59

Mr. DALE. Well, she had readily admitted that she had been
meeting with Harry Thomason that week, but we didn’t know
what—what the matter was. .

Ms. Ros-LEHTINEN. What did she say about those meetings?

Mr. DALE. Well, she never did say anything about them except
for the fact that she told me that she was working on a special
project for Harry Thomason and the First Lady.

Ms. Ros-LEHTINEN. So you were aware of these meetings that
she had with the First Lady, and what—did she say anything
about those meetings?

Mr. DALE. Well, she didn’t elaborate on those, either. I mean, I
just assumed that she was working on something outside of the
White House Travel .

Ms. Ros-LEHTINEN. And did you hear Miss Cornelius talk about
her access to the President much at all?

Mr. DALE. Yes. She used to take great delight in boasting to us
about the fact that she was the President’s cousin and she told me
that she talked to him on—three or four times a day. All she had
to do was pick up the phone and call him and she got right
through.

Ms. Ros-Leariven. So it was clear to you that she had access to
the President and she made it very clear in her discussions with
you and the rest of the personnel that she spoke with the President
on a regular basis?

Mr. DALE. Yes, she did.

Ms. Ros-LEHTINEN. Mr. Watkins in his memo—

Mr. CLINGER. The gentlelady’s time has expired unfortunately.

Ms. Ros-LEHTINEN. Thank you.

Mr. CLINGER. I now recognize the gentlelady from Michigan,
Miss Collins, for 5 minutes.

Miss CoLLins of Michigan. I thank you, Mr. Chairman. I would
like to yield my time to Congresswoman Carolyn Maloney.

Mrs. MALONEY. Thank you very much.

First of all, I would like to be associated with the comments of
my colleague from Vermont, Mr. Sanders, who expressed his con-
cern for all of you and also for any other Government employee
that has lost their job, the 113 Postal workers who lost their jobs,
were pink slipped according to The Hill this week, and to the many
Federal employees during the 21-day shutdown who were not able
to have money for Christmas. They didn’t have very much of a
Christmas. I had one constituent whose son could not even go back
<0 college because of the lack of money and the insecurity that she
felt during the Government layoffs.

I would like to put in the record, Mr. Chairman, an article by
dim Dwyer in the Daily News from January 18, and in it he is very
critical of Congress. ie says that instead of pla: ing partisan poli-
tics, we should be—and he is concerned about the seven jobs that
are lost—but he said we should be looking at the 40,000 individ-
uals who lost their jobs from AT&T; the 12,000 individuals who
lost their jobs in the merger between Chase and Chemical; the
30,000 who lost their jobs from Sears Roebuck; Boeing laid off
28,000; IBM, 63,000; OTE, 17,000; NYNEX, 16,000; AT&T, 40,000;
Delta Airlines, 15,000; Digital Equipment, 20,000; Lockheed Mar-
tin, 15,000; and here—and I would ike here is his quote. He said


123

Mr. Wisk. Were you aware they were conducting this review?

Mr. Date. As I testified earlier, when—the morning when it
started I was told that it was going to be a review of the office. As
the day went on and as it got late in the afternoon, it became ap-
parent to me this was more than just a review.

Mr. Wisk. And when the FBI interviewed you, did you tell them
about this practice?

Mr. DALE. The FBI never interviewed me. I went to trial, never
answered one question, was never attempted to talk to by anybody,
except someone from the GAO called and left a message on my an-
swering machine one day, and when he didn’t get me he called my
attorney. My attorney would not, permit me to talk to him at that
time because of the investigation. But, other than that, nobody ever
attempted to talk to me.

And, Mr. Wise, I might interject here, I volunteered to go in and
talk to the Justice Department.

Mr. Wise. Is it your statement then your attorney would not per-
mit you?

My. Dae. Well, I don’t know that my attorney wouldn’t permit
me, but he told me I don’t think the Justice Department is inter-
ested in talking to you.

Mr. WIsE. I see.

I thank the Chair. And if I could just close by saying that I think
and it is my hope that the Chair will follow through on obtaining
the witnesses that the minority has requested, because I think it
goes to answering whether there was political motivation and ulti-
Mately goes to answering a lot of the questions Mr. Dale has
raised.

Mr. CLINGER. I thank the gentleman for his comments; and in re-
sponse to the gentleman I would indicate that, yes, we do intend
to pursue that. I would restate what I said earlier this morning
and that is that we have requested and yet—not yet received docu-
ments from the Justice Department which we would need to have
in order to proceed to a discussion of those issues.

I must say in closing, gentlemen, that I am really, frankly, aston-
ished that you were indicted and brought to trial and put through
what you were put through without ever having been interviewed
by, basically, your accusers, as I understand it. Is that correct?

Mr. DALE. That is correct.

Mr. CLINGER. A lot of discussion here today about the fact that
other people were fired, 113 people were let go from here. I think
the difference here is, No. 1, they were aware in June this was
going to happen. You never really knew it until the day, I believe,
that you were let go, if that was my understanding of. your testi-
mony here today.

Mr. DALE. That is correct.

Mr. CLINGER. So I think that the difference here that we have
to bear in mind is this is not about how people are let go or how
they are pink-slipped, it really has to do with credibility, and I
think that is the key here in terms of differentiating this from
other people who have been let go from the job.

Here, you, I think it is becoming abundantly clear, were basically
sort of designated scapegoats to provide a justification for what we
all agree was illegitimate. We would not all be here today and you


25

of the press—the very people that he was su to be stealing from—came forth
and testified on his beHall, while the Justice Department could not produce one, not
one, to testify against him, For he and his family their ordeal should have been
over—in fact the President himself said he was sorry for what Billy had gone
through, wished him well, and hoped that he could get on with his life. No one
would like that more than’Billy Dale, his family, and, along with our families, each
and every one of us at this table. Unfortunately, as a result of the discovery of a
memo from a then senior staff member of this administration, which contradicts
comments of the First Lady, we again have become targets of false charges. We are
now accused—I believe the wording was “it now seems clear” that we—allowed
press members to circumuent customs regulations on their return to the U.S. from
overseas Presidential travel. This, in spite of the fact, that every international
White House press charter has assigned to it, on a rotational basis, a U.S, Customs
Agent. who travels with the group and has the responsibility of collecting from each
manifested passenger a completed customs declaration, and clears all passengers
and cargo on board the aircraft. In fact, the same procedure applies to all pas-
sengers and cargo on board Air Force One—including the President himself. We
were also described as “no more than glorified bellmen for the press.” I would only
quote the President at his press conference of last week when he said “an allegation
is not the same thing as a fact”, and that “. . . the American people are fundamen-
tally fair-minded.” I would hope that he would repeat his statement to some of his
spokesmen.

‘Along those same lines, during your hearings of last week a new “so what” who
cares attitude seemed to be the new theme for some in this room. During a recent
First Lady interview, Mrs. Clinton expressed, as would any parent, how concerned
she was, and the effort she hs made to help her daughter cope with hearing the
many negative comments being made about her mother. Blanche Dale, unfortu-
nately, was not able to do so for her daughters over the past 30 months—she had
to sit and wat 4

+ Her daughter Kim, who two days after returning from her. honeymoon had to
report to the Department of Justice and show how she had paid for her wedding,
her reception, her honeymoon, and, since we were present at her reception, answer
questions about any discussions we had.

* Her daughter Vickie, when interviewed by the Justice Department, in explain-
ing that she was giving her cash car payments to her father so that he could deposit
them In the White House Credit Union for her, was asked if she was not uncomfort-
able with giving her cash to someone who was stealing money from the Travel Of.

ice.

To those who say “so what” you should remember that the American people may
have a gray area on jegal points, but they know right from wrong.

On January ist of this year, { officially retired from Government service, having
had the privilege of serving 4 Presidents, even if only in a “no more than” capacity.
I would hope that people would understand that, for me and thousands of others,
when Air Force One would arrive, the markings on the side were not Democratic
party or Republican party—it read “United States of America”. The emblem on its
side was not a political poster, it was the seal of the Executive Office of the Presi-
dent of the United States. When that door opened, the man or woman chosen by
the people of this country to fill that office had my complete loyalty and support
I did that for 13 of the proudest years of my life. Thank you Mr. Chairman.

Mr. CLINGER. I would now like to ask Mr. Wright—if you would
present your testimony, Mr. Wright.

STATEMENT OF GARY D. WRIGHT, FORMER DEPUTY
DIRECTOR, WHITE HOUSE TRAVEL OFFICE

Mr. WRIGHT. Good afternoon, Mr. Chairman, members of the
committee. That is a rather hard act—sorry, that is a hard act to
follow, John. I’ll read my rather brief statement.

My name is Gary D. Wright. I was employed at the White House
Telegraph and Travel Office for 32 years before being fired on May
19, 1993, along with the rest of the staff. At the time of my dismis-
sal I was the eputy Director of the Travel Office.

I was well aware during my 32 years of serving eight Presidents
that I worked at the pleasure of the President, which means that
I could be terminated at any time without protection afforded a


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, JR. Pennsylvania, Chairman

BENJAMIN A. GILMAN, New York

DAN BURTON, Indiana

J. DENNIS HASTERT, Ilinois

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

STEVEN SCHIFF, New Mexico

ILEANA ROS-LEHTINEN, Florida

WILLIAM H. ZELIFF, Jr., New Hampshire

JOHN M. McHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

PETER BLUTE, Massachusetts

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

JON D. FOX, Penney!

RANDY TATE, Washington

DICK CHRYSLER, Michigan

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

WILLIAM 3. MARTINI, New Jersey

JOE SCARBOROUGH, Florida

JOHN B. SHADEGG, Arizona

MICHAEL PATRICK FLANAGAN, Mlinois

CHARLES F. BASS, New Hampshire

STEVEN C. LATOURETTE, Ohio

MARSHALL “MARK” SANFORD, South
Carolina

ROBERT L. EHRLICH, JR., Maryland

‘CARDISS COLLINS, Illinois

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

JOHN M. SPRATT, JR., South Carolina

LOUISE McINTOSH SLAUGHTER, New
York

PAUL E. KANJORSKI, Pennsylvania

GARY A. CONDIT, California

COLLIN C. PETERSON, Minnesota

KAREN L. THURMAN, Florida

CAROLYN B. MALONEY, New York

THOMAS M. BARRETT, Wisconsin

GENE TAYLOR, Mississippi

BARBARA-ROSE COLLINS, Michigan

ELEANOR HOLMES NORTON, District of
Columbia

JAMES P. MORAN, Virginia

GENE GREEN, Texas

CARRIE P. MEEK, Florida

CHAKA FATTAH, Pennsylvania

BILL BREWSTER, Oklahoma

TIM HOLDEN, Pennsylvania

BERNARD SANDERS, Vermont
(Independent)

JAMES L. CLARKE, Staff Director
KEVIN SABO, General Counsel
JupirH McCoy, Chief Clerk

Bup MYERS, Minority Staff Director

ay


119

that surprising to you? That was the GAO report of January 24.
In fact, it is today’s report. $200,000 not deposited in the check-
book.

Mr. DALE. Well, see, it surprises me. It never happened when I
was there.

Mr. Suays. I do know there is a double standard. I do know the
White House is not holding the Energy Department and the Com-
merce Department to the same standard they were holding you to.
And I am, once again, going to use my time. I do not know what
is in your future, each and every one of you, but I apologize to each
and every one of you; and I am sorry you did not get that same
sincere apology from people on the other side. You all were
screwed. .

Mr. CLINGER. The gentleman yields back the balance of his time.

I would now recognize the gentlewoman from Illinois, Mrs, Col-
lins.

Mrs. CoLLins of Illinois. I yield to the gentleman from West Vir-
ginia, Mr. Wise.

Mr. Wise. Point of parliamentary inquiry, Mr. Chairman. In the
passing system, am I entitled to pass until the next person; or is
the gentlewoman from Illinois entitled to pass?

Mr. CLINGER. I would certainly allow that.

Mr. Wisk. In that case, I would ask to pass.

Mr. CLINGER. In which case, then, I would now move to recognize
the gentleman from California, Mr. Horn, for 5 minutes, and may
1 ask him to yield to me for about 20 seconds?

Mr. Horn. Absolutely. Twenty seconds to the Chairman.

Mr, CLINGER. Just to make the case in our discussions with GAO
and in preparation for the report they issued, they found that,
frankly, as I understand, not very many airlines were interested in
bidding on this. And I gather, Mr. Dale and others, that one of the
reasons for this is you had a pretty demanding customer group, did
you not, that really liked certain special things that some airlines
would not perhaps be willing to provide or were unable to provide?

Mr. DALE. Yes, sir.

Mr. CLINGER, So this was a fairly customized service that you
were providing in trying to meet the wishes of your customers.

Mr. DaLe. That’s right.

_ Mr. CLINcER. Thank you. And I thank the gentleman for yield-
ing.

Mr. Horn. Mr. Chairman, when I opened the questioning earlier
this morning, I thanked you for pursuing this, and we have heard
nothing but sort of minimization by our friends on the minority.
And I say to my colleagues that preceded me—Mr. Burton, who has
taken much of my remarks in wanting to really pursue this situa-
tion; Mrs. Morella, who is always humane and puts a wonderful
perspective on it; but I want to particularly praise my colleague,
Chris Shays. I never knew him until I came here, but for several
xearg before I came here I watched MacNeil Lehrer and I watched

ir. Shays of Connecticut conduct as vigorous a pursuit of the truth
in the Reagan administration HUD scandal as did the Democratic
member of the Subcommittee. 1

guess my apology today is your listening to many of m od.
friends on the other side of the aisle, the Democratic side, not sit-


68

difference was due to GTR’s. The GTR’s were remitted along with the net check to
the charter company. Both the check and the GTR are negotiable instruments and
together totaled the invoice amount.
bjective 10: To analyze, in more detail, the receipts and disbursements activity

of the press travel fund for the month of February 1993.
Procedures:

(a) Obtained the February 1993 Riggs National bank statement and the canceled
checks on file.

(b) Listed each canceled check that made up the total disbursement amount for
February 1993.

(c) Discussed the reasonableness of the level of cash receipts in the month of Feb-
ruary 1993 with the Director of the press travel office.
Findings:

(a) The total amount of checks returned with the February bank statement
($1,030,835 (cents omitted)) agreed to the total amount disbursed per the bank

statement. Significant disbursements making up this total include the following
(cents omitted

‘Treasurer of the US. (for Air Force One charges—August, 1992-January, 1993) $525,037
Airline of the Americas eee . 79,456
ATRT (phone charges—September 5, 1992-October 25, 1992 or 13 trips) « 327,891

Total significant disbursements ....... 923,384

(b) According to our interview with the Director of the press travel office, low re-
ceipts in February 1993 were due to a decrease in press travel after the November
election and the fack of travel early on by the new Administration which took over
on January 20, 1993.

Objective 11: To approximate the net assets of the press travel fund at May 15,
1993.

Procedures:

(a) Obtained the cash balance of the press travel fund at Riggs National Bank at
April 30, 1993 from the April 30, 1993 bank statement reconciliation.

(b) Subtracted from the April 30, 1993 cash balance the following amounts:

* Amount of checks written on’ the cash account from May 1, 1993 to May 15,
1998 that were identified in the press travel fund check book.

* Amount of unpaid vendor invoices at May 15, 1993 that were identified from
the trip worksheets or actual hard copy vendor invoices in the open invoice file.

(c) Added to the April 30, 1993 cash balance the following amounts:

* Amount of deposits made to the cash account from May 1, 1993 to May 15, 1993
that were identified from copies of deposit slips.

« Amount of checks received by the press travel office in payment of bills which
had not yet been deposited that were located in a locked drawer in the press travel
office.

* Amount of outstanding accounts receivable at May 15, 1993 that were identified
from the automated billing system.

¢ Amount of unbilled expenses which had been paid by the press travel office but
had not yet been billed to the customer/press. This amount was estimated by re-
viewing the paid invoices for these expenses and noting that the amount had not
been set up as an accounts receivable,

Findings:
The approximate net assets of the press travel fund at May 15, 1993 were com-

puted as follows:

Cash balance per April 30, 1993 bank statement reconciliation coe $368,876
Less: Checks writen from May 1 t0 May 15, 1993 .socsor : (618,88)
Less: Estimated unpaid invoices (.e., accounts payable) at May 15, 1993 : (521,602)
Add: Estimated accounts receivable at May 15, 1993 (See NOTE below) 366,793
‘Add: Deposits to bank account from May 1 to May 15, 1993 oo. snsmsn 76,488,
‘Add: Checks on hand not yet deposited to bank but already applied to accounts receivable 92,025,

‘Add: Unblied expensed incurred by the press travel office but not yet biled to the press and nat included
in the estimated accounts receivable amaunt uns a3
Estimated net assets at May 15, 1993 ....... 7 65,635

NOTE: The data in the automated billing system indicated that a trip occurring in December 1992 was nat billed. The tip file showed dis-
bursements forthe trip totaling approximately $113,000. We were sable to determine ifthe tip had been billed, and, it not, why i had not
been billed. This amount ss not included in the accounts recetable balance of $366,793 above


79

Mr. BLuTE. And you cannot explain where those documents got
to?

Mr. DALE. The first 2 weeks that Catherine Cornelius worked in
my office, I was on sick leave. And I found out after 2 weeks, com-
ing back, that she had been rummaging through the files.

(r. BLUTE. Mr. Chairman, I think it is very clear what happened
here. Even on Inauguration Day, as you have testified, you were
receiving calls about the new Travel Office Director, Catherine
Cornelius, asking for her; is that correct?

Mr. DALE. That’s correct.

Mr. BLUTE. Yet later on the White House officials said she just
wanted to learn. And all around you there were little signals that
you were getting, the flowers that were then taken back, and var-
ious other signals that a political offensive had started; that your
office was a target of opportunity for the new administration to put
their people in, which, in and of itself, once again, is not wrong.
But to bring the FBI in and the IRS and to try to frame up what
obviously are decent, hardworking public servants is wrong, and I
think this committee thanks you very much for your testimony.

Mr. CLINGER. The gentleman’s time has expired.

I am now pleased to recognize the Chairman of our District of
Columbia Subcommittee, the gentleman from Virginia, Mr. Davis,
for 5 minutes.

Mr. Davis. Thank you, Mr. Chairman.

Let me just say that I am not sure firing you would have been
illegal. I think it would have been wrong. We have people, civil
servants, who have been doing a good job, and as we try to move
away from the politics of the old days, I think it would have been
wrong, but it would have been perfectly legal, and that is the point
Mr. Blute was trying to make.

Once again, though, the way this was handled, trashing innocent
people’s reputations, spreading lies and rumors and so on, I think
has escalated this, and the cover-up, to where we are today.

I want to ask a few questions.

Mr. Dale, in early February, Darnell Martens, a partner of Harry
Thomason’s, called you to seek business; did he not?

Mr. DALE. Yes, he did.

Mr. Davis. Was there any doubt in your mind he was seeking
business for his company, TRM?

Mr. Date. No, sir, because I had asked him what was in it for
him and he told me the financial gain he would realize.

Mr. Davis. Did he tell you who else was involved in the partner-
ship with him?

Mr. DALE. No, sir, I didn’t know who he was or any connection
he might have with the White House.

Mr. Davis. Did he say anything about he was just checking this
out for other people?

Mr. DALE. I don’t remember that he did. He just indicated that
he was looking for business.

Mr. Davis. And did you know at the time who Darnell Martens
or Harry Thomason were?

Mr. DALE. No, sir.

Mr. Davis. When did you learn that they were friends of the
President?


15

wards of $450,000, by admitting that I should not have put Travel
Office checks into my own account, something I have always admit-
ted at trial.

The letter from my lawyer to the Justice Department made clear
that I would never admit to having spent the Travel Office money
on myself, because I had not done that. It was always important
to me that everyone understand that I had not embezzled any
money. The Justice Department refused to end the case on that
basis, so we went to trial, and the jury accepted my explanation.

Since the Justice Department's own rules prohibit the release of
confidential communications, I don’t know how the letter made it
into the hands of the press, but it angers me beyond words that
people are trying to take advantage of this leak to suggest that my
acquittal was not deserved.

At the end of the trial, the President apologized for what I went
through, but I must question the sincerity of that apology in light
of the events of the past 2 weeks. And no one has yet apologized
to my colleagues. Instead, the President’s lawyer goes on television
to level new false charges, and no one tells the public that the new
and better Travel Office doesn’t pay its bills on time and has been
the subject of constant complaints from the people it is supposed
to serve.

I will always be grateful to the people who stood up for me at
my trial and the many great people around the country who sup-
ported us through these trying times. I always tried to gain the re-
spect and trust of the people I worked for in the White House and
the people I worked with in the press. I look forward to the day
this is behind my family and me.

Mr. Chairman, I thank you for this opportunity and I—I am pre-
pared to answer all questions to the best of my ability. Thank you.

Mr. CuINGER. Thank you very much, Mr. Dale. Appreciate your
testimony.

[The prepared statement of Mr. Dale follows:]

PREPARED STATEMENT OF BILLY R. Dare ForMER Director, Wulre House TRAVEL
FFICE

Good morning Mr Chairman, committee members and counsel.

My name is Billy Dale and I am the former Director of the White House Tele-
graph and Travel Office. It is with great relief that I sit with you this morning to
tell my side of the story about the scandal and Popularly referred to as “Travelgate.”

For nearly thirty-two years I worked in the White House Travel Office, as it’s di-
rector for the last eleven. During that time my colleagues and I carried out the rig-
orous task of arranging for the press to accompany and cover the President of the
United States as he travelled this Nation and around the world.

Through several administrations we functioned as an efficent, effective organiza-
tion serving the President without regard to partisanship. In fact, 1 had faithfully
served seven Presidents prior to Mr. Clinton and, even though I was ready for re-
tirement, my colleagues would have gladly continued in that role for him throughout
his entire administration. But that was not to be, as the Clinton campaign, transi-
tion teams and the Clinton administration had other designs on the White House
Travel Office.

During the 24% years between May 19, 1993, the day I was as fired from my posi-
tion as director of the travel office. And the day I finally got to testify at my trial
to defend myself against the false charge that I embezzled money from the press,
I did not attempt to answer that charge or any of the other false charges that were
levelled at me concerning my management of the Travel Office. It was not easy for
me or my family. We were subjected to the most intense intrusions and harassment
you can imagine. We were sustained during those very difficult times by our faith
and the many friends and professional colleagues who stood by our side.


74

LEAVE BILL DALE ALONE
(Long Beach Press-Telegram, January 12, 1996)
ANOTHER PRESPECTIVE

The Clintons took Billy Dale's job, trashed his reputation, sieced the FBI on him
and ruined him financialy. And still they won't leave him alone.

Billy Dale was the director of the White House travel office, a low-echelon post
where he had served since the Kennedy administration. He and six others were
abruptly fired, on Hillary Clinton's direct orders, it now appears, so the Clintons
could give those jobs to their friends.

To cover this hamhanded combination of arrogance and ineptitude, the White
House accused Dale of embezzlement. When that case finally came to trial after two
years, a jury quickly and completely vindicated Dale.

Now comes Robert Bennett, a member of the Clintons’ growing legal corps who
represents the president in the Paula Jones scrape and also represents TV million-
aire Harry Thomason, a close Clinton friend who was involved in the travel office
fring.

On national TV, Bennett said that Dale had been willing to plea bargain his way
out of the trial, adding in a sarcastic sneer, “so let’s not all cry about Billy Dale.”

So what? Dale was looking at a choice between plea bargaining to a misdemeanor
and paying a $69,000 fine or fighting the charges and paying $500,000 in legal bills.

In the lush green pastures where high-priced lawyers like Bennett graze, money
is not a considerstion. For jobless working people like the Dales, it is. fn this event,
Dale fought and won. He is innocent, and whether he once considered a plea bar.
gain now doesn’t mean a damn thing.

The Clintons will leave the presidency with a generous pension and numerous
perks. They are both Ivy League lawyers, and, with the numerous money-making
opportunities available to ex-presidents, their legal bills, even at Bennett's rates
shouldn't be a problem.

The Dales, the kind of people who in Clinton’s words worked hard and played by
the rules, are left with nothing.

By itself, Bennett’s eruption about a plea bargain wouldn’t mean much except ill-
considered mouthing off. But then Democratic National Committee Chairman Dan
Fowler made the same charge on television the following night.

Perhaps it was coincidence; more likely, it was vindictive White House spin con-
trol. The conventionial wisdom in Washington is that the White House will go to
any length to protect the first lady from her self-inflicted embarrassments.

e attacks on the hapless Billy Dale bear out the conventional wisdom

Mr. Horn. I want to read a couple of paragraphs here, because
we have heard it discussed this morning.

It said: “To cover up this hamhanded combination of arrogance
and ineptitude, the White House accused Dale of embezzlement.
When that case finally came to trial after 2 years, a jury quickly
and completely vindicated Dale.

“Now comes Robert Bennett, a member of the Clintons’ growing
legal corps, who represents the President in the Paula Jones scrape
and also represents TV millionaire Harry Thomason, a close Clin-
ton friend, who was involved in the Travel Office firing.

“On national TV, Bennett said that Dale had been willing to plea
bargain his way out of the trial, adding, in a sarcastic sneer, says
Scripps Howard: ‘So let’s not all cry about Billy Dale.’”

Then the Scripps Howard goes on to say, “So what”, a phrase we
heard this mornin, repeated from a phrase of the minority. “Dale
was looking at a choice between plea bargaining to a misdemeanor
and paying the $69,000 fine or fighting the charges and paying
$500,000 in legal bills.”

And then the Scripps Howard goes on: “In the lush green pas-
tures where high-priced lawyers like Bennett graze, money is not
a consideration. For jobless working people like the Dales, the fam-
ily, it is. In this event, Dale fought and won. He is innocent. And



32

Mr. CLINGER. In fact, all of the witnesses that appeared from the
news media were character witnesses on your behalf; is that cor-
rect?

Mr. DALE. That is true, and we had more standing in the wing
waiting to testify, wanted to testify, and the judge said I have
heard enough, let’s call a halt to all of this.

Mr. CLINGER. Even though you were being accused of stealing
from the news media?

Mr. DALE. That is correct.

Mr. CLINGER. These were their funds, not taxpayer funds, their
funds you were being charged with ripping off, basically.

Let me get right to a couple of critical charges that were made
just to clarify them. The charge that you handled large, sort of a
large slush fund of money, you carried large amounts of cash which
were unaccounted for, one; and the second charge is that you did
put money into your own account and that you have testified the
reason for that was the reasons you negotiated a plea was because
that was going to be difficult to really get across to a jury.

Tell us in your own words why you used that technique.

Mr. DALE. Yes, sir.

In 1982, when I took over as Director of the Travel Office, I had
a meeting with the White House Correspondents Association and
some other White House staff members to discuss how we could
hold down the cost of future trips. In that meeting it was decided
that I should maintain a surplus of $25,000 in the account, and if
that account grew to, let’s say, $30,000, because of some windfall
or something, then the next trip I would work that $5,000 off by
decreasing the trip expenses by 1, 2, 3, 5 percent.

Also, if that fund dropped to $20,000, I could make it up on fu-
ture trips or the next trip by using the same manner of accounting.
Well, $25,000 in 1982, was probably enough money, but by 1988,
it had become apparent to me that $25,000 was not enough money
to maintain this surplus. And I will give you an example of what
Tam talking about.

In 1986, UPI went bankrupt and stuck me with approximately
$40,000. That was $40,000 that I had to make up on future trips
and it was not easy. And there were other things that happened
along the way, unexpected charges that came up. One time in Ma-
drid, Spain, I had to pay $29,000 for unused hotel rooms on behalf
of the Press Corps.

So the checks, by and large, that I put through my personal
checking account, were refund checks from telephone companies
that had overbilled us for one reason or another and sent the
money back. Now, if I had put those in the Riggs account, it was
my obligation to work that off on the next trip.

ell, it was apparent to me that the next trip was not nec-
essarily the one that I wanted to work it off on. It may not be the
one that needed to work it off on, so I cashed in those checks. I
kept the money in the Travel Office behind my desk and I used it
as I saw fit on future trips for unexpected expenses like that that
I did not intend to bill back to the press.

Mr, CLINGER. And none of that money was used for your own
benefit in any way?

Mr. DALE. No, sir, that money was always in the Travel Office.


103

tion of horrendous wasteful conditions of travel in the executive
branch of the White House, not this particular office but everybody
else.

So when friends of the Clintons called them personally and said,
we hear rumors of kickbacks in your Travel Office, we hear lack
of bidding, we hear special conditions, we hear people are travelin,
with cash and paying cash, we hear gifts are being made, you don’t
think it was reasonable for these new people who arrived in Wash-
ington after a year of hearing $100 million squandered in travel in
the, White House to be a little cautious and then try to decide what
to do?

What did Mr. Watkins tell us last week? He said he went into
the general counsel’s office and said, “I didn’t know what to do?”
But they all remembered there was a thing called the FBI and they
thought that was the Federal police force and they thought maybe
they better call them in because they have heard the potential of
criminality. And that is what he did, rightly or wrongly.

Did they have justification for doing it? Was that the proper
process? We will probably never know. But as my friend from Mis-
sissippi, as my friend from West Virginia, and my friend from Vir-
ginia have said, when are we going to spend our time on this com-
mittee and with the occasion that happened in the White House on
something more rational?

There is nothing we can do for these people. We have a—I hope
we have apologized. I certainly do. If you have been discomforted,
I know you have, you have my apology as an official of the U.S.
Government. But——

Mr. SHAys. You don’t sound like you believe it. You honestly
don’t sound like you believe it.

Mr. KaNJorskI. That I believe what?

Mr. SHays. You are saying it with words without meaning be-
cause your actions don’t demonstrate that you really are sorry.

Mr. KANJoRSKI. Chris, you are getting much harsher in your old
age.

Mr. DALE. Mr. Kanjorski, are you trying to say that I was some
way involved in Mr. Sununu’s personal travel bill?

Mr. KANJORSKI. Mr. Dale, I am not. suggesting that.

Mr. DALE. Well, then, why do you bring it up?

Mr. KANJoRSKI. I am suggesting to you that all of America knew
there was a problem with travel. If was on national television
when this new, young administration with inexperienced people
took over the White House. They didn’t know what group did what
to whom on travel, and their best friends, their highest confidences
with them told them there was something happening in this little
office and they took action. May have been precipitous, may have
been dumb, and if we had to indict someone a dumbness we prob-
ably would this—this early administration.

ut_we—there is no criminality. There is no unethical conduct
here. You have expended money. There has been embarrassment.
and you have lost your jobs. But so have thousands, hundreds of
thousands of other Federal workers done the same thing. Most re-
cently for no cause at all.

Mr. CLINGER. The gentleman’s time has expired.

Mr. Burton. Mr. Chairman, would you yield to me?


39

As the meeting was drawing to a close, they had asked me a lot
of personal questions, what kind of automobile did I drive and
things like that, and they looked at me and they said, “Don’t be
surprised if you hear from Baltimore and they want to audit you.

Mr. Burton. As I understand it, the rest of you have had indica-
tions that the IRS may be wanting to audit you or talk to you as
well.

Mr. McSWEENEY. That is correct.

Mr. BurTon. Is that correct?

Mr. DREYLINGER. I am not aware of that in my case.

Mr. MAUGHAN. No.

Mr. Burton. You two are not.

Any of the rest of you?

Mr. BRaASssEUx. No.

Mr. WRIGHT. No.

Mr. McSwEENEY. At the meeting between my counsel and the
IRS, they said basically the same thing, not to be surprised if it
happened.

Mr. Burton. Mr. Chairman, I know my time is up, but let me
make one request, and that is, we do have Ms. Richardson appear
before this committee under oath, and I hope we can bring Mr.
Hubbell as well, because I have a number of questions.

Mr. CLINGER. As I have indicated to you, we intend to do that,
Mr. Burton.

Mr. Burton. Thank you, Mr. Chairman.

Mr. CLINGER. At this time I recognize the gentlewoman from
New York, Mrs. Maloney.

Mrs. MALONEY. Thank you, Mr. Chairman.

Once again this committee is playing politics instead of shaping
policy. More taxpayer dollars are being spent on allegations that,
even if revealed to be true, would not even be illegal.

If the majority is so concerned about the White House Travel Of-
fice, it should be focusing this hearing on how to improve manage-
ment in the White House Travel Office. That would be a very con-
structive conversation.

So at the risk of sounding constructive in what I consider just
one more shot in the opening of the 1996 Presidential campaign,
I would like to ask my colleagues to join me in a bill that would
privatize the Travel Office, that would just depoliticize it, profes-
sionally manage it. The Republicans aren’t happy with the way the
Democrats ran it; the Democrats aren’t happy with the way the Re-
publicans ran it. I suggest we move forward, privatize the office,
and get on with the other problems before Government.

I would like to ask the panelists a question. I would like to ask
each and every one of you the same question, and I would like to
begin with Mr. McSweeney. I would like to ask you if you person-
ally knew of any activity relating to White House Travel Office op-
erations, and occurring during your service in that office, that was
illegal. And if you knew of any activity that was illegal, will you
please elaborate and tell us about it.

Mr. McSwEENEY. No, I did not, do not, know of any that was ille-
gal. Do you have a specific?

Mrs. MALONEY. No. I am asking you.

Mr. McSwEENEY. No, ma’am, I do not. I would not have done it.


64

Lack of Contractual Support

There is no forma) contract with the primary domestic press charter air carrier.
There is no evidence or documentation of competitive bids or purchase orders for
press charter service.

Inadequate Billing Process
Billing practices are informal and inconsistent.

Differences between estimated trip costs, which are the primary basis for billings
and actual costs incurred, are not documented,

This section of our report details the observations and findings of our study. For

cach area of our study we identify the study objective, the procedures we performed,
and our findings.

Objective 1: To gain an understanding of the accounting system, specifically the
cash receipts and cash disbursements cycles.
Procedures:

We interviewed the Director of the press travel office to gain an overall under-
standing of the financial management practices and policies of the office.

Findings:

Our inquiries related to the major financial management practices and policies of
the office indicated a number of potential significant internal control weaknesses,
including the following:

General:
+ No general ledger or other form of double entry bookkeeping.

© No financial statement preparation.
* No external review mechanism.

Cash Receipts:

+ No cash receipts journal.

« Improper segregation of duties with respect to access to accounting function and
access to cash receipts.

© Incoming checks not restrictively endorsed on a timely basis.

* Incoming checks not deposited on a daily basis.

* Inadequate reconciliation of total cash receipts to deposits in the bank due to
lack of daily cash receipts log.

* Inability to determine if cash received was properly or accurately applied to the
related receivable (customer/press account balance).

Air Charter:

+ No overall contract with the primary domestic charter company.
+ No contracts issued for each individual trip.

+ No documentation of competitive bids.

°
.

No purchase orders for press charter service.
No detailed service information provided in charter billings to document exactly
what is being paid for and if the charges are reasonable.
Trip Billing System:
* Billing invoices not prenumbered or multi-part. Access to the stationary not
controlled.
* Trip records can be deleted from the automated billing system when open re-
ceivables still exist.
* The system provides no summary of daily cash applied to the receivables.
« Remittances provided by the customers/press discarded after the receipts are re-
corded in the system,
* Search capabilities on the automated billing system limited and information can
only be listed by trip.
Press Reimbursement of Trip Costs:
* No formal reconciliation procedure exists to adjust amounts billed to the press
after comparison to actual costs.
Accounts Payable /Cash Disbursements:
* No cash disbursements journal.
* Inadequate or non-existent segregation of duties between individuals with ac-
counting and check writing authorities.
* No payable log exists for air charter invoices.


35

Mrs. COLLINS of Illinois. Does not cover it all.

All right, then. .

Mr. Dale, you have answered some of these questions, and I
want to just ask you a few more. You know all these findings of
all Peat Marwick, lack of accountability and all that kind of stuff.

Do you disagree with these findings?

Mr. DaLg. Absolutely.

Mrs. CoLLINs of Illinois. That answers that question very, very

uickly.
g Now, what about the lack of accounting controls and systems and
olicies and no system for procurement documents, and no general
Ted er and all of that; do you agree with those findings?
ir. DALE. I do not, and I don’t know if those are—if they mean
me, the White House, or who are they referring to, that report that
you are reading from?

T had records to prove every financial transaction that took place
in that Travel Office as long as I was the Director, until Catherine
Cornelius came into the office. After she came in, I could not tell
you what happened.

I can tell you that on October 24, I sat at home and I watched
this hearing, and if the jury had been sitting in this room, I was
a convicted felon by the tone of some of the people on this panel.
I got so angry that I didn’t know what to do.

Mrs. CoL.ins of Illinois. And you said to yourself later, thank
God for juries, because the jury found you not—

Mr. DALE. But the jury was not sitting in this room that day.

Mrs. CoLLIns of Illinois. No, that is true, but, ultimately, that
happened.

Mr. DALE. But you people convicted me before I ever went to
trial. I went back and watched the tape of it yesterday and it just
irritated me even deeper than it did then.

Mrs. COLLINS of Illinois. Let me say this; if, in fact, you were
convicted, as you say by this panel, I believe it was in an effort to
find out actually what had happened. And if you felt that you were
offended in some way, know, too, that that is part of our respon-
sibility, to try to get at the truth of whatever the matter was.

We hope that you do not now feel that we have created a great
injustice to you, especially in light of the fact that the jury found
that that was not the case.

Mr. DALE. Well, I will reserve my feelings.

Mrs. CoLLins of INinois. Well, fine, that is fair enough.

Now, yu have taken issue with the White House’s allegation of
financial mismanagement and shoddy accounting. And on May
14—I keep on doing this Peat Marwick because I want to give you
a chance to clear it up.

On May 14, 1993, the Peat Marwick reviewers discovered dis-
crepancies in the recording of accounts in the petty cash fund. We
talked about that. And the following day, you told Daniel Russell,
one of those CPAs, that you had located some of the missing funds.

I am going to quote from the FBI interview notes to you. And it
says you told Mr. Russell that you had to set aside money to use
as kickback money to move luggage. Dale, he says, did not supply
the money earlier because he knew it did not look good and it re-
flected that he had done a poor job of accounting.


67

Average daily balance.
Total receipts (for the month).
Current balance on hand as of April 30, 1993.

Findings:
We noted the following information (cents omitted

Beginning balance at January 1, 1992 ... $636,813,
Total receipts, January 1, 1992~April 30, 1993, 10,446,951
Total disbursements, January 1, 1992-Apri 30, 1993 - _ *10,709,680
Ending balance at April 30, 1993 374,084
——=

Range of average daily balance:
High in January, 1993 1,080,247
Low in March, 1993 245,195

Objective 8; To gain an understanding of the volume of air charter service fees
for the period January 1, 1992 through May 15, 1993 and to determine the recipient,
of the fees.
Procedures:
(a) Obtained the check books from January 1, 1992 through May 15, 1993 and
noted checks disbursed in payment of either commercial or chartered air service.
(b) Summarized the detailed information gathered in (a) above by individual car-
rier/airline.
Findings:
In summary, the following airlines or charter services were disbursed funds from
the press travel fund from January 1, 1992 through May 15, 1993 (cents omitted):

Domestic Travel:

Uttar, Ine . $428,733,
Airline of tt cas 2,123,939
Pan Am World Airways 100,815
Miami Air International .. 343,024
2,996,511

International Travel:
1,479,247
892,064
154,579
2,525,890

Grand Total nes a sot 5,522,401

Objective 9: To determine that all disbursements made to Ultrair, Inc. or Airline
of the Americas since September 1992 were included in the overall trip charges on
the trip worksheet for a specific trip.

Procedures:

(a) Assembled, from the check book stubs, a listing of all disbursements made to
Ultrair, Inc. or Airline of the Americas since September 1992.

(b) Traced the check amount to the respective trip worksheet, or trip worksheets
in the case of one check paying for more than one trip. We noted whether there
were any discrepancies between the amount disbursed to the charter company and
the amount indicated as the “actual” cost on the trip worksheet.

(c) Noted whether there were other types of trip charges (e.g., hotel, truck rental,
telephone) on the same trip worksheet for the trip numbers being reviewed.
Findings:

(a) All checks disbursed to Ultrair, Inc. or Airline of the Americas were included
on trip worksheet(s).

(b) We noted that these trip worksheets did contain other trip costs (i.e., there
were other charges in addition to the charter service such as phone charges, hotel,
truck rental, ground transportation, etc.).

(c) We noted that the check amount disbursed to Ultrair, Inc. or Airline of the
Americas was different than the amount noted as actual cost of “press charter.” The



104

Mr. CLINGER. I am going to now announce that we will have, I
understand, a—there are questions that still Members would like—
I believe we have completed one full round of questioning. There
are Members who still have questions they would like to ask. We
will go until all the questions have been asked and responded to.
I am, however, going to limit the time for this round to 3 minutes
per questioner and we will start.

Mr. SHaAys. Mr. Chairman, could I question you on why we are
doing that? I have been here all day. I have heard accusations on
colleagues on the other side.

Mr. CLINGER. All right. I hear you and you want to go the full
time. I would then ask unanimous consent that the time be limited
to 3 minutes.

Mr. Suays. I object.

Mr. CLINGER. An objection is heard. I will take the first round
of questions.

And let me ask you this, Mr. Dale. I think it is important, when
you were fired—in fact this is a question to be addressed to all of
the members of the panel here. It was the 19th of May; wasn’t it?

Mr. DALE. Yes, sir.

Mr. CLINGER. Some of you were abroad at the time and heard
about it through the news media or in personal phone calls; is that
correct?

Mr. BRASSEUX. Yes.

Mr. McSWEENEY. Yes.

Mr. CLINGER. Were you told—and you have made this point but
I think it really has to be hammered home. Were you given reasons
for the firing? Were you told that this was for cause?

Mr. MAUGHAN. No, sir.

Mr. DALE. As I remember, the terminology was that we were
being terminated because they were going to outsource some of our
services. They did make reference to the Peat Marwick audit.

Mr. CLINGER. But did you see the Peat Marwick audit?

Mr. DALE. No, I did not.

Mr, CLINGER. And you subsequently became aware that the Peat
Marwick report was not even finished at that point?

Mr. DALE. Yes, sir, I’m aware of that.

Mr, CLINGER. So none of you were ever given—did you receive a
copy of the Peat Marwick report from personnel in the White
House subsequent to your firing?

Mr. DALE. No, sir.

Mr. CLINGER. So none of you were ever shown that as a result
or given the reason that this was the cause of your firing?

Mr. DALE. No, sir.

Mr, McSWEENEY. Mr. Chairman, in fact, I was away and got
back that Monday, the 24th, and had learned about everythin;
through—through TV and actually when I got to personnel, I ha
asked on three different occasions for something in writing from
the White House as to why I was fired and I had put before me
by personnel a prepared letter of resignation stating that I was re-
signing due to change of administration.

Mtr LINGER. And you refused to sign that letter.

Mr. McSWEENEY. I refused to sign that, that’s correct.

Mr. CLINGER. And then you were escorted out.


45

as if they were treated unfairly, and it sounds to me as if an injus-
tice, was done to them, and that is wrong. Nobody should apologize
to them.

But, Mr. Chairman, I would hope this committee is used in a
nonpartisan way to take a look at all of the injustices, all of the
miscarriages of justice that take place to all of our Federal employ-
ees, and I hope that we can broaden our inquiry and broaden our
scope and take a look at other problems that Federal employees are
facing as well.

Thank you, Mr. Chairman.

Mr. CLINGER. I thank the gentleman, and I now recognize the
gentleman from Connecticut, Mr. Shays, for 5 minutes.

Mr. SHays. Thank you, Mr. Chairman.

Mr. Chairman, I am ashamed of this committee but only for one
reason, that we are not having people on the other side asking
questions that need to be asked. And I know that when I serve
on the HUD investigation as a freshman and new Member on the
Republican side and we looked at HUD and we looked at the Re-
publican administration, I had some of my Republicans say, well,
you know, Democrats look at Democrats and Republicans look at
Republicans. But I felt, and a lot of other people felt, we should
just look at the issue.

I apologize first to you, Mr. Dale. I represent a part of this Gov-
ernment, but on behalf of whatever part of this Government I rep-
resent, I apologize to you, I apologize to your wife, I apologize to
your children. And for each of you here, I apologize for whatever
part of this Government I represent, because I am also ashamed
of this Government now that I serve in and that I deeply love.

I am ashamed of an administration which had totally the right
to fire each and every one of you. You knew when you got the job
you were not hired as a civil servant, you were not protected by
civil service laws, but you at least knew if you were let go, they
would just do it.

We didn’t know that they would use the IRS and the FBI to get
you to do it and justify it for cause. Now, I’ll tell you what I’m trou-
bled by, Mr. Dale. I’m troubled that you and only one other person
had control of money. I think that’s a recipe for a disaster, and you
may be an extraordinarily honest man and you are guilty of no
crime. But what a temptation. And so that process is wrong and
it shouldn’t exist, so you change the process.

And what I’m somewhat ambivalent now, yes, we're going to get
the IRS here and we're going to get the FBI here and we're going
to say how could you have done this; and what they are going to
do is work harder than ever to prove each and every one of you is
guilty because now they have to defend themselves.

So, Mr. Dale, in a way, you can’t even speak out because now the
IRS is investigating you. And what an un—an incredibly out-
rageous position to put you in. I’d like to know from each of you
how much you have had to spend to defend yourself, and I’m going
to start from my right to the left.

Mr. VAN EIMEREN. I am one of the fortunate ones. I am not out-
of-pocket anything.


87

Mr. KANsorskI. I should not be quoting that way. Serious finan-
cial management and weaknesses existed. .

Mr. BurTON. Is that an indictable offense, if that is the case?

Mr. KaNJorsKI. No, but what I am concluding from that. I am
not sure, I am not castigating you or the White House. I am trying
to figure out—as a Member of Congress, if I walk into my office,
or my wife walks into my office, and she gets a call from a very
responsible friend of ours that is in business, a banker, a lawyer,
someone who has no reason to misinform you of something, and he
tells her that there is mismanagement in my office, funds are bein;
mismanaged, are we not expected to take some sort of action?
would expect——

Mr. DALE. Absolutely.

Mr. KaNnuorski. I would expect her to inform my Chief of Staff
immediately. I would expect her to inform me immediately. And
not having dealt with this, I would probably call the FBI or call
someone and say, “what is this,” knowing full well these are my
funds, these are Federal funds, or at least funds that Federal offi-
cials are responsible for.

Mr. DALE. No, sir, you are wrong, there were no Federal funds
involved.

Mr. KANJoRSKI. That Federal officials are responsible for. If
those funds were embezzled it would be the obligation of the U.S.
Government to make that trust fund whole. So to that extent, we
were the full faith and credit underwriters of the funds you held.

Mr. DALE. No, sir, you were not. The U.S. Government did not
make up the $40,000 when UPI filed bankruptcy. I had to make
it up. The United States Government—

Mr. KANJORSKI. Of course you have to make it up. We will go to
any responsible party.

t me ask you on that question. You had to make up—if I may
indulge the committee for another 2 minutes because I yielded.

Mr. CLINGER. I will indulge the gentleman for one more question.

Mr. KANJORSKI. The case where you had to make it up has a
very simple answer. Why did you not contest the fact you are not
responsible and should not have had to make it up, in order to
have that case litigated in a court of law? Unless they can prove
you are responsible, you do not have to make it up.

Mr. DALE. I didn’t have that option. Or I didn’t think I had the
option.

Mr. KANJorsKI. I understand the costs you went through, I un-
derstand the embarrassment, all those things. I am just saying, do
you feel that we ought to go on with this hearing and really go into
finding out and calling these prosecutors in and calling that Grand
dury in and determining whether or not there is something here
that we are not aware of, or was this something that happened
that was not perhaps handled in the best way but there was no
maliciousness to it?

Mr. DALE. No, sir, I would not agree with that.

Mr. CLINGER. The gentleman’s time has expired.

I am now pleased to recognize the gentleman from New Jersey,
Mr. Martini, for 5 minutes.

Mr. MartTINI. Thank you, Mr. Chairman.


8

last week that he had no idea what she did with the Travel Office records provided
to Peat Marwick. The very revealing “Watkins memo” was found in Ms.
Thomasson’s “messy files.” Ms. Thomasson who played a key role in firing the em-
ployees also was not called by the prosecution. Mr. Watkins, the individual who
communicated the firings to these employees, was himself fired for taking a White
House helicopter on a mid-week golfing trip. The prosecution didn’t call Mr. Watkins
as a witness either.

When the Justice Department went to trial in the case of U.S. v. Billy Dale they
had to concede that many records that they knew had once existed were missi!
and unaccounted for. The FBI took almost a month to get into the White House an:
secure any documents. We have heard no plausible explanation for this Jong delay
in securing the records. Now we have again just learned from the Justice rt-
ment that many of the documents they supposedly had obtained from the ite
House never actually left the White House compound and were instead maintained
at the White House. Finally, the head of the White House Records Management Of-
fice raised red flags to Staff Secretary John Podesta that documents were being
tampered with and improperly handled in the days following the firings. Even
World Wide Travel employees who came in from Arkansas to assist in the Travel
Office firings were concerned with documents being “trashed’ the office. The
notes from the White House Management Review are full of questions asking where
the documents were, but Mr. Podesta, who was put in charge of the White House
Management Review failed to include this information in his report.

It seems that “due process” and “integrity of records” sto at the White House
door. Why were the Justice Department and the FBI willing to suspend normal
practices when the White House was involved? Is the highest office in the land
given a pass on normal criminal investigative procedures?

As a result of our investigation, so far as it is clear to me, the alleged “concern”
about financial mismanagement that we have heard often in the past few weeks was
always a cover for a decision that had been made long before Peat Marwick ever
crossed the threshold of the White House. As David Watkins testified last week and
as his notes revealed, on May 12, 1993—two full days before Peat Marwick came
in—the First Lady expressed her wishes to Harry Thomason that the Travel Office
employees all be fired that day.

One week later on May 19, 1993, Dee Dee Myers claimed on behalf of the White
House that the seven Travel Office employees had been fired based on a report
which did not exist of an audit which never occurred. Peat Marwick documents we
have received from the White House as well as Vince Foster’s notes indicate involve-
ment of the White House in dictating the terms of the Peat Marwick review, and
editing the review. In other words this much touted “audit” was actually a non-inde-
pendent, non-audit.

Mr. Larry Herman, who headed up the review, told Committee staff of pressure
on Peat Marwick to finish the review quickly once they had cited it as justification
for the firings. No doubt this was so the White House could substantiate their
claims of financial mismanagement. The Peat Marwick report itself never once men-
tions the words “abysmal mismanagement” and Mr. Herman told the Committee he
would not use such terms. In fact Mr. Herman told GAO investigators he was sur-
prised by the decision to fire the employees before the review was even completed
and he told the Committee that he himself did not think his review warranted the
firings.

Frankly, I have been very disappointed in the total refusal of my colleagues on
the other side of the aisle to approach this investigation with any semblance of an
open mind. As my colleague, Mr Shays noted in our last hearing, many of us have
sat through countless investigations when our colleagues were in the majority and
in many if not most cases worked in a bipartisan manner even when it hurt our
own party. As Meg Greenfield pointed out earlier this week, there does not need
to be a “murder mystery” to warrant serious review of a matter by Congress.

Just this morning we all honored one of our colleagues, former Congressman Mike
Synar who passionately and aggressively pursued various investigations in this

‘committee. | worked in a bipartisan fashion with Mike Synar in many investiga-
tions when Republicans were in the White House and have tried to continue that
spirit as Chairman.

Abuse of power is always an important and relevant issue in a government that
is the size of ours. Giving these individuals the opportunity to tell the American

ple the ugly truth about how they were mistreated and maligned by this Admin-
istration is long past due. I welcome you gentlemen this morning.

Mrs. CoLLins of Illinois. Thank you, Mr. Chairman.



WHITE HOUSE TRAVEL OFFICE—DAY THREE

WEDNESDAY, JANUARY 24, 1996

HOUSE OF REPRESENTATIVES,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The committee met, pursuant to notice, at 11:30 a.m., in room
2154, Rayburn House Office Building, Hon. William F. Clinger, Jr.
(chairman of the committee), presiding.

Members present: Representatives Clinger, Gilman, Burton,
Morella, Shays, Schiff, Ros-Lehtinen, McHugh, Horn, Mica, Blute,
Fox, Gutknecht, Martini, LaTourette, Ehrlich, Collins of Illinois,
Wise, Owens, Slaughter, Peterson, Sanders, Thurman, Maloney,
Barrett, Taylor, Collins of Michigan, Norton, Moran, Meek, Fattah,
and Holden.

Staff present: James Clarke, staff director; Judy Blanchard, dep-
uty staff director; Kevin Sabo, general counsel; Jonathan Yates, as-
sociate general counsel; Barbara Bracher, chief investigative coun-
sel; Barbara Comstock, investigative counsel; Joe Loughran, inves-
tigator/professional staff; Edmund Amorosi, director of communica-
tions; Judith McCoy, chief clerk; Cheri Tillett, assistant chief clerk/
calendar clerk; Cissy Mittleman, David Jones, professional staff;
David Schooler, minority chief counsel; Ronald Stoman, minorit;
deputy director; Donald Goldberg, minority assistant to counsel;
Miles Q. Romney, minority professional staff; Ellen Rayner, minor-
ity chief clerk; and Cecelia Morton, minority office manager.

Mr. CLINGER. Good morning. The Committee on Government Re-
form and Oversight will come to order.

As we did at the last hearing in this matter, I will give an open-
ing statement. I will then recognize Mrs. Collins for an opening
statement. Others who wish to have opening statements please
submit them for the record or use part of their time during the
question period to make those statements.

“So what?” we have been hearing from many of my Democratic
colleagues over the past few weeks in regard to this investigation.

So what if the White Hcuse fired the Travel Office employees
and high ranking officials failed to tell the real information to nu-
merous investigators or provided “vague and protective” informa-
tion, to use . Watkins’ words, about the real reason for the
firings and thwarted countless attempts to get at the truth and
really wasted taxpayer dollars on incomplete investigations?

So what if the new administration wanted to throw contracts to
their friends and get a good press story, again as stated by David
Watkins, by alleging wrongdoing by the former staff?

@



42

Mr. CLINGER. The gentlewoman’s time has expired. And in re-
sponse to the question, shouldn’t one of our concerns be how we
could improve the Travel Office, I think that is obviously one of our
purposes here, as well as how we can improve travel in the Depart-
ment of Commerce, travel in the Department of Energy, where
there seem to have been serious problems that have not yet come
before this committee but perhaps shall.
wet this, time I will recognize the gentlewoman from the State of

aryland,

Mrs. MALONEY. Will the chairman yield?

Mr. CLINGER. The time is Mrs. Morella’s.

Mrs. MorELLA. Thank you, Mr. Chairman.

I want to commend you, Chairman Clinger, to hold this impor-
tant hearing to further investigate the injustice that was done to
our seven Federal civil servants. I really want to thank our wit-
nesses for their years of loyal Government service and for appear-
ing before us today.

'e know it is not easy to relive this over and over again. The
effects that the firings have had on your lives and the lives of your
families is really inexcusable, and I find it to be shocking.

White House employees, whether they are part of the civil
service or political appointment process, serve at the pleasure of
the President. The President will restructure the White House ac-
cording to perceived needs or the plans of the administration and
no one has questioned that.

Indeed, Mr. Dale, you indicated that you and your colleagues an-
ticipated there might be changes in the Travel Office. But to fire
seven loyal civil servants under the pretenses of criminal conduct
without real evidence before a report was even complete is abso-
lutely outrageous.

1 am particularly glad that we are holding a hearing to focus on
the impact of these political actions on the lives of those of you who
were involved, something that politics have overshadowed so far.
The Travel Office staff members were career Government employ-
ees, and we have heard from between 9 and 32 years experience
in the Travel Office itself, including service to both Democratic and
Republican Presidents. They reported to work one day, were told
that they were fired as a result of their poor performance and mis-
management.

Further, a White House spokesperson told me that their termi-
nation was also due in part to findings of an FBI investigation, in-
cluding potential criminal conduct. They were told to clear out
their belongings after up to 32 years of service, were escorted from
the White House grounds in a cargo van by the Secret Service.
What a reward that is for loyal service. They returned home to
friends and family who had learned on television that they were
fired in conjunction with an FBI investigation.

You know, Mr. Chairman, it is precisely these human effects that.
warrant these hearings. Federal employees, regardless of where
they work—at the Justice Department, Defense, White House—
should not be fired on the basis of false allegations. What is so
painfully apparent in this case is that false charges were brought
against dedicated, long-term Federal employees to justify their
firings.


73

around again, dropping memos on tables where only the First Fam-
ily and a few Secret Service people are there. It boggles the mind.

The Chairman mentioned in introducing me that I chair one of
the subcommittees, the one on Government Management, Informa-
tion, and Technology. Let me ask you, one of our recommendations
is that the Executive Office of the President, the White House,
ought to have an independent Inspector General. That would have
solved a lot of these problems. Someone that is there as a profes-
sional, who can go in and analyze a situation, conduct the appro-
priate management audit, or financial audit.

I have listened to my friends on the minority side today do a lot
of chatter about this being an audit. Anybody that has ever run an
organization knows this was not an audit of finances, this was an
audit of practices. The blame for lack of computers and everything
else could go over several administrations.

I remember when President Bush went in there, he could not be-
lieve the lack of a communications system. The White House had
not kept up with technology.

Let me ask you, Mr. Dale, do you have any feelings on the value
of an Inspector General in the Office of the President, the White
House, would that be helpful?

Mr. DALE. I personally think that it would, yes.

Mr. Horn. Any other opinions on that?

Do you all think it might be helpful to have an independent offi-
cial, not beholding to the President, who is there to make sure the
public interest is done?

Mr. McSWEENEY. I think it would have been helpful to have any-
one to turn to. The day that I walked out of the New Executive Of-
fice Building there was nowhere to turn and the Government was
after me.

Mr. Horn. Any other feelings?

Mr. VAN EIMEREN. I can only agree with that.

Mr. WRIGHT. Independent is the key word.

Mr. Horn. Independent. Not beholding to any President, but
serving all Presidents, just as you served all Presidents, regardless
of party and regardless of ideology.

One of the things I think over the years that many of us have
been proud of in this Government, when you look at the profes-
sionals in the Office of Management and Budget and the profes-
sionals in the White House, these truly were servants of the Presi-
dency, not a particular President, but getting the job done whoever
is President.

I have an editorial here, Mr. Chairman, that is titled: “Leave
Billy Dale Alone.” It is by the Scripps Howard News Service. It ap-
peared in the leading newspaper in my district, the Long Beach
Press Telegram, on January 12, 1996.

I would like to include it in the record at this point.

Mr. CLINGER. Without objection, so ordered.

[The information referred to follows:]


82

Mr. DALE. At first we thought it would, but as it turned out, it
didn’t. But we were very limited in what we could introduce in
court as far as White House documents.

Mr. GUTKNECHT. Mr. Chairman, I think these gentlemen have
been more than willing to testify before us here today, so I don’t
want to go too long, but I just want to say, and maybe I should
ask, which of the three actually had to attend their father’s funeral
still being sullied?

I can’t imagine anything worse. This administration, which came
into office saying “I feel your pain,” I cannot imagine anything
more reprehensible than that. And then I understand that one of
you, and I cannot remember which one, got a call from your daugh-
ter to say something to the effect, say it isn’t true, dad.

Mr. BrASSEUx. Exactly. Yes, sir. That is hard to take.

Mr. GUTKNECHT. As a father of two daughters, I could not imag-
ine. When we file for public office, in effect, we say that we can be
called almost anything in the book and it is all legal and we don’t
have any real recourse. Obviously, you do have ultimately some re-
course, perhaps in a civil suit. I am not an attorney and I am not
going to give any advice, but it seems to me you have awfully
strong grounds and this would be a very fertile field to have a case
tried in DC, where you have an awful lot of Federal employees.

I have to say I am amazed at how calm you are. Because it
seems to me that if it were me I would have an anger and a rage
burning inside me. I would be like a volcano, because I cannot be-
lieve what you folks have been through over the last several years.

It seems to me that we have Chairman Clinger, who is probably
among the most moderate nonpartisan Members of this Congress,
who, I think finally, has begun to exhibit some of the rage that we
are beginning to feel about the activities that have taken place over
the last several years.

I did not know until my colleague, Mr. Davis, just announced
that there are now even more documents finally coming forward,
documents that we have requested for over a year, and this sort
of drip, drip, drip of new information, new documents, new testi-
mony, it seems to me it is unbelievable.

But there is one word and we have heard from the other side,
and we have heard from the administration, we have heard from
some of their lawyers, we have heard lots of legalisms, we have
heard half-handed excuses, but the real word is moral. | mean
there is something, I don’t know what obstruction of justice really
is, and I don’t know if we have a legal definition of abuse of power,
but I know this. This is wrong. It is morally wrong what they did
to you for their own political reasons. And it seems to me we do
have some responsibility, moral responsibility, if you will, to get to
the bottom of this and make certain that, No. 1, the people who
were responsible are punished, and No. 2, that this does not hap-
pen again. .

I thank you all for coming here today. We appreciate what you
have been through and we are going to do everything we can to
make it right.

Mr. CLINGER. I thank the gentleman.

And I am now pleased to yield to the gentleman from Ohio, Mr.
LaTourette, for 5 minutes.


WHITE HOUSE TRAVEL OFFICE—DAY THREE

HEARING

BEFORE THE

COMMITTEE ON
GOVERNMENT REFORM
AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
SECOND SESSION

JANUARY 24, 1996

Printed for the use of the Committee on Government Reform and Oversight

ee

U.S. GOVERNMENT PRINTING OFFICE
23-472 CC WASHINGTON : 1996

For sale by the U.S. Gi
Superintendent of Documents, Co

ISBN 0-16-052471-7



108

Mr. Dale, it is my understanding that the criminal case against
you is based in part on the fact that from February 1988 to April
1991 on 55 different occasions you deposited checks into your per-
sonal account and that these checks were refunds from different
vendors which were intended to reimburse the employees of the
press for their expenses. Are these facts correct?

Mr. DALE. Essentially, yes.

Mrs. MALONEY. They are essentially correct.

It also is my understanding from the documents that you did not
tell any of the other witnesses on the panel or anyone else that you
were depositing these checks intended to reimburse the press, the
employees of the press, into your personal account; is that correct?

Mr. DALE. That’s correct. Along with a lot of other things I didn’t
tell them,

Mrs. MALONEY. Mr. Dale, most people would at least be some-
what suspicious if a Government employee deposited checks in-
tended to reimburse the press into their personal account. Why
didn’t you tell someone else in the office about this rather unusual
procedure if for no other reason than to protect yourself from sus-
picion?

Mr. Date. Because I had logs to prove where each and every dol-
lar that was spent and because it was my responsibility to main-
tain the surplus. That is why I didn’t tell them,

Mrs. MALONEY. Mr. Dale, the Travel Office maintained a Riggs
bank account.

Mr. DaLe. That’s right.

Mrs. MALONEY. According to your attorney’s opening statement
at trial, the reason you deposited checks intended to reimburse the
press into your personal account is that you needed to establish a
second account as a way to avoid having to charge the press for
each and every cost. Your attorney characterized this system, “as
a disastrous business judgment.”

In retrospect, would it have been more reasonable to simply set
up a second account called a Travel Office Account at a bank?

Mr. Date. No, ma’am. It was a disastrous decision on my part,
I readily admit that, but there’s no other way that I would have
done anything else in the Travel Office other than that. I—if I set
up another, a second account at another bank, that’s going to mean
that this surplus is increasing and I’ve got to work it off. The
money that I cashed from those checks was in the Travel Office at
all times unless—up until it was spent on official trips.

Mrs. MALONEY. And how did you work it off?

Mr. DALE. I worked it off by paying for unused hotel rooms. I
worked it off by paying for catering, for electricians in press cen-
ters, for the ground handlers in a place like Seoul, Korea, Singa-
pore, Indonesia, places like that.

Mrs. MALONEY. Mr. Dale, your—according to your attorney’s
opening statement, you used your own personal cash that you kept
at home for various cash expenses that you and your staff incurred
on trips. You then reimbursed yourself with the reduced collection
intended to reimburse the press. You also used cash that you took
from the White House travel account at Riggs bank on these same
trips




109

How did you keep track of what money came from the house and
what money came from the Riggs account? For example, did you
keep the money in separate pockets? How did you kee,

Mr. Date. No, ma’am. When I was traveling before 1988, there
were many times, especially overseas, that I had to take money out
of my own personal pocket to pay for expenses that I incurred on
behalf of the press and reimburse myself once I got back to Wash-
ington.

And when I traveled overseas if I took $15,000 with me in petty
cash, and if I spent it, then I allocated it from the different funds
once I got back and determined what the other trip expenses were
and what expenses I was going to bill to the press.

Mr. CLINGER. The gentlelady’s time has expired. I now recognize
the gentleman from Indiana, Mr. Burton, for 5 minutes.
ia Burton. I yield about 10 seconds to my colleague from Flor-
ida.

Mr. Mica, Mr. Chairman, I think I have heard it all in the last
36 months I have been in Congress, missing files, reappearing files
and stuff like that. I have got to leave, fellas, but I heard, heard
it all, it took the cake this morning when you told me about the
roses that you got then they took them away. So as I leave, I got
you each a rose and you can keep—you guys can keep these.

Thank you, Mr. Chairman.

Mr. BuRTON. I am afraid, Mr. Chairman, this is going. to be a lit-
tle longer than 15 seconds but I guess I will have to live with it.

Let me—can you hurry it up, Mica? You are on my time.

Mr. CLINGER. You can proceed. I think they can answer.

Mr. Burton. I have a question for Mr. Dale. He has to put his
rose on or something.

Mr. Mica. We won’t take these back, I guarantee you.

Mr. CLINGER. The gentleman from Indiana.

Mr. BurTON. I have been on the International Operations and
Foreign Affairs. And our military attache when we travel around
the world carries about $15,000 to $20,000 around the world. When
you go to a Third World country, when you land you have to pay
a landing fee and sometimes it has to be in cash. When you go to
a McDonald’s in the middle of the night sometimes it has to be
paid in cash. I want to ask you, Mr. Dale, when you traveled with
the press corps did you encounter the same kind of situation?

Mr. Date. Yes, sir.

Mr. BurTON. That is the reason why he had to have money at
his home when he left at 3 in the morning to go on an international
trip because he had to pay for these incidental expenses that the
press corps was going to incur and these were not Federal funds.

Now, I want to say one more thing. He was found not guilty and
for the Democrats in this Congress to retry him before this commit-
tee is—is unbelievable. He has been acquitted. And what they are
bringing up right now are things that are normal—a normal course
of business in traveling around the world for the press corps or for
this Government when we take an Air Force plane.

Now, let me get into another thing here. One of the questions
that has been raised by the minority is, we are going after the
White House, we are going after the First Lady and we shouldn’t
be doing that, and one of the things that we have raised today is


30

While on active duty, I served at Eniwetok Atoll in the Marshall
Islands, which was the Pacific Atomic Proving Grounds for the
United States. I served until August 1952, I was released from ac-
tive duty, returned to Northport where I finished high school,
worked in a shell plant until August 1953, at which time I enlisted
in the USS. Air Force and spent the next 19 years on active duty.
My primary job in the Air Force was in cryptographic operations.

During my career in the U.S. Air Force, I had numerous assign-
ments throughout the world. One of these assignments was at
Shepperd Air Force Base, TX. While at Shepperd, I worked as a
cryptographic operations instructor. During this assignment, I was
one of 20 instructors interviewed for duty with the White House
Communications Agency at the White House. Of the 20 inter-
viewed, 3 were selected for duty at the White House.

During my 5 years at the White House, during the Johnson and
first Nixon administration, I worked as a communications center
specialist. At the end of my 5-year tour, I spent a year in Vietnam.
Upon returning to the States, I was assigned to the Defense Com-
munications Agency with a duty station in JCS—Joint Chiefs of
Staff—communications center at the Pentagon. I worked there
until I suffered a heart attack in November 1971.

1 was hospitalized for 2 months, then returned to light duty until
I was placed on TDRL—Temporary Disabled Retired List—in June
1972. I remained on TDRL until December 25, 1973, at which time
I was placed on the Permanent Disabled Retired List because of my
inability to pass a physical for worldwide duty.

I worked two civilian jobs after that, one as a service station at-
tendant and the other as a management trainee for a consumer fi-
nance company after I was medically retired. I returned to the
White House as a civil service employee in September 1973, and
worked in the Telegraph and Transportation Office as a commu-
nications officer and a travel assistant, as required.

I was employed as a civilian in the White House for a period of
19 years and 9 months, during the Nixon, Ford, Carter, Reagan,
and Bush administrations and the first 4 months of the Clinton ad-
ministration, at which time I was fired along with six other em-
ployees in the Telegraph and Travel Office, supposedly for financ-
ing mismanagement and sloppy bookkeeping.

While employed in the Telegraph/Travel Office, I was responsible
for the record—which was printed communications—all unclassi-
fied, both sent and received by the President, Vice President, and
staff members of the Executive Office of the President and the
White House Office of Administration. This duty included prepar-
ing and transmitting large books, or batches, of mail-gram invita-
tions to social events, as directed by the Social Office.

I also made bank deposits to the White House Press Travel Fund
bank account to Riggs National Bank located on Pennsylvania Ave-
nue NW, Washington, DC. This entailed taking checks that were
received from the press participants of a trip in support of the
President, running a tape on them, verifying the tape to be correct,
usually with another member of the office staff, but not always,
due to personnel being out of the office on trips supporting the
President.


89

our First Lady is still insisting that she had no role other than she
was concerned but she did not order the firing, and I go back to
Mr. Watkins. Initially, in the initial memo by the White House un-
dertaken to look into this issue, most of the blame seemed to have
been placed on Mr. Watkins and his handling of this, and there
was a noticeable absence of any of the conversations with the First
Lady or Mr. Thomason or anyone else. And one has to ask, in my
opinion, and the American people have to ask, if there was nothing
wrong in the handling of this matter in the manner in which you
were fired, then why is it that everybody is trying to distance
themselves from the actual responsibility of firing you?

Why is it that Mr. Watkins took the time after the fact to write
this soul-searching memo to say he was going to straighten out the
reference, the record, and clearly did straighten out the record in
my opinion, having heard his testimony and having read that
memo. He certainly does in that memo clearly place the respon-
sibility for these firings back into the Oval Office through the First
Lady, in my opinion. So that is a question that I think should be
raised by everyone who tries to minimize these hearings.

If there was nothing wrong, and if it was such a minimal matter,
as we hear on the other side constantly, then why is it that no one
has stepped forward and clearly said this was my responsibility?
They have shifted it back and forth and they are continuing to shift
it back and forth.

And IJ am satisfied they know that the evidence is there now that
the manner in which you were treated was inappropriate, was ma-
licious, and really was a misjudgment on their part to try to gain
some political spin.

let. me just close by saying what I said last week but I think
it is worth saying, anyone who read the Watkins memo last week,
and I invite anyone in the American public to do so, and anyone
who listened to his testimony would clearly come away from the
plain meaning of those words where the authority was and the de-
cision was, and as far as I am concerned when someone says there
was pressure, all hell would break out, uses that type of terminol-
ogy throughout that memo, he did not have the free will to exercise
his decision on his own and he knew very well that the decision
had to be made, had to be made quickly to fill those slots with their
people and you unfortunately have been the victim, in my opinion,
of a very malicious act the very least, putting it mildly.

So let me close by saying on behalf of the American people and
for those that we can speak on behalf of, we certainly do apologize
for the travail that you have been put through and the ordeal that
you and your families have been put through, and I say that sin-
cerely, and thank you for being here on this very long day. Thank

you.
[The prepared statement of Hon. William J. Martini follows:]

PREPARED STATEMENT OF Hon, WILLIAM J. MARTINI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY

v1 Want to join in commending Chairman Clinger for holding this important. hear-
ing today.

ir. Chairman, in previous statements the White House has continually asserted
that the First Lady, Hillary Rodham Clinton, did not play a significant role in this
matter.


84

In today’s hearing we have sort of heard, well, OK, you have
been indicted, you have been acquitted, and I think Mr. Davis
made the observation, and all of us said, who used to be prosecu-
tors, Mr. Davis used the example of a ham sandwich. That is an
expression we have in the prosecutorial business. But now there is
this plea agreement and so that is being trotted out at the third

earing.

And in the time since we have had our other hearing, it is incom-
prehensible to me if the Government has documents in its posses-
sion that tends to show that a person charged a crime is not guilty
of that crime and they will not release those documents to let a
person defend themselves, I think almost everybody would be in a
position that you found yourself in as you attempted to defend
yourself. So I am sorry that that is the way the justice system has
unraveled for you.

I want to follow up on a couple of observations that were made
by some of my colleagues, and going back to Ms. Cornelius, who I
believe is the third cousin of the President of the United States. I
think in response to Mr. McHugh’s question you said Mr. Watkins
asked you to teach her the travel business; is that right?

Mr. DALE. That’s right.

Mr. LaToureETTE. From the documents I reviewed, in order to
teach her the travel business because she would be a new employee
coming into an office staff with gentlemen who had been there be-
tween 9 and 32 years; and you Setermined, or did you not suggest
that she go to Dallas to take a course to learn the computer system
that you use in the Travel Office?

Mr. DALE. Yes, sir, I did. As a matter of fact, 1 already had the
arrangements made and she was scheduled to go on Monday morn-
ing, May the 17th.

Mr. LaTouretrE. But Ms. Cornelius, the third cousin of the
President, did not go to Dallas to learn the computer system, did
she?

Mr. DALE. No, she did not.

Mr. LaTourRETTE. Why is that?

Mr. DALE. I think she thought she was going to be taking over
the office and she would leave the computer operations to the other
people.

Mr. LaTourETTE. When you were asked to teach her the travel
business, were you aware at that time she had authored a memo
the previous December talking about how she could come in and
run the Travel Office?

Mr. DALE. I did not come into possession of that until 2, 3 or 4
days before we were fired.

Mr. LaToureETTE. You are aware as you sit here today that part
of the brouhaha that eventually consumed you on May 19 were
based upon allegations that Ms. Cornelius was making to others in
the administration, are you not?

Mr. DALE. Yes, I am.

Mr. LaTouretTe. You mentioned in your opening remarks, and
I forget your exact words, but you put it rather well, and it was
rather polite, that somehow she was indicating that you had ac-
quired possessions that she didn’t think Federal employees could


12

out his entire administration. But that was not to be, as the Clin-
ton campaign, transition teams, and the Clinton administration
had other designs on the White House Travel Office.

During the 24 years between May 19, 1993, and the day I was—
the day I was fired from my position as Director of the Travel Of-
fice and the day I finally got to testify at my trial to defend myself

inst the false charge that I embezzled money from the press, I
did not attempt to answer that charge or any of the other false
charges that were leveled at me concerning my management of the
Travel Office. It was not easy for me or my family. We were sub-
jected to the most intense intrusions and harassment you can
imagine. We were sustained during those very difficult times by
our faith and the many friends and professional colleagues who
stood by our side.

I had hoped that after the jury found me not guilty so quickly
we could return to the very quiet and simple life we used to live.
However, since the release of David Watkins’ memorandum de-
seribing how he was supposedly pressured to fire the entire staff
at the White House Travel Office, I have been subjected to false at-
tacks at least as vicious as the ones I was tried and acquitted. This
time, however, there is no trial pending. This time I will not sit si-
lently and take it.

The Clinton administration and the spokespersons have truly
gone into full attack in an effort to hide the truth. In a series of
radio, television, and print interviews, Mrs. Clinton has sought to
minimize her involvement in the firing. In interviews with Barbara
Walters and again on National Public Radio, Mrs. Clinton stated
that her only involvement was to express concern about the finan-
cial mismanagement that was discovered when the President ar-
rived. Since the President arrived in January 1993, one can only
assume she was referring to purported financial mismanagement
that was discovered at or about that time. Her lawyer, David Ken-
dall, repeated this claim on Nightline and Ann Lewis, the deputy
director of the Clinton-Gore campaign did the same on a National
Public Radio talk show. Over two Sundays, Robert Bennett first
claimed on This Week With David Brinkley that I had agreed to
plead guilt to embezzlement and followed this up on Face the Na-
tion with the untrue and previously unheard charge that the Trav-
el Office was involved in a scandal which implicated Customs laws
and State tax laws.

I do not know who gave the order that resulted in David Watkins
firing me and my six colleagues on May 19, 1993.

I can tell you that I met with Miss Janet Greene, Mr. Watkins’
former assistant, on May 17, 1993, in the office of Mr. Al Nagy, an-
other member of the ‘ite House staff, to discuss what had gone
on in the Travel Office over the previous weekend.
inter meeting with Miss Greene for about an hour, she said,

ily:

I'm gonna tell you something and if you ever repeat it, I will deny it. There is
one person and only one person responsible for what has taken place with—with
your office and he occupies the Oval Office. Now do I need to mention any names?

From my point of view, it hardly matters whether Mr. Watkins
was acting on his own or at the direction of the President, Mrs.
Clinton, Harry Thomason or anyone else. What does matter is that


54

What did you bring into the office to change that? And the rea-
son I ask that is because some of what’s happening today may not
have happened if we could have—if we go Wack and review what
we've done to where we are today and what we need to do to move

on.

Mr. DALE. OK, when I took over the office, there were no—there
was no tracking system, there were no petty cash logs. I instituted
a petty cash log where each and every penny of the petty cash was
accounted for. I instituted logs where every check that came into
the office—let me clarify that, every check for the Press Travel
Fund from the news organizations that came into the office was
logged into a received log; every invoice that came into the office
was logged into the receive—into another receive log; and when
those invoices were paid, that log was completed, the invoice was
placed in the Proper trip folder and there was a log for every finan-
cial transaction that took place in that office.

Mrs, THURMAN. OK.

In response then to Peat Marwick, or whatever, since the Chair-
man has made the mention that this is the opportunity for you to
give your side, how would you respond, then, based on your testi-
mony just, then, of what the criticisms were or the issues that they
raised and some of the accounting issues, so that again if this com-
mittee were to look at this or to look at overview, what would you
suggest where they might have been missed?

d_I will tell you that I think it’s very difficult sometimes for
anybody to come in and look at an office that does not deal with
it on an every day basis, and understand it totally. But on the
other side, they did raise some very—some issues that we should
be concerned about, and particularly so that we don’t see this hap-
pen in Government again.

Mr. DALE. OK; the concerns that I’m aware of that they raised
were that they could not put their hands on the logs at that time,
and I have never hidden the fact that some of my records were
missing when they came in there and some of them I didn’t know
about until they asked me for them. Catherine Cornelius has ad-
mitted that she took files home with her. I don’t know to this day
what files she is talking about. But if you want to go to the Peat
Marwick report, I would suggest that you turn to page 6.

Mrs. THURMAN. I don’t have that in front of me, but go ahead.

Mr. DALE. They—they list a number of checks going back to
1991, which they said was not logged in on the petty cash logs. I
question how they knew that if they did not have access to the
petty cash logs?

And then they come down in the paragraph here and they state
that they did not have the petty cash logs, so they don’t know
whether these were logged in or not. So they have—in my opinion,
they had an agenda when they came in there. They—they had to
find something to justify this report.

Thank you, Mr. Chairman?

Mr. CLINGER. The gentlelady’s time has expired.

Mrs. THURMAN. Just in a—if we could form as a formal request
of this committee, continue to look for those audit reports that are
noted within the GAO, I think that would be a service to this com-
mittee as we go forward in looking at similar issues throughout our


96

fact that you have always been doing your job and that you were
fired without cause.

Mr. BuRTON. Would the gentleman yield?

Mr. Fox. I would be glad to yield.

Mr. BurTON. It is my understanding that the report was not

even given to the White House at the time that they were fired.
Am I correct?

Mr. DALE. That’s correct.

Mr. BRASSEUXx. I believe so, yes.

Mr. BurTON. So they said they were firing ou based upon the
sloppiness found in that report but they didn’t Yave the report yet,
it hadn’t come out yet.

I thank the gentleman for yielding.

Mr. Fox. I reclaim my time and finally comment——.

ts. MALONEY. Point of information, Mr. Chairman. May I
add——

Mr. Fox. I have the floor.

Mr. CLINGER. The gentleman has the floor. You are asking him
to yield?

Mrs. MALONEY. Will you yield for a clarifying point?

Mr. Fox. I still—I have only 15 seconds. I can’t yield.

T wanted to just ask, make a further comment, that it is as
shocking to me and the American public to see that people who
have been doing their job professionally from 9 to 32 years should
be summarily dismissed without cause is not only a travesty, it is
downright unfair. I hope that the wrongs are righted by new proce-
dures we develop in making sure that the executive branch upholds
the same kind of oath to the people as the Congress does. Thank
you.

Mr. CLINGER. The gentleman’s time has expired. I now recognize
the gentleman from West Virginia.

Mr. Wise. Thank you, Mr. Chairman. Could I pass to Mr. Moran
and come back?

Mr. CLINGER. Recognize the gentleman from Virginia, Mr.
Moran, for 5 minutes.

Mr. Moran. I thank my friend from West Virginia and I thank
the Chairman, and I want to go right back to what Mr. Fox just
said, that the executive branch ought to uphold the same principles
that the Congress does.

You know, the Congress, under the new Republican leadership,
just fired 11 people that have worked for the House of Representa-
tives from 15 to 32 years, none of them were told why. We found
out the reason why is because we passed legislation that would
make us responsible for the same kind of work force laws that
apply to the private sector.

Mr. Fox. Will the gentleman yield?

Mr. Moran. And so to avoid application of those private sector
laws, we fired these people summarily.

Mr. Fox. Will the gentleman yield?

Mr. Moran. No, not right now. I want to make my point and
then I will see what you have in mind, but I haven’t had a chance
to make a point yet, Jon, so I am going to take this opportunity
because it is one that we need to bear in mind. We ought not be
hypocritical about this. | am sympathetic to employees, but if here


5

whether he once considered a plea bargain now doesn’t mean a
damn thing.” From the Scripps Howard.

And, Mr. Chairman, I think that sort of sums it up. The Amer-
ican Bar should be looking at lawyers that miscite and misquote
the truth in these cases, be it on the West Coast or the East Coast.
I think the American people have had enough.

Mr. CLINGER. The gentleman’s time has expired.

I am now pleased to recognize the Chairman of our Civil Service
Subcommittee, the gentleman from Florida, Mr. Mica, for 5 min-
utes.

Mr. Mica. I thank you, Mr. Chairman.

I have a couple of questions about the firing.

It is my understanding, Mr. Dale, when you were called into Mr.
Watkins and fired, or terminated, told you would be out in 2 hours,
that he indicated that this was part of the National Performance
Review, this change in personnel. I think I read some other state-
ments where you or one of the others had said that they recall Mr.
Watkins saying this; do you recall that?

Mr. DALE, I recall him telling us that we were being terminated
as part of the President’s commitment to reduce the White House
staff by 25 percent, yes.

Mr. Mica. I think also the Press Secretary, Dee Dee Myers, also
mentioned the National Performance Review as one of the reasons;
is that correct?

Mr. Date. I think so, yes.

Mr. Mica. Had anybody from the Vice President’s Office or Na-
tional Performance Review ever been in your office?

Mr. DALE. No, sir.

Mr. Mica. Anyone aware of the National Performance.

Mr. DREYLINGER. No, sir.

Mr. McSwEENEY. No, sir.

Mr. MAUGHAN. No, sir.

Mr. Mica. Some of you had prior full civil service rights or expe-
rience; is that correct?

Who had those from other agencies? If you could tell me your
name for the record and what you had.

Mr. VAN EIMEREN. Yes. Bob Van Eimeren.

Mr. Date. I did. Billy Dale.

H Mr. McSwWEENEY. My first Government job was at the White
louse.

Mr. DREYLINGER. Other than the military, mine was at the
White House also.

Mr. Maucuan. And I had afterwards, when I took the job over
at the Defense Department.

Mr. Mica. Anyone else?

What concerns me, I chair the House Civil Service Subcommit-
tee, and I think Federal employees should have some rights, even
if you work for the White House.

And they had the right to dismiss you, as far as I can see, under
their practices.

What drives me absolutely crazy is the fact that they used, it ap-
pears, the FBI for cover and then harassed you and some of the
others involved in this with the IRS.


36

Tell me in your own words what happened there.

Mr. DALE. First of all, when Mr. Russell came in the office on
the morning of May 14, nobody ever told me that this was an audit.
This was a review of the Travel Office to see if services could be
streamlined or improved in any way.

Nobody ever told me to provide any money to Mr. Russell and
I dispute the fact that he said I gave him the money the next day.
I remember it as showing it to him that afternoon, when it became
apparent to me that this was more than just a review because of
the records that he was asking for.

So there are some inconsistencies in what he remembers and
what I remember.

Mr. CLINGER. The gentlewoman’s time has expired.

The gentleman from Indiana, Mr. Burton, is recognized for 5
minutes,

Mr. Burton. Thank you, Mr. Chairman.

You know, I have heard this White House talk about their con-
cern for Federal employees over the past several weeks and
months, but the way you guys were treated is beyond comprehen-
sion. It rivals, in my opinion, the Spanish Inquisition. This is just
unbelievable.

The jury was out less than 2 hours, less than 2 hours, and they
came back with a not guilty verdict on Mr. Dale, and yet my Demo-
crat colleagues appear today to continue to question the veracity of
that decision. I mean, I don’t know why you are even talking about
that. He has been acquitted. Not guilty. No problem.

Now, these people, Mr. McSweeney and Mr. Dale, both voted for
Bill Clinton. They are Democrats. So this cuts across party lines.
They were there-—

Mrs COLLINS of Illinois. Will the gentleman yield?

Mr. Burton. I will not yield.

Mrs. CoLLIns of Illinois. Well, you used my name.

Mr. Burton. I will not yield. 1 will not yield.

Mrs. COLLINS of Illinois. Mr. Chairman.

Mr. Burton. I will not yield.

Mr. CLINGER. The gentleman from Indiana controls the time and
he has indicated he will not yield.

Mr. Burton. I will not yield.

Mrs. CoLLins of Illinois. Well, Mr. Chairman, the gentleman did
use my name and called me Democrat Collins, and I think the Re-
publicans over there ought to have the courtesy to allow me to ex-
plain my position.

Mr. CLINGER. I do not believe the gentleman used you're name.

Mrs. MALONEY. Mr. Chairman, point of information and clarifica-
tion.

Mr. CLINGER. The gentlewoman will state her point of informa-
tion.

Mrs. MALONEY. Point of information and clarification.

Mr. Chairman, the speaker, Mr. Burton, said that the Democrats
called this hearing.

Mr. Burton. I did not say that.

Mrs. MALONEY. We did not call this hearing. This was not our
idea.

Would you please clarify who called this hearing?


48

Mr. CLINGER. The gentleman’s time has expired.

Now I recognize for 5 minutes the gentleman from Wisconsin,
Mr. Barrett.

Mr. BarreTT. Thank you, Mr. Chairman.

To the gentlemen here today, I am sorry that you had to go
through what you went through. I think it’s unfair whenever any
individual has to incur legal expenses to defend their good name,
and I’m sorry that happened. In retrospect, I think that there were
mistakes that were made.

Having said that, I look at the letter of May 17, 1993, from Mr.
Kennedy—or to Mr. Kennedy from Peat Marwick. And I look at
that letter—just take a couple minutes—and I look at that letter,
and I assume all of you have seen that, and I would guarantee to
each of you that had this administration not done something and
had this letter come to the attention of some or many of my col-
leagues on the other side of the aisle, they would have been yelling
to the high heavens about how inept the Clinton administration is,
how there was a scandal in the White House Travel Office and that
something had to be done now.

And I say that because, unfortunately, that’s the reality of the
way things work in this town. When I’m back in my district in Wis-
consin, people ask me what the difference is between Washington
and serving in the State legislature in Wisconsin, and I tell them
Washington is just a mean place. It’s a mean town and that’s the
way it is. You have to—you have to understand that.

T don’t particularly like the fact that it’s mean, but I would bet
that most, if not all of you, would agree with me that had the Re-
publicans seen what Peat Marwick said, whether it’s correct or not
correct—and I understand, Mr. Dale, where you vigorously dispute
that.

Mr. DALE. Absolutely.

Mr. BARRETT. That they would have made political hay out of
that. I think—would you agree with that; don’t you?

Mr. DALE. Well, I don’t now because I’ve never been in a politi-
cal fight like this before.

Mr. BARRETT. Well, I—then—then perhaps you can accept my
presentation that I think—I think that they would do that.

Mr. DALE. Would—.

Mr. BarreTT. Go ahead.

Mr. DALE. If you got this letter, would you give me an oppor-
tunity to defend myself? I was never given an opportunity to an-
swer one question until I took the witness stand in my trial, ap-
proximately 30 months later.

Mr. Barrett. I probably would have. But, again, that’s why I say
that I think there were some mistakes that were there, and I,
frankly, think that it was clear that the Clinton administration
wanted to bring its own people in and I think again we all recog-
nize that they could do that, that this was not the appropriate way
to do it having it tied in with this. I don’t think that it was. But
I understand why that happened.

Now, at the same time, I certainly agree with Mr. Sanders that
I am—as I said, I’m sympathetic, I don’t think you were treated
fairly. But I don’t think that this snapshct where we see your faces,
and you all look like good people, tells the whole story. Because


117

Mr. CLINGER. I thank the gentlelady for that very eloquent per-
oration, and now I recognize the gentleman from Connecticut, Mr.
Shays, for 5 minutes.

Mr. Suays. Thank you.

I have a question to ask you, Mr. Dale, but I will preface my
statement by saying that I had one hope that never came true
today, that you would have Republicans and Democrats who would
sincerely apologize to each of you and not try to belittle what hap-
pened to you by suggesting that other people get fired, because that
is about as disingenuous a statement as I have ever heard.

I do not know people who get fired and then are accused of being
crooks who are not crooks. I do not know that people are bein
fired that are given so little time and basically stuck in the bac
of a truck as though they are cattle, without even seats to sit on,
and I could go on.

I am particularly disappointed that Mr. Kanjorski, for whom I
have a lot of respect, came in quickly, made his charges and left.
Because I think he owed it to you to hear your entire testimony,
and I would have liked to have personally responded to some of his
accusations, Since he is not here, I do not feel I can, but I would
just like to say I would apologize for his smearing each and every
one of you and not even giving you a chance to respond.

Now, Mr. Dale, I do need to ask you some questions. I want to
be on record with you as saying that I cannot, for the life of me,
justify a fund going into my own personal account. I think that is
a mistake, I think it should not happen, and I think you now know
why.

Mr. DALE. Yes, sir.

Mr. SHays. I want to know if you understand that?

Mr. DALE. Yes, sir, I do.

Mr. SHayYs. You put it in your own account. Your account is being
audited, and now the IRS is taking a look and so on, and I don’t
even know what the outcome will be and neither do you, regret-
fully, but I am sure you feel you conducted yourself well. But that
was clearly a mistake.

The second thing that I have to say to you is that I do agree with
my colleague on the other side of the aisle that says you do bid;
and what I have a difficult time understanding is you do not bid
for each trip but you bid for jobs and you say, well, in the course
of the year we may have so many and you will charge so much for
each flight and miles. Why would that not happen?

Mr. DaLe. I am not quite sure I understand what you are asking.

Mr. SHays. Why would you not bid generically for an airline that
says you have our business? Any time we have travel, you get the
business. I do not understand how—your comment that, wall, you
had to find a plane with 6 hours to go. Why would you not have
a number of people who would bid for the business and then be
guaranteed a certain price? You would not haggle about the price;
there is the business.

Mr. DALE. Oh, yes, you do haggle about the price.

Mr. SHays. You are misunderstanding me, and I want to be clear
on this. You have a long-term contract. That is a year’s contract.
Any business during the year you get the business and you bid for


53

the radio that has been used against me to make me be something
that I’m not.

So trust—I mean I—I absolutely can appreciate that concern of
your family and those that are surrounding you and that feeling
that you’ve done nothing wrong, but it’s a 30-second ad, and let’s

0 at it.
Bs So, Mr. Dale, what I would like to know, though, and I’m trying
to, I guess, do the same thing that Mrs. Maloney was, I’m inter-
ested in making government more efficient and to work better. I
think that should be what this committee is about; its reform and
its oversight.

In reviewing the GAO report, there was in the first part, past re-
views of the Travel Office that they’ve talked about, as far back as
1980 or 1982, I believe. And they said that according to the Direc-
tor of Administration and the EOP, from 1981 to 1985, OMB re-
viewed the operations of the White House Travel Office in 1981 or
in 1982.

There’s a footnote to that says that the former Director of Admin-
istration said he no longer had a copy of the review but that it
should be available in the Reagan Presidential Library, and at our
request, the White House Counsel’s Office asked the Reagan and
Bush Presidential libraries to search for records of this report, how-
ever, so far neither library staff was able to find it. So we are miss-
ing a document, to some degree.

But it goes on, and I think this is important, it says: The former
Director of Administration said that he did recall that he did not
suspect the Travel Office of engaging in any wrongdoing but that
he was interested in good management. And goes on to say: That
according to the former Director of Administration the review
found no evidence of criminal wrongdoing but did reveal lax ac-
counting practices that had the potential for fraud and substantial
excess of cash.

I think you talked about this on your $25,000 issue and in the
Travel Office checking account. The former Director of Administra-
tion instructed that the excess balance in the checking account be
refunded to the press, which I believe you did take that step, and
that the Director of the Travel Office at the same time—at that
time retired, and the former Director of Administration told us that
if the Travel Office Director had not retired, he would have been
removed.

According to an employee of the office at the time, a new Travel
Office Director was appointed who was an acquaintance of a senior
official in the new Reagan administration. We were told by an em-
ployee of that Travel Office at that time that the new Director
didn’t work out and was replaced after a few months by an experi-
enced Travel Office staff member who served as the Director until
May 1993. My assumption is that is you.

Mr. DALE. That’s correct.

Mrs. THURMAN. What I would like to know in the time, with that
kind of beginning of you coming into that, can you give us some
ideas of the steps that you took, other than the $25,000 issue, that
would have made the management of this office in their terms—
I guess it was an interested in good management.


49

what's going on right now in this building is that we're seein,
The Hill says this morning, “113 Postal Workers Who Have Lost
Their Jobs,” who I—I imagine were very good workers, too.

Mr. McSwEENEY. Mr. Barrett, can you name one of them that
turned on a television set to hear himself accused of being a thief?

Mr. Barrett. No.

Mr. McSwEENEY. Thank you, sir.

Mr. BARRETT. Again, I am not defending. But I can tell you that
I will bet these 113 workers are not getting jobs in other parts of
the civil service, and I feel sympathetic.

Mr. DALE. On May the 19——

Mr. BARRETT. Excuse me, Mr. Dale.

Mr. DALE. I’m sorry.

Mr. Barrett. And I feel sympathetic to them.

Again, I’m not here to attack any of you. I think you are good
people. I think you’re very good people and I think it’s unfortunate
that this happened. But my point is it’s happening to other people
and these people have families to support.

n Mr. Maughan said that three of your fathers died before

you had a chance to have your names cleared, that pulled at my

eart strings. I think that would be terrible to have your father die
and not have a chance to have your name cleared.

When I hear Mr. Maughan say that he has served the Govern-
ment 42 years, 8 months, my reaction was this guy has served the
Government longer than I’ve been alive. My hat’s off to you, and
I think that you’re good people. But I think it’s unfortunate that
you’re—that you're caught up in this.

But again, it’s a—it’s a two-sided fight, frankly. And the day fol-
lowing the election in 1994—I also serve on the Banking Commit-
tee and I had to speak to some banking officials in my district. I
said I can’t make a lot of guarantees because of the new Congress,
but I'll make one guarantee to you; we will have 2 years of Water-

ate—or Whitewater hearings and they will terminate shortly be-
‘ore the election. And frankly, I would have said the same thing
about this issue.

T’m sure every single one of you wants to put this behind you and
get on with your lives. And again, I’m sympathetic. I feel sorry for
you. I think all of you know this is going to drag on for another
2 or 3 months, .

Mr. McSwEENEY. Mr. Barrett, can you assure me that you would
advise Mr. Bennett of how you feel?

Mr. BarrETT, I don’t know who Mr. Bennett is.

Mr. McSweeney. Mr. Bennett is the President’s lawyer who has
accused us again of some more illegalities. I certainly contact his
office —

Mr. BARRETT. Thank you.

I can see the basis for that.

Mr. McSWEENEY. Thank you.

Mr. BARRETT. I am not going to give advice to the President’s
legal counsel. If you will, I don’t.

Mr. McSWEENEY. I appreciate it.

Mr. BarReETT. I just want you to know how I feel. I think that
we have to understand the context of what is going on here. This
is hard-ball politics from both sides. You're caught in it.


78

have been long forgotten. But instead, they went another way, and
it is very clear, I think, what has happened here.

I want to ask all of you, but particularly Mr. Dale, because I
think you have the longest tenure in the Travel Office; is that cor-
rect?

Mr. DaLe. I think I have about 2 weeks longer than Mr. Wright.

Mr. BLUTE. So we have some long-term experience here, and you
have been through many transitions where new administrations
have come into office. I just want to ask you that whenever another
new administration came into office, did you ever feel any sense
that your office was being sized up as a targeted opportunity for
the new administration’s political cronies? Did you ever feel that in
any other transition?

Mr. DALE. There had been a couple of times that we had other
political staff that felt they wanted to work in our office until they
found out what a headache and hard work it was, then they de-
cided to go somewhere else in the Government.

Mr. BLUTE. So it never went anywhere?

Mr. DALE. .

Mr. BLure. When you met with Mr. Watkins, the day he in-
formed you that Catherine Cornelius was going to be coming into
your office, I want you to elaborate on what was his rationale. Did
he mention to you that she was a Presidential cousin? How did he
justify this move?

Mr. Dag. Well, we had been aware all along that Catherine
Cornelius had an interest in working in the Travel Office. But
when he called me over, he told me that she was acting as a recep-
tionist in his outer office and that she was unhappy, and that she
thought she might want to go into the travel business once she left
the White House and asked me if 1 would be willing to take her
aboard and teach her the travel business because she had never
worked in it before.

And I told him, sure. I asked him, how do I treat her? And he
said you treat her just like any of the other employees. She does
the same duties that they do.

Mr. Bute. So you were of the impression she was a relatively
young woman who was politically connected, but, that is OK, you
were going to impart upon her the experience of your office; and
as it turned out it was something quite different.

Mr. Date. Right.

Mr. BLute. She was working with Mr. Thomason and with oth-
ers in the White House to somehow make a case against the Travel
Office employees.

1 want to ask you this question, because you mentioned it, and
you did it vaguely, but I want you to clarify it. There were missing
documents from your records that the GAO and other reviewers,
the Peat Marwick reviewers, could not get access to, and this
caused them to write some things that perhaps were not absolutely
accurate. But you have indicated that perhaps you think that
maybe those documents were taken.

Mr. DALE. I have no other reason to think otherwise. Because be-
fore Catherine Cornelius came into that office, I prided myself on
the fact that I could put my hands on any record that I was ques-
tioned about within a 10- to 15-minute time.



88

Let me just follow up on the question, Mr. Dale, that was asked
of you by my colleague from Pennsylvania, which really is asking
you to uy to bifurcate a process. It is inherently unfair to try to
suggest that you, in your own mind, should divide where along in
this process there may have been inappropriate legal actions in in-
vestigating this matter.

Quite frankly, my colleague has a legal background, as I do, and
others here on this panel do, and the inherent unfairness of that
is those of us who have had experience in this area know that a
matter can be tainted from wrongdoing right in the beginning, and
that taint remains in the case. And the Justice Department and
the courts may never know about the wrongdoing in the initial
stages of the investigation, such as the loss of documents and the
secretion of other evidence, et cetera.

So to frame the question like that has done you, I think, an in-
justice and I just want to comment on that point.

I would like to just use my time to share with you some of my
thoughts on this as a new member of this committee and new
Member of Congress.

First of all, many people have come up to me, as we have had
hearings and have asked me, and I have heard from my collea;
efforts to minimize the significance of these hearings, particularly
in the beginning, particularly when we began this process some
months ago, and to the credit of our Chairman and his willingness
to go forward on these committees, I think we now see a much dif
ferent light and particularly the American people today have had
the benefit of actually seeing why these committees are so—these
hearings are so important. They have had the chance to listen to
the testimony of live people, people whose lives have been dramati-
cally impacted in a very negative way by the mishandling of your
termination and firing, people whose families have been impacted
financially and emotionally. So I am hopeful that the American
people and the people following these hearings now know why it
was so important for Congress to undertake finding out and hear-
ing from you as well what did happen in the firings back on May
19, 1993.

And I don’t think there is any position anymore to attempt to
minimize the importance of these hearings because if out of these
hearings we are successful in the future standing between the
abuses of powers and the wrongful firings and mistreatments and
using public employees as pawns and using your integrity and your
character and your many years of service to the U.S. Government
to be used only as pawns in a failed political media plan, and that
is what this was in my opinion, this was an assessment by the
White House that if they had just terminated you for no cause,
they would have sustained some negative publicity for that and—
but they had the right to do that. They chose instead to try to avoid
that and spin it the best way, and I think unfortunately we are
seeing more political spin in this governing process than I would
like to see in my first year here. But now when the political spin
impacts on people’s lives, we do have a very major role in standing
up and getting to the bottom of this.

It is interesting having sat here a week ago and listened to Mr.
Watkins, and it is interesting also even as recently as last week


43

I serve on the Civil Service Subcommittee; I represent a lot of
Federal employees; I think this is absolutely outrageous.

I wanted to point out, Mr. Dale, the investigation of you even in-
volved the investigation of the costs of your daughter's wedding. I
have never heard of anything like that.

Mr. Brasseux, you were in a cargo van, you mentioned, with no
seats. You were asked to vacate in 2 hours and that an investiga-
tion was to take place.

Mr. McSweeney, you were called by your son in Ireland and told
that this was the case.

Mr. Wright, you were in Korea, and you had to hire an attorney.

Mr. Dreylinger, 26 years in the Travel Office with 7 Presidents.

Mr. Van Eimeren, no involvement in finances in the work you
did in the Travel Office. You needed an attorney. What a plight to

e in.

Mr. Maughan, you have served 42 years for the United States of
America, and, as was mentioned, Americans do know right from
wrong.

Now, there are many questions I could ask, but I wanted to
quote from Mr. McSweeney’s statement because he quoted a report,
that we hear a lot of, that came from the Peat Marwick manage-
ment team that they put together kind of at the last minute, not
the auditing team, and in that report he says that:

As you know, the procedures were revised throughout our onsite work to reflect
the timeframe ‘and the limited availability of data, information, and documented
policies and procedures. As such, this report may not necessarily disclose all signifi-
cant matters about the Press Travel Office or reveal errors or irregularities, if any,
in the underlying information. Our procedures do not constitute an audit, examina-
tion, or review in accordance with standards established by the American Institute
of Certified Public Accountants. We do not express an opinion or any other form of
assurance on the information presented in this report.

As a matter of fact, they had stated at a subsequent time that
what they looked at did not warrant firings. I point that out, and
if I have any time left, referring to what Mr. Dale had said about
management now in the Travel Office, would you, Mr. Dale, in m
remaining few moments, like to make any comments about how it
is now organized and managed?

h Mr. DALE. Well, the only thing I can tell you is secondhand,
earsay.

But Thave checked with AT&T. At the time that I left the White
House, I owed AT&T approximately $300,000, which I was waiting
for invoices. AT&T has told me that to this day it has never been

aid; that the White House Travel Office is indebted to them hun-

reds of thousands of dollars. They would not tell me how much.
They shouldn’t have told me they were indebted, probably. But.
when I can call their accounting department, and my name is on
these bills, it is easy enough for me to find out what is still out-
standing from when I was in the office.

If I remember correctly, my checkbook balance, when I left the
White House Travel Office, was somewhere over $600,000. I had
invoices that we had submitted to the press corps that would prob-
ably bring in another million dollars. I was wondering what hap-
pened to that money.

Mrs. MorELLA. Is it true that they balanced the checkbook for
the first time in 8 months just before the 1995 GAO report?


113

Dale also said he believed the White House had decided long before the audit that
his staff should be fired, and that it pressured to get the audit done simply to have
a reason to justify the decision. . ;

“What does matter is that the public understands that. the firings were not driven
by supposed concerns over financial mismanagement, but were in fact the product
of @ decision that. was reached long before anyone even began to look into the way
that the travel office was managed,” he said.

Mrs. Clinton and Thomason have denied any wrongdoing, The first lady has
said she only expressed concerns after hearing reports there might be financial mis-
management in the office but never ordered anyone to fire the workers.

The panel has produced evidence showing that a consulting firm in which
‘Thomason was a partner had expressed interest in the travel office business and
that Thomason was the first to allege mismanagement by longtime travel office em-

loyees.

PAmong the most serious allegations Thomason raised, that travel office workers
were demanding kickbacks, turned out to be unfounded, the documents indicate.

Recently disclosed memos state that Mrs. Clinton was “ready to fire them all” and
that there would be “hell to pay” if presidential aides did not take such action quick-
ly in accordance with her wishes.

Former White House chief of administration David Watkins, who actually handled
the firings, testified last week that while the decision was his own he believed the
first lady was behind the pressure.

He said that message was conveyed to him both by Thomason and then-White
House lawyer Vincent Foster, who committed suicide two months later.

Mr. Date. Mrs. Maloney, may I comment on that?

Mr. CLINGER. Without objection, the document will be entered in
the record.

Mr. DALE. I dispute that any petty cash funds were put into my
account.

Mrs. MALONEY. That is precisely, Mr. Chairman, why we need to
get Mr. Herman here. We have two different accounts.

Mr. CLINGER. You can count on the fact Mr. Herman will be
here, because that is definitely at variance with what he told our
investigators.

Mr. Suays. He will be here under oath.

Mr. CLINGER. Mr. Wise.

Mr. Wise. Mr. Dale, I think I will switch pretty much from
where things have been. Was there, up until May the—say the
13th, was there competitive bidding for the services, the charter
services?

Mr. DALE. Yes, sir.

Mr. WISE. So was there competitive bidding on every flight or did
you handle that?

Mr. DALE. Not each and every flight. Mr. Wise, I can recall one
time that I got a call at home at 9 o’clock at night that told me
to have an airplane sitting at Point Mugu, CA, at 6 a.m. the next
morning. This gentleman sitting right here was in California.

You don’t have time to put charters like that out for competitive
bidding. I had approximately 9 hours to get an airplane out there,
and I went to the company I felt like could accommodate me.

Mr. Wise. I understand that. But what about in practice in gen-
eral? Was there any kind of competitive bidding process? Were
there forms to fill out?

Mr. DALE. We had a form to fill out that indicated the airlines
that I called; and after a while, when you call United Airlines 50
times and ask them if they are interested in doing a charter and
they tell you no, you get tired of calling them. It was to a point,
before Pan Am went out of business, they were the only ones that


122

over the weekend; and we have all been involved a lot with FEMA
and those agencies, as I know the gentleman can appreciate.

Let me go back to the question, Mr. Dale, that Mrs. Maloney
asked, that the criminal case was based on a practice of you depos-
iting on a number of different occasions checks into a personal ac-
count. There were refunds from different vendors intended to reim-
burse the press for their expenses.

You testified, I believe, that that was a practice you had that no
one else knew about. I am not making any allegations about it
being illegal. I think that—well, let me ask you. ‘Sid you not ac-
knowledge in retrospect it was probably not the best procedure?

Mr. DALE. I have already admitted that.

Mr. WISE. The question I did have is, you said you did not share
that practice—knowledge of that practice with any of the gentle-
men at the table, many of whom who had worked with you for 20
years and more. And why would that. be?

Mr. Date. I guess what I should have said is that I did not go
to any of them and tell them. I did not try to hide it from them.
The drawer I kept the money in and the logs, Gary Wright had a
key to it. He could have gone into it at any time, and J never at-
tempted to hide it.

But there were many things in that office that I came in contact
with day in and day out in the management of it that I didn’t go
and tell them about it. I worked it out myself. It was just the way
the job was.

Mr. WisE. But can it at least be accepted that, to an outsider
coming in, that would be an unusual practice?

Mr. Date. That’s right, and that is why I object to the fact that
nobody ever came and asked me about it. Nobody, until the day I
took the stand, the witness stand in my own trial, has asked me
one question about the management of the White House Travel Of-
fice.

Mr. Wise. If nobody knew about the practice, how were they to
ask you about it?

Mr. DALE. They didn’t ask me about any practice. If they had
come and talked to me, I would have told them.

I told the gentleman on the day that I turned the money over to
him—or I didn’t turn the money over to him. He never asked to
see any money. He took my word for everythin that I told him.
And I told him that this money was in a locked drawer behind that
cabinet. I didn’t just happen to find it. I knew it was there all the
time.

Mr. Wise. Mr. Dale, in terms of Peat Marwick, did they raise any
questions with you in the course of their review and did you talk
to them about these practices?

Mr. DALE. No, sir.

Mr. WISE. So you are saying nobody at Peat Marwick talked to

ou?
y Mr. DALE. No, sir.

Mr. Wise. Did you——

Mr. DALE. Peat Marwick people came to me and asked me where
they could find a certain file or a certain document over the week-
end while they were conducting their review, and I would tell them
where to find it, and that is all they ever asked me.


CONTENTS

Hearing held on January 24, 1996 .. as
Statement of:
Brasseux, Barnaby L., former Assistant to the Director, White House
Travel Office ..
Dale, Billy R., former Director, White House Travel Office
Dreylinger, John P., former Assistant to the Director, White House Travel

Office ee
Maughan, Ralph T. “Moe”, former Communications Officer, White House
Travel Office .. see
McSweeney, John P., former Assistant to the Director, WI
Travel Office ..
Van Eimeren, Robert S., former Assistant to the Director, White House
Travel Office ..
Wright, Gary D., former Deputy Director, White House Travel Office
Letters, statements, etc. submitted for the record:
Bass, Hon. Charles F., a Representative in Congress from the State
of New Hampshire, prepared statement o
Brasseux, Barnaby L., former Assistant
‘Travel Office, prepared statement of .
Clinger, William F., Jr., a Representat
of Pennsylvania, prepared statement of ...
Dale, Billy R., former Director, White House Travel
statement of.
Martini, Hon. William J., a Representative in Congress from the State
of New Jersey, prey red statement of ...
McSweeney, John former Assistant to the Director, White House
Travel Office, prepared statement of .

fice, prepared

am


106

to all of the offices in the White House and including the Travel
Office?

Mr. DALE. Well, I don’t know that she had keys but she had ac-
cess, could get. them.

Mr. CLINGER. And isn’t it true that she was in your office one
morning by herself before any of you came to work?

Mr. DALE. That’s true. On the Friday before I left work with——

Mr. CLINGER. Friday what?

Mr. DALE. Friday, the 14th of May.

Mr. CLINGER. 14th of May.

Mr. DALE. She—about 10 at night it was apparent that Peat
Marwick was not going to finish their work that day. She sug-
gested we go home and come back the next morning, and I said Full
wait till everybody is out and I’ll lock up. She said, you don’t need
to worry about that. I have GSA coming to change the locks on
your office and I'll have the keys to them and we never had keys
after that.

Mr. CLINGER. When you were fired, you came back to your office,
I believe, to find—I mean you had been called upstairs by Mr. Wat-
kins and told that this was, this was gayonara, you were done for,
and you came back to your office and I believe you found people
already, as I understand it, at work at your work stations, presum-
ably attempting to take over the work of the Travel Office?

Mr. Dats. That's correct.

Mr. CLINGER. Where did they come from?

Mr. DALE. Some of them were from World Wide Travel in Little
Rock; some of them were OMB employees; and some of them, I
don't know who they were. There were approximately 12 to 14 peo-
ple.

Mr. CLINGER. So they had to have been really brought in prior
to the day that you were actually fired. They had to be on the scene
before that time, before the Peat Marwick study was completed or
final report was done; would they not?

Mr. DaLe. I have since found that the people from World Wide
Travel were staying in a hotel room here in Washington from the
previous Thursday. .

Mr. CLINGER. Previous Thursday. Again, substantially before
there was a Peat Marwick study or before the FBI was involved or
anybody else; is that correct?

Mr. DALE. Yes, sir.

Mr. CLINGER. How many—were records missing from your office
as a result of—after Patsy Thomasson was there on the occasion
you mentioned earlier?

Mr. DALE. Sir, I don’t know because I didn’t have a chance to in-
ventory the records.

Mr. CLincER. After that you never had a chance to inventory.

Mr. DaLe. No, sir.

Mr. CLINGER. My time has expired. I now recognize the
gentlelady from New York, Mrs. Maloney.

Mrs. MALONEY. Thank you, Mr. Chairman.

Many of us today have expressed concern not only for the seven
employees but all Federal employees, particularly those that were
furloughed during the shutdown. I would like to ask you, Mr, Van
Eimeren, were you furloughed?


66

(c) Due to limitations in the press travel office documentation, we were unable to
determine whether 23 of the cash receipts were properly posted to their respective
account balances.

Objective 4: To determine that written checks are the only disbursements from
the Riggs National Bank account.

Procedures:

(a) Reviewed bank statements for the period January 1, 1992 to April 30, 1993
looking for non-check disbursements.

(b) Counted the number of canceled checks returned with each bank statement.
and compared them to the number of checks clearing the bank that month.
Findings:

(a) We found no non-check type (e.g., no wire transfers, etc.) disbursements from
the Riggs National Bank account.

(b) In all cases, the number of canceled checks returned with the bank statement
was the same as the number of checks disbursed that month per the bank state-
ment.

Objective 5: To assess the quality of documentation supporting selected cash dis-
bursements.

Procedures:

(a) Chose a non-statistical sample of 76 canceled checks form the period January
1, 1992 to April 30, 1993, noting the date, check number, amount and payee. The
non-statistical sample included 17 checks made out to “cash” which were reviewed
as part of the procedures for Objective 2.

(b) Compared each check to available vendor invoices, with the exception of the
checks written to cash.

(c) Reviewed each canceled check for apparent propriety of endorsement.
Findings:

(a) Of the non-petty cash check disbursements, 12 disbursements (canceled
checks) appear to have no supporting invoice. Nine of the 12 disbursements were
for baggage handling charges at hotels. The total amount of these nine disburse-
ments was $4,690.07.

(b) Two disbursements represented refunds for overpayment by customers/press.
There is no supporting documentation for these refunds, The two disbursements
amounted to $374.75.

(c) One disbursement to Pan Am Express on December 20, 1991 did not have a
related invoice. The Director of the press travel office informed us that the payment
was based on an oral price quote from the charter company. The dollar amount of
this disbursement was $12,841.56.

(d) We noted differences in the check disbursement amount and the invoice
amount for charges related to press charter service. This difference, in all cases, was
indicated by the press travel office to be Government Travel Requests (G'TR’s).
GTR’s were forwarded, along with the check amount, to the charter service. The
total of the two (check and GTR) equaled the invoice amount. Both the check and
GTR are negotiable instruments.

Objective 6: To assess the quality of the documentation supporting a selected
trip’s costs (as indicated on the trip worksheet).

Procedures:

(a) Chose one trip from the total trip files from January 1, 1992 to the present.

(b) Traced each check that was disbursed in payment of the total trip charges in-
dicated on the trip worksheet to the related vendor invoices (i.e., original docu-
mentation requesting payment for services).

(c) Reviewed each canceled check for apparent propriety of endorsement.

Findings:
(a) All checks written in payment of charges related to this one trip (President
Clinton’s trip to Detroit, Michigan on February 10, 1993) appear to be properly sup-

ported.

(b) All checks appear to be properly endorsed.

Objective 7: To analyze the volume of cash activity flowing through the press
travel fund bank account from the period January 1, 1992 through April 30, 1993.
Procedures:

(a) Obtained bank statements since January 1, 1992.

(b) Collected the following information about the press travel fund cash account.

Beginning and ending bank balances of the press travel fund cash account.


52

Mr. McSwEENEY. I was re—the question I believe was that we
had been given new—another job, so I continue to draw a salary,
but I had been labeled a thief. I think that was what I was reply-
ing to.

r. SCHIFF. Did that mean something to you?

Mr. McSWEENEY. Yes, it did, and to my family.

Mr. ScuirF. Well, can you explain that? I think it’s self-evident,
but I will give you the chance.

Mr. McSwEENEY. I’m not one usually that’s intimidated. The
Irish in me, I’ve been in it for 2¥2 years, I’ve had a rage inside of
me that I hope some day to have either Mack McLarty or someone
of authority at the White House, I have never had anyone tell me
why I was fired and I—I would like to do that.

Mr. Scuirr. Mr. Dale, did you want to add to that? Or any of the
other—

Mr. Date. No. I can’t follow him that well.

Mr. Suays. You're not Irish?

Mr. DALE. No, sir.

Mr. ScuirF. Any of the other witnesses want to add on that?

I mean, it has been suggested you got new jobs or offered new
jobs, basically what are you complaining about? I mean, that’s
what I’ve been hearing.

Anyone want to explain what they are complaining about real
quickly?

Mr. DALE. Well, the most ironic thing about me is that I had my
papers in to retire. I had met with David Watkins 2 days before
we were fired and notified him of my intentions to retire on June
the 3rd. He didn’t give me an opportunity.

Mr. ScuiFF. Very quickly, anyone else want to comment on the
question?

Mr. DREYLINGER. Yes, sir.

One of the things about the whole thing is you felt like all these
institutions of the Government that seemed to be for you have not
been there for you, and it—it’s disappointing and depressing, even
though I will admit that there have been elements that have been
there for us with our legal fees.

Mr. CLINGER. The gentleman’s time has expired.

Mr. ScuirF. Thank you, Mr. Chairman.

Mr. CLINGER. I would just notify that we will break at about 2
for lunch, since the cafeteria is going to close at 2:30, so we will
have a few more questions here.

And I would now recognize the gentlelady from Florida, Mrs.
Thurman.

Mrs. THURMAN. Thank you, Mr. Chairman.

Mrs. MEEK. Mr. Chairman—you have two remaining down here,
Mr. Chairman.

Mrs. THURMAN. You are certainly the youngest, Mrs. Meek, no
question in my mind. At least in acting, I know that.

I think all of us are concerned about how this was handled and
at any time, sympathetic and, of course, we've all dealt with it in
a political scheme through campaigns and elections, and I, too, can
tell you maybe to the—not to the same extreme that you have, but
certainly my children have come home concerned about an ad on


101

In our system, the jury heard that evidence, did not concur with
the grand jury, did not return a verdict of guilty, and acquitted you
and you have that benefit. You have paid a price, Mr. Dale. We all
know that. But every one of us that are subjected to that type of
situation every day of our lives in our system, judicial system, has
to pay that price.

Now, if you have something different to add to that, did these
prosecutors do something wrong? Did those judges do something
wrong? Did that grand jury do something wrong? Let’s get them in
here and find out. And I will be your best advocate. But let’s get
off this silliness.

Mr. CLINGER. The gentleman’s time has expired. But I will give
Mr. Dale an opportunity to respond to the question.

Mr. DALE. Mr. Kanjorski, on the 24th of October you sat here
and you associated me with the offices that brought back Mercedes
from Germany on military airplanes. You associated me with the
office that sent White House staffers in cars for lunches and kept
the cars sitting on street corners while they went to lunch. And if
you investigated the George Bush travel office, you did not inves-
tigate my office.

Att. KANJorskI. I said at that hearing I did not investigate your
office.

Mr. DALE. But you associated me——

Mr. KANJoRSKI. You just mentioned some of the horrendous
things that happened during the Bush administration. Did——

Mr. DALE. No, sir. Those Mercedes—they happened in the
Reagan administration, early in the 1980's.

Mr. KaNJorskI. And what was it, let’s set the record straight, 17
or 19 multihundreds of thousands of dollars in cars——

Mr. CLINGER. The gentleman’s time has expired.

Mr. Kanjorski.—in this country that have avoided Customs.

Mr. CLINGER. It is not the subject of this hearing.

Mr. KaNJorsKI. Did this committee investigate that?

Mr. CLINGER. I will now recognize the gentleman from West Vir-
ginia, Mr. Wise, for 5 minutes.

Mr. WisE. Before I yield my time, Mr. Chairman, let me just say
that it does seem to me that this—it seems to me that everyone
agrees that there was terrible handling in the beginning, the dis-
missal of these gentlemen. The testimony I heard last week sug-
gests to me that many of these gentlemen would have been dis-
missed in the course of the National Performance Review anyhow
over a course of time but done in a logical manner. Walking in and
firing seven people is not a good way to handle business. And so
the irony is that they probably would have been at the same point
but yet not without—but without all of this controversy.

But I still am concerned because I haven’t heard anything that
is indictable yet. It seems to me this committee ought to be in-
volved. Yes, there are a lot of dumb mistakes and if we want to
drag this out for about three or four more days with dumb mis-
takes, but being dumb is not indictable. If it were, nobody would
be left in Washington.

So I guess you have to ask what is the purpose of this proceed-
ing? But I will get around to that in the second round of my hear-
ing.


26

Government employee. However, as one of the White House operat-
ing units, our office function was nonpolitical.

Jur office dates back to at least the Lincoin administration, and
no incoming President ever found it necessary to replace our office
with his campaign workers.

After President Clinton took office, we started etting indications
and hearing rumors that we might be replaced by Clinton people
and a travel agency. No top-level White House staffers of the Clin-
ton—Clintons ever came to our office to find out what we did, how
we did it or to advise us of any instructions or changes they would
want. We worked with the press office during Presidential trips as
usual. The press office seemed to be happy with our work, so I
began to think that we would survive.

it came as a complete shock to me on May 19, 1993, to hear on
Cable News Network that I and our entire office had been fired.
At the time I was at work in Seoul, Korea, with a White House ad-
vance survey team preparing for President Clinton’s first foreign
trip. I was absolutely stunned to hear that Bill Clinton’s staff had
ordered an FBI investigation of us for criminal wrongdoing.

Because of the criminal investigation, I, along with each person
in our office, was forced to hire an attorney. As Deputy Director of
the office, I was a prime target, along with the Director, Billy Dale;
and my financial affairs were investigated in minute detail by the
FBI.

Due to my position as Deputy Director, I was not offered another
job in the Government. I was forced to accept an early and vol-
untary retirement from the Government at a reduced annuity. This
early retirement has caused financial hardship for me and my fam-
ily.
There have been accusations made about gross financial mis-
management, taking illegal kickbacks and embezzlement. These al-
legations are all false.

I would like to give you a brief history of how we operated our
office. Our office originated as the White House Telegraph Office.
As telegraph operators for the President, someone from our office
traveled on the train with the President when he traveled. The of-
fice was given the task of coordinating all the arrangements with
the railroad for the President, staff and press.

As travel progressed from trains to airplanes, our duties and re-
sponsibilities changed. When the President started using military
aircraft, our office worked with commercial airlines to charter
planes for the press. Our primary job was to coordinate the air
charters, bus charters, rental cars, baggage trucks, hotel accom-
modations for the press and the press office staff.

In addition to being in charge of the press charter, keeping track
of the manifest and seeing that things ran smoothly, we also sent
a man out in advance of the trip to each overnight stop. After each
trip a memorandum was prepared for each member of the press ad-
vising them of their prorated share of the cost of that trip.

Billing and bookkeeping, an important and necessary function,
was just one part of our job. While our accounting procedures may
not have been perfect in the eyes of a professional accounting firm,
we did keep complete records of financial transactions. We had
spreadsheets that detailed what each member of the press’s in-


22

outrage at his name being used, completely denying any involve-
ment with the letter and supporting Billy Dale’s handling of the of-
fice,

The culmination for me, I had hoped, was when a jury, after less’
than 2 hours’ deliberation, acquitted Billy Dale of ail charges. Dur-
ing this trial, countless members of the press, the very people that
he was supposed to be stealing from, came forth an testified on
his behalf, while the Justice Department could not produce one—
not one—to testify against him.

For him and his family their ordeal should have been over. In
fact, the President himself said he was sorry for what Billy had
gone through, wished him well and hoped that he could get on with

is life. No one would like that more than Billy Dale, his family
and, along with our families, each and every one of us at this table,

Unfortunately, as a result of the discovery of a memo from a then
senior staff member of this administration, which contradicts com-
ments of the First Lady, we again have become targets of false
charges. We are now accused—and I believe the wording was “it
now seems clear’—that we allowed press members to circumvent
customs regulations on their return to the U.S. from overseas Pres-
idential travel, this in spite of the fact that every international
White House press charter has assigned to it, on a rotational basis,
a U.S. Customs agent who travels with the group and has the re-
sponsibility of collecting from each manifested passenger a com-
pleted customs declaration and clears all passenger and cargo on
board the aircraft. In fact, the same procedure applies to all pas-
gengers and cargo on board Air Force One, including the President

imself.

We were also described as no more than glorified bellmen for the

ress. I would only quote the President at his press conference of
fast week when he said, “an allegation is not the same thing as a
fact” and also that “the American people are fundamentally fair-
minded.” I would hope that he would repeat his statement to some
of his spokesmen.

Along these same lines, during your hearings of last week a new
so-what, who-cares attitude seemed to be the new theme for some
in this room. During a recent First Lady interview, Mrs. Clinton
expressed, as would any parent, how concerned she was and the ef-
fort she had made to help her daughter cope with hearing the
many negative comments being made about her mother.

Blanche Dale, unfortunately, was not able to do so for her daugh-
ters over the past 30 months. She had to sit and watch as her
daughter Kim who, 2 days after returning from her honeymoon,
had to report to the Department of Justice and show how she had
paid for her wedding, her reception, her honeymoon, and, since we
were present at her reception, answer questions about any discus-
sions we may have had.

Her daughter Vickie, when interviewed by the Justice Depart-
ment, in explaining that she was giving her cash car payments to
her father so that he could deposit them in the White House Credit
Union for her, was asked if she was not uncomfortable with givin;
her cash to someone who was stealing money from the Travel Of-
fice.


105

Mr. McSwEENneY. I was escorted out of the office.

Mr. CuinceRr. And I believe that you were then, I believe, all of
you—those of you who were told on the 19th that your services
were no longer rendered, how did you then leave the White House?
Under what conditions or circumstances did you leave the White
House?

Mr. DREYLINGER. We left in—Mr. Chairman, we left in a panel
van, but I’d also like to say when I went to personnel my resigna-
tion form was blank. They just wanted my signature.

Mr. MAUGHAN. So was mine.

Mr. CLINGER. Did you sign that?

Mr. DREYLINGER. No, sir, I did not.

Mr. CLINGER. Mr. Dale, how did you leave the White House?

Mr. DALE. Someone within the office had called the White House
garage and asked if a van could come and take us with our per-
sonal belongings to our vehicles on the Ellipse and they sent a
cargo van and the five of us left in that.

Mr. CLINGER. So you were crammed in the back of a cargo van.

Mr. DALE. Yes, sir, with no seats.

Mr. CLINGER. It just seems to me that this is the most unbeliev-
ably demeaning, humiliating—it is just appalling to me the insen-
sitivity and the way this thing was handled. I mean, it just really
is very upsetting.

Let me ask you a couple of questions about documents and pa-
pers and records that seem to have disappeared. Shortly after
Catherine Cornelius started working in the Travel Office, records
did begin to disappear; did they not? And I think we have had dis-
cussions about money being taken home. We now know that docu-
ments were taken home; do we not?

Mr. DALE. Yes, sir.

Mr. CLINGER. Could you explain how you all learned of missing
records?

Mr. DALE. When I came back from leave 2 weeks after Catherine
Cornelius had been in the office, Gary Wright met me the morning
I walked in on Monday morning and said, Billy, there’s something
in your middle drawer I think you ought to take a look at. I went
to my middle drawer, Pulled out a Xerox copy of a check payable
to Pan American World Airways in the amount of $288,000 that I
had written approximately 2¥2 years prior to that.

I asked Gary, what do you mean, I should take a look at this.
And he said, well, we came in the office last Friday morning, the
Xerox machine was jammed and we had to call a technician to
unjam it, and this is what he found. And he said I made the com-
ment or someone made the comment at that time, oh, do you mean
this has been in there for 2 years.

Mr. CLINGER. Did you inquire of Catherine Cornelius when you
found copied documents in the machine?

Mr. DALE. Well, I think Gary did.

Mr. WRIGHT. Yes, I did, and she pleaded ignorance to the—to any
knowledge of the check or anything else and suggested that per-
haps we should secure the canceled check statements in a more se-
cure location, which I did.

Mr. CLINGER. I believe that Patsy Thomasson, who was in the
Office of Administration at that time, did she have keys and access


34

son to be concerned, because he would have been reimbursed in
any case by ABC.

ir, CLINGER. He did indeed, but he also indicated that he felt
that Mr. Dale was a totally honest man and that he never had any
cause to question his integrity.

The gentlewoman from Tinois.

Mrs. COLLINS of Illinois. Thank you, Mr. Chairman,

I understand that several of you, or two or three of you, have al-
ready retired, but at the time this happened, did any of you lose
any pay? Any of you?

ir. McSWEENEY. No, I was paid, but called a thief.

Mrs. CoLLins of Illinois. Everybody else was paid; is that right?

Mr. Maucuan. Same answer.

Mrs. COLLINS of Illinois. All of you were paid.

OK, thank you very much.

Now, in your new jobs, were you given civil service protections?

Mr. DREYLINGER. Yes.

Mr. Maucuan. I was.

Mrs. COLLINS of Illinois. All of you were given civil service pro-
tections. And that included seniority rights, and more important
than that, due process rights; is that so?

Mr. MAuGHAN, Yes.

Mrs. CoLLINS of Illinois. Mr. McSweeney, I believe it was you
who testified on page 5 of your testimony that you had legal fees
of over $65,000 of your retirement funds.

Mr. McSWEENEY. $65,000 of my money, which I planned to use
for my retirement. My retirement funds are in the Government.
They are my funds.

Mrs. CoLLins of Illinois. Were you aware of the fact that GAO
said that you were entitled to have those legal funds reimbursed?

Mr. McSwEENEY. GAO has what? I’m sorry.

Mrs. CoLLins of Illinois. GAO has said that you are entitled to
have those funds reimbursed.

Mr. McSWEENEY. Those funds, the funds that were within the
Government for my retirement, is a completely separate amount of
money from the $65,000 that came out of my pocket. Not the Gov-
ernment retirement.

I think what I might clarify is that the use of the term “pension
funds" is that I wanted to use that money for my pension when I
retired.

Mrs, COLLINS of Illinois. I am looking at the GAO report, and it
is on page 49, in case you want to review it or have some legal per-
son review it, it says that Title I of the Act which appropriates
money to the Department of Transportation, provided $150,000 to
the Office of General Counsel for the Travel Office investigation-re-
lated expenses of the five employees during calendar year 1993, on
the condition that the employees were not subjects of the investiga-
tion.

And as of April 14, no funds had been paid yet to reimburse the
employees legal expenses. So somewhere along in there I believe
you can be reimbursed. .

Mr. McSwEENEY. I’m sorry, I misunderstood. Yes, in fact, we
have been reimbursed for that $150,000, but it does not cover what
we all spent.


115

though they suddenly were told the day they were fired they were
supposed to be out of there.

Second factor is 92 of the 113 of them were, in fact, offered other
employment. I don’t think that was the case, at least initially, in
your case.

Mr. WIsE. Would the gentleman yield?

Mrs. MALONEY. Point of information, Mr. Chairman.

Mrs. MoRELLA. Not on my time.

Mrs. MALONEY. Could I get a point?

Mr. Dale, you said people had not been paid. Would you clarify
who has not Been paid?

Mr. DALE. The U.S. Government, the Department of State, the
embassies around the world. It is my understanding——

Mrs. MALONEY. The U.S. Government has not been paid by the
Clinton White House?

Mr. DALE. It is my understanding that the embassies, on foreign
trips, they pick up expenses after the trip has left their city; and
if they have had to pay for any unused rooms on behalf of the press
corps, or any incidental charges that I would have reimbursed
them for. They told me that they have not been paid for any charge
such as that since I left the White House.

Mrs. MALONEY. Why would the Government pay for the press’s
staying in their rooms and their board?

Mr. DALE. It is supposed to be just a transfer. Because that em-
bassy does business with those hotels on a continuing basis, and
they pay for it in order to stay in good standing with the hotel, and
they expect to get reimbursed by the White House Travel Office.

Mrs. MALONEY. My question is, however, if it is not White House
personnel and if it is not White House business but employees from
the private sector employed by the private-sector press that is in-
curring these expenses, my question is why should the Federal
Government and the taxpayers’ dollars pay for that? Why does the
AP not pay for the rooms of the AP reporters? Why does The New
York Times not pay for the rooms of The New York Times report-
ers?

Mr. Dats. I think I may have confused you. These are not rooms
that were used. These are rooms that were reserved and not used.

Mrs. MALONEY. But then they were billed for them. So the cost
was incurred—you are saying the White House did not pay for this
cost. My question to you is why should it be a White House cost?
It is a private industry cost.

Mrs. MoreELLA. Mr. Chairman, I assume that is not on my time.

Mr. CLINGER. I am going to start the clock again. The gentle-
woman from Maryland has 4% minutes.

Mrs. MorELLA. Thank you, Mr. Chairman. I started off here this
morning, and I am here at the end, and I have heard over and over
again the statements that have been made and some people who
were not here, but what we do know? I do not think this hearing
has to do with being a Republican or a Democrat or an independent
or a libertarian or whatever political persuasion one may have. It
has to do with some people being treated wrongly for no fault of
their own and something—because they are civil servants, particu-
larly, we have a role to play to make sure this does not happen


58

Mrs. MEEK. I was trying to answer the gentleman’s question.

Mr. CLINGER. Time now to recognize the other gentlelady from
Florida, Ms. Ileana Ros-Lehtinen, for 5 minutes.

Ms. Ros-LEHTINEN. Thank you very much, Mr. Chairman.

dust before I get into my line of questioning, I have the greatest
respect for my dear colleague, Congresswoman Meek. We had the
pleasure of serving together in the Florida House and the Florida
Senate for many years. But if I could just clear up this timeframe
issue.

Let’s be clear about this. These gentlemen were in no way fired
for any impropriety of the handling of funds, any hint of financial
mismanagement. They were not fired for these actions. They were
fired before any Management Review report came out. The First
Lady indicated that she wanted to fire them. The replacements she
wanted to put in in their place were already gearing up before
there was any hint of that, as Mr. Dale had pointed out in his testi-
mony this morning. This mismanagement report came after the
fact and was what he called a convenient excuse, and I think that
is the correct term for it. So let’s not mismatch the timeframe here.
They were fired. Then the White House found an excuse to justify
this unjustifiable action of firing these individuals.

But if I could start with my line of questioning, Mr. Dale, I won-
der if you could ask—answer some questions that I have about
Catherine Cornelius and the actions of the office. I believe that you
might be the proper individual to ask, but if others would like to
answer that, that would be fine as well. If you could tell the com-
mittee what was Catherine Cornelius doing in your office during
the week before the firings and was she in the office very much
during that time?

Mr. DALE. No, ma’am. As I remember, Catherine was spending
probably 6 or 7 hours of a day out of the office, and one day when
she came back I guess she could sense that I was going to question
where she had been and she volunteered the fact that she was
working on a special project for Harry Thomason and the First.
Lady.

Ms. Ros-LEHTINEN. And this special project, do you have any
idea what that special project might have been?

Mr. DALE. Well, my feeling today is that it was the White House
Travel Office.

Ms. Ros-LEHTINEN. Who was she working with during that
week?

Mr. DALE. I don’t know who Catherine was working with but I’m
sure that she had other people, especially after duty hours, that
were working with her.

Ms. Ros-LEHTINEN. Those individuals would be?

Mr. DALE. Well, there was one young lady that she worked very
closely with by the name of Clarissa Cerda, who as I understood
had finished law school, she just had not passed the bar exam yet,
and she expressed an awful lot of interest in our office, also.

Ms. Ros-LEHTINEN. You had mentioned Mr. Harry Thomason.
Were you aware of the meetings that Catherine Cornelius had had
with Mr. Thomason?


112

ing Herman had told committee investigators he did not think his
review warranted the firings. And I quote from Herman: “We never
made any recommendations nor were we ever asked for any rec-
ommendations on whether the President should terminate any-
body,” Herman said today. But he said his audit turned up evi-
dence that Dale had written petty cash checks to himself and de-
posited them in his account. Such action, and I quote, “I think
probably does warrant some immediate action,” Herman said. “My
personal assessment is that most companies today would question
that and would include questioning whether to remove that person
from that position.”

And it goes on and on and on, and I would like to put it into the
record.

Mr. CLINGER. Without objection.
[The information referred to follows:]

ACCOUNTING FIRM PARTNER TOLD COMMITTEE FiriNGs Nor Justiriep By AUDIT

(Marcy Gordon)

WASHINGTON (AP) The accountant who audited the White House travel office
said today he was surprised when presidential aides fired the workers because his
staff had not yet even finished writing the draft report of its findings.

But taking exception to comments attributed to him today by a key Republican,
Peat Marwick accountant Larry Herman said in an interview his audit did in the
end turn up “serious financial mismanagement” that might have justified at least
the firing oF the office’s director.

House Government Reform and Oversight Committee chairman William Clinger,
R-Pa., opened a hearing today on the controversial May 1993 firings by saying that
Herman had told his investigators that he “did not think his review warranted the
firings.”

Herman said he believed his comments to the congressional investigators had
been “misinterpreted.”

“We never made any recommendations nor were we ever asked for any rec-
ommendations on whether the president should terminate anybody,” Herman said
in a telephone interview.

But he said his audit turned up evidence that the office’s director, Billy Dale, had
written petty cash checks to himself and deposited them in his account and that
“I think probably does warrant some immediate action.”

“My personal assessment is . . . that most companies today would question that
and would include questioning whether to remove that person from that position,”
he said.

He said he did not have an opinion as to whether the other six workers fired
along with Dale in May 1993 should have been dismissed. Five of those were rein-
stated to other jobs and the sixth retired. Dale was tried on embezzlement charges
and acquitted.

Herman said that while his audit ultimately turned up ‘clear evidence of financial
mismanagement” that he was still surprised when the firings were announced.

“At the time they fired them, we were still writing our draft report and I was sur-
prised that those actions were taken while we were still writing our draft,” he said.

The White House created a public outcry May 19, 1993 when it fired the seven
longtime travel office workers, who arranged flights for the White House press
corps, and put a 25-year-old cousin of President Clinton in charge of the office.

Since then, presidential aides have insisted the firings, while badly handled, were
justified by the findings in the Peat Marwick audit.

Clinger’s investigative panel has been gathering evidence it says shows that both
first lady Hillary Rodham Clinton and presidential friend Harry Thomason pres-
sured White House aides to fire the staff.

It heard today from the seven fired workers.

Dale testified that former presidential aide Janet Green came to him two days be-
fore the firings and told him “that there is one person and only one person respon-
sible for what has taken place with your office and he occupies the Oval Office.”


76

Do you feel that there was a use of a law enforcement agency in
this process, Mr. Dale?

Mr. DALg. Yes, sir, I do.

Mr. Mica. Again, my reading of this is that on the 12th of May,
they called in the FBI before Peat Marwick, which was retained on
the 13th. They also made statements, as I recall it was a Mr. Ken-
nedy, that said if we do not have a response in 15 minutes, we will
have the IRS or some other agency, I am paraphrasing him. Is that
your reading and belief of this?

Mr. DALE. Yes, sir.

Mr. McSWEENEY. Yes, it is. And also, if | might add, on the 20th
of May, the President was asked, this is the day after the firing,
what he knew about the firing. ‘And he was very specific that he
knew absolutely nothing and that he would refer all questions to
his senior staff who were handling it.

Mr. Mica. I think it is offensive to hear from the other side any
comparison between what. they did with the Federal law enforce-
ment agency and then with the IRS, financial arm of the United

tates.

I understand you all have or has everyone undergone some scru-
tiny by the IRS; is that correct?

Mr. DREYLINGER. I am unaware of it. I just assumed that during
this procedure we have.

Mr. MAUGHAN. I was not interviewed by the IRS, but I think
mainly because I had a good attorney and he talked them out of
it.

Mr. DREYLINGER. I was interviewed by the IRS.

Mr. Mica. Are some of you currently still undergoing examina-
tion, are you aware of it, by IRS?

Mr. DALE. I am.

Mr. McSwEENEY. I have no idea, although they did say not to be
surprised if it happened. Although I would have no way of knowing
if it was happening.

Mr. Mica. The other thing that disturbs me in this whole process
is there was no NPR review. I heard other Members question be-
fore, and they asked you this question. Had you had any indication
that you were misperforming, there was mismanagement, there
was financial misfeasance in that office from January 20 to May
19? Anyone aware of anything?

Mr. WRIGHT. No, there was no communication.

Mr. Mica. No NPR. So, basically, the whole thing is concocted.
It looks to me like Mr. Thomason, I guess the administration had
had Nannygate and they had problems with Waco and the Presi-
dent’s $200 haircut, but you guys ended up as the scapegoat. This
was going to be a fancy PR move.

Did Mr. Thomason, when he came in, he came in in February
and tried to get business from you, did he tell you that he had an
interest in that business or did Darnell Martens come in?

Mr. DALE. Well, it was Mr. Thomason’s partner, Darnell
Martens, who called me on the phone. To this day, I have never
met either one of them.

Mr. Mica. Did Darnell Martens disclose that Thomason had an
interest?

Mr. DALE. No, sir.


28

My duties included acting as an advance representative for Presi-
dential trips. This required me to travel to the locations that the
President would be visiting and, while there, make arrangements
for hotel space, telephone service, local transportation, and meal
catering that would be needed by the members of the press corps
and ite House staff traveling aboard the press charter. I also
traveled on the press charter and coordinated the transportation
needs of the press corps and staff during those trips.

During my 26 years at the Travel Office, I believe that I did a
good job, both for the White House and for the press corps. I don’t

now of anything I did that would justify the accusations of finan-
cial mismanagement that were made against me in 1993.

To the extent that I dealt with the financial end of the Travel
Office—the preparation of bills to the press, the processing of in-
coming and outgoing checks, and the handling of the petty cash
that I would need to take on trips—I don’t think that I mis-
managed anything. To this date, no one has indicated, either orally
or in writing, the specifics of what it was that I was accused of
doing wrong.

In carrying out my duties at the Travel Office, I dealt with the
White House staff, the Secret Service, the Department of State, the
military, domestic and foreign airlines, bus and rental car compa-
nies, hotel and convention centers, and representatives of many for-
eign governments. I believe that during my years at the Travel Of-
fice that the office enjoyed a reputation for honesty, integrity, and
competence.

I enjoyed my position at the Travel Office. My duties required
that I travel to different parts of the United States and to many
foreign countries in the service of the President and the press
corps. It was a satisfying job, even though it often required long
hours and hard work.

I was stunned when I was told by David Watkins on May 19,
1993, that I was being terminated on 2 hours’ notice, and I was an-
gered when I learned that I was being accused of criminal mis-
conduct by the White House. There never was a basis for those ac-
cusations, and I think it was irresponsible of the people who made
them. I regret that we were not treated as individuals and that the
implication of criminal activities was used across the board and
tarnished everyone.

After the ite House, in July 1993, acknowledged its mistake
in terminating me and most of the others from our Travel Office
positions, I thought that I may be restored to that position and con-
tinue in the job. But during the months that the White House was
looking for a position for me within the Government, it was made
absolutely clear to me that I would not be returned to the Travel
Office. There never was an explanation why.

Eventually I was forced to accept a position at another Govern-
ment agency, where I am still employed. It is not the position that
I wanted, but I was told that if I did not accept it, I would be ter-
minated from Government service. I could not afford to have that
happen.

T understand today, from reading the accounts of the events that
preceded my firing in May 1993, that the administration wanted to
put its people into the Travel Office. What they didn’t seem to un-


94

Mr. DALE. Yes, sir.

Mr. Fox. Were you aware that the kickback issue is what the
FBI said largely gave them jurisdiction and—to get involved in the
case?

Mr. DALE. Yes, sir, I am.

Mr. Fox. Did you also know that the White House learned very
early on in the Management Review that the kickback allegation
was nonexistent yet did not include it in the Management Review?

Mr. DALE. No, sir, I don’t think I knew that.

Mr. Fox. Did you know that Harry Thomason himself talked
with Miami Air President Ross Fischer who says he told Mr.
Thomason he never said anything about kickbacks?

Mr. DALE. I've read that in the news, yes.

Mr. Fox. Did you know that when GAO interviewed all the var-
ious carriers that you worked with that not one provided any evi-
dence of kickbacks?

Mr. DALE. Yes, sir, I know that.

Mr. Fox. Yet you continued to get investigated about this bogus
claim; did you not?

Mr. DALE. Yes, I did.

Mr. Fox. Did you know the White House Management Review
draft June 26, 1993, actually included a section which read as fol-
lows: In early March, Martens tells Thomason again about his con-
versation with Dale and about the further information he has gath-
ered on the Travel Office. Martens also tells Thomason that he has
heard about a conversation between Dale and the president of
Miami Air in which Dale allegedly told Miami Air that it would
have to pay some form of special remuneration to secure White
House business.

Evidently, what Martens heard from Penny Sample is that the
Travel Office had its own agenda with regard to hiring charter car-
riers, and what Sample had heard from Ross Fischer, president of
Miami Air, was he thought airline of the Americas, now doing busi-
ness as UltrAir, had a special relationship with the Travel Office.
But Fischer stated that Dale never solicited payment from him,
that he never made such an allegation. In other words, the draft
report included in this section which would have demonstrated to
all that this kickback allegation was false and the result of rumors
being propounded by Darnell Martens and Harry Thomason to
spread the word around the White House.

Was the White House protecting Mr. Thomason against civil
suits or why was this exculpatory information omitted from the
final report, if you know?

Mr. Dats. I don’t know.

Mr. Fox. In fact, in your time period in the White House Travel
Office, did you ever know, were you aware of any wrongdoing by
any of our fellow employees?

ir. DALE. No, sir.

Mr. Fox. Had there ever been a prior administration which had
asked you to make special considerations for one travel agency or
another?

Mr. DALE. I’m not quite sure I understand——

Mr. Fox. Was there any request by a prior administration that
there was wrongdoing in the office?


9

I understand your interest in permitting these seven individuals
to tell their stories and in particular to allow Mr. Dale the oppor-
tunity to respond to the various charges that have been raised
against him. These, of course, include the findings of financial mis-
management made in the Peat Marwick review as well as his ac-
tivities that provided probable cause for a grand jury to indict him
of criminal charges for embezzling funds. However, question what
this has to do with your stated purpose of this committee’s inves-
tigation into the Travel Office.

‘ou have repeatedly assured us that your only intent is to find
out the facts about the firings of the Travel Office staff. None of
these witnesses have any firsthand knowledge about their firings.
And they have already said that. In fact, Mr. Dale, who headed the
Travel Office, stated as much in this article in the Washington Post
on Sunday when he wrote “To begin with, I do not know who gave
the order to fire me or my six colleagues.”

Now, I think we have to be very careful that in attempting to re-
pair the damage done to the reputation of these individuals that
we do not impugn the integrity of the career prosecutors of the De-
partment of Justice or the professionals of Peat Marwick. There
have been suggestions that the career Public Integrity section pros-
ecutors with the Department of Justice were somehow pressured by
the White House into indicting Mr. Dale. Similarly, the Peat
Marwick team has been accused of trumpin up its findings of fi-
nancial mismanagement at the urging of the White House.

Now, since we have seen no evidence to support these charges,
these individuals must also be given a chance to tell their side of
the story under oath. Therefore, Mr. Chairman, in order to allow
both the Justice Department and Peat Marwick to respond to these
very serious charges, I am today requesting that you schedule a
hearing and call representatives from the departments and the au-
diting firm. As has been said over and over again by members of
this committee and by the administration, the firing of the Travel
Office employees was terribly mishandled. Although the President
was, indeed, entitled to hire his own people for the Travel Office,
just as the Chairman was allowed to fire the entire nonpartisan
clerical staff of this committee when he became Chairman, his han-
dling was dead wrong.

Mr. Dale’s article raises many questions about both the financial
management of the Travel Office and the financial practices that
led to his indictment. Let me be absolutely clear about this because
there seems to be some confusion. The Peat Marwick review made
a number of observations and findings of “significant accounting
system weaknesses.” And let me quote from its findings and par-
ticularly say “we observed several significant weaknesses in the ex-
isting internal controls system of the press office.” So what? Well,
here is what.

According to the Peat Marwick review, those witnesses include
“lack of accountability, lack of accounting controls and systems,
lack of documentation, lack of contractual support, and an inad-
equate billing process.”

According to Peat Marwick, Mr. Dale himself admitted to their
auditors that he withheld an envelope full of cash during the first
day of the review, and I’m quoting from the FBI review with Peat


77

Mr. Mica. The only one that I can see that was bad mouthing
you was Thomason and he was part of TRM who wanted some of
this business; right?

Mr. DALE. That is true.

Mr. Mica. It was Thomason, R was Richland, and M was
Martens, so they all had—he had an interest. I am not sure if he
is aware of, and I am not sure what his status was later on, but
if he was a special Government employee, he may, in fact, have vio-
lated the U.S, Code 18205, which prohibits folks from getting any-
thing of benefit in return and having a position. Are you aware of
that?

Mr. DALE. Yes, sir.

Mr. Mica. Thank you.

Mr. CLINGER. The gentleman’s time has expired.

I am now pleased to recognize the gentleman from Massachu-
setts, Mr. Blute, for 5 minutes.

Mr. BLUTE. Thank you, very much, Mr. Chairman, and I want
to commend you for the way that you have conducted these hear-
ings over these months. You have been honest, you have been
straightforward and you have been seeking the truth in this matter
and you have run into a lot of blocks and walls in your efforts to
gain documents.

And one of the reasons we are here today at this late date is that
documents this committee subpoenaed from the White House con-
cerning this affair did not show up until very, very recently, and
as you know, the Watkins’ memos tend to be different from what
was said earlier by White House officials.

So I think it is important that we finally get to the bottom of this
for the American people. I do not know and understand why it was
so difficult for the White House to just come clean and admit that
this was a mistake; that they intended to change people there,
which they had a legitimate legal authority to do, but instead they
did not do that, they engaged in a deception.

I said to Mr. Watkins something that my mother used to tell the
Blute kids, and that was: “Oh what a tangled web we weave when
first we practice to deceive.” And it seems to me that the White
House engaged in deception from the very beginning as to why you
were all fired.

And then, after it was fairly revealed that there was a mistake
there, they engaged in deception to try to prevent the real story
from coming out. The Watkins’ memo was very clear on that and
many other memos. And I think there are serious questions here
to which this committee and the American people deserve to find
the answers.

I am somewhat troubled by some of our minority colleagues who
seem to think this is no bi; yeal. The inappropriate use of the FBI
and the IRS is no big deal. White House officials not being forth-
coming to congressional investigators, to GAO investigators; this is
no big deal to them. I think it is a very big deal and it really cuts
fo democracy as to how each branch can keep an eye on the other

ranch, .

If they had handled this the right way, at the White House, this
would now be a long-forgetten personnel move. It might have been
a tough move, it might have been a political move, but it would


83

Mr. LaToureTTE. Thank you, Mr. Chairman. ;

Just a couple of observations that I would like to make in the
beginning, with you, Mr. Dale, in particular. I was very much look-
ing forward to your coming here today, because I have had a lot
of characterizations of you and seen a lot of characterizations of

ou in the press. And I would say this side of the aisle and Sam
onaldson lon’t agree all the time, but I would suggest to you that
I would agree with his observation that you seem to be very candid
and a straight-shooter, and I hope you take this the right way, but
you don’t strike me as a big schemer or someone who was dropping
an elaborate plan to defraud the Press Corps.

As a matter of fact, all seven of you just seem like people who
have worked between 9 and 32 years at the White House Travel
Office trying to do your jobs and provide the best service you could
to the ite House Press Corps and also the Presidents that you
served. Unlike some other people in this town that may deserve the
appellation “slick,” I don’t think anyone will call you “Slick Billy”
by the time we are done with this set of hearings.

Mr. McSweeney, although I am a new freshman, I have become
somewhat battle-Hardened during this 104th Congress. I was par-
ticularly moved by your statements earlier today when you talked
about the rage you felt for the last 2 years. I don’t blame you. I
felt it as you spoke and talked about Mr. Dale’s daughters and the
wedding plans. I don’t know how the seven of you lived with it or
how you get past it.

As I sit here, and I used to be a prosecutor, and when I met Mr.
Dale during the break, and when he found out I was a prosecutor,
I sort of backed up because he has not had good experience with
prosecutors recently. But none of you sounded rehearsed or
coached, you do not have lawyers whispering in your ears and pro-
viding you with answers, you have not issued a single denial, and
in giving your testimony today you have not shut down the C-
SPAN and the network cameras. You have let America hear what
it is you have to say, and I appreciate that.

You were not here for the first two hearings, but I want to go
back in chronology. The first hearing sort of had_a theme that be-
cause you, Mr. Dale, were under indictment, the Chairman and the
majority of this committee was all wet and what are you looking
into this thing for?

As a matter of fact, I remember at one point during the first
hearing where the Chairman was chastised, for apparently he had
sent a letter that indicated that some exculpatory material had
been found. And for those of you who are not lawyers, exculpatory
material means information that the Government has in its posses-
sion that shows a person charged with a crime is not guilty. And
there were some on the other side of the panel who were suggest-
ing what a horrible thing to do, to provide to a person charged with
a crime documents in possession of the Government that would
tend to show they were not guilty of that crime. I thought that was
strange, given my background.

At the second hearing we had, you had been acquitted, and we
were faced with “so what?” Even though you had been acquitted,
we were told the fact a Grand Jury indicted you still made you
somehow a bad person and we should be looking at that.


5

charge of the White House Management Review, failed to include
this information in his report.

As we had heard earlier, when we reviewed all of the reports and
all of the investigations that had been done, none of them were
really thorough because most of them had no access to many of the
documents that have only just come to light. So it seems that due
process and integrity of records stopped at the White House door.
Why were the Justice Department and the FBI willing to suspend
normal practices when the White House was involved? Is the high-
est office in the land given a pass on normal criminal investigative
procedures?

So as a result of our investigation, so far as it is—so far, it is
clear to me the alleged concern about financial mismanagement
that we have heard often in the past few weeks was always a cover
for a decision that had been made long before Peat Marwick ever
crossed the threshold of the White House. As David Watkins testi-
fied last week, and as his notes reveal, on May 12, 1993, two full
days before Peat Marwick came in, the First Lady expressed her
wishes to Harry Thomason that the Travel Office employees all be
fired that day.

One week later on May 19, 1993, Dee Dee Myers claimed on be-
half of the White House that the seven Travel Office employees had
been fired based on a report which did not exist of an audit which
never occurred. Peat Marwick documents we have received from
the White House as well as Vince Foster’s notes indicate involve-
ment of the White House in dictating the terms of the Peat
Marwick review and editing of that review. In other words, this
much touted audit was actually a non-independent, nonaudit.

Mr. Larry Herman, who headed up the review, told the commit-
tee staff of pressure on Peat Marwick to finish the review quickly
once the White House had cited it as justification for the firings.
No doubt this was so the White House could substantiate its claims
of financial mismanagement. The Peat Marwick report itself never
once, never once mentions the words abysmal mismanagement,
pross mismanagement, or any of the other pejoratives that have

een bandied about. And Mr. Herman, the man who was in charge
of the review, told the committee he would not use such terms. [In
fact, Mr. Herman told GAO investigators during their review that
he was surprised by the decision to fire the employees before the
review was even completed and he told the committee that he him-
self did not think his review warranted the firings.

Frankly, I have been disappointed in the total refusal of my col-
leagues on the other side of the aisle to approach this investigation
with any semblance of an open mind. As my colleague Mr. Shays
noted in our last hearing, many of us have sat through countless
investigations when our colleagues were in the majority and in
many, if not most, cases worked in a bipartisan manner even when
it hurt our own party. As Meg Greenfield pointed out earlier this
week, there does not need to be a murder mystery to warrant seri-
ous review of a matter by Congress.

Just this morning we all honored one of our colleagues, former
Congressman Mike Synar, who passionately and aggressively pur-
sued various investigations in this committee, and I believe I
worked in a bipartisan fashion with Mike in many of those inves-


111

gal. If somebody at the White House got the FBI involved in this
and misused the power of the White House, that is illegal.

The First Lady, according to the notes we have, has lied, because
the chronology of events does not bear out what she said; and that
is why I think it is absolutely essential, Mr. Chairman, that we
bring all these people before this committee and get to the bottom
of it.

Because the end result is they could have fired these people any-
how, but they have hurt them, they have hurt their families and
hurt their reputations and hurt their honor, and it didn’t need to
happen. It is a miscarriage of justice, and I think there is a real
possibility there is an abuse of power and some felonies have been
committed, and I personally resent the minority retrying this case
in this body when they have been—when the charges against Mr.
Dale have been dismissed.

Mr. CLINGER. The gentleman’s time has expired.

The gentleman from West Virginia.

Mr. Wisk. Thank you, Mr. Chairman, and I know the gentleman
from Indiana will want to join the minority in the application we
have made to the Chair to have those Justice Department officials
as well as to have the Peat Marwick officials come before this com-
mittee.

It_seems to me you have to get into what were the reasons be-
hind the decisions to prosecute. Certainly to have those profes-
sional prosecutors here discussing why they did would answer your
questions but, also, I think bring a lot to this.

I might raise to the gentleman before me that the gentleman
from Florida, who with such fanfare presented you with those red
roses, that while he gave you those red roses he did not mention
that he is part of the same leadership team that yesterday gave
113 pink slips to Federal congressional employees without cause.

The gentleman from Pennsylvania, our Chairman, who very elo-
quently talked about the demeaning conduct and the way you were
ushered out of the White House—and I do happen to agree it was
demeaning, the way you were ushered out in the back seat of a
van—I cannot consider anything more demeaning than just hours
before the protection for congressional workers is to take effect that
113 of them are dismissed, given pink slips, without notice, so the
new contractor can come in.

There is a lot of demeaning activity going along, and I would
yield to the gentlewoman, Mrs. Maloney, for another question she
would like to ask.

Mrs, MALONEY. I would like to ask the Chairman if I could put
into the record something that just came off the AP wire in which
Larry Herman is talking directly to the AP writer, and he is taking
exception to comments attributed to him at this hearing by a key
Republican. And he said in a telephone interview, meaning today,
meaning this hearing today, he said in a telephone interview, and
I quote, that the audit did turn up mismanagement that might
have justified at least the firing of Dale, end quote. Still, he said,
and I quote, at the time they fired him, we were still writing our
draft report, and I was surprised.

He goes on and he says that Representative Clinger, Chairman
of the Government Reform Committee, opened the hearing by say-


81

Mr. McSwEENEY. No, sir.

Mr. DALE. No, sir. .

Mr. Davis. Did anyone ever raise the issue of financial mis-
Management or concerns or anything at all; ask you for any ac-
counting or ask you about how or why you did what you did?

Mr. DALE. No, sir.

Mr. Davis. Can you describe the management or direction pro-
vided to your office from Ms. Thomasson or Mr. Watkins?

Mr. DALE. We had none.

Mr. Davis. Now, Mr. Van Eimeren, Harry Thomason told First
Lady Hillary Rodham Clinton that he could have a better, cheaper
operation up and running in an hour in the White House Travel
Office. Did you find this to be the case after you returned from your
May 19, 1993 meeting in which the entire White House office staff
was fired?

Mr. VAN EIMEREN. When I returned to the office, Mr. Davis, it
was probably about 15 minutes. The meeting with Mr. Watkins
was about 15 minutes. And walking back into the office, and there
were other people sitting at our desks, but they really had no clue
as to what to do, and one of the World Wide Travel personnel sit-
ting at my desk started asking me questions, how do you do this,
how do you do that. And I just simply stated to her, sorry, but I
am not in the mood to tell you how to do my job right now.

Mr. Davis. Did you have any contact with them afterwards?

Mr. VAN EIMEREN. No, I did not.

Mr. Davis. Incredible. Well, let me just ask.

Mr. Chairman, I understand that we have just received over
5,000 more pages of documents, which include many documents re-
lated to Mr. Harry Thomason that we have only now received be-
cause we issued subpoenas for these documents that have been evi-
dently long withheld. We still have much more to learn about Mr.
Thomason’s role in this.

And with that, I would yield back and only say to these gentle-
men, I saw you on Larry King, and I represent a lot of Federal em-
ployees, and I know the rhetoric is great, but when you trash peo-
ple who have given their careers to Government like this, it is the
wrong message. You were wrongly treated and it is regrettable,
and I hope that this story, as it goes out across this country, will
clear once and for all the mysteries that surrounded this and the
false allegations that came forth.

Thank you.

Mr. CLINGER. The gentleman yields back the balance of his time.

I thank him for his questioning.

I will now yield 5 minutes to the gentleman from Minnesota, Mr.
Gutknecht.

Mr. GUTKNECHT. Thank you, Mr. Chairman.

I don’t intend to take my full 5 minutes, but, Mr. Dale, we have
had written testimony, I’m sorry, documented and written and oral
testimony, under oath in this committee, that documents were de-
stroyed, computer files were erased. I was curious, did any of that
affect your ability to defend yourself? Were any of those files that
were ultimately found to be missing or that we know now that had
been destroyed, did that affect your act to defend yourself?


107

Mr. VAN EIMEREN. Yes, I was.

Mrs. MALONEY. And where were you transferred to? Where were
you working when this happened?

Mr. VAN EIMEREN. You're referring to the latest furlough?

Mrs. MALONEY. Yes, yes.

Mr. VAN EIMEREN. The Department of Commerce.

Mrs. MALONEY. The Department of Commerce.

Mr. Wright, were you furloughed?

Mr. Wricut. I have been retired.

Mrs. MALONEY. You are retired.

Mr. Brasseux.

Mr. BRASSEUX. I was furloughed the first time. I am with GSA.
The second time I was working.

Mrs. MALONEY. Mr. Dale?

Mr. DALE. I’m retired.

Mrs, MALONEY. Mr. McSweeney?

Mr. McSWEENEY. I was on duty the first time and I retired before
the second time.

Mrs. MALONEY. OK. And Mr. Dreylinger?

Mr. DREYLINGER. I also work for GSA. And I was furloughed the
first time but not the second.

Mr. MAuGHAN. I was with the Department of Defense and was
furloughed the first time and retired before the second one came
around.

Mrs. MALONEY, Well, those of you that were furloughed this last
time, you, Mr. Van Eimeren, and you were at Commerce, that was
one of the departments that was shut down; did you miss any pay-
checks?

Mr. VAN EIMEREN. I missed—I was paid for 1 week. Instead of
the normal 2, 2-week pay period, I was paid for 1 week.

Mrs. MALONEY. So you did miss a paycheck due to the Repub-
lican shutdown.

During the time that you were in transition from this job or fired
from this job, did you ever lose a check? Did you ever lose pay-
ment?

Mr. VAN EIMEREN. No, I did not.

Mrs. MALONEY. You did not lose payment. I understand that you
are now—or are you civil service now?

Mr. VAN EIMEREN. Yes, I am.

Mrs. MALONEY. You are civil service now, Is it better to be a civil
service employee as opposed to a political appointee as you were at
the Travel Office that serves at the pleasure of the President?

Mr. VAN EIMEREN. I was not a political appointee. I was career
civil service at the White House.

Mrs. MALONEY. You were career civil service?

Mr. VAN EIMEREN. But we came under the exempted civil serv-
ice, which meant that we served at the pleasure of the President.

Mrs. MALONEY, But is it better to serve under civil service where
you do not serve at the pleasure of the President but-——.

Mr. VAN EIMEREN. Well, certainly there are advantages to it. You
have more rights.

Mrs. MALONEY. I would like to go back to the line of questioning
that my colleague, Mr. Kanjorski, had earlier.


92

none; report on cash-flows, none. They held that there was tremen-
dous mismanagement.

Now, I have a question for Mr. McSweeney.

Mr. DALE. Do I get a chance to answer those?

Mrs. MALongEY. I asked your—yes, you have a chance to answer.

Mr. DALE. I dispute each and every one of them.

How do you get approval for a cash expenditure when you're
standing on an isolated spot on a runway in a foreign country at
3 in the morning and you're told that it’s going to cost you $2,500
to load an airplane? 10 do you call? Put yourself in my shoes.
That’s all I ask you to do.

Mrs. MALONEY. It just said there were no records. Now, if you
would like——

Mr. DALE. That is absolutely false.

Mrs. MALONEY. I would like you to respond in writing to all of
the allegations put forward not by me, not by the Democrats, not
by the Republicans, but by an independent body. I request very re-
spectfully that you put in writing why none of these management
suggestions or management—I would call these general accounting
procedures, general management procedures, why none of them
were put into a formalized management——

Mr. DALE. Go right up and down the line here and ask these gen-
tlemen if those procedures were in existence.

Mr. CLINGER. The gentlelady’s time has expired.

Mrs. MALONEY. Mr. Chairman, if I could just say—add one to
you, sir, because I know what you really care about is getting the
Travel Office running better. If we could. ask each of them to reply
in writing to each of the findings again by an independent auditing
firm and by the General Accounting Office, I do believe that we
should spend time in trying to figure out how to better run this of-
‘ice.

And again, I truly believe, Mr. Chairman, if you were interested
in good management, we would simply outsource this office and
have it—and I have legislation to achieve that and then let us go
forward with other hearings on how we can provide more American
jobs, the economy, Medicaid, Medicare.

Mr. CLINGER. The gentlelady’s time has expired. But Mr.
McSweeney wanted to reply.

Mr. McSweeney. Thank you, Mr. Chairman. I just wanted to
make one point. You’re asking for us to answer when we did not
have management authority, five out of the seven here, and I don’t
quite understand what you're talking about.

Mrs. MALONEY. Well, these were the findings in the——

Mr. McSwEENEY. The report that you're asking us to present to
you in writing, five out of the seven of us have no management or
financial responsibilities at all, so—

Mrs. MALONEY. Mr. McSweeney, you raised a very good point. I
was merely responding to the gentleman who has the management.
authority who said that all of you would agree with his position.
Earlier he said that. And so I was assuming that he meant that
you then probably had management authority.

Then maybe—I would like to clarify it, Mr. Chairman, that only
those who had management authority respond in writing to the
findings of the independent audit.


60

the seven people in the White House Travel Office are far more im-
portant to the Republicans than the quarter million at these com-
panies who lost their jobs. And I would just like to state that I be-
jieve these hearings are very partisan. I would like to ask Mr. Dale
a question.

Mr. Dale, serious financial management weaknesses were found
by the Peat Marwick firm in its May 1993 review of the Travel Of-
fice. In May 1994, the General Accounting Office in its review con-
cluded “serious financial mismanagement.” On Page 3 it said,
“GAO’s review of records from the Travel Office and Peat
Marwick’s work papers as well as discussions from Peat Marwick
and former and current White House officials confirmed that seri-
ous financial management weaknesses existed.” GAO’s review con-
firmed the findings of Peat Marwick and pointed out basic mis-
management and went through a whole lot of findings where they
thought there were a lot of problems.

Mr. Dale, in your Op Ed article in the Washington Post of Janu-
ary 21, you referred to “the so-called financial mismanagement dis-
covered by Peat Marwick.” You went on to state that the most seri-
ous issue raised by Peat Marwick was your failure to record five
petty cash checks totaling $14,000.

Do you disagree with the GAO findings? The GAO findings of
mismanagement, do you disagree with them?

Mr. DALE. Yes, I do.

Mrs. MALONEY. Can you explain why?

Mr. DALE. Because I did not have records available to me at the
time Peat Marwick came in or I assume that those records were
not available when the GAO did their investigation or audit of the
Travel Office. If all of my records had been available, there
wouldn’t have been any question, no question in my mind about
that.

Mrs. MALONEY. While you were with the Travel Office, were you
aware that in the 1980’s OMB staff found poor financial manage-
ment practices in the Travel Office and excess money in its bank
account? Did you take any actions to improve that?

Mr. Date. Yes, I did. And that—those—that audit was done be-
fore I assumed the directorship of the office.

Mrs. MALoney. I would like to go—first of all, may I put the arti-
cle from Jim Dwyer in the record, Mr. Chairman?

Mr. CLINGER. Without objection, so ordered.

(The information referred to follows:]

D.C. Gona SHow’s FAMILIAR RING

(By Jim Dwyer, January 18, 1996, New York Daily News)

I am still waiting for them to start the congressional hearings on the 40,000 lay-
offs at AT&T. Among other places. Instead, we have Alfonse D’Amato following the
road to the bright lands of Arkansas trailer parks.

“It’s a job we have to do,” D'Amato declared solemnly as he began another day
of doing nothing at length. “I want to thank the ranking member for for giving us
the opportunity to explore it in the depth we found necessary.”

Yes, the Senate Whitewater Committee went into the matter in depth. You would
not believe how D'Amato can take seven full hours to investigate file cabinets that
may contain, at their most thrilling, invoices for paper clips that once held folders
containing information about the trailer park. Tim Coyne, waiting on line at a mid-
town unemployment office yesterday, was very impressed by the Congress.


56

denied by the man who did the firing. So that was verified, and I’m
sorry that the American people didn’t get a chance to see that—
say that—see that.

One other thing I want to point out is it has been stated that
there’s a parallel between your firings and the dismissal of other
people in the Government here at the congressional level in the
Post Office, and so forth. The fact of the matter is your honor was
tainted, your integrity was tainted. It didn’t happen with the oth-
ers. It is unfortunate they lost their jobs, but there were reasons
for that. But you were accused of being crooked.

In our Declaration of Independence, our Forefathers pledged
their lives, their fortunes and their sacred honor because the only
thing they considered sacred was their honor. When you destroy a
man’s honor and integrity, you have, in effect, destroyed him, and
that is the real problem here. They tried to attack your honor.

This, in my opinion, by the ite House was not an investiga-
tion; it was an inquisition, and we are going to continue and get
to the bottom of this. And once again, as my colleagues have, we
apologize to you for what you have been through and thank you for
yielding.

Mr. uncer. At this point, I’m going to recess the hearing for
45 minutes because the cafeteria is going to close.

[Recess.]

Mr. CLINGER. The Committee on Government Reform and Over-
sight will resume its sitting. And I am now pleased to recognize the
gentlelady from Florida, Mrs. Meek, for 5 minutes.

Mrs. MEEK. Thank you, Mr. Chairman.

First of all, Iam glad that you gave the members of the White
House Travel Office—

Mr. CLINGER. Can’t hear you, Mrs. Meek.

Mrs. MEEK. Thank you. Thank you, Mr. Chairman.

First of all, 1 am happy that you gave the members of the White
House Travel Office a chance to come before the Congress and ex-
plain their side of the story. It is unfortunate how things have
evolved here, and hopefully in the end you will feel better about
what happened, even though you had some real permanent injury
because of this.

I think that as far as I can see in listening, and having worked
in supervisory positions all of my life, that I think that even
though Mr. Dale was cleared by the criminal court and he is not
a criminal, he was not dishonest, but what he did, in my opinion,
was a fireable offense. And I think the other members of this group
are victims of a circumstance that they worked for someone who
had used—maybe got a little bit careless because of his long years
in the White House. But I think that the rest of you are swept into
this because of that kind of thing that happened, and even though
they cleared him of it, internal control, according to what we are
reading and by Mr. Dale’s own admission that he commingled
funds and that he put funds in a personal account. Now, if anyone
were to do that, that shows a big glint of impropriety. It is im-
proper to mix those funds. It is improper to set up a personal ac-
count and put funds in it that don’t belong there, even though he
did nothing with a criminal intent. But he knew, having supervised
all those years, that that was an improper thing to do because it


18

White House and the people I worked with in the press. I look forward to the day
when this is behind my family and me.

Mr. Chairman I thank you for this opportunity and I am prepared to answer all
questions the best of my ability.

Mr. CLINGER. I will now ask Mr. Brasseux if you would present
us with your testimony.

STATEMENT OF BARNABY L. BRASSEUX, FORMER ASSISTANT
TO THE DIRECTOR, WHITE HOUSE TRAVEL OFFICE

Mr. BRASSEUX. Thank you, Mr. Chairman.

Mr. Chairman, distinguished members of this committee, my
name is Barney Brasseux; and I’m a former member of the White
House Travel Office. I began my service at the White House in

uly—

Mr. Says. Mr. Chairman, could the gentleman put the micro-
phone much closer to him?

Mr. BRASSEUx. I’m sorry.

Mr. Suays. I’m sorry—and it’s the silver mike that picks up your
voice.

Mr. BRASSEUX. Is that better? I’m sorry.

I began my service at the White House in July 1982 and served
until May 19, 1993. In my 11 years at the White House, I worked
hard; and I always tried to do my best. I take a great deal of pride
in the job I did and the tremendous privilege of working at the
White House and serving the President of the United States.

Tm here today to answer any questions this committee may have
regarding my experience in the White House Travel Office and the
events surrounding the termination of the Travel Office employees
by the Clinton administration on May 19, 1993.

For me, the 19th of May, 1993 was the beginning of a difficult
time and the first of several eventful days that turned my life up-
side down. I was fired, told to vacate the premises within 2 hours,
driven out of the White House in the back of a cargo van with no
seats, implicated by the White House in criminal wrongdoing, and
placed under investigation by the United States Justice Depart-
ment, even though I had no financial responsibility whatsoever in
the office.

I sometimes find it hard to believe that I’m in the middle of what
has become such a publicized event. For the past 2¥2 years, I and
my colleagues have been the subject of numerous newspaper and
magazine articles, radio programs and television news stories. In
the past few weeks, there has been a newspaper story about the
Travel Office firings almost every day.

Many questions and concerns have been raised in these reports
regarding the handling of our termination. The manner of our dis-
missal, the damage to our reputations, the impact of this action on
our families, the possible involvement of the First Lady of the Unit-
ed States, and the role of the Federal Bureau of Investigation are
just a few. All of these issues are very important to me and I trust
to you as well.

I sincerely hope that my presence here today will prove helpful
to you in your continuing efforts to fully explore this entire affair,
and I look forward to the final results of this committee’s investiga-
tion.


47

and that I would agree to serve 2 to 4 months in jail, if that’s what
they wanted, because I had been told or been estimated that my
legal expenses could exceed $450,000 and the anguish of going
through a trial, and I didn’t want to put my family through that
unless I absolutely had to.

Mr. Suays. And it is possible, isn’t it, Mr. Dale, that you could
be innocent and be found guilty and you had to recognize that was
a fact, too?

Mr. Date. That's true. But in my plea bargaining I told them
under no circumstances would I agree that I stole any money or
used any Travel Office money in any manner except what it was
meant to be used for.

Mr. SuHays. OK, now Mr. Dale and Mr. Wright, you handled the
money.

Would, Mr. McSweeney, representing the rest, you did not han-
dle money; is that correct?

Mr. McSWEENEY. No, sir.

Mr. SHays. Why were you considered a crook?

Mr. McSWEENEY. Because the only way they could bring in the
people from Arkansas was to clean out the entire office, including
the telegraph side. That was the only way they could do it.

Mr. SHays. I want to hear from each of the individuals beside
Mr. Dale and Mr. Wright.

Did any of you—I’d like to go down, did any of you handle
money?

Mr. VAN EIMEREN. No, sir.

Mr. Suays. Collect money, reimburse it, put it in the accounts
and so on?

Mr. VAN EIMEREN. No, sir. I handled very few dollars of petty
cash.

Mr. Says. I’m running out of time.

I’m sorry, very few dollars of what?

Mr. VAN EIMEREN. Very few dollars of the petty cash. When a
trip was out, bus drivers, what have you, we give them a gratuity.

Mr. Suays. Tiny dollars.

Mr. Brasseux, you handled money next?

Mr. BrassEUX. Yes. Yes, sir, I helped with some of the account-
ing practices but I had no financial responsibility, meaning I
couldn’t sign a check.

Mr. Says. You did the bookkeeping.

Mr. Brasseux. I helped with some of the bookkeeping, check-
writing.

Mr. Suays, Mr. McSweeney?

Mr. McSWEENEY, The same. I did the bookkeeping, but I had no
financial responsibility at all.

Mr. DREYLINGER. I had the same, I think all of us did have petty
cash responsibilities when we would do a trip or go on an advance,
but other than that, no responsibility.

Mr. SHays. Have any of you—yes, sir.

Mr. Maucuan. Yes. And as is stated in my statement, part of my
responsibilities was making a bank deposit for the Press Travel
Fund that ranged anywhere from $72,000 to $555,000.

Mr. Suays, Thank you very much.

Mr. MAUGHAN. No petty cash.


51

I think the—I think Mr. Watkins’ recollection was in a direct
conversation with Mrs. Clinton: We need the slots, we need to get
their people out and our people in.

I’m sure these people—these people that had been there for years
didn’t realize that they were some of these people, at least in some-
body’s mind. But the fact of the matter is the evidence is over-
whelming that this termination occurred because of a political
agenda.

eNow, I want to stop right here and emphasize that the question
has been raised a number of times, in essence, so what? The fact
of the matter is that these positions could be terminated at the
pleasure of the President, all these employees knew it. And, in fact,
politics being what it is, there are times when both Democrats and
Republicans have made changes in employment in certain positions
for what might be considered political reasons. I’m not here to de-
fend the practice, but I can distinguish it.

There is no example I can think of in a change of personnel with
the change of administration or change in the majority in Con-
gress, that was accompanied by a false set of charges to besmirch
the reputations of long-standing, fine Government employees. If
changes were made for the reasons cited, that a new majority or
new administration wanted their own people in office, that’s what
was stated and it can be certainly criticized for that reason, but it
still is—is immensely different from the idea of charging, and in
my judgment, misusing law enforcement, such as announcing an
FBI investigation which was totally improper to do that.

I can tell you that as a career prosecutor, the FBI never confirms
or denies it’s doing an investigation, that there was an investiga-
tion here, and I want to continue to say that the suggestion has
also been made that, well, that was a mistake made early in May
1993, and the administration really wouldn’t continue to do that,
act in that fashion.

The problem is that’s exactly what they’ve been doing. Charges
continue to be leveled up till the present time against one or more
of these employees, and there continues, there has been a resist-
ance to providing documents and information. As the Chairman
pointed out, we're still having these hearings because we have re-
quested documents for years that are just now suddenly materializ-
ing. So I think there is a major difference here in what we are ex-
amining as this committee and other kinds of changes in personnel.

And to conclude on this point, I would say that those who might
be watching on C-SPAN or through other electronic device, know
they didn’t see Mr. Watkins’ testimony on C-SPAN or any other
electronic form because he pulled the plug. He had the legal right
to do so.

But if there’s any question about the propriety of what happened
in the Travel Office, the fact that the White House official who did
the firings took sort of an electronic Fifth Amendment, should an-
swer everybody’s question about whether it was appropriate or not.

Mr. McSweeney with my—with my remaining time, I would like
to go to you first and then perhaps Mr. Dale or anyone else. You
stated that you were reimbursed your salary but called a thief. I
believe those were your words. Am I remembering right?


80

Mr. DALE. After we were fired and I read about it in the news-
paper.

Mr. Davis. If you had known they were friends of the President,
would you have thrown business their way or acted in any way dif-
ferent?

Mr. DALE. No, sir, I would not.

Mr. Davis. Mr. Martens said, he was upset you could not give
him an opportunity to get the business. Can you explain why it
was not feasible to y rovide him with the business?

Mr. DALE. Because if Mr. Martens had gotten business, the char-
ter companies would have had to pay him a commission, approxi-
mately 10 percent. And I told him that I didn’t see where that
would be financially beneficial to the White House Press Corps,
and, besides, I didn’t need a middleman to handle the contacts at
the airlines for me.

Mr. Davis. It would have been an extra cost, in other words?

Mr. DALE. An extra cost, yes.

Mr. Davis. Did you have ever have any inquiry from anyone at
the White House as to why Darnell Martens could not get the busi-
ness?

Mr. DALE. No, sir.

Mr. Davis. At the time you did not know that TRM, the company
owned by Darnell Martens and Harry Thomason were also seeking
GSA contracts?

Mr. DALE. No, sir, I did not.

Mr. Davis. Prior to your firing, how often had you met with
Patsy Thomasson or David Watkins?

Mr. DALE. I had never met Patsy Thomasson until May 14, the
morning she walked into my office with the Peat Marwick people.

Mr. Davis. How about David Watkins?

Mr. DALE. The one time that I met with him was when he called
me over to tell me that Catherine wanted to work in my office.

Mr. Davis. And he never——

Mr. Date. I had met him in the hall in an unofficial capacity,
shook hands with him and introduced myself, but no official meet-
ings.

Sir. Davis. He had not expressed any concern about the quality
of your work or any rumors he had heard or anything else?

Mr. DALE. No, sir.

Mr. Davis. Mr. Dale, you testified that you tried on numerous oc-
casions to meet with George Stephanopoulos and Dee Dee Myers
and could not. What would you ordinarily have done in interacting
with their office?

Mr. DaLe. Well, when we leave Washington with the President
on a Presidential trip, we consider the Press Secretary to be our
supervisor. We work Ter them,

Mr. Davis. What financial management concerns did Patsy
Thomasson or David Watkins raise with any of you? Did either of
them raise any concerns with you?

Mr. DALE. No.

Mr. McSWEENEY. None.

Mr. Davis. So you are out-trashed in the press and they never
raised any question with you about you given any rebuttal or any-
thing else?


13

the public understands that the firings were not driven by sup-
posed concerns over financial mismanagement but were in fact the

oduct of a decision that was reached long before anyone even
Began to look into the way the Travel Office was managed.

What matters to me is that fancy lawyers and others who speak
for the White House not be allowed to get away with the lie that
my colleagues and I were involved in other kinds of wrongdoing.
It also matters to me that people not be allowed to spread the
equally vicious lie that I was willing to plead guilty to embezzle-
ment Yefore trial. And, finally, it matters to me that these same
people not be allowed to tell the public that the Travel: Office was
cleaned up and is now managed better.

During the preparation for my trial, we discovered a lot of infor-
mation that demonstrated that the so-called financial mismanage-
ment discovered by Peat Marwick between May 14 and May 16,
1993, merely provided a convenient excuse to carry out a decision
that had been in the works for a long time. Legal rules kept the
jury from hearing those facts.

‘or example, in September 1992, Travel Weekly magazine pub-
lished an interview with David Watkins in which he extolled the
critical role of World Wide Travel for its essential role in ensuring
that the Clinton campaign had sufficient funds to spend on certain
crucial primaries. World Wide had accomplished this by its creative
billing procedures of the media that traveled with the Clinton cam-
paign. This is the same Little Rock travel agency whose employees
were already sitting at our desks when we returned from our meet-
ing with David Watkins the day we were fired.

‘hen in November 1992, days after the election, Steven Davison
of World Wide told Arkansas Business magazine that World Wide
was already considering opening an office in Washington to handle
the travel needs of the President’s staff, a function that had always
been performed by the Travel Office.

In December 1992, World Wide raised this issue in a letter to
Catherine Cornelius, a Clinton campaign and transition staffer and
cousin of the President, who passed it on to her superior, David
Watkins, along with her endorsement. Later that month came the
first of several memoranda written by Miss Cornelius in which she
set forth her plans to restructure the Travel Office with herself in
my job and giving World Wide the staff ticketing function.

e also learned at about the same time several White House cor-
respondents were told by a Clinton transition official that the new
administration had plans to remove the Travel Office staff.

On Inauguration Day, we began to get calls at the Travel Office
for people looking for the “new director’, Catherine Cornelius. A
few days later, Darnell Martens, Harry Thomason’s partner in the
charter-brokerage business, drafted a memorandum in which he set.
out his ideas for taking over the other major function of the Travel
Office: arranging for press charters. Like the ticketing function,
this was another potentially lucrative area of business for a private
firm.

I was not aware of this memorandum when Mr. Martens called
me a few weeks later to discuss this proposal. When I explained
to him politely I had thought that I couldn’t see the benefit of deal-
ing through a middleman to perform the function that the Travel


55

Government, and I would—I would hope that these things are not
lost there, they should have been archived someplace.

Mr. CLINGER. I would hope so as well.

Mrs. THURMAN. Thank you.

Mr. CLINGER. We will continue.

I will recognize the gentleman from New York, Mr. Gilman.

Mr. GILMAN. Thank you, Mr. Chairman. I'll be brief.

Mr. Dale, prior to your firing, how often had you met with your
supervisors Patsy Thomasson or David Watkins or Dee Dee Myers?

Mr. Date. I had only met with one of them, that was David Wat-
kins, and that was 5 weeks or so before, when he called me to his
office to notify me that he was going to install Catherine Cornelius
in the office to work and learn the travel business.

Mr. GILMAN. And that was the extent of your meeting?

Mr. DALE. That was the extent of my meeting. I was unsuccess-
ful in arranging meetings with any of them, although I tried.

Mr. GILMAN. You made requests of all of them?

Mr. DALE. I made requests on either the afternoon of Inaugura-
tion Day as the press office was getting settled in or the next day,
I went to George Stephanopoulos’ office because it has always been
my tradition or the tradition of the office to introduce yourself to
the people that you most closely interact with in the administra-
tion, requested a meeting with him to introduce myself. His sec-
retary or assistant told me that she would get back to me.

Mr. GILMAN. Did any of your supervisors, Mr. Dale, ever raise
the issue of financial mismanagement, or concerns, of these con-
cerns with you? Did anyone ever ask you for any accounting or ex-
planation about how or why you did what you did?

Mr. DALE. No, sir.

Mr. GILMAN. Mr. Dale, did you ever get any lucrative stock op-
tions or futures options as a result of your public position?

Mr. DALE. No, sir.

Mr. Gitman. And, Mr. Dale, did UltrAir ever pay kickbacks to
any of the White House Travel Office employees, as far as you

now?

Mr. DALE. No, sir.

Mr. Gitman. And I ask that of all of the panelists, did any of you
receive any kickbacks?

Mr. Wricur. No.

Mr. BRASSEUX. No.

Mr. DREYLINGER. No.

Mr. MAUGHAN. No.

Mr. McSWEENEY. No.

Mr. VAN EIMEREN. No.

Mr. GILMAN, No yes answer amongst any of them.

Thank you very much.

Thank you, Mr. Chairman.

I'll be pleased to yield to the gentleman from Indiana.

Mr. Burton. Real briefly.

I think one point that Bas not been made that really should be
made, is that at the closed hearing when Mr. Watkins testified, he
verified every one of his notes. He did not deny anything that was
in those notes. And so the question about the First Lady’s deter-
mination to be involved and to get rid of you folks has not been


2

So what if the White House learned that Harry Thomason’s alle-
gations of kickbacks and bribes were false and perhaps slanderous
but failed to include this information in the White House Manage-
ment Review and in fact removed this exculpatory information
from a draft report of that Management Review?

So what if the FBI and the IRS were enlisted to harass seven
innocent people by Clinton cronies peddling false allegations of
kickbacks and bribes?

The White House talking points are being followed dutifully by
a “so what” chorus and now the administration is hauling out a
whole new collection of carefully crafted and I might say lawyerly
non-denial denials.

The blasé attitude adopted by my colleagues is a striking change
from the past when even the whith of trouble would have put them
into investigative overdrive. So what? These seven men here today
are the so what. So what? These seven men are here to tell them
their side of the story, to give them and their wives and their chil-
dren, their families, an opportunity to have their story told.

As an Arkansas paper described the scenario:

The Clintons took Billy Dale’s job, trashed his reputation, sicced the FBI on him
and ruined him financially. And still they wont leave him alone, to cover up this
hamhanded eombination of arrogance and ineptitude, the White House accused Dale
of embezzlement.

On the editorial page of the Washington Post, Meg Greenfield
said this was “the worst kind of unfounded and destructive assault
on innocent people, people who could have been replaced in a
straightforward way. This was not, in other words, just an act of
so-called cronyism.

What we will see and hear today is an administration’s arro-
gance and really ruthlessness brought to light by seven people who
worked hard and played by the rules. Fortunately, in the end, our
judicial system worked for these people but not without a signifi-
cant personal and financial cost to themselves.

Mr. Dale has amassed almost a half a million dollars in legal
fees to defend himself against this continuing assault. Mr.
McSweeney estimates he spent almost $60,000; Mr. Van Eimeren,
$35,000; Mr. Dreylinger, $34,000; Mr. Maughan, $44,000; Mr.
Brasseux, $20,000; and Mr. Wright, $6,000. Their families have
suffered countless indignities for being in the wrong place at the
wrong time when ambitious friends of Bill wanted to “take advan-
tage of Washington opportunities,” as stated in a memo from one
friend of Bill, Darnell Martens, to another, Harry Thomason.

Unfortunately today, the Clinton administration and its highly
paid surrogates continue their campaign to scapegoat the former
Travel Office employees while ignoring the possibility of wrong-
doing by administration officials and powerful political supporters.
This wrongdoing appears to include a pattern of withholding rel-
evant documents and pertinent facts from numerous previous in-
vestigations, and this wrongdoing may include the abuse of the FBI
and IRS to advance the fortunes of friends and family at the ex-
pense of innocent bystanders, an area this committee will explore
in subsequent hearings.

Let me apologize in advance to the witnesses for what may be,
hopefully not but could be, continued attacks today but please un-


72

And I am now pleased to recognize the gentleman from Califor-
nia, the Chairman of the Government Management Subcommittee,
Mr. Horn, for 5 minutes.

Mr. Horn. Thank you, very much, Mr. Chairman.

First, I want to commend you, since you started early on, 3 years
ago, trying to get the evidence on this particular situation, and the
majority in charge of the Congress, and this committee at that
time, simply stiffed you and told the people in the executive
branch, do not cooperate. We have never had much cooperation. So
I commend you for getting before us the victims of this absurdity.

What you went through, Mr. Dale, would be known in the Soviet
Union when Stalin ruled supreme, as a political show trial. It was
ruthless, it was an abuse of Federal power. And as you look at this,
in my humble opinion, the apologies should be coming from the
President, the First Lady, and the White House staff involved.
They ought to be ashamed of themselves.

The U.S. attorney, who permitted your indictment ought to be
ashamed. The Attorney General of the United States, in whom a
lot of us have great trust, and has integrity, she ought to be re-
viewing that case, as to how this happened and how that indict-
ment went through. The misuse of the Federal Bureau of Investiga-
tion is an outrage.

And Mr. McSweeney, I am probably not as Irish as you are, but
I am half Irish, and that is just enough to get my dander up all
morning. I have been suffering as I listened to this, and it is an
outrage.

1 am also concerned that probably—well, has any civil liberties
group in the country offered to help any one of you? Can we go

lown the line?

Did you have the ACLU say we think this is terrible and we
want to protect your rights?

Mr. MAUGHAN. No, sir.

Mr. Horn. No.

Mr. DREYLINGER. No.

Mr. Horn. No.

Mr. McSwEENEY. No, sir.

Mr. Horn. No.

Mr. DALE. No, sir.

Mr. Horn. No.

Mr. BrassEvux. No.

Mr. Horn. No.

Mr. WRIGHT. No.

Mr. Horn. No.

Mr. VAN EIMEREN. No.

Mr. Horn. No. They should be ashamed. They should be
ashamed.

I must say I have only heard silence out of any of them. They
come and tell us all the great things they are doing. They ought
to do some of the tough things, which is when people are victimized
by the Government they have served so loyally.

What we have is a governmental cancer going on, hidden by a
smile, and it disturbs me greatly. We seem to have Peter Pan float-
ing around the White House, disappearing files one day, floating


27

volvement was in each trip and what they were being billed as
their prorated share of the trip. The check payment for their travel
was logged and posted in the spreadsheet. Every invoice was logged
in and 4 record made of the date and check number when it was

‘id.

In order to get the bills to the press out on a timely basis, usu-
ally one or 2 days after a trip, we had to use estimates for some
of our expenses, use frequently the vendors’ bills would not ar-
rive for several weeks. Because of this, we would sometimes
overbill and at other times underbill. Since the same news organi-
zations went on most of the trips, it all evened out over time. As
a result of mailing our bills in a timely manner after a trip, we
were able to receive payment and pay all of the vendors in 30 days
most of the time.

At no time did we ask for or accept kickbacks from any air car-
rier or any other vendor with whom we did business. At Mr. Dale’s
direction, our primary goal was to keep trip costs down.

When it came to trip costs, we were the best friends the press
corps had. I guess that may have been one of the reasons for the
Clintons to fire us. We were a small group of honest, hard working,
dedicated Government employees who were trying to do our job the
very best we knew how. We all have letters of commendation from
the Presidents we have served as well as their press secretaries.

I am still trying to come to grips with how our office, so highl.
thought of and trusted by the people for whom we worked and Sith
whom we did business for so many years, could be perceived by the
Clinton White House as being so rotten that the only way they felt
they could deal with us was to fire us and engage the FBI to inves-
tigate the phony allegations made against us.

ank you.

Mr. CLINGER. Thank you, Mr. Wright.

Now we will ask Mr. Dreylinger if you would present us with
your testimony.

STATEMENT OF JOHN P. DREYLINGER, FORMER ASSISTANT
TO THE DIRECTOR, WHITE HOUSE TRAVEL OFFICE

Mr. DREYLINGER. Mr. Chairman, members of the committee, my
name is John P. Dreylinger. I am one of the fired members of the
White House Travel Office. I was employed at the White House
Travel Office from February 22, 1967, to May 19, 1993.

While I was an enlisted man in the Army, from December 1961
to February 1967, I had been assigned to duty at the White House
Communications Agency. On my release from active duty I was of-
fered and accepted a job as an assistant in the White House Travel
Office. I served in the Travel Office during the administrations of
Presidents Johnson, Nixon, Ford, Carter, Reagan, Bush, and Clin-
ton. Counting both my military and civilian service, I have been a
Government servant for almost 35 years.

My duties as an assistant in the Travel Office were to serve the
needs of the White House by assisting the press corps that wished
to travel with the President on trips outside of Washington, DC,
and when in Washington to provide commercial travel services for
the White House staff. .


70

Mrs. MALONEY. I agree with the Chairwoman and, Mr. Chair-
man, let’s go down to the floor and vote on a bill that will privatize
the Travel Office, remove it from politics.

Billy, you said in your opening statement that it was filled with
political problems. Other people have found political problems. Peat
Marwick finds problems. Let’s just move it into the private sector
and stop this three—this circus on partisan attacks.

Mr. CLINGER. I appreciate the gentlelady’s plug for her bill, but.
T now recess the committee.

{Recess.]

Mr. CLINGER. The Committee on Government Reform and Over-
sight will resume sitting.

And I am now pleased to recognize the gentleman from New
York, the Chairman of the Post Office Subcommittee, Mr. McHugh,
for 5 minutes.

Mr. McHueu. Thank you, Mr. Chairman.

During the course of today’s testimony, we have heard a lot
about how you gentlemen, if not universal, most of you felt that
there would be changes made in how the Clinton administration
would want your office to be run. I do not think any professional
would see anything unusual in that.

I note that in the testimony presented by Mr. Wright, for exam-
ple, you make the comment that no top level White House staffers
of the Clintons ever came to our office to find out what we did, how
we did it, or to advise any of us, give us instructions or changes
that they would want. Is that pretty much a universal perception?

It seems to me, having spent a little time in government admin-
istration, that if you are concerned about the operation of any of-
fice, that you would take the time, as a new President is in town,
to visit those areas of concern, to look at them firsthand. How
about that?

Did those people from the Clinton administration come down and
examine your operations and try to find out some information for
themselves prior to all the other audits and nonaudits that oc-
curred?

Mr. DALE. No, sir.

If I may answer that, they did not, and we were not successful
in getting a meeting with them.

If I may just state my own personal opinion; when the Clinton
administration came in, there was almost an arrogance toward
them, that they felt like they had won the election and they didn’t
need anybody to tell them or advise them how to do things.

Mr. McHucu. Notwithstanding your personal observation, Mr.
Dale, which I appreciate, I would turn to the other members on the
panel here this morning. Was that your experience with respect to
no one from the administration coming down and looking at your
operation or talking to you about it?

Mr. DREYLINGER. No one ever talked to me, sir.

Mr. McSWEENEY. That is true, and it was one of the indications
that I had, that in the past we had always worked closely with the
Press Office and the Advance Office and there was no relationship
whatsoever. And it was just sort of another indication to me that
we were not going to be in their plans.


63

KPMG Peat MARWICK MANAGEMENT CONSULTANTS,
WASHINGTON DC,
May 17, 1993.
Mr. William H. Kennedy III,
Associate Counsel to the President,
The White House,
Office of the Counsel, Room 136,
Old Executive Office Building,
Washington, DC.

DEAR Mr. KENNEDY: KPMG Peat Marwick is pleased to provide you with this re-
port summarizing the observations and findings resulting from our procedures relat-
ing to the White House Office of Travel and Telegraph's (referred to in this report
as the press travel office) management, systems, policies, and procedures.

The purpose of our work was to assist you in assessing present accounting poli-
cies, practices and procedures. Our on-site work, which consumed approximately 300
hours of professional time, was conducted at the press travel office from May 14,
1993 to May 16, 1993.

The following paragraphs describe the specific objectives, procedures and findings
of our work. The procedures we performed were limited in nature and extent and
were agreed to by the Office of Management and Administration. As you know, the
procedures were revised throughout our on-site work to reflect the time-frame and
the limited availability of data, information, and documented policies and proce-
dures. As such, this report may not necessarily disclose all significant matters about
the press travel office or reveal errors or irregularities, if any, in the underlying in-
formation. Our procedures do not constitute an audit, examination, or review in ac-
cordance with standards established by the American Institute of Certified Public
‘Accountants and, therefore, we do not express an opinion or any other form of assur-
ance on the information presented in our report. Furthermore, we do not make any
representations regarding the sufficiency of the procedures we performed for your
information needs.

Page two summarizes our major observations and findings relating to the account-
ing system. In particular, we observed several significant weaknesses in the existing
internal control systems of the press travel office. The specific procedures performed
and our findings are described in more detail in the sections that follow.

In addition to the weaknesses summarized on page two, we noted certain other
discrepancies. For example, with regard to petty cash transactions, eight checks
written to cash on the Riggs National Bank account were either not accounted for
as an increase to the petty cash fund, were incorrectly recorded in the petty cash
fund, or were missing from the petty cash fund documentation. The total amount
of such discrepancies was $18,200. This and other discrepancies are described in
more detail in the pages that follow.

OBSERVATIONS AND FINDINGS

Summary of Significant Accounting System Weaknesses

Lack of Accountability

There is a lack of financial control consciousness.

There is no formal financial reporting process.

There are no reconciliations of financial information other than reconciliations of
bank statements.

There is no documented system of checks and balances on transactions and ac-
counting decisions within the office.

There is no apparent oversight or higher level review process of financial activi-
ties or transactions of the office.

Lack of Accounting Controls and Systems
Accounting policies and procedures are informal or poorly communicated.
ere is no systems or procedures documentation.
There is no general ledger, or cash receipts/disbursements journals.
There appears to be a lack of accounting expertise.
Lack of Documentation
Several disbursements have missing or inadequate documentation.

Documentation for bills submitted to the press is either inadequate or missing.
No copies of bills to customers/press are on file.


20

their first full day in office receiving phone calls for Catherine
Cornelius, the “new head of the White House Travel Office”.

And one final indication occurred in the beginning of May when
a uniformed White House messenger burst into our office and pre-
sented each of us with a beautiful long-stemmed red rose, along
with a note signed by the President and the First Lady thanking
us for all of our hard work during the first 100 days and urging
us on to greater accomplishments during the following months.
Five minutes later, the same messenger returned and retrieved
them with the remark that we should not have received them.

On my return to the United States, I was directed to and did re-
port to the office of Mr. David Watkins on the morning of May 24,
to complete the sign-out formalities required when terminated. I
was escorted to the Travel Office and on entering found Catherine
Cornelius, the President's cousin and now officially the head of the
office, who on seeing me departed the office. I was then left with
12 to 15 individuals—none with White House passes—either seated
at every desk or going through the travel records located in vertical
files within the office.

I wish I could say that at that time my concern was for Billy
Dale, but it was for myself as I realized that any document or
record that I might need to answer any and all charges that
might—may be brought against me were being gone through by
total strangers without anyone with White House clearance being
present.

As difficult and intimidating as this was, I was more upset to
find that when I prepared to pack up my personal effects I found
that they had been thrown out. In fact, the mailbox unit itself,
within which we each had storage space, had been dismantled an
was sitting in the middle of the office with a sign that said “out.”

The items lost were trip photos and mementos, personal cor-
respondence, phone and address books, pay stubs, travel vouch-
ers—nothing of great monetary value but my property. What has
worried me is that any mail that may have arrived for me during
my 10-day leave had also been discarded, and I have never been
given an explanation by anyone at the White House for these ac-
tions.

During the day I had repeatedly asked that I be given a letter
informing me of the reason for my termination and was assured
that before I completed my sign-out one would be provided. Unfor-
tunately, what actually happened was that I was escorted across
Pennsylvania Avenue, a public street, as if under arrest by a mem-
ber of the White House security office and taken to the personnel
office in the New Executive Office Building where I was presented
a prepared letter of resignation that stated that I was resigning
due to change in administration.

My last act as a White House staff member was to refuse to sign
the document presented me, and I was then escorted out of the
building.

I listened with interest last week when a comparison was made
between our dismissal and the handling of the congressional staff
members who lost their jobs as a result of the last election and if
one, even one, was handled as we were, they have my sympathy.


37

Mr. CLINGER. The gentlewoman should understand that the
Chairman called the hearing. I do not believe Mr. Burton implied
or suggested or stated that the minority had called this hearing. It
was called at my request, because I felt it was time, past due time,
for these gentlemen to have a chance to tell their story under oath
in a public forum.

The gentleman from Indiana.

Mr. BurTON. Mr. Chairman, I hope they did not take away from
my time because I want my full 5 minutes.

One of the things that concerns me—and, first of all, I want to
apologize to you guys for what you have been through, for what

our kids and wives have been through and your families have
Been through. I think von have done a great job. And I have talked
to a lot of members of the media and you have the highest respect
from the people in the media. People who attack Republicans as
well as Democrats, they think you did a great job down there. That
is one of the reasons I think they took the approach they did at
the White House to try to get rid of you because they did not want
to offend the media and cause a black eye for themselves.

Now, let me just talk about a few things. The First Lady has said
time and again, she had no involvement in this. We go back to Mr.
Watkins, and he says we both knew there would be hell to pay if
after our failure in the Secret Service situation earlier, we failed
to take swift and decisive action in conformity with the First Lady’s
wishes.

Now, there is some question. She says time and again, she had
nothing to do with this, but today we find a note to Mack McLart;
from Ricki Seidman, the White House Senior Adviser to Mac!
McLarty, on July 9, and she says in that memo: Heads up. Possible
New York Times negative editorial regarding Hillary and the Trav-
el Office. Maggie and Podesta trying to stop it. She is talking to
a Janine regarding scheduling Webb Hubbell. Must meet with you.

And there is another note ‘here that says: Heads up. New York
Times negative editorial regarding Hillary and the Travel Office.
Webb Hubbell needs 30 minutes with the First Lady.

It seems to me unbelievable that all of these people at the White
House are either lying or incorrect in the First Lady’s involvement.

I am not concerned about the administration’s ability to fire
these individuals, should they have chosen to do so. That does not
bother me, because new administrations come in and they can re-
place anybody they choose. But when they start doing things like
they did, destroying people’s reputations and misusing the power
of the White House, that goes way beyond the scope of just getting
rid of people they do not want in this and putting people in who
are their friends.

I have been led to believe, and I hope, Mr. Chairman, we are
able to bring Ms. Richardson, the head of the IRS in here, because
we have notes which lead us to believe that the IRS may have been
involved in trying to keep a lid on this. I am trying to find my
notes here quickly. Here we are.

According to the White House staff, notes of an interview with
Beth Nolan and Cliff Sloan of the White House Counsel’s Office,
BK, that is Bill Kennedy in the White House Counsel’s Office, said
PR, that is Peggy Richardson, the Commissioner for the IRS, is on


57

just made it look like his intent was dishonest when it really was
not. So I think that in his own personal account there, Mr. Dale
has a lot of things to look at in his own Supervisory manner. The
rest of you answered to him. He is responsible for the management
style. He is responsible for the procedures of that office and every-
thing falls in his lap.

And the petty cash which is mentioned here, the jury cleared
him, naturally, but the jury could clear him of criminal acts but
they cannot clear Mr. Dale, no matter how well intended he is, of
shoddy accounting and poor management procedures. So I think
Mr. Dale, in my opinion, of all the people here, was the only one
who should have been fired.

I think that the White House may have bungled this matter.
They may have bungled it by going in and firing the entire staff
instead of if they had some problems with Mr. Dale’s administra-
tion. It is just like a football coach, all the problems belong on him.

Now, they had every right to fire you without bringing up this
big quagmire they are in. If they had wanted to fire you, they could
have. That was their prerogative. They were new coming in. Just
like you come into a new administration, they have a right. But not
to blemish your record by saying that you are guilty of dishonest
things. I think the only person who may have a hint of impropriety
is Mr. Dale.

And my question to you, Mr. Dale, is as a longtime supervisor
if someone under your supervision did what you did, would you not
censor them or fire them?

Mr. DaLe. Not without questioning them.

Mrs. MEEK. I am sorry, Mr. Dale.

Mr. DALE. Not without questioning them first. I would give them
an opportunity to explain what they were doing.

Mrs. MEEK. I think you are right about that. I think you should
have been given a chance to explain. But once you explained it or
once the facts came out regarding it, you should have been
censored, but the staff, the rest of these people here, should not
have been fired.

Mr. McHUGH. Would the gentlelady yield?

Mrs. MEEK. Yes.

Mr. McHucu. I was wondering, given the criteria she just set
out, if the gentlelady feels that Hazel O’Leary, who has $250,000
of unaccounted travel funds, ought to be fired?

Mrs. MEEK. Well, that is——

Mr. McHucu. Or before the gentlelady answers, if she will con-
tinue to yield, Ron Brown has oa million in cost overruns on his
credit cards. Should he be fired?

Mrs. MEEK. That brings up another factor there and you have
every right to pursue that one.

But I should ask you should all these people be fired that got
paid for not working during the Government shutdown? That to me
was another example of shoddiness and someone not paying atten-
tion to the lives of these people.

Mr. CLINGER. The gentlelady’s time——

Mrs. MEEK. You have a lot of people that have been hurt by the
shutdown and lost their jobs.

Mr. Clinger.—has expired.


23

To those who say so what, you should remember that the Amer-
ican people may have a gray area on legalese, but they know right
from wrong.

On January 1 of this year I officially retired from Government
service, having had the privilege of serving four Presidents, even
if only in a “no more than” capacity. I would hope that peopl
would understand that, for me and thousands of others, when Ai
Force One would arrive the markings on the side were not Demo-
cratic Party or Republican Party. It read United States of America.
The emblem on its side was not a political poster. It was the seal
of the Executive Office of the President. And when that door
opened, the man or woman chosen by the people of this country to
fill that office had my complete loyalty and support, and I did that
for 13 of the proudest years of my life.

Thank you, Mr. Chairman.

Mr. CLINGER. Thank you very much, Mr. McSweeney, for that el-
oquent testimony.

(The prepared statement of Mr. McSweeney follows:]

PREPARED STATEMENT OF JOHN P. MCSWEENEY, FORMER ASSISTANT TO THE
Director, WHITE House TRAVEL OFFICE

Mr, Chairman, ladies and gentlemen of the committee, I should start by telling
you that I have never made a speech in my life, and I ask your indulgence for the
ervousness on my part. I will do my best. As background, my Government career
began on February 2, 1980 when I accepted a position in the White House Travel
Gifhee during the administration of President Jimmy Carter. Although I have been
a registered democrat for 44 years, it was not political but a civil service appoint-
ment. This came to an abrupt halt while I was on leave in Ireland, when my son
dim called to inform me that the evening news shows had just announced that the
entire staff of our office had been fired, and that the FBI was starting an investiga
tion for possible criminal activity. For me, our termination did not come as a sur-
prise as for months prior there were many indications that we were not in their fu-
ture plans—World Wide Travel from Little Rock in December of 1992 giving inter-
views to travel trade papers stating that they would be opening an office in Wash-
ington to handle White House travel; on their first full day in office receiving phone
calls for Catherine Cornelius, the “new head of the White House Travel Office’: and
one final indication occurred in the beginning of May, when a uniformed White
House messenger burst into our office and presented each of us in the office with
a beautiful long stemmed red rose, along with a note signed by the President and
the First Lady, thanking us for all’ of our hard work during the first 100 days, and
urging us on to greater accomplishments during the following months. Five minutes
later the same messenger returned and retrieved them with the remark that we
should not have received them, What did concern me, though, was the fact that the
FBI was involved. Needless to say, the remaining time away was not pleasant, but
it became more bearable as the press reports uncovered more and more discrep-
ancies in the story being spread by the White House.

On my return fo the U.S., I was directed and did report to the office of Mr. David
Watkins on the morning of May 24 to complete the sign out formalities required
when terminated. I was escorted to the Travel Office, and on entering found Cath-
erine Cornelius, the President's cousin, and now officially the head of the office, who
on seeing me departed the office. 1 was then left with 12 to 15 individuals—none
with White House passessither seated at every desk, or going through the travel
records located in vertical files within the office. I wish’I could say that at that time
my concern was for Billy Dale, but it was for myself, as I realized that any docu-
ment or record that I might ‘need to answer any and all charges that may be
brought against me were being gone through by total strangers without anyone with
White House clearance being present, It was later discovered that this seme situa.
tion went on for 22 days afler our firings. As difficult and intimidating as this was,
IT was more upset to find that when I prepared to pack up my personal effects I
found that they had been thrown out—in fact the mailbox unit itself, within which
we each had storage space, had been dismantled and was sitting in’ the middle of
the office with a sign that said “out”. The items lost were trip photos and momentos,
personal correspondence, phone and address books, pay stubs and travel vouchers—


90

However, afer last week's testimony by former White House aide David Watkins
Iam more convineed than ever about the First Lady’s involvement in the White
House Travel Office firings of May 19, 1993.

Last week when I asked Mr. Watkins where he felt the “extreme pressure” to fire
White House Travel Office employees was coming from, he stated that to the best
of his knowledge the source was in fact the First Lady,

As a new Member of Congress, I am very troubled by the deliberate campaign by
the Administration to mislead this Committee and the American people about the
role of Hillary Rodham Clinton, President Clinton's friend Harry Thomason and
other high level White House officials in the Travelgate matter.

‘As T stated last, week, the Watkins memorandum has put the credibility of the
First Lady between the crosshairs.

Mr. Chairman, 1am attending today’s hearing because I believe the President, the
Congress, and the American People owe the seven former employees af the White
House Travel Office an apology.

These individuals have faced a continuous tide of malicious and mean spirited at-
tacks by White House Officials over the past two and half years.

It’s time for the Clinton Administration to stop playing games with these people’s
lives. Mr. Chairman, today’s testimony will finally allow us to hear from true vic-
tims of the Travelgate debacle.

It is critical that this Committee should closely examine the facts and review all
the evidence before reaching any conclusions of misconduct or criminality in this
matter.

However, I will say that on the surface, the Watkins memorandum and the behav-
ior of White House officials seem to confirm many of the suspicions and questions
that have been raised in the Travel Office incident.

These hearings should continue to be carried out in as fair and non-partisan man-
ner as possible. The White House should have every opportunity to respond to any
new allegations.

T am hopeful that we will be able to finally resolve this matter in the coming
weeks so that we may focus this Committee’s attention on critical issues of the day
such as balancing the budget and reforming welfare.

Mr. DALE. Thank you.

Mr. McSWEENEY. Thank you.

Mr. CLINGER. I thank the gentleman and now I am pleased to
yield to the other gentleman from Pennsylvania, Mr. Fattah, for 5
minutes.

Mr. Fatran. Thank you, Mr. Chairman.

Let me say I was very happy to be here for the opening state-
ment and hear I think it is Mr. ‘McSweeney, Tam not sure, say that
if there were other public employees who were treated in this man-
ner that he felt for them because it is interesting that even though
you are being almost used as props that this Congress has not
treated long-term nonpartisan employees well.

But let’s move to your instant case. I would hope that after we
have now discovered that you have been put in this situation that
there could be more done about providing some assistance than
just for us to hold a hearing, that if in fact the committee deter-
mines through the evidence that, you know, these expenditures in
your private funds for legal fees were unnecessary because of the
way that this was mishandled that perhaps something could be
done to alleviate you of that burden.

It is interesting also that I think at the crux of this, if something
was done wrong, we are really talking about the FBI and the Jus-
tice Department proceeding with an investigation that should not
have been proceeded with. The committee, at least from the com-
ments I have heard, Members want to keep talking about the
White House. If something was really done wrong here, it is with
the law enforcement officials who proceeded with the suggestion
that there was less than adequate evidence to proceed with a crimi-


44

Mr. DaLe. I heard that, yes, and found approximately $200,000
that they had deposited in the bank and didn’t know about.

Mrs. Morea. Thank you, Mr. Dale; and thank you, Mr. Chair-
man.

Mr. CLINGER. The gentlewoman’s time has expired, and I now
recognize the gentleman from Vermont, Mr. Sanders, for 5 min-
utes.

Mr. SANDERS. Mr. Chairman, I share your concern about the way
the White House fired these seven employees of the White House
Travel Office.

It is my understanding that the White House had every right, if
it chose to do that, when they came into office, for litical reasons,
to say we don’t want you, we want other people. I don’t think there
is any dispute over that.

It is also my understanding that the White House inappropri-
ately fired them, quote-unquote, for cause, suggesting that there
was financial mismanagement when, in fact, that may not have
been the case. To the degree that the White House did that, clearly
what the White House did was inappropriate and it was wrong.

Mr. Chairman, my concern is not that we should not take a hard
look at what happened to these people, but my concern is that we
should take a look at all issues that impact Federal employees in
a nonpartisan way and in perspective.

For example, Mr. Chairman, I note today that in The Hill news-
paper, front page, headline, “House Hands Pink Slips to 113 Postal
Workers.” “Less than a day before the Congressional Accountability
Act took effect Tuesday, the House Chief Administrative Office
fired all but 6 of the 119 post office workers, making room for a
private company to take over the House postal operations next
month.”

The 113 mail room employees received notice of their dismissal
just hours before a deadline for accepting an offer from Pitney
Bowes’ Management Service, etc. Just hours. Mr. Chairman, that
is 113 workers. Are we going to have a hearing on that as well?

To the degree that these people were wronged, so have other
Federal employees been wronged. Mr. Chairman, recently, as you
know, 750,000 Federal employees were either furloughed, sent
home without pay, or were forced to work without pay. These peo-
ple have suffered pain and embarrassment and financial problems
as a result of what the White House may have done to them, but
so did hundreds of other, hundreds of thousands of Federal work-
ers, who did not receive the paychecks that they were entitled to.

Some of those folks may not have been able to pay their mort-
gage on time; some of them may have lost their homes; some of
them may have paid their tuition payments late. Are we going to
take a look at what happened to hundreds of thousands of Federal
employees who were sent home without pay?

Mr. Chairman, recently there have been cuts in Federal pro-
grams that go to homeless people. How do homeless people survive
if there are not going to be housing shelters or affordable housin,
available to them? How do hungry Americans get by if Federal ai
for nutrition programs are cut?

The only point I am trying to make, Mr. Chairman, is not under-
line not, to defend what happened to these people. It sounds to me


85

have, like lake homes and things of that nature. Is that your un-
derstanding? . . .

Mr. DALE. That’s right, but she didn’t take into consideration
that that lake home was mortgaged.

Mr. LaToureETTE, Are you the one that owns the lake home?

Mr. DALE. Yes, I am.

Mr. LaToureETTeE. Did you steal any jnoney from the citizens of
the United States or the Press Corps to buy that home?

Mr. DALE. No, sir.

Mr. LaToureTTE. Did anyone have the courage to ask you when
or how you acquired it and what the mortgage was?

Mr. DALE. No, sir.

Mr. LaToureTTE. Did any of the rest of you gentlemen have the
nerve, as Federal employees, to own anything? Were you ever
interviewed by anybody at the White House and asked how it is

‘ou came by these possessions? You worked hard for it. Did any-
Body ask you how you came into possession of those things?

Mr. MAUGHAN. No, sir.

Mr. DREYLINGER. No, sir.

Mr. DALE. No.

Mr. BRASSEUX. No, sir.

Mr. Wricut. No.

Mr. VAN EIMEREN. No.

Mr. CLINGER. The gentleman’s time has expired.

And I now recognize the gentleman from New Jersey, Mr. Mar-
tini, for 5 minutes.

I’m sorry, forgive me. I should recognize the minority side, my
colleague from Pennsylvania, Mr. Kanjorski.

Mr. KaNJorsKI. I am learning more every day what it is like to
be in the minority.

First of all, I will give yeu a report, Mr. Chairman. I am so:

I have not been here for all of the hearing. The commonwealth suf-
fered a billion dollars worth of damage, and part of that was in
your district, and I can assure you we just had a meeting with the
Lieutenant Governor and the delegation and we are moving along
and proceeding well in a very bipartisan way to help our constitu-
ents.

If I may, I was a little disturbed in prior testimony before this
committee on this whole fact, because coming from a legal back-
ground myself, I have a great deal of respect for the process, the
legal process, and this is, of course, directed to you, Mr. Dale.

It is not normal that a Governor or a President would have some
impact on what a district attorney or what a U.S. attorney does in
a legal matter. And there is less likelihood that that individual will
have an impact on what a Grand Jury of citizens do when they are
given sworn testimony.

In this case, as I understand it, the normal process, the standard
procedure of the criminal prosecution by the Public Integrity Sec-
tion of the Justice Department was followed in all regards. There
are a multiplicity of steps that they have gone through and they
followed those steps. And as a result, as I understand it, ulti-
mately, the investigation having been had, the evidence of that in-
vestigation having been taken to a Grand Jury empowered for over
15 months, it, in fact, returned an indictment against you. And


62

I would just point out that the gentlelady from New York has
cited a number of people who have been unemployed or put out of
work. But the difference here is that none of them were put out
of work or there was no suggestion that the First Lady had any-
thing to do with their being put out of work, so I think that ought
to be part of the record.

Mrs. MALONEY. Mr. Chairman, may I put this list in the record
of the findings of GAO which are quite extensive where they had
no written policies or procedures that goes down specifically.

Mr. CLINGER. Without objection.

{The information referred to follows:]

KPMG Observations Related to Criteria GAO Identified

CategonyCriteria KPMG Observations May 1993,
‘Administrative guidelines:
Written policies and procedutes: nn . None
Segregated duties; lines of authorty cleatly communicated None
Periodic audits _ None
Oversight and guidance None
Procurement of goods and services:
Customers needs determined se : “ None
Goods and services acquired competitively a None
Documented agreements or written contracts None
‘Accumulation and allocation of costs:
‘System to identity and record al casts... None
System to determine costs to be recovered . Not tested
System to provide accurate data for billing . None
Biling practices:
Billings prepared timely Some procedures in place
Payment due date identified. ...-..rornnnnsnernen Not tested
‘ystem to maintain history of billings and receipts ... None
‘System to apply receipts to appropriate outstanding bills... coonee Some procedures in place

System to track money owed and produce collection letters for overdue accounts Some procedures in place
Cash management:

Vouchers reviewed and approved before payment sone None

Procedures to prevent duplicate payments ... . . Not tested

Payments made timely Not tested

Receipts deposited on the day received or next business day ...... . None

‘Small receipts accumulated and deposited weekly senor Some procedures in place

Adequate internal controls tor security of funds... ‘Some procedures in place
Periodic bank reconciliations a Some procedures in place
Financial reporting:

‘Transactions accurately recorded and disclosed in financial reports None
General ledger to classify, summarize, and report financial reports None
Subsidiary ledgers to provide detailed information, which are periodically rec- None
onciled
‘System for reports .. se one
Report on Financial Position = _ wee None
Report on Operations . coven None
Report on Cash Flows seni None

‘Source: GAO analysis of KPMG data

Mr. McSweENEY. Mr. Chairman, could I have a quick entry?
Would you enter the cover letter which says it is not an audit or
anything of that?

Mr. CLINGER. Without objection, the cover letter will be included
with the review.

(The information referred to follows:]


86

after a hearing of several weeks, a jury did finally closet itself and
come back, I think within 2 hours, and find you not guilty. That
is the normal process.

Do you have anything that leads you to believe that there was
an obstruction of justice or an abuse of justice by anyone at the
Justice Department, the FBI, on the Grand Jury or the trial jury
or the trial judge in this case?

Mr. DALE. No, sir, I have no proof of that, and I would hesitate
to accuse anybody of that.

Mr. KANJoRSKI. I didn’t ask you if you had proof. Do you have
any indication of that or any inclination or any suggestion of that?

Mr. DALE. Well, I have to ask myself how the FBI got involved
in this. I have to ask myself—I have been told that a case——

Mr. KaNuorskI. No, the FBI got involved. I know that is some-
thing that is open as to how that happened. I am not talking about
the initial call to the White House from the FBI; we have had testi-
mony. The testimony was they found out something was not quite
right, and they did not know, having not been in office more than
a short time and never having run across this situation. And, quite
frankly, I am not sure they did the right thing.

I am not talking about that. I am talking about the process after
it moved out of the White House, when it was referred to the Jus-
tice Department and the Public Integrity Section of the Justice De-
partment; are you suggesting in any way that either those attor-
neys in the Justice Department, the people in the Grand Jury, the
judge that tried the case or the people that made up the jury were
in some way compromised?

Mr. DALE. Absolutely not, because I would——

Mr. BurTON. Would the gentleman yield?

Mr. KANJORSKI. Well, if we have an agreement that I get the
time back, yes, I yield to Mr. Burton.

Mr. BurRTON. It is my understanding that the White House with-
held documents from the Public Integrity Section which would have
had a bearing on possibly even having an indictment.

Mr. KANJORSKI. As I understand it, reclaiming my time, I am not
familiar with that case, it is Mr. Dale’s contention that there was
some log that he did not have; that he then, therefore, was asking
for and was not available or not known of.

Mr. Burton. If the gentleman would yield further.

He did not even have his own petty cash records. They were kept
from him. So things he could have used before the Grand Jury to
prevent an indictment were kept from him by the White House.

Mr. KaNJorskI. I understand that, but also I understand that in
the report of Peat Marwick, the accounting firm—that clearly is a
very responsible firm, would you not agree, Mr. Dale?

Mr. DaLe. Depending on what you want them to do, yes.

Mr. KANJORSKI. They said there was gross mismanagement.
there.

Mr. DALE. Show me in their report where it says that?

Mr. CLINGER. If the gentleman would yield.

Nowhere in that report does it talk about gross mismanagement.

Mr. Davis. Perhaps the gentleman from Pennsylvania could tell
us where the report states that.


121

What we see here in the testimony from Mr. Watkins and all the
rest, as we have sat through it, looked at many of the displays, we
have a pattern and practice of deceit and abuse by the White
House. This is not letting some poor soul go with a pink slip. And
as was said—very eloquently stated by some of you, it is one thing
to be let go with a pink slip, it is another thing to be fired from
your job where you Rave conducted yourself as a professional and
you go home and your child is looking at the TV and says, daddy,
are you really a thief? Or, daddy, did you misuse the public trust?

The fact is, there was not an abuse of trust by any of you sitting
before us. And apologies are owed not by Members of Congress;
apologies are owed by the President of the United States and the
First Lady, as I said earlier today, and all those that were involved
in this travesty.

So I must say, Mr. Chairman, our friends in the minority seem
to dismiss seven people. And why are we are concerned? We are
concerned because when you have done something to seven people
it means, as in the Nixon White House, maybe you are doing it to
a lot more people. I said this morning we are talking about a ‘ite
House cancer with a smile, and I say, after listening to the rest of
the testimony, we are talking about arrogance with a smile.

Thank you, Mr. Chairman.

Mr. CLINGER. The gentleman yields back his time, and I would
Now recognize the gentleman from West Virginia, Mr. Wise.

Mr. Wiser. Thank you, very much, Mr. Chairman.

The gentleman from California speaks eloquently. It is not right
to do it to seven people. It is not right to do it to 113 people. It
is not right to deny 113 congressional workers their protection just
hours before that protection goes into effect. It is not right to, a
couple weeks before Christmas, to fire 10—or was it 11—members
of the House floor staff. Merry Christmas and good-bye.

So I guess I question where this leads when some say seven peo-
ple. I think we also ought to look at overall practices. Nobody
seems to have clean hands on this.

Mr. Dale, the gentleman from Connecticut quite properly pointed
out that you have been tried; and I want to preface my remarks
by saying I am not trying to retry you, that I am going to ask ques-
tions. But the issue has been raised by the people who asked you
to be here about whether there was political motivation in, A, firing
you; and, B, then whether there was political motivation by the
Justice Department or the FBI. So those questions have to be got-
ten into.

But let me preface my remarks once again by saying you have
been acquitted. The allegations that were made, the indictment
that was brought has been found by a jury to not have substance,
so I just want that on the record. But now we have to get in the
motivation of what brought you to the court.

I also might add to the gentleman from Connecticut, who spoke
about Mr. Kanjorski—and he can speak quite well for himself—but
it is my understanding that Mr. Kanjorski, as well as perhaps the
Chairman, has—I know earlier today and I think at this moment—
has been dealing with flood problems. He does represent Wilkes-
Barre, PA, which was probably one of the most hardest hit areas


124

would not be here testifying today if the White House had done
what they had the right to do, which was to tell you we want you
out and we want our people in. And what the difference here was
that there was an attempt made—a clumsy, awkward attempt
made to justify what they otherwise would try to do. It is as simple
as that. Because all of the records about Peat Marwick and so forth
came after the fact, after the decision had been made that you
should have to go.

Gentlemen, I want to express to you the appreciation of the com-
mittee. You have had a long day Jere today, and you have been
very patient, and you have been very forthright in your responses
to the questions of the committee. We are grateful for that.

As I stated at the beginning of this hearing, I felt that you de-
served an opportunity to tell your story under oath before the Con-
press of the United States, and you have had that opportunity. I

ope that you feel that you have had that opportunity to get your
story out and to have your story told. Because I think, as I said
at the beginning, there is a question of “so what”—well, I think you
are. So what? ‘These were human lives that were affected by what
was done, and I think we do see here certainly a question of abuse
of power.
0, gentlemen, we thank you again very, very much for your tes-
timony here today; and this hearing is adjourned.
[Whereupon, at 5 p.m., the committee was adjourned.]

ie)


31

This verified tape was then Xeroxed, and the proper check num-
ber and organization from which it came would be typed next to
the amount of the check. This provided us with a 3-column record
for future reference if the need ever arose to verify any check or
billing misunderstanding.

On May 19, 1993, the complete office staff of the Telegraph and
Travel Office was summarily fired. This action caused an untold
amount of stress on the seven employees and their families. During
the time of the firing and the time that Mr. Billy R. Dale was
cleared in a jury trial, three of our fathers passed away prior to the
trial and were buried, never knowing for sure that their sons were
not guilty of what they had been accused of.

Five of the employees, two of which were not even in the country
at that time, were placed on administrative leave with pay for the
remainder of May, at which time we were told we would be re-
moved from the payroll but would continue to have medical and
hospitalization insurance for an additional 30 days.

Prior to the end of May, we, the five, were called by Mr. Mark
Gearan, the Deputy Chief of Staff, and told we would be on admin-
istrative leave with pay for an indefinite period of time. After a 5-
month pesiod of administrative leave, we were offered jobs with the
Federal Government at different locations. Two were employed
with the General Services Administration, one by the State Depart-
ment, one by the Commerce Department, and I went to the Defense
Department in the Office of the Deputy to the Under Secretary for
Policy, Policy Support, and Emergency Planning, where I remained
until I retired from the Federal Government on January 2, 1996,
with a combined total of 42 years and 8 months of service to the
United States of America, of which I am very proud.

I sincerely thank you for giving me this opportunity to read this
statement into the record. Thank you.

Mr. CLINGER. Thank you, Mr. Maughan and thank all of our
panel for your very compelling stories of the events surrounding
your firing and the events subsequent to your firing and what it

as meant to you during your lives.

We will now start with the 5-minute rule and I will start with
the first round of questioning.

Mr. Dale, just to be very clear, you did not handle taxpayers’
money. There was no Federal money involved in the accounts that
were under your supervision, was there?

Mr. DALE. That is true.

Mr. CLINGER. One of the things that struck me about this whole
exercise for the past 2¥2 years that we have been sort of looking
at this or attempting to look at it, has been the very strong support
you and the others have received really across the board, many of
those coming from the news media, who are the ones, presumably,
that were affected, if there was, in fact, wrongdoing with regard to
their money; people like Brit Hume, Sam Donaldson, and others
really who testified on your behalf.

Were there any members of the news media whose funds you
were the steward of who testified in your trial against you or raised
concerns about your mismanagement, supposedly of the Travel Of-
fice funds?

Mr. DALE. No, sir.


7

wrongdoing may include the abuse of the FBI and TRS to advance the fortunes of
Trends and family at the expense of innocent bystanders—an area this Committee
will explore in subsequent hearings. :

Let me apologize in advance to the witnesses for what may be continued attacks
today but please understand from whence they come. These attacks are coming from
those who apparently think it is fine to call in the FBI and IRS on the merest hint
of rumors. These attacks are coming from those who have ignored, REAL travel
scandals such as Secretary Hazel O'Leary's $250,000 of unaccounted for taxpayer
funds, and Secretary Ron Brown’s $24 million in overspending for travel and
$360,000 in unreimbursed advance travel expenses. At the Commerce Department,
we now know hundreds of employees misused government credit, cards for personal
expenses ranging from jewelry to car ingurance— according to an internal audit from
the Commence 16's office. So please take the attacks with a grain of salt. We are
seeing a full court “circle the wagons” attack the messenger assault.

I know that for most of you it must be strange to be at the center of this
firestorm. You dutifully served the government for years far from the spotlight and
this was not a stage you would have sought. It is a tribute to you all that after a
30 month investigation the Justice Department could not come up with any neigh-
borg or friends or colleagues who had anything but the highest regarde for you all.
At Mr. Dale's trial, ABC’s Sam Donaldson told the jury that Billy Dale was “a to-
tally honest man,”’“I've known him for 20 years and he's a man of high integrity,”
testified the LA Times’ Jack Nelson. And the president of the White House Cor-
respondents’ Association, the group whose funds Mr. Dale was accused of stealing,
also testified on his behalf.

‘What is often overlooked is that tax money was not even involved in the Travel
Office. As a reporter recently pointed out to Press Secretary Mike McCurry, “This
was ail news media money... and as far as I know, no one in the news media
has complained about any mismanagement. So why was there this great concern?”

Fortunately, Mr. Billy Dale, the former Director of the Travel Office, is with us
today and did not have to read about the long withheld “Watkins memo” or other
long withheld White House documents from a jail cell where this Administration
wanted to send him for 20 years. His six former colleagues—Gary Wright, John
McSweeney, John Dreylinger, Barney Brasseux, Ralph Maughan and Van
Eimeren also join us today. All seven of these individuals were subjected for the
past 30 month’ to all the might of the federal government including Justice Depart-
ment Public Integrity prosecutors, FBI agents and IRS agents roaming their neigh-
borhoods, culling through their financial records and interviewing themselves and
their families.

It is important to note that the White House not only denied this Committee and
the Independent Counsel long-sought documents, but it also failed to turn over to
criminal investigators relevant documents that would have possibly been excul-
patory material—material that Mr. Dale may have been entitled to during his trial.

e Justice Department has only recently admitted to us that they were very dis-
turbed by the lack of White House cooperation with the CRIMINAL investigation
into the White House Travel Office matter. Documents about Harry Thomason were
withheld for almost a year, long after commitments had been made to Public Integ-
rity that all documents had been turned over.

‘ormer Interior secretary James Watt pleaded guilty recently to withholding doc-

uments from a grand jury. A person may be held in contempt of Congress. under
2 US.C. 192 for refusing to produce documents or records, In fact, three Reagan
Administration officials prosecuted by Iran-Contra independent counsel Lawrence
Walsh—Elliott Abrams, Alan Fiers and Robert McFarlane pled guilty to withholding
information from Congress.
__ Of course we may never really know what happened to many of the documents
in the Travel Office because both the White House and the FBI demonstrated a true
case of “abysmal mismanagement” in handling this investigation. In short the White
House withheld documents and dragged out document production and the FBI and
Justice Department at best, looked the other way too often.

Travel Office records began to be removed from the Travel Office shortly after a
Presidential cousin, Catherine Cornelius, began working in the Travel Office in
April 1993. Senior White House officials knew that Catherine Cornelius was taking
home documents from the Travel Office and the record of what documents ever
made it back to the White House is sketchy at best. The prosecution notably did
not call Ms. Cornelius as a witn

When the White House sent in Peat Marwick to do a quick “review,” the docu-
ments were handed over to Patsy Thomasson at the conclusion of the review. Ms.
Thomasson just happens to be the individual whom the White House described just
last week a3 having “hopelessly messy files.” Mr. Watkins, her supervisor, testified



46

Mr. SHays. OK, I don’t want to waste my time. You came out
whole. You were just accused of being a crook, but other than that,
you know, OK.

Mr. VAN EIMEREN. The appropriation was sufficient.

Mr. Suays. Mr. Wright?

Mr. WRIGHT. $6,000.

Mr. SHays. $6,000.
$4000 I have yet to be reimbursed for approximately

,000.

Mr. SHays. But you will be reimbursed?

Mr. Dale?

Mr. DALE. Out of my Pocket, so far, I have spent $105,535, and
T have faced legal bills of approximately another $300,000.

Mr. Suays. Tell me, so far, you have spent how much?

Mr. DALE. $105,535.

Mr. SHays. And how much is owed now?

Mr. DALE. Well, my—I think my attorney has sympathy on me,
he hasn’t submitted his final bit to me yet, but approximately
$300,000.

1 Mr. SHays. So you have about $400,000. So when you win you
ose.

Mr. DALE. There was also a legal defense fund set up and it’s
paid close to $100,000, so the legal bills were in the neighborhood
of $500,000, so I have been told.

Mr. Suays. Thank you Mr. Dale.

Mr. McSweeney?

Mr. McSWEENEY. My total was $65,000, in which I have already
been reimbursed about $35,000.

Mr. SHays. And will you be reimbursed for the remaining?

Mr. McSWEENEY. We have hopes.

Mr. SHays. OK.

Who reimburses you for this?

Mr. McSwEENEY. The Congress.

Mr. SHays. OK.

Because someone screwed you and we have to make up for it?

Mr. McSWEENEY. That’s correct.

Mr. DREYLINGER. I had a total of about $34,000, and the Trans-
portation funds that were allocated covered all of my legal ex-
penses.

Mr. Maucuan. I had approximately $44,000 and $34,000 was
covered by the DOT appropriation.

Mr. SHAyYs. Now, Mr. Dale, I just want to go through this plea
bargain issue. I’m really sorry we have to bring it up because that
is confidential information, and once again, they not only went
after you to try to prove that you were a crook, but afterwards they
then tried to say that you did, you know, ie were trying to do a
plea bargain so you must have been a crook and that your vindica-
tion is somehow tainted.

My understanding is this, that basically you were just going, to
acknowledge the fact that you had put money in your account. You
were not acknowledging in any way that you had done anything
crooked; is that correct?

Mr. DALE. That’s correct. We told the Justice Department if they
wanted jail time, that we would admit that I commingled funds


6

tigations when Republicans were in the White House, and I have
tried to continue that spirit as Chairman.

Abuse of power is always an important and relevant issue in a
Government that is the size of the Government of the United
States of America. Giving these individuals the opportunity to tell
the American people the really unfortunate truth about how they
were mistreated and maligned by this administration is long past
due. So I welcome the gentlemen here this morning and I would
now recognize the gentlelady from Illinois, Mrs. Collins, for any
opening statement she might care to make.

(The prepared statement of Hon. William F. Clinger, Jr. follows:]

PREPARED STATEMENT OF WILLIAM F. CLINGER, JR., A REPRESENTATIVE IN CONGRESS.
FROM THE STATE OF PENNSYLVANIA

THE TRAVEL OFFICE EMPLOYEES: DESIGNATED SCAPEGOATS

Good morning. The Committee will come to order.

“SO WHAT . . .” we have been hearing from my Democratic colleagues over the
past few weeks in regard to this investigation.

‘So what if the White House fired the Travel Office employees and high ranking
officials failed to tell the real story to numerous investigators or provided “vague
and protective” information—to use Mr. Watkins’ words—about the real reasons for
the firings and thwarted countless attempts to get at the truth and wasted taxpayer
dollars on incomplete investigations?

So what if the new Administration wanted to throw contracts to their rich friends
and get a “good press story’—again as stated by David Watkins—by alleging wrong-
doing by the former staff?

So what if the White House learned that Harry Thomason’s allegations of “kick-
backs” and bribes were false and perhaps slanderous but failed to include this infor-
mation in the White House Management Review and in fact removed this excul-
patory information from a Draft Report of the Management Review?

So what if the FBI and IRS were enlisted to harass seven innocent people by Clin-
ton cronies peddling false allegations of kickbacks and bribes?

The White House talking points are being dutifully followed by a “So What” cho-
rus and now the Administration is hauling out a whole new collection of carefully
crafted-and lawyerly NON-DENIAL DENIALS.

The blase attitude adopted by my colleagues on the other side of the aisle is a
striking change from the past when even the whiff of trouble would put them into
investigative overdrive. So what?! These seven men here today are the so what. So
what?!! Tell that to their wives, children and families. Tell that to their parents.
Tell that to their friends and neighbors.

As an Arkansas paper described the scenario: “The Clintons took Billy Dale's job
trashed his reputation, sicced the FBI on him and ruined him financially. And atill
they won't leave him alone, . . . to cover up this hamhanded combination of arro-
gance and ineptitude, the White House accused Dale of embezzlement.” The Edi-
torial Page editor of ‘The Washington Post, Meg Greenfield said this was “the worst
kind of unfounded and destructive assault on innocent people—people who could
have been replaced in a straightforward way . . . this was not, in other words, just
an act of so-called cronyism.”

What we will see today is an Administration’s arrogance and ruthlessness brought
to light by seven people who worked hard and played by the rules. Fortunately, in
the end, our judicial system worked for these people. But not without, a significant
personal. and financial cost to them. Mr. Dale has amassed almost half « million

jollars in legal fees to defend himself against this continuing assault. Mr.
McSweeney estimates he spent almost $60,000; Mr. Van Eimerein, $35,000; Mr.
Dreylinger, $34,000; Mr. Maughan, $44,000; Mr. Brasseux, $20,000; and Mr. Wright
$6,000. Their families have suffered countless indignities for being in the wrong
place at the wrong time when ambitious Friends of Bill wanted to “take advan
of Washington opportunities” as stated in a memo from one Friend of Bill—Darnell
Martens—to another—Harry Thomason. .

Unfortunately today, the Clinton Administration and its highly paid surrogates
continue their campaign to scapegoat the former Travel (fice employees while ig-
noring the possibility of wrongdoing by Administration officials and powerful politi
eal supporters. This wrongdoing appears to include a pattern of withholding rel-
evant ments and pertinent facts from numerous previous investigations. This



40

Mrs. MALONEY. I know you would not have.

Yes, sir, would you?

Mr. DREYLINGER. I am not aware of any illegal activities.

Mrs. MALONEY. Did you?

Mr. MAuGHAN. No, ma’am.

Mr. BRASSEUX. No, ma’am.

Mr. WRIGHT. No, ma’am.

Mr. VAN EIMEREN. No, ma’am.

Mrs. MALONEY. Mr. Dale?

Mr. DALE. No, ma’am.

Mrs. MALONEY. Mr. Dale, would you describe the duties of the
Travel Office?

I was curious about one of your statements earlier where you
said that in travel over to Spain you had to pay for the cost of the
hotel rooms for the press corps. Why did you have to pay for their
hotel room? Why didn’t they pay for their own hotel room?

Mr. DALE. Because these were hotel rooms we reserved on their
behalf and went unused.

Mrs. MALONEY. And if they are not used, then your office would
pick up the cost of that as opposed to billing——

Mr. DALE. Unfortunately, we never had to pick up a tab that
large before.

Mrs. MALONEY. Could you just outline what your office did?

Mr. DALE. Well, our office made the travel arrangements for the
White House press corps to cover the President, which included the
chartering of an airplane; handling their luggage, equipment, char-
tering buses, trucks, rental vehicles to meet them on the distant
end; reserving hotel rooms; booking them; coordinating with the
bell man; and just any logistical arrangement that needed to be
made on their behalf, which included handling their passports on
international trips, turning them over to an immigrations officer
that traveled along with the Customs officer, and just making sure
that everything ran smooth; and I felt we did a good job of it.

Mrs. MALONEY. Are you aware that last September an inter-
agency group issued a report recommending full agency use of trav-
el management centers—in other words, privatizing all travel
throughout Government? Did you see that report?

Mr. DALE. No, ma’am, I did not.

Mrs. MaLoney. And you mentioned that you handled reserva-
tions and ticketing service for the White House. Are you aware that
they are now being performed by a private travel management
agency?

Mr. DALE. Yes, ma’am.

Mrs. MALONEY. Which is really, as I understand it, how it is han-
dled throughout Government.

In a 1994 GAO report, a request for proposal for Executive Office
travel services was issued, in 1994 of April, and that also offered
the possibility of additional work to include arranging air charter
services with fees to be negotiated.

I would appreciate your comments on the outsourcing or
privatizing of the air charter operation for the Executive Office. Do
you see any reason why that service cannot be privatized?

Mr. DALE. Personally, yes, I do.

Mrs. MALONEY. Could you tell us why?


120

ting through this hearing, coming in here and winging it, trying to
confuse the viewing public, confuse the written record with analy-
ses that are absolutely false, making absolutely no sense.

Now, let met get into some of this. Mr. Chairman, I have 10 re-
ports of the General Accounting Office titled “Financial Manage-
ment”. They are divided equally between the Customs Bureau and
the Internal Revenue Service. Let me just read you a few titles,
and we will agree on putting some of this in the record in titles.

Customs lacks adequate accountability over its property in weap-
ons. Customs’ self-assessments of its internal control and account-
ing systems is inadequate. Customs did not adequately account for
or control its accounts receivable. Customs’ accountability for seized
property and special operation advances was weak. Customs’ ac-
counting for budgetary resources was inadequate.

IRS lacks accountability over its automatic data processing re-
sources. IRS’ weaknesses increase, risk of fraud and impaired li-
ability of management information. IRS’ self-assessment of its in-
ternal control in accounting systems is inadequate. And, finally,
important IRS revenue information is unavailable or unreliable.

Now, in every one of these reports—and these are all during the
Clinton administration, and they are just a handful. There are
many more. In every one of these reports, the General Accounting
Office, the agent of the Congress to audit the executive branch on
both programmatic audits and financial audits, always has a re-
sponse from the head of the agency.

As I said earlier, as a university president, when I had the State
auditor or the California State university system auditor or the leg-
islative auditor, whoever it was, they always gave the chief execu-
tive the draft report and permitted us to write a letter that said
where we agree, where we disagree, and these reports have exactly
that from the head of the IRS and the head of Customs.

It is very clear in the questioning that Peat Marwick, a private
firm, went in, did a study. None of you ever saw it. None of you
ever had a chance to reply. So there was no way a supervising offi-
cer could have known anything based on that Peat Marwick report.
because they only had half the equation. And that is what really
disturbs me in this whole operation here, that no due process was
followed, which is normal process for any audit of a Government
agency.

Now, leu us talk a little about the U.S. attorney. I don’t even
know the name of the U.S. attorney involved, but let me just say,
as a student of history, be it Republican U.S. attorneys or Demo-
cratic U.S. attorneys, they are ambitious. They would like to be
judges. Maybe they would like to be Attorney General.

And let me talk about Federal agencies and the culture of Wash-
ington. The FBI—clearly misused by the Clinton White House. And
there is no question, with any new President, regardless of party,
they want to please the President in these executive agencies.

Private firms bidding for future contracts perhaps on accounting.
They would like to please the President. That is just human na-
ture. And we need to view what the FBI did, what the United
States Attorney did, what Peat Marwick did. Was that the fair way
to go about it?


19

Thank you very much, Mr. Chairman.

Mr. CLINGER. Thank you. Sorry for giving you the French pro-
nunciation of your name, Mr. Brasseux.

(The prepared statement of Mr. Brasseux follows:]

PREPARED STATEMENT OF BARNABY L. BRASSEUX, FORMER ASSISTANT TO THE
Director, WHITE House TRAVEL OFFICE

Mr. Chairman, distinguished members of this committee, my name is Barney
Brasseux and I am a former member of the White House Travel Office. I began my
service at the White House in July of 1982 and served until May 19, 1993. In
eleven years at the White House | worked hard and always tried to do my best.
take a great deal of pride in the job did and in the tremendous privilege of working
at the White House and serving the President of the United States.

Tam here today to answer any questions this committee may have regarding
experience in the White House Travel Office and the events surrounding the termi-
nation of the Travel Office employees by the Clinton administration on May 19,

3.

For me, the 19th of May, 1993 was the beginning of a difficult time and the first
of several eventful days that turned my life upside down. I was fired, told to vacate
the premises within two hours, driven out of the White House in the back of a cargo
van with no seats, implicated by the White House in criminal wrongdoing, and

laced under investigation by the United States Justice Department even though I
fad no financial responsibility whatsoever in the office.

I sometimes find it hard to believe that I am in the middle of what has become
such a publicized event. For the past two and one half years myself and my col-
Teagues have been the subject of numerous newspaper and magazine articles, radio
programs, and television news stories. In the past few weeks there has been a news-
paper story about the Travel Office firings almost every day.

fany questions and concerns have been raised in these reports regarding the
handling of our termination. The manner of our dismissal, the damage to our rep-
utations, the impact of this action on our families, the possible involvement of the
First Lady of the United States, and the role of the Federal Bureau of Investigation
are just a few. All of these issues are very important to me and I trust to you as
well.

T sincerely hope that my presence here today will prove helpful to you in your con-
tinuing efforts to fully explore this entire affair and I look forward to the final re-
sults of this comittee’s investigation.

‘Thank you very much.

Mr. CLINGER. Mr. McSweeney.

STATEMENT OF JOHN P. McSWEENEY, FORMER ASSISTANT TO
THE DIRECTOR, WHITE HOUSE TRAVEL OFFICE

Mr. McSweEENEY. Mr. Chairman, ladies and gentlemen of the
committee, I should start by telling you that I have never made a
speech in my life; and I ask for your indulgence for my nervous-
ness.

As background, my Government career began on February 2,
1980, when I accepted a position in the White House Travel Office
during the administration of President Jimmy Carter. Although I
had been a registered Democrat for 44 years, it was not a political
but a civil service appointment. This came to an abrupt halt while
I was on leave in Ireland when my son Jim called to inform me
that the evening news shows had just announced that the entire
staff of our office had been fired and that the FBI was starting an
investigation for possible criminal activity.

For me, our termination did not come as a surprise as for months
prior there were many indications that we were not in their future
plans—World Wide Travel from Little Rock in December 1992, giv-
Ing interviews to travel trade papers stating that they would be
opening an office in Washington to handle ite House travel; on


“4

Office had performed for decades to the apparent satisfaction of
press and all previous administrations, Mr. Martens followed up
with a second memorandum to Mr. Thomason complaining about
me personally.

Of course, I was unaware of this memorandum. I was also un-
aware that several weeks later and several weeks before Peat
Marwick ever set foot in the Travel Office, Mr. Thomason began to
spread the rumor that I was demanding kickbacks in exchange for
charter business. No one ever confronted me with that rumor; nor,
to my knowledge, did anyone ever try to determine whether there
was any truth to it until after I was fired. It was an absolute lie
that was spread, so far as I can tell, to begin a process of justifying
my removal. I take some satisfaction in the fact that the Justice
Department thoroughly investigated this allegation and rejected it.

Yet, without even looking into the charge, Mr. Watkins installed
Catherine Cornelius into the Travel Office with the directions to
keep her eyes and ears open. When Miss Cornelius reported to him
and Mr. Thomason that she believed that I and other Travel Office
employees were living beyond her conception of what a Government
employee ought to be able to afford, the White House counsel was
notified and the FBI was contacted.

All of this occurred before the administration’s decision on May
13 to retain Peat Marwick to perform a financial review of the
Travel Office. In addition, documents I have read about in the pa-
pers the last few weeks state that on May 12, Mrs. Clinton was al-
ready expressing her desire to have us replaced. So I am forced to
wonder what is the financial mismanagement that she was con-
cerned with before Peat Marwick even began its work?

It is also important for people to understand that the most seri-
ous issue raised by Peat Marwick, which did not issue its final re-
port until 2 days after we were fired, was my failure to report five
checks totaling $14,000, in the office’s petty cash-flow. No one from
the administration ever asked for an explanation, even though I
had worked at the Travel Office for seven previous Presidents, had
background investigations by the FBI, and maintained an unblem-
ished record. What’s even worse, they decided to fire everyone,
even though it was clear that I was the only person responsible for
these discrepancies.

All these facts lead us to conclude that the financial mismanage-
ment that the White House says is the reason we were fired is just
a convenient excuse. If the President or the First Lady or anyone
else wanted us out in order to give the business to their friends
and supporters, that was their privilege. But why can’t they just
admit that that is what they wanted to do, rather than continue
to make up accusations to hide that fact?

The administration has also tried to justify its handling of my
firing by claiming that I had offered to plead guilty to embezzle-
ment, the charge that the jury acquitted me on. That is simply not
the case.

In late November 1994, after investigating me for 18 months, the
Justice Department told my lawyers that it had decided to indict
me on two counts of embezzlement. After talking to my family and
consulting with our lawyers, we decided to try to put an end to the
anguish and avoid the expensive trial, which was estimated up-


3

derstand from whence they come. These attacks are coming from
those who apparently think it is fine to call in the FBI and IRS
on the merest hint of rumors. These attacks have come in the past
from those who have ignored real travel scandals, such as Sec-
retary Hazel O’Leary’s $250,000 of unaccounted-for taxpayer funds
and Secretary Ron Brown’s $24 million in overspending for travel
and $360,000 in unreimbursed advanced travel expenses. At the
Commerce Department, we now know hundreds of employees mis-
used Government credit cards for personal expenses ranging from
jewelry to car insurance, according to an internal audit from the
Commerce IG’s office. So please take the attacks, if there are any,
with somewhat of a grain of salt.

I know that for most of you it must be strange to be at the center
of this firestorm. You dutifully served the Government for years,
far from the spotlight and this was not a stage you would have
sought. It is a tribute to you that after a 30-month investigation
the Justice Department could not really come up with any neigh-
bors or friends or colleagues who had anything but the highest re-
gards for you all. At Mr. Dale’s trial, ABC’s Sam Donaldson told
the jury Billy Dale is “a totally honest man.” “I’ve known him for
20 years and he’s a man of high integrity,” testified LA Times’ Jack
Nelson. The president of the White House Correspondents’ Associa-
tion, the group whose funds Mr. Dale was accused of stealing, also
testified on his behalf.

What is often overlooked is that tax money, tax money was not
involved in any way in the Travel Office. As a reporter recently
pointed out to Press Secretary Mike McCurry, “This was all news
media money, and as far as I know, no one in the news media has
complained about any mismanagement whatever. So why was
there this great concern?”

Fortunately, Mr. Billy Dale, the former Director of the Travel Of-
fice, is with us today and did not have to read about the long with-
held Watkins memo or other long withheld White House documents
from a jail cell where this administration really was trying to send
him for 20 years. His six former colleagues, Gary Wright, John
McSweeney, John Dreylinger, Barnaby Brasseux, Ralph Maughan,
and Bob Van Eimeren, also join us today. All seven of these indi-
viduals were subjected for the past 30 months to all the might of
the Federal Government, including Justice Department Public In-
tegrit Prosecutors, FBI agents and IRS agents roaming their
neighborhoods, culling through their financial records and inter-
viewing them and their families.

It is important to note that the White House not only denied this
committee and the independent counsel long-sought documents, but.
it also failed to turn over to criminal investigators relevant docu-
ments that would have possibly been exculpatory material, mate-
rial that Mr. Dale may have been entitled to during his trial.

The Justice Department has only recently admitted to us that it
was very disturbed by the lack of White House cooperation with
the criminal investigation into the White House Travel Office mat-
ter. Documents about Harry Thomason were withheld for almost a
year, long after commitments had been made to Public Integrity
that all documents had been turned over.


110

if the White House and the First Lady involved the FBI or the IRS
in getting involved in this, there may have been a misuse of power
and a felony committed, and that is why we need to have these
hearings and get to the bottom of it.

We should check into whether or not the White House withheld
information and whether or not there was a proper investigation of
this by the Justice Department. And the Justice Department may
not have had the records necessary when this grand jury investiga-
tion took place, the prosecutor was investigating this. And so the
people who indicted this man who was later acquitted may not

ave had all the facts before them. They may have been delib-
erately withheld by the White House and if that is the case, that
is an obstruction of justice and we need to get to the bottom of it.

Now, regarding the First Lady. She has said time and again she
was not involved. We have here notes from Mr. Watkins, hell to
pay if we didn’t accede to the First Lady’s wishes. Vince Foster reg-
ularly informed me the First Lady was concerned, and the desired
action was the firing of the Travel Office staff.

Now, we have this in place after place after place, memo after
memo after memo. Hillary Rodham Clinton wanted these people
fired, but she said she had nothing to do with it.

Now, we look at the chronology of events. They were fired on
May 19. On May 12, Mr. Watkins—his notes say that Harry
Thomason came to him and said Hillary wants them all fired
today. This is on May 12. On May 12, Watkins’ notes say Harry
Thomason came to him and said Hillary wants them all fired
today.

Foster first learns of the Travel Office from Harry Thomason and
Watkins. On May 13, according to Foster’s own notes, he has his
first conversation with the First Lady on this day. That is not con-
sistent with the chronology of events.

Now the First Lady says she didn’t talk to Harry Thomason
about this, but this was totally inconsistent with all the reports
and all the evidence that we have. Now, the First Lady says Foster
was the source, but he did not even talk to her until about this
until May 13, the day after Watkins’ notes say Harry Thomason
came to him and said Hillary wants them all fired. So Vince Foster,
who she said was the source of all this, did not even know about
it until the day after Harry Thomason came to Watkins and said
that Hillary wanted them fired.

Now, if that is the case, then the First Lady has lied and that
is why we need to continue to have these hearings. And if she lied
about this and if she or somebody at the White House asked the
FBI to get involved or if the White House did, as this memo said,
and it could be the First Lady, these are White House notes that
say, according to White House staff notes of an interview with Beth
Nolan and Cliff Sloan of the White House Travel office, BK—that
is Bill Kennedy in the White House counsel’s office—says that PR,
that is Peggy Richardson of the IRS commissioner, is on top of it.
She said at a party the IRS is on top of it and some reference to
IRS agents are aware or something like that. And this—they were
talking about the UltrAir down in Tennessee. .

Now, if these things are accurate, then somebody at the White
House was talking to the IRS about an investigation. That is ille-


69

Objective 12: To review the policies and procedures used to calculate amounts
billed to the press for press travel, and to compare the actual cost of the trips to
the amounts billed to the press.

Procedures:

(a) Interviewed individuals responsible for preparing bills to the press review the
procedures used to prepare the pills.

(b) Gained a general understanding of the automated billing system used to gen-
erate invoices.

(©) Compared the amount billed to the press by the press travel office per reports
generated by the automated billing system to the actual cost incurred for the trip
per the trip worksheets for 28 consecutive trips between August 23, 1992 and Octo-

r 12, 1992.

In performing this procedure, we selected the most recent trip for which substan-
tially all costs incurred (per the trip worksheet) had been invoiced and paid, which
was the trip departin, ber 11, 1992 and returning October 12, 1992. We then
examined each preceding trip in consecutive order, completing through August 23,
1992 in the time provided.

(a) Compared the amount billed to the press per the trip spreadsheet generated
by the automated billing system in the trip files for 5 trips to another report pro-
duced from the same automated billing.

Findings:

(a) No written policies or procedures documenting the billing process exist.

(b) We were informed that amounts billed to the press were based on estimates
of trip costs, not on actual costs, because of the time delay in receiving invoices for
certain trip expenses (such as long-distance telephone lines). No subsequent formal
reconciliation of estimated to actual costs was made.

(c) The Director stated that differences between the amount billed and actual cost
for trips were recovered or refunded through adjustment or billings on subsequent
trips. No formal documentation of these adjustments was maintained.

a We were unable to determine actual amounts billed to the press because the
original source documentation was unavailable, and other sources of the billed
amounts were inconsistent. Per the Director, copies of the original invoices sent to
the press were not maintained on file in the office. For three of five trips reviewed,
the dollar amounts contained on a summary report generated from the automated
billing system and used by the office as the record of amounts billed differed from
corresponding amounts on another report generated from the same system.

This report relates only to the items specified above and reflects events and cir-
cumstances as they were documented or conveyed orally to us from May 14, 1993
through May 16, 1993.

ery truly yours,
KPMG Peat Marwick.

Mr. McHucu. Mr. Chairman, with respect to the unanimous con-
sent request from the gentlelady from New York.

Mr. CLINGER. Yes.

Mr. McHucu. I would just say that I appreciate her effort to un-
derline and point out to us the devastating job losses that have oc-
curred under the Clinton administration.

Mrs. CoLLINs of Illinois. Mr. Chairman, I think that was totally
uncalled for. Mr. Chairman. Mr. Chairman.

Mr. CLINGER. I must remind the audience that you are here as
guests of the House of Representatives and expressions of support
or opposition to any comments by members of the panel are not ap-
propriate.

Mrs. CoLLins of Iinois. Mr. Chairman?

Mrs. MALONEY, Mr. Chairman?

Mr. CLINGER. The committee—yes.

Mrs. Couuins of Illinois. Not only that, Mr. Chairman, this is the
third time this has happened. It seems to me if this continues and
I think that the room will have to be cleared of those who think
this is some kind of theater.


24

nothing of great monetary value—but stil, it was my propery, What has worried
me is that any mail that may have arrived for me during my 10 day leave had also
been discarded. I have never been given an explaination by anyone at the White
House for these actions. During the day, I had repeatedly asked that I be given a
letter informing me of the reason for termination, and was assured that before I
completed my sign out one would be provided. Unfortunately, what actually hap-
pened was that T was escorted across Pennsylvania Avenue—a public street, as if
under arrest—by a member of the White House Security Office, and taken to the
personnel office in the New Executive Office Building where I was presented a pre-
pared letter of resignation that stated that I was resigning “due to change in admin-
istration”. My last act as a White House staff member was to refuse to sign the doc-
ument presented me and I was then escorted out of the building. I listened with
interest last week when a comparison was made between our dismissal and the han-
dling of the congressional staff members who lost their jobs as a result of the last
election, and if one—even one—was handled as we were, they would have my sym-

pathy.

The following day, May 25, in spite of all the accusations being put out by the
White House during the previous 6 days, J received a call from Mr. Mark Gearan,
an aide to Mr. Mack Mc , who actually attempted to convince me that I had
not really been fired, but had only been put on administrative leave as they now
realized that I had no financial authority of any kind within the office. He had no
explanation as to why the 5 of us to which this applied would not be permitted to
return to the White House Travel Office.

Although the White House recognized that not all of us had any financial author-
ity, for the next 30 months we all me part of a full blown Department of Justice
investigation, with Billy Dale as their target for myself it involved FBI agents inter-
viewing my neighbors—two grand jury appearances, two Justice Department and
FBI interviews, and one meeting with the along, with legal fees of over $65,000
of my retirement funds. Over time, where before I had been intimidated, it now
turned to complete frustration as the White House had free reign with the media
in putting out their story, while we were muzzled by the Justice Department—they

resented me with a letter that stated that I was not a subject or target of their
investigation “at the present time”, which meant that anything said could be used
against me. Every day, the White House justifying their actions on the basis of an
accounting firms “audit” that found “financial mismanagement”—while I am sitting
at home with a copy of the firm’s report which reads—and this is a direct quote
from their report: “as you know, the procedures were revised throughout our on-site
work to reflect the time-frame and the limited availability of data, information, and
documented policies and procedures, As such, this Teport may not necessarily dis-
close all significant matters about the press travel office or reveal errors or irreg-
ularities, if'any, in the underlying information. Our procedures do not constitute an
audit, examination, or review in accordance with standards established by the
American Institute of Certified Public Accountants and, therefore, we do not express
an opinion or any other form of assurance on the informtion presented in our re-
port.” To this day the White House has based the justification for our dismissal on
the findings of this firm, I am sure you can understand my frustration.

Billy Dale’s trial, which began on October 26 of last year, was preceded 2 days
earlier by the initial hearing of this committee. Again to have to sit, in frustration,
and hear members of the committee describe our office as a “rats nest” of Reagan
supporters who:

* stonewalled when one member of the committee attempted to have us make fi-
nancial disclosure on the cost of Presidential travel and we would not—while it is
common knowledge that our office has nothing to do with Presidential travel and
has no allotment or authority to disburse Government funds at any time—the allot-
ment and accounting of Government funds for non-military Presidential travel is
made through the Administrative Office of the White House, and for the use of mili-
tary assets, such as Air Force One and helicopters, through the military office in
the White House.

* The author of an anonymous “whistleblower” letter was identified by a commit-
tee member as a Mr. John Vickroy, a former member of our office, who was then
supposedly fired when his identity became known to Billy Dale, a clear violation of
Federal law—when it is common knowledge that John Vickroy retired from the
White House, and when notified of the committee members comments sent a fax to
the chairman that same evening stating his outrage at his name being used, com-
pletely denying any involvement with the letter, and supporting Billy Dale's han-
dling of the office.

‘The culmination for me, I had hoped, was when a jury, after less than two hours
deliberation, acquitted Billy Dale of all charges. During this trial countless members



10

Marwick, “Mr. Dale, because he knew it would not look good and
it reflected that he had done a poor job of accounting.”

Now Mr. Dale states in the Post article that the most serious
issue raised by the Peat Marwick team was his failure to record
certain petty cash checks. So the public understands what this
means, let me briefly explain that, too.

Now, when Mr. Dale or other authorized Travel Office employees
withdrew funds from the Travel Office bank account to be used for
petty cash expenses on a trip, he would make a check out to “cash”
and then record that amount into the petty cash ledger. Now Peat
Marwick’s auditors found that in numerous cases checks made out
to “cash” were never actually entered into the petty cash ledger.
According to what the Peat Marwick auditors told the FBI, Mr.
Dale could not explain these discrepancies. FBI investigators have
told committee staff that these discrepancies, coupled with the fact
that Mr. Dale appeared on the second day of the review with
$2,800 in cash which he said accounted for some of the missing
petty cash, gave them a sufficient reason to open a criminal inves-
tigation. However, from an auditor’s point of view, this was not the
most serious finding. The most serious charge was the Travel Of-
fice lack of accountability.

So what? Here is what. Peat Marwick found a lack of accounting
controls, no formal financial reporting process, no reconciliation of
financial information—I even reconcile my bank account, my check-
book account—no documentation system of checks and balances of
transactions—whoever heard of such a thing in accounting deci-
sions—and no oversight of review of financial activities. Lack of ac-
countability may not—may also have resulted in such abuses of
fundamental common sense as placing checks to the Travel Office
directly into Mr. Dale’s personal checking account.

Again, let me make this clear so that the public understands
this. So what? Here is what. One of the reasons that Mr. Dale
came under suspicion from the prosecution was for placing a total
of $54,000 of Travel Office funds into his personal checking ac-
count, a practice his own attorney characterized as “a disastrous
business judgment.”

So in closing now let me again note that all of us on this commit-
tee have great empathy for the five lower level employees. Iam
sorry for what they have gone through and I hope that there are
lessons not only for future White Houses but for future Congresses
as well when they fire nonpartisan career staff.

To Mr. Dale, ? say you have also been through a great deal of
suffering and a jury has found you not guilty of criminal charges.
Now, normally that would be the end of the matter, but the Chair-
man has convened this committee hearing to look into the cir-
cumstances of your firing, and I hope that today’s hearing will pro-
vide you with another opportunity to respond to the various allega-
tions made by the GAO, Peat Marwick, and the Public In ity
section concerning the management, and I use the word loosely, of
the Travel Office, and yield back the balance of my time.

Mr. CLINGER. I thank the gentlelady.

And in response to your request for having the Justice Depart-
ment here, I think we certainly are willing to take that under ad-
visement. I would, however, remind the gentlelady that we have



29

derstand about the seven of us that staffed the White House Travel
Office under the administration of as many as eight Presidents is
that we were their people. I myself had the honor and the privilege
to serve six other Presidents, and I would have continued to serve
President Clinton had I been given the opportunity.

Thank you, Mr. Chairman.

Mr. CLINGER. Thank you, Mr. Dreylinger.

And now Mr. Van Eimeren, please.

STATEMENT OF ROBERT S. VAN EIMEREN, FORMER
ASSISTANT TO THE DIRECTOR, WHITE HOUSE TRAVEL OFFICE

Mr. VAN EIMEREN. Good morning.

My name is Bob Van Eimeren, and I worked in the White House
Travel Office from May 19, 1984, until our sudden dismissal on
May 19, 1993.

My primary duty was handling reservations and ticketing for
commercial air and rail travel for the White House staff and those
agencies that are part of the Executive Office of the President. I
also traveled, to a limited extent, in advance and with the White
House press corps and Press Office staff in conjunction with a trip
of the President. This involved, in brief, making arrangements nec-
essary to assure a smooth and successful trip on their behalf.

On May 19, 1993, I and my former coworkers were terminated
under the guise of financial mismanagement. Speaking for myself,
I had no involvement in the finances under question in review of
the Travel Office, yet I was terminated nonetheless.

To add insult to injury, I found my reputation dragged through
the mud when the ite House Press Secretary announced to the
world that the FBI was called to investigate possible criminal con-
duct in the office. At that point I had to seek counsel and an attor-
ney to defend myself from this baseless charge. I understood that
I served at the pleasure of the President, but I did not have to ac-
cept false accusations.

I was placed on paid administrative leave after it was deter-
mined that I had no connection to the charges being levied. After
5 months of negotiations with the White House, a position with an-
other Government agency was offered to me, which I accepted, and
for that I am grateful. But almost 3 years later questions regarding
the operation of the Travel Office under Billy Dale remain, and I
welcome this opportunity to respond to your questions pertaining
to my role and tenure in the White House Travel Office.

Thank you.

Mr. CLINGER. Thank you, Mr. Van Eimeren.

Mr. Maughan.

STATEMENT OF RALPH T. “MOE” MAUGHAN, FORMER
COMMUNICATIONS OFFICER, WHITE HOUSE TRAVEL OFFICE

Mr. MAUGHAN, Thank you, Mr. Chairman.

I am Ralph T. “Moe” Maughan. I was born and raised in
Northport, Alabama, attended Northport Elementary School and
Tuscaloosa County High School—like some of the others, I am not
used to this—in March 1949, I joined the Alabama National Guard,
31st Division and was placed on active duty with the Army in Jan-
uary 16, 1951.


98

are probably explanations for that and I am not going to accuse
Mr. Dale or anyone else of wrongdoing until it is proved in a court
of trial.

Mr. Says. You already did accuse him of that, Mr. Moran. He
was found innocent.

Mr. CLINGER. The point of order. The gentleman from Virginia
has the time.

Mr. Moran. Mr. Shays, I said that none of these employees had
any money, public money in their home. That is what I said. I re-
ferred to the employees that were summarily fired without cause.
And I think we ought to be, you know—here is an article on the
front page of The Hill newspaper, about 113 people that work for
the Post Office were fired without cause. Now, it is going to be
privatized, fine. But you know, there is ample precedent for people
being let go who serve at the pleasure of the President or the Con-
gress.

Now, I think if the—if you think about it, the fact that all we
can come up with from this administration is something that hap-
pened in the first few days of the administration. I can’t imagine
that they are so squeaky clean that this is all that they can come
up with when you have a Peat Marwick study that shows phe-
nomenal management inconsistencies.

Granted, the fact that this is not a typical bureaucratic function,
that you have to react quickly, you have to use what resources are
available, you have to exercise judgment. Nobody is perfect. But
anyone who wanted to find cause for firing one or all of the staff
in this Peat Marwick report could find out. And apparently rumors
circulated that were substantiated by the Peat Marwick report.

The point is not whether a firing was fair or not. Those kinds of
things happen and I don’t know whether or not they were fair. The
point is whether this is worth all the national attention that it is
getting, the kinds of accusations that have been made at the First
Lady, at Presidential staff, the kinds of time that has been devoted
to this hearing when we have so many profoundly important issues
that we can’t deal with because we are dealing with some—with
half a dozen people who don’t—who wish they weren’t fired. But it
happens all the time.

Mr. CLINGER. The gentleman’s time has expired.

Mr. Moran. Thank you, Mr. Chairman.

Mr. DALE. May I reply?

Mr. CLINGER. I will give the panel an opportunity.

Mr. McSwWEENEY. Mr. Moran, would you just agree that the cov-
ering letter from Peat Marwick read:

‘As you know, the procedures were revised throughout our onsite work to reflect
the timeframe and limited availability of data, information, and documented policies
and procedures?

‘As such, this report may not necessarily disclose all significant matters about the
press Travel Office or reveal errors or irregularities, if any, in the underlying infor-
mation. Our procedures do not constitute an audit, examination or review in accord-
ance with the standards established by the American Institute of Certified Public
Accountants and therefore we do not express an opinion or any other form of assur-
ance on the information presented in our report.

Will you accept that that was their covering letter?

Mr. Moran. That is the covering letter to virtually every audit.
Mr. McSWEENEY. Thank you, sir.


91

nal indictment. I want to join in with the comments of my col-
league from Pennsylvania that if that is really the allegation, that
we need to stop chasing this, this attack on Hillary Clinton and
really focus in on whether or not we have law enforcement officials
who, for whatever purpose, would take someone who innocently
may have mishandled some things in a management sense and
then tried to turn that into a criminal matter.

So I would hope that if people are seriously and sincerely con-
cerned that we would do something about your personal situations,
No. 1, and, second, that we would get to the heart of what should
be the real concern of this committee, and I would like to yield
whatever other time I have to either Congresswoman Maloney if
she would like it or my colleague from Pennsylvania. Thank you.

Mrs. MALONEY. Thank you. Thank you very much.

I would like to be associated with my colleague’s comments, his
concern, not just for these seven Federal employees but the many
Federal employees that were furloughed and did not receive pay-
checks. I understand you received paychecks but they did not re-
ceive paychecks during that furloughed time.

And to my very good friend and colleague from New Jersey, I
just would like to take issue with one comment that you said that
we are treating this as a minimal matter. The minority is treatin;
it very seriously and in fact we have come forward with several
proposals to improve the management of the White House Travel
Office and, in fact, 27 of the suggested improvements have already
been implemented by the White House that were made by GAO.

The auditing firm Peat Marwick, in their Management Review,
which was later reviewed by the GAO, listed a number of weak-
nesses that still remain in the Travel Office, and I would like to
go through them during your period, Mr. Dale, and they said: That
written policies and procedures, none, none existed; segregated du-
ties, lines of authority, clearly communicated, none; periodic audits,
none; oversight and guidance, none; procurement of goods and serv-
ices, customers’ needs determined, none; goods and services ac-
quired competitively, none. I thought that was a requirement in
the Federal Government that everything be competitively bid but
they found that nothing was competitively bid.

Mr. McSWEENEY. Mr. Chairman, can I answer that?

Mrs. MALONEY. Please may I go through this list?

Documented agreements or written contracts, none. No written
contracts. System to identify and record all costs, none. Again, this
is the finding by an independent body, not a Republican, not a
Democrat, but an independent body.

Systems to provide accurate data for billing, none.

Then it goes into billing practices: Billings prepared timely, some
procedures were in place; system to maintain history of billings and
receipts, none; under cash payment, vouchers reviewed and ap-
proved before payment, GAO and Peat Marwick found none; re-
ceipts deposited on the day received or next business day, none.

Under financial reporting, it says: transactions accurately re-
corded and disclosed in financial reports, none; general ledger to
classify, summarize and report financial data, none; systems for re-
ports, none; report on financial position, none; report on operations,


il

been requesting documents with regard to this matter from the
Justice Department for some time. We stil] do not have the docu-
mentation we would need which we would need to have prior to a
hearing. But as soon as those documents are forthcoming, we
would certainly take that request under advisement.

(The prepared statement of Hon. Charles F. Bass follows:]

PREPARED STATEMENT OF HON. CHARLES F. Bass, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW HAMPSHIRE

Thank you Mr. Chairman. First, let me say that I am glad that the seven wit-
nesses belore this committee have finally been given the opportunity to tell their
side of the story. The administration used these dedicated professionals as scape-
goats in a plan to get good press. I believe that this type of manipulation is intoler-
able. Furthermore, | must state my grave concerns about the White House's decision
to use the Federal Bureau of Investigations to justify these firings. The investiga-
tions were costly to these seven former Travel Office employees both in terms of
their reputations and their life savings. In fact, Billy Dale was forced to spend al-
most half a million dollars to defend himself. This is inexcusable.

Today, I hope that we will be able to show that these gentlemen before us were
used as political pawns in a press game. We will see that 1 ey had served a number
of other administrations and done the job required of them. Unfortunately, this was
not good enough for the current administration. Instead, it appears that the only
way the Travel Office employees could be good enough for the current administra-
tion would have been if they were political cronies.

‘Thank you Mr. Chairman.

Mr. CLINGER. I think we are now prepared to invite our wit-
nesses to come forward to the witness table, if you would.

Gentlemen, and if you want to, as you probably know, it is a cus-
tom, the custom of this committee to swear all of our witnesses so
that no witness is prejudiced in any way. So if you have no objec-
tion, I would ask you to raise your right hand.

[Witnesses sworn.]

Mr. CLINGER. Let the record indicate that all of the witnesses an-
swered in the affirmative, and with that, gentlemen, if you will
take your seat and welcome you all here. And I am going to, first
of all, start out with the former head of the Travel ice, Mr. Billy
Dale. If you would proceed with you" testimony, Mr. Dale. You can
summarize it or give it in full or however you want to proceed.

STATEMENT OF BILLY R. DALE, FORMER DIRECTOR, WHITE
HOUSE TRAVEL OFFICE

Mr. DALE. Good morning, Mr. Chairman, committee members
and counsel. My name is Billy Dale and I am the former Director
of the White House Telegraph and Travel Office. It is with great
relief that I sit with you this morning to tell my side of the story
about the scandal and abuse of political power now popularly re-
ferred to as Travelgate.

For nearly 32 years I worked in the White House Travel Office.
as its director for the last 11. During that time, my colleagues and
I carried out the rigorous task of arranging for the press to accom-
pany and cover the President of the United States as he traveled
this Nation and around the world.

Through several administrations we functioned as an efficient,
effective organization serving the President without regard to par-
tisanship. In fact, I have faithfully served seven Presidents prior to
Mr, Clinton and, even though I was ready for retirement, my col-
leagues would have gladly continued in that role for him through-


97

is one woman that worked for 34 years for the Congress and she
got a form letter pink slip without so much as her name on it from
us.

Mr. SHAYS. Was she accused of being a crook?

Mr. Moran. John Kostelnick had a quota of staff to fire and he
refused and so he was fired. He was in charge of office furnishings.

We have people that worked for the House since they were teen-
agers, 20 years, terminated and they didn’t even get their name on
the termination slip, not a word of thank you. People throughout
the U.S. House of Representatives, both Republicans and Demo-
crats, were summarily fired because we didn’t want them to get
compensation for the comp time that they had developed when they
worked late hours in the House, and to avoid that liability we fired
them and never even said thank you for your service to this insti-
tution. So if that is the policy that we want to be consistent
with——

Mr. Fox. Will the gentleman briefly yield?

Mr. Moran. Very quickly, Mr. Fox.

Mr. Fox. I believe the distinction is we didn’t have the FBI
brought in falsely to charge employees with wrongdoing in a crimi-
nal way and I understand otherwise there are some analogous
points you make. There is clearly a distinction with employees who
have been there 34 years in the White House, falsely being ac-
cused, bringing in the White House and FBI to buttress a claim
which was false.

Mr. Moran. Mr. Fox, I will address that since you brought it up.
None of these employees took tens of thousands of dollars of public
funds and put them in their home, in cash in their account.

Mr. CLINGER, Will the gentleman yield?

Mr. Moran. Well, I will subsequently. You know——

Mr. Suays. Mr. Chairman, I object.

Mr. Moran. If you wish time, I will be happy to—.

Mr. Suays. Mr. Chairman, I object. The gentleman has not been
at the hearing; he is making an accusation that is simply untrue.
It is unfair to those gentlemen. If you had been here, you would
know the accusations you make are not true. I strongly object to
it.

Mr. CLINGER. The gentleman needs to be corrected. These were
not public funds, these were private funds.

Mr. Moran. They were reimbursements from travel.

Mr. WISE. Point of clarification, Mr. Chairman.

The gentleman is correct that there were allegations of funds
being put into personal accounts.

Mr. CLINGER. But not public funds.

Mr. WISE. Correct.

Mr. Moran. They were reimbursements related to the function
that the gentleman was providing.

Now, you know, I can understand how those things happen.
You've got a responsibility to make things run, and from the people
I have talked to, the reporters, they felt that you made things run
and that in fact staff did a Rood job.

It was a high pressure job. It—you had to respond immediately,
and the fact is that you did. Now, how you did that and whether
or not funds were mixed, as has been charged or not, I think there


102

I yield the balance of my time to Mr. Kanjorski.
vit Kanuorski. Thank you very much to my friend from West

I nia.

ir. Dale, I am a little bit disturbed because I have heard a lot
of comments, read a lot of things, and I come from a little town in
northeastern Pennsylvania and I practiced law for more than 20
years of my life, ran a law firm, and I dealt with people who would
pay their bills in cash and people who would pay their bills in
checks, and I had some junior partners and I handled associates
and I had staff working for me and office personnel, and I am as-
tounded when I see somebody who takes cash home and keeps it
in his home. I am astounded when someone takes funds that other-
wise are business funds and puts them into personal accounts. If
my staff had ever done that, they call it “commingling” in the law.

Mr. DaALe. That’s exactly right.

Mr. KANJoRSKI. And there is a presumption that it is wrong, that
any rational, reasonable person knows they don’t take their em-
ployer’s funds or trust funds that they are empowered with and
take them home.

Mr. DALE. Neither did I. You haven’t been here and you didn’t
hear me. I never took any office funds home with me unless I was
traveling the next day and needed the money for the trip, as all
of us did.

Mr. KANJoRSKI. Then you did take them home. It is not that you
never did, you did when you were traveling.

Mr. DALE. Mr. Kanjorski, if you had traveled and you would go

et an advance, do you take it home with you or do you leave it
in the office? It doesn’t do you any good to go out on the road and
travel if your petty cash is back in the office.

Mr. BURTON. Would the gentleman yield, Mr. Kanjorski?

Mr. KaNJoRSKI. Mr. Burton, you and I sat on the same commit-
tee and examined the Bush administration.

Mr. Burton. How well I know.

Mr. KANJorSkI. And just how bad it was. And I have to say this,
Mr. Dale, that you probably are the product of the investigation
that my subcommittee made and Mr. Burton was a part of, because
we did hear about Mr. Sununu and how wasteful he was.

Mr. DALE. I had nothing to do with Mr. Sununu.

Mr. KaNJORSKI. Wait a minute.

And the Clintons and the Gores heard about it and they and
their friends heard about it and anybody in Washington at the time
was embarrassed. It wasn’t George Bush or Barbara Bush that was
responsible. I hope to heavens that they were spending their time,
and I know they were, deciding the important issues that face the
American people.

Mr. CLINGER. Will the gentleman yield just briefly to make the
point that I am sure you appreciate that this—these gentlemen
were not involved in anything having to do with the travel of Mr.
Sununu. The Travel Ofte doesn’t deal with White House person-
nel travel. It only deals with the press corps.

Mr. KANJORSKI. Mr. Chairman, I fully understand that. And
what I am saying is that they don’t seem aware of the fact of what
culture this new administration came into, The White House hav-
ing spent and listened to through the entire year prior to their elec-


118

this. That is what I am saying. I do find it difficult that you could
not have bid this out.

Mr. DALE. Well, first of all, you have to find somebody that
wants to take the bid. We could not find anybody that wanted to
do the charters except Pan Am.

Mr. SHAyYS. World Wide Travel wanted to come in, and you had
Mr. Thomason, and he had his people he wanted to get in. With
all due respect——

Mr. DALE. Mr. Shays, you have to understand that when Air
Force One leaves, I have to have an airplane available to leave, too.
I have to have a company that I can depend on for on-time, me-
chanical and otherwise. There is a great deal of pride taken in
Presidential travel by everybody that is involved with it. The mili-
tary, the Secret Service, the communications people, nobody wants
the finger pointed at them and said the President is saying why
did you cause me to be delayed. I didn’t want that, and 1 wanted
a company, and I was expected to provide—

Mr. Suays. I understand sometimes when you bid out for an ele-
vator in a hotel you get the worst elevator—I mean when you con-
struct. I understand you want the best service. But that can be
contingent upon if you are not satisfied with the service. All I am
saying to you is that it is hard for me—I agree with Mrs. Maloney
pn, this issue. It is hard for me to accept that something cannot be

id out.

Mr. DALE. It could be bid out, and I did. I tried each and every
time I met with airlines, employees from different airlines.

Mr. McSwEENEY. Sorry. Mr. Shays, an added feature of this,
which has not been brought up, the decision as to what airline
would get the business was not only Bill Dale’s. It was the White
House correspondents who were paying for it. And don’t make the
mistake of thinking that they were not interested in a good airline
operating——

Mr. SHays. That is a valid point. Let me get to something else
before my time runs out.

Mr. Dale, you left how much in the account—when you were
given 2 hours and taken in basically a van and escorted out, how
much was in the account, to the best of your knowledge?

Mr. DALE. To the best of my knowledge, and I could be wrong
on this, but it was over $600,000.

Mr. SHays. M. understanding is that when the audit was done
you had in payable-—when the report was done, and I do not want
call it an audit, you had $52,000 in the accounts payable and in
the accounts receivable $366,000. And when the GAO did a report
at the end of 12/31 the accounts payable grew from $5.7 million
and accounts receivable $5.6 million.

What would explain the incredibly large accounts payable and
accounts receivable in both these accounts after you left?

Mr. DALE. I can only assume that, as far as the money that they
accumulated, they were not paying the bills that I left for them.

Mr. SHays. And they were not collecting money either.

Mr. DaLx. They collected the money from the people who I had
already billed, yes.

Mr. SHays. My understanding is, by the GAO report of 1/24/96,
that $200,000 in deposits were not entered in the checkbook. Is


65

Objective 2: To determine if checks written to cash were recorded as increases
to the petty cash fund, and that selected withdrawals from the petty cash fund were
supported and properly billed.

Procedures:

(a) Selected all checks written to “cash” (total of 17 checks) from the population
of canceled checks on file received from Riggs National Bank from January 1, 1992
to April 30, 1993.

Traced the amount and date on the canceled check to the petty cash book.

(c) Located and summarized the detailed petty cash uses (i.e., expenses incurred)
for each employee of the office. This procedure was done in order to determine if
the detailed information agreed to the summary information.

(d) Traced a non-statistical sample of 10 petty cash disbursements related to 10
trips as Tisted in the petty cash book to the charges on the respective trip work-
sheets.

Findings:

(a) On the first day of our fieldwork, we noted and inquired about eight discrep-
ancies between the amounts written to “cash” on the Riggs National Bank account
and the recording of these amounts into the petty cash fund. Each of the eight
checks was made out to “cash” and signed by the Director of the press travel office,
and endorsed by the same individual, A detailed listing of discrepancies follows:

Check ate chen MOE ona
January 11, 1993 .... 44a) $2,500 None
October 9, 1992 ........ see bs . sopsoetoennees 4173 5,000 $2,000
June 17, 1992 .. v o sseceunnvenssasten o 3898 3,000 None
April 20, 1982 once cssesen 3780 2,500 None
February 18, 1992 3617 3,000 None
December 27, 1991 ....... 3567 2,000 None
December 18, 1991 ... 3557 3,000 None
December 5, 1991 3533 2,000 None

23,000

(b) For three petty cash transactions dated December 27, 1991, December 18, 1991
and December 5, 1991, the page from the petty cash book was missing for this time
period and the entry therefore is untraceable.

(c) On the second day of fieldwork, the Director of the press travel office informed
us that he located $2,800 of the $3,000 unaccounted for in the October 9, 1992 petty
cash transaction. He informed us that he found it in an envelope located in a locked
drawer in the office, separate from the rest of the petty cash.

(d) Total of checks written to cash and not recorded on petty cash log or subse-
quently located by the press travel office is $18,200.

(e) For the 10 selected petty cash disbursements (i.e., use of a petty cash draw
by an individual) chosen, we traced the petty cash disbursement amount per the
petty cash book to the respective summary trip worksheet located in the trip files.

e noted that the amount of the petty cash disbursement was recorded on the sum-
may trip sheet as an actual cost incurred on that particular trip.

Objective 3: To assess whether checks recorded as received in the press travel
office were deposited into the Riggs National Bank account within a reasonable time
and were properly posted to the automated billing system (i.e. properly applied to
the outstanding billy.

Procedures:

(a) Selected a non-statistical sample of 25 items from the “Checks Received Log”
for the time period January 1, 1992 to May 14, 1993.

‘Traced each sample item to the respective time period’s deposit slip.
Traced the deposit slip noted above to the bank statement.
Traced each sample item to the automated billing system.

Findings:
(a) All items selected agreed to the deposit slip amounts and to the bank state-
ments.

(b) All checks in our non-statistical sample were deposited into the bank within
one week’s time period.


7

Mr. McHucu. So when the administration talks about concerns
about improprieties, concerns about one thing or another, those
concerns did not come about from their personal investigation or
their personal knowledge. Would you say that is true?

Mr. McSwEENEY. That is true. In fact, on at least one occasion,
I went over to the West Wing and saw Bill Dale sitting outside of
Dee Dee Myers office leaning on the railing trying to get in to see
her, and he was never able to do it.

Mr. McHucu. I see. Let me just comment.

We have heard a lot today about a particular newspaper article,
and no one likes to see people lose their jobs and, indeed, the head-
lines suggest that postal workers, 113, were handed pink slips.
Those are personal tragedies.

Whenever there are changes in an administration or changes in
a Congress or changes in a way a government is run, regrettably,
very unfortunately, people lose their jobs.

But to suggest that somehow these workers equate to what these
people at this dais and at that podium have experienced, I think,
is ludicrous to a fault. Beyond that, if we read beyond the head-
lines, the article says some other interesting things that I have not
heard mentioned here today.

It suggests very correctly that back in June this Congress,
through its oversight committee, the House Oversight Committee,
voted, in public, to privatize this post office. In no small measure
because of the very regrettable outrages that occurred there under
past majorities. I will not recount those here. So these workers
have known, as great as the tragedy of losing a job may be, that
this day was coming because of the vote the House took in the open
last June.

Second, the article also notes that Pitney Bowes, who has won
the contract, has offered job opportunities to some 90 of those 113
employees. Now, those positions may not be to the full liking of the
employees in question. I understand that as well. But to just sug-
gest here today, as has been suggested, that somehow these work-
ers are in a similar situation as these, I think, does no service to
the very important work of this committee.

These people found themselves in this position for one reason,
there was a political agenda that went bad. There was a political
agenda that they tried to backfill and, at best, that was improper,
unfair, and maybe, at worst, illegal, with the using of Federal
agencies from the FBI to possibly the IRS, as we have heard here
today.

And, Mr. Chairman, I trust that we will pursue those very im-
portant questions further, to justify a political action. That is not
changing an administration. That is not politics as usual. That is
a disgrace.

I commend the Chairman for being here today; and I, too, gentle-
men, offer my apologies to you for whatever small part of this Gov-
ernment I represent. You have been treated terribly, and I am
ashamed.

Mr. Chairman, I yield back the balance of my time.

Mr. CLINGER. The gentleman yields back the balance of his time.


16

I had hoped that after the ey found me not guilty so quickly, we could return
to the very quiet and simple life we used to live. However, since the release of David
Watkins’ memoradum describing how he was supposedly ressured to fire the entire
staff of the White House Travel Office, I have been subjected to false attacks at
least as vicious as the ones on which I was tried and acquitted. This time, however,
there is no {rial pending. This time I will not sit silently and take it.

The Clinton administration and its spokespersons have truly gone into full attack
in an effort to hide the truth. In a series of radio, television and print interviews,
Mrs. Clinton has sought to minimize her involvement in the firing. In interviews
with Barbara Walters and again on National Public Radio, Mrs. Clinton stated that
her only involvement was to express concern about the financial mismanagement
that was discovered when the President arrived. Since the President arrived in Jan-
uary 1993, one can only assume that she is referring to purported financial mis-
management that was discovered at or about that time. Her lawyer, David Kendall,
repeated this claim on Nightline and Ann Lewis, the deputy director of the Clinton:
Gore sempaign did the same on a National Public Radio talkshow. Over two Sun-
days, Robert Bennett first claimed on This Week With David Brinkley that I had
agreed to plead guilty to embezzlement and followed this up on Face the Nation
with the untrue and previously unheard charge that the Travel Office was involved
in a scandel which implicate customs law and State tax laws.

Ido not know who gave the order that resulted in David Watkins firing me and
my six colleagues on May 19, 1993. I can tell you that I met with Miss Janet Green,

ir. Watkins’ former assistant, on May 17, 1993 in the office of Mr. Al Nagy, an-
other member of the White House staff, to discuss what had gone on in the Travel
Office over the previous week-end, After meeting with Miss Green for about an hour
she said “Billy, I am going to tell you something and if you ever repeat it I will
deny it, there is one person responsible for what has taken place with your office
and he occupies the Oval Office.” “Now do I need to mention any names?” From my
point of view it hardly matters whether Mr. Watkins was acting on his own or at
the direction of the President, Mrs. Clinton, Harry Thomason or anyone else. What
does matter is the the public understands that firings were not driven by supposed
concerns over financial mismanagement, but were in fact the product of a decision
that was reached long before anyone even began to look into the way that the Trav-
el Office was managed. What matters to me is that fancy lawyers and others who
speak for the White House not be allowed to get away with the lie that my col-
leagues and I were involved in other kinds of wrongdoing. It also matters to me that
people not be allowed to spread the equally vicious lie that I was willing to plead
guilty to embezzlement before trial. And finally, it matters to me that these same
people not be allowed to tell the public that the travel office was cleaned up and
is now managed better.

During the preparation for my trial, we discovered a lot of information that dem-
onstrates that the so called finanacial mismanagement discovered by Peat Marwick
between May 14 and May 16, 1993 merely provided a convenient excuse to carry
out a decision that had been in the works for a long time. Legal rules kept the jury
from hearing those facts. For example, in September 1992, Travel Weekly magazine

ublished an interview with David Watkins in which he extolled the critical role of
orld Wide Travel for it’s essential role in ensuring that the Clinton campaign had
sufficient funds to spend on certain crucial primaries. World Wide had accomplished
this by it’s creative billing procedures of the media that travelled with the Clinton
campaign. This is the same Little Rock travel agency whose employees were already
sitting at our desks when we returned from our meeting with David Watkins the
day we were fired.
en, in November 1992, days after the election, Steven Davison of World Wide
told Arkansas Business magazine that World Wide was already considering opening
an office in Washington to handle the travel needs of the President’s staff, a func-
tion that had always been performed by the Travel Office.

In December 1992, World Wide raised this issue in a letter to Catherine
Cornelius, a Clinton campaign and transition staffer and cousin of the President,
who passed it on to her superior, David Watkins, along with her endorsement. Later
that month came the first of several memoranda written by Miss Cornelius in which
she set forth her plans to restructure the travel office with herself in my job and
giving World Wide the staff ticketing function. We also learned that at about the
same time several White House correspondents were told by a Clinton transition of-
ficial that the new administration had plans to remove the travel office staff.

On Inauguration Day we began to get calls in the travel office from people looking
for the “new Director”, Catherine Cornelius. A few days later, Darnell Martens,
Harry Thomason’s partner in the charter-brokerage business, drafted a memoran-
dum in which he set out his ideas for taking over the other major function of the


99

Mr. MoraNn. And the fact is that in any corporation that would
be a damning audit that where heads would roll in any corporation
as in any public entity. .

Mr. CLINGER. The gentleman’s time has expired and I will now
recognize the gentleman from Mississippi for 5 minutes.

Mr. Tayor. Thanks, Mr. Chairman.

Mr. CLINGER. Recognize Mr. Taylor.

Mr. Taytor. I apologize. The defense authorization bill was on
the floor; the R&D Committee was meeting simultaneously.

But Mr. Chairman, what I wanted to say is that I think these
hearings prove really just one thing: We are here to serve the pub-
lie. ‘And I think the public would best be served if the White House
Travel Office was closed.

This Nation is going through a process of downsizing: 200,000
Federal employees since President Clinton took office.

I serve on the Armed Services Committee. Hundreds of thou-
sands of soldiers, sailors, airmen, and Marines have been let go,
not given the opportunity to reenlist since 1989. We have a third
fewer congressional staffers, and just today as my friend, Mr.
Moran, pointed out, 113 Postal employees were let go. No one takes
any great pride in this. But we have a Nation that is spendin;
$270 billion a year more than it collects in taxes. It squandere
$300 billion a year in interest on that debt and something has got
to give.

I have never been so unfortunate as to be fired, but it could hap-
pen to anyone in this room next November, so I do have empathy
for you. But the point is not these gentlemen, it is not the White
House, it is the need to reduce Government spending.

Reporters are smart people. If you don’t believe me, ask them.
Reporters can make their own travel arrangements. There are trav-
el agencies all over this town. Citizens of this country do not need
to have a travel office in the White House or anyone else to make
reporters’ lives easier for them. That is what it is all about.

Shut it down. Don’t privatize it. Don’t put it out for bid. Let re-
porters do what business people all across this country do on a reg-
ular basis and that is make their own travel arrangements.

Mr. BurTON. Would the gentleman yield, please?

Mr. Taytor. If these gentlemen feel like they have been
wronged, there are courts for them to go to if they feel like they
have been slandered.

Mr. BurTON. Will the gentleman yield?

Mr. TayLor. Yes, Mr. Burton.

Mr. Burton. Thank you. I will just take a minute.

But one of the problems is, they went into this in some detail
earlier today, when the President has to go someplace and the
White House press corps is going to go with him, there is a security
problem. The Secret Service doesn’t want that sort of information
Jet out. And these people have to go with the President at the time
the President goes and they use charter airlines. And if you didn’t
have some central location or group to do this, you couldn't do it.

Mr. TayLor. Reclaiming my time.

Mr. BuRTON. What you are talking about simply won’t work.

Mr. TayLor. Mr. Burton, reclaiming my time, everyone in this
town finds some reason for a special privilege and for Government


21

The following day, May 25, in spite of all the accusations bein;
put out by the White House during the previous 6 days, I receiv
a call from Mr. Mark Gearan, an aide to Mr. Mack McLarty, who
actually attempted to convince me that I had not really been fired
but had been put on administrative leave, as they now realized
that I had no financial authority of any kind within the office. He
had no explanation as to why the five of us to which this applied
would not be permitted to return to the White House Travel Office.

Although the White House recognized that not all of us had any
financial authority, for the next 30 months we all became part of
a full-blown Department of Justice investigation with Billy Dale as
their target. For myself, it involved FBI agents interviewing my
neighbors, two grand jury appearances, two Justice Department
and FBI interviews, and one meeting with the IRS, along with
legal fees of over $65,000 of my retirement funds.

Over time, where before I had been intimidated, it now turned
to complete frustration as the White House had free reign with the
media in putting out its story while we were muzzled by the Jus-
tice Department. They presented me with a letter that stated that
I was not a subject or target of their investigation at the present
time, which meant that anything I said could be used against me.

Every day, the White House justifying its actions on the basis of
an accounting firm’s “audit” that found “financial mismanage-
ment”—while I’m sitting at home with a copy of the firm’s report
which reads—and this is a direct quote from their covering letter:

‘As you know, the procedures were revised throughout our onsite work to reflect
the timeframe ‘and the limited availability of data, information and documented
policies and procedures. As such, this report may not necessarily disclose all signifi-
Eant matters about the Press Travel Ofte or reveal errors or irregularities, if'any,
in the underlying information. Our procedures do not constitute an audit, examina-
tion or review in accordance with standards established by the American Institute

of Certified Public Accountants and, therefore, we do not express an opinion or any
other form of assurance on the information presented in our report.

To this day the White House has based the justification of our
dismissal on the findings of this report.

Billy Dale’s trial, which began on October 26th of last year, was
preceded 2 days earlier by the initial hearing of this committee.
Again to have to sit, in frustration, and hear members of the com-
mittee describe our office as a “rat’s nest” of Reagan supporters
who stonewalled when one member of the committee attempted to
have us make financial disclosure on the cost of Presidential travel
and we would not, while it is common knowledge that our office
has nothing to do with Presidential travel and has no allotment or
authority to disburse Government funds at any time. The allotment
and accounting of Government funds for nonmilitary Presidential
travel is made through the Administrative Office of the White
House and for the use of military assets, such as Air Force One and
the helicopters, through the military office in the White House.

Also, the author of an anonymous whistle-blower letter was iden-
tified by a committee member as a Mr. John Vickroy, a former
member of our office, who was then supposedly fired when his iden-
tity became known to Billy Dale, a clear violation of Federal law—
when it is common knowledge that John Vickroy retired from the
White House and when notified of the committee member’s com-
ments sent a fax to the Chairman that same evening stating his


50

These 113 postal workers are caught in it. The people who are
involved in the committees going on across the hall and across the
Hill for Whitewater are going on it, too.

Would I like to see it end? I would. I think it would be better
for the American people if we put it behind them. I think it would
be better for your lives if we put this behind you.

Thank you, Mr. Chairman.

Mr. CLINGER. I thank you, Mr. Barrett.

I would just point out for the record that we have been request-
ing documents and information about this matter since June 1993.

would agree with the gentleman from Wisconsin, I would have
loved to have had this over and done with a long time ago, but
there has been recalcitrance on the part of those we tried to get
information from.

And I would now recognize the gentleman from New Mexico, Mr.
Schiff for 5 minutes.

Mr. Scuirr. Thank you, Mr. Chairman.

Mr. Chairman, I think we should make it clear that if—if there
was any lax financial accounting procedures in the Travel Office—
and that’s a matter of some debate. But if there were, that is not
the reason why any of the individuals seated in front of us were
fired. The proof of that is several-fold.

The first is, why fire all seven of these individuals since it is ob-
vious that only one or perhaps two had clear responsibility for fi-
nancial management? § if the object was to clean up financial
mismanagement, there would be no reason to terminate those em-
ployees who were simply following instructions of their superiors,
yet, of course, we know all seven were terminated.

Second of all, it seems to me that if any kind of lax accounting
procedures were reason to terminate people at the White House,
the White House Travel Office, if I’m reading the General Account-
ing Office report that was just completed at your request correctly,
there are lax accounting procedures there today that are outline
in this report. And I think the classic has to be that—the classic
has to be that according to the General Accounting Office—excuse
me again, the White House Travel Office had not balanced its
checkbook, hadn’t done what every American individual and busi-
ness normally does each month, for the period from January 1995,
to August 1995, it did so very hurriedly when it heard the GAO
was coming, and lo and behold, found $200,000 that had not en-
tered in their checkbook.

Yet the people responsible for that now are apparently still work-
ing there. In fact, if travel financial management is that important
to this administration, it seems to me if press reports can be be-
lieved, that there are two Cabinet Members who probably should
be looking for a job right now.

Now, the real reason why these individuals were fired is that
there was a political agenda to change their employment from
these individuals to a substitute group friendlier to this adminis-
tration, political allies of this administration. I think the evidence
is overwhelming, particularly after Mr. Watkins’ testimony before
us a short time ago, that from the highest echelons of the Clinton
administration, the emphasis was on a plan to put in allies.



95

Mr. DALE. No, sir. ;

Mr. Fox. Or whether there was any kickback allegations in prior
administrations?

Mr. DALE. No, sir.

Mr. Fox. Any prior administration come in wholesale and try to
remove seven employees without cause?

Mr. DALE. No, sir.

Mr. Fox. Mr. Brasseux, could I ask you a couple questions?

Mr. BRASSEUX. Yes, sir.

Mr. Fox. I understand you asked for something in writing after
learning that you and all your employees had been fired.

Mr. BRASSEUX. Yes, sir, that is correct.

Mr. Fox. Who did you ask to give you something in writing?

Mr. BRasSEUx. When we were fired, Mr. Watkins fired us but he
had a colleague with him, a Mr. Brian Foucart, I believe was his
last name. And I asked Mr. Foucart.

Mr. Fox. And on how many occasions did you ask for something
in writing?

Mr. BRASSEUX. I asked him right after that meeting. Later that
afternoon I ran into Mr. Watkins in the hall and asked Mr. Wat-

ins.

Mr. Foucart initially told me that he would have, try to have it
to me before the day was out. Mr. Watkins said when I saw him
that afternoon that he couldn’t get it to me but he’d get it in the
mail. And then when I called his office a week later, they told me
it was in the mail. One of his secretaries, I’m not sure who I talked
to when I called his office, and obviously I never received anything.

Mr. Fox. So you never received anything from the White House
as to why you were being terminated?

Mr. BRASSEUX. That's correct.

Mr. Fox. Did they say it was for cause or not for cause?

Mr. BRASSEUX. No.

Mr. Fox, They didn’t say anything.

Mr. Brasseux. They didn’t say anything. I never received any-
thing, that’s correct.

Mr. Fox. So how did you learn you were terminated?

Mr. BRassEUX. Well, at the meeting when Mr. Watkins termi-
nated us. He said, based on the Peat Marwick review, that they’d
found some sloppy accounting and mismanagement, that they
thought they could do a job better and be out of here by noon.

Mr. Fox. Did you get a chance to respond to the Peat Marwick
report?

Mr. BRASSEUx. No, he was talking as he backed out the door.

Mr. Fox. So you never had a chance to rebut it at all?

Mr. BRASSEUX. No, sir, not at all.

Mr. Fox. You could have understood being terminated because
you were working in the White House which has a change of ad-
ministrations now and again and given a chance to work elsewhere
but without having the firing without cause.

Mr. Brassrux. Well, we understood at that time when we were
fired, we—we understood that that could have happened any time.
We had accepted it, that that was the way of life there.

Mr. Fox. If I understand how the gentleman feels at the table
this morning, this afternoon, is that what you feel is unfair is the


33

Mr. CLINGER. And you did keep a record of the amounts that
were put through that account, but my understanding is that those
records have not been able to be located?

Mr. DaLe. That's right, I kept the same ledger sheets for that
fund that I kept for the petty cash fund. In February 1993, the
loose-leaf binder that we had kept the petty cash logs in had never
been emptied and I decided to take all the ledger sheets out of the
petty cash log except for 1 year’s worth and I put all of these to-
gether in a large Manila envelope.

It was my intention to separate those by years and then file
them ina file cabinet that corresponded to that year, but I got busy
later that afternoon, got a telephone call or something, and I just
put the envelope behind my desk on a window well, in a file rack,
and thought I will get to it later. I never got to it later because that
envelope disappeared after Catherine Cornelius came to work in
the office.

Mr. CLINGER. Let me just ask all of you one simple question, I
think it requires a yes or no. My time is about to expire.

One of the accusations was, and there was a whistle-blower let-
ter at one point that suggested that you all were sort of aiders and
abetters of smuggling operations in terms of bringing in valuable
oriental rugs and fine wines and so forth. Let me just ask each of
you, if you would, to say yes or no.

Did you facilitate or aid or abet smuggling of this kind in any
way?

Mr. Maughan?

Mr. MAUGHAN. No, sir.

Mr. CLINGER. Mr. Dreylinger?

Mr. DREYLINGER. No.

Mr. CLINGER. Mr. McSweeney?

Mr. McSWEENEY. No, sir.

Mr. CLINGER. Mr. Dale?

Mr. DALE. No, sir.

Mr. CLINGER. Mr. Brasseux?

Mr. BRASSEUX. No.

Mr. CLINGER. Mr. Wright?

Mr. WRIGHT. No, sir.

Mr. Cuincer. And Mr. Van Eimeren?

Mr. VAN EIMEREN, No, sir.

Mr. CLINGER. Well, I just wanted to get that laid to rest right
off the bat so we don’t have to deal with that.

Ms. Norton, Mr. Chairman, on your line of questioning, could I
ask for a clarification?

I believe you asked the question concerning the people who testi-
fied at the trial and indicated that they were willing to testify, de-
spite the fact that the funds involved were their funds. Is it not
true that the funds involved would have been the funds of their
employer and not their personal funds?

Mr. CLINGER. That is correct. But I believe he also indicated that
nobody from the news media, neither the employers or the employ-
ees, testified or were involved in his trial at all.

Ms. Norton. I wanted to clarify that Sam Donaldson, if he was
testifying, it was not about his personal funds that he had any rea-


17

‘Travel Office: arranging for press charters. Like the ticketing function, this was an-
other potentially lucrative area of business for a private firm. | was not aware of
the memorandum when Mr. Martens called me a few weeks later to discuss this
roposal. When I explained to him politely, I had thought that I couldn’t see the
nefit of dealing through a middle man to perform the function that the Travel Of-
fice had performed for decades to the apparent satisfaction of the press and all pre:
vious administrations. Mr. Martens followed-up with a second memorandum to Mr.
Thomason complaining about me personally.

Of course, I was unaware of this memorandom, I was also unaware that several
weeks later and several weeks before Peat Marwick ever set foot in the Travel Of-
fice Mr. Thomason began to spread the rumor that I was demanding kickbacks in
exchange for charter business. No one ever confronted me with that rumor, nor to
my knowledge did anyone ever try to determine whether there was any truth to it,
until after I was fired. It is an absolute lie that was spread, so far as I can tell,
to begin the process of justifying my removal. I take some satisfaction in the fact
that the Justice Department thoroughly investigated this allegation and rejected it.

Yet, without even looking into the charge, Mr. Watkins installed Catherine
Cornelius into the travel office with directions to keep her eyes and ears open. When
Miss Cornelius reported to him and Mr. Thomason that she believed that I and
other Travel Office employees were living beyond her conception of what a Govern-
ment em) lovee ought to be able to afford, the White House Counsel was notified
and the FBI was contacted.

All of this occured before the administration’s decision on May 13 to retain Peat
Marwick to perform a financial review of the Travel Office. In addition, documents
T've read about in the papers the last few weeks state that on May 12 Mrs. Clinton
was already expressing her desire to have us replaced. So, I am forced to wonder,
what the financial mismanagement that she was concerned with before Peat
Marwick even began its work?

It is also important for people to understand that the most serious issue raised
by Peat Marwick, which did not issue it’s final report until two days after we were

fired, was my failure to record 5 checks totalling $14,000 in the office’s petty cash
log. No one from the administration ever asked for an explanation, even though I
had worked at the travel office for 7 previous Presidents, had background investiga-
tions by the FBI, and maintained an unblemished record. What’s even worse they
decided to fire everyone, even though it was clear that I was the only person respon-
sible for these discrepancies.

All these facts lead us to conclude that the financial mismanagement that the
White House says is the reason we were fired is just a convenient excuse. If the
President, or the First Lady, or anyone else wanted us out in order to give the busi-
ness to their friends and supporters, that was their privilege. But, why can’t they
just admit that is what they wanted to do rather than continue to make up accusa-
tions to hide that fact?

The administration has also tried to justify its handling of my firing by claiming
that I had offered to plead guilty to embezzlement, the charge that the jury acquit-
ted me on. That is simply not the case. In late November 1994, after investigating
me for 18 months, the Justice Department told my lawyers that it had decided to
indict me on two counts of embezzlement.

After talking to my family and consulting with our lawyers, we decided to try to
put an end to the anguish and avoid the expense of trial, which was estimated up-
wards of $450,000, by admitting that I should not have put travel office checks into
my own account, something I have always admitted at trial. The letter from my law-
yer to the Justice Department made clear that I would never admit to having spent
the Travel Office’s money on myself, because I had not done that. It was always
important to me that everyone understand that I had not embezzled any money.
The Justice Department refused to end the case on that basis, so we went to trial,
and the jury accepted my explanation. Since the Justice Department’s own rules
prohibit the release of confidential communications, I don’t know how the letter
made it into the hands of the press. But it angers me beyond words that people are
trying to take advantage of this leak to suggest that my acquittal was not deserved.

‘At the end of the trial the President apologized for what I went through. But I
must question the sincerity of that apology in light of the events of the past two
weeks. And no one has yet apologized to my colleagues. Instead the President’s law-
yer goes on television to level new false charges. And no one tells the public that
the new and better Travel Office doesn’t pay its bills on time and has been the sub-
ject of constant complaints from the people it is supposed to serve.

T will always be grateful to the people who stood up for me at my trial and the
many great people around the country who have supported us through these trying
times. I always tried to gain the respect and trust of the people I worked for in the


61

“It’s a game show,” said Coyne. “It’s like in the Great Depression you had all the
dance marathons.” Give us the dance marathons. This tinny scandal lacks the ne-
cessities, which are sex or money or both. Therefore, we are being asked to make
do with the details of who Xeroxed a legal bill for the trailer park 12 years ago and
what color folder it was in. Not even Clinton haters are setting the VCRs for this

earing.

Co) 8 has proposed to rmanently change the Medicare and Medicaid system.
President Clinton apposes the change. No hearings, but we do have a special com:
mittee investigating Whitewater.

You might think it was the most vital issue in America. Once, the phone company
was a job for life. This week, AT&T begins to get rid of 40,000 employees. ase
and Chemical banks are merging, and 12,000 will lose their jobs. We are urged in
New York magazine to buy the stock of the new, leaner bank.

“Nobody grew up with a parent who could prepare them for the kind of job mar-
Ketplace that is our there now,” said Tim Coyne, who filled out papers to list himself

for jobs.

‘oyne had worked as a placement counselor for Touro College, trying to find jobs
for students with computer and accounting degrees. Then he set up a company to
place computer experts in banking and finance jobs.

His big problem was that people in the banks couldn't make up their minds about
hiring anyone. Why bother if everyone is going to be laid off in six months?

ingress is now enraptured with seven people fired from a travel office that ca-
tered to the White House press corps. I have no idea what that is about. The Repub-
licans have a team in Congress that is looking at it full time to see if Hillary Clinton
can be arrested for firing seven people.

Meanwhile, there have been a few other lay-offs set in motion:

January 1993 Sears, Roebuck, 50,000
February 1993 Boeing, 28,000
July 1993 IBM, 63,000
January 1994 GTE, 17,000
January 1994 NYNEX, 16,800
February 1994 AT&T, 15,000
April 1994 Delta Airlines, 15,000

fay 1994 Digital Equipment, 20,000
June 1995 Lockheed Martin, 15,600
January 1996 AT&T, 40,000

The seven people in the White House travel office are far more important to the
Republicans than the quarter million at these companies who lost their jobs.

ether you take people off welfare, or you lay them off from jobs, nobody goes
home and says, ‘Honey, you and the kids got to die it's good for the economy,” said
Coyne, 43, a Vietnam veteran.

“No one wakes on a Friday and orders 40,000 lay-offs” he said. “I’m no Socialist,
but an executive should be fired outright any time he orders a layoff. The question
should be: “You mean, you didn’t know you had 2,500 people you didn't need on the
payroll?

at_is one question. Here are a few others the senators might squeeze in be-
tween the painstaking recreation of the Arkansas trailer park deal that has cap-
tivated the national government.

What is downsizing all about? Just companies responding to the discipline of the
stock market? Or are there perverse incentives built into the tax code that don’t re-
ward job retention? Are pension funds, with their huge stakes in the stock market,
completely blind to the lives and places that are capsized by downsizing? And when
the profits are taken, who pays the social costs?

“It’s all portfolio management, not business management,” said Coyne. “It has to
do with how your funds are doing at a given moment. It has nothing to do with
how many pairs of shorts are getting sewn, or how many socks are getting woven.
“Whether it’s Whitewater, or ‘I didn’t pe the right seat on the plane so I shut down
the government,’ it’s so blatantly banal.

“It’s a game show to them.”

Mrs. MALONEY, I would like to go down the findings in the GAO
report with which you disagree.

Mr. CLINGER. The gentlelady’s time has expired. We will have
another opportunity but the gentlelady’s time has expired.

We are going to recess for the vote, which is in progress. I think
it is the only vote of the day. So we will recess for about 10 min-
utes.


114

wanted the business; and after they went out of business, I had to
scurry around and take whoever I could get.

At the complaints of the White House press corps, they did not
like the people that we were chartering and called me on the phone
on occasions to tell me that. John McSweeney was on a trip one
time when the President of the Correspondents Association
boarded the airplane and started complaining to him about the air-
craft and how crowded it was. John McSweeney took his cell phone
out, dialed my number in the office and handed it to him.

Mr. McSWEENEY. I took the coward’s way out.

Mr. DALE. So I am the one who bore those complaints, yes.

Mrs. MALONEY. Will my colleague yield?

Mr. Wise. Certainly.

Mrs. MALONEY. You mentioned in the competitive bidding that
only Pan Am wanted to do the job. Who was handling the charter-
ing now? Is there any company out there now who will handle the
chartering?

Mr. DALE. Not the scheduled carriers I dealt with, because just
in the last 2 weeks my contact at one of the scheduled carriers told
me they would not charter to the White House without payment up
ront.

Mrs. MALONEY. Well, they are obviously working, because the
press is accompanying the President on his foreign trips, so there
must be some chartering firms that were willing to do the business.

Mr. DALE. One of the gentlemen sitting against the wall right
over here is a gentleman that traveled with both of us, the Clinton
White House and me. I think he is the better one to answer who
provided the best service.

Mrs. MALONEY. That is not the issue. That is not what we are
looking at now.

Mr. DALE. That is exactly what I was tasked with, was to provide
a comfortable, convenient service for the White House press corps.

Mr. Wise. One last question. Mr. Dale, last week, or in the Wat-
kins hearing, a draft GA0 study, I believe dated December 1995,
was brought up about how the White House Travel Office had im-
proved in 26 of 29 areas. Have you had a chance to review that re-
port?

Mr. DALE. No, sir. I would really like to. I would question the
GAO. Do they know who to go to and talk to? Do they know which
office to go to at the State Department to see if the White House
Travel Office is reimbursing the Government for funds expended on
behalf of the press comps that I used to pay for, that I used to use
this petty cash to pay for?

Check it out. They have not been paid since I left the White
House.

Mr. CLINGER. The gentleman’s time has expired, and I will now
yield to the gentlewoman from Maryland and ask her if she might
yield 30 seconds to me.

Mrs. MoRELLA. To the Chairman I would yield 30 seconds.

Mr. CLINGER. Just to clarify again—and I thank the gentlelady.
Just to clarify again the element that was raised here about the
113 postal workers who were fired. Unlike you, gentlemen, they
really were aware back in June that this was likely to happen be-
cause, in fact, the office was going to be privatized. So it wasn’t as


116

again, and we say to them we are sorry, and we correct the prob-
lem.

I have listened to the stories of Mr. Dale’s daughter’s wedding
expenses being investigated; others who may have property being
checked on, whether they had the ability to pay for it; three of the
witnesses’ fathers passed away during this; careers were jeopard-
ized; Mr. Wright's early retirement with reduced annuity; hearing
also on Dateline NBC of Mr. Dale talking about waking up at night
to his wife sobbing in bed and that he himself was pacing the floor
at night.

1 cannot imagine people going through this, who were inves-
tigated by the FBI, the IRS, over such a long period of time, and
then we talk about downsizing the White House Travel Office.
Frankly, it has been upsized since the change took place. I think
now there are nine employees there rather than even a reduction
from the seven. So that statement is kind of thrown out.

And when we had Mr. Watkins appear before this committee last
week we heard at least half a dozen times the fact that Mr. Wat-
kins said that this was the result of a desire for press opportunity.
Now, you may have heard that, too. I don’t think anyone durin;
the day has asked you how you would respond to the so-calle
planned or desired press opportunity, one that would jeopardize
people’s livelihoods and careers. I wondered if you would like to
comment on that press opportunity situation.

Mr. McSweeENgY. I think that might fit in with some of the deci-
sions that Mr. Watkins has continued to make. He made a wrong
decision. It was a hell of a press opportunity, and look what he
found himself with.

Mrs. MorELLA. Any of the others hear about this concept of a
press opportunity?

Mr. Brasseux. I saw the statement where he mentioned they
needed some positive press, and this is what they wanted to do,
and I was obviously very disappointed.

Mrs. MorELLA. Doesn’t show logical thinking or caring about
people.

I am also concerned about what this whole episode has to say to
our young people whom we would like to have interested in public
service. Do I want to work for the Federal Government? Do I want
to dedicate my life to the Federal Government knowing that there
is a possibility that I might be treated in this manner?

Mr. DALE. Yes, I would recommend that they do, and I would
hope that this was an isolated incident. I would not think that—
I would not want to go to my grave thinking that this Government
operates that way, and I don’t think that.

Mrs. MorELLA. I would agree with you, and I think that is why
it is important that we isolate it here in this committee and say
this shall not happen again.

I was reminded of a line from Othello, which I think states what
we all feel and how you feel certainly. In act three the statement
is made—made by Iago, “Who steals my purse, steals trash. But he
that filches from me my good name, robs me of that which not en-
riches him and makes me poor indeed.” I think that is what we are
talking about.

l yield back, Mr. Chairman.


4

Former Interior Secretary James Watt pleaded guilty recently to
withholding documents from a grand jury. A person may be held
in contempt of Congress under 2 USC. 192 for refusing to produce
documents or records. In fact, three Reagan administration officials
prosecuted by Iran-Contra independent counsel Lawrence Walsh—
Elliott Abrams, Alan Fiers, and Robert McFarlane—pled guilty to
withholding information from Congress.

Of course we may never really know what happened to many of
the documents in the Travel Office because both the White House
and the FBI demonstrated a true case of “abysmal mismanage-
ment” in the handling of this investigation, the very thing that the
Travel Office employees were charged with. In short, the White
House withheld documents and dragged out document production
and the FBI and Justice Department, at best, looked the other way
too often.

Travel Office records began to be removed from the Travel Office
shortly after a Presidential cousin, Catherine Cornelius, began
working in the Travel Office in April 1993. Senior White House of-
ficials knew that Catherine Cornelius was taking home documents
from the Travel Office and the record of what documents ever
made it back to the White House is sketchy at best. The prosecu-
tion notably did not call Miss Cornelius as a witness.

When the White House sent in Peat Marwick to do a quick re-
view, stress review, this was not an audit, the documents were
handed over to Patsy Thomasson at the conclusion of that review.
Ms. Thomasson just happens to be the individual whom the White
House described just last week as having “hopelessly messy files.”
Mr. Watkins, her supervisor, testified last week that he had no
idea what she did with the Travel Office records provided to Peat
Marwick. The very revealing Watkins memo was found in Ms.
Thomasson’s “messy files.” Ms. Thomasson, who played a key role
in firing the employees, also was not called by the prosecution. Mr.
Watkins, the individual that communicated the firings to these em-
ployees, was himself fired for taking a White House helicopter on
a midweek golfing trip. The prosecution didn’t call Mr. Watkins as
a witness, either.

When the Justice Department went to trial in the case of United
States v. Billy Dale, they had to concede that many records that
they knew had once existed were missing and unaccounted for. The
FBI took almost a month to get into the White House and secure
any documents. We have heard no plausible explanation for this
long delay in securing the records. Now we have again just learned
from the Justice Department that many of the documents that the:
supposedly had obtained from the White House never actually let
the White House compound and were instead maintained at the
White House.

Finally, the head of the White House Records Management Office
raised red flags to Staff Secretary John Podesta that documents
were being tampered with and improperly handled in the days fol-
lowing the firings. Even World Wide Travel employees who came
in from Arkansas to assist in the Travel Office firings were con-
cerned with documents being trashed in the office. The notes from
the White House Management Review are full of questions asking
where the documents were, but Mr. Podesta, who was put in


93

Mr. CLINGER. We will request that. That can be done and they
will do so.

Mr. Horn. Mr. Chairman, if 1 may suggest, I have listened to
this exchange with interest. The individuals we are asking to reply
to the gentlewoman from New York’s questions do not have the
records that have in some cases been destroyed, in some—from
what we understand, certainly were not taken out of the White
House Travel Office when they all left. They would have seen each
other lugging lots of records. Nobody saw that. I think it is harass-
ment to ask them to reply in writing and I would prefer, Mr. Chair-
man, that we extend the round, we will get the questions asked.

Mr. CLINGER. We are going to do just that, Mr. Horn

Mr. Horn. And let’s have those answers.

And I would say to the gentlewoman from New York, anybody
who has ever run an organization—and I have run a university for
18 years—you have auditors all the time. What do they look at?
They say, is there a written series of processes and systems for an
office? Then the question is, did a particular office follow those
written systems and authorizations? This is not an indictable of-
fense when you do not follow them, you simply have auditors who
say, here were your systems and here were your processes, did you
follow them? The fact is in small groups like this group, it is often
done without written—in the private industry, as well as public.

Mrs. MALONEY. Point of personal privilege.

Mr. CLINGER. The gentlelady will state her point of personal
privilege.

Mrs. MALONEY. Point of personal privilege only because my name
was raised and an inaccurate statement was made. I was not ask-
ing for the files or the records. I was merely responding to what
Peat Marwick listed as management policies. And for example, as
one of their management policies, they said that it was standard
operating procedure——

Mr. CLINGER. You made those points.

Mrs. MALONEY. Not competitively bid contracts.

Mr. CLINGER. The gentlelady’s time has expired and we are now
going to move to the gentleman from Pennsylvania, Mr. Fox, for 5
minutes.

Mr. Fox. Thank you, Mr. Chairman.

I appreciate the Chairman holding these hearings. I believe it is
very important that a discussion of possible abuses be put before
the American people. I am concerned, as well as my colleagues, I
am sure, are about the abuse of power by Federal agencies in the
current administration. It deflects attention away from the false
charges, the improper firing of the White House Travel employees,
all indications to me from what I have heard so far today is that
they wanted to hire their own friends as opposed to maintaining
what was an apolitical office doing an excellent job on behalf of the
executive branch.

I would like to ask a couple questions, if I may, to Mr. Dale and
others at the table. I want to also say, join with my other col-
leagues who had said previously how much we appreciate you
being here today and being so candid with us. You heard about the
kickback allegations that Harry Thomason made at the White
House that were passed on to the FBI; did you not?


38

top of it. She said at a party the IRS is on top of it, and some ref-
erence to IRS agents aware of something like that.

Now, if the ite House went so far as to use the IRS and the
FBI to try to discredit these people and to force them out, that is
a miscarriage of justice, and I believe it borders on a felony, and
we need to get to the bottom of that, Mr. Chairman, and bring
those people before this committee, have them put under oath, so
that we can find out if those kinds of wrongdoings took place.
There may be some prosecutions in order down the road.

I have a number of questions here I would like to ask the gentle-
men real quickly. 1 know my time is probably going to run out.

Do you believe, gentlemen, any of you, that the IRS may be pre-
pared to audit you, or have you had any indications you might be
audited by the IRS?

Mr. DALE. Mr. Burton, first of all, let me correct the record. I am
not a Democrat.

Mr. Burton. Well, the only reason I said that, Mr. Dale, is be-
cause in November 1992, in an article, it says, “Like a lot of fellow
Marylanders, Billy Dale went into the polling booth and cast his
vote for Bill Clinton. ‘I was like a lot of people,’ he says, ‘I thought
we needed a change.”

So maybe you just made one mistake.

Mr. McSWEENEY. Can we make that two? I did not vote for Bill
Clinton. My lawyer said I did because I was a registered Democrat,
but, no, I did not.

Mr. DALE. But on your question, yes, I am the target of an IRS
audit at this time.

Mr. BurToNn. Do you feel that this is an unjustifiable action?

Mr. Date. I feel like it was brought on by the Travel Office
firings, yes.

Mr. Burton. Are you familiar with UltrAir in Tennessee?

Mr. DALE. Yes, sir, I am.

Mr. BurTON. Have you talked to any of those people down there
in the last few months?

Mr. DALE. Yes, sir, I have.

Mr. Burton. They asked for an opinion from the IRS about ex-
cise taxes, and within 24 hours they were literally attacked by the
IRS agency, took all of their records, and for the next 24 months
had them under a very scrupulous investigation, and they were
found to not have done anything wrong.

It leads one to believe that the IRS was used to try to discredit
you through UltrAir and also discredit UltrAir. Do you believe that
is the case?

Mr. DALE. Yes, sir, I do.

Mr. BurRTON. So you think there is a real possibility that the IRS
and Mrs. Richardson may have been involved with the White
House in trying to put you fellows in a bad light?

Mr. DALE. I can tell you that I don’t remember the date, but
somewhere along October, November 1993, I got a summons from
the IRS to appear in my attorney’s office and bring all documents
pertaining to the Travel Office. I went, and it was our understand-
ing at that, that they were going to question me about the excise
tax and how the White House Travel Office had handled it.


100

to do something special for them, including reporters. I think re-
porters are smart enough to make their own travel arrangements.
I think this was done to kind of schmooze up to the press. All of
us are guilty of that. There is absolutely no reason on earth to have
a White House Travel Office. Maybe there was in the past.

But I plan to introduce legislation, Mr. Chairman; I would hope
you would introduce legislation to abolish the White House Travel
Office. Don’t privatize it; just do away with it. And if Mr. Burton
chooses to start that business himself, God bless him.

Mr. DREYLINGER. Mr. Chairman, could I ask one question?

Mr. TAyLor. Mr. Chairman, | yield the remainder of my time to
Mr. Kanjorski.

Mr. DREYLINGER. Mr. Chairman, could I ask you one question?
Would we do away with every travel office in every Government
agency? I think every Government agency in Washington has a
travel office that they use either onsite or somewhere within town.

Mr. KANJoRSKI. I hope that won’t be on my time, Mr. Chairman.

Mrs. MALONEY. May I respond to that?

Mr. CLINGER. I think Mr. Kanjorski has the time.

Mr. KaNvorskI. I will take the time for a moment.

Let me say I join with the gentleman from Mississippi, that I
spent 2 years of my life investigating the travel of the executive
branch under George Bush as President of the United States, and
I have never seen the likes of which justifications can be made for
taking aircraft, using limousines, doing all kinds of silly things
when you happen to get a title and come to Washington, DC.

And let me say that I agree with him and the press has done
nothing less than they—they may not sometimes get the salary
commensurate with what they think they should be paid, but they
certainly do want the perks, equal or better than anything we do
up here on the Hill, but they don’t ever seem to disclose it. I abso-
lately agree, let’s do away with the office. Let them have their own
thing.

Gentlemen, except for the fact of how this was handled, and I
would concede did, as a matter of fact I think last week when Mr.
Watkins testified, I said it was dumb, dumber, and dumbest. The
dumb thing was what they first did and how they handled it at the
White House. The dumb thing was this committee got involved.
That was the dumber thing. And the dumbest thing was when Mr.
Watkins didn’t testify openly on television so the American people
would hear what it was all about, because after he testified here
for 5 hours it was very clear to me and I think everyone who would
have listened to him on a television screen that there were seven
unhappy people here, some of which ultimately—one of which ulti-
mately was indicted and went to trial and spent a lot of money.

But I have enough faith in our system to say that if the grand
jury didn’t have enough evidence, it wouldn’t have indicted. If a
judge hadn’t looked at the indictment and had the prosecutors
come forth—and they have ethical standards that they have to
meet—they would have moved for an immediate dismissal of those
indictments if they thought they were wrong. There was a suffi-
cient element of facts for them to warrant that the issue should go
before a jury.


4l

Mr. DALE. Because of the security that was required in Presi-
dential trips.

If you are talking about the White House press charters, that is
the only one I am familiar with and the only one I feel qualified
to talk about.

But if you are suggesting that a private company could arrange
those charters, well, I think that you need to find out more about
what the Travel Office did and the security involved in a Presi-
dential trip.

Mrs. MALONEY. In Presidential trips now, staff travel in the
White House currently is done by a private contractor. If it is done
for the staff by a private contractor, why cannot the press activity
also be done by a private contractor?

Mr. DALE. It is my understanding it is not.

Are you talking about the commercial travel or the charters?

Mrs. MALONEY. Both.

Mr. DALE. It is my understanding that a private company does
the commercial travel but White House employees handle the
White House press charters. That is my understanding. And under-
stand, I have not been back since the day after I was fired.

Mrs. MALONEY. Can you elaborate on why your job could not be
done by a private company?

Mr. Dats. I didn’t say it couldn’t be done. But I don’t think that
it is realistic to think that a private company can come in and the
Secret Service would communicate with them on security arrange-
ments and the coordination of the movement of Air Force One with
a private company and the turnover that they might have as they
would with Government, White House employees.

Mrs. MALONEY. Yet that is the way it is handled in many cases.
That is the way it is handled with the staff.

Mr. DALE. Not for the President of the United States.

Mr. McSWEENEY. Are you talking of the staff on Air Force One
when you talk of staff?

Mrs. MALONEY. The staff on Air Force One is on Air Force One.
I am talking about additional staff that may go that is not on Air
Force One. If the staff is on Air Force One, they are with the Presi-

lent.

Mr. McSWEENEY. The only staff that would be going on the press
plane would be the press office staff, and their arrangements are
made through White House personnel working in the White House
Travel Office unless, that is, that has changed in the last month
and a half.

Mrs. MALONEY. If I could have an additional minute, I was very
touched by your statement, Mr. McSweeney, when you said you
looked at Air Force One, and there was the emblem, and it was not
a Republican emblem, and it was not a Democratic, it was the
United States of America, and I do not see why we cannot treat
the Travel Office the same way. Let us not have a Republican one
or a Democratic one; let us have a professional office—

Mr. McSWEENEY. We never have. We never have.

Mrs. Maloney.—that makes the appropriate arrangements. And
I would like to discuss this further with you. I do not see why this
cannot be handled, if it is a separate plane, separate from the
President, by private companies.