WHAT NEXT FOR THE INDEPENDENT COUNSEL?

CONGRESSIONAL RECORD (House of Representatives)
Dan Burton (R-Ind.), May 29, 1996

Mr. BURTON of Indiana. Mr. Speaker, this week, the President's business partners in the Whitewater venture were found guilty of a total of 22 counts of bank fraud. James and Susan McDougal were President and Mrs. Clinton's business partners in the Whitewater Development Corp: which is still the main focus of Kenneth Starr's investigation.

In addition, Jim Guy Tucker, Bill Clinton's successor as Governor of Arkansas, was found guilty of conspiracy and mail fraud.

Recently, a number of my colleagues have been raising questions about Mr. Starr's ethics and his work as Independent Counsel. They have stated that he is biased because of his Republican background or his legal work for different clients.

Mr. Speaker, this is nonsense being put out by the Democrats for political purposes. Mr. Starr's results speak for themselves:

First, of 19 charges that Mr. Starr filed against Mr. McDougal, he was convicted on 18.

Second, of four charges Mr. Starr filed against Mrs. McDougal, she was convicted on all four.

Third, of seven charges filed against Governor Tucker, he was convicted on two.

Fourth, of 30 charges Mr. Starr filed in these cases, he won convictions on 24. That is an 80 percent conviction rate. A jury of 12 Arkansas citizens has examined the evidence and clearly does not feel that Mr. Starr is filing frivolous or unsupported charges.

Fifth, in addition to this week's convictions, Mr. Starr has received guilty pleas from nine other people involved in Whitewater --political associates of President Clinton, associates of Madison Guaranty Savings and Loan, and people who worked on the Whitewater deal.

Sixth, one of those people who pled guilty was the Associate Attorney General of the United States -- Webster Hubbell -- a close friend of the President.

Clearly, serious crimes have been committed, and the independent counsel is doing a good job of bringing people to account for them. That is why Democrats are suddenly attacking the Independent Counsel.

At this point, there are two obvious questions that everyone is asking:

First, what impact do these convictions have on the President and Mrs. Clinton?

Second, where does the Independent Counsel go from here?

Let me shed a little light on these questions.

What impact do these convictions have on the President and Mrs. Clinton? President Clinton was not on trial in this particular case. But he was never far away from it either.

David Hale testified that then-Governor Clinton pressured him to make the illegal loan of $300,000 to Susan McDougal.

Documents presented during the trial showed that part of that money went to pay debts of the Whitewater Development Corp. Bill and Hillary Clinton were partners in Whitewater , so they directly benefited from this loan.

The defense believed President Clinton's testimony during the trial would be a knockout punch for the defendants. It wasn't. The President's testimony apparently did little to cast doubts on the prosecution's case. Mr. and Mrs. McDougal were convicted on 22 of 23 counts.

The Castle Grande real estate deal was at the heart of this case. As an attorney at the Rose Law Firm, Hillary drew up legal papers for some of the key transactions. Throughout the trial, documentary evidence showed that this deal was a series of sham transactions that helped bring about the downfall of Madison Guaranty Savings and Loan.

This raises a very serious question: How much did Hillary Clinton know about the true nature of the Castle Grande deal?

For four years, Mrs. Clinton has been telling the public that she did very little legal work on the Castle Grande project. She made this statement in a sworn statement to Federal banking investigators.

However, the Rose Law Firm billing records that mysteriously turned up at the White House in January disputed that statement. Even though they had been under subpoena for 2 years, the records weren't given to the Independent Counsel until they were `discovered' in January.

It was quickly discovered that the billing records had Mrs. Clinton's fingerprints on them. More importantly, these records for the first time provided documentation that Mrs. Clinton had drafted legal documents for Castle Grande.

The questions that this raises are numerous:

First. Did Mrs. Clinton mislead Federal investigators about her involvement in Castle Grande?

Second. Did she or anyone at the White House obstruct justice by hiding these records for two years?

Third. Did Mrs. Clinton understand the nature of the sham transactions for which she was drawing up option agreements?

Where does the Independent Counsel go from here?

There are many other facets of the Whitewater scandal that merit continued investigation:

First, the Whitewater deal itself; second, potentially illegal contributions to Bill Clinton's campaigns; and third, the death of Vincent Foster.

One important area that I hope the Independent Counsel is exploring is the Arkansas Development Finance Authority -- or ADFA.

ADFA was created by Governor Clinton in 1985 to provide economic development loans in Arkansas.

In December of 1988, ADFA deposited $50 million in a Japanese bank in the Cayman Islands. I have a copy of the contract that I will enter into the record. I have also delivered a copy of this document to the Independent Counsel's office.

Why would an economic development agency in Arkansas deposit $50 million in a bank in the Cayman Islands? The Cayman Islands are a well-known center of money laundering for drug dealers. The State Department's international narcotics control report described the Caymans as 'a haven for money laundering.'

In addition, public documents show that ADFA was steering bond underwriting business to a firm owned by Dan Lasater. Mr. Lasater's story by now is well-known. He was a financial supporter of Bill Clinton's campaigns. He flew Bill and Hillary Clinton around on his private plane. He hired Bill Clinton's brother and paid off an $8,000 drug debt he owed. Mr. Lasater also pled guilty to Federal charges of cocaine distribution.

Why was ADFA steering business to someone like Dan Lasater, who was well-known in Arkansas for drug use and wild parties at which drugs were freely distributed?

Why was ADFA putting millions of dollars in foreign banks in a money-laundering haven like the Cayman Islands?

Was then-Governor Clinton aware of what was going on at the agency that he created?

All of these questions need to be resolved. The Independent Counsel should not quit--and I am confident that he will not quit--until these questions are completely answered to the public's satisfaction.

The questions that this raises are numerous: Did Mrs. Clinton mislead the Federal investigators about her involvement in Casa Grande? Did she or anyone else in the White House obstruct justice by hiding these records for two years? Did Mrs. Clinton understand the nature of the sham transactions for which she was drawing up option agreements.?

Second, where does the independent counsel go from here? There are many other facets of the Whitewater scandal that merit continued investigation: the Whitewater deal itself, potentially illegal contributions to Bill Clinton's campaigns, the death of Vince Foster. One important area that I hope the independent counsel is exploring is the Arkansas Development Financial Authority.

The ADFA was created by Governor Clinton in 1985 to provide economic development loans in Arkansas. In December of 1988 the Arkansas Development Financial Authority deposited, and get this, $50 million in a Japanese bank in the Cayman Islands. I have a copy of the contract that I will enter into the Record. Tomorrow night, since I am out of time now, Mr. Speaker, I will go into more detail on this $50 million that was Arkansas money that was transferred to the Cayman Islands, a major transit point for drug trafficking in this hemisphere....

Mr. BURTON of Indiana. Mr. Speaker, what I did in my special order was ask a number of questions that were still unanswered. One of the questions that I think is very, very important is why did the Arkansas Development Financial Authority send $50 million of Arkansas money to the Cayman Islands to deposit in a bank in the Cayman Islands, which is a major drug transit point acknowledged by almost every DEA agent in the world? Why would they send $50 million of Arkansas money down there? That is a question that needs to be answered.

I have the electronic bank transfer statements in my office. I am going to put them in the Congressional Record. There is no doubt the money was wired to the Cayman Islands. The question needs to be asked, why was it wired? Why would the Governor of Arkansas allow that? Why would the Arkansas Development Financial Authority, a State-run agency, send their money out of the country to a drug haven? I hope that the independent counsel will explore that. We are going to ask other questions as well.

This document is an unofficial version of the Congressional Record. The printed Congressional Record produced by the Government Printing Office is the only official version.