as transcribed in the CONGRESSIONAL RECORD (SENATE)
March 20, 1996
Ted Koppel [voice-over]. The Whitewater controversy, accusations made and denied.
James Stewart [Author, 'Blood Sport']. Mrs. Clinton, essentially, took singlehandedly the control of this investment.
Hillary Clinton. We saw no records, we saw no documents.
Ted Koppel [voice-over]. New questions about the Clintons' credibility.
James Stewart. I think the death of Vincent Foster is the pivotal event in this story.
Hillary Clinton. There were no documents taken out of Vince Foster 's office on the night he died.
President Bill Clinton. An allegation comes up, and we answer it, and then people say, 'Well, here's another allegation. Answer this.'
James Stewart. The President practically screamed over the phone. He said, 'I can't take this anymore. I'm here in Europe and they're asking me about Whitewater.'
Ted Koppel [voice-over]. Now, the picture may become a little clearer. Tonight, new details about Whitewater, Vince Foster and damage control.
Announcer. This is ABC News Nightline. Reporting from Washington, Ted Koppel.
Ted Koppel. This program may be the first you've heard about 'Blood Sport,' a new book which becomes available later this week, but it will not be the last. To begin with, you need to know how and why the book came about. The idea appears to have originated with Hillary Clinton. In any event, it was her close friend, Susan Thomases, herself a lawyer, who approached the author, Jim Stewart, and suggested that those closest to the First Family and, indeed, the President and the First Lady themselves, would be willing to cooperate with an objective, outside-the-Beltway writer on a detailed, no-holds-barred Whitewater book.
Stewart, a lawyer and former page one editor of the Wall Street Journal, had impeccable credentials. He had shared in a 1988 Pulitzer Prize for his reporting on insider trading. In 1991, he published the book 'Den of Thieves,' about financial fraud in the 1980's. Stewart took up the offer and even had one lengthy meeting with Mrs. Clinton at the White House, but the promised cooperation never materialized, although a number of people close to the Clintons did ultimately talk. Stewart went ahead and wrote the book anyway. Jim Stewart is a meticulous writer, which is another way of saying that there are few blaring headlines, but dozens of troubling revelations.
To understand what Jim Stewart has done, you need to refresh your memory on what the Clintons have variously claimed and insisted. The Clintons have insisted, for example, that they were only passive investors in Whitewater, and had virtually nothing to do with it themselves.
Hillary Clinton. We gave whatever money we were requested to give by Jim McDougal. I mean, he was the one who would say, 'Here's what you owe on interest, here's what your contributions should be.' We did whatever he asked us. We saw no records, we saw no documents.
Ted Koppel. The Clintons insist that they have fully cooperated with the investigation of Whitewater, but that they have been dogged by one unproved allegation after another.
President Bill Clinton. That's really the story of this for the last four years. An allegation comes up and we answer it, and the people say, 'Well, here's another allegation. Answer this.' And then, 'Here's another allegation. Answer this.' That is the way we are--we're living here in Washington today.
Ted Koppel. And only a couple of weeks ago, after the FDIC released a report prepared by Jay Stevens, a former Republican U.S. attorney not known to be friendly toward the Clintons, there was this.
Mark Fabiani [Associate White House Counsel]. This report blows out of the water the allegations that have been made about the First Lady and the Rose Law Firm, and it undermines the contention of those who would extend these Whitewater hearings endlessly on into the future.
Ted Koppel. That may be as good a place as any to introduce Jim Stewart, the author of 'Blood Sport,' in his first television interview on the book, and let me have you respond right away, because the White House is obviously very proud of the fact that Jay Stevens, Republican, no friend of the Clintons, supervised a report by the FDIC which, in effect, according to the White House, found the Clintons blameless in the--in the Whitewater affair. Is that an overstatement?
James Stewart [Author, 'Blood Sport']. Well, I think the White House reaction is misplaced optimism. The report is good news, as far as it goes, but it doesn't go very far. It explicitly says that it's not the definitive report on many of the questions that have arisen here, and there is still an independent counsel investigating all of these and even more allegations. As long as the independent counsel investigation continues, a real threat hovers over this President.
Ted Koppel. Why or how do you explain the fact that Jay Stevens, who, as I say, has no particular love for the Clintons, why would he end an investigation if, as you say, it's incomplete?
James Stewart. He was retained to investigate the narrow question of whether the government should sue the Clintons or others to regain losses from Madison Guaranty, and he concluded there was no evidence to warrant a suit against the Clintons or the Rose Law Firm to do that, and I think that's the right conclusion. I do not conclude that Madison Guaranty losses flowed to the Clintons.
Ted Koppel. What then, do you conclude, that--I mean, try and give it to me in a broad sense. What is it that you would say if you were obliged, in 15 or 30 seconds, to summarize what is troublesome about Whitewater and what will still come back to haunt the Clintons?
James Stewart. Well, I think the Whitewater investment and the story of that is important because it shows many things about the Clintons. It shows their willingness to hold themselves to the standards that everyone else has to meet. It shows their willingness to abide by financial requirements in obtaining mortgage loans. But I think, most of all, it shows their willingness, while in Arkansas, to accept the favors of people who were regulated by the state.
Their attitude to this, which bordered on the negligent in the beginning, clearly indicated a mindset which said, 'Somebody else will take care of us because of our power as highly elected officials in the state of Arkansas.'
Ted Koppel. In a sense, Jim, that's a negative way of saying the same thing we heard Mrs. Clinton say at the beginning of this broadcast. In other words, let somebody else take care of this. She put, in a more positive sense, i.e., 'We had nothing to do with this. If Jim McDougal came and said, 'You owe so-and-so-much in interest,' we paid it, but we never saw documents, we never had an active role in this Whitewater affair.' To which you would say what?
James Stewart. Well, that simply isn't true. I think it may have been true in the very beginning of the investment, when there were still high hopes that this would make money and the McDougals could handle everything, but by 1986, when the McDougal empire was crumbling, it was not true. At that point, Mrs. Clinton essentially took, singlehandedly, the control of this investment. She was the one who negotiated the loan renewals with the bank that held the mortgage. She was the one who handled all the correspondence. She was the one who went over all the numbers. She had possession of all the records.
Ted Koppel. It is your contention that she vastly inflated the value of the Clintons' interest in Whitewater.
James Stewart. That's correct.
Ted Koppel. Correct?
James Stewart. As I'm sure anybody who has ever applied for a mortgage knows, you have to disclose your assets in such a financial disclosure statement, and there are warnings on these forms to be honest about this, to be accurate, to be careful, not to use uncertain judgments, because to inflate that can be a federal crime. And yet Mrs. Clinton valued Whitewater at $100,000 on a 1987 financial disclosure document, right after the bank itself had visited the property and concluded the most generous estimate for their half-interest would be $52,000.
Ted Koppel. So when you're talking about a $100,000 evaluation, you're not talking about the value of the whole property, but the Clinton's half-interest?
James Stewart. They valued their half-interest at $100,000.
Ted Koppel. I ask you this question advisedly, reminding our viewers that you have some experience as a lawyer. Is that a crime?
James Stewart. It is a crime to submit a false financial document. In fact, their partners, the McDougals, are on trial in Little Rock this week for having submitted false financial documents to financial institutions. But to prove a case like that, a prosecutor would have to prove that it was knowingly a false submission. We haven't heard an explanation from either Mrs. Clinton or the President about that document, and that ultimately would be a question for a prosecutor and a jury to decide.
Ted Koppel. I bring you back, Jim, to what we heard the President say just a few moments ago, again, at the top of this broadcast, sort of this--this cry of 'What in heaven's name are we supposed to do? Somebody makes an allegation, we respond to the allegation. Somebody makes a new allegation, we respond to that allegation.' This sounds like another one of those allegations. How do you respond to--to what the President is saying?
James Stewart. Well, I don't think these allegations would be coming out, or the revelations, in this kind of slow, drip-by-drip process, if the White House and the Clintons had been forthright from the beginning, when this first surfaced in the campaign. Get the story out. They came to me, or they sent someone to me, allegedly because they wanted to get the whole story out, and they had been advised at the time--and I told them the same thing--that to stop these inquiries, get in front of the story. Tell us what happened, and don't leave holes in the story. Be complete. Err on the side of completeness, and if people are bored, they can ignore it. But that has never been the strategy they have employed.
Ted Koppel. Let's take a short break, Jim. When--we come back, we will talk about what Vince Foster knew about Whitewater and a number of other subjects.
[Commercial break.]
Ted Koppel. And back once again with Jim Stewart.
You begin with the suicide of Vince Foster , and clearly believe that his suicide is pivotal to understanding everything that's happened to the Clintons in--in subsequent months and years. Have you reached any conclusion as to why he committed suicide?
James Stewart. Well, first of all, there was the things [sic] he enumerated in--in the note that he wrote, and I think foremost among those was probably his concern about the handling of the firing of employees in the travel office, but what I think I can contribute that's new is that there were things bothering him that were so serious he didn't dare write them in his note, he didn't confide them to his wife. He was worried about his marriage. He was very much enmeshed in what we now know as Whitewater, and he knew of things that hadn't come to light that could prove embarrassing. He was concerned about the deterioration of his relationship with the First Lady, and I think there's a good chance he knew of the problems that Webster Hubbell was about to face, given his handling of clients in the Rose firm.
Ted Koppel. When you talk about Web Hubbell, I should point out, first of all, Vince Foster , Hillary Clinton, Web Hubbell had all been partners at the--at the Rose Law Firm together. Web Hubbell then came with the Clintons to Washington, was briefly the assistant attorney general of the United States, and you write that in the months before Vince Foster committed suicide, that he went over to Web Hubbell's house and went down in the basement to look at what?
James Steward. Well, there were files in Web Hubbell's basement that had been removed from the Rose Law Firm during the campaign by Web Hubbell and Vince Foster . Web and Vince, during the campaign, went through the Rose Firm and removed anything that they thought might be controversial or create problems for the campaign, and this including many of the billing records relating to Hillary Clinton's work for Madison Guaranty and other matters. And one day Vince Foster went over and he and Web Hubbell got into the basement, they went to the boxes, and they went through those materials looking for these particular files, which they did get and turn over to the First Lady. But also in those files were all of this other material, including a lot of the Whitewater material, bank records from Whitewater, and the billing records, as I mentioned before.
Ted Koppel. Is it--is it your impression that Vince Foster then took those billing records to the White House, to his office?
James Stewart. It's certainly a possibility. I don't know for sure, and nobody's said they recalled him taking documents out of the basement. But those documents in the basement were later all turned over to the Williams and Connolly firm after they learned that Web Hubbell had all these documents, and they supposedly turned all those documents over to Congress. So these records did not surface there. So that suggests to me that somehow, between their first being removed from the Rose firm to their being discovered, they were in Vince Foster 's office.
Ted Koppel. Talk to me for a moment about--about Travelgate, but first of all, let's take a look at something the First Lady said, I believe in her interview with Barbara Walters, about the whole Travelgate affair.
Hillary Clinton ['20/20']. I think that everyone who knew about it was quite concerned, and wanted it to be taken care of, but I did not make the decisions, I did not direct anyone to make the decisions, but I have absolutely no doubt that I did express concern, because I was concerned about any kind of financial mismanagement.
Ted Koppel. Mrs. Clinton presents herself in that interview as exercising a sort of passive role. 'Yes, I may have expressed some concern about but I certainly didn't initiate it.' There is a memorandum by David Watkins, I believe. Tell the story of that memorandum, because it, of course, suggests something totally different, but the White House itself ultimately produced that memorandum and made it available. Why is that significant?
James Stewart. Well, the facts, as I discovered, on the travel office affair, are as follows. I learned, before the production of this memo, that in fact, whatever her own personal belief about this is, Mrs. Clinton was the first person to suggest to David Watkins that these people be replaced.
Ted Koppel. David Watkins being?
James Stewart. He was the head of management in the White House and was the person in charge of personnel in the White House, including the travel office.
Ted Koppel. Right.
James Stewart. She was the first one to say to him, 'We need our people in this office.' Did she literally say 'Fire them'? No. But the implication seemed very clear to him and to everyone else who spoke with her, and that's what set in motion the chain of events that led to their being fired.
Ted Koppel. But the--the memorandum that David Watkins wrote to his own file about all of this, and about falling on his sword for the First Lady, is a memorandum that the White House itself, after all, made available. Now, that certainly puts them in a good light, doesn't it?
James Stewart. Well, I don't think so. First of all, that memorandum had been under subpoena for a considerable period of time. The independent counsel, the predecessor to Kenneth Starr, had subpoenaed that particular document. Meanwhile, I think the White House was aware that all this information was soon going to be made public. I have no idea how they found it, when they did, or why they decided to--to make it public when they did, but I do know that the week before that, I and my fact checker were checking the details about the First Lady's involvement in the travel office affair with the White House press office, with people in the White House, and had even faxed them material that dealt with this very subject, and almost immediately after that the memo itself appeared.
Ted Koppel. What you're suggesting, Jim, is that because you indicated that something about this was going to be in your book that they then decided to--to make it public before it became public in your book?
James Stewart. Well, as I said, I don't know why they did it. All I can say is, I had all this information in the book, we were fact-checking this information with the White House, so the White House knew this information was going to be in the book and shortly after that the memo appeared. But I'm sure the White House will say that no, that had nothing to do with it.
Ted Koppel. Let's take another short break. An inside peek at the White House damage control operation when we come back.
[Commercial break.]
Ted Koppel. There was, Jim Stewart, considerable debate going on within the White House, you discovered, about how much to reveal, when to reveal it, how cooperative to be, and at one point there is a--a line that I suspect is going to be a rather devastating line that the First Lady uttered in reference to all of this.
James Stewart. Well, you're--you're right. The--there was internal advice, especially from David Gergen, to turn everything over, and this was seriously considered until the First Lady interrupted at one point and said, 'Well, you know, I'm not going to have people poring over our documents. After all, we're the President,' suggesting that, by virtue of grandeur and power of the office, that they somehow should not have to endure such an experience.
Ted Koppel. The key questions, I think, ultimately may become not so much what happened during Whitewater, but what happened in more recent months, in terms of either covering things up or not being as forthcoming with information. There is one story that--that you uncover having to do with the Paula Jones story, this is the young lady who charged sexual harassment against then-Governor Clinton, and the--and the Arkansas state troopers who were then guarding Mr. Clinton. What is that all about?
James Stewart. Well, I think it's well-known at this point that the troopers surfaced with some accounts of their experiences while in the security detail of the governor. What I think hasn't gotten much attention is that before these reports were published, and before the troopers actually made the final decision to reveal what they claim to know, there was pressure applied to them to try to get them not to speak out, and I think the most significant example of this came when the President of the United States himself called one of these troopers and offered him a federal job.
That trooper subsequently decided not to participate. He was not one of the troopers who subsequently did tell stories to anyone, so if the goal of that job offer was to get this trooper to remain silent, it worked.
Ted Koppel. Is there not one trooper who, in fact, ended up with a federal job?
James Stewart. The head of the governor's security detail did end up with a federal job, but the trooper who heard directly from the president and decided not to participate did not accept it. He said he didn't--didn't want one of these jobs, he wanted to stay in Little Rock.
Ted Koppel. Now, again, let me draw on some of your experience as a lawyer. If, indeed, that could be--that could be proved true, the charge that you--that you make in your book, that would be a federal crime, would it not?
James Stewart. Well, that, again, could be a federal crime. I think the--the issue here is was a job offered explicitly in exchange for something else?
Ted Koppel. Let me ask you--and I realize this--this may be the most difficult question I ask you of all--after having written a book that is 400 pages-plus, how do you--how do you reduce it to a conclusion as to culpability, lack of culpability, whether this is a story that has just been blown way out of proportion, whether it is simply being kept alive for partisan reasons now and is--is doomed to do so for the rest of this year because there is a presidential election and because, you know, for the Clintons, the unfortunate timing that your book is coming out right now--how do you summarize everything you've learned?
James Stewart. Well, my interest is not partisan, and my interest is not narrowly was a law broken. I think to sum up the whole book is a study in the acquisition and wielding of power, and in the end, it's a study of the arrogance of power, what people think they can do and get away with as an elected official, and then how candid and honest they are when questioned about it. I think that is what it reveals, I think, most significantly about the Clintons.
Ted Koppel. And--and to those who say, has all of this investigation, the congressional investigations, the independent prosecutors, the time that you have spent in putting this book together, you know, was the--was it all worth all the money and the time and the effort and the pain?
James Stewart. I think, in the end, we'll find that it was, that the truth is important in our society, that justice is important in our society. I don't think you can put a price tag on those things. Yes, it's terribly expensive, and at times it seems very wasteful, and at times it's nasty and it's partisan. It often is a blood sport, as Vince Foster said. But why is that? It's 'cause the truth was never honored in the first place, and I hope if there's any lesson that comes out of that, that people in the future will recognize that.
Ted Koppel. Jim Stewart, thank you.
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.