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, 1994,60 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)
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. (1113) 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.61 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)
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.62 (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)
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 judgement" 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 transcripts63 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)
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)64
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.65 " 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. § 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)