Union Calendar No. 595

106th Congress, 2d Session – – – – – – – – – – House Report 106–1027

JANET RENO’S STEWARDSHIP OF THE

JUSTICE DEPARTMENT: A FAILURE

TO SERVE THE ENDS OF JUSTICE

TENTH REPORT

BY THE

COMMITTEE ON GOVERNMENT REFORM

together with

MINORITY VIEWS

Volume 1 of 2

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

DECEMBER 13, 2000.—Committed to the Committee of the Whole House

on the State of the Union and ordered to be printed

NO’S STEWARDSHIP OF THE JUSTICE DEPARTMENT:

FAILURE TO SERVE THE ENDS OF JUSTICE

U.S. GOVERNMENT PRINTING OFFICE

67–356 WASHINGTON : 2000

Union Calendar No. 595

106th Congress, 2d Session – – – – – – – – – – House Report 106–1027

JANET RENO’S STEWARDSHIP OF THE

JUSTICE DEPARTMENT: A FAILURE

TO SERVE THE ENDS OF JUSTICE

TENTH REPORT

BY THE

COMMITTEE ON GOVERNMENT REFORM

together with

MINORITY VIEWS

Volume 1 of 2

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

DECEMBER 13, 2000.—Committed to the Committee of the Whole House

on the State of the Union and ordered to be printed

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS III, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

DAVID A. KASS, Deputy Counsel and Parliamentarian

KRISTI L. REMINGTON, Senior Counsel

JIM SCHUMANN, Counsel

KIMBERLY A. REED, Counsel

MARIA P. TAMBURRI, Assistant to the Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHILIP SCHILIRO, Minority Staff Director

PHILIP S. BARNETT, Miniority Chief Counsel

KRISTIN AMERLING, Minority Deputy Chief Counsel

PAUL WEINBERGER, Minority Counsel

LETTER OF TRANSMITTAL

HOUSE OF REPRESENTATIVES, Washington, DC, December 13, 2000.

Hon. J. DENNIS HASTERT,

Speaker of the House of Representatives,

Washington, DC.

DEAR MR. SPEAKER: By direction of the Committee on Government Reform, I submit herewith the committee’s tenth report to

the 106th Congress.

DAN BURTON,

Chairman.

(III)

(V)

C O N T E N T S

Page

Findings of the Committee on Government Reform ............................................. VII

I. The Attorney General’s conflicted investigation ......................................... 1

A. Background on the Independent Counsel Act ................................... 3

B. A rocky start: early conflicts in the Justice Department’s campaign finance investigation ............................................................... 9

C. Attorney General Reno changed her interpretation of the Independent Counsel Act .......................................................................... 14

D. Memoranda from FBI Louis J. Freeh and Task Force Supervising

Attorney Charles La Bella recommending that an independent

counsel be appointed .......................................................................... 19

E. Department of Justice rebuttal memoranda ..................................... 44

F. Department of Justice’s bad faith in its application of the Independent Counsel Act .......................................................................... 54

G. The failure to appoint a special counsel for Vice President Gore .... 59

II. The failures of the Justice Department investigation ................................ 63

A. The Justice Department failed to pursue the December 15, 1995,

coffee tape ........................................................................................... 63

B. The Justice Department has failed to question the President and

Vice President effectively .................................................................. 71

C. The Justice Department failed to pursue relevant documents ........ 74

D. The Justice Department failed to pursue key individuals and

entities ................................................................................................ 84

E. The Justice Department failed to pursue the Kansas conduit contribution scheme ................................................................................. 107

F. The Justice Department failed to investigate leaks harmful to

the campaign fundraising investigation ........................................... 116

III. The Justice Department’s political interference with congressional oversight ............................................................................................................. 123

A. Failure to comply with subpoenas for the Freeh and La Bella

memoranda ......................................................................................... 123

B. Failure to produce the Conrad memorandum ................................... 143

C. The Justice Department’s political gamesmanship ........................... 146

IV. The favorable treatment of the Attorney General’s friends ....................... 154

A. The Justice Department’s handling of the Soka Gakkai matter ..... 154

B. Robert Bratt ......................................................................................... 181

Exhibits .................................................................................................................... 188

APPENDIXES

Appendix 1.—Correspondence between the committee and the Justice Department ...................................................................................................................... 638

Appendix 2.—Kansas Democratic party disclosure forms (receipts and disbursements) .......................................................................................................... 1862

VIEWS

Minority views of Hon. Henry A. Waxman, Hon. Tom Lantos, Hon. Major

R. Owens, Hon. Edolphus Towns, Hon. Paul E. Kanjorski, Hon. Carolyn

B. Maloney, Hon. Eleanor Holmes Norton, Hon. Chaka Fattah, Hon. Elijah

E. Cummings, Hon. Dennis J. Kucinich, Hon. Rod R. Blagojevich, Hon.

Danny K. Davis, Hon. John F. Tierney, Hon. Jim Turner, Hon. Harold

E. Ford, Jr., and Hon. Janice D. Schakowsky ................................................... 2008

Exhibits .................................................................................................................... 2034

(VII)

FINDINGS OF THE COMMITTEE ON GOVERNMENT REFORM

The Attorney General of the United States has exhibited a critical lack of judgment in her stewardship of the campaign fundraising investigation. Furthermore, the reputation of the Justice

Department has suffered greatly during her tenure. Given the evidence compiled by the committee, it is hard to escape the conclusion that the Attorney General has acted politically to benefit the

President, the Vice President, and her own political party. Specifically:

• The Attorney General had a conflict of interest in the

Justice Department investigation of possible criminal

wrongdoing involving the President and Vice President.

Any investigation of the campaign fundraising scandal required

a detailed examination of the actions of the President and Vice

President. The Justice Department is wholly unsuited to conduct such an investigation, and the repeated failures of the Department during the last 4 years proves that the Attorney General cannot investigate her superiors.

• When investigative matters arose that touched upon the

President, the Vice President, or the Democratic party,

the Attorney General abandoned her expressed belief

that an appearance of conflict was to be avoided by the

Nation’s chief law enforcement official. On May 14, 1993,

Attorney General Reno testified before Congress. She stated: ‘‘It

is absolutely essential for the public to have confidence in the

system and you cannot do that when there is a conflict or an

appearance of conflict in the person who is, in effect, the chief

prosecutor.’’ This belief gave way to an inexplicable acceptance

of the very appearance of conflict she sought to avoid when she

retained supervision of the campaign finance investigation of

the President, the Vice President and her own political party.

• The decision to retain control of the investigation of the

President and the Vice President showed an unacceptable indifference to an appearance of impropriety. The

principal beneficiaries of the campaign finance scandal of 1996

were President Clinton and Vice President Gore. In insisting

that she retain control of the investigation of the President and

Vice President, Attorney General Reno has failed to exercise a

minimally acceptable standard of judgment required of the custodian of Federal law enforcement. If her investigation of campaign fundraising matters had indeed been thorough and vigorous, and if she had exhibited good faith cooperation with legitimate congressional oversight of her investigation, there

would be less cause for concern. However, the decision to retain

supervision of the investigation of the President, the Vice PresiVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00009 Fmt 7633 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
VIII

dent, senior administration officials and her political party—juxtaposed with numerous missteps, failures, preferential treatment of political appointees, rejection of the advice of senior advisors, combined with the obvious bad faith exhibited toward

congressional oversight—does not instill confidence in the Department of Justice.

• The decision to retain control of the investigation of her

own political party showed an unacceptable indifference

to an appearance of impropriety. For much of her adult life,

the Attorney General has been an elected public official. She

has, throughout that time, been elected on the Democratic party

ticket. Although there has been an effort to describe the 1996

campaign finance scandal as a matter of ‘‘everybody does it,’’ it

is worth noting that Campaign Financing Task Force supervisor

Charles La Bella devoted approximately 65 pages to possible

Democratic misconduct and approximately 2 pages to possible

Republican misconduct. The Attorney General’s insistence on

maintaining supervision of the investigation of her own political

party again showed indifference to the appearance of evenhanded application of justice, and a critical lack of judgment. An

example of this is the Justice Department failure to investigate

an apparently illegal scheme by the DNC to use conduit contributors to funnel over a third of a million dollars to the Kansas

Democratic party. The Department conducted a 3 year investigation of contributions to Republicans in Kansas but failed

even to consider an illegal—and successful—effort by her own

party to use straw donors for political benefit.

• The failure to conduct a thorough investigation promoted an appearance of favoritism. This reflected poorly

on the judgment of the Attorney General, particularly

given recommendations made in 1997, 1998, and 2000,

that someone else should supervise the investigation.

Charles La Bella made the following point in his first recommendation for an independent counsel: ‘‘[i]f these allegations

involved anyone other than the President, Vice President, senior

White House, or DNC and Clinton/Gore ’96 officials, an appropriate investigation would have commenced months ago without

hesitation.’’

The following failures bolster the conclusion that the Justice

Department has not lived up to its obligation to conduct a thorough investigation of the campaign fundraising scandal, and

that the country would have been better served if an independent counsel or special counsel had been appointed to handle the investigation:

• The President was not asked a single question about foreign

money until 2000.

• The President was not asked a single question about James

Riady until 2000.

• The President was not asked a single question about John

Huang, Charlie Trie, Mark Middleton, and the Presidential

Legal Expense Trust until 2000.

IX

1When the White House released this document on Sept. 22, 2000, White House staff anonymously suggested that ‘‘FR’’ could stand for ‘‘finance-related,’’ not fundraiser. Other documents

authored by the same individual, however, show that her use of the abbreviation ‘‘FR’’ refers

to fundraisers.

• The President was not asked a single question about his 5

minute meeting with Korean national John K.H. Lee, which

resulted in a $250,000 illegal political contribution, until

2000.

• The President and Vice President were not asked a single

question about White House coffee fundraising events until

2000.

• The Vice President was not asked a single question about

the Hsi Lai Temple fundraiser until 2000.

• The Vice President was not asked a single question about

Maria Hsia until 2000, after she had been convicted in Federal court. To make matters worse, the Justice Department

failed to subpoena the White House for records regarding

Hsia.

• The Vice President was not asked a single question about

John Huang or James Riady until the year 2000.

• The Justice Department should have been aware of evidence that, on December 15, 1995, the Vice President expressed an interest in showing political advertisements to

James Riady, who lived in Jakarta, Indonesia. Not only did

the Justice Department fail to obtain the original evidence

for over 6 months, at least one unidentified source within

the Department sought to discredit the possible evidence before it was even reviewed.

• The Vice President’s former Director of Political Affairs appears to have never been interviewed by the Justice Department. This comes in spite of the fact that she authored such

communications as the recently produced e-mail that discusses a ‘‘coffee list’’ and states: ‘‘these are FR coffees

right?’’ 1

• The Vice President was not asked about the September 27,

1993, fundraiser with John Huang and China Resources

Chairman Shen Jueren until 2000.

• At a very sensitive time in the Department’s investigation

of Charlie Trie, it became clear that Trie’s former bookkeeper was destroying evidence. Although the FBI wanted

to move swiftly and execute a search warrant, Justice Department lawyers refused to approve such a warrant.

• The Justice Department failed to subpoena the White

House for records regarding Ernest Green and Mark Middleton until 2000.

To date, the Justice Department has failed to advance an investigative rationale for these significant failures. It appears that

the President and Vice President received preferential treatment at the expense of the campaign finance investigation.

X

• The Attorney General has taken an active step to assist

the Vice President during his election campaign. On August 23, 2000, the Attorney General announced that she would

not appoint a special counsel to investigate Vice President Gore:

‘‘I have concluded that there is no reasonable possibility that

further investigation could develop evidence that would support

the filing of charges for making a willful false statement [in the

Hsi Lai Temple or White House coffee investigation].’’ The Attorney General further explained her position in a committee

interview on October 5, 2000: ‘‘[t]he Vice President defined what

he meant by a fund-raiser. . . . Based on his definition of what

a fund-raiser was and what he said, I would not be able to

prove, based on that, that he believed it to be a fund-raiser and

testified falsely.’’ Minutes later, the Attorney General reinforced

this point: ‘‘I think the whole statement clearly reflects what the

Vice President understood a fund-raiser to be, and within his

definition, I think he made it clear that his statement was not

inaccurate.’’

There can be no more stark example of why the Attorney General should refrain from acting as investigator, judge and jury

in a matter involving the Vice President. There are many suspects of criminal inquiry or criminal defendants around the

country who would be eager to accept an offer from the government to be allowed to insert their definition of a factual matter

in place of a jury’s determination of a factual matter. The Attorney General has made an extraordinary accommodation to the

Vice President—she effectively allowed him the opportunity to

define a material element of the investigation and then said not

only that she believed him, but that there was no possibility of

developing evidence that would cast doubt on his definition.

• The Attorney General has gone to extraordinary lengths

to cover up the failures of the Justice Department. Examples of bad faith negotiation by the Justice Department regarding document requests are legion. While the Department has argued that turning over documents would harm ongoing investigations or chill internal communications, these explanations

have almost universally turned out to be pretexts to cover up

embarrassment. For example:

• On December 10, 1999, the Department of Justice announced that it would not comply with a committee subpoena for FBI interview summaries of the President and

Harold Ickes. One month prior to this notification, committee staff had been told that the documents would be produced, without fail, on a specific date. After relying on Department representations, the committee was disappointed

to learn of the Department’s new position. Not surprisingly,

the change of position came the week before John Huang

was scheduled to testify before the committee. It must be

noted that the hypocrisy of the Department’s position was

underscored by the fact that when Democrat Senate Committee Chairman Donald Riegle requested FBI interview

summaries in 1994, 84 such documents were produced by

XI

the Attorney General. It appears that a special standard

was developed for the campaign finance investigation—one

made more understandable when the interviews of the

President were finally produced and it became clear that

the Justice Department had neglected to ask a single question about foreign money or James Riady.

The hypocrisy of the Department’s refusal was also underscored by the assertion that ‘‘[t]he Department has observed what appears to be an increasing incidence of public

release of [FBI interviews].’’ Chairman Riegle released 84

FBI summaries in 1994. The Committee on Government

Reform, however, had released a grand total of one FBI

summary in the previous 3 years.

• The Freeh and La Bella memoranda, and the transcripts of

the Justice Department interviews with the President and

Vice President, show an investigation derailed. Thus, the

committee believed it was prudent to come to an understanding of what documents had been subpoenaed by the

Justice Department. This too proved informative. For example, by obtaining subpoenas issued to the White House, the

committee now knows that the Justice Department did not

even ask the White House for information about former

Presidential advisor Mark Middleton (who invoked his fifth

amendment rights before this committee) or about Vice

Presidential friend and fundraiser Maria Hsia. Unfortunately, however, the Justice Department and DNC have

gone to extraordinary lengths to keep this committee from

obtaining the subpoena issued to the DNC. The DNC and

the Justice Department have worked hand-in-glove to keep

the committee from learning whether the Department was

thorough in making its document requests to the DNC. As

of October 10, 2000, the DNC continues to refuse to comply

with a congressional subpoena for the document requests

issued to it by the Justice Department.

• The Attorney General and her subordinates have made

false statements to obtain tactical advantage in different

negotiations. At various points in the committee’s investigation, the Justice Department relied upon obfuscation. The Attorney General and her staff ignored truth when a falsehood made

one of their arguments stronger.

• The Attorney General continued to rely on Lee Radek’s advice regarding campaign finance matters even after he was

rebuked within the Justice Department for attempting to

mislead his superiors about important elements of the investigation.

• After a Federal court ruling made it permissible for the Justice Department to share most of the Freeh and La Bella

memoranda with Congress, committee staff requested the

opportunity to review the memoranda and were rebuffed.

Nevertheless, the Attorney General stated in a letter, ‘‘[w]e

advised the Committee staff last fall that the memorandum

XII

with reduced redactions was available for review.’’ The Attorney General’s statement was patently false. This statement is typical of the deceptive, self-serving statements

made by the Justice Department throughout the debate on

the Freeh and La Bella memoranda.

• After the committee subpoenaed the Freeh and La Bella

memoranda, the Attorney General and Director Freeh

signed a statement that the committee’s subpoena was ‘‘unprecedented.’’ This allowed the media and other commentators to paint the committee in an unfavorable light. The

committee pointed out that this statement was factually inaccurate, and the FBI Director withdrew his statement. The

Attorney General, however, persisted in claiming that the

subpoena was unprecedented until the following year when

one of her subordinates finally admitted, in writing, that

the subpoena was not unprecedented. By then, of course,

the Attorney General had obtained the desired political benefit, and there were no negative repercussions. While this

admission would have greatly harmed the Justice Department’s political position in August 1998 during the contempt debate, by March 1999 few in the public cared.

• Justice Department officials believed that a key supervisor of the campaign finance investigation thought that

the Attorney General’s political future hinged on her decisions regarding her political superiors. The Attorney

General’s decision to retain control of this investigation

while there was such a cloud over its stewardship shows

a critical failure of judgment. William Esposito, the former

Deputy Director of the FBI, testified before the committee that

in November 1996, Lee Radek, the head of the Public Integrity

Section, told him that he ‘‘felt a lot of pressure,’’ and that the

Attorney General’s job might ‘‘hang in the balance’’ depending

on his decisions in the campaign finance investigation. This testimony, which was corroborated by another senior FBI official,

Neil Gallagher, reinforced the committee’s long-held view that

the Attorney General had a political conflict of interest in trying

to investigate the fundraising of the President, the Vice President and the Democratic party.

• The Justice Department’s political support for the President and Vice President was evident when its officials

publicly undermined prosecutors who recommended

independent investigations of the President, Vice President and Democratic party. The Attorney General’s failure to solve this problem by appointing an independent

counsel to conduct the investigation was a significant

failure of judgment. Justice Department officials showed that

they were acting in a political manner when they publicly disparaged their colleagues on a number of occasions. The Attorney

General tolerated this conduct by keeping the investigation

under the purview of these same individuals.

XIII

• When Robert Conrad recommended that a special counsel

be appointed to investigate Vice President Gore, the New

York Times reported that ‘‘Justice Department officials disparaged his conclusions.’’ The newspaper reported: ‘‘[o]ne

Justice Department official said that Mr. Conrad was alone

in his recommendation. ‘No other prosecutor in this matter

thought that there should be a need for a special counsel,’

said the official, who spoke on the condition of anonymity.’’

This was such an egregious lie that even the Attorney General could not allow it to go unremarked. The same day, she

stated that Conrad’s recommendation was supported by

other prosecutors.

• When Director Freeh recommended that an independent

counsel be appointed to look into fundraising matters, he

was savaged by both Justice Department and White House

officials. For example, the New York Times reported the following in 1997: ‘‘[a]lthough Mr. Clinton had pointedly avoided answering questions about Mr. Freeh’s disagreement

with Ms. Reno’s decision, White House aides were not so

circumspect. They privately ripped into Mr. Freeh—once

lauded by the President as one of his best appointees—and

called him a disloyal subordinate.’’

• When Charles La Bella’s recommendation for an independent counsel was being openly discussed in the media by

the Attorney General’s advisors, not only was La Bella’s

legal acumen attacked. One Justice Department official

commented that some people were wondering whether La

Bella had a ‘‘deep-seated psychiatric problem,’’ or whether

he was unstable. One can hardly imagine a clearer message

to refrain from making honest recommendations than having a government official question your sanity.

• The committee has been obstructed by the Justice Department’s failure to provide guidance regarding subjects

of investigation that would hamper ongoing criminal investigations. While investigating the illegal fundraising activities of John Huang, Charlie Trie and Johnny Chung, the committee respected requests by the Justice Department not to ask

questions about certain individuals or subjects. For example, on

November 9, 1999, Chairman Burton informed Attorney General

Reno: ‘‘I will respect the Department’s wishes, and avoid questioning Mr. Trie about these two individuals, as long as they are

under active investigation. I will also instruct other members of

the Committee to avoid questioning Mr. Trie about those two individuals.’’ Many months later, the committee sought guidance

as to whether it is permissible to go back and revisit the unresolved subjects. The Justice Department has simply refused to

cooperate and respond to numerous committee requests on these

matters.

• The Justice Department’s failure to be vigorous in pursuit of evidence indicates a lack of judgment and a proclivity to take the side of the White House.

XIV

• The Justice Department appears to be more interested in defending the White House in the e-mail matter than investigating it. The Justice Department appears to be engaging in a vigorous defense of the White

House in the e-mail matter, rather than investigating possible wrongdoing by the White House. Although the Justice

Department refuses to disclose staffing levels of the e-mail

investigation, it has become known that the one part time

lawyer handling the e-mail investigation for the Department has recently left government employment. This does

not indicate an aggressive allocation of resources. (For a detailed discussion of this issue, please refer to the recentlyreleased committee report ‘‘The Failure to Produce White

House E-Mails: Threats, Obstruction, and Unanswered

Questions.’’)

• Justice Department lawyers have taken affirmative

steps to mislead the public regarding key matters

that relate to document discovery in the campaign finance investigation. This undermines confidence in

the Justice Department and shows an extreme lack of

judgment on the part of the Attorney General. Department of Justice lawyers are taking active steps to mislead

a Federal court and the public about essential elements of

White House document production. For example, Department lawyers stated that the ‘‘technical failure [to produce

the e-mails] is a long-standing matter of public record that

has been confirmed by the White House itself.’’ This, of

course fails to disclose that the White House did not tell the

Justice Department investigators and Congress that it had

not fully complied with subpoenas. (For a detailed discussion of this issue, please refer to the recently-released committee report ‘‘The Failure to Produce White House E-Mails:

Threats, Obstruction, and Unanswered Questions.’’)

• The failure to investigate whether there has been an

obstruction of congressional investigations of the

campaign finance scandal indicates that the Justice

Department is giving the White House preferential

treatment. In an October 5, 2000, interview with the committee, Attorney General Reno made it clear that she would

not take proactive steps to determine whether the White

House had obstructed congressional investigations by failing

to take steps to produce subpoenaed e-mail records. (For a

detailed discussion of this issue, please refer to the recentlyreleased committee report ‘‘The Failure to Produce White

House E-Mails: Threats, Obstruction, and Unanswered

Questions.’’)

• For reasons unexplained to date, the Attorney General

has been lenient in her treatment of major foreign benefactors of the President, Vice President and DNC. There

has been a very lengthy delay in Justice Department efforts to

indict major DNC benefactors James Riady, Ji Shengde, Liu

XV

Chao-ying and Tomy Winata. There is no acceptable explanation

for the lack of vigor in the investigations of these individuals.

• Leaks from Justice Department personnel have harmed

the campaign finance investigation. The Attorney General has exhibited poor judgment in leaving the investigation in the hands of people who have demonstrated

their interest in harming the investigation. The Justice Department’s campaign fundraising investigation has been

plagued by leaks. These leaks, which were often made at strategic times, greatly harmed the Justice Department’s investigation, and strongly suggested that certain officials in the Justice

Department did not want the investigation to succeed. These

leaks provide a clear example of why the Attorney General

should have appointed an independent counsel—to remove the

investigation from politically biased officials at the Justice Department.

• While acting as the primary Main Justice supervisor of

the campaign finance investigation, Deputy Assistant Attorney General Alan Gershel took time away from his responsibilities to be the lead attorney in the trial of

Charles Bakaly. It is difficult to determine which is a

greater failure of judgment—Gershel agreeing to take on

this assignment, or the Attorney General and the head of

the Criminal Division allowing him to take on the assignment. Charles Bakaly was the spokesman of Independent

Counsel Kenneth Starr during the Lewinsky investigation. For

Gershel or the Attorney General to have decided that he, and

only he, out of hundreds of lawyers qualified to work on the

case, was essential to the Bakaly prosecution, shows an astounding lack of judgment. At a time when it was becoming

clear that the Justice Department had failed to ask the President and Vice President questions about significant campaign finance matters—and a whole new element of the investigation

was opening up with the disclosure that the White House had

failed to produce e-mail records to the Justice Department—

Gershel decided to take on additional responsibility. Perhaps

more important, he was oblivious to concerns that as the supervisor of an investigation of the President and his election tactics, he might look less than impartial if he prioritized his time

so that he was a lead prosecutor in a case urged by the President, and designed to discredit Independent Counsel Starr.

1 28 U.S.C. §§ 591–599 (expired 1999).

Union Calendar No. 595

106TH CONGRESS REPT. 106–1027 " ! HOUSE OF REPRESENTATIVES 2d Session Vol. 1 of 2

JANET RENO’S STEWARDSHIP OF THE JUSTICE DEPARTMENT: A FAILURE TO SERVE THE ENDS OF JUSTICE

DECEMBER 13, 2000.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. BURTON, from the Committee on Government Reform

submitted the following

TENTH REPORT

On October 19, 2000, the Committee on Government Reform approved and adopted a report entitled, ‘‘Janet Reno’s Stewardship of

the Justice Department: A Failure to Serve the Ends of Justice.’’

The chairman was directed to transmit a copy to the Speaker of the

House.

I. THE ATTORNEY GENERAL’S CONFLICTED INVESTIGATION

Since the inception of the Department of Justice’s Campaign Financing Task Force, many people have believed that a conflict or

perceived conflict of interest existed for the Department of Justice

to investigate the fundraising issues surrounding the Democratic

party and the reelection of President Clinton and Vice President

Gore. This was because Attorney General Reno, ostensibly the final

decisionmaker in any Justice Department investigation, was appointed by the President and answered only to him. The Independent Counsel Act1 (‘‘the Act’’) was enacted for just such situations. In order to avoid a conflict or an appearance of a conflict

when the Attorney General would have to investigate the administration of which she is a part, she was able to request the appointment of an independent counsel. However, Attorney General Reno

disregarded the Act and insisted that she was able to conduct the

campaign finance investigation without conflict. This assertion was

unfortunate considering she had an inherent conflict in any investigation involving the President, Vice President, and Democratic

National Committee as central figures. Her actions troubled the

2

2 In nearly all of the preliminary investigations conducted by the Department of Justice, the

allegations investigated came from an outside source. The press first reported on the President

and Vice President’s fundraising phone calls from the White House. The Senate Governmental

committee and were the committee’s impetus for conducting oversight of the Department of Justice in this matter. Although the

Independent Counsel Act expired, and Reno would not have been

able to request the appointment of an independent counsel in this

matter after June 30, 1999, the committee believed it was important to investigate because the Attorney General’s handling of the

campaign finance investigation was tantamount to obstructing her

own investigation.

What the committee eventually came to discover was alarming.

Through various memoranda eventually produced to the committee, it was learned that Reno engaged in a creative analysis of

the law in what appeared to be an effort to avoid the implementation of the Independent Counsel Act. FBI Director Louis J. Freeh

and later, Task Force Supervising Attorney Charles La Bella, took

the position that under both the discretionary and mandatory provisions of the independent counsel statute, the Attorney General

should request the appointment of an independent counsel for the

campaign finance investigation. However, the Attorney General

and her senior advisers disagreed with the conclusions reached by

Freeh and La Bella. After each preliminary investigation of senior

level White House officials, including the President and Vice President, opened by the Public Integrity Section (PIS), the Attorney

General determined that no independent counsel was warranted.

There are dozens of memoranda among senior level Justice Department officials discussing whether an independent counsel should be

appointed to investigate campaign finance matters. The Justice officials, in their memoranda, spend hundreds of pages in an attempt

to explain away the need for an independent counsel. The committee was shocked to find that the Chief of the Public Integrity

Section, who was in charge of the application of the Independent

Counsel Act, frequently misrepresented the facts and the law in

memoranda for the Attorney General. In retrospect, had an independent counsel been appointed, thousands of hours could have

been spent investigating criminal and possible criminal conduct,

rather than fighting the recommendations of those that believed an

independent counsel was necessary.

The Attorney General was able to avoid the appointment of an

independent counsel through a disregard of the law and a narrow

view of the evidence. She did this by refusing to consider all of the

evidence, taken as a whole, to determine whether there was sufficient information to appoint an independent counsel. Instead, she

would examine individual pieces of information, as if in a vacuum,

and disregard the fact that nearly all of the allegations relating to

campaign finance violations led back to the overwhelming need for

money created by the President and Vice President themselves.

To make the appointment of an independent counsel more unlikely, the Task Force was not able to seek out information relating

to covered persons under the Act. It seems that they had to hope

that specific information from a credible source would simply appear. If this were to happen, the Department would then be able

to initiate a preliminary investigation.2 Ultimately, Attorney GenVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00020 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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Affairs Committee brought the issue of Ickes’ alleged perjury to the Task Force’s attention. Common Cause first brought the media fund allegations to the Department. 3The Independent Counsel Act expired June 30, 1999. 28 U.S.C. § 599. However, soon after

the expiration of the Act, the Department of Justice enacted regulations allowing the Attorney

General to appoint a special counsel, who would be authorized to investigate and prosecute matters when the Attorney General concludes that extraordinary circumstances exist such that the

public interest would be served by removing a large degree of responsibility for a matter from

the Department of Justice. 28 C.F.R. § 600 et. seq. (1999). 4 28 U.S.C. § 599 (1994).

5See generally hearing on the ‘‘Reauthorization of the Independent Counsel Statute,’’ before

the subcommittee on Commercial and Administrative Law of the House Committee on the Judiciary, 106th Cong. (1999); hearings on the ‘‘Independent Counsel Act,’’ before the Senate Committee on Governmental Affairs, 106th Cong. (1999). 6 Because of the authority it conveyed upon an independent entity, appointed by a three judge

panel, many people charged that the Independent Counsel Act was unconstitutional. 7 28 U.S.C. § 594(i).

8 28 U.S.C. § 594(a).

eral Janet Reno chose to ignore the facts, the political conflicts, and

the trust placed in her by the American people, by refusing to appoint an independent counsel for the campaign finance matter.3

On June 30, 1999, the Attorney General and many senior level

political appointees at the Justice Department could breathe a collective sigh of relief. On that day, the Independent Counsel Act expired.4 After holding hearings, Congress decided not to reauthorize

the Act.5 Therefore, the Department of Justice could no longer be

called upon to implement the Act in the campaign finance investigation. After the Act expired, the Attorney General assured Congress and the public that the Department had instituted regulations allowing for a ‘‘special counsel.’’ A special counsel was supposed to be similar to an independent counsel, but without the statutory authority or independence. It came as no surprise that when

Reno’s new Supervising Attorney, Robert Conrad, determined that

a special counsel should be appointed to investigate Vice President

Gore, Reno declined.

A. BACKGROUND ON THE INDEPENDENT COUNSEL ACT

The Independent Counsel Act allowed the Attorney General, in

certain situations, to remove an investigation from the Department

of Justice, and place it in the hands of a neutral party who was

empowered to investigate and prosecute Federal crimes.6 That neutral party was the independent counsel. The Office of Independent

Counsel was entirely separate and independent from Main Justice.7 What made the independent counsel truly unique was that

it had all of the power and authority of the Department of Justice,

but did not report to the Attorney General or President.8 This was

considered to be the best manner in which to assure the public that

a truly non-partisan investigation, free from undue influence,

would be conducted.

1. Legislative History of the Act

The independent counsel statute was conceived in the aftermath

of the Watergate investigation. As a result of the experiences of

Watergate, Congress came to believe that the Attorney General

and political appointees at the Department of Justice were not always able to conduct an impartial investigation when Presidential

and party politics were involved. For instance, during the Senate

Select Committee on Presidential Campaign Activities’ (Watergate

Committee) investigation, the committee uncovered evidence of imVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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9 CRS Rept. No. 87–192A, ‘‘Legislative History and Purposes of Enactment of the Independent

Counsel Provisions of the Ethics in Government Act of 1978,’’ Mar. 4, 1987, at 2. 10 Id. 11 Id. 12 Id. (citing ‘‘Final Report of the Senate Select Committee on Presidential Campaign Activities,’’ S. Rept. No. 93–981, at 80–81 (1974)). 13 Id. (citing ‘‘Final Report of the Senate Select Committee on Presidential Campaign Activities,’’ S. Rept. No. 93–981, at 96 (1974)). 14Whitney North Seymour, Jr. was appointed on May 29, 1986, to investigate former aide to

President Reagan, Michael Deaver. The allegations involved post-employment conflict of interest

laws relating to Deaver’s representation of certain foreign clients before the White House after

leaving government employment. 15 ‘‘Removing Politics from the Administration of Justice,’’ hearings on S. 2803 and S. 2987

before the Subcommittee on Separation of Powers of the Senate Committee on the Judiciary,

93d Cong. 216 (1974). 16 Id. at 200.

propriety on the part of the Department of Justice.9 In particular,

the Watergate Committee concluded that the Chief of the Department’s Criminal Division, Henry Peterson, acted as a conduit for

information from the grand jury to the Counsel to the President

and the President himself.10 In addition, Peterson gave the President tactical advice regarding the manner in which the White

House should respond to the Watergate investigation.11 The committee also determined that Peterson ‘‘attempted to insure that the

Department of Justice investigation of Watergate ‘was narrowed

down’ to avoid investigating the President.’’ 12 After uncovering this

troubling conduct, at the completion of its investigation the Watergate Committee recommended the establishment of a permanent,

independent prosecutor to handle ‘‘criminal cases in which there is

a real or apparent conflict of interest in the executive branch.’’ 13

In so doing, Congress wanted to ensure that nothing similar could

happen in the future.

Between 1974 and the Act’s passage in 1978, both the Senate

and House held numerous hearings on the various bills proposing

an independent prosecutor. The first Senate hearings focused on

the political and personal conflicts of interest in the Attorney General investigating the President or high-level administration officials. Whitney North Seymour, Jr., who was later appointed as an

independent counsel,14 testified in 1974, that, ‘‘[l]oyalty to the political interests of the administration may often require disloyalty to

the goal of impartial justice.’’ 15 Seymour illustrated the point that

the Office of Attorney General is a political one, and that the Attorney General’s loyalty often lies with the President who appointed

him. Therefore it would be presumed that the Attorney General

would want to shield the administration. Similarly, Watergate Special Prosecutor Archibald Cox testified regarding his belief in the

need for independent counsel legislation. He stated, ‘‘[t]he pressures, the tensions of divided loyalty are too much for any man,

and as honorable and conscientious as any individual might be, the

public could never feel entirely easy about the vigor and thoroughness with which the investigation was pursued. Some outside person is absolutely essential.’’ 16 Cox recognized the importance of the

public’s confidence in an investigation of a political figure. Likewise, the theory of those advocating the legislation was that if

someone independent were to conduct the investigation, the

public’s concerns would be allayed.

In its reports on the independent counsel legislation, Congress

echoed the themes of conflicts of interest and public confidence in

5

17S. Rept. No. 95–170 at 5–6 (1977). 18 ‘‘Legislative History and Purposes of Enactment of the Independent Counsel (Special Prosecutor) Provisions of the Ethics in Government Act of 1978,’’ CRS Rept. No. 87–192A at 3, Mar.

4, 1987 (citing ‘‘Removing Politics from the Administration of Justice,’’ hearings on S. 2803 and

S. 2978 before the Subcommittee on Separation of Powers of the Senate Committee on the Judiciary, 93d Cong. (1974)). 19 Id. at 9 (citing S. Rept. No. 94–823, at 5). 20The Independent Counsel Act was passed as Title VI of the Ethics in Government Act of

1978, Public Law No. 95–521, as amended and reauthorized by Public Law 97–409, Public Law

100–191, and Public Law 103–270 (codified at 28 U.S.C. §§ 591–599 (1994)) (no longer in effect

June 30, 1999). The Act as first passed referred to a ‘‘special prosecutor.’’ Id.

investigations. The following rationales for passage of the Act were

highlighted:

• The Department of Justice has difficulty investigating alleged criminal activity by high-level government officials.

• It is too much to ask for any person that he investigate his

superior.

• It is a basic tenet of our legal system that a lawyer cannot

act in a situation where he has a conflict of interest or the

appearance thereof. . . . The Attorney General and his

principal assistants are appointees of the President and

members of an elected administration. It is a conflict of interest for them to investigate their own campaign or, thereafter, any allegations of criminal wrongdoing by high-level

officials of the executive branch. The appearance of conflict

is as dangerous to public confidence in the administration

of justice as true conflict itself. Having men of integrity operate in the face of a conflict is an insufficient protection for

a system of justice.17

Although there was a general consensus of why there was a need

for some type of independent prosecutor, at first there was not

agreement on how the entity should be structured. One of the first

bills proposed the establishment of an ‘‘independent Department of

Justice,’’ or some other permanent mechanism for appointing special prosecutors, rather than relying on the Attorney General to

make a request in each instance.18 The Senate’s reasoning behind

such a proposal was that ‘‘[i]t is not sufficient to rely on the President or the Attorney General to appoint a temporary special prosecutor the next time the Attorney General or the President has a

conflict of interest or the appearance thereof. It is not at all obvious

that such an appointment will occur.’’ 19 Attorney General Janet

Reno was met with that same criticism for her refusal to appoint

an independent counsel in the campaign finance matter. However,

under the language of the Act as passed, the Attorney General had

the prerogative on whether or not to appoint an independent counsel.

2. Language of the Act

The Independent Counsel Act was not passed until 1978, approximately 4 years after the Congress first began looking into the

concept.20 The proposed purpose of the Act was ‘‘to provide a mechanism to avoid the inherent or structural conflicts of interest, or

the appearances of conflicts or of ’conflicting loyalties,’ which could

arise where the Attorney General or the President must supervise

or conduct criminal prosecutions of themselves, or of high level offiVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00023 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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21 ‘‘Independent Counsel Provisions: An Overview of the Operation of the Law,’’ CRS Rept. No.

98–283, at 3 (Mar. 20, 1998). 22 28 U.S.C. § 591(b). 23 28 U.S.C. § 591(c)(1). 24Public Law No. 97–409. 25 ‘‘Legislative History and Purposes of Enactment of the Independent Counsel (Special Prosecutor) Provisions of the Ethics in Government Act of 1978,’’ CRS Rept. No. 87–192A, at 17

(Mar. 4, 1987) (citing H. Rept. No. 95–1307, at 4–5 (1978)) (emphasis added).

cials or colleagues in the President’s Administration.’’ 21 In order to

do so, certain individuals were automatically covered by the Act:

• the President and Vice President;

• Cabinet level officials;

• an individual working in the Executive Office of the President and compensated at a rate equivalent to SES II;

• any Assistant Attorney General, or DOJ employee compensated at or above SES III;

• the Director and Deputy Director of the CIA, and the Commissioner of the IRS;

• any person who held a position listed in (1)–(5) for 1 year

after the person leaves office;

• the chairman and the treasurer of the campaign committee

seeking the election or reelection of the President, and any

officer of that committee exercising authority at the national level, during the incumbency of the President.22

Congress also realized that situations would arise where investigation by the Attorney General or Department of Justice officials

of an individual not identified in the statute would create some

type of conflict. Therefore, the Attorney General was permitted to

appoint an independent counsel for any person if he determined

that an investigation by him or other Department of Justice officials might have resulted in a ‘‘personal, financial, or political conflict of interest.’’ 23 This ‘‘catch-all’’ conflicts provision was not

added to the Act until 1982, when the Act was reauthorized.24 A

similar provision had been considered in 1977, but had been

dropped prior to the enactment of the Independent Counsel Act. Although it did not remain in the final legislation, the House report

noted:

The mechanism recommended by the committee is triggered by a conflict of interest. That conflict is defined to

occur in two situations. The first situation arises when

specified high-level executive branch officials are accused

of committing specified offenses. . . . The second situation

arises when an investigation or prosecution directly and

substantially affects the political interests of the President

or Attorney General.25

The original report language demonstrates that there surely would

be a conflict were the Attorney General to investigate a matter relevant to the political interests of the President and their political

party. During the 1982 reauthorization, Congress determined that

the ‘‘catch-all’’ provision was needed in the Act because there were

situations where serious conflicts of interest could arise that were

7

26 Id. at 17–18 (citing S. Rept. No. 97–469, at 9 (1981) (emphasis added). 27 Attorney General Reno has recently interpreted the Act so as to exclude perceived conflicts.

See letter from Janet Reno, Attorney General, U.S. Department of Justice, to Orrin G. Hatch,

chairman, Senate Judiciary Committee, (Apr. 14, 1997). 28 28 U.S.C. § 591(d)(1). 29 28 U.S.C. § 591(d)(2). 30 28 U.S.C. § 591 (a), (c). 31 28 U.S.C. § 592(a)(1). 32 28 U.S.C. § 592(a)(3). 33 28 U.S.C. § 592(a)(1). 34 28 U.S.C. § 592(a)(2)(A).

not covered by the mandatory provision. The 1982 Senate report

explained, ‘‘[t]he Committee recognizes that there may be instances

when investigations by the Attorney General of persons not covered

by the Act may create an actual or apparent conflict of interest.’’ 26

At the time of consideration, Congress clearly understood that perceived conflicts could be just as harmful to the public’s trust in a

Department of Justice investigation as actual conflicts.27

As a consequence of the amendments in 1982, the statute could

be triggered in one of two ways. The mandatory triggering occurred

when the Attorney General received information alleging a violation of Federal law by a covered official. Under the discretionary

provision, the Attorney General could determine that some other

individual posed a conflict for him or the Department. Thereafter,

there were several steps the Attorney General would take to determine whether an independent counsel was necessary under the

Act. The first step was the threshold inquiry, in which the Attorney

General examined the sufficiency of the allegations presented to determine whether there were grounds to investigate. In determining

the sufficiency of the allegations that a covered individual violated

a Federal law the Attorney General could only consider the ‘‘degree

of specificity of the information’’ and the ‘‘credibility of the source

of the information.’’ 28 The Attorney General would have 30 days in

which to make this determination.29 If, within the 30 days, he decided that the information received was specific and the source was

credible, or, if he were unable to make any determination within

that time, the investigation would move on to the ‘‘preliminary investigation’’ stage.30 The Act required that the preliminary investigation be completed within 90 days.31 In addition, the Attorney

General was able to request that the Special Division grant a one

time extension of 60 days in which to complete the preliminary investigation.32 During this phase, the Attorney General, after reviewing the matter, was to determine whether there were ‘‘reasonable grounds to believe that further investigation is warranted.’’ 33

The Act was drafted so that the Department of Justice would

have limited authority to conduct an investigation during the

threshold inquiry and preliminary investigation stages; therefore

the parameters of those inquiries were purposely narrow. Similarly, there was no authority to ‘‘convene grand juries, plea bargain, grant immunity, or issue subpoenas’’ during the preliminary

investigation.34 The statute intentionally limited the power of the

Attorney General during this period in order to prevent his extensive participation in substantive decision making. Again, this is to

avoid potential conflicts of interest. If, at the completion of the preliminary inquiry, the Attorney General determined that no further

investigation were warranted, he was required to notify the Special

8

35The Special Division is a division of the U.S. Court of Appeals for the District of Columbia

Circuit. The court consists of three circuit court judges or justices appointed by the Chief Justice

of the United States. No two judges may be named to the Special Division from the same court

at the same time, and one of the judges must be from the District of Columbia Circuit. The

judges are appointed for 2 year terms, with any vacancy being filled only for the remainder of

the 2-year period. 28 U.S.C. § 49. 36 28 U.S.C. § 592(b). 37 28 U.S.C. § 592(a)(2)(B)(ii). 38 ‘‘Independent Counsel Provisions: An Overview of the Operation of the Law,’’ CRS Rept. No.

98–283, at FN 22 (Mar. 20, 1998) (citing H. Rept. No. 103–511, at 11 (1994)). 39 28 U.S.C. § 592(c)(1)(B). 40 28 U.S.C. § 592(c). 41 28 U.S.C. § 593(b). 42 Attorney General Reno initiated a preliminary investigation of President Clinton to examine

whether he violated 18 U.S.C. section 607. The investigation related to alleged fundraising telephone calls made by President Clinton from the White House. The Attorney General also initiated a preliminary investigation of President Clinton to examine the Common Cause allegations

of violations of election laws. Vice President Gore was subject to the same preliminary investigation. Two additional preliminary investigations were opened on Vice President Gore relating to

fundraising telephone calls he made from his White House office. The first investigation was

an inquiry into whether Gore violated section 607. The second investigation looked into whether

Gore made false statements to investigators during the initial preliminary inquiry. 43 In re William Jefferson Clinton, notification to the court pursuant to 28 U.S.C. § 592(b) of

results of preliminary investigation (Special Div. DC Cir. 1997); in re William Jefferson Clinton,

notification to the court pursuant to 28 U.S.C. § 592(b) of results of preliminary investigation

(Special Div. DC Cir. 1998); in re Albert Gore, Jr., notification to the court pursuant to 28 U.S.C.

§ 592(b) of results of preliminary investigation (Special Div. DC Cir. 1997); in re Albert Gore,

Jr., notification to the court pursuant to 28 U.S.C. § 592(b) of results of preliminary investigation

(Special Div. DC Cir. 1998); in re Albert Gore, Jr., notification to the court pursuant to 28 U.S.C.

§ 592(b) of results of preliminary investigation (Special Div. DC Cir. 1998).

Division of the Court of Appeals 35 that handled independent counsel matters.36 As a check on his discretion, the Attorney General

was not permitted to make a determination that ‘‘no further investigation was warranted’’ based on a finding that the official lacked

the state of mind required for the violation, unless there was ‘‘clear

and convincing evidence.’’ 37 Congress believed that the Attorney

General would rarely base a determination on state of mind, noting: ‘‘Congress believes that the Attorney General should rarely

close a matter under the independent counsel law based upon finding a lack of criminal intent, due to the subjective judgments required and the limited role accorded the Attorney General in the

independent counsel process.’’38

In considering whether further investigation was warranted, the

Attorney General was required to take into account the written or

other established policies of the Department of Justice relating to

the conduct and prosecution of criminal investigations.39 Had the

Attorney General found reasonable grounds to believe that further

investigation was warranted, or after the specified period no determination was made, the Attorney General was required to apply to

the Special Division for the appointment of an independent counsel.40 The Special Division then was responsible for appointing an

independent counsel and defining his prosecutorial jurisdiction.41

During the campaign finance investigation Attorney General

Reno initiated several preliminary investigations, including two related to President Clinton and three related to Vice President

Gore.42 Independent of those investigations, FBI Director Louis

Freeh and Task Force Supervising Attorney Charles La Bella recommended that the Attorney General request the appointment of

an independent counsel based on their opinion that both the mandatory and discretionary provisions of the Act had been triggered.

Miss Reno declined to request the appointment of an independent

counsel in each instance.43

9

44 Common Cause (visited Sept. 9, 2000) <http://www.commoncause.org/publications/

1196jusstm.htm>. Common Cause alleged that both the Clinton and Dole campaigns violated

Federal election laws by using their respective party committees to purchase TV advertisements,

while circumventing the spending limits imposed on the candidates. Id. 45 Id. 46 Connie Cass, ‘‘Democratic Committee Bows to Pressure and Releases Financial Data,’’ AP,

Oct. 29, 1996. Chairman Bill Clinger, Chairman Benjamin Gilman, Chairman Gerald Solomon,

and Chairman Bill Thomas all requested that the Attorney General appoint an independent

counsel to look into allegations of improprieties in Democrats’ fundraising, including allegations

of illegal contributions from foreign individuals and corporations. Id. 47President William J. Clinton, White House press conference (Nov. 8, 1996). 48 Carolyn Skorneck, ‘‘Attorney General Rejects Call for Special Prosecutor,’’ AP, Nov. 8, 1996.

B. A ROCKY START: EARLY CONFLICTS IN THE JUSTICE DEPARTMENT’S

CAMPAIGN FINANCE INVESTIGATION

1. Reno’s Job ‘‘Hangs in the Balance’’

After the November 1996 elections, Attorney General Reno was

called on to decide whether to appoint an independent counsel to

look into allegations of campaign finance abuses. As early as October 9, 1996, public interest group Common Cause requested that

an independent counsel be appointed to investigate allegations of

abuses on the part of both Republicans and Democrats.44 Common

Cause also argued that Attorney General Reno and the Department of Justice had a conflict in conducting any criminal probe of

campaign fundraising.45 Soon thereafter, Attorney General Reno

received requests from the chairmen of four House committees and

Senator John McCain for her to appoint an independent counsel.46

Pressure was building for a thorough investigation into the allegations of campaign finance abuses that were appearing daily in

newspapers across the country. Many people believed that because

the investigation would necessarily focus on political activities and

the actions of President Clinton, Vice President Gore, and other

high-ranking administration officials, the Attorney General would

have a conflict were she to conduct the investigation.

While Reno weighed whether to appoint an independent counsel

for campaign finance, President Clinton was determining which

members of his Cabinet would remain for his second term. Attorney General Reno already had stated publicly that she would like

to remain in her position. However, the President refused to comment on whether he would retain Reno as Attorney General.47 In

fact, the press reported that ‘‘White House aides, meanwhile, have

privately said they wish Reno would leave in part because of her

readiness to send allegations of official misconduct to independent

counsels.’’48 The White House was making it clear, through the

press, that the President was contemplating appointing a new Attorney General, in part because Reno had requested too many independent counsels. The Attorney General serves at the pleasure of

the President, and the President made it clear that he did not want

an independent counsel appointed for the campaign finance investigation.

Instead of appointing an independent counsel, in late November

1996, Attorney General Reno created a ‘‘Task Force’’ to investigate

the allegations of campaign finance abuses in the 1996 election

cycle. At the beginning of the investigation, the Task Force was

nothing more than a few attorneys in the Public Integrity Section

(PIS) of the Department of Justice. PIS was headed by Lee Radek,

10

49GAO report at 20. 50GAO report at 27. 51 Jeffrey Goldberg, ‘‘What Is Janet Reno Thinking?,’’ NY Times Magazine, July 6, 1997, at

30.52 Id. 53 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before

the House Committee on Government Reform, 106th Cong. 38 (2000) (testimony of William J.

Esposito) (preliminary transcript). 54 Id. 55 Id. at 39. 56 Id. 57Memorandum from Louis J. Freeh, Director, Federal Bureau of Investigation, to William

Esposito, Deputy Director, Federal Bureau of Investigation (Dec. 9, 1996) (exhibit 1). 58 Id. 59 ‘‘Oversight Hearing on 1996 Campaign Finance Investigation,’’ hearing before the Senate

Subcommittee on Administrative Oversight and the Courts of the Senate Committee on the Judiciary, 106th Cong. 18 (2000) (Federal Document Clearing House transcript).

who Attorney General Reno placed in charge of the investigation.49

As Chief of PIS, Radek was responsible for conducting preliminary

investigations under the Independent Counsel Act and making recommendations to the Attorney General on its application.50 Radek

made his views on the Act very clear, stating in an interview that

‘‘[i]nstitutionally, the independent counsel statute is an insult.’’ 51

He added, ‘‘[i]t’s a clear enunciation by the legislative branch that

we cannot be trusted on certain species of cases.’’ 52

FBI Director Louis Freeh expressed to Attorney General Reno

his reservations about Radek and PIS’ involvement in the campaign finance investigation. Director Freeh’s concerns stemmed

from a conversation between Lee Radek and FBI Deputy Director

William J. Esposito prior to the integration of the Department of

Justice and FBI agents into a formal Task Force. A meeting between Esposito and Radek took place on November 20, 1996, the

same time that the media was reporting on the precarious nature

of Reno’s position.53 They met to discuss, among other things, the

campaign finance investigation.54 Mr. Esposito testified that at the

end of his meeting with Radek that, ‘‘[Radek] made the statement

that there is a lot of pressure on him [Radek], and the Attorney

General’s job could hang in the balance.’’ 55 Esposito further testified that Radek linked the Attorney General’s job status with the

pressure on Radek and PIS.56 Concerned about the statement,

Esposito reported the comment to Director Freeh.

Radek’s comment raised the question of whether he was able to

be an impartial decisionmaker in the campaign finance investigation. Director Freeh also was troubled by the statement, and raised

the issue with the Attorney General.57 In a memorandum outlining

his conversation with Attorney General Reno, Director Freeh indicated that he told the Attorney General that, ‘‘those comments

would be enough for me to take [Radek] and the Criminal Division

off the case completely.’’ 58 Furthermore, Radek himself later acknowledged that he was aware of rumors that the White House

might not retain Reno as Attorney General during the second term.

Radek stated, ‘‘I recall press speculation that the possibility of her

being the Attorney General into the second term might be being

held up because the White House was concerned about the way she

was doing her job[,] including this campaign finance investigation.’’ 59 Freeh’s concerns regarding Radek were justified considVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00028 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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60 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before

the House Committee on Government Reform, 106th Cong. 45 (2000) (testimony of William J.

Esposito) (preliminary transcript). 61 Id. at 46–48. 62 Id. at 46–48, 50. 63 Attorney General Janet Reno, press conference (May 19, 2000). 64 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before

the House Committee on Government Reform, 106th Cong. 42 (2000) (testimony of Lee Radek)

(preliminary transcript). 65 Id.; ‘‘Oversight Hearing on 1996 Campaign Finance Investigation,’’ hearing before the Senate Subcommittee on Administrative Oversight and the Courts of the Senate Committee on the

Judiciary, 106th Cong. 17 (2000) (Federal Document Clearing House transcript). 66 ‘‘Oversight Hearing on 1996 Campaign Finance Investigation,’’ hearing before the Senate

Subcommittee on Administrative Oversight and the Courts of the Senate Committee on the Judiciary, 106th Cong. 22 (2000) (Federal Document Clearing House transcript). 67 Exhibit 1.

ering the timing of the comments and the position Radek assumed

in the investigation.

According to Director Freeh, the Attorney General said that she

would look into the matter of Radek’s comment.60 However, none

of the individuals who were parties to the conversation were contacted about the statement.61 In fact, after her conversation with

Director Freeh, the Attorney General formally established the

Campaign Financing Task Force and placed it under the auspices

of the PIS, making Radek the single most important attorney in

the campaign finance investigation.

The only follow-up Attorney General Reno ever conducted on

Radek’s comment occurred when the Freeh memo came to light,

31⁄2 years after it was written. Once Director Freeh’s concerns were

made public, in May 2000, Deputy Attorney General Eric Holder

and even Attorney General Reno herself, contacted Esposito and

Radek to determine what they recalled about the meeting.62 Such

attention from the highest levels appears to indicate that the Attorney General realized that her disregard for Director Freeh’s concerns created the perception that the Justice Department purposely

ignored the conflict. As for the Attorney General, she stated that

she did not recall the meeting to which Director Freeh referred in

his memorandum, and did not recall any concerns raised regarding

PIS or Lee Radek.63 Likewise, Radek did not recall his meeting

with FBI Deputy Director Esposito.64 When called before House

and Senate committees to testify about his alleged statement,

Radek insisted that he could not recall the meeting with Esposito,

but nevertheless said that he would not have made a statement

linking pressure and the Attorney General’s job ‘‘hanging in the

balance.’’ 65 It is difficult to understand how Radek was able to

both state affirmatively that he had no recollection of the Esposito

meeting and be certain that he did not make the statement attributed to him in Director Freeh’s memo.66

2. PIS Control of the Task Force

Relations between the FBI and Department of Justice were

somewhat shaky in the beginning. Prior to any formalization of the

Task Force, the Department of Justice asserted to the public and

the media that the Federal Bureau of Investigation (FBI) was the

lead agency on the campaign finance investigation.67 However, the

FBI had yet to be contacted by the Justice Department. Despite the

assertions about the FBI, PIS had been working with Commerce

Department Inspector General investigators on the campaign fiVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00029 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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68 Id. 69 Id. See also Daniel Klaidman, ‘‘Dodging A Bullet (Attorney General Janet Reno and the Investigation into Allegedly Illicit Fundraising by the Democratic Party),’’ Newsweek, Dec. 9, 1996,

at 24. 70 Exhibit 1. 71 Id. 72See letter from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice,

to Steven E. Zipperstein, Chief Assistant U.S. Attorney, U.S. Attorney’s Office, Central District

of California (Nov. 1, 1996). 73Memorandum from Craig C. Donsanto, Public Integrity Section, U.S. Department of Justice,

to Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice (Nov. 1, 1996). 74 Id. 75 Id.

nance matter.68 FBI Director Louis Freeh stated that he told the

Attorney General, ‘‘it didn’t make sense for PIS to call the FBI the

‘lead agency’ in this matter while operating a ‘Task Force’ with

DOC [Commerce] IGs who were conducting interviews of key witnesses without the knowledge or participation of the FBI.’’ 69 Freeh

then recommended that the FBI and ‘‘hand-picked DOJ attorneys

from outside Main Justice’’ conduct the investigation.70

Director Freeh also expressed general concern over the prospect

of PIS controlling the investigation. In his memorandum, Director

Freeh indicated that he told the Attorney General that ‘‘in [his]

view, PIS was not capable of conducting the thorough, aggressive

kind of investigation which was required.’’ 71 The Attorney General

disregarded Director Freeh’s recommendation and formally installed the investigation in PIS, headed by Radek. Although it was

apparent that the campaign finance investigation would be followed very closely by the public, the media, and Congress, Radek

appointed a junior PIS trial attorney, Laura Ingersoll, to lead the

investigation. It appeared that the Justice Department was setting

the investigation up to fail.

A prime example of PIS’ attitude toward the investigation and

the Independent Counsel Act is the early investigation of Vice

President Gore’s fundraiser at the Hsi Lai Temple in Los Angeles.

After the media reported allegations of the Vice President’s involvement in the fundraiser at the Buddhist temple, the local U.S. Attorney’s Office in California consulted with Main Justice and was

given approval to investigate the matter on October 17, 1996.72 In

the following 2 weeks Steve Mansfield, the Assistant U.S. Attorney

assigned to the matter, actively investigated it. However, shortly

before the election, Lee Radek informed the U.S. Attorney’s Office

that Main Justice, through PIS, was taking the case away from

them.73 Radek indicated that PIS would handle the case because

the independent counsel statute had been implicated.74 In an effort

to continue his investigation, Mansfield vainly objected to PIS’ effort to take the case away.75

What is even more troubling is that, after having taken the case

away from the Central District, under the pretext of an investigation to determine whether the application of the Independent

Counsel Act was appropriate, PIS never conducted the threshold

inquiry. PIS’ inaction gave the members of the Hsi Lai Temple the

opportunity to destroy documents central to the investigation. Had

they allowed the U.S. Attorney’s Office to conduct the investigation,

they surely would have been able to quickly subpoena documents

and witnesses.

13

76Subpoena from Dan Burton, chairman, Committee on Government Reform, to Janet Reno,

Attorney General, U.S. Department of Justice (June 26, 2000) (seeking all records relating to

any possible consideration of the appointment of an independent counsel in the Hsi Lai Temple

matter). All correspondence between and subpoenas to the Department of Justice are contained

in appendix I. 77GAO report at 1. 78 Id. at 1. 79 Id. at 20. 80 Id. at 20. 81 Id. at 5.

In order to determine whether PIS made any attempt to investigate the matter, the committee subpoenaed the Justice Department’s file on the Hsi Lai preliminary investigation. In response,

the committee received a stack of news clippings.76 There was obviously no investigation. It appears that PIS took the case away from

the U.S. Attorney’s office on a pretext. Radek’s misleading explanations were typical of his handling of the fundraising investigation. He admittedly disliked the Independent Counsel Act, and had

already acknowledged that he was under a lot of pressure regarding the Independent Counsel Act provisions. His actions with regard to the Hsi Lai Temple were representative of the manner in

which Radek conducted himself during the campaign finance investigation.

Radek’s control over the campaign finance investigation caused

some friction with the FBI as well. From the beginning, the working relationship between the Department of Justice and FBI was

strained.77 DOJ attorneys and FBI investigators disagreed over the

proper approach to the investigation, and an atmosphere of mistrust developed.78 One of the problems was that PIS did not have

any plan for investigating the campaign finance matter.79 Radek

assumed that PIS could conduct the campaign finance investigation

as he would conduct any other PIS investigation.80 In so doing, he

underestimated the nature and breadth of the investigation. Unfortunately for PIS, its normal caseload did not compare with the

campaign finance investigation. It ultimately became clear that PIS

and Ingersoll were unable to handle such a complicated investigation.

Attorney General Reno eventually was forced to follow Director

Freeh’s original recommendation. The Task Force under PIS was

failing and the structure had to be changed. The GAO investigation

of the management and oversight, operations, and results of the

Task Force reported:

In the fall of 1997, displeased with the investigation’s slow

pace, disclosures in the press about critical leads not being

pursued, and internal frictions, the Attorney General and

the FBI Director changed the Task Force’s leadership.

Subsequently, the Task Force’s oversight structure was

streamlined by the removal of [the Public Integrity Section] from its leadership role and the commitment of additional staff and information management resources to get

the investigation on track.81

In September 1997, Charles La Bella, first Assistant U.S. Attorney

in San Diego, and James DeSarno, a former Special Agent-inCharge of the FBI’s New Orleans Field Office were placed in

charge of the Task Force. After La Bella’s arrival, Lee Radek and

14

82 Id. at 37. 83 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before

the House Committee on Government Reform, 106th Cong. 151–152 (2000) (testimony of Lee

Radek) (preliminary transcript). The GAO report indicated that, ‘‘Mr. Radek continued a direct

role whenever Independent Counsel statute issues arose, as PI maintained primary responsibility for initial inquiries and preliminary investigations related to the statute.’’ GAO report at

37.84GAO report at 4. 85 Id. at 24. 86 Id. at 25. 87 Exhibit 1. 88 Id. 89Senate Judiciary Committee Chairman Orrin G. Hatch and nine other Republican Members

made the request. See letter from Janet Reno, Attorney General, U.S. Department of Justice,

to Orrin G. Hatch, chairman, Senate Judiciary Committee (Apr. 14, 1997). 90 Id. 91 Id.

PIS were taken out of the direct chain of command.82 However,

Radek maintained primary responsibility for threshold inquiries

and preliminary investigations under the Independent Counsel

Act.83

It was the application of the independent counsel statute that remained one of the main areas of contention between the Department of Justice and FBI.84 Radek categorized the conflict as disagreements over the threshold of information required to trigger a

recommendation for an independent counsel.85 The FBI agreed, indicating that senior FBI officials believed Radek’s criteria for what

information was needed to trigger the seeking of an independent

counsel were too stringent.86 The FBI had been wary of its interaction with the Department of Justice on independent counsel

issues, as it was excluded from the independent counsel decisionmaking process previously.87 Director Freeh wrote, ‘‘[i]t was unfortunate that DOJ declined to allow the FBI to play any role in the

Independent Counsel referral deliberations.’’ 88 By late-1997, Director Freeh made a formal recommendation that the Attorney General appoint an independent counsel.

C. ATTORNEY GENERAL RENO CHANGED HER INTERPRETATION OF THE

INDEPENDENT COUNSEL ACT

To understand how the Attorney General was able to consistently

refuse to appoint an independent counsel in the campaign financing investigation, it is necessary to understand her interpretation

of the Independent Counsel Act. In addition, it has to be pointed

out that her interpretation has not been consistent. Attorney General Reno made numerous appointments under the discretionary

provision of the statute that she never could have made under her

present day interpretation. Her first articulation of her revised

analysis was in response to a March 1997, Senate Judiciary Committee request that she appoint an independent counsel in the campaign finance matter.89 Reno responded 1 month later, declining to

request the appointment of an independent counsel.90 In the response, she laid out several points about the Independent Counsel

Act itself, upon which her refusal was based.91

1. Appearance of a Conflict Versus Actual Conflict

The key to Reno’s arguments was her interpretation of the statute itself. If one were to follow the simple language of the statute,

it would have been difficult for Reno to explain why she could not

15

92Letter from Janet Reno, Attorney General, U.S. Department of Justice, to Orrin G. Hatch,

chairman, Senate Judiciary Committee (Apr. 14, 1997). 93 ‘‘Oversight of the Department of Justice,’’ hearing before the Senate Committee on the Judiciary, 105th Cong. 12 (1997). 94She stated that she ‘‘must conclude that there is a potential for an actual conflict of interest

rather than merely an appearance of a conflict of interest.’’ ‘‘Oversight of the Department of Justice,’’ hearing before the Senate Committee on the Judiciary, 105th Cong. 12 (1997) (testimony

of Attorney General Janet Reno). 95 Id. 96 Id. 97Furthermore, Attorney General Reno was relying on the statement of only one Congressman, Representative Hall, for her argument. 98 ‘‘Using and Misusing Legislative History: A Re-Evaluation of the Status of Legislative History in Statutory Interpretation,’’ report to the Attorney General (Jan. 5, 1989). The report

states:

Rejection of proposed language does not necessarily imply an intent to reject its substance. Language may be rejected because it is perceived to be superfluous and potentially damaging to the prospects for passage of the bill. If the perception that it is superfluous is correct, the actual meaning of the statute is the same without the language

as it is with it; rejection of that language cannot imply that the enacted statute should

be interpreted to mean something different. Id. at 107. 99 Id. at 108.

use the discretionary provision of the Act to request an independent counsel. Reno needed to interpret the statute in such a

way that she could argue that the Act did not permit her to invoke

the discretionary clause. Breaking with her own previous interpretations on the discretionary provision of the Act, Attorney General

Reno stated in her letter to the Senate Judiciary Committee that

‘‘[u]nder the Act, I must conclude that there is a potential for an

actual conflict of interest, rather than merely an appearance of a

conflict of interest.’’ 92 In the past, she had requested the appointment of independent counsels based on an appearance of a conflict.

Reno repeated her new understanding of the discretionary provision in her May 1997 testimony before the Senate Judiciary Committee, where she was questioned about her interpretation.93 In

her testimony, she repeated her conclusions regarding the discretionary provision, using the exact words of her letter.94 Reno expressly relied on the legislative history of a single proposed amendment to the Independent Counsel Act for her interpretation.95 She

testified regarding her theory:

The Congress in 1994, under the reauthorization, considered a proposal for a more flexible standard for invoking

the discretionary clause which would have permitted its

use to refer any matter to an independent counsel when

the purposes of the Act would be served. Congress rejected

this suggestion, explaining that such a standard would

substantially lower the threshold for use of the general

discretionary provision.96

However, as support for her argument, Reno was relying on negative legislative history.97 She attempted to define what Congress

intended by describing what it did not do, rather than what it did.

The Justice Department itself had rejected the practice, noting that

it is not useful as an interpretive tool.98 In fact, a Justice Department report to the Attorney General states, ‘‘[r]ejection is doubtful

evidence of the legislative intent, let alone the meaning of the statute as enacted.’’ 99 Furthermore, the Attorney General neglected to

mention the report language supporting the idea of an apparent

conflict of interest. The legislative history is replete with statements of intent that completely contradict the Attorney General’s

16

100For examples of such statements, see section I.A. above. 101 ‘‘Using and Misusing Legislative History: A Re-Evaluation of the Status of Legislative History in Statutory Interpretation,’’ report to the Attorney General, at 17–18 (Jan. 5, 1989) (citing

S. Rept. No. 97–469, at 9 (1981)) (emphasis added). 102 ‘‘To Reauthorize the Independent Counsel Law for an Additional 5 Years, and for Other

Purposes,’’ hearing before the Senate Committee on Governmental Affairs, 103d Cong. 12 (1993)

(statement of Attorney General Reno). 103Prior to joining the White House staff, Watkins had also worked on President Clinton’s

1992 campaign.

interpretation.100 For example, the Senate report accompanying the

1982 amendments to the Act stated, ‘‘[t]he Committee recognizes

that there may be instances when investigations by the Attorney

General of persons not covered by the Act may create an actual or

apparent conflict of interest.’’ 101 Not only did Reno have a problem

with her interpretation of the Act’s legislative history, she had her

own prior statements, as well as prior requests she had made for

the appointment of independent counsels to explain away.

When called upon to testify before the Senate Governmental Affairs Committee on May 14, 1993, regarding the reauthorization of

the Independent Counsel Act, Janet Reno stated:

It is absolutely essential for the public to have confidence

in the system and you cannot do that when there is conflict or an appearance of conflict in the person who is, in

effect, the Chief prosecutor. There is an inherent conflict

here, and I think that that is why this Act is so important.

* * * * *

The Independent Counsel Act was designed to avoid even

the appearance of impropriety in the consideration of allegations of misconduct by high-level Executive Branch officials and to prevent, as I have said, the actual or perceived

conflicts of interest. The Act thus served as a vehicle to

further the public’s perception of fairness and thoroughness in such matters, and to avert even the most subtle influences that may appear in an investigation of highly

placed Executive officials.102

After the reauthorization of the Independent Counsel Act on

June 30, 1994, the Attorney General, adhering to her original interpretation, referred at least four matters to an independent counsel that fell under the discretionary provision of the Act. She first

referred what has become known as the Whitewater matter. In

that case, she requested the independent counsel under the political conflict of interest provision because the individuals under investigation were friends and former business partners of the President and Mrs. Clinton. Similarly, under the discretionary provision,

Attorney General Reno asked that the jurisdiction of the Whitewater Independent Counsel be expanded to include an investigation of former Assistant to the President for Management and Administration David Watkins for the Travel Office matter.103 David

Watkins did not satisfy any of the requirements for the mandatory

provision of the Act, and had left the White House’s employ several

years earlier. Several months after the Watkins referral, the Attorney General again requested that the Whitewater Independent

Counsel’s jurisdiction be expanded to include an investigation of

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104Letter from Janet Reno, Attorney General, U.S. Department of Justice, to Orrin G. Hatch,

chairman, Senate Committee on the Judiciary 3 (Apr. 14, 1997) (emphasis added).

vestigation Division who had been detailed to the White House.

The only political conflict of interest Mr. Marceca, or any of these

individuals, posed to the Attorney General or the Justice Department were their connection to the White House. Finally, the Attorney General requested that the Whitewater Independent Counsel’s

jurisdiction be expanded to include an investigation of a perjury allegation against former Counsel to the President Bernard Nussbaum. Nussbaum left the White House nearly 3 years earlier. As

with all of the prior investigations, Nussbaum did not fall under

the mandatory provision of the Act. The Attorney General had to

make the determination that there was a political conflict of interest for her to investigate the McDougals, David Watkins, Anthony

Marceca, and Bernard Nussbaum.

It is obvious that the Attorney General was applying the standard of an apparent conflict in these earlier independent counsel appointments. Had she been applying the actual conflict standard she

surely would not have come to the conclusion that she had an actual conflict of interest with individuals such as the McDougals,

David Watkins, Bernie Nussbaum, or Anthony Marceca, but not

with any of the individuals involved in the campaign finance investigation. Her conflict, or perceived conflict, with those individuals

for whom she did recommend an independent counsel was based on

their relationship with President Clinton or the White House generally. The most glaring example is Anthony Marceca, a low-level

detailee from the Department of Defense. It is laughable that Reno

would determine that Marceca posed a conflict of interest for her

while fundraisers for the DNC and friends of the President, such

as John Huang and Charlie Trie, did not. By changing her interpretation, Reno set the bar for appointing an independent counsel

even higher for the campaign finance investigation than previous

investigations.

2. Standard for Initiating a Preliminary Investigation

Reno also raised the bar by ignoring the statutory language of

the discretionary provision, and instead applying a higher standard

for initiating a preliminary investigation. In interpreting the discretionary provision of the Independent Counsel Act, the Attorney

General stated, contrary to the statutory language, that:

If, on the other hand, I receive specific and credible evidence that a person not covered by the mandatory provisions of the Act has committed a crime and I determine

that a conflict of interest exists with respect to the investigation of that person, I may—but need not—commence a

preliminary investigation pursuant to the provisions of the

Act.104

However, the statute reads:

When the Attorney General determines that an investigation or prosecution of a person by the Department of Justice may result in a personal, financial, or political conflict

of interest, the Attorney General may conduct a prelimiVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00035 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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105 28 U.S.C. § 591(c)(1) (emphasis added). 106 28 U.S.C. § 591 (1978). 107Public Law 97–409. 108 Id. 109S. Rept. No. 97–469 (1981). 110Memorandum from Louis J. Freeh, Director, Federal Bureau of Investigation, to Janet

Reno, Attorney General, U.S. Department of Justice (Nov. 24, 1997); memorandum from Charles

La Bella, Supervising Attorney, U.S. Department of Justice Campaign Financing Task Force,

and James DeSarno, Assistant Director, Federal Bureau of Investigation, to Janet Reno, Attorney General, U.S. Department of Justice, and Louis J. Freeh, Director, Federal Bureau of Investigation, (July 16, 1998). Both memoranda also recommend that the Attorney General recommend the appointment of an independent counsel pursuant to the mandatory provisions of

the Act. Id.

nary investigation of such person in accordance with section 592 if the Attorney General receives information sufficient to constitute grounds to investigate whether that person may have violated federal criminal law. ...105

Under Reno’s standard, before initiating a preliminary investigation under the discretionary provision, she needed to have specific

and credible evidence that a crime was actually committed. However, under the language of the statute, information that a crime

may have been committed was sufficient.

The original independent counsel provisions of the Ethics in Government Act of 1978, did require that in order to trigger a preliminary investigation, ‘‘the Attorney General receive[] specific information that a person has committed a violation. . . .’’ 106 However, in

1982, the independent counsel provisions were reauthorized and

amended.107 At that time, Congress changed the name from special

prosecutor to independent counsel, and changed the requirement

for triggering a preliminary investigation to ‘‘grounds to investigate

whether a person may have violated . . .’’ 108 The accompanying

Senate report clarified:

It cannot be expected at this first step in the process that

the Attorney General could or should determine that a

criminal act has been committed. The purpose of the

change is to make it clear that the Attorney General

should proceed under the Act if the information indicates

that a violation of criminal law may have taken place.109

The legislative history of the provision clearly shows that Congress

intended to create a lower threshold, and intentionally replaced the

language ‘‘has committed’’ with ‘‘may have.’’

Throughout the campaign finance investigation Reno used her

creative analysis of the statute to support her argument that she

did not create a conflict by investigating. However, both FBI Director Freeh and Task Force Supervising Attorney Charles La Bella

wrote detailed memoranda to the Attorney General explaining why

they believed that she did have a conflict of interest, and therefore

must appoint an independent counsel.110 They pointed out that the

Task Force investigation was leading to the highest levels of the

White House. Nevertheless, Attorney General Reno adopted a very

narrow view of the language of the independent counsel statute, allowing her to claim that the campaign finance investigation had

not yet reached the legal threshold for applying the Act.

19

111 Id. 112See memorandum from Mark M. Richard, Acting Assistant Attorney General, U.S. Department of Justice, to Janet Reno, Attorney General, U.S. Department of Justice (Sept. 29, 1997)

(recommending that the Attorney General initiate a preliminary investigation into whether Vice

President Albert Gore, Jr., violated Federal criminal law, 18 U.S.C. § 607, requiring that a preliminary investigation be commenced); memorandum from Mark M. Richard, Acting Assistant

Attorney General, U.S. Department of Justice, to Janet Reno, Attorney General, U.S. Department of Justice (Oct. 14, 1997) (recommending that the Attorney General initiate a preliminary

investigation into whether President William Jefferson Clinton violated Federal criminal law,

18 U.S.C. § 607, in soliciting contributions to the Democratic National Committee from his office

in the White House). 113See memorandum from Louis J. Freeh, Director, Federal Bureau of Investigation, to Janet

Reno, Attorney General, U.S. Department of Justice (Nov. 24, 1997) (exhibit 2). 114 Id. 115 Id.

D. MEMORANDA FROM FBI DIRECTOR LOUIS J. FREEH AND TASK FORCE

SUPERVISING ATTORNEY CHARLES LA BELLA RECOMMENDING THAT

AN INDEPENDENT COUNSEL BE APPOINTED

Both FBI Director Freeh and Task Force Supervising Attorney

Charles La Bella believed that the Attorney General was required,

under the Independent Counsel Act, to request the appointment of

an independent counsel in the campaign finance matter.111 In detailed memoranda, they applied the facts of the case to the independent counsel statute and came to the same conclusions. As the

head of the FBI, Director Freeh was the chief investigator for the

campaign finance investigation, and was familiar with both the

facts and the law. Charles La Bella was Reno’s handpicked choice

for the Supervising Attorney position. La Bella coordinated the entire investigation, giving him the benefit of a comprehensive view

of the matter. Freeh and La Bella were the two individuals with

perhaps the best grasp of the investigation as a whole. Nevertheless, Attorney General Reno ignored their counsel. She insisted on

compartmentalizing the investigation, viewing from a vacuum only

one issue at a time and drawing no connections between the massive illegal fundraising and the push on the part of the administration to raise unprecedented amounts of money.

1. The Freeh Memorandum

In the fall of 1997, Attorney General Reno was confronted with

her first decisions under the Independent Counsel Act in the campaign finance investigation. The initial question was whether to

initiate preliminary investigations of Vice President Gore and

President Clinton for fundraising telephone calls made from the

White House.112 Reno agreed to the preliminary investigations, and

was soon faced with making the final decision on whether to request the appointment of an independent counsel. Prior to her decision, FBI Director Freeh forwarded her a memorandum offering his

recommendation that an independent counsel be appointed.113

The November 24, 1997, memorandum from FBI Director Louis

J. Freeh outlined his evaluation of the campaign finance investigation to date.114 He recounted the purpose and structure of the independent counsel statute, citing the legislative history. He reviewed

Congress’ intent in passing the legislation, outlining the justifications for the Act itself.115 Freeh, quoting from the original Senate

report on the Act, repeated the reasons for the Act’s enactment: the

Department of Justice has difficulty investigating alleged criminal

activity by high-level government officials; it is too much to ask for

20

116 Id. at 1 (quoting the Senate Governmental Affairs Committee report upon the enactment

of the Independent Counsel Act. S. Rept. No. 100–123, at 2 (1978)). 117See id. at 7. 118See id. 119 Id. 120 Id. at 8. See H. Rept. No. 105–829 (1998) (House Committee on Government Reform’s interim report into the campaign financing investigation); S. Rept. No. 105–167 (1998) (Senate

Governmental Affairs Committee final report on its investigation of illegal or improper activities

in connection with 1996 Federal election campaigns.) 121 Exhibit 2 at 8. 122 Id. 123 Id. at 2.

any person that he investigate his superior; and, the appearance of

conflict is as dangerous to public confidence in the administration

of justice as true conflict itself.116

a. FBI’s Investigative Plan

In order to explain the context in which the memorandum was

written, Freeh reviewed the Task Force’s investigative plan, which

investigators had been following since early 1997.117 The Task

Force had developed three distinct areas of investigation, which

they believed were interrelated.118 The three matters were:

• An aggressive campaign fundraising operation developed

and executed by a core group of individuals from the DNC

and the White House, including the President, the Vice

President, and a number of top White House advisors.

• Allegations of illegal conduct by a myriad of opportunists

and other individuals who gained White House access in

order to further their personal, business, and political interests.

• Efforts by the [People’s Republic of China] and other countries to gain foreign policy influence by illegally contributing

foreign money to U.S. political campaigns and to the DNC

through domestic conduits.119

Director Freeh explained that, ‘‘[t]he core group investigative

plan was based on a theory that most of the alleged campaign

abuses flowed, directly or indirectly from the all-out effort by the

White House and the DNC to raise money.’’ One of the reasons for

this was the President’s decision to put in place an early and expensive media campaign. In order to pay for all of the television

airtime and commercials they wanted to run, Clinton/Gore ’96 and

the DNC had to raise huge sums of money. Director Freeh pointed

out that it was this need for money that led to things such as the

White House coffees, overnights in the Lincoln bedroom, Presidential perks for large donors, as well as the telephone solicitations

by the President and Vice President.120 Freeh asserted that nearly

all of the FBI investigators’ ‘‘investigative avenues’’ were linked to

the initiatives of the core group.121 That was not to say that Freeh

believed that the core group members were necessarily culpable for

any criminal violations, but that they should not be immune from

investigation.122 Director Freeh’s explanation of the investigation,

and acknowledgment that it led to the ‘‘highest reaches of the

White House,’’ including the President and Vice President, seemed

exactly the type of situation for which the Independent Counsel Act

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124 Id. 125See id. at 8. 126See id. 127 Id. 128 Id. 129 Id. 130 Id. 131 Id. 132 Id. 133 Id. at 9. 134 Id. 135 Id.

tion was leading the Task Force, the attorneys and investigators

necessarily had to consider whether the independent counsel statute should apply.124

The Department of Justice conducted the investigation in a manner that avoided looking into the actions of the core group of individuals referred to in Freeh’s memorandum.125 Freeh explained

that the FBI and Department of Justice had a fundamental disagreement over the manner in which the investigation should proceed.126 The FBI wanted to conduct a top-down strategy, and focus

on the core group of individuals.127 The strategy followed from the

working theory that the majority of the abuses occurred as a result

of the core group’s effort to raise vast sums of money.128 In contrast, the Department of Justice wanted to focus on what Freeh referred to as the ‘‘opportunists.’’ 129 Freeh stated that with such a

‘‘bottom up’’ strategy, the investigation may or may not ever lead

to the core group.130 In addition, by so doing, the Department of

Justice was assured that it most likely would not need to address

Independent Counsel Act issues. Finally, in July 1997, Freeh became frustrated with the Department of Justice’s investigation and

ordered FBI agents to interview ‘‘all relevant core group and DNC

officials.’’ 131 At that time there still was no prosecutor assigned to

handle core group issues.132

b. The Department of Justice’s Approach to Investigating Covered Persons

Freeh indicated that the Department of Justice attorneys in

charge of the Task Force adopted a ‘‘cautious approach to investigating covered persons.’’ 133 The Department of Justice attorneys

were extremely reluctant to proceed into areas of investigation

where covered persons might be implicated, whereas in a normal

investigation, agents and attorneys would follow all investigative

leads.134 Freeh asserted that this process led to a flawed investigation in the following ways:

First, the Task Force has partitioned its investigation, focusing on individual persons and events without effectively

analyzing their relationship to the broader fundraising

scheme. Second, the Task Force attorneys sometimes have

made dispositive factual assumptions without investigating to see if those assumptions are accurate. . . .

Third, important investigative areas, such as the serious

allegations raised by Common Cause, have never been

pursued because they have been tied up in lengthy threshold legal analyses within the Department.135

22

136The Justice Department did have preliminary investigations open on President Clinton and

Vice President Gore at the time Director Freeh wrote his memorandum, which Director Freeh

readily acknowledges. However, those investigations were in response to media reports that both

the President and Vice President had made telephone calls from their White House offices soliciting campaign contributions. Ultimately, Attorney General Reno declined to request the appointment of an independent counsel in both cases. 137 Exhibit 2 at 9. 138 Id. 139 Id. 140 Id. 141 Id. 142 Id. at 10. 143 Id. 144 Id. at 13. 145 Id. 146 Id. 147 Id. at 10.

Again, this manner of investigation appears to almost intentionally

skirt around the independent counsel process. It was evident that

Reno refused to invoke the discretionary clause of the Independent

Counsel Act, and the Task Force’s investigation made it very unlikely that she would have to confront an allegation against a covered person.136

In those instances where allegations were reviewed for the application of the Independent Counsel Act, they were handled by the

Public Integrity Section.137 The PIS attorneys had very limited involvement in the Task Force’s work, and were therefore unfamiliar

with the broader investigation.138 Freeh acknowledged that the

issues should have been reviewed by PIS, but believed that the

front line investigators and attorneys were being excluded unnecessarily.139 Freeh pointed out that separation between PIS and the

Task Force in the independent counsel review process became even

more apparent after Attorney General Reno changed the Task

Force leadership and took PIS out of its leadership role.140 Accordingly, the new Task Force leadership, Supervising Attorney

Charles La Bella and Lead Investigator James DeSarno, had ‘‘no

meaningful role’’ in independent counsel matters.141 Freeh added

that the tenor of the weekly meetings of the Task Force leadership

changed ‘‘markedly,’’ explaining that there was no longer any discussion of independent counsel related issues.142 Although Freeh

noted that ‘‘the FBI has very recently received several DOJ drafts

on pending IC matters, FBI officials have not had any significant

role in the deliberative process.’’ 143

c. Information Sufficient to Trigger the Independent Counsel

Statute in the Campaign Finance Investigation

In his memorandum, Freeh laid out the argument for appointing

an independent counsel using the facts of the campaign finance investigation. Freeh connected the various pieces of the Task Force’s

investigation to what he referred to as an ‘‘overall funding

scheme.’’ 144 The scheme was tied back to the core group’s fundraising, which Freeh believed had never been investigated properly.145 Freeh stated: ‘‘As a starting point, the Campcon Task Force

has failed to address an overarching issue: whether the Clinton/

Gore campaign (as well as the Dole campaign) engaged in an illegal

scheme to circumvent the federal campaign financing laws.’’ 146

The allegations Freeh was referring to were based on allegations

set forth by the public interest group Common Cause.147 In Freeh’s

23

148 Id. 149 Id. In 1996, there was a spending limit of approximately $62 million for the general election. Id. 150 Id. 151 2 U.S.C. §§ 431–455; 26 U.S.C. § 9031 et. seq.; 26 U.S.C. § 9001 et. seq. 152 Exhibit 2 at 11. 153 Id. at. 10. 154 Id. at 11. 155 Id. at 11–12. 156 Id. at 12. 157 Id. 158 Id. 159 Id. at 13.

memorandum, he focused on the manner in which the Clinton/Gore

campaign appeared to have violated several election laws.148 He explained that in early 1995, the Clinton/Gore campaign agreed to

engage in an ‘‘extremely ambitious series of TV ads,’’ which would

be very expensive. The problem for the campaign was that it was

limited in the amount of money it was able to spend during both

the primary and general elections.149 In exchange for receiving

Federal matching funds, a candidate for President is required to

limit his overall campaign spending, during both the primary and

general elections.150 The Federal Election Campaign Act (FECA),

Presidential Primary Matching Payment Account Act, and the

Presidential Election Campaign Fund Act set forth criminal penalties for any knowing and willful violations of the spending limits.151

The Clinton/Gore campaign worked out a plan to use the DNC

to purchase the advertising, effectively working around the spending limits imposed by accepting matching funds.152 The campaign

actually controlled the advertising, from creation to placement,

while the President personally reviewed and approved all of the

ads.153 Common Cause alleged that all of the facts put together led

to a violation of the law.154 The Justice Department’s preliminary

conclusion was that, ‘‘this scheme was simply an act of ‘coordination’ between the Clinton/Gore campaign and the DNC.’’ 155 Director Freeh argued that the allegations presented unprecedented

legal issues that led to differences of opinion of the election law experts on whom the Task Force relied.156 He added that because the

law was unclear, and that there were no established enforcement

policies to turn to at either the Department of Justice or the Federal Election Commission (FEC), the case should be turned over to

an independent counsel to make the judgment of whether there

was a prosecutable offense.157 Freeh stated that, ‘‘[a]ny case in

which there is no clear policy against prosecution or any arguably

exceptional circumstances are present should be sent to a special

prosecutor.’’ 158 Freeh believed that the two most important points

that the Attorney General should consider in deciding whether to

seek the appointment of an independent counsel for the Common

Cause allegations were: ‘‘(1) the Department has had the allegations for more than a year; and (2) there is virtually no chance that

the allegations could be resolved in the course of a limited preliminary inquiry.’’ 159

i. Vice President Gore and President Clinton

Freeh believed that many of the other allegations of criminal or

potentially criminal activity were a result of the overarching need

24

160 Id. 161 Id. 162 18 U.S.C. section 607 makes it unlawful ‘‘for any person to solicit or receive any contribution within the meaning of section 301(8) of the FECA in any room or building occupied in the

discharge of official duties by any [officer or employee of the United States]. 163 Exhibit 2 at 14. 164 Id. at 15. 165 Id. 166 Id. 167 Id. at 16. Freeh also warned against closing the case based on lack of intent. Freeh stated

that based on the facts, one could not come to the conclusion, beyond a reasonable doubt, that

the Vice President had no knowledge that the money he was raising would be used for both

‘‘hard’’ and ‘‘soft’’ money accounts. An important distinction to make the argument that a violation of 18 U.S.C. section 607 occurred. Id.

for money to pay for the media campaign. He explained, ‘‘[i]n addition to allegations of a broad conspiracy to circumvent the campaign contribution and spending limits, many of the other allegations that have arisen in the course of the investigations have a direct connection to the core group’s fundraising scheme.’’ 160 For instance, Freeh cited the preliminary investigations into President

Clinton and Vice President Gore’s fundraising telephone calls from

the White House.161 In the case of the Vice President, who admitted that he made fundraising calls from his White House office, the

Attorney General was faced with three legal questions in determining whether to request the appointment of an independent

counsel:

• Does section 607 [of the criminal code] 162 apply to the Vice

President’s telephone solicitations?

• Assuming section 607 does apply, is there an established

DOJ policy of non prosecution of such offenses?

• Assuming section 607 applies and there is no established

policy of non-prosecution, is further investigation warranted

by an independent counsel? 163

Freeh concluded that section 607 would apply under the fact pattern presented by the Vice President’s phone calls.164 He also found

that there was neither a written nor other established policy of

non-prosecution in section 607 cases, primarily because the facts of

the individual cases are determinative.165 Finally, Freeh acknowledged that there was a consensus among Department of Justice

prosecutors that it was likely that Justice would never prosecute

a case such as Gore’s, even if there were a technical violation.166

However, Freeh pointed out that the independent counsel statute

did not permit the Attorney General ‘‘to simply dispose of a case

through an exercise of prosecutorial discretion.’’ 167

As to the Vice President, Freeh concluded:

The Attorney General should seek the appointment of an

Independent Counsel with respect to the Vice President’s

telephone solicitations. Such an appointment is warranted

on two levels. The preferable course of action would be to

refer this matter as simply one piece of a comprehensive

Independent Counsel investigation which focuses on the

alleged scheme to circumvent the campaign financing laws.

. . . Viewed in that context, it is essentially immaterial

whether the telephone solicitations sought ‘‘hard’’ money

or ‘‘soft’’ money, or whether they were made from public

25

168 Exhibit 2 a 17. 169 Id. at 18. 170 Id. 171See H. Rept. No. 105–829 (1998) (House Committee on Government Reform’s interim report into the campaign financing investigation); S. Rept. No. 105–167 (1998) (Senate Governmental Affairs Committee final report on its investigation of illegal or improper activities in connection with 1996 Federal election campaigns.) 172 18 U.S.C. § 607. An Office of Legal Counsel opinion concluded that certain rooms in the

White House were not covered by section 607 if they were used for ‘‘personal entertaining where

there is a history of such use and where the cost of such use is not charged against an account

appropriating funds for official functions.’’ Exhibit 2 at 19. Originally, the Department of Justice

assumed that all of the coffees took place in the White House residence, without ever investigating whether that was the case. However, after the belated production of White House videotapes, it became clear that the coffees took place in several different rooms, including the Oval

Office. 173 Exhibit 2 at 20. 174 Id. 175 Id. at 20. Section 441e of FECA states that:

It shall be unlawful for a foreign national directly or through any other person to make

any contribution of money or other thing of value, or to promise expressly or impliedly

to make any such contribution, in connection with an election to any political office or

in connection with any primary election, convention, or caucus held to select candidates

for any political office; or for any person to solicit, accept, or receive any such contribution from a foreign national. 2 U.S.C. § 441e.

space or private space. Because they were a key component of the overall fundraising scheme alleged by Common

Cause and others, these solicitations should be referred for

further investigation by an Independent Counsel. Such a

referral could be made under either the mandatory clause

or as a discretionary matter.168

Director Freeh took a similar position in the investigation of President Clinton’s telephone solicitations from the White House residence. He acknowledged that the calls most likely were not a violation of section 607, however, considered them to be part of a larger

conspiracy to circumvent the campaign finance laws.169 For this

reason, Freeh believed that an independent counsel should be appointed, and the President’s phone calls should be part of the investigation.170

ii. White House Coffees and Overnights

The Clinton administration regularly held fundraising coffees

with the President and Vice President in the White House, invited

large donors to stay overnight in the Lincoln bedroom, or take trips

on Air Force One.171 Again, there was a question of whether the

actions of the Clinton administration violated section 607 for fundraising on Federal property.172 Freeh believed that the coffees,

overnights in the Lincoln bedroom, and other perks for big donors

were part of the overall scheme that he discussed, and that they

should be part of an independent counsel investigation.173

iii. Solicitation of Foreign Nationals

In the course of the campaign finance investigation, the Task

Force ‘‘developed substantial evidence that money from foreign nationals flowed into the DNC as a result of the massive fundraising

effort coordinated by the DNC and the White House.’’ 174 Freeh asserted that the Federal Election Campaign Act (FECA) should

apply to those contributions.175 However, early in the campaign finance investigation, the Attorney General came to the opposite conclusion. She reasoned that the foreign gifts given to the DNC were

26

176 Exhibit 2 at 20. Contribution is defined as including, ‘‘any gift, subscription, loan, advance,

or deposit of money or anything of value made by any person for the purpose of influencing any

election for Federal office . . .’’ 2 U.S.C. section 431(8)(A)(i) (emphasis added). 177 Exhibit 2 at 20. 178 Id. at 20 (quoting 1987 U.S.C.C.A.N. 2158). 179 Id. at 21. 180 Id. Freeh cited to a Jan. 6, 1997, statement of the FEC general counsel, indicating that

if money is ‘‘used for a candidate’s election directly, then there is no question that 441e applies.’’

Id.181 Id. at 23. 182 Id. 183 Id. at 24. 184 Id. at 25.

soft money, and that soft money did not fall within the definition

of ‘‘contribution’’ under the FECA.176 Freeh argued that Reno’s

legal reasoning was intensely criticized by numerous election law

experts, and that at the very least, the issue was one of unsettled

law.177

Soft money is neither defined nor specifically addressed in the

FECA, and therefore Freeh questioned whether the Department of

Justice should have engaged in ‘‘elaborate legal analysis’’ in the

midst of determining whether an independent counsel should be

appointed.178 He also pointed out that it was premature for Attorney General Reno to consider all foreign gifts soft money.179 Freeh

stated, ‘‘[i]n light of the evidence of nearly absolute control of DNC

fundraising efforts by the White House, there is a very real issue

about whether the ‘soft money’ argument is largely a sham.’’ 180

d. Additional Reasons to Appoint an Independent Counsel

i. The DNC Was ‘‘Commandeered’’ by the White House

Freeh pointed out that the independent counsel statute was established because of the campaign related abuses of Watergate.181

Top campaign officials were the only non-government officials to be

included in the mandatory provision of the Act because those individuals are so important to the individual running for President.182

Freeh acknowledged that under the statute, only the chairman and

treasurer of Clinton/Gore would be covered. However, he argued

that in the campaign finance case, the DNC itself should trigger

the discretionary provision of the Act:

It does not by its terms cover senior officers of the Democratic National Committee. However, in deciding whether

to exercise her discretionary authority, the Attorney General should consider how the DNC was used during the

1996 election cycle. By essentially commandeering the

DNC for the purpose of getting the President re-elected,

the White House appears to have erased the traditional

lines between the President’s own campaign committee

and the national party committee. In fact, the DNC was in

large part the President’s central re-election machine,

under the tight control of senior White House advisors.183

ii. The FBI Had a Conflict in Releasing National Security

Matters to the White House

The campaign finance investigation required the Task Force to

look into allegations of Chinese Government efforts to influence the

United States elections.184 This particular portion of the investigaVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00044 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
27

185 Id. 186 Id. at 27. 187 Id. 188GAO report at 34. 189The GAO report on the Campaign Finance Task Force found that ‘‘[i]n the fall of 1997,

displeased with the investigator’s slow pace, disclosures in the press that critical leads were not

being pursued, and internal frictions plaguing CFTF, the Attorney General and FBI Director

Freeh decided to replace CFTF’s leaderhip.’’ GAO report at 34. 190GAO report at 41. La Bella returned to San Diego to become Acting U.S. Attorney for the

Southern District of California. However, he was not nominated to fill the position permanently.

Id.

tion caused a conflict for both the FBI and Department of Justice

because they had ‘‘conflicting duties to (1) keep the President informed about significant national security matters, and (2) simultaneously keep from the White House certain national security information that may relate to the ongoing criminal investigation.’’ 185

Freeh acknowledged that the appointment of an independent counsel would not entirely alleviate the problem, but would ease the

perception of a conflict.

e. Conclusions

Director Freeh found there was sufficient evidence under both

the mandatory and discretionary provisions of the Act for Attorney

General Reno to request the appointment of an independent counsel. Freeh argued that the Attorney General’s interpretation of the

Act, requiring an actual conflict of interest, was not supported by

the language or the legislative history of the statute.186 Finally, he

concluded by stating:

The Chief Campcon investigator, Director Freeh, has concluded that the investigation presents the Department

with a political conflict of interest. This by itself does not

trigger the independent counsel statute, since the ultimate

resolution of the conflict issue rests solely with the Attorney General. However, the Director’s view should be a significant factor in the Attorney General’s continued analysis of whether to invoke the discretionary provision.187

Attorney General Reno ultimately disregarded the arguments set

forth in Director Freeh’s memorandum. She steadfastly maintained

that she had no actual conflict of interest, despite what appearances might have been.

2. The La Bella Memorandum

Shortly before Freeh submitted his memorandum to the Attorney

General, there was a major reorganization of the Task Force. The

Department of Justice realized that the established structure of the

Task Force, with PIS as the leader, was not able to conduct the investigation in a productive manner.188 Therefore, in September

1997, Reno brought in Charles La Bella, a prosecutor from outside

of Main Justice, to lead the Task Force.189 La Bella stayed with the

Task Force for approximately 1 year, leaving between July and August 1998.190

Prior to leaving the Task Force, La Bella drafted a 94-page

memorandum outlining the facts surrounding several different investigations that La Bella believed warranted the appointment of

28

191Memorandum from Charles G. La Bella, Supervising Attorney, Campaign Financing Task

Force, and James DeSarno, Assistant Director, Federal Bureau of Investigation, to Janet Reno,

Attorney General, U.S. Department of Justice, and Louis J. Freeh, Director, Federal Bureau of

Investigation (July 16, 1998) (exhibit 3). 192 Exhibit 3. 193 Id. at 1. 194 Id. at 3. 195 Id. at 6.

an independent counsel.191 La Bella came to the same conclusion

as Director Freeh had nearly 8 months earlier, that an independent

counsel should have been appointed. He also echoed the concepts

of a ‘‘core group’’ and ‘‘opportunists’’ outlined in the Freeh memo.

However, La Bella focused his summary around individuals involved in the Task Force’s investigation, including: Harold Ickes;

President Clinton; Vice President Gore; Hillary Rodham Clinton;

and, John Huang, Marvin Rosen, David Mercer and the DNC.192

With respect to the individual Task Force investigations, La Bella

articulated common themes running through each and tying them

together:

the desperate need to raise enormous sums of money to finance a media campaign designed to bring the Democratic

party back from the brink after the devastating Congressional losses during the 1994 election cycle, and the calculated use of access to the White House and high level officials—including the President and First Lady—by the

White House, DNC and Clinton/Gore ’96, as leverage to extract contributions from individuals who were themselves

using access as a means to enhance their business opportunities.193

La Bella, like Freeh, focused on the idea that the exploitation of

the campaign financing laws were a direct result of the conditions

established by the White House.

According to La Bella, as the pressure to raise money grew, there

was a blurring of lines between the campaign and the DNC—there

was an intermingling of funds, resources, and personnel—that

eventually led to violations of the campaign contribution laws.194

La Bella explained:

The intentional conduct and the ‘‘willful ignorance’’ uncovered by our investigations, when combined with the line

blurring, resulted in a situation where abuse was rampant,

and indeed the norm. At some point the campaign was so

corrupted by bloated fundraising and questionable ‘‘contributions’’ that the system became a caricature of itself. It

is hoped that this report will place in context the abuses

uncovered in our investigation: a system designed to raise

money by whatever means, and from whomever would give

it, without meaningful attention to the lawfulness of the

contributions or the manner in which the money was

spent.195

La Bella did not reserve his criticism for only the Clinton administration and the DNC; he was equally critical in his evaluation of

the manner in which the Department of Justice had conducted the

campaign finance investigation.

29

196 Id. at 6. La Bella indicated that there were several investigations where key players and

themes were consistent, such as the investigations of Johnny Chung, Maria Hsia, Charlie Trie,

Mark Jimenez, Howard Glicken, and John Huang. Id. 197 Id. 198 Id. at 7. 199 Id. 200 Id. 201 Id. 202 Id. at 7–8. 203 Id. at 8. La Bella took issue with the Department of Justice’s use of the term ‘‘evidence,’’

which was not in the statutory language. He believed it created a higher threshold for preliminary investigations.

a. The Department of Justice’s Investigative Approach

The Task Force as it was run by PIS operated under a method

of investigation which La Bella described as a ‘‘stovepipe’’ approach, conducting 30 to 40 investigations of individual targets at

any given time.196 Each investigation was assigned an investigative team of agents and prosecutors who were solely responsible for

that particular investigation, and necessarily focused on its own

issue.197 La Bella expressed concern that while each team might

have been aware of other teams’ overlapping activities, there had

never been an overall review.198 Likewise, when the Attorney General and her advisers viewed the results of the investigation, they

too focused on it one allegation at a time. Rather than viewing the

entire ‘‘landscape’’ of allegations against covered persons, PIS,

which had primary authority for the Act, viewed each allegation

independently, making it difficult to trigger the application of the

Act.199 La Bella recommended an approach that looked at all of the

allegations in a broader context.200

The memorandum was La Bella’s attempt to bring all the pieces

of the investigation together to form a whole picture. Upon doing

so, he remarked that the information developed to that point presented ‘‘the earmarks of a loose enterprise employing different actors at different levels who share a common goal: bring in the

money.’’ 201 La Bella believed that such a situation should trigger

the Independent Counsel Act. However, in practical terms, nobody

at the Task Force had ever looked at the overall investigation to

determine whether all the pieces of information put together might

trigger the Act. That is, when viewed as a whole, whether there

was specific information from a credible source that a covered person may have violated a Federal criminal law. La Bella asserted

that each time such an investigation was suggested, it was rejected

based on the claim that such an investigation could only be conducted as a preliminary investigation under the Act.202 The Department of Justice then insisted that a preliminary investigation

could only be initiated if there were ‘‘specific and credible evidence

that a potential criminal violation has occurred.’’ 203 However, the

Justice Department’s argument was circular. The Task Force was

unable to look for information on covered persons unless there was

a preliminary investigation, but could not initiate a preliminary investigation without specific and credible evidence; and, in order to

find evidence one had to investigate. Obviously, with those limitations placed on the Task Force, investigations relating to covered

persons would go nowhere. The Task Force had to hope that information on covered individuals would just appear.

30

204 Id. 205 Id. 206 Id. 207 Id. at 9. 208 Id. 209 Id. at 13.

The information in the La Bella memo was information that the

Task Force already had. However, La Bella attempted to put it in

the context of the entire investigation.204 Having done that, La

Bella was able to distinguish alarming patterns running through

each investigation. Were he to have reviewed the individual actions

in an investigative vacuum, they might have appeared innocuous.205 La Bella remarked:

This is especially true with respect to the conduct of senior

White House officials and key DNC and Clinton/Gore officials. These individuals make brief, albeit key, appearances in the individual investigations. While their participation in a single investigation generally falls short of a

knowing participation in potential criminal conduct, the

sum of their appearances results in a pattern of conduct

worthy of investigation.206

b. The Department of Justice Did Not Apply Thresholds of Investigation Uniformly

i. Initiating a Preliminary Investigation

The Attorney General instructed the Task Force to ‘‘leave no

stone unturned.’’ 207 The Task Force was able to open an investigation on an uncovered person ‘‘based upon a determination that

there is an allegation which, if true, may present a violation of federal law.’’ 208 Although the threshold was admittedly low, the Department of Justice had articulated ‘‘compelling’’ reasons why it

was the most appropriate policy for the campaign finance investigation:

the shortened statue of limitations for election violations;

the rash of potential illegal activities presented during the

1996 election cycle and the resulting political crisis; the

apparent injection of foreign money into our political system; the widespread circumvention of existing election law

restrictions; the exposure of gaps in the law which permitted wholesale circumvention of federal election laws;

and the possible participation—or willful blindness—of

public officials, and high level party officials in connection

with these activities.209

The Justice Department had put forth strong justifications for its

position, but seemed to ignore that reasoning when it came to certain individuals. La Bella contrasted the stated standard for opening a Task Force investigation with the one that had been imposed

when dealing with covered persons under the Independent Counsel

Act. Particularly, when dealing with the President, Vice President,

and senior White House personnel, the Justice Department required specific and credible evidence that a crime had been committed in order for the Department, through PIS, to commence an

31

210 Id. at 9. 211 Id. at 11. La Bella also made the distinction between the terms ‘‘evidence’’ and ‘‘information.’’ The Justice Department consistently used the term evidence when referring to the standard in the Independent Counsel Act, whereas the statutory language refers to ‘‘specific information from a credible source.’’ According to La Bella, the term evidence suggests a higher burden

of proof. To him, the distinction, although subtle, was significant. Id. at 10–11. 212 Id. at 8 (emphasis added). 213 Id. at 10. 214 Id. at 11. 215 Id. 216 Id. Independent counsels were appointed for both Babbitt and Herman. In re Bruce Edward Babbitt, application of the Attorney General pursuant to 28 U.S.C. § 592(c)(1) for the appointment of an independent counsel (Special Div. D.C. Cir.) (Feb. 11, 1998); in re Alexis M.

Herman, application of the Attorney General pursuant to 28 U.S.C. § 592(c)(1) for the appointment of an independent counsel (Special Div. D.C. Cir.) (May 11, 1998). 217 Exhibit 3 at 11. 218 Id. 219 Id. at 12

investigation.210 According to La Bella, this structure made it nearly impossible to investigate covered persons.

La Bella stated that ‘‘the Department would not investigate covered White House personnel nor open a preliminary inquiry unless

there was a critical mass of specific and credible evidence of a federal violation.’’ 211 Again, the standard the Attorney General mandated in cases of covered persons was ‘‘specific and credible evidence that a potential criminal violation has occurred.’’ 212 For La

Bella, the use of the word ‘‘evidence’’ instead of ‘‘information,’’ as

is used in the statute, also indicated a higher standard. He also explained that when an allegation against a covered person was

made, PIS took over the investigation, taking it out of the Task

Force’s jurisdiction. Therefore PIS controlled the standards used to

consider the allegations under the Act.213 In contrast, he noted that

the Task Force initiated criminal investigations of individuals not

covered by the Act on a ‘‘wisp of information.’’ 214 Furthermore, he

pointed out that even when the Department was conducting a preliminary investigation under the Act, the President, Vice President,

and senior White House officials were treated more favorably than

others were.215 For example, the matters involving Interior Secretary Bruce Babbitt and Labor Secretary Alexis Herman illustrated La Bella’s contention.216 He observed that the amount of information needed to trigger the Independent Counsel Act, and subsequently warrant further investigation in those cases, was extremely low in comparison to the standards set for the President,

Vice President, and senior White House personnel.217

La Bella believed that the standard for initiating a preliminary

investigation under the Act should be the same as the threshold

applied when determining whether to open a Task Force investigation.218 The Attorney General, La Bella argued, was artificially

raising the standard to determine whether there were grounds sufficient to investigate. Looking to the legislative history, La Bella

stated that the reference to ‘‘the specificity of the information and

the credibility of the source for the information’’ was intended to

limit the factors the Attorney General could consider when deciding

whether to proceed with a preliminary investigation. However,

Reno turned the language around to create some type of higher

threshold for even commencing an investigation that might implicate a covered person.219 La Bella observed that the Department

of Justice engaged in ‘‘unnecessary complication’’ when applying

32

220 Id. 221 Id. at 14. 222 Id. 223 Id. at 9, 14. Of course, the requirement that the information be specific and from a credible

source would still be taken into account. Id. 224 Id. at 12. 225 Id. 226The statute makes it clear that the Attorney General may not base her recommendation

on a finding that an official lacked the state of mind required for the crime, unless there exists

‘‘clear and convincing evidence.’’ ‘‘Independent Counsel Provisions: An Overview of the Operation

of the Law,’’ CRS Rept. No. 98–283, at 4 (Mar. 20, 1998) (citing H. Rept. No. 103–511, at 11

(1994)). Furthermore, Congress, in enacting the statute, believed that it would be a ‘‘rare case’’

in which the Attorney General could come to such a conclusion. Id. The House report notes:

‘‘Congress believes that the Attorney General should rarely close a matter under the Independent Counsel law based upon finding a lack of criminal intent, due to the subjective judgments required and the limited role accorded the Attorney General in the independent counsel

process.’’ Id. However, that is precisely what Reno did in the case of Vice President Gore. 227 28 U.S.C. § 592(c)(1) (emphasis added).

the Independent Counsel Act standards, both in commencing and

conducting an investigation.220 La Bella added:

This is especially so where the President and White House

personnel are involved. Indeed, the continuing and often

heated debate involving the so-called Common Cause allegations is an apt example. If these allegations involved

anyone other than the President, Vice President, senior

White House, or DNC and Clinton/Gore ’96 officials, an appropriate investigation would have commenced months ago

without hesitation. However, simply because the subjects

of the investigation are covered persons, a heated debated

[sic] has raged within the Department as to whether to investigate at all. The allegations remain unaddressed.221

Also with regard to the investigation of the Common Cause allegations, La Bella charged that, ‘‘[t]he contortions that the Department has gone through to avoid investigating these allegations are

apparent.’’ 222 The standards for initiating an investigation, La

Bella argued, should be identical, and the better standard to use

was the general Task Force standard: a determination that there

is an allegation which, if true, may present a violation of federal

law.’’ 223

ii. Determining Whether Further Investigation Was Warranted

Like the standard for commencing an investigation, La Bella

urged that the standard for determining whether further investigation was warranted in a preliminary investigation be similar to the

standard the Task Force used in both conducting and closing investigations.224 In the Task Force’s investigations, they adhered to the

‘‘leave no stone unturned’’ policy demanded by the Attorney General.225 Conversely, in preliminary investigations, the Attorney

General appeared to search for reasons not to continue to investigate. For example, during the campaign finance investigation, she

often turned to examining the intent of the individual under investigation in order to close the investigation.226 The Independent

Counsel Act instructed the Attorney General to comply with the

‘‘written or other established policies of the Department of Justice

with respect to the conduct of criminal investigations.’’ 227 La Bella

asserted that the ‘‘leave no stone unturned’’ theory was the established policy of the Task Force’s investigation, as mandated by

33

228 Exhibit 3 at 14. La Bella stated, ‘‘[i]t has also been the policy of the Task Force to continue

to investigate allegations and to decline prosecution and/or further investigation only after each

and every allegation has been fully investigated. This is true despite the fact that some allegations approached what a reasonable investigator might characterize as frivolous.’’ Id. at n.2. 229 Id. at 15. 230 Id. 231 Id. 232 Id. 233 Id. at 18. 234 Id. (citing to 1978 U.S.C.C.A.N. at 4270). 235 Id.

Reno.228 As such, the Department of Justice should adhere to the

same standard when considering whether further investigation is

warranted in a preliminary investigation. That is, the Attorney

General should not have engaged in contortions to find a somewhat

viable reason not to investigate. Anything that might even be considered prosecutorial discretion should have been left to an independent counsel to decide.

iii. La Bella’s Interpretation of the Legislative History

La Bella supported his theories with the legislative history of the

Independent Counsel Act.229 He demonstrated that Congress often

corrected the manner in which the Department of Justice was implementing the Act by amending the language of the Act. At the

outset, he stated that Congress intended to create a system under

which covered individuals were treated in the same manner as

other individuals being investigated by the Justice Department, no

more harshly or leniently.230 The amendments in 1987 and 1994

made clear that individuals covered by the Act should be treated

the same as non-covered individuals in determining whether an investigation is initiated, and once initiated, whether further investigation was warranted.231 This was established, according to La

Bella, by the language requiring the Department to follow ‘‘established policies’’ in making its determinations.232

La Bella cited numerous examples of the Congress criticizing the

Department for interpreting the Independent Counsel Act in a

manner that would serve Justice’s own purposes. By doing so, the

Justice Department substituted its own judgment for that of Congress.233 In order to demonstrate his point that the Department

had raised the bar for investigating covered individuals, La Bella

pointed to the following passage to demonstrate Congress’ intent on

the standards for investigation:

The purpose of allowing the Justice Department to conduct

a preliminary investigation is to allow an opportunity for

frivolous or totally groundless allegations to be weeded out.

. . . On the other hand, as soon as there is any indication

whatsoever that the allegations. . . . involving a high-level

official may be serious or have any potential chance of substantiation, a Special Prosecutor should be appointed to

take over the investigation.234

La Bella acknowledged that the Independent Counsel Act was not

a ‘‘model’’ piece of legislation, but believed that people in the Department of Justice were trying to substitute what they thought to

be the proper threshold for investigation.235

34

236See exhibit 3 at 20–79. 237 Id. at 24. 238 28 U.S.C. § 591(b)(3). La Bella pointed out that the President is authorized to pay 25 persons at level II, only 6 individuals in the Executive Office of the President are paid at that

level—none of whom are involved in the campaign finance investigation. In prior administrations, the Deputy Chief of Staff had been covered by the Act by virtue of his salary. Exhibit

3 at 20. 239 Exhibit 3 at 20. As de facto chairman of the re-elect, Ickes would be subject to the Independent Counsel Act pursuant to section 591(b)(6). 240 Exhibit 3 at 22. 241 Id. at 23. According to La Bella, Clinton campaign advisor Dick Morris ‘‘confirmed that

Ickes was the sole person charged with making financial decisions for the White House, DNC

and the reelection effort.’’ Id. Morris also added that Ickes controlled ‘‘every aspect of DNC and

Clinton/Gore fundraising and that Ickes was brought in by the President.’’ Id. Finally, in an

interview with former White House Chief of Staff Leon Panetta, Panetta told the Task Force

that he personally did not have the experience needed to run a national Presidential campaign

and he therefore ‘‘relied heavily on Ickes to handle all issues relating to the President’s re-election.’’ Id. at 24. 242 Id. at 21. The test was originally developed to determine whether Clinton fundraiser Terry

McAuliffe was a covered person under the Act. Ultimately, PIS determined that he was not a

covered person. Id. 243 Id. 244 Id. 245 Id. at 25.

a. Information Sufficient to Warrant the Appointment of an

Independent Counsel

There were numerous fact patterns involving covered and other

individuals that the Task Force had looked into and that La Bella

believed were sufficient to warrant the appointment of an independent counsel. Among those individuals implicated in the investigation were: President Clinton; Vice President Gore; Harold

Ickes; Hillary Rodham Clinton; and, John Huang, Marvin Rosen,

David Mercer, and the DNC.236

i. Harold Ickes

There were numerous allegations surrounding Harold Ickes,

President Clinton’s Deputy Chief of Staff, during the campaign finance investigation. Ickes was at the center of the Common Cause

allegations because he ran the DNC and Clinton/Gore reelection efforts from the White House.237 Ickes was not a ‘‘covered person’’

under the mandatory provision of the Act because his salary did

not reach level II of the Executive Schedule, a requirement under

the Act.238 However, La Bella believed that the mandatory provision should be applied to Ickes. His argument was based on the

theory that Ickes was a de facto officer of Clinton/Gore ’96, exercising authority at the national level.239

In support of his argument, La Bella pointed to information such

as the DNC and Clinton/Gore ’96 reporting to Ickes before authorizing the disbursement of any funds or taking other actions.240 In

addition, individuals involved in the re-election effort confirmed

Ickes leadership role.241 La Bella applied the facts of Ickes case to

a two-part test developed by PIS for determining whether an individual was a covered person under section 591(b)(6) of the Act.242

The test relied upon an analysis of title and function in order to

determine whether an individual was a covered person.243 La Bella

argued that when he reviewed the reality or function of Ickes’ position rather than just the title he was given, Ickes fell under the

mandatory provision because of his re-elect activities.244 In the alternative, La Bella believed that Ickes fit within the discretionary

provision of the Act as well.245 La Bella cited to the legislative hisVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00052 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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246 Id. at 25 (citing 1987 U.S.C.C.A.N. at 2165). 247 Id. Ultimately, the Attorney General decided to open a preliminary investigation of Harold

Ickes under the Independent Counsel Act to investigate allegations of perjury before the Senate

Governmental Affairs Committee. No independent counsel was appointed. 248Trie was a close friend of President Clinton’s from Arkansas with wide-ranging access to

the White House, Presidential advisors, and Clinton administration officials. See H. Rept. No.

105–829 at 1347 (1998). Trie later plead guilty to knowingly causing the DNC to make a false

report to the FEC and knowingly causing a conduit contribution to be made to the DNC. 249 Exhibit 3 at 26. 250The PLET was established by and for the benefit of the President and the First Lady for

the purpose of paying their personal legal bills. Contributions to the PLET were limited to

$1,000 per person. See S. Rept. No. 105–167, at 2711 (1998). 251 Exhibit 3 at 26. Michael Cardozo, the PLET Executive Director, hired a private investigator to examine the Trie donations. Cardozo briefed Ickes, the First Lady’s Chief of Staff, and

several of the White House counsels regarding the private investigators findings. In his prepared statement before the Senate Governmental Affairs Committee, Cardozo explained what

the investigators found and why Trie’s contributions were ultimately returned:

One, the unique circumstances under which the funds were delivered to the Trust; Two,

the fact that it now appeared that most if not all of these contributions were raised

at meetings of a religious organization, the Ching Hai—Buddhist sect which according

to IGI had been described by some as a ‘‘cult’’ and which raised concerns abut peer pressure and coercion; and Three, concern over the ultimate source of some of the contributions due to what appeared to be the advancement of funds by the Ching Hai organization to some contributors. Id. at 30.

252 Exhibit 3 at 29. 253 Id. 254 Id. at 32. 255 Id. 256 Id.

tory of the discretionary provision as intending ‘‘to include members of the President’s family, and lower level campaign and government officials who are perceived to be close to the President.’’ 246

Due to Ickes role in the campaign, the control he wielded, and his

close relationship to the President, La Bella argued that the circumstances fit the type of political conflict that the Act envisioned.247

Once La Bella established that the Independent Counsel Act

should cover Ickes, he turned to the fact patterns that warranted

the appointment of an independent counsel. The first argument La

Bella made was that Ickes ‘‘knowingly permitted the DNC and

Clinton/Gore ’96 to accept conduit contributions collected by Charlie Trie 248 and to file false and misleading reports with the

FEC.’’ 249 Ickes had a unique knowledge of Trie’s questionable contributions to another entity associated with the Clintons, the Presidential Legal Expense Trust (PLET).250 Ickes, along with several

senior White House staff, was briefed on the questionable source

for the funds.251 During the meeting, Deputy Counsel to the President, Bruce Lindsey mentioned that he knew Trie from Arkansas,

and that Trie was involved with the Democratic party.252 Ickes,

who La Bella considered the de facto head of Clinton/Gore ’96 and

the DNC, was the only individual at the meeting who had regular

contacts with those organizations.253 He concluded that Ickes

therefore had a duty to warn both organizations.

After the campaign finance scandal was reported in the press,

the Executive Director of the DNC, B.J. Thornberry, asked Ickes

about DNC fundraiser John Huang.254 Ickes indicated that if the

DNC were looking at John Huang, they should also take a look at

Charlie Trie.255 The comment, La Bella believed, spoke volumes

about Ickes knowledge of Trie and his fundraising.256 La Bella

summarized, ‘‘[a]t best, Ickes engineered an effort to consciously

avoid learning the truth about Trie. At worst, Ickes’ failure to act

36

257 Id. at 35. 258 Id. at 37. 259 Id. at 38. 260 Id. at 40. 261 Id. at 41. 262 Id. 263 Id. at 41–42. 264 Id. at 45. 265 Id.

was intended to conceal the truth from those who would have protected the DNC and Clinton/Gore from Trie’s illegal solicitations/

contributions.’’ 257

La Bella also believed that Ickes’ role in the Common Cause allegations was troubling. He asserted that the information uncovered

to date warranted the appointment of an independent counsel. He

expressed frustration that the Department had not taken any action whatsoever, even independent of Ickes, on the Common Cause

allegations.258 La Bella outlined the Department’s refusal to initiate an investigation and stated:

The alternative approach—a parochial and professorial application of the [Independent Counsel Act]—is the very approach that has gotten the Department into trouble in the

past. It is the same type of maneuvering and practice that

triggered the 1987 Amendments to the ICA and the sharp

criticism of the Department that accompanied these

amendments. Indeed, one could argue that the Department’s treatment of the Common Cause allegations has

been marked by gamesmanship rather than an even-handed analysis of the issues.259

Ickes was intimately involved with the media efforts that were central to the Common Cause allegations. The President conferred the

authority to run the re-election effort upon Ickes, who did so.

Therefore, La Bella concluded that ‘‘[t]o the extent that there was

any effort to circumvent the regulations outlined above, Ickes was

at the heart of the effort.’’260

The final area of investigation relating to Ickes was the Diamond

Walnut matter.261 The allegations centered on whether there was

an effort to encourage teamster contributions and support of the

Democratic party through the use of the administration’s influence

to attempt to settle an ongoing labor dispute.262 Ickes testified

about the matter before the Senate Governmental Affairs Committee, and there were some questions regarding the truthfulness

of his testimony.263 La Bella outlined the facts and information

that the Task Force had to date, and admitted that the investigation was in its ‘‘infancy.’’ 264 However, he concluded that there was

sufficient specific information from a credible source to commence

an investigation. The Task Force had done so, however, La Bella

believed that, in light of the other information on Ickes, a preliminary investigation should have been initiated.265

ii. President Clinton

La Bella laid out his argument for appointing an independent

counsel to investigate the President, who is a covered person under

the Act. The main issues he addressed were: Charlie Trie’s PLET

contributions and subsequent appointment to a Presidential comVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00054 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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266 Id. at 46–56. 267See S. Rept. No. 105–167, at 2722 (1998). The money orders delivered to the PLET by Trie

were sequentially numbered, meaning that they were purchased at one location. However, they

were written from people living in different parts of the country. Many of the checks had the

identical spelling error of ‘‘presidencial.’’ In addition, some of the checks were written by one

person on behalf of another, in violation of trust guidelines. Finally, the Supreme Master Suma

Ching Hai, who provided the reimbursement for the contributions, is based out of Taiwan—a

violation of the foreign money guideline. Id. 268The committee learned that the White House made the appointment process for the Commission very political. Because he had been instrumental in the creation of the commission, Senator Bingaman and his staff were supposed to have had a great deal of input into the creation

of the Commission. Bingaman’s staffer, Steve Clemons, found that he had a great deal of trouble

getting Bingaman’s candidates for the Commission approved. Charles Duncan, the Assistant Director of Presidential Personnel told Clemons that he checked all candidates names against a

DNC donor list. When Trie’s appointment was brought up, Clemons objected based on lack of

experience and quality of candidate. However, the White House responded that Trie was a

‘‘must appointment’’ from the ‘‘highest levels of the White House.’’ See H. Rept. No. 105–829,

at 1374–1390 (1998). 269 Exhibit 3 at 46. 270 Id. 271 Id. at 48. 272 Id. 273 Id. at 50. 274 Id. 275 Id.

mission; the Common Cause allegations and conspiracy to violate

soft money regulations; and, the President and senior White House

officials’ knowledge of foreign contributions.266

As mentioned in the previous section, Charlie Trie, a close friend

of the President and DNC fundraiser and contributor, delivered

questionable contributions to the PLET totaling $789,000. According to its own guidelines, the PLET only accepted contributions

from individual U.S. citizens using their own funds; and, the contributions had to be voluntary. Ultimately, it was discovered that

the Trie contributions came from the Supreme Master Suma Ching

Hai of the Ching Hai Buddhist sect, who offered to reimburse her

followers if they contributed $1,000 to the PLET.267

Not only were the contributions suspect, but the timing of the

contributions was suspect as well. Around the time of the contributions, Trie was appointed to the Commission on U.S. Trade and Investment Policy (Commission).268 The President issued an Executive order expanding the size of the Commission on January 31,

1996, while Trie had visited the President 2 days earlier.269 Trie

delivered the first contributions on March 21, 1996.270 Approximately a month later, Trie received his formal appointment to the

Commission.271 During the time period between the delivery of the

contributions and Trie’s appointment, the PLET Executive Director

made the First Lady and senior White House staff aware of the

problems with the contributions and Trie’s delivery of them.272

Subsequently, the President himself was made aware of the problems, as he affirmed the decision to return the funds. La Bella concluded that based on the President’s knowledge of the contributions

and of the status of Charlie Trie as a fundraiser and contributor

to the DNC and Clinton/Gore ’96, his involvement should have

been further investigated.273

La Bella also believed that the President played a major role in

the Common Cause allegations.274 He pointed out that the President was regularly briefed on the media fund and re-election efforts.275 In addition, as Director Freeh pointed out in his memorandum, the President was highly involved in the creation and

38

276 Id. 277Id. at 51. 278 Id. 279 Id. at 52. 280 Id. 281 Id. 282 Id. 283 Id. at 60. 284 Id. at 53. 285 Id. 286 Id. at 54.

placement of the ads. It was the President who entrusted Harold

Ickes with running the media campaign that is at the heart of the

Common Cause allegations. Therefore, La Bella imputes to the

President knowledge of Ickes’ control over both the DNC and Clinton/Gore ’96 in order to effect the media campaign.276

In conjunction with the media fund and general re-election efforts, there was an ongoing demand for more money to sustain the

campaign.277 La Bella described events that he believed demonstrated a pattern of activity involving senior White House officials. He added, ‘‘[t]his pattern suggests a level of knowledge within the White House—including the President’s and First Lady’s offices—concerning the injection of foreign funds into the reelection

effort.’’ 278 The two examples La Bella used were the White House’s

handling of major donors Johnny Chung and Charlie Trie.

Chung had a significant amount of contact with the First Lady’s

office in order to make arrangements for his Chinese associates to

meet both the President and the First Lady. Chung first made attempts to get meetings and perks through the DNC.279 However,

even the DNC was wary of Chung and his Chinese business associates. Therefore, Chung went to the First Lady’s Chief of Staff,

Maggie Williams. On two separate occasions when the DNC would

not deliver, Williams was able to arrange a photo-op with the

President or First Lady for Chung and groups of Chinese businessmen.280 In one instance, Chung offered the DNC $50,000 to arrange for him and a group of Chinese businessmen to meet with

President Clinton.281 When the DNC would not do it, the First

Lady’s office did, using the $50,000 to retire a portion of its debt

to the DNC.282 Chung explained in an interview with the Task

Force that he informed White House and DNC staff that ‘‘the more

access he could get, the better his business would be and the more

he could contribute.’’ 283 It should have been clear to anyone who

dealt with Chung that he was using funds from the Chinese businessmen he brought to meet the President to contribute to the

DNC.

At one point, the NSC stepped in to question whether photos of

the President in the White House with the Chinese businessmen

should be released.284 The NSC was told that the individuals were

major DNC donors and that the President’s office would like to release the photos.285 After reviewing the Johnny Chung scenarios,

La Bella concluded that the connection between Chung’s foreign

business associates and his DNC contributions was quite clear. He

added, ‘‘[i]t is inconceivable that senior officials at the White House

were oblivious to these connections.’’ 286

White House officials should have drawn similar conclusions

about Charlie Trie and his contributions. Both the President and

39

287 Id. at 54–55. 288 Id. at 55. 289 Id. 290 Id. at 57. 291 Id. 292 Id. 293 Id. In fact, a subsequent preliminary investigation was opened on the Vice President when

his aide’s handwritten notes of a money meeting were discovered. The notes showed that hard

and soft money splits for the media fund were discussed at a meeting the Vice President attended. 294 Id. at 60.

First Lady, along with senior White House staff, were warned

about the possibility of problems with Trie’s fundraising through

the PLET fiasco.287 Although they were aware that Trie was an active fundraiser for the DNC, nobody brought the problem to the attention of the DNC.288 La Bella stated:

These actions (and inactions) involving the President, First

Lady, Ickes, White House Counsel and Bruce Lindsey, suggest a conscious decision not to learn the truth about Trie’s

fundraising activities. By not alerting the DNC and Clinton/Gore and by directing IGI not to confront Trie about

the PLET ‘‘donations,’’ the White House chose not to impede a potent fundraiser at a time when funds were needed.289

La Bella was able to tie all of the issues relating to the President

together through the Common Cause allegations. For instance, the

need to raise astronomical amounts of cash developed from the

need to pay for the media campaign. Because the re-election efforts

needed to raise so much cash, they turned a blind eye to problems

such as foreign money coming into the campaign. Finally, under La

Bella’s analysis, the President was in the middle of it all. He approved the media campaign and followed it closely, assisted in raising the cash, and attending all of the fundraisers where he greeted

the numerous foreign attendees, many of whom were unable to

even speak English. La Bella argued that the President’s role needed to be investigated and therefore, an independent counsel should

have been appointed.

iii. Vice President Gore

The argument for an investigation of Vice President Gore was

nearly identical to that of the President.290 Like the President, Vice

President Gore participated in the decisionmaking on the media

campaign and approved the efforts.291 Furthermore, La Bella believed that there should be a close review of the Vice President’s

fundraising calls from his White House office.292 The Department

of Justice already had concluded that Gore did believe that he was

soliciting ‘‘hard’’ money, a distinction that meant that there would

have been no violation of law. However, La Bella did not want to

rely solely on the Vice President’s word, he believed further investigation was warranted.293

iv. Hillary Rodham Clinton

The First Lady is not covered under the mandatory provision of

the Independent Counsel Act. However, La Bella concluded that

she should be considered under the discretionary provision.294 He

40

295 Id. 296 Id. 297 Id. 298 Id. at 61–73. 299 Id. at 61. 300 Id. at 69. Several individuals were working on Huang’s behalf to get him a fundraising

position with the DNC, including James Riady, Mark Middleton, and Joe Giroir. Riady, Huang,

and Giroir had a meeting with the President at which they discussed Huang working at the

DNC as a fundraiser. The President enlisted the help of White House aides Bruce Lindsey and

Harold Ickes to pave the way for Huang with the DNC. Ickes contacted the head of DNC fundraising Marvin Rosen and DNC Chairman Don Fowler to recommend Huang. Huang’s application did not move forward until the President personally mentioned Huang to Rosen during a

fundraiser. Shortly thereafter, Huang was hired at the DNC. See H. Rept. No. 105–829, at

1207–1208 (1998). 301 Exhibit 3 at 70. 302 Id. at 67. 303 Id.

believed that, like Ickes and the President, her role in the Charlie

Trie contributions and failure to warn the DNC and Clinton/Gore

about those contributions should be further investigated. In addition, the First Lady’s office also had a close relationship with contributor Johnny Chung that La Bella believed also should be investigated further.295 Chung often made arrangements through the

First Lady’s office for his Chinese business associates to meet with

the President and First Lady.296 La Bella summarized, ‘‘[g]iven our

threshold for opening investigations, determination of what the

First Lady knew and what she did (or chose not to do) in connection with the information detailed above, is something which deserves further inquiry.’’ 297

v. Other Campaign Finance Figures

Central to the campaign finance investigation was the role of the

DNC, its officers, and fundraisers. Millions of dollars in illegal or

otherwise questionable contributions flowed into the DNC’s coffers

during the 1996 Federal elections. It was the discovery of a foreign

contribution to the DNC that led to the campaign finance investigation. John Huang, a DNC fundraiser, brought foreign money

into the DNC and became a major figure in the investigation. La

Bella focused on the events that brought John Huang to the DNC,

the individuals involved, as well as the actions taken by the DNC

that allowed them to cross the line of legality.298 He stated,

‘‘[t]hese incidents suggest that at some level, certain DNC fundraisers were actively engaged in conduct which had the effect of

concealing questionable fundraising conduct from the FEC and the

public.’’ 299

Huang came to the DNC as a fundraiser through the intervention of President Clinton, who enlisted White House aides and personally spoke with the DNC to help Huang.300 Prior to that, Huang

was a political appointee, subject to the Hatch Act, at the Department of Commerce.301 While at the Commerce Department, Huang

had engaged in fundraising activities, in violation of the Hatch Act,

with the full knowledge, and possibly at the prompting of the

DNC.302 La Bella described how David Mercer, DNC Deputy Finance Director, credited Huang’s wife Jane for funds raised in

order to hide the fact that Huang was violating the Hatch Act.303

The committee later learned that while Huang was still working at

41

304 Ickes asked Huang to raise funds for Jesse Jackson, Jr.’s congressional campaign during

Huang’s ‘‘interview’’ process for the DNC. Huang stated that Ickes said something like, ‘‘can you

help out from the Asian American community, round-up ten to fifteen thousand dollars for Jesse

Jackson, Jr.?’’ Ultimately, Huang did raise several thousand dollars for Jackson. FBI summary

of Huang interview, DOJ–H000127–131. 305 Exhibit 3 at 67. 306 Id. La Bella indicated that Justice Department Research showed that, ‘‘a scheme to defraud in connection with false statements and active concealment relating to campaign funds

solicited in violation of the Hatch Act, does present a viable prosecutable theory. Id. 307 Id. at 71. 308 Id. Chung was referring to Chairman Chen of Haomen Beer, who later used his photograph with President Clinton as a marketing tool in China. Id. 309 Id. at 72. 310 Id. 311 Id. at 73.

the Commerce Department, White House Deputy Chief of Staff

Harold Ickes actually asked Huang to raise money.304

Although there are no criminal penalties for violating the Hatch

Act, La Bella believed that the disclosure of the violation would

have jeopardized both Huang’s Commerce Department employment

and his move to the DNC, resulting in a ‘‘public relations nightmare.’’ 305 Futhermore, La Bella indicated that the actions taken by

Huang and Mercer possibly were in violation of section 371 of the

criminal code. Such a violation would have involved a scheme to

defraud the United States based on the Hatch Act violation.306 In

light of the other evidence, and the potential section 371 violation,

La Bella believed that a full investigation was warranted.

La Bella also cited to miscellaneous events that raised questions

about whether DNC officials were aware of potential irregularities

and illegalities in fundraising. For instance, by mid-1994, the DNC

practically dismantled its procedures for vetting all contributions of

$10,000 or more.307 Without vetting, the DNC would have no information on large contributions. As further evidence he cited to Johnny Chung’s efforts to bring numerous Chinese businessmen to meet

with the President. For example, Chung wrote to DNC Finance Director Richard Sullivan about a group of his Chinese associates

who were to meet with the President, stating that one of the group

would play ‘‘an important role in our future party functions.’’ 308

Chung even wrote to Deputy Assistant to the President Doris Matsui, ‘‘[i]n the next two years I will be coordinating a lot of visits

from Asian business leaders to support DNC. I look forward to

working closely with you. . . .’’ 309 La Bella believed that in light

of these and other examples, a thorough investigation of the DNC’s

practices was in order. Such an investigation, he said, would be a

political conflict of interest for the Department of Justice.310 He

bolstered his assertion with the fact that the President and Harold

Ickes were instrumental in running the affairs of the DNC and

Clinton/Gore, meaning that any investigation would certainly include their activities.

vi. The Loral Matter

Illustrating his assertion that there was a higher threshold for

initiating an investigation of the White House or its senior officials,

La Bella cited to the investigation of the satellite communications

company Loral.311 Shortly before La Bella wrote his memorandum,

there were allegations reported in the media that the administration gave Loral an export waiver for satellite technology in return

42

312 Id. 313 Id. 314 Id. at 74. 315 Id. In comparison, the Justice Department imposed a higher standard when considering

allegations related to senior White House officials: ‘‘a determination that there is specific and

credible evidence of a federal violation.’’ Id. at 10. 316 Id. at 74. 317 Id. 318 Id. 319 Id. at 75. 320 Id. 321 Id. 322 Id. Robert Litt and Mark Richard were the individuals in contact with the White House

regarding the Loral matter. Litt conveyed the Department’s concerns over the possible waiver

to Counsel to the President Charles Ruff. Id. at 75–76. 323 Id. at 79. 324 Id. at 93.

for the campaign contributions of its CEO Bernard Schwartz.312

According to La Bella, nobody at the Department of Justice was

able to provide a sound premise upon which to base the initiation

of a criminal investigation.313 Rather, because of the media and political pressure, Justice commenced an investigation.314 Therefore,

the standard used by the Justice Department in this case was that

‘‘allegations were made which, if true, suggested a potential violation of federal law.’’ 315 In light of the Loral investigation, La Bella

believed that there was no justification for the refusal to initiate

an investigation into the Common Cause allegations.316

As the Justice Department already had decided to commence an

investigation, La Bella argued that the actual and potential conflicts of interest were such that the appointment of an independent

counsel ought to be sought.317 For instance, one of the areas of investigation was to determine whether Schwartz’ campaign contributions ‘‘corruptly influenced’’ President Clinton’s 1998 decision

to grant Loral a waiver over the objections of the Department of

Justice.318 At the time of the waiver, the Department of Justice

had an open criminal investigation of Loral for the alleged transfer

of technology to China.319 The Department of Justice informed the

White House that a waiver would hinder its ongoing investigation

of Loral.320 In addition to investigating the decision of the President, several high-level Justice Department officials were involved

in discussions with the White House prior to the President’s decision to grant the waiver.321 La Bella indicated that these officials’

conversations with White House Counsel would be material to the

investigation as well.322 In the end, La Bella determined that the

most important factor in the investigation was that it would be an

investigation of the President. He concluded that ‘‘if the matter is

sufficiently serious to commence a criminal investigation, it is sufficiently serious to commence a preliminary inquiry under the ICA

since it is the president who is at the center of the investigation.’’ 323

d. La Bella’s Conclusions

La Bella argued that Justice Department officials were waiting

for some type of smoking gun that implicated, beyond a doubt, a

covered person in an act that violated Federal law.324 However, in

the campaign finance matter, the information had to be gathered

43

325 Id.

and reviewed as a whole, rather than looking at each individual

piece. La Bella explained:

[T]here are bits of information (and evidence) which must

be pieced together in order to put seemingly innocent actions in perspective. While this may take more work to accomplish, in our view it is no less compelling than the proverbial smoking gun in the end. . . . Indeed, were this

quantum of information amassed during a preliminary inquiry under the ICA, we would have to conclude that there

are reasonable grounds to believe that further investigation is warranted.325

The report acknowledged that there were some areas of the campaign finance investigation that as an experienced prosecutor, La

Bella would not pursue. Nevertheless, he made clear that in the

situation at hand, the prosecutorial discretion belonged to an independent counsel.

3. Conclusion

Both Director Freeh and Supervising Attorney La Bella believed

that an independent counsel should be appointed to investigate the

campaign finance investigation. Furthermore, they agreed that the

Department of Justice was applying the Independent Counsel Act

in a manner that almost assured that one would not be appointed.

They both saw that the tunnel vision of Reno and her senior political advisors allowed them to ignore the big picture. Central to that

big picture was what both Freeh and La Bella believed was some

type of broad conspiracy centered around the need to raise vast

sums of money and the willingness to bend or break the campaign

financing laws to get it. The Common Cause allegations were a

major part of their theory, and they asserted that the Department

of Justice refused to investigate these allegations at any level.

The Common Cause allegations laid out a common theme in both

memoranda. The facts were that the President and Vice President

needed to run ads early and frequently to be re-elected. In order

to run the ads the campaign needed to raise significant amounts

of money. The White House, DNC, and Clinton/Gore ’96 all participated in the effort to raise the money and pay for the ads. Once

they began the operation, the three entities became blurred and

began to spend money as if they were one. All of this happened

under the watch and with the knowledge of the President, Vice

President, and senior White House, DNC, and Clinton/Gore staff.

As momentum started building, they needed more money, and that

left the door open for people like John Huang, Charlie Trie, Johnny

Chung, and Pauline Kanchanalak to bring in questionable funds.

Neither Freeh nor La Bella definitively state that White House,

DNC, or Clinton/Gore officials knew about the illegal contributions.

However, in their memoranda they show that there was sufficient

information to further investigate. Because the President and Vice

President were so intimately involved in the areas being investigated, it was nearly impossible for the Task Force to conduct the

investigation without looking into their conduct. As Freeh noted,

44

326Memorandum from Robert S. Litt, Associate Deputy Attorney General, U.S. Department

of Justice, to Janet Reno, Attorney General, U.S. Department of Justice, and Eric Holder, Deputy Attorney General, U.S. Department of Justice (July 20, 1998) (exhibit 4). 327 Id. at 1. 328 Id. 329 Id. at 2. 330 Id. at 3.

the Justice Department attorneys were extremely reluctant to proceed into areas of investigation where covered persons might be implicated, necessitating the appointment of an independent counsel.

The Department of Justice was setting a very high standard for

appointing an independent counsel in the campaign finance investigation. Although Attorney General Reno constantly repeated that

she would appoint an independent counsel when presented with

specific information from a credible source that needed to be further investigated, she had not done so in practice. As both La Bella

and Freeh argued, any one piece of information seen in a vacuum

might not satisfy the standard, rather, the pieces together created

a pattern that could not be ignored.

E. DEPARTMENT OF JUSTICE REBUTTAL MEMORANDA

The Department of Justice circulated the La Bella memorandum

to senior level personnel for review and discussion. In memoranda

to the Attorney General, several senior level personnel responded

to the facts and issues raised in the memorandum. The committee

received the responses of Associate Deputy Attorney General Robert Litt and Chief of the Public Integrity Section Lee Radek, who

both had negative reactions to the La Bella memo.

1. Litt’s Response to the La Bella Memorandum

In a July 20, 1998, memorandum to the Attorney General, Litt

sets forth his observations about the La Bella memo.326 He first denied that the Department had applied an artificially high standard

in applying the Independent Counsel Act. Litt then summarily

stated that the Department of Justice never prohibited La Bella

and the Task Force from conducting an investigation of the entire

campaign finance landscape in order to determine whether specific

information from a credible source sufficient to trigger the Act existed.327 Litt believed that the comprehensive nature of La Bella’s

memorandum proved that the Task Force had not been impeded in

its investigation.328 In short, Litt concluded, ‘‘it is not the Independent Counsel Act that is blocking investigation of the President

and those around him; it is the lack of any specific and credible information that they may have committed a crime.’’ 329

Litt’s rebuttal of La Bella’s allegations is unimpressive. He never

addressed the argument that the Attorney General would look only

at individual pieces of information in deciding whether the Independent Counsel Act was triggered rather than reviewing the investigation as a whole. Furthermore, he simply denied that La

Bella’s statements about the artificially high standard for the Independent Counsel Act were accurate. Obviously, La Bella had a difference of opinion which Litt never factually rebutted.

Litt then turned to the individual cases discussed by La Bella,

including the Common Cause allegations.330 Litt criticized La Bella

for bringing up the Common Cause allegations, stating that the DeVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00062 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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331 Id. 332 Id. 333Memorandum from Robert S. Litt, Associate Deputy Attorney General, U.S. Department

of Justice, to Janet Reno, Attorney General, U.S. Department of Justice 4 (Feb. 6, 1998). 334 Addendum to interim report from Charles G. La Bella, Supervising Attorney, Campaign

Financing Task Force, and James DeSarno, Assistant Director, Federal Bureau of Investigation,

for Janet Reno, Attorney General, U.S. Department of Justice, and Louis J. Freeh, Director,

Federal Bureau of Investigation 5 (Aug. 12, 1998) (paraphrasing finding of FEC audit) (exhibit

5).335 Exhibit 4 at 4. 336Memorandum from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, to James K. Robinson, Assistant Attorney General, Criminal Division, U.S. Department of

Justice (Aug. 5, 1998) (exhibit 6) this memorandum was forwarded to the Attorney General on

Aug. 6, 1998.

partment had already determined that they did not warrant criminal investigation under the FECA or Presidential Funding Acts.331

He also dismissed La Bella’s legal argument that the Common

Cause allegations could be prosecuted as a conspiracy to defraud

the United States.332 Both Litt and PIS, headed by Radek, had rejected the Common Cause allegations earlier, and recommended

that the charges be left to the FEC to investigate. Litt wrote:

It is unfortunate that the FEC is so weak, but we should

not use that as an excuse to disregard well-established

concepts of predication and well-established procedures, to

conjure up novel legal theories of which political candidates had no notice, and to take on the responsibility of

primary regulator of the political process. That is not an

appropriate function of the Department of Justice.333

There was a difference of opinion between the Task Force prosecutors and the FBI on the one side, and the Attorney General’s

advisors and PIS on the other about whether there was a violation

of any laws in the scheme described by Common Cause. La Bella

wanted at a minimum, to investigate. The Attorney General and

her advisors decided that there was no predication to investigate,

and refused to allow a Task Force investigation of the issue to go

forward. Ultimately, La Bella and other Common Cause advocates

received belated support in a FEC audit that found that the ‘‘DNC

media payments ($46,546,476) to have been an in-kind contribution

to either the primary or general campaign committee.’’ 334

Addressing another section of the LaBella memorandum, Litt

generally agreed that Harold Ickes and high-ranking DNC officials

ought to be investigated, but not by an independent counsel.335 Although La Bella did advocate considering Ickes under the mandatory provision, he also urged the Attorney General to recognize the

conflict of interest she and the Department had in investigating

Ickes and the DNC. Litt neglected the argument that these matters

ought to be considered under the discretionary provision of the

Independent Counsel Act.

2. Radek Response to the La Bella Memorandum and La Bella’s

Reply

Lee Radek, the Chief of the Public Integrity Section, attacked La

Bella’s memorandum to the Attorney General in his own August 5,

1998 response.336 Radek criticized La Bella’s recommendations as

‘‘flawed and based on numerous misinterpretations of the IndeVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00063 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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337 Id. at 2. 338 Id. at 1. 339 Exhibit 5 at 1. 340 Exhibit 6 at 3. 341 Id. 342 Id. 343 Id. 344 Id. 345 Id. 346 Id. 347 Exhibit 5 at 1.

pendent Counsel Act.’’ 337 He also complained bitterly about what

he perceived as personal digs:

I am, to put it directly, outraged by the personal attacks

and the suggestions contained in this Report, some subtle,

and some stunningly blunt, that the motivations of those

who have advised the attorney General over the last two

years concerning the application of the Act with respect to

campaign financing matters have been colored by bad

faith, a deliberate twisting of the law, and an effort to protect the White House.338

When La Bella’s was confronted with Radek’s charges, he replied,

‘‘such an approach lessens legitimate debate and hampers the ability to reason to a result based on the merits.’’ 339 La Bella, on the

other hand, insisted on replying to the substance of Radek’s comments, rather than to his attacks.

i. Stovepipe Versus Landscape Analysis

Radek addressed La Bella’s criticism that the Department was

conducting a ‘‘stovepipe’’ analysis rather than a ‘‘landscape’’ analysis. Radek contended that there had been no previous investigation that was as carefully coordinated as the Task Force.340 He argued that efforts had been made and, ‘‘extensive steps have been

taken to ensure that any overlapping evidence or potentially interlocking cases is [sic] not overlooked.’’ 341 Radek asserted that if the

big picture had been ignored it was the fault of La Bella himself.342

He also denied, as ‘‘simply untrue,’’ La Bella’s contention that the

Task Force had not been allowed to do a ‘‘broad survey of the entire campaign finance landscape.’’ 343

As evidence that La Bella was wrong, Radek pointed to the two

examples that La Bella used in his memorandum. Radek first

brought up the Common Cause allegations, and stated that they

were ‘‘thoroughly considered, analyzed at length, and closed on

their merits.’’ 344 He also stated that the Task Force was told that

they were free to investigate any of the facts underlying the investigation.345 Similarly, Radek asserted that the core group investigation was fully pursued by the FBI and dropped because it was

not fruitful.346

In response to Radek’s assertions regarding the stovepipe analysis, La Bella clarified that he had intended ‘‘to reference the natural tendency of investigators and prosecutors to segment individual allegations and charges.’’ 347 La Bella indicated that he was

not criticizing the investigators, rather, he had hoped that his

memorandum would cause the Attorney General and her advisors

to see the matter from the landscape view. He believed that the

47

348 Id. La Bella acknowledged that the core group investigation was closed before he arrived

at the Task Force, and he had therefore relied upon the representations of others who were

present. 349 Id. at 2. 350 Id. 351 Id. 352 28 U.S.C. § 591(d)(1). 353 Exhibit 6 at 5. 354 Exhibit 5 at 8. 355 Exhibit 6 at 5. 356 Id. 357 Id. 358 Exhibit 5 at 9. See section C.2.b.iii. for La Bella’s analysis of the legislative history. 359 Id.

Common Cause allegations and core group analysis would have

forced the Department of Justice to look at the investigation from

the landscape view sooner.348

La Bella took issue with Radek’s contention that the Common

Cause allegations had been ‘‘closed on the merits.’’ 349 On the contrary, he believed that the matter had been tabled, pending a decision by the Attorney General. La Bella stated that the Task Force

had continually raised the Common Cause issue in order to come

to some type of conclusion. Each time the issue was brought up,

the Task Force was told that the matter remained under consideration.350 La Bella pointed to an August 4, 1998, memorandum from

Criminal Appeals regarding Common Cause in support of his contention that the matter was very much open.351

ii. Independent Counsel Act Interpretation

Radek next turned to the Department’s application and interpretation of the Independent Counsel Act. He took issue with the ‘‘evidence’’ versus ‘‘information’’ distinction pointed out by La Bella.

The Act itself refers to the specificity of the information and the

credibility of the source.352 However, the PIS and Attorney General

consistently referred to the ‘‘specific and credible evidence’’ needed

to initiate a preliminary investigation. Radek insisted that he used

the words evidence and information interchangeably, and did not

mean for a higher threshold to apply.353 In response, La Bella argued that the wording of the Act itself was crucial as it could make

a difference in whether the Act was triggered.354

As described above, in his memorandum, La Bella criticized the

Department for having two standards for investigation, a higher

one for covered persons and a lower threshold for all others. Radek

argued that the Act itself imposed this higher standard.355 He discussed how Congress, in contrast to La Bella’s argument, was worried that the threshold for investigation might be too low, and

therefore used the specific and credible language to normalize the

threshold.356 Radek concluded that ‘‘[t]he Report’s conclusion that

this minimal standard should be set aside in this case has no support in the Act, and indeed appears to us to be the very sort of

strained, result-oriented analysis of which it accuses those who disagree with the authors.’’ 357 According to La Bella, the 1987 and

1994 amendments to the Independent Counsel Act rebutted

Radek’s arguments which were based on the 1982 amendments.358

He argued that after the 1982 amendments, it became clear that

the Justice Department was applying a higher threshold for the

Act rather than applying it too loosely.359 Therefore, Congress

48

360 Exhibit 6 at 9. 361 Id. at 10. Radek quibbled with the manner in which La Bella made his argument, stating

that La Bella presumed to make the decision for the Attorney General, whereas, the decision

is discretionary. Id. La Bella’s response was that:

While we gather that it is Public Integrity’s policy not to give advice as to invocation

of the discretionary clause, [] we believe that as supervisors of the Task Force, it is our

responsibility to address this important issue. To do otherwise is to ignore the facts and

fail to provide a framework in which they should be considered. After hearing the various viewpoints, the decision, of course, is entirely the Attorney General’s to make.’’ Exhibit 5 at 9.

362 Exhibit 6 at 11. 363 Id. 364 Exhibit 5 at 13. Section 317 deals with a conspiracy to defraud the United States, and was

discussed at great length in the La Bella memorandum. 18 U.S.C. § 371. Section 1341 relates

to frauds and swindles involving the mails. 18 U.S.C. § 1341. 365 Exhibit 5 at 16.

changed the language to allow the Justice Department to take into

account its own established policies in making decisions under the

Act.

iii. Harold Ickes

Radek disagreed with La Bella’s analysis of Ickes under the

Independent Counsel Act. Radek insisted that the law did not permit the Attorney General to consider whether an individual was a

‘‘de facto’’ officer of a campaign committee, as La Bella argued that

Harold Ickes was.360 However, he did acknowledge that the argument that the Attorney General should consider Ickes under the

discretionary provision was persuasive.361 La Bella defended the

‘‘de facto’’ analysis, comparing it to liability in corporate law.362 For

instance, Ickes would have been considered an ‘‘agent’’ of Clinton/

Gore ’96 based on that committee’s own admissions. Therefore,

Clinton/Gore ’96 could have been held liable for Ickes’ actions, making him a de facto officer in La Bella’s view.

The issue relating to Charlie Trie’s PLET contributions encompassed Harold Ickes and the First Lady, as well as several other

individuals in La Bella’s memorandum. Radek stated that he could

find no basis upon which to hold Ickes and the First Lady, criminally liable for failing to warn the DNC and Clinton/Gore about

Trie’s questionable fundraising.363 La Bella responded that in

Ickes’ case, there was support in basic agency law and statutes 18

U.S.C. sections 371 and 1341, among others.364 As for the First

Lady, La Bella stated that, ‘‘[h]er potential criminal involvement

tracks the conduct set forth relating to the PLET incident.’’ 365

Therefore, he concluded that her conduct warranted further inquiry. La Bella made a novel legal argument that the Justice Department would have to determine whether it could support. It

should be noted that the Task Force prosecuted several DNC fundraisers under a similarly novel legal argument regarding causing

false statements to be made to the DNC. Those arguments were

upheld on appeal.

iv. President Clinton

Radek also disagreed with the issues raised in the La Bella

memorandum regarding the President. First, he stated that there

was no evidence of a quid pro quo in which the President appointed

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366 Exhibit 6 at 12. 367 Id. at 13. 368 Id. at 12. 369 Id. at 12. 370 Exhibit 5 at 15. 371 Id. 372 Id. 373See in re Albert Gore, Jr., notification to the court pursuant to 28 U.S.C. § 592(b) of results

of preliminary investigation (Special Div. DC Cir. 1998). 374 Id. 375 Exhibit 6 at 16.

tributions to the PLET.366 Second, he states that there is no evidence that the President knew any contributions to the campaign

were foreign.367 However, he does not take into account the fact

that it was nearly impossible for the Task Force to develop any evidence on covered individuals under the standards set by the Department of Justice.

Although La Bella raised numerous questions about the President’s actions, Radek asserted that ‘‘there is absolutely no specific

and credible information suggesting that the president committed

a crime with respect to any of these matters; the Report identifies

none, but rather lists a series of provocative and speculative hypothetical questions it asserts should be answered.’’ 368 Radek added

that La Bella had fallen back on his argument that there should

be one standard for initiating an investigation, which was not possible to do while still adhering to the standard of the Independent

Counsel Act.369 Radek seems to prove La Bella’s point through his

argument. There are two standards for investigating, as Radek acknowledges, and the Task Force was prohibited from investigating

the President or any other covered person unless they uncovered

a specific piece of evidence that implicated a covered person in a

violation of criminal law.

v. The Vice President

Radek also rebuffed the arguments regarding the investigation of

Vice President Gore. However, by the time La Bella wrote his

reply, the Task Force had received a memorandum of a White

House ‘‘money meeting’’ with David Strauss’ handwritten notes referencing what was discussed at the meeting and the comments of

the Vice President.370 The notes showed that hard and soft money

splits required to pay for the media fund were discussed, although

the Vice President previously stated that he had no knowledge that

hard money would be used for the media fund.371 Therefore, as

noted by La Bella, the discovery of the Strauss memo yet again

raised the question of the Vice President’s knowledge.372 In fact,

after the Strauss memo came to light, the Attorney General did initiate a preliminary investigation.373 However, she ultimately declined to appoint an independent counsel.374

vi. The DNC and Its Officials

The La Bella memorandum also reintroduced the argument that

the Attorney General had a political conflict of interest in investigating the DNC. The individuals involved were fundraiser John

Huang, Finance Chairman Marvin Rosen, and Deputy Finance Director David Mercer, among others.375 Radek summarily dismissed

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376 Id. 377 Id. 378 Exhibit 5 at 16. 379 Id. 380Memorandum from (name redacted), Assistant U.S. Attorney, to Chuck La Bella, Supervising Attorney, Campaign Financing Task Force (Dec. 23, 1997). (Exhibit 7). It has been made

public that the author of the memorandum was Steve Clark, AUSA. 381 Exhibit 6 at 16.

eral long ago.376 As long as no new information or developments

had arisen relating to a covered person, Radek rejected the idea of

an independent counsel.377 However, La Bella again pointed out

that the DNC had been under the control of the White House and

was used almost exclusively to re-elect the President.378 Therefore,

he concluded that the matter, and the individuals being investigated, posed a political conflict of interest.379

vii. The Common Cause Allegations

The Common Cause allegations were central to both Freeh and

La Bella’s theories of the overall campaign finance investigation,

yet the Department of Justice refused to investigate them. When

La Bella was brought in to supervise the Task Force, he assigned

one attorney, Steve Clark, to work solely on Common Cause. In

late December 1997, Clark left the Task Force out of frustration

over the Department’s handling of Common Cause. Prior to his departure, Clark wrote in a December 23, 1997, memorandum:

That, to date, we have been unable to investigate the Common Cause allegations in a straightforward way has been

a great personal and professional disappointment. But, I

believe the public has been most dis-served [sic] by the

way in which the ‘‘whether to investigate’’ issue has been

approached, debated, and resolved. Never did I dream that

the Task Force’s effort to air this issue would be met with

so much behind the scenes maneuvering, personal animosity, distortions of fact, and contortions of law. (It also is my

impression that many involved have not read the pertinent

cases.) All this, not to forestall an ill-conceived indictment,

not to foreclose a report making an independent counsel

referral, but to prevent any investigation of a matter involving a potential loss of over $180 million to the Federal

treasury.380

It was not at all clear that Clark was referring to Radek in the passage, in fact, more than one individual would appear to be implicated. However, Radek’s opinions match those that were disputed

by Clark. Furthermore, Radek stooped to pure fabrication when he

claimed that the Attorney General had decided that it did not warrant the appointment of an independent counsel. He was surely

aware that there was never any closing memo on the Common

Cause allegations that was approved by either the Attorney General or Director Freeh.381

After insisting that the matter had been closed, Radek went on

to address the merits of the allegations. He claimed that the FEC

had primary responsibility for investigating and interpreting the

election laws and, under longstanding agreements between the

FEC and Department of Justice, it would be inappropriate for JusVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00068 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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382 Exhibit 7. 383 Exhibit 5 at 5. 384 Exhibit 6 at 19. 385 Exhibit 7. 386 Exhibit 5 at 5. 387 Id. 388 Id. at 6. 389 Id. at 7.

tice to investigate. Long before Radek wrote his memo, Clark rebutted the arguments Radek put forward. In his December 1997

memorandum, Clark stated:

While I recognize that there have been legitimate disagreements, some positions urged in support of avoiding any investigation have been so plainly wrong as to be disheartening (e.g., the suggested referral to the FEC, on the

misapplication of the MOU with that agency, with the

claim that the FEC could refer the case back after it

checked out the ad content, but with the unspoken reality

that no criminal investigation would ever happen—certainly not within the three year statute of limitations; or

the contention that an independent counsel referral must

be made immediately if any investigation is even authorized).382

La Bella agreed with Clark, stating that ‘‘the MOU does not mandate that initial responsibility be placed with the FEC. It is clear

that the Department can investigate independently.’’ 383

Radek rejected the theory that the Common Cause allegations

could establish a section 371 conspiracy to defraud the United

States. He stated, ‘‘[t]o the contrary, the Attorney General has addressed the ultimate issue here squarely. She has decided that no

amount of coordination between the candidates and the party can,

by itself, constitute a violation. Only the content of the ads can establish a civil violation of the FECA.’’ 384 In his memorandum,

Clark had a better perspective on the allegations generally. He

pointed out that the Department could not possibly know, without

investigating further, whether or not they could initiate criminal

prosecutions.385

In response, La Bella directly addressed the criminal conspiracy

argument, citing to the recent findings of a FEC audit report stating that the payments made by the DNC for the media campaign

were in-kind contributions to either the primary or general campaign.386 The FEC audit also found that the ads contained an electioneering message.387 La Bella asserted that the audit report

added ‘‘considerable, credible, and new information supporting the

Common Cause allegations.’’ 388 The finding specifically supported

the allegations that the President directed and controlled ads that

were paid for by the DNC pursuant to the President’s request and

that were intended to effect the President’s election.389 In addition,

because the auditors found ‘‘electioneering content,’’ meaning there

was some type of violation of the campaign laws, the theory of a

section 371 conspiracy was bolstered. Clinton/Gore’s exclusion of

the funds used to pay for the media campaign from its spending

52

390 Id. 391Memorandum from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, and David A. Vicinanzo, Supervising Attorney, Campaign Financing Task Force, to James

K. Robinson, Assistant Attorney General, U.S. Department of Justice, at 2 (Nov. 20, 1998). 392Memorandum from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, and David A. Vicinanzo, Supervising Attorney, Campaign Financing Task Force, to James

K. Robinson, Assistant Attorney General, U.S. Department of Justice, at 2 (Nov. 20, 1998). 393 28 U.S.C. § 592(a)(2)(B)(ii). 394 ‘‘Independent Counsel Provisions: An Overview of the Operation of the Law,’’ CRS Rept.

No. 98–283, at FN 22 (Mar. 20, 1998) (citing H. Rept. No. 103–511, at 11 (1994)). 395Memorandum from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, and David A. Vicinanzo, Supervising Attorney, Campaign Financing Task Force, to James

K. Robinson, Assistant Attorney General, U.S. Department of Justice, at 4 (Nov. 20, 1998).

figures was therefore a potential criminal violation of the Federal

campaign financing laws, according to La Bella.390

After the Task Force received the FEC Audit memorandum referred to by La Bella, the Attorney General could no longer ignore

the matter, and was forced to open a preliminary investigation on

the Common Cause allegations. Three months after his stinging

memorandum ridiculing the Common Cause allegations, Radek,

along with the new Task Force Supervising Attorney David

Vicinanzo, finally acknowledged that those allegations were credible. Radek stated:

To the extent that these advertising expenditures did constitute contributions to and expenditures by the campaign

committees, they were unlawful, in that they would have

violated among other things, (1) the FECA’s limits on contributions to candidates by multicandidate political parties

like the DNC, and (2) the PPMPAA’s and PECFA’s expenditure limits on publicly financed elections. Any such

violations made knowingly and willfully would potentially

be criminal.391

Radek stated that he would take the FEC’s findings at face value

for the purposes of the preliminary investigation. He determined

that the main focus of the preliminary investigation was whether

the President and Vice President had the requisite intent, knowing

and willful, to be criminally liable.392 It is important to remember

at this point that, as a check on the Attorney General’s discretion

under the Independent Counsel Act, she was not permitted to

make a determination that ‘‘no further investigation was warranted’’ based on a finding that Clinton or Gore lacked the state

of mind required for the violation, unless there was ‘‘clear and convincing evidence.’’ 393 When drafting the Act, Congress believed

that the Attorney General would rarely base a determination on

state of mind, noting that ‘‘due to the subjective judgments required and the limited role accorded the Attorney General in the

independent counsel process.’’ 394 Nevertheless, Radek, accepting

all of the other arguments that a criminal act transpired, focused

in on intent as a way to avoid invoking the Independent Counsel

Act. In fact, Radek concluded that the President and Vice President

met this extremely high standard set by Congress, stating, ‘‘in our

view these facts establish that the President and Vice President

lacked the requisite specific intent to violate the law.’’ 395

Radek determined that the President and Vice President did not

have the specific intent based upon their reliance on the advice of

53

396Memorandum from Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, and David A. Vicinanzo, Supervising Attorney, Campaign Financing Task Force, to James

K. Robinson, Assistant Attorney General, U.S. Department of Justice, at 37 (Nov. 20, 1998). 397 Id. 398 Id. at 40. 399Memorandum from Larry Parkinson, general counsel, Federal Bureau of Investigation, to

Louis J. Freeh, Director, Federal Bureau of Investigation, at 3 (Dec. 4, 1998) (exhibit 8). 400 Id. 401 Id. 402 Id. at 5. 403 Id. 404 Id. (quoting memorandum written by Joe Sandler, general counsel, DNC). 405 Id. 406 Id.

counsel.396 That is, they relied upon the advice of the DNC and

Clinton/Gore attorneys who advised them. The attorneys, Joe Sandler and Lyn Utrecht, reviewed all of the ads before they were released and provided their opinion that the ads did not contain an

electioneering message.397 Radek concludes that there was no evidence showing that the President and Vice President had independent knowledge of the electioneering standard or whether they

might be violating it.398 However, he had to determine whether no

further investigation was warranted. In this case, it is not at all

clear that there was clear and convincing evidence of a lack of intent sufficient enough to overcome the need for further investigation, certainly without having conducted a grand jury investigation.

The FBI found that the ‘‘advice of counsel’’ defense relied upon

by Radek and Vicinanzo was ‘‘not strong enough to satisfy the

‘clear and convincing’ standard under the Independent Counsel

Act.’’ 399 FBI General Counsel Larry Parkinson indicated in a

memorandum to Director Freeh that there were several reasons

why the standard had not been met. First, while relying on the advice of counsel defense, the President and Vice President had no direct contact with the attorneys providing the advice.400 Parkinson

points out that all of the advice was filtered through intermediaries

and raised serious questions as to whether the actual legal advice

was provided to the President and Vice President.401 In addition,

the attorneys in question, Sandler and Utrecht, were not disinterested parties, both had a vested interest in ensuring the re-election of Clinton and Gore. As Parkinson stated, had they wanted a

truly disinterested opinion they could have gone to the FEC for advice.402

Perhaps most important to whether further investigation was

warranted was that Sandler, one of the attorneys upon whom Clinton and Gore were relying, wrote a memorandum indicating he had

doubts about whether the media campaign was violating election

law.403 The memo stated, ‘‘Under [the FEC’s legal] test, the DNC

is bumping up right against (and maybe a little bit over) the line

in running our media campaign about the federal budget debate,

praising the President’s plan and criticizing Dole by name.’’ 404 The

Sandler memo was somehow rewritten to soften the language by

the time it was sent to the White House.405 Sandler was interviewed about the memoranda, and Parkinson stated that, ‘‘Sandler

gave a contorted explanation which led our agents to believe he

was lying.’’ 406 In addition, the FBI believed that the White House

54

407 Id. at 6. 408Memorandum from Larry Parkinson, general counsel, Federal Bureau of Investigation, to

James K. Robinson, Assistant Attorney General, U.S. Department of Justice, at 7 (Nov. 20,

1998). 409 Id. (citing to 1987 U.S.C.C.A.N. at 2159–60). 410 Id. at 8. 411 Exhibit 8 at 8.

had not produced all documents relevant to the preliminary investigation.407

Parkinson also took issue generally with Radek’s application of

the clear and convincing standard in the Vice President’s case. He

pointed out that Congress intended to set a very high threshold for

the Attorney General to close a case based on lack of intent to commit the crime.408 He cited to the legislative history of the Act,

wherein Congress stated that, ‘‘[t]he Justice Department’s demand

for proof of intent to justify continuing independent counsel cases

is disturbing, because criminal intent is extremely difficult to assess, especially in the early stages of an investigation. Further, it

often requires subjective judgments, which should ideally be left to

an independent decisionmaker.’’ 409 Parkinson framed the question

as whether the Attorney General could reasonably conclude that

the Vice President’s case was one of those ‘‘rare cases’’ in which she

could reach the threshold of the clear and convincing standard.

Parkinson clearly concluded that it would not be reasonable for the

Attorney General to make that determination.410

The Parkinson memorandum should have been sufficient to convince the Attorney General that further investigation into the Common Cause allegations was warranted. Parkinson raised numerous

issues that were not addressed by the preliminary investigation. In

fact, Parkinson stated that the preliminary investigation, ‘‘consisted primarily (but not exclusively) of an examination of an advice of counsel defense.’’ 411 That is hardly a ringing endorsement

of the Public Integrity Section’s preliminary investigation. Nevertheless, Attorney General Reno embraced the advice of counsel defense, disregarded the glaring problems with the investigation, and

declined to appoint an independent counsel.

F. DEPARTMENT OF JUSTICE’S BAD FAITH IN ITS APPLICATION OF THE

INDEPENDENT COUNSEL ACT

1. The Chief of the Public Integrity Section Was Predisposed

Against the Act

The memoranda written by Freeh and La Bella made it clear

that they believed that an independent counsel should have been

appointed to investigate the campaign finance matter. However,

the Justice Department’s legal interpretation and application of the

Act all but ensured that an independent counsel would not be appointed. Even the head of the Criminal Division, James Robinson,

agreed that the Department had been applying too high of a

threshold to trigger the appointment of an independent counsel in

the case of the Common Cause allegations. He stated:

It occurs to me that Public Integrity, in insisting upon a

‘‘may have violated the law’’ standard which includes a

consideration of the ‘‘state of the law’’ at the time of the

conduct in question, and which also addresses the issue of

55

412Memorandum from James K. Robinson, Assistant Attorney General, U.S. Department of

Justice, to Janet Reno, Attorney General, U.S. Department of Justice, at 4 (Aug. 25, 1998). Robinson disagreed with Lee Radek’s analysis of the Common Cause allegations in Radek’s response

to the La Bella memo, and recommended that the Attorney General initiate a preliminary investigation. Id. at 11. 413 Jeffrey Goldberg, ‘‘What Is Janet Reno Thinking?,’’ NY Times Magazine, July 6, 1997, at

30.414 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before the House Committee on Government Reform, 106th Cong. 38 (2000) (testimony of William

J. Esposito) (preliminary transcript).

‘‘willfulness,’’ is applying a higher trigger standard than

the one called for by the ICA.412

However, it should have come as no surprise to anyone that Public

Integrity would avoid the application of the independent counsel

statute. The Chief of the Public Integrity Section made his views

of the Act very clear when he told the New York Times,

‘‘[i]nstitutionally, the Independent Counsel statute is an insult. It’s

a clear enunciation by the legislative branch that we cannot be

trusted on certain species of cases.’’ 413 Obviously, Radek, who was

in charge of the application of the statute, had a bias against the

Act. He also had an additional impetus for rejecting the Act early

in the investigation, to protect Reno’s position at the Department.

He told the Deputy Director of the FBI that he was under pressure

because of the campaign finance investigation and that the Attorney General’s job might depend on the decisions he made in the investigation.414

Radek’s subsequent recommendations regarding the initiation of

preliminary investigations or appointments of an independent

counsel demonstrate that he interpreted the Act as narrowly as

possible, or even misinterpreted the Act, in order to avoid its invocation. In their memoranda, Director Freeh and Supervising Attorney La Bella exhaustively analyzed the Public Integrity Section’s

thresholds and standards of investigation. They both came to the

conclusion that PIS was applying a higher standard of investigation for individuals covered by the Independent Counsel Act.

2. The Chief of the Public Integrity Section Misrepresented Facts

There have been numerous other examples of problems with

Radek’s interpretation of the Independent Counsel Act, some already cited. One of the most egregious examples, according to both

the Freeh and La Bella memoranda, was Radek’s refusal to consider a preliminary investigation of the Common Cause allegations

until forced to do so by the FEC audit report. However, Radek was

also criticized for misleading statements he made regarding the

various investigations and the contortions he sometimes went

through to avoid invoking the Act. In one instance, the Acting Assistant Attorney General for the Office of Legal Counsel Dawn

Johnsen rebuked Radek for misrepresenting the opinions of her office in a memorandum to the head of the Criminal Division. She

stated:

[T]o the extent that the [Radek] memorandum attempts to

report remarks made by OLC lawyers at the meeting, it

does so incorrectly and incompletely. Thus, not only did

the memorandum leave the mistaken impression that

‘‘OLC positions’’ were expressed, it also mischaracterized

56

415Memorandum from Dawn Johnsen, Acting Assistant Attorney General, U.S. Department

of Justice, to Lee J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, at 1

(Oct. 2, 1997). 416Memorandum from Lee J. Radek, Chief, Public Integrity Section, to James K. Robinson,

Assistant Attorney General, U.S. Department of Justice (Aug. 24, 1998) (transmitted to the Attorney General by Robinson). 417Memorandum from (name redacted), Assistant U.S. Attorney, U.S. Department of Justice,

to James K. Robinson, Assistant Attorney General, U.S. Department of Justice (Aug. 25, 1998).

(Exhibit 9). The name of the Attorney, Judy Feigin, has been made public since the Justice Department’s production of the memorandum. 418 Id. at 2. 419 Id.

the comments that individual lawyers offered in [sic] during the meeting.415

In another example, Radek wrote an August 24, 1998, memorandum recommending that the Attorney General not pursue a

preliminary inquiry into whether the Vice President may have provided false statements regarding his fundraising telephone calls

from the White House.416 A line attorney, Judy Feigin, took issue

with many of the factual assertions made by Radek in his recommendation, and wrote a memorandum clarifying the facts.417

She stated that FBI agents’ notes and recollections of witness interviews were significantly different from what Radek had written in

his memorandum.418 In particular, Radek characterized White

House Chief of Staff Leon Panetta as having an ‘‘evolving memory,’’

implying that he was not a credible witness.419 Feigin stated that

the agents viewed Panetta as a very credible witness. Feigin cited

numerous examples of Radek’s factual inaccuracies and blatant

misrepresentations, including:

• The memo (p. 11) says Panetta’s ‘‘impression’’ was that

the Vice President was following the hard money discussion. The agents’ notes reflect that Panetta said the

Vice President was listening attentively.

• Page 10, fn. 11 suggests that the media fund was not

an item in the DNC budget during the Spring and

Summer of 1995. However Watson recalled the agenda

of the June 8, 1995 meeting included the media fund.

• Page 11, fn. 12 says that Panetta may have contradicted himself. The agents’ notes do not support this.

Panetta recalled the general topic discussed though not

the specific details.

• Page 12: The memo suggests that Rosen recalled the

focus of the fundraising proposals presented to the

President and Vice President during the November

meeting was on raising soft money. The agents’ notes

indicate that Rosen had no recall whether the events

were intended to raise soft or hard money.

• Page 14, n. 15: The footnote concludes that Panetta,

among others, did not understand the statement made

by Pastrick at the top of the footnote. In fact, Panetta

understood clearly the first part of the statement, i.e.,

that every DNC expenditure during a federal campaign

is required to have a hard money component. The only

thing Panetta did not know was the $20,000 limit.

57

420 Id.

• Page 15, n. 16: The memo quotes Ickes’ statement that

Strauss was very sophisticated in matters of soft

money/hard money, and therefore may have written

notes of greater detail than actually discussed. However, the memo does not mention Strauss’ own statement (reflected in agents’ notes) that he was not familiar with these issues as they pertained to the White

House and the DNC. Strauss was adamant that those

notations reflected comments made at the meeting.

• Page 16: The memo says that Gore stated he and the

President did not often attend DNC budget meetings

like that held on Nov. 21. In fact, the agents report that

most witnesses indicated that the President and Vice

President generally did attend the DNC budget meetings.

• The memorandum at least twice refers to the fact that

the Vice President might well have left the meeting at

the point in which the hard money media fund discussion took place. Not only is there no evidence that this

occurred (i.e., no witness recalls his leaving) but the

agents’ notes reflect that Ickes told them that when he

conducted meetings (and he was conducting the meeting on November 21), he would halt the proceedings if

the President or Vice President stepped out of the room;

the meeting would resume when they returned. Therefore, rather than presume the Vice President was not

present, the presumption must be that he was.420

The information mischaracterized or left out by Radek was absolutely crucial to determining whether to initiate a preliminary investigation of Vice President Gore. At issue was whether the Vice

President believed the media fund was financed exclusively with

soft money, as Gore originally stated during the first investigation

of his fundraising phone calls. What was discussed and recalled by

other individuals present at the meeting would be a strong indication of the Vice President’s knowledge. In Feigin’s memorandum,

she points out that there was specific evidence from a credible

source suggesting that the Vice President did know that the DNC

media fund had a hard money component, and that the only evidence to the contrary were self-serving statements by the Vice

President and his counsel. Radek’s flawed memorandum, on the

other hand, intentionally or unintentionally had the effect of tipping the scales in Gore’s favor and avoiding the initiation of a preliminary investigation under the Independent Counsel Act.

A further example of Radek’s tendency to discriminate against

the Act occurred during the initial November 1997, investigation of

the allegations that Gore made solicitations for campaign contributions from his White House office. La Bella raised a troubling issue

regarding Radek’s recommendation against the appointment of an

independent counsel, stating, ‘‘[m]y overall concern is that at every

point where two inferences could be drawn from a set of facts, the

58

421Memorandum from Charles G. La Bella, Supervising Attorney, Campaign Financing Task

Force, to Janet Reno, Attorney General, U.S. Department of Justice, at 2 (Nov. 30, 1997). 422 Id.at 7. 423On one occasion, Radek recommended that the Attorney General initiate a preliminary investigation. In a Sept. 29, 1997, memorandum, Radek concluded that, with regard to the allegations that Vice President Gore may have solicited campaign contributions from his White House

office in violation of 18 U.S.C. section 607, there was information sufficiently specific and credible to warrant further investigation. Radek had to come to this conclusion given the Vice President admitted he made the fundraising telephone calls from his office. Memorandum from Lee

J. Radek, Chief, Public Integrity Section, U.S. Department of Justice, to Mark M. Richard, Acting Assistant Attorney General, U.S. Department of Justice (Sept. 29, 1997). After the preliminary investigation, Radek concluded that there was insufficient evidence that the Vice President

may have violated section 607 to warrant further investigation. Therefore, he recommended

against the appointment of an independent counsel. Memorandum from Lee J. Radek, Chief,

Public Integrity Section, U.S. Department of Justice, to Mark M. Richard, Acting Assitant Attorney General, U.S. Department of Justice, at 41 (Nov. 21, 1997). 424 At the time, the Independent Counsel Act had expired, and had not yet been reauthorized.

inference consistent with a lack of criminal intent/conduct was always chosen.’’ 421 He added:

By routinely embracing the most innocent inference at

every turn, even if the inferences are factually defensible,

the memorandum creates an appearance that the Department is straining to avoid the appointment of an Independent Counsel and foreclose what many would characterize as an impartial review of the allegations. When you

look at the facts, the memos, the meetings, and the DNC

practice, it is hard to say, as the memorandum does, that

there is only one conclusion to be reached.422

Perhaps if Radek had weighed the facts in favor of declining to initiate a preliminary investigation or appoint an independent counsel

only on this one occasion, he would be more credible. However, it

appears to have been his pattern and practice in nearly every Task

Force investigation.423 This leads the committee to believe that

Radek was intentionally avoiding the application of the Independent Counsel Act.

3. The Attorney General Avoided the Invocation of the Independent

Counsel Act

In the end, the decisions on independent counsels were left to the

Attorney General alone. She consistently failed to apply the Act in

the campaign finance investigation, and the blame falls squarely on

her. Although Public Integrity Chief Lee Radek developed many of

the theories upon which Reno relied, it was the Attorney General

who chose not to apply the Act responsibly.

In defense of herself, Attorney General Reno often invoked the

numerous previous independent counsels she had appointed as

proof that she was doing the right thing. However, none of the

other independent counsels were a direct referral based on the

President or First Lady except for Whitewater. In the Whitewater

case, the Attorney General adamantly refused to appoint a special

prosecutor 424 until the President ordered her to do so.

Task force attorneys and FBI officials wrote numerous memoranda to the Attorney General regarding her interpretation of the

statute or practical application of it. They often explained why the

standard she was applying was too high, or the analysis was

flawed. By intentionally ignoring the advice given to her by people

like Director Freeh and Supervising Attorney La Bella, who were

59

425The Attorney General’s refusal to produce the Conrad memorandum to the committee is

discussed in detail later in this report. 426 News conference with Attorney General Reno, Washington, DC. (Aug. 23, 2000). 427 Interview of Vice President Gore 68–69 (Apr. 18, 2000).

familiar with both the facts and the law, Attorney General Reno

crippled the campaign fundraising investigation. It appeared from

her actions throughout the investigation, that that was her intent

all along.

G. THE FAILURE TO APPOINT A SPECIAL COUNSEL FOR VICE PRESIDENT

GORE

The committee learned in December 1999 that the President and

Vice President had never been interviewed about the vast majority

of their activities relating to the 1996 campaign fundraising scandal. Shortly thereafter, in April 2000, the head of the Campaign Financing Task Force, Robert Conrad, requested interviews with

President Clinton and Vice President Gore. In these interviews,

Conrad covered many of the subjects that had been neglected by

the Justice Department for the preceding 3 years.

After his interview with Vice President Gore, Conrad made a recommendation to the Attorney General that a special counsel be appointed to investigate the Vice President for possible false statements made during the course of the April 18, 2000, interview. The

details of Conrad’s recommendation are not available to the committee, given the Justice Department’s refusal to produce the

Conrad memo to the committee.425 However, the facts that have

been made public make it clear that Conrad’s recommendation was

based in part on his opinion that the Vice President may have

made false statements about the Hsi Lai Temple fundraiser and

the White House coffees.426

The central dispute in the Vice President’s interview about the

Hsi Lai Temple event was whether or not the Vice President knew

that the event was a fundraiser. During his testimony, the Vice

President stated that:

There was no solicitation of money. I did not see any

money or checks change hands. I never heard it discussed.

Nor do I believe it took place, incidentally. Perhaps you

know that some money changed hands there. But to this

day, I don’t think any did.

* * * * *

And subsequent disclosures in the press and subsequent

production of memoranda that I never saw at the time

showed that—showed what they showed. And the very

fact, for me, the very fact that the members of a financerelated event were present at the event was the only connection that I had to the possibility that it was finance-related.

But I did not know that it was a fundraiser. And I do not

to this day know that it was a fundraiser.427

After the Vice President made this statement, Conrad presented

him with a number of pieces of evidence suggesting that the Hsi

Lai Temple event was considered to be a fundraiser by the Vice

60

428 Id. at 52–53. 429 News conference with Attorney General Reno, Washington, DC. (Aug. 23, 2000).

President’s staff and the DNC staff. Nevertheless, the Vice President continued to assert that the event was not a fundraiser.

Conrad also asked the Vice President his understanding of the

nature of White House coffees. Again, the Vice President insisted

that the coffees were not intended to raise funds:

Mr. CONRAD. What was the purpose of the coffees?

Vice President GORE. Well, they were for the President to

meet with people who were interested in supporting his

policies and his politics. But that was more or less on his

side of the house and I’m not the best source of information about that.

Mr. CONRAD. In terms of a fund-raising tool, what was the

purpose of the coffees?

Vice President GORE. I don’t know. They were on his side

of the house. And I will give you my understanding of

what I thought they were. I thought they were events that

allowed the President to spend time with influential people

who wanted to talk about policy, who would at some later

time possibly be asked to financially support the DNC. It

was certainly not my understanding that they were fundraising events.

Mr. CONRAD. Did you have any understanding, or do you

have any understanding that there was a price tag associated with the coffees?

Vice President GORE. No, I do not and did not.428

Conrad then presented to the Vice President the evidence that the

coffees were used to raise funds for the DNC, but the Vice President did not change his belief that the coffees were not fundraisers.

On August 23, 2000, after a lengthy period of deliberation, the

Attorney General decided not to appoint a special counsel to investigate false statements made by the Vice President. The Attorney

General explained her reasoning at a press conference:

Because further investigation is not likely to result in a

prosecutable case under applicable criminal law and principles of federal prosecution, I have concluded that a special counsel is not warranted.

The transcript reflects neither false statements nor perjury, each of which requires proof of a willfully false statement about a material matter. Rather, the transcript reflects disagreements about labels. I have concluded that

there is no reasonable possibility that further investigation

could develop evidence that would support the filing of

charges for making a willful false statement.

The Task Force will, of course, continue its ongoing investigation into illegal fundraising activity and will be free to

pursue all avenues of investigation, wherever they may

lead.429

61

430 Neil A. Lewis and Don Van Natta, Jr., ‘‘Reno, Rejecting Aide’s Recommendation, Declines

to Name Counsel on Gore Fund-Raising,’’ the New York Times at A19 (Aug. 23, 2000). 431 News conference with Attorney General Reno, Washington, DC. (Aug. 23, 2000). 432 Id. 433 Interview of Attorney General Janet Reno 34 (Oct. 5, 2000) (preliminary transcript). 434 E-mail message from Karen Skelton to Ellen Ochs (Apr. 23, 1996) (exhibit 10).

In her statement, the Attorney General said more than that she

simply would not appoint a special counsel. She stated that there

was no reasonable possibility of developing evidence which could

lead to charges that the Vice President made a false statement during his interview. This definitive statement effectively closed the

door to any further investigation of issues arising out of the Vice

President’s interview.

During the period leading up to the Attorney General’s announcement, a Justice Department source had leaked information

making it appear that Conrad was alone in recommending a special

counsel to the Attorney General, being quoted in the New York

Times as saying that ‘‘no other prosecutor in this matter thought

that there should be a need for a special counsel.’’ 430 At her press

conference, Attorney General Reno made it clear that the Justice

Department leak was false: ‘‘today Bob Conrad has been tagged

with being the only person in the Justice Department who thought

I should appoint a special counsel. Although I’m not going to get

into who recommended what, I can tell you that that is not correct.’’ 431 Later, Reno confirmed that at least two other advisors of

hers supported the appointment of a special counsel for Vice President Gore.432 A false leak from a Justice Department official about

the level of support for Conrad’s special counsel decision should

have given the Attorney General pause. It appears that certain

Justice Department officials are willing to both leak information

about ongoing cases, and to lie about those cases, in order to create

a public perception that is favorable to the Vice President. If these

types of individuals are advising the Attorney General, how can

she possibly receive unbiased advice?

Unsurprisingly, the Attorney General’s broad decision not to appoint a special counsel was not supported by the law, or the facts

of the Task Force investigation. In those respects, it closely resembled the Attorney General’s earlier decisions not to appoint independent counsels. The Attorney General’s decision had a number of

serious flaws.

The Attorney General did not have all of the relevant evidence

before her. In late August, when the Attorney General made her

decision, the Justice Department and FBI were in the process of reconstructing the first batch of ‘‘missing’’ e-mail which had not been

produced to investigators by the White House. When she made her

decision on August 23, 2000, the Attorney General had reviewed

‘‘some of the e-mails, not all of them.’’ 433 The e-mail reconstructed

by the FBI had direct relevance to the decisionmaking process that

the Attorney General was undertaking. One e-mail, from Gore’s Political Director, stated ‘‘[t]hese are FR coffees right?’’ 434 Given the

fact that the e-mail reconstruction process was turning up evidence

relevant to the special counsel decision, it is peculiar that the Attorney General would reach her decision before having all of the

evidence. In addition, the author of the e-mail was Vice President

62

435 Interview of Attorney General Janet Reno 39 (Oct. 5, 2000) (preliminary transcript). 436 Interview of Attorney General Janet Reno 42–43, 46–47 (Oct. 5, 2000) (preliminary transcript).

Gore’s former Political Director, and she has yet to be interviewed

by the Justice Department.

In fact, it appears that the Attorney General did not believe that

there could be any evidence which would undermine the Vice President’s statements. In her interview with the committee on October

5, 2000, the Attorney General stated ‘‘I don’t think that there is a

reasonable possibility of finding an e-mail or evidence that says,

yes, I did it.’’ 435 Of course, it would not be necessary for the Justice

Department to find an e-mail where the Vice President says ‘‘yes,

I did it’’ in order to support the filing of false statements charges.

Rather, it would only be necessary to find an e-mail message indicating that the Vice President contemporaneously believed that the

White House coffees or the Hsi Lai Temple event were fundraisers.

It is difficult to believe that the Attorney General concluded that

there was not a reasonable possibility of uncovering such evidence

through the e-mail reconstruction process. While it might be appropriate for the Vice President’s lawyers or staff to have blind faith

in his credibility, it is unseemly and disturbing when the Attorney

General makes a leap of faith to clear the Vice President of wrongdoing.

The Attorney General also based her decision on her belief that

‘‘the transcript reflects disagreements about labels.’’ The Attorney

General reiterated this belief in her October 5 interview:

The Vice President defined what he meant by fund-raiser,

and there is no information at this time that there were

funds raised that he knew about at the Temple. Based on

his definition of what a fund-raiser was and what he said,

I would not be able to prove, based on that, that he believed it to be a fund-raiser and testified falsely.

* * * * *

And if a man says this is my definition of a fund-raiser

and this is not my definition of a fund-raiser, I’ve got to

look at that and take it within the four corners of this

transcript and judge based on his definition as to whether

there is a false statement.

* * * * *

I think the whole statement clearly reflects what the Vice

President understood a fund-raiser to be, and within his

definition, I think he made it clear that the statement was

not inaccurate.436

It is remarkable that the Attorney General would base her decision

not to appoint a special counsel on the fact that the Vice President

defined ‘‘fundraiser’’ in such a way as to exclude all of the evidence

suggesting that the Hsi Lai Temple event and the White House coffees were fundraisers. The Vice President’s definition, which requires funds to actually change hands at the event, differs from the

definition used by the DNC, under which the DNC assigned the

Hsi Lai Temple event and the White House coffees to raise certain

amounts of money for the DNC. The Vice President’s definition also

63

437 Committee on Government Reform and Oversight subpoena to the Executive Office of the

President, Mar. 4, 1997, at 1, 3–4.

differs from that of his staff, who considered both events to be

fundraisers. Given these facts, the Attorney General would be entitled, and in fact, obligated, to consider whether the Vice President’s

definition of ‘‘fundraiser’’ was reasonable and not simply a post hoc

defense to avoid prosecution.

The Attorney General’s decision not to appoint a special counsel

to investigate Vice President Gore is, unfortunately, consistent

with her earlier decisions not to appoint independent counsels to

investigate the fundraising scandal. The Attorney General ignored

the facts and the law to reach a strained conclusion which was favorable to the Vice President. Unlike her other decisions, this one

was made in the middle of the Presidential election campaign, and

provided the Vice President with a valuable boost. Yet again, the

Attorney General placed politics over impartial enforcement of the

laws.

II. FAILURES OF THE JUSTICE DEPARTMENT INVESTIGATION

The Attorney General’s failure to appoint an independent counsel

to head the campaign fundraising investigation had unfortunate

practical consequences. The investigation was inadequate in many

ways. Key documents were never subpoenaed. Key witnesses were

never interviewed. Guilty parties have yet to be indicted. The Justice Department failed to pursue evidence aggressively. The Department’s investigation has been extraordinarily passive, and appears designed more to provide political cover to the administration

than to find out what happened in the 1996 elections.

The Justice Department did prosecute important individuals

whose actions were central to the scandal, namely John Huang and

Charlie Trie. Even in those prosecutions, however, where the Justice Department gained the cooperation of Trie and Huang, the

Justice Department failed to follow significant leads. Other individuals, particularly those at the White House and the DNC, received

a free pass from the Justice Department regardless of the evidence

against them. The end result was a good cover story for an investigation derailed. The Justice Department could point to 25 prosecutions as evidence of its commitment to get to the truth. The

White House and the DNC could rest assured that they would not

be next.

A. THE JUSTICE DEPARTMENT FAILED TO PURSUE THE DECEMBER 15,

1995, COFFEE VIDEOTAPE

1. The White House Production of Fundraising Videotapes

On March 4, 1997, the committee served a subpoena on the

White House for records, including any ‘‘video or audio recording,’’

on various named individuals central to the campaign finance investigation.437 In response, the White House produced documents,

but not videotapes. The Senate Committee on Governmental Affairs specifically asked the White House about recordings of fundraising events in August 1997. However, the White House claimed

64

438S. Rept. No. 105–167, at 4284–4285 (1998). 439The White House’s assertion that there were no responsive videotapes was based on the

fact that the White House Communications Agency (WHCA) produced only six documents, and

no videotapes, pursuant to the White House Counsel Office’s request for records to be searched.

However, the White House claimed that a proper search was not conducted by WHCA. Steven

Smith, WHCA’s chief of operations, said that his office was never asked for any videotapes or

documents about the coffees until around October 1997. George Lardner, Jr., ‘‘Aide Says Agency

Didn’t Get Request For Coffee Tapes,’’ Washington Post, Oct. 13, 1997, at A1. The committee

received the first White House videotapes on Oct. 5, 1997. 440Letter from Attorney General Janet Reno to Chairman Henry Hyde, Oct. 3, 1997. 441 Jim Abrams, ‘‘Reno Says She Will Not Resign, Will Not Stop Investigation,’’ Associated

Press, quoting Meet the Press (NBC television broadcast, Oct. 12, 1997). 442 Id.

that there were no video recordings.438 Nevertheless, the Senate

continued to question whether the recordings existed. Finally, the

White House revealed in October 1997 that videotapes showing

President Clinton and Vice President Gore with many individuals

then under criminal investigation did indeed exist.439

Although the White House discovered the videotapes on October

1, 1997, White House Counsel Charles Ruff did not immediately inform the Justice Department about their existence immediately.

Despite the fact that he attended his weekly meeting with Attorney

General Janet Reno on October 2, 1997, Ruff did not mention the

videotapes. At the time of the meeting, Ruff was aware that Reno

would be making a decision on whether or not to appoint an independent counsel within days. The videotapes were important pieces

of evidence showing who attended and what occurred at numerous

events. The next day, October 3, 1997, Special Counsel to the President Lanny Breuer informed the Senate of the existence of the videotapes, but neglected to inform the Justice Department. Reno announced her decision not to appoint an independent counsel on October 3.440 When Breuer informed the Justice Department of the

videotapes on October 4, 1997, it appeared as though the White

House had purposefully withheld the tapes until after Reno made

her decision.

Once the Attorney General learned what had occurred, she said:

‘‘I was mad at the people responsible, but what I think what’s important now is that we move on.’’ 441 Despite her anger, Reno

quickly jumped to the defense of the White House. Based on what

could only have been a cursory review of the tapes, Reno fully exonerated the White House of any wrongdoing when she said ‘‘we

do not have any indication of criminal activity by people covered

under the Independent Counsel Act, including the President.’’ 442

2. The December 15, 1995, White House Coffee

The videotapes showed a number of events where the President

and Vice President were raising funds for the DNC. One of the

events, a December 15, 1995, coffee, was especially relevant because the President and Vice President attended along with Arief

Wiriadinata, an Indonesian citizen living in the United States.

Wiriadinata and his wife, Soraya, contributed $455,000 to the DNC

after they received a $500,000 wire transfer from Indonesia from

Soraya’s father, Hashim Ning. Ning was a former business partner

of the Riady family. The initial review of this tape showed that

Arief Wiriadinata greeted President Clinton and said ‘‘James Riady

65

443White House Communications Agency videotape, Dec. 15, 1995. The committee subpoenaed

the original WHCA Betacam tape of the event from the White House. 444 Id. 445Two DNC officials, DNC Finance Chairman Marvin Rosen and DNC Finance Director

Richard Sullivan, were in the vicinity of the Vice President when the comments were made.

However, it is unclear who made the follow-up statement. 446FBI interview of Vice President Gore, at 10 (Nov. 11, 1997). 447 Vice President Gore was scheduled to hold his own coffee for DNC contributors in the Old

Executive Office Building on Dec. 15, 1995. The Vice President was not included on the guest

list for the coffee President Clinton held for DNC contributors in the Roosevelt Room of the

White House on the same day. Guest list for Dec. 15, 1995, White House coffee (exhibit 11).

It should also be noted that the Roosevelt Room is an official room in the White House and

political solicitations there are illegal.

sent me.’’ 443 When the committee analyzed the tape further, it became apparent that the Vice President may have spoken with

Wiriadinata as well. Vice President Gore appears to say:

We oughta, we oughta, we oughta show Mr. Riady the

tapes, some of the ad tapes.444

Another voice then adds:

I’ll see if I can do that.445

Vice President Gore was apparently referring to DNC issue advertisements that were televised across the country from the fall of

1995 until the election in 1996. President Clinton and Vice President Gore had agreed to help raise millions of dollars to finance the

DNC’s unprecedented advertisement blitz. According to the Vice

President, the ads were shown to ‘‘individuals who would be willing

to contribute to the DNC media fund.’’ 446 The Vice President traveled to San Francisco on October 13, 1995, to show a group of potential contributors the DNC issue ads. Then, on December 11,

1995, 4 days prior to the coffee, Vice President Gore was in an airport hangar in Chicago again showing the DNC issue ads to potential donors in order to solicit contributions. Therefore, it was clear

that in December 1995, the Vice President was using the presentation of the DNC issue ads as a fundraising tool. Four days after

the Chicago fundraiser, Vice President Gore attended the December 15, 1995, White House coffee. Therefore, it is reasonable to believe that the Vice President was thinking about obtaining financial support from donors when he apparently suggested that the

DNC issue ads be shown to James Riady.447

3. The December 15, 1995, Videotape is Relevant to the Investigation of Vice President Gore

If Vice President Gore said that DNC advertisement tapes should

be shown to James Riady in December 1995, his comment has farreaching implications that could demonstrate the Vice President’s

direct knowledge of criminal activity in the 1996 Presidential campaign. For the Vice President to have made the comment, he would

have to be aware of two significant facts: (1) the Vice President understood that Arief Wiriadinata had a connection to James Riady;

and (2) the Vice President had to know that James Riady was either raising or funneling contributions into the 1996 campaign, or

that he was important enough to receive preferential treatment.

The Vice President first would have to know who Arief

Wiriadinata was and that Wiriadinata was connected to James

Riady. Arief Wiriadinata and his wife, Soraya, were Indonesians

66

448The visit at the hospital was the first time Huang met Arief and Soraya Wiriadinata. ‘‘The

Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before the House

Committee on Government Reform, 106th Cong., 247 (Dec. 16, 1999) (preliminary transcript). 449Letter from President Clinton to Hasjim [sic] Ning, June 19, 1995, F 0033816 (exhibit 12). 450 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 252 (Dec. 16, 1999) (preliminary

transcript). 451 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 13 (Dec. 17, 1999) (preliminary

transcript). 452Testimony of Vice President Albert Gore Jr., at 111 (April 18, 2000).

who settled in Springfield, VA, where Arief was employed as a gardener. The Wiriadinatas were able to become prominent DNC donors enjoying the attention of the President and Vice President because of Soraya’s father, Hashim Ning. Ning was a former business

partner of the Riady family and a co-founder of the Lippo Group.

When Ning became ill during a visit to the United States in June

1995, James Riady had his representative, John Huang, visit Ning

in the hospital.448 During Ning’s hospital stay, Riady and Huang

arranged a ‘‘get well’’ card from President Clinton and a visit from

Mark Middleton, who had worked in the White House chief of

staff’s office.449

By November 1995, while still employed by the Commerce Department, Huang began soliciting contributions from Arief and

Soraya Wiriadinata on Riady’s recommendation.450 Over the next

6 months, the Wiriadinatas would give $455,000 to the DNC. The

Wiriadinatas’ contributions all came from a $500,000 wire transfer

sent to them on November 7, 1995, by Hashim Ning. By the time

of the White House coffee on December 15, 1995, the Wiriadinatas

had already contributed $130,000. John Huang’s testimony before

the committee in December 1999 revealed the close link between

the contributions and the Lippo Group. First, Riady told Huang

that he should ask the Wiriadinatas to give. Second, the money

given by the Wiriadinatas came from one of the Riadys’ long-time

associates. Finally, and perhaps most striking, Huang testified that

when Ning died in late 1995 or early 1996 and the Wiriadinatas

had to return to Indonesia, they gave him a series of blank checks

to fulfill their contribution commitment to him.451 Huang kept the

blank checks in his desk and used them as needed to make contributions to the DNC on the Wiriadinatas’ behalf.

On November 2, 1995, Arief and Soraya Wiriadinata attended

their first DNC fundraiser with Vice President Gore. At the event,

John Huang introduced the couple to the Vice President. By this

time, the Vice President had already begun the solicitation of contributors for the DNC issue ad campaign. The next known meeting

between the Vice President and Arief Wiriadinata occurred at the

White House coffee on December 15, 1995.

The Vice President’s comment to Wiriadinata begs the question:

why did the Vice President refer to James Riady? Was the Vice

President aware that Riady was the source of the Wiriadinata contributions? Two possible explanations are apparent: either the Vice

President heard Wiriadinata say ‘‘James Riady sent me’’ to the

President or the DNC officials near the Vice President prompted

his remark about the ad tapes. The Vice President knew that Riady

was an Indonesian businessman.452 Therefore, the Vice President’s

comment is troubling, as the showing of advertisement tapes to doVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00084 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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453The DNC’s last officially recorded contribution from James Riady occurred October 1992.

The reason was because Riady had been permanently moved back to Indonesia in 1990 at the

latest, and therefore, was ineligible even to make any political contributions in 1992. 454 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 111 (Dec. 15, 1999) (preliminary

transcript).

nors appears to have been a device to encourage further contributions and provide thanks for past contributions.

Clearly, it would have been illegal for Riady to contribute money

to the 1996 Presidential campaign.453 Even John Huang, the DNC

fundraiser responsible for many of the illegal contributions to the

DNC in 1995 and 1996, acknowledged that it would have been illegal for Riady to contribute:

Mr. SHAYS. Would it have been illegal for you to raise

money from the Riadys when you worked for the DNC?

Mr. HUANG. I’m sorry, sir?

Mr. SHAYS. Would it have been illegal for you to have

raised money from the Riadys? You seem to want to make

clear to me that somehow during that time while you

worked at the DNC you did not raise money from the

Riadys but you raised money from people who had business acquaintances and agreements with the Riadys.

Mr. HUANG. Because I had the knowledge at that time Mr.

Riady has relinquished his green card status back to the

United States and he was no longer holding the PR, socalled permanent resident status in the United States, he

was not eligible to take care of any further.454

Vice President Gore’s statement about Riady is troubling in light

of his testimony concerning James Riady in his April 18, 2000,

interview with the Task Force. In that testimony, the Vice President created the impression he did not know Riady well, and was

not politically involved with Riady:

Mr. CONRAD. When is the first time you ever met James

Riady?

Vice President GORE. To my knowledge, I have only seen

him twice in my life. I may be wrong about this. There

may be other times that I’m not thinking, that I’m not remembering.

But the only times—I think the only times I’ve met him

were once when he was in Betty Currie’s office preparing

to go in to see the President with a couple of other people.

Mr. CONRAD. Did you know who those people were?

Vice President GORE. No, I did not. I was on the way out.

And either he introduced himself or somebody introduced

him to me. The only other time I—

Mr. CONRAD. Before you get to the other time, do you recall the substance of any conversation with him at that

time?

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455Testimony of Vice President Albert Gore, Jr., at 109–111 (Apr. 18, 2000). 456 Id. at 111. 457 Id. at 114.

Vice President GORE. Hello, how are you. I said, you know,

I’ve heard your name. That was it. The door was open. It

was one of those deals.

Mr. CONRAD. What about the second time?

Vice President GORE. The second time was in Malaysia. I

filled in for the President at the last minute for a trip to

Kuala Lumpur for a meeting for the Asian Pacific—

Mr. CONRAD. Economic Council?

Vice President GORE. Yes, APEC.

Mr. CONRAD. Right.

Vice President GORE. And in conjunction with that event,

which was hosted by Mahathir, the leader of Malaysia,

there was a cultural event where all of the heads of state

and their stand-in—of which I think I was the only standin—all went to this big dinner and they had a dance, kind

of a show. And he came up to me during that and said, introduced himself again, and said, hello, how are you. I

said, fine, hello, how are you. It was just—that was the

substance of it[.]

Mr. CONRAD. Any substantive conversation with Mr.

Riady?

Vice President GORE. No.

Mr. CONRAD. And no other meetings that you remember?

Vice President GORE. No, not that I remember? 455

In his testimony, the only personal information the Vice President

knew about James Riady was that Riady was a businessman in Indonesia.456 The Vice President said he did not learn of Riady’s relationship to President Clinton until after the scandal became public.457 The Vice President also indicated that he had no direct

knowledge of Riady’s involvement in politics or campaign contributions:

Mr. CONRAD. Mr. Riady has been fairly active, some would

say aggressive, in his courting of other political people. But

I take it from your testimony that you’ve provided today

that you weren’t one of them?

Vice President GORE. No. I think that—no. Unless you

count his role evidently in the background of organizing

that trip to Taiwan, but I never saw him or talked to him

there.

* * * * *

Mr. CONRAD. At least based on your previous testimony,

you had no knowledge of any financial sponsorship by Mr.

Riady of a portion of the ’89 trip to Asia?

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458 Id. at 113–114. 459 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 9–11 (Dec. 17, 1999) (preliminary

transcript).

Vice President GORE. I don’t think so . . .

* * * * *

Mr. CONRAD. Also in August of 1992, Mr. Riady made certain financial fund-raising commitments to the President.

Did you ever have any discussions with the President

about the fund-raising role of Mr. Riady in—

Vice President GORE. No.

Mr. CONRAD. —The 1992 election cycle?

Vice President GORE. No.458

If the Vice President told Arief Wiriadinata that the DNC issue

advertisements should be shown to James Riady, it would dramatically undermine the testimony given by Vice President Gore to the

Justice Department. The Vice President testified that he was unaware of Riady’s fundraising or contributions in the 1992 election,

and Riady was clearly unable to participate in the 1996 election.

Ostensibly, the only reason Vice President Gore was showing the

ad tapes was to solicit a contribution, or to provide thanks for past

contributions.

4. The Justice Department Failed to Obtain the Original Videotape

After the Apparent Remarks by Vice President Gore to

Wiriadinata Became Public

The Justice Department has had a copy of the videotape for the

December 15, 1995, White House coffee since October 5, 1997. Yet

in five interviews with the Vice President, the Justice Department

did not ask any questions about Wiriadinata or that particular

White House coffee. Either the Justice Department has not seriously examined the videotapes or they are unwilling to ask Vice

President Gore what he said.

The committee highlighted Vice President Gore’s remarks at the

coffee on previous occasions. The Justice Department has chosen

not to take notice any of these times. On December 17, 1999, at a

committee hearing, Congressman Souder asked John Huang about

the videotape:

Mr. SOUDER. And then so at one point Mr. Wiriadinata

says James Riady sent me, and then if you keep listening

to the tape, as he speaks to the President, a voice can be

heard saying we should show tapes of the advertisements

to Mr. Riady. This sounds like Vice President Gore.

* * * * *

Mr. SOUDER. Thanks. Why would the Vice President have

said we should show tapes of the advertisements to Mr.

Riady?

Mr. HUANG. I really don’t know, Congressman, no.459

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460Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (July 18, 2000) (correspondence between the committee and the Justice Department is contained in appendix 1). 461The Justice Department witnesses were James Robinson, Assistant Attorney General,

Criminal Division; Alan Gershel, Deputy Assistant Attorney General, Criminal Division; Robert

Raben, Assistant Attorney General, Office of Legislative Affairs; and Robert Conrad, Supervising

Attorney, Campaign Financing Task Force. 462 ‘‘Has the Department of Justice Given Preferential Treatment to the President and Vice

President,’’ hearing before the House Committee on Government Reform, 106th Cong., 41 (July

20, 2000) (preliminary transcript). 463Letter from James C. Wilson, chief counsel, Committee on Government Reform, to Robert

Raben, Assistant Attorney General (Aug. 1, 2000). 464Letter from Robert Raben, Assistant Attorney General, to James C. Wilson, chief counsel,

Committee on Government Reform (Aug. 4, 2000).

Representatives of the Justice Department were present throughout the 3 days of hearings with John Huang in December 1999.

Nevertheless, the Justice Department did not follow up on this

issue after the committee’s hearing.

After the Vice President released his April 18, 2000, interview

with the Task Force, the committee once again asked the Justice

Department why the Vice President was not questioned about the

Wiriadinata coffee.460 The Justice Department was also informed

that the committee had possession of the original tape of the December 15, 1995, coffee, the best possible source of the information.

The Justice Department did not respond.

At a hearing on July 20, 2000, the committee directly questioned

four top-level Justice Department officials about the Vice President’s comments at the December 15, 1995, coffee.461 The Justice

Department officials refused to comment on any aspect of the tape:

Mr. BARR. I ask again, is this tape, is this coffee, are these

individuals, is this language, of interest to the Department

of Justice?

Mr. ROBINSON. I cannot comment on the investigative matter but obviously we are here, we have heard it and we receive lots of information from Congress and other sources.

Whenever we get information, we look at it carefully as a

general proposition, but I can’t comment on the specifics of

our investigations. It would be inappropriate.462

In an attempt to assess how carefully the Justice Department

has reviewed this evidence, if at all, the committee wrote to the

Justice Department on August 1, 2000, and asked if Justice Department lawyers had ever listened to the original White House

tape of the Wiriadinata coffee.463 The Justice Department refused

to answer the question, stating:

[I]t would be inappropriate for this Department to provide

such information concerning an ongoing investigation, both

in terms of the ethical responsibilities of federal prosecutors, and in terms of our duty to avoid any appearance of

undue external influence on our investigations.464

Apparently, the high-minded ideal which prevented the Justice Department from discussing basic facts about the videotape with the

Congress does not apply to its relationship with the media. On July

19, 2000, an unnamed Justice Department source leaked the Department’s interpretation of the substance of the tape by telling the

71

465 ‘‘Justice Says White House Coffee Tape Unclear; Hearings Scheduled Tuesday’’ [sic]

(viewed July 19, 2000) http://www.cnn.com/2000/ALLPOLITICS/stories/07/19/burton.gore/

index.html. 466 ‘‘Congressman Focuses on Gore Videotape Comment,’’ Associated Press, July 19, 2000. 467Don Van Natta Jr., ‘‘Questions Raised by House Panel About Gore Remark at a 1995

Fund-Raiser,’’ New York Times, July 19, 2000, at A21. 468Letter from Robert Raben, Assistant Attorney General, Department of Justice, to Dan Burton, chairman, Committee on Government Reform (Sept. 25, 2000). Several days after the Sept.

25, 2000, letter, an FBI agent called the committee staff and requested the videotape. Committee staff informed the FBI agent that the committee would like to receive a written request

before it turned over the original evidence to the FBI. The agent agreed to ask a Justice Department lawyer to send a written request to the committee. As of Oct. 10, 2000, the committee

has not received the request. 469President Clinton was interviewed on Nov. 11, 1997, and Nov. 9, 1998. Vice President Gore

was interviewed on Nov. 11, 1997, June 10, 1998, Aug. 8, 1998, and Nov. 11, 1998.

press that it was unclear what was said on the tape because of

‘‘poor audio.’’ 465

Vice President Gore and his White House surrogates have been

unwilling to explain the Vice President’s remarks. The Vice President himself admitted it was his voice, but deflected questions by

saying it was a political attack using news that had been available

for years.466 The White House offered, off-the-record only, that the

Vice President may have said ‘‘Godfrey,’’ rather than ‘‘Riady,’’ a reference to H. Lee Godfrey, who also attended the December 15 coffee. Even the White House refused to go on the record with this

defense, and the Vice President did not embrace it.467

If the Vice President told Arief Wiriadinata that the DNC issue

advertisements should be shown to James Riady, it would constitute a significant piece of evidence that top White House officials

may have been aware of illegalities in the 1996 Presidential campaign. The Justice Department’s purposeful refusal to examine the

evidence or to question the Vice President on this matter clearly

demonstrates its unwillingness to pursue an honest and thorough

investigation.

On September 25, 2000, 9 months after the committee first highlighted the December 15, 1995, coffee tape, the Justice Department

finally informed the committee it would ask for the videotape. As

of October 10, 2000, though, it still had not made a written request

for the videotape.468

B. THE JUSTICE DEPARTMENT HAS FAILED TO QUESTION THE

PRESIDENT AND VICE PRESIDENT EFFECTIVELY

1. Delay in Asking Relevant Questions

From the beginning of the campaign finance scandal, it was clear

that President Clinton and Vice President Gore were knowledgeable witnesses and possible participants in a scheme to bring illegal money into the DNC to finance their re-election. Accordingly,

it was important for the Justice Department to interview the President and Vice President—both thoroughly and expeditiously. However, the Justice Department waited over 3 years before asking the

President or Vice President about most aspects of the fundraising

scandal.

The Justice Department interviewed President Clinton two times

and Vice President Gore four times in 1997 and 1998.469 The Justice Department purposefully restricted the topics covered in the

six interviews to the DNC issue advertisements and telephone solicitations from the White House. The justification for limiting the

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470Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Dec. 14, 1999). 471The Justice Department’s attempt to withhold these interview summaries from the committee is discussed in detail later in this report.

interviews to those two issues was because they were the subjects

of preliminary investigations under the Independent Counsel Act.

This rationale, however, fails to explain why they could not have

been asked about other pertinent subjects.

Under the Justice Department’s self-imposed restriction, the

President and Vice President would not be interviewed about their

interaction with various criminals and questionable individuals because those investigations were not part of a preliminary investigation under the Independent Counsel Act. However, the Justice Department ignored evidence that the President and Vice President

were possibly aware of illegal activity. In addition, the Justice Department ignored the fact that the President and Vice President

were significant witnesses in the investigation. In some instances,

President Clinton and Vice President Gore were the only available

witnesses. Thus, there was no acceptable investigative reason for

the failure to ask questions about important subjects. It appears,

moreover, that the President and Vice President received preferential treatment at the expense of the campaign finance investigation.

On April 25, 1999, due to concerns that the President and Vice

President were receiving preferential treatment, the committee

subpoenaed all Task Force interviews with President Clinton and

Vice President Gore. In response to the committee’s subpoena, the

Justice Department, which previously supplied interview summaries to the Congress, announced a new policy of refusing to provide such summaries. The purported basis for the new Justice Department policy was that the public release of the interview summaries would have a chilling effect on future witnesses’ cooperation, thereby harming law enforcement efforts.470

In December 1999, the Justice Department finally allowed the

committee to review the interview summaries of the President and

Vice President, but not to have copies.471 The committee’s review

in December 1999 found that the Justice Department had questioned the President and Vice President only about DNC issue advertisements and telephone solicitations at the White House. After

3 years of investigation, the Justice Department had not asked

President Clinton one question on the following issues:

• The President’s relationship with James Riady.

• John Huang’s placement at the DNC.

• White House coffees and other perks offered in exchange for

contributions.

• The President’s interactions with Johnny Chung and the

reasons Chung was given access to the White House.

• Charlie Trie’s contributions to the Presidential Legal Expense Trust.

• Charlie Trie’s appointment to the Bingaman Commission.

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• The President’s attendance at the July 30, 1996, fundraiser

with James Riady and three of his Asian business associates.

• The February 6, 1996, White House coffee with Charlie Trie

and Wang Jun.

• The June 18, 1996, White House coffee with Huang, Pauline

Kanchanalak and the CP Group from Thailand.

• The President’s attendance at the February 19, 1996, May

13, 1996, and July 22, 1996, fundraisers, where numerous

foreign nationals attended and contributed.

• The President’s 5-minute meeting with John K.H. Lee, a

Korean national, in exchange for $250,000.

Similarly, the Vice President was not questioned for 3 years about

the following topics:

• The Hsi Lai Temple.

• The Vice President’s relationship with Maria Hsia.

• The Vice President’s relationship with John Huang.

• The Vice President’s relationship with Howard Glicken.

• White House coffees.

• Senator Gore’s 1990 trip to Asia with Hsia and Huang.

• The September 27, 1993, fundraiser with Huang and China

Resources Chairman Shen Jueren.

• The February 19, 1996, fundraiser at the Hay Adams.

On December 15, 1999, the Justice Department finally produced

the interview summaries of President Clinton and Vice President

Gore. The committee publicly announced the deficiencies of the

interviews on December 16, 1999. The Justice Department’s last

interviews with the President and Vice President were in November 1998, and there was no evidence that the Justice Department

intended to question them again. Since the Justice Department unreasonably withheld the interview summaries from the committee,

the Justice Department would not have publicly revealed them voluntarily. However, once the committee announced the Justice Department’s complete failure to ask a single question of the President or Vice President about foreign money or their knowledge of

various criminals in the campaign finance investigation, the President and Vice President were re-interviewed in April 2000.

2. Favorable Circumstances of the April 2000 Interviews

The April 2000 interviews were conducted differently than the

previous six interviews with the President and Vice President. This

time, the President and Vice President were both under oath and

the interviews were transcribed. This provided the Justice Department with the benefit of having a clear record of what was discussed, but it also put the President and Vice President in a position where they could publicly release their interviews, theoretically compromising the Department’s investigation. In addition, the

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472The Department was also under a time limit in its interview of President Clinton. President Clinton and his attorneys agreed to an interview with Robert Conrad by Apr. 7, 2000. However, 2 days before the scheduled interview, and the day after the Vice President’s contentious

interview with the Task Force, the President rescheduled his weekly Saturday radio address to

Friday, Apr. 21, 2000, the day of the Task Force interview. Mr. Conrad, who had previously

been given as much time as necessary to complete the interview, then had to cover 43 topics

in less than 4 hours. Letter from Robert J. Conrad, Jr., to Beth Nolan, et al., Apr. 11, 2000;

letter from Robert J. Conrad, Jr., to Beth Nolan, et al., Apr. 20, 2000. 473 ‘‘Has the Department of Justice Given Preferential Treatment to the President and Vice

President,’’ hearing before the House Committee on Government Reform, 106th Cong., 49 (July

20, 2000) (preliminary transcript). 474 Id. at 112–113 (2000). 475 Id. at 107–109. 476The committee subpoenaed the transcript of the President’s Apr. 21, 2000, interview after

the Vice President publicly released his transcript. When the President produced a copy of his

transcript to the committee, he also gave a copy to the media.

dinary courtesy by supplying the exhibits that were to be used in

the interviews beforehand.472

By prior agreement with the Task Force, both President Clinton

and Vice President Gore were given copies of their April 2000

interview transcripts. The committee is unaware of the President

and Vice President or any other witness receiving copies of any of

their previous interviews. Task Force Chief Robert Conrad explained that they were provided with a copy of the transcripts as

a result of negotiations with the President and Vice President’s

counsels.473

The Justice Department had consistently told the committee that

any release of interview summaries or transcripts would harm ongoing investigations. However, by allowing the President and Vice

President to have copies of the transcripts, they contradicted their

own argument. Again, it appears the President and Vice President

were accorded preferential treatment. At the committee’s July 20,

2000, hearing, all of the Justice Department officials present

agreed with Attorney General Reno’s statement to the committee

that, ‘‘significant harm to ongoing investigations would result from

the disclosure of the records of the recent interviews.’’ 474 Disregarding any harm that might come to the Justice Department’s

investigation, Vice President Gore released his interview transcript

to blunt media reports that the Task Force had once again recommended an outside prosecutor to investigate the Vice President.475 President Clinton followed suit and released his testimony

on July 24, 2000.476

C. THE JUSTICE DEPARTMENT FAILED TO PURSUE RELEVANT

DOCUMENTS

1. Failure to Subpoena Relevant Records

The committee was concerned about the Justice Department’s

ability to conduct a fair and impartial investigation, particularly in

light of its numerous missteps and failures. In order to carry out

its oversight investigation of the Justice Department, the committee decided review document requests and subpoenas sent by

the Justice Department to the White House, the Commerce Department, the State Department, and the DNC so that it could determine how thorough the Justice Department investigation had been.

After the committee obtained records from the White House and

Commerce Department which revealed how incomplete and incompetent the Justice Department investigation had been, the Justice

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477The Vice President also was not questioned about his relationship and interaction with

Hsia until after her conviction. 478 Justice Department subpoena for documents to Ann Frank Lewis, Aug. 13, 1997 (exhibit

13). 479The subpoena was sent to Lewis on Aug. 15, 1997, immediately after the Task Force interviewed Lewis, even though Lewis had no substantive knowledge of the individuals or the White

House’s involvement in campaign finance improprieties or illegalities.

Department began a concerted effort to keep the committee from

obtaining the subpoenas served upon both public and private entities by the Justice Department. As a result of the Justice Department’s efforts, which are described in detail below, the Justice Department has limited the committee’s oversight of the Justice Department investigation, and covered up the Department’s biased investigation from any further public scrutiny.

a. The White House

On March 16, 2000, the committee subpoenaed the White House

to produce subpoenas and document requests it had received from

the Task Force. These records were received nearly 5 months later

on August 10, 2000. The White House obviously had thousands of

documents relating to numerous individuals involved in the campaign finance investigation, and the Justice Department subpoenaed many documents from the White House. However, in certain

crucial cases—Maria Hsia, Ernest Green, and Mark Middleton—

the Justice Department either failed to ask the White House for

documents or they requested the documents only very recently,

years after the individual’s involvement in the scandal became

known.

The Task Force never asked the White House for records concerning Maria Hsia. Hsia had a close relationship with Vice President Gore spanning 10 years. The Justice Department prosecuted

Hsia for funneling illegal contributions to the DNC in support of

Vice President Gore’s visit to the Hsi Lai Temple in April 1996.

Yet, the Justice Department never subpoenaed the White House for

records relating to Hsia. This failure meant that the Justice Department brought a case against Hsia without a full understanding

of Hsia’s interactions with White House officials.477 The Justice Department did subpoena records on Maria Hsia from Ann Lewis, the

White House Communications Director.478 However, that subpoena, sent to Lewis in her personal capacity, in no way obligated

the White House to produce any records regarding Hsia.479

The Justice Department did not subpoena the White House for

records on Ernest Green or Mark Middleton until March 2000.

Both Green and Middleton were key players in the campaign finance scandal in that each could provide substantial amounts of information about the fundraising activities of Charlie Trie, John

Huang, and their interaction with the Clinton administration.

Green and Charlie Trie were fundraising and business partners

from 1994 to 1996. Green and Trie were frequent visitors to the

White House and each were friends of President Clinton. Green

used his influence in the DNC and Clinton administration to help

Trie, and Trie in return tried to find business opportunities for

Green in Asia. In 1998, Green became the focus of a Justice Department investigation for perjury relating to his testimony before

Congress on Charlie Trie.

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480Listing of Task Force cases, June 4, 1999 (exhibit 14).

Unlike Green, Middleton invoked the fifth amendment against

self-incrimination and has refused to cooperate with the committee.

Mark Middleton is a key figure in the campaign finance scandal.

Middleton served as the principal White House contact for both

John Huang and Charlie Trie. Once Middleton left the White

House, he traveled to Asia with Trie and courted many foreign

businessmen. Middleton frequently brought his foreign business clients to the White House. The White House had numerous records

of Middleton bringing his foreign business clients to the White

House, at times to meet the President, First Lady, or the White

House staff. Middleton’s extensive involvement in the campaign finance scandal all centers around the White House. There cannot

be any investigation of Middleton, much less a serious one, without

his White House records.

In 1999, the committee obtained a document from the Justice Department that indicated that the Department’s investigation of

Middleton was ‘‘reinvigorated’’ in light of Charlie Trie’s cooperation

with the Justice Department.480 In fact, when Charlie Trie testified

before the committee in March 2000, the Justice Department requested that the committee refrain from asking any questions

about Middleton or Green because they were part of ongoing investigations.

The Justice Department’s subpoenas to the White House reveal

a great deal about the Department’s investigation. While the Attorney General has frequently stated that the Task Force is free to

follow any evidence, it is obvious that the Task Force is avoiding

gathering critical evidence. It is difficult to believe that Justice Department prosecutors simply forgot to ask for this crucial evidence.

Rather, it is possible that the Attorney General and her staff felt

hesitant to pressure the White House which they serve to produce

documents. Furthermore, as has become abundantly clear in the

Justice Department investigation of the e-mails that have been

withheld by the White House, it seems that the Justice Department is subordinate to the White House where document requests

are concerned. An independent counsel would not experience this

same conflict, and likely would have obtained the necessary documents.

b. The State Department

On August 4, 2000, the committee sent a subpoena to the State

Department for any requests or subpoenas it received from the Justice Department in the course of the campaign finance investigation. The Justice Department’s requests to the State Department

were particularly critical due to the numerous foreign nationals involved in the investigation and allegations of foreign governments

funneling illegal contributions into the DNC. If the Justice Department was serious about its investigation, it would ask the State

Department to pressure foreign governments to provide access to

the necessary documents and witnesses.

Rather than comply with the committee’s subpoena, the State

Department turned to the Justice Department, to see whether it

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481Letter from Robert Raben to Chairman Dan Burton, Sept. 25, 2000. 482 Briefing report by the U.S. General Accounting Office, ‘‘Campaign Finance Task Force:

Problems and Disagreements Initially Hampered Justice’s Investigation,’’ May 2000, at 48. 483Subpoena to the Custodian of Records, Executive Office of the President, May 26, 1998. 484Listing of Task Force cases, June 4, 1999 (exhibit 14).

ment to redact from their submission to the committee any information that related to ongoing investigations. The Justice Department’s position was more fully explained in a September 25, 2000,

letter from Assistant Attorney General Robert Raben, which

claimed that the Justice Department had a right to redact information that related to ongoing investigations from State Department

documents.481

The Justice Department’s position is legally groundless, and

moreover, has in practice, been abused by the Justice Department.

When the committee did finally receive documents from the State

Department, they were redacted so that almost every substantive

piece of information was taken out. It is difficult to believe that the

Justice Department still has so many ongoing investigations. If the

Department’s investigation is as far-flung as its redactions suggest,

it is not equipped to handle such an investigation, having, as of December 31, 1999, only 13 attorneys and 12 agents, down from 24

attorneys and 67 agents in 1997.482

Moreover, one specific redaction by the Justice Department suggests that the Department is acting in bad faith, and that it is redacting material that does not relate to ongoing investigations. The

committee has been able to determine, by comparison with the

same subpoena from the White House that was not redacted, at

least two names redacted by the State Department at the Justice

Department’s insistence: Liu Chao-Ying and her father, General

Liu Huaqing.483 Liu Chao-Ying, a colonel in the Chinese military,

gave $80,000 to the DNC through DNC fundraiser Johnny Chung.

Liu Chao-Ying also introduced Chung to General Ji Shengde, the

head of Chinese military intelligence, who gave Chung an additional $300,000 to funnel into the DNC. General Liu Huaqing, was

the vice chairman of the Central Military Commission, and reportedly oversaw the Chinese army’s modernization program. He was

also a member of the Standing Committee of the Politburo of the

Communist party.

As late as June 4, 1999, the Task Force had already listed Liu

Chao-Ying as a ‘‘Pending Inactive Investigation.’’ 484 The Task

Force had not listed any investigation of General Liu Huaqing as

of June 1999. Both Liu Chao-Ying and General Liu Huaqing are

Chinese nationals living in China, and the committee is unaware

of any Justice Department or State Department efforts to have Liu

Chao-Ying or her father extradited. Furthermore, the Justice Department presented no objections to the committee’s public hearings with Johnny Chung where he extensively discussed his interactions with Liu. It is troubling that they would allow their star

witness against Liu to testify publicly about his dealings with her,

and then claim that peripheral documents relating to her are part

of an ongoing investigation. The facts suggest that it is highly unlikely Liu Chao-Ying or Liu Huaqing are the subjects of active Justice Department investigations. Rather, it appears that once again,

78

485 ‘‘Contacts Between Northrop Grumman Corporation and the White House Regarding Missing White House E-Mails,’’ hearing before the Committee on Government Reform, 106th Cong.,

111–12 (Sept. 26, 2000) (preliminary transcript).

the Justice Department is making a bad faith effort to shield itself

from congressional oversight.

c. The DNC

On August 3, 2000, the committee subpoenaed the DNC to

produce the subpoenas and document requests it received from the

Justice Department. For the next 6 weeks, the DNC failed to comply with the subpoena. During this period of time, counsel for the

DNC informed the committee that they had concerns about complying with the subpoena, based on warnings accompanying a number of the subpoenas that they were not to be publicly disclosed.

Counsel for the DNC attempted to contact the Justice Department

during this 6 week period to determine whether the Justice Department objected to the DNC’s compliance with the committee subpoena. DNC counsel claims that despite a number of contacts with

the Justice Department, he was unable to obtain a definitive answer from the Department. Accordingly, as of September 26, 2000,

the committee’s subpoena had still not been satisfied. Therefore,

when Deputy Assistant Attorney General Alan Gershel appeared

before the committee, he was asked about the DNC subpoena:

Committee COUNSEL. We also subpoenaed the DNC. We

asked the DNC for subpoenas served upon it by the Task

Force. Now, despite the fact that the subpoena was served

over 6 weeks ago, the DNC has failed to comply because

the Department of Justice has prevented it from doing so.

This was communicated to us today. The DNC, however,

is either a witness or a target of the Department in this

investigation.

Now I am going to read some words that your immediate

superior, Assistant Attorney General Robinson, spoke at

our last hearing. He testified under oath: ‘‘although a prosecutor may prefer that a witness not disclose information

about a pending case, the government does not have any

right to dictate who a witness can or cannot talk to. Witnesses do not belong to either side of a matter. As a matter

of due process and prosecutorial ethics, the government

cannot threaten or intimidate a witness for the purpose of

preventing a witness from talking to a subject or a target

of investigation or from exercising their First Amendment

rights.’’

Now, isn’t that what the Department of Justice is doing

now in terms of preventing the DNC from complying with

the congressional subpoena?

Mr. GERSHEL. Absolutely not. The DNC has never been

told not to comply with this committee’s subpoena. To the

contrary, it’s not my understanding. I have not had contact

with them. It’s my understanding they were told to fully

comply with the subpoena.485

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486Letter from Alan Gershel, Deputy Assistant Attorney General, to Judah Best, Debevoise

& Plimpton (Sept. 29, 2000) (exhibit 15). 487The Justice Department’s position with respect to the DNC’s compliance with a lawful congressional subpoena—that it can take no position—gives an indication of the Department’s lack

of respect for Congress. Given this position, it is difficult to see how the Department could prosecute any party for obstructing or failing to comply with a congressional subpoena. 488These comments were made by Judah Best, counsel for the DNC, during a telephone conversation on Oct. 4, 2000. 489See, e.g., letter from Daniel O’Brien, Assistant U.S. Attorney, to Custodian of Records,

Democratic National Committee (Jan. 21, 2000) (exhibit 16).

Shortly after the hearing, Mr. Gershel attempted to clarify his

statement in a letter:

Some members of the committee had the misimpression

that the Department was preventing the DNC from complying with its subpoena. I also may have contributed to

the confusion by offering my mistaken understanding that

the DNC had been told by the Department to fully comply

with the subpoena.

I want to clarify that the Department takes no position on

the issue of the DNC’s rights and obligations concerning

compliance with a congressional subpoena. That is an

issue between the DNC and the congressional committee.

It certainly has never been the Department’s intent to prevent or discourage compliance with a congressional subpoena.486

Leaving aside the dramatic difference between Gershel’s initial testimony that the DNC was told to ‘‘fully comply’’ with the subpoena,

and his later statement that the Department ‘‘took no position’’ on

the DNC’s compliance, the effect of the Department’s actions was

clear.487 Two months have passed since the committee issued its

subpoena, and the DNC has not complied with the subpoena.

After the September 26, 2000, hearing, DNC counsel called and

then wrote to the committee to express their ‘‘concern’’ regarding

committee’s counsel’s representations at the hearing. DNC counsel

took the position that the DNC was never ‘‘prevented’’ from complying with the committee’s subpoena. Rather, in their mind, the

Justice Department had protested the committee subpoena, and

had raised ‘‘admonitions’’ with the DNC about disclosing the subpoena.488 The DNC tried to resolve these issues prior to the committee’s hearing, and was unsuccessful. In the mind of DNC counsel, such conduct by the Justice Department did not ‘‘prevent’’ the

DNC from complying the with the committee’s subpoena.

However, there is ample evidence that the Justice Department’s

actions have prevented timely compliance with the committee’s

subpoena:

• A number of Justice Department subpoenas to the DNC

warned the DNC that ‘‘[b]ecause this subpoena relates to an

ongoing official criminal investigation being conducted by

the Federal Bureau of Investigation, it is requested that you

not disclose the existence of the subpoena for an indefinite

period of time. Disclosure may impede the investigation and

interfere with the enforcement of the law.’’ 489 Such directions are, however, contrary to the ethical standards of

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490Letter from Robert Raben, Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform (Sept. 25, 2000) (emphasis added). 491Letter from Judah Best, Debevoise & Plimpton, to Dan Burton, chairman, Committee on

Government Reform (Oct. 6, 2000) (exhibit 17). 492The mere fact that the DNC shows such interest in protecting the integrity of the Justice

Department investigation speaks volumes. The DNC is at the center of the campaign fundraising scandal. The fact that the DNC is working in tandem with the Justice Department to

keep information about the investigation out of Congress’ hands suggests that the DNC is trying

to hide something about the investigation. If the subpoenas to the DNC are anything like the

subpoenas to the White House, it is likely trying to hide the fact that the Justice Department

has conducted a weak and politically biased investigation. 493The DNC and their counsel have a long history of misrepresentations to the committee.

These are detailed in chapter II of the committee’s interim report on the campaign fundraising

investigation.

prosecutors outlined by Assistant Attorney General Robinson before the committee.

• In a letter to the committee, which was copied to the DNC,

Assistant Attorney General Raben expressed concern about

the committee’s subpoena to the DNC. In that letter, Raben

stated that ‘‘I am writing to express the Department’s serious concern about the committee’s recent practice of subpoenaing public and private sector entities to produce copies

of grand jury subpoenas and other documents relating to

evidence gathered by the Campaign Financing Task Force,

including subpoenas and documents relating to ongoing

criminal investigations.’’ 490 The only private sector entity to

which the committee directed such a subpoena was the

DNC. The Justice Department’s expression of ‘‘serious concern’’ about the DNC subpoena was in conflict with the Department’s official position that it could take no position on

whether the DNC should comply with the subpoena.

Indeed, these protests had their intended effect, as on October 6,

2000, the DNC informed the committee that it would not comply

with the committee’s subpoena.491 In his letter to the committee,

DNC counsel repeatedly cited the fact that the Justice Department

had ‘‘protested’’ the committee’s subpoena, and that the Department had concerns about the effect of compliance with the subpoena on ongoing investigations. Claiming that it wanted to protect

these ongoing investigations, as well as the reputations of individuals named in the subpoenaed documents, the DNC refused to comply with the committee’s subpoena.492

At the conclusion of this matter, it is clear that both the DNC

and the Justice Department have worked together to keep the committee from obtaining information which might be extremely embarrassing to the Department of Justice and which might expose

the DNC to additional investigation, as happened to the White

House when it became clear the Justice Department had failed to

ask the President and Vice President so many important questions.

The Justice Department’s admonitions and protests regarding the

committee’s subpoena sent the clear message to the DNC that it

should not comply with the committee’s subpoena. At the same

time, in his letter of September 29, 2000, Mr. Gershel did state

that the Department took no position on the committee’s subpoena.

Therefore, in the final analysis, it is the DNC that has decided to

willfully disobey a lawful congressional subpoena.493

81

494 Around 1996, Trie began to use his residence in Little Rock as the office for his Arkansas

companies, consequently most of his business records were at that location. 495The committee requested records from Trie in a letter to Trie’s attorneys on Jan. 20, 1997.

Trie’s attorney said that because of the Justice Department’s criminal investigation, they would

not comply with the committee’s document request. In February 1997, the committee attempted

to serve a subpoena on Trie’s attorneys in Washington, DC, but the attorneys refused to accept

service. 496Testimony of Maria Mapili at 21, U.S. v. Yah Lin ‘‘Charlie’’ Trie, No. LR–CR–98–239 (D.

AR, May 18, 1999). Mapili received immunity and testified against Trie during his trial in Little

Rock, AR on obstruction of justice charges in April 1999. Before the trial was completed, Trie

reached a plea agreement with the government. 497 Id. 498The FBI charged that the timing of the grand jury subpoena cost them a valuable investigative lead. The Justice Department and the FBI had already agreed to place a pen register

on Mapili’s telephones to record the telephone numbers of incoming and outgoing calls made

after Mapili was served with the grand jury subpoena. Before the pen register was in place,

FBI Special Agent Daniel Wehr, in Little Rock, AR, was ordered to serve the grand jury subpoena on Mapili. Both Agent Wehr and FBI Special Agent in Charge in Arkansas Ivian Smith

complained that the decision to prematurely serve the subpoena before the pen register was installed cost them a valuable lead. ‘‘The Justice Department’s Handling of the Yah Lin ‘‘Charlie’’

Trie Case,’’ hearing before the Senate Committee on Governmental Affairs, 106th Cong., 52–53

(Sept. 22, 1999). 499 Interview of Kevin Sheridan, Committee on Government Reform, at 2–3 (Sept. 13, 1999).

2. The Justice Department Failed to Obtain a Timely Search Warrant for Charlie Trie’s Residence

In 1997, a serious dispute arose between Justice Department attorneys and FBI agents regarding decisions made by the Justice

Department in the investigation of Charlie Trie. The dispute concerned whether the Justice Department justifiably rejected a FBI

request for a search warrant for Trie’s residence after the FBI

found documents discarded in the trash that were responsive to a

subpoena.494

On March 7, 1997, Maria Mapili, Charlie Trie’s bookkeeper, was

served with a subpoena for documents by the Senate Committee on

Governmental Affairs.495 Mapili contacted Trie in Asia and informed him that she had been served with a subpoena from the

Congress. According to Mapili, Trie told her to throw away certain

documents called for in the subpoena.496 Mapili began to destroy

documents specified by Trie, but at some point, Mapili became

nervous and hid documents instead of destroying them. The FBI

found in Trie and Mapili’s garbage a number of documents relevant

to the fundraising investigation, and which were responsive to the

Senate subpoena.

FBI Special Agent Roberta Parker and her partner, FBI Special

Agent Kevin Sheridan requested search warrants for Trie’s residence because they believed that Mapili was obstructing justice by

destroying evidence. The agents were told by Task Force chief,

Laura Ingersoll, that grand jury subpoenas had to be served before

probable cause for search warrants would exist.497 A grand jury

subpoena was served on Mapili on June 27, 1997.498

In the search of the trash after the grand jury subpoena was

served, the FBI found discarded financial statements and a check

register for Daihatsu, along with a fax cover sheet to Antonio Pan.

Agent Sheridan’s understanding from Laura Ingersoll was that

finding additional discarded documents after the grand jury subpoena was served would be sufficient evidence to allow the FBI to

obtain the search warrant.499 Agents Parker and Sheridan began

drafting an affidavit for search warrants for the residences of Trie

and Mapili on July 1, 1997, and gave a copy to the Justice DepartVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00099 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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500 Interview of Roberta Parker, Committee on Government Reform, 4 (Aug. 27, 1999); interview of Kevin Sheridan, Committee on Government Reform, at 3 (Sept. 13, 1999). 501During the telephone conference, Lee Radek acknowledged the deteriorating relationship

between the Task Force and the FBI when he advised William Corcoran that they were not to

seek a search warrant in Little Rock without his personal approval. Radek’s purpose behind this

decision was to inject himself between the FBI and Ingersoll, who was a frequent target of FBI

attacks and criticisms. Interview of Lee Radek, Committee on Government Reform, at 2 (Sept.

17, 1999). Radek’s move added another bureaucratic layer to an already cumbersome process

and required the approval of the Chief of the Public Integrity Section on routine matters. 502 Interview of Laura Ingersoll, Committee on Government Reform, at 6 (Sept. 17, 1999). 503 Interview of Kevin Sheridan, Committee on Government Reform, at 3 (Sept. 13, 1999). Ingersoll met with Agents Sheridan and Laughlin in the afternoon of July 2, 1997, after the telephone conference with Lee Radek. Ingersoll did not specifically recall meeting with Sheridan

and Laughlin, while Laughlin recalled the meeting, but could not remember what was said.

Interview of Laura Ingersoll, Committee on Government Reform, at 5 (Sept. 17, 1999); interview

of Laura Laughlin, Committee on Government Reform, at 2 (Oct. 1, 1999). 504 Ingersoll e-mail to Mark Richard, Bob Litt, and Lee Radek, July 7, 1997 (exhibit 18). 505 ‘‘The Justice Department’s Handling of the Yah Lin ‘‘Charlie’’ Trie Case,’’ hearing before

the Senate Committee on Governmental Affairs, 106th Cong., 1st Sess., 78 (Sept. 22, 1999);

interview of Kevin Sheridan, Committee on Government Reform, at 3 (Sept. 13, 1999). 506Sheridan said they had done searches before with a lot less probable cause than there was

in the Trie case. Interview of Kevin Sheridan, Committee on Government Reform, at 5 (Sept.

13, 1999); Parker said she had never seen a warrant be rejected like this. Interview of Roberta

Parker, Committee on Government Reform, at 8 (Aug. 27, 1999). 507See Illinois v. Gates, 462 U.S. 213, 238 (1983); Beck v. Ohio, 379 U.S. 89, 91(1964);

Brinegar v. U.S., 338 U.S. 160, 176 (1949); Wong Sun v. U.S., 371 U.S. 471, 479 (1963).

ment attorneys. Agents Parker and Sheridan had not heard of any

opposition to the search warrants up to this point.500

On July 2, 1997, Justice Department Attorneys Jonathan Biran

and William Corcoran had a telephone conference with Lee Radek,

and during this discussion, the three Department lawyers decided

that there was no probable cause for the warrants.501 This decision

contradicted everything the FBI had been told up to this point.

While Ingersoll conceded that the discarded documents were relevant, she said that before a warrant could be obtained, there also

needed to be proof that Mapili was knowingly destroying the documents to avoid producing them.502

Ingersoll told FBI agents Kevin Sheridan and Laura Laughlin

that the search warrants were rejected, but she could not give a

good answer as to why there was no probable cause.503 Ingersoll

sent an e-mail to her superiors on July 7, 1997, stating that the

‘‘case agent’’ and Laughlin conceded that there was no probable

cause for the search warrants.504 In her testimony before the Senate, Ingersoll admitted she was referring to Agent Sheridan, but

Agent Sheridan denied that he ever conceded that there was no

probable cause for the warrants.505 Both Agents Parker and Sheridan found the refusal to pursue search warrants in this case to be

abnormal compared to their other experiences.506

The Justice Department imposed a higher standard than necessary for a search warrant. A search warrant needs to be supported by probable cause. Probable cause exists ‘‘where the known

facts and circumstances are sufficient to warrant a man of reasonable prudence in the belief that contraband or evidence of a crime

will be found.’’ 507 The question was simply whether it was reasonable to believe, given the known facts and circumstances, that

Mapili was obstructing the subpoenas, not whether it could be

proven.

After the search warrant request was denied, the FBI agents

continued to investigate the matter. Agent Parker spoke with

Agent Daniel Wehr in Little Rock and they listed documents found

in the trash covers that were not produced pursuant to the grand

83

508 Roberta Parker memorandum to ‘‘Criminal Investigative’’, July 25, 1997. 509 Interview of Laura Ingersoll, Committee on Government Reform, at 7 (Sept. 17, 1999).

Biran told Ingersoll that some of the documents were produced pursuant to the grand jury subpoena were incriminating and some other documents that were destroyed were copies of documents that had been produced. 510 Interview of Roberta Parker, Committee on Government Reform, 7–8 (Aug. 27, 1999). 511 Indictment of Yah Lin ‘‘Charlie’’ Trie, U.S. v. Trie, No. LR–CR–98–239 (D. AR., Nov. 9,

1998). 512Sheridan said they were told in writing not to contact the Senate. Interview of Kevin

Sheridan, Committee on Government Reform, at 4 (Sept. 13, 1999). Parker said Ingersoll told

them she would handle all liaison with the Senate, and Parker took that to mean they should

not contact the Senate. Interview of Roberta Parker, Committee on Government Reform, at 8

(Aug. 27, 1999). 513 Radek said there were no special restrictions on Task Force attorneys, but the usual procedures were to be followed—informing superiors after the fact or going through the Congressional

Affairs Office. Interview of Lee Radek, Committee on Government Reform, at 3 (Sept. 17, 1999). 514 Corcoran memos, attachment to memorandum of Sept. 29, 1997, at A–046; interview of

Laura Ingersoll, Committee on Government Reform, at 3 (Sept. 17, 1999).

jury subpoena.508 Task Force Attorney Jonathan Biran and Agent

Parker then traveled to Little Rock to compare the documents recovered in the trash with the documents produced pursuant to the

grand jury subpoena. After the review, Biran advised Ingersoll that

there was no basis for an obstruction prosecution against Mapili.509

Agent Parker had a different assessment of the document review.

It was clear to Agent Parker that folders marked ‘‘President Clinton’’ and ‘‘Vice President Gore’’ that contained only one or two documents were not complete as was a fax cover sheet indicating five

pages when only one was produced.510

The FBI agents were proven correct. On October 21 and 22,

1997, Mapili was interviewed by the Task Force and FBI agents in

anticipation of her testimony before the grand jury. During the

interviews, Mapili admitted that she had destroyed documents and

stashed other documents that still remained hidden. Mapili had not

informed her attorney or Trie’s attorneys about the hidden documents. In addition, Mapili admitted that she did this at the direction of Charlie Trie, who told her to destroy certain documents

after she received the Senate subpoena in March 1997. On October

23, 1997, the FBI conducted simultaneous searches of Trie’s residence and office in Little Rock and his office at the Watergate in

Washington, DC, uncovering many responsive documents that had

never been produced to investigators. On November 9, 1998, Charlie Trie was indicted in Arkansas for obstructing the campaign finance investigation of the Senate Committee on Governmental Affairs.511

The Senate was not informed that Mapili was destroying records

in response to their March 1997 subpoena. The FBI agents were

told not to have contact with the Senate investigation.512 Although

Agents Parker and Sheridan were under the impression that Ingersoll could contact the Senate should the need arise, Ingersoll denied it was her responsibility. Ingersoll’s superior, Lee Radek, said

Ingersoll was free to contact the Senate with any pertinent information.513 The explanation given by Ingersoll and Corcoran for not

contacting the Senate was that since they had not seen the Senate

subpoena, they did not know what it subpoenaed, and thus they

were not in a position to determine if the documents found in the

trash were responsive to it.514

Although Justice Department attorneys and FBI agents differed

on their recollection of the facts and the application of the law, one

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515 ‘‘The Justice Department’s Handling of the Yah Lin ‘‘Charlie’’ Trie Case,’’ hearing before

the Senate Committee on Governmental Affairs, 106th Cong., 99 (1999). 516 Id. at 98. Ingersoll was the first chief of the Task Force. She was appointed to head the

Task Force by Lee Radek on Nov. 1, 1996. When it became apparent that the Task Force was

not doing its job properly, Attorney General Reno replaced Ingersoll with Charles LaBella in

September 1997. 517 Id. at 12 (statement of Special Agent-in-Charge Ivian Smith). Agent Smith is a 25-year veteran of the FBI. 518The Justice Department collected 13 boxes worth of documents from Trie. The committee

examined the documents and found a great deal of significant information that could not have

been obtained from any other source.

area of general agreement was the degree of control top-level Justice Department officials exercised over the campaign finance investigation. Lee Radek, Chief of the Public Integrity Section and a

28-year veteran of the Justice Department, stated: ‘‘we had the Attorney General regularly wanting to know how the investigation

was progressing. We had supervision of the Acting Assistant Attorney General on a daily basis, something that usually does not happen.’’ 515 Laura Ingersoll, former chief of the Task Force and a 11-

year veteran of the Justice Department, said the degree of control

exercised by the Justice Department was ‘‘unprecedented.’’ 516 For

the FBI agents in the field, the Justice Department’s control of the

investigation caused, ‘‘problems of aggressiveness and timeliness of

investigative avenues [and] . . . investigative decisionmaking

[that] was slow, if at all.’’ 517

The Justice Department’s decisionmaking process caused a substantial delay in the Charlie Trie investigation. Even when it did

finally issue a grand jury subpoena to Mapili, its purpose was to

scare Mapili into preserving the documents and not to investigate

Trie’s criminal activity, even though many of Trie’s illegal activities

had been publicly documented. Without the FBI’s insistence that

something be done to preserve evidence, there was no indication

that the Justice Department intended to subpoena documents that

proved very useful in the investigation of Trie.518

D. THE JUSTICE DEPARTMENT FAILED TO PURSUE KEY INDIVIDUALS

AND ENTITIES

1. Failure to Pursue the DNC

While the White House was the focal point for favors and access,

the DNC served as the collection point for the illegal foreign and

conduit contributions. In that capacity, officials at the DNC worked

closely with the individuals bringing in foreign conduit contributions, John Huang and Charlie Trie. Huang and Trie both began

their associations with the DNC as outsiders, giving illegal foreign

and conduit contributions in exchange for favors and access. By

1996, the DNC had brought Huang and Trie inside the operation.

Huang was a fundraiser working for the DNC and Trie spent a

large amount of time soliciting contributions for Huang’s events.

No one voiced any concerns about allowing Huang or Trie to work

on the DNC’s behalf.

There is evidence, however, that at least four officials at the

DNC may have known of, encouraged or even participated in, illegal activities by Huang and Trie. Their knowledge of illegal acts by

Huang and Trie began at the very early stages of Huang and Trie’s

association with the DNC. In interviews and depositions with the

Justice Department and Congress, the DNC officials gave very misVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00102 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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519Deposition of Melinda Yee, Senate Committee on Governmental Affairs, May 9, 1997, at

14.520 Id. at 198. 521Memorandum from Melinda Yee to RHB [Ronald H. Brown], Oct. 15, 1991, DNC 0828866–

67 (exhibit 19). 522Memorandum from Melinda Yee to RHB [Ronald H. Brown], Oct. 22, 1991, DNC 0828865

(exhibit 20).

leading and potentially perjurious testimony to protect the DNC

and to cover up their own involvement in the illegal activity.

Despite the fact that the Justice Department has all of the information about the DNC officials’ involvement in the fundraising

scandal, the committee is not aware of any DNC official who has

been under serious scrutiny by the Task Force. In several instances, DNC officials were questioned about their knowledge or

participation in Huang and Trie’s illegal acts, but there is no evidence that the Justice Department intended to investigate thoroughly or prosecute possible criminal acts by officials of the DNC.

At other times, the Justice Department completely ignored evidence of wrongdoing by DNC officials.

a. Melinda Yee, DNC Director of Constituencies

Melinda Yee was a key figure in the campaign fundraising investigation, as she had contacts with John Huang and the Riadys in

the 1992 election all the way through the 1996 election. Yee met

Huang in the late 1980s when she worked as the executive director

of the Organization for Chinese Americans, and Huang was just beginning his political involvement. Melinda Yee joined the DNC in

1990 as the Director of Constituencies. When Yee worked for both

the DNC and Clinton/Gore ’92 during the 1992 campaign, she

would occasionally see Huang in Los Angeles. After the election,

Yee worked briefly for the Office of Presidential Personnel before

joining the Commerce Department in May 1993.519

In deposition testimony before the Senate, Yee was asked to recite the times she saw Huang between their initial meeting and his

employment with the Commerce Department in July 1994. Yee

stated that she saw him whenever the 1992 campaign went to Los

Angeles, but she could not recall any other specific meetings.520

Yee failed to mention her interaction with Huang in relation to the

DNC’s trip to Asia between December 4–13, 1991, for DNC Chairman Ron Brown. To ensure that the fundraising portion of the trip

was successful, Yee recruited John Huang to raise money in Hong

Kong. Yee also explained Huang’s role on the trip to Chairman Ron

Brown:

John Huang is our key to Hong Kong. He is also interested

in renewing his trusteeship to us on this trip through his

Asian banking connections. He has agreed to host a high

dollar event for us in Hong Kong with wealthy Asian

bankers who are either U.S. permanent residents or with

U.S. corporate ties. He will make sure that all of the hotel

accommodations, meals, and transportation are paid for by

his bank. He should be invited to be part of our delegation.521

Yee said John Huang agreed to host an event in Hong Kong with

a goal of $50,000.522 The schedule for Chairman Brown shows dolVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00103 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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523Memorandum from Melinda Yee to Alexis Herman, et al., Dec. 2, 1991, DNC 0828853–58

(exhibit 21). 524 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the Committee on Government Reform, 106th Cong., 192–195 (Dec. 17, 1999) (preliminary transcript). 525 Id. at part I, 73. 526Memorandum from Melinda Yee to Governor Clinton, Aug. 14, 1992, CG92B–00543 (exhibit 22). 527Letter from Nancy Luque to Barbara Comstock, chief counsel, Committee on Government

Reform and Oversight, July 17, 1998 (exhibit 23).

lar signs next to a lunch and a dinner on December 10, 1991,

hosted by the Lippo Group.523

Huang testified that Yee invited him to go on the trip and that

he did arrange for Lippo to pay the DNC’s expenses. Huang gathered individuals together for a lunch and dinner hosted by Lippo,

but he flatly denied that he ever promised to raise money or did

raise any money in Hong Kong:

Mr. BURTON. Exhibit No. 109. That exhibit is a memo from

Melinda Yee to DNC Chairman Ron Brown. Ms. Yee said

you offered to host an event in Hong Kong with a goal of

$50,000; is that correct?

Mr. HUANG. The memo indicated that way. I did not really offer that $50,000.

* * * * *

Mr. BURTON. You never promised that. Did you say that

you would consider it? Did you say you would do it?

Mr. HUANG. She has proposed that I could do that.524

Less than 1 year later, Huang and Yee were again discussing

fundraising for the DNC. In August 1992, Huang asked Yee to arrange a private limousine ride between James Riady and then-Governor Clinton.525 Yee made the arrangements and drafted a briefing memo to Clinton. Huang provided her with the information for

the memo. Yee wrote that Riady gave $100,000 for the August 14,

1992, fundraiser and that he had, ‘‘the potential to give much

more.’’ 526 Although Huang denied talking to Yee about future contributions, after Riady’s limousine ride with Governor Clinton,

Riady funneled over $640,000 to the 1992 campaign through his

employees.

Yee invoked her fifth amendment right against self-incrimination

with the committee and refused to appear at a deposition.527 She

had previously given deposition testimony to the Senate Committee

on Governmental Affairs in May 1997. In her testimony to the Senate, Yee directly contradicted her own DNC documents and

Huang’s testimony on the subject of fundraising with Huang:

Q. Did you ever talk to John Huang about fundraising?

A. No.

Q. When I say ever, I mean at any time. Did you talk to

John Huang about fund raising, political or campaign fund

raising?

A. Well, I know he did fundraising, but I was, again, in the

political division and he worked with the finance people on

fundraising matters, specific fundraising.

87

528Deposition of Melinda Yee, Senate Committee on Governmental Affairs, May 9, 1997, at

198–99 (emphasis added). 529The Justice Department should also investigate Yee’s statements about APAC-Vote, an

Asian American organization set up for the 1992 campaign by Nora Lum. Yee denied that

APAC-Vote was affiliated with the DNC, but Yee wrote to Lum stating that APAC-Vote was

very important to the DNC and the DNC agreed to fund the organization. In addition, Yee wrote

a letter authorizing Nora Lum of the ‘‘DNC’s APAC-Vote Project to open an account under the

name of ‘DNC/APAC’.’’ 530FBI interview of David Lawrence Mercer, at 9 (Apr. 27, 1998). 531FBI interview of John Huang, at 57 (Jan. 19–Feb. 10, 1999).

Q. Did you discuss fund raising matters with him?

A. Not—I was working—I talked to him about political

issues. I mean, if he had a fund raising, it could have been

mentioned, but if he ad [sic] to actually do fund raising, he

worked with finance. I mean, I just didn’t, I wasn’t—that

wasn’t my job.

Q. When are you talking about? You said, you talked to

John Huang when he worked with finance at DNC.

A. No, no, I’m saying he worked with—I’m not staff forwarding. I’m just saying, when I was at the DNC or during

the campaign, I would work with him on these issues and

campaign organizing. If he had finance issues, he didn’t

work with me. He worked with whoever he worked with

and I don’t know who in the finance division. This was in

1992. I’m not talking about when he actually worked

there.528

Yee’s testimony before the Senate cannot be reconciled with documents or the testimony of John Huang. Yee asked Huang to raise

$50,000 for the DNC in Hong Kong and they discussed Riady’s

$100,000 and ‘‘potential to give much more’’ during the 1992 campaign.

The Justice Department should investigate Melinda Yee about

her relationship with John Huang, her interaction with Huang for

the DNC’s 1991 trip to Asia, the 1992 limousine ride, and the contributions that resulted from the ride.529 There is evidence that

Yee may have misled the Senate about the nature of her relationship with Huang. Despite this evidence, the committee has seen no

indication that Yee is under active investigation.

b. David Mercer, DNC Deputy Finance Director

There is substantial evidence that DNC fundraiser David Mercer

conspired with John Huang to violate the Hatch Act, and then lied

about his actions when questioned by this committee. While he

worked as a Commerce Department employee, Huang was constrained in the political activities he could perform. Although Mercer was ‘‘mindful of the Hatch Act,’’ it did not stop him from asking

Huang repeatedly to violate the statute.530 Mercer placed numerous calls to Huang at the Commerce Department and asked at

least once to meet him across the street from the Commerce Department so Mercer could ask Huang to solicit contributions. At

one point, Huang even asked Mercer not to get him involved in

fundraising while he worked at the Commerce Department.531 Mercer did not stop.

88

532S. Rept. No. 105–167, at 1189 (1998). 533FBI interview of John Huang, at 26 (Feb. 23–Mar. 26, 1999). 534S. Rept. No. 105–167, at 1189 (1998). 535 Id. at 1189–1190. 536FBI interview of David Lawrence Mercer, at 7 (Apr. 27, 1998). 537FBI interview of John Huang, at 27 (Feb. 23–Mar. 26, 1999). 538S. Rept. No. 105–167, at 1190 (1998). 539DNC check tracking forms for Arief Wiriadinata and Soraya Wiriadinata, DNC 1276337

and DNC 1276338.

In June 1995, Mi Ryu Ahn contributed $10,000 to the DNC. Ahn

made the contribution after she received four or five telephone calls

from John Huang, who was working at the Commerce Department.532 Although Huang stated that he did not solicit Ahn for her

contribution, Huang clearly referred her to Mercer.533 Four days

before receiving Ahn’s $10,000, Mercer left a message for Huang at

the Commerce Department that read: ‘‘Have talked to Mi. Thank

you very much.’’ 534 On the check tracking form used by the DNC

to record both internal and required information for the FEC, Mercer listed Jane Huang, John Huang’s wife, as the solicitor of the

contribution from Ahn.535 Mercer stated that he listed Jane Huang

as the solicitor because she was an active trustee and there was

a connection between the Huangs and Ahn.536 Statements from

both John Huang and Mi Ryu Ahn contradict Mercer’s contention.

Huang stated that Jane Huang most likely did not know Ahn and

that Jane did not solicit contributions while John worked at the

Commerce Department.537 Ahn could not recall ever talking to

Jane Huang, but she did remember that John Huang asked her to

get involved with the DNC.538

John Huang also introduced Mercer to Arief and Soraya

Wiriadinata. In November 1995, while Huang still worked at the

Commerce Department, Arief and Soraya Wiriadinata each contributed $15,000 to the DNC. David Mercer was the DNC contact for

those two contributions and he filled out their check tracking forms

for the DNC. Mercer again recorded Jane Huang, John’s wife, as

the solicitor of the contributions.539 Mercer was asked why he listed Jane Huang, instead of John Huang, as the solicitor the contributions from the Wiriadinatas:

Q. How did you know to credit this to Jane Huang as solicitor?

A. Through an understanding prior of the Wiriadinatas

having association with the Huangs.

Q. How did that understanding come about?

A. I don’t know.

Q. But you understood that the Wiriadinatas and the

Huangs were associated. How did you understand they

were associated?

A. I don’t recall.

Q. Why didn’t you put John Huang down as solicitor?

A. I don’t recall why I—you know, I don’t recall. I didn’t,

you know—I don’t . . . I don’t recall. Jane could have—I

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540Deposition of David L. Mercer, Senate Committee on Governmental Affairs, May 27, 1997,

at 33–34. 541S. Rept. No. 105–167, at 1191 (1998). 542 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 280 (Dec. 17, 1999) (preliminary

transcript). 543Letter from Richard Sullivan, director, Business Leadership Forum, and Timothy C. Collins, chairman, Business Leadership Forum, to Charlie Trie, Oct. 10, 1994 (exhibit 24). 544 Interview of Yah Lin ‘‘Charlie’’ Trie, Committee on Government Reform, at 2–3 (Feb. 29,

2000).

could have been told that Jane was the one that brought

these checks in. I don’t know.540

Mercer could not explain his own actions because to do so would

uncover Mercer’s role in encouraging Huang to violate the Hatch

Act.

John Huang and Arief and Soraya Wiriadinata all directly contradict Mercer’s testimony. Not only did Arief say that John Huang

solicited the November 1995 contributions, but both Arief and

Soraya denied ever speaking to or meeting with Jane Huang.541

Huang also stated that Mercer testified falsely:

Mr. WILSON. But you do recall, and I may be wrong on the

complete number, but on some of the DNC check tracking

forms your wife was listed as the solicitor of contributions

from the Wiriadinatas.

Mr. HUANG. I’ve learned that since I saw the documents.

Mr. WILSON. Now, that was not correct you’ve testified, is

that right?

Mr. HUANG. That was not correct. My wife did not solicit

those contributions, no.542

The Justice Department should investigate David Mercer for

knowingly giving false testimony to the Congress by stating that

Jane Huang solicited the contributions from Mi Ryu Ahn and the

Wiriadinatas. Mercer’s fundraising activities with Huang, while

Huang was at the Commerce Department, points to a greater concern: Mercer knew that the DNC was hiring someone who was willing to break the law in return for contributions to the DNC.

c. Richard Sullivan, DNC Finance Director

In 1994, Charlie Trie and his foreign financier, Ng Lap Seng,

contributed $15,000 to the DNC in illegal foreign money through

the San Kin Yip International Trading Co. Documents show that

DNC officials knew the money came from Ng Lap Seng and may

have attempted to hide that fact. There is no evidence that the Justice Department has pursued these issues.

On October 10, 1994, Charlie Trie received a fundraising letter

from Richard Sullivan, Director of the BLF, and Tim Collins of the

Business Leadership Forum (BLF), a DNC donor council for business leaders to interact with officials in the Clinton administration

and the Democratic party.543 Trie was invited to recruit a guest to

join the BLF and attend a small October 20, 1994, BLF event with

Vice President Gore and senior administration officials in Washington, DC. Trie recruited his foreign benefactor Ng Lap Seng to

join the BLF.544

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545 Id. at 3. 546Letter from Richard Sullivan to Ng Lap Seng, Oct. 24, 1994 (exhibit 25). 547FBI interview of Richard Lyles Sullivan, at 14 (Aug. 13, 1997). 548FBI interview of Richard Lyles Sullivan, at 14 (Aug. 13, 1997). 549Deposition of Richard Sullivan, Senate Committee on Governmental Affairs, June 4, 1997,

at 101–102. 550FBI interview of Richard Sullivan, at 2 (Nov. 21, 1997). The Business Council was the earlier name for the BLF. 551The only known copy of Sullivan’s letter was seized by the Justice Department and the

FBI after a search warrant was executed on Charlie Trie’s residence in Little Rock in October

1997. 552Sullivan was interviewed by the Justice Department two times prior to the search warrant

in October 1997. After the letter was seized, the Justice Department interviewed Sullivan Nov.

21, 1997, Dec. 1, 1997, May 14, 1998, Sept. 17, 1998, Sept. 18, 1998, Nov. 23, 1998, and Mar.

15, 1999. 553FBI interview of Charlie Trie, at 7 (June-October 1999).

To pay for Ng’s membership in the BLF, a company newly incorporated by Trie, San Kin Yip International Trading Co., gave a

$15,000 check to the DNC. Sullivan filled out the DNC check tracking form for the $15,000 San Kin Yip contribution. The check was

signed by Ng Lap Seng in Chinese.545 On the check tracking form,

Sullivan listed Charlie Trie as the contact for the contribution. Following the event, though, Sullivan sent a letter to Ng Lap Seng,

not Trie, thanking him for his contribution and for joining the

BLF.546 There was no documentary evidence other than the Chinese signature that would have told Sullivan that the contribution

came from Ng and not Trie, who Sullivan listed on the check tracking form.

In deposition testimony, Sullivan distanced himself from Trie. In

fact, Sullivan said that he specifically told David Mercer to instruct

Trie that conduit contributions were unacceptable.547 Sullivan said

he also gave a general warning to DNC fundraisers that if there

was any chance of illegal contributions, Trie might be involved.548

Sullivan stated he did not solicit any contributions from Trie and

that Deputy Finance Director David Mercer was Trie’s primary

contact.549 Sullivan did describe to the Justice Department a September 1994 event Trie attended at Mercer’s invitation where Trie

agreed to serve as a chairman of the DNC Business Council.550

Sullivan said about 30 people attended and they went to hear the

Vice President speak at the Old Executive Office Building. However, Sullivan neglected to tell the Justice Department about his

involvement with Trie and Ng at the October 20, 1994, event and

Ng’s contribution to the DNC.

The Justice Department did not confront Sullivan with the documents evidencing his own involvement with the illegal contribution

from Ng. The Justice Department has had possession of Richard

Sullivan’s thank you letter to Ng Lap Seng since October 1997.551

The Justice Department interviewed Sullivan seven times after it

seized the letter from Charlie Trie’s residence in Little Rock and

not once did the Justice Department ask Sullivan about it.552 The

Justice Department did manage to ask Trie whether he sponsored

Ng for membership in the BLF. When Trie could not recall, there

were no further questions on the subject.553

d. Fran Wakem, Deputy Director, DNC Business Leadership

Forum

Fran Wakem was the Deputy Director of the Business Leadership Forum. In late 1994, Wakem arranged for an invitation to Lin

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554 Note from Jennifer Russell to Charlie Trie (exhibit 26). Attached to the letter is the committee’s translation of the letter. 555Letter from Francessa Wakem to Miss Lin Rou Qing, Nov. 9, 1994 (exhibit 27). 556Facsimile from Jennifer Russell to Fran Wakem, Nov. 16, 1994 (exhibit 28). The draft letter from Fran Wakem to Lin Ruo Qing is attached. 557Letter from Fran Wakem to Lin Ruo Qing, Nov. 16, 1994 (exhibit 29). 558FBI interview of Francessa J. Wakem, at 2 (Oct. 6, 1998). 559 Id. 560FBI interview of Richard Sullivan, at 2 (Sept. 18, 1998). 561 Id. 562 Id. 563 Interview of Fran Wakem, Committee on Government Reform, at 3 (Sept. 13, 2000).

Ruo Qing, a former colonel in the People’s Liberation Army who

was associated with Charlie Trie, to come to the United States and

attend a DNC fundraiser.

In 1994, Trie was introduced to Lin Ruo Qing when she served

as the chairwoman of the San You Scientific and Technology Industry Group in Beijing, which was a Chinese Government-controlled

entity. Trie started his own company called Sanyou Science &

Technology Enterprises USA, Inc. in hopes of creating a joint venture with Lin’s company in Beijing.

As part of his efforts to enter a joint venture with Lin, Trie invited Lin to attend a DNC fundraiser in December 1994. Trie’s employee, Jennifer Russell, contacted Richard Sullivan, Director of the

DNC’s Business Leadership Forum, and was told that a new member needs to pay $10,000 in order to attend a BLF event.554 Since

Trie was already a member of the BLF, Sullivan’s reference applied

to Trie’s efforts to get Lin into the BLF event.

In order to facilitate Lin’s entry into the United States, Trie,

through his employee Jennifer Russell, asked Fran Wakem, deputy

director of the BLF, to invite Lin to a BLF event in the United

States. In a letter dated November 9, 1994, Fran Wakem invited

Lin to join the BLF and attend one of several upcoming BLF

events.555 Wakem signed the letter and addressed it to Lin’s business address in Beijing. Wakem’s letter apparently was not specific

enough to enable Lin to receive a United States entry visa. On November 16, 1994, Russell sent a copy of the letter back to Wakem

with suggested revisions.556 Wakem quickly changed the letter,

signed it, and sent the revised letter, still with the Beijing address,

back to Russell.557

The FBI interviewed Wakem about her involvement in inviting

a former military officer from Beijing to join the BLF and attend

a BLF event. Although Wakem verified her signatures, Wakem had

no recollection of her letters to Lin.558 Wakem knew that foreign

nationals could not join the BLF because they could not contribute,

and she could not think of any situation where a foreign national

was invited to join the BLF.559 Richard Sullivan, director of the

BLF, said that Wakem’s letters to Lin were prepared at Charlie

Trie’s request.560 Sullivan, though, said he authorized Wakem to

invite Lin to attend BLF events, but not to invite Lin to join the

BLF.561 Sullivan surmised that Wakem sent letters inviting Lin to

join the BLF because it was easier than drafting a new letter.562

Wakem’s letter to Lin contained two references about traveling to

the United States. Wakem admitted that such references were not

contained in BLF form letters inviting someone to join the donor

program.563

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564 Id. at 3. 565 Id. at 3. 566 Id. at 4. 567 Brian Duffy and Bob Woodward, ‘‘FBI Warned 6 on Hill About China Money; Officials Say

Lawmakers, Others Targeted in $2 Million Plan to Buy Influence,’’ Washington Post, Mar. 9,

1997, at A1.

In an interview with the committee, Wakem stated that she did

not recall any of her dealings with Russell or the Lin letters.

Wakem did admit, though, that the letters she signed to Lin were

not ‘‘form letters.’’ 564 As such, they were required to be approved

by the DNC’s general counsel’s office before being sent out, but

Wakem could not specifically recall whether the letter to Lin was

approved by the general counsel’s office.565 In addition, since the

letters referencing visits to the United States were clearly not form

letters, Sullivan’s speculation that Wakem sent out a form letter

inviting Lin to join cannot be correct. Wakem could not explain

why it would not have occurred to her that the letters were inappropriate when she added two sentences inviting Lin to the United

States. In her interview with the committee, Wakem characterized

her letter as ‘‘wacky’’ and asked rhetorically, ‘‘why in the hell was

I doing that?’’ 566 Wakem’s memory loss this year in no way effects

the fact that in 1994, she knowingly invited a foreign national living in Beijing to join the BLF.

2. Failure to Pursue Foreign Kingpins

The campaign finance investigation revealed that three major

participants in the scandal—John Huang, Charlie Trie, and Johnny

Chung—each had wealthy and powerful foreign patrons. Documentary and testimonial evidence revealed that the foreign patrons had

indeed funneled illegal foreign contributions into the DNC. Four

foreign nationals in particular attracted investigative scrutiny:

James Riady, Ng Lap Seng, General Ji Shengde, and Tomy Winata.

These foreign nationals attracted attention not just because of the

hundreds of thousands of dollars they provided in illegal political

contributions, but also because they all had strong ties to the People’s Republic of China (PRC) and other foreign governments. In

March 1997, it was reported that United States intelligence had

learned in 1996 that the PRC had discussed a plan to influence

United States policy through lobbying and funding.567 Despite

these alarming allegations, it appears that the Justice Department

has done little to investigate or prosecute the foreign kingpins who

were the source of much of the illegal money in the 1996 elections.

a. James Riady

James Riady’s family runs the Lippo Group, a $12 billion business empire based in Jakarta, Indonesia. Although the ethnic Chinese Riady family had close ties to the regime of President

Soeharto in Indonesia, it also maintained very close business relationships with PRC Government interests and participated in

major investments in China. One Lippo link in particular merits

scrutiny—its multiple partnerships with China Resources. China

Resources was owned entirely by the PRC Government and has

been identified as an intelligence-gathering arm of the People’s Liberation Army (PLA). According to John Huang, China Resources’

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568FBI interview of John Huang, at 133 (Feb. 23–Mar. 26, 1999). 569 Id. 570 At the direction of the DNC, some of the Lippo contributions were sent to State Democratic

parties. 571FBI interview of John Huang, at 20 (Oct. 25–26, 1999). 572FBI interview of John Huang, at 22–25 (Jan. 19–Feb. 10, 1999).

operation (MOFTEC).568 MOFTEC is responsible for ensuring MFN

status for China and reducing or eliminating United States-imposed restrictions on technical exports.569

The Justice Department and the committee received extensive

evidence and testimony documenting James Riady’s involvement in

funneling illegal contributions to the DNC and State Democratic

parties. In August 1992, Huang arranged for Riady to have a private limousine ride with then-Governor Bill Clinton, so Riady could

tell Governor Clinton that he would raise $1 million for the Governor’s Presidential campaign. Riady and Huang then identified

Lippo employees and their spouses who could contribute to fulfill

Riady’s promise. At least $750,000 in illegal contributions from

Lippo Group employees and their spouses were sent to the DNC in

the 1992 election.570 Huang gave Riady a detailed listing of Lippo

employees’ contributions and some of the employees bank accounts

numbers so they could be reimbursed.571 Huang was personally

told by some of the Lippo employees that they received reimbursements.572 The committee has bank records which show that the

Lippo employees received reimbursements from various companies

in amounts equaling their political contributions.

After the 1992 election, Riady continued to remain involved in

U.S. politics. In 1995, he appealed directly to President Clinton to

have his long-time aide John Huang hired at the DNC. During his

year at the DNC, Huang would raise at least $1.6 million in illegal

contributions, a substantial amount of it from individuals with ties

to the Lippo Group. For example, Huang raised over $450,000 from

Arief and Soraya Wiriadinata, an Indonesian gardener and his

wife, who received the entire sum that they gave to the DNC from

Hashim Ning, a long-time Indonesian business partner of the

Riadys.

Despite the ample documentary and testimonial evidence implicating James Riady in illegal conduct, the Justice Department has

failed to indict Riady. The department obtained John Huang’s cooperation over a year ago, and gave Huang a reduced sentence in

exchange for his testimony against Riady. Yet a year later, the Department still has not brought charges against Riady.

The Justice Department’s failure to bring charges against Riady

certainly does not spring from any lack of evidence against Riady.

It is possible that the Department has been dissuaded from pursuing Riady because of his close relationship with President Clinton. President Clinton has never denounced James Riady since his

role in the fundraising scandal was uncovered, and he has never

demanded that Riady return to the United States to face charges.

Rather, he has continued to embrace a man who has been caught

trying to illegally subvert U.S. elections.

In September 1999, shortly after Huang finished providing evidence against Riady to the Justice Department, President Clinton

saw Riady at an APEC conference in New Zealand. After he finished giving a speech, the President went down a ropeline, where

94

573 After learning of the Clinton-Riady encounter, the committee requested any WHCA videotapes of the New Zealand event. Two WHCA videotapes filmed the event, but remarkably, both

missed the encounter between the President and Riady. One camera stopped filming as soon

as the President reached Riady’s place in line. The other WHCA cameraman was focused on

his WHCA colleague rather than the President meeting Riady. The committee obtained a third

tape of the event from a private source which captured the entire encounter between Riady and

Clinton. This tape showed that the President greeted Riady warmly. 574 Notwithstanding the President’s warm embrace of Riady, the White House refuses to

produce any documents related to recent contacts between Riady and the White House. The

committee asked the White House to produce documents about this meeting on Oct. 5, 1999,

but the White House has failed to produce any such records. 575 It should be noted that Riady has a history of providing money and jobs to his allies and the allies of President Clinton when they are under investigation. He provided $100,000 to Webster Hubbell when he was under investigation by the Office of the Independent Counsel, he has

hired former Arkansas Governor Jim Guy Tucker to work for him in Jakarta, and he provided

John Huang with $20,000 in cash during the same period of time that Huang was ‘‘cooperating’’

with the Justice Department. 576 Attorney General Reno appointed an independent counsel for Whitewater because Jim

McDougal was involved. There is every indication that Riady is just as close to President Clinton as McDougal. Why did the Attorney General not employ the same rationale in this case?

Riady was prominently placed. When he saw Riady, the President

stopped, and they exchanged extended pleasantries.573 The President apparently expressed little hesitation about meeting with

Riady, who was a central target of one of the largest investigations

in the history of the Justice Department.574

Recent news reports suggest that the relationship between

James Riady and Bill Clinton is alive and well, and not limited to

one friendly handshake in New Zealand. The Far Eastern Economic Review reported on October 5, 2000, that Riady has been

telling associates that he has invited President Clinton to join the

Lippo Board of Directors after he leaves office in 2001, and expects

the President to accept his offer. While this report has not been

confirmed, it would be a shocking development if the President

went to work for a man who is the target of a massive Federal investigation, who has close ties to the PRC, and who has been

caught trying to funnel illegal foreign money to United States political campaigns. It would be a sad commentary on the Attorney

General’s judgment if she clung to her supervision of the investigation of the President and Riady while, at the same time, Riady was

planning to involve the President in business ventures—as he had

done with Webster Hubbell and Jim Guy Tucker after both came

under investigation.575

President Clinton’s continued warm relationship with James

Riady sends the wrong message to the Justice Department. When

one looks at the videotape of President Clinton and Riady exchanging warm greetings in September 1999, it is easy to see why the

Justice Department has not indicted him. This problem provides a

clear example of why the Justice Department is entirely unsuited

to conduct this investigation, and why an independent counsel was

necessary.576

b. General Ji Shengde and Colonel Liu Chao-Ying

For almost 2 years, the committee’s critics claimed that there

was no evidence of a Chinese plan to influence United States elections. For these critics, it was not enough to show that John Huang

and Charlie Trie had funneled hundreds of thousands of dollars

into the elections from foreign businessmen with close ties to

China. However, in May 1999, when Johnny Chung testified before

the committee, he provided clear evidence that Chinese military ofVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00112 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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577 ‘‘Johnny Chung: Foreign Connections, Foreign Contributions,’’ hearing before the House

Committee on Government Reform, 106th Cong., 283 (May 11, 1999). 578 Id. 579Listing of Task Force cases, June 4, 1999 (exhibit 14). It should be noted that the Justice

Department recently attempted to withhold documents relating to Liu from the committee,

claiming that she was part of an active investigation. 580 Interview of George Johnson, Committee on Government Reform, at 2 (Feb. 13, 1998). 581Li Ka Shing is one of the wealthiest individuals in Asia. Henry Fok, who is very wealthy,

endeared himself to the Communist Chinese by running guns into China during the Korean

War.

ficers had funneled money into United States elections. Despite

this clear evidence, the Justice Department has also failed to bring

charges against either Chinese military officer involved.

When he appeared before the committee, Chung testified that in

August 1996, a business associate, Colonel Liu Chao-Ying, introduced him to General Ji Shengde, the head of Chinese military intelligence. Chung testified that General Ji told him:

We like your President very much. We would like to see

him reelected. I will give you $300,000 U.S. dollars. You

can give it to the President and the Democrat party.577

Shortly after this meeting, General Ji provided Chung with

$300,000 through his subordinate, Liu Chao-Ying. Chung funneled

$35,000 of this money to the DNC.578

If the Justice Department was interested in determining the

scope of the effort by the PRC to influence United States elections,

the obvious first step would be to pursue General Ji Shengde and

Colonel Liu Chao-Ying. However, there is little evidence that the

Department has taken any firm steps to prosecute them. A list of

Justice Department Task Force cases as of June 4, 1999, listed Liu

Chao-Ying as a ‘‘Pending Inactive Investigation.’’ 579 Consistent

with the inactive state of the Department’s investigation is that the

administration has never called upon the Chinese Government to

provide Liu or Ji to United States law enforcement.

Johnny Chung was one of the only witnesses to provide full and

honest cooperation to the committee after he pled guilty. Chung

provided clear evidence implicating high-level Chinese Government

officials in illegal activity. It is inexplicable that the Department

has not actively pursued this evidence. The failure, while one of

many, is one of the most serious, and it sends a dangerous message

China, and other governments that might seek to exercise improper

influence in the United States electoral process.

c. Ng Lap Seng

Ng Lap Seng is an ethnic Chinese businessman who became

wealthy through real estate ventures in Macau. According to one

of Ng’s business partners, Ng’s success was due to the fact that he

was chosen to be a ‘‘front man’’ in different investment projects for

city and provincial governments in China.580 Ng was also a member of the Chinese People’s Political Consultative Conference

(CPPCC), a Communist political group populated by some of the

most powerful people in Asia, including Stanley Ho, Li Ka Shing,

Henry Fok, and Hong Kong’s Chief Executive Tung Chee Hua.581

Ng also conducts business with Wang Jun, chairman of CITIC, and

son of the former Vice President of China, Wang Zhen. Ng’s largest

project is the Nam Van Lakes development, a $600 million hotel

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582 Interview of Barry Gold, Committee on Government Reform and Oversight, at 1–2 (Mar.

26, 1998). 583 Interview of Yah Lin ‘‘Charlie’’ Trie, Committee on Government Reform, at 6 (Feb. 29,

2000). 584When Trie testified before the committee, the Department identified three active investigations relating to Trie: Ernie Green, Mark Middleton, and Jude Kearney. The committee was prevented from questioning Trie about these matters. The committee questioned Trie extensively

about his dealings with Ng.

and casino development co-owned by Edmund Ho Wah Hau, chosen

by Beijing as the first chief executive of Macau, and Stanley Ho

Hung Sun, who holds the monopoly on gambling rights in Macau.

Barry Gold, senior vice president and head of the Asian project finance group in Hong Kong for Lehman Brothers, when told of details of the project by Trie, said it consisted of casinos and ‘‘wellknown Chinese interests.’’ 582

In 1994, Ng and Trie formed a partnership in which Ng would

give Trie money, and Trie would find investors for the Nam Van

Lakes development. Over the next 2 years, Ng wired over $1 million to Trie. Trie used the money for all of his expenses, including

making illegal contributions to the DNC and reimbursing the contributions of others. Ng obviously understood that Trie was using

the wire transfers for political contributions because Ng attended

a number of fundraising events with Trie. In October 1994, Ng was

even credited by the DNC for giving a contribution, even though he

was ineligible to give and he signed the check in Chinese. In October 1995, Ng had Charlie Trie and Ernie Green set up a dinner

with Commerce Secretary Ron Brown and Ng’s Asian business colleagues in Hong Kong. At the dinner, Secretary Brown told the

crowd that they should do business with Trie in the United States

and that Trie had a close relationship with President Clinton. Trie

told the Asian businessmen to help the Democratic party with contributions.583

There was not even a pretense of an investigation of Ng Lap

Seng by the Justice Department. In January 1998, the Justice Department indicted Charlie Trie and Antonio Pan, while both were

hiding in Asia, for funneling Ng’s money into the DNC. If the Justice Department was truly following a ‘‘bottom up’’ approach to the

campaign finance investigation, Ng would naturally be the next

target after Trie and Pan. However, in June 1999, the Task Force

identified all of its investigations and Ng Lap Seng was not even

mentioned. However, there is no indication that the Justice Department is actively pursuing Ng.584 The fact that a foreign national

could knowingly provide hundreds of thousands of dollars for illegal

contributions in a U.S. Presidential campaign and completely escape scrutiny is unconscionable.

There is no excuse for the Justice Department’s failure to investigate or indict Ng Lap Seng. Ng is in the same situation as James

Riady. Both were wealthy overseas businessmen who used individuals in President Clinton’s inner circle to funnel hundreds of thousands of dollars in illegal campaign contributions to the DNC.

Press reports indicate that the Justice Department is at least working on an investigation of James Riady. There has been no indication that the Justice Department will ever investigate Ng Lap Seng

for his illegal actions.

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585 Hearing on ‘‘The Role of Yah Lin ‘‘Charlie’’ Trie in Illegal Political Fundraising, Part I,’’

hearing before the Committee on Government Reform, 106th Cong., 37–39 (Mar. 1, 2000) (preliminary transcript). 586 Id. at 39–40. 587 Id. at 39.

d. Tomy Winata

Tomy Winata is a fourth foreign national who illegally funneled

money into U.S. elections, but there has not been any indication

that the Justice Department intends to pursue his illegal conduct.

Winata is an Indonesian billionaire with close ties to both the Chinese and Indonesian Governments. Winata served as the main

business partner of the PLA and the largest shareholder in

Satelindo, a major Indonesian telecommunications company.

Winata was also a former business partner of the Riady family and

Colonel Liu Chao-Ying. Winata gave Trie a total of $120,000 in

wire transfers and between $10,000 and $20,000 in cash each time

Winata visited the United States.

In late 1995, Winata told Trie he wanted a private, one-on-one

meeting with President Clinton. Trie could not obtain a private

meeting, but as an alternative, Trie invited Winata to sit next to

President Clinton at the February 19, 1996, fundraiser at the Hay

Adams Hotel in Washington, DC. Winata declined the invitation

but sent two of his employees instead. Trie requested that Winata

send money for the event, so Winata sent $200,000 in Bank Central Asia travelers checks with his employees.585 Trie used a por- tion of the $200,000 to reimburse contributors illegally for the February 19, 1996, event.586 Trie testified that Winata knew he was

going to use the travelers checks to pay for tickets to the fundraiser.587

Although Winata’s true involvement in illegal political contributions was not known until Trie began cooperating, Winata’s name

had already surfaced through the wire transfers sent to Trie’s bank

accounts. Despite Trie’s testimony, though, there is no indication

that the Justice Department intends to indict Winata for knowingly

funneling illegal contributions to the DNC.

3. Mark Middleton, Assistant to the White House Chief of Staff

Mark Middleton is the highest-ranking Clinton administration

official to invoke his fifth amendment right against self-incrimination in the fundraising scandal. The committee found that Middleton was heavily involved with several of the central figures

under investigation. No other White House official had as much

contact with John Huang, James Riady, and Charlie Trie as Mark

Middleton. Their contacts continued after Middleton left the White

House. While on his own, Middleton courted wealthy foreign businessmen and offered access to the White House and the DNC.

During the time Middleton worked in the White House, he

served as a key contact with Huang and Riady. White House

records showed numerous visits and telephone calls between

Huang, Riady, and Middleton. Middleton also served as a conduit

of information between the White House and Huang and Riady.

Middleton met with Huang and Riady three times in the week before Riady paid Hubbell $100,000. Middleton also hand-delivered a

‘‘get well’’ note from President Clinton to Hashim Ning when he fell

98

588 John Huang said Middleton told him about the $15 million offer and Huang told Middleton

to be ‘‘very careful.’’ FBI interview of John Huang, at 30 (Feb. 23–Mar. 26, 1999). 589 As explained above, the Department did not even obtain the records on Middleton from

the White House, where he worked for 2 years, until March 2000. 590See H. Rept. No. 105–829, at 1370–1373. 591Guest list for Feb. 6, 1996, White House coffee. 592DNC check tracking form for Ernie Green, DNC 3064259; hearing on ‘‘The Role of Yah Lin

‘‘Charlie’’ Trie in Illegal Political Fundraising, Part I,’’ hearing before the House Committee on

Government Reform, 106th Cong., 266 (2000) (preliminary transcript).

ill in the United States. In gratitude, Ning’s daughter, Soraya

Wiriadinata, and her husband Arief gave $455,000 to the DNC.

After leaving the White House, Middleton was paid $12,500 a

month by a Riady company.

Middleton also served as Charlie Trie’s main White House contact. Trie and Ng Lap Seng would regularly meet with Middleton

in the White House when they came to Washington. When Middleton left the White House, he traveled to Asia twice with Trie.

Middleton openly used his former position in the White House to

impress potential Asian clients. During the second trip with Trie,

Middleton discussed getting $15 million for President Clinton’s reelection with the treasurer of Taiwan’s ruling party.588

After leaving the White House, Middleton amassed an impressive

array of wealthy foreign clients. However, there is no evidence that

Middleton provided any work for his clients beyond facilitating

White House visits, meetings with Clinton administration officials,

or meetings with the chairman of the DNC. On several occasions,

Middleton made it blatantly clear to White House and DNC officials that his foreign clients were prepared to make substantial political contributions or trade access for cash.

The Justice Department has been investigating Middleton for 4

years. It has had Charlie Trie’s cooperation with the investigation

for over a year. Nevertheless, it has still failed to bring charges

against Mark Middleton, one of the central figures in the scandal.

Moreover, there is every indication that the Department is not

even conducting a thorough or aggressive investigation of Middleton.589 Such failures indicate that the Department is not interested in learning what happened in the 1996 elections.

4. Ernie Green

The committee’s investigation of the activities of Charlie Trie involved a review of Trie’s relationship with Ernest G. Green, who

is also a close friend of President Clinton. Green and Trie had a

close personal and business relationship, and they used their political contacts in order to further their business goals. They also

made two trips to Asia, ostensibly for business reasons, to court

prospective clients with invitations to events and fundraisers with

top administration officials. In October 1995, in Hong Kong, Green,

Trie, and Ng Lap Seng hosted a dinner of Asian businessmen with

Commerce Secretary Ron Brown.590 In February 1996, Trie accompanied Wang Jun, one of the most prominent Chinese businessmen, to a White House coffee.591 On the same day, Green contributed $50,000 to the DNC, the precise amount Trie was instructed

to pay to attend a coffee.592 Green and Trie accompanied Wang to

meetings in Washington and New York. Green also used his White

99

593Memorandum for the President from Bob J. Nash, Nov. 22, 1995, EOP 002216–002223.

Ernie Green was listed as Trie’s sponsor for appointment to the Commission. 594Deposition of Ernest G. Green, Committee on Government Reform and Oversight, Dec. 17,

1997, at 210–214. 595Deposition of Ernest Green, Senate Committee on Governmental Affairs, June 18, 1997,

at 191–192. 596 In fact, the $2,000 in travelers checks that Green received from Trie was right in the middle of the time that Green was making all of these cash deposits, February and March 1996. 597Deposition of Ernest G. Green, Committee on Government Reform and Oversight, Sept. 25,

1998, at 20–30. 598 Id. at 12–14.

House contacts to help Trie land a Presidential appointment on an

international trade commission.593

Green was deposed by the House Government Reform Committee

and the Senate Committee on Governmental Affairs. When new

evidence contradicting Green’s testimony was discovered, Green

was deposed a second time by this committee. On March 12, 1999,

the committee referred Green’s case to the Justice Department,

asking the Department to determine whether Green perjured himself in his depositions.

In his depositions, Green attempted to minimize his relationship

with Trie. Green also denied that he made any conduit contributions or that his $50,000 contribution was connected in any way to

Trie and Wang Jun’s attendance at the White House coffee.594 Perhaps more significantly, Green claimed that he never received any

money from Trie.595 The committee discovered irrefutable evidence

that Green did receive at least $2,000 in travelers checks from

Trie. In addition, Green’s bank records showed numerous cash deposits into separate bank accounts at the time of Green’s major

contributions to the DNC.596 Green could not explain the source for

the over $30,000 in cash he deposited.597 Green also denied that

two cash deposits of $3,500 and $2,500 were connected to his

$6,000 contribution to the DNC around the same time.598 The committee’s referral clearly spelled out that, at a minimum, Green

gave false statements about whether he received any money from

Trie, and perhaps, misled the committee about his other contributions to the DNC.

Shortly after the committee’s referral, around May 1999, Trie

began cooperating with the Justice Department. The Justice Department attempted to shield from the committee or the public any

information Trie gave about Green under the guise that Green was

the subject or target of an ongoing criminal investigation. In November 1999, the committee immunized Trie, but was told by the

Justice Department that questions relating to Green, along with

Mark Middleton and Jude Kearney, were off limits. The basis for

the Department’s decision was that their investigation of Green

was very serious and would be resolved in the near future. The

committee was told that if Trie testified publicly about Green, it

could jeopardize any case against Green.

Through disclosures by the Justice Department and Trie, the

committee subsequently learned that Trie did indeed provide incriminating information about Green. Not only did Trie’s statements affirm the validity of the committee’s referral against Green,

but Trie also provided additional information that contradicted

other sworn statements by Green regarding both his political conVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00117 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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599Subpoena to the Custodian of Records, Executive Office of the President, Mar. 24, 2000

(exhibit 30); subpoena to the Custodian of Records, U.S. Department of Commerce, Mar. 24,

2000 (exhibit 31). 600 ‘‘Has the Justice Department Given Preferential Treatment to the President and Vice

President,’’ hearing before the House Committee on Government Reform, 106th Cong., 121–123

(July 20, 2000) (preliminary transcript).

tributions and his role in arranging high-level political meetings for

Trie.

The committee recently discovered that the Justice Department

had not even requested Green’s records from either the White

House or the Commerce Department until March 24, 2000, 1 full

year after the committee’s referral.599 Therefore, in February 2000,

when the Justice Department told the committee that it was about

to take action on Green, and prevented the committee from questioning Trie about Green, it had not even taken the basic first step

of getting Green’s documents from the White House or the Commerce Department. At a hearing on July 20, 2000, the Justice Department was asked to explain the anomaly between their words

and their actions:

Mr. LATOURETTE. Let me ask you this, and I think I already know the answer, but you know what? I’m going to

ask it anyway. Are Mark Middleton and Ernie Green

under active investigation by the Department of Justice?

Mr. CONRAD. I couldn’t comment on that.

Mr. LATOURETTE. Well, the reason I ask you that question,

we were specifically asked by the Department of Justice to

avoid talking about Ernie Green during the Charlie Trie

hearing, if I remember correctly. Because we were advised

that there was an ongoing criminal investigation that the

Justice Department was very excited about.

But I have to tell you that the level of excitement is puzzling to me, and I assume to my colleagues, when we find

out that what you’re so excited about you’re not even requesting records about from the White House. And again,

I don’t like this backseat driving business. It makes me

very uncomfortable, because I’m sure as career prosecutors, you do an excellent job . . . Mr. Robinson, do you

want to say something?

Mr. ROBINSON. I would like to make one comment that I

hope will continue to be the case in our interaction on parallel matters with the Congress. To the extent that we

have conversations with counsel for committees about the

appropriate scope of inquiry into witnesses, we don’t make

those, we don’t have those conversations with the expectation that they will be publicly disseminated. And the Code

of Professional Responsibility prohibits us from doing that.

Mr. LATOURETTE. Yes, and I appreciate that chastisement,

but I will tell you that the committee also has an oversight

responsibility. And what you’re asking us to do is say,

trust us. But then when we get documents from the White

House, we find out that stuff we gave you a year and a

half ago, you haven’t acted on[.] 600

101

601 In his interview with committee staff and his testimony before the committee, Trie cited

a number of cases where Zhan arranged conduit contributions with individuals he did not even

know.

The comments by Congressman LaTourette summarize the committee’s conclusions about the Justice Department’s handling of the

Green case. The committee referred the matter to the Justice Department in March 1999, and it is clear that the Justice Department took little action on the referral, failing to subpoena records

on Green from the White House or the Commerce Department

until the following year. The Department’s failure to act quickly on

the referral is puzzling, given the clear evidence of perjury prepared by the committee. Even more puzzling though, is the fact

that the Justice Department continued to delay action on Green,

even after Charlie Trie presented them with substantial evidence

of perjury and other crimes committed by Green. The Justice Department’s failure to pursue the case against Green vigorously creates the appearance that the Justice Department is hesitant to

pursue ever the clearest criminal case against individuals who are

prominent Democrats and friends of President Clinton.

5. Keshi Zhan

The Justice Department lost another investigative opportunity by

failing to do a thorough investigation of Keshi Zhan, an associate

of Charlie Trie. Zhan was initially thought to have been merely

Trie’s assistant and hostess in Washington, DC. She initially

gained notoriety in the campaign fundraising investigation for having made a $12,500 contribution to the DNC on her annual salary

of $22,408 as an Arlington County records clerk. However, as the

investigation developed, it became clear that Zhan had a serious

role in illegal activity.

As the committee developed documentary and testimonial evidence, it became clear that Zhan was close to Ng Lap Seng, Charlie

Trie’s benefactor, who provided Trie with over $1 million, much of

which was directed into political campaigns. In addition, Zhan’s father was a high-ranking professor of linguistics at a Chinese university, suggesting that her family had some political influence in

China. Finally, Zhan was implicated in facilitating conduit contributions on behalf of Trie.601 This activity was significant, because the Justice Department has a policy of refusing to prosecute

mere conduit contributors. However, it does prosecute individuals

who facilitate conduit contributions.

The Justice Department has failed to prosecute Zhan, despite a

surfeit of evidence against her. The Senate Committee on Governmental Affairs immunized Zhan in 1997, and attempted to take her

deposition. However, it soon became clear that Zhan was lying

about even the simplest matters. Therefore, the committee closed

her deposition. Zhan could be prosecuted for false statements made

during the course of this deposition. However, the Department has

declined to do so. Moreover, it appears that the Justice Department

is failing to pursue Zhan for any of her illegal activities. A list of

the status of Justice Department campaign fundraising investigations, which was inadvertently released by the Justice Department,

102

602Listing of Task Force cases, June 4, 1999 (exhibit 14). 603FBI interview of John Huang, at 41 (Jan. 19–Feb. 10, 1999); FBI interview of Charlie Trie,

at 50 (June–October 1999). 604FBI interview of John Huang, at 4 (Feb. 5, 1999); FBI interview of Charlie Trie, at 51

(June–October 1999). 605Wire transfer from Lucky Port Investments Ltd. to Yah Lin or Wang Mei Trie, May 6,

1994. 606 Interview of Yah Lin ‘‘Charlie’’ Trie, Committee on Government Reform, at 13 (Feb. 29,

2000).

listed the following information about Zhan: ‘‘Keshi Zhan (subfile

of Trie, not being actively pursued).’’ 602

By failing to pursue the Zhan investigation, the Justice Department has missed an opportunity to uncover valuable information

about the campaign fundraising scandal. There is ample evidence

to prosecute Zhan for a number of felonies, but the Department has

simply decided, without explanation, not to investigate her.

6. The Justice Department Failed to Ask Key Questions of John

Huang

The Justice Department approved plea agreements with John

Huang and Charlie Trie in 1999. The plea agreements allowed

Huang and Trie to plead guilty to lesser offenses than their conduct warranted in return for full cooperation with the Task Force’s

investigation. The benefit to the Justice Department was to learn

the details of Huang and Trie’s activities and to gain information

about the involvement of others, particularly those above Huang

and Trie.

By obtaining the summaries of the Justice Department interviews of Huang and Trie, and by questioning them extensively, the

committee has learned that the Justice Department failed to question Huang and Trie about a number of significant matters. Most

importantly, the Justice Department failed to question either

Huang or Trie extensively about a number of connections between

Trie, Huang, Riady, and Lippo Group employees. By failing to examine sufficiently the ties between them, the Justice Department

allowed Huang and Trie to both claim that they were ignorant of

each other’s criminal activities.

a. The Justice Department Did Not Investigate Ties Between

Trie, Huang, and the Lippo Group

Trie and Huang both state that they met around the summer of

1994.603 When Huang moved to the DNC in late 1995, Huang and

Trie began working together to solicit contributions. Both claim

that since they had met after both were established with the Democratic party, they did not discuss the rules of fundraising.604 Their

claims are difficult to believe, in light of the evidence to the contrary. There is substantial evidence linking Trie to the Lippo Group

and James Riady. This evidence may suggest that Trie was not acting on his own in funneling money to the DNC, but rather, like

John Huang, was acting as an agent of the Lippo Group.

The money for Trie’s first illegal contributions to the DNC in

May 1994 came from Lucky Port Investments Ltd.605 The owner of

Lucky Port, Peter Chen, was a longtime Lippo employee and good

friend of the Riady family patriarch, Mochtar Riady.606 While at

Lucky Port, the Riadys accepted Chen’s offer to invest in a shopVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00120 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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607 Interview of Carol Pan, Committee on Government Reform, at 1 (Dec. 1, 1998). Carol Pan,

Antonio’s ex-wife, worked at Lucky Port with Antonio and Chen. 608 Hearing on ‘‘The Role of Yah Lin ‘‘Charlie’’ Trie in Illegal Political Fundraising, Part I,’’

hearing before the House Committee on Government Reform, 106th Cong., 236 (Mar. 1, 2000)

(preliminary transcript). 609 Id. at 228–235. 610 Undated document entitled, ‘‘Cooperation Opportunities with James Riady’’ (exhibit 32). 611 Hearing on ‘‘The Role of Yah Lin ‘‘Charlie’’ Trie in Illegal Political Fundraising, Part I,’’

hearing before the Committee on Government Reform, 106th Cong., 231–235 (Mar. 1, 2000) (preliminary transcript).

ping mall in China with a former member of the PLA.607 At the

time of the wire transfer, Chen was still a Lippo employee as well.

Antonio Pan, another longtime Lippo employee and future Trie assistant also worked at Lucky Port. Trie testified that this was the

only money he received from either Lippo or anyone associated

with the Riadys.608 The Justice Department did not question Trie about the $100,000 from Lucky Port. While he admitted that this

money came from the Lippo Group, Trie could not explain why he

received this money, and denied that he was acting on behalf of the

Lippo Group when he funneled the $100,000 from Lucky Port into

the U.S. elections. In failing to question Trie about the $100,000

from Lucky Port, the Justice Department missed a valuable piece

of evidence linking Trie and the Lippo Group.

The Justice Department missed other important leads linking

Trie and Lippo. In documents seized from Trie’s home by the FBI,

one undated document, in Chinese, was entitled, ‘‘Cooperation Opportunities with James Riady.’’ The document lists five separate

business ventures involving Lippo and the Riadys. Trie strongly denied his own involvement in any of the projects listed in the document, which he said was authored by either Peter Chen or Antonio

Pan.609 However, Trie admitted that one of the Lippo business

projects in the documents did involve him:

5. L.A. Bank Stocks: Maybe a part of the L.A. bank stock

can be sold to Wang Jun. Knowing you have good relations

with Wang Jun, hoping you can be the intermediary. Proposing that Wang Jun buy the Lippo bank stocks with

money as reinforcement to enter the U.S. market. You may

also plan to get a part of the stocks and a director position.

James is a fair person. He knows especially the long-term

strategy and the advantage of using business partners. He

knows you have good relations with China. Hope you may

be able to help realize the above suggestions. He agrees

with my proposal and is willing to work with you on the

above items.610

Trie admitted that Lippo was asking him to contact Wang Jun,

CITIC chairman, to invest with Lippo.611 Although Trie denied any

involvement with Lippo, he was clearly involved in negotiations of

various business deals with James Riady. The Justice Department

did not ask Trie about this document.

These pieces of evidence are important in determining the extent

and nature of the relationship between John Huang and Charlie

Trie. Considering Huang’s claim that he was unaware of the fact

that most of the contributions raised by Trie were illegal, it is important to obtain independent proof of the nature of the relationship between Huang and Trie. These pieces of evidence, which the

104

612Memo from Melinda Yee to Brian Foucart, Nov. 15, 1991, DNC 0828876 (exhibit 33). 613Memo from Melinda Yee to RHB [Ronald H. Brown], Oct. 22, 1991, DNC 0828865 (exhibit

20). 614Memo from Linda Rotunno to Cheri Carter, Oct. 25, 1991 (exhibit 34). 615 It should be noted that the DNC was very familiar with Huang, Hsia, and James Riady

by this point because of their high-profile as fundraisers in California for the DSCC. 616 Id. 617 Id.; memo from Melinda Yee to RHB [Ronald H. Brown], Oct. 15, 1991 (exhibit 19). 618The Riady family also paid all of the DNC’s hotel, meal, and transportation expenses in

Hong Kong. 619Schedule for Asia/Hawaii, DNC 0828853–58 (exhibit 21).

Department did not question Trie about, suggest that the relationship between Trie and Huang was close, and raise the possibility

that they were working together to raise illegal funds in 1996.

b. The Justice Department Did Not Investigate the 1991 DNC

Trip to Asia

The Justice Department did not ask Huang any questions about

a DNC trip to Asia in December 1991. This was an important area

to explore because in 1996, the DNC claimed the two main fundraisers on the 1991 Asia trip, John Huang and Maria Hsia, duped

them in 1996 by funneling illegal conduit and foreign contributions

into the DNC. But in 1991, the DNC asked both Huang and Hsia

to solicit political contributions in Asia.

A review of the DNC documents for the trip show that the only

purpose of the trip was fundraising. DNC documents about the trip

focus almost exclusively on fundraising and whether enough money

would be raised to justify the trip. Melinda Yee, who asserted her

fifth amendment privilege against self-incrimination before the

committee, wrote, ‘‘our goal is to bring $100,000 out of Taiwan and

thus far, $50,000 is pledged.’’ 612 Chairman Ron Brown commented

that the planning for the trip, ‘‘looked good pending confirmation

($) from Waihee, Hsia, Huang.’’ 613 Linda Rotunno, from the Finance Division of the DNC, summed up the DNC’s view by saying,

‘‘as far as our goals are concerned, it would be a wasted trip if we

could not finesse these new relationships into real money.’’ 614

The DNC recruited two fundraisers whose later tactics would

haunt the DNC, John Huang and Maria Hsia, to bring in the

money from Asia.615 Maria Hsia’s job was to identify contributors

who were going to give the money to the DNC while they were in

Taiwan.616 John Huang agreed to host a high dollar event for the DNC where $50,000 would be collected from wealthy Asian bankers

in Hong Kong who were either United States permanent residents

or with United States corporate ties and even more money would

be received when they returned to the United States.617 According

to Huang’s resume, however, his only contacts with wealthy Asian

bankers were the Salim Group and the Riady family, both of which

were ineligible to contribute to the DNC.618 The DNC noted

Huang’s commitment with dollar sign notations next to a lunch and

dinner sponsored by the Lippo Group in Hong Kong.619

The DNC and its officials have not been forthcoming about what

happened on the 1991 Asia trip. Although the DNC was able to

produce many documents on planning the trip, it could not produce

a single document detailing what actually occurred in Asia. The

DNC officials involved in the trip refused to cooperate. Maria Hsia

and Melinda Yee exercised their fifth amendment privilege against

105

620 Interrogatories to Secretary Alexis Herman, May 7, 1998. 621Deposition of Linda Rotunno, Mar. 19, 1998, at 70. 622 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

Committee on Government Reform, 106th Cong., 194 (Dec. 17, 1999) (preliminary transcript). 623 Id. at 194–197. 624 Undated memorandum from Vida Benavides to Laura Hartigan (exhibit 35). 625 Id.; interview of Darius Anderson, Committee on Government Reform, Jan. 21, 2000, at

1. 626 Undated memorandum from Vida Benavides to Laura Hartigan (exhibit 35).

self-incrimination and have refused to cooperate with the committee. Alexis Herman, who documents show was very involved in

the trip, cannot even recall it happening.620 Linda Rotunno does

not recall writing the memorandum which stated that the trip

would be a waste unless the DNC got contributions from it.621 John

Huang disavowed any involvement in the DNC’s expectation that

he would solicit contributions in Hong Kong. Huang testified before

the committee that despite all of the DNC documents showing that

he committed to raising money in Hong Kong, he did not ask for

any money or contributions from anyone. Huang did admit that

Melinda Yee proposed that Huang would raise $50,000 in Hong

Kong, but Huang denied he did so.622 Huang claimed that he told

the DNC that he could gather businessmen to greet Chairman

Brown in Hong Kong, but Huang denied that the dollar signs next

to the Lippo Group lunch and dinner signified a fundraising

event.623

The 1991 DNC trip to Asia was the first chapter in the DNC’s

long and sordid relationship with foreign money. By investigating

this trip, the Justice Department could have learned more about

the relationship between Huang, Maria Hsia, and the DNC. However, it apparently failed to ask Huang any questions about this

matter. This failure cannot be explained.

c. The Justice Department Did Not Investigate Huang’s Demands for Political Jobs in Exchange for Contributions

The Justice Department did not question Huang about his role

in a September 27, 1993, fundraiser in Los Angeles with Vice

President Gore. By 1993, Huang had established himself as one of

the dominant players in the California Asian American fundraising

community. The DNC, cognizant of Huang’s importance, arranged

to meet with Huang, who was described as the Chair of the local

fundraising committee.624 DNC staff went to Huang’s office at the

Lippobank, and Huang agreed to raise $200,000 for the September

fundraiser with Vice President Gore.625 During the meeting, several others on Huang’s fundraising committee stated that they felt

hesitant about committing to contribute without a guarantee that

there would be political appointments of Asian Americans by the

time of the fundraiser.626 For example, the DNC was told that

March Fong Eu, who was later appointed Ambassador to Micronesia, was concerned that she had not yet been contacted about her

appointment.

After the meeting, Huang contacted the DNC with a compromise

offer and the reasons for his concessions in exchange for his cooperation with the fundraiser:

106

627 Undated memorandum from Vida Benavides to Martha Phipps, et al., (exhibit 36). 628Letter from March Fong Eu to John Huang, Sept. 23, 1993, HHH 3164 (exhibit 37). 629 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 208–209 (Dec. 17, 1999) (preliminary transcript).

John Huang’s Proposal

(1) downpayment commitment of $100,000.

* * * * *

(3) commit 300–400,000 dollars at a later event once significant appointments are named and if the administration

are useful of APA’s during the APEC Conference in Seattle.

* * * * *

Reasons:

* * * * *

(3) Since John Huang himself is up for an appointment,

his early commitment of 200,000 would be perceived as a

buy-off.

(4) These fundraisers would like to help in the future by

going back to their fundraising base but would look foolish

if they themselves commit to give without a guarantee of

a possible appointment. Their own credibility will be questioned . . . regardless if their [sic] ‘‘activist’’ or not. WE

should not assume that APA fundraisers lack political integrity.

SOLUTIONS

(1) Accept John Huang’s proposal, on the condition that

the next fundraiser will raise $900,000 to a total of $1 million dollars when Clinton comes to LA in December

* * * * *

These must happen:

(1) appointments by December.627

One month after Huang laid out his proposal, the White House signaled their acceptance of his terms. March Fong Eu wrote Huang

to inform him that she learned the White House was set to announce her ambassadorship to Micronesia.628 On the top of the letter, it says, ‘‘copy to JTR,’’ meaning James Tjahaja Riady. Huang

admitted that this was the sign he was waiting for from the administration.629

Huang kept his promise and funneled over $120,000 in illegal

foreign and conduit contributions through Lippo employees and

Lippo companies to the September 27, 1993, fundraiser after receiving March Fong Eu’s letter. In December 1993, Huang funneled

another $156,000 to the DNC for a fundraiser with President Clinton in furtherance of Huang’s promise for additional money.

The Justice Department never asked Huang about his negotiations with the DNC for the September 27, 1993, fundraiser. In his

testimony before the committee, Huang admitted that he offered to

exchange contributions for political appointments with the DNC,

107

630 Id. at 207–208 (1999). 631Dave Seaton, ‘‘Local Demos say they felt need to repay state party: Legality of transfers

questioned,’’ Winfield Daily Courier, Oct. 9, 1997 at 39 (exhibit 38). 632The chart at the end of this section provides a one-page overview of the DNC’s conduit

contribution scheme. 633Kan Stat. Ann. § 25–4153 (1999). 634Transcript of deposition of Joseph E. Sandler, former general counsel, Democratic National

Committee, by Committee on Government Reform at 150 (May 14, 1998) (deposition on file with

committee). Sandler also indicates that ‘‘Harold Ickes, Doug Sosnik, Karen Hancox would have

reviewed the budget.’’ Id. 635 Under Federal law, the treasurer of a political committee is required to file reports that

disclose ‘‘the total amount of all disbursements, and all disbursements [including] . . . transfers

to affiliated committees and, where the reporting committee is a political party committee,

transfers to other political party committees, regardless of whether they are affiliated[.]’’ See 2

U.S.C. § 434(b)(4)(C). National party committees are further required under 11 CFR 104.9(e) to

‘‘report in a memo Schedule B each transfer from their non-federal account(s) to the non-federal

account(s) of a state or local party committee.’’ In other words, non-Federal or ‘‘soft’’ money is

clearly covered by the Federal regulations governing disclosure. Also, 18 U.S.C. § 1001 prohibits

false reports to the Federal Election Commission. 636The committee was provided a list of Justice Department campaign finance cases. As of

the date of the list, June 4, 1999, the Triad investigation was listed as ‘‘ongoing,’’ even though

there appears to be no serious suggestion that the Triad organization did anything illegal with

respect to Kansas political contributions. The Justice Department list contains no reference to

the DNC scheme to funnel soft money to Kansas, and the witnesses interviewed by this committee had not been contacted by the Justice Department at the time of their interview. See

listing of Task Force cases (June 4, 1999) (exhibit 14).

although Huang denied that he said his commitment of $200,000

could be perceived as a payoff for his own appointment.630

E. THE JUSTICE DEPARTMENT FAILED TO PURSUE THE KANSAS

CONDUIT CONTRIBUTION SCHEME

I believe there was a very orchestrated campaign from a

high level to move money from Washington to Topeka.631—Henry Helgerson, D–Wichita.

One of the more interesting episodes in the 1996 election cycle

involved an apparently illegal conduit contribution scheme by the

Democratic National Committee to funnel more than a third of a

million dollars to the Kansas Democratic party.632 The motivating

factor for this scheme appears to have been a Kansas statute that

limited the amount of out-of-state non-Federal (soft) money that

could legally be contributed to Kansas political parties.633 In order

for the national party to contribute large amounts of soft money to

influence the two Senate and four House races in 1996, the Kansas

statute had to be circumvented. This resulted in a particularly clever—but relatively transparent—effort to funnel money to the State

Democratic party through a number of State political parties, Kansas County parties, and individual Kansas legislators. According to

then-DNC General Counsel Joseph Sandler, ‘‘[p]robably people

from the White House would have been involved[.]’’ 634

Although these apparent violations of law 635 by the DNC were

reported in the media, and although the committee brought these

violations to the attention of the Department of Justice, the Attorney General made no effort to look into the allegations. It is troubling that while Attorney General Reno’s Justice Department conducted a 3 year investigation of contributions to Republicans in

Kansas that originated with the Triad organization,636 she took no

steps to look at the obvious pattern of conduit contributions that

originated with the DNC and that ended up in Topeka. This uneven enforcement of the law provides further indication that Attorney General Reno should not have retained supervision of the inVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00125 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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637The Justice Department appears to have provided great deference to Senator Daschle. Not

only did they avoid investigating the Kansas matter when it was clear that a member of his

staff would need to be questioned, they also avoided referring to the conduit contributions made

to him in the Charlie Trie indictment. There appeared to be no rationale for the omission of

these particular contributions. 638Letter from the Honorable J. Robert Kerrey, chairman, Democratic Senatorial Campaign

Committee, to Donald Biggs, Kansas State Senate candidate (Aug. 1, 1996) (exhibit 39).

vestigation of her own political party. Her failure to conduct even

a cursory investigation pursuant to laws currently on the books

also provides support to political efforts to make campaign finance

reform more of an issue than it might otherwise be.

The decision by the Justice Department not to investigate the

Kansas matter is particularly troubling because a line appears to

have been drawn by the Attorney General and her staff: conduit

schemes involving the likes of Charlie Trie, John Huang and Johnny Chung were to be investigated, but a conduit scheme involving

the Democratic party was to be ignored. In many respects, one

would think that a scheme to circumvent campaign financing laws

by one of the two major political parties would be accorded at least

as much—if not more—importance than efforts by individuals who

might be acting at their own behest. The Justice Department’s decision is even more curious because the individual who appeared to

be the DNC’s liaison in Kansas came to Washington immediately

after the 1996 election and was given a job on the staff of Democratic Senate Minority Leader Tom Daschle.637

1. The Elements of the Conduit Contribution Scheme

In a 2 month period prior to the 1996 election, the Kansas Democratic party or its affiliates received over a third of a million dollars

in contributions that appear to have originated in Washington, DC,

with the DNC or affiliated organizations. The contributions were

derived from the following sources:

• A total of $254,950 was received during the months of September and October from 17 State political parties. Each State

gave either $14,990 or $15,000, the limit permitted according to

Kansas statute. Prior to making these contributions, many of

these States had an influx of funds from the national Democratic party in Washington, DC.

• A total of $56,900 was contributed to the State Democratic

party or its affiliates by Kansas County Democratic parties. On

September 30, 1998, 17 county parties were sent $5,000 by the

Democratic Congressional Campaign Committee in Washington,

DC. Within a matter of days, 13 of these counties had passed

along most of this money to the State party.

• Kansas State Senate and House candidates also received money

from the Democratic National Committee or its affiliates in

Washington, DC and passed much of the money on to the State

party. During the first week of August, for example, State Senate candidate Donald Biggs received a check for $1,000 from the

Democratic Senatorial Campaign Committee in Washington,

DC.638 Biggs later received a memorandum dated September 3,

1996, from the Office of the Senate Democratic Leader in Kansas, Jerry Karr. It stated:

109

639Memorandum from Tressie Hurley to Donald Biggs, Kansas State Senate candidate (Sept.

3, 1996) (exhibit 40) (emphasis added). 640Letter from Tino Monaldo to Carol Williams, executive director, Kansas Commission on

Governmental Standards and Conduct (Nov. 13, 1997) (exhibit 41). 641Transcript of deposition of Joseph E. Sandler, former general counsel, Democratic National

Committee, by Committee on Government Reform at 152 (May 14, 1998) (deposition on file with

committee). 642 Appendix 2 provides supporting documentation for the charts that follow.

The DSCC, in an effort to support state senate

candidates, the Democratic Party, and their own

candidates, will contribute $1,000 to each state

Senate campaign our office designates. You may

keep $200 but then must turn around and contribute $800 to the Senate Victory Fund, P.O. Box

1811, Topeka, KS 66601.

* * * * *

This money will help you (the $200) and it will

help the Kansas Coordinated Campaign and all

Democratic candidates as well.639

As this instruction indicates, there was a very clear and specific

intent to use Kansas citizens as conduits to funnel money from

Washington, DC to the State party.

a. Contributions from the DSCC Using States as Conduits

Why did States—particularly traditionally campaign cash-poor

States like Maine, New Hampshire, Idaho, Wyoming and South

Dakota—make large political contributions to Kansas? Tino

Monaldo, who in 1996 was a lawyer for the Kansas Democratic

party, would have the public believe Kansas ‘‘attracted these contributions from other DSPs [Democratic State Parties] because of

the excellence of its coordinated campaign efforts, and the quality

of its candidates.’’ 640 The more honest answer, however, was provided by then-DNC General Counsel: ‘‘I’m aware that the DSCC requested State parties to make—other State parties to make political contributions to the Kansas Democratic Party.’’ 641 Thus it was

not the effectiveness of the Kansas Democratic party that drew unsolicited contributions; rather, it was on order from Washington,

DC.

The following chart provides an overview of which States contributed to Kansas, when they received funds from Washington, and

when the money was sent on to Kansas: 642

110

643 Arkansas reporting requirements are such that this information was not recorded. 644The committee was unable to obtain information for Colorado filings after June 28, 1996. 645The committee was unable to obtain information for Georgia filings after May 9, 1996. 646There were numerous large donations from the DNC during the relevant time period. 647 Records show that South Carolina received only $1,140 from the DNC in 1996. 648South Dakota’s records provided no dates for contributions received from the DNC. 649Letter from Kevin J. Mattson, executive director, the Maine Democratic party, to Marilyn

Canavan, Commission on Governmental Ethics (Nov. 4, 1996) (exhibit 42).

States responsible for sending $15,000 or $14,990

to Kansas

Date State received money from DSCC and date received by Kansas

Amount sent by the

DSCC to States near

in time to the contribution to Kansas

Entity

Idaho .............................................................. 9/10/96 ‰ 9/17/96 $64,464 DSCC

Florida ............................................................ 9/29/96 ‰ 9/27/96 40,000 DSCC

Nebraska ........................................................ 10/8/96 ‰ 9/30/96 50,000 DSCC

Arkansas ........................................................ 643 ‰ 10/3/96

Maine ............................................................. 10/2/96 ‰ 10/4/96 15,000 DSCC

Colorado ......................................................... 644 ‰ 10/4/96

Georgia ........................................................... 645 ‰ 10/7/96

Louisiana ........................................................ 646 ‰ 10/16/96

Alabama ......................................................... 10/15/96 ‰ 10/16/96 15,000 DSCC

Wyoming ......................................................... 10/15/96 ‰ 10/18/96 15,000 DSCC

South Carolina ............................................... 647 ‰ 10/18/96

California ....................................................... 10/18/96 ‰ 10/18/96 35,000 DSCC

South Dakota ................................................. 648 ‰ 10/18/96

New Hampshire .............................................. 10/17/96 ‰ 10/21/96 18,750 DSCC

Minnesota ....................................................... 10/23/96 ‰ 10/25/96 17,500 DSCC

Michigan ........................................................ 10/29/96 ‰ 10/25/96 16,500 DSCC

Montana ......................................................... 10/25/96 ‰ 10/30/96 25,000 DSCC

As seems fairly clear from the above chart, it would be very surprising indeed if the contributions to Kansas were not coordinated.

It takes a significant suspension of credulity to conclude that 17

States suddenly took it upon themselves to make large contributions to Kansas.

Furthermore, there are other indications that these contributions

were unusual. For example, the Maine Democratic party amended

an earlier financial disclosure report required by Maine and communicated the following to the State Commission on Government

Ethics: ‘‘The committee mistakenly did not report a contribution to

the Kansas Democratic party. The disbursement was made from an

account that is normally inactive. In fact, this was the only disbursement from the account this year.’’ 649

b. Contributions from the DCCC Using Kansas Counties as

Conduits

Seventeen county parties were sent $5,000 by the Democratic

Congressional Campaign Committee (DCCC) on September 31,

1996. Within days, 13 of the recipients made substantial contributions to the Kansas Democratic party. Most of these contributions

were for the same amount. This is remarkable, given that the average total annual receipt for the 13 counties was $19,816. The following chart provides an overview of which Kansas counties received contributions from Washington, and what they did with the

money:

111

650Transcript of deposition of Jim Lawing, former chairman, Sedgwick County Democratic

Central Committee by Committee on Government Reform at 22–23 (Feb. 18, 1998) (deposition

on file with committee). 651 Reno County Democratic Central Committee’s disclosure forms of disbursements (schedule

C) (Aug. 10, 1996–Oct. 8, 1996) (exhibit 43). 652 ‘‘KCCC’’ is the Kansas Coordinated Campaign Committee. See Invoice from Reno County

Democratic Committee to KCCC (exhibit 44). 653 Check from Reno County Democratic Central Committee to Kansas Democratic party (exhibit 45).

County * Amount sent

to State party

Date sent to

State party

Total county receipts for 1996

& percentage of income derived

from the DCCC

Receipts Percentage

Cowley .......................................................................................... $4,750 10/8/96 $6,001 83

Douglas ........................................................................................ $4,500 10/7/96 $28,081 17

Ellis .............................................................................................. $4,500 10/4/96 $18,387.27 27

Harvey ........................................................................................... $4,500 10/13/96 $7,463 70

Leavenworth ................................................................................. $4,500 10/9/96 $7,322 68

Marshall ....................................................................................... $4,750 10/9/96 $5,590 89

Miami ........................................................................................... $4,500 10/17/96 $5,500 91

Osage ........................................................................................... $4,750 10/7/96 $5,200.98 96

Reno ............................................................................................. $4,500 10/3/96 $18,435 27

Riley ............................................................................................. $4,500 10/2/96 $10,216 49

Sedgwick ...................................................................................... $4,250 10/4/96 $98,208 5

Shawnee ....................................................................................... $4,500 10/3/96 $34,182 14

Wyandotte ..................................................................................... $2,400 10/30/96 $13,031 38

* Thirteen county parties were sent $5,000 by the DCCC on September 31, 1996, and passed money on.

It is interesting to note that at least one of the counties appears

not to have even asked for money from Washington. When asked

why the Democratic Congressional Campaign Committee contributed $5,000 to Sedgwick county, former chairman of the Sedgwick

County Democratic Central Committee Jim Lawing answered: ‘‘No

we never solicited that gift . . . it never occurred to me or anybody

else with the Sedgwick County Democratic Central Committee to

go look for that source of funding at the national level.650 In fact,

prior to the 1996 election, records indicate that county parties provided almost no money to the State party. In 1992, $1,924.88 was

passed along to the State party by all county parties combined. In

1994, $1,200 was passed along. In 1996, $60,650 was passed from

county parties to the State party.

An invoice prepared by the Reno County Democratic Committee

is illustrative of the close coordination between Washington and

Kansas:

9–30–96 (Monday)—DCCC sends Reno County $5,000 651

Date Unknown—$5,000 arrives

10–3–96 (Thursday)—KCCC bills Reno County for $4,500 652

10–3–96 (Thursday)—Reno sends check to Kansas Dem. party

for $4,500 653

Other Kansas Counties had so few financial transactions in 1996

that the DCCC contribution provided most of the county’s annual

revenue. For example, Osage County received a $5,000 check on

September 30, 1996, and 7 days later sent $4,750 to the State

party. Interestingly enough, Osage County revenue for the entire

year—excluding the $5,000 from Washington—was $200.98. Miami

County revenue for the entire year, excluding the $5,000 from

Washington, was $500, and it passed $4,500 to the State party. But

112

654Transcript of deposition of Joseph E. Sandler, former general counsel, Democratic National

Committee, by Committee on Government Reform at 155 (May 14, 1998) (deposition on file with

committee). 655Document entitled, ‘‘Contribution Plan from DSCC in Washington—July 22, 1996’’ (exhibit

46).

for the out-of-State benevolence, Marshall County revenue was only

$590 for 1996, and Marshall County passed almost all of its windfall on to the State party. Although the DNC’s then-General Counsel was aware that States were being asked to give money to Kansas, he was unaware of the arrangements with the counties. Indeed, in 1998 he testified ‘‘that comes as a surprise to me even

today.’’ 654

c. Contributions from Washington Using Kansas Citizens as

Conduits

In addition to the Memorandum from Tressie Hurley to Don Biggs that explains ‘‘[y]ou may keep $200 but then must turn

around and contribute $800 to the Senate Victory Fund,’’ the committee obtained a document titled, ‘‘Contribution Plan from DSCC

in Washington.’’ It states: ‘‘The DSCC, in an effort to support state

senate candidates, the Democratic Party, and their own candidates,

will contribute $500 to each state Senate campaign we designate.

The campaign may keep $100 but then must turn around and contribute $400 to either the Kansas Coordinated Campaign or the

Senate Victory Fund. . . . It will help the candidate ($100) but it

will help the Kansas Coordinated Campaign and all Democratic

candidates as well.’’ 655

The following chart details contributions received from Washington by State candidates and the amount they in turn forwarded

to the State party:

Received Amount passed on Date received and date disbursed

Senate Candidate:

Don Biggs ............................................ $1,000 $800 8/5/96 ‰ 9/5/96

Glenn Braun ........................................ $1,000 $800 8/1/96 ‰ 8/6/96

Micheline Burger ................................. $1,000 $800 8/5/96 ‰ 8/29/96

Bill Campsey ....................................... $1,000 $500 8/1/96 ‰ 8/5/96

Dana Crietz .......................................... $1,000 $800 8/8/96 ‰ 8/8/96

Larry Daniels ....................................... $1,000 $800 8/1/96 ‰ 8/9/96

Diana Dierks ........................................ $1,000 $800 8/6/96 ‰ 8/6/96

Christine Downey ................................. $1,000 $800 8/5/96 ‰ 8/20/96

Paul Feliciano ...................................... $1,000 $800 8/3/96 ‰ 8/12/96

Wade Garrett ....................................... $1,000 $800 8/6/96 ‰ 8/9/96

Rip Gooch ............................................ $1,000 $800 7/30/96 ‰ 9/11/96

Greta Goodwin ..................................... $1,000 $800 8/6/96 ‰ 8/9/96

Richard Hazell ..................................... $1,000 $800 8/1/96 ‰ 8/22/96

Anthony Hensley .................................. $1,000 $800 8/20/96 ‰ 9/24/96

Gerald Karr .......................................... $1,000 $800 8/6/96 ‰ 8/13/96

Janis Lee .............................................. $1,000 $800 8/1/96 ‰ 8/13/96

Janice McIntyre .................................... $1,000 $800 8/30/96 ‰ 8/5/96

Marge Petty ......................................... $1,000 $800 8/1/96 ‰ 8/6/96

Pat Huggins Pettey .............................. $1,000 $800 8/5/96 ‰ 8/7/96

John Sears ........................................... $1,000 $800 8/1/96 ‰ 9/1/96

Chris Steineger .................................... $1,000 $800 8/12/96 ‰ 8/12/96

Arthur Tannahill .................................. $1,000 $800 8/1/96 ‰ 8/5/96

Doug Walker ........................................ $1,000 $800 8/1/96 ‰ 8/9/96

Allan White .......................................... $1,000 $800 8/1/96 ‰ 9/8/96

113

656Transcript of deposition of Douglas Walker, former Kansas State Senator, by the Committee on Government Reform at 40 (Feb. 23, 1998) (deposition on file with committee). 657Transcript of deposition of Henry Helgerson, member, Kansas State House, by the Committee on Government Reform at 22 (Feb. 19, 1998) (deposition on file with committee). 658 Id. at 54–55. 659 Id. at 22–23.

Received Amount passed

on Date received and date disbursed

Sherman Jones (In his Schedule C Expenditures and Disbursements, it

is clear that Jones gave the money

on the day he received it. He also

sent the money to the Kansas Senate Victory Fund, care of the

‘‘DSCC.’’ The address is Topeka,

but it is strange that DSCC is

mentioned.).

$1,000 $800 8/5/96 ‰ 8/5/96

Total Senate .................................... $25,000 $19,700

House Candidate:

Judy Showalter ..................................... $500 $400 8/7/96 ‰ 8/9/96

Joe Shriver ........................................... $500 $250 8/6/96 ‰ 10/16/96

Troy Findley .......................................... $500 $400 8/5/96 ‰ 8/14/96

Chris Gallaway .................................... $500 $400 8/5/96 ‰ 8/8/96

Jim Garner ........................................... $500 $250 8/6/96 ‰ 8/8/96

Bob Grant ............................................ $500 $400 8/5/96 ‰ 8/13/96

Jerry Henry ........................................... $500 $250 8/1/96 ‰ 8/9/96

Tom Platis ........................................... $500 $250 8/5/96 ‰ 8/20/96

Harry Stephens .................................... $500 $375 8/6/96 ‰ 8/20/96

Vince Wetta ......................................... $500 $500 8/1/96 ‰ 8/14/96

Total House ..................................... $5,000 $3,475

Total Senate and House ................. $30,000 $23,175

One recipient of a check from Washington provided a rather odd

answer to a relatively straightforward question. When asked: ‘‘[i]s

it fair to say that no one told you that your receipt of this money

was conditioned on your sending part or all of it to the Kansas

Democratic Party or an affiliate,’’ State senate candidate Doug

Walker replied: ‘‘I’m not sure if the answer is yes or no.’’ 656

When State Representative Henry Helgerson was deposed by this

committee, he indicated that his initial concern arose because ‘‘I

was asked to accept money and then pass it on.’’ 657 He testified:

‘‘I was asked to receive the check and to give $400 prior to receiving the check. That occurred before I received it. And then I received the check shortly after that.’’ 658 When it was first suggested

that he would receive money, and that he should pass it on after

it arrived, Helgerson told the committee that he said to staff at the

State legislature: ‘‘I think that’s illegal, because I helped write the

campaign finance law a few years ago. And I said that it sounded

to me like it violated state law.’’ 659 The concern over the legality

of the contribution scheme was also expressed in a local Kansas

newspaper:

Brad Russell, an Olathe attorney who also ran for a Kansas Senate seat in 1996, confirmed that he was asked to

pass part of a DNC donation along for use by the state

party. Russell said he was contacted by a staffer in the

Kansas Senate Minority Leader’s Office, who indicated he

114

660Phil LaCerte, ‘‘Democrat party chair doubts any role in fund-raising scheme,’’ Johnson

County Sun, Sept. 26, 1997, at 69 (exhibit 47). 661 Reno County Democratic Central Committee’s disclosure forms of receipts and disbursements (schedules A and C) (Aug. 10, 1996–Oct. 8, 1996) (exhibit 48).

would be receiving a check from the Democratic Senatorial

Campaign Committee. Russell said the staffer encouraged

him to send 20 percent of the donation along to the state

party. ‘‘It sounded to me like that would be running afoul

of the spirit, if not the out and out letter of the law,’’ Russell said.660

As Helgerson and Russell’s statements make clear, there were contemporaneous concerns about the instructions to act as a conduit

for money that originated in Washington and was intended to go

to the State party. When all the contributions are considered together, it is clear that the DNC and its affiliates were attempting

to avoid Federal disclosure requirements.

2. By Funneling Money to the State Party, the DNC in Washington

Was Able to Benefit Statewide Candidates and Get More for

Each Dollar than if it had Simply Contributed to Candidates

Conduit contribution schemes are generally designed to circumvent disclosure requirements. The ultimate goals are usually to

enable contributions in excess of those legally permitted, or to hide

the true identity of the contributor. Often, these two goals coexist.

In Kansas, State statute prohibited contributions of out-of-state

soft money above certain levels. Therefore, a conduit scheme was

necessary to allow any one donor to make sizable soft money contributions.

The purpose of the Kansas conduit scheme appeared to be twofold: (1) when re-directed to the State party, the money could be

used for statewide candidates; and (2) by effecting an economy of

scale at the State level, more could be obtained for a lesser expenditure.

a. The Money from Washington Benefited Statewide Candidates

Unfortunately, most Kansas Democratic party officials would not

cooperate with the committee’s investigation. Therefore, it was difficult to obtain straight answers to questions about how money

that originated in Washington was used. However, it appears that

once the money was funneled to the State party, it was not used

exclusively for the benefit of the original recipient. For example,

the State disclosure of the Reno County Democratic Central Committee stated that it was contributing $4,500 to the State party for

‘‘electoral targeting data, Voter data base and software survey research—Voter contact services GOTV.’’ 661

Another statewide Democratic party official provided an additional rationale for why it was important for the money from Washington to be redirected to the State party. He suggested:

As you are aware, the Kansas Democratic Party through

the KCCC is providing generic voter contact/GOTV activities on behalf of Democratic candidates all the way down

115

662Memorandum from Tom Beal, Democratic Coordination Campaign, to Doug Johnston

(Sept. 24, 1996) (exhibit 49). 663Letter from the Honorable Martin Frost, chairman, Democratic Congressional Campaign

Committee, to treasurer, Sedgwick County Democratic Committee (Sept. 30, 1996) (exhibit 50). 664Letter from Jim Lawing, county chair, Sedgwick County Democratic Central Committee,

to the Honorable Martin Frost, chairman, Democratic Congressional Campaign Committee (Oct.

2, 1996) (exhibit 51). 665Letter from Jim Lawing, county chair, Sedgwick County Democratic Central Committee,

to Tom Beal, Democratic Coordination Campaign (Oct. 4, 1996) (exhibit 52). 666Transcript of deposition of Jim Lawing, former chairman, Sedgwick County Democratic

Central Committee by Committee on Government Reform at 30 (Feb. 18, 1998) (deposition on

file with committee). There was also a suggestion that the ‘‘State Committee would do all of

the necessary printing . . . at its own expense’’ Id. This, too, would permit an economy of scale

unavailable without the subterfuge of the conduit contribution scheme.

the ticket. In addition we have provided field organizers

and a state wide voter file.662

As this communication makes clear, if money sent to the county by

the DNC in Washington was re-directed to the State party, the

State party would be able to undertake initiatives that would be

of benefit to candidates outside of the particular county that had

initially received the money.

It is interesting to follow the paper trail that accompanied some

of the individual contributions. For example, on September 30,

1996, DCCC Chairman Martin Frost sent $5,000 to Sedgwick

County and said that he was pleased to support ‘‘your 1996 nonfederal general election activities in the state of Kansas.’’ 663 Two

days after the check is dated, the County Chair thanked Representative Frost, remarking ‘‘please let the members of the DCCC know

how helpful the $5,000 contribution will be in getting our base of

support to the polls.’’ 664 Four days after the DCCC check was

dated in Washington, the Sedgwick County Democratic Central

Committee sent a check for $4,250 to the Kansas Coordinated

Campaign.665 The person who signed the letter is the same person

who recognized that the money would go further if spent by the

State party, as opposed to the county party. The only possible conclusion that follows from this tortured series of exchanges is that

the conduit scheme had been set up to achieve something that

would not have been legal if the money had been initially sent to

its ultimate destination.

b. The Kansas State Party Could Obtain a Greater Level of

Services for the Same Expenditure than if Individual

Counties or Candidates Spent the Money that They Received from Washington

One Kansas county official provided an insight into why there

was benefit attached to taking the money sent by Washington to

counties and individuals and funneling it to the State party. He

suggested that the State party would be able to take care of responsibilities for mailing campaign-related information, and ‘‘do so

on the state’s mailing permit which apparently allowed for a little

cheaper rate than we would get here.’’ 666 State party executives refused to cooperate with the committee, and therefore did not answer questions about the precise benefits derived from bundling

smaller sums of money for use in larger spending campaigns. Nevertheless, it is reasonable to infer that the very type on conduct refVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00133 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
116

erenced by Mr. Lawing is in fact the type of conduct that did take

place.

Kansas State Democratic Party—Contributions Originating with the Democratic National

Committee or its Affiliates in Washington, DC

State parties (Democratic parties in 17 states gave to the

Kansas Democratic Party.)

County parties (Seventeen county parties were sent $5,000 on

9/30/98 by the DCCC. Thirteen

sent the following amounts to

the State party.)

Local candidates (29 candidates for the Kansas Senate received $1,000

each. 41 candidates for the Kansas House received $500 each.)

Idaho: $15,000 Cowley: $4,750 Senate

Florida: $15,000 Douglas: $4,500 24 Senate candidates sent $800 on.

Nebraska: $14,990 Ellis: $4,500 1 Senate candidate sent $500 on.

Arkansas: $15,000 Harvey: $4,500

Maine: $15,000 Leavenworth: $4,500 House

Colorado: $14,990 Marshall: $4,750 10 House candidates sent a total of $3,475 to the State Dem.

Party.

Georgia: $15,000 Miami: $4,500

Louisiana: $15,000 Osage: $4,750

Alabama: $14,990 Reno: $4,500

Wyoming: $14,990 Riley: $4,500

South Carolina: $15,000 Sedgwick: $4,250

California: $14,990 Shawnee: $4,500

South Dakota: $15,000 Wyandotte: $2,400

New Hampshire: $15,000

Minnesota: $15,000

Michigan: $15,000

Montana: $15,000

Total: $254,950 Total: $56,900 Total: $23,175

Total = $335,025

F. THE JUSTICE DEPARTMENT FAILED TO INVESTIGATE LEAKS

HARMFUL TO THE CAMPAIGN FUNDRAISING INVESTIGATION

The Justice Department’s frequent and harmful leaks about the

campaign fundraising investigation provided another clear sign of

the investigation’s failure. These leaks, which were often made at

strategic times, greatly harmed the Justice Department’s investigation, and strongly suggested that certain officials in the Justice Department did not want the investigation to succeed. The Attorney

General has failed to investigate the vast majority of these leaks,

and they have continued unabated, up to the present time. These

leaks provide a clear example of why the Attorney General should

have appointed an independent counsel—to remove the investigation from the politically biased officials at the Justice Department.

1. Leaks Regarding DNC Issue Ads

The day after Justice Department lawyers interviewed President

Clinton regarding his role in crafting DNC ‘‘issue ads’’ promoting

his Presidency, a senior official in the Justice Department leaked

information relating to that interview. Judging from the quote provided to the Washington Post, that senior official clearly gave the

reporter the impression that it was unlikely that the Attorney General would appoint an independent counsel:

‘‘Because this involves political speech, which clearly falls

under the protection of the First Amendment, there is a

relatively high threshold for determining what constitutes

117

667 John F. Harris and Roberto Suro, ‘‘Clinton: 1996 ‘Issue Ads’ Passed Legal Test,’’ the Washington Post, Nov. 10, 1998, at A6. 668 Ronald J. Ostrow, ‘‘Report to Reno Urges Independent Counsel on Fund-Raising,’’ Los Angeles Times, July 24, 1998, at A6. 669 Roberto Suro and Michael Grunwald, ‘‘Independent Probe of ’96 Funds Urged; Reno Noncommittal on Campaign Report,’’ the Washington Post, July 24, 1998, at A21.

criminal behavior,’’ said a senior Justice Department official. ‘‘There are not a lot of mysteries surrounding how the

DNC ads were produced and financed, but whether anything crossed that threshold is another matter.’’ 667

The willingness of Justice Department staff to discuss ongoing investigations with the press should be contrasted to the Attorney

General’s repeated refusals to answer questions from this body—

which is Constitutionally charged with overseeing the Justice Department. These types of leaks demonstrate that the Justice Department relies on the ‘‘open case’’ justification to keep damaging

information from Congress, but casts that rationale aside when it

wants to spread information favorable to the administration in the

press.

2. Leaks Regarding the La Bella Memorandum

In July 1998, shortly after Charles La Bella, the head of the

Campaign Finance Task Force, gave the Attorney General his

memorandum concluding that she was required by law to appoint

an independent counsel, details of that memorandum were leaked

to the press. Again, unnamed ‘‘senior Justice Department officials’’

released sensitive investigative materials to several newspapers:

Government sources, even those speaking anonymously,

declined to provide specifics on La Bella’s report, which

runs more than 100 pages. But one source who had read

the report said it represents ‘‘a fresh approach to everything he [La Bella] has seen’’ and called for legal conclusions and steps that had not been advanced earlier.668

Officials familiar with Freeh’s memo last winter and La

Bella’s current report said that La Bella’s includes a much

more extensive review of the evidence and makes a firmer

conclusion that there are sufficient indications of wrongdoing by top officials to oblige Reno to seek an outside

prosecutor. As with the Freeh memo, the basic argument

is that top Democratic and White House officials conducted

a systematic and deliberate effort to circumvent campaign

finance laws setting limits on fund-raising and defining

what constitutes a legal contribution.669

Another leak of the La Bella memorandum occurred in the pages

of the Wall Street Journal. There, it was reported that the La Bella

memorandum focused on potential wrongdoing by Harold Ickes:

Charles La Bella’s findings, presented in a lengthy memorandum to Ms. Reno, focus sharply on the fund-raising efforts of Harold Ickes, the former deputy White House chief

of staff. They form the basis of Mr. La Bella’s recVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00135 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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670 Brian Duffy, ‘‘Campaign Probe Looked at Ickes, Says La Bella,’’ the Wall Street Journal,

Aug. 3, 1998. 671 Jerry Seper, ‘‘No Outside Counsel Likely in Probe of Gore Campaign Calls,’’ the Washington Times, Nov. 24, 1998, at A3. See also David Johnston, ‘‘Reno’s Aides Split on Merits of

Need for Gore Prosecutor,’’ the New York Times, Nov. 24, 1998, at A1. 672 Roberto Suro, ‘‘Prosecutors’ Approach to Huang Signals Shift in Campaign Probe,’’ the

Washington Post, Oct. 2, 1998, at A17.

ommendation that Ms. Reno seek the appointment of an

independent counsel.670

While the Attorney General apparently tolerated public release

of details from the La Bella memorandum by her senior staff, for

almost 2 years she refused to provide the same memorandum to

Members of Congress charged with oversight of the Justice Department.

3. Leaks Regarding the Gore Independent Counsel Decision

The Attorney General was also steadfast in refusing to comment

on her decisionmaking process in concluding that an independent

counsel was not necessary to investigate the fundraising scandal.

However, her aides did not show similar reticence. Before the Attorney General reached a decision on appointing an independent

counsel to investigate Vice President Gore’s fundraising telephone

calls, her aides were discussing her decisionmaking process with

reporters, saying ‘‘they believe the Attorney General will reject accusations that there is specific and credible evidence of criminal

wrongdoing[.]’’ 671 These types of leaks again show that Department officials did not hesitate to spread information favorable to

the administration in the press.

4. Leaks Regarding the Huang Investigation

Justice Department staff also leaked information regarding the

investigation of former DNC Finance vice-chair and Presidential

appointee John Huang. On October 2, 1998, the Washington Post

reported that the Justice Department was no longer seeking to

prosecute John Huang:

Now, instead of pressuring Huang to say what he knows

about White House officials in exchange for immunity from

prosecution, federal prosecutors are bargaining to get his

testimony against Maria Hsia, a California fundraiser already under indictment who played a minor though controversial role in 1996, according to lawyers close to the

case.

* * * * *

And a senior Justice Department official said that some investigators have concluded that Huang does not have information that would support the prosecution of the Democratic officials who received and spent the funds he raised

or the White House officials who promoted his career in

Washington.

As a result, attention has turned to the possibility that

Huang might be able to bolster the endangered case

against Hsia.672

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673 Jeff Gerth, ‘‘Democrat Fund-Raiser Said to Detail China Tie,’’ the New York Times, May

15, 1998, at A1. 674 Roberto Suro and Bob Woodward, ‘‘Chung Ties China Money to DNC,’’ the Washington

Post, May 16, 1998, at A1.

This leak must be contrasted with the Attorney General’s refusal

to produce subpoenaed documents to this committee because she

feared that the members of the committee would publicly disclose

a ‘‘roadmap’’ to the investigation. Justice Department staff, however, felt free to disclose the Department’s investigative roadmap

regarding John Huang.

5. Leaks Regarding Johnny Chung

One of the most disturbing leaks to come from the Justice Department concerned the testimony of DNC fundraiser Johnny

Chung. After Mr. Chung pled guilty to criminal charges and began

cooperating with the Justice Department, details of his testimony

were on the pages of the New York Times:

A Democratic fund-raiser has told Federal investigators he

funneled tens of thousands of dollars from a Chinese military officer to the Democrats during President Clinton’s

1996 re-election campaign, according to lawyers and officials with knowledge of the Justice Department’s campaign

finance inquiry.

The fund-raiser, Johnny Chung, told investigators that a

large part of the nearly $100,000 he gave to Democratic

causes in the summer of 1996—including $80,000 to the

Democratic National Committee—came from China’s People’s Liberation Army through a Chinese lieutenant colonel

and aerospace executive whose father was Gen. Liu

Huaqing, the official and lawyers said.

* * * * *

A lawyer for Mr. Chung, Brian A. Sun, declined to comment on his client’s conversations with investigators, citing

his client’s sealed plea agreement with the Justice Department. ‘‘I’m shocked that sources at the Justice Department

would attribute anything like that to my client.’’ 673

Similar leaks appeared in the Washington Post:

Democratic fund-raiser Johnny Chung has told Justice Department investigators that a Chinese military officer who

is an executive with a state-owned aerospace company

gave him $300,000 to donate to the Democrats’ 1996 campaign, according to federal officials[.] 674

These leaks proved extraordinarily harmful to Johnny Chung.

First, they were used by certain members of the Committee on

Government Reform to attack Chung, and undermine his credibility at the very time that he was offering evidence tying senior

Chinese officials to efforts to influence United States elections.

Second, and more importantly, these leaks led to threats to

Chung’s life. In May 1998, when these articles appeared, Chung

was cooperating with the Justice Department investigation, and

had recently been contacted by Robert Luu. Luu claimed to be an

associate of Liu Chao-Ying, and suggested to Chung that if he reVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00137 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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675 ‘‘Johnny Chung: Foreign Connections, Foreign Contributions,’’ hearing Before the House

Committee on Government Reform, 106th Cong. 266 (May 11, 1999) (statement of Johnny

Chung).

fused to cooperate with the Justice Department, he and Liu would

compensate Chung. Luu also subtly suggested that if Chung did cooperate with the Justice Department, Chung and his family could

be in danger. Chung cooperated with the FBI in an effort to get a

tape of Luu offering money in exchange for Chung’s silence. The investigation was at its most delicate phase at the time the leaks appeared in the New York Times. Chung described the events that

followed in his testimony before the committee:

In the first week of May, I learned that the New York

Times was doing a story that involved Liu Chao Ying and

the $300,000. The FBI and I were very concerned that the

news story would scare Mr. Luu off. My attorney and I

tried to get the New York Times to kill the story. They refused. On the day before the story came out (May 15,

1998), I ended up going forward with a meeting with Luu

and his attorney. I consulted with the FBI before I proceeded.675

After the article appeared, though, Chung and the FBI were not

able to get Luu on tape threatening Chung, and it appeared that

Luu had grown more cautious, and tried to distance himself from

his earlier statements to Chung. However, Chung made it clear

that the leaks from the Justice Department posed a serious threat

to him:

Mr. BARR. Do you consider that your life was in danger in

1998 because of the leaked story that appeared in the New

York Times?

Mr. CHUNG. That is correct, and I am still looking out my

back every day.

Mr. BARR. Did you leak that information in any way,

shape or form to the New York Times?

Mr. CHUNG. No. I don’t leak that information to the New

York Times.

Mr. BARR. And would it also be accurate that your attorneys didn’t leak that information to the New York Times?

Mr. CHUNG. We tried to stop them.

* * * * *

Mr. BARR. Well, we would like the Department of Justice

to find that out. It would be very interesting to find out,

one, if they are concerned about it, because this is a very

damaging leak that endangered a very important witness,

yourself; and it may very well have come from the Department of Justice. So we would be very interested in that,

as I am sure you would be.

Mr. CHUNG. Mr. Congressman, that night, I had to go to

a meeting with those people. My attorney told me, don’t

go. Maybe you are in trouble, in danger. I talked to my

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676 Id. at 319–20. 677 In December 1998, and again in August 1999, the committee drew the attention of the Justice Department to many of the leaks discussed in this section of the report. Committee staff

met with Justice Department staff on Oct. 27, 1999, to discuss the Justice Department leak investigations. In that meeting, the Justice Department confirmed that of all of the leaks brought

to their attention, they had only investigated the leaks of the Freeh memo and the decisionmaking relating to John Huang. In addition, the Department disclosed a leak of information relating to Charlie Trie. 678 ‘‘Justice Says White House Coffee Tape Unclear; Hearings Scheduled Tuesday’’ (published

July 19, 2000) <http://www.cnn.com/2000/ALLPOLITICS/stories/07/19/burton.gore/index.html>.

wife, I talked to my attorney again, and I talked to the

FBI. I want to go forward because I want the truth to

come out.676

The seriousness of this leak was apparent to the Justice Department as soon as it happened. However, it appears that the Justice

Department has not undertaken any steps to determine where this

information came from. Committee staff interviewed staff of the

Justice Department Office of Professional Responsibility, who confirmed that as of October 27, 1999, this leak had not come under

investigation by the Department.677 While most of the leaks from

the Justice Department simply send the message that the Department is politically biased and not interested in a thorough investigation, this leak sent an even more dangerous message. This leak

showed that someone involved in the Chung investigation thought

that press coverage in the New York Times was more important

than Chung’s well-being, or the success of a significant sting operation. It is deeply disturbing that the Justice Department has not

investigated this leak.

6. Leaks Regarding the December 15, 1995, White House Coffee Videotape

In July 2000, the committee brought the December 15, 1995,

White House coffee videotape to the attention of the Justice Department. The committee had subpoenaed the original White

House videotape of the event, and with the superior audio quality

of that tape, was able to confirm that on the tape Vice President

Gore said ‘‘we oughta, we oughta, we oughta show Mr. Riady the

tapes, some of the ad tapes.’’ In a letter dated July 18, 2000, the

chairman asked the Attorney General to investigate these statements by the Vice President. A CNN article the following day captured the response of the Justice Department: ‘‘a Justice Department source said it was unclear what was on the tape because of

poor audio.’’ 678

This particular leak was troubling for two reasons. First, it constituted a comment on an ongoing investigation by a Justice Department staffer. When the committee called a number of Justice

Department officials before the committee, and asked them questions about the tape, they refused to comment in any way. It is

troubling that Justice Department staff would observe Departmental policy when called before Congress and presented with serious evidence, and then disregard that same policy when denigrating the evidence in the press. But even more telling, is that the

leak makes the very point the committee was trying to impress

upon the Justice Department. The committee possessed the original White House tape of the event, and only using that original

122

679 Neil A. Lewis and Don Van Natta, Jr., ‘‘Reno, Rejecting Aide’s Recommendation, Declines

to Name Counsel on Gore Fund-Raising,’’ the New York Times, Aug. 23, 2000, at A19. 680 News conference with Attorney General Janet Reno, Washington, DC, (Aug. 23, 2000).

tape could the Justice Department reach a justifiable conclusion

about the contents of the tape.

7. Leaks Regarding the Vice President Gore Special Counsel Decision

The most recent leak in the Justice Department’s campaign fundraising investigation came in August 2000, when the Attorney General was considering whether to appoint a special counsel to investigate Vice President Gore. The day of the Attorney General’s announcement, the New York Times reported that ‘‘[o]ne Justice Department official said that Mr. Conrad was alone in his recommendation. ‘No other prosecutor in this matter thought that

there should be a special counsel,’ said the official, who spoke on

the condition of anonymity.’’ 679 However, just hours later, the Attorney General came forward to state that the ‘‘Justice Department

official’’ cited in the Times had been lying: ‘‘today Bob Conrad has

been tagged with being the only person in the Justice Department

who thought that I should appoint a special counsel. Although I’m

not going to get into who recommended what, I can tell you that

that is not correct.’’ 680

The false leak regarding Robert Conrad’s recommendation follows the pattern of Justice Department leaks. Information was

spread by Justice Department staff, in contravention of Department policy, to minimize the seriousness of the investigation and

to benefit the Clinton-Gore administration. The Attorney General

did take the unusual step of making it clear that the leak was untrue. However, there is no sign that the Justice Department has

taken any steps to find the source of this leak.

The leaks from the Justice Department’s campaign fundraising

investigation are harmful on many levels. First, they harm the Department’s investigation. The leak of information about Johnny

Chung endangered the investigation and Chung’s life. The leak of

information about John Huang provided him a signal that he was

not a serious target of the Department’s investigation. Second, the

leaks have been made to minimize the investigation and support

the Clinton administration. Recommendations for independent and

special counsels have been trivialized, as has evidence of potential

wrongdoing. Finally, these leaks have proven that the Justice Department cannot be trusted to carry out the campaign fundraising

investigation. By keeping the investigation in the Department,

where political appointees have had tight control over the investigation, the Attorney General has created an atmosphere where

Department officials have the opportunity to undermine the case.

By failing to investigate and punish the individuals responsible for

the leaks, the Attorney General has sent the message that these

kinds of leaks are permissible.

123

681The Attorney General, in her opposition to disclosure of the Freeh and La Bella memoranda, fails to understand that the only recommendations chilled by oversight are dishonest or

malicious recommendations. A review of honestly held opinions will never prevent anyone from

acting in good faith in the future.

III. THE JUSTICE DEPARTMENT’S POLITICAL INTERFERENCE WITH

CONGRESSIONAL OVERSIGHT

A. FAILURE TO COMPLY WITH THE COMMITTEE’S SUBPOENA FOR THE

FREEH AND LA BELLA MEMORANDA

For 21⁄2 years, the committee struggled to obtain copies of the

Freeh and La Bella memoranda from the Justice Department. During that period of time, the committee issued four different subpoenas for the memos, in addition to a number of additional formal

requests for the documents. Throughout the process, the Justice

Department raised countless objections to complying with the committee’s demands. The Justice Department’s recalcitrance culminated in the committee’s August 6, 1998, vote to hold the Attorney General in contempt of Congress. In May 2000, the Justice Department finally relented, and provided copies of the Freeh and La

Bella memos, and a number of other memoranda relating to the Attorney General’s independent counsel decisionmaking process, to

the committee. The committee released those documents to the

public a short time later, on June 6, 2000.

When the committee subpoenaed the Freeh and La Bella memoranda, the Justice Department raised a number of different objections to complying with the subpoenas. First, the Department

claimed that the committee’s demand would harm the campaign

fundraising investigation. Then it claimed that the committee’s action would harm the effective functioning of the Justice Department. Finally, it claimed that there was no legal precedent for the

committee’s action. However, when the Justice Department finally

turned the documents over to the committee, it was clear that the

Justice Department’s objections had been utterly false and baseless. Indeed, the fact that the Campaign Financing Task Force supervisor Robert Conrad later wrote a memorandum suggesting a

special counsel to investigate whether the Vice President committed perjury, lays to rest the argument that honestly held opinion is ‘‘chilled’’ by congressional oversight.681

The contents of the Freeh and La Bella memoranda were highly

informative, and pointed out a number of shortcomings in the Task

Force’s investigation. However, almost as revealing as the memoranda was the way that the Justice Department handled the committee’s demands for the memoranda. When the Justice Department was faced with a situation that was embarrassing and that

pointed out the Attorney General’s abysmal handling of the campaign fundraising investigation, it turned to mistruths, obfuscation,

and outright obstruction of the committee’s demands.

1. Why the Committee Needed the Freeh and La Bella Memoranda

In December 1997, the committee learned from press reports that

the Director of the FBI had drafted a memorandum to the Attorney

General recommending the appointment of an independent counsel

to investigate potential violations of law relating to the 1996 DemoVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00141 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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682See, e.g., David Johnston, ‘‘F.B.I.’s Chief Tries to Influence Reno, Memo Argues for Appointment of Independent Prosecutor,’’ N.Y. Times, Dec. 2, 1997, at A1. 683See, e.g., David Johnston, ‘‘Report to Reno urges a Counsel Over Donations,’’ N.Y. Times,

July 23, 1998, at A1. 684 ‘‘S. 24, the Independent Counsel Reauthorization Act of 1993,’’ hearing before the Senate

Committee on Governmental Affairs, 103d Cong., 12 (1993).

cratic election campaign.682 Similarly, in July 1998, the committee

learned from press reports that Charles La Bella, the Supervising

Attorney of the Justice Department Campaign Financing Task

Force, had recommended that the Attorney General appoint an

independent counsel to lead the investigation.683 In both cases, it

appeared that the investigators with the greatest knowledge of the

campaign fundraising scandal had decided that the Justice Department could not conduct the investigation without a conflict of interest.

The failure of the Attorney General to follow the advice of her

advisors to appoint an independent counsel was a strange departure for the Attorney General. Indeed, she had appointed independent counsels for a number of cabinet officials, and had strongly

supported the reauthorization of the Independent Counsel Act in

1994. At a hearing in 1994, the Attorney General stated:

The Independent Counsel Act was designed to avoid even

the appearance of impropriety in the consideration of allegations of misconduct by high-level Executive Branch officials and to prevent, as I have said, the actual or perceived

conflicts of interest. The Act thus served as a vehicle to

further the public’s perception of fairness and thoroughness in such matters, and to avert even the most subtle influences that may appear in an investigation of highly

placed Executive officials.684

As the Attorney General correctly observed in 1994, the proper application of the Independent Counsel Act was crucial in assuring

American citizens that allegations of wrongdoing by senior government officials were being investigated thoroughly and free of political bias. Yet, when the time came that the Attorney General was

faced with allegations of criminal wrongdoing by the President,

Vice President, and senior officials of her political party that went

to the heart of the Nation’s political process, she steadfastly refused to appoint an independent investigator.

Fueling the committee’s concern that the Justice Department

simply was not able to investigate the President, Vice President,

and senior DNC officials were the Justice Department’s numerous

fumbles and failures in the investigation by that point. By December 1997, the time that word of Director Freeh’s memorandum first

leaked to the press, the Justice Department had already began to

lose control of its investigation:

• The first lead prosecutor in charge of the investigation,

Laura Ingersoll, had to be removed by Attorney General

Reno, and replaced with Charles La Bella.

• The White House delayed the production of a number of

records to the Justice Department, including crucial videotapes of Presidential fundraising events. In addition, the

125

685 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before the House Committee on Government Reform, 106th Cong., 39 (2000) (preliminary transcript).

White House often preceded document productions with Friday night ‘‘document dumps’’ to the media.

• Specific and credible allegations of criminal wrongdoing had

already been made against senior DNC and administration

officials, and yet, no independent counsel had been appointed, and few indictments had been brought.

In addition, a number of other problems had developed inside the

investigation, and had not yet become known to the outside world.

For example, at the beginning of the investigation, Lee Radek, who

was then in charge of the investigation, told William Esposito, a

senior FBI official, that he felt ‘‘that there was a lot of pressure on

him, and the Attorney General’s job could hang in the balance

based on the decision that he would make.’’ 685 Several months

later, FBI agents discovered Charlie Trie’s employees destroying

documents responsive to congressional and Justice Department

subpoenas. They asked for a search warrant to stop the destruction, and to determine what documents Trie had in his possession

that he had not yet turned over. Laura Ingersoll, the head of the

Task Force, refused to let the Task Force agents get the search

warrant, claiming that they did not have adequate probable cause.

Also, by December 1997, despite the fact that the fundraising investigation had been underway for over a year, the Justice Department had failed to subpoena critical documents from the White

House, including documents relating to Maria Hsia.

By the time that word of Charles La Bella’s recommendation

leaked in July 1998, the committee’s skepticism of the Justice Department investigation had grown. Despite 19 months of investigation, the Justice Department still had not taken any significant action against the foreign kingpins of the fundraising scandal, like

James Riady or Ng Lap Seng. Similarly, the Task Force had failed

to take any action against officials in the administration and DNC

who had made the scandal possible, like Harold Ickes, Richard Sullivan, or David Mercer. Rather, the Task Force had brought

charges only against the low-level fundraisers who had solicited

much of the illegal money, like Charlie Trie, John Huang, and

Maria Hsia.

Accordingly, when the committee demanded the Freeh and La

Bella memoranda, it was attempting to discover the reasons why

the Attorney General was failing to trigger the Independent Counsel Act, and whether the inherent conflict of the Attorney General’s

investigation of the President, Vice President, and her own political

party, had adversely impacted even-handed enforcement of the law.

In each case, it appeared to the committee that there was significant cause to trigger the Act, and that the Attorney General had

not explained her failure to do so. Moreover, it appeared at the

time that the failure of the Attorney General to trigger the Act was

causing significant, irreversible harm to the investigation.

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686David Johnston, ‘‘F.B.I.’s Chief Tries to Influence Reno, Memo Argues for Appointment of

Independent Prosecutor,’’ N.Y. Times, Dec. 2, 1997, at A1. 687 Id. 688Letter from Dan Burton, chairman, Committee on Government Reform and Oversight, to

Louis Freeh, Director, Federal Bureau of Investigation (Dec. 2, 1997) (all committee correspondence with and subpoenas to the Justice Department are printed in the appendix accompanying

this report). 689Letter from Janet Reno, Attorney General, to Dan Burton, chairman, Committee on Government Reform and Oversight 1–2 (Dec. 4, 1997). 690Subpoena duces tecum issued by the Committee on Government Reform and Oversight

(Dec. 5, 1997). 691Letter from Dan Burton, chairman, Committee on Government Reform and Oversight, to

Janet Reno, Attorney General 1 (Dec. 5, 1997). 692 Id. at 2. 693Letter from Janet Reno, Attorney General, and Louis Freeh, Director, Federal Bureau of

Investigation, to Dan Burton, chairman, Committee on Government Reform and Oversight (Dec.

8, 1997).

2. The Committee’s December 1997 Subpoena for the Freeh Memorandum

On December 2, 1997, press reports emerged indicating that FBI

Director Louis Freeh had drafted a memorandum to the Attorney

General asking her to appoint an independent counsel to conduct

the campaign fundraising investigation.686 The reports indicated

that Director Freeh believed that the Justice Department had a political conflict of interest which prohibited it from conducting an investigation of the Clinton administration.687 That same day, the

committee scheduled a hearing into the matter, and sent Director

Freeh a letter requesting him to produce his memorandum to the

committee by December 4, 1997.688 On December 4, 1997, Attorney

General Reno wrote to the chairman, explaining why she would not

comply with the chairman’s request. In her letter, the Attorney

General identified two reasons for her refusal to comply with the

chairman’s request: first, that longstanding Justice Department

policy prohibited the Department from sharing with Congress deliberative material relating to open criminal cases; and second, that

to provide this kind of deliberative material to Congress would chill

Justice Department personnel from providing their frank advice to

the Attorney General in future investigations.689

As the Attorney General refused to produce the memorandum

voluntarily, on December 5, 1997, Chairman Burton issued a subpoena to the Justice Department, requiring the production of the

Freeh memorandum.690 In a letter accompanying the subpoena,

Chairman Burton pointed out that it was critical to the committee’s

oversight responsibility to review the Freeh memorandum.691 He

also pointed out that the committee’s demand was consistent with

a number of subpoenas and requests issued by congressional committees over the past decade.692 In those cases, the Justice Department complied with congressional requests.

On December 8, 1997, Attorney General Reno and Director Freeh

responded to the subpoena, again refusing to comply. The Attorney

General and Director Freeh reiterated the two reasons that Ms.

Reno gave for refusing to comply in her December 4, 1997, letter.693 In addition, they enunciated several new reasons for refusing to comply: first, that public and judicial confidence in the Department’s investigation would be undermined by congressional intrusion into the investigative process; second, that disclosure of the

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694 Id. at 1–2. 695David Johnston, ‘‘Report to Reno urges a Counsel Over Donations,’’ N.Y. Times, July 23,

1998, at A1. 696Letter from Dan Burton, chairman, Committee on Government Reform and Oversight, to

Janet Reno, Attorney General 1 (July 23, 1998). 697Subpoena duces tecum issued by the Committee on Government Reform and Oversight

(July 24, 1998). 698Letter from Janet Reno, Attorney General, and Louis Freeh, Director, Federal Bureau of

Investigation, to Dan Burton, chairman, Committee on Government Reform and Oversight 1

(July 28, 1998).

tioned in the memorandum could be damaged by the disclosure of

the memorandum.694 In addition, Attorney General Reno and Director Freeh claimed that the precedents for the committee’s action,

which had been cited in the chairman’s letter of December 5, 1997,

were inapplicable to this case.

The committee accepted at face value a number of the arguments

that had been forwarded by the Justice Department. The committee hoped that the Attorney General was operating in good faith

when she made these points, and that she was not using these arguments simply as pretext to avoid compliance with the committee’s subpoena. Accordingly, the committee sought to reach an accommodation with the Justice Department to avoid enforcement of

the committee’s subpoena. Such an accommodation was reached in

December 1997, when the Department agreed to allow Chairman

Burton, Congressman Waxman, and three committee staff to review a heavily-redacted copy of the Freeh memorandum. The small

portion of the memo that the chairman was allowed to review confirmed the committee’s view that the law required the Attorney

General to appoint an independent counsel to investigate the campaign fundraising scandal.

3. The Committee’s July 1998 Subpoena for the La Bella Memorandum

On July 23, 1998, a number of newspapers reported that the supervising attorney of the Campaign Financing Task Force, Charles

La Bella, had drafted a report to the Attorney General recommending that she appoint an independent counsel to take over the

investigation.695 According to these press reports, like Director

Freeh, Mr. La Bella had concluded that the law required the appointment of an independent counsel, both because of the highlevel administration officials who were being investigated, as well

as the conflict of interest that the Attorney General had in conducting the investigation.

That same day, July 23, 1998, Chairman Burton sent a formal

request to the Attorney General, asking her to produce to the committee both the Freeh and La Bella memoranda.696 The following

day, committee staff were informed by telephone that the Justice

Department would not comply with the chairman’s request. Accordingly, on July 24, 1998, the chairman issued a subpoena to the Justice Department, requiring the production of the Freeh and La

Bella memoranda.697 On July 28, 1998, Attorney General Reno and

Director Freeh wrote to the chairman, informing him that they

would not comply with the committee’s subpoena.698 In the letter,

the Attorney General and the Director repeated many of the arguments made when they refused to comply with the committee’s

subpoena for the Freeh memorandum in December 1997. The AtVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00145 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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699 Id. at 1–3. 700Letter from Dan Burton, chairman, Committee on Government Reform and Oversight, to

Janet Reno, Attorney General (Aug. 3, 1998). 701 Id. at 3–4.

torney General and Director laid out five arguments against compliance with the committee’s subpoena: (1) that longstanding Justice Department policy prohibited the Department from sharing

open law enforcement files with Congress; (2) that disclosure of the

memoranda could provide a ‘‘road map’’ of the Department’s investigation; (3) the reputations of individuals mentioned in the memoranda could be harmed by public disclosure of the documents; (4)

that disclosure of the memoranda would create the perception that

Congress was putting political pressure on the Justice Department,

and consequently, would undermine public confidence in the results

of the investigation; and (5) the memoranda reflected the personal

view of their authors, and the public disclosure of the memoranda

could create a ‘‘chilling effect’’ on candid advice in the future.699

The chairman responded on August 3, 1998, to inform the Attorney General that he would not accept her explanation, and would

move to enforce the committee’s subpoena.700 In this letter, and

throughout his correspondence with the Justice Department on this

matter, the chairman explained why the objections raised by the

Department had no merit:

• First, the ‘‘longstanding policy’’ of refusing to share open

law enforcement files with Congress, referred to by Attorney General Reno, was never intended to be used as a way

of refusing to comply with a congressional subpoena. Rather, the only valid basis for refusing to comply with the committee’s subpoena would be to cite executive privilege, or

some other constitutional privilege. The committee provided

the Attorney General with a number of precedents for the

committee’s action, where Congress obtained records relating to open Justice Department cases.701

• Second, the Attorney General’s claim that the memoranda

provided a ‘‘road map’’ that would harm the Task Force’s investigation was misleading. Much of the content of the

memoranda had already been leaked to the press. In addition, the facts discussed in the memoranda were all publicly

known through the investigations conducted by the Government Reform Committee and the Senate Committee on Governmental Affairs.

• Third, the complaint that the reputations of innocent persons could be harmed by disclosure of the memoranda was

similarly hollow. The vast majority of individuals discussed

in the memoranda were individuals who had been discussed

extensively in the public record, been deposed, or testified

at public hearings.

• Fourth, the Attorney General’s complaint that the disclosure of the memoranda would create the impression that

Congress was placing political pressure on the Justice Department to prosecute certain matters was completely untenable. In the summer of 1998, there was already a wideVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00146 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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702See H. Rept. No. 105–728 (1998). 703 Rule 6(e) establishes the secrecy of grand jury proceedings. 704See letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno,

Attorney General 3 (Oct. 12, 1999). The request to review the memoranda was made by the committee’s chief counsel, James C. Wilson, to Craig Iscoe, Associate Deputy Attorney General, at

the conclusion of a staff interview of Lee Radek.

spread perception that the Attorney General was refusing to

investigate certain matters because of her political bias.

This committee was simply calling on the Attorney General

to appoint an independent counsel, not to indict certain individuals. It is a testament to the doublespeak of this Attorney General that she can claim to be acting in an apolitical

and principled fashion by conducting an investigation of her

boss and political party, and that it would be ‘‘politically

motivated’’ if she turned the investigation over to an independent counsel.

• Finally, the Attorney General’s claims that the release of

the memoranda would create a chilling effect was similarly

baseless. As previously noted, many of the memoranda’s

conclusions had already been shared with the press by Justice Department personnel.

Despite the overwhelming weight of the committee’s arguments,

the Attorney General refused to comply with the committee’s subpoena. Accordingly, the chairman scheduled a vote on a report citing the Attorney General for contempt of Congress. The members

of the committee were subjected to an intensive lobbying campaign

by the Justice Department to vote against the report. Two members of the committee were even invited by President Clinton to attend a ceremony at the White House at the time that the report

was scheduled for a vote. Despite the lobbying campaign, the committee’s Republican members voted unanimously in favor of the report. On August 6, 1998, the Attorney General was cited for contempt of Congress.702 However, the contempt report was not taken

up on the House floor prior to the end of the 105th Congress.

4. The Committee’s October 1999 Request to Review the Freeh and

La Bella Memoranda

Despite the committee’s contempt vote, the Justice Department

still made no effort to accommodate the committee’s interests. Committee staff were allowed only several opportunities to review heavily-redacted copies of the lengthy memoranda. In the summer of

1999, a new ruling from the Court of Appeals for the District of Columbia Circuit narrowed an earlier interpretation of Rule 6(e) of

the Federal Rules of Criminal Procedure.703 This new ruling

cleared the way for the Justice Department to share a great deal

of information with the committee that was previously thought to

be covered by Federal grand jury secrecy rules. Accordingly, on

September 17, 1999, committee staff asked Justice Department

staff to make the Freeh and La Bella memoranda available for review by committee staff, in light of the new 6(e) ruling.704 By October 12, 1999, the Justice Department had still failed to reply to the

committee’s request. On October 12, Chairman Burton wrote to the

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705 Id. 706Letter from Janet Reno, Attorney General, to Dan Burton, chairman, Committee on Government Reform 3 (Mar. 21, 2000). 707 If such an offer had been made, the committee would have accepted the offer, as it accepted

the offer when it was made in March 2000. 708William C. Rempel and Alan C. Miller, ‘‘Funds Probe Unfairly Spared White House, ’98

Report Says; Donations: Revelations from Long-Sealed Report Show Internal Dissension on

Reno’s Refusal to Appoint Counsel,’’ L.A. Times, Mar. 10, 2000, A1. 709Subpoena duces tecum issued by the Committee on Government Reform (Mar. 10, 2000). 710Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Mar. 10, 2000).

Attorney General and formally requested that she make the memoranda available for review in their less-redacted format.705

The Justice Department never responded to the chairman’s October 12, 1999, request to provide the memoranda for the committee’s

review in the less-redacted format. On March 21, 2000, in a letter

responding to a later subpoena for the memoranda, the Attorney

General stated ‘‘as a result of the Court decision, a large portion

of the previously redacted information was no longer subject to redaction. We advised the Committee staff last fall that the memorandum with reduced redactions was available for review.’’ 706 The

Attorney General’s statement was patently false. At no time in

1999 did Justice Department personnel make the Freeh or La Bella

memoranda available for the committee’s review.707 The statement

in the Attorney General’s letter is typical of the deceptive, self-serving statements made by the Justice Department throughout the debate on the Freeh and La Bella memoranda.

5. The Committee’s March 2000 Subpoena for the Freeh and La

Bella Memoranda

On March 10, 2000, the Los Angeles Times published an article

on the La Bella memorandum which included extensive quotes

from the memorandum.708 The Los Angeles Times apparently obtained a copy of the memoranda, despite the fact that it had never

been provided to the committee, which had subpoenaed it almost

2 years earlier. Therefore, on March 10, 2000, the committee subpoenaed the Freeh and La Bella memoranda, as well as all other

Justice Department memoranda responding to the Freeh and La

Bella memoranda.709 In a letter accompanying the subpoena, the

chairman noted that the leak of the La Bella memorandum undermined all of the arguments that the Attorney General had made

to the committee in the preceding year and a half.710 The Attorney

General had argued that the release of the memoranda would give

the targets of the investigation a ‘‘road map’’ of the prosecutors’

plans; she said that the release of the documents would create a

‘‘chilling effect’’ on her senior advisors; and she stated that the

memoranda were so sensitive that she could not even let all of the

members of the committee look at them. However, while she was

using these arguments to avoid complying with a lawful subpoena,

she was careless enough to let her staff leak the La Bella memorandum to the Los Angeles Times. Given the fact that the entire

memorandum was in the possession of the Los Angeles Times, and

that large portions of it had been reported, the chairman again

asked the Attorney General to now comply with the subpoena by

March 14, 2000.

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711Letter from Janet Reno, Attorney General, to Dan Burton, chairman, Committee on Government Reform (Mar. 21, 2000). 712 Id. at 2. 713 Id. at 3–4. 714 Committee staff learned that staff of the House Judiciary Committee were allowed to take

extensive notes while reviewing the La Bella memorandum. 715On May 3, 2000, the committee issued a new subpoena to the Justice Department for all

‘‘formal memoranda that were sent to the Attorney General or senior Justice Department officials in connection with decisions involving the application of the Independent Counsel Act to

campaign finance-related matters, including memos that address the Independent Counsel Actrelated aspects of the Freeh and La Bella memoranda.’’ Subpoena duces tecum issued by the

Committee on Government Reform (May 3, 2000). The Justice Department’s production of the

various campaign fundraising memoranda was formally made in response to this subpoena.

Amazingly, the Attorney General still refused to comply. In a letter dated March 21, 2000, she recited many of the arguments that

she made in previous letters to the committee.711 She also acknowledged that the Justice Department had leaked the La Bella memorandum to the Los Angeles Times:

There have apparently been disclosures from one or more

memoranda to the media. It is not clear whether the entire

memoranda or only portions were disclosed to the media,

or whether additional materials were disclosed as well. In

any event, whatever disclosure was made was wholly unauthorized.712

While it was comforting to know that the Attorney General did not

authorize the release of the La Bella memorandum to the press,

the endless parade of leaks of information relating to the campaign

fundraising investigation was disturbing. By March 2000, the

chairman had repeatedly brought the Attorney General’s attention

to the fact that her subordinates were leaking highly sensitive information relating to the investigation. Yet, she apparently took no

action to identify and discipline these individuals. Nor did she understand the appearance problems derived from her refusal to endorse an independent investigation while her subordinates were

undermining the Department’s own efforts.

Despite the leak of the memorandum to the press, the Attorney

General still refused to provide the memorandum to the committee.

She did offer to allow committee staff to review the Freeh and La

Bella memoranda, in their less-redacted form.713 However, as a

condition of that review, staff were not allowed to take any notes.

The Attorney General’s conditions were somewhat troubling, given

that she had allowed the staff of another committee to review the

memoranda while taking notes.714 In addition, the Attorney General’s condition rendered a review of the memoranda difficult, given

the fact that the major memoranda (including the reply memorandum of Lee Radek, the response of Charles La Bella, and the

summary memorandum of James Robinson) totaled over 180

pages.715

a. The Committee’s Attempts to Reach Agreement with the

Justice Department

Despite the Attorney General’s unsatisfactory response to the

committee’s March 10 subpoena, committee staff began to review

the responsive memoranda on March 31, 2000. Over the next 2

months, committee staff reviewed the memoranda a number of

times. During this period, the committee also negotiated with the

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716This statement was made initially by John Tanner of the Justice Department’s Office of

Legislative Affairs at a meeting on May 16, 2000, between Mr. Tanner, Alan Gershel, Deputy

Assistant Attorney General, James C. Wilson, majority chief counsel, Committee on Government

Reform, David A. Kass, majority deputy counsel, Committee on Government Reform, Phil

Schiliro, minority staff director, Committee on Government Reform, and Phil Barnett, minority

chief counsel, Committee on Government Reform. 717 Indeed, approximately 65 pages of the La Bella memorandum are devoted to discussions

of Democrat wrongdoing, while approximately 2 pages are devoted to Republican wrongdoing. 718 John Solomon, ‘‘Freeh: Justice Felt Pressure Not to Proceed with Probe to Save Reno,’’ Associated Press, (May 18, 2000). 719Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (May 19, 2000).

Justice Department regarding the Department’s refusal to comply

with the committee’s subpoena. The Department repeatedly asked

the committee to agree to a ‘‘protocol’’ under which the committee

would receive and handle the subpoenaed memoranda. While the

Department was never specific about how it wanted the committee

to handle the memoranda, it identified two major concerns: (1) protecting the identity of line attorneys mentioned in the memoranda;

and (2) ‘‘keeping internal, deliberative documents out of the campaign season.’’ 716

The Justice Department’s candor on this point was refreshing,

but it revealed the central motive in the Justice Department’s actions throughout the debate over the Freeh and La Bella memoranda—protecting the Clinton administration from political embarrassment. It is illustrative that at the end of the day, after all of

the posturing, the Justice Department identified only these two

concerns when turning the documents over to the committee. No

longer did the Department raise arguments about ‘‘chilling effects’’

or ‘‘prosecutorial roadmaps.’’ Rather, now it was focused on the

negative political impact that the release of the documents would

have on the Democratic party. Indeed, the Freeh and La Bella

memoranda overwhelming discuss potentially illegal conduct by

Democratic officials and donors.717 Therefore, when the Justice Department stated that it wanted to keep these documents out of the

campaign season, it was saying that it did not want documents embarrassing to Democrats to come out during the campaign.

b. The Justice Department’s Production of the Memoranda to

the Committee

Other developments quickly superseded the committee’s negotiations with the Justice Department. On May 18, 2000, the Associated Press reported that in December 1996, Lee Radek, the head

of the Public Integrity Section, which was then conducting the campaign fundraising investigation, told William Esposito, the Deputy

FBI Director, that Radek felt ‘‘a lot of pressure’’ and that the Attorney General’s job might ‘‘hang in the balance’’ with respect to the

campaign fundraising investigation.718 This report reinforced the

committee’s long-held view that the Attorney General had a political conflict of interest in trying to investigate the fundraising of

the President, Vice President and Democratic party. Therefore, on

May 19, the chairman wrote to the Attorney General informing her

that the committee had scheduled a hearing on this matter, and requesting the production of the Freeh, La Bella, and related memoranda before that hearing.719 On May 23, the chairman wrote

again, demanding production of the memoranda, and informing the

133

720Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (May 23, 2000). 721Letter from Robert Raben, Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform (May 24, 2000). 722 Id. at 1. 723Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (May 31, 2000). 724Letter from Robert Raben, Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform (June 2, 2000). 725 Id. 726 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before the Committee on Government Reform, 106th Cong. 5, (June 6, 2000) (preliminary transcript). 727 Id. at 9.

Attorney General that the memoranda would be treated as any

other committee record, subject to release by a vote of the committee.720

On May 24, 2000, Robert Raben, the Assistant Attorney General

for Legislative Affairs responded to the chairman, stating that the

Justice Department was ‘‘pleased to agree to your Committee’s proposal as set forth in your May 23 letter and as elaborated in subsequent discussions with your staff.’’ 721 Under the agreement

reached with the Justice Department, all of the memoranda responsive to the committee’s May 3 subpoena were to be produced

to the committee. The documents were to be kept in a secured facility, and access was to be restricted to six staff from each side of

the committee. In addition, the committee was to provide the Department with notice of any plan to release the documents, and

also gave the Justice Department the opportunity to explain why

the release should not take place.722

On May 31, 2000, the chairman wrote to the Attorney General

and informed her of the plan to release the Freeh and La Bella

memoranda, as well as other related memoranda, at the committee’s June 6, 2000, hearing.723 On June 2, 2000, the Justice Department wrote to object to the committee’s release of the documents.724 In this, the final objection prior to the release of the documents, the Justice Department only identified two concerns: first,

the chilling effect that the release of the memoranda might have

on the ability of Justice Department lawyers to render full and

frank advice; and second, the way that the memos infringed upon

the ‘‘privacy interests’’ of individuals mentioned in the memoranda.725

On June 6, 2000, at a hearing of the committee on the Department’s implementation of the Independent Counsel Act, the chairman asked unanimous consent to release the Freeh, La Bella, and

a number of related memoranda.726 Representative Lantos then

amended the unanimous consent request to release all of the documents received from the Justice Department in response to the

May 3, 2000, subpoena.727 All of the records were then released by

unanimous consent.

6. The Justice Department’s Misleading Arguments

It is understandable that the Justice Department resisted giving

the committee the Freeh and La Bella memoranda. The Justice Department did have legitimate institutional interests at stake that

it was entitled to protect. However, once the committee served its

subpoena upon the Justice Department, it was legally obligated to

134

728Letter from Janet Reno, Attorney General, to Dan Burton, chairman, Committee on Government Reform and Oversight (Dec. 4, 1997); letter from Janet Reno, Attorney General, and

Louis Freeh, Director, Federal Bureau of Investigation, to Dan Burton, chairman, Committee

on Government Reform and Oversight (Dec. 8, 1997). 729Letter from Janet Reno, Attorney General, and Louis Freeh, Director, Federal Bureau of

Investigation, to Dan Burton, chairman, Committee on Government Reform (July 28, 1998). 730Letter from Janet Reno, Attorney General, to Dan Burton, chairman, Committee on Government Reform (Mar. 21, 2000).

produce the memoranda to the committee. Rather than follow the

legally obligated course of action, the Justice Department used misleading arguments for over 2 years to avoid complying with its

legal duty. Few of the arguments were true, and none constituted

a valid basis for a subpoena. Now that the Justice Department has

complied with the committee’s subpoenas, it appears that the Justice Department did not even believe the arguments that it was

making.

a. The Justice Department’s Shifting Arguments

When the committee first subpoenaed the Freeh memorandum in

December 1997, the Justice Department presented four main arguments: (1) the Justice Department had a policy against discussing

investigative strategies of open cases (and that it was unprecedented for a congressional committee to demand such records); (2)

the release of the memoranda could create a ‘‘chilling effect’’ on

Justice Department employees; (3) the memorandum could provide

a ‘‘road map’’ of the investigation; and (4) the reputations of individuals mentioned in the memoranda could be harmed by the release of the documents.728

When the committee subpoenaed the Freeh and La Bella memoranda in July 1998, the Department reiterated its earlier concerns,

and made an additional argument, that compliance with the committee’s demand would create the perception of political influence

in the prosecutorial process, undermining public confidence in the

investigation.729

When the committee subpoenaed the memoranda in March 2000,

the Attorney General made only three arguments: (1) the campaign

fundraising investigation remained open, and therefore, the release

of the memoranda could have an impact on the investigation; (2)

the release of the memoranda could create a chilling effect inside

the Justice Department; and (3) the memoranda were available for

review by committee staff, and therefore, it was unnecessary to

provide the memoranda to the committee.730 As explained above,

the Attorney General’s statement in the March 21, 2000, letter that

committee staff were offered the opportunity to review the memoranda in the fall of 1999 was false.

However, when the committee actually received the memoranda

in May 2000, the Justice Department made four arguments, two of

which were made in the three earlier rounds of discussion: (1) the

release of the memoranda would create a chilling effect; (2) the

memoranda would infringe privacy interests of individuals mentioned in the documents, and (3) the memoranda contained the

identity of line attorneys; and (4) the memoranda should not be released during the campaign season.

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731Letter from Janet Reno, Attorney General, and Louis Freeh, Director, Federal Bureau of

Investigation, to Dan Burton, chairman, Committee on Government Reform and Oversight 2

(Dec. 8, 1997). 732 ‘‘Charges of Illegal Practices of the Department of Justice,’’ hearings before a subcommittee

of the Senate Committee on the Judiciary, 66th Cong. 484–538 (1921). 733McGrain v. Daugherty, 273 U.S. 135, 151 (1927). 734See, e.g., hearings before the Senate Select Committee on ‘‘Investigation of the Attorney

General,’’ vols. 1–3, 68th Cong. 1495–1503, 1529–30, 2295–96 (1924). 735 Id. at 1495–1547.

b. The Justice Department’s False Arguments

i. The Justice Department’s Nonexistent ‘‘Policy’’ Against

Providing Deliberative Documents

The argument repeated most often by the Justice Department

throughout the debate on the Freeh and La Bella memoranda was

that the Justice Department had a longstanding policy against providing deliberative documents about ongoing investigations to Congress. In fact, in a December 8, 1997, letter to Chairman Burton,

Attorney General Reno and FBI Director Freeh stated that ‘‘[i]t is

unprecedented for a congressional committee to demand internal

decisionmaking memoranda generated during an ongoing criminal

investigation.’’ 731 As was pointed out by the committee in its correspondence with the Justice Department, this claim was not true:

congressional committees had demanded and received internal decisionmaking memoranda and other investigative materials during

ongoing investigations.

Palmer Raids Investigation: In the early 1920s, the Senate

and the House held hearings into the raids and arrests of suspected communists conducted by the Department of Justice under

Attorney General A. Mitchell Palmer. During the course of their investigation, the committees received a number of Department

records relating to the raids. Included in the documents provided

to the committees was a ‘‘memorandum of comments and analysis’’

prepared by a Department lawyer, responding to a District Court

opinion, which was under appeal, and which criticized the Department’s actions.732 This document was provided to the committee

even though it contained facts and the Department’s legal reasoning regarding an open case.

Teapot Dome Scandal: Later in the 1920s, the Senate conducted an investigation into the Department of Justice’s handling

of the Teapot Dome scandal, specifically, charges of ‘‘misfeasance

and nonfeasance in the Department of Justice.’’ 733 The Senate

committee heard from Justice Department attorneys and agents

who offered extensive testimony about the Department’s failure to

pursue cases. Likewise, the Senate committee also received documentary evidence from the Department about its nonfeasance. Testimony and documents were received from a number of cases, some

of which were still open.734 In one notable example, the Attorney

General permitted an accountant with the Department to testify

and produce documents relating to an investigation that he conducted. The accountant produced his confidential reports in which

he had described his factual findings and made recommendations

for further action. The Department had failed to act upon his recommendations, although the case was still open.735 In a letter to

the committee on March 12, 1999, Acting Assistant Attorney General Dennis Burke acknowledged that this case did provide a preceVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00153 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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736See ‘‘White Collar Crime in the Oil Industry,’’ joint hearings before the Subcommittee on

Energy and Power of the House Committee on Interstate and Foreign Commerce and the Subcommittee on Crime of the House Committee on the Judiciary, 96th Cong. (1979). 737 Id. at 156–57. 738 ‘‘Contempt of Congress,’’ report of the Committee on Public Works and Transportation, H.

Rept. No. 97–968 at 10 (1982). 739 Id. at 28 (letter from Robert M. Perry, associate administrator and general counsel to

Chairman Elliott H. Levitas, Oct. 7, 1982). 740 Id. at 42 (memorandum from President Ronald Reagan to the Administrator of the Environmental Protection Agency). 741 Id. at 87–88 (memorandum from Assistant Attorney General Theodore B. Olson to Attorney General William French Smith).

dent for the committee’s request, but attempted to distinguish the

case because the Senate committee was not asking for a prosecutorial decisionmaking document like the Freeh or La Bella memoranda.

White Collar Crime in the Oil Industry: In 1979, the House

Committee on Interstate and Foreign Commerce and the House

Committee on the Judiciary held joint hearings on allegations of

fraudulent pricing in the oil industry. As part of that inquiry, the

committees examined the failure of the Justice Department to investigate properly and prosecute related cases. As part of their

hearings, the committees held closed sessions where they received

evidence regarding open cases in which indictments were pending.736 In open session, the committees called a Justice Department

staff attorney who testified as to the reasons for not proceeding

with a certain criminal case, despite the fact that a civil prosecution of the same case was pending. The Department similarly provided the committees with documentary evidence relating to this

case.737

Gorsuch/EPA Investigation: In the early 1980’s the Subcommittee on Oversight and Investigations of the House Committee

on Public Works and Transportation investigated the enforcement

policy of the Environmental Protection Agency (EPA) with regard

to the Superfund program. The subcommittee investigated the

EPA’s enforcement policy with respect to both criminal and civil

matters.738 In response to the committee’s document requests, the

EPA, with the advice and assistance of the Justice Department, objected to the request on the basis that ‘‘[i]nternal enforcement documents which form the basis for ongoing or anticipated civil or

criminal prosecutions are extremely sensitive. These documents include, for example, memoranda by Agency or Department of Justice

attorneys containing litigation and negotiation strategy, settlement

positions, names of informants in criminal cases, and other similar

material.’’ 739 After the committee’s issuance of a subpoena for the

documents, President Reagan asserted executive privilege over the

documents, stating that ‘‘a controversy has arisen . . . over the

EPA’s unwillingness to permit copying of a number of documents

generated by attorneys and other enforcement personnel within the

EPA in the development of potential civil or criminal enforcement

actions against private parties.’’ 740 The Department of Justice took

the position in the case that the policy against providing Congress

with access to open law enforcement files applied to both civil and

criminal matters.741 Despite the President’s invocation of executive

privilege in the Gorsuch matter, the committee and the House of

Representatives voted to hold Administrator Gorsuch in contempt

of Congress for refusing to produce the subpoenaed documents. UlVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00154 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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742Letter from Chairman Lee Hamilton to Attorney General Edwin Meese III, Jan. 14, 1987. 743See ‘‘Report of the Congressional Committees Investigating the Iran-Contra Affair,’’ H.

Rept. No. 433 and S. Rept. No. 216, 100th Cong. 310, 317, 314, 647 (1987).

timately the documents were produced, and the contempt citation

was withdrawn.

Iran-Contra: The most well-known example of congressional

oversight of the Justice Department involving the demand and receipt of information from open case files in the investigation of the

Iran-Contra affair. As part of their work, the Iran-Contra committees investigated the nature of the Department of Justice’s initial

inquiry into the affair. The investigating committees demanded the

production of the Department’s files regarding their initial inquiry.

The House committee requested, inter alia:

(b) All records relating to Justice Department consideration of, or action in response to, the request of October

17, 1986, by members of the House Committee on the Judiciary for an application for appointment of an independent counsel.

(c) All records relating to the consideration of, and ultimate preparation and submission of, an application for appointment of an Independent Counsel on the Iran matter.

(d) All records from January 1, 1984, to December 15,

1986, relating to requests to, by, or through the Department of Justice to stop or delay ongoing investigations relating to the anti-government forces in Nicaragua and assistance being provided to them[.] 742

The Department resisted, making claims similar to those Attorney General Reno is making now. The Department claimed that

the production of documents to the committees would prejudice the

upcoming prosecutions by the independent counsel. The committees

overruled this objection, and received all requested documents, despite the fact that the independent counsel was pursuing the prosecution of a number of open cases. The committees obtained both

documentary evidence and the testimonial evidence of a number of

high-level Department officials, including Attorney General

Meese.743

Other Cases: In other cases where congressional oversight committees sought access to Department of Justice records relating to

prosecution of cases, the cases at issue were closed. However, those

committees were investigating the fact that the cases were closed,

because they were closed through alleged malfeasance on the part

of the Department. For example, in the Rocky Flats case, and in

the case of Congressman Dingell’s investigation of the Department’s environmental crimes prosecutions, there were allegations

that the Department was allowing guilty parties out of criminal

prosecutions with only minimal punishment. In the Rocky Flats

matter, Congressman Dingell described the Department’s objections to disclosure, which are similar to those asserted here, as

‘‘misguided and legally unjustifiable.’’ Ultimately, over the objection

of the Department, investigating committees obtained a number of

sensitive internal documents. In the Rocky Flats case, the committee even obtained testimony from line attorneys at the DepartVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00155 Fmt 6659 Sfmt 5602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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744 Another notable example of the scope and need for congressional oversight of the Justice

Department can be found in Watergate. In his testimony in the House Judiciary Committee’s

INSLAW hearings, House Counsel Steven R. Ross addressed the nature of congressional oversight in the Watergate scandal:

The Impeachment Report concluded, ‘‘Unknown to Congress, the efforts of the President, through Dean, his counsel’’—specifically, having the Assistant Attorney General

tell Congress to hold off its investigation because of pending proceedings—‘‘had effectively cut off the investigation.’’

Of course, the excuse of pending proceedings did not keep Congress out of investigating

Watergate forever; it only delayed that Congressional investigation. By Spring of 1973,

Congressional committees were no longer accepting the claim of parallel proceedings as

an excuse for withholding evidence. Ultimately, Watergate and its cover-up, including

the role of Attorney General Mitchell, the role of Attorney General Kleindienst in related matters, and the manipulation of the Justice Department and the FBI, were thoroughly probed by the Senate Watergate Committee and the House Judiciary Committee. This probing occurred at the same time as the pending investigations and proceedings of Special Prosecutors Cox and Jaworski.

* * * * * * *

Watergate was a dramatic instance where the House and Senate investigations had to

overcome, not mere claims of pendency of civil proceedings—let alone, as here, mere

pendency of the appeal from such proceedings—but claims of impact on soon-to-be-tried

criminal cases. It was up to the committees to determine what evidence they needed,

not to the Justice Department to measure whether to block those committees. History

reflects that it was only because this Committee insisted on obtaining all the documents

and other evidence from the Justice Department, despite any claims about pending proceedings, that the depths of the scandal were ultimately plumbed.

It is an appropriate note to this period that two Attorneys General—Kleindienst and

Mitchell—were eventually convicted of perjury before Congressional investigations.

‘‘The Attorney General’s Refusal to Provide Congressional Access to ‘‘Privileged’’ INSLAW Documents,’’ hearing before the House Committee on the Judiciary, 101st Congress 88–90 (Dec. 5,

1990) (statement of Steven R. Ross) (emphasis added). Based on his review of this and the other

precedents discussed above, Ross concluded that the Justice Department’s policy of refusing access to open civil or criminal law enforcement files has been consistently rejected by the courts

and by Congress. Id. at 84, 94. 745Letter from Janet Reno, Attorney General, and Louis Freeh, Director, Federal Bureau of

Investigation, to Dan Burton, chairman, Committee on Government Reform and Oversight (Dec.

8, 1997). 746 ‘‘The Need for an Independent Counsel in the Campaign Finance Investigation,’’ hearing

before the Committee on Government Reform and Oversight, 105th Cong. 70 (Aug. 4, 1998). 747Letter from Dennis K. Burke, Acting Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform 2–3 (Mar. 12, 1999).

ment. It also obtained documents, witness interviews, and other

records submitted to the grand jury, but not subject to Rule 6(e).744

Shortly after he signed a letter claiming that the committee’s

subpoena was ‘‘unprecedented,’’ 745 FBI director Louis Freeh reversed course, and admitted that ‘‘your subpoena is not an unprecedented one, but it is an extraordinary one.’’ 746 However, the Attorney General persisted in claiming that the committee’s subpoena

was unprecedented until the following year. In March 1999, after

the threat of contempt had subsided, Acting Assistant Attorney

General Dennis Burke admitted that the committee’s subpoena was

not unprecedented.747 While this admission would have greatly

harmed the Justice Department’s political position in August 1998,

during the contempt debate, by March 1999, few in the public

cared.

ii. The Chilling Effect of the Release of the Memoranda

The Attorney General claimed that if the Justice Department

complied with the committee’s subpoena, it would create a ‘‘chilling

effect’’ that would discourage Justice Department personnel from

providing the Attorney General with candid and thorough advice.

By its very nature, the Attorney General’s argument was highly

speculative, and difficult to prove. There is no evidence that the

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748Memorandum from Lee J. Radek, Chief, Public Integrity Section, to James K. Robinson,

Assistant Attorney General 2 (Aug. 6, 1998) (exhibit 6).

public release of the Freeh and La Bella memoranda has had any

such chilling effect. Indeed, the evidence shows that the Attorney

General’s advisors continue to offer their candid, written advice,

despite the intense public scrutiny given to the Freeh and La Bella

memoranda. Charles La Bella drafted his memorandum after all of

the attention given to the Freeh memorandum in December 1997.

In the middle of the debate over whether to hold the Attorney General in contempt for her failure to turn over the Freeh and La Bella

memoranda, her advisors continued to draft lengthy reports reviewing the evidence in the campaign fundraising investigation. This

practice continued even after the Justice Department turned the

memoranda over to the committee in May 2000. In the spring of

2000, the new head of the Task Force, Robert Conrad, prepared a

report recommending the appointment of a special counsel to investigate Vice President Gore. Indeed, the only practical consequence

of the committee’s release of the Freeh and La Bella memoranda

is probably the message that one should not commit dishonest

views to paper. The committee does not feel the need to protect dishonest or malign advice.

Also undermining the Attorney General’s claim of a chilling effect was the fact that some of her advisors contemplated the publication of their memoranda. In addition, once the memoranda were

turned over to the committee, it became clear that at least one

Charles La Bella’s critics, Lee Radek, contemplated that the memos

would be made public: ‘‘[i]t is inexcusable, and I believe clearly calculated, that they [La Bella and De Sarno] have chosen to communicate their views about others within the Department in a memorandum that is the subject of such intense public interest, and is

therefore likely to be leaked or become public through some other

route.’’ 748

It appears that this committee’s interest in the Freeh and La

Bella memoranda has not had any chilling effect on Justice Department personnel. The more serious chilling effect on those personnel

may come from the Attorney General’s apparent disinterest in the

advice of her advisors. She disregarded calls from seven different

career law enforcement professionals to appoint an independent or

special counsel to investigate Democratic fundraising in 1996. At

the same time she appeared to be oblivious to failures to ask important questions and interview significant witnesses, and the reality that subordinates were leaking material in a way that undermined the Justice Department investigations. It is surprising that

advisors like Robert Conrad still make recommendations to appoint

a special counsel when the Attorney General routinely disregards

such recommendations.

Another more likely source of a chilling effect upon the Attorney

General’s advisors is the fact that their recommendations are selectively leaked to the media after they are made. The recommendations of Director Freeh, Charles La Bella, and Robert Conrad were

all leaked to the press shortly after they were made. Often, these

leaks were made in such a way to disparage the authors of the documents. For example, as one ABC reporter noted:

140

749 Beverly Lumpkin, ‘‘Waco, Yet Again,’’ (published Mar. 17, 2000) <http://

www.abcnews.go.com/sections/us/hallsofjustice/hallsofjustice28.html>. 750 Neil A. Lewis and Don Van Natta, Jr., ‘‘Reno, Rejecting Aide’s Recommendation, Declines

to Name Counsel on Gore Fund-Raising,’’ N.Y. Times (Aug. 23, 2000) at A19. 751 Attorney General Reno, remarks at press conference, Washington, DC (Aug. 23, 2000). 752David Johnston, ‘‘Reno Decision Bares Rifts on Clinton Team,’’ N.Y. Times (Dec. 4, 1997)

at A28.

I vividly recall talking to officials back then who were

amazed at the language employed in the report. This

week, they remembered their shock. One senior aide who

is no fan of Public Integrity and had generally supported

La Bella’s efforts, said in his report La Bella had gone

‘‘over the top’’ and ‘‘out of bounds.’’

He said La Bella had become ‘‘too emotionally involved to

be able to present a cogent legal argument;’’ it was more

a rant, a tirade, than an argument. The so-called evidence

was really just new wine in old bottles. And this official

noted that in ensuing days the vitriol became remarkable

on both sides. He recalled that some people were actually

wondering whether La Bella had a ‘‘deep-seated psychiatric problem,’’ or whether he was unstable.

* * * * *

I asked, well, did his argument make sense? ‘‘It made

sense, it was just wrong.’’ He said parts of it contained

‘‘horrendous inferences’’ and were ‘‘not persuasive.’’ 749

Similarly, when Robert Conrad recommended that a special

counsel be appointed to investigate Vice President Gore, senior

‘‘Justice Department officials’’ disparaged his conclusions:

One Justice Department official said that Mr. Conrad was

alone in his recommendation. ‘‘No other prosecutor in this

matter thought that there should be a need for a special

counsel,’’ said the official, who spoke on the condition of

anonymity.750

The following day, the Attorney General was forced to admit that

this statement, given by one of her own Justice Department staff,

was false, and that Mr. Conrad had been supported in his recommendation by two other Task Force prosecutors.751

Even worse than the criticism in the press aimed at Justice Department officials who dared speak their mind was the treatment

that Director Freeh received at the hands of the White House after

his recommendation that an independent counsel be appointed. The

New York Times reported the White House’s reaction to his recommendation in December 1997:

Although Mr. Clinton had pointedly avoided answering

questions about Mr. Freeh’s disagreement with Ms. Reno’s

decision, White House aides were not so circumspect. They

privately ripped into Mr. Freeh—once lauded by the President as one of his best appointees—and called him a disloyal subordinate.752

It is difficult to believe that the committee’s subpoena for the Freeh

memorandum could have had a greater chilling effect upon Director Freeh’s actions than criticism leveled at him by staff of the

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753 ‘‘The Justice Department’s Implementation of the Independent Counsel Act,’’ hearing before the Committee on Government Reform, 106th Cong. 15 (June 6, 2000) (preliminary transcript). 754One example of an issue in the La Bella memorandum that was not public prior to the

release of the La Bella memorandum was the role of Robert Litt, a senior Department staffer,

in the Loral investigation. In his memorandum, Charles La Bella took issue with what he saw

as Mr. Litt assisting the White House with its ‘‘damage control’’ at the same time that the DeContinued

President of the United States. Yet, while Attorney General Reno

defended Director Freeh against the committee’s advances, she did

not afford him the same protection from the White House.

iii. The Memoranda Did Not Contain a ‘‘Road Map’’ of the

Investigation

The Attorney General claimed that the subpoenaed memoranda

contained a ‘‘road map’’ of her investigation, and that the information in the documents, if it came into the possession of the targets

of the investigation, could seriously prejudice the investigation.

Now that the committee has received the documents, we can see

that the Attorney General’s claim was not true. None of the matters discussed in these memoranda was ever prosecuted. As Chairman Burton observed when the committee released the memoranda, ‘‘if this is a road map, it’s a road map of a car going around

in circles.’’ 753

The Freeh memorandum discusses only seven substantive investigative matters: (1) the ‘‘Common Cause Allegations;’’ (2) Vice

President Gore’s fundraising phone calls; (3) President Clinton’s

fundraising phone calls; (4) allegations made against Secretary

O’Leary by Johnny Chung; (5) White House coffees and overnights;

(6) solicitation of money from foreign nationals; (7) the White

House Database. Of these investigative areas, the Justice Department brought charges in only one area—solicitation of funds from

foreign nationals. This section of Director Freeh’s memorandum is

four paragraphs long, and discusses only general legal issues, and

does not even name any of the individuals under investigation.

Given these facts, it is difficult to understand the Attorney General’s reference to a ‘‘road map.’’ There is no information in the

Freeh memorandum that related to any criminal charges ever

brought in the campaign fundraising investigation.

The La Bella memorandum discussed a wide range of subject

areas, six in all: (1) Harold Ickes; (2) President Clinton; (3) Vice

President Gore; (4) First Lady Hillary Clinton; (5) John Huang,

Marvin Rosen, David Mercer and the DNC; and (6) Loral. Of all

of these individuals and entities, charges were brought only against

one individual, John Huang, and for conduct not discussed in the

La Bella memorandum.

iv. The Memoranda Did Not Infringe on Privacy Interests

On several occasions, the Attorney General asserted that the release of the memoranda would infringe upon the privacy interests

of individuals who were named in the documents, but who were

never charged with any crimes. This argument, like the others, was

specious. Once the committee received the memoranda, it was able

to see that there were very few facts discussed in the documents

that had not already been extensively discussed in public.754 InVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00159 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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partment was investigating the White House’s handling of the Loral matter. As Mr. Litt was

a senior Justice Department official, it is difficult to believe he has a strong privacy interest

in keeping this matter out of the public record. 755 At one point, Justice Department staff recommended that the committee redact from the

La Bella memorandum the discussion of the ‘‘Gina Ratliff’’ incident, wherein Johnny Chung alleged that he was threatened by the First Lady’s Chief of Staff, Margaret Williams, to repay

debts he owed to a former employee, Gina Ratliff.

In addition, when the chairman proposed releasing the binders of selected memoranda, Representative Lantos amended the unanimous consent request to release all of the documents received by the committee in response to its May 3 subpoena. Among these documents was a

memorandum referring to an investigation of CIA Director Tenet which contained various personal information about the Director. This information was redacted from the memorandum,

and in addition, that memorandum was never released or disseminated by the committee majority.756 ‘‘The Justice Department Memos,’’ N.Y. Times (Mar. 11, 2000) at A14.

deed, when the committee was releasing the memoranda, the Justice Department was given an opportunity to protect privacy interests by suggesting redactions. It failed to identify one substantive

area, or the name of any suspect or witness that should be redacted

from the documents prepared for release by the majority staff.755

v. The Release of the Memoranda Does Not Create the

Perception of Political Influence in the Task Force Investigation

The Attorney General’s claim that the release of the memorandum would create the perception that her investigation was politically influenced is, like many other of her claims, speculative.

However, the committee’s interest in this matter, from the beginning, has not been to dictate any certain outcome in the campaign

fundraising investigation, but rather, to ensure that a thorough

and unbiased investigation is conducted. It has been the Attorney

General’s continued refusal to appoint an outside investigator to

conduct the investigation, not the efforts of this committee, that

have undermined public trust in the Attorney General’s investigation. The editorial board of the New York Times observed that:

[The memoranda] are further evidence of Ms. Reno’s politicized handling of the campaign fund-raising issue and of

her dedication to protecting Democratic Party interests

from start to finish. . . . These latest documents, however,

cast further doubt on her wisdom and add to the evidence

that she has run a Justice Department that often puts politics ahead of impartial law enforcement.756

Given observations like that, and from a number of other editorial

boards, it may be that the release of the memoranda did undermine confidence in the Justice Department’s investigation—not because it raised some specter of political influence—but because it

showed how political the Department’s investigation had been.

vi. The Justice Department’s Request to Keep the Memoranda Out of the Campaign Season

Shortly before the Justice Department produced the subpoenaed

memoranda to the committee, Justice Department staff and committee staff negotiated terms for the handling of the documents.

During those negotiations, Justice Department staff identified one

of their central concerns as ‘‘keeping the memoranda out of the

campaign season.’’ This request had never been raised in the earlier debates over the Freeh and La Bella memoranda. Indeed, one

143

757 News conference with Attorney General Reno, Washington, DC (Aug. 23, 2000).

can only imagine the reaction if the Attorney General had stated

in a letter that she was refusing to comply with the committee’s

subpoena because she feared that the memoranda would be used

to attack Vice President Gore. However, that is precisely what her

subordinates suggested in their negotiations with committee staff.

Again, it is understandable that the Attorney General wanted

these memoranda out of the public’s hands. The documents do not

portray the subjects of the Justice Department’s investigation in a

positive light. However, the Attorney General is not entitled to use

political fallout as a reason to avoid complying with a congressional

subpoena. That her staff even recommended such a thing speaks

volumes about the Justice Department’s motives throughout this

matter.

B. THE JUSTICE DEPARTMENT’S FAILURE TO PRODUCE THE CONRAD

MEMORANDUM

The committee had hoped that the Justice Department’s damaging, and ultimately unsuccessful experience in trying to keep the

Freeh and La Bella memoranda from the committee would keep it

from repeating such efforts in the future. The Justice Department’s

misleading arguments and bad faith in trying keep the Freeh and

La Bella memoranda from the committee were fully exposed when

the committee obtained the documents in May 2000. However, the

committee’s recent efforts in trying to obtain the Conrad memorandum has shown that the Justice Department has learned nothing from its experiences. It has continued to deal with the committee in bad faith, trying to keep information embarrassing to the

administration from becoming public.

After the Attorney General announced her decision not to seek

a special counsel for Vice President Gore on August 23, 2000, the

committee subpoenaed the Conrad memorandum and all related

memoranda, from the Justice Department. The committee believed

that Attorney General Reno’s announcement on August 23, 2000,

gave every indication that the investigation of false statements by

Vice President Gore had been closed, and accordingly, that the

Conrad memorandum could be produced to the committee:

The transcript reflects neither false statements nor perjury, each of which requires proof of a willfully false statement about a material matter. Rather, the transcript reflects disagreements about labels. I have concluded that

there is no reasonable possibility that further investigation

could develop evidence that would support the filing of

charges for making a willful false statement.

The Task Force will, of course, continue its ongoing investigation into illegal fundraising activity and will be free to

pursue all avenues of investigation, wherever they may

lead.757

In this statement, the Attorney General clearly indicated that

there was no reasonable possibility that the Justice Department

would ever turn up evidence supporting the filing of charges

against Vice President Gore for making a false statement. Given

144

758See letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno,

Attorney General (Sept. 7, 2000).

the basis of the Attorney General’s efforts to frustrate congressional oversight of the Justice Department—that she did not want

to interfere with ongoing investigations—she would hardly have

made such a pronouncement unless she believed this matter to be

closed. Therefore, she should not flout a valid congressional subpoena. Her willingness to do so, given her strong conclusion, is indicative of the extreme bad faith currently being exercised by the

Justice Department.

The deadline for compliance with the subpoena, August 31, 2000,

passed without any action by the Justice Department. On September 6, 2000, committee staff discussed the subpoena with Justice Department staff.758 During that discussion, Justice Department staff could not provide a cogent explanation for the failure to

produce the Conrad memorandum. The Department did suggest

that it was possible that the Conrad memorandum did still pertain

to an open case. However, the discussion gave every indication that

the Justice Department had decided that it was not going to

produce the Conrad memorandum to the committee, but was still

groping for the rationale for its refusal. As the experience with the

Freeh and La Bella memoranda had shown, it was not unusual for

the Reno Justice Department to reach its conclusion first, and attempt to develop a rationale later.

The Justice Department refused to provide any further information regarding its refusal to comply with the committee’s subpoena

for the Conrad memorandum until the committee’s October 5, 2000,

interview with the Attorney General. During that interview, the

Attorney General was questioned about her failure to comply with

the committee’s subpoena:

Committee COUNSEL. Moving on to the Conrad—Mr.

Conrad’s recommendation to appoint a special counsel. Is

it fair to say that you have absolutely refused to comply

with the Committee’s subpoena for us to receive Mr.

Conrad’s recommendation to you to appoint a special counsel?

Attorney General RENO. I don’t think Mr. Conrad’s memo

should be produced. I think it is part of a pending investigation.

Chairman BURTON. Is that—that is pretty much the same

reason you gave for not giving us the La Bella memo?

Attorney General RENO. What I indicated for the La Bella

memo was that it was—been a part of the investigation.

Much of it has been made public now, and the matter is

behind. The issues in the Conrad memo, as I told them,

could still be pursued, any lead could be followed; and I

want to make sure that we don’t do anything that interferes with that.

* * * * *

Chairman BURTON. It is not a matter of whether the

issues in the Conrad memo can be pursued. It is whether

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759 Interview of Attorney General Reno 47–50 (Oct. 5, 2000) (preliminary transcript).

they are being pursued. Are the issues raised in the

Conrad memo still under active investigation?

Attorney General RENO. I cannot comment.

Chairman BURTON: You can’t tell us whether or not they

are under active investigation? The reason we can’t see the

memo, according to you, is because there is an ongoing

criminal investigation. If there is no investigation going

on, then there should be no reason why we can’t see the

memo. And so all we are asking is, simply, are the issues

raised in his memo still under investigation?

Attorney General RENO. I can’t tell you that.

Chairman BURTON. You are not telling us about any specific investigation; you are not talking about anything like

that. All we are asking generically is, are the issues raised

in his memo—and you don’t have to go into the specifics—

are those being pursued in an investigation, criminal investigation?

Attorney General RENO. Mr. Chairman, I respectfully suggest to you that if I start answering questions like that, I

am going to continue to run into the situation that I am

faced with now where people are beginning to question

whether we are being pushed around by Congress inappropriately in pending criminal matters.759

The Attorney General’s responses to Chairman Burton are

facially absurd. In her announcement on August 23, 2000, she stated that she was not appointing a special counsel to investigate the

Vice President because there was no reasonable possibility that further investigation would produce evidence that would support the

filing of charges. This statement sent the clear message that Vice

President Gore had been cleared, and that he was no longer under

investigation for making false statements. This message was

warmly welcomed by the Gore campaign. However, when the committee subpoenaed the Conrad memorandum, the Attorney General

tried to manufacture a reason why the committee could not receive

the document. When she was squarely asked whether Conrad was

still investigating false statement charges against Vice President

Gore, Attorney General Reno refused to answer the question. In

the past, the Justice Department has rarely hesitated to tell the

committee that it could not receive certain documents because they

pertained to an open case. The fact that the Attorney General refused to state whether the Conrad investigation of Vice President

Gore is still open suggests one of two possibilities: (1) that the case

is in fact closed, or (2) that the Attorney General’s statement that

there was ‘‘no reasonable possibility that further investigation

could develop evidence’’ was made to benefit the Vice President. If

the former is true, the Attorney General is withholding the Conrad

memo from the committee with no proper justification. If the latter

is true, the Attorney General has misled the public about the nature of the Task Force’s investigation to benefit the Presidential

nominee of her political party.

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760 Interview of Attorney General Reno 53 (Oct. 5, 2000) (preliminary transcript). 761Subpoena duces tecum issued by the Committee on Government Reform (Nov. 9, 1999) (all

committee correspondence with and subpoenas to the Justice Department are printed in the appendix accompanying this report).

The Justice Department has also refused to provide the committee with any opportunity to review the Conrad memorandum.

When asked why the Justice Department had not provided the

committee the opportunity to review the memorandum, Reno provided the following answer:

I think it is important, based on the experience that we

are having now and the questions that have been raised,

that we do everything we can to ensure that there is not

an inappropriate outside influence on a pending matter.760

However, the refusal to provide any review of the Conrad memorandum stands in contrast to the Department’s willingness to allow

the committee to review the Freeh and La Bella memoranda. The

Department allowed the committee to review those memos in 1998,

despite the fact that information in those documents still conceivably was linked to open cases.

The Justice Department’s refusal to provide the Conrad memorandum to the committee provides further evidence of the

politicization of the Justice Department. Without any legal or factual basis, the Justice Department has refused to comply with a

lawful congressional subpoena. It appears that the Justice Department’s motive for keeping the Conrad memo out of Congress’ hands

is the same motive that has guided it for the past 4 years—protecting the Clinton-Gore administration from criminal jeopardy and

public embarrassment.

C. THE JUSTICE DEPARTMENT’S POLITICAL GAMESMANSHIP

The Justice Department’s refusal to cooperate with the committee was also manifested in its willingness to engage in political

gamesmanship to try to embarrass the administration’s critics.

There were two notable instances of this behavior during the campaign fundraising investigation: first, the release of the FBI interview summary of former Congressman Gerald Solomon; and second, the attempted release of investigative material relating to

Chairman Burton.

1. The Release of the Solomon Interview Summary

a. The Justice Department Refuses to Provide the Clinton and

Gore Interview Summaries

On November 9, 1999, the committee subpoenaed the FBI interview summaries of President Clinton and Harold Ickes.761 The

committee was seeking the records as part of its oversight of the

Justice Department’s campaign fundraising investigation, to ensure

that the Justice Department conducted thorough interviews of Mr.

Ickes and Mr. Clinton before declining to appoint an independent

counsel to investigate their fundraising activities. The committee

did not expect to receive any resistance to this subpoena, as it had

already received FBI interview summaries for John Huang. Before

the committee received a response to the subpoena from the Justice

147

762Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Nov. 17, 1999). This request was made pursuant to the committee’s subpoena

of July 29, 1999, which required the Justice Department to produce all records relating to the

investigations of John Huang and Yah Lin ‘‘Charlie’’ Trie. On several occasions, the chairman

sent specific narrow requests to the Department for records covered by this subpoena. 763Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Nov. 30, 1999). 764Letter from Robert Raben, Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform 1–2 (Dec. 10, 1999).

Department, the chairman sent another request to the Department

on November 17, 1999, requesting 25 additional FBI interview

summaries relating to the campaign fundraising investigation, including the interview summaries for Vice President Gore.762

Committee staff asked Justice Department staff about the production of these interview summaries on a number of occasions

during the following weeks. As Chairman Burton noted in a November 30, 1999, letter to the Attorney General, the Justice Department failed to produce the records, and provided no explanation for the failure to produce them.763 At the time, the committee was planning to hold a major hearing on John Huang from

December 15–17, 1999. On December 10, 1999, the committee finally received an answer to its requests. In a letter to Chairman

Burton, Assistant Attorney General Robert Raben explained that

the Justice Department was formulating a new policy against the

release of FBI interview summaries to Congress:

The decision by the Department and its FBI component to

permit the Committee to review the 302s, but not to provide copies, is based upon the chilling effect that public

disclosure of the 302s can have on law enforcement. Historically, witnesses who have been interviewed by the FBI

have understood that their interviews, and the information

that they provided, would not be made public unless the

witness were to testify at a public trial or the prosecutor

were to use the information as the factual basis for a

guilty plea. . . . A witness who believes that it is likely

that his or her interview will become public may become

less willing to cooperate fully with the FBI.

The Department has observed what appears to be an increasing incidence of public release of 302s. The widespread public disclosure of 302s is likely to make it more

difficult for the FBI to conduct its investigations in the future, especially in cases in which witnesses may become

reluctant to cooperate out of a desire to avoid becoming

publicly involved in a high-profile matter.764

The Justice Department’s position was further elaborated by

Craig Iscoe, Associate Deputy Attorney General, and Larry Parkinson, General Counsel of the FBI, in a meeting on December 13,

1999. In that meeting, Mr. Iscoe and Mr. Parkinson expounded on

the Justice Department’s concern that the release of FBI interview

summaries to the committee would harm the Department’s ability

to conduct investigations in the future. Committee staff pointed out

to Mr. Iscoe and Mr. Parkinson that the Department had produced

interview summaries on a number of other occasions, and had

never expressed this concern until the committee sought the interVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00165 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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765Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Dec. 14, 1999). 766 Id. at 1. 767 Id. 768 Id. 769Letter from Robert Raben, Assistant Attorney General, to Dan Burton, chairman, Committee on Government Reform 1–2 (Dec. 10, 1999). 770Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (Dec. 14, 1999).

view summaries of President Clinton, Vice President Gore, and

Harold Ickes.

The chairman protested the Department’s decision not to provide

the interview summaries in a letter on December 14, 1999.765 First,

the chairman pointed out the suspicious timing of the Department’s

decision. The Department was subpoenaed to produce the interview

summaries of President Clinton and Harold Ickes over a month

earlier, and was requested to produce Vice President Gore summaries almost a month earlier.766 Despite numerous requests during that period of time, the Department announced its decision not

to provide the documents to the committee only several days before

the John Huang hearing. The subpoenaed documents were needed

for the hearing, and indeed, ended up being discussed extensively

at the hearing.

The chairman also pointed out the Justice Department’s apparent double standard. In the 103rd Congress, Chairman Don Riegle

requested a number of FBI interview summaries, which he received, and subsequently published in a Senate report.767 In the

104th Congress, the Department provided Chairman Bill Clinger

with 183 FBI interview summaries pertaining to the White House

Travel Office investigation.768 In addition, throughout the fall and

winter of 1999, the Justice Department was producing scores of

interview summaries pertaining to the Waco investigation, even as

it was trying to prevent the committee from obtaining interview

summaries from the fundraising investigation. Moreover, by December 10, the committee had received three FBI 302s relating to

the campaign fundraising investigation—John Huang, Charlie Trie,

and Johnny Chung—without the committee even requesting the

302 for Johnny Chung. Therefore, the Justice Department’s newlyfound hesitance seemed to be linked to the fact that the committee

was now requesting the 302s for the President, Vice President and

Harold Ickes.

Finally, the chairman took issue with the statement by Assistant

Attorney General Raben in his December 10, 1999, letter in which

he stated that ‘‘[t]he Department has observed what appears to be

an increasing incidence of public release of 302s.’’ 769 The chairman

then pointed out that Chairman Riegle released 84 FBI interview

summaries in a Democrat-controlled Congress in 1994, and that

the Government Reform Committee had released just 1 such interview summary in the preceding 3 years.770 The chairman also

noted the fact that the Department’s concerns about the release of

302s harming ongoing investigations seemed to be misplaced.

When the committee received the 302s for Charlie Trie, they had

supposedly redacted all information from the summary that could

harm ongoing investigations. However, the Department failed to redact from the Trie 302 information relating to Ernest Green, information which strongly indicated that Green had perjured himself

149

771 Id. at 2. 772 Id. 773 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 55 (1999) (preliminary transcript). 774 Id. at 166. 775 Id. 776 Id. at 167.

in a committee deposition.771 At the time, Green was under active

investigation by the Justice Department for perjury, and the release of this information could have theoretically harmed the Department’s investigation. The committee identified the Justice Department’s error, and on its own initiative, redacted the information relating to Green.772

After receiving the chairman’s letter, the Department finally relented, and provided the requested 302s for President Clinton, Vice

President Gore, and Harold Ickes on December 15, 1999. When the

committee was able to review these 302s, it learned that the Justice Department had failed to ask the President and Vice President

about central matters involved in the campaign fundraising scandal: the President had not been asked about James Riady or Charlie Trie; and the Vice President had not been asked about the Hsi

Lai Temple fundraiser or Maria Hsia. Once the committee received

these 302s, it became evident why the Justice Department had

gone through such contortions to keep them out of the public domain. However, if the content of the 302s was not enough to confirm that the Justice Department’s posturing of the past month had

been purely political, the Department’s actions in the following 2

days would confirm that fact.

b. The Justice Department Releases the Interview Summary

of Representative Gerald Solomon

When John Huang appeared before the committee on December

15, 1999, he made the following statement:

People seeking publicity have lied about me repeatedly in

the press and even before this committee without consequence. For example, a former Member of this body, Mr.

Solomon, in attacking the administration, accused me of

economic espionage on the basis of what I am advised was

an anonymous source at a cocktail party, with whom, it

turned out, did not even mention my name or do anything

other than perpetuate a rumor against an unidentified

Asian-American, a rumor which Mr. Solomon was only too

eager to embrace and capitalize upon.773

At the time that Mr. Huang made his statement, it was unclear

where he had obtained this information. Therefore, Chairman Burton asked John Huang to identify the source of his knowledge

about Representative Solomon’s comments.774 Huang told the

chairman that he had been told this by his attorneys.775 Chairman

Burton then asked Ty Cobb, Huang’s counsel, where he had obtained this information, and Mr. Cobb stated that he had learned

this information from one of the prosecutors on the Campaign Financing Task Force.776 As Chairman Burton noted in a letter to

the Justice Department after the Huang hearing, it was highly irregular that the Department would share this kind of information

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777Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General 2 (Apr. 18, 2000). 778 Id. 779 ‘‘The Role of John Huang and the Riady Family in Political Fundraising,’’ hearings before

the House Committee on Government Reform, 106th Cong., 97 (1999) (preliminary transcript). 780 Id. at 97–98. 781This information was related by Craig Iscoe, Associate Deputy Attorney General, to committee staff when he brought the Solomon 302 to committee offices on Dec. 16, 1999. 782This information was related by Craig Iscoe, Associate Deputy Attorney General, to committee staff when he brought the Solomon 302 to committee offices on Dec. 16, 1999.

with the target of a criminal investigation.777 As the chairman

noted, the disclosure to Huang’s attorneys ‘‘could have no legitimate investigative purpose, and seemed to be designed only to give

Mr. Huang a sympathetic anecdote for his opening statement.’’ 778

Moreover, the Department’s willingness to provide details from FBI

interview summaries certainly undermined the arguments it had

so forcefully made just days earlier, when it claimed that releasing

302s would chill witnesses from giving interviews to law enforcement, or that it would jeopardize investigations. Indeed, it is hard

to conceive of a situation that would chill a witness from giving an

interview more than turning the details of the interview over to an

admitted felon who then used that information to attack the witness in the press and on national television.

However, the Justice Department’s hypocrisy was only beginning

to emerge. During the first day of the Huang hearing, in response

to Huang’s opening statement, Congressman Waxman asked Chairman Burton to request the FBI interview summary of Congressman Solomon from the Justice Department.779 Chairman Burton

agreed that he would do so.780 The following day, Associate Deputy

Attorney General Craig Iscoe appeared at the committee offices

with a copy of the Solomon 302. The chairman had not even formally requested the Solomon 302, but the Justice Department had

produced it nonetheless in under 24 hours. There were several

facts about this chronology that were especially troubling:

• The Justice Department produced the 302 without a formal

request of any type, much less a subpoena. Justice Department staff explained that it views an oral request made by

a chairman during a committee hearing the same way that

it would view a written request or a subpoena.781 This was

the first time that this policy was ever enunciated for this

committee, and it seemed to be a post hoc justification for

the Department’s actions.

• The Justice Department produced the Solomon 302 in under

24 hours. Craig Iscoe, the Associate Deputy Attorney General who brought the 302 to the committee, explained that

the 302 was relatively short, and was easy to prepare for

production.782 However, when the Reno Justice Department’s track record of document productions is closely scrutinized, the rapid production of the Solomon 302 appears

suspicious. During the committee’s investigation, there were

occasions where the Justice Department: lost committee

document requests; failed to produce documents for days because they could not find a messenger to bring the documents to committee offices; failed to produce documents for

days because they had to be personally Bates-stamped by

151

783See, e.g., letter from Dan Burton, chairman, Committee on Government Reform, to Janet

Reno, Attorney General (Feb. 11, 1999) (regarding failure of Justice Department to respond in

timely fashion to requests for documents relating to Orlando Castro); letter from Dan Burton,

chairman, Committee on Government Reform, to Janet Reno, Attorney General (June 14, 1999)

(regarding failure of Justice Department to respond in timely fashion to requests for documents

relating to search warrant of Trie residence). 784 It is only fair to point out that Mr. Parkinson did not appear to be involved in the Justice

Department’s efforts to get the Solomon 302 out to the committee and the media. 785Shortly after Chairman Burton announced his plans to conduct an investigation of the

1996 campaign fundraising scandal, Mark Siegel, a former DNC officer and active DNC fundContinued

the Associate Deputy Attorney General; or simply took

months to produce documents because of vacations, illness,

or difficulty in locating responsive documents.783 Yet, when

the Department had a 302 that was potentially embarrassing to Representative Solomon, a critic of the Justice

Department, they produced it in less than 24 hours.

• The Solomon 302 was produced rapidly, and without a formal request, despite the Justice Department’s impassioned

arguments of several days earlier. The Department had

been arguing that the committee was receiving and releasing too many 302s. The Department was even willing to

argue that it should not obey a congressional subpoena because of the harm that the committee was doing by requesting and releasing 302s. Yet, scarcely days after those arguments had been made, the Department provided a 302 to

the committee without a formal request. Moreover, Department staff had made the information in that 302 available

to a convicted felon so that he could paint himself in a more

favorable light in his congressional testimony. The speed

with which this document was produced made a mockery of

the apparently earnest entreaties made just days earlier by

Associate Deputy Attorney General Iscoe and FBI General

Counsel Parkinson.784

The Department’s release of the Solomon 302 served as a stark

example of the politicization of the Justice Department. The Department was willing to disobey lawful subpoenas when the committee was seeking information pertaining to the President and

Vice President that was embarrassing to the Justice Department

because it indicated a serious failure in the campaign fundraising

investigation. Yet, when the Justice Department had the opportunity to spread information that harmed a widely respected Republican Member of Congress, it abandoned all of its principled arguments and seized the opportunity. Faced with an example like

this, it is difficult to believe that the actions of the Reno Justice

Department were motivated by anything other than crass political

self-interest.

2. Attempted Release of Information Relating to Chairman Burton

Six months later, the Justice Department again tried to release

information that was harmful to one of its critics. This time, on the

eve of the committee’s release of the Freeh and La Bella memoranda, the Justice Department attempted to force the committee to

release information relating to the Justice Department’s investigation of Chairman Burton.785

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raiser, alleged that he had been ‘‘shaken down’’ to make political contributions by Chairman

Burton. Given Mr. Siegel’s political affiliation, and the timing of his charges, his allegations

could scarcely be taken seriously. Nevertheless, the Justice Department launched a grand jury

investigation of the allegations, issuing subpoenas to the Burton campaign shortly after the Government Reform Committee issued its first subpoena to the Justice Department. 786Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (June 6, 2000). 787Subpoena duces tecum issued by the Committee on Government Reform (May 3, 2000).

Throughout the month of May 2000, the Justice Department located and made available to the committee various memoranda responsive to the committee’s May 3, 2000, subpoena for the Freeh

and La Bella memoranda, as well as other memoranda written in

response to those two reports. After the responsive documents were

produced to the committee on May 24, 2000, the committee continued to receive additional documents. In most cases, these were

memoranda that were missed in earlier searches. In most of these

cases, these documents pertained to the Attorney General’s decision not to appoint an independent counsel to investigate the 1996

campaign fundraising scandal.

In late May, the committee scheduled a hearing to take place on

June 6, 2000. At this hearing, the committee was scheduled to release the Freeh and La Bella memoranda and related documents,

and it was also scheduled to question Public Integrity Section Chief

Lee Radek about those documents. However, on the evening of

June 5, 2000, a staff attorney in the Department’s Office of Legislative Affairs contacted committee staff to tell them that the Department would be producing to the committee that evening a document relating to the investigation of Chairman Burton. Chairman

Burton responded almost immediately with a letter refusing to accept production of the records, and questioning the Department’s

attempt to send the documents to the committee.786 The Department’s attempted production of records relating to Chairman Burton raised several troubling questions: (1) how were the Burton

records related to the committee’s subpoena; (2) why did the Justice Department attempt to produce records relating to what purported to be an open investigation; and (3) why did the Justice Department attempt to provide these records to the committee at 5:10

p.m., on the evening before a hearing.

First, the committee’s May 3, 2000, subpoena called for ‘‘[a]ll formal memoranda that were sent to the Attorney General or senior

Justice Department officials in connection with decisions involving

the application of the Independent Counsel Act to campaign finance-related matters, including memos that address the Independent Counsel Act-related aspects of the Freeh and La Bella

memoranda.’’ 787 When they told committee staff that they intended

to produce the documents relating to the Burton investigation, Justice Department staff were unable to provide any explanation of

how the records related to the committee’s subpoena. While there

was a provision of the Independent Counsel Act that allowed the

Attorney General to request an independent counsel for Members

of Congress, there had been no indication that such a request had

been made for Chairman Burton. Indeed, the Justice Department

has investigated many Members of Congress in the past several

153

788 After the committee refused to accept records relating to the investigation of Chairman

Burton, the Justice Department did attempt to explain the production of records relating to

Chairman Burton. In a letter dated June 9, 2000, Robert Raben, the Assistant Attorney General, stated that ‘‘[w]e have confirmed that the allegations that are discussed in the memorandum were the subject of a decision under the Independent Counsel Act and therefore that

the memorandum is responsive to your subpoena. We have further confirmed that production

of the memorandum would not harm any pending investigation—which is the standard we have

applied to all other documents responsive to the Committee’s subpoena for Independent Counsel-related memoranda.’’ Letter from Robert Raben, Assistant Attorney General, to Dan Burton,

chairman, Committee on Government Reform (June 9, 2000). Taking the significant step of accepting all of these representations as true, the timing of the Department’s decision still raises

serious questions about the Department’s motivations. The Department attempted to produce

the memorandum to the committee on the eve of the release of the Freeh and La Bella memoranda (and the wholesale release of all independent counsel memoranda, which was proposed

by the committee minority). 789Memorandum titled Task Force cases (June 4, 1999) (exhibit 14). 790 Chairman Burton has often questioned the apparent Justice Department practice of leaving cases open long after investigative activity in that case has ceased. The Justice Department

has often refused to produce records about a matter to the committee, claiming that the matter

is open. However, in many of these cases, it is apparent that all activity in the case has stopped.

The June 4, 1999, list of Task Force cases seems to confirm the chairman’s criticisms. For example, there are 27 cases listed under the heading ‘‘Investigations Which FBI and the Task Force

have closed (awaiting AG determination).’’ Id. There are another 14 cases listed under the heading ‘‘Investigations Not yet Closed but Likely to be Shortly.’’ Id. Chairman Burton’s case is listed

under this heading, with the additional notation ‘‘closing memo sent to Public Integrity.’’ Id. 791Letter from Dan Burton, chairman, Committee on Government Reform, to Janet Reno, Attorney General (June 6, 2000). 792 Id.

years, and of all of those investigations, the Department proposed

producing documents only from the Burton investigation.788

Second, the Justice Department had frequently refused to

produce records to the committee on the basis that the subpoenaed

records related to an open investigation. A memorandum improperly released by a senior Justice Department staffer in 1999 listed

the allegation against Chairman Burton as ‘‘not yet closed, but

likely to be shortly.’’ 789 Despite this designation in June 1999, neither Chairman Burton nor his private counsel have ever been informed that the investigation against him was closed. Therefore, it

appears that as of the Department’s attempted release of the information regarding Chairman Burton in June 2000, the investigation

of Chairman Burton was still technically open. Leaving aside the

significant issue of why the Burton investigation was left open for

so long after all investigative work had ceased,790 the Justice Department appeared to be deviating from its policy of refusing to release records relating to open cases, so that it could release records

relating to Chairman Burton.

Third, the timing of the Department’s decision was especially

suspicious. The Department had had over 2 months to locate

records responsive to the committee’s subpoena. Yet, it waited until

the evening before the committee’s release of the Freeh and La

Bella memoranda to attempt to produce these records to the committee. When committee staff asked Justice Department staff to describe the process that led to this document being discovered, Justice Department staff described it as ‘‘people rooting through boxes

and pulling out documents.’’ 791 As part of an effort to better understand this process, and identify the staffer who was ‘‘rooting

through’’ boxes relating to the Burton investigation, the chairman

asked the Justice Department to identify the staffers responsible

for proposing the production of the Burton records.792 The Department never responded to this request.

154

The Justice Department’s attempt to produce records relating to

the investigation of Chairman Burton appeared to be a maneuver,

much like the release of the Solomon 302, designed to draw attention away from committee hearings which were embarrassing to

the Clinton administration. It also appeared to be designed to intimidate Chairman Burton, and to discourage him from subpoenaing documents from the Justice Department. Like the Department’s release of the Solomon 302, the Department’s attempted

release of information about Chairman Burton was done in contravention of Department policy, and under highly irregular circumstances.

IV. FAVORABLE TREATMENT OF THE ATTORNEY GENERAL’S FRIENDS

A. THE JUSTICE DEPARTMENT’S HANDLING OF THE SOKA GAKKAI

MATTER

The committee investigated the efforts of Rebekah Poston, a

prominent Miami lawyer and a friend of the Attorney General, to

obtain confidential law enforcement information from the Justice

Department. The committee has learned the following:

• Rebekah Poston was hired by Soka Gakkai, a large Japanese Buddhist sect, to obtain criminal justice records on a

man named Nobuo Abe, the head of a rival Buddhist sect.

Soka Gakkai hoped to use these records in a defamation

lawsuit against Abe.

• Poston hired private investigators who illegally obtained

confidential National Crime Information Center (NCIC)

records on Nobuo Abe.

• Poston then filed a Freedom of Information Act (FOIA) request to legally obtain this same information on Abe. Longstanding Justice Department policy prohibited the Department from releasing this type of information pursuant to a

FOIA request. Moreover, long-standing Department policy

prohibited even confirming or denying the existence of a

criminal record. Accordingly, Poston’s FOIA request was rejected, as was her appeal.

• Poston used her influence with the Attorney General’s Chief

of Staff to obtain a reversal of the Justice Department’s position. Poston had at least 22 contacts with senior Justice

Department staff regarding her FOIA request. Her contacts

resulted in a meeting between her and Associate Attorney

General John Schmidt, the third-ranking official in the Justice Department. Schmidt reversed the earlier decision of

Richard Huff, the head of the Office of Information and Privacy, who had rejected Poston’s FOIA appeal. Huff could recall no other meetings like this in his 25 year career.

• When the Department of Justice responded to Poston’s

FOIA request, it stated that it had no records on Nobuo

Abe. Poston’s investigators believed that the record they

had earlier obtained had been deleted by government officials. This deletion, as well as other evidence regarding the

record, led a number of individuals involved in the case to

155

793 Both during and after the committee’s July 27, 2000, hearing, Ms. Poston and her counsel

denied that she ever intended to invoke her fifth amendment rights. However, during the committee’s interview of Ms. Poston on June 29, 2000, Ms. Poston’s counsel, Eduardo Palmer, informed committee staff that Ms. Poston would not answer any questions about her efforts to

obtain information through private investigators because of attorney-client privilege issues and

because of her possible criminal exposure. These issues were raised in a letter to Chairman Burton after the committee’s hearing. See letter from C. Boyden Gray, Wilmer Cutler & Pickering,

to Chairman Dan Burton (Sept. 21, 2000) (exhibit 53). Ms. Poston’s—and her counsel’s—expressions that she would be unable to answer questions because of ‘‘possible criminal exposure,’’ and

her baseless invocation of attorney-client privilege are discussed in detail below. 794 Bob Whitby, ‘‘The Buddha Brotherhood,’’ Miami New Times (Nov. 11, 1999).

speculate that the Abe record had been planted in the NCIC

system by individuals associated with Soka Gakkai.

• The evidence that Abe’s NCIC record was illegally accessed

was provided to lawyers at the FBI’s Office of Professional

Responsibility on at least four different occasions. Yet, the

FBI and the Justice Department failed to conduct a thorough investigation of these allegations.

There are two deeply troubling aspects to the facts uncovered by

the committee. First, a prominent Florida attorney, a close friend

of the Attorney General, was involved in criminal activity. This

criminal activity has gone without any investigation or punishment

for nearly 6 years. Now that the committee has brought these facts

to light, Rebekah Poston has refused to answer any questions regarding her activities. Poston refused to answer a number of questions in a private interview, citing both attorney-client privilege,

and concerns regarding possible criminal exposure. Then, when

called to a public hearing, Poston repeatedly cited attorney-client

privilege.793 Second, this same friend of the Attorney General used

her influence within the Justice Department to obtain a one-time

reversal of long-standing Department policy. The implications of

the Justice Department’s failures in this case are severe: (1) it appears that the Department does not want to investigate allegations

of improper access to its law enforcement databases; (2) it appears

that the Department does not want to investigate allegations of

wrongdoing by a friend of the Attorney General; (3) it appears that

the Department applies a more lenient legal standard to FOIA requests made by a friend of the Attorney General than other FOIA

requesters; and (4) the long-standing Justice Department policy of

neither confirming nor denying the existence of criminal records relating to non-citizens is in doubt.

1. Background

a. Background on Soka Gakkai

Soka Gakkai was formed in 1930 as an organization espousing

the reform of Japanese schools. After World War II, Soka Gakkai

became affiliated with the Nichiren Shoshu Buddhist sect. Between

1951 and 1991, Soka Gakkai operated as a lay organization affiliated with the Nichiren Shoshu Buddhist sect. During that period

of time, Soka Gakkai grew to have approximately 10 million members and assets over $100 billion.794 Soka Gakkai also controls

Komeito, which is the fourth-largest political party in Japan.

In 1991, after years of tension between Nobuo Abe (also known

as Nikken Abe), leader of Nichiren Shoshu, and Daisaku Ikeda,

leader of Soka Gakkai, the leaders of Nichiren Shoshu expelled

156

795Memorandum from Rich [Lucas] to Phil [Manuel] (Nov. 4, 1994) (exhibit 58). 796 Interview of John Hogan at 2 (June 23, 2000) (Hogan interview). 797 Interview of Rebekah Poston at 1 (June 29, 2000) (Poston interview); Hogan interview at

1. 798Poston interview at 1.

Soka Gakkai members from their sect, and severed all ties between

the groups. This action sparked extended litigation between the

groups that continues to this day. This litigation reached American

shores, as Nichiren Shoshu and Soka Gakkai both had extensive

United States assets and membership.

In June 1992, two Soka Gakkai publications published a controversial allegation by Hiroe Clow, a Soka Gakkai member. Clow

stated that in 1963, she traveled to the United States with Nobuo

Abe, and was called by Mr. Abe late at night after he was detained

by the Seattle police for being involved in an altercation with prostitutes. Ms. Clow stated that she picked Mr. Abe up at the police

station, and that no charges were filed against Abe. Clow’s charges

against Abe were a major embarrassment for Abe and Nichiren

Shoshu, and they responded by filing a lawsuit for libel against

Clow and Soka Gakkai in Japan. This lawsuit, as well as counterclaims, and related litigation in the United States, was pursued by

both sides with little regard for expense, and both sides employed

large teams of lawyers and investigators in the United States and

Japan.

Soka Gakkai International-USA had extensive real estate holdings in the United States, including a 120-acre compound outside

of Miami, FL. Steel Hector & Davis, a leading Miami law firm, represented Soka Gakkai in connection with its Florida real estate

projects, and considered Soka Gakkai a major client.795 In late

1994, Soka Gakkai apparently asked Steel Hector if it could assist

in connection with the Abe lawsuit.

b. Background on Steel Hector & Davis

Steel Hector & Davis was formed in 1925, and is now one of Florida’s largest and best known law firms. The current Attorney General of the United States, Janet Reno, served as a partner at the

firm prior to her service as Florida State Attorney. When Soka

Gakkai was seeking help in getting information from the Justice

Department, Steel Hector was a good choice for other reasons as

well. John Edward Smith, a senior partner in the firm, was a longtime friend of the Attorney General, and was one of only two lawyers to help her prepare for her confirmation hearings.796 Rebekah

Poston also made Steel Hector a good choice for Soka Gakkai.

Poston had just joined Steel Hector as counsel, but she was an experienced white collar defense lawyer, and more importantly, was

also a friend of the Attorney General. Poston’s sister, Roberta Forrest, served as the campaign manager for Reno when she ran for

State Attorney. Poston’s sister also worked as a secretary in the

State Attorney’s office where both Reno and her future Chief of

Staff at the Justice Department, John Hogan, worked.797 Poston

describes herself as a friend of the Attorney General, and describes

her sister as a close personal friend of the Attorney General.798

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799 Interview of Richard Lucas at 1 (July 11, 2000) (Lucas interview). 800Memorandum from Rich Lucas to Phil Manuel (Dec. 28, 1994) (exhibit 72). 801 After the committee’s July 27, 2000, hearing regarding this subject, committee staff was

contacted by counsel for Mr. Langberg, who denied that Mr. Langberg had hired Palladino to

obtain any information on Abe. He also denied that Mr. Langberg was involved in any illegal

activity. The committee intends to subpoena information from Mr. Langberg and Mr. Palladino

to confirm the extent of their involvement in this matter. 802 18 U.S.C. § 641; see also facsimile from John Sebastian to Phillip Manual (sic) (Feb. 15,

1995) (attaching two newspaper articles about prosecutions for theft of NCIC records) (exhibit

80).

2. Rebekah Poston Illegally Obtains Information from the Department of Justice

In 1992, Soka Gakkai printed the account of Hiroe Clow, a member of Soka Gakkai. Clow stated that in 1963, she witnessed the

arrest of Nobuo Abe, the leader of Nichiren Shoshu, for soliciting

prostitutes. Litigation in the United States and Japan commenced

soon thereafter. Nichiren Shoshu argued that Nobuo Abe, its High

Priest, had been defamed by the charges printed by Soka Gakkai.

In response, Soka Gakkai argued that Mrs. Clow had been defamed

by Abe’s repeated statements that Clow’s accusations were false.

Central to these lawsuits was whether there was any proof that

Abe had actually been arrested for soliciting prostitutes in Seattle

in 1963. Soka Gakkai’s lawyers faced two major problems. First,

the incident occurred 30 years earlier, and few records remained,

especially since charges were never brought against Mr. Abe. Second, if records did exist, they may have resided in non-public files

or databases.

a. Soka Gakkai Illegally Obtains Information on Nobuo Abe

Through Jack Palladino

According to one cooperating witness, Soka Gakkai’s main lawyer

in the United States, Barry Langberg, hired Jack Palladino, a wellknown private investigator, to determine whether Abe was arrested

in Seattle in 1963.799 Palladino then apparently contacted a source

in the Bureau of Prisons who had access to the National Crime Information Center (NCIC) database. This source accessed the database, and noted the following information:

3/63, NCIC-NATF, Complaint by four females of possible

pandering and solicitation by a bald Oriental, male, no

english at 12:40 AM, taken in for questioning, at 1:30 AM,

no english. detained [sic] and released at 3:30 AM, forwarded by teletype.800

This information was then apparently provided to other attorneys

working on the case. If this information on Abe was taken from the

NCIC database and provided to private parties like Langberg or

Palladino, the source at the Bureau of Prisons (BOP) broke the

law, as did possibly Langberg and Palladino.801 Federal law prohibits the theft, conversion, or unauthorized conveyance of government records, and individuals have been prosecuted for the theft of

NCIC records specifically.802

Soka Gakkai would later attempt to confirm this record through

other sources, and would have great difficulty in doing so. First, it

received confirmation through Rebekah Poston and her investigators that there was a record on Abe in the NCIC system, but that

it was different from the record viewed by the source at the Bureau

158

803 Interview of Philip Manuel at 3 (July 18, 2000) (Manuel interview). 804See Steel Hector & Davis billing records at 0000143, 0000154 (exhibit 100). 805Memorandum from Mike Wilson to John Gibbons at 1 (Nov. 27, 1996) (exhibit 98). 806Lucas interview at 3.

of Prisons. Then, subsequently, when Poston tried to access the

record through the FOIA process, she was told that no record existed. These later problems, which are discussed in detail below,

have led individuals involved in the case to speculate that the

NCIC information on Abe was planted there by the initial source

at the Bureau of Prisons. This speculation is supported by several

factors:

• It is unlikely that a computer record would have existed for

Abe if he was detained and released in 1963 on a minor

charge.

• Indeed, in his interview with committee staff, Phil Manuel,

the main investigator who worked for Poston, noted that he

believed that the BOP source was a member of Soka

Gakkai, and a friend or associate of Hiroe Clow.803 If that

information is true, she would have had the motive to fabricate evidence against Abe.

• Other private investigators were unable to verify the information provided by the BOP source.

• When conducting a search for records in response to

Poston’s FOIA request, the Justice Department was unable

to find any records on Abe.

If indeed this information on Abe was planted in the NCIC system, it raises serious questions about the stewardship of the NCIC

database, and makes the subsequent failure by the Justice Department to investigate this matter even more troublesome.

b. Poston Requests Her Private Investigators to Break the

Law

While Soka Gakkai already had gained access to what purported

to be Abe’s arrest record, they chose to confirm its existence

through another source. It is unclear why Soka Gakkai chose to

hire another set of lawyers and investigators to access Abe’s record

a second time. Perhaps they were concerned with the reliability of

Mr. Palladino’s work, or perhaps they simply wanted a high degree

of confidence in their information before they used it in court in

Japan.

Billing records subpoenaed by the committee indicate that

Poston’s work for Soka Gakkai began in early November 1994.804

Poston was one of a number of lawyers hired by Soka Gakkai

through their main California-based lawyer, Barry Langberg.

While the circumstances of Poston’s hiring are not entirely clear,

at least one document prepared by individuals working with Poston

states that ‘‘Steel Hector was hired due to the relationship with the

Attorney General.’’ 805 Indeed, Poston confirmed to investigators

working for her that she believed that the only reason Steel Hector

& Davis was working on this matter was because of the firm’s influence in Washington.806

159

807Steel Hector & Davis billing records at 0000154 (exhibit 100). 808Memorandum from Rich Lucas to Phil Manual (Nov. 2, 1994) (exhibit 54). 809Steel Hector & Davis billing records at 0000154. 810Memorandum from Rich Lucas to Phil Manuel (Nov. 4, 1994) (exhibit 55). 811Memorandum from Rich Lucas to Phil Manuel (Nov. 4, 1994), (with handwritten notations

of Phil Manuel) (exhibit 56).

Poston had her initial client meeting on the Abe matter on November 2, 1994.807 Due to an invocation of privilege by Soka

Gakkai, the committee has not learned who met with Poston, or

what was discussed. However, immediately after her client meeting, Poston apparently contacted Richard Lucas, a private investigator in Florida who worked with the Philip Manuel Resource

Group (PMRG), an investigative firm based in Washington, DC.

Poston retained PMRG to work on the case, and specifically, to determine whether Abe had a record in the NCIC system. Lucas explained Poston’s request in a memo to Phil Manuel, the principal

in PRMG:

[Poston] called this afternoon asking for assistance on a

government inquiry. Her request is unusual and came

with the usual promises that it will lead to bigger and better things.

She is attempting to obtain a March 1963 document that

substantiates an individual was arrested 30 years ago in

Seattle for prostitution. It was confirmed, according to her,

through the Federal Bureau of Prisons that they have in

there [sic] files a reference of this arrest.808

This task, though, proved difficult for Lucas and Manuel to accomplish. Poston’s billing records indicate that she had four telephone calls with ‘‘investigators’’ over the next 2 days.809 On November 4, 1994, Lucas sent another memo to Manuel:

As you know we received an assignment from Poston and

now I am in a precarious position.

* * * * *

It appears the two alternatives are to use a confidential

source or tell Poston that we do not want the case. The latter will cause ill feelings since we should have informed

her on Wednesday but it is better to be up front now than

to incur expenses, not get the information, and burn

bridges with the our [sic] only inroad at Steel Hector

Davis.810

Manuel responded by saying ‘‘Poston must realize that SUPERMAN does not exist. There is no confidential source who will give

documentary evidence which is not released through proper channels. . . . If the document exists we can get it but it will take

time—that’s it. She’ll have to take it or leave it.’’ 811 After an additional memo from Lucas asking him to reconsider, Manuel wrote

‘‘I do not know a confidential source in Seattle which has the authority to hand search criminal files that are not on a computer—

remember we have no identifiers like DOB or SSN only a name

therefore NCIC sources are useless. Computer files do not go back

to 1963. The files must be hand searched by someone with acVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00177 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
160

812Memorandum from Rich [Lucas] to Phil [Manuel] (with handwritten notations by Phil

Manuel) (exhibit 57). 813Lucas interview at 1. In an interview with committee staff, Philip Manuel denied that he

ever obtained NCIC information, or any other proprietary government information on Abe.

Manuel interview at 2–3. However, Manuel’s interview statement is contradicted not only by

Lucas, but also by Manuel’s own sworn affidavit, in which he states ‘‘I contacted a confidential

and highly reliable source’’ and ‘‘my source told me that there was a federal government record

for Nobuo Abe which referred to ‘Suspicion of Solicitation of Prostitution, Seattle Police Department, March 1963.’ ’’ 814Lucas interview at 1. 815 Id. 816Memorandum from Richard Lucas to Rebekah Poston (Nov. 11, 1994) (exhibit 61). 817 Id.

cess.’’ 812 Later on November 4, Poston obtained Abe’s date of birth,

and provided it to Manuel and Lucas to assist them in their search.

c. Poston Obtains the Information

Using the information provided by Poston, Manuel and Lucas

each contacted confidential sources to determine whether Abe had

an arrest record. Manuel contacted Ben Brewer, the manager of

the Program Support Section within the Administration Division at

the FBI.813 According to Richard Lucas, Brewer accessed the NCIC

database, and told Manuel the information on Abe contained in the

database.814 Lucas contacted a friend, Tony Gonzalez, a retired IRS

investigator, to ask for help in obtaining criminal history information on Abe. Gonzalez in turn contacted a confidential source who

provided him with information regarding Abe’s purported 1963 arrest in Seattle.815 Several days later, on November 11, 1994, Lucas

sent a memo to Poston containing the information that Manuel and

Lucas had been able to obtain from their confidential law enforcement sources:

A source was contacted and provided the following information:

1. The source was provided with the identifiers of Nobuo

Abe and Noburo Abbe, and the date of birth of December

19, 1922. The source was also told there was no social security number due to the subject not being a U.S. citizen.

2. The source relayed that under the data provided there

was a reference to ‘‘Solicitation of Prostitution, Seattle Police Department, March 1963’’. The charge was abbreviated and not spelled out.816

The memo then contained a detailed explanation of the NCIC database, as well as an explanation of why information like this would

be in the NCIC:

6. The source theorized that if Abe was a Japanese citizen

with no U.S. residence or forms of identification, other

than a passport, an inquiry might have been made with

NCIC to determine if he was wanted on other charges or

had previous encounters with law enforcement.817

After receiving this information, Poston and Soka Gakkai came

back with a number of questions. George Odano, the Soka Gakkai

representative dealing with Poston, posed a number of questions to

Poston, seeking more detail on the information that the investigators had obtained, as well as confirmation that the information obVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00178 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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818Facsimile from Rebekah Poston to Richard Lucas (Nov. 11, 1994) (attaching Nov. 10, 1994

letter from George Odano to Rebekah Poston) (exhibit 62). 819 Id. 820Memorandum from Richard Lucas to Rebekah Poston (Nov. 17, 1994) (exhibit 63). 821Lucas interview at 2. Again, Manuel denied in his committee interview that he obtained

NCIC information on Abe. However, Manuel’s denials are contradicted by his own sworn affidavit, and are not credible.

tained by Manuel and Lucas was accurate.818 Apparently, one concern was that the information that Soka Gakkai had previously obtained from the Federal Bureau of Prisons was more detailed than

the information obtained by Manuel and Lucas. Poston forwarded

these questions to Lucas, ordering him to ‘‘please get answers to as

many of these as you can and be specific. This is a matter of serious importance.’’ 819

Lucas provided these follow-up questions to Phil Manuel, and

Manuel worked to obtain the requested information. Six days later,

on November 17, 1994, Lucas wrote another memo to Poston to address Odano’s follow-up questions:

A source within the U.S. government in Washington D.C.

was contacted and provided the following information:

1. There is no record or information on Hiroe Clow.

2. There is a record for Nobuo Abe. The record refers to

‘‘Suspicion of Solicitation of Prostitution, Seattle Police Department, March 1963’’. There is no reference to Abe’s date

of birth nor the exact date of the incident. There was no

other significant date as to the facts and circumstances

surrounding the incident.

3. The confidential source stated that the information on

Mr. Abe was an inquiry for information by the Seattle Police Dept. not a recording of an arrest or conviction.

4. The source in Washington D.C. has access to any inquiries made by third parties on Mr. Abe. According to the

computer tracking system there have been more than six

inquiries on Mr. Abe from various U.S. cities over the last

two weeks.

5. The various inquiries by the different government entities has caused concern in the Washington D.C. central office. The source stated the recorded information should

never have been entered on Mr. Abe. The source also stated that if Mr. Abe made an official request, the entry

under his name would be removed from the record. In addition, it is under consideration that the entire record be

removed due to the obvious recent interest by numerous

third parties, the date of the alleged incident and the fact

it is a ‘‘questionable entry’’.

6. It is our opinion that any effort to obtain the information on Nobuo Abe through an official request be done expeditiously.820

Lucas informed committee staff that Manuel obtained this information from Ben Brewer, his confidential source in the FBI.821

At this point, both Lucas and Manuel were becoming quite concerned with their involvement in the Soka Gakkai matter. Both

162

822Lucas interview at 2. 823 Id. 824 Id. When questioned by minority staff at the committee’s July 27, 2000, hearing, Lucas

qualified the statement he had given to majority staff on an earlier occasion. When asked if he

felt that his actions broke the law, Mr. Lucas first stated that he could not reach a legal conclusion determining whether or not he broke the law. ‘‘Felonies and Favors: A Friend of the Attorney General Gathers Information from the Justice Department,’’ 106th Cong. 52 (July 27, 2000)

(preliminary transcript). Then, he stated that ‘‘I do not believe my contact with Mr. Gonzalez

was breaking the law.’’ Id. at 53. Mr. Lucas’ conclusion that he was not breaking the law was

based upon the fact that he claims that he did not have specific knowledge that Gonzalez would

be accessing the NCIC database, and that he did not specifically request Gonzalez to access to

NCIC database. The fact that Lucas, and for that matter, Manuel, did not specifically ask their

sources to access NCIC is legally irrelevant. Rather, the fact is that they were asked to confirm

the existence of information in NCIC, and asked their sources to confirm the existence of the

information. Their sources then did so, by accessing NCIC. Such activity is illegal. 825 Id. 826 Id. 827Memorandum from Richard Lucas to Rebekah Poston (Dec. 9, 1994) (exhibit 67). 828Memorandum from Philip R. Manuel to Rebekah Poston (Dec. 22, 1994) (exhibit 71).

were under the impression that this would be a small project when

they accepted it.822 In fact, the only reason they accepted it was because Poston was a senior lawyer with a prominent firm with close

connections to the Justice Department. Otherwise, PMRG never

would have accepted a case so small.823 However, shortly after they

started working on the project, Lucas and Manuel realized that the

project was more complicated, and exposed them to significant

risks. Lucas told the committee that it was clear that ‘‘essentially

you were breaking the law’’ by doing what Poston had asked.824 In

sum, Lucas and Manuel became convinced that Poston had asked

them to expose themselves to a major risk for very little financial

reward.825

d. The Information on Abe is Deleted

By December 1994, Manuel and Lucas became concerned that

the NCIC record on Abe was going to be deleted. Apparently, Ben

Brewer, Manuel’s source within the FBI, told Manuel that there

was concern in the FBI about the origin of the Abe record, and that

it might be deleted.826 By early December 1994, Lucas was discussing with Poston actions that Soka Gakkai could take to secure

the Abe NCIC record before it was deleted. They discussed seeking

a court injunction preserving the Abe record, but apparently decided not to.827

By late December 1994, Abe’s NCIC record had been deleted. On

December 22, 1994, Manuel wrote a memo to Poston in which he

described his contacts with a confidential source who accessed

NCIC on his behalf (Richard Lucas informed the committee that

this source was again Ben Brewer of the FBI):

This is to report that a highly confidential and reliable

source has advised as follows regarding the subject of your

inquiry:

(1) Whatever files of references, either in data base [sic]

form or hard copy form, which were available previously

have apparently been purged. There are currently no derogatory references to the subject of your inquiry in any

files maintained by or under the control of the Department

of Justice or any of its investigative agencies. Specifically,

there is no information in NCIC.828

163

829Memorandum from Rich Lucas to Phil Manuel (exhibit 71). 830 Id. 831Memorandum from Michael Wilson to John Gibbons (Nov. 19, 1996) (exhibit 97). 832Memorandum from Michael Wilson to John Gibbons (Nov. 27, 1996) (exhibit 98). 833 18 U.S.C. § 641. 834See, e.g., United States v. Elefant, 999 F.2d 674 (2d Cir. 1993). 835Letter from John C. Gibbons to David V. Ries, Deputy Chief, Office of Professional Responsibility, Federal Bureau of Investigation, May 28, 1997 (exhibit 103).

Because of the confusion surrounding Abe’s NCIC record at this

point, Poston apparently went back to the original source of the information on Abe—Jack Palladino’s source at the Bureau of Prisons. Poston apparently learned exactly what information the BOP

source extracted from the NCIC, and passed this information on to

PMRG.829 Poston asked Lucas and Manuel to determine whether

the BOP source’s notes were legitimate, and whether that kind of

information could have come from databases accessible at the

BOP.830

It is unclear what, if any, answers Manuel and Lucas were able

to provide to Poston. A number of records show that Poston was

hiring still more private investigators as late as 1996 to determine

what happened to the NCIC records on Abe.831 It appears that

Poston decided that it was crucial to her case to determine where

the original BOP source got the information on Abe. It also appears

that Poston’s desire to get information from the BOP source may

have even led her to offer a bribe to the BOP employee. As one

memo from 1996 notes:

Poston stated she was told the Bureau of Prison [sic] employee would not come forward due to her pension may be

at risk if she was exposed. She added an offer may have

been made as to severance pay by the client if that resulted.832

Due to barriers raised by Poston and her attorneys, namely the invocation of the fifth amendment and attorney-client privileges, the

committee has not been able to learn whether Poston or Soka

Gakkai ever made good on this payment to their confidential

source.

e. The Actions Taken Were Illegal

There is no question that the actions taken by Rebekah Poston,

Philip Manuel, Richard Lucas, and their confidential sources, were

illegal. 18 U.S.C. § 641 provides for felony or misdemeanor penalties for anyone who ‘‘embezzles, steals, purloins, or knowingly

converts to his use or the use of another, or without authority,

sells, conveys or disposes of any record . . . or whoever receives,

conceals, or retains the same with intent to convert it to his use

or gain, knowing it to have been embezzled, stolen, purloined or

converted[.]’’ 833 This statute has been used to prosecute individuals

who sell or give away government information.834 It appears that

both Poston and the private investigators at PMRG were aware of

their legal exposure. Richard Lucas stated that ‘‘in direct conversations with Ms. Poston, she commented about her concern that the

activities of the unknown Bureau of Prisons employee and the actions taken by PMRG on her behalf could be illegal[.]’’ 835 There is

also a document indicating that Phil Manuel was aware of the

164

836Facsimile from John Sebastian to Philip Manuel (Feb. 15, 1995) (attaching articles regarding the theft of NCIC records) (exhibit 80). 837Memorandum from Michael Wilson to John Gibbons (Nov. 27, 1996) (exhibit 98).

risks involved in improperly obtaining NCIC information. On February 15, 1995, an individual named John Sebastian sent Manuel

a fax of two newspaper articles with the handwritten note ‘‘TITLE:

OUT ON THE LIMB.’’ Sebastian then wrote on top of each article

a caption stating ‘‘THEFT OF NCIC RECORDS.’’ 836 The articles

describe police officers prosecuted for selling NCIC printouts.

In addition, the 1996 memo describing Poston’s efforts to obtain

information from Jack Palladino’s source at the BOP raises additional questions about illegal conduct by the Soka Gakkai lawyers

and investigators. The memo indicates that Poston may have made

an offer that Soka Gakkai would reimburse the BOP source if she

lost her pension as a result of coming forward with her confidential

information.837 If these allegations are true, they could constitute

a bribe or solicitation for bribery, in violation of 18 U.S.C. § 201.

3. Poston Requests Information on Nobuo Abe Through FOIA

a. Poston Places FOIA Requests for Information on Abe

On November 21, 1994, Poston submitted FOIA requests to the

Justice Department, the Federal Bureau of Investigation, the Immigration and Naturalization Service, and a number of other agencies, requesting information on Abe’s alleged detention in Seattle.

Given the claims of attorney-client privilege made by parties involved in the investigation, all of Poston’s reasons for pursuing the

information through FOIA are unknown. However, it appears that

information obtained through legal means would be easier to use

in the ongoing litigation in Japan. In addition, it appears that

Poston had a concern that the Abe record might be deleted from

the NCIC database, given the concern within the FBI that it was

not a legitimate record.

b. Poston Publicly Confirms that She Already Has the Information

While her FOIA requests were still pending, in December 1994

and January 1995, Poston took steps that publicly acknowledged

the receipt of confidential NCIC records from Manuel and Lucas.

First, on December 9, 1994, Poston wrote a letter to Soka Gakkai

confirming that she had obtained the NCIC information on Abe:

Your organization has requested us to investigate whether

the United States government has maintained any records

of an investigation concerning an individual known as

Nobuo Abe, a foreign national, born December 19, 1922.

Subsequent to this request, we engaged the Philip Manuel

Resource Group, Ltd. (PMRG), a highly prestigious private

investigations firm based in Washington, D.C[.]

PMRG reported to us on November 17, 1994, that a source

within the U.S. government in Washington, D.C. was contacted and the source confirmed to PMRG that there is a

record for Nobuo Abe. According to PMRG’s report to us,

the record refers to:

165

838Letter from Rebekah Poston to Soka Gakkai (Dec. 9, 1994) (exhibit 68). 839Letter from Rebekah Poston to Hiroe Clow (Jan. 4, 1995) (exhibit 73). 840The SGI–USA Newsletter (Jan. 9, 1995) (exhibit 74). 841 Interview of Richard L. Huff at 1 (June 16, 2000) (Huff interview). 842 Id. 843 Id. at 1–2. 844 Id. at 2.

Suspicion of Solicitation of Prostitution

Seattle Police Department

March, 1963

* * * * *

I am able to testify as to the truthfulness and accuracy of

my statements in this letter.838

Poston repeated the same information in a letter sent to Hiroe

Clow on January 4, 1995.839 Shortly thereafter, in a SGI–USA

newsletter dated January 9, 1995, Barry Langberg, Hiroe Clow’s

lawyer, publicly disclosed Poston’s letter to Clow.840 Langberg included the letter in an interview in which he was explaining the

progress of Clow’s lawsuit against Abe.

Poston’s disclosure of the information that PMRG had obtained

for her is surprising, given that her activities had been cloaked in

secrecy to that point. Moreover, the disclosure by Poston constitutes a public admission that she had hired individuals who

broke the law to obtain Abe’s NCIC information, with Poston’s apparent knowledge and consent. In addition, Poston’s disclosure of

the information obtained by PMRG constitutes a waiver of any attorney-client privilege or work product protection that she could invoke over those subjects.

c. Negative Responses to Poston’s FOIA Requests

When Poston made her FOIA requests for NCIC information on

Nobuo Abe, she was taking on a long-standing Justice Department

policy against the release of that kind of information. According to

Richard Huff, the Co-Director of the Office of Information and Privacy, the Department has a policy against releasing any criminal

justice information to a third party without permission of the party

involved.841 Moreover, in cases where they cannot release records,

the Department has a policy against even confirming or denying

the existence of criminal justice records within the Department.842

According to Huff, this policy ensures that individuals who have arrest records, and other records, have those records kept private. As

Huff explained to committee staff, if the Department confirmed

when individuals did not have arrest records, and simply said ‘‘no

comment’’ when they did have records, any person would be able

to determine who had arrest records in the Justice Department.843

Therefore, according to Huff, the Justice Department’s policy of refusing to confirm or deny whether criminal justice records exist is

integral to a system that attempts to protect the privacy of individuals involved.844

Poston apparently recognized the fact that she was attempting to

obtain information in the face of long-standing Justice Department

policy. She informed the committee that she viewed her FOIA request as a long-shot, because she was requesting information on a

166

845Poston interview at 3. 846Letter from Hiroe Clow to Janet Reno, Attorney General, Department of Justice (Mar. 21,

1995) (exhibit 110). 847Letter from J. Kevin O’Brien, Chief, Freedom of Information—Privacy Acts Section, Information Resources Division, Federal Bureau of Investigation, to Rebekah Poston (Dec. 8, 1994)

(exhibit 66). 848Letter from Bonnie L. Gay, Attorney-in-Charge, FOIA/PA Unit, Executive Office for U.S.

Attorneys, to Rebekah Poston (Jan. 12, 1995) (exhibit 75). 849Poston interview at 2. 850 Id. 851Letter from Rebekah Poston to Attorney General Janet Reno (Feb. 3, 1995) (exhibit 77). 852Poston interview at 3. 853See Steel Hector & Davis billing records (exhibit 100).

person that she did not represent.845 Poston’s client, Hiroe Clow,

also seemed to recognize that the FOIA request would not be granted, stating in a letter to Janet Reno: ‘‘[m]y lawyers tell me that

things don’t look so good on the F.O.I.A. request if decided in accordance with previous practices.’’ 846 And, as expected, Poston’s

FOIA requests were rejected. The FBI informed Poston that she

could not receive any information on Abe unless she provided either proof of death, or a notarized waiver from Abe.847 Similarly,

the Executive Office of United States Attorneys told Poston that

she must provide a notarized waiver by Abe.848

Poston met with the FBI to discuss their handling of the FOIA

request, and according to Poston, the FBI was receptive to her arguments, but informed her that their general policy was not to release, or even confirm or deny the existence of records about third

parties in NCIC without the permission of the third party.849 According to Poston, the FBI told her that they would like to help

her, but that any decision on the release of Abe’s NCIC information

would have to be made by the Attorney General, not the FBI.850

After she received negative responses to her FOIA requests, on

February 3, 1995, Poston submitted an appeal to the Justice Department. In her appeal, she argued that the Justice Department

should release NCIC records on Abe, based on the fact that there

was a significant public interest in whether Abe was arrested in

Seattle in 1963; and that as a non-citizen, Abe was not protected

by the Privacy Act.851 However, Poston was aware that her arguments would not likely be accepted by the Justice Department.852

The Justice Department had an established policy that it would not

confirm or deny the existence of the records that Poston was seeking. This policy had been in place for a significant period of time,

and Poston’s arguments did not change that fact.

4. Rebekah Poston’s Lobbying Campaign

After her unsuccessful meeting with the FBI, Poston began a remarkable series of contacts with the Justice Department, in an effort to reverse the existing Justice Department policy, and obtain

whatever information existed on Nobuo Abe in the NCIC system.

Between January and June 1995, Poston contacted high-level Justice Department officials at least 22 times regarding her FOIA request.853 These contacts were made with senior staff in the Office

of the Attorney General, the Office of the Associate Attorney General, and the Office of Information and Privacy. Poston began this

lobbying campaign even before her FOIA appeal had been rejected

by the Justice Department. As she explained in her interview with

committee staff, she understood that her legal arguments were a

167

854Poston interview at 3. 855 Id. 856 Id. 857 Id. 858 Id. 859 Id. 860See Hogan interview. 861 Id. at 1. 862 Id. 863 Id. 864Poston interview at 3. 865See Steel Hector & Davis billing records. A number of the cited pages refer to contact between Poston and the Attorney General’s Office. However, in her interview, Poston acknowledged that her sole contact in the Attorney General’s Office was Hogan. Similarly, in his interview, Hogan stated that he believed that other than the Attorney General, he was the only person in the Attorney General’s Office who knew Poston.

long-shot, and she believed that she needed to raise this matter at

the highest levels of the Justice Department.854

a. Poston’s Contacts with John Hogan

Over the next several months, Poston would be in frequent contact with John Hogan, the Chief of Staff to the Attorney General.

According to Poston, Hogan is a good friend of hers, and a great

friend of her sister.855 As an example of her family’s friendship

with Hogan, Poston informed the committee that at the time of

Hurricane Andrew, Hogan invited Poston’s sister and Poston to

stay with him in his house.856 Poston initially told Hogan that she

was in a ‘‘FOIA situation,’’ and wanted to meet with the decisionmakers face-to-face to make her case.857 Poston explained to Hogan

that she wanted him to make an introduction to the relevant individuals who could help her.858 According to Poston, Hogan told her

that ‘‘he didn’t do FOIA, but would be happy to help her,’’ and he

told her that he would check into the matter.859

Hogan’s account differs in some significant respects from

Poston’s. First, he downplayed his relationship with Poston. He acknowledged that he knows Poston, but did not describe her as a

friend.860 He similarly downplayed Poston’s relationship with the

Attorney General, merely acknowledging that Roberta Forrest was

a secretary for the State Attorney’s Office, failing to mention that

she managed Ms. Reno’s campaigns for office.861 Hogan acknowledged that he was contacted by Poston, and that Poston asked him

for help with her FOIA appeal. However, he stated that he ‘‘did not

pay much attention to what she was saying after he heard that it

was a FOIA case,’’ and that he generally suggested that she needed

to talk to people in the DOJ FOIA office.862

Hogan informed the committee that he believed that he spoke

with Poston on less than five occasions.863 Similarly, Poston estimated that she spoke with Hogan on two to four occasions.864 However, records subpoenaed by the committee reveal a remarkable

volume of contacts between Poston and Hogan. Between January

26, 1995, and June 2, 1995, Poston contacted John Hogan at least

18 times on the Soka Gakkai matter.865 While it is possible that

some of these contacts were occasions when Poston merely left a

message with Hogan, they clearly indicate that Hogan did more

than suggest that Poston speak with officials in the Justice Department FOIA office.

168

866 Huff interview at 2. 867Letter from Richard L. Huff to Rebekah J. Poston (Apr. 25, 1995) (exhibit 83). 868Memorandum from Attorney General Janet Reno to staff of the Attorney General (Apr. 28,

1995) (exhibit 84). 869Poston interview at 4.

b. Poston’s FOIA Appeal is Rejected

During the time that Poston was making these contacts with

Hogan, her appeal was rejected by the Justice Department’s FOIA

office. In a letter dated April 25, 1995, Richard Huff, the Co-Director of the Office of Information and Privacy, rejected Poston’s arguments. Huff informed the committee that he did not spend much

time deliberating Poston’s appeal, and viewed it as a clear-cut decision.866 In Huff’s mind, the Supreme Court directly addressed this

issue:

I find the Supreme Court’s holding in United States Department of Justice v. Reporter’s Committee for Freedom of

the Press, 489 U.S. 749 (1989) to be controlling in this

case. Thus, in the absence of such authorization [from Mr.

Abe], and after careful consideration of your appeals from

the actions of the EOUSA and the FBI, I have decided to

affirm the initial actions of these components in refusing

to confirm or deny the existence of records responsive to

your request. Lacking an individual’s consent, proof of

death, official acknowledgment of an investigation, or an

overriding public interest, even to acknowledge the existence of law enforcement records pertaining to an individual could reasonably be expected to constitute an unwarranted invasion of personal privacy.867

At this point, the Office of Information and Privacy, which served

as the highest office deciding FOIA appeals within the Justice Department, had spoken. To obtain a reversal would require the

intervention of a high-level appointee at the Justice Department.

c. Attorney General Reno Recuses Herself

On April 28, 1995, only 3 days after Huff rejected Poston’s FOIA

appeal, the Attorney General recused herself from the Soka Gakkai

matter. In a memorandum to her staff, copied to the Associate Attorney General, Ms. Reno stated:

This is to inform you that I have recused myself from participation in the FOIA appeal made to the Department

concerning requests for information relating to Nobuo Abe,

a prominent religious leader, on behalf of Mrs. Hiroe Clow.

Apparently, an attorney, who is a close personal friend of

mine and participated in my confirmation hearing preparation has requested my intervention in the matter and I

want to make it very clear that I have chosen to disqualify

myself from any participation and request that no information regarding this matter be brought to my attention.868

Poston was asked about the recusal memo, and stated that the

memo clearly refers to a contact from John Edward Smith, a close

friend of the Attorney General, and a senior partner at Steel Hector who worked on the Abe matter.869 However, Poston denied havVerDate 11-MAY-2000 03:09 Dec 15, 2000 Jkt 067356 PO 00000 Frm 00186 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1027V1.XXX pfrm11 PsN: HR1027V1
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870 Id. 871See Steel Hector & Davis billing records (exhibit 100). 872 Hogan interview at 2. 873 Id. 874 ‘‘Felonies and Favors: A Friend of the Attorney General Gathers Information from the Justice Department,’’ 106th Cong. 147–48 (July 27, 2000) (preliminary transcript).

ing any knowledge that Smith contacted Reno on the Abe matter.870 In addition, the Steel Hector billing records do not show

that Smith billed any time on the Abe matter.871 John Hogan, the

Attorney General’s Chief of Staff, similarly believed that the memo

referred to Smith.872 In his interview with committee staff, Hogan

claimed that he was unaware that Reno had recused herself from

this matter.873 However, at the committee’s July 27, 2000, hearing,

Hogan offered a new explanation of Reno’s recusal:

I had a conversation with her [Poston] at one point, and

she clearly was frustrated with the fact that her position

was not gaining momentum within the Department, and

she mentioned to me that she was handling the matter

with a man by the name of John Edward Smith. I knew

him to be a friend of the Attorney General. Again, I have

worked with the Attorney General since 1979 and knew

her before that. He had been at Steel Hector & Davis

when the Attorney General was there, as opposed to Ms.

Poston, who joined the firm after Ms. Reno left. He was

someone—when she was nominated to be Attorney General, he took a leave of absence from the firm and actually

came up here to Washington to help her prepare for her

confirmation hearings. He came up here and helped her

prepare for those hearings.

So when Ms. Poston mentioned John Edward Smith’s

name to me, I became concerned. I went to the Attorney

General and said, there is this FOIA matter that Rebekah

Poston had called me on, and I sent it off to the career people. And the Attorney General just said, I am recusing myself from the matter. Make sure nothing else comes to me.

Although Ms. Poston I would not characterize as a friend

or social acquaintance of the Attorney General, Mr. Smith

was, and that was my notice that he was more involved,

and so I brought it to her attention.874

However, Hogan’s hearing testimony is in some tension with the

text of Reno’s recusal memo, which states that ‘‘[a]pparently, an attorney, who is a close personal friend of mine and participated in

my confirmation hearing preparation has requested my intervention in the matter[.]’’ This statement is considerably different from

what Hogan supposedly relayed to the Attorney General. Given the

fact that Poston is unaware of Smith’s contacts with Reno, the two

versions of Hogan’s recollection, and the text of Reno’s own recusal

memo, the committee is left with a number of questions:

• Did anyone representing Soka Gakkai contact Attorney

General Reno? If it was John Smith, why didn’t he either

inform Poston, who was overseeing the case, or bill his

time?

170

875 Id. 876Letter from Rebekah Poston to John Hogan (May 12, 1995) (exhibit 85). 877 Id.

• If Smith contacted Reno, why does Rebekah Poston claim to

be unaware of the contact? Smith was not the main attorney on the case, and it is difficult to believe that he would

contact the Attorney General about the case without informing Poston.

• Why did Reno recuse herself from the case? Richard Huff,

who has directed the Office of Information and Privacy for

almost 20 years, stated that he has never heard of the Attorney General, Deputy Attorney General, or Associate Attorney General ever recusing themselves from a FOIA appeal.

• The manner of Reno’s recusal raises significant questions

about the contacts that led to the recusal. What did Smith

ask Reno to do? Hogan stated that in his experience, Reno

would ‘‘not receive it well if [someone like Smith] asked her

for special treatment on behalf of a client.’’ 875 that is the

case, why did Smith, a long time friend of the Attorney

General, contact her?

d. John Hogan Arranges a Meeting with the Associate Attorney General

After the rejection of her FOIA appeal, Rebekah Poston continued her contacts with John Hogan, requesting a meeting with the

Associate Attorney General. On May 12, 1995, she wrote to Hogan,

and specifically requested a meeting. In a letter marked ‘‘PERSONAL AND CONFIDENTIAL,’’ Poston stated that she was ‘‘rather disappointed’’ with the Justice Department’s rejection of her

FOIA appeal.876 She then requested the meeting with Schmidt:

Consequently, John Smith, Russell Bruemmer and I believe we must take one last step before deciding whether

to initiate litigation on these issues. Believe me, we do not

want to bring unnecessary or senseless litigation. Unfortunately, however, we are lacking an understanding, given

our arguments and the failure of anyone in the Office of

Information and Privacy to address them head on, as to

why our appeal has been denied. If you could assist the

three of us in scheduling a meeting with Mr. Schmidt, we

would like to address our concerns with him. We have not

yet attempted to contact Mr. Schmidt.

We trust that Mr. Schmidt will agree to one final conference on this matter; we will of course work with his

schedule on a convenient date and time.

I harken [sic] back to the beginning of this matter when

you and I first spoke. You commented that you didn’t understand why they could not tell whether they have a

record or not. Frankly, we would be satisfied with such a

response.877

171

878Steel Hector & Davis billing records at 0000146 (exhibit 100). 879Poston interview at 3. 880 Id. 881 Hogan interview at 1. 882 Id. at 2. 883 Id. 884 Calendar of Rebekah Poston for June 15, 1995, Steel Hector & Davis document 000028 (exhibit 99). 885Poston interview at 5. 886 Id. 887 Id. 888 Id.

Steel Hector & Davis billing records also indicate that Poston

called Hogan at least four times in late May and early June, apparently the time when the meeting with Schmidt was scheduled.878

In her interview with committee staff, Poston stated that she was

asking Hogan to help set up the meeting with Schmidt.879 Poston

stated that Hogan was responsive, and said he would contact

Schmidt, and help set up the meeting.880 When he was interviewed

by committee staff though, Hogan had a different recollection. He

stated that he did not even recall Poston asking for help in setting

up a meeting with Schmidt.881 Hogan stated that ‘‘I cannot imagine

that I would be so presumptuous as to ask Schmidt to meet with

anyone.’’ 882 Hogan did allow that it was possible that he forwarded

Poston’s May 12 letter to Schmidt’s office, but does not believe that

he ever spoke with Schmidt about this matter.883

Hogan’s account of how the Schmidt meeting was arranged is

troubling. Poston clearly stated that Hogan helped arrange the

meeting. The timing and volume of the telephone calls between

Poston and Hogan supports the conclusion that Hogan was involved in scheduling the meeting with Schmidt. Under Hogan’s account, the 18 contacts from Rebekah Poston go unexplained. Poston

continued to contact him, despite the fact that in their initial conversation, Hogan told her that he did not ‘‘do FOIA,’’ and directed

her to the Office of Information and Privacy. The fact that there

were so many more contacts, including contacts shortly before the

meeting with Schmidt, supports the conclusion that Hogan was involved in scheduling the meeting. Finally, common sense supports

the conclusion that Poston received some assistance in arranging

a meeting with the Associate Attorney General on a matter so

small as a FOIA appeal. It would be unlikely that the Associate Attorney General would meet with a party on this kind of matter unless there was some special request.

e. The Justice Department ‘‘Reverses its Policy’’

Rebekah Poston, John Smith, and Russell Bruemmer met with

John Schmidt on June 15, 1995, at 3:30 p.m.884 Before their meeting with Schmidt, John Smith arranged for the group to visit Attorney General Reno in her office. In her interview, Poston confirmed

that John Smith had made this appointment with the Attorney

General.885 Poston stated that this was a social call, and that the

group exchanged pleasantries with the Attorney General.886 For

example, Poston stated that the Attorney General asked her how

her sister and her children were doing.887 Poston denied that she,

Smith, or Bruemmer discussed the Soka Gakkai matter with the

Attorney General.888 When the Attorney General asked them what

172

889 Id. 890 Id. 891 Id. 892 Id. 893 Id. 894 Interview of John R. Schmidt (June 16, 2000). 895 Id. 896 Id. 897 Huff interview at 2–3. 898 Id. at 3. 899 Id. 900 Id. 901 Id.

brought them to the Justice Department, Smith stated that ‘‘we

have other business in the Department.’’ 889

After their meeting with the Attorney General, Poston, Smith

and Bruemmer met with Schmidt. According to Poston, Schmidt

started the meeting by informing them that he had not yet discussed the matter with Richard Huff.890 Poston took this as a positive sign, because it meant that Schmidt had an open mind on the

subject.891 On the other hand, it is slightly troubling that Schmidt

would not take any steps to educate himself on the Department’s

FOIA policy before he met with a party who was seeking the reversal of long-standing Department policy. Poston commented on another troubling aspect of the meeting with Schmidt—Schmidt had

no staff present at the meeting with Poston.892 It is strange enough

that Schmidt, the third-highest official in the Department of Justice, would even attend a meeting on a FOIA request. It is even

more odd that he would attend this meeting by himself, and not

seek to delegate this matter to a staffer. Due to Schmidt’s failure

to recall even the most basic facts about this matter, we cannot determine whether Schmidt recognized that Poston’s request was irregular, or whether he simply wanted to work on this matter himself.

Poston informed the committee that she, Smith and Bruemmer

made their points with Schmidt, and he stated that he would take

their arguments under advisement.893 When he was interviewed by

committee staff, Schmidt could recall almost nothing about the entire Soka Gakkai matter. Schmidt did recall that he asked Huff to

find out what information the Department had on Abe, and that

when he discovered that there were no records, that he decided

they could tell that to Poston.894 According to Schmidt, ‘‘it was

hard to see the adverse consequences’’ of confirming that there

were no NCIC records on Abe.895 Schmidt told committee staff that

‘‘Dick [Huff] said he would be comfortable with that.’’ 896

Richard Huff, though, tells a dramatically different story. Huff

stated that Schmidt called him in mid-June to ask about the

Poston FOIA appeal.897 They arranged a meeting for June 22,

1995. At the meeting, Schmidt asked Huff what the Department

policy was on releasing this kind of information.898 Huff told

Schmidt that Abe, as a foreign national, was not covered by the

Privacy Act.899 Huff also explained, however, that there was a Department policy against even confirming or denying the existence

of criminal justice information on third parties, whether they were

U.S. citizens or not.900 Schmidt asked Huff if they could make a

disclosure in this case.901 Huff responded by saying that they

173

902 Id. 903 Id. 904 Id. 905 Id. 906 Id. 907 Id. 908 Id. Huff informed Schmidt that the Privacy Act did not apply to Nobuo Abe, since he was

not a U.S. citizen or permanent resident. Therefore, the Justice Department’s confirmation that

Abe had no records at DOJ was not a violation of the Privacy Act. Despite the fact that the

Privacy Act was inapplicable in this case, Huff still believed that Justice Department policy not

to confirm or deny the existence of any criminal justice records should apply. 909 Id. 910Letter from Richard L. Huff to Rebekah J. Poston (July 11, 1995) (exhibit 90). 911 Huff interview at 3. 912 Id. 913 Id.

should not vary Justice Department policy in this case.902 Huff believes that Schmidt also mentioned the fact that Poston was threatening to litigate if she did not receive the information that she had

requested. Huff responded by telling Schmidt that the odds were

‘‘spectacular’’ that the Justice Department would prevail in such

litigation, given that the Supreme Court had already addressed

this precise issue.903 Schmidt resolved the meeting by asking Huff

to find out whether the Department had any NCIC records on

Abe.904

After his meeting with Schmidt, Huff requested the FBI and the

Executive Office of U.S. Attorneys to search for the requested information on Abe, and they confirmed that they had no information

on Abe.905 Huff communicated this fact to Schmidt.906 Schmidt

asked Huff if the Department could tell Poston that they had no

NCIC records on Abe.907 Huff told Schmidt that they legally could

do so.908 Schmidt then directed Huff to reverse his earlier decision,

and confirm in a letter to Poston that they did not have any NCIC

records on Abe.909 Accordingly, on July 11, 1995, Huff wrote to

Poston to tell her that:

After considering your Freedom of Information Act request

under Attorney General Reno’s policy of undertaking discretionary disclosure of information whenever no foreseeable harm would result, Associate Attorney General John

R. Schmidt has determined that it is appropriate to disclose the fact that neither the Federal Bureau of Investigation nor the Executive Office for United States Attorneys

maintains, or has any evidence of ever maintaining, any

record within the scope of your request.910

While Schmidt told committee staff that Huff was ‘‘comfortable’’

with this decision, Huff told a different story, and pointed out a series of remarkable facts about this matter.

• First, Huff made it clear to Schmidt that he disagreed with

the decision.911 He told Schmidt that it wouldn’t be illegal

to release this information, but that he disagreed with the

discretionary disclosure. In addition, Huff characterized

Schmidt’s decision as ‘‘unusual.’’ 912

• In his 25 years at the Justice Department, Huff had never

had any one-on-one meetings with Schmidt, or any other

Associate Attorney General.913

174

914 Id. at 1. 915 Id. 916 Id. 917 Id. at 3. 918 Id. 919Poston interview at 5. 920 Id.

• When asked how much senior political appointees were involved in FOIA appeals, Huff stated that ‘‘typically, there is

none.’’ 914

• Huff is aware of involvement of senior political appointees

in FOIA appeals in only two other cases. The first case involved a request for notes taken by a Justice Department

lawyer relating to an interview of Sandra Day O’Connor before she was appointed to the Supreme Court. The Office of

Information and Privacy initially made a decision to grant

the request, and this decision was then overturned by a political appointee.915 The second case involved a request by

Terry Anderson, who had been held captive in Lebanon, for

criminal justice information possessed by the government

on the individuals who had held him captive. The Office of

Information and Privacy had denied his request, consistent

with Justice Department policy, and then, after significant

media attention, political appointees at the Department directed Huff to reverse the decision.916 Both cases stand in

obvious contrast to this case.

• It is unclear what effect the Schmidt decision had on Justice Department policy. Huff was asked whether this decision was a change of DOJ policy, or whether it was a onetime departure from existing policy. Huff stated that he believed that it was a one-time departure.917 When asked if

Schmidt offered Huff any reason why this case would be

treated differently from any other FOIA case coming to the

Department, Huff stated that Schmidt offered no such rationale.918

5. Aftermath

a. Poston ‘‘Wins the Battle, but Loses the War’’

When Poston received the July 11, 1995, letter from Huff informing her that Schmidt had decided to disclose the fact DOJ had no

NCIC records on Nobuo Abe, she felt like she had ‘‘won the battle,

but lost the war.’’ 919 When asked to explain why she felt that way,

she declined, based on her lawyers’ concerns that such an explanation would cause her to disclose the illegal activities conducted

on her behalf by PMRG.920 However, documents obtained by the

committee show how disturbed Poston was to find out that the Justice Department did not have any records on Abe. Huff’s letter conflicted with the information that Phil Manuel, Richard Lucas, and

Jack Palladino had extracted from confidential sources within the

Justice Department. On July 19, 1995, shortly after she got the

Huff letter, Poston wrote to Manuel and Lucas to ask them to follow up with their confidential sources:

175

921Letter from Rebekah Poston to Philip Manuel and Richard Lucas at 2 (July 19, 1995) (exhibit 92). 922 ‘‘Felonies and Favors: A Friend of the Attorney General Gathers Information from the Justice Department,’’ 106th Cong. 155 (July 27, 2000) (preliminary transcript). 923 Id. 924Lucas interview at 3. 925 Id.

I need your assistance in helping me explain to my clients

the apparent inconsistencies between the letter we received from Richard L. Huff, dated July 11, 1995 and your

investigative reports of November 11 and 17, 1994.

Our personal meeting with Deputy [sic] Associate Attorney

General John Schmidt resulted in a policy decision by the

Attorney General to reverse the original position of the Department of Justice by authorizing the release of the requested record or a statement as to whether it existed in

the past. That is a major accomplishment and victory. The

result, however, is quite perplexing.

I can only conclude that since a record existed, which your

two independent sources verified, the places searched enumerated in Huff’s letter must not have been the proper locations. Any other conclusion means that the sources are

either not telling the truth or that the record was deleted

(a real possibility according to the source in the November

17, 1994 report) without a trace, an impossibility according

to former, FBI, S/A Lawler, if the record was ever in

NCIC. That is part of the problem.

Our client views this letter as an absolute defeat for them

in Japan.

* * * * *

Our client is requesting that each of you ask your sources

for an explanation or [sic] where they found the record.

The Attorney General’s position is clear—its existence and/

or its deletion is authorized to be disclosed.

I have the utmost confidence in your reports. We must try

our best to resolve this critical issue for our client. Please

give this matter your immediate attention. Leave no stone

unturned.921

Poston and Schmidt were questioned about this letter at the committee’s hearing. When questioned about the statement that the

Attorney General had decided to reverse the Justice Department’s

position, Schmidt stated that it was ‘‘obviously wrong’’ and ‘‘lawyer’s puffery.’’ 922 However, Poston stood by the statement in her

letter, saying ‘‘it could have been more artfully written to say the

‘office of,’ but I don’t believe it’s puffery.’’ 923 Poston’s insistence

that the Office of the Attorney General was responsible for her success in obtaining the information on Abe continues to raise questions about the involvement of John Hogan in this matter.

Lucas informed the committee that he took no action in response

to Poston’s requests.924 He believes that Phil Manuel’s confidential

source, Ben Brewer, told Manuel that he believed that Abe’s NCIC

record was erased, and that there was no evidence of its erasure.925

176

926 Id. 927 Id. 928 Id. 929 Affidavit of Philip R. Manuel at 2–3 (Sept. 20, 1975) (exhibit 95). 930 Affidavit of Richard Lucas at 2 (Sept. 22, 1995) (exhibit 96).

After Lucas and Manuel failed to produce any further information, Poston threatened to make both of them testify at trial in

Japan, where apparently, Poston’s earlier representations about

the existence of an NCIC record on Abe were coming under considerable scrutiny.926 Lucas refused to go to Japan and instead,

Poston drafted an affidavit for Lucas to sign.927 Lucas refused to

sign the affidavit unless Manuel signed one as well.928 The surprising result was that in September 1995, Manuel and Lucas both

executed sworn affidavits regarding their activities in the Abe case,

including their illegal conduct in obtaining the information on Abe.

Manuel admitted:

11. As part of PMRG’s investigation, I contacted a confidential and highly reliable source who I believed would

be able to determine whether the federal government had

documentary evidence.

12. My source told me that there was a federal government

record for Nobuo Abe which referred to ‘‘Suspicion of Solicitation of Prostitution, Seattle Police Department, March

1963.’’

13. My source further told me that the record concerning

Mr. Abe reflected that the Seattle Police Department had

made an inquiry for information.

14. My source also told me that if Mr. Abe made an official

request for the information under his name to be removed

from the record, it could be removed.

15. Sometime later, my source informed me that the record

concerning Mr. Abe apparently had been purged.

16. I am confident that the information provided to me by

the source is accurate and reliable.929

Lucas made similar admissions in his affidavit:

9. As part of my investigation for PMRG, I contacted a

highly reliable source and advised the source that I was

attempting to confirm the existence and the whereabouts

of documents in the possession of the federal government

related to Mr. Abe. I told this source that Mr. Abe’s name

is ‘‘Nobuo Abe’’ and that his date of birth is December 19,

1922. I also told the source that Mr. Abe had no social security number because he was not a U.S. citizen.

10. The source later reported to me that he had determined that the federal government did have a record regarding a Nobuo Abe which referred to solicitation of prostitution, Seattle Police Department, March 1963.

11. I am confident that the information provided to me by

the source is accurate and reliable.930

177

931See letter from David V. Ries, Deputy Assistant Director, Office of Professional Responsibility, Federal Bureau of Investigation, to the OSO Group, Ltd. (Feb. 19, 1997) (exhibit 102). 932 Id. 933Letter from John C. Gibbons to David V. Ries, Deputy Assistant Director, Office of Professional Responsibility, Federal Bureau of Investigation (May 28, 1997) (exhibit 103). 934Letter from David V. Ries, Deputy Assistant Director, Office of Professional Responsibility,

Federal Bureau of Investigation, to the OSO Group, Ltd. (Sept. 4, 1997) (exhibit 105). 935Letter from John C. Gibbons to David V. Ries, Deputy Assistant Director, Office of Professional Responsibility, Federal Bureau of Investigation (Sept. 26, 1977) (exhibit 106). 936Letter from David V. Ries, Deputy Assistant Director, Office of Professional Responsibility,

Federal Bureau of Investigation, to the OSO Group, Ltd. (Oct. 16, 1997) (exhibit 107).

b. Justice Department Fails to Prosecute Poston or Manuel

One of the committee’s greatest concerns is that the Justice Department has shown no interest in prosecuting the clearly illegal

conduct evident in this case. The actions by Poston, Manuel, and

Lucas clearly implicate 18 U.S.C. § 641. Any case brought against

Poston or Manuel would be exceedingly strong, as it would be bolstered by extensive documentary evidence, as well as the testimony

of Richard Lucas. Indeed, Poston and Manuel admit to their illegal

actions, in writing, and in Manuel’s case, even under oath.

The Justice Department has been provided with this information

on a number of occasions. In February 1997, counsel for Nichiren

Shoshu, John Gibbons, sent a set of documents to the FBI Washington Field Office.931 Those documents detailed the fact that

NCIC information on Abe had been illegally obtained by Poston,

Manuel, and Lucas. Those records were forwarded to the FBI Office

of Professional Responsibility (OPR). On February 19, 1997, David

Ries, the Deputy Chief of OPR, wrote to Gibbons, stating that the

charges ‘‘have no merit.’’ 932 However, Ries did state that the FBI

OPR would consider revisiting the issue if it obtained a detailed

statement from Richard Lucas. Gibbons provided a detailed accounting of Lucas’s testimony in May 1997.933 In September 1997,

Ries responded, stating that ‘‘the allegations presented by you and

others have been repeatedly brought to the attention of the FBI by

numerous individuals in various communications and in various

meetings, for a number of years. . . . This review indicates the allegations remain without merit.’’ 934 Gibbons wrote back on September 26, 1997, to ask Ries to at least interview Lucas before he

reached any conclusions that the Abe matter was without merit.935

Ries wrote back one final time on October 16, 1997, to tell Gibbons

that OPR would not conduct any further investigation into the Abe

matter, and that his ‘‘allegations remain without merit.’’ 936

In addition to numerous attempts made by counsel for Nichiren

Shoshu, the committee has referred this matter to the Justice Department. In 1998, committee staff met with FBI personnel to explain this matter, and request the FBI to investigate the potentially illegal actions taken by Poston and PMRG.

It is astounding that the Justice Department has refused to take

action on this matter. The Department has been provided on repeated occasions with clear-cut evidence of illegal activity. There is

both documentary and testimonial evidence that Rebekah Poston,

Philip Manuel, and Richard Lucas penetrated confidential law enforcement databases to obtain information on Nobuo Abe. However,

the Department has concluded on three separate occasions, without

explanation, that these charges are ‘‘without merit.’’ Apparently,

though, they have not attempted to interview any of the witnesses

178

937 Although there is no doubt that Richard Lucas’ conduct was unlawful, it must be pointed

out that he was the only witness involved in the illegal efforts to obtain information on Abe

to cooperate fully with the committee. As important, his offer of cooperation to the Justice Department indicates a willingness to atone for his part in improper conduct. By comparison,

Poston and Manuel have taken no steps to cooperate with law enforcement.

in this case, including Richard Lucas, who offered repeatedly to be

interviewed, against his own legal interests.937

6. Poston’s Appearance Before the Committee on July 27, 2000

On July 27, 2000, the committee held a hearing at which Rebekah Poston, Philip Manuel, Richard Lucas, John Schmidt, Richard Huff, and John Hogan testified.

a. Poston Refused to Invoke the Fifth Amendment

When Poston was interviewed by committee staff on June 29,

2000, her counsel informed committee staff that she would not answer questions about her efforts to obtain information about Nobuo

Abe through private investigators. Her counsel, Eduardo Palmer,

stated that Poston would not answer these questions because of the

attorney-client privilege and Poston’s possible criminal exposure.

Therefore, committee staff asked few questions about those subjects.

When Poston was informed in early July that she would be called

to a hearing of the committee, her counsel strenuously objected. In

a conference call on July 12, 2000, her counsel, Eduardo Palmer,

C. Boyden Gray, and Jane Sherburne, explained the reasons why

they believed Poston should not be called to the committee’s hearing. During this telephone call, Palmer and Gray repeatedly stated

that they believed that Poston would be forced to take the fifth if

called to a hearing. Palmer repeatedly stated that he did not want

Poston to be forced to take the fifth publicly, and argued that in

light of this fact, it would be more appropriate to hold a closed

hearing, to spare Poston the embarrassment of taking the fifth

publicly.

Once at the hearing, Poston and her counsel did not invoke the

fifth amendment, and even attempted to deny that they ever stated

that they would if called to a hearing. When asked about her contacts with private investigators, and her requests that they illegally obtain NCIC information, Poston claimed attorney-client

privilege. Chairman Burton then questioned her about her counsel’s representations:

Chairman BURTON. Let me just inform Ms. Poston, first of

all, that you are directed by the committee to answer the

question and you do run the risk of being held in contempt

of Congress if you do not.

The second thing is, I’d like to ask the question, when you

appeared before Mr. Wilson and his colleague and were

discussing these issues, did you indicate that you would

take the fifth amendment before this committee?

Ms. POSTON. I did not, nor do I intend to do so.

* * * * *

179

938 ‘‘Felonies and Favors: A Friend of the Attorney General Gathers Information from the Justice Department,’’ 106th Cong. 39–40 (July 27, 2000) (preliminary transcript).

Chairman BURTON. Did your legal counsel, your lawyers,

indicate that you might take the fifth amendment?

* * * * *

Mr. PALMER. I had discussions with a member of your

committee who spoke with me about these matters over

the course of the last year and a half.

Chairman BURTON. I’m talking about when you were here,

what, a few weeks ago.

Mr. PALMER. Three weeks ago.

Chairman BURTON. Yes.

Mr. PALMER. No, sir.

Chairman BURTON. When you discussed with them on the

phone the issues in the last week did you indicate that she

might take the fifth amendment?

Mr. PALMER. Members of your committee indicated to me

that, in their view, the conduct at issue here could constitute a criminal violation; and we discussed all the privileges that would be applicable in that situation. I advised

them that if that were the situation that, first and foremost, the information the committee sought would be protected by the attorney-client privilege and the work product doctrine.

I also told them that if they believed that a witness had

committed a criminal offense and they knew that from the

outset, that it would be improper for—to force the witness

to come before this committee merely to assert a fifth

amendment privilege.

Chairman BURTON. So you did indicate that Ms. Poston

might under these circumstances assert her fifth amendment privilege.

Mr. PALMER. I indicated exactly what I just expressed to

you.938

Palmer’s characterization of his discussions with committee staff

varied substantially from reality. Palmer’s discussions with staff

were not an abstract discussion of the propriety of forcing a witness

to invoke the fifth amendment. Rather, he made an extended plea

to have Poston appear in a closed session, based upon the fact that

it would be improper and embarrassing to force her to take the

fifth in public. Indeed, if Palmer never intended to have Poston

take the fifth, as he claimed at the hearing, the plea made in his

July 12 conference call was highly misleading. In retrospect, it appears as though the positions taken by Poston and her counsel

evolved. Initially they believed that they would be compelled by the

facts of this particular case to invoke the fifth amendment. Later,

they decided—improperly, from the perspective of the committee—

to use the attorney-client privilege as an all-purpose prophylactic

against appearing to admit guilt to any possible crime.

180

939Poston’s refusal to comply with the chairman’s order should be contrasted with Richard

Lucas’s compliance with the chairman’s order. Lucas answered all questions put to him, understanding that the committee had considered and rejected all claims of privilege. ‘‘Felonies and

Favors: A Friend of the Attorney General Gathers Information from the Justice Department,’’

106th Cong. 45–46 (July 27, 2000) (preliminary transcript).

b. Poston Refused to Answer Questions Which She Was Legally Obligated to Answer

A number of times during the committee’s hearing, Poston was

asked about her contacts with Philip Manuel Resource Group, and

her efforts to obtain criminal history information about Nobuo Abe.

Any time that Poston was asked substantive information about

those efforts, she invoked attorney-client privilege. Poston invoked

the privilege despite the fact that she was informed that the privilege did not apply. As explained to her during the hearing, many

of the subjects being discussed in the committee’s hearing were not

privileged in any way, for the following reasons:

• A number of details about Poston’s contacts with PMRG

were published by her client in the Soka Gakkai newsletter.

The publication of these matters would waive the privilege.

• Many of the contacts between Poston and her investigators

took place prior to the establishment of a formal agency relationship between Steel Hector & Davis and PMRG.

• Many of the activities undertaken by PMRG were illegal,

and cannot be the subject of a claim of privilege, because of

the crime/fraud exception to the privilege.

• Finally, Congress need not recognize the attorney-client

privilege, and the committee does not in the Poston case,

given the clear indicia that Poston and her investigators

were engaged in illegal activity.

Despite a clear instruction from the chairman that she answer

questions put to her, Poston refused to answer questions about her

attempts to gather criminal history information on Nobuo Abe.939

Improper access to law enforcement databases is a serious and

pervasive problem. While it is not uncommon for investigators to

access databases like NCIC without permission, such activity is illegal. The Department of Justice and FBI should take seriously

their responsibility to guard the privacy and integrity of the information in law enforcement databases. When confronted with clear

evidence that a team of lawyers, private investigators, and law enforcement personnel were improperly accessing the NCIC record of

Nobuo Abe, the Justice Department should have taken action, and

prosecuted the responsible parties. By failing to investigate this

case, the Justice Department and FBI have sent the clear message

that they do not value the sanctity of law enforcement databases.

Similarly, Justice Department’s handling of Rebekah Poston’s

FOIA request raises serious questions. Justice Department policy

called for Poston’s FOIA request to be rejected, without confirming

or denying the existence of any record. However, through her contacts in the Office of the Attorney General, Poston was able to obtain special treatment. While the disclosure made by the Justice

Department in response to Poston’s FOIA request was not criminal,

it was an unseemly favor for a friend of the Attorney General. This

181

940 ‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal Division’s Office of Administration,’’ U.S. Department of Justice, Office of the Inspector General, at xiii (Sept. 2000). 941 Created in 1986, ICITAP’s mission includes ‘‘two principal types of projects: (1) developing

police forces in the context of international peacekeeping operations, and (2) enhancing the capabilities of existing policing forces in emerging democracies based on internationally recognized

principles of human rights, the rule of law, and modern police practices.’’ Id. at 23. 942 Created in 1991, OPDAT ‘‘works with United States embassies and other United States

government agencies to coordinate training for judges and prosecutors in South and Central

America, the Caribbean, Russia, other Newly Independent States, and Central and Eastern Europe. The office also serves as the Department of Justice’s liaison between private and public

agencies that sponsor visits to the United States for foreign officials interested in learning about

his country’s legal system.’’ Id. at 24–25. In 1997, ‘‘OPDAT’s mission shifted exclusively to international training issues.’’ Id. at 23 n.1. 943 ‘‘Hearing on the Immigration and Naturalization Service,’’ hearing before the Senate Judiciary Subcommittee on Immigration, 105th Cong. (testimony of Doris Meissner, Commissioner,

Immigration and Naturalization Service) (May 1, 1997). 944 Id. at xiii. 945See, e.g., ‘‘Hearing on the Immigration and Naturalization Service,’’ hearing before the

Senate Judiciary Subcommittee on Immigration, 105th Cong. (testimony of Doris Meissner,

Commissioner, Immigration and Naturalization Service) (May 1, 1997); Michael Isikoff, ‘‘The

Perils of Romance,’’ Newsweek Online (Sept. 12, 2000) <www.msnbc.com/news/459043.asp>;

Jerry Seper, ‘‘Top Justice Officials Being Probed About Security Violations,’’ the Washington

Times, Sept. 22, 2000, at A10; and Jamie Dettmer, ‘‘Internal Probe to Embarrass Justice Department,’’ Insight on the News, Jan. 3, 2000, at 6. 946Transcript of interview of Attorney General Janet Reno, Department of Justice, in Washington, DC, at 62 (Oct. 5, 2000) (preliminary transcript). Because of Reno’s confidence in Bratt,

she personally asked him to be detailed to INS. Id. and ‘‘Hearing on the Immigration and Naturalization Service,’’ hearing before the Senate Judiciary Subcommittee on Immigration, 105th

Cong. (testimony of Doris Meissner, Commissioner, Immigration and Naturalization Service)

(May 1, 1997).

disclosure makes it appear that the Justice Department places the

Attorney General’s personal friendships above the judgment of career Justice Department staff and long-standing Justice Department policy.

B. ROBERT BRATT

Robert K. Bratt, who had a 21 year career with the Department

of Justice, retired on August 1, 2000. From August 1995 to July

2000, he was the Criminal Division Executive Officer for the Office

of Administration (OA).940 From March 1995 until his retirement,

Bratt also held the following posts:

• March 1995–August 1996: Acting Director of the International Criminal Investigative Training Assistance Program (ICITAP)941

• September 1996–April 1997: Coordinator of ICITAP and Office of Overseas Prosecutorial Development, Assistance and

Training (OPDAT)942

• April 1997–March 1998: Detailed as Executive Director for

Naturalization Operation of the Immigration and Naturalization Service (INS)943

• March 1998–July 2000: Detailed as Acting Director of Information Management Narrowband Communications Wireless

Offices of Justice Management Division (JMD) 944

Bratt, a onetime Reno favorite, served as one of the Attorney General’s top troubleshooters.945 In a committee interview, Attorney

General Reno stated that ‘‘Mr. Bratt was first introduced to me as

somebody in the [C]riminal [D]ivision who was a very good administrator, and I saw him in that context.’’ 946

182

947 ‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal Division’s Office of Administration,’’ U.S. Department of Justice, Office of the Inspector General, at 27 (September 2000). 948 Id. at 27 n.4. 949 Id. at 401. 950 Id. at 402. 951 Id. at 205. 952 Id. 953 Id. at 21 (regarding Associate Deputy ICITAP Director Joseph Trincellito’s conduct). 954 Id. at 405 (regarding ICITAP Director Janice Stromsem’s conduct). 955 Id. at 21 (regarding Associate Deputy ICITAP Director Joseph Trincellito’s conduct). 956 Id. (regarding Special Assistant to the ICITAP Director Cary Hoover’s conduct). 957 Id. at 402. 958 Id. at 180.

In March 1997, the Department of Justice Office of Inspector

General (OIG) initiated an investigation into ‘‘allegations of misconduct, security violations, financial mismanagement, travel violations, and favoritism in ICITAP, OPDAT, and [OA].’’ 947 Bratt was

one of the main subjects of this investigation. As a safeguard measure, in March 1998, after OIG briefed Attorney General Reno on

the ongoing investigation, the Department of Justice suspended

Bratt’s security clearance.948 In September 2000, OIG released its

findings in the report: An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal Division’s Office of Administration.

In its report, the OIG determined that ‘‘Bratt repeatedly engaged

in substantial misconduct while serving as the Executive Officer of

the Criminal Division and while he was responsible for overseeing

ICITAP and OPDAT.’’ 949 In particular, the OIG concluded the following:

• Bratt committed egregious misconduct by using his government position to improperly procure visas for two

Russian citizens[.] 950

• Bratt attempted to provide his former assistant ‘‘with a

false scenario that she would then provide to the OIG’’

in its investigation.951

• Bratt ‘‘was engaged in an effort to alert and probe witnesses, to dissemble to them that he had never knowingly done anything wrong, and to seek reassurance

from them that they would not say otherwise’’ to the

OIG.952

• ICITAP employees under Bratt’s supervision failed ‘‘to

observe fundamental security practices,’’ 953 failed to

‘‘enforce the government’s security regulations,’’ 954 resisted continual ‘‘advice and warnings of ICITAP’s security officers,’’ 955 and ‘‘violated security regulations by

disclosing classified information to uncleared parties

and by removing documents.’’ 956

• Bratt committed serious misconduct in connection with

his government travel.957

• Bratt ‘‘put his staff in a position where following his instructions left them with no other option [but to violate

Department of Justice rules.]’’ 958

183

959 Id. at 403. 960 Id. at 402. 961 Id. at 403. 962 Id. 963 Id. at 402. 964 Hearing on the Department of Justice Office of the Inspector General’s September 2000

report titled: ‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the

Criminal Division’s Office of Administration,’’ hearing before the House Judiciary Committee,

106th Cong. (testimony of Eric Holder, Deputy Attorney General, Department of Justice) (Sept.

21, 2000). 965On July 10, 2000, Bratt was provided a copy of the draft IG report and asked to respond.

On July 19, 2000, Bratt submitted an application for early retirement. 966On August 1, 2000, Bratt’s early retirement took effect. In mid-September, the OIG report

was released to Congress. The Judiciary Committee made the report available to the public on

its Web site. 967The OIG found that Turcotte’s conduct did not warrant discipline. ‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal Division’s Office of Administration,’’ U.S. Department of Justice, Office of the Inspector General, at 407 (September 2000).

• Bratt had a pattern of ‘‘blaming his staff for his own

misconduct and failures to abide by the rules’’ during

the OIG investigation.959

• Bratt was not forthcoming and honest during his interviews with [the OIG].960

• Bratt’s [romantic] involvement with [a female Russian

citizen] also raised significant security concerns.961

In the end, Attorney General Reno’s ‘‘successful, effective troubleshooter and adviser’’ was found to be ‘‘a supervisor who willfully

violated government regulations, who was recklessly indifferent to

the security interests of the government, who induced subordinates

to aid and abet his misconduct, and who made false statements to

the OIG.’’ 962

Building upon the OIG’s alarming evidence, this committee is

concerned about several instances of possible Department of Justice favoritism toward Bratt and its effects. Despite Bratt’s egregious conduct, the Department offered and Bratt accepted early retirement, which included employment benefits and an annuity. The

OIG determined that, in effect, this option allowed Bratt to be ‘‘no

longer subject to discipline by the Department’’ because he is no

longer a Federal employee.963 Deputy Attorney General Eric Holder testified that ‘‘Bratt was not awarded any special arrangements’’

regarding early retirement.964 However, the committee believes

that Bratt took advantage of this offer to escape discipline. The

timing of the OIG’s release of a draft copy of its report to Bratt and

Bratt’s application for early retirement, which comes within a few

days of each other, is suspect.965 Bratt’s early retirement took effect 1 month before the OIG released its report.966

The committee also believes that Bratt’s senior position within

the Department of Justice had a chilling effect on whistleblowers.

Denise Turcotte, Bratt’s former assistant, was co-opted to make improper travel arrangements for Bratt.967 In her initial interview

with OIG, Turcotte denied doing anything improper. Several

months after that interview, she voluntarily asked the OIG to reinterview her. During the interview, Turcotte explained that Bratt

had tried to influence her testimony, and get her to lie about her

activities:

Ms. TURCOTTE. He said that he had had like a full day of

talking with you folks about travel and that he wanted to

184

968Transcript of Office of the Inspector General, U.S. Department of Justice, investigative

interview of Denise Turcotte (Feb. 24, 1999) at 20. 969 John Nassikas represented Denise Turcotte as counsel. 970Transcript of Office of the Inspector General, U.S. Department of Justice, investigative

interview of Denise Turcotte (Feb. 24, 1999) at 47–48. 971 Id. at 46.

talk to me about it, and could we go for a walk, so we went

for a walk. We went, he got a bagel and I was very uncomfortable. He started talking about, you know, basically, I

turned all the travel over to you and, you know, I—I expressed, you know, you made the final decisions, basically.

If I made any preference, you had the final decision.

OIG: Is this Mr. Bratt saying this to you?

Ms. TURCOTTE. This is Mr. Bratt saying this. And I am

going—I am in shock, first of all, and I just continued to

listen to him because I couldn’t quite tell where he was

going with it. But he also said that, first of all, he didn’t

want anyone to know about this conversation. He made

that very clear, we never had this conversation. And,

again, I didn’t say yes or no about keeping any, you know.

He—he said that—something to the effect, and I can’t recall the exact words, but I never asked you to juggle my

travel hours so that I could qualify for business class, did

I? 968

Also in this interview, Turcotte was asked why she had been afraid

of coming forward.

Ms. TURCOTTE. [Bratt] is a powerful guy, yeah. He knows

a lot of high level people. And I was hoping that, gee, if

I get bored with this position in the Criminal Division, you

know,—am I thinking the OIG had better hire me? I mean

I am—you know, I am—there’s that part of it, too. You

know, please, you know, I can be trusted. I don’t know

where I—you know, I just don’t know.

Mr. NASSIKAS.969 And he is a powerful, as I understand,

personality. I mean there’s a——

Ms. TURCOTTE. Yeah, he is very charismatic. He has done

a lot of pet projects for Reno. He has been tasked to do the

INS thing, for instance. Now it is the wireless thing. Of

course, the circumstances are different, but—— 970

It is clear that Turcotte believed she could not come forward because of Bratt’s relationship with Attorney General Reno and other

high-level Department of Justice officials. Turcotte also indicated

that whistleblower protections were not enough to protect her

against retaliation.971

The actions of another senior Justice Department official may

also have had a chilling effect upon whistleblowers. Shortly after

the allegations against Bratt surfaced, Stephen Colgate, Assistant

Attorney General for Administration, Justice Management Division, who was a close friend of Bratt, told the Legal Times: ‘‘Believe

185

972Sam Skolnik, ‘‘Charges of Fraud, Waste Prompt Probe of Justice Department Training Programs,’’ Legal Times, Sept. 21, 1998, at 2. 973Transcript of interview with Attorney General Janet Reno, Department of Justice, in

Washington, DC at 71–73 (Oct. 5, 2000) (preliminary transcript).

me, when the dust settles, Bratt will be vindicated . . . [the allegations are] an outrage, an absolute outrage.’’ 972

Colgate’s comments are troubling because he is commenting

about an open case. More important, such comments by a senior

Justice Department official like Colgate condemning whistleblowers’ allegations sends a clear message that whistleblowers are

not welcome at the Department. Much to the dismay of this committee, when the Attorney General was asked about the effects of

Colgate’s comment, she only defended his actions and refused to

admit the potential negative implications.

Committee COUNSEL. And it would not be mysterious, I

think, but our concern would be that if senior Department

of Justice officials are commenting about what is a pending case, something that we have so much communication

back and forth with with [sic] the Department, that that

communicates to employees in the Department of Justice

something very negative. Do you think Mr. Colgate should

have made a statement like that back in 1998?

Attorney General RENO. My understanding is that he was

recused from this matter and that he feels that the questions and the answer—and that the answer was taken out

of context. So I would have to check on that.

Committee COUNSEL. But is it just he feels it was taken

out of context or do you think it was appropriate or inappropriate for him to go on the record and make a comment

about what was at that point a pending matter that was

just starting to be investigated by the Inspector General’s

office?

Attorney General RENO. I would have to understand the

context.

Committee COUNSEL. But even without the context, just

the comment on the pending investigation, is that something you would condone or not condone?

Attorney General RENO. I would look at it in terms of the

context and how it was said and what was asked and

where the occasion took place.

Committee COUNSEL. Do you personally have any reaction

to the effect that a statement like that would have on a

low level employee like Ms. Turcotte?

Attorney General RENO. Counsel, I may not have—be as

far along in my review of the matter to understand all the

details I need to properly respond to your question, but I

just think it is important before I do that, I understand all

the issues and that I don’t spout off without being fully informed.973

186

974 Id. at 63 975 Id. at 64–65. 976 Id. at 65–66. 977 Id. at 70–71. 978The OIG also concluded that senior level Department of Justice employees were failing to

doing their jobs:

Even if Bratt had been an exemplary manager, ICITAP and OPDAT would have benefited from attention and guidance by senior Criminal Division managers[.] [T]he failure

to adequately supervise [Bratt’s] conduct added fuel to ICITAP’s preexisting problems.

We do not believe that all of ICITAP’s difficulties and Bratt’s and other managers’ improprieties could only have been ferreted out by an OIG investigation. Some of them,

particularly security and travel issues, should have been apparent to anyone taking the

time to look. The fact that the Criminal Division did not follow up to ensure that recommendations from other OIG or internal investigations had been implemented is an

example of the lack of adequate oversight.

‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the Criminal Division’s Office of Administration,’’ U.S. Department of Justice, Office of the Inspector General,

at 413 (September 2000).

During the October 5, 2000, committee interview, there were

many more examples of Attorney General Reno’s unwillingness to

answer questions about Mr. Bratt. As the transcript shows, Attorney General Reno was either unwilling or unable to answer many

of the questions directed to her:

Committee COUNSEL. Have you read the Office of Inspector

General report about Mr. Bratt?

Attorney General RENO. I have read it but not in detail.974

* * * * *

Committee COUNSEL. [W]ere you aware the Inspector General concluded Mr. Bratt had asked his former assistant to

lie for him?

Attorney General RENO. Because the disciplinary and remedial matters are pending, we are limited, as I am sure

the committee understands, in what we can say about

them[.]975

* * * * *

Committee COUNSEL. But my question is, if [Bratt] doesn’t

work for the Department of Justice, short of a prosecution,

is there any avenue of discipline that the Department of

Justice can effect at this point?

Attorney General RENO. There are matters relating to a

number of issues within the report, and I think it would

be inappropriate to comment until all those matters are resolved.976

* * * * *

Committee COUNSEL. [D]o you at this point think that Mr.

Bratt did receive any preferential treatment by the Department of Justice thus far?

Attorney General RENO. I think the important thing for

me, before I answer specific questions, would be to review

the whole record. And I think that is something Dr. Hawk

Sawyer should do.977

These exchanges did nothing to resolve the committee’s serious

questions about this case.978

187

979 Hearing on the Department of Justice Office of the Inspector General’s September 2000

report titled: ‘‘An Investigation of Misconduct and Mismanagement at ICITAP, OPDAT, and the

Criminal Division’s Office of Administration,’’ hearing before the House Judiciary Committee,

106th Cong. (statement of Representative Howard Coble) (Sept. 21, 2000).

Representative Howard Coble recently expressed concern at a Judiciary Committee hearing about the OIG report that, when it

came to security issues, the ‘‘fox may be guarding the henhouse

down at Justice.’’ 979 Noting the Department of Justice’s favorable

treatment toward Bratt and inaction toward Colgate’s intimidating

statements to the press, this committee also must conclude that the

Department’s embarrassing instances of security breaches by top

officials are being contained—not discouraged—with a ‘‘fox guarding the henhouse’’ approach. The Bratt case provides just one more

example of an Attorney General more interested in providing unfair advantages to her friends and political allies than in doing her

job.

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