Adair emphasized that it was not 
appropriate for the White House to seek access to unredacted 
transcripts because the ``unredacted transcripts contained 
information about the criminal referrals, which basically was 
the reason we were conducting the investigation in the first 
place, to see whether any of that information had been provided 
by Treasury to the White House.'' 1172
    The transmittal letter accompanying the transcripts 
contained the stipulation that the transcripts ``are being 
provided solely to assist you in the preparation for Mr. 
Cutler's testimony before the House and Senate Banking 
Committees.'' 1173 But, according to a May 8, 1995 
Associated Press story, Mr. Cutler used the confidential 
transcripts to brief witnesses at the White House prior to 
their testimony before the House and Senate Banking 
Committees.1174 The article revealed that Mr Cutler stated 
that he would ``confront'' witnesses about discrepancies in 
their testimony, but denied that he would tell witnesses where 
he got his information; Mr. Cutler was quoted as saying, ``I 
think it was perfectly appropriate to say that `this is your 
testimony to us. There is conflicting testimony. Are you sure 
that's what you said?' '' 1175.
    Before the Special Committee, Mr. Cutler initially tried to 
distance himself from the comments attributed to him in the 
Associated Press story. He stated that despite the suggestion 
in the May 8 article that the White House used the information 
they learned from the transcripts to prepare witnesses before 
they appeared before the Senate Banking Committee, they ``did 
not do so.'' 1176 But Mr. Cutler ultimately admitted that, 
``[w]e had the information from the transcripts in our heads 
and all we did was to say there may be some conflicting 
testimony, are you sure of what you've told us?'' 1177 In 
addition, the transcripts were used in preparing a report that 
was shown during a July 24, 1994 meeting at the White House for 
the private lawyers for the White House witnesses. The report 
contained a White House ``version'' of the events.1178
    The Treasury OGC also transmitted summaries of deposition 
transcripts 31 to the White House.1179 Inexplicably, 
these summaries were sent without a transmittal 
letter.1180 Mr. McHale, who supervised the preparation of 
the summaries,1181 did not know how the summaries were 
sent to the White House.1182 Four other Treasury 
witnesses--Mr. Knight, Mr. Schmalzbach, Mr. McHale and Mr. 
Dougherty--also did not know.1183 Mr. Dougherty, an OGC 
attorney, denied that he delivered the summaries to the White 
House, stating, ``I have no recollection of ever providing any 
summaries to anyone.'' 1184
---------------------------------------------------------------------------
    \31\ The summaries were prepared when the OGC knew that the IG 
objected to the transfer of transcripts. (Dougherty, 11/8/95 Hrg/. p. 
156.) Mr. Cottos testified that he had not been consulted about the 
propriety of the summaries. (Cottos, 11/8/95 Hrg. p. 29.) Not 
surprisingly, Ms. Kerner was aware that Mr. McHale and others in the 
OGC, were working on the summaries, and was actually given a copy of 
them. (Kerner, 11/8/95 Hrg. p. 29.) Sarah Jones, a Tres. OGC attorney 
who worked on the team that summarized the transcripts, reported 
directly to John Bowman, Jean Hanson's Assistant General Counsel for 
Banking and Finance. (Dougherty, 11/6/95 Dep. p. 27.) Mr. Bowman was 
also a fact witness in the investigation.
---------------------------------------------------------------------------
    In a July 27, 1994 memo to Ms. Sherburne, Sharon Conaway, 
an attorney in the White House Counsel's Office, described a 
conversation she had with Mr. Dougherty. Ms. Conaway wrote that 
Mr. Dougherty ``gave me summaries of the transcripts he did not 
realize we did not have and told me that the transcripts could 
be given to witnesses and their counsel.'' 1185 Mr. 
Dougherty did not recall saying that to Ms. Conaway.1186 
Ms. Sherburne testified that:

          On July 27th, 1994, I asked Sharon Conaway, a lawyer 
        on our team, to ask Treasury whether it had lifted its 
        condition on our use of the IG transcripts so that we 
        could send the transcripts of Mr. Katsanos's IG 
        testimony to counsel for Ms. Caputo (Mrs. Clinton's 
        press secretary). I recall that Ms. Conaway informed me 
        that she spoke with David Dougherty, a lawyer in the 
        general counsel's office at Treasury. He advised her 
        that Treasury had not lifted the restrictions on the 
        transcripts themselves, but she told me that Treasury 
        had a form of summary that it evidently believed did 
        not raise the same concerns that caused it to restrict 
        the use of the underlying transcripts. And that there 
        accordingly were no restrictions on the dissemination 
        of these summaries. Ms. Conaway told me that Dougherty 
        offered to give these summaries to our review team, and 
        that he did so. She also told me based on Mr. 
        Dougherty's advice, she sent the summary of Katsanos's 
        IG deposition to Ms. Caputo's lawyer.1187

    Ms. Sherburne claimed that the White House received the 
summaries with the understanding that they were 
unrestricted.1188 Secretary Bentsen testified, however, 
that the summaries should have been subject to the same 
restrictions that applied to the transcripts.1189 That is, 
they could ``be used only by his [Mr. Cutler's] staff and only 
for his testimony before the committee.'' 1190
    At least one deposition summary was sent directly to 
William Taylor, an attorney for a White House witness, Lisa 
Caputo, the Press Secretary to the First Lady.1191 The 
transfer of transcripts to the lawyers for one of the White 
House officials directly violated the restrictions contained in 
the July 23 transmittal letter, which prohibited the White 
House from disclosing the transcripts ``to individuals (other 
than Mr. Cutler) who may be called as witnesses by either 
Committee. Similarly, you have agreed not to disclose these 
transcripts to counsel for any such individuals.'' 1192
    During the 1994 Congressional hearings, held on the 
propriety of White House-Treasury contacts, Mr. Cutler also 
relied on the OGE opinion as evidence that no White House 
personnel had engaged in improper conduct.1193 Mr. Cutler 
represented to the Senate Banking Committee on August 4, 1994 
that he had found no evidence of wrongdoing, and he said that 
the OGE had ``informally concurred'' with his conclusion that 
``no violation of any ethical standard . . . occurred.'' 
1194
    According to Stephen Potts, the Director of OGE, the OGE 
``did not do an analysis of the conduct of White House 
officials as to whether or not they violated the code of 
conduct.'' 1195 In a November 8, 1995 letter, Mr. Potts 
confirmed that the ``OGE did not `informally concur' in Mr. 
Cutler's conclusion that no violation of ethical standards 
occurred by any White House official.'' 1196 Another OGE 
official, Jane Ley also testified that, ``we didn't make any 
conclusions about the conduct of individuals in the White 
House.'' 1197
    When confronted with Mr. Potts' statements that the OGE had 
not ``informally concurred'' with Mr. Cutler's findings that no 
White House officials had violated any ethical standards, Mr. 
Cutler admitted:

          Now, I may have gone too far when I testified before 
        this Committee on August the 5th . . .. When I said 
        that the Office of Government Ethics has informally 
        concurred that they don't think any White House 
        official has violated these ethical standards.1198 
        32
---------------------------------------------------------------------------
    \32\ On May 20, 1996, more than six months after he testified 
before the Special Committee, Mr. Cutler provided the Special Committee 
with a letter in which he sought to recast the sworn testimony that he 
gave on both August 5, 1995, before the Senate Banking Committee, and 
on November 9, 1995, before the Special Committee.

    When he was directly questioned about the inconsistencies 
between his August statements, and the assertions made by the 
OGE in November 8, 1995, letter, Mr. Cutler again admitted he 
may have ``transgressed.33 ''
---------------------------------------------------------------------------
    \33\ Chairman D'Amato: ``I suggest to you that, when you come as 
the White House counsel and you say that informally that we have been--
we being the White House--White House officials have the blessing of 
the Office of Government Ethics as it relates to no violations of any 
ethical standards occurred, and thereafter every--just about every 
White House official comes in and waves it, that was just not accurate.
    Mr. Cutler: What I said in my testimony before you on August the 
5th was that the OGE had reviewed the factual findings of the Treasury 
Inspector General and issued its formal opinion concurring that no 
violation of any ethical standard--these are the so-called standards of 
ethical conduct for the executive branch--occurred by any current 
Treasury or RTC official. Then I said, I have reached the same 
conclusions as to White House officials, and based on the facts as I 
reported to them to this nonpartisan Office of Government Ethics, that 
office has informally concurred. Now that may have been where I 
transgressed. (Cutler, 11/9/95 Hrg. pp. 33-34.)
---------------------------------------------------------------------------

III. White House Interfered with the Special Committee's 1995-96 
        Investigation

    On January 5, 1994, in the midst of White House discussions 
over the appointment of a special counsel, James Hamilton 
advised President Clinton:

          The White House should say as little and produce as 
        few documents as possible to the Press. Statements and 
        documents likely will be incomplete or inconclusive, 
        and could just fuel the fires.1199

Clearly, senior White House officials followed Mr. Hamilton's 
advice in producing documents to the Special Committee.
    On June 2, 1995, the Special Committee sent its first 
request for documents to the White House. Documents continued 
to trickle in from the White House until as late as May 11, 
1996. Some agencies, notably the RTC and the Justice 
Department, should be applauded for their efforts to produce 
documents. The RTC produced more documents than any agency and 
did so in a timely manner. Unfortunately, the White House and 
various persons associated with the White House were not nearly 
as forthcoming in producing their documents. The Special 
Committee was forced to engage in protracted efforts to obtain 
documents. Even worse, documents often were produced months 
after they were first requested or subpoenaed.
            A. The refusal of William Kennedy to comply with the 
                    Special Committee's subpoena for his notes of the 
                    November 5, 1993 White House defense meeting
    In response to a subpoena from the Special Committee on 
October 26, 1995, commanding the production of all documents in 
the White House's custody or control related to Whitewater, 
Madison Guaranty, CMS and related matters, the White House 
advised the Special Committee on November 2, 1995, that it 
would not produce a number of responsive documents on the 
grounds of privilege. The withheld documents included notes 
taken by former Associate Counsel to the President William 
Kennedy at an important November 5, 1993 meeting of White House 
officials and the Clintons' private attorneys concerning 
Whitewater and Madison Guaranty.
    On December 5, 1995, Mr. Kennedy, citing the attorney-
client privilege, refused to answer the Special Committee's 
questions about the substance of meetings.1200
    On December 8, 1995, the Special Committee issued a 
subpoena duces tecum to Mr. Kennedy directing him to 
``[p]roduce any and all documents, including but not limited 
to, notes, transcripts, memoranda, or recordings, reflecting, 
referring or relating to a November 5, 1993 meeting attended by 
William Kennedy at the offices of Williams & Connolly.'' Mr. 
Kennedy refused to comply with the Special Committee's 
subpoena. On December 14, 1995, after careful consideration, 
the Chairman overruled the objections to the subpoena, and the 
Special Committee voted to order Mr. Kennedy to produce the 
responsive documents by 9:00 a.m. on December 15, 1995. After 
Mr. Kennedy failed to comply with this order and after 
unsuccessful efforts to reach agreement with the White House, 
the Special Committee voted on December 15, 1995, to report the 
matter to the Senate.1201
    On December 20, 1995, the full Senate adopted Senate 
Resolution 199, directing the Senate Legal Counsel to initiate 
a civil action in federal District Court pursuant to 28 U.S.C. 
Sec. 1365 (1994), for an order requiring the witness to produce 
the subpoenaed documents. If the district court determines that 
the witness has no valid reason to withhold the subpoenaed 
documents, the court would direct the witness to produce them. 
If a witness disobeys that order, the witness could be found in 
contempt of court. The district court, in its discretion, could 
order sanctions against the witness to induce compliance with 
its order to produce the documents.
    On December 22, 1995, before the Senate Legal Counsel 
commenced a civil contempt proceeding, the White House reversed 
course, and Mr. Kennedy produced his notes to the Committee. 
The notes were highly relevant to the Committee's 
investigation. They provided evidence that confidential 
information, which the White House had inappropriately gathered 
from various agencies investigating Whitewater and Madison, was 
passed to the private lawyers representing President and Mrs. 
Clinton to assist their personal legal defense. Although the 
White House claimed that certain confidential RTC information 
contained in the notes had also been reproduced in the press, 
the White House had information from Treasury officials with 
which to judge whether those press accounts were, in fact, 
accurate. Beyond this, the notes contained details that 
identified additional investigative avenues for the Committee.
            B. White House delays in producing highly relevant 
                    documents to the Special Committee
    On January 29, 1996 the White House produced the notes of 
White House Director of Communications Mark Gearan from 
meetings of the Whitewater defense team in January 
1994.1202 These notes were relevant to inquiries by the 
Banking Committee during its hearings in 1994 as well as the 
inquiries of the Inspectors General from the Department of 
Treasury and the RTC. When asked to explain the sudden 
appearance of these notes, Mr. Gearan stated that the notes 
``were inadvertently moved to the Peace Corps with other 
personal effects in boxes.'' 1203 The White House 
Counsel's Office had told Mr. Gearan that they would take 
responsibility for document production from his White House 
files.1204
    In October 1993, Mr. Gearan learned that the notes were 
removed from the White House and instructed an assistant to 
return these notes to the White House.1205 For reasons 
unknown, the notes were not returned:

          The next point in time where this came to my 
        attention was at the end of January, January 31st, I 
        believe, where there was--in conversations with my 
        counsel, who had been talking to the White House 
        counsel, they had indicated to my counsel that they 
        were having difficulty finding my files at the White 
        House, which of course we found surprising, at which 
        point I went back to the area where they were stored 
        and found that the had not been returned as I had 
        thought. So, I called counsel and we immediately 
        returned them to the White House counsel.1206

Mr. Gearan came across the notes while going through his 
personal effects looking for pictures and other materials to 
put on his walls at the Peace Corps.1207 The White House 
eventually produced the notes to the Special Committee on 
January 29, 1996 and February 7, 1996.
    As a result of reviewing Mr. Gearan's notes, the Special 
Committee questioned several witnesses. At least two of the 
witnesses, Mr. Lindsey and Mrs. Schaffer, had appeared before 
the Special Committee just weeks prior to the production of Mr. 
Gearan's notes.
    On February 13, 1996, the White House produced important 
documents from the files of Mr. Waldman, Special Assistant to 
the President. Mr. Waldman claimed that he discovered these 
documents in his office in a file marked ``WWDC''--Whitewater 
Development Corporation--in the course of an office 
move.1208 It is unclear why, if Mr. Waldman or the White 
House had conducted a proper search for documents, documents 
from a file marked ``WWDC'' were overlooked.
    Then, on February 20, 1996, the White House produced 
documents prepared by Mr. Ickes in January 1994. In an 
explanatory letter for this production, the White House wrote 
that ``two of the documents among this material had been 
provided by Mr. Ickes to the Counsel's Office in March of 1994. 
Unfortunately, in the course of our review, we mistakenly 
overlooked them . . . As to the remainder of the material 
produced today, all from the early 1994 period, Mr. Ickes was 
under the mistaken belief that this material had been provided 
to the Counsel's Office and his private counsel in March of 
1994.'' 1209
    Finally, on March 1, 1996, the day after funding for the 
Special Committee expired under S. Res. 120, Bruce Lindsey, 
Deputy Counsel to the President, produced notes concerning the 
November 5, 1993 Whitewater defense team meeting and other 
responsive documents. The transmittal for Mr. Lindsey's notes 
stated cryptically that the documents ``inadvertantly were not 
produced to you or the White House Counsel's office.'' 
1210

               Part IV. The Rose Law Firm Billing Records

    Late in the afternoon on Friday, January 5, 1996, a 
messenger delivered a large, yellow manila envelope to the 
Special Committee. Inside were 114 pages of documents, most 
measuring 11 by 17 inches, accompanied by a letter from David 
Kendall, lawyer for the Clintons. Mr. Kendall wrote: ``I 
enclose documents which we have stamped DKSN028928 to 
DKSN029043. These documents were discovered yesterday by Ms. 
Carolyn Huber, Special Assistant to the President/Special 
Director of Correspondence.'' 1211 The matter-of-fact tone 
of Mr. Kendall's prose belied the significance of this 
production. The 114 enclosed pages, computer printouts of the 
Rose Law Firm's billings to Madison Guaranty, constitute the 
best, and therefore most important, evidence concerning Mrs. 
Clinton's representation of James McDougal's S&L in the mid-
1980s--a relationship that was under investigation by at least 
three separate federal agencies.
    The records had been subject to several different federal 
subpoenas, besides that of the Special Committee, for nearly 
two years. When federal investigators served their subpoenas, 
the billing records were nowhere to be found. Despite extensive 
searches conducted by the Rose Law Firm, neither the originals 
nor copies were discovered.1212 The billing records were 
not in the firm's computers, its client files, or its storage 
facility.1213 The disappearance was not isolated, but 
rather occurred in the context of a larger pattern of removal, 
concealment and, at times, destruction of records concerning 
Mrs. Clinton's representation of Madison.

I. The Destruction and Mishandling of Rose Law Firm Files

    In 1988, Mrs. Clinton ordered the Rose Law Firm to destroy 
records relating to her representation of Madison.1214 
This was not a routine destruction of records. At the time, 
federal regulators were investigating the operations and 
solvency of Madison, in anticipation of taking over the 
institution. These Rose Law Firm records, which, after 
Madison's failure would belong to the RTC,1215 would have 
been directly relevant to that investigation.
    By ordering their destruction, Mrs. Clinton eliminated 
pertinent records and also exposed her firm to potential 
liability with respect to her representation. If such 
representation was proper, as Mrs. Clinton has claimed, her 
document destruction deprived the law firm of the records 
necessary to defend itself in a suit by federal investigators. 
Moreover, in 1988, Seth Ward, a former associate of Mr. 
McDougal and Webster Hubbell's father-in-law, was suing Mr. 
McDougal over the Castle Grande land deal that federal 
regulators have described as a fraud.1216 Mrs. Clinton had 
performed work on the project, including numerous telephones 
calls and meetings with Mr. Ward, and the law firm's records of 
her work and the transactions surrounding this land deal 
certainly would have been highly relevant to the conduct of 
that suit.
    The pattern recurred only a few years later. According to 
the Rose Law Firm, Mr. Hubbell obtained some billing records 
reflecting Rose's representation of Madison in 1989 or 1990. 
The Rose Law Firm represented to the Special Committee that a 
firm partner, then representing the RTC in litigation 
concerning Madison Guaranty, provided all billing records for 
Madison to Mr. Hubbell to ascertain whether the firm had a 
potential conflict of interest.1217 According to the Rose 
Law Firm: ``The Rose partner was assured by Mr. Hubbell a few 
days later that the prior representation had been disclosed to 
the RTC. Rose does not know what Mr. Hubbell did with the 
records.'' 1218
    The mishandling of Madison documents continued during the 
1992 presidential campaign. After questions arose about the 
Clintons' investment with the McDougals in Whitewater and Mrs. 
Clinton's representation of Madison Guaranty before a state 
agency, Mrs. Clinton's then-law partner, Vincent Foster, 
collected all the information he could on the Madison 
representation from the Rose Law Firm's files. At the 
conclusion of the campaign, the firm's files on Madison, which 
were by now the property of the RTC as conservator of Madison, 
as well as certain files of other Rose clients for whom Mrs. 
Clinton had performed legal services, were secretly removed 
from the firm by another then-Rose Law Firm partner, Webster 
Hubbell. Mr. Hubbell removed these files, some of which were 
the firm's only copies,1219 without obtaining the consent 
of the firm or client.1220

II. The ``Disappearance'' and ``Discovery'' of the Rose Law Firm 
        Billing Records

    During the 1992 presidential campaign, on February 12, 
1992, an unknown person printed out a set of the Rose Law 
Firm's computerized records of billings to Madison 
Guaranty.1221 These computerized records were the only 
source of detailed information about the services that the Rose 
Law Firm provided and billed to Madison Guaranty. The records 
provide information well beyond that reflected in bills sent to 
Madison--such as the date services were performed, the amount 
of time expended by particular lawyers, and precise services 
performed, including the identity of persons with whom Rose 
lawyers spoke or met in the course of representing 
Madison.1222
    Mr. Hubbell asserted that either he or former Deputy White 
House Counsel Vincent Foster, also a Rose partner, directed the 
Rose accounting department to print the billing records for 
Madison.1223 In addition to obtaining the computerized 
billing records, Mr. Hubbell also retrieved other files and 
documents relating to Mrs. Clinton's work for Madison:

          I recall in 1992 that the issue regarding our 
        representation of Madison and specifically our work 
        before the Arkansas Securities Department was of 
        interest to Mr. Gerth of The New York Times, and that 
        our firm was being questioned by people within the 
        campaign about her work in that regard. We did some 
        work in trying to organize and pull up the files. And 
        in connection with that, bills were pulled and reviewed 
        by myself and Mr. Foster and Mr. Massey, I 
        believe.1224

Because of allegations that Mrs. Clinton had a conflict of 
interest in appearing before her husband's appointee, Beverly 
Bassett Schaffer, Arkansas Securities Commissioner, Mr. Hubbell 
reviewed the records in 1992. During his review, Mr. Hubbell 
made notations next to entries in the bills related to the 
firm's work in connection with Madison's novel proposed 
preferred stock offering before the Arkansas Securities 
Department. According to Mr. Hubbell, ``the issue then, way 
back when, was did Mrs. Clinton ever have any contact with the 
Arkansas Securities Department. When we went back to the bills, 
that was the only, I believe, indication on the bills of a 
direct contact with the Arkansas Securities Department, so I 
underlined that--probably gave that to Vince.'' 1225
    Indeed, in notes taken during the 1992 campaign concerning 
Whitewater, Susan Thomases recorded a February 24, 1993 
conversation with Mr. Hubbell about the Rose Law Firm's 
representation of Madison. According to her notes, Mr. Hubbell 
told Ms. Thomases that Mrs. Clinton did all the billing for the 
Rose Law Firm to Madison, and that she had numerous conferences 
with Mr. McDougal, Madison President John Latham, and Rick 
Massey, then a junior associate at the firm.1226 Ms. 
Thomases' also indicated that Mrs. Clinton had reviewed some 
documents and that she had at least one telephone conversation 
with Ms. Schaffer in April 1985.1227 Ms. Thomases recorded 
in the margin of her notes next to this entry: ``Acc. to time 
Rec.'' She testified that ``[t]his is my notation for according 
to time records,'' 1228 and that the notation reflected 
what Mr. Hubbell had indicated to her.1229
    Ms. Thomases asserted, however, that she herself did not 
see the billing records,1230 nor did she ever ask to see 
the time records.1231 Ms. Thomases further claimed that, 
other than her conversations with Mr. Hubbell in 1992, she 
never had any discussions with anyone about the billing 
records.1232 She contended that she had no knowledge 
concerning the handling of billing records and how records were 
transported from Little Rock to the White House 
Residence.1233
    In addition to Ms. Thomases, Mr. Hubbell discussed the 
contents of the records in 1992 with Loretta Lynch, an attorney 
working on Whitewater issues for the Clinton campaign.1234 
Ms. Lynch testified that, in response to press inquiries, she 
talked to Ms. Schaffer and reviewed the files of the Arkansas 
Securities Department in an attempt to reconstruct Mrs. 
Clinton's role in representing Madison before state 
regulators.1235 During the course of this investigation, 
she and Ms. Thomases agreed that they should ask members of the 
Rose Law Firm about billing records.1236 Ms. Lynch talked 
to Mr. Hubbell about Mrs. Clinton's work for and billings to 
Madison Guaranty,1237 who advised her that he had reviewed 
the Rose Law Firm's billing records concerning Madison 
Guaranty.1238 Ms. Lynch also knew that Mr. Foster had 
reviewed the billing records,1239 but she does not recall 
speaking with anyone else at the Rose Law Firm regarding the 
billing records.1240 Ms. Lynch testified that she did not 
handle any records reflecting billings by the Rose Law Firm to 
Madison Guaranty, and that she had no knowledge regarding how 
those records came to be deposited in the White House 
Residence.1241
    When Mr. Hubbell and Mr. Foster reviewed the billing 
records in 1993, they spoke with each other about the Rose Law 
Firm's representation of Madison. Mr. Hubbell identified the 
notes written by Mr. Foster in red ink on the billing records 
found in the White House Residence--e.g., ``HRC--this suggests 
1st matter'' 1242 or ``HRC I believe there was a 
subsequent bill''. 1243 These notes suggested to Mr. 
Hubbell that ``[w]e were both working on it, and this is what 
he did to ultimately give it to somebody to indicate what was 
going on, what the records showed highlighted.'' 1244 As 
of the time Mr. Hubbell handled the records, Mr. Foster had not 
written or made any notations on the records.1245
    According to Mr. Hubbell, Mr. Foster was the last person he 
saw handling the billing records.1246 Mr. Hubbell did not 
know who removed the records from the Rose Law Firm,1247 
or how they came to be left in the White House 
Residence.1248 He claimed not to have spoken with anyone 
about the billing records since the 1992 presidential 
campaign.1249
    Mr. Hubbell stated that he may have spoken with Carolyn 
Huber, Special Assistant to the President and Special Director 
of Correspondence for the White House, about the records when 
she was the administrator of the Rose Law Firm, but not when 
she was at the White House.1250 When Mr. Hubbell learned 
that Ms. Huber had discovered the billing records in her 
office, ``I kind of smiled.'' 1251 According to Mr. 
Hubbell, ``I know Ms. Huber, and it just didn't surprise me 
that all of a sudden she discovered them.'' 1252 He 
explained, somewhat cryptically: ``First of all, I felt sorry 
for her, but just that all of a sudden, oh, you're looking for 
the billing records, here they are. You know, it just wouldn't 
surprise me that something like that happened. I read about it, 
but I just smiled about it.'' 1253
    During the first two weeks of August 1995, while the 
Special Committee was holding hearings into the handling of 
documents in Mr. Foster's office at the time of his death, Ms. 
Huber testified that she saw the Rose Law Firm billing records 
for the first time.1254
    The billing records, which were subject to several 
different federal subpoenas, were in the Book Room, a small 
room on the third floor of the First Family's private quarters 
in the White House Residence.1255 The room is adjacent to 
Mrs. Clinton's private office and is accessible only to a 
limited number of private guests and staff.1256 Gifts, 
book, and memorabilia are stored in the Book Room until they 
can be catalogued and put away.1257 In the center of the 
room sits a large table where such memorabilia are 
piled.1258
    In early August 1995, Ms. Huber was gathering newspaper and 
magazine clippings in the Book Room when she noticed the 
records in clear view on the edge of the table.1259 The 
records were folded in half, and Ms. Huber recognized the 
records, from her experience at the Rose Law Firm, to be 
billing records.1260 Ms. Huber recalled that, 
specifically, the records were not on the table a week or two 
earlier when Ms. Huber was last in the Book Room.1261 
Because Ms. Huber thought that the billing records were left in 
the Book Room for her to file,1262 she placed the records 
in a box to be taken to her office without studying 
them.1263 White House ushers carried this box, along with 
several others, and placed them on the floor of Ms. Huber's 
office.1264 Later, a table was placed over these 
boxes.1265
    For several months, Ms. Huber forgot about the records. 
Meanwhile, the Special Committee, continuing its investigation 
into activities and transactions relating to Whitewater and 
Madison, held several hearings in December 1995 on the extent 
of Mrs. Clinton's role in the Madison representation. The 
billing records figured prominently in these hearings. On 
December 1, 1995, Mr. Hubbell was unable to provide complete 
answers about the Mrs. Clinton's role in the Rose Law Firm's 
representation of Madison because he did not have the billing 
records to refresh his memory.1266 Likewise, Ms. Thomases 
testified on December 18, 1995, about her work during the 
campaign and her notes about billing records relating to Mrs. 
Clinton's work for Madison.
    On the morning of January 4, 1996, Ms. Huber was having new 
furniture placed in her office in the East Wing of the White 
House.1267 In the process, the table that had concealed 
the box containing the billing records for five months was 
removed.1268 Once the boxes were uncovered, Ms. Huber 
began to file the contents of the boxes.1269 As she was 
filing, Ms. Huber pulled the billing records out of their box 
and examined them more closely.1270
    Immediately, Ms. Huber realized the billing records were 
related to Madison Guaranty.1271 She was horrified because 
she understood their significance; she had seen several 
subpoenas calling for the production of Madison Guaranty 
records, including these very records.1272 She had also 
assisted the President and Mrs. Clintons' personal counsel, 
David Kendall in searching and reviewing documents in the White 
House responsive to those subpoenas.1273 Ms. Huber 
contacted Mr. Kendall and asked him to meet her in her office 
as soon as possible because she had found some 
documents.1274 After calling Mr. Kendall, Ms. Huber called 
her attorney, Henry Shuelke.1275
    Early in the afternoon on January 4, Ms. Huber met with Mr. 
Kendall.1276 She gave him the records and explained her 
discovery.1277 Worried, Ms. Huber asked Mr. Kendall 
whether she had done the right thing in contacting 
him.1278 Mr. Kendall assured Ms. Huber that she had made 
the correct decision.1279 Mr. Kendall examined the billing 
records and asked Ms. Huber whether she could identify the 
handwriting in red ink.1280 Ms. Huber identified some of 
the notations as Mr. Foster's handwriting.1281 Mr. Kendall 
then told Ms. Huber to maintain custody of the 
records,1282 and that he would contact White House counsel 
and meet with her later in the day.1283
    Mr. Kendall then contacted Special Counsel to the President 
Jane Sherburne and Mr. Shuelke, who agreed to meet around 5:00 
p.m. in Ms. Huber's office.1284 Ms. Sherburne informed her 
supervisor, Deputy Chief of Staff Harold Ickes, and her staff 
of the discovery of the billing records.1285 No one 
contacted the Independent Counsel or any other investigative 
agency, including the Special Committee. Mr. Kendall and Ms. 
Sherburne claimed that they did not inform Mrs. Clinton on 
January 4 about the discovery of the billing records.1286
    Ms. Huber, Mr. Kendall, Ms. Sherburne and Mr. Shuelke met 
that evening.1287 Ms. Huber once again explained her 
discovery of the records.1288 Ms. Huber told the assembled 
attorneys--as she also had testified to before the Special 
Committee--that she clearly recalled seeing the records in 
early August 1995. Ms. Huber and the lawyers together examined 
the billing records page by page.1289 Ms. Huber identified 
for them some of the handwriting on the billing records as Mr. 
Foster's and some as the Rose Law Firm bookkeeper.1290 In 
view of Mr. Foster's notes in red ink, the billing records were 
obviously a copy of the original records.1291 Other 
handwritten notes appear to have been made on the original and 
then copied.1292
     At one point in the meeting, Ms. Sherburne asked to speak 
with Mr. Kendall and Mr. Shuelke in the hallway.1293 Ms. 
Sherburne raised the issue of how the documents should be 
reproduced and whether the integrity of the documents should be 
preserved in case the records would later be examined for 
fingerprints.1294 The attorneys never considered 
contacting the Independent Counsel for advice on how best to 
proceed.1295
    Mr. Kendall and Mr. Shuelke returned to Ms. Huber's office 
and photographed the box in which Ms. Huber found the records 
earlier in the day.1296 Ms. Sherburne and Ms. Huber 
searched for a color copier in the White House 
offices.1297 After finding a copier, Ms. Huber made 
copies, while Ms. Sherburne collated and checked for 
completeness.1298 Two color copies of the billing records 
were made.1299 Mr. Kendall took the original set of the 
billing records and one copy with him that evening. Ms. 
Sherburne took the other copy of the billing records to examine 
and to keep for White House records.1300
    The next morning, January 5, 1996, Mr. Kendall and Ms. 
Sherburne notified the Independent Counsel of the discovery of 
the billing records.1301 That same morning, Ms. Sherburne 
informed President Clinton of their discovery.1302 Later 
that afternoon, Mr. Kendall produced a copy of the billing 
records to the Special Committee.1303 Copies of the 
billing records were also produced to the other investigative 
agencies.1304

III. Mrs. Clinton's Statements in Light of the Rose Law Firm Billing 
        Records

    The billing records provide the best evidence of the legal 
services performed by Mrs. Clinton for Madison Guaranty and, as 
a result of the failed memories of many Rose Law Firm 
attorneys, are the only source of detailed information about 
the legal services rendered to Madison. Whereas the bills and 
statements sent to clients indicate only the total amount due 
and the general services performed, these computerized billing 
records provide detailed information on the specific task 
performed, the date that it was performed, the person who 
performed the task, and the amount of time expended on the 
task.1305 The computerized billing records are thus an 
invaluable asset in reconstructing Mrs. Clinton's actual 
involvement in the matter. This is especially so with respect 
to Mrs. Clinton's billings to Madison, because her timesheets 
were apparently destroyed in 1988.1306
    In total, Mrs. Clinton billed Madison Guaranty for 89 
tasks, including 33 conferences with Madison Guaranty 
officials, on 53 separate days.1307
            A. Madison's retention of the Rose Law Firm
    During the 1992 campaign, the Clinton campaign sought the 
facts surrounding the Rose Law Firm's retainer with Madison 
Guaranty in 1985 and 1986. In a March 18, 1992 memorandum to 
senior campaign officials Bruce Lindsey and David Wilhelm, 
Loretta Lynch noted that the campaign had conducted an 
exhaustive review of available documents, but certain questions 
regarding the retainer remain that ``simply must be answered by 
Hillary and Bill themselves.'' Among these questions were:

          1. Did Bill Clinton solicit a retainer agreement for 
        the Rose Law Firm from Jim McDougal? If so, when did 
        that happen and what were its terms? Who, other than 
        Jim and Susan were privy to that discussion?
          * * * * * * *
          7. When was the Rose Law Firm put on retainer by McD 
        and for what business (LL has asked Webb Hubbell this 
        question numerous times. The answer continues to 
        change, despite the repeated press inquiries on this 
        exact point).1308

    This memorandum was prepared after the Clinton campaign had 
already released a fact sheet stating that Richard Massey, a 
young associate in the Rose Law Firm in 1985, was responsible 
for the retainer--not Mrs. Clinton:

          The Rose Law Firm was retained to represent Madison 
        Guaranty. The business was brought to the firm not by 
        Hillary Clinton but by Richard Massey, long time friend 
        of John Latham, Madison's CEO.1309

    The circumstances surrounding the Rose Law Firm's retainer 
with Madison were not resolved during the 1992 campaign. Mrs. 
Clinton, and others on her behalf, have repeatedly made 
statements that Mr. Massey brought in Madison Guaranty as a 
client and that, even though she was the billing partner on the 
matter, she was merely a ``backstop'' because the firm did not 
permit associates to bill clients directly.1310
    During a press conference on April 22, 1994, Mrs. Clinton 
stated that Mr. Latham, the President of Madison Guaranty, 
asked Mr. Massey whether he would be interested in representing 
Madison in connection with a proposed stock offering. Mrs. 
Clinton claimed that she became involved in the matter only 
because Mr. Massey ``needed a partner to serve as his backstop, 
and that was one of the rules of our firm.'' 1311 Mrs. 
Clinton further explained that Mr. Massey was aware that she 
knew Mr. McDougal, so ``he came to me and asked if I would talk 
with Jim to see whether or not Jim would let the lawyer and the 
officer go forward on this project. I did that, and I arranged 
that the firm would be paid $2,000 retainer.'' 1312
    In an unsworn statement to the RTC in November 1994, Mrs. 
Clinton similarly told investigators that ``she recalled Massey 
came to her and asked her to be the billing attorney which was 
a normal practice when an associate was handling the matter. . 
. . Mrs. Clinton recalled that a Madison official (individual 
unknown) approached Rick Massey regarding a preferred stock 
offering in an effort to raise capital.''
     In a sworn response to an RTC interrogatory in May 1995, 
Mrs. Clinton elaborated on her story. Mrs. Clinton stated that 
Mr. Massey approached her because ``certain lawyers'' in the 
Rose Law Firm were ``opposed'' to representing Mr. McDougal 
until Mr. McDougal paid an outstanding bill, and he was aware 
that Mrs. Clinton knew Mr. McDougal. Mrs. Clinton wrote:

          In the spring of 1985, Massey came to see me because 
        he had learned that certain lawyers at the firm were 
        opposed to doing any more work for Jim McDougal or any 
        of his companies until he paid his bill and then only 
        if Madison Guaranty agreed to prepay a certain sum. . . 
        I believe Massey approached me about presenting this 
        proposal to Jim McDougal because he was aware that I 
        knew him.

    Mr. Massey, however, directly contradicted Mrs. Clinton's 
account in sworn testimony before the Special Committee. 
According to Mr. Massey, he was not responsible for bringing in 
Madison as a client.1313 Mr. Massey testified specifically 
that Mr. Latham never offered him Madison's business,1314 
and that he did not recall approaching Mrs. Clinton with a 
proposal to represent Madison.1315 Mr. Massey also 
indicated that he did not ask Mrs. Clinton, as she claimed, to 
be the billing attorney.1316
    David Knight, a former Rose partner specializing in 
securities law, testified that he attended the lunch meeting 
during which, according to Mrs. Clinton, Mr. Latham allegedly 
retained Mr. Massey and the Rose Law Firm.1317 Mr. Knight 
confirmed Mr. Massey's testimony that Mr. Latham did not ask 
Mr. Massey to represent Madison on the preferred stock 
offering. Quite to the contrary, according to Mr. Knight, the 
subject of that stock offering never arose.1318 In fact, 
Mr. Latham informed Messrs. Knight and Massey at the lunch that 
Mr. McDougal made all hiring decisions and that Madison already 
had outside counsel.1319
    Mr. Latham testified that Mr. McDougal, not he, made the 
decision to retain the Rose Law Firm.1320 In an interview 
with RTC investigators, Mr. Latham similarly stated that 
``McDougal had friends over there and he suggested we use them. 
When asked who the friends were Latham said that they were 
Hillary Rodham Clinton and others.'' 1321
    Mr. McDougal has also contradicted Mrs. Clinton's account 
about the retainer. Mr. McDougal has stated that he put Mrs. 
Clinton on retainer as a favor to then-Governor Clinton. In 
1992, Mr. McDougal told Jim Blair and Loretta Lynch that 
Governor Clinton, wearing jogging pants, visited his office and 
told him that he and Mrs. Clinton were pressed for money and 
asked Mr. McDougal to give some work to Mrs. Clinton.1322 
Two hours later, Mrs. Clinton visited Mr. McDougal to set up 
the retainer.1323 According to notes taken by Mr. Blair, 
Mr. McDougal said that he remembered the encounter 
``explicitly'' because Governor Clinton, in his exercise 
clothes, left a permanent stain on Mr. McDougal's ``new leather 
contour chair.'' 1324
    In 1993, Mr. McDougal repeated this account of the so-
called ``jogging'' incident to the Los Angeles Times. Governor 
Clinton reportedly dropped by Mr. McDougal's trailer office, 
told Mr. McDougal that the Clintons were financially strapped, 
and asked Mr. McDougal to throw some work to Mrs. 
Clinton.1325 Mr. McDougal also repeated to the newspaper 
what he had told Mr. Blair: ``I hired Hillary because Bill came 
in whimpering they needed help.'' Mr. McDougal said he had no 
specific legal work in mind when he hired Mrs. 
Clinton.1326 That same day, Mrs. Clinton visited Mr. 
McDougal's office, and Mr. McDougal put her on retainer for 
$2,000 a month.
    On May 8, 1996, during the Tucker-McDougal trial in Little 
Rock, Mr. McDougal revised his story somewhat. He testified 
that President Clinton came by one morning and, ``I said to 
Bill something to the effect of, `We're needing more legal 
work. Would it help Hillary if we gave some of the work to the 
Rose Firm?' And he said yes.'' 1327 Mr. McDougal did not 
recall telling Mr. Blair that Bill Clinton specifically said he 
``needed'' money.1328 Although Mr. McDougal denied stating 
in an FBI interview that ``Clinton came in claiming he had 
financial problems,'' 1329 he did recall that Mrs. Clinton 
``came by the same day'' to set up the retainer.1330
    At the Tucker-McDougal trial, President Clinton testified 
that he recalled visiting Mr. McDougal, but did not recall 
asking Mr. McDougal to place Mrs. Clinton on retainer.1331
    Mrs. Clinton's account of her role in connection with the 
Madison retainer turns on the alleged existence of a debt that 
Mr. McDougal's Madison Bank & Trust owed to the Rose Law Firm 
in 1985. According to Mrs. Clinton, she insisted on the $2000 
per month retainer to assure her partners that Mr. McDougal 
would pay the firm's fees--an issue that, she claims, arose 
because of Mr. McDougal's failure to pay fees owed to the Rose 
Law Firm in connection with its representation of Madison Bank 
& Trust.
    Documentary evidence and testimony provided to the Special 
Committee, however, indicate that the outstanding balance of 
Rose's bill to Madison Bank & Trust was paid in late October 
1984, many months prior to Mrs. Clinton's retainer in April 
1985.
    Gary Bunch, President of Madison Bank & Trust since 1970, 
provided the Special Committee with documents showing that the 
legal fees owed to the Rose Law Firm were paid in late October 
1984. The Minutes of Madison Bank & Trust for October of 1984 
indicate that $5,000 in legal fees were owed to the Rose Law 
Firm for work on the ``Huntsville move appeal,'' 1332 a 
matter concerning the relocation of the bank, and that ``Mr. 
McDougal seconded that Mr. Bunch will negotiate settlement with 
the firm.'' 1333 Mr. Bunch confirmed that Mr. McDougal 
directed him to pay the outstanding Rose Law Firm bill for the 
Madison Bank & Trust matter in full in October 1984.1334
    A receipt from Madison Bank & Trust's debit ledger show 
$5,000 in legal fees were paid on October 23, 1984.1335 In 
addition, the bank's minutes for November 27, 1984 confirm this 
payment: ``The reduction in earnings was attributed to heavy 
accounting fees for the audit and a payment of legal fees from 
1983 lawsuit.'' 1336
    Among the billing records discovered in the Book Room of 
the White House Residence was a 1981 bill from the Rose Law 
Firm to Madison Bank & Trust. This bill, for over $13,000, was 
marked ``Paid.'' A note in Mr. Foster's hand, however, stated: 
``HRC I believe there was a subsequent bill.'' 1337
    Following the discovery of the billing records and the 
testimony of Mr. Massey before the Special Committee, Mrs. 
Clinton changed her story in a February 1996 interview with RTC 
investigators. According to Mrs. Clinton, the late Vincent 
Foster, not Mr. Massey, first informed her that Mr. Massey 
wanted to do work for Madison: ``I believe it was Vince Foster 
who came to me, who said that Mr. Massey wanted to do this 
work, but the partners didn't want him to do it.'' 1338 
When asked who suggested that she approach Mr. McDougal, Mrs. 
Clinton answered: ``I don't have a specific recollection. I 
believe it was Vince Foster, but I'm not positive.'' 1339
            B. Mrs. Clinton's contacts with regulator Beverly Bassett 
                    Schaffer
    In 1985, the Rose Law Firm represented Madison in 
connection with a proposal for a preferred stock offering 
before the Arkansas Securities Department. During the 1992 
campaign, allegations surfaced that Beverly Bassett Schaffer, 
who Governor Clinton appointed as Arkansas Securities 
Commissioner, gave preferential treatment to Madison Guaranty 
because of her relationship with the Governor and Mrs. Clinton. 
The Clinton campaign denied that Mrs. Clinton attempted to 
influence Commissioner Bassett.
    The billing records show that Mrs. Clinton called Ms. 
Schaffer the day before the Rose Law Firm submitted Madison's 
proposal for its preferred stock offering to the Arkansas 
Securities Department.1340 The records reflect that Mrs. 
Clinton billed as much as one hour to the call.1341 Ms. 
Schaffer notified Mrs. Clinton of the approval of the proposal 
two weeks later in a letter addressed to ``Dear Hillary.'' 
1342
    Prior to the discovery of the billing records, Mrs. Clinton 
claimed in her sworn responses to RTC interrogatories in May 
1995 that she called the Arkansas Securities Department to find 
out ``to whom Mr. Massey should direct any inquiries.'' 
1343 She did not recall to whom she spoke.1344
    In testimony before the Special Committee, former 
Commissioner Schaffer directly contradicted Mrs. Clinton and 
stated that the proposal was discussed during the phone call. 
According to Ms. Schaffer:

          [Mrs. Clinton] called and said they had a proposal, 
        and what it was about; and I said I'm familiar with 
        that; I've already looked at that. You know, I agree 
        with the--basically I have no problem with that 
        position, and you'll be getting a letter soon to that 
        effect. . . . I think in substance I said, basically, I 
        agree with the position--I mean, that preferred stock 
        can be issued pursuant to the Business Corporation 
        Code.1345

    Mr. Massey similarly disputed Mrs. Clinton's account of the 
phone call to Ms. Schaffer. Mr. Massey testified that he 
drafted the proposal and knew exactly to whom the proposal 
should be sent.1346 Mr. Massey further testified that Mrs. 
Clinton never instructed him about whom to address the 
transmission letter.1347 Mr. Massey did not recall asking 
Mrs. Clinton to make such an inquiry and was not aware that she 
had.1348
            C. Mrs. Clinton's role in Madison's proposed preferred 
                    stock deal
    Mrs. Clinton has minimized her role in the Rose Law Firm's 
representation of Madison before the Arkansas Securities 
Department in connection with Madison's proposed stock 
offering. Although she was the billing partner, Mrs. Clinton 
has denied that she handled much of the workload on the matter. 
When asked about the subject during a press conference on April 
22, 1994, Mrs. Clinton told reporters that ``the young 
attorney, the young bank officer did all the work. . . . It was 
not an area that I practiced in it was not an area that I 
really know anything to speak of about.'' 1349
    In a 1994 sworn statement to the FDIC, Mrs. Clinton 
similarly stated:

          While I was the billing partner on the matter, the 
        great bulk of the work was done by Mr. Richard Massey, 
        who was then an associate at the Rose Law Firm and 
        whose specialty was securities law. I was not involved 
        in the day to day work on that project. . . . Mr. 
        Massey primarily handled the matter. . . . I was not 
        involved in any meetings with state regulators. . . 
        .1350

    Mrs. Clinton likewise told RTC investigators in 1994 that 
Mr. Massey was the lead attorney on the matter.1351 And, 
in sworn interrogatories to the RTC in May 1995, Mrs. Clinton 
stated, ``While I was the billing partner on the matter, the 
great bulk of the work was done by Mr. Richard Massey, who was 
then an associate at the Rose Law Firm and whose specialty was 
securities law.'' Mrs. Clinton added that ``I was not in charge 
of the Rose Law Firm's work for Madison Guaranty in 1985-86, 
although I was the billing partner.'' 1352
    The billing records and Mr. Massey's testimony directly 
contradict Mrs. Clinton's claim that her role on the matter was 
merely to serve only as a ``backstop.'' Mrs. Clinton billed 6.2 
hours on the preferred stock deal for conferences alone that 
she had with Mr. McDougal, with Mr. Latham and Davis Fitzhugh, 
two other Madison S&L officers involved in the stock 
offering.1353 In addition, Mrs. Clinton had at least six 
conferences with Mr. Massey, the young Rose Law Firm associate 
on the matter.1354 Mrs. Clinton also reviewed the 
amendments to the application submitted to the Arkansas 
Securities Department.1355
    Mr. Massey testified that he did his work under the 
supervision of Mrs. Clinton.1356 According to Mr. Massey, 
``Mrs. Clinton was the billing attorney and had a relationship 
with me such that she needed to know what I was doing so she 
could be prepared to update the client at any time.'' 1357 
When asked whether Mrs. Clinton's work on the stock proposal 
deal was ``minimal,'' Mr. Massey responded, ``In my own mind 
it's a significant amount of time.'' 1358
            D. Mrs. Clinton's role in the Castle Grande transaction
    Before the billing records were discovered, little was 
known about the nature of the Rose Law Firm's representation of 
Madison Guaranty in connection with the Castle Grande land 
transaction. Perhaps because Mrs. Clinton had ordered the 
destruction of Madison-related records in 1988, the Rose Law 
Firm no longer possessed any file related to the Castle Grande 
deal.
    Federal investigators described the Castle Grande 
transactions as a series of land flips and transactions that 
cost the American taxpayers $4 million.1359 The land deal 
was designed to conceal Madison Guaranty's investment in Castle 
Grande through its subsidiary, Madison Financial Corporation. 
Mr. Ward was the ``straw man'' purchaser in the project--one 
who lends his name to the title, but does not actually have an 
ownership interest.1360 Arkansas regulations limited an 
S&L's direct investment in its subsidiaries or affiliates to 6 
percent of total assets.1361 Mr. Ward was needed as the 
straw man because ``had MGSL purchased Castle Grande directly, 
they would have exceeded their direct investment limit.'' 
1362 Madison, in effect, paid for Mr. Ward's share in the 
venture, and was promised $300,000 in commissions for lending 
his name.
    In 1995, when the RTC asked about her knowledge of Castle 
Grande, Mrs. Clinton stated ``I do not believe I knew anything 
about any of these real estate parcels and projects.'' 
1363 The billing records suggest otherwise.
    The billing records identify Mrs. Clinton as the billing 
partner on the matter--even though Mrs. Clinton claimed that 
she had no idea how the Rose Law Firm became involved in the 
matter.1364 These records indicate that Mrs. Clinton 
billed more time on the Castle Grande matter--29.5 hours, or 54 
percent of total billings on the matter--than any other lawyer 
at the Rose Law Firm. Indeed, nearly half of Mrs. Clinton's 
total billings to Madison were for work on Castle Grande. In 
the months following the initial transaction, Mrs. Clinton had 
at least 12 conferences with Mr. Ward and numerous meetings 
with Madison officials in connection with the subsequent sales 
that she billed to the IDC/Castle Grande matter. One of the 
conferences with Mr. Ward even related to ``the purchase from 
Brick Lile,'' the seller of the IDC/Castle Grande property. 
Mrs. Clinton also had conferences with two attorneys who were 
involved in the initial transaction--Thomas Thrash, the 
associate at the Rose Law Firm who attended the closing, and 
Daryl Dover, the attorney for the seller.
    In January 1986, Mrs. Clinton tripled Rose's bill to 
Madison for her work on the Castle Grande/IDC matter without 
providing any supporting information. Mrs. Clinton has claimed 
that this fee, representing 14.5 hours, was for work that she 
did between January 15 and January 30, 1986, which she forgot 
to enter on her time sheets as ``work in progress.'' 1365
    After the discovery of the billing records, Mrs. Clinton 
attempted to explain the apparent contradiction between her 
statements about her minimal involvement in the Castle Grande 
transaction and the billing records. In a television interview, 
Mrs. Clinton explained that she did not know the Castle Grande 
property by this name, and that the matter she worked on was 
known by the name of the seller, IDC. She explained that it was 
a ``separate deal'' entirely:

          Again, there's not a contradiction. Castle Grande was 
        a trailer park on a piece of property that was about 
        1,000 acres big. I never did work for Castle Grande. 
        Never at all. And so, when I was asked about it last 
        year, I didn't recognize it, I didn't remember it. The 
        billing records show I did not do work for Castle 
        Grande. I did work for something called IDC, which was 
        not related to Castle Grande. . . . Separate deal 
        completely.1366

    When asked by the Pillsbury Firm what she meant by 
``separate deal,'' Mrs. Clinton gave a similar answer:

          Well, my understanding is that the work for Madison 
        concerned property that was referred to then at the 
        time and continually by the Rose Firm as IDC or 
        Industrial Development Corporation property. I know 
        that work as IDC. That's how it was billed. And I did 
        not know that there was something called Castle Grande, 
        to the best of my recollection, until it came to my 
        attention through these investigations, the entire 
        thousand acres that we referred to as IDC was being 
        called Castle Grande . . . .
          I was informed sometime within the last year or two 
        that there was a trailer park on the IDC property 
        called Castle Grande Estates. To the best of my 
        recollection, that was the first I had ever heard of 
        Castle Grande Estates.1367

    Substantial evidence, however, contradicts Mrs. Clinton's 
statements concerning the name of this project. Madison 
Guaranty officials and federal regulators all commonly referred 
to the entire parcel of land as ``Castle Grande.'' Television 
advertisements in Little Rock promoting the land development 
referred to the land as ``Castle Grande.'' Susan McDougal told 
ABC news that the entire development was considered ``Castle 
Grande.'' Internal Madison Board Minutes dated September 12, 
1985, referred to ``Castle Grande Estates.'' Harry Don Denton, 
a Madison officer, testified at the Tucker-McDougal trial that 
the entire property was named Castle Grande immediately after 
its purchase from IDC.1368 Finally, records reflecting a 
meeting between Alston Jennings, former attorney for Mr. Ward, 
and Mr. Kendall, the Clintons' attorney, on January 11, 1996--
the week after the billing records were discovered--referred to 
``Castle Grande.'' 1369 No mention was made of 
IDC.1370
    More important than the mere extent of her services related 
to the Castle Grande, however, is the nature of her work. For 
his role as the ``straw man'' and other related services to the 
project, Mr. Ward was owed a commission. On March 31, 1986, 
Madison Guaranty loaned $400,000 to Mr. Ward.1371 One week 
later, on April 7, 1986, Madison Financial Corporation, a 
subsidiary of Madison Guaranty, executed two promissory notes, 
for $300,000 and $70,943, purporting to reflect loans from Mr. 
Ward to Madison Financial.1372 Thus, except approximately 
$30,000 for administrative expenses, the two Madison Financial 
notes offset Mr. Ward's debt to Madison Guaranty. At the end of 
the day, Mr. Ward kept the bulk of the $400,000 as his 
commission for the Castle Grande fraud.
    At about this time, bank examiners were auditing Madison 
Guaranty's books, and James Clark, the chief examiner, asked 
whether the three notes were related.1373 Madison 
official, Mr. Denton, assured him that these notes were not 
related.1374 According to Madison official John Latham, 
however, the three notes were related, and the $400,000 March 
31 loan from Madison Guaranty was intended to pay Mr. Ward's 
commissions.1375
    The Rose Law Firm billing records revealed for the first 
time that on April 7, 1986, the day the Madison Financial notes 
were executed, Mrs. Clinton billed 10 minutes to the IDC/Castle 
Grande matter for ``Telephone conference with Don Denton.'' 
1376 A message slip produced by Mr. Denton reflects that 
Mrs. Clinton called him from the Rose Law Firm on April 7, 
1986.1377 In a June 11, 1996 interview with FDIC 
investigators, Mr. Denton stated that Mrs. Clinton called 
seeking copies of the notes between Mr. Ward, Madison 
Financial, and Madison Guaranty.1378 Mr. Denton told 
investigators that during the conversation he cautioned Mrs. 
Clinton that a problem might exist with respect to the April 
7th notes to Mr. Ward because ``they constituted in effect a 
parent entity fulfilling the obligation of a subsidiary,'' 
1379 a violation of the so-called direct investment rule. 
Mrs. Clinton, however, ``summarily dismissed'' that concern in 
a way that he took to mean that ``he would take care of savings 
and loan matters, and she would take care of legal matters.'' 
1380
    The billing records showed that on May 1, 1986, Mrs. 
Clinton billed Madison Guaranty for two hours for the following 
work: ``Conference with Seth Ward; telephone conference with 
Seth Ward regarding option; telephone conference with Mike 
Shauffler; prepare option.'' 1381 Indeed, a May 1 option 
agreement between Mr. Ward and Madison Financial bore a word 
processing code (``0190g'') that, according to the Rose Law 
Firm's counsel, indicates the document was created at the Rose 
Law Firm by or for Mrs. Clinton.1382 The May 1st agreement 
gave Madison an option from Mr. Ward to convey his portion of 
the Castle Grande property back to Madison. Mr. Clark, the bank 
examiner, told investigators that, after reviewing the records 
and in light of Mr. Denton' testimony, he believed that the May 
1st option prepared by Mrs. Clinton ``was created `in order to 
conceal the connection--whatever it was--between' '' the March 
31st and April 7th notes.1383
    On June 13, 1996, in light of the significant new evidence 
offered by Mr. Denton and Mr. Clark relating to the extent and 
nature of Mrs. Clinton's role in Castle Grande, the Special 
Committee requested that Mrs. Clinton ``refresh her memory 
about these transactions, and to inform the Special Committee 
of what she recalls about them'' in writing, under oath.'' 
1384 In her response affidavit, Mrs. Clinton did not 
answer the question, but simply referred to her attorney's 
transmittal letter ``addressing certain allegations recently 
made by Mr. Don Denton.'' 1385 In his letter, Mr. Kendall 
maintained that Mr. Denton's recollection is ``wholly 
unreliable'' 34 but gave no indication as to the 
recollection of the First Lady.1386 Mrs. Clinton, 
therefore, has neither denied nor confirmed Mr. Denton's 
account.
---------------------------------------------------------------------------
    \34\ Mr. Kendall based this assertion on the fact that Mr. Denton 
testified at two trials, Ward v. Madison Guaranty, and United States v. 
McDougal et al., yet did not mention his April 7, 1986 telephone 
conversation with Mrs. Clinton. Mr. Kendall, however, offered no 
indication whether Mr. Denton was asked questions about his 
conversations with Mrs. Clinton or, for that matter, whether such 
conversations and Mrs. Clinton's work for Madison were within the scope 
of the trials.
    What is clear, however, is that Mr. Denton recalled the 
conversation only after being shown Mrs. Clinton's billing records 
refelcting the 12 minute telephone call on April 7. When he was shown 
this record, on June 3, 1996, he did not recall the conversation. 
However, after the interview, he reviewed his files and discovered the 
April 7 message slip from Mrs. Clinton. His memory thus refreshed, he 
provided additional testimony to the FDIC-IG, all under a legal 
obligation of truthfulness, 18 U.S.C. Sec. 1001. (Denton, FDIC-IG 
Report of Interview, June 11, 1996.) Mr. Denton has no reason to 
mislead investigators, much less to go out of his way to give 
inaccurate testimony.
---------------------------------------------------------------------------

IV. The Federal Investigations into the Rose Law Firm's Representation 
        of Madison

    When the FDIC assumed control of Madison in 1989, Madison 
had a pending lawsuit against its former independent 
accountants, Frost & Company (``Frost'').1387 The suit was 
filed in 1988 by the Memphis law firm of Gerrish & McCreary and 
alleged malpractice on the part of Frost in connection with its 
audits of Madison performed in 1984 and 1985.1388 The 
Frost litigation was assigned to FDIC attorney April Breslaw, 
who removed Gerrish & McCreary from the case and hired the Rose 
Law Firm to handle the matter.1389 Rose partner Webster 
Hubbell was the billing partner and lead trial counsel on the 
case.1390 Although the original claim was for $10 million, 
Rose settled the case in late February 1991 for $1.025 
million.1391 The firm was paid $375,380 for its 
work.1392
    In 1994, the FDIC Office of the Inspector General (``FDIC-
IG'') and the RTC-IG began investigations into possible 
conflicts of interests related to the Rose's representation of 
those agencies in the Frost litigation.
    During a February 24, 1994 hearing before the Senate 
Banking Committee, Ranking Member Alfonse D'Amato raised 
questions about a February 17, 1994 report of the FDIC Legal 
Division regarding the FDIC's hiring of Rose as counsel with 
respect to Madison.1393 This report was prompted by 
stories appearing in the media in late 1993 and early 1994 
alleging that Rose had failed to disclose conflicts related to 
its representation of Madison before the Arkansas Securities 
Department and the litigation against Madison brought by Mr. 
Hubbell's father-in-law, Seth Ward.1394 The FDIC Legal 
Division concluded that neither Rose's representation of 
Madison before the Arkansas Securities Department nor Mr. 
Ward's suit against Madison constituted a conflict.1395 At 
Senator D'Amato's urging,1396 then FDIC Acting Chairman 
Andrew C. Hove agreed to ask the FDIC-IG to conduct an 
investigation.1397
    On February 8, 1994, the RTC's Office of Contractor 
Oversight and Surveillance (``OCOS'') issued a report 
dismissing allegations of conflicts of interest related to 
Rose's representation of the RTC in the Frost case.1398 On 
February 24, 1994, RTC Interim Chief Executive Officer 
(``CEO'') Roger Altman agreed to ask the RTC-IG to review the 
OCOS Report.1399 On March 2, 1994, RTC Deputy and Acting 
CEO John Ryan requested that the RTC-IG investigate the matters 
raised in the OCOS Report.1400
    The FDIC-IG issued its report on July 28, 1995, days before 
Ms. Huber discovered the billing records in the Book Room of 
the White House Residence. In the course of its investigation, 
the IG reviewed (1) the alleged conflicts of interest related 
to the FDIC's retention of Rose; (2) the FDIC Legal Division's 
conflicts report; (3) and certain legal fee payments made by 
the FDIC to Rose.1401
    With respect to the conflicts related to the FDIC's 
retention of Rose, the IG concluded that the Rose Law Firm and, 
specifically, that Mr. Hubbell had failed, as required by 
ethical rules, to disclose the firm's prior representation of 
Madison. The FDIC-IG reported:

          The results of our investigation evidenced 
        conflicting relationships among the Rose Law Firm, Rose 
        partner Webster L. Hubbell, and Mr. Hubbell's father-
        in-law since 1971, Seth Ward. During the time that Mr. 
        Hubbell represented the Madison Conservatorship on 
        behalf of the FDIC, Mr. Hubbell's father-in-law was 
        engaged in litigation adverse to the Madison 
        Conservatorship. We found that neither the Firm nor Mr. 
        Hubbell had informed FDIC of these relationships when 
        the Firm was hired in March 1989 to handle the lawsuit 
        against Frost or while the Firm was acting as litigator 
        for the Madison Conservatorship.1402

    The report further found that Mr. Hubbell's representation 
of the FDIC was improper in light of Rose's prior 
representation of Mr. McDougal's S&L:

          The results of our investigation also evidenced 
        conflicting representations on the part of the Rose Law 
        Firm with respect to its representation of FDIC 
        regarding the Madison Conservatorship. Specifically, we 
        found that the Firm had represented Madison and its 
        wholly owned subsidiary, Madison Financial Corporation, 
        in 1985 and 1986 on various legal matters, including 
        representation of Madison in 1985 before the Arkansas 
        Securities Department (ASD). During its 1985 
        representation of Madison the Firm submitted materials 
        to the ASD which were prepared by Frost, the firm that 
        was later sued by Rose on behalf of FDIC for the 
        Madison Conservatorship. We further found that for many 
        years the Rose Law Firm represented Mr. Hubbell's 
        father-in-law, Seth Ward, or Mr. Ward's companies 
        regarding various legal matters. However, there was no 
        evidence to show that Mr. Hubbell or the Rose Law Firm 
        disclosed these representations to FDIC when the Firm 
        was hired or during its representation of the Madison 
        Conservatorship in the Frost lawsuit.1403

    In its review of the FDIC Legal Division's February 17, 
1994 Report, the FDIC-IG determined that the Legal Division 
failed to consider certain conflicts criteria and additional 
evidence obtained by the IG.1404
    The RTC-IG, after a separate investigation, issued its 
report on August 3, 1995--again days before someone placed the 
billing records in the Book Room.35 The RTC-IG found that 
``Rose Law Firm did not disclose actual or potential conflicts 
relating to Madison and another six of the 17 institutions for 
which the firm represented FDIC and RTC.''1405
---------------------------------------------------------------------------
    \35\ The Rose Law Firm resisted the RTC OIG's investigation. After 
Rose declined a request to provide client identity information, the OIG 
issued a subpoena calling for the production of documents that would 
establish the identities of Rose's clients between 1985 and 1994. In 
April 1994, Rose filed suit against the RTC and the OIG, seeking to 
enjoin the OIG's conflicts investigation and bar enforcement of the 
subpoena. The suit was dismissed in August 1994. In November 1994, a 
federal district court ordered Rose to comply with the subpoena. See 
Adair v. Rose Law Firm, 867 F. Supp. 1111 (D.D.C. 1994); (RTC OIG 
Report p. I-1--I-2; Black, 8/10/95 Hrg. pp. 119-121.)
---------------------------------------------------------------------------
    Among the ``undisclosed'' matters identified by the RTC-IG 
Report related to Rose's involvement in the Castle Grande land 
deal:

          At the time it assisted MADISON GUARANTY with the 
        CASTLE GRANDE deal, ROSE LAW FIRM was aware of 
        regulatory concerns about the soundness of the 
        institution, particularly its net worth, through its 
        representation of MADISON GUARANTY on applications with 
        the ARKANSAS SECURITIES DEPARTMENT to issue preferred 
        stock and to commence broker/dealer operations. 
        Although FROST & COMPANY's defense called the conduct 
        of MADISON GUARANTY management into question and ROSE 
        LAW FIRM had represented MADISON GUARANTY/MADISON 
        FINANCIAL/SETH WARD in an acquisition of property 
        orchestrated by that management and subsequently 
        heavily criticized by the regulators, ROSE LAW FIRM did 
        not disclose fully its relationship with MADISON 
        GUARANTY in the purchase and development of the IDC 
        property to FDIC or RTC when it was retained in the 
        suit against FROST & COMPANY.1406

    Mr. Adair, Inspector General of the RTC, provided further 
explanation of the conflicts problem posed by Rose's 
involvement in Castle Grande in his testimony before the House 
Banking Committee in August 1995:

          Arkansas State Regulations had prohibited Madison 
        Guaranty from acquiring a tract of property that became 
        known as Castle Grande, and as an entity the Rose Law 
        Firm was aware of this restriction because it had 
        previously represented Madison Guaranty in other work 
        involving the Arkansas Securities Department.
          According to a subsequent Home Loan Bank Board 
        examination that was done, to avoid this restriction, 
        Madison Guaranty assigned the right to purchase part of 
        the property to an employee of the institution who was 
        the father-in-law of a Rose partner.
          Madison Guaranty financed 100 percent of that 
        employee's purchase, providing over $1 million in non-
        recourse financing and obtained an option from the 
        employee to convey the property back to Madison 
        Guaranty.
          Essentially, the purchase appears to have been 
        structured to avoid violation of state law by Madison 
        Guaranty. Madison Guaranty paid the Rose Law Firm for 
        legal services in connection with the transaction.
          In a report of examination of March 1986, Federal 
        Home Loan Bank Board examiners identified this 
        transaction as one of a series of fictitious 
        transactions causing losses to Madison Guaranty.
          When Madison Guaranty's independent public accountant 
        was sued by FDIC for its part in the failure of the 
        institution, the accounting firm's defense called the 
        conduct of Madison Guaranty's management into question 
        for several transactions including Castle Grande.
          Although the Rose Law Firm had earlier assisted 
        Madison Guaranty management in the original Castle 
        Grande transaction, the Rose Law Firm did not disclose 
        its role in that transaction when later retained by the 
        FDIC in the malpractice suit against Madison Guaranty's 
        independent public accountant.1407

    On December 29, 1995, RTC General Counsel William Collishaw 
informed the Arkansas Supreme Court Committee on Professional 
Conduct that the RTC-IG Report ``provides a sufficient 
indication of the existence of possible undisclosed conflicts 
of interest by the Rose Law Firm such that it raises concerns 
about the Rose Law Firm's compliance with the Arkansas Rules of 
Professional Conduct.''1408 The matter is still pending 
before the Committee on Professional Conduct.1409
    Relying primarily on the report of the RTC-IG, the 
Pillsbury Firm reviewed Rose's representation of the FDIC and 
the RTC.1410 Pillsbury determined that ``[b]etween the 
time the Rose Law Firm was substituted in and the time the 
Frost case settled, the Rose Law Firm developed an 
impermissible conflict of interest, which it neither fully 
disclosed to its client, the RTC, nor had waived.'' 1411 
Pillsbury concluded that ``[a] claim could be asserted against 
the Rose Law Firm with respect to the conflict of interest.'' 
1412 Specifically, Pillsbury identified Seth Ward and the 
Castle Grande transaction as among the factors leading to its 
conclusion that Rose had a conflict of interest.1413
    Ms. Black, counsel to the RTC-IG, stressed the significance 
of the billing records found in the Book Room of the White 
House to her investigation. She explained that the records 
related to the key transactions at issue in the allegations of 
conflicts of interest:

          The investigation which we were performing in 1994 
        and completed in the summer of 1995 was an 
        investigation of actual or potential conflicts that the 
        Rose Law Firm might have had with regard to its work 
        for initially the FDIC and then the RTC. As a part of 
        that investigation, we looked at the firm's work for 
        Madison Guaranty. We also looked at the firm's work, if 
        any, for Seth Ward.
          We looked at various transactions, including Castle 
        Grande, IDC, the Frost litigation, the representation 
        before the Arkansas Security Department and general 
        work that they did for Madison Guaranty. These 
        records--the records that were available to us at the 
        time we were doing our investigation were very sparse. 
        It was very difficult for us to understand what the 
        Rose Law Firm had in fact done. We had no more than a 
        handful of invoices, five or six.1414

    Ms. Black stated that the billing records were the best 
available evidence of the work Rose performed for Madison and 
that those records were ``considerably more detailed than what 
was available to us before.''1415
    Ms. Black testified that if the RTC-IG had the billing 
records during its investigation, ``certainly there would have 
been questions that we asked witnesses that we did not ask. 
There would have been lines of inquiry that we would have 
pursued that we did not pursue. There might have been witnesses 
that we would have asked to interview that we did not ask to 
interview.''1416
    In particular, the Rose billing records increased the RTC-
IG's knowledge of Mrs. Clinton's role in Rose's representation 
of Madison. When Ms. Black testified before the House Banking 
Committee in August 1995 about her report, all that she could 
say was that Mrs. Clinton worked for Madison. ``We don't know 
what it was. The bills that were submitted by Rose had the 
names of attorneys who did the work at the top, and then they 
had a block discussion of the activities that occurred, and we 
don't know who did what.''1417 Ms. Black further testified 
in 1995 that ``[w]e have no evidence that she [Hillary Clinton] 
worked on Castle Grande.''1418
     After the billing records were discovered, Ms. Black 
testified that the RTC-IG learned, for the first time, of the 
following relevant matters:
          Mrs. Clinton's role in drafting the May 1, 1986 
        option agreement between Madison and Seth Ward;
          Mrs. Clinton's telephone conference with Beverly 
        Bassett Schaffer the day before the Rose Law Firm sent 
        a letter to Ms. Schaffer requesting approval of 
        Madison's plan to issue a series of preferred stock;
          Mrs. Clinton's review of a letter discussing the 
        Arkansas banking regulation which limited direct 
        investments by an S&L in an affiliate or subsidiary; 
        and
          Mrs. Clinton's 15 conferences, either in person or on 
        the telephone, with Seth Ward, the key player in the 
        Castle Grande deal.1419
    Ms. Black stated that the RTC-IG would have interviewed 
Mrs. Clinton if it had the billing records during its 
investigation.1420

V. The Special Committee's Investigation into the Circumstances 
        Surrounding the Discovery of the Billing Records

    The FDIC-IG issued its report on the Rose Law Firm's 
conflicts of interest stemming from its representation of 
Madison on July 28, 1995. The RTC-IG issued its report on the 
same matter on August 3, 1995. During the two week period 
following the publication of these reports, Ms. Huber first saw 
the billing records in the Book Room of the White House 
Residence, next to Mrs. Clinton's office.
    The Special Committee conducted hearings in December 1995 
into matters relating to the Rose Law Firm and Mrs. Clinton's 
representation of Madison. Specific questions were raised 
regarding the existence of the billing records. Mr. Hubbell 
claimed that he could not provide complete answers about the 
Mrs. Clinton's representation of Madison because he did not 
have the billing records to refresh his memory.1421 Ms. 
Thomases similarly testified about her campaign notes relating 
to billing records reflecting Mrs. Clinton's work for 
Madison.1422 About two weeks later, on January 4, 1996, 
Ms. Huber examined the records she recovered from the Book Room 
and realized that they were the missing billing 
records.1423
    Because of the importance of the records and the mysterious 
circumstances of their disappearance and discovery, the Special 
Committee conducted an exhaustive investigation to identify the 
person or persons who removed them from the Rose Law Firm in 
1992 and who placed them in the Book Room of the White House 
Residence in August 1995.
    The White House produced to the Special Committee records 
reflecting all persons who entered the White House Residence 
from July 20 through August 14, 1995.1424 The White House 
provided lists of construction workers who were on the payroll 
of contractors performing renovations in the White House 
Residence during this period.1425 Finally, the White House 
produced lists of overnight guests of President and Mrs. 
Clinton during this period.1426
    The White House informed the Special Committee that 
approximately 206 persons had access to the Book Room during 
the relevant period from July 20 to August 14, 1995, when Ms. 
Huber testified she found the billing records.1427
    Of the 206 persons with access to the Bookroom during the 
relevant period, 28 were White House Residence Staff.1428 
The Chief Usher, Gary Walters, testified that the Residence 
staff may not place documents in, or move documents around, the 
White House Residence without authorization.1429 According 
to Mr. Walters, it is highly unlikely that a member of the 
Residence staff placed the records in the Book Room.1430 
Because the White House Residence employees would have had 
little opportunity to gain access to the billing records and no 
reason to place them in the Book Room, the Special Committee 
concluded that no residence employee placed the billing records 
in the Book Room.
    After eliminating the 28 members of the Residence Staff, 
178 persons remained. Of those, approximately 30 construction 
workers, who were involved in ongoing work in the Book Room or 
in the adjacent Exercise Room, were given access to the Book 
Room. Dennis Freemyer, the Deputy Head Usher in charge of 
construction projects, testified that the construction workers 
and outside contractors were all instructed not to touch or 
move anything in the White House Residence.1431 According 
to Mr. Freemyer: ``They are asked not to touch anything. If 
they need something moved, they're to ask either the National 
Park Service or a member of our staff, if they are present.'' 
1432 All construction workers and outside contractors were 
escorted by either Secret Service or White House Ushers at all 
times while they were in the Residence.1433 For security 
reasons, the escorts specifically check at the completion of 
each day's work to ascertain whether the workers had left 
anything behind.1434 According to Mr. Freemyer, it is 
highly unlikely that a construction worker or outside 
contractor placed the records in the Book Room.1435 
Because the outside contractors had no opportunity to gain 
access to the billing records or reason for placing them in the 
Book Room, the Special Committee concluded that no outside 
contractor placed the records in the Book Room.
    After eliminating the construction workers, 148 persons 
remained, including 55 public officials.1436 These public 
officials included 24 U.S. mayors, President and Mrs. Kim of 
South Korea, and various Cabinet officials and National 
Security Staff.1437 Given their official positions and 
their lack of access to the billing records or motive to place 
them in the Book Room, the Special Committee concluded that 
none of these individuals placed the Rose Law Firm billing 
records in the Book Room.
    Of the remaining 93 persons who had access to the White 
House residence during the period from July 20 through August 
14, 1995, records of the Secret Service and the White House 
Usher's Office identified 60 Residence guests.1438 The 
Special Committee sent interrogatories to these guests. Each 
guest responded that he or she did not handle the records, have 
any discussions about the records, or have any knowledge of how 
they came to appear in the Book Room of the White House 
Residence.
    Apart from the Residence guests, construction workers, and 
staff, the remaining 33 individuals who had access to the Book 
Room during the relevant period had a past or present working 
relationship with the President and the First Lady. Of these 33 
persons, the Special Committee received evidence from all 
except the President and the First Lady. Ten were sent 
interrogatories, and the others gave testimony directly to the 
Special Committee. All denied having handled the records, 
having any discussions about the records,36 or having any 
knowledge about how the records appeared in the Book Room of 
the White House Residence.
---------------------------------------------------------------------------
    \36\ Susan Thomases testified that she talked with Mr. Hubbell in 
1992 about Mrs. Clinton's work for Madison, and he indicated to her 
that he had reviewed time records. With respect to reviewing the 
records herself, however, Ms. Thomases testified, ``I never saw them. . 
. . I never heard what happened to them.'' (Thomases, 12/18/95 Hrg. pp. 
54-55.)
---------------------------------------------------------------------------
    The President and Mrs. Clinton are the only persons on the 
list of 206 persons having access to the White House Residence 
from whom the Special Committee has not received evidence. On 
June 13, 1996, the Special Committee requested that Mrs. 
Clinton respond in writing, under oath, about ``any knowledge 
she may have concerning the Rose Law Firm billing records 
bearing Bates Stamp numbers DKSN028928 through DKSN029043, 
including whether she has reviewed, handled, or discussed 
(other than with counsel) these records, and her knowledge 
relating to the disappearance or discovery of these records.'' 
1439
    On June 17, 1996, Mrs. Clinton responded: ``I do not know 
how the billing records (DKSN028928 through DKSN029043) came to 
be identified by Mrs. Huber at the White House on January 4, 
1996, although I have read various media accounts.'' In light 
of the Special Committee's request for detailed and specific 
information relating to any knowledge she had concerning the 
disappearance or discovery of these records, Mrs. Clinton's 
answer is incomplete. For example, she does not state whether 
she has any knowledge as to how the billing records were 
removed from the Rose Law Firm; who possessed the billing 
records between February 1992 and August 1995; where they were 
stored between February 1992 and August 1995; and, most 
importantly, who placed them in the Book Room of the White 
House in August 1995. There is no mystery as to how Ms. Huber 
came to identify the records on January 4, 1996. These other, 
more important questions, however, remain to be answered.
    On June 4, 1996, the FBI informed the Special Committee 
that the fingerprints of six persons were found on the Rose 
billing records discovered in the Book Room.1440 In 
addition to fingerprints of Ms. Huber and Marc Rolfe, a 
Williams & Connolly legal assistant who stamped numbers on the 
records to prepare them for production,1441 the FBI also 
identified the fingerprint of Sandra Hatch, a Rose Law Firm 
file clerk assigned to Mr. Foster in 1992,1442 and a palm 
print of Mildred Alston, Mrs. Clinton's Rose Law Firm secretary 
and currently Special Assistant for White House Personal 
Correspondence.1443
    Ms. Hatch testified that, as Mr. Foster's file clerk, she 
was often asked by Mr. Foster or his secretary to photocopy 
documents and files--which, on occasions, included timesheets 
and billing records of the size and description similar to 
those found in the White House Book Room.1444 She did not, 
however, recall a specific instance when Mr. Foster asked her 
to photocopy or handle such records.1445 She did not 
recall handling, discussing, or overhearing any discussions 
about records specifically relating to the Rose Law Firm's work 
for Madison.1446 Ms. Hatch testified that although she 
packed some of Mr. Foster's personal files from the Rose Law 
Firm for shipment to the White House in January 1993, she did 
not see any records resembling the billing records discovered 
in the Book Room.1447 She had no knowledge of how the 
billing records got to the White House Residence.1448 When 
asked to speculate how her fingerprint got onto the billing 
records, Ms. Hatch replied, ``It's very possible I could have 
been asked to pick them up. I don't know. It would just be a 
guess.'' 1449
    Mildred Alston testified that, although she had been to 
Mrs. Clinton's office on the third floor of the White House 
Residence, she had never been to the adjacent Book 
Room.1450 Prior to her appearance before the Grand Jury in 
1996, Ms. Alston had never seen the billing records discovered 
in the Book Room since she came to Washington.1451 She did 
see and handle records resembling those found in the Book Room 
while she worked at the Rose Law Firm, 1452 and speculated 
that ``I'm sure if the tests indicate that my palm print is 
wherever on this piece of paper, or on the original of this 
piece of paper, then I handled them, or touched them or leaned 
on them'' while she was at the Rose Law Firm.1453 Ms. 
Alston testified that, in January 1992, she helped pack Mrs. 
Clinton's documents and left some of them in the custody of Amy 
Stewart, a Rose lawyer, to be shipped to the White 
House.1454 Ms. Alston did not know whether the billing 
records found in the Book Room were among the files shipped to 
the White House from Mrs. Clinton's office at the Rose Law 
Firm. 1455
    The FBI also identified the fingerprints of Mrs. Clinton 
and Vincent Foster on the billing records.1456 Mr. Foster 
received the billing records during the 1992 Presidential 
campaign, and was the last known person to have handled the 
records.1457 Lawyers for the Clintons, both from the White 
House and from Williams & Connolly, have stated that Mrs. 
Clinton ``may have handled the billing records in 1992.'' 
1458 What is left unanswered by this statement, however, 
are the critical questions concerning the mystery of the 
billing records: when did Mrs. Clinton handle them? Why did she 
handle them? And specifically, what information was she 
attempting to glean from them?
    A close analysis of the billing records, Mr. Foster's 
notations, and the location of Mrs. Clinton's and Mr. Foster's 
fingerprints reveal at least some answers to these questions. 
The records disclose Mrs. Clinton's role in advising Mr. 
McDougal's Castle Grande transaction and they indicate Mrs. 
Clinton's and Mr. Foster's concern over Mrs. Clintons' 
involvement in the transactions.
    Mrs. Clinton left her fingerprints at two places on the 
billing records. The FBI identified ``[o]ne fingerprint located 
on the front bottom near the left edge of the page DEK 
014950.'' 1459 At approximately this location on the 
page,37 is an entry reflecting that Mrs. Clinton 
participated in a ``teleconference with B. Bassett, Securities 
Commissioner.'' 1460 The entry is underlined in an 
unidentified hand, but the presence of Mrs. Clinton's 
fingerprint at this approximate location, and the absence of 
any other identifiable finger print on the page,1461 
strongly suggest that Mrs. Clinton made the markings.
---------------------------------------------------------------------------
    \37\ DEK 014950 was produced to the Special Committee as 
DKSN028943. (Facsimile from Nicole Seligman to Robert Giuffra, June 5, 
1996.)
---------------------------------------------------------------------------
    This entry on the billing records, for upwards of one hour 
on the day before Rose submitted Madison's novel preferred 
stock proposal to Ms. Schaffer,1462 contradicts Mrs. 
Clinton's response to RTC interrogatories that in May 1995, 
when she called the Arkansas Securities Department to find out 
``to whom Mr. Massey should direct any inquiries,'' she did not 
recall to whom she spoke.1463 Mrs. Clinton's sworn 
statement is contrary to the testimony of the other two 
participants in the telephone conference, Ms. Schaffer and Mr. 
Massey.1464 Ms. Schaffer, in particular, testified that 
she substantively discussed the legality of the preferred stock 
proposal.1465
    Mrs. Clinton's fingerprints and the markings on the billing 
records at this entry indicate that Mrs. Clinton was aware of 
the nature of her contact with Ms. Schaffer as recently as 
February 1992, three years before her sworn answer to the RTC 
interrogatories. Ms. Schaffer recalled the substance of the 
conversation from over ten years ago, and it is unclear why 
Mrs. Clinton provided inaccurate information to the RTC on the 
conversations about which she had substantive knowledge as 
recently as 1992.
    Mr. Foster's fingerprints on the billing records indicate 
his attention to Mrs. Clinton's role with respect to the Castle 
Grande transaction, a ``land flip'' deal that federal 
regulators have described as a fraud costing the taxpayers $4 
million.1466 The transaction was fraudulently structured 
to evade Arkansas' ``direct investment'' rule, which limits an 
S&L's investment in its subsidiaries and service 
corporations.1467
    The FBI identified ``[o]ne fingerprint on the front lower 
right corner of page DEK 014969'' belonging to Mr. 
Foster.1468 At approximately this location on the 
page,38 is an entry reflecting that Mr. Massey 
participated in a conference with Sarah Hawkins, a Madison 
official, and the Federal Home Loan Bank ``regarding brokerage 
activities and direct investment rule.'' 1469 The entire 
entry is circled, most probably by Mr. Foster, given the 
presence of his fingerprint proximate to the entry. The 
markings suggest that Mr. Foster recognized the significance of 
the direct investment rule as it related to the activities of 
Madison.
---------------------------------------------------------------------------
    \38\ This document was produced to the Special Committee as 
DKSN028962. (Facsimile from Nicole Seligman to Robert Giuffra, June 5, 
1996.)
---------------------------------------------------------------------------
    The importance of Mr. Foster's recognition as it related to 
Mrs. Clinton's representation of Madison becomes clear with the 
FBI's identification of ``[o]ne fingerprint on the front upper 
right corner of page DEK 015030'' belonging to Mr. 
Foster.1470 At approximately this location on the page 
39 is an entry reflecting that Mrs. Clinton had a 
telephone conference with Donald Denton, a Madison official, 
for approximately 12 minutes on April 7, 1986.1471 
Someone, apparently Mr. Foster, circled the name of the 
attorney on the entry: ``HRC.'' 1472
---------------------------------------------------------------------------
    \39\ This document was produced to the Special Committee as 
DKSN029024. (Facsimile from Nicole Seligman to Robert Giuffra, June 5, 
1996.)
---------------------------------------------------------------------------
    This telephone call is among the critical events in 
illuminating the nature of Mrs. Clinton's work in connection 
with the fraudulent Castle Grande transaction. The land deal, 
as noted above, was a sham transaction designed to conceal 
Madison Guaranty's investment in Castle Grande through its 
subsidiary, Madison Financial. Mr. Ward was the ``straw man'' 
purchaser in the project--one who lends his name to the title, 
but does not actually have an ownership interest.1473 In 
order to conceal the commissions owed to Mr. Ward for his 
services, Madison Guaranty, Madison Financial, and Mr. Ward 
executed three promissory notes purporting to evidence loans 
but, in fact, were a means to pay Mr. Ward for his commissions. 
Two of these notes were executed on April 7, 1986.
    That same day, Mr. Denton, Madison's loan officer, received 
a message from Mrs. Clinton.1474 According to Mr. Denton, 
Mrs. Clinton called seeking copies of the April 7th notes 
between Mr. Ward and Madison Financial.1475 When Mr. 
Denton cautioned Mrs. Clinton that the April 7th notes from 
Madison to Mr. Ward may pose a problem because ``they 
constituted in effect a parent entity fulfilling the obligation 
of a subsidiary,'' 1476 Mrs. Clinton ``summarily 
dismissed'' Mr. Denton's warning.1477 She replied in a 
manner he took to mean that ``he would take care of savings and 
loan matters, and she would take care of legal matters.'' 
1478
    She indeed took care of matters. The Rose Law Firm billing 
records indicate that, three weeks later, on May 1, 1986, Mrs. 
Clinton prepared an option agreement between Mr. Ward and 
Madison Financial.1479 The word ``HRC'' in the entry was, 
as in the April 7th entry, circled apparently by the same 
hand.1480 Based on the new evidence derived from Mr. 
Denton and the billing records, the federal regulator who 
examined Madison in 1986 believed that Mrs. Clinton's May 1 
option ``was created `in order to conceal the connection--
whatever it was--between' '' the March 31 and April 7 
notes.1481
    On June 13, 1996, the Special Committee requested that the 
First Lady attempt to refresh her recollection regarding the 
matters discussed by Mr. Denton and to inform the Committee of 
what she recalls about them.1482 On June 17, 1996 the 
Special Committee received an affidavit from Mrs. Clinton 
accompanied by a letter from Mr. Kendall. In the affidavit, 
Mrs. Clinton gave no answer to the question posed by the 
Special Committee; instead, she simply referred to Mr. 
Kendall's letter ``addressing certain allegations recently made 
by Mr. Don Denton.'' 1483 In his letter, Mr. Kendall 
maintained that Mr. Denton's recollection is ``wholly 
unreliable'' 40 but gave no indication as to the 
recollection of the First Lady.1484 The First Lady thus 
has neither confirmed nor denied Mr. Denton's testimony.
---------------------------------------------------------------------------
    \40\ Mr. Kendall based this assertion on the fact that Mr. Denton 
testified at two trials, Ward v. Madison Guaranty, and United States v. 
McDougal et al., yet did not mention his April 7, 1986 telephone 
conversation with Mrs. Clinton. Mr. Kendall, however, offered no 
indication whether Mr. Denton was asked questions about his 
conversations with Mrs. Clinton or, for that matter, whether such 
conversations and Mrs. Clinton's work for Madison were within the scope 
of the trials.
    What is clear, however, is that Mr. Denton recalled the 
conversation only after being shown Mrs. Clinton's billing records 
reflecting the 12 minute telephone call on April 7. When he was shown 
this record, on June 3, 1996, he did not recall the conversation. 
However, after the interview, he reviewed his files and discovered the 
April 7 message slip from Mrs. Clinton. His memory thus refreshed, he 
provided additional testimony to the FDIC-IG, all under a legal 
obligation of truthfulness, 18 U.S.C. Sec. 1001. (Denton, FDIC-IG 
Report of Interview, June 11, 1996.) Mr. Denton has no reason to 
mislead investigators, much less to go out of his way to give 
inaccurate testimony.
---------------------------------------------------------------------------
    The significance of the billing records as they relate to 
Castle Grande is perhaps best illustrated by the activities of 
Mrs. Clinton's legal defense team immediately after the 
discovery of the records. A message slip from John Tisdale, the 
Clintons' Arkansas lawyer to Alston Jennings, Seth Ward's 
former attorney on Castle Grande, indicate that, on June 5, 
1996, the day after Ms. Huber discovered the records in her 
White House office, Mr. Kendall called Mr. Tisdale and Mr. 
Jennings to arrange a meeting.1485 One week after the 
records were discovered, on January 11, 1996, Mr. Kendall flew 
to Little Rock and met first with Mr. Jennings and then with 
Mr. Ward.1486 The meeting with Mr. Ward lasted 30-40 
minutes.1487 Curiously, Mr. Kendall had also contacted Mr. 
Jennings in August 1995. Subsequent to that contact, Mrs. 
Clinton summoned Mr. Jennings to the White House for a personal 
meeting on August 10, 1995, around the time that the billing 
records were placed in the Book Room of the White House 
residence.
    Mrs. Clinton, as the billing partner and lead attorney for 
Rose on the matter, most likely would have appreciated the 
importance of the billing records and the information they 
impart on Castle Grande. What remains unanswered is how Mr. 
Foster gained knowledge of the significance of these 
transaction--sufficient knowledge apparently to highlight the 
entry on the billing records for Mrs. Clinton's April 7th 
telephone call with Mr. Denton and for her preparation of the 
May 1 option. Given that Mr. Foster directed his handwritten 
notes on the billing records to Mrs. Clinton, the most 
reasonable inference is that Mrs. Clinton shared her 
recollection of the transactions with Mr. Foster, and the two 
collaborated in reviewing the billing records some time after 
February 1992. If that is so, then the question arises as to 
why Mrs. Clinton stated to investigators in 1995 that ``I do 
not believe I knew anything about any of these real estate 
parcels and projects.'' 1488
    The billing records, and the evidence from Mr. Denton which 
the entries on the billing records elicited, indicate that Mrs. 
Clinton either had knowledge of or consciously avoided the fact 
that the Castle Grande transactions potentially violated bank 
regulations. That knowledge provides a powerful motive to 
protect the billing records from careful scrutiny by 
investigators. Because Mrs. Clinton had ordered the destruction 
of other documents relating to Mrs. Clinton's representation of 
Madison--including her timesheets and other work files directly 
relating to Castle Grande--the billing records were the only 
documentary evidence available which reflected the true extent 
and nature of Mrs. Clinton's role with respect to the 
fraudulent scheme.
    The evidence strongly suggests that Mr. Foster and Mrs. 
Clinton, at some time after February 1992, worked together to 
reconstruct Mrs. Clinton's role in Castle Grande. The evidence 
also indicates that Mr. Foster and Mrs. Clinton appreciated the 
significance of Mrs. Clinton's April 7 telephone call to Mr. 
Denton and her preparation of the May 1 option, in the words of 
a federal regulator, ``to conceal'' the true nature of the 
transaction.1489 Both had a powerful motive to protect the 
billing records from scrutiny. Mr. Foster is now deceased.

                                Endnotes

    1 White House Production S 12517.
    2 O'Melveny & Myers Document CCBW-884
    3 Williams & Connolly Document DKSN001168-001169.
    4 Williams & Connolly Document DKSN013309.
    5 RTC Document FDICHRC 162-163.
    6 Denton, 6/11/96 FDIC OIG Interview pp. 2-3.
    7 Wright, 1/26/96 Dep. p. 157-159.
    8 Clark, 1/18/96 Hrg. pp.162-164..
    9 Treasury Contacts Report, p. 3 & n. 7.
    10 IX Hearing Before the Committee on Banking, Housing, and 
Urban Affairs, Document pp. 1450-1455.
    11 Foren, 11/13/95 Dep. p. 107.
    12 Foren 11/14/95 Dep. p. 107
    13 Foren, 11/28/95 Hrg. p. 23.
    14 Coleman, 11/9/95 Dep. pp. 63-68; Coleman, 12/1/95 Hrg. pp. 
11-12.
    15 Coleman, 12/1/95 Hrg. p. 16; see also Coleman, 11/9/95 Dep. 
p. 70; Kennedy, 11/1/95 Dep. p. 12; Kennedy, 12/5/95 Hrg. p. 69
    16 Kennedy, 11/1/95 Dep. pp. 22-23; Kennedy, 12/5/95 Hrg. 
pp.16-20.
    17 Kennedy, 11/1/95 Dep. pp. 12-14; Kennedy, 12/5/95 Hrg. pp. 
13-15.
    18 Hogan & Hartson Document BL011722.
    19 S. Rep. 103-433, ``Madison Guaranty S&L and the Whitewater 
Development Corporation, Washington, D.C. Phase, Report of the 
Committee on Banking, Housing, and Urban Affairs, United States Senate, 
on the Communications Between Officials of the White House and the U.S. 
Department of the Treasury or the Resolution Trust Corporation,'' 103rd 
Cong., 2d Sess., January 3, 1995 pp. 9-13 (hereinafter, ``S. Rep. 103-
433'').
    20 S. Rep. 103-433 p. 11.
    21 S. Rep. 103-433 p. 11.
    22 S. Rep, 103-433 p. 12.
    23 RTC Document TH705.
    24 Sloan, 7/21/94 Dep. p. 44-47, S. Hrg. 103-889, Vol. V, pp. 
680-682.
    25 White House Document X983, S. Hrg. 103-889, Vol. IX, p. 
1086.
    26 White House Document X984 S. Hrg. 103-889, Vol. IX, p. 
1087.
    27 White House Document X984, S. Hrg. 103-889, Vol. IX, p. 
1087; S. Rep. 103-433, Vol. 11, p. 16.
    28 S. Rep. 103-433 pp. 12-13. Check cite.
    29 S. Rep. 103-433 p. 18.
    30 Lindsey, 7/21/94 Dep. p. 219, S. Hrg. 103-889, Vol. V, p. 
451.
    31 S. Rep. 103-433 p. 18.
    32 S. Rep. 103-433 pp. 26-34.
    33 White House Document X534, S Hrg. 103-889, Vol. VIII, p. 
641.
    34 White House Document X534, S Hrg. 103-889, Vol. VIII, p. 
641.
    35 Kennedy, 12/5/95 Hrg. p. 46.
    36 12/12/95 Submission of Williams & Connolly to the Special 
Committee p. 13, reprinted in Kennedy Notes Report, S. Rep. 104-191 p. 
70.
    37 Lindsey, 11/28/95 Hrg. p. 205.
    38 Lindsey, 11/28/95 Hrg. p. 204.
    39 Kennedy, 1/15/96 Dep., pp. 145-146.
    40 Black, 11/7/95 Hrg. pp. 168, 190.
    41 New York Post, 11/29/95, p. 16.
    42 Eggleston, 11/4/95 Dep. pp. 61-58; Spotila, 11/6/95 Dep. 
pp. 52-65.
    43 Justice Department Document TTK-157.
    44 Gearan, 2/15/96 Hrg. pp. 9-12.
    45 White House Production S020567.
    46 White House Production S 020566; Gearan, 02/15/96 Hrg., p. 
15.
    47 Gearan, 2/15/96 Hrg. p. 15.
    48 Gearan, 02/15/96 Hrg., pp. 15-16; Ickes, 02/22/96 Hrg., pp. 
68-69.
    49 White House Production S020578.
    50 Wright, 1/26/96 Dep. p. 13.
    51 White House Production S 02084. (CHECK)
    52 White House Production S 02084. (CHECK)
    53 White House Production S 020579.
    54 White House Production S 020579.
    55 White House Document S020760-020761.
    56 White House Document S020760-020761.
    57 White House Production, ?, S020576.
    58 White House Production, ?, (Not Numbered).
    59 Gearan, 02/15/96 Hrg., p. 182.
    60 Schaffer, 04/29/96 Dep., pp. 38-39.
    61 Rutherford, 2/29/96, Dep. p. 43.
    62 Schaffer, 04/29/96 Dep., p. 26.
    63 S. Rerp. 103-433, p. 81.
    64 Altman Diary, Treasury Doc. No. 2987; S. Rep. 102-433, p. 
65-67.
    65 Pillsbury Madison & Sutro, A Report on Certain Real Estate 
Loans and Investments Made By Madison Guaranty Savings & Loan and 
Related Matters, 12/19/95, p. 39.
    66 Denton, 6/11/96 FDIC OIC Interview p. 3.
    67 Stephanopoulos, 07/19/94 Dep. p. 40.
    68 Steiner, 07/18/94 Dep., pp. 199-200.
    69 Hanson, 07/17/94 Dep., p. 652.
    70 Hanson, 07/17/94 Dep., p. 651.
    71 S. Rep. 103-433, p. 145.
    72 S. Rep. 103-433, Vol. II, p. 145; Steiner, 7/18/94, Dep. 
pp. 205-206.
    73 S. Rep. 103-433, Vol. II, p. 145; Steiner, 7/18/94, Dep. 
pp. 205-206.
    74 Stephens, 05/15/96 Dep. p. 13.
    75 Stephens, 05/15/96 Dep. p. 21.
    76 Stephens, 05/17/96 Hrg., p. 19.
    77 Stephens, 05/17/96 Hrg., pp. 7-8.
    78 Lewis, 11/29/95 Hrg. p. 6.
    79 Iorio, 10/20/95 Dep. p. 123; Lewis, 11/29/95 Hrg. p. 26.
    80 11/27/95 Transcript of Conversation Between L. Jean Lewis 
and April Bristle, p. 59.
    81 DOJ Doc. A7049-50. Banks dep. 91.
    82 Iorio and Lewis, 11/29/95 Hrg., p. 28.
    83 Gangloff, date, pp. 72-74.
    84 Department of Justice Production FBI-00001545.
    85 DOJ Production 014277.
    86 Keeney, 12/06/95 Hrg., p. 28.
    87 Casey, house dep. p. 112; Johnson, date, pp. 55-56.
    88 DOJ Doc. 16848.
    89  Hubbell Dep. 10/26/95, Dep. pp. 96-99, 149-151.
    90 Hrg. 11/8/95, p. 8.
    91 Adair, 11/7/95 hrg., p. 123.
    92  Hrg. 11/7/95, p. 124.
    93 Cottos, 11.8.95 Hrg. p. 35-36.
    94  Blight, 11/7/95 Hrg. pp. 108-109.
    95 Hrg. 11/7/95, pp. 119-20.
    96 S. Hrg. 103-889, Vol. IV, pp. 90, 432, 461, 735 & 743.
    97  Potts, 11/8/95 Hrg., pp. 226-27.
    98 Cutler, 11/9/95 Hrg. p. 34.
    99 White House Production, Cover Letter, 1/29/96.
    100 Gearan, 2/12/96, Dep. p.12.
    101 Waldman, 2/21/96, pp. 15-17.
    102 White House Production, 2/20/96, Cover Letter.
    103 Letter from Allen Snyder to Robert Giuffra, Mar. 1, 1996, 
p. 1.
    104 S. Rep. 103-433, Vol. II, pp. 125-135.
    105 Ickes, 7/24/94 Dep. pp. 118-126.
    106 Ickes, 7/24/94 Dep. p. 119.
    107 Ickes, 7/24/94 Dep. p. 123.
    108 White House Document S9908-S9911.
    109 White House Document S9909.
    110 5 C.F.R. Sec. 2635.701(a).
    111 5 C.F.R. Sec. 2635.702. See also Office of Government 
Ethics, Report to the Secretary of the Treasury pp. 2-4 (July 31, 
1994).
    112 The White House, Remarks by the President in Appointment 
of Lloyd Cutler for Special Counsel to the President, March 8, 1994.
    113 See 5 C.F.R. Sec. 2635.703 (``An employee shall not . . . 
allow the improper use of nonpublic information to further his own 
private interest or that of another, whether through advice or 
recommendation, or by knowing unauthorized disclosure.'').
    114 3 CFR Sec. 100.735-18.
    115 Clark, 1/18/96 Hrg. p. 90
    116 Clark, 1/18/96 Hrg. p. 90.
    117 Williams & Connolly Document DKSN028928-DKSN029043.
    118 Associated Press, 4/22/94, ``Text of First Lady Hillary 
Rodham Clinton's News Conference in the State Dining Room of the White 
House.''
    119 Williams & Connolly Document DKSN028943.
    120 Williams & Connolly Document DKSN028943.
    121 Williams & Connolly Document DKSN0128940.
    122 Massey, 1/11/96 Hrg. pp. 184-185.
    123 Williams & Connolly Document DKSN028928-DKSN029043.
    124 Williams & Connolly Document DKSN028928-DKSN029043.
    125 Williams & Connolly Document DKSN028943.
    126 Massey, 1/11/96 Hrg. p. 93.
    127 Massey, 1/11/96 Hrg. p. 93.
    128 Massey, 1/11/96 Hrg. pp. 96-97.
    129 Pillsbury Madison & Sutro, A Report on Certain Real Estate 
Loans and Investments Made by Madison Guaranty Savings & Loan and 
Related Matters, 12/19/95, p. 39.
    130 Hillary Rodham Clinton Answer to RTC Interrogatory Number 
29, p. 73, 5/24/95, RTC Document 74.
    131 RTC Supplemental Interrogatories, 1/20/96, RTC Document 
SINNTR00100.
    132 Clark, 6/10/96 FDIC-IG Interview p. 9.
    133 Clark, 6/10/96 FDIC-IG Interview p. 9.
    134 Clark, 6/10/96 FDIC-IG Interview p. 9.
    135 Clark, 6/10/96 FDIC-IG Interview p. 9.
    136 RTC Document, SEN 32912-32913.
    137 Williams & Connolly Document DKSN029024.
    138 Denton Document, DD000000241.
    139 Denton, 6/11/96 FDIC OIG Interview pp. 2-3.
    140 Id. at 3.
    141 Id.
    142 Williams & Connolly Document, DKSN029026.
    143 12/28/95 Pillsbury Report p. 74.
    144 Clark, 6/10/96 FDIC-IG Interview p. 9.
    145 6/13/96 letter from Senators Alfonse D'Amato, Richard 
Shelby, Christopher Bond, Connie Mack, Lauch Faircloth, Robert Bennett, 
Rod Grams, Pete Domenici, Orrin Hatch, and Frank Murkowski to David 
Kendall.
    146 Affidavit of Hillary Rodham Clinton, June 17, 1996, p. 2.
    147 6/17/95 Letter from David Kendall to Alfonse D'Amato, p. 
2.
    148 Letter from Alston Jennings to Viet Dinh, February 7, 
1996, attachment.
    149 February 7, 1996 letter from Alston Jennings to Viet Dinh.
    150 Ward, 2/12/96 Dep. p. 102.
    151 Vinson & Elkins Document RS237A.
    152 Hubbell, 2/7/96 Hrg. p. 169.
    153 Clark, 1/18/96 Hrg. pp. 162-164.
    154 Williams & Connolly Document DKSN28929.
    155 Hubbell, 2/7/96 Hrg. p. 48.
    156 Hubbell, 2/7/96 Hrg. p. 56.
    157 Hubbell, 2/7/96 Hrg. p. 52.
    158 Hubbell, 2/7/96 Hrg. p. 53.
    159 Hubbell, 2/7/96 Hrg. p. 54.
    160 Huber, 1/18/96 Hrg. p. 5.
    161 Huber, 1/18/96 Hrg., pp. 5, 8.
    162 Huber, 1/18/96 Hrg. p. 9.
    163 Huber, 1/18/96 Hrg. pp. 16-17, 28.
    164 Huber, 1/18/96 Hrg. pp. 17-18.
    165 Huber, 1/17/96 Dep. p. 85.
    166 Huber, 1/18/96 Hrg. p. 19; Huber, 1/17/96 Dep. pp. 85.
    167 Hubbell, 6/4/95 Dep. p. 95.
    168 Affidavit of Hillary Rodham Clinton to the Special 
Committee, June 17, 1996, p. 1.
    169 Pillsbury Madison & Sutro, ``Madison Guaranty Savings & 
Loan and Whitewater Development Company, Inc.: A Preliminary Report to 
the Resolution Trust Corporation,'' April 24, 1995, pp. 15-16, and p. 
25 (hereinafter, ``4/24/95 Pillsbury Report'').
    170 4/24/95 Pillsbury Report p. 11.
    171 4/24/95 Pillsbury Report p. 19.
    172 4/24/95 Pillsbury Report p. 32.
    173 4/24/95 Pillsbury Report p. 32.
    174 4/24/95 Pillsbury Report p. 43.
    175 Pillsbury Madison & Sutro, ``General Report on the 
Investigation of Madison Guaranty Savings & Loan and Related 
Entities,'' December 28, 1995, p. 7 (hereinafter, ``Pillsbury General 
Report'').
    176 4/24/95 Pillsbury Report p. 44.
    177 Pillsbury General Report pp. 7-8.
    178 Pillsbury General Report p. 8.
    179 Pillsbury General Report p. 8.
    180 Pillsbury General Report p. 8.
    181 Pillsbury General Report p. 9.
    182 Pillsbury General Report p. 9.
    183 Pillsbury General Report p. 9.
    184 4/25/95 Pillsbury Report, p. 4.
    185 RTC Document PLS0020S.
    186 RTC Document PLS0033S.
    187 Wright, 1/26/96 Dep. pp. 157-159.
    188 Wright, 1/26/96 Dep. pp. 157-159.
    189 Wright, 1/26/96 Dep. p. 164.
    190 Madison Guaranty S&L and the White Water Development 
Corporation: Washington, DC, Phase, Report of the Committee on Banking, 
Housing, and Urban Affairs on the Communications between Officials of 
the White House and the U.S. Department of the Treasury or the 
Resolution Trust Corporation, S. Rep. 103-433, Jan. 3, 1995, p. 3 & n. 
7.
    191 Treasury Contacts Report, p. 3 & n. 7.
    192 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Document, pp. 1447-1449.
    193 IX Hearing before the Committee on Banking, Housing, and 
Urban Affairs, White House Document, pp. 1450-1455.
    194 Office of Special Investigations, GAO/OSI-94-23, 
``Inadequate Oversight of Capital Management Services, Inc.,--an SSBIC, 
p. 2 (hereinafter GAO/OSI-94-23).
    195 GAO/OSI-94-23, p. 2.
    196 GAO/OSI-94-23, p. 2.
    197 GAO/OSI-94-23, p. 2.
    198 ``SBA Policy and Procedure Release #2017'' (reprinted in 
GAO/OSI-94-23, p. 22).
    199 ``SBA Policy and Procedure Release #2017'' (reprinted in 
GAO/OSI-94-23, p. 23).
    200 ``SBA Policy and Procedure Release #2017'' (reprinted in 
GAO/OSI-94-23, p. 4).
    201 ``SBA Policy and Procedure Release #2017,'' reprinted in 
GAO/OSI-94-23, p. 5; see also McDougal Transcript, 4/11/96 p. 4501.
    202 ``SBA Policy and Procedure Release #2017'' (reprinted in 
GAO/OSI-94-23, p. 5).
    203 GAO/OSI-94-23, p. 11.
    204 Foren, 10/26/95 Dep. pp. 161-162.
    205 Foren, 10/26/95 Dep. pp. 162-163.
    206 Foren, 10/26/95 Dep. pp. 162-163.
    207 DOJ Document 007763-007765.
    208 Foren, 10/26/95 Dep. pp. 162-164; DOJ Document 007763-
007765.
    209 Clinton's trial testimony p. 21 April 28, 1996.
    210 Foren, 10/26/95 Dep. pp. 30-33.
    211 Foren, 10/26/95 Dep. pp. 31-32.
    212 Foren, 10/26/95 Dep. pp. 33-34, 49-50.
    213 Foren, 10/26/95 Dep. pp. 80-81.
    214 Foren, 11/28/95 Hrg. p. 20.
    215 Foren, 11/28/95 Hrg. p. 23.
    216 1/31/96 OIC Document (2/17/94 Hale Indictment).
    217 1/31/96 OIC Document (2/17/94 Hale Indictment).
    218 DOJ Document 007763-007765.
    219 S. Rep. 103-433 p. XIII.
    220 Jeff Gerth, ``Clintons Joined S&L Operator in an Ozark 
Real-Estate Venture,'' New York Times, March 8, 1992, p. A1.
    221 Jeff Gerth, ``Clintons Joined S&L Operator in an Ozark 
Real-Estate Venture,'' New York Times, March 8, 1992, p. A1.
    222 Lewis, 11/29/95 Hrg. p. 6; Iorio, 10/20/95 Dep. pp. 10, 
16, 176-181.
    223 Iorio, 10/20/95 Dep. p. 38.
    224 Lewis, 10/30/95 Dep. p. 22; Lewis, 10/31/95 Dep. p. 336; 
Lewis, 11/29/95 Hrg. p. 7.
    225 Lewis, 10/30/95 Dep. p. 31.
    226 Lewis, 11/29/95 Hrg. pp. 7-9.
    227 Lewis, 11/29/95 Hrg. p. 8.
    228 Lewis, 11/29/95 Hrg. p. 9.
    229 Lewis, 11/29/95 Hrg. pp. 8-9.
    230 Lewis, 11/29/95 Hrg. p. 8.
    231 Lewis, 11/29/95 Hrg. p. 8.
    232 Lewis, 11/29/95 Hrg. p. 9.
    233 Lewis, 11/29/95 Hrg. pp. 9-10.
    234 Lewis, 10/30/95 Dep. p. 25.
    235 Lewis, 11/29/95 Hrg. p. 10; see RTC Document PLS0016S-
PLS0035S.
    236 RTC Document PLS0035S; Iorio, 11/28/95 Hrg. p. 70.
    237 DOJ Document JDA 000200.
    238 DOJ Document JDA 000200.
    239 DOJ Document JDA 000200.
    240 Thompson, 10/24/95 Dep. p. 13; R. Knight, 10/19/95 Dep. p. 
8.
    241 Dudine, 10/19/95 Dep. p. 17.
    242 Thompson, 10/24/95 Dep. p. 14; Dudine, 10/19/95 Dep. pp. 
13, 18, 32.
    243 Iorio, 11/29/95 Hrg. p. 74.
    244 RTC Document PLS0020S.
    245 RTC Document PLS0020S.
    246 RTC Document PLS0016S.
    247 RTC Document PLS0033S.
    248 RTC Document PLS0032S.
    249 Lewis, 11/29/95 Hrg. pp. 79-80; 10/30/95 Dep. pp. 35, 447.
    250 Iorio, 11/29/95 Hrg. p. 82.
    251 RTC Document PLS0022S.
    252 RTC Document PLS0022S.
    253 Wright, 4/25/96 Hrg. p. 117.
    254 Wright, 1/26/96 Dep. p. 162.
    255 Wright, 4/25/96 Hrg. pp. 119-120.
    256 Wright, 1/26/96 Dep. p. 164.
    257 Wright, 4/25/96 Hrg. p. 124.
    258 S. Rep. 103-433 p. XIV.
    259 DOJ Document 10/27/93 (Not Numbered) letter from Paula J. 
Casey to L. Jean Lewis declining to take action on referral.
    260 RTC Document 09/01/92 (Not Numbered) letter from L. 
Richard Iorio to Charles A. Banks.
    261 DOJ Document 10/27/93 (Not Numbered) letter from Paula J. 
Casey to L. Jean Lewis declining to take action on referral.
    262 DOJ Document JDA 000200.
    263 McWhorter, 10/17/95 Dep. p. 13.
    264 McWhorter, 10/17/95 Dep. p. 31; Banks 10/24/95 Dep. p. 56.
    265 Banks, 10/24/95 Dep. p. 56.
    266 Barr, 11/13/95 Dep. pp. 10-13.
    267 Raphaelson, 10/26/95 Dep. p. 5.
    268 Barr, 11/13/95 Dep. pp. 11-13.
    269 Raphaelson, 10/26/95 Dep. pp. 12-17, 34-35.
    270 Barr, 11/13/95 Dep. p. 14.
    271 Barr, 11/13/95 Dep. pp. 14-15.
    272 Barr, 11/13/95 Dep. p. 22.
    273 Barr, 11/13/95 Dep. p. 43.
    274 DOJ Document 7214.
    275 DOJ Document 017458.
    276 FBI Document 00000986-996.
    277 FBI Document 00000988.
    278 FBI Document 0000991-00000992.
    279 FBI Document 00000986-996.
    280 FBI Document 1031; Kendrick, 10/30/95 Dep. p. 16.
    281 Mueller, 10/11/95 Dep. p. 8.
    282 Verinder, 10/31/95 Dep. p. 6.
    283 Kendrick, 10/30/95 Dep. p. 18.
    284 FBI Document 1031, 523-525; Kendrick, 10/30/95 Dep. pp. 
18-19.
    285 Banks, 12/05/95 Hrg. p. 165.
    286 DOJ Document 7051-7052.
    287 DOJ Document 7051-7052.
    288 FBI Document 00000527.
    289 Kendrick, 10/30/95 Dep. p. 22.
    290 Banks, 10/24/95 Dep. pp. 82-84.
    291 DOJ Document 7049-7050.
    292 DOJ Document 7049.
    293 DOJ Document 6671-6672.
    294 Frazier, 10/12/95 Dep. p. 15; DOJ Document 001484.
    295 McDowell, 09/15/95 House Dep. pp. 18-19.
    296 DOJ Document 7041-7045.
    297 DOJ Document 7039.
    298 DOJ Document 7039.
    299 Carver, 10/17/95 Dep. pp. 69-72.
    300 Carver, 12/06/95 Hrg. pp. 41-42.
    301 Frazier, 12/05/95 Hrg. pp. 171-173.
    302 Frazier, 12/05/95 Hrg. pp. 171-173.
    303 DOJ Document 000030.
    304 DOJ Document 00031.
    305 Henneman (O'Dowd), 10/13/95 Dep. pp. 16-19.
    306 Pence, 10/18/95 Dep. pp. 19-20.
    307 Pence, 10/18/95 Dep. pp. 22-23.
    308 Pence, 10/18/95 Dep. p. 22.
    309 Iorio and Lewis, 11/29/95 Hrg. p. 28.
    310 Iorio, 11/29/95 Hrg. p. 68.
    311 Lewis, 11/29/95 Hrg. 68.
    312 Banks, 12/05/95 Hrg. p. 165; Dodson, 10/18/95 Dep. p. 59.
    313 Lewis, 10/30/95 Dep. p. 82.
    314 R. Knight, 10/19/95 Dep. p. 8.
    315 Lewis, 11/29/95 Hrg. p. 14.
    316 Lewis, 11/29/95 Hrg. p. 14.
    317 Lewis, 10/30/95 Dep. p. 87.
    318 Lewis, 11/29/95 Hrg. p. 14.
    319 Lewis, 11/29/95 Hrg. pp. 14-15.
    320 RTC Document PLS0050S (RTC Referral #730CR0192); RTC 
Document PLS0081S (RTC Referral #730CR0196).
    321 RTC Document PLS0081S (RTC Referral #730CR0196).
    322 Lewis, 10/30/95 Dep. p. 95.
    323 RTC Document PLS0048S.
    324 RTC Document PLS0048S.
    325 RTC Document PLS0049S.
    326 RTC Document PLS0049S.
    327 RTC Document PLS0049S.
    328 RTC Document PLS0050S.
    329 Lewis, 10/30/95 Dep. p. 96.
    330 RTC Document PLS0075S.
    331 RTC Document PLS0069S-PLS0072S.
    332 RTC Document PLS0073S-PLS0075S.
    333 RTC Document PLS0073S-PLS0075S.
    334 RTC Document PLS0073S.
    335 RTC Document PLS0077S.
    336 RTC Document PLS0077S.
    337 RTC Document PLS0073S.
    338 RTC Document PLS0073S.
    339 RTC Document PLS0077S.
    340 RTC Document PLS0075S.
    341 RTC Document PLS0075S.
    342 RTC Document PLS0075S.
    343 RTC Document PLS0081S.
    344 Lewis, 10/30/95 Dep. p. 104.
    345 Lewis, 10/30/95 Dep. pp. 109-110.
    346 Lewis, 10/30/95 Dep. p. 88.
    347 United States of America v. James B. McDougal, Jim Guy 
Tucker, and Susan H. McDougal, No. LR-CR-95-173 (E.D. Ark.).
    348 Stephen Labaton, ``Clinton Partners in Arkansas Deal 
Convicted by Jury,'' New York Times, May 29, 1996, p. A1; Glenn R. 
Simpson, ``Three Defendants in Whitewater Case are Found Guilty on 
Fraud Charges,'' Wall Street Journal, May 29, 1996, p. A3.
    349 OIC Document, 8/17/95 (not numbered) Grand Jury Indictment 
of James B. McDougal, Jim Guy Tucker and Susan H. McDougal.
    350 OIC Document, 8/17/95 (not numbered) Grand Jury Indictment 
of James B. McDougal, Jim Guy Tucker and Susan H. McDougal.
    351 R.H. Melton and Michael Haddigan, ``Three Guilty in 
Arkansas Fraud Trial,'' The Washington Post, 5/27/96, p. A1.
    352 Lewis, 11/29/95 Hrg. p. 6.
    353 Iorio, 10/20/95 Dep. pp. 95-96.
    354 Iorio, 11/29/95 Hrg. pp. 38-39.
    355 Iorio, 11/29/95 Hrg. p. 39.
    356 Lewis, 11/29/95 Hrg. p. 15.
    357 Lewis, 11/29/95 Hrg. pp. 15-16; Iorio, 10/20/95 Dep. p. 
53.
    358 Lewis, 10/30/95 Dep. p. 132.
    359 Lewis, 11/29/95 Hrg. p. 18; Lewis, 10/30/95 Dep. p. 131.
    360 RTC Document PLS0001S-PLS0013S.
    361 RTC Document PLS0001S-PLS0013S; Iorio, 10/20/95 Dep. p. 
54.
    362 RTC Document PLS0001S-PLS0013S.
    363 Lewis, 10/30/95 Dep. p. 137.
    364 Lewis, 11/29/95 Hrg. p. 15; Lewis, 10/30/95 Dep. p. 142.
    365 Iorio, 10/20/95 Dep. pp. 257-259; Lewis, 10/30/95 Dep. p. 
142.
    366 Lewis, 11/29/95 Hrg. p. 17; Lewis, 10/30/95 Dep. pp. 131-
132; Iorio, 10/20/95 Dep. p. 56.
    367 Lewis, 10/30/95 Dep. p. 127.
    368 Iorio, 10/20/95 Dep. p. 51.
    369 Iorio, 10/20/95 Dep. p. 57.
    370 Yanda, 11/30/95 Hrg. p. 13.
    371 RTC Document TH0704.
    372 Iorio, 10/20/95 Dep. p. 52.
    373 Iorio, 10/20/95 Dep. pp. 52, 72, 235-236.
    374 Yanda, 11/02/95 Dep. pp. 67-68; see also RTC Document 
JY0009.
    375 Lewis, 11/29/95 Hrg. p. 24.
    376 Lewis, 10/31/95 Dep. pp. 120-121; Lewis, 11/29/95 Hrg. pp. 
163-164.
    377 Lewis, 10/30/95 Dep. p. 144.
    378 Iorio, 10/20/95 Dep. p. 63.
    379 Yanda, 11/02/95 Dep. pp. 81-82.
    380 Lewis, 10/30/95 Dep. pp. 146-147.
    381 RTC Document RI0204.
    382 Resolution Trust Corporation, Office of Inspector General, 
Report of Investigation Concerning Rose Law Firm, File No. WA-94-0016, 
August 3, 1995, p. I-13 (hereinafter, ``RTC OIG Report'').
    383 Breslaw, 10/23/95 Dep. p. 8.
    384 Breslaw, 06/06/95 House Dep. p. 32.
    385 Breslaw, 06/06/95 House Dep. p. 56.
    386 Breslaw, 06/06/95 House Dep. p. 89.
    387 Federal Deposit Insurance Corporation, Office of Inspector 
General, Report of Investigation of Alleged Conflicts of Interest by 
the Rose Law Firm, Case No. IO-94-096, July 28, 1995, p. 1 
(hereinafter, ``FDIC OIG Report'').
    388 RTC Document AB0257.
    389 Breslaw, 06/06/95 House Dep. p. 41; FDIC OIG Report p. 54.
    390 RTC Document TH1009.
    391 RTC OIG Report Volume II.
    392 RTC Document TH1009.
    393 RTC Document TH1009.
    394 RTC Document TH1009.
    395 RTC Document RI0109.
    396 RTC Document RI0109.
    397 Iorio, 11/29/95 Hrg. p. 60; Iorio, 10/20/95 Dep. p. 111.
    398 Iorio, 11/29/95 Hrg. pp. 61-62.
    399 Iorio, 10/20/95 Dep. p. 113.
    400 Breslaw, 11/30/95 Hrg. pp. 44-46.
    401 Breslaw, 11/30/95 Hrg. p. 45.
    402 RTC Document AB0502, AB0505.
    403 Breslaw, 11/30/95 Hrg. p. 65; Breslaw, 10/23/95 Dep. pp. 
187-188.
    404 Lewis, 10/30/95 Dep. pp. 156-157.
    405 11/27/95 Transcript of Conversation Between L. Jean Lewis 
and April Breslaw, p. 59.
    406 Transcript of Conversation prepared for Committee on 
Banking and Financial Services, U.S. House of Representatives, pp. 10-
11. The transcript of the tape prepared for the Senate similarly states 
(pp. 66-67):
        ``Well, like I said, I feel self conscious asking that because 
in some ways it's kind of a silly question. But, you know, it's the 
kind of thing that they're looking for what they can say. And I do 
believe they want to say something honest. I don't believe at all and I 
don't want to suggest at all that they want us to reach a certain 
conclusion. I really don't get that feeling. But--(Inaudible)--happier 
than others, you know, because it would get them off the hook.'' --
(Inaudible.)
    407 Lewis, 11/29/95 Hrg. p. 22.
    408 140 Cong. Rec. H1999, H2003 (1994) (statement of Rep. 
James A. Leach).
    409 RTC Document AT0128.
    410 RTC Document EK5867-EK5870.
    411 RTC Document EK5868.
    412 Breslaw, 11/30/95 Hrg. pp. 108-109.
    413 Breslaw, 11/30/95 Hrg. pp. 56-57, 106-108, 121.
    414 Breslaw, 11/30/95 Hrg. pp. 54-56, 87-88, 109.
    415 Breslaw, 11/30/95 Hrg. p. 56.
    416 Breslaw, 11/30/95 Hrg. p. 87.
    417 Breslaw, 11/30/95 Hrg. p. 146.
    418 RTC Document MG0472.
    419 Iorio, 10/20/95 Dep. p. 123; Lewis, 11/29/95 Hrg. p. 26.
    420 Iorio, 11/29/95 Hrg. p. 26.
    421 Iorio, 11/29/95 Hrg. p. 26.
    422 Iorio, 11/29/95 Hrg. p. 26.
    423 Lewis, 11/29/95 Hrg. p. 26; Lewis, 10/30/95 Dep. pp. 164-
165.
    424 Lewis, 11/29/95 Hrg. p. 26; Lewis, 10/30/95 Dep. pp. 164-
165.
    425 Lewis, 11/29/95 Hrg. p. 26; Lewis, 10/30/95 Dep. pp. 164-
165.
    426 Lewis, 11/29/95 Hrg. pp. 26-27; Iorio, 10/20/95 Dep. pp. 
126-128; see RTC Document RI0003, RI0012, RI0017.
    427 RTC Document RI0003, RI0012, RI0017.
    428 Iorio, 10/20/95 Dep. pp. 134-135.
    429 Iorio, 10/20/95 Dep. pp. 134-135.
    430 Lewis, 11/29/95 Hrg. p. 27.
    431 Lewis, 11/29/95 Hrg. p. 27.
    432 Iorio, 10/20/95 Dep. p. 138; Lewis, 11/29/95 Hrg. p. 27.
    433 Lewis, 11/29/95 Hrg. p. 27; Iorio, 11/20/95 Hrg. p. 70; 
Iorio, 10/20/95 Dep. pp. 131-132.
    434 Lewis, 11/29/95 Hrg. p. 27.
    435 Adair, 10/26/95 Dep. pp. 89-90.
    436 Adair, 11/26/95 Dep. p. 92.
    437 Adair, 10/26/95 Dep. pp. 92-93.
    438 Adair, 10/26/95 Dep. pp. 92-93.
    439 Adair, 10/26/95 Dep. pp. 90-91.
    440 Jackson, 10/19/95 Dep. pp. 27-29.
    441 DOJ Document 007724.
    442 GAO/OSI-94-23, p. 2.
    443 GAO/OSI-94-23, p. 4.
    444 GAO/OSI-94-23, p. 4.
    445 GAO/OSI-94-23, p. 4.
    446 Foren, 10/26/95 Dep. at 13; Foren Document, 10/26/95 (Not 
Numbered).
    447 Foren, 10/26/95 Dep. p. 13.
    448 Foren, 10/26/95 Dep. p. 13.
    449 Foren, 10/26/95 Dep. p. 20-21.
    450 Foren, 10/26/95 Dep. p. 21.
    451 Foren, 10/26/95 Dep. p. 22.
    452 Foren, 10/26/95 Dep. p. 26.
    453 Foren, 10/26/95 Dep. p. 27.
    454 Foren, 10/26/95 Dep. pp. 30-31.
    455 Foren, 10/26/95 Dep. p. 31; 11/28/95 Hrg. p. 17.
    456 Foren, 10/26/95 Dep. p. 31.
    457 Foren, 11/28/95 Hrg. p. 16.
    458 Foren, 10/26/95 Dep. pp. 32-33; 11/28/95 Hrg. p. 16.
    459 Foren, 10/26/95 Dep. p. 33.
    460 Foren, 10/26/95 Dep. p. 33.
    461 Foren, 10/26/95 Dep. pp. 153-54; 11/28/95 Hrg. pp. 17-18.
    462 Foren, 11/28/95 Hrg. p. 18.
    463 Foren, 10/26/95 Dep. p. 107.
    464 Foren, 10/26/95 Dep. p. 25.
    465 Foren, 10/26/95 Dep. p. 25.
    466 Foren, 10/26/95 Dep. p. 25.
    467 Foren, 10/26/95 Dep. p. 41.
    468 Foren, 10/26/95 Dep. p. 37.
    469 Foren, 10/26/95 Dep. p. 37.
    470 Foren, 10/26/95 Dep. p. 42; DOJ Document GAC2706.
    471 Hawkins, 11/27/95 Dep. p. 14.
    472 Hawkins, 11/27/95 Dep. p. 15.
    473 Hawkins, 11/27/95 Dep. p. 15.
    474 Foren Document, 10/26/95 (not numbered).
    475 Foren Document, 10/26/95 (not numbered).
    476 Foren Document, 10/26/95 (not numbered).
    477 Jackson, 10/19/95 Dep. pp. 27-29.
    478 David Hale Plea Agreement, 3/19/94.
    479 Casey, 11/1/95 Dep. pp. 14-19.
    480 Casey, 11/1/95 Dep. pp. 33-41.
    481 Casey, 09/28/95 House Dep. pp. 5-6.
    482 Casey, 09/28/95 House Dep. p. 45.
    483 Casey, 11/01/95 Dep. p. 39-41.
    484 Casey, 11/01/95 Dep. p. 41.
    485 Casey, 11/1/95 Dep. p. 19.
    486 Coleman, 12/01/95 Hrg. pp. 5-7.
    487 Coleman, 12/01/95 Hrg. p. 6.
    488 Coleman, 12/01/95 Hrg. p. 7.
    489 Coleman, 12/01/95 Hrg. pp. 7-8.
    490 Jackson, 10/19/95 Dep. 41-44.
    491 Coleman, 12/01/95 Hrg. p. 9.
    492 Coleman, 11/9/95 Dep. p. 16.
    493 Jackson, 10/19/95 Dep. pp. 44-46.
    494 Jackson, 12/01/96 Hrg. pp. 224-25.
    495 Coleman, 12/01/96 Hrg. p. 10.
    496 Casey, 11/1/95 Dep. p. 28.
    497 Casey, 11/01/95 Dep. p. 32; 12/1/95 Hrg. 221.
    498 Casey, 12/01/95 Hrg. pp. 198-99.
    499 Casey, Hrg. 12/01/95 p. 221.
    500 Casey, 11/01/95 Dep. pp. 58-59, 258.
    501 Coleman, 11/9/95 Dep. p. 21.
    502 Coleman, 11/9/95 Dep. pp. 37-38.
    503 Coleman, 12/1/95 Hrg. 20; Casey, 12/10/95 Hrg. 196.
    504 Coleman, 12/1/95 Hrg. p. 19.
    505 Coleman, 11/9/95 Dep. pp. 22-23.
    506 Coleman, 11/9/95 Dep. pp. 22-23.
    507 Coleman, 11/09/95 Dep. p. 34.
    508 Coleman, 12/01/95 Hrg. p. 70.
    509 Coleman, 11/9/95 Dep. pp. 38-39.
    510 Coleman, 11/9/95 Dep. pp. 24-25, 39.
    511 Casey, 12/01/95 Hrg. p. 196.
    512 Casey, 11/01/95 Dep. pp. 66-68.
    513 Casey, 11/1/95 Dep. pp. 71-74.
    514 Coleman, 11/9/95 Dep. p. 27; Coleman, 12/01/95 Hrg. p. 23.
    515 DOJ Document 007640-41.
    516 Casey, 12/01/95 Hrg. pp. 275-76.
    517 DOJ Document 17493.
    518 Casey, 11/1/95 Dep. pp. 141-145.
    519 Johnson, 12/01/95 Hrg. p. 212; Johnson, 10/24/95 Dep. pp. 
30-31.
    520 OIC Document 1074.
    521 DOJ Document 7640.
    522 Coleman, 12/01/95 Hrg. p. 24.
    523 Casey, 12/01/95 Hrg. p. 197.
    524 Johnson, Hrg. 12/01/95 pp. 226-228.
    525 Casey, 11/1/95 Dep. p. 73.
    526 Casey, 12/01/95 Hrg. p. 200.
    527 Casey, 11/1/95 Dep. pp. 64-65.
    528 Casey, 12/01/95 Hrg. pp. 230-32.
    529 Nathan, 10/27/95 Dep. p. 7.
    530 DOJ Document 004660.
    531 DOJ Document 004661.
    532 DOJ Document 007719-27.
    533 DOJ Document 004660-62.
    534 Keeney, 12/06/95 Hrg. pp. 13, 19.
    535 Keeney, 12/06/95 Hrg. p. 15-16; Gangloff, 12/06/95 Hrg. p. 
17; McDowell 12/06/95 Hrg., p. 17.
    536 Gangloff, 12/6/95 Hrg. pp. 16-20.
    537 Gangloff, 12/6//95 Hrg. 62-71.
    538 Gangloff, 12/6/95 Hrg. pp. 72-74.
    539 Keeney, 12/06/95 Hrg. pp. 15-16.
    540 Keeney, 12/06/95 Hrg. pp. 21-22.
    541 Carver, 12/06/95 Hrg. p. 23; McDowell, 12/06/95 Hrg. p. 
23.
    542 Keeney, 12/6/95 Hrg. p. 18.
    543 Keeney, 12/06/95 Hrg. p. 19.
    544 Johnson, 12/1/95 Hrg. pp. 226-228.
    545 Keeney, 12/06/95 Hrg. pp. 17, 19.
    546 Keeney, 12/6/95 Hrg. p. 17.
    547 Casey, 11/01/95 Dep. pp. 122-27.
    548 Keeney, 12/6/95 Dep. pp. 17-18.
    549 Keeney, 12/06/95 Hrg. p. 19.
    550 Casey, 11/1/95 Dep. p. 127.
    551 Johnson, 12/01/95 Hrg. p. 212-13.
    552 Casey, 11/1/95 Dep. p. 177-78.
    553 Keeney, 12/06/95 Hrg. p. 23.
    554 Keeney, 12/06/95 Hrg. 23; Keeney, 10/20/95 p. 51-52.
    555 Gangloff, 12/06/95 Hrg. p. 23-24.
    556 Casey, 12/01/95 Hrg. p. 245.
    557 DOJ Document 007637.
    558 Casey, 12/01/95 Hrg. p. 247; Johnson, 12/01/95 Hrg. p. 
247.
    559 Coleman, 11/1/95 p. 54.
    560 DOJ Document 007763-65.
    561 DOJ Document 007811.
    562 DOJ Document 007724.
    563 Jackson, 10/19/95 Dep. pp. 83-86.
    564 DOJ Document FBI-00001545, 00001287.
    565 FBI Document 00001287; Irons, 12/05/95 Hrg. p. 140.
    566 Casey, 11/1/95 Dep. pp. 154-155.
    567 FBI Document 00001545-1546; Casey, 12/01/95 Hrg. pp. 238-
240.
    568 Casey, 12/01/95 Hrg. p. 238; Casey, 11/1/95 Dep. p. 154.
    569 Casey, 11/1/95 p. 154.
    570 FBI Document 00001545; Irons, 12/05/95 Hrg. p. 139.
    571 Johnson, 10/24/95 Dep. p. 141-42.
    572 Keeney, McDowell, Gangloff and Carver, 12/06/95 Hrg. p. 
20-21.
    573 FBI Document 00001322.
    574 Casey, 11/1/95 Dep. p. 173.
    575 Casey, 11/1/95 pp. 170-193.
    576 Keeney, 12/06/95 Hrg. p. 22.
    577 Casey, 11/01/95 Dep. pp. 174-175.
    578 DOJ Document 014277.
    579 Casey, 11/01/95 Dep. p. 251.
    580 Casey, 11/01/95 Dep. p. 176.
    581 Johnson, 10/24/95 Dep. pp. 143-44.
    582 Casey, 11/01/95 Dep. pp. 176-77.
    583 Casey, 11/01/95 Dep. pp 177.
    584 Casey, 11/1/95 Dep. pp. 78-79.
    585 RTC Document, 10/27/93 Letter to Ms. Lewis declining the 
referral.
    586 Keeney, 12/06/95 Hrg. p. 27.
    587 Casey, 11/01/95 Dep. pp. 184-85.
    588 DOJ Document 006767. (emphasis added).
    589 Casey, 11/01/95 Dep. p. 182.
    590 Carver, 12/06/95 Hrg. p. 28.
    591 See e.g., Keeney, 12/06/95 Hrg. p. 26; Carver, 11/17/95 
Dep. p. 68; McDowell, 12/06/95 Hrg. p. 29; Gangloff, 12/06/95 Hrg. p. 
29.
    592 Carver, 12/06/95 Hrg. p. 27; Keeney, 12/06/95 Hrg. p. 27; 
McDowell, 12/06/95 Hrg. p. 27.
    593 Casey, House Dep. p. 112; Johnson, 10/24/95 Dep. pp. 55-
56.
    594 DOJ Document 2204-2205.
    595 McDowell, 12/06/95 Hrg. p. 32.
    596 McDowell, 12/06/95 Hrg. pp. 31-32.
    597 Casey, 11/1/95 Dep. p. 195.
    598 McDowell, 12/06/95 Hrg. p. 33.
    599 DOJ Document 005136.
    600 DOJ Document 000327.
    601 DOJ Document 188879-80.
    602 Coleman, 12/01/95 Hrg. pp. 60-61.
    603 OIC Document, 3/19/94 Plea Agreement
    604 Foren, 11/28/95 Hrg. p. 20.
    605 Foren, 11/28/95 Hrg. pp. 20-21.
    606 Foren, 10/26/95 Dep. pp. 80-81.
    607 Foren, 11/28/95 Hrg. p. 20.
    608 Foren, 11/28/95 Hrg. p. 20.
    609 Foren, 11/28/95 Hrg. p. 21.
    610 Foren, 11/28/95 Hrg. p. 21; DOJ Document GAC 2796.
    611 Foren, 11/28/95 Hrg. p. 21; Foren Document (Not Numbered); 
SBA Document (Not Numbered).
    612 Foren, 11/28/95 Hrg. p. 21; Foren Document (Not Numbered); 
SBA Document (Not Numbered).
    613 Foren Document (Not Numbered); SBA Document (Not 
Numbered).
    614 Foren, 11/28/95 Hrg. p. 22.
    615 Foren, 11/28/95 Hrg. p. 64.
    616 Bowles, 11/28/95 Hrg. p. 25.
    617 Foren, 11/28/95 Hrg. p. 23.
    618 Foren, 11/28/95 Hrg. p. 23.
    619 Shepperson, 11/28/95 Hrg. pp. 23-24.
    620 Bowles, 11/28/95 Hrg. p. 24.
    621 Bowles, 10/31/95 Dep. pp. 30-31.
    622 Bowles, 10/31/95 Dep. p. 38.
    623 Bowles, 10/31/95 Dep. pp. 32-33.
    624 Bowles, 11/28/95 Hrg. p. 24.
    625 Bowles, 11/28/95 Hrg. pp. 24-25.
    626 White House Document S012334.
    627 Bowles, 11/28/95 Hrg. p. 25.
    628 White House Document S 012334.
    629 Bowles, 11/28/95 Hrg. p. 25.
    630 Bowles, 11/28/95 Hrg. p. 25.
    631 Foren, 11/28/95 Hrg. p. 26.
    632 Foren, 11/28/95 Hrg. p. 26; Foren Document (Not Numbered); 
SBA Document (Not Numbered).
    633 Shepperson, 11/28/95 Hrg. p. 82.
    634 Foren, 11/28/95 Hrg. p. 83.
    635 Foren, 11/28/95 Hrg. p. 26-27; Foren Document (Not 
Numbered); SBA Document (Not Numbered).
    636 Foren, 11/28/95 Hrg. p. 26-27 Foren Document (Not 
Numbered); SBA Document (Not Numbered).
    637 Bowles, 11/28/95 Hrg. p. 27.
    638 Bowles, 11/28/95 Hrg. p. 27.
    639 Foren, 11/28/95 Hrg. p. 27.
    640 Foren Document (Not Numbered); SBA Document (Not 
Numbered).
    641 Foren Document (Not Numbered); SBA Document (Not 
Numbered).
    642 Foren Document (Not Numbered); SBA Document (Not 
Numbered).
    643 Bowles, 11/28/95 Hrg. p. 28.
    644 Bowles, 11/28/95 Hrg. p. 29.
    645 Bowles, 11/28/95 Hrg. p. 29.
    646 Bowles, 11/28/95 Hrg. p. 29.
    647 Bowles, 11/28/95 Hrg. p. 29.
    648 Bowles, 11/28/95 Hrg. p. 31.
    649 Bowles, 11/28/95 Hrg. p. 32.
    650 SBA Document (Not Numbered).
    651 SBA Document (Not Numbered).
    652 SBA Document (Not Numbered).
    653 SBA Document (Not Numbered).
    654 SBA Document (Not Numbered).
    655 Bowles, 11/28/95 Hrg. p. 37.
    656 Foren, 11/28/95 Hrg. p. 94.
    657 Bowles, 11/28/95 Hrg. p. 37.
    658 FBI Document 00001542.
    659 FBI Document 00001542-1543.
    660 Irons, 12/05/95 Hrg. p. 135.
    661 Irons, 12/05/95 Hrg. p. 188.
    662 Hubbell, 10/26/95 Dep. p. 38.
    663 Mays, 11/21/95 Dep. p. 29.
    664 Coleman, 12/1/95 Hrg. pp.10-11; 11/9/95 Dep. pp. 63-66.
    665 Kennedy, 12/5/95 Hrg. pp. 8-9.
    666 Coleman, 12/1/95 Hrg. p. 12.
    667 Coleman, 12/1/95 Hrg. p. 12; 11/9/95 Dep. pp. 66-67.
    668 Coleman, 12/1/95 Hrg. p. 16.
    669 Kennedy, 12/5/96 Hrg. pp. 31-32; Coleman, 12/1/95 Hrg. p. 
24-25.
    670 Coleman, 12/1/95 Hrg. p. 12.
    671 Coleman, 12/1/95 Hrg. p. 14.
    672 Coleman, 12/1/95 Hrg. p. 12.
    673 Coleman, 12/1/95 Hrg. p. 12.
    674 Coleman, 11/9/95 Dep. p. 139.
    675 Coleman, 11/9/95 Dep. pp. 63-64; 12/1/95 Hrg. pp. 16-17.
    676 Coleman, 12/1/95 Hrg. pp. 16-17; 11/9/95 Dep. pp. 139-142.
    677 Coleman, 12/1/95 Hrg. p. 17.
    678 Kennedy, 12/5/95 Hrg. p. 12-13.
    679 Kennedy, 12/5/96 Hrg. p. 14.
    680 Kennedy, 12/5/95 Hrg. p. 13.
    681 White House Document S007375.
    682 Kennedy, 12/5/95 Hrg. p. 13.
    683 Kennedy, 12/5/95 Hrg. pp. 22-23.
    684 Kennedy, 12/5/95 Hrg. pp. 23-24; 100-101.
    685 Coleman, 12/1/95 Hrg. pp. 14-15.
    686 Kennedy, 11/9/95 Dep. pp. 12, 18.
    687 Kennedy, 12/5/95 Hrg. pp. 15-16, 21.
    688 Kennedy, 12/5/95 Hrg. p. 22.
    689 Kennedy, 12/5/95 Hrg. pp. 15-16.
    690 Kennedy, 12/5/95 Hrg. pp. 15-16.
    691 Kennedy, 12/5/95 Hrg. pp. 15-16.
    692 Coleman, 12/1/95 Hrg. p. 16.
    693 Coleman, 12/1/95 Hrg. p. 13.
    694 Coleman, 12/1/95 Hrg. p. 13.
    695 Coleman, 12/1/95 Hrg. pp. 13-14.
    696 Kennedy, 12/5/95 Hrg. p. 22; Kennedy, 11/9/95 Dep. p. 21.
    697 Kennedy, 12/5/95 Hrg. p. 32.
    698 Kennedy, 12/5/95 Hrg. pp. 103-104.
    699 White House Document. S 007376-77; S 007956-57.
    700 Kennedy, 11/9/95 Dep. pp. 38-39.
    701 Kennedy, 11/9/95 Dep. pp. 40-41.
    702 White House Document S 007956.
    703 Kennedy, 12/5/95 Hrg. p. 102.
    704 Kennedy, 12/5/95 Hrg. p. 22.
    705 Kennedy, 11/9/95 Dep. p. 21.
    706 Kennedy, 12/5/95 Hrg. pp. 20-22.
    707 White House Document S 007957.
    708 White House Document S 007376.
    709 White House Document S 007956.
    710 Kennedy, 12/5/95 Hrg. pp. 100-101.
    711 White House Document S 007957.
    712 Kennedy, 11/9/95 Dep. p. 25.
    713 Kennedy, 11/1/95 Dep. pp. 25-26.
    714 Kennedy, 12/5/95 Hrg. p. 32.
    715 Kennedy, 11/9/95 Dep. pp. 27-29.
    716 Kennedy, 12/5/95 Hrg. pp. 25-26, 39.
    717 Lindsey, 11/3/95 Dep. p. 15.
    718 Lindsey, 11/3/95 Dep. p. 15.
    719 Lindsey, 11/3/95 Dep. p. 16.
    720 Lindsey 11/3/95 Dep. p. 16; Kennedy, 12/05/95 Hrg. pp. 
105-107.
    721 Hubbell, 12/1/95 Hrg. p. 127.
    722 DOJ Document A000507.
    723 Hubbell, 12/1/95 Hrg. p. 127.
    724 Hubbell, 12/1/95 Hrg. p. 127.
    725 Kennedy, 12/5/95 Hrg. p. 40.
    726 Kennedy, 12/5/95 Hrg. pp. 32-33, 40.
    727 Hogan & Hartson Document BL011718.
    728 Hogan & Hartson Document BL011718.
    729 Hogan & Hartson Document BL011718.
    730 Hogan & Hartson Document BL011719.
    731 Hogan & Hartson Document BL011720.
    732 Hogan & Hartson Document BL011720-011721.
    733 Hogan & Hartson Document BL011721.
    734 Lindsey 11/28/95 Hrg. pp. 105-110.
    735 GAO/OSI-94-23, pp. 11-13.
    736 Hogan & Hartson Document BL011722.
    737 Lindsey, 11/28/95 Hrg. pp. 103-104.
    738 Lindsey, 11/28/96 Hrg. p. 107.
    739 Lindsey, 11/21/95 Dep. pp. 10-11.
    740 Hogan & Hartson Document BL011722.
    741 Hogan & Hartson Document BL011722.
    742 Lindsey, 11/28/95 Hrg. pp. 120-121.
    743 Lindsey, 11/28/95 Hrg. pp. 123-25.
    744 Blair, 11/20/95 Dep. p. 10.
    745 Blair, 11/20/95 Dep. p. 36.
    746 Blair, 11/20/95 Dep. p. 37.
    747 Blair, 11/20/95 Dep. p. 18.
    748 Blair, 11/20/95 Dep. pp. 58-59.
    749 Bumpers, 11/20/95 Dep. p. 24.
    750 Bumpers, 11/20/95 Dep. pp. 11-13.
    751 Bumpers, 11/20/95 Dep. pp. 11-12.
    752 Hogan & Hartson Document BL011718-011722.
    753 S. Rep. 103-433, ``Madison Guaranty S&L and the Whitewater 
Development Corporation, Washington D.C. Phase, Report of the Committee 
on Banking, Housing, and Urban Affairs, United States Senate, on the 
Communications Between Officials of the White House and the U.S. 
Department of the Treasury or the Resolution Trust Corporation,'' 103rd 
Cong., 2d Sess., January 3, 1995 pp. 9-13) (hereinafter, ``S. Rep. 103-
433'').
    754 RTC Document TH704.
    755 RTC Document TH705.
    756 Roelle, 7/20/94 Dep. pp. 12-15, S. Hrg. 103-889, Vol. VII, 
p. 423.
    757 Roelle, 7/20/94 Dep. p. 96, S. Hrg. 103-889, Vol. VII, p. 
463.
    758 Roelle, 7/20/94 Dep. p. 97-98, S. Hrg. 103-889, Vol. VII, 
p. 464.
    759 Treasury Department Document 4420 (1994), S. Hrg. 103-889, 
Vol. XII, p. 2715.
    760 S. Rep. 103-433 p. 11.
    761 S. Rep. 103-433 p. 11.
    762 S. Rep. 103-433 p. 12.
    763 Sloan, 7/21/94 Dep. p. 44-47, S. Hrg. 103-889, Vol. V, pp. 
680-682.
    764 White House Document X983, S. Hrg. 103-889, Vol. IX, p. 
1086.
    765 White House Document X983, S. Hrg. 103-889, Vol. IX, p. 
1086.
    766 White House Document X984, S. Hrg. 103-889, Vol. IX, p. 
1087.
    767 White House Document X984, S. Hrg. 103-889, Vol. IX, p. 
1087; S. Rep. 103-433, Vol. II, p. 16.
    768 S. Rep. 103-433 pp. 12-13.
    769 S. Rep. 103-433, Vol. II, p. 17.
    770 S. Rep. 103-433, Vol. II, p. 18.
    771 S. Rep. 103-433, Vol. II, p. 18.
    772 S. Rep. 103-433 p. 18.
    773 Lindsey, 7/21/94 Dep. p. 219, S. Hrg. 103-889, Vol. V, p. 
451.
    774 S. Rep. 103-433 p. 18.
    775 Mason, 10/25/95 Dep. p. 18.
    776 Mason, 10/25/95 Dep. pp. 25-26.
    777 Mason, 10/25/95 Dep. pp. 46-47, 50-51.
    778 Mason, 10/25/95 Dep. p. 26.
    779 Mason, 10/25/95 Dep. p. 27.
    780 Mason, 10/25/95 Dep. p. 48.
    781 Willkie Farr & Gallagher Document ST000036.
    782 ST0000047.
    783 Stephen Labaton, ``Clinton Partners in Arkansas Deal 
Convicted By Jury.'' New York Times, 5/29/96 p. A1.
    784 Carmichael, 10/25/95 Dep. pp. 76-77.
    785 Carmichael, 10/25/95 Dep. p. 78.
    786 S. Rep. 103-433 pp. 26-34.
    787 White House Document X534, S. Hrg. 103-889, Vol. VIII, p. 
641.
    788 DeVore, 7/20/94 Dep. p. 174, S. Hrg. 103-889, Vol. VI, p. 
949.
    789 White House Document X534, S Hrg. 103-889, Vol. VIII, p. 
641.
    790 White House Document X534, S Hrg. 103-889, Vol. VIII, p. 
641.
    791 White House Document X535, S Hrg. 103-889, Vol. VIII, p. 
642.
    792 Kennedy, 12/5/95 Hrg. p. 46.
    793 Kennedy Notes Report, S. Rep. 104-191, pp. 44-45.
    794 Kennedy Notes Report, S. Rep. 104-191, pp. 44-45.
    795 Lindsey, 11/28/95 Hrg. pp. 204-205.
    796 Report of the Special Committee to Investigate Whitewater 
Development Corporation and Related Matters, S. Rep. 104-204, Jan. 22, 
1996, pp. 16-18.
    797 White House Document S012529-S012438.
    798 White House Document S012529-S012538.
    799 Kennedy, 1/15/96 Dep. pp. 145-146.
    800 Kennedy, 1/15/96 Dep. pp. 146-47, 189.
    801 White House Document S12535.
    802 White House Document S12534
    803 Lindsey, 1/16/96 Hrg. p. 59.
    804 Willkie Farr & Gallagher Document ST000036.
    805 Willkie Farr & Gallagher ST0000047.
    806 Kennedy, 1/15/96 Dep. p. 135.
    807 Kennedy, 1/15/96 Dep. p. 141.
    808 White House Document S12529.
    809 White House Document S12535-S12538.
    810 Mark Hosenball & Michael Isikoff, ``A Churning Scandal,'' 
Newsweek, Jan. 8, 1996, p. 43.
    811 White House Document S12529.
    812 Kennedy, 1/16/96 Hrg. pp. 58-59; 1/15/96 Dep. p. 143.
    813 Williams & Connolly Memorandum to the Special Committee, 
12/12/95, at p. 13.
    814 Kennedy, 1/16/96 Hrg. pp. 296-297.
    815 White House Document S12534.
    816 Kennedy, 1/16/96 Hrg. pp. 56, 68, 81-82.
    817 Kennedy, 1/15/96 Dep. pp. 60-61.
    818 Kennedy, 1/16/96 Hrg. p. 61.
    819 Kennedy, 1/16/96 Hrg. pp. 63-64.
    820 Hubbell, 2/7/96 Hrg. p.169.
    821 Clark, 1/18/96 Hrg. pp.162-164
    822 Black, 2/6/96 Hrg. p.89.
    823 Hubbell, 2/7/96 pp.20, 50-51
    824 Clark, 1/18/96 Hrg. p.90
    825 Clark, 1/18/96 Hrg. p. 90.
    826 Kennedy, 1/16/96 Hrg. pp. 64-65.
    827 Kennedy, 1/16/96 Hrg. pp. 65-66.
    828 Kennedy, 1/16/96 Hrg. pp. 67-68, 292-294.
    829 Kennedy, 1/16/96, Hrg. pp. 295-96.
    830 White House Document S12517.
    831 White House Document S12529.
    832 White House Document S012530.
    833 White House Document S012530.
    834 White House Document S012530.
    835 White House Document S12532.
    836 Eggleston, 11/28/95 Hrg. pp. 137-138.
    837 Eggleston, 1/28/95 Hrg. pp. 138-139.
    838 SBA Document, 11/4/93 (not numbered).
    839 Department of Justice Document GAC 2401.
    840 White House Document S11399.
    841 Eggleston, 11/28/95 Hrg. p. 138-139.
    842 Eggleston, 11/28/95 Hrg. p. 139.
    843 SBA Document, 11/16/93 (Not Numbered).
    844 SBA Document, 11/16/93 (Not Numbered).
    845 Eggleston, 11/28/95 Hrg. p. 139.
    846 Spotila, 11/6/95 Dep. p. 13.
    847 Spotila, 11/6/95 Dep. pp. 14-15.
    848 Eggleston, 11/28/95 Hrg. pp. 35-36.
    849 Spotila, 11/28/95 Hrg. pp. 151-152.
    850 Spotila, 11/28/95 Hrg. p. 152.
    851 Spotila, 11/28/95 Hrg. p. 149.
    852 SBA Document, 11/15/96 (Not Numbered).
    853 SBA Document 11/16/96 (Not Numbered)
    854 White House Document S11399.
    855 Eggleston, 1/16/96 Hrg. p. 14.
    856 White House Document S11399.
    857 White House Document S12604.
    858 Eggleston, 1/16/96 Hrg. p. 20.
    859 Eggleston, 1/16/96 Hrg. pp. 22-23.
    860 Lindsey, 1/16/96 Dep. p. 93.
    861 Spotila, 11/28/95 Dep. p. 152.
    862 Bowles, 11/28/96 Hrg. pp. 76-77.
    863 Spotila, 11/28/95 Hrg. p. 152.
    864 DOJ Document JDA81.
    865 DOJ Document JDA82.
    866 DOJ Document JDA82.
    867 DOJ Document FBI-1951.
    868 DOJ Document FBI-1951.
    869 DOJ Document JDA 75.
    870 DOJ Document TTK-157.
    871 DOJ Document JDA 75.
    872 DOJ Document TTK-158.
    873 DOJ Document No. JDA 67.
    874 DOJ Document JDA 67.
    875 Eggleston, 11/28/95, Hrg. pp. 142-143.
    876 Eggleston, 11/28/95 Hrg. p. 142.
    877 Eggleston, 11/28/95 Hrg. p. 142.
    878 Eggleston, 11/28/95 Hrg. p. 143.
    879 Eggleston, 11/28/95 Hrg. p. 144; DOJ Document JDA 67.
    880 Eggleston, 11/28/95 Hrg.p. 144.
    881 DOJ Document FBI-1951.
    882 DOJ Document JDA 70.
    883 DOJ Document JDA70.
    884 DOJ Document JDA70.
    885 Gearan, 02/15/96 Hrg. pp. 262-63.
    886 Gearan, 02/15/96 Hrg. pp. 262-63.
    887 Ickes, 2/22/96 Hrg. p. 219.
    888 Ickes, 2/22/96 Hrg. p. 8; Lindsey, 7/21/94 Dep. p. 128; 
Nussbaum, 7/23/94 Dep. p. 171.
    889 Ickes, 2/22/96 Hrg. p. 8; Lindsey, 7/21/94 Dep. p. 128; 
Nussbaum, 7/23/94 Dep. p. 171.
    890 Gearan, 02/12/96 Dep. p. 80.
    891 White House Document S020565-S020570, S020575-S020577.
    892 White House Document S020565-S020585.
    893 White House Document S020565.
    894 White House Document S020567.
    895 White House Document S020567.
    896 Gearan, 02/15/96 Hrg. pp. 17-18.
    897 Gearan, 02/15/96 Hrg. p. 18.
    898 White House Document 020567.
    899 White House Document S020567.
    900 White House Document S020567.
    901 White House Document S020567; Gearan, 02/15/96 Hrg. pp. 
19-20.
    902 White House Document S020566; Gearan, 02/15/96 Hrg. p. 15.
    903 Gearan, 2/15/96 Hrg. p. 15.
    904 Gearan, 02/15/96 Hrg. pp. 15-16; Ickes, 02/22/96 Hrg. pp. 
68-69.
    905 White House Document S020569.
    906 White House Document S020569.
    907 White House Document S020569.
    908 White House Document S020569; Gearan, 02/15/96 Hrg. pp. 
21-23.
    909 Ickes, 2/22/96 Hrg. p. 69.
    910 White House Document S020578.
    911 White House Document S020578.
    912 White House Document S020578.
    913 Gearan, 02/15/96 Hrg. pp. 22-23.
    914 White House Document S020576.
    915 White House Document S020576.
    916 White House Document S020578.
    917 Wright, 1/26/96 Dep. p. 13.
    918 Gearan, 2/15/96 Hrg. p. 28.
    919 Gearan, 2/15/96 Hrg. p. 28-30.
    920 White House Document S02084.
    921 White House Document S02084.
    922 Ickes, 02/22/96 Hrg. pp. 129-131.
    923 Ickes, 02/22/96 Hrg. p. 132.
    924 White House Document S020567; Gearan, 02/15/96 Hrg. pp. 
19-20.
    925 White House Document 020567.
    926 White House Document S020567; Gearan, 02/15/96 Hrg. pp. 
19-21.
    927 White House Document S020565.
    928 White House Document S020576.
    929 White House Document S020576.
    930 White House Document S020576.
    931 Gearan, 02/25/96 Hrg. p. 63.
    932 White House Document S020576.
    933 Gearan, 02/15/96 Hrg. pp. 65-66.
    934 White House Document S020579.
    935 White House Document S020579.
    936 White House Document S020579.
    937 Gearan, 02/15/96 Hrg. pp. 62, 88.
    938 Ickes, 02/22/96 Hrg. pp. 152-53.
    939 Ickes, 2/22/96, Hrg. pp. 152-153.
    940 Department of Treasury Document 2987.
    941 Treasury Document 2987 (1994 Production).
    942 Treasury Document 2987 (1994 Production).
    943 Treasury Document 2987 (1994 Production).
    944 Ickes, 02/22/96 Hrg. pp. 92-93; White House Document S 
020797.
    945 White House Document S 020801-02.
    946 A.G. No. 1844-94, 59 F.R. 5321-22 (1994).
    947 White House Document S 020574.
    948 Jeff Gerth, ``The 1992 Campaign: Personal Finances; 
Clintons Joined S.&L. Operator in an Ozark Real-Estate Venture,'' 3/8/
92 New York Times, p. A1; ``Conflicted Americans,'' 3/18/92 Los Angeles 
Times.
    949 Jeff Gerth, ``The 1992 Campaign: Personal Finances; 
Clintons Joined S.&L. Operator in an Ozark Real-Estate Venture,'' 3/8/
92 New York Times, p. A1.
    950 Jeff Gerth, ``The 1992 Campaign: Personal Finances; 
Clintons Joined S.&L. Operator in an Ozark Real-Estate Venture,'' 3/8/
92 New York Times, p. A1.
    951 ``Conflicted Americans,'' 3/18/92 Los Angeles Times.
    952 Vinson & Elkins Document RLF1 03182-03183.
    953 Vinson & Elkins Document RLF1 03184.
    954 House Document 00010787.
    955 ``Conflicted Americans,'' 3/18/92 L.A. Times.
    956 O'Melveny & Myers Document CCBW 771-775, 776-788, 881-883.
    957 RTC Document PLS0068S-83S.
    958 RTC Document, PLS0075S.
    959 RTC Document, PLS0075S.
    960 RTC Document, PLS0081S.
    961 S. Rep. 103-433, ``Madison Guaranty S&L and the Whitewater 
Development Corporation, Washington D.C. Phase, Report of the Committee 
on Banking, Housing, and Urban Affairs, United States Senate, on the 
Communications Between Officials of the White House and the U.S. 
Department of the Treasury or the Resolution Trust Corporation,'' 103rd 
Cong., 2d Sess., January 3, 1995 pp. 9-13) (hereinafter, ``S. Rep. 103-
433'').
    962 White House Document S 012517.
    963 Lindsey, 1/10/96 Dep. pp. 59-60.
    964 Dec. 20, 1993, New York Times Editorial, (Cited privilege, 
not produced by the White House. White House permitted the Special 
Committee to review document.)
    965 Dec. 20, 1993, New York Times Editorial, (Cited privilege, 
not produced by the White House. White House permitted Special 
Committee to review document.)
    966 Dec. 20, 1993, New York Times Editorial, (Cited privilege, 
not produced by the White House. White House permitted Special 
Committee to review document.)
    967 Lindsey, 1/10/96 Dep. pp. 5-6.
    968 Lindsey, 1/16/96 Hrg. pp. 196-198.
    969 Lindsey, 1/16/96 Hrg. p. 197.
    970 Lindsey, 1/16/96 Hrg. p. 197-200.
    971 White House Document S 020574.
    972 Eggelston, 03/04/96 Dep. p. 34.
    973 White House Document S 020575.
    974 Waldman, 02/21/96 Dep. p. 69.
    975 Denton, 5/8/96 Hrg. p. 23.
    976 Denton, 5/8/96 Hrg. p. 24.
    977 White House Document S 020576.
    978 White House Document S 020576.
    979 White House Document S 020576.
    980 Gearan, 2/15/96 Hrg. pp. 158-159; Ickes, 2/22/96 Hrg. pp. 
87-88.
    981 Gearan, 2/15/96 Hrg. pp. 158-159; Ickes, 2/22/96 Hrg. pp. 
87-88.
    982 Eggelston, 3/04/96 Dep. p. 35.
    983 Eggleston, 3/4/96 Dep. pp. 33-35.
    984 White House Document S 020576-77.
    985 White House Document S 020577.
    986 White House Document S 020577.
    987 Waldman, 2/21/96 Dep. 83-84.
    988 Ickes, 02/22/96 Hrg. pp. 207-08; Gearan, 02/15/96 Hrg. p. 
48.
    989 Ickes, 2/22/96 Hrg. 88; White House Document S 020577.
    990 Ickes, 2/22/96 Hrg. p. 88.
    991 Ickes, 2/22/96 Hrg. 89.
    992 Schaffer, 4/29/96 Dep. p. 56.
    993 Schaffer, 04/29/96 Dep. p. 14, 38-39.
    994 Schaffer, 04/29/96 Dep. pp. 38-39.
    995 Lindsey Document BL005910.
    996 Lindsey Document BL005910.
    997 Rutherford, 2/29/96 Dep. pp. 20-24.
    998 Schaffer, 04/29/96 Dep. p. 26.
    999 Ickes, 02/22/96 Hrg. p. 102.
    1000 Wright, 1/26/96 Dep. p. 174.
    1001 Wright, 1/26/96 Dep. pp. 10-11.
    1002 Wright, 1/26/96 Dep. p. 74.
    1003 Wright, 1/26/96 Dep. p. 75.
    1004 Wright, 1/26/96 Dep. pp. 71-72.
    1005 Wright, 1/26/96 Dep. p. 171.
    1006 Wright, 1/26/96 Dep. p. 172.
    1007 Wright, 1/26/96 Dep. p. 188.
    1008 Wright, 1/26/96 Dep. p. 17.
    1009 Wright, 1/26/96 Dep. p. 17.
    1010 White House Document S 020760.
    1011 White House Document S 020760.
    1012 White House Document S 020760-61.
    1013 Pub. L. 103-204.
    1014 12 U.S.C. sec. 1441, modified by, RTC Completion Act of 
1993, Public Law 103-204.
    1015 General Report on the Investigation of Madison Guaranty 
Savings & Loan and Related Entities, Pillsbury, Madison & Sutro, 
December 28, 1995, p. 1. (hereinafter 12/28/95 PMS General Report).
    1016 Kulka, 07/19/94 Dep., pp. 89-90.
    1017 Kulka, 07/19/94 Dep., p. 91.
    1018 Kulka, 07/19/94 Dep., p. 91.
    1019 Stephanopolous, 07/19/94 Dep. p. 40. Depositions of White 
House Officials, Hearing Before the Committee on Banking, 103rd 
Congress, Volume V, p. 186.
    1020 Steiner, 07/18/94 Dep., pp. 199-200.
    1021 Steiner, 07/18/94 Dep., pp. 199-200.
    1022 Hanson, 7/17/94, Dep. pp. 650-653.
    1023 Hanson, 07/17/94 Dep. p. 652.
    1024 Hanson, 07/17/94 Dep. p. 651.
    1025 S. Hrg. 103-889, Vol. VI, pp. 859-860.
    1026 S. Rep. 103-433, Vol. II, p. 145; Steiner, 07/18/94 Dep. 
pp. 205-206.
    1027 Stephens, 05/15/96 Dep. p. 13.
    1028 Stephens, 05/15/96 Dep. p. 21.
    1029 Stephens, 05/17/96 Hrg. p. 19.
    1030 Stephens, 05/15/96 Dep. p. 92.
    1031 Stephens, 05/15/96 Dep. p. 62.
    1032 Ericson, 05/10/96 Dep. pp. 32-33; Patterson, 05/14/96 
Dep. pp. 138-40; Stephens, 05/17/96 Hrg. pp. 61-62.
    1033 Stephens, 05/17/96 Hrg. pp. 7-8.
    1034 Patterson, 5/14/96 Dep. p. 66.
    1035 Stephens, 05/17/96 Hrg. pp. 8-9.
    1036 Patterson, 5/14/96 Dep. p. 22; Patterson, 05/17/96 Hrg. 
p. 37.
    1037 Patterson, 05/17/96 Hrg. p. 89.
    1038 Gabrellian, 05/29/96 Dep. p. 39.
    1039 Kulka, 05/29/96 Dep. pp. 30-31.
    1040 Stephens, 05/17/96 Hrg. p. 126.
    1041 Ericson, 05/10/96 Dep. p. 34.
    1042 Patterson, 05/17/96 Hrg. pp. 81-82; Stephens, 05/17/96 
Hrg. p. 82; Ericson, 05/17/96 Hrg. p. 82.
    1043 Patterson, 05/17/96 Hrg. pp. 81-82; Stephens, 05/17/96 
Hrg. p. 82; Ericson, 05/17/96 Hrg. p. 82.
    1044 Hrg., 5/17/96 pp. 81-82.
    1045 Stephens, 5/17/96 Hrg. p. 9-10.
    1046 Stephens, 05/17/96 Hrg. p. 9.
    1047 Ericson, 05/10/96 Dep. pp. 44-45.
    1048 Patterson, 5/17/96 Hrg. p. 80.
    1049 Ericson, 05/17/96 Hrg. p. 88.
    1050 Stephens, 05/17/96 Hrg. p.22.
    1051 Stephens, 05/17/96 Hrg. pp. 23-27.
    1052 Stephens, 05/17/96 Hrg. pp. 23-27.
    1053 Stephens, 05/17/96 Hrg. pp. 23-27.
    1054 Stephens, 05/17/96 Hrg. pp. 23-27.
    1055 Ericson, 05/17/96 Hrg. p. 92.
    1056 Ericson, 05/17/96 Hrg. p. 93.
    1057 Report to the RTC on Madison Guaranty Savings & Loan and 
Whitewater Development Corporation, Inc., Pillsbury, Madison & Sutro, 
April 24, 1995, pp. 140-141.
    1058 White House Document S 020819, S 020888.
    1059 S. Rep. 103-433, Vol. II, pp. 217-218.
    1060 Ickes, 7/24/94 Dep., S.Rep. 103-889, Vol IX, pp. 1720-
1727.
    1061 Ickes, 7/24/94 Dep.
    1062 Ickes, 7/24/94, Dep. p. 119; see also Ickes, 7/24/94, 
Dep. p. 123: ``all this was new to me'', S.Rep. 103-889, Vol V, p. 
1414.
    1063 Ickes, 7/24/94, Dep., S.Rep. 103-889, Vol. V, p. 1414.
    1064 Ickes, 7/24/94, Dep., S.Rep. 103-889, Vol. V, p. 1414.
    1065 White House Document S 9908-S9911.
    1066 White House Document S 9909.
    1067 White House Document S 20819, S 20888.
    1068 White House Document S 20790; Ickes, 2/22/96 Hrg. p. 49.
    1069 Ickes, 2/22/96 Hrg. p. 50.
    1070 White House Document S 20790; Ickes, 2/22/96 Hrg. p. 52.
    1071 White House Document S 20783-S 20784.
    1072 Treasury Document 014941.
    1073 Potts, 10/11/95 Dep. pp. 27-29.
    1074 Cottos, 10/18/95 Dep. p. 15.
    1075 Treasury IG Document 391.
    1076 Blight, 10/10/95 Dep. pp. 20-21.
    1077 Cottos, 11/8/95 Hrg. p. 15; Treasury IG Document 444-446.
    1078 Cottos, 11/8/95 Hrg. p. 15.
    1079 Cottos, 11/8/95 Hrg. pp. 15-16.
    1080 Blight, 10/10/95 Dep. p. 90.
    1081 Black, 11/7/95 Hrg. pp. 116-117.
    1082 Adair, 11/7/95 Hrg. p. 109.
    1083 Cottos, 11/8/95 Hrg. pp. 16-17.
    1084 Cottos, 11/8/95 Hrg. p. 17.
    1085 Cottos, 11/8/95 Hrg. p. 16
    1086 Cottos, 11/8/95 pp. 81-82.
    1087 Treasury OIG Document 2171.
    1088 Treasury Document 16012.
    1089 Kerner, 11/8/95 Hrg. p. 79.
    1090 Cesca, 11/8/95 Hrg. pp. 80, 83.
    1091 Blight, 10/10/95 Dep. pp. 62-65.
    1092 Schmalzbach, 11/8/95 p. 135.
    1093 Schmalzbach, 11/8/95 Hrg. p. 130.
    1094 Cottos, 11/8/95 Hrg. pp. 17-18.
    1095 Adair, 11/7/95 Hrg. p. 123.
    1096 Black, 11/7/95 Hrg. p. 157.
    1097 Cesca, 11/8/95 Hrg. p. 19.
    1098 Cottos, 11/8/95 Hrg. p. 20.
    1099 Cesca, 11/8/95 Hrg. p. 20.
    1100 Cottos, 11/8/95 Hrg. p. 26.
    1101 Black, 11/7/95 Hrg. p. 119.
    1102 Blight, 10/10/95 Dep. p. 74.
    1103 Adair, 10/26/95 Dep. p. 56.
    1104 Blight, 10/10/95 Dep. p. 75.
    1105 Black, 11/7/95 Hrg. p. 119.
    1106 Black, 11/7/95 Hrg. p. 122.
    1107 Cottos, 11/8/95 Hrg. p. 27.
    1108 Schmalzbach, 10/20/95 Dep. p. 119.
    1109 Schmalzbach, 11/8/95 Hrg. p. 131.
    1110 Schmalzbach, 11/8/95 Hrg. pp. 132-134.
    1111 S. Rep. 103-433 p. 141.
    1112 Treasury Document 014931-014938.
    1113 Cottos, 11/8/95 Hrg. p. 35.
    1114 Kerner, 11/8/95 Hrg. p. 30.
    1115 Cottos, 11/8/95 Hrg. p. 35.
    1116 Cottos, 11/8/95 Hrg. p. 36.
    1117 Kerner, 11/8/95 Hrg. p. 30.
    1118 McHale, 10/19/95 Dep. p. 98
    1119 Kerner, 11/8/95 Hrg. p. 32.
    1120 Kerner, 11/8/95 Hrg. p. 32.
    1121 Cottos, 11/8/95 Hrg. p. 36.
    1122 Black, 11/7/95 Hrg. pp. 123-125.
    1123 Bentsen, 11/7/95 Hrg. p. 30.
    1124 Black, 10/12/95 Dep. p. 160-161.
    1125 Treasury Document 11124.
    1126 Kerner, 11/8/95 Hrg. p. 46.
    1127 Cutler, 11/6/95 Dep. pp. 9-10.
    1128 Cutler, 11/6/95 Dep. pp. 36-37.
    1129 Cutler, 11/6/95 Dep. pp. 37-39.
    1130 Cutler, 11/6/95 Dep. p. 37.
    1131 Bentsen, 11/7/95 Hrg. pp. 32-33.
    1132 Knight, 10/25/95 Dep. p. 38.
    1133 Knight, 10/25/95 Dep. p. 40.
    1134 Knight, 10/25/95 Dep. p. 31.
    1135 Knight, 10/25/95 Dep. p. 126.
    1136 Cutler, 11/6/95 Dep. p. 65.
    1137 Cutler, 11/6/95 Dep. p. 69.
    1138 Cutler, 11/6/95 Dep. p. 69.
    1139 Cutler, 11/11/95 Dep. pp. 18-19.
    1140 Cutler, 11/6/95 Dep. p. 49.
    1141 Cutler, 11/6/95 Dep. p. 44.
    1142 Bentsen, 11/7/95 Hrg. p. 63.
    1143 Cesca, 11/8/95 Hrg. p. 119.
    1144 Black, 11/7/95 Hrg. p. 191.
    1145 Black, 11/7/95 Hrg. p. 117.
    1146 Black, 11/7/95 Hrg. p. 117.
    1147 Cottos, 11/8/95 Hrg. p. 26.
    1148 Cottos, 11/8/95 Hrg. pp. 26-27.
    1149 Adair, 11/7/95 Hrg. pp. 117-118.
    1150 Black, 11/7/95 Hrg. p. 119.
    1151 Treasury OIG Document 365.
    1152 Treasury OIG Document 367.
    1153 Dougherty, 11/8/95 Hrg. p. 165.
    1154 RTC OIG Document 6877.
    1155 Adair, 10/26/95 Dep. p. 140; Blight, 10/10/95 Dep. pp. 
80-81; Black, 10/12/95 Dep. pp. 149-150.
    1156 Bentsen, 11/7/95 Hrg. p. 31.
    1157 Cesca, 10/13/95 Dep. p. 153.
    1158 Cesca, 10/13/95 Dep. pp. 155-156.
    1159 Cesca, 10/13/95 Dep. p. 158.
    1160 Cesca, 10/13/95 Dep. p. 173.
    1161 Cesca, 10/13/95 Dep. pp. 176-177.
    1162 Knight, 11/8/95 Hrg. p. 144.
    1163 Knight, 11/8/95 Hrg. p. 145.
    1164 Knight, 11/8/95 Hrg. p. 145.
    1165 Cottos, 10/18/95 Dep. p. 143.
    1166 Cottos, 10/18/95 Dep. p. 143.
    1167 Cottos, 10/18/95 Dep. pp. 144-145.
    1168 Adair, Black, Blight, Switzer, November 7, 1995 Hrg. pp. 
120-121.
    1169 Black, 11/7/95 Hrg. p. 192.
    1170 Black, 11/7/95 Hrg. p. 192.
    1171 Blight, 10/10/95 Dep. p. 59.
    1172 Adair, 10/26/95 Dep. p. 140.
    1173 Treasury Document 6877.
    1174 Associated Press, May 5, 1995.
    1175 Associated Press, May 5, 1995.
    1176 Cutler, 11/9/95 Hrg. p. 11.
    1177 Cutler, 11/9/95 Hrg. pp. 115, 119-120.
    1178 Cutler, 11/9/95 Hrg. pp. 10, 13; Sherburne, 11/9/95 Hrg. 
p. 90.
    1179 Dougherty, 11/8/95 Hrg. p. 156.
    1180 Knight, 11/8/95 Hrg. p. 199.
    1181 McHale, 11/8/95 Hrg. p. 197.
    1182 McHale, 11/8/95 Hrg. p. 202.
    1183 Knight, Schmatzbach, McHale, Dougherty, 11/8/95 Hrg. p. 
197.
    1184 Dougherty, 11/8/95 Hrg. p. 192.
    1185 Dougherty, 11/8/95 Hrg. p. 161.
    1186 Dougherty, 11/8/95 Hrg. p. 161.
    1187 Sherburne, 11/9/95 Hrg. pp. 17-18.
    1188 Sherburne, 11/9/95 Hrg. p. 88.
    1189 Bentsen, 11/7/95 Hrg. pp. 65-66.
    1190 Bentsen, 11/7/95 Hrg. p. 65.
    1191 White House Document S 007108.
    1192 Treasury Document 6877.
    1193 S. Rep. 103-889, Vol. IV, pp. 90, 432, 461, 735 & 743.
    1194 S. Rep. 103-899, Vol. IV, p. 735.
    1195 Potts, 11/8/95 Hrg. p. 231.
    1196 OGE, 11/8/95 (No Number).
    1197 Ley, 11/8/95 Hrg. p. 230.
    1198 Cutler, 11/9/95 Hrg. p. 29.
    1199 White House Document, S012512.
    1200 Kennedy, 12/5/95 Hrg. pp. 42-47, 59-61.
    1201 S. Rep. 104-191, 12/19/95, p. 20.
    1202 White House Document, Cover Letter, 1/29/96.
    1203 Gearan, 2/12/96 Dep. p. 12.
    1204 Gearan, 2/12/96 Dep. p. 13.
    1205 Gearan, 2/12/96 Dep. p. 14.
    1206 Gearan, 2/12/96 Dep. p. 15.
    1207 Gearan, 2/12/96 Dep. p. 16.
    1208 Waldman, 2/21/96 pp. 15-17.
    1209 White House Document, 2/20/96 Cover Letter.
    1210 Letter from Allen Snyder to Robert Giuffra, Jr., 3/1/96, 
p. 1.
    1211 Williams & Connolly, 1/5/96 (Cover Letter).
    1212 Clark, 1/18/96 Hrg. p.90
    1213 Clark, 1/18/96 Hrg. p. 90.
    1214 Vinson & Elkins Document RS237A.
    1215 Clark, 1/18/96 Hrg. p. 163.
    1216 Hubbell, 2/7/96 Hrg. p. 101.
    1217 Response of Rose Law Firm to Interrogatory Propounded by 
the Special Committee to Investigate Whitewater Development Corporation 
and Related Matters, Jan. 17, 1996, p. 4.
    1218 Response of Rose Law Firm to Interrogatory Propounded by 
the Special Committee to Investigate Whitewater Development Corporation 
and Related Matters, Jan. 17, 1996, p. 4.
    1219 Hubbell, 2/7/96 Hrg. p. 169.
    1220 Clark, 1/18/96 Hrg. pp. 162-164.
    1221 Williams & Connolly Document DKSN28929.
    1222 Williams & Connolly Document DKSN 28934; Massey, 1/11/96 
Hrg. p. 226.
    1223 Hubbell, 2/7/96 Hrg. p. 48.
    1224 Hubbell, 2/7/96 Hrg. p. 42.
    1225 Hubbell, 2/7/96 Hrg. p. 46.
    1226 Willkie, Farr & Gallagher Document ST32.
    1227 Willkie, Farr & Gallagher Document ST32.
    1228 Thomases, 12/18/95 Hrg. p. 53.
    1229 Thomases, 12/18/95 Hrg. p. 53.
    1230 Thomases, 12/18/95 Hrg. p. 69.
    1231 Thomases, 12/18/95 Hrg. p. 70.
    1232 Thomases, 5/14/96 Hrg. p. 49.
    1233 Thomases, 5/14/96 Hrg. p. 49.
    1234 Hubbell, 2/7/95 Hrg. p. 54.
    1235 Lynch, 5/14/96 Dep. pp. 94, 107-108.
    1236 Lynch, 5/14/96 Dep. p. 111.
    1237 Lynch, 5/14/96 Dep. p. 104.
    1238 Lynch, 5/14/96 Dep. p. 104.
    1239 Lynch, 5/14/96 Dep. p. 112.
    1240 Lynch, 5/14/96 Dep. p. 111.
    1241 Lynch, 5/14/96 Dep. p. 158.
    1242 Williams & Connolly Document DKSN28934.
    1243 Williams & Connolly Document DKSN28933.
    1244 Hubbell, 2/7/96 Hrg. p. 47.
    1245 Hubbell, 2/7/96 Hrg. p. 47.
    1246 Hubbell, 2/7/96 Hrg. p. 56.
    1247 Hubbell, 2/7/96 Hrg. p. 52.
    1248 Hubbell, 2/7/96 Hrg. p. 53.
    1249 Hubbell, 2/7/96 Hrg. p. 54.
    1250 Hubbell, 2/7/96 Hrg. p. 54.
    1251 Hubbell, 2/7/96 Hrg. p. 56.
    1252 Hubbell, 2/7/96 Hrg. pp. 56-57.
    1253 Hubbell, 2/7/96 Hrg. p. 57.
    1254 Huber, 1/18/96 Hrg. p. 5.
    1255 Huber, 1/18/96 Hrg., pp. 5, 8.
    1256 Huber, 1/18/96 Hrg. pp. 6-7.
    1257 Huber, 1/18/96 Hrg. p. 5.
    1258 Huber, 1/18/96 Hrg. pp. 5, 13.
    1259 Huber, 1/18/96 Hrg. p. 9.
    1260 Huber, 1/18/96 Hrg. pp. 16-17, 28.
    1261 Huber, 1/18/96 Hrg. pp. 10, 14.
    1262 Huber, 1/18/96 Hrg. p. 12.
    1263 Huber, 1/18/96 Hrg. pp. 9, 12.
    1264 Huber, 1/18/96 Hrg. p. 9.
    1265 Huber, 1/18/96 Hrg. p. 18.
    1266 Hubbell, 12/1/95 Hrg. pp. 149-150.
    1267 Huber, 1/18/96 Hrg. pp. 17-18.
    1268 Huber, 1/18/96 Hrg. pp. 17-18.
    1269 Huber, 1/18/96 Hrg. p. 18.
    1270 Huber, 1/18/96 Hrg. p. 18.
    1271 Huber, 1/17/96 Dep. p. 85.
    1272 Huber, 1/18/96 Hrg. p. 19; Huber, 1/17/96 Dep. pp. 85.
    1273 Huber, 1/18/96 Hrg. pp. 19-20.
    1274 Huber, 1/18/96 Hrg. p. 57; Kendall, 2/8/96 Hrg. p. 4; 
Huber, 1/17/96 Dep. p. 86.
    1275 Huber, 1/17/96 Dep. p.86.
    1276 Kendall, 2/8/96 Hrg. p. 48.
    1277 Kendall, 2/8/96 Hrg. p. 48.
    1278 Kendall, 2/8/96 Hrg. p. 49.
    1279 Kendall, 2/8/96 Hrg. p. 49.
    1280 Kendall, 2/8/96 Hrg. p. 49.
    1281 Kendall, 2/8/96 Hrg. p. 49; Huber, 1/18/96 Hrg. p. 25.
    1282 Kendall, 2/8/96 Hrg. p. 49.
    1283 Kendall, 2/8/96 Hrg. pp. 49-50.
    1284 Sherburne, 2/8/96 Hrg. pp. 4-5.
    1285 Sherburne, 2/6/96, Dep. pp. 21-22.
    1286 Kendall, 2/8/96 Hrg. pp. 66-70; Sherburne, 2/8/96 Hrg. 
pp. 66-70; Sherburne, 2/6/96 Dep. pp. 19-20; Kendall, 2/7/96 Dep. p. 
19.
    1287 Sherburne, 2/8/96 Hrg. p. 5.
    1288 Huber, 1/18/96 Hrg. pp. 58-59.
    1289 Kendall, 2/8/96 Hrg. pp. 53.
    1290 Huber, 1/18/96 Hrg. p. 71.
    1291 Huber, 1/18/96 Hrg. p. 25; Kendall, 2/8/96 Hrg. p. 4.
    1292 Huber, 1/18/96 Hrg. p. 71.
    1293 Sherburne, 2/8/96 Hrg. p. 57.
    1294 Sherburne, 2/8/96 Hrg. pp. 57-58.
    1295 Kendall, 2/8/96 Hrg. pp. 66-70; Sherburne, 2/8/96 Hrg. 
pp. 66-70.
    1296 Kendall, 2/7/96 Dep. pp. 57-58.
    1297 Huber, 1/18/96 Hrg. pp. 43-44; Kendall, 2/8/96 Hrg. pp. 
55-56.
    1298 Huber, 1/18/96 Hrg. pp. 43-44; Kendall, 2/8/96 Hrg. p. 
56.
    1299 Kendall, 2/8/96 Hrg. p. 56.
    1300 Kendall, 2/8/96 Hrg. p. 56; Sherburne, 2/8/96 Hrg. pp. 
58-59.
    1301 Sherburne, 2/8/96 Hrg. p. 60.
    1302 Sherburne, 2/8/96 Hrg. pp. 58-59.
    1303 Kendall, 2/8/96 Hrg. p. 60.
    1304 Kendall, 2/8/96 Hrg. pp. 6-7.
    1305 Williams & Connolly Document DKSN 28934; Massey, 1/11/96 
Hrg. p. 226.
    1306 Response of the Rose Law Firm to Interrogatory Propounded 
by the Special Committee to Investigate Whitewater Development 
Corporation and Related Matters, Jan. 17, 1996, p. 3.
    1307 Williams & Connolly Document DKSN028928-DKSN029043.
    1308 Williams & Connolly Document DKSN028158.
    1309 Williams & Connolly Document DKSN028065.
    1310 Associated Press, 4/22/94, ``Text of First Lady Hillary 
Rodham Clinton's News Conference in the State Dining Room of the White 
House.''
    1311 Associated Press, 4/22/94, ``Text of First Lady Hillary 
Rodham Clinton's News Conference in the State Dining Room of the White 
House.''
    1312 Associated Press, 4/22/94, ``Text of First Lady Hillary 
Rodham Clinton's News Conference in the State Dining Room of the White 
House.''
    1313 Massey, 01/11/96 Hrg. p. 233.
    1314 Massey, 1/11/96 Hrg. pp. 18-19.
    1315 Massey, 1/11/96 Hrg. pp. 25-26.
    1316 Massey, 1/11/96 Hrg. pp. 29, 222-23.
    1317 Knight, 05/16/96 Hrg. p. 10.
    1318 Knight, 05/16/96 Hrg. p. 12.
    1319 Knight, 05/16/96 Hrg. p. 10.
    1320 Latham, 05/16/96 Hrg. p. 15.
    1321 Latham, 7/12/95 RTC Interview p. 105.
    1322 Sidley & Austin Document 000637.
    1323 Sidley & Austin Document 000637.
    1324 Sidley & Austin Document 000637.
    1325 William C. Rempel and Douglas Frantz, ``Fallout From 
Collapse of S&L Shadows Clinton,'' L.A. Times, 11/7/93, p. A17.
    1326 William C. Rempel and Douglas Frantz, ``Fallout From 
Collapse of S&L Shadows Clinton,'' L.A. Times, 11/7/93, p. A17.
    1327 J. McDougal, 5/8/96 McDougal Trial Testimony p. 7298.
    1328 J. McDougal, 5/8/96, McDougal Trial Testimony pp. 7299-
7300.
    1329 J. McDougal, 5/8/96, McDougal Trial Testimony p. 7303.
    1330 J. McDougal, 5/8/96, McDougal Trial Testimony p. 7303.
    1331 W. Clinton, 4/25/96 Dep. McDougal Trial Testimony, p. 
120.
    1332 Bunch Document, 5/14/96 (Not Numbered).
    1333 Bunch Document, 5/14/96 (Not Numbered).
    1334 Bunch, 05/16/96 Hrg. pp. 18-21.
    1335 Bunch Document, 5/14/96 (Not Numbered).
    1336 Bunch Document, 5/14/96 (Not Numbered).
    1337 Williams & Connolly Document DKSN28933.
    1338 1996 Pillsbury Madison & Sutro interview of Hillary 
Rodham Clinton, pp. 27-31, Resolution Trust Corporation Document S-
INTV000628-632.
    1339 1996 Pillsbury Madison & Sutro interview of Hillary 
Rodham Clinton, pp. 27-31, Resolution Trust Corporation Document S-
INTV000628-632.
    1340 Williams & Connolly Document DKSN028943.
    1341 Williams & Connolly Document DKSN028943.
    1342 Williams & Connolly Document DKSN0128940.
    1343 Hillary Rodham Clinton Answers to Interrogatories, 5/24/
95 p. 41, RTC Document