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74–735 2001

S. HRG. 106–1059

1996 CAMPAIGN FINANCE INVESTIGATIONS

HEARINGS

BEFORE THE

SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT

AND THE COURTS

OF THE

COMMITTEE ON THE JUDICIARY

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

MAY 24, JUNE 6, and JUNE 21, 2000

Serial No. J–106–85

Printed for the use of the Committee on the Judiciary

(II)

COMMITTEE ON THE JUDICIARY

ORRIN G. HATCH, Utah, Chairman

STROM THURMOND, South Carolina

CHARLES E. GRASSLEY, Iowa

ARLEN SPECTER, Pennsylvania

JON KYL, Arizona

MIKE DEWINE, Ohio

JOHN ASHCROFT, Missouri

SPENCER ABRAHAM, Michigan

JEFF SESSIONS, Alabama

BOB SMITH, New Hampshire

PATRICK J. LEAHY, Vermont

EDWARD M. KENNEDY, Massachusetts

JOSEPH R. BIDEN, JR., Delaware

HERBERT KOHL, Wisconsin

DIANNE FEINSTEIN, California

RUSSELL D. FEINGOLD, Wisconsin

ROBERT G. TORRICELLI, New Jersey

CHARLES E. SCHUMER, New York

MANUS COONEY, Chief Counsel and Staff Director

BRUCE A. COHEN, Minority Chief Counsel

SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT AND THE COURTS

CHARLES E. GRASSLEY, Iowa, Chairman

JEFF SESSIONS, Alabama

STROM THURMOND, South Carolina

SPENCER ABRAHAM, Michigan

ROBERT G. TORRICELLI, New Jersey

RUSSELL D. FEINGOLD, Wisconsin

CHARLES E. SCHUMER, New York

KOLAN DAVIS, Chief Counsel

MATT TANIELIAN, Minority Chief Counsel

(III)

C O N T E N T S

Wednesday, May 24, 2000

STATEMENTS OF COMMITTEE MEMBERS

Page

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa ..................... 10

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, prepared

statement .............................................................................................................. 64

Schumer, Hon. Charles E., a U.S. Senator from the State of New York ............ 5

Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 9

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 1

Thurmond, Hon. Strom, a U.S. Senator from the State of South Carolina,

prepared statement .............................................................................................. 65

Torricelli, Hon. Robert G., a U.S. Senator from the State of New Jersey .......... 6

WITNESSES

Gallagher, Neil, Assistant Director, National Security Division, Federal Bureau of Investigation, U.S. Department of Justice, Washington, DC .............. 29

Parkinson, Larry, General Counsel, Federal Bureau of Investigation, U.S.

Department of Justice, Washington, DC ............................................................ 32

Radek, Lee J., Chief, Public Integrity Section, U.S. Department of Justice,

Washington, DC ................................................................................................... 12

Tuesday, June 6, 2000

STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa ..................... 69

Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 71

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 67

Thurmond, Hon. Strom, a U.S. Senator from the State of South Carolina,

prepared statement .............................................................................................. 69

WITNESSES

Esposito, William, Former Deputy Director, Federal Bureau of Investigation,

U.S. Department of Justice, Washington, DC ................................................... 95

Gangloff, Joseph, Principal Deputy Chief, Public Integrity Section, U.S. Department of Justice, Washington, DC ................................................................ 73

Wednesday, June 21, 2000

STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa ..................... 108

Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 193

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 107

WITNESSES

Conrad, Robert J., Jr., Supervising Attorney, Campaign Financing Task

Force, U.S. Department of Justice, Washington, DC ........................................ 165

Litt, Robert S., Former Principal Associate Deputy Attorney General, U.S.

Department of Justice, Washington, DC ............................................................ 210

Page

IV

Mansfield, Stephen, Former Assistant U.S. Attorney, U.S. Department of

Justice, Los Angeles, CA ..................................................................................... 178

McDonald, Danny L., Vice Chairman, Federal Election Commission, Washington, DC ............................................................................................................. 149

Wold, Darryl R., Chairman, Federal Election Commission, Washington, DC .... 149

QUESTIONS AND ANSWERS

Responses of Larry Parkinson to Questions from Senator Leahy ....................... 219

SUBMISSIONS FOR THE RECORD

Bryant, Robert M., Assistant Director, Federal Bureau of Investigation, U.S.

Department of Justice, Washington, DC, letter and attachment to Director

Freeh, May 15, 1997 ............................................................................................ 224

Federal Bureau of Investigation, Washington, DC, investigation transcription,

November 13, 1997 .............................................................................................. 509

Freeh, Hon. Louis J., Director, Federal Bureau of Investigation, U.S. Department of Justice, Washington, DC:

memorandum to Mr. Esposito, December 9, 1996 ......................................... 300

letter and attachment to Attorney General Reno, November 24, 1997 ....... 245

memorandum to Larry Parkinson, December 8, 1998 ................................... 287

Harshbarger, Scott, President, Common Cause, and Fred Wertheimer, President, Democracy 21, joint letter to Senator Specter, June 20, 2000 ................ 147

McBride, Ann, President, Common Cause, Washington, DC, letter to Attorney

General Reno, October 9, 1996 ........................................................................... 111

Neal, James F., Attorney, Neal & Harwell, PLC, Nashville, TN, facsimile

transmittal to Peter Ainsworth, July 27, 1998 .................................................. 362

Parkinson, Larry R., General Counsel, Federal Bureau of Investigation, U.S.

Department of Justice, Washington, DC, memorandum to Deputy Attorney

General Eric H. Holder, Jr., January 30, 1998 ................................................. 275

Radek, Lee J., Chief, Public Integrity Section, Criminal Division, U.S. Department of Justice, Washington, DC:

memorandum to Mark M. Richard, November 24, 1997 ............................... 463

memorandum to Robert S. Litt, November 25, 1997 ..................................... 446

memorandum to Jim Robinson, July 28, 1998 ............................................... 357

memorandum to Jim Robinson, August 3, 1998 ............................................ 373

memorandum to James K. Robinson, November 17, 1998 ............................ 404

memorandum to James K. Robinson, November 20, 1998 ............................ 302

memorandum to James K. Robinson, November 20, 1998 ............................ 346

Robinson, James K., memorandum to Attorney General, August 24, 1998 ........ 378

Trial Attorney, Public Integrity Section, Criminal Division, U.S. Department

of Justice, Washington, DC, memorandum to Lee Radek, August 5, 1998 ..... 369

Wertheimer, Fred, President, Democracy 21, and Scott Harshbarger, President, Common Cause, joint letter to Senator Specter, June 20, 2000 ............. 147

Wold, Darryl R., Chairman, Federal Election Commission, Washington, DC:

letter and attachments to Senator Specter, June 21, 2000 ........................... 532

letter and attachments to Senator Specter, July 28, 2000 ............................ 536

(1)

THE 1996 CAMPAIGN FINANCE

INVESTIGATIONS

WEDNESDAY, MAY 24, 2000

U.S. SENATE, SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT

AND THE COURTS, COMMITTEE ON THE JUDICIARY, Washington, DC.

The subcommittee met, pursuant to notice, at 9:22 a.m. in room

SD–226, Dirksen Senate Office Building, Hon. Arlen Specter presiding.

Also present: Senators Grassley, Sessions, Torricelli, and Schumer.

OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S.

SENATOR FROM THE STATE OF PENNSYLVANIA

Senator SPECTER. The Senate Judiciary Subcommittee on Oversight will now proceed. The purpose of this hearing is on the Attorney General’s decision not to appoint independent counsel.

At the outset, I note that it is regrettable that this inquiry comes

in the midst of a presidential election, but it should be noted for

the record that strenuous efforts have been made for a long time

to answer the questions which we are inquiring into today.

I first broached some of those questions with the Attorney General in this room on April 30, 1997, followed up with a detailed letter the next day on May 1, on the issue of advocacy ads. A memorandum was prepared by Director Louis Freeh of the FBI on November 24, 1997, recommending the appointment of independent

counsel, and the Attorney General was requested by letter of December 2, 1997, to make that memorandum available and she declined. The memorandum from Charles La Bella was submitted on

July 17, 1998, and 1 week later the Attorney General was requested to make that memorandum available and again she declined.

So the timing is not a matter for this subcommittee, and the

three memoranda and other documents have only been produced in

response to subpoenas, and then beyond subpoenas to the preparation of a resolution to seek a contempt citation against the people

who have not produced the records.

We have heard from Charles La Bella and his recommendation.

We will hear today from Mr. Parkinson, General Counsel to the

FBI. We will hear today from Mr. Lee Radek, Chief of the Public

Integrity Section. We will hear today from Mr. Neil Gallagher, who

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grettably, Mr. Esposito cannot be present because of personal matters.

Our inquiry will pick up the details on the Attorney General’s decision not to seek independent counsel. The determination stated

by the Attorney General on declining independent counsel as to the

President and the Vice President, which she did on December 8,

1998, turned on the finding, ‘‘the President and Vice President

were advised that the issue advertising campaign was lawful and

that lawyers were reviewing every advertisement to ensure full

compliance with the law.’’ We will be inquiring into that with reference to a number of witnesses, specifically Mr. Parkinson, who in his memorandum pointed out that there was no advice directly from attorneys for either

the President or the Vice President, and both of the attorneys had

a specific interest, one being the attorney for the Democratic National Committee and the other being the attorney for the ClintonGore campaign. And even one of those attorneys had expressed

that advice of counsel defense with substantial reservations.

When the Attorney General declined the appointment of independent counsel as to the Vice President, she did so with the essential conclusion being, ‘‘the Government would have to prove beyond

a reasonable doubt that at the time he made the telephone calls

that were at issue in the 1997 investigation, the Vice President actually knew that the media campaign had a hard money component.’’ Those words and that articulation really sounds in prosecutorial discretion, as opposed to the statutory standard of a reasonable basis to proceed with an investigation, not whether there is

the evidence for conviction.

Similarly, key findings of the Attorney General again sound in

prosecutorial discretion, ‘‘I find the evidence fails to provide any

reasonable support for the conclusion that the Vice President may

have lied.’’ Further, a little later on, ‘‘I conclude that there is no

reasonable prospect that these facts could support a successful

prosecution,’’ again sounding in prosecutorial discretion as opposed

to a statutory standard of a reasonable basis to proceed with an investigation.

The finding on December 8 as to the President and the Vice

President did contain language of the Attorney General that she

found clear and convincing evidence that the President and the

Vice President lacked the requisite specific intent to violate the

law. That issue will be a detailed question for this subcommittee’s

inquiry.

When the Attorney General declined to appoint independent

counsel as to the Vice President on November 24, 1998, there was

not even that finding made, although it seems to be indispensable

in order not to proceed with the appointment of independent counsel, although a real question would exist had the finding been

made if there was any basis for that finding.

The Congress amended the independent counsel statute in 1987

to erect what was thought to be a very high barrier for the Attorney General to decline the appointment of independent counsel on

the basis of lack of criminal intent. That reason had been used by

Attorney General Meese in quite a number of matters, one of the

most celebrated involving Edward Smultz. So the Congress went

3

out of its way to say that was not a basis, unless it was, ‘‘clear and

convincing evidence.’’ And to repeat, the Attorney General found

that in the December 8 finding, but did not find it as to the Vice

President on November 24 on the issues of the telephone calls and

the criminal intent.

We are going to be starting today’s hearing focusing on a memorandum which was written by FBI Director Freeh to Mr. Esposito

dated December 9, 1996, which was turned over to the subcommittee last Thursday, May 18. In my legal opinion, this memorandum should have been turned over much, much sooner, and it

was turned over only after a resolution had been prepared for a

contempt citation.

I saw this memorandum for the first time last Thursday, on the

18. Then it appears in the New York Times and the Washington

Post on an Associated Press story the next day, on May 19. And

it is very troublesome, this kind of a public disclosure, before this

subcommittee even has an opportunity to review the memo and to

conduct an inquiry, and it may be a preemptive disclosure to soften

the blow.

We intend to pursue that question because there is a certain

amount of contempt shown for the Congress, the Senate, the Judiciary Committee, this subcommittee, when a memorandum is not

produced for 31⁄2 years and then the day the subcommittee finally

gets it, there is a contemporaneous release, or perhaps an earlier

release to the news media.

As I said earlier, Mr. Esposito cannot be here today because of

personal reasons, and we are going to start the hearing today with

an inquiry on this memorandum and then move to a broader subject. And we are going to start here because Mr. Gallagher, who

was present at the meeting with Mr. Radek, has commitments to

leave the country and has to be out of here at a reasonably early

time.

We are handling these documents under the most extraordinary

limitations imaginable. It seems as if the Judiciary Committee

can’t have access to the documents that the newspapers have access to. And these documents could be reviewed only in S–407,

which is a rather tortuous process. The room that I spent the last

2 days in is about the size of a telephone booth, and there were

four people in it at one time.

And we got these documents released this morning, after 8 a.m.,

and they still aren’t going to be released publicly, although I would

like to have them released to the public. I think the public has a

right to know what these documents are. But in a convoluted series

of proceedings, we do have the authority to use these documents

in the hearing, something we didn’t even have in the La Bella

hearing, questioning him on the basis of a 100-page document

without having the document present.

I am going to take a minute or two to read this document because it can’t be released otherwise unless it is read at the hearing.

To Mr. Esposito from Director of the FBI, dated 12/9/96, subject,

Democratic national campaign matter: ‘‘As I related to you this

morning, I met with the Attorney General on Friday, 12/6/96, to

discuss the above-captioned matter. I stated that DOJ had not yet

referred the matter to the FBI to conduct a full criminal investigaVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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tion. It was my recommendation that this referral take place as

soon as possible. I also told the Attorney General that since she

had declined to refer the matter to an independent counsel, it was

my recommendation that she select a first-rate DOJ legal team

from outside Main Justice to conduct the inquiry. In fact, I said

that these prosecutions should be ‘junkyard dogs,’ and that in my

view, PIS, ‘‘Public Integrity Section,’’ was not capable of conducting

the thorough, aggressive kind of investigation which was required.

I also advised the Attorney General of Lee Radek’s comment to you

that there was a lot of ’pressure’ on him and PIS regarding this

case because the Attorney General’s job might hang in the balance,

(or words to that effect.) I stated that those comments would be

enough for me to take him and the Criminal Division off the case

completely. I also stated that it didn’t make sense for PIS,’’ Public

Integrity Section, ‘‘to call the FBI the ‘lead agency’ in this matter

while operating a ’task force’ with DOC IG’s,’’ referring to Department of Commerce Inspectors General, ‘‘who were conducting interviews of key witnesses without the knowledge or participation of

the FBI. I strongly recommend that the FBI and hand-picked DOJ

attorneys from outside Main Justice run this case, as we would any

matter of such importance and complexity. We left the conversation

on Friday with arrangements to discuss the matter again on Monday. The Attorney General and I spoke today and asked for a meeting to discuss the ’investigative team’ and hear our recommendations. The meeting is now scheduled for Wednesday, 12/11/96,

which you and Bob Litt will also attend. I intend to repeat my recommendation from Friday’s meeting. We should present all of our

recommendations for setting up the investigation, both AUSAs,’’ Assistant U.S. Attorneys, ‘‘and other resources. You and I should

also discuss and consider whether, on the basis of all the facts and

circumstances, including Huang’s recently released letters to the

President, as well as Radek’s comments, I should recommend that

the Attorney General reconsider referral to an independent counsel.

It was unfortunate that DOJ declined to allow the FBI to play any

role in the independent counsel referral deliberations. I agree with

you that, based on DOJ’s experience with the Cisneros matter,

which was only referred to an independent counsel because the FBI

and I intervened directly with the Attorney General, it was decided

to exclude us from this decisionmaking process. Nevertheless,

based on information recently reviewed from PIS/DOC,’’ Public Integrity Section/Department of Commerce, ‘‘we should determine

whether or not an independent counsel referral should be made at

this time. If so, I will make a recommendation to the Attorney General. The Attorney General has been quoted as saying that she did

not remember being told by Mr. Freeh that she and Mr. Radek

should recuse themselves after he complained of pressure to scuttle

the probe. She said she talked with Mr. Freeh about Public Integrity on a continuing basis, but did not remember comments concerning pressure on her or the Department.’’

We will need to have, obviously, the Attorney General’s testimony at a later stage on a wide range of issues, and specifically

this conversation, at least as reported in this memorandum. And

Director Freeh has forcefully stated his desire not to testify even

with a subpoena, and I have just as forcefully replied that I

5

thought he was an indispensable witness. That was before this

memorandum came to light, and in view of the Attorney General’s

contradiction or disagreement with the Director’s memorandum,

there is no doubt in my mind, at least, that he will have to testify

about that point.

We have Mr. Radek and Mr. Gallagher here. Mr. Radek was

quoted as well in the press, but he is here and can speak for himself. And I have asked the FBI to make Mr. Esposito available during the week of June 5. We have a recess next week—preferably

on the 7, which is a Wednesday; if not, on a Tuesday. We will have

to coordinate that schedule with the ranking member and the full

committee on their schedule.

Senator Torricelli.

Senator TORRICELLI. I would like to yield to Senator Schumer at

this time, if I could, Mr. Chairman.

Senator SPECTER. Well, Senator Schumer is entitled to his own

time, but so be it.

Senator SCHUMER. I have a scheduling problem.

Senator SPECTER. Well, let the record show Mr. Schumer was

waiting here a while. He must have something to say.

STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR

FROM THE STATE OF NEW YORK

Senator SCHUMER. Well, thank you. I appreciate it, Mr. Chairman, and I appreciate my friend from New Jersey’s courtesy in

yielding. I do want to say something today that has been gnawing

at me for some time, and it is time I just came forward and said

it.

What I want to say is simply this, that I believe in the integrity

of Janet Reno. I have gotten to know the Attorney General over the

last 7 years. I have listened to her testify countless times. I have

sat across the table from her in negotiating sessions, sometimes as

an ally and sometimes not. I have looked her dead in the eye and

I have debated with her. We have agreed and sometimes we have

disagreed.

Right now, we are in a pretty vociferous dispute on Indian land

claims litigation in upstate New York. But through all of this,

whether we have agreed or not, she has always been honest. She

has always made her decision on the merits of every issue that

faced her, at least the best I can tell.

Now, I could go into the substantive proof of the Attorney General’s integrity—the large number of independent counsels she has

appointed, the many times she has come and testified on the myriad of issues that Congress has asked her to explain and done so

in a straightforward manner, the straightforward way in which she

handles the sometimes politically unpopular positions she takes because she thinks that, on the merits, these are the right positions.

But I will say this instead. Beyond all of the issues and all of

the partisan wrangling and all the hearings and legislative scuffles

we have had over the last 7 years, all of the ‘‘who is right’’ and

‘‘who is wrong,’’ all of the finger-pointing and laying blame—beyond

all this, in quieter moments, I think we all make judgments about

an individual’s character based largely on instinct. We make gut

decisions about people, and that is why I came today.

6

In my gut, I believe in Attorney General Janet Reno’s integrity.

She is one of the most honest and straight-shooting people I have

ever dealt with in more than 25 years in politics. It is not my opinion alone. To quote the FBI Director, Louis Freeh, on this issue he

said, ‘‘I have tremendous respect for our Attorney General. I have

tremendous affection for our Attorney General. I do not believe for

one moment that any of her decisions, but particularly her decisions in this matter, have been motivated by anything other than

the facts and the law which she is obligated to follow. If I thought

anything differently, I wouldn’t be sitting here as FBI Director.’’ I know that this hearing, Mr. Chairman, is not directly about the

Attorney General. It is about differences of opinion between the

FBI and DOJ. I have great respect for both. I have great respect

for Louis Freeh, who is my fellow New Yorker and a friend.

Senator TORRICELLI. Jersey City.

Senator SCHUMER. Mr. Torricelli says Jersey City, which is sort

of New York.

But in any case, the differences here about the opinions between

the FBI and DOJ on complicated legal issues related to the appointment of independent counsels in 1996 and 1997 are a legitimate matter for this subcommittee to look into, no question about

it. But at the end of the day, I dare say some will agree and some

will disagree and some will say, wow, it is a tough decision, there

is a big gray area there.

And once again, the Attorney General will either be in favor with

the administration or out of favor with the administration. There

have been lots of ups and downs of that over the last while, and

the same can be said of my colleagues on the other side of the aisle.

At times in her career, they have praised her as a person of integrity who stands up to the administration. Other times, they have

attacked her.

But whatever the members of this committee ultimately conclude, I hope I can convince this committee that the Attorney General’s decision was based on her very best evaluation of the law

and the facts. That is the way she makes all of her decisions, with

integrity, with honesty, on the merits, and nothing else. And sometimes it pleases one side and sometimes it pleases the other.

Thank you, Mr. Chairman.

Senator SPECTER. Thank you very much, Senator Schumer.

Senator Torricelli.

STATEMENT OF HON. ROBERT G. TORRICELLI, A U.S. SENATOR

FROM THE STATE OF NEW JERSEY

Senator TORRICELLI. Thank you, Mr. Chairman, very much. Mr.

Chairman, I have believed that this committee in holding hearings

with regard to Wen Ho Lee and Peter Lee and a variety of other

matters has provided a very useful service. There clearly were

problems with the administration of justice and there were, in my

judgment, some compromises in the national interest.

I am less certain that this review of the enforcement of the campaign finance laws and the investigation of the 1996 campaign is

serving a useful purpose. It has been 4 years since the ClintonGore campaign commenced and then concluded operations. That

campaign has been the subject of extensive congressional hearings

7

and prolonged Justice Department investigations through a variety

of avenues in a number of venues.

The central difficulty remains that the campaign finance laws of

the United States are in a virtual state of collapse. As much or

more than any member on this panel or perhaps in this institution,

I am involved in those campaign finance laws as the Chairman of

the Democratic Senatorial Campaign Committee.

A series of court decisions, actions by the Justice Department,

and both action and inaction by this Congress have for all practical

purposes left the United States without a comprehensive or comprehendible system of campaign finance laws. It is not therefore

surprising that the Clinton-Gore campaign and the Republican National Committee and the Democratic National Committee at times

find themselves in some conflicts of interpretation.

What remains before the Justice Department, however, is whether there were some actions by central participants, including the

President and Vice President, or a conspiracy at any level to evade

those laws which remain clear and comprehensible. I believe that

the evidence is overwhelming that that simply did not take place.

Mr. Radek’s memo of November 20, 1998, I think is central to

our discussions, ‘‘The evidence is clear and convincing that the

President and the Vice President lacked any intent to violate the

law in connection with the DNC issue ad campaign and reasonably

believed that an ad campaign was lawful, and that the DNC and

Clinton-Gore counsel reviewed every ad to ensure compliance with

the law.’’

Indeed, I believe, in support of Mr. Radek’s conclusion, the actions of the Clinton-Gore campaign, while not meeting the model

of what many of us would like the campaign finance laws to be, indeed were acting within current interpretations of the political culture of the country and on the best advice of counsel. Their actions

indeed would not be atypical with what was taking place in the Republican or the Democratic National Committee, or any other campaigns being conducted on a large scale at that time.

The question then turns on whether or not the Justice Department approached this issue itself with the proper integrity and

with a dispassionate review. I believe the best evidence on that fact

comes from that famous citizen of Jersey City, Mr. Freeh, who, as

was quoted earlier by Senator Schumer, said, ‘‘The FBI is not being

impeded in any way in conducting our investigation. No investigative avenues have been closed and nothing has changed as a result

of the decision last Tuesday not to seek an independent counsel.

The task force was formed last December. Their marching orders

are to go wherever the evidence may lead.’’

Mr. Lantos had asked, ‘‘Do you have any doubts about Ms.

Reno’s integrity?’’ Mr. Freeh: ‘‘No, sir.’’ Mr. Freeh then went on to

say that she meets the standard, and exceeds it, of an Attorney

General. Mr. Lantos then asked, ‘‘If the Attorney General declined

to appoint independent counsel, did the ongoing investigation come

to a grinding halt?’’ Mr. Freeh: ‘‘No, sir, it did not impede it at all.’’

Finally, on August 4, 1998, Mr. Freeh said, ‘‘I do not believe for

one moment that any of her,’’ speaking of the Attorney General,

‘‘decisions, but particularly her decisions in this matter, have been

8

motivated by anything other than the facts and the law which she

is obliged to follow.’’ I believe that is overwhelming, it is strong, and it is conclusive.

Reasonable people could differ, but what remains central is that an

investigation occurred professionally, apparently properly staffed

and funded, and has been ongoing. It has not yet come to a conclusion 4 years later.

We are now in the midst of another national election. The campaign finance laws are not only not clear, they are worse—new

court decisions, new interpretations, and even less actions by the

Congress has corrected this myriad of laws. I do not believe we are

serving any great national purpose. The time of this Congress

should be spent in rewriting these campaign finance laws and giving clear guidance to those of us who must live and operate under

them.

I have reviewed many of these memoranda, admittedly not as

many as Senator Specter. I will conclude by giving my own views

about having reviewed Mr. La Bella’s. Mr. La Bella may be an accomplished prosecutor. He may have a good command of the law.

I found his analysis of the White House operations and the ClintonGore campaign to be sophomoric and remarkably lacking in understanding of the American political culture at this point in our history. He was expressing shock at things which most interns in political campaigns would find a normal course of events, not in legal

violations, but in organization and operation of campaigns.

I do not know Mr. Radek and I hold no brief for Ms. Reno. I have

been among those in this institution, which includes almost everyone, who has criticized her when she didn’t agree with me and

praised her when she did. I have more often than most of my colleagues disagreed with her. Having read all these items over numerous hours, I cannot conclude anything but that she was vigilant, defended the public interest, was aided enormously by Mr.

Freeh; that there were reasonable differences of opinion with the

Department of Justice and the FBI, but that each of the participants seems to respect the judgment of the other and generally

seem to be content that justice was done.

If it were otherwise, I would say so. I did with Peter Lee, I did

with Wen Ho Lee. I do not think the Department of Justice or the

FBI properly represented the interests of the American people in

those cases. In this instance, I believe there are problems. There

are problems with the law, there are problems in the political culture.

But I cannot conclude that any of the central participants themselves engaged in anything other than what Mr. Radek has outlined in his memorandum, not to suggest as Mr. Freeh did in his

own memorandum that there were not a myriad of what he simply

concluded were opportunists who violated laws that were clear and

brought embarrassment to the President and the Vice President

and the political system.

Mr. Chairman, I do, however, look forward to the hearing and

the testimony and hearing from our witnesses.

Thank you.

Senator SPECTER. Thank you, Senator Torricelli.

Senator Sessions.

9

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM

THE STATE OF ALABAMA

Senator SESSIONS. Thank you, Mr. Chairman. I recall the old

maxim that justice grinds slow, but exceedingly fine. I do not agree

that this was a well-run investigation. It was fitfully conducted

with interruptions repeatedly from the Public Integrity Section and

the FBI. And Mr. La Bella, who was brought into this case to be

the person to provide some integrity and leadership, was being demeaned, not even being allowed to ask the Vice President questions

on one occasion, and not even being in the room another time that

he was interviewed.

This has not been a good investigation, and it is shocking and

surprising to me, and disappointing to me really, to see that the

FBI Director went to the extent, and had to go to the extent, and

rightly so, to ask that the Public Integrity Chief and the Attorney

General recuse themselves from this investigation because he indicated they could not do their job. In fact, their job was on the line

if they were to proceed with an investigation aggressively. That is

a stunning, stunning event that ought to shock all of us.

If there is any doubt about the integrity of Public Integrity, who

can we trust in the Department of Justice? So I feel real strongly

about that and find this to be an unacceptable way this investigation has been conducted. And I am glad that you are finally producing some of the documents that are establishing what has gone

on here.

I would say this, that the truth is going to show, in my view,

that there were interferences with this investigation by the Public

Integrity Section that stopped the investigation of the FBI and others from proceeding in a normal course, stopped the U.S. attorney’s

office in California from proceeding in a normal course. All the

time, we were being promised that they were steadfastly seeking

to get the truth in this matter. So, Mr. Chairman, I would express

my appreciation for your leadership. It is a thankless task. It is

nothing that gives any of us any pleasure.

I will add one more thing about the Attorney General. I remember 2 years ago, I believe, in this room, maybe 3 years ago, and I

reminded her when we were raising the question of the need for

an independent counsel that she served at the pleasure of the

President of the United States. That angered her and she did not

like that, but that is a plain fact.

The Attorney General was called upon to investigate the person

who could remove her from office just like that, and that is why

an independent counsel should have been appointed. That is why

the chairman of the Judiciary Committee repeatedly called on her

to do so. That is why the FBI Director did so, and that is why his

memorandum supported it.

It is not a light and trivial matter. It was a very big deal. In

terms of the cases where independent counsels were appointed, I

think it was trivial compared to this one. This was the mother lode,

this was the big deal, and this was the one she refused to give up.

And now we have this mess. Now, we have a mess, in an election

cycle, a matter that should have been cleared up by an independent

evaluation by an independent truth organization that could have

10

clarified the issues and have it over now. But it is not going away.

We are going to get to the truth of this matter.

Thank you, Mr. Chairman.

Senator SPECTER. Thank you, Senator Sessions.

Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR

FROM THE STATE OF IOWA

Senator GRASSLEY. Mr. Chairman, I commend you for your persistence. You are always running into road blocks. You seem to

have a way of, one way or another, getting around these road

blocks. The obstacles keep coming, but you are very persistent in

pursuing the constitutional mandate of oversight of the executive

branch.

Today’s oversight activities require the answer to a simple question: who in the Justice Department makes decisions about the

merits of cases involving allegations of misconduct by senior public

officials? The question arises because of the recommendations made

by Mr. La Bella. He wanted to appoint an independent counsel.

Unfortunately, the big wheels at the Justice Department overruled

the merits of the case. They ignored the wisdom of career prosecutors. Some career prosecutors were so disgusted by these decisions

that they quit.

It looks like the Public Integrity Section at the Justice Department just dropped the ball. It looks like Public Integrity ignored all

the facts. It ignored the evidence, it ignored the advice of experts,

it ignored the recommendations of career prosecutors and the FBI.

This subcommittee has examined documents on Mr. Radek’s decision. These documents suggest that Mr. Radek may have decided

that the La Bella memo posed a threat to Attorney General Reno’s

tenure. Mr. Radek’s concerns were also reported in the media, and

I hope that this issue gets the scrutiny it deserves.

It seems like the Public Integrity Section needs a wake-up call.

It is supposed to be staffed by civil servants, not partisan politicians. In the past, I have dealt with the Public Integrity Section

and its Chief, Mr. Radek. I am pleased that Mr. Radek is here

today.

On May 1, 1997, I referred campaign finance-raising matters to

Justice. It concerned Mr. William Brandt, the head of a company

in Chicago. The company invited banking institutions to a September 17, 1996, $10,000-per-couple Democratic fundraising reception and dinner. It was held in Mr. Brandt’s home. The invitation

listed the Chairman of the National Bankruptcy Review Commission as the guest of honor. Mr. Clinton attended this fundraiser.

My staff received numerous calls from banking institutions.

These were the complaints: the callers objected to the suggestion

that attendance was an opportunity to influence the chairman’s decisionmaking on pending issues. To their credit, some of the bankers declined the invitation. They declined on ethical grounds.

I, too, became very concerned about the propriety of this event.

It is illegal to link campaign contributions to pending legislation.

It doesn’t matter which political party is sponsoring the event; it

is not right and it is illegal.

11

There are stark contradictions in Mr. Brandt’s explanation of

this event. He told the subcommittee one thing and he told his

banking associates something entirely different. The difference in

the two stories is like night and day. My staff has documents that

prove Mr. Brandt attempted to exert inappropriate pressure. He

exerted pressure by requiring attendance in exchange for support

on bankruptcy issues. Those same issues were about to be considered by the Bankruptcy Review Commission.

My staff provided Public Integrity solid evidence that Mr. Brandt

may have made false statements to Congress in violation of Federal

law. The evidence given to Mr. Radek was backed up with exhibits

and witness statements supporting the allegations. It took 2 years

and 4 months to get an answer, and that answer, Mr. Chairman,

was a non-answer. The non-answer is contained in a letter dated

August 9, 1999.

According to press reports, this letter came 2 weeks after Mr.

Brandt’s company donated $20,000 to the Democratic National

Committee. The Justice Department’s response was not only long

overdue, it was also unresponsive, and it may have been tainted by

campaign monies. The two-paragraph response from Mr. Radek

simply said the allegations had no merit. Mr. Radek apparently

came to this conclusion with no evidence. He didn’t interview important witnesses, he didn’t interview attendees at fundraisers. It

looks like Mr. Radek dropped the ball.

For the record, on March 22, 2000, I referred another case to Mr.

Radek for investigation. This one involves the current Director of

the Defense Criminal Investigations Service, Mr. John Keenan. Mr.

Keenan directs a Federal law enforcement agency; he is a Federal

law enforcement officer. Official records indicate that he personally

returned 11 confiscated handguns to a convicted felon who was on

supervised probation.

Mr. Keenan’s actions were in direct violation of a Federal court

order. They may have violated Federal statutory law. Worst of all,

they put a U.S. probation officer in harm’s way. These allegations

were also referred to Mr. Radek’s office by the Chief of the Criminal Division of the U.S. Attorney’s office, Eastern District of Virginia.

I hope that Mr. Radek’s response in that case will be

uncharacteristic of our previous dealings. I expect to receive a

prompt response and I expect a thorough examination of all the

facts. I hope that the response is not dismissive of the facts referred by the U.S. Attorney, as they apparently were in the case

of the La Bella memo. I also hope that a response from Public Integrity is not influenced by campaign money or political considerations. I hope that Mr. Radek doesn’t drop the ball this time.

Senator Specter, my staff is in regular contact with line attorneys and with the inspector general community. These contacts

pertain to numerous issues of misconduct involving high-ranking

Government officials. They feel, as I do, that the Public Integrity

Section at Justice does not have a good reputation. It has a reputation for ignoring the facts and disregarding evidence.

Like the U.S. Office of Special Counsel, it has become a burial

ground for allegations of misconduct by senior officials. This reputation, by the way, pre-dates the Clinton administration. The misVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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sion of the Public Integrity Section should be rigorous, impartial

oversight, regardless of which party is in power. Politics have no

place in the Public Integrity Section.

So, Senator Specter, I thank you for your time and look forward

to exercising oversight of the Public Integrity Section at Justice.

Senator SPECTER. Thanks very much, Senator Grassley.

By way of just a comment or two as to what Senator Torricelli

has said, that he is, ‘‘less certain that we are serving a useful purpose here,’’ and we are not serving any great national purpose—we

should be doing legislating—I agree that we ought to be doing legislating, and I have introduced a statute on campaign finance reform myself, and supported McCain-Feingold. There is plenty of

time to do legislating and to do oversight.

When Senator Torricelli characterizes the Attorney General as

vigilant, I am prepared to reserve judgment on that until we examine the details of these oversight proceedings. Speaking for myself,

I am not prepared to make a conclusion about that.

When Senator Torricelli says that Mr. La Bella was sophomoric,

I have to disagree with him, having had some experience as a prosecutor. I am sorry that that document is not in the public domain

so that the American people can draw their own conclusions about

the quality of his investigation. I would say that his report was

cum laude, maybe magna cum laude. But that is something which

is going to have to be judged in a broader context than by this subcommittee, and only the public disclosure of that memorandum will

be able to accomplish that.

The issue of the Attorney General’s integrity is not one which I

personally challenge. The issue as to whether there was an appropriate judgment on independent counsel is the principal concern.

The Director’s memorandum does raise the integrity issue, but it

is a memorandum of a conversation involving Mr. Radek, not the

Attorney General. And we can’t really review that until we hear

from the Attorney General, and that we will do.

Mr. Radek, would you step forward, please, and raise your right

hand? Do you solemnly swear that the testimony you will present

to this subcommittee of the Judiciary Committee of the U.S. Senate

will be the truth, the whole truth, and nothing but the truth, so

help you God?

Mr. RADEK. I do.

Senator SPECTER. Mr. Radek, please be seated. You have a prepared statement. You may proceed at this time as you choose.

STATEMENT OF LEE J. RADEK, CHIEF, PUBLIC INTEGRITY

SECTION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

Mr. RADEK. Thank you, Senator. I apologize for the format of my

printed statement, Mr. Chairman. It was prepared late. I also

apologize for the way I am going to read it because I didn’t have

time to put it into geezer print for myself, so if you will bear with

me just a moment, please.

Good morning, Mr. Chairman and members of the subcommittee.

I am here today in response to your request to testify about matters relating to the Independent Counsel Act and its application to

campaign finance matters. Before we get into the substance of

those matters, I would like to correct some of the misstatements

13

that have been made about who I am and what my role is within

the Department of Justice.

I am and always have been a non-political career prosecutor. Including my military service, I have more than 30 years of service

in the Federal Government, spanning six administrations and 10

Attorneys General. I joined the Justice Department in 1971

through the Attorney General’s Honors Program. For 5 years, I

served as a trial attorney in the Criminal Division, dealing with

labor racketeering and legislation.

In 1976, I was selected to assist in the formation of the Public

Integrity Section, where I served as a line prosecutor for 2 years.

In 1978, I was selected to become Deputy Chief of the Public Integrity Section, a position I held for 14 years. In 1989, I was detailed

to be part of the prosecution team that handled the Ill Wind investigation into Defense procurement fraud and corruption. As part of

that assignment, I became a Special Assistant U.S. Attorney in the

Eastern District of Virginia. In 1992, I was selected to be the Director of the Asset Forfeiture Office in the Criminal Division, and in

1994 I returned to Public Integrity as Chief, where I have served

for 6 years.

As Chief of the Public Integrity Section, I have supervised the investigation and prosecution of public officials at the local and State

levels for the commission of Federal crimes, and of officials in the

judicial, legislative, and executive branches of the Federal Government.

Historically, the Public Integrity Section was also charged with

the primary responsibility for conducting the necessary preliminary

investigations under the Independent Counsel Act, and providing

the Attorney General with the necessary facts to permit her to

make the decisions entrusted to her under the Act.

With respect to matters that involved campaign financing in the

course of the 1996 election, the Section discharged that responsibility jointly with the Campaign Finance Task Force. It was also

the practice of the Attorney General to seek out the views and recommendations of a variety of advisers concerning key decisions

under the Act. I routinely provided her with my recommendations

in the course of that process at her request.

With respect to the recent independent counsel decisions involving campaign finance, I was one of many people who gave the Attorney General recommendations. Sometimes she followed my advice, sometimes she didn’t. At the end of the day, it was the Attorney General who made those decisions, as is required by the statute. And the reasons for her decisions are set forth on each of these

specific investigations in detailed, formal filings made with the

court, some of which you read from this morning, Mr. Chairman.

The Department has obtained permission from the court to have

those filings unsealed and disclosed to the public, and a complete

set of the filings has been provided to this subcommittee. Any concerns the subcommittee might have as to whether the Independent

Counsel was properly applied in these matters should focus on the

analysis and reasoning relied upon by the Attorney General and

set out in those findings.

It has been widely known for some time that there were internal

disagreements among various officials on a number of independent

14

counsel issues, particularly with respect to issues raised in the socalled La Bella memo. This, of course, is hardly surprising and certainly not new. Internal disagreements among Department of Justice officials about various aspects of the Independent Counsel Act

date back to its passage over 20 years ago.

What is new is the determination of some to delve into those confidential discussions and disagreements that were intended as an

honest and frank exchange of views between the Attorney General

and her various advisers. I disagreed with some of Mr. La Bella’s

recommendations, and you have copies of my memoranda in which

I set forth my disagreements and the reasons therefor. But I also

agreed with Mr. La Bella on many occasions during the time that

we worked together. We were both non-political career prosecutors.

We had different interpretations of some aspects of the Independent Counsel Act, but I certainly agree with his recent statement that the internal debate within the Department was never

about politics and that nobody at the Department was politically

protecting anybody.

Similarly, with Director Freeh, I may not have always agreed

with him on legal issues, but I agree with his congressional testimony where he said, ‘‘I do not believe for one moment that the Attorney General’s decision, particularly her decision in this matter,

may have been motivated by anything other than the facts and the

law which she is obligated to follow.’’ Finally, I think it is important that although I am willing to answer your questions about my internal recommendations on independent counsel matters, I do so reluctantly because I believe that

the public airing of confidential deliberations relating to sensitive

criminal investigations will inevitably chill frank and candid advice, especially from non-political career prosecutors and supervisors.

When career officials avoid making unpopular recommendations

for fear of being publicly criticized in a political arena, the administration of justice suffers. While Congress no doubt has legitimate

oversight interests in connection with the Independent Counsel

Act, I hope that as much as possible this subcommittee will focus

on departmental policies and the actual decisions that were made

by the Attorney General and not the internal details of who gave

what advice on any particular matter.

Thank you, Mr. Chairman.

Senator SPECTER. Thank you, Mr. Radek. The subcommittee is

sensitive to the issue of internal deliberations. We are able to exercise our oversight responsibilities only if we do look at the reasons

behind what the Attorney General has decided, and that involves

a careful analysis of voluminous documents, and that also involves

a supplementing of those analyses by talking to people have been

a party to those recommendations, and really a part to those decisions.

And we have been circumspect in limiting our inquiries on socalled line attorneys only where indispensable, and the objection

has been made by the Attorney General to line attorneys, but not

to people in other categories, such as yourself. And the precedents

are clear that the Congress has oversight authority on matters of

this sort, matters which are closed, and even as to pending crimiVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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nal investigations because of our responsibility to see to it that the

laws are faithfully executed. But we are sensitive to the concerns

which you have expressed, and we are also sensitive to our own responsibilities.

Mr. Radek, you were in the hearing room and heard me read the

memorandum from Director Freeh to Mr. Esposito. What did occur

on the conversation between you and Mr. Esposito where Mr. Gallagher was present, if you would set the time frame as best you

can, the locale?

Mr. RADEK. I can say that the date of this memorandum and the

date that it attributes to the conversation was very early on, before

the task force really had any form.

Senator SPECTER. Do you have a copy of the memorandum before

you?

Mr. RADEK. I do, yes, Mr. Chairman.

Senator SPECTER. Fine.

Mr. RADEK. I can say that I have no recollection of the conversation, so it is very difficult for me to discuss what words I may have

said or what I may not have said. And that may be one reason why

the quotation of mine which you referred to is so contorted. It is

very hard to say you didn’t say something in a conversation——

Senator SPECTER. The quotation was so what?

Mr. RADEK. Contorted in the press, the fact that I—what it said

was I have no recollection, but I wouldn’t have said it because it

has no basis in fact. That is because I don’t recall——

Senator SPECTER. I didn’t refer to your comment as contorted.

Mr. RADEK. No. I was referring to it as contorted. I said——

Senator SPECTER. I didn’t refer to your comment at all because

you are here and you ought to have the benefit of expressing yourself without any characterization from me or anyone else until you

have commented.

Mr. RADEK. Not to bicker, Mr. Chairman, you said I had a quote

in the paper.

Senator SPECTER. Yes.

Mr. RADEK. And I was saying that that quote was contorted. I

was characterizing it and I was not accusing you of characterizing

it.

The quote, which is accurate--it is what I said, but it is contorted

because I don’t remember a conversation on this subject with Mr.

Esposito at all. And now I have learned that Mr. Gallagher was

supposedly present, and it still does not refresh my recollection as

to having any conversation with the two of them on this subject.

I may well have had discussions with them on this subject. I simply don’t recall this conversation. I can tell you that the statements

attributed to me in the press were certainly not said by me because

I never would have said that there was pressure on me not to go

forward with the investigation, which is something that the press

carried that is not in this memorandum, a phrase ‘‘not to go forward.’’ And I can tell you that I would never, and I am sure I never

did link up the Attorney General’s job status with the pressure

that was on the Public Integrity Section.

Senator SPECTER. Mr. Radek, at the time of this memorandum,

early December 1996, the Attorney General had not yet been reVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
16

appointed, and it was the talk of the town that there was an issue

as to whether she was to be reappointed, correct?

Mr. RADEK. That is correct.

Senator SPECTER. And a good bit of that conversation turned on

how she would treat the President and other ranking administration officials with respect to appointment of independent counsel.

Mr. RADEK. 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. I

recall press speculation to that effect, Mr. Chairman.

Senator SPECTER. Well, was there anything that was of concern

to the White House in the press speculation besides the campaign

finance matters?

Mr. RADEK. I think there may have been any number of things.

I think the press usually referred to it as independent counsel

issues, but—— Senator SPECTER. There may have been any number of things.

Can you recollect any?

Mr. RADEK. No, I can’t. Again, it seemed to me that the discussion included campaign finance, but wasn’t limited to that. I am

trying to recall what was in the paper 4 years ago, so I don’t have

a clear recollection of it.

Senator SPECTER. Well, you do recall the discussion about the

campaign finance investigation and the issue of whether independent counsel would be appointed to investigate the President or

the Vice President?

Mr. RADEK. Yes, sir.

Senator SPECTER. And you don’t recall anything specific about

any other issue, but you think there may have been, was the word

you used?

Mr. RADEK. I think that there was—again, I am trying to recall

what was in the paper 4 years ago, so forgive any inaccuracy. But

my best recollection is that there was speculation in the press that

any number of independent counsel decisions that the Attorney

General may have been engaged in were unpopular with the White

House. But, again, it was press speculation. There was no official

word coming out of anywhere.

Senator SPECTER. You say that you have no recollection of this

conversation which Mr. Esposito had reported to FBI Director

Freeh, according to the Director’s memorandum, correct?

Mr. RADEK. That is correct, sir.

Senator SPECTER. Well, in the face of this contemporaneous

memorandum, would you deny that such a conversation occurred

where the word ‘‘pressure’’ was used?

Mr. RADEK. To the contrary, I would undoubtedly, in conversations with Mr. Esposito, talk about pressure on the Public Integrity

Section at frequent occasions whenever he and I would talk.

Senator SPECTER. What kind of pressure on the Public Integrity

Section would you discuss with Mr. Esposito?

Mr. RADEK. Thank you for the opportunity to answer that, Mr.

Chairman. It was pressure to do the job, and do it well.

Senator SPECTER. Well, we are going to give you every opportunity to answer a great many questions——

17

Mr. RADEK. I appreciate it.

Senator SPECTER. [continuing.] And an opportunity to speak to

subjects on which there are no questions, so that you have the full

opportunity to state your position.

Mr. RADEK. Let me say it again, to do the job, to do it vigorously,

and to do it well.

Senator SPECTER. Well, you say that there were other conversations relating to pressure on the Public Integrity Section?

Mr. RADEK. At this particular time, and later, I was quite willing

to describe the situation in the campaign finance investigation as

being a pressure cooker on the Public Integrity Section. We were

being scrutinized by the Congress, by the media, and by the Attorney General all to do a good job, and it was a lot of pressure. It

was an unusual situation.

Senator SPECTER. Well, what pressure did you get from the Attorney General?

Mr. RADEK. I got pressure to do a good job, and to do it well. One

of our greatest fears was that the Attorney General or the media

would find a fact before our investigators did, and then we would

have to explain why we hadn’t found it. And so were scrambling

around to learn as much as we could as fast as we could.

Senator SPECTER. The media is pretty good at finding facts?

Mr. RADEK. They are.

Senator SPECTER. Pretty good at finding memoranda?

Mr. RADEK. They seem to be, yes.

Senator SPECTER. Do you know, speaking of that, how the media

got a hold of this memorandum before the subcommittee did?

Mr. RADEK. Absolutely not. It certainly wasn’t from me.

Senator SPECTER. So when this memorandum refers to the word ‘‘pressure,’’ that is a word that you might well have used in the

context of lots of pressure on the Public Integrity Section?

Mr. RADEK. Yes, sir.

Senator SPECTER. And how about the reference in this memorandum to the Attorney General’s job might hang in the balance,

or words to that effect?

Mr. RADEK. Again, I do not recall the conversation. These are not

words that I would use. I can’t think of a time when I was concerned or discussing whether the Attorney General’s job was hanging in the balance, and it is certainly not with relation to the pressure on the Public Integrity Section. The ‘‘because’’ in this memo

is a mischaracterization. And I don’t know whether it is Mr.

Esposito’s mischaracterization or Mr. Freeh’s mischaracterization,

but in no way would I have ever said, again not remembering the

conversation, that the pressure on the Public Integrity Section was

related to her job status. I didn’t feel that. I don’t believe it. It

would have been false, and I wasn’t in the habit of lying to Mr.

Esposito or Mr. Gallagher.

Senator SPECTER. Not in the habit of what?

Mr. RADEK. Lying to Mr. Esposito or Mr. Gallagher.

Senator SPECTER. Lying?

Mr. RADEK. Yes, because it would be a lie if I said that the two

were related.

Senator SPECTER. It would be a lie?

Mr. RADEK. Yes, sir.

18

Senator SPECTER. If you said the Attorney General’s job was on

your mind at all with respect to the pressure on the Public Integrity Section?

Mr. RADEK. It would be a lie if I said there was pressure on the

Public Integrity Section because the Attorney General’s job hanged

in the balance, which is what this memo quotes me as saying.

Senator SPECTER. Well, so what you are saying, Mr. Radek, is

that even though you do not have a specific recollection of the conversation and you have a contemporaneous memorandum which is

very specific on the Attorney General’s job being on the line, you

never said anything to that effect?

Mr. RADEK. Mr. Chairman, there is a reason for hearsay rules.

I have a memorandum prepared by a person to the person who had

the conversation with me which characterizes my words in a way

that I believe are inaccurate.

Senator SPECTER. Well, this is a hearsay memorandum. That is

true. Mr. Gallagher is about to testify in support of it, and Mr.

Esposito is due to be a witness and there is every reason to expect

that he will testify in support of it as well.

Let me come back to my question which I don’t think you directly

answered, and that is in the face of your not recollecting the conversation and in the face of a contemporaneous memorandum that

the Attorney General’s job might hang in the balance, or words to

that effect, are you denying that any such statement was made by

you?

Mr. RADEK. I am not sure, Mr. Chairman, and I don’t want to

quibble, that you characterize this memorandum accurately. So let

me say what I deny, and that is what is contained in this memorandum. I am certain, although I have no recollection, that I never

said that there was a lot of pressure on me and the Public Integrity

Section regarding this case because the Attorney General’s job

might hang in the balance, or words to that effect, which is a direct

quote from the memorandum.

Now, I may have said that we were under a lot of pressure and

I may well have said that her job status was questionable because

both of those things were true. What I never would have done was

to relate them and to say that her job was in jeopardy because of—

or that I was under pressure because her job was in jeopardy. It

just is not something I would have said.

Senator SPECTER. Well, let’s explore your statement just now

that you might have said that her job status might have been in

jeopardy. Did you make a comment to that effect?

Mr. RADEK. I don’t recall the conversation at all, but as you and

I have just discussed, it is true that at the time she was waiting

to hear whether she was going to be into the second term of this

administration, be the Attorney General, and so that subject may

well have been discussed. What would not have been said by me

was that that was the cause of the pressure on me.

Senator SPECTER. All right. So you are saying that the subject

may well have been discussed that the Attorney General’s job was

in jeopardy?

Mr. RADEK. It may well have. Again, I don’t recall.

Senator SPECTER. May well have discussed that the Attorney

General’s job was in jeopardy?

19

Mr. RADEK. It may well have. I don’t recall. The words ‘‘hangs

in the balance’’ do not sound like anything I would say.

Senator SPECTER. Well, the memorandum says ‘‘words to that effect.’’ But you are saying that there may have been a discussion

that the Attorney General’s job may be—you said at that time the

Attorney General’s job may be in jeopardy?

Mr. RADEK. That is possible, yes.

Senator SPECTER. Possible. And you do believe that there may

well have been a discussion about pressure on the Public Integrity

Section?

Mr. RADEK. Yes, sir.

Senator SPECTER. So your narrow line of denial is a connection.

Is that accurate?

Mr. RADEK. This is not a narrow line of denial, Senator. I am trying to describe to you what my thoughts were and what I might

have said.

Senator SPECTER. Well, let’s take out the word ‘‘narrow.’’ The line

of denial is that although you may have said that there was pressure on Public Integrity and you may have said the Attorney General’s job may be in jeopardy, you did not connect the two.

Mr. RADEK. That is correct.

Senator SPECTER. Senator Torricelli.

Senator Torricelli. Thank you, Mr. Chairman, very much.

Mr. Radek, there is at least the suggestion that as the head of

the Public Integrity Section, you might have been complicit in action or silence to the political benefit of President Clinton or Vice

President Gore and the Democratic National Committee.

You were appointed to your position by President Clinton?

Mr. RADEK. No, sir. I was selected for my position by a Senior

Executive Service merit board, and on their recommendation I was

appointed, I believe, by——

Senator TORRICELLI. Which appointments have you received from

President Clinton?

Mr. RADEK. None, sir. I have never sought or received political

office.

Senator TORRICELLI. And you have just started in the Justice Department under a Democratic administration?

Mr. RADEK. I started under the Nixon administration.

Senator TORRICELLI. You have served in Democratic and Republican administrations for how many years?

Mr. RADEK. Twenty-nine.

Senator TORRICELLI. Was this suggestion made about the role

you have played because of a longstanding relationship you have

with the President?

Mr. RADEK. I have no relationship with the President, sir.

Senator TORRICELLI. Could it be because you have had an active

involvement in Democratic Party politics?

Mr. RADEK. I have certainly never been involved in Democratic

Party politics.

Senator TORRICELLI. Do you have any reason to suggest why,

given your longstanding service to the U.S. Government, your reputation, and your commitment to the law, based on your involvements and relationships, anyone would suggest that you would exVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
20

ercise anything other than the proper judgment or act with integrity in this instance?

Mr. RADEK. I am sorry, sir. I lost the beginning of the question.

I can speculate as to why people might make such accusations, but

the fact is I believe—— Senator TORRICELLI. But you cannot think of anything based on

your background or association with the administration, your political involvements, why anyone having looked at your record and

professional reputation would think that you would look at an issue

like this with anything other than integrity?

Mr. RADEK. No, sir, except that they disagree with my final recommendations.

Senator TORRICELLI. How many independent counsels has Attorney General Reno named during her tenure?

Mr. RADEK. I have lost track, sir.

Senator TORRICELLI. Eleven?

Mr. RADEK. Seven, sir.

Senator TORRICELLI. Seven. In those seven instances, has there

ever been a disagreement with senior officials of the FBI, the Justice Department, the Attorney General’s staff on whether or not

any of those seven independent counsels should be made?

Mr. RADEK. There clearly has, Senator.

Senator TORRICELLI. Is it unusual that there be such a disagreement?

Mr. RADEK. To the contrary, it is a difficult statute to administer,

it is a difficult statute to apply, and there are strong feelings about

such matters and there are certain cautions that people are concerned with. And so this Attorney General more than any I have

seen certainly encourages vigorous debate on all sides of the issue

and sometimes those—— Senator TORRICELLI. Have you witnessed the decision on all

seven of these from some perspective or another in Justice?

Mr. RADEK. Not Ken Starr in Whitewater and his first appointment, although some of the later——

Senator TORRICELLI. That is to your credit. But in the other six,

you have at least been a witness to the judgment being made?

Mr. RADEK. Yes, sir.

Senator TORRICELLI. So would you characterize for the committee

that for one of the Attorney General’s assistants, a senior official

in Justice or in the FBI to be giving different advice in tone or substance—would you characterize this as unusual or something that

would be expected during the course of deliberations?

Mr. RADEK. It was much more common to have a disagreement

than unanimous agreement.

Senator TORRICELLI. You have been fairly unequivocal in making

clear your belief that there was no political pressure on the Attorney General or any suggestion that her tenure would be jeopardized by appointing an independent counsel. In addition to the

quotes in these memoranda, is there anything the committee

should know that would in any way suggest, to your knowledge,

that indeed there was any pressure put on the Attorney General

on this issue whatsoever?

Mr. RADEK. No. I am aware of no pressure being put on her, and

what I was recounting about pressure was all press speculation as

21

to why she wasn’t being named for the second term. If she was

under such pressure, I can say that she never conveyed it and

never in any way apparent to me reacted to it.

Senator TORRICELLI. Indeed, wouldn’t it probably be a fair conclusion that in naming Mr. Starr, to cite the most obvious, and

each of the other seven independent counsels, it would be logical

to assume that the White House would have preferred that none

of those independent counsels be named——

Mr. RADEK. That would be fair, yes.

Senator TORRICELLI [continuing.] And probably was not pleased

by her judgment?

Mr. RADEK. I believe that would be accurate, yes.

Senator TORRICELLI. But, indeed, despite naming Mr. Starr and

each of these independent counsels on seven instances, including

people closest to the President and members of his own Cabinet,

up to and including the time of this decision, you never heard any

suggestions from her or any comments indicating that her position

was in jeopardy or her continuing as Attorney General would be

dependent upon any of those instances?

Mr. RADEK. That is correct, I never did.

Senator TORRICELLI. The judgment then remained about whether

or not this investigation would be better done at Main Justice or

by bringing in personnel from the field or in the form of this independent counsel. Was it your judgment that at Main Justice, given

the complexities of the campaign finance laws and the limited

number of people who actually have experience with these laws,

that the case might be pursued more vigorously and professionally

if you were to rely upon people at Main Justice?

Mr. RADEK. Yes, sir, it was my perception. You know, I have

heard criticism from former U.S. attorneys and others, and there

always is a sort of friendly rivalry between U.S. attorneys’ offices

and Main Justice. But the fact is that most of the expertise for

election crimes is contained in the Public Integrity Section.

Senator TORRICELLI. Indeed, wouldn’t it be fair to say that overwhelmingly, U.S. attorneys’ offices around the country, most of

them, have never dealt with the campaign finance issue or have

dealt with very few of those cases?

Mr. RADEK. Some are better than others. I mean, some particular

problem, districts get into it very heavily and their expertise is

probably equal to ours. Generally, it is not a primary target of enforcement of the Department of Justice.

Senator TORRICELLI. So if there were a dispassionate judgment

about where there was the most prosecutorial experience and

knowledge of this law, all other considerations aside, the judgment

would be that Main Justice had the expertise to pursue these

cases?

Mr. RADEK. I thought so, yes.

Senator TORRICELLI. Let me ask you more directly—Senator

Specter, I think, ably came to the question from a variety of ways

about whether or not you had any recollection of that specific, unfortunate quote about tying the Attorney General’s judgment to

pressure. I want to do so as well on the question of the threshold,

specifically the independent counsel law.

22

Do you have any special and credible information for any person

covered under the Act that, in your judgment, even at this late

date, would require the appointment of an independent counsel?

Mr. RADEK. I do not, if the statute were still in effect.

Senator TORRICELLI. Do you have any information regarding activities of the President of the United States or the Vice President

of the United States indicating that anything that they did or said

might suggest specific and credible information that would require

the appointment of independent counsel?

Mr. RADEK. No.

Senator TORRICELLI. On September 25, 1998, you wrote a memorandum, ‘‘The issues in the Republican National Committee investigation are largely identical to the issues in the Democratic National Committee investigation. The principal difference between

the two investigations is that the facts of the RNC media project

have not been fleshed out as much.’’

In reviewing the political culture in 1996 and the ways in which

the Democratic and Republican parties approached campaign finance laws using the campaign committees and the two respective

party committees and soft and hard money allocations, do you,

from this perspective in time, see any principal difference in how

the parties designed their campaigns and operated within the campaign finance laws? I am not asking you to cite specific instances,

but your general impression having watched the investigation to

date.

Mr. RADEK. Here is my general impression. The use of soft

money to buy issue ads, as they were referred, seems to have been

a Republican invention that the Democrats perfected beyond what

most would imagine to be possible. The Colorado GOP case basically brought this, what I think is a clear loophole in the campaign

laws, into the area of the light and legitimacy. And the White

House and the DNC in the 1996 election took advantage of that as

far as they possibly could.

Senator TORRICELLI. Indeed, to take this further, the issue advocacy ads and the soft money expenditures from the RNC being perfected and duplicated by the DNC also then involved similar actions by State parties with Federal and soft money in many States

in the Nation——

Mr. RADEK. That is correct, yes.

Senator TORRICELLI [continuing]. And the Republican Senatorial

Campaign Committee and even the Democratic Senatorial Campaign Committee, despite its extraordinary compliance with the

law.

Mr. RADEK. That is correct. But back to your original question,

I think that in the 1996 presidential election the volume on the

Democrat side in these issues ads was much, much greater than

the Republicans.

Senator TORRICELLI. Well, indeed, which may be because there

was an incumbent administration that was more successful in raising the funds. But this is not a question of degree of compliance

or violation of the law. It is whether or not the principle stands,

and the principle seems to have been universally shared.

23

Mr. RADEK. The principle—the loophole was taken advantage of

by both sides, but as I say, much more so, I thought, on the Democrat side.

Senator TORRICELLI. Could you quantify for us, since the campaign finance investigations began in reaction to the allegations regarding the President and the Vice President, the DNC and the

RNC, approximately the commitment of resources that were given

either in Assistant U.S. Attorneys or in FBI resources?

Mr. RADEK. I am sorry. I do not have those. The number of

agents approached, I believe, 100 at one time, but I could stand to

be corrected on that. Attorneys—we had, I think, at a max maybe

15 attorneys assigned to the task force. In the early days when I

was running it out of the Public Integrity Section, we set it up with

4 to 5 attorneys, and there were probably 25 to 30 agents. Then

there was a squad of agents assigned—— Senator TORRICELLI. Well, the number I have heard is 100, so

you are basically confirming that number.

Mr. RADEK. Somewhere around—— Senator TORRICELLI. A hundred FBI agents and 15 line attorneys

were involved in this. Now, to give some assurance to people about

the level of commitment of the Justice Department, that, for example, significantly exceeds what Mr. Specter and I have found was

involved by the Department of Justice in prosecuting cases or seeking evidence in the theft of nuclear secrets from Los Alamos and

Chinese espionage.

If you were to rate the commitment of the Justice Department

toward these instances, some of which are misdemeanors, some of

which are felonies, this nevertheless would rank as one of the larger commitment of resources, would it not, by the Justice Department?

Mr. RADEK. Of which I am aware, yes, Senator.

Senator TORRICELLI. OK. Mr. Chairman, thank you for the time.

Mr. Radek, thank you for your responses.

Senator SPECTER. Thank you, Senator Torricelli.

Senator Sessions, to the extent possible, we would like to focus

Mr. Radek now on the memorandum because Mr. Gallagher needs

to leave. He is going to testify. Mr. Radek is going to testify in a

second section, but I know that Senator Torricelli has other commitments and might have to leave. So if you do, too, or Senator

Grassley does, I want to provide some flexibility as to how we handle it. But if you are able to stay, we would like to get Mr. Gallagher on and off as soon as we could.

Senator Sessions.

Senator SESSIONS. I will have an opportunity later to ask some

questions about the conduct of the investigation?

Senator SPECTER. Exactly.

Senator SESSIONS. I have just got a few questions in that regard.

Senator SPECTER. The subcommittee will pursue that, but to the

extent we can limit it now to get Mr. Gallagher on his way to Ireland, it would be appreciated.

Senator SESSIONS. All right. I would note Senator Torricelli suggests there is legal expertise on election matters in the Department

of Justice. And that is true, but there also is investigative and

prosecutorial expertise in attorneys who are in court regularly, and

24

they are able, in my view, to get the truth better. I mean, that is

what we are involved in here, I think, is an opportunity to get the

truth and find out what the facts were or were not.

Well, I am troubled, Mr. Radek. You have taken an oath this

morning, I believe.

Mr. RADEK. Yes, sir.

Senator SESSIONS. And I notice that when you make your comments that you would not have said this or would not have said

this, you add each time ‘‘but I don’t remember the conversation.’’

Mr. RADEK. That is true.

Senator SESSIONS. So it is hard for me to take real seriously your

denial that you said something that you say you don’t recall. Do

you understand that difficulty that I would have?

Mr. RADEK. I understand it perfectly, Senator, but if I could recall it, of course, I would. I just simply can’t.

Senator SESSIONS. Let me ask you, were you aware that the FBI

Director had talked to the Attorney General about this statement

that you allegedly made shortly after it was allegedly made?

Mr. RADEK. I was never aware of it until I saw this memorandum the week before last.

Senator SESSIONS. She never inquired of you about that?

Mr. RADEK. No.

Senator SPECTER. You say you saw the memorandum the week

before last?

Mr. RADEK. Week before last.

Senator SPECTER. Precisely when?

Mr. RADEK. It was faxed to me on May 4.

Senator SPECTER. Excuse me, Senator Sessions.

Senator SESSIONS. No. That is fine.

That was the internal FBI memorandum?

Mr. RADEK. Yes, sir.

Senator SESSIONS. But you are now aware, are you not, that at

or about that time the Director of the FBI personally talked with

the Attorney General about this situation?

Mr. RADEK. No, sir.

Senator SESSIONS. Are you aware of it now?

Mr. RADEK. Yes, sir. I don’t know. I am aware of it from the

memorandum, but the Director said he was going to or did talk to

her.

Senator SESSIONS. And despite the fact that the FBI Director

shared with her that you made the statement that there was pressure involved and the Attorney General’s job may be on the line,

and he believed and interpreted that to mean that there was pressure not to vigorously investigate the case, she never asked you

about it?

Mr. RADEK. She never asked me about it. As far as all your prefatory facts, I don’t know whether they are true or false. I don’t

know that they had the discussion. I know that he says they did.

Senator SESSIONS. Well, I think the prefatory facts were well

founded. You don’t dispute any of them, do you?

Mr. RADEK. I don’t know, Senator.

Senator SESSIONS. You chair the Public Integrity Section?

Mr. RADEK. I am its Chief, yes, sir.

25

Senator SESSIONS. Its Chief, and you are appointed by the Attorney General, are you not?

Mr. RADEK. I am not. I was appointed by the Assistant Attorney

General for the Criminal Division, who was JoAnn Harris, who was

also mostly a career prosecutor. Now, I do have a certificate on my

wall that looks very nice that is signed by Janet Reno, but as far

as I know, Janet Reno didn’t know my name when I became Chief

of the Public Integrity Section. And all your implications and the

La Bella testimony to the contrary, I am not in any way subject

to the political appointment process. I am Senior Executive Service,

career.

Senator SESSIONS. But the chiefs of sections are appointed by the

Attorney General, are they not?

Mr. RADEK. They are not. They are Senior Executive Service.

They are appointed by Merit Systems Protection Board—I mean

merit systems boards.

Senator SESSIONS. Well, you have merit protection. I understand

that.

Mr. RADEK. But the appointment comes from the Assistant Attorney General for the Criminal Division.

Senator SESSIONS. Well, the Assistant Attorney General for the

Criminal Division is appointed by who?

Mr. RADEK. By the Attorney General, and she is appointed by

the President, but that doesn’t mean——

Senator SESSIONS. That is exactly right.

Mr. RADEK [continuing]. That the President appointed me. I am

a career prosecutor, sir.

Senator SESSIONS. You held a position at the pleasure of the Attorney General, did you not?

Mr. RADEK. Everyone in the Department of Justice does that,

Senator.

Senator SESSIONS. That is correct.

Mr. RADEK. So does Mr. La Bella, or so did Mr. La Bella. I mean,

that is not——

Senator SESSIONS. Well, let’s suggest an independent agency appointed you. The Attorney General approved your appointment and

could have removed you, isn’t that correct?

Mr. RADEK. The Attorney General can fire me for cause, sir.

Senator SESSIONS. I don’t mean fire; remove you from the position as Chief of Public Integrity without cause.

Mr. RADEK. Sure, the Attorney General can do that to anyone in

the Justice Department.

Senator SESSIONS. That is correct. I don’t know why we had an

argument over that.

Mr. RADEK. Except for the U.S. Attorneys. That would take the

President.

Senator SESSIONS. I think I will pass to the next subject.

Senator SPECTER. Thank you, Senator——

Senator SESSIONS. Do you recall a conversation in which Mr. Gallagher and Mr. Esposito were present on or about the time referred

to in the memorandum?

Mr. RADEK. I can’t place it in time. I recall one conversation with

Mr. Esposito and Mr. Gallagher in Mr. Esposito’s office in which

26

we were discussing a certain case in Cleveland. I don’t recall the

topic of campaign finance coming up at all.

Senator SESSIONS. If those individuals say you said words to the

effect that are referred to in the memorandum, you dispute that

only on the fact that you weren’t likely to have said that, but you

are not able to deny it categorically?

Mr. RADEK. I am able to deny that I would have said such a

thing. I have no recollection of having said these words at all, Senator, or anything to their effect.

Senator SESSIONS. So the answer is you have no recollection of

having said these words?

Mr. RADEK. My answer, as discussed with the chairman, is that

I would never have said this, yes.

Senator SESSIONS. But you have no recollection of having said

them?

Mr. RADEK. That is correct.

Senator SESSIONS. And do you deny—well, we will let the other

witnesses testify.

Thank you.

Senator SPECTER. Thank you, Senator Sessions.

Senator Grassley.

Senator GRASSLEY. So you can hurry on, Mr. Chairman, I won’t

ask any questions, but let me make just a couple of comments here

in a minute-and-a-half.

The memo from Director Freeh suggests that he told the Attorney General that both she and Mr. Radek should remove themselves from the decisionmaking process in regard to deciding on an

independent counsel. I think, Mr. Chairman, that when the Director of the FBI brings such a charge to the Attorney General, the

Attorney General is obligated to act. She did not.

The result, in my view, is at least a perception problem now for

the Attorney General. The Freeh memo calls into question the Attorney General’s judgment. Since she did not understand the potential conflicts both for her and for Mr. Radek, in my view, she has

put her judgment on this issue at risk and the criticism is warranted.

I am not prepared to question whether or not the Attorney General’s decision on the independent counsel was politically motivated, but I do think that it looks bad. First, when you have a

hand-picked career prosecutor vehemently calling for an independent counsel—that was Charles La Bella—when you have an

FBI Director calling for an independent counsel, when you have career prosecutors resigning on principle over this issue, and, four,

not quite as clear, but when you have a chief antagonist who is

head of an office, the Public Integrity Section, which office has a

reputation, as I have already spoken to, for never seeing a case it

really wanted to prosecute, this is really a bad combination.

Thank you.

Senator SPECTER. Thank you very much, Senator Grassley.

Mr. Radek, do you know why the Director Freeh memorandum

of December 9, 1996, was not turned over to the subcommittee

sooner than May 18, since you say you saw it on May 4?

Mr. RADEK. No, sir, I do not. I was informed that the Director

had found it on or about that date.

27

Senator SPECTER. Who informed you of that?

Mr. RADEK. The Deputy Attorney General.

Senator SPECTER. And what were the circumstances for Mr. Eric

Holder telling you that?

Mr. RADEK. He called me and asked me whether I recalled the

conversation, and I asked him—I informed him that I did not, and

he said that the Director had just found a memo which was being

prepared to be turned over to Congress and he wanted—— Senator SPECTER. And he said the Director had just found this

memo?

Mr. RADEK. That is what he told me, yes, sir.

Senator SPECTER. Did Mr. Holder tell you when he first saw this

memo?

Mr. RADEK. No, he did not, and then I asked—— Senator SPECTER. Are you aware of the fact that there had been

a subpoena issued which required the production of this memorandum returnable on April 20?

Mr. RADEK. No, I am not aware of that. I am not surprised by

it. I am just not aware of it specifically.

Senator SPECTER. What else did Mr. Holder tell you with respect

to this issue?

Mr. RADEK. Not much, except that he sort of quoted from it, and

I asked him to fax it to me and he did.

Senator SPECTER. He sort of quoted from it and you asked him

what?

Mr. RADEK. To fax it to me, which he did.

Senator SPECTER. And what did you do next by way of, say, making a denial of the substance of the memo to any of your supervisors?

Mr. RADEK. I read the memo and called the Deputy Attorney

General back and told him that I had many remarks about the

memo, but I told him that I—— Senator SPECTER. You said you had many remarks about it?

Mr. RADEK. Many remarks about the memo.

Senator SPECTER. What were your remarks about the memo?

Mr. RADEK. Well, I was sort of revisiting the dismissal of Ms. Ingersoll from the task force and the fact that Director Freeh seemed

to have pre-judged the issues before the task force was even in

place.

Senator SPECTER. What issue did Mr. Freeh pre-judge?

Mr. RADEK. The issue of whether or not the Public Integrity Section should be involved in the task force.

Senator SPECTER. Well, if Mr. Freeh heard from Mr. Esposito

that the Public Integrity Section was under pressure because the

Attorney General’s job was held in the balance, wasn’t that a sufficient reason to rule out the Public Integrity Section if, in fact, Mr.

Esposito was telling Director Freeh the truth?

Mr. RADEK. It might have been if it were true, sir, but more specifically I was referring to the fact that he seemed to still be holding a grudge about the Cisneros independent counsel matter.

Senator SPECTER. But on the issue of the sufficiency to remove

the Public Integrity Section, if the Chief of the Public Integrity Section said that the Section was under pressure on campaign finance

cases because the Attorney General’s job was in the balance, and

28

if Director Freeh accepted the veracity of Mr. Esposito’s statement,

wouldn’t that be sufficient to call for the removal of the Public Integrity Section, or at least the Chief?

Mr. RADEK. If, in fact, the Chief of the Public Integrity Section

had said such a thing, certainly some inquiry should have been

made as to whether or not such a thing was said.

Senator SPECTER. Do you think Director Freeh should not accept

what Mr. Esposito tells him?

Mr. RADEK. I think Mr. Freeh was under some obligation to

make further inquiry.

Senator SPECTER. To talk to you about it?

Mr. RADEK. I mean, we are talking again about a memo Director

Freeh directed to the person who had the conversation.

Senator SPECTER. We are well aware of that. The question—— Mr. RADEK. Talk to me about it, talk to the Attorney General

about it.

Senator SPECTER. Well, he did talk to the Attorney General

about it—— Mr. RADEK. He says he did. She doesn’t—— Senator SPECTER [continuing]. According to what Director Freeh

says in the memo.

Mr. RADEK. I am sorry to talk at the same time you were, but

he says he did. She says she doesn’t recall it, to my knowledge.

Senator SPECTER. Well, we have a sequence of affirmative statements by one side memorialized in a document and no recollection

by others, you and the Attorney General.

Mr. RADEK. That is correct.

Senator SPECTER. If Director Freeh is accurate, truthful, in what

he has put in this memorandum that he told the Attorney General

that Mr. Radek said the Public Integrity Section was under a lot

of pressure and that her job held in the balance, shouldn’t she have

talked to you about it?

Mr. RADEK. I am certain that had this been conveyed to her that

she would have conducted some inquiry, yes, sir.

Senator SPECTER. So are you saying that you doubt that this was

conveyed to her?

Mr. RADEK. I doubt it, yes, sir, but I have no independent knowledge.

Senator SPECTER. But you doubt the truthfulness of Mr.

Esposito’s report to Director Freeh—— Mr. RADEK. You know——

Senator SPECTER. Wait a minute, wait a minute. We won’t talk

together if you wait until I finish the question.

Mr. RADEK. I am sorry.

Senator SPECTER. So you doubt the truthfulness of Mr. Esposito’s

statement to Director Freeh that Mr. Radek said that the Public

Integrity Section was under a lot of pressure and the Attorney

General’s job was in the balance, and the truthfulness of Director

Freeh’s statement as recorded in this memorandum by him that he

told that to the Attorney General?

Mr. RADEK. You left out the word ‘‘because,’’ Senator. I doubt the

truthfulness of any statement attributed to me that the Public Integrity Section was under pressure because the Attorney General’s

job hung in the balance.

29

Senator SPECTER. I wasn’t revisiting what you said, although I

may well do that. I was on a very separate subject, and the separate subject was that if Director Freeh told the Attorney General

what he says he told her in this memo that the Chief of the Public

Integrity Section had said that the Public Integrity Section was

under a lot of pressure and the Attorney General’s job was in the

balance—if Director Freeh is honest and forthright and truthful

about that statement and he told her that, as this memorandum

says, whether she should have then questioned you about it.

Mr. RADEK. She should have questioned me about it, and the fact

that she didn’t is what makes me doubt that it was effectively communicated to her.

Senator SPECTER. Effectively communicated?

Mr. RADEK. Yes.

Senator SPECTER. What Director Freeh says he told the Attorney

General, he didn’t really do, right?

Mr. RADEK. If he had, I am sure she would have talked to me

about it, and she didn’t.

Senator SPECTER. Would you sit back, Mr. Radek? We are going

to call you back on other matters. As I have said, we are going to

try to get Mr. Gallagher in and out. It is too late now to get Mr.

Gallagher in and out in a hurry, but we will get him in and out

as fast as we can.

Mr. Gallagher, will you raise your right hand, please? Do you solemnly swear that the testimony that you will give before this subcommittee of the Judiciary Committee of the U.S. Senate will be

truth, the whole truth, and nothing but the truth, so help you God?

Mr. GALLAGHER. I do.

Senator SPECTER. Mr. Gallagher, do you care to make any opening statement?

STATEMENT OF NEIL GALLAGHER, ASSISTANT DIRECTOR, NATIONAL SECURITY DIVISION, FEDERAL BUREAU OF INVESTIGATION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

Mr. GALLAGHER. No, Senator. I am prepared to answer questions.

Senator SPECTER. Mr. Gallagher, were you present at a conversation which involved Mr. Radek and Mr. Esposito?

Mr. GALLAGHER. Yes, Senator, I was.

Senator SPECTER. Can you place that conversation in a time

frame when it occurred?

Mr. GALLAGHER. It was in early December 1996.

Senator SPECTER. And where did the conversation occur?

Mr. GALLAGHER. In Mr. Esposito’s office at FBI headquarters.

Senator SPECTER. And what were the circumstances that led to

that conversation?

Mr. GALLAGHER. Well, first of all, let me put it in perspective. At

the time, Mr. Esposito was the assistant director in charge of the

FBI’s Criminal Investigative Division. I was his principal deputy

assistant director. Mr. Esposito is in an adjacent—was at the time

in an adjacent office to mine. He stopped in and asked me if I

would join him in a meeting with Lee Radek. The purpose of the

meeting was the beginning of the process of the FBI becoming diVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
30

rectly involved in what would become campaign financing investigations.

Senator SPECTER. And what conversation then occurred?

Mr. GALLAGHER. We discussed two particular aspects. One was

Mr. Radek reviewed some of the analysis that had been going on

for a period of time by the Public Integrity Section. We also discussed the investigative efforts that had been conducted by Department of Commerce inspectors general regarding the activities of

John Huang while at the Department of Commerce.

During this discussion, there was a statement made by Mr.

Radek that, as reflected in the memorandum, that there was a lot

of pressure on him and on the Public Integrity Section, and this

was attributed to the fact that the Attorney General’s job may

hang in the balance.

Senator SPECTER. Are you sure that conversation occurred?

Mr. GALLAGHER. I am certain of the conversation. The only addition that I would make to the statement of pressure, that it was

a general statement of pressure not only on Lee Radek, on the Public Integrity Section, but for that matter on the FBI, and that it

impacted upon the decisions that would be made in these early

days of the investigation.

My sense and my reaction to the statements that I heard Lee

Radek make that day was that this would be a very sensitive, very

critical investigation, and I felt a sense of urgency on behalf of the

FBI that we would have to put together an investigative team to

get moving forward with the investigation.

Senator SPECTER. Well, was there a specific statement about

pressure on the FBI?

Mr. GALLAGHER. It is my recollection that there was a statement.

I have a specific recollection of Mr. Radek, who I have dealt with

extensively during this same time period on other investigative

matters, talk about a sense of pressure that he and the Public Integrity Section felt. But I have a less specific but general recollection that there may have been some reference to pressure on the

FBI, and walked away from the meeting with a sense, again, that

this would be a very sensitive and critical investigation.

Senator SPECTER. Well, as of that time, the Attorney General

had already turned down a request for independent counsel, correct?

Mr. GALLAGHER. It is my understanding, Senator, that that is accurate.

Senator SPECTER. And you are sure the conversation occurred

where Mr. Radek used the language pressure on the Public Integrity Section because the Attorney General’s job was in the balance?

Mr. RADEK. Yes, Senator, and——

Senator SPECTER. Are you sure of that?

Mr. GALLAGHER. I am positive, and at the same time there may

have been some general discussion as to the fact that the Attorney

General had not yet been selected by the President to continue in

his Cabinet. We had discussions around that issue, but again I did

not walk away with anything but a sense of urgency to move forward with the investigation.

Senator SPECTER. Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman.

31

Just briefly, Mr. Gallagher, where did this conversation take

place where you were——

Mr. GALLAGHER. In Mr. Esposito’s office.

Senator TORRICELLI. And what was the date of this meeting?

Mr. GALLAGHER. I recall it being early December 1996. This was

the very first meeting between Lee Radek, myself, and Bill

Esposito to begin the process of the FBI taking a more active—not

a more active—an active role in the investigation that would become the campaign financing——

Senator TORRICELLI. Were you the only people in the room?

Mr. GALLAGHER. I would have to defer, now that I have described

the meeting, to Lee Radek. It may be that his—one of his deputies,

Joe Gagloff, was in the room. If he did, he did not play an active

part in the discussion. If it will help Lee Radek, I was sitting on

the sofa in Bill Esposito’s office. Bill Esposito was in the wing chair

to my left. Lee Radek was in the wing chair to my right. The three

of us were the primary participants in the discussion, but I have

a vague recollection that he may have had a deputy off to the side.

Senator TORRICELLI. You recognize, Mr. Gallagher, that the allegations you are making are contradicting a sworn statement by the

head of the Public Integrity Section of the U.S. Justice Department. If indeed Mr. Radek were not testifying truthfully, this

would have extraordinary consequences. Yet, he has been rather

strong in his testimony.

But you do not remember the date of the meeting or even who

was in the room. You do have a memory of the seating arrangement, but not knowing the date of the meeting or who was present,

you can understand, would in some people’s minds raise questions

about how specifically you could otherwise remember exactly what

was said, and I think would make it difficult for many to conclude

that Mr. Radek’s statement would not then be taken at face value,

and he believes this didn’t happen.

Mr. GALLAGHER. Senator, I can only respond that it was the very

first meeting between Lee Radek and the FBI on what would become the transformation of the investigation. I have specific recollection of where the meeting occurred. Yes, I cannot speak to the

exact date, but I know it was in early December 1996.

Senator TORRICELLI. But you don’t remember who was in the

room?

Mr. GALLAGHER. I remember Lee Radek, myself, Bill Esposito.

Senator TORRICELLI. But not whether there were any others?

Mr. GALLAGHER. At most, there was a fourth person. If it was,

he sat off to the side and did not actively participate in the discussion. So I give you his name in complete candor as to who could

possibly have been in the room. That is the only other person who

may have been in the room.

Senator TORRICELLI. Finally, I think this is necessary for the

record and I do not do this to challenge either your integrity or

your credibility. But it should be pointed out to my colleagues that

you did testify before the Governmental Affairs Committee, of

which I am also a member, and there were circumstances after

that in which you needed to clarify or change the context of your

testimony.

32

Could you explain to the committee, since obviously your testimony is in conflict with Mr. Radek’s and any nuance of credibility

is extremely important to the committee, what led to your clarifying your previous testimony to the committee?

Mr. GALLAGHER. In the unrelated matter before the Governmental Affairs Committee?

Senator TORRICELLI. Yes.

Mr. GALLAGHER. I became aware of information which at the

time that I testified I was not cognizant of. Once I became aware

of that information, I felt an obligation—— Senator TORRICELLI. You then corrected the record and changed

your testimony?

Mr. Gallagher [continuing]. To correct the record and submitted

a letter to that effect.

Senator TORRICELLI. Mr. Chairman, I have no further questions.

Senator SPECTER. Thank you, Senator Torricelli.

Senator Grassley.

Senator GRASSLEY. I won’t ask any questions.

Senator SPECTER. Thank you very much, Senator Grassley.

Mr. Gallagher, were there any other written memoranda relating

to this meeting or arising from this meeting, to your knowledge?

Mr. GALLAGHER. I am unaware of any, Senator. I was not—and

maybe as a clarification, I did not participate in the subsequent

discussion between Mr. Esposito and the Director. My only recollections are to the actual meeting. I may have seen this document,

but I don’t have a specific recollection of it.

Senator SPECTER. Thank you very much, Mr. Gallagher. The

final question for you: will you make your plane?

Mr. GALLAGHER. I will make my plane, and I appreciate your

consideration, Senator.

Senator SPECTER. You are excused.

Mr. GALLAGHER. Thank you.

Senator SPECTER. Mr. Parkinson, will you step forward, please?

Will you raise your right hand? Do you solemnly swear that the

testimony that you will give before this subcommittee of the Judiciary Committee of the U.S. Senate will be the truth, the whole

truth, and nothing but the truth, so help you God?

Mr. PARKINSON. I do.

Senator SPECTER. Thank you, Mr. Parkinson. Would you state

your position, please?

STATEMENT OF LARRY PARKINSON, GENERAL COUNSEL, FEDERAL BUREAU OF INVESTIGATION, U.S. DEPARTMENT OF

JUSTICE, WASHINGTON, DC

Mr. PARKINSON. My position is General Counsel with the FBI.

Senator SPECTER. And how long have you held that position?

Mr. PARKINSON. I have held that position since August 1997.

Senator SPECTER. And before that, you were——

Mr. PARKINSON. Before that, I was the Deputy General Counsel

at the FBI, dating back to December 1995.

Senator SPECTER. Mr. Parkinson, did you have occasion to write

a memorandum to Assistant Attorney General Robinson of the

Criminal Division dated November 20, 1998?

Mr. PARKINSON. Yes, sir.

33

Senator SPECTER. Would you tell us the circumstances that led

you to write that memorandum?

Mr. PARKINSON. At the time, we were reaching the end of the

preliminary inquiries with respect to Vice President Gore and Harold Ickes. The Attorney General was having to reach a final decision as to whether to seek an appointment of an independent counsel. We were having internally within the Department of Justice a

number of discussions about what we had learned during the preliminary inquiry and discussions about where we go from here.

The views of those participants were solicited by the Attorney

General. A memo was invited from the FBI, and consequently I

wrote this memo which referred to the two preliminary inquiries.

Senator SPECTER. And had Director Freeh written an earlier

memorandum recommending the appointment of independent counsel in campaign finance matters?

Mr. PARKINSON. Yes.

Senator SPECTER. Do you know the date of that memorandum?

Mr. PARKINSON. November 24, 1997. There had been a previous

memo in May 1997 which he also gave to the Attorney General,

and you have that as well.

Senator SPECTER. Mr. Parkinson, who was the first individual

that you took up an analysis on evidence in the memorandum of

November 20, 1998?

Mr. PARKINSON. In the November 20, 1998, memo it refers primarily to the preliminary inquiry involving Vice President Gore.

There is a very brief position taken with respect to Mr. Ickes at the

end of the memo. It is not a lengthy analysis because there had

been a previous analysis by the Department of Justice that we

agreed with and I didn’t feel the need to go into an extensive analysis with respect to Mr. Ickes.

Senator SPECTER. And did you believe that independent counsel

should have been appointed as to Vice President Gore?

Mr. PARKINSON. Yes, and that was our recommendation.

Senator SPECTER. Is your recommendation characterized in conclusory form by the first paragraph on page 4 under ‘‘Sufficiency

of the Evidence?’’

Mr. PARKINSON. Yes. I mean, that begins the analysis with respect to the Vice President.

Senator SPECTER. And would you read that conclusion, please?

Mr. PARKINSON. Do you want me to begin with the first sentence,

‘‘Is there?’’

Senator SPECTER. Correct.

Mr. PARKINSON. OK. ‘‘Is there sufficient evidence as a matter of

law to prove that Vice President Gore made a false statement when

he told the investigators on November 11, 1997, that he believed

the media fund was composed solely of soft money? We believe the

answer to this first question is clearly yes. The Radek-Visinanzo

memorandum concludes that the falsity element of the offense has

not been established. This conclusion rests principally on an opinion that there is in insufficient evidence that the Vice President

was ever aware of a hard money component to the media fund.

However, the memorandum falls short in two respects. First, it

fails to give sufficient weight to the inculpatory evidence surrounding the November 21, 1995, meeting. Second, it focuses alVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
34

most exclusively on that single meeting without taking into account

the wide range of other relevant evidence.’’ Senator SPECTER. What was the evidence with respect to the people who were present at the meeting who gave evidence relevant

to the issue or to the discussion of a hard money component to the

fundraising which the Vice President was undertaking?

Mr. PARKINSON. It is set out in my memo, and then attached to

the memo is an investigative summary prepared by the investigators which goes into more detail. But in a nutshell, there were a

number of participants in the meeting, four of which recalled the

discussion of a hard money component to the media fund during

that 1995 meeting.

Senator SPECTER. And who were those witnesses and what did

they say?

Mr. PARKINSON. Those four witnesses were David Strauss, Leon

Panetta, Bradley Marshall, and Brian Bailey. They vary slightly on

their recollections, and I am not sure I could, without spending

considerable time going through this investigative summary, be extraordinarily precise. But in a nutshell, all of those four—each of

those four witnesses indicated that they were present at the meeting, that the Vice President was present at the meeting, and that

there was some discussion about a hard money component to the

media fund.

Senator SPECTER. In the Attorney General’s declination to appoint independent counsel on November 24, 1998, she says at the

bottom of page 3, ‘‘Only two attendees of the meeting even recall

the topic of a hard money component to the media fund being

raised during the meeting.’’ Is that accurate?

Mr. PARKINSON. I don’t believe it is accurate. I didn’t recall that

from the notification itself, and as the investigative summary

points out in more detail, there were four people who had that

recollection.

Senator SPECTER. And was the recollection of Mr. Strauss confirmed in a written document?

Mr. PARKINSON. Yes. There was what became known as the

Strauss memo, and that is also discussed. There is a memo that

describes some portions of the meeting that was written by David

Strauss.

Senator SPECTER. And what does that memo say with respect to

the hard money component?

Mr. PARKINSON. It has references in the margins about a 65 soft

and 35–65 percent soft, 35 percent hard, component. Let me try to

be precise, and this is referred to on page 4 of the supplement, but

the handwritten notes on the documents were 65 percent soft, 35

percent hard, corporate or anything over 20K from an individual.

And he identified those as notes that he took during the November

21, 1995, meeting.

Senator SPECTER. And for the record, would you briefly state

what the significance is of the hard versus the soft money components of fundraising?

Mr. PARKINSON. Well, obviously in this context it was very significant in this sense because what we were focused on in that preliminary inquiry in the fall 1998 was the Vice President’s statement that he made a year previously that he was not aware of a

35

hard money component to the media fund. And the purpose of the

November 21, 1995, meeting was a discussion of the media fund,

and this was evidence that there was clearly—it seems to be clear

that there was a discussion of a hard money component in a meeting that the Vice President attended.

Senator SPECTER. And if the Vice President had known that

there was a hard money component to the money he was raising,

what would the legal consequence of that have been?

Mr. PARKINSON. The potential legal consequence is that he would

have made a false statement when he was interviewed by the investigators a year previously in November 1997 in connection with

the first preliminary inquiry that related to him.

Senator SPECTER. One of the individuals who testified about the

Vice President’s attendance at the meeting where hard money was

discussed was Mr. Leon Panetta?

Mr. PARKINSON. That is correct.

Senator SPECTER. And essentially what did Mr. Panetta say?

Mr. PARKINSON. Essentially, and again in a nutshell—it is laid

out in significantly more detail in the attachment, but he did not

recall specifically the November 21, 1995, meeting, but he did recall attending several meetings in the Map Room in which these

budget issues were discussed. And he does recall a meeting in

which the hard money/soft money components of the media fund

were discussed, and it was his memory that the Vice President was

in attendance. He recalls the Vice President being there for all of

these discussions as part of gearing up for the reelection campaign.

Senator SPECTER. And did Mr. Panetta say with respect to the

purpose, quote—or that the purpose of the meeting with respect to

the attendance of the Vice President and the President was to,

‘‘make sure they knew what the hell was going on?’’

Mr. PARKINSON. I don’t have that precisely in front of me, Mr.

Chairman.

Senator SPECTER. Well, take a look at your memo. You will find

it.

Mr. PARKINSON. Oh, it is in my memo?

Senator SPECTER. Correct.

Mr. PARKINSON. If you can direct me to the page, I am sure I can

find it quickly.

Senator SPECTER. If I direct you to the page, you can find it

quickly? Try 0150, for starters. I can understand, Mr. Parkinson,

why at this point I know more about your memorandum than you

do.

Mr. PARKINSON. I am sorry, Mr. Chairman. I don’t find it. I don’t

find that quote.

Senator SPECTER. Take a look at the next page. It continues on

to 0151. And talking about Panetta, quote——

Mr. PARKINSON. I am sorry, Mr. Chairman. I was looking at my

memo, as opposed to the attachment to my memo. I do see that and

it concludes——

Senator SPECTER. Well, these are attachments to your memo.

Mr. PARKINSON. That is correct, and it concludes by saying he

emphasizes the purpose of the meeting was to, ‘‘make sure they

knew what the hell was going on.’’

36

Senator SPECTER. And two other witnesses testified that the Vice

President was present at the time hard money was discussed?

Mr. PARKINSON. That is correct.

Senator SPECTER. And who were those witnesses?

Mr. PARKINSON. Those witnesses were Bradley Marshall and

Brian Bailey.

Senator SPECTER. Was all this information conveyed to the Attorney General, Mr. Parkinson?

Mr. PARKINSON. To my knowledge, it was. I don’t have personal

knowledge of what actually went to the Attorney General, but certainly these discussions and these memos were being generated for

her final decision.

Senator SPECTER. But these memos went from you to the Assistant Attorney General of the Criminal Division, Mr. Robinson?

Mr. PARKINSON. That is correct.

Senator SPECTER. For the purpose of being forwarded to the Attorney General?

Mr. PARKINSON. Yes, that was——

Senator SPECTER. Do you have any idea why in her formal statement she would only know of two witnesses who testified about the

Vice President being present when hard money was discussed?

Mr. PARKINSON. I do not know the answer to that question.

Senator SPECTER. Now, you have referred also to documents

which were provided to the Vice President. In the appendix to your

memorandum, there are 13 memoranda sent by Mr. Ickes to the

Vice President, correct?

Mr. PARKINSON. That is correct.

Senator SPECTER. And what is the import of those 13 memoranda?

Mr. PARKINSON. Well, the memoranda are—there are a couple of

significant pieces. What these memoranda are, at least in the investigators’ mind—and I agree with them—these are indications of

discussions between the time period of August 1995 and July 1996

that referred to a hard money component of the media fund, which

was the central issue in the preliminary inquiry.

And as set forth in the description of those 13 memos, there were

a number of references to that hard money component, and these

were memos that, based on the evidence, went to the Vice President. And they were also—the second piece of that that I would

note is that they were—most of them were crafted as a series of

bullets or short summaries designed for a busy person to absorb

fairly quickly.

Senator SPECTER. The Attorney General’s declination emphasizes

the Vice President’s statement that he did not read the memos. But

he made other relevant comments, as you have noted, as being—

did you put it inculpatory of the Vice President as to what he said?

Mr. PARKINSON. Yes. That was the term that I used in the memo,

yes, ‘‘inculpatory.’’

Senator SPECTER. And if you turn to the addendum marked 147,

it reads, ‘‘The Vice President has remarked in two interviews that

he did not read these memos, as he did not as a general rule read

memos authored by Harold Ickes on DNC budgetary matters.’’ He

nonetheless said that, ‘‘the subject matter of the memorandums

37

would have already been discussed in his and the President’s presence.’’

Mr. PARKINSON. Right.

Senator SPECTER. Is that an accurate summary of that particular

issue?

Mr. PARKINSON. Yes, I believe it is.

Senator SPECTER. What reliance, if any, in your recommendation

for independent counsel did you place on the Vice President’s statement that even though he hadn’t read the memoranda, the subject

matter had already been discussed with him and the President?

Mr. PARKINSON. I took some issue with the statement that he

said he didn’t read the memos, and I have a section in my memo

saying at least we ought to critically examine that.

Senator SPECTER. Why did you take issue with his statement to

that effect?

Mr. PARKINSON. These were issues—a couple of reasons. These

memos, as I said before, were designed, many of them, as bullets

designed to be read by him. And it was my view that at least we

ought to devote some significant investigative effort to figuring out

whether a blanket statement that ‘‘I didn’t read Harold Ickes’

memos’’ would stand up.

In my view, this was an extraordinarily important issue for those

running for office, including the Vice President. The question at

hand, and that is whether or not there was a hard money component to the media fund, was not, in my view, a down in the weeds

kind of issue; it was kind of fundamental. And Harold Ickes was

the person at the White House who was essentially running much

of the campaign, and it struck me as something that at least we

ought to investigate further, whether or not we could simply rely

on a statement that he said ‘‘I didn’t read Ickes’ memos.’’

Senator SPECTER. Well, all of this is in the context of the issue

of criminal intent being not subject to the decision by the Attorney

General on appointing independent counsel unless there was, ‘‘clear

and convincing evidence,’’ under the independent counsel statute of

the state of mind or lack of criminal intent.

And how did those factors, all the memoranda and the four witnesses, impact on your consideration as to whether somebody could

reasonably say that there was clear and convincing evidence that

he didn’t know anything about the hard money component?

Mr. PARKINSON. In my view—and, again, it is set forth in my

memo on pages 7 and 8—in my view, the clear and convincing

standard was intended to be a very high threshold. I referred at

some length in my memorandum about—I referred at some length

from the legislative history in 1987, in which Congress made clear

that they intended this to be a high threshold, and they criticized

the Department at that time for a disturbing practice of dismissing

or failing to seek an independent counsel based on state of mind,

and so they intentionally set a high threshold.

They made clear that it would be a rare case—and I have quoted

the legislative history in that respect—‘‘a rare case in which the

Attorney General will be able to meet the clear and convincing

standard and in which such evidence would be clear on its face. It

would be unusual for the Attorney General to compile sufficient

38

evidence at that point in the process.’’ That was a quote from the

legislative history.

And I concluded that section by simply asking the question about

whether or not this was indeed such a rare case. And my conclusion, at least, was that based on all of the evidence, the witnesses,

as well as the documentary evidence, that this was hardly one of

those rare cases.

Senator SPECTER. Hardly?

Mr. PARKINSON. Correct.

Senator SPECTER. Clear-cut, not to be classified as one of those

rare cases?

Mr. PARKINSON. I didn’t think this one was very close.

Senator SPECTER. With respect to what you characterized as inculpatory statements, if you turn to page 0149 of the attachments,

the first full paragraph, second sentence, ‘‘pointed out’’—this is the

Vice President speaking, ‘‘pointed out that he had been a candidate

for 16 years and thought he had a good understanding of the hard/

soft money.’’ What impact did that statement of the Vice President have on

your consideration of the clear and convincing standard for ruling

out mens rea, state of mind, or criminal intent?

Mr. PARKINSON. Well, I think when we were focusing on state of

mind, it seemed critical to me that we focus not only on the events

at hand, but whatever historical knowledge the person might have

had. And I believed then and believe now that that prior experience and his activity in campaigns was a relevant factor.

Senator SPECTER. Referring back to Leon Panetta, at 0150, with

respect to this November 21, 1995, meeting, Mr. Panetta said that

the, ‘‘hard/soft money breakdown of media fund discussed at all

three meetings. There was always a discussion and examination of

the overall DNC budget and, at a minimum, a reference to the

hard/soft breakdown of the media fund. Recalls gearing up for the

reelection campaign. Meetings were structured around making

presentations to POTUS,’’ President of the United States, ‘‘and

VPOTUS,’’ Vice President of the United States. ‘‘Both were provided with whatever documents were being discussed, and both always had something to say. Going on, ‘‘POTUS and VPOTUS would

comment on what was being presented to them. Media fund was

the focus of the 11/21/95 meeting, and the purpose was to make

sure POTUS and VPOTUS were aware of what was going on with

the media fund.’’

What impact does that have on the state of mind issue?

Mr. PARKINSON. I thought it was very significant.

Senator SPECTER. Why?

Mr. PARKINSON. Obviously, this was not just one meeting. There

were a series of discussions. This was a critical piece of the campaign strategy. This was an indication from someone of very significant stature and placement of that process, Mr. Panetta, who

indicated that the President and the Vice President were personally engaged in these discussions.

Senator SPECTER. What did the Vice President say about leaving

the meetings?

Mr. PARKINSON. The Vice President said a couple of things, that

he may have left the meeting. He said that he drank a lot of iced

39

tea during meetings and it may have caused him to leave the room.

He also indicated that there were—— Senator SPECTER. Drank a lot of iced tea, so he might have left

the room?

Mr. PARKINSON. Correct, and may not have been present when

the critical words were said. He also indicated, as I recall, that

there were frequently interruptions to these meetings.

Senator SPECTER. Well, he says in the addendum at 0148, a

statement to the Vice President and then 10 lines down, ‘‘does not

know if he left the meeting while it was going on, for any reason.’’ So according to his statement, he was unsure.

Mr. PARKINSON. Correct.

Senator SPECTER. So he postulates drinking a lot of iced tea and

possibly leaving the meetings for a restroom break?

Mr. PARKINSON. That is the way we understood it.

Senator SPECTER. How did you weigh that in the state of mind

issue?

Mr. PARKINSON. I didn’t personally find that very compelling.

Senator SPECTER. Why not?

Mr. PARKINSON. For one thing, if this was just one meeting in

which this was a one-sentence statement, I may have found it more

compelling. But as I indicated, this was—the evidence indicated

that there was a series of meetings, and to me it would be quite

a coincidence to have missed all of the references to a hard money

component, for that reason.

Senator SPECTER. When the Attorney General declined to appoint

independent counsel as to the Vice President, she used language

which I referred to before which is really prosecutorial discretionary language. But there was no finding that there was clear

and convincing evidence that the Vice President did not knowingly

violate the law.

Wouldn’t that finding be indispensable if she were to accept the

Vice President’s assertion that he didn’t know there was a hard

money component, in the face of the statements of the four witnesses who were at the November 21 meeting, the 13 memoranda,

and the Vice President’s own statements about his experience as a

candidate, and the substance of the Ickes memos having been discussed in his presence and the presence of the President? Wouldn’t

she have had to make that finding as an indispensable basis for declining?

Mr. PARKINSON. As I recall—and I am sure Mr. Radek can add

to this, but as I recall, in the end she concluded that she did not

have to get to that issue about clear and convincing because she

had agreed with Mr. Radek and Visinanzo’s memorandum that the

falsity element of the offense had not been satisfied, and therefore

she did not have to get to that issue.

Senator SPECTER. Well, the falsity element turned indispensably

on the state of mind, didn’t it? There was no doubt that he had

raised hard money from witnesses who were questioned by the

FBI, correct?

Mr. PARKINSON. Correct.

Senator SPECTER. How many witnesses questioned by the FBI

whom the Vice President had raised money from testified that he

had raised hard money from them?

40

Mr. PARKINSON. I don’t—I can’t give you a precise number. There

were some, but there were any number of people that were solicited

who had no idea whether they were talking about hard money or

soft money. So, that number gets a little bit hard to—— Senator SPECTER. Well, there were people who testified that he

raised hard money from them.

Mr. PARKINSON. Correct.

Senator SPECTER. There were some, and weren’t there also some

who were surprised that their contributions had been allocated to

the hard money account because they were limited to $25,000 total

annually on hard money and they later found out that when the

allocations were made to the hard money account that they had exceeded the Federal limit on hard money?

Mr. PARKINSON. That is correct.

Senator SPECTER. And that was money raised by the Vice President?

Mr. PARKINSON. Yes. There is, Senator—just on the clear and

convincing issue, the last footnote of her notification of November

24 does refer to it. It concludes with one sentence that says, ‘‘If the

clear and convincing evidence were applicable to this determination, I would find by clear and convincing evidence that the Vice

President did not lie,’’ though she did something in the alternative.

Senator SPECTER. But that was not a matter discussed at all in

the lengthy statement of declination, except for a footnote, you say?

Mr. PARKINSON. The best I can recall, that is correct, because she

didn’t find that the fundamental elements of the offense had been

satisfied.

Senator SPECTER. But how could there be a finding that the fundamental elements of the offense were not satisfied in the absence

of finding clear and convincing evidence of no criminal intent?

Mr. PARKINSON. We had a lot of discussions about a fairly

nuanced legal point, and that was that in false statement and perjury charges, at what point does the clear and convincing standard

apply and how does that relate to the falsity element of a false

statement charge. We had lots of discussions about how that applied, and it was the conclusion, at least of the Attorney General,

that they were separate and distinct issues. And while you certainly were focusing on state of mind in assessing whether the falsity element was satisfied, it was not the same question that you

would reach if you had to get to the clear and convincing standard

under the statute.

Senator SPECTER. Well, let’s focus on that for just a minute. The

question was, did the Vice President know that he was raising

hard money, and here you have his denial and an explanation

about iced tea. And on the other side, you have four witnesses and

the fact that some of the people he raised money from did contribute hard money, and others where there wasn’t an express raising of hard money had it allocated to hard money, and 13 memoranda which showed that he was supposed to raise hard money,

and his statement about being experienced, 16 years as a candidate, and that even if he didn’t read the memoranda, these were

matters discussed with him and the President.

Now, the question is did he know that he had raised hard money,

because if he did, there would have been a false statement. Now,

41

that requires an analysis as to his state of mind as to whether he

knew he was raising hard money. Wouldn’t that conclusively involve the question as to whether, on the totality of that evidence,

there was clear and convincing evidence that he did not know he

was raising hard money?

Mr. PARKINSON. The clear and convincing evidence standard is,

as you well know, the part of the independent counsel statute

which comes into play, and this was the analysis that we ended up

with within the Department only after you find that the elements

of the offense have been satisfied. And then the question is, having

satisfied the elements of the offense, focusing on the individual’s

state of mind, is there clear and convincing evidence that he did

not have the requisite state of mind.

At a certain point, I think the issues do tend to collapse and you

are looking at the same fundamental question, and that is what

was his state of mind. But they are two separate issues. First, you

figure out whether or not the elements of the offense are satisfied,

and then if you do, then you get to the statutory piece relating to

clear and convincing evidence.

Senator SPECTER. But the determination as to whether the elements of the offense occurred are identical, to wit did he know he

was raising hard money.

Mr. PARKINSON. I think, at bottom, they are essentially identical.

The standards are slightly different. Clear and convincing is intended under the statute to be a higher threshold before you choose

not to seek an independent counsel.

Senator SPECTER. But if the issue is independent counsel and the

question is whether he knew he was raising hard money, it seems

to me to be an inevitable conclusion that the clear and convincing

evidence standard had to be met.

She did find that as to the President and the Vice President on

her December finding, and that was essentially based, as I had

read into the record before, on the advice of counsel argument. You

analyzed that in your memorandum of December 4, and what were

your findings as to that?

Mr. PARKINSON. I concluded—and it is set forth in the memo

from December 4 as well as the Director’s memo to me of December

8—that the advice of counsel defense was fairly strong in this case,

but in my view it was not strong enough to satisfy the clear and

convincing evidence standard under the statute. And I set forth a

number of reasons why I thought this was not that compelling, and

I took some issue with the Department of Justice memorandum

that said this was one of the strongest cases for advice of counsel

defense that they had seen.

Senator SPECTER. And the advice of counsel defense is essentially

in the nature of an affirmative defense, isn’t it, Mr. Parkinson?

Mr. PARKINSON. Yes.

Senator SPECTER. And the reasons you set forth were, number

one, that the advice had never been given directly to the President

and Vice President?

Mr. PARKINSON. There was no direct contact between the lawyers

that they are relying on for the advice of counsel defense and the

principals.

42

Senator SPECTER. Well, how can you have an advice of counsel

defense if the advice is not given by counsel directly?

Mr. PARKINSON. It is certainly legally possible to have an advice

of counsel defense, notwithstanding the fact that the advice filtered

through someone else, which is the case in this matter.

Senator SPECTER. But you found that was a reason not to accept

it?

Mr. PARKINSON. That was a reason for me to conclude that the

advice of counsel defense was not as strong as I thought others

were.

Senator SPECTER. And a second reason you have in your memo,

to try to boil it down and wrap it up a little sooner here, is that

both of these lawyers had substantial interests in terms of their

representing the Democratic National Committee and the ClintonGore campaign?

Mr. PARKINSON. That is correct. I mean, a fundamental strength

of an advice of counsel defense is that the attorneys who are giving

the advice are disinterested. And in our view, they were not disinterested in this case.

Senator SPECTER. And one of them even had some qualifications

as to the advice of counsel defense?

Mr. PARKINSON. That is correct.

Senator SPECTER. And what was that qualification?

Mr. PARKINSON. It wasn’t so much a qualification as it was, as

a I recall, the difference between—there was a question about electioneering message versus express advocacy which was a critical

issue in this case, and one of the attorney’s advice was—it appeared to us to be miscommunicated to the principals, which raised

some question about the viability of relying on an advice of counsel

defense.

Senator SPECTER. What was miscommunicated to the principals?

Mr. PARKINSON. I note on page 4 of my memo there is an indication that the legal advice of Sandler and Utrecht may not have

been getting through. Sandler and Utrecht stated that they had

consistently applied the electioneering message legal standard, not

the express advocacy standard, when they reviewed the content of

the DNC ads. Yet, virtually every other witness recalled Sandler

and Utrecht’s advice in terms of express advocacy.

And I conclude saying, while the DOJ memo concludes this inconsistency is not significant, certainly it raises some question

about whether the attorneys’ advice was being heard and heeded.

Senator SPECTER. Especially in the context that neither the

President nor the Vice President dealt directly with those attorneys?

Mr. PARKINSON. That is correct.

Senator SPECTER. Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman, very much.

Mr. Parkinson, do you see the FBI’s role in this process as advisory to the Attorney General?

Mr. PARKINSON. That is correct, Senator.

Senator TORRICELLI. Is it unusual for the FBI to give advice to

the Attorney General in such an instance?

Mr. PARKINSON. It certainly wasn’t in the last several years, no.

43

Senator TORRICELLI. Do you consider the Attorney General to be

bound by your advice?

Mr. PARKINSON. No.

Senator TORRICELLI. Was it unusual for the Attorney General to

solicit advice from the head of the Criminal Division or Public Integrity, her principal aides, and the FBI, and where there was conflicting advice she made her own judgment?

Mr. PARKINSON. Not unusual at all. It was typical.

Senator TORRICELLI. Do you in your mind believe that there is

any question about the integrity of Janet Reno or her operating in

the national interest in having solicited independent advice and

then having, to the best of her abilities, made a judgment?

Mr. PARKINSON. No, I do not.

Senator TORRICELLI. Do you have any information indicating that

the Attorney General was not acting with integrity, consistent with

her responsibilities?

Mr. PARKINSON. No.

Senator TORRICELLI. Indeed, given the imprecise standards of the

campaign finance laws and some of the conflicting interpretations

and facts, wouldn’t it be understandable that the Attorney General

might be receiving different conclusions and different advice from

her assistants and other prominent officials in the Justice Department and the FBI?

Mr. PARKINSON. That would certainly be expected.

Senator TORRICELLI. It would be expected. So, indeed, as this

evolved is really what one might have anticipated?

Mr. PARKINSON. I think that is correct in terms of differences of

opinion and advice.

Senator TORRICELLI. Is there any reason to believe that Mr.

Radek in writing his memorandum was not adhering to the highest

professional standards and acting with integrity in reaching his

own conclusions based on law?

Mr. PARKINSON. No, I do not, Senator.

Senator TORRICELLI. Indeed, while you might disagree with Mr.

Radek’s conclusions, as an attorney, having read them, I find them

plausible. If I do not agree with them in each instance, I can understand how a well-reasoned person operating in good faith could

reach these conclusions even if I don’t agree with all of them. Do

you find yourself in the same position that I find myself?

Mr. PARKINSON. I often found myself in that position.

Senator TORRICELLI. I think there are several of Mr. Radek’s

points that bear being read into the record. Respond to them if you

find them appropriate. Responding to Mr. La Bella’s report, Mr.

Radek writes, ‘‘The report leaps to the outrageous conclusion that

the Public Integrity Section has engaged in a results-oriented analysis to protect the White House when it asserts that different

standards have been applied to the various campaign finance matters that have arisen under the Act.’’

Do you have any reason to believe that different standards are

being applied to different people who were being evaluated under

the provisions of the Act or, Mr. Parkinson, do you think that the

standard would seem to be fairly evenly applied, even if you do not

agree with all of the interpretations of the Department?

44

Mr. PARKINSON. Generally, I thought they were evenly applied.

I did have quibbles occasionally along the way.

Senator TORRICELLI. As we all would. But, in fact, anyone asserting that there was a results-oriented analysis, that would indeed

be outrageous, given the integrity of the people involved and by

your own statement that this seemed to be evenly applied.

Mr. PARKINSON. I never concluded that this was results-oriented.

Senator TORRICELLI. No, I am not suggesting that you did. I am

simply soliciting your help.

Mr. Radek goes on to cite, referring to the La Bella report, 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.’’ Clearly, hypothetical questions are not a standard

under the Act for reaching any conclusion.

With, I think, reference to the Vice President, Mr. Radek concluded that the report was so superficial that he was at a loss as

to how to respond. I might point out that had I been writing the

report, that is exactly the word that I would have used, ‘‘superficial.’’ Now, let me get to the question of these meetings and the Vice

President. Being a fair man, I am certain you put this into some

context before reaching your own conclusions. For the committee’s

purposes, what is the volume of memoranda the Vice President receives on a weekly, monthly, or annual basis?

Mr. PARKINSON. I don’t know the answer to that, but I would assume that it is enormous.

Senator TORRICELLI. You are the committee suggesting your own

belief that it is credible to assume that the Vice President did read

a specific memorandum. Presumably, if the Vice President were receiving two memoranda a week as opposed to 2,000, or 500 memoranda a year as opposed to 10,000, it would have some bearing on

the credibility of whether he read an individual memorandum.

Mr. PARKINSON. I think there is no question about that, and I

want to correct one thing that you said, Senator Torricelli, and that

is that I was not saying that I found—that I concluded that he read

a particular memorandum or didn’t read a particular memorandum. The issue on the table was whether or not there was reason for further investigation. I don’t think we were in a position at

that time, nor should we have been in a position to reach ultimate

conclusions as to what he saw and what he didn’t see.

Senator TORRICELLI. But if indeed it could be concluded that the

Vice President, having received an enormous number of memoranda, could not possibly have read them all and was likely to have

only read a portion of them, that would go to the question of

whether or not there was credible information that the Vice President knew about the hard/soft money combinations.

Mr. PARKINSON. No question about it.

Senator TORRICELLI. And indeed we are unable in the committee

today to establish the context and the volume of this material and

how likely it was.

Would it surprise you to know that as the Chairman of the

Democratic Senatorial Campaign Committee, memoranda have

45

been prepared for me about every State in the Union that has a

senatorial election this year? I would assume that I am much more

involved in the daily events of the management of those campaigns

than the Vice President, who has other responsibilities in his own

campaign.

Would it surprise you to know that I could not cite for you a single formula of hard/soft money or the determination to use such in

any State in the Nation, although such memoranda have been prepared for me as late as yesterday?

Mr. PARKINSON. No, it would not.

Senator TORRICELLI. The meeting that was held where allegedly

this hard/soft split was discussed in the presence of the Vice President, how many people were in that meeting?

Mr. PARKINSON. It appears that there were approximately 15

people in that meeting.

Senator TORRICELLI. Fifteen. Now, unaided by access to contemporaneous statements or other written material, how many of those

people were able to recollect whether there was a specific discussion of hard/soft money-raising?

Mr. PARKINSON. Four.

Senator TORRICELLI. And they were?

Mr. PARKINSON. They were the ones that I mentioned before— David Strauss, Leon Panetta, Bradley Marshall, and Brian Bailey.

Senator TORRICELLI. Well, indeed my information is Mr. Strauss

only remembered this after having seen contemporaneous writings.

Mr. PARKINSON. I believe that is correct, but he did—— Senator TORRICELLI. So now we are down to three. Mr. Marshall

apparently later recalled making the statement, but initially when

asked did not do so. Is my information accurate on that count?

Mr. PARKINSON. I think that is accurate. I would have to doublecheck the investigative summary.

Senator TORRICELLI. OK, now we are down to two. I am aware

of Mr. Panetta. Who was the other one?

Mr. PARKINSON. Brian Bailey.

Senator TORRICELLI. Are you certain of that, Mr. Parkinson?

That is not consistent with what I have.

Mr. PARKINSON. Well, that is what is set forth in the investigative summary, and I have no—— Senator TORRICELLI. Well, you know what? I will give you the

benefit of it, but we have now established that there were 15 people in the room. I am aware of specific information that one person,

Mr. Panetta, remembered a discussion of hard and soft money, and

he remembered it only in the second conversation. When initially

asked, he didn’t recall it either.

So now we are being asked to believe that the Vice President, arguably the second busiest person in the room with the most other

things under consideration, remembered a hard/soft money discussion, although people specifically involved in the campaign with

specific responsibilities for hard/soft money did not remember this

discussion. Some of those directly involved in the question did not

remember the discussion until seeing contemporaneous statements

written and presented to them. The Vice President remembered

this, but none of the others did, with the exception of Mr. Panetta,

who only remembered it upon the second time being asked. It apVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00049 Fmt 6633 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
46

pears to me the Vice President is not being held to an unusual

standard; he is being held to a unique standard that strains credibility.

Mr. PARKINSON. My response is simply as I said—— Senator TORRICELLI. Well, it is not required, but if you want to

make a response.

Mr. PARKINSON. No, that is fine. I think my assessment is laid

out in the memo.

Senator TORRICELLI. In your memorandum, in fairness to the

Vice President, while I recognize this is not the standard for appointment of the counsel, nevertheless I think it should be said the

following is written, ‘‘There appears to be a consensus that the

facts as known would not warrant prosecution.’’ This is in reference

to a false statement.

Is that indeed the conclusion that is in your report?

Mr. PARKINSON. That is correct.

Senator TORRICELLI. Mr. Parkinson, I take it as a member of this

committee that this hearing is of considerable importance and that

you would do the same.

Mr. PARKINSON. Absolutely.

Senator TORRICELLI. And you have paid considerable attention to

this meeting?

Mr. PARKINSON. When you say ‘‘this meeting,’’ what are you referring to?

Senator TORRICELLI. This hearing.

Mr. PARKINSON. Sure.

Senator TORRICELLI. During the course of this hearing, are there

three elements that must be reached in the appointment of an

independent counsel?

Mr. PARKINSON. Well, it comes in different stages, but to trigger

an independent counsel preliminary inquiry, there are three.

Senator TORRICELLI. OK, and in my questions to Mr. Radek and

yourself, how many of the three have I referred to? Do you know?

Mr. PARKINSON. You certainly have referred to specific information. And I may be missing the thrust of your question, Senator.

Senator TORRICELLI. Here is my point, Mr. Parkinson. It is not

to embarrass you. The Vice President of the United States was

asked some years after attending a meeting in which, based on my

political experience, he probably was there to show interest in the

campaign, encouragement to people who were working on the campaign by exercising some interest, but feigning considerable other

interest, about a specific piece of information.

Although there were 15 people in the room, we can establish

with certainty that one person, upon being asked on a second instance, recalls the issue at question. You have been in this room

considerably less time with considerably greater knowledge, I think

greater interest, and yet are unable to recall two of the three specific elements required for the offense being discussed that I made

reference to them during this meeting.

I am not raising that because I believe it is a failure of you to

take this hearing seriously or of your recollection, but to put in

some context of fairness what it is the Vice President of the United

States is being expected to recall. Indeed, I believe you were correct

when you wrote on the issue of false statements, whether or not

47

the Vice President could be expected not only to remember the conversation but ever to have read these memoranda, that no prosecution credibly ever could have been obtained, and in my judgment

never should have been pursued.

Thank you, Mr. Parkinson, for your time. Thank you, Mr. Chairman.

Senator SPECTER. Thank you, Senator Torricelli.

Senator Sessions.

Senator SESSIONS. Mr. Chairman, I will just ask a couple of questions.

With regard to the decision on independent counsel, you and Director Freeh did not agree with the Attorney General’s decision, is

that correct?

Mr. PARKINSON. That is correct. There were several occasions. I

don’t know which—— Senator SESSIONS. And it is your testimony today that you have

no evidence of improper influence or motivation on behalf of the Attorney General?

Mr. PARKINSON. That is correct.

Senator SESSIONS. And you don’t know what went on and who

she has talked to or anybody else?

Mr. PARKINSON. No, other than I know who she talked to within

the Department when she was present at a meeting.

Senator SESSIONS. But you don’t know if she was talking to

Charles Ruff or the White House or the President or the Vice President or his counsel or anybody else about these matters?

Mr. PARKINSON. No.

Senator SESSIONS. You just don’t know?

Mr. PARKINSON. Don’t know.

Senator SESSIONS. How long have you been with the FBI?

Mr. PARKINSON. I have been with the FBI almost 5 years.

Senator SESSIONS. That is all I have.

Senator SPECTER. Mr. Parkinson, when you take up the issue

Senator Torricelli did that a conviction is unlikely to occur, is that

in any way a standard which is to be used to determine whether

there ought to be an investigation by independent counsel?

Mr. PARKINSON. No, it is not, Mr. Chairman, and the last sentence after the sentence that he referred to says, ‘‘But that is not

the issue before us,’’ and I think—— Senator SPECTER. That was the sentence that Senator Torricelli

left off?

Mr. PARKINSON. Well, that was the concluding sentence after the

one that he mentions, and I think that is critical. I mean, this is

not—we are not discussing whether or not we were at a point of

making any prosecutable case. That is not the issue; it wasn’t the

issue then.

Senator SPECTER. On a preliminary inquiry, you don’t have access to a grand jury. You don’t have access to subpoenas. The investigative scope is very limited.

Mr. PARKINSON. That is correct.

Senator SPECTER. And it is very limited because there is a statutory intent by Congress of an approach that there ought to be very

little investigation done by the Department of Justice before an

independent counsel comes in.

48

Mr. PARKINSON. That is precisely why the statute withholds

some of the most fundamental investigative tools during preliminary inquiries.

Senator SPECTER. So that it is hardly to a consideration by the

Attorney General on following the statute and appointing independent counsel as to what the ultimate outcome is going to be.

That is entirely speculative, but in any event not an appropriate

standard for the Attorney General’s consideration.

Mr. PARKINSON. Right. That, in my view, is an exercise of prosecutorial discretion, and the statute and certainly the legislative

history makes absolutely clear that that is not appropriate.

Senator SPECTER. Mr. Parkinson, when Senator Torricelli tried to

reduce your witnesses from four to I don’t know how many, if Mr.

Strauss has his recollection refreshed by a written memorandum,

then as a matter of law doesn’t he have a recollection?

Mr. PARKINSON. In my view, that becomes quite compelling. He

not only has a recollection, but he has a contemporaneous notation

that describes it.

Senator SPECTER. Well, focusing just on the recollection, never

mind your view or my view, the law is that if a witness refreshes

a recollection from a document, then he has a recollection.

Mr. PARKINSON. That is correct.

Senator SPECTER. And when you talk about Bailey and Marshall,

unless your reports are wrong, Bailey, ‘‘recalls individuals discussing hard and soft money at the meeting.’’ That appears on page

0149. And Leon Panetta, quote, ‘‘hard and soft money breakdown

in the media fund was discussed at all three meetings,’’ at 0150.

And Bradley Marshall said that the spending side of the DNC

media campaign was involved, which was 35 percent Federal hard

money.

Mr. PARKINSON. That is correct, and I believe the investigative

summary is accurate.

Senator SPECTER. So there were four witnesses who testified

about hard money being discussed in the presence of the Vice

President.

Mr. PARKINSON. That is correct.

Senator SPECTER. Mr. Parkinson, when you come to your conclusion that reasonable people can draw different judgments as a vast

generalization, that is pretty hard to disagree with. We are about

to question Mr. Radek on a number of the specifics, and where the

statute calls for a preliminary inquiry based on information and he

substitutes ‘‘evidence,’’ that is a pretty big distinction, isn’t it?

Mr. PARKINSON. It potentially is. I obviously have read the exchange with Mr. La Bella and Mr. Radek. In this case, I think

when Mr. Radek says he was using the terms interchangeably, I

think he is accurate that sometimes that was done.

Senator SPECTER. It is sometimes done to interchange ‘‘evidence’’

with ‘‘information?’’

Mr. PARKINSON. It is important, obviously, to interpret the statute as written, and the statute refers to information.

Senator SPECTER. Well, there is a tremendous difference between

evidence and information. Evidence is material which comes into a

court of law to make a determination of fact. Information may or

may not have that level of reliability.

49

Couldn’t reasonable people disagree about using a standard of information, which the statute specifies, as opposed to a much higher

standard of evidence?

Mr. PARKINSON. I think the bottom line is that when the standard was applied, I think everybody understood what the statute required. But, yes, there is a significant difference between information and evidence. I don’t question that at all.

Senator SPECTER. And when Mr. Radek’s memorandum picks up

the issue of, on looking at a preliminary inquiry, that conduct could

not have been willful violation of the law and thus could not be

prosecuted criminally, and the memorandum is submitted by Mr.

Robinson, his superior, to the Attorney General saying that is a

wrong standard—you don’t consider state of mind on a preliminary

inquiry—can reasonable minds differ on that that the statute specifically excludes state of mind to determine whether there is a preliminary inquiry?

Mr. PARKINSON. I guess I am not sure how to answer whether

reasonable minds can differ. I think there were a lot of reasonable

minds engaged in this, but I think Mr. Robinson had the standard

correct.

Senator SPECTER. Well, there is a standard of if reasonable people disagree, and if no reasonable person would disagree as a matter of law if a case is thrown out, not a matter for the jury—you

don’t let a jury speculate if reasonable people would not disagree.

And Senator Torricelli was asking you if Mr. Radek was reasonable, and I am not contending he is not reasonable, but I am looking at a series of factors that he made critical decisions here which

were patently unreasonable; that reasonable people could not disagree; that evidence is different from information; that the statute

calls for state of mind not to be considered on the determination

of a preliminary inquiry.

That is correct, isn’t it?

Mr. PARKINSON. That is correct.

Senator SPECTER. And that when you take up the subject of state

of mind, there has to be clear and convincing evidence, not the exercise of prosecutorial discretion saying never mind. The prosecutor

may decide not to pursue it for a lot of reasons, but that is not the

same as finding clear and convincing evidence that there is no

criminal intent, right?

Mr. PARKINSON. That is correct.

Senator SPECTER. OK, thank you very much, Mr. Parkinson. It

was nice talking to a real lawyer. Thank you.

Mr. PARKINSON. Thank you, Mr. Chairman.

Senator SPECTER. Mr. Radek, would you come back, please?

Mr. Radek, you have a very distinguished career as a public servant, and I don’t think it makes any difference who appointed you

or whose pleasure you serve at. The question really is on a lineby-line analysis of a lot of tough legal concepts what is an appropriate judgment here. Was there an appropriate exercise of discretion as a matter of congressional oversight? If you have a motivation to succumb to pressure if the Attorney General’s job may be

in the balance, that is a factor of objectivity of judgment, if that

is going to be a consideration.

50

You were quoted in the New York Times on July 6, 1997. I will

read you the paragraph. ‘‘Radek, a bluff, cheerful man of 54, was

unwilling to discuss details of the ongoing investigation when I

spoke to him, but he was happy to defend the Justice Department’s

ability to investigate the executive branch. ‘The independent counsel statute is an insult,’ Radek said. ‘It is a clear enunciation of the

legislative branch that we cannot be trusted on certain species of

cases.’ ’’ Is that an accurate quotation?

Mr. RADEK. Yes, sir.

Senator SPECTER. As a generalization, you don’t think very much

of the independent counsel statute, to put it mildly.

Mr. RADEK. I was very happy to see its demise, Mr. Chairman.

Senator SPECTER. And before its demise, what did you think of

it?

Mr. RADEK. I didn’t like the statute. The fact that it was an insult was not as important to me as the damage I thought it did

to our system of Government.

Senator SPECTER. Why?

Mr. RADEK. Well, it set up a pseudo fourth branch of Government, one that was not responsible to the body politic.

Senator SPECTER. What do you think of the media?

Mr. RADEK. What do I think of the media?

Senator SPECTER. Yes. They are the fourth branch of Government, I thought.

Mr. RADEK. Oh, I am sorry. Let’s make this one the fifth.

Senator SPECTER. This would be the fifth branch of Government.

Mr. RADEK. You are absolutely right, Mr. Chairman.

Senator SPECTER. The media was there before the independent

counsel statute.

Mr. RADEK. You are absolutely right, and I apologize to my

friends in the media.

The fact is that it set up a system in which the checks and balances set up by the Founding Fathers simply did not work, and it

was to the disadvantage of the investigators. Everybody was subject to political criticism and no one was responsible to the body

politic, and I thought that for that reason the law was just a real

bad concept, and I think I had a lot of agreement in this body.

Senator SPECTER. But you took an oath to uphold the law, Mr.

Radek.

Mr. RADEK. Yes, sir, I did, and I——

Senator SPECTER. Not to make the law, not to disagree with the

law, but to uphold the law.

Mr. RADEK. That is absolutely right, and I did the very best I

could at all times. And I think I administered that law about as

well as it could be administered. I know you disagree with that.

Senator SPECTER. Well, you started off with a pretty negative

view of the law, as you have just said.

Mr. RADEK. Yes, sir, and can I point out—— Senator SPECTER. Usurpation of power, Founding Fathers. If you

were sitting here in a confirmation proceeding, you might not pass.

You are making law, not interpreting law, judge.

Mr. RADEK. I don’t think we have to worry about my being here

for a confirmation proceeding, Mr. Chairman.

51

Senator SPECTER. I don’t know about that, but I think you are

right. We don’t have to worry about it. We will just await the

events and see what happens.

Mr. Radek, when you use a standard of—the statute talks about

credible information, you use a standard of evidence. Isn’t that a

very far reach, information and evidence being very, very different?

Mr. RADEK. They aren’t, Senator, in the context of the independent counsel statute, because you have to take the phrase as a

whole. I mean, what the statute says is specific information from

a credible source. Specific information from a credible source is evidence. Now, the fact that I may have said at times specific evidence, specific and credible evidence, credible evidence, is simply a

redundancy.

What the statute says and what I have consistently applied—and

I think you will find no one to dispute this—is that we have to base

the information on—or the independent counsel statute has to be

triggered by information that is more than rumor, innuendo, speculation. It has got to be facts, and facts generally can be referred to

as evidence because they have to be in some way provable or not.

And your interpretation that I meant admissible evidence just

couldn’t be further from the way it was, Mr. Chairman.

Senator SPECTER. But, Mr. Radek, evidence means admissible.

That is what evidence means.

Mr. RADEK. No, it doesn’t, because then what would inadmissible

evidence be?

Senator SPECTER. Evidence which doesn’t come in.

Mr. RADEK. You just called it evidence, Mr. Chairman. That is

what it is. Evidence is facts. Some of it is admissible, some of it

isn’t.

Senator SPECTER. Do you think that when the Congress wrote

the language of the specificity of the information received and the

credibility of the source of information that those words were used

unadvisedly?

Mr. RADEK. No, I don’t. I think actually that was a pretty good

standard. If you are going to have an independent counsel act to

be triggered by something, it seems to me that that was a pretty

solid and well-thought-out limitation.

Senator SPECTER. When you start to talk about inadmissible evidence, you are really talking about a non-sequitur. Once it is concluded to be inadmissible, it is not evidence, although it could be

evidence and be excessively prejudicial, so that there is some evidence which is not admissible, inadmissible evidence, even though

it does qualify as evidence.

Mr. RADEK. Mr. Chairman, let me respond by saying I have

spent a good deal of professional life inside Federal grand juries.

Every fact that we present to that grand jury we consider to be evidence. Some of it is blatant hearsay, some of it is less than substantiated, but it is information that the grand jury needs to know.

That is evidence. It is information; it is information that is based

upon fact.

And the only reason I use the word ‘‘evidence’’ instead of ‘‘information’’ in some instances, besides the fact that it is wordsmithing

and I don’t want to be too repetitious, is to connote that what we

mean here is facts and not just speculation and innuendo.

52

Senator SPECTER. Well, Mr. Radek, with all due respect, you are

not accurately citing what is presented to grand juries. Grand juries get a lot of materials which are not evidence, a lot of hearsay,

a lot of material which would not come into a court.

Mr. RADEK. We simply disagree on the definition, Senator. But

I can assure you, please believe that from the beginning to the end,

the standard that was applied—and Mr. Parkinson just said the

same thing—the standard we applied was the statutory standard,

specific information from a credible source.

Senator SPECTER. Well, Mr. Radek, I do not accept that. I do not

accept that at all. I do not accept that when you talk about evidence instead of information, but I am interested to hear what you

were doing. I am interested to hear what the Chief of the Public

Integrity Section was doing requiring evidence instead of information. That is a big distinction to me. And we may disagree on it,

and I have my rule and you have yours.

Turning to your memorandum to Mr. Robinson dated August 5,

on page 18 where you say, ‘‘That conduct could not have been a

willful violation of the law and thus could not be prosecuted criminally’’—and Mr. Robinson picks that up in his memorandum to the

Attorney General dated August 25 at page 4 and says, ‘‘In Public

Integrity’s version of the ‘may have violated the law’ standard, in

my view, issues of ‘state of mind required for violation of criminal

law involved’ that any violation could not have been a willful violation’’—and then he says a little further down, ‘‘considerations of

this matter are prohibited by the Independent Counsel Act until

such time as a preliminary investigation has been commenced.

Under section,’’ et cetera, ‘‘state of mind considerations are not

even to be considered.’’

Is Mr. Robinson correct about the appropriate legal standard?

Mr. RADEK. Yes, he is, because state of mind considerations are

not to be considered during the preliminary analysis, only after a

preliminary investigation.

Senator SPECTER. So you were corrected on that?

Mr. RADEK. Yes, sir, to the extent that my remark may have

based a decision or recommendation on state of mind. But I am unable to find it in my memo. You said it was page 19?

Senator SPECTER. Page 18 in your memo and page 4 in his

memo.

Mr. RADEK. I am sorry.

Senator SPECTER. Mr. Radek, you gave considerable weight to

the advice of counsel defense. What is your view as to the testimony of Mr. Parkinson on that point?

Mr. RADEK. Well, I agree with Mr. Parkinson that the problem

of the lack of total neutrality of the attorneys somewhat weakens

the state of—or I mean the advice of counsel defense. And, in fact,

that was an integral part of my memorandum.

But you have to understand, Mr. Chairman, that I didn’t think

this was a crime. I mean, I didn’t think that we had a criminal violation here, and so all of the other issues that were sort of involved

in that—it was sort of intuitive to me that there couldn’t be criminal intent in a case where I didn’t believe anybody could understand that this would be a crime.

53

Senator SPECTER. Well, how about the false statement issue for

the Vice President?

Mr. RADEK. Well, the false statement issue for the Vice President

was something else, but that didn’t involve advice of counsel.

Senator SPECTER. So you thought essentially the advice of counsel point was an irrelevancy because there was no crime to begin

with, so advice of counsel wasn’t necessary?

Mr. RADEK. Well, it is not irrelevant because there were clearly

those who disagreed with me, including the Attorney General, that

there might be a potential crime here.

Senator SPECTER. But so far as you were concerned, if you start

out with a conclusion that there is no criminal conduct here in any

event, that is the beginning and end. Wouldn’t that be a short

memorandum to the Attorney General, no crime involved?

Mr. RADEK. My view is expressed early and often as to—and we

are speaking merely about the Common Cause allegation here that

the use of soft money to buy the issue ads was never going to be

a crime until the Federal Election Commission ruled on the issue

and said that it was going to be a crime; that it would be no only

impossible for anyone to form criminal intent, but until the FEC

said it was a crime, it wouldn’t be. That was my position and I expressed it whenever asked.

Now, what flows from that is the fact that I believed that no one

could possibly form criminal intent because the law was so unclear

that there was no real prohibition. And the fact of a—or the element of a knowing violation of the law was necessary to get a conviction in an FEC case.

Senator SPECTER. What did you think of the conclusion of Mr.

Robert Litt, Principal Associate Deputy Attorney General, in concluding that the evidence did not meet the clear and convincing

standard of the Act to decide that the Vice President did not knowingly make a false statement?

Mr. RADEK. I disagreed with it, but I respected it, like many

other opinions of Mr. Litt’s and others in the discussions.

Senator SPECTER. Senator Torricelli asked questions about other

independent counsel appointments. Were you involved in the appointment of independent counsel for Secretary of Labor Alexis

Herman?

Mr. RADEK. I was.

Senator SPECTER. I questioned the Attorney General about this

in this room at some length and found it really an inexplicable appointment. In her statement appointing an independent counsel,

she says this among other things: ‘‘While I cannot conclusively determine at this time that any of these allegations are credible,

much of the detail of the story he has told has been corroborated,

though none of it clearly inculpates Herman.’’ And she goes on, ‘‘Although our investigation has developed no evidence clearly demonstrating Secretary Herman’s involvement in these matters and

substantial evidence suggesting that she may not have been involved, a great deal of Yene’s story has been corroborated. We are

thus unable to conclude that he is not credible.’’ With those findings that the evidence against Secretary Herman

was not credible, how in the world was it justified to appoint independent counsel as to her?

54

Mr. RADEK. The discussion that you are talking about there, Senator, is one part of the information, and that is Mr. Yene. He made

certain allegations and there was much debate about whether or

not he was believable, he was a credible source of information.

Senator SPECTER. Well, what was his role? He was the person

who is supposed to have provided the money?

Mr. RADEK. He was a person who was involved in many of the

transactions. He was more a witness to the transactions than deeply involved in any of them. But he told a story, and most of our

preliminary investigation involved whether or not we could corroborate his story. And his story, to the extent we could investigate it,

was corroborated, not to the extent that we still believed he was

totally credible, but not to any extent that we could dismiss what

he said. And so we were left in a situation where further investigation was required.

Senator SPECTER. Well, I took a look at the Herman matter and

it seems to me incredible. She was exonerated by independent

counsel, which, of course, is not the standard. But to have the principal antagonist here and make findings that there could not be a

determination that Yene’s allegations are credible, not just him but

the allegations, and though none of it clearly implicates Herman,

and then substantial evidence suggesting that she may not have

been involved—the Herman independent counsel looks to me like

a make-weight to start to build up a record. Look at all these people the Attorney General has found independent counsel for. Independent counsel Ray made a finding as to Mr. Nussbaum that

there was hardly any basis for independent counsel having been

appointed.

And I only mention it tangentially and briefly because I don’t

think it makes a point that because seven independent counsels

had been appointed that this is a rigorous standard on the appointment of an independent counsel.

Senator Sessions.

Senator SESSIONS. Thank you, Mr. Chairman.

Well, Mr. Radek, you had no doubt, regardless of everything else

we have said, that this was a major issue of importance to the Nation. This fundraising issue had been part of the last-minute campaign issue and important to the newly elected President and Vice

President.

Mr. RADEK. No doubt whatsoever.

Senator SESSIONS. And you are aware that that called for—well,

I would agree with the Chairman and the FBI Directors and many

others that you were compelled to require an independent counsel.

But assuming you were not and it was just discretionary as to

whether or not to have an independent counsel, if the Department

were to be able to keep the case, it was going to have to conduct

it with the highest degree of professionalism, objectivity, and aggressiveness consistent with the law. Wouldn’t you agree?

Mr. RADEK. I agree.

Senator SESSIONS. So you decided to keep the case?

Mr. Radek. I didn’t decide to keep the case.

Senator SESSIONS. You didn’t give it to the independent counsel.

The Attorney General, at your recommendation, decided to keep it

in the Department.

55

Mr. RADEK. It is not within my discretion to give things to an

independent counsel. It is not necessarily within the Attorney General’s discretion, although she could have a regulatory independent

counsel. The statute requires certain things to have or not to have

an independent counsel.

Senator SESSIONS. Well, the Attorney General——

Mr. RADEK. Senator, I am sorry to interrupt, but again I made

recommendations on allegations as they came up. I did not have a

discussion with the Attorney General talking generally about who

should investigate this. It came to me initially.

Senator SESSIONS. And you supervised the investigation and still

do?

Mr. RADEK. No, sir. I haven’t been involved in the supervision of

that since shortly after Mr. La Bella arrived.

Senator SESSIONS. Who is running it now?

Mr. RADEK. Well, her current head of the task force is Mr.

Conrad, and he is supervised by Mr. Gerschel, a deputy assistant

attorney general, and Mr. Robinson, the Assistant Attorney General.

Senator SESSIONS. But if he wanted to interview lawyers and ask

them questions about the case——

Mr. RADEK. That requires certain approvals within the Department.

Senator SESSIONS. Are you totally out of the investigation?

Mr. RADEK. I am informed——

Senator SESSIONS. At least the Public Integrity task force?

Mr. RADEK. I am informed of the agenda for their weekly meetings with the Attorney General, and Mr. Conrad calls me for advice

from time to time, as did Mr. Visinanzo.

Senator SESSIONS. Do they work for the Public Integrity Section?

Mr. RADEK. No.

Senator SESSIONS. They are not part of the Public Integrity Section now?

Mr. RADEK. I believe they are on my rolls as a detail, but they

are not part of—they are not responsible to the management of the

Public Integrity Section.

Senator SESSIONS. Well, let me just run over some things and

see. Originally, when this matter broke about the Buddhist Temple

controversy, the U.S. attorney’s office in Los Angeles commenced

an investigation, did it not?

Mr. RADEK. It did—it did not. I am sorry.

Senator SESSIONS. Well, it developed a plan to do the investigation, didn’t it?

Mr. RADEK. It requested permission from the Public Integrity

Section to open an investigation, and that permission was given.

Senator SESSIONS. And how long did they—they developed a plan

of investigation after it was given to them?

Mr. RADEK. I don’t know.

Senator SESSIONS. Well, do you recall stopping that investigation?

Mr. RADEK. I recall calling Mr. Ziperstein, the first assistant out

there at the time, and telling him that the matter should be transferred to the campaign finance task force.

56

Senator SESSIONS. Do you recall a November 1, 1996, letter to

that office that states the Public Integrity Section—that is you— responsible for all independent counsel matters, has been assigned

to examine all of the allegations to determine whether further investigation is warranted?

Mr. RADEK. I recall that well.

Senator SESSIONS. Signed by who?

Mr. RADEK. Me.

Senator SESSIONS. Well, you don’t assign it to yourself, do you?

Mr. RADEK. Sure.

Senator SESSIONS. You are the Chief of the Public Integrity Section?

Mr. RADEK. Yes, sir.

Senator Sessions. And you wrote them and said you had been assigned to examine these allegations, not by the Attorney General?

She didn’t have anything to do with this?

Mr. RADEK. I don’t know whether she did or not. I was assigned

by Mr. Litt.

Senator SESSIONS. Mr. Litt?

Mr. RADEK. Yes.

Senator SESSIONS. So you were assigned by Mr. Litt, not yourself——

Mr. RADEK. Yes.

Senator SESSIONS [contining]. To determine whether further investigation is warranted and whether the appointment of an independent counsel might be appropriate. ‘‘As it would be necessary in

any matter with potential independent counsel ramifications, your

office should take no steps to investigate these matters at this

time.’’ Mr. RADEK. That is correct.

Senator SESSIONS. So you stopped it there in Los Angeles?

Mr. RADEK. I stopped it—well, actually, I didn’t stop it because

they never got started. And, in fact, when I asked them for all their

evidence, they had none. They cited lack of agent resources for not

having conducted any investigation during the several weeks that

they had it.

Senator SESSIONS. Well, on November 30—that was November

1—the Attorney General made her decision not to appoint an independent counsel. Do you recall that?

Mr. RADEK. In response to a letter from Congress, I believe, yes.

I don’t know the——

Senator SESSIONS. Did you advise her on that?

Mr. RADEK. Yes, I am sure I did.

Senator SESSIONS. Well, let me ask you, between the time you

stopped the Los Angeles attorney’s office and the time 30 days later

she made this decision to not go forward, what was done in the investigation?

Mr. RADEK. Well, first of all, Senator, there was no decision ever

made not to go forward. In fact, the Hsi Lai Temple matter to

which you refer was investigated vigorously and eventually resulted in the conviction of Maria Hsia.

Senator SESSIONS. Well, between the time of this 30 days and the

time you indicated she made her decision that she was not going

to appoint an independent counsel at your recommendation, what

57

evidence was gathered? You said none had been done by the U.S.

attorney’s office.

Mr. RADEK. My understanding is that subpoenas and interviews

began immediately upon the receipt of that thing to the task force.

Senator SESSIONS. Well, was the FBI involved in it then?

Mr. RADEK. About then, yes.

Senator SESSIONS. During this 30-day period when you made the

decision and the recommendation, had the FBI participated in this

investigation at all? And I will advise you I understand they did

not.

Mr. RADEK. I understood from Mr. Gallagher’s testimony earlier

that the meeting he says happened in December was to get the FBI

involved. My impression was they were involved before that, but he

may be right. I just don’t recall.

Senator SESSIONS. Were witnesses from the Temple interviewed?

Did you review their reports of interview, the FBI 302’s?

Mr. RADEK. During that 30 days, I am sure I did not, no, Senator. But eventually, of course, they were interviewed and Ms.

Maria Hsia was prosecuted for the——

Senator SESSIONS. Some were interviewed, but some had fled the

country by then, had they not?

Mr. RADEK. I don’t know that they fled the country before they

were interviewed. Clearly, there were witnesses who fled the country before the Hsia trial, and we tried to get them back, ‘‘we’’ being

the Department of Justice.

Senator SESSIONS. Well, I want to go back and ask you to be explicit. You are in charge of one of the most important investigations

in the country involving the President and Vice President of the

United States. You advised the Attorney General not to appoint an

independent counsel. She formally declined on November 30, 1996.

I would like to know what interviews and investigation had been

done prior to you advising her of that specifically.

Mr. RADEK. Senator, the November 1996 response was a response to a letter from Congress. It was about the allegations made

in a letter from Congress. It had little or nothing to do with what

we were investigating in the task force, except to the extent that

it set forth the same things.

And so when you ask me what was done on the Hsi Lai Temple

investigation, I will be glad to tell you that everything was done

and it ended in a prosecution. If you ask me what was done during

that first 30 days that caused a letter to say no independent counsel, I can say nothing because the two were not related closely.

Senator SESSIONS. Well, I want to talk about the process here,

is what I am talking about. And I am talking about whether or not

we should have had an independent counsel, which I think the

facts in this brouhaha and spasm we are now in is absolute proof

of why we should have had one. And I would like to know at the

time she made that opinion whether or not any witnesses had been

interviewed, and I would like for you to name who they were.

Mr. RADEK. I cannot name, and I guess I have to answer I don’t

know just based on my recollection, Senator.

Senator SESSIONS. Were John Huang or any Democratic National

Committee officials interviewed?

58

Mr. RADEK. I brought John Huang and his counsel in very early,

but I think it was probably after this.

Senator SESSIONS. Now, there was a video of this event, was

there not?

Mr. RADEK. I believe there was.

Senator SESSIONS. How soon did anyone inquire about that video

and where it was?

Mr. RADEK. I don’t know.

Senator SESSIONS. The video would have shown exactly what the

Vice President knew and did and said if it had been—or least what

he said and did.

Mr. RADEK. And did, yes.

Senator SESSIONS. Wouldn’t it?

Mr. RADEK. Yes, it would.

Senator SESSIONS. It would have been valuable evidence.

Mr. RADEK. It is valuable evidence.

Senator SESSIONS. Where is it?

Mr. RADEK. I don’t know.

Senator SESSIONS. Do you think it may have been recovered had

the agents moved immediately and perhaps the Los Angeles U.S.

Attorney’s office hadn’t been stopped?

Mr. RADEK. I think that the task force moved more quickly than

the U.S. attorney’s office would have, but that is my opinion.

Senator SESSIONS. Well, let’s just say it this way. In that 30 days

of November after you stopped them and it was under your supervision, this investigation was under your supervision, what did you

do to investigate?

Mr. RADEK. It is more accurate to say that we took the case from

them. It is not accurate to say we stopped them. But that aside,

this case was handled as a task force matter. It was investigated,

and it was investigated vigorously. I can’t recount for you what was

done in the first 30 days of that investigation. I am sorry.

Senator SESSIONS. Well, my information is nothing was done of

significance. Witnesses fled, the video disappeared, records were

shredded. You don’t dispute that, do you?

Mr. RADEK. Actually, I do. I don’t know that there is any evidence that there were records shredded in the Hsi Lai Temple case,

and I don’t think there were any witnesses who fled during those

first weeks. But that is my best recollection.

Senator SESSIONS. Well, in 1997 we had had a basic view by the

Vice President, and I think the Attorney General, that this was soft

money and it wasn’t covered by the law. Isn’t that correct?

Mr. RADEK. Are we talking about the Hsi Lai Temple?

Senator SESSIONS. Yes.

Mr. RADEK. The soft money had nothing really to do with that,

except as it might have caused us a problem with respect to foreign

contributions. The real problem in the Hsi Lai Temple case was

conduit contributions, a concept I know you are familiar with.

Senator SESSIONS. Well, I know that. But at any rate, in September of 1997 the Washington Post reported $120,000 of money

solicited by Vice President was, in fact, deposited in hard money

accounts. And you were in charge of conducting a 30-day review of

that with the task force, is that correct?

59

Mr. RADEK. That is not related to the Hsi Lai Temple matter, unless I am confused, Senator.

Senator SESSIONS. Well, I am just going through all the matters

here.

Mr. RADEK. If you would—the hard money/soft money mixup,

and I will call it a mix-up and I will explain why I will call it a

mix-up, occurred with relation to the Vice President and President’s phone calls from Federal properties, potential violations of

607, the Pendleton Act. It was—— Senator SESSIONS. I am familiar with that, but I guess my point

to you is in 1997, we had this shake-up, this blow-up, when we

found out that the excuse on the phone call money was not valid.

There was hard money involved, isn’t that correct, and La Bella

was appointed?

Mr. RADEK. La Bella came in as a result of the press finding out

before the task force and the FBI that those contributions that had

been—some contributions that had been solicited by the Vice President and possibly the President had been converted from soft

money accounts to hard money accounts by the DNC.

Senator SESSIONS. And that had to be a source of embarrassment.

Mr. RADEK. Absolutely.

Senator SESSIONS. Well, how was it that the press finds out what

you are supposed to be investigating?

Mr. RADEK. My understanding is that the information was contained in documents that the FBI had in its possession, but that

they had not had a chance to review because there were technical

problems with the document software that the FBI had and the attorneys were unaware of it.

Senator SESSIONS. Now, was Mr. La Bella—when he was brought

in to head the investigation, was that part of Public Integrity or

was that part of an independent Department of Justice task force?

Mr. RADEK. Well, it evolved. When Mr. La Bella was appointed——

Senator SESSIONS. What was he told that he was going to do?

Mr. RADEK. Well, I can tell you what he told me he was told and

I can tell you what I was told. Mr. Litt, who was primarily giving

instructions as to management issues at this time, told me that I

was to supervise Mr. La Bella. He told Mr. La Bella that he was

not to be supervised by me. You can see where this might have

caused some misunderstandings and didn’t get Chuck and I off on

the right foot. Eventually—— Senator SESSIONS. Not a good step if you are trying to maintain

public confidence in your Department of Justice investigation of

your ultimate supervisors.

Mr. RADEK. I don’t think it really hurt the investigation any, but

it sure caused some misunderstandings between Mr. La Bella and

I.

Senator SESSIONS. Well, it hurt public perception. I will just tell

you why. Let’s note a few things. On September 9, 1997, your Public Integrity Section attorneys that were investigating the matter

sent a letter to Vice President Gore’s chief legal counsel and they

solicited his opinions about whether or not the law had been violated. Isn’t that right?

60

Mr. RADEK. In independent counsel matters, we invariably do

that, Senator.

Senator SESSIONS. And they affirmatively sought out whether or

not there had been, ‘‘any contemporaneous advice of counsel concerning the solicitation of contributions on Federal property,’’ among other things you asked.

Mr. RADEK. Yes, we would do that routinely in an independent

counsel matter. We are reliant upon the subjects because we have

no compulsory process.

Senator SESSIONS. And then on September 29, 20 days later, you

advised the Attorney General to proceed to a preliminary inquiry

before deciding the independent counsel issue. And as part of this,

you cite a footnote of your letter that Vice President Gore’s personal counsel had urged the same process to negate any, ‘‘appearance,’’ in reaching a conclusion prior to having such investigation.

Mr. RADEK. I am sorry?

Senator SESSIONS. You noted in your footnote that Vice President

Gore’s counsel joined with you in the recommendation to the Attorney General that there be a preliminary inquiry. Is that right?

Mr. RADEK. I guess so. I wouldn’t have said it if it wasn’t true.

Senator SESSIONS. So then on October 2, a few days later, you

drafted another memo to Mr. Robinson, who was the Chief of the

Criminal Division, regarding the matter. And on page 2 of that

memo you stated, ‘‘We have discovered evidence from which it can

be inferred that the Vice President may have known at the time

he made his fundraising telephone calls that the DNC needed hard

money to keep its message on the airwaves.’’ Does that sound

right?

Mr. RADEK. Yes, sir.

Senator SESSIONS. But you later recommended no independent

counsel be appointed. Did you discover any other specific information to refute this evidence?

Mr. RADEK. Oh, sure, we discovered a lot. We did a preliminary

investigation, and you have the memorandum that sets for the details.

Senator SESSIONS. I am not sure it is as strong as you would suggest. On November 30, a month later, a month-and-a-half later perhaps, Mr. La Bella wrote a letter to the Attorney General through

Mark Richard and stated that his task force—were you operating

another investigation, in addition to his task force?

Mr. RADEK. No, sir.

Senator SESSIONS. Well, he wrote to Mr. Richard that his task

force was requested by you to halt their own investigation into

these matters, and that as of the same date the ‘‘investigation remains on hold at the request of Public Integrity.’’ Why did you ask

Mr. La Bella to back off, especially when the Attorney General

brought him on board on September 16 to lead this aggressive investigation?

Mr. RADEK. I am not familiar with that document, Senator. Can

you tell me what I was asking him to back off of?

Senator SESSIONS. On November 30, Mr. La Bella wrote, through

Richard, that his task force was requested by you to halt their investigation of these matters, suspend them. This is a quote from

his letter of November 30, ‘‘On November 21, I received the first

61

draft of Public Integrity’s memorandum on VPOTUS,’’ Vice President of the United States, ‘‘calls.’’ I am quoting now: ‘‘This is the

first write-up I have seen regarding the facts developed by Integrity’s inquiry. As structured, I have no role in the preliminary investigation of the President’s calls from the White House, except

for my attendance at his interview on November 11, 1997. Nor

have I been provided copies of the key documents referenced in

Public Integrity’s memorandum. Thus my analysis, such as it is,

and reaction to Public Integrity’s memorandum is very limited. I

must give deference to the instincts and judgments of prosecutors

and investigators who conducted and participated in the preliminary inquiry.’’ Then in footnote 7 he quotes the suggestion on page 11, footnote

10, of the Public Integrity draft that the task force is continuing

to look at the Democratic National Committee’s allocation practice

is somewhat inaccurate. ‘‘The task force was halted at the request

of Public Integrity because they feared it might chill those who

were talking voluntarily with POTUS and VPOTUS investigators.

The investigation was halted at the time when the task force was

attempting to interview high-level DNC employees, the very people

who might have shed some light on the contact with the White

House and the essence of the Common Cause investigations. This

investigation remains on hold at the request of Public Integrity.’’ So did you stop that investigation, and if so why?

Mr. RADEK. I stopped it because during the early course of our

preliminary investigations on the President and the Vice President,

witnesses expressed reluctance to talk because they felt they were

subjects of the Common Cause allegation investigation. But they

were willing to talk on the preliminary investigation which had a

90-day window as long as that investigation was not moving forward.

There was also a resource issue with respect to needing attorneys

and agents to conduct the preliminary investigation within a certain window of time. But I assure you that window of time was

short and they went back to what they were doing shortly thereafter.

Senator SESSIONS. Well, this is the second incident of you, I

would suggest, stopping an ongoing investigation. And I find it

strange and disingenuous that the person the public had all been

told was conducting the investigation was stopped and not allowed

to pursue the investigation.

Mr. RADEK. Well, the person who was conducting the investigation was never stopped from thoroughly investigating any allegation, and I believe he so testified, Senator Sessions. But to the extent that there was a temporary halt, I admit that it was done, but

I thought it was necessary.

Senator SESSIONS. So you stepped in and took over and started

making decisions, contrary to the opinion of the attorney the American public had been told was going to conduct this investigation.

Mr. RADEK. I don’t know that it was contrary to his opinion, but

the Attorney General left the determination of independent counsel

matters with the Section because of our experience with it.

Senator SESSIONS. Well, I will just read you again what he said.

‘‘The task force’’—that is La Bella’s group—‘‘was halted at the time

62

when the task force was attempting to interview high-level Democratic National Committee employees, the very people who might

have some light to shed on contact with the White House, the essence of the Common Cause allegations.’’ Do you disagree that he

was not happy?

Mr. RADEK. Oh, no.

Senator SESSIONS. It doesn’t sound like he was happy to me.

Mr. RADEK. No. I am sure he wanted to do this job because that

is what he did, and I would have been unhappy if I were him, too.

But I can assure you it was a temporary halt.

Senator SESSIONS. Well, as far as I knew and as far as any

American knew, Mr. La Bella was going to conduct this investigation according to his best judgment as a professional career attorney. And now we find out that a high-level appointee of the Attorney General is intervening and stopping it, isn’t that correct?

Mr. RADEK. I am not an appointee of the Attorney General, Senator, and I didn’t stop him for very long.

Senator SESSIONS. Well, you stopped him and he was not happy

about it. In 1998, the investigation began to focus on whether the

Vice President lied to investigators during the November 11, 1997,

interview, and this issue was brought to the forefront by La Bella’s

July 16, 1998, report to the Attorney General reviewing his strong

recommendations that an independent counsel be appointed.

The key point I would like to focus on with you is the follow-up

investigation was conducted not by a task force attorney, but by

one of your assistants, Mr. Ainesworth, wasn’t it?

Mr. RADEK. Mr. Ainesworth was detailed to the task force, Senator.

Senator SESSIONS. Who detailed him to it?

Mr. RADEK. I did. I hired him onto the task force. Many of the

task force attorneys are detailed from Public Integrity.

Senator SESSIONS. Usually, a task force attorney gets to decide

who his own attorneys are, doesn’t he?

Mr. RADEK. At the time I hired him, I was in charge of the task

force.

Senator, let me correct one thing that you have said, and that

is the fact that the Vice President may have made false statements

to the FBI. That information came from the Vice President through

his counsel, Jim Neil. It was not investigated because it was

brought to anyone’s attention in the La Bella memorandum.

Senator SESSIONS. Well, regardless, that was the investigation.

Let me ask you this. During the follow-up interview of the Vice

President himself, it was not done by Mr. La Bella or any other attorney from the task force. It was done by Mr. Ainesworth, isn’t

that correct?

Mr. RADEK. Mr. Ainesworth was on the task force. And, in fact,

all of the independent counsel matters that were conducted during

this investigation were conducted jointly by the task force and the

Public Integrity Section.

Senator SESSIONS. Well, who was the head of the task force?

Mr. RADEK. I believe by that time it was Mr. Visinanzo.

Senator SESSIONS. He wasn’t in on the interview?

Mr. RADEK. No, and neither was I. It was determined to let the

trial attorneys do it.

63

Senator SESSIONS. Who determined that?

Mr. RADEK. I think Mr. Visinanzo.

Senator SESSIONS. He didn’t even appear himself at the interview?

Mr. RADEK. No, and to the extent that Mr. La Bella and I attended the early interviews, it wasn’t all that useful either. The

trial attorneys and the agents should have been conducting these

interviews and that is the way it went.

Senator SESSIONS. And back at the first interview of the Vice

President, you issued directions about what subjects would be covered and what were not, isn’t that correct?

Mr. RADEK. I issued no limitations, except that it was agreed

generally that we would confine ourselves at that time to the independent counsel issues.

Senator SESSIONS. Didn’t you direct that there be no further inquiries into the Temple matter at that time?

Mr. RADEK. Not that I recall. Do you have something to refresh

my recollection?

Senator SESSIONS. That is my understanding.

Mr. RADEK. I don’t believe that I did. If I did, it would have simply been to expedite the independent counsel matter. Again, the

rules of that interview were not set too firmly, but it was clearly

our intention simply to conduct the preliminary investigation under

the independent counsel statute at that time and to conduct other

interviews later. And I think Mr. La Bella testified we weren’t

ready to do the whole panoply of questions on the President or the

Vice President or a whole lot of other people at that time.

Senator SESSIONS. Well, I would just say, Mr. Chairman, that I

believe at best this was a herky-jerky, uncoordinated investigation

that should have been placed in the hands—if it were kept in the

Department of Justice, which I think was wrong, but if it had been

it ought to have been placed in the hands of a top-flight professional prosecutor who should have been allowed to do this job to

pursue the facts.

Ultimately, the Attorney General and the Public Integrity Chief

would be involved in any decision to charge, but the question and

concern I have is that the management of the investigation, the

gathering of the facts, was systematically frustrated and not proceeded with effectively. And I think that was wrong. I think it has

embarrassed the Department of Justice, and I think it should embarrass Mr. Radek.

Senator SPECTER. Thank you very much, Senator Sessions.

We will continue the matter. We still have the memorandum of

FBI Director Freeh to get into, the memorandum of Director Freeh

recommending independent counsel and the memorandum of Director Freeh regarding the conversation between Messrs. Radek and

Esposito, and the conversation between the Attorney General and

the Director of the FBI. And we hope to move into those matters

shortly after we come back from recess in 10 days.

Mr. Radek, we may want you to come back, depending on the

testimony of Mr. Esposito.

Senator SESSIONS. Mr. Chairman, I would note one more matter

that frustrated——

64

Senator SPECTER. Before you do, I just want Mr. Radek’s statement as to his willingness to come back.

Mr. RADEK. I will not say that I am happy, Mr. Chairman, but

of course I will come back.

Senator SPECTER. Thank you.

Mr. RADEK. And I will answer any questions.

Senator SESSIONS. I will pass on that.

Senator SPECTER. That concludes our hearing.

Mr. RADEK. Thank you.

Senator SPECTER. Before we conclude, the statements of Chairman Hatch and Senator Thurmond will be included in the record.

[The prepared statements of Senators Hatch and Thurmond follow:]

PREPARED STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE

OF UTAH

The Judiciary Committee has long been interested in the issues surrounding the

application of the Ethics in Government Act—the Independent Counsel statute—and

in particular, how that Act has been applied to the fundraising abuses which occurred during the 1996 presidential elections. The application of the Independent

Counsel statute raises very serious issues of public confidence in the enforcement

of our laws and in our institutions of government. As such, they are an important

area for Judiciary Committee oversight.

This Committee, in fact, was the first Committee to formally call for the appointment of an Independent Counsel for the 1996 campaign finance scandal, having

done so back in 1997. We held several hearings on the issues underlying the debate

and explored the critical questions of whether the Attorney General was required

to appoint an independent counsel under the mandatory provisions of the Act, and

the related question of whether, in any case, she should appoint an independent

counsel under the discretionary provisions of the Act due to inherent conflicts of interest.

During my questioning of the Attorney General, I made it clear that she was inherently conflicted in investigating the President and Vice President. Now, evidence

uncovered by this Committee, under the joint efforts of myself, Senator Specter,

Senator Grassley and others, demonstrate that Senate Republicans were not the

only ones who felt the Attorney General was conflicted and should appoint an independent counsel.

We know now that the FBI Director, the hand-picked lead prosecutor for the Department of Justice Task Force, Charles La Bella, and other senior members of the

Justice Department and the FBI were arguing in favor of the appointment of an

independent counsel, but to no avail. Documents grudgingly turned over to the Justice Department reveal that senior members of the Justice Department—such as

Robert Litt and the Chief of the Criminal Division, James Robinson, argued in favor

of the appointment of an independent counsel as to at least one or more of the fundraising related allegations. Veteran, career prosecutors assigned to the Task Force

felt the same way. Despite this, and despite the strongly held views of the FBI that

an independent counsel was necessary, the Attorney General refused to appoint one.

Indeed, Attorney General Reno has persistently suggested that the law prohibited

her from appointing an independent counsel.

We will try to get to the bottom of that decision. Part of the problem appears to

be an overly narrow and constricted interpretation of how to proceed under the statute and a failure to analyze the facts as a whole.

There is also evidence that considerations besides the facts and the law may have

influenced—consciously or unconsciously—the analysis of the Justice Department.

Documents uncovered by the Committee include a memorandum from the FBI Director to his Deputy Director, Mr. Esposito, dated December 9, 1996, which reflects

the fact that Mr. Radek—Attorney General Reno’s preferred lead investigator—

made comments that there was a lot of pressure on him because the Attorney General’s job may hang in the balance or words to that effect. Such comments are profoundly disturbing. As difficult as it may be, the Attorney General and her staff

must put justice and the fair, impartial application and enforcement of the law

ahead of their personal careers. The fact that senior officials within the Justice Department felt pressure only underscores the inherent conflict of interest she and the

65

Justice Department had in investigating allegations against the President and Vice

President.

The documents are also disturbing in that they reflect a seeming inability of the

Justice Department to reassess their early conclusions in light of new facts. The documents confirm what I have been saying for years—that rather than apply the law,

Reno’s inner circle saw it as their mission to search for new reasons not to appoint

an independent counsel even when additional facts call into question past rationales

for not appointing one. For example, new evidence surfaced in the investigation of

potential false statements by Vice President Gore that could not be ignored by some

senior members of the Justice Department—yet still the Attorney General did not

appoint an independent counsel. The witnesses may address this in more detail, but

the discovery of additional notes of meetings, memos to the Vice President and witness testimony provided compelling evidence that further investigation was necessary into whether the Vice President made false statements when he told the Justice Department task force that he was not aware of the hard money component of

the media fund.

Not only did the Attorney General reject the views of Mr. Parkinson, the FBI Director, and Mr. La Bella on this score, but senior members of the Justice Department also concluded that an independent counsel was appropriate on this issue.

In a November 22, 1998 memorandum to the Attorney General, Mr. Robert Litt

advised that, whether or not there was ultimately an indictable case, he could not

conclude on the existing evidence that there was clear and convincing evidence that

Vice President Gore did not possess the requisite intent to be guilty of making a

false statement.

At this critical stage in applying the Independent Counsel statute, it was incumbent upon the Attorney General to focus on the facts—and not simply prefer one

set of inferences over another.

There are serious questions to be answered here concerning whether, in the end,

the Justice Department and the Attorney General did their jobs. I commend Senator

Specter and the other members of the subcommittee for their diligence.

PREPARED STATEMENT OF HON. STROM THURMOND, A U.S. SENATOR FROM THE

STATE OF SOUTH CAROLINA

Mr. Chairman: I am pleased that we are holding this oversight hearing today regarding the 1996 campaign finance investigations. We have with us two men who

have been actively involved in the details of the investigation and of the debate

within the Administration over whether to seek an Independent Counsel.

From the beginning, F.B.I. under Director Freeh was convinced that this investigation of 1996 fundraising irregularities should not be handled within the Department and that an Independent Counsel must be appointed. He made this clear to

the Attorney General in meetings and in memoranda that the Department has

made every effort to prevent from becoming public.

The conclusion he reached was based on a straightforward approach to the law

and the facts. The primary reason for the Independent Counsel statute was to have

an outside prosecutor investigate potential wrongdoing by top Executive Branch officials when the Attorney General would have a conflict of interest. The standard was

clearly met. For example, it was reported in the media this past weekend that Mr.

Radek told the F.B.I. very early in the investigation that the Attorney General’s job

may hang in the balance. This is a classic example of a conflict of interest that

makes the need for a special counsel more clear.

The investigation has gone forward within the Justice Department, but it has

never been aggressive or effective. For example, John Huang, who funneled at least

$1.6 million of illegal contributions to the Democratic Party in 1996, received probation, which only covered charges that predated the 1996 campaign.

I find it particularly unfortunate that the Chief of the Public Integrity Section,

who is here today, has always been a major impediment to the appointment of an

independent counsel. Of all people, he should understand how critical it is to maintain the people’s confidence in the fairness and impartiality of our system of justice.

It is clear that the only way to restore public trust in this investigation is to appoint

a special counsel, and I again urge the Attorney General to do so.

Senator SPECTER. That concludes the hearing.

[Whereupon, at 12:53 p.m., the subcommittee was adjourned.]

(67)

THE 1996 CAMPAIGN FINANCE

INVESTIGATIONS

TUESDAY, JUNE 6, 2000

U.S. SENATE, SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT

AND THE COURTS, COMMITTEE ON THE JUDICIARY, Washington, DC.

The subcommittee met, pursuant to notice, at 11:08 a.m., in room

SD–226, Dirksen Senate Office Building, Hon. Arlen Specter presiding.

Also present: Senators Grassley, Sessions, Smith, and Torricelli.

OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S.

SENATOR FROM THE STATE OF PENNSYLVANIA

Senator SPECTER. The Senate Judiciary subcommittee on Department of Justice oversight will now proceed. We had scheduled this

hearing at 11 a.m. to accommodate the schedule of the ranking

Democrat, whom I am advised is due to be here shortly. But in

view of the limited time available, with witnesses having other

commitments this afternoon, and the parties having their caucus

luncheons, we are going to proceed now with opening statements,

with the expectation that Senator Torricelli will arrive before we

call our first witness.

This hearing today is going to pursue the question of the relationship between the Department of Justice generally and the FBI

specifically on campaign finance investigations, with particular

focus on the memorandum from Director Freeh to Mr. Esposito

which was the subject of our hearing on May 24.

We are going to be pursuing the matter further because Mr.

Esposito is present today, and in the interim we have found that

Mr. Esposito’s notes reflected the presence of Mr. Gangloff at the

meeting, of the Department of Justice. So we have sought all the

participants of the meeting—Mr. Radek, Mr. Gangloff, Mr.

Esposito, and Mr. Gallagher—to testify on this matter.

This is an important memorandum which has many ramifications. The report of the General Accounting Office which came out

just yesterday comments about, as they put it, ‘‘bitterness,’’ between the Department and the Bureau. There is no doubt that the

relationship was poisoned between the Bureau and the Department, and the extent of the effect of this memorandum is a key factor to be considered by the subcommittee.

You have the GAO report commenting that the FBI agents and

the Department of Justice lawyers had feuds and had to be kept

68

on separate floors. We have the later turn-down of the Department

of the request by the FBI for a search warrant as to Charlie Trie.

You had the extraordinary event less than a year ago where the

U.S. Marshals went into the FBI quarters at Quantico to get materials related to Waco. And a question which the subcommittee will

explore is whether the application by the FBI on the very important warrant for Wen Ho Lee under the Foreign Intelligence Surveillance Act was affected by this kind of disagreement.

A second critical ramification which this committee is looking at

is the issue of the duty of the FBI, and specifically Director Freeh,

to turn over the memorandum of December 9, 1996, to the oversight group. It may well be that there was a duty, even in the absence of subpoena, for Director Freeh and the FBI to turn over that

memorandum because of its serious import both to the Judiciary

Committee and to the Governmental Affairs Committee, which was

conducting a detailed investigation on these precise subjects all

during 1997.

There is no doubt that Director Freeh and the FBI had a duty

to turn over the memorandum as of April 20, the return date on

the subpoena. It was not made available to the subcommittee until

late in the evening of May 17, and this follows a pattern of documents being turned over very, very late. And those are issues

which we will consider very carefully.

There is no doubt that Director Freeh had a very difficult position in terms of reporting for oversight the information that Mr.

Esposito provided that Mr. Radek had said that there was pressure

on Public Integrity on campaign finance investigations because the

Attorney General’s job was in the balance.

But the Congress gave the FBI Director a 10-year term especially

to insulate him from that kind of pressure. We had the situation

with FBI Director L. Patrick Gray and the pressure put on by the

executive branch, and the Director of the FBI has been given unusual tenure by the Congress, with the expectation that the tenure

will give him the status and stature to turn over information for

this committee on oversight. And that is something we intend to

pursue very, very vigorously.

If Mr. Esposito and Mr. Gallagher are correct as to what Mr.

Radek said about pressure and the Attorney General’s job being on

the line, that may well explain why independent counsel was not

appointed. That may well explain the extraordinary finding by the

Attorney General of clear and convincing evidence of no criminal

intent by the President and Vice President on exceeding Federal

spending limits. That may account for the Attorney General’s disregarding evidence of the Vice President raising hard money and

knowing that he was raising hard money. And those are issues

which we shall pursue.

We have requested the appearance of the Attorney General, who

has agreed to come before the subcommittee. We are now working

on a specific date, and we are pushing to have that earlier rather

than later because we believe this matter ought to be concluded as

early as possible.

It was not the timing of this subcommittee to have the matter

come as close to a presidential election, but there is a record of pursuit on the Freeh memorandum recommending independent counVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00072 Fmt 6601 Sfmt 6601 E:\HR\OC\A735.XXX pfrm03 PsN: A735
69

sel within a few days after he had sent it to the Attorney General

in 1997. And there is a record of pursuit of the La Bella memorandum within 1 week after he submitted it to the Attorney General in July 1998.

And we have been very diligent in pressing this matter so that

there is no delay here and no effort to have this come in the midst

of any sort of a campaign season. But we intend to pursue, as I

say, all the way, and that includes the testimony of Director Freeh.

Let me yield at this time to our distinguished chairman of the

full subcommittee, again with my thanks for his cooperation on this

particular aspect of the subcommittee’s work.

I would like to place into the record a statement from Senator

Strom Thurmond.

[The prepared statement of Senator Thurmond follows:]

PREPARED STATEMENT OF HON. STROM THURMOND, A U.S. SENATOR FROM THE

STATE OF SOUTH CAROLINA

Mr. Chairman: I am pleased that we are holding this oversight hearing today regarding the 1996 campaign finance investigations.

These hearings are reaffirming that an Independent Counsel clearly should have

been appointed years ago to investigate the illegal fundraising activities of the 1996

Clinton-Gore Reelection Campaign. Memoranda from F.B.I. Director Freeh discussing the need for an Independent Counsel, which has recently been quoted in the

press, provides additional proof.

In fact, a Freeh memorandum first revealed a key meeting between the F.B.I. and

Mr. Lee Radek, the Chief of the Public Integrity Section, where Mr. Radek connected the pressure that was being placed on them to appoint an Independent Counsel to the fact that the Attorney General’s job may hang in the balance. Mr. Radek

denies this, but the F.B.I. had no reason to say something that was not true. I believe the F.B.I.

This meeting is critical because it shows that the Attorney General had an absolute, obvious conflict of interest. If she appointed an Independent Counsel, she may

not be reappointed as Attorney General for a second term. This is the exact type

of situation the Independent Counsel statute was designed to avoid. Mr. Radek understood her conflict of interest and all of the facts, but he joined with her in opposing the appointment of an Independent Counsel.

I find it particularly unfortunate that the Chief of the Public Integrity Section has

always been a major impediment to the appointment of an Independent Counsel.

Of all people, he should understand how critical it is to maintain the people’s confidence in the fairness and impartiality of our system of justice. The people have

no confidence in the way this investigation has been handled within the Justice Department, and the recent revelations only reaffirm this.

The only way to restore public trust in this matter is to appoint a special counsel,

and I again urge the Attorney General to do so.

Senator SPECTOR. Senator GRASSLEY.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR

FROM THE STATE OF IOWA

Senator GRASSLEY. Well, thank you, Mr. Chairman, for your very

hard work for the last 8 months as you have been pursuing this.

I guess you have been pursuing it for 3 or 4 years, but through this

subcommittee and with the full committee and with the leadership,

trying to get more attention brought to this issue and finally having it done through this subcommittee.

The purpose behind today’s hearing is to determine why the Attorney General turned down the advice of high-level Justice Department officials in campaign finance investigations. The advice

was to request that an independent counsel be appointed. From the

documents we have read, the entire FBI from top to bottom favored

70

such an appointment. So did the Attorney General’s own handpicked lead attorney and his subordinates. All vehemently supported such an appointment.

The primary opponent of the appointment was Mr. Radek. He is

head of the Public Integrity Section of the Justice Department. His

office for many years has had a reputation as a black hole for referred cases. The vast majority of cases referred are declined. This,

I think, has earned Mr. Radek the nickname of Dr. No.

I think it is fair to reiterate the point made at our last hearing

that Mr. Radek was no fan of the independent counsel law. He may

not have wanted his power to be usurped by an independent counsel. This may be why he fought so hard against those arguing for

the appointment of an independent counsel.

I think it is highly instructive that the inspector general community and the U.S. attorney community from all around the country

share the view that Mr. Radek’s shop is a black hole of case referrals. In fact, at a recent monthly meeting of inspectors general, a

very interesting and telling thing happened.

A discussion occurred about how Public Integrity never prosecutes cases. The frustration was shared by a prominent U.S. attorney who happened to be present. That U.S. attorney offered to

serve as an alternative office for the IG community for prosecuting

cases, since Public Integrity is such a black hole. Now, this is an

enormously significant issue, in my view.

We have heard the same thing from the U.S. attorney community. No one will deal with Public Integrity because all the hard

work that goes into referral is for naught. It is an extraordinary

step, in my opinion, for a U.S. attorney to tell inspectors general

that Public Integrity is so bad that you can come to me instead for

prosecution. That is a very incredible situation to be in.

I say this to provide the context for this hearing. When so many

high-level officials within the Department of Justice were advocating the appointment of an independent counsel, Dr. No was saying no. It was a very adamant ‘‘no.’’ The question is why did the

Attorney General choose Mr. Radek’s advice over that of Mr. Freeh

and Mr. La Bella and other career prosecutors.

A second question also arises. Prior to August 1998, the Attorney

General used the argument that raising soft money from the White

House was not illegal. After an FEC audit, in August 1998, undermined that argument, the Attorney General suddenly changed to

an advice of counsel argument. This switch suggests that the important thing for the Attorney General was to protect the President

and the Vice President at all costs.

So, Mr. Chairman, it seems to me there is good circumstantial

evidence that the Attorney General succumbed to political pressure

in not appointing an independent counsel. Listening to the advice

of Dr. No might have been expedient at the time, but it has become

quite clear in hindsight, and in oversight, that it might have been

the very wrong decision.

Thank you.

Senator SPECTER. Thank you very much, Senator Grassley.

Senator Sessions.

71

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM

THE STATE OF ALABAMA

Senator SESSIONS. Thank you, Mr. Chairman, for your determined efforts to produce the facts in this matter. It is a matter of

great importance. We are talking about an investigation that involved the sitting Vice President of the United States. It was in the

national newspapers. The matter we are talking about today broke

on the eve of the election and was a remarkable event.

The meeting at issue that we will be talking about today, troubling to me, is that it was the first meeting between high-level FBI

and DOJ officials to investigate campaign finance violations. Yet,

Mr. Radek, who was in charge of that, has difficulty remembering

the details of that meeting. I think it was a very important meeting.

After that meeting, and after Mr. Esposito shared his results

with the Director of the FBI, Mr. Freeh, Mr. Freeh was extraordinarily concerned. In very short order, he asked for and went to

see the Attorney General of the United States. And as I review the

memorandum that he made of that meeting, directed to Mr.

Esposito who was in charge of this investigation, apparently, I become even more troubled, Mr. Chairman, than I have been before.

The language he used to the Attorney General was forceful and

significant. I would suggest he had no misunderstanding of what

he was doing. Mr. Freeh has been around a long time. He understands the prosecution of important cases, and he said some things

that I think ought to be reviewed by us all.

He said, quote—and this is a quote from his memorandum—‘‘In

fact, I said’’—this is Mr. Freeh to Attorney General Reno—‘‘that

these prosecutors should be ‘junkyard dogs.’ ’’ Now, that is a phrase

that is used to refer not to an unfair prosecutor, but a prosecutor

of skill and determination who is going to be facing a defense team

that is going to obstruct and resist all the way. And you have got

to be aggressive to pursue, to get the documents, to use the grand

jury, to use subpoenas, to use court orders and contempt citations,

if necessary, to get the truth. And that is what Mr. Freeh told her.

She understood, I trust, precisely what he meant by that.

Then he went on to say in this memorandum of his conversation

with the Attorney General of the United States, ‘‘And in my view,

the Public Integrity Section was not capable of conducting the thorough, aggressive kind of investigation that was required.’’ He went

on to say, ‘‘I also advised the Attorney General of Lee Radek’s comments to you,’’ Mr. Esposito, ‘‘that there was a lot of pressure on

him and Public Integrity regarding this case because ‘the Attorney

General’s job might hang in the balance’ (or words to that effect).

I stated that these comments would be enough for me to take him

and the Criminal Division off the case completely.’’ And I would agree. Anybody who is in charge of this investigation who feels pressure and who feels like they can’t do the job, or

suggest it in any way, should not be in charge of an investigation

like this.

He also went on to note, ‘‘I also stated that it didn’t make sense

for the Public Integrity Section to call the FBI the lead agency in

the matter, while operating a task force with Department of Commerce inspectors general.’’ That is also a troubling thing to me, Mr.

72

Chairman, because based on my experience with the Department

of Justice, when you have a matter of this significance, you want

not the inspector general of the Department of Commerce, an agency that would have generally less skill in these kinds of matters,

and also be more subject to political pressure. But you would want

the FBI, which is the lead agency for corruption and fraud in the

country, and also an agency, as you noted, that has a Director that

is not subject to removal.

So Mr. Freeh was expressing some legitimate concern here. They

are saying that the FBI is doing this, but we are not. The people

who are doing the interviews are Department of Commerce inspectors general. He went on to note, ‘‘These inspectors general are conducting interviews of key witnesses without the knowledge or participation of the FBI. I strongly recommend that the FBI and handpicked DOJ attorneys from outside Main Justice run this case, as

we would any matter of such importance and complexity.’’ Mr. Chairman, the fact that Mr. Radek stopped the work of the

U.S. attorney’s office who initially began to prepare to investigate

this matter, and apparently did little or no investigation of the

facts of the case before advising the Attorney General not to have

an independent counsel, is very troubling to me. I just cannot understand how that could happen.

The Attorney General had to know that this was a matter of

great national importance. And if she was not going to appoint an

independent counsel, she had to know that there was every demand on her, if she were going to defend the rule of law and justice

in America, to make sure the prosecutors that she selected in the

Department of Justice were independent, experienced and tough,

and willing to take on the challenge. And I feel very sad about it.

It would have been so much better to have an independent counsel, as you recommended, and Senator Hatch and others recommended. And if you don’t, you have really got to carry the ball

aggressively. That was not done, in my view, and as a result we

have the American people rightly concerned about whether justice

has been done.

Frankly, we ought not to overlook the fact that the ultimate

problem here was the President of the United States, and perhaps

the Vice President who was to be investigated, putting pressure on

the Attorney General, actually holding perhaps her job at bay over

this very decision. And I think that is a matter that ought not to

be lost on the American people, and we have a duty in this Congress to try to make sure that the Justice Department operates

with integrity above all else.

Thank you for your effort.

Senator SPECTER. Thank you, Senator Sessions.

Senator Torricelli, do you care to make an opening statement?

Senator TORRICELLI. Mr. Chairman, I would rather we proceeded

to the witnesses. I have views on this matter, but I prefer to express them during the questioning.

Senator SPECTER. Fine. Thank you very much, Senator Torricelli.

The scope of this hearing is going to be limited to this memorandum and the meetings relating to the memorandum. We have

been requested to limit to that subject because the witnesses have

other obligations today, and there will be a follow-up hearing next

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week where we will be looking into specific cases where Public Integrity had picked up the cases and what they done with them.

At this time, Mr. Gangloff, would you step forward, please?

Would you raise your right hand?

Do you solemnly swear that the testimony that you will give before this subcommittee of the Committee on the Judiciary of the

U.S. Senate will be the truth, the whole truth, and nothing but the

truth, so help you God?

Mr. GANGLOFF. I do.

Senator SPECTER. You may be seated. Thank you for joining us,

Mr. Gangloff.

Since the hearing on May 24, we had been informed that you

were present at the meeting with Mr. Radek, Mr. Esposito, and Mr.

Gallagher, since your name appeared on the calendar of Mr.

Esposito. And as soon as we determined that, we made the request

of the Department of Justice that you be present for today’s hearing, and we thank you for joining us.

Do you recollect a meeting on Wednesday, November 20, involving——

STATEMENT OF JOSEPH GANGLOFF, PRINCIPAL DEPUTY

CHIEF, PUBLIC INTEGRITY SECTION, U.S. DEPARTMENT OF

JUSTICE, WASHINGTON, DC

Mr. GANGLOFF. Senator, I do not recollect a meeting on that specific date.

Senator SPECTER. Let me finish the question—involving Mr.

Radek, Mr. Esposito, Mr. Gallagher, and yourself?

Mr. GANGLOFF. Senator, I do not recollect a meeting on that specific date. The only—— Senator SPECTER. Do you recollect a meeting among the four of

you on any date?

Mr. GANGLOFF. I am sure that the four of us met on many dates.

Whether there were other people present at the time or not, I can’t

really say.

Senator, I would like to be helpful to you, so if you would let me

just put it into context, I would certainly be happy—— Senator SPECTER. Well, that is fine. You may proceed as you

wish, of course.

Mr. GANGLOFF. Thank you.

Because the problem that I have is in trying to recollect this

meeting, I have looked at the text of this memorandum and tried

to recollect a meeting where this conversation would have occurred.

And the fact is I can’t recollect any meeting where these issues

were presented in this particular way.

So that sort of is my quandary. I am looking back 31⁄2 years and

basically trying to find something that is not a unique incident in

terms of meetings. Mr. Esposito, I dealt with quite frequently in

my capacity as legal adviser to the Integrity Committee of the

President’s Council on Integrity and Efficiency, which is made up

of the inspectors general. And I also dealt quite frequently with

Mr. Gallagher.

Senator SPECTER. Well, when you say you cannot recollect any

meeting where the issues were presented in this particular

way——

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Mr. GANGLOFF. Right.

Senator SPECTER [continuing]. Can you recollect any meeting

where there was a generalized discussion, for example, on pressure

on the Public Integrity Section?

Mr. GANGLOFF. Well, not in those words. And, in fact, I would

go so far as to say that were those type of words used, I think I

would have recollected the incident. Pressure in the Public Integrity is, I think, much like atmospheric pressure. It is always

present. You might notice if it were absent, but otherwise you don’t

notice it.

Even as I read this memorandum, I am somewhat perplexed because not really knowing the—I don’t know—I haven’t followed the

testimony in this matter. I didn’t know until yesterday afternoon

that my presence would be required. But even in reviewing this,

the fact that there is pressure—there is always pressure to do a

good job, and I would see it that way.

The characterization that there was some thought that the Attorney General’s job would be held in the balance seems totally foreign to any actual conclusion we could have drawn at the time in

any event, because our conversations even in the hallways would

have been much more consistent with the observation that, as it

often is in the Public Integrity Section, you can’t tell what the consequences of a particular action would be.

In other words, would the appointment of an independent counsel help the Attorney General or others politically, or would it, in

fact, have the exact opposite effect? And I have been in the Public

Integrity Section since January 1981, and I must say that my experience has been that I can’t recall in that time, under any administration, where there has been pressure to reach a particular result

in any particular case.

Senator SPECTER. With respect to your only finding out about

this yesterday afternoon, that is a little surprising because Mr.

McArthur advises me that the request was made for you last

Thursday evening, just as soon as we had received a fax of Mr.

Esposito’s diary which showed your name.

Mr. GANGLOFF. Well, that could be. I was out of the office all day

Friday and I had physician’s appointments on Monday morning.

Senator SPECTER. Well, I would think that in a matter of this

sort they would have let you know early, but let’s move beyond to

the substance.

When you say that it would be indeterminate as to whether appointment of independent counsel would be interpreted one way or

another, let’s examine that for just a minute. In late November,

about the time a meeting is reflected in Mr. Esposito’s notes, there

was considerable public discussion about whether Attorney General

Reno would be retained for a second term.

May the record show a nod in the affirmative on that?

Mr. GANGLOFF. Yes, I recall that.

Senator SPECTER. And there was considerable talk in the public

domain about a concern which the President had about the frequency of the appointment of independent counsel to investigate

the executive branch, and specifically the independent counsel investigation run by Mr. Starr. Isn’t that a factor of general knowledge?

75

Mr. GANGLOFF. I don’t have a specific recollection of the President having said that. I know there was certainly discussion of the

number of appointments.

Senator SPECTER. Well, then moving beyond whether you recollect the President’s having said it, wasn’t it pretty clearly in the

public domain that there was concern by the President, by the executive branch, of the Attorney General’s having appointed these

independent counsels?

Mr. GANGLOFF. Senator, I will take your word on that. The fact

is—and it may come as some surprise, but working in the Public

Integrity Section, I really don’t follow from day to day the discussions as to whether people agree with or disagree with the policies

of the Department at the higher level.

Basically, at the section level what we are charged with doing is

analyzing allegations, trying to get facts together, and making recommendations. And the insulation is so great, quite frankly, that

there is no profit—it is not worth the time to read every editorial,

et cetera.

At the Attorney General’s level, and perhaps at Mr. Radek’s

level, it is necessary because people will often question you about

those things. But for someone at my level, specifically, who is involved in the operational aspect of it, I don’t want to know and I

don’t care who says we should do one thing or another.

The two points that come to mind, and I think I really should

make a note of, are, first, we had, as a matter of fact—I was acting

chief at the time—made an independent counsel, or as close as we

could, appointment with respect to the Whitewater matter. So that

is by one way of background.

I also would point out that, as you want to marshall the facts as

to what would cut one way, one of the consequences of appointing

an independent counsel, of course, would be to totally preclude the

use of a grand jury, the issuance of subpoenas, or the use of search

warrants. So the effect—— Senator SPECTER. When independent counsel is appointed——

Mr. GANGLOFF. No, no, at the time the decision was made, because at that time if the Department launched into a preliminary

investigation, and when we were waiting for who knows how much

time for a court to make an appointment, the Department, pursuant to the statute, would have been prohibited from engaging in

this more vigorous type of investigation. So someone could certainly

argue that the appointment of an independent counsel would have

that positive effect from the standpoint of the President’s position.

Senator SPECTER. Well, that would be outside the scope of argument because the Congress had already decided that if the President was to be involved, or the Vice President or certain category

of officials, that the Department of Justice would not make the investigation.

So you have a preliminary inquiry and you have a very abbreviated timetable during which the Department of Justice would not

be authorized to have grand jury subpoenas for the specific purpose

of not getting the Department of Justice very much involved—— Mr. GANGLOFF. Well, you are talking about—— Senator SPECTER. Well, excuse me. Let me finish—but just to

make a very preliminary decision as to whether further investigaVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00079 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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tion is necessary, where Congress had set a very low standard to

keep the Department of Justice out.

And when you refer to a time lag on the court appointing independent counsel, that is not factually correct. The court had been

very prompt. But whatever time it took, this was the law of the

land——

Mr. GANGLOFF. Senator, you are talking about——

Senator SPECTER. Just a minute—had been decided by the Congress. So the question really is in pursuing your awareness of it

that this was not a casual matter. It had been on the front pages

and network television in October about the allegations raised

about both Republicans and Democrats exceeding the spending limits.

Had those matters not crossed your attention?

Mr. GANGLOFF. Senator, you have raised two completely different

issues in your question. The first issue has to do with your response to my observation that it would be difficult to decide on

which way of a balance it would fall to launch an investigation or

not. And I simply was pointing out by explaining the independent

counsel procedures, with the same allusion, the fact that it certainly could be argued that if, in fact, the decisions were not being

made for proper purposes but for political advantage, one could

argue that there was a political advantage that would occur from

either course.

The second issue that you raise is——

Senator SPECTER. Would you explain that? What would the political advantage be to the President to have independent counsel appointed?

Mr. GANGLOFF. Well, remember, we are not just talking about an

advantage to the President, but also to the Attorney General, because that is the focus of your inquiry. But the advantage to the

President, it seems to me, at least arguably, would be that by its

very nature the first thing that the Department could do without

criticism would be run into a 60-day period and a 90-day period of

review. During that period of time, it certainly could be argued

that witnesses could get together, orchestrate their stories, et

cetera.

Then an appointment would be made to a court, which, as a matter of fact, does not have a reputation for making prompt appointments. During that period of time, as well as during the previous

120 days, and possibly with an extension inserted, there would

have been no authority with respect to the Department of Justice

to issue grand jury subpoenas, to conduct searches, or to hold

grand jury proceedings.

So that is what I am suggesting. I am not suggesting in any way

that it is dispositive. All I am saying is to hear that the Attorney

General’s job was in the balance, depending on a particular decision, I am simply telling you that it would be difficult to even speculate as to which would have the political advantage.

As to the second——

Senator SPECTER. Well, Mr.——

Mr. GANGLOFF. Excuse me, Senator.

Senator SPECTER. Go ahead.

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Mr. GANGLOFF. As to the second issue that you raised, the legal

requirements concerning the appointment of an independent counsel, I would recall that when the independent counsel statute that

is at issue was reauthorized, the Department actually urged that

reauthorization be permitted on the basis of consideration of a,

‘‘matter,’’ as opposed to focusing the statute on a consideration of

allegations against specific individuals.

Congress rejected that approach and instead decided that what

should occur should be that the independent counsel mandatory

provisions would only become implicated upon the reaching of the

‘‘credible and specific’’ standard with respect to individuals. So

when the analysis is done with respect to mandatory appointment,

the first requirement is that we analyze on the basis of allegations

against the individuals.

Senator SPECTER. Well, that is true, and that is what the Congress had decided. And the statutory framework had been decided

in accordance with establishing the laws of the United States,

which left the Department of Justice out of investigating people

like the President on a charge of exceeding the campaign expenditures, and limiting the role of the Department of Justice very severely not to go to the grand jury, but to look to independent counsel if there were to be a further investigation.

But let’s come to the core issues here, Mr. Gangloff, to see if this

will refresh your recollection. The memorandum has already been

read by Senator Sessions, and the key language here relating to

what Mr. Esposito told Director Freeh that, ‘‘Lee Radek’s comments’’—‘‘there was a lot of ‘pressure’ on him and PIS regarding

this case because ‘the Attorney General’s job might hang in the balance’ (or words to that effect).’’ When Mr. Radek testified on the 24, he was asked by me—and

this appears at page 20 of the transcript—‘‘So when this memorandum refers to the word ‘pressure,’ that is a word you might well

have used in the context of lots of pressure on the Public Integrity

Section?’’ Mr. Radek: ‘‘Yes, sir.’’

Then on page 22, my question: ‘‘All right, so you are saying that

the subject may well have been discussed that the Attorney General’s job was in jeopardy?’’ Mr. Radek: ‘‘It may well have.’’ My

question: ‘‘Well, may well have discussed the Attorney General’s

job was in jeopardy?’’ Mr. Radek: ‘‘It may well have. I don’t recall.

The words ‘hangs in the balance’ do not sound like anything I

would say.’’

And my follow-up: ‘‘Well, the memorandum says ‘words to that

effect,’ but you are saying that there may have been a discussion

that the Attorney General’s job may have been—may be—you said

at that time the Attorney General’s job may be in jeopardy.’’ Mr.

Radek: ‘‘That is possible, yes.’’

And then we had a little discussion about what was a narrow

line of disagreement, and continuing on page 23 I said, ‘‘The line

of denial is that although you may have said that there was pressure on Public Integrity, and you may have said the Attorney General’s job may be in jeopardy, you did not connect the two.’’ Mr.

Radek: ‘‘That is correct.’’

Two questions. Does that refresh your recollection when you hear

Mr. Radek having testified that there may have been language

78

about pressure and may have been language about the Attorney

General’s job hanging in the balance, but no connection between

the two? Do you think that you might have been present when

such a conversation occurred?

Mr. GANGLOFF. Senator, let me at least make this, again, observation. This memorandum is dated December 9, 1996, and I see

that Mr. Freeh is reporting his best recollection of something that

he heard a good 21⁄2 weeks earlier. So it is quite possible that there

has been some evolution of the language, I will say.

With respect to being at a specific meeting with Mr. Esposito and

raising these specific points, I don’t have a specific recollection. The

fact is the conversation we would have had on an almost daily

basis in our own hallways—to back up just for a second and to give

you some context, I was in Europe when these allegations first

came in, and Lee called me there and said that the allegations had

come in and that it was a serious matter and that when I came

home, you know, that would be the first attention that I should pay

to something, would be to this particular matter.

Certainly, we recognized that with respect to this matter and

half a dozen other, or maybe a dozen other matters, there are implications at a political level. And the Attorney General’s job, I suppose, in some respects is always, ‘‘in jeopardy.’’ But to tie two

things together and say that the outcome or the specific structure

of the work done at the Public Integrity Section is somehow tied

to that is not only something that I don’t remember, but is something so foreign to my experience that I would suspect that I would

remember.

The other problem that I have even in seeing this memorandum

is a few things that I’d like to note. First, junkyard dogs are not

known for having any judgment. A junkyard dog, when the gates

are closed, eats up whatever comes inside that gate. And I also

want to mention that within the 20 years I have been in the Public

Integrity Section, I have never heard Mr. Radek referred to as Dr.

No.

So the number of assumptions that are being made here are, in

my—you know, having reviewed this for only a day, are in some

respects off the chart. I can’t really reconcile, for example, the sentence in this memorandum which says ‘‘it was my recommendation

that the referral take place as soon as possible’’ with the statement

which is in paragraph five that says ‘‘it didn’t make sense for PIS

to call the FBI the lead agency in the matter.’’

One expresses a view that it seems that there has been no referral. The other seems to say that the Department is tagging the FBI

with a leadership role. My suspicion is that whatever transpired

that resulted in the writing of this memorandum is that facts that

occurred after—and I am assuming that some meeting occurred on

or about the 20 of November, which is the date that we focus on—

that some facts occurred during that period of time between then

and the 9 which are flavored here, and in some ways assumptions

are being made that they were facts as known on the 20, but, in

fact, they developed over time.

And, finally, in terms of putting it in context, I checked my

records this morning and I see—which may also explain some of

the distraction of this—that I was also out of the country for a

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week ending on December 12. So whatever happened between that

meeting, assuming that it occurred, and it very well might have,

and the issuance of this memorandum, I am simply suggesting this

would have been a moving matter and that it would be very surprising to me if Mr. Freeh was not receiving information not only

from Mr. Esposito and not only from the Attorney General, but

other information.

And a careful reading of this memorandum doesn’t actually tell

you when particular conclusions were reached by Mr. Freeh,

whether they were before or after this meeting, et cetera. The same

with Mr. Esposito. I would be very surprised to learn that Mr.

Esposito didn’t discuss this matter with Mr. Freeh between the 20

and the 9.

Senator SPECTER. Mr. Gangloff, all of that may be true or it may

not be true.

Mr. GANGLOFF. Right.

Senator SPECTER. But the question is a very narrow one which

does not make any of that relevant, at least as I see it. And the

narrow question is what Mr. Radek said to Mr. Esposito. Mr.

Esposito is here to testify to that, as Mr. Gallagher testified. And

I won’t take the time to read you his testimony where he was positive that Mr. Radek made the comment about pressure on the Public Integrity Section, and that pressure was exerted because the Attorney General’s job was on the line, that there was a connection.

So, that is the context.

And however you may define junkyard dogs, or whatever you

may think about Dr. No or Mr. No, those can all be a subject of

extended discourse. But the point at issue is what was said by Mr.

Radek to Mr. Esposito, and what was the context, which was well

known at that time, that there was speculation that the Attorney

General may not be reappointed, and that there was speculation

and a lot of talk on the front pages and on network news that it

was because independent counsel had been appointed in Whitewater and other matters, and that was to the President’s displeasure.

Now, if those aren’t matters which were brought to your attention or within your purview so that it would have some effect of

perhaps stimulating your recollection, or stimulating your recollection when you heard what Mr. Radek said, so be it.

Mr. GANGLOFF. Well, I certainly was aware of the context, and

I appreciate your efforts to refresh my recollection. But it is true

that, as I stated at the beginning, I don’t have a specific recollection of this conversation. And having reviewed it, though, I do go

the extra step of saying had I heard a conversation that contained

the suggestion that you are now putting on this—I don’t even know

that it is really present in the memorandum, frankly, but that had

this nexus suggested and that had this flavor of animosity in terms

of our work with the Bureau at this time, I would be surprised

even 31⁄2 years later to have totally forgotten that.

Senator SPECTER. Well, but there is some apparent recollection

on the part of Mr. Radek at least somewhere down that identical

road. So we will pursue it.

Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman, very much.

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Mr. Gangloff, I don’t believe that we know each other.

Mr. GANGLOFF. Correct.

Senator TORRICELLI. The questions raised by this panel go to the

professionalism of your office and the integrity of Mr. Radek, so

they are of some substantial importance. So I would like for just

a moment to lay a foundation here so the committee understands

who we are talking to and what perspective you bring to the Senate on this issue.

When is it that you joined the Department of Justice?

Mr. GANGLOFF. I joined the Department of Justice in 1977 as

part of the Honors Law program. I was graduated from the University of Pennsylvania Law School.

Senator TORRICELLI. So you have served under two Democratic

and two Republican administrations?

Mr. GANGLOFF. Yes.

Senator TORRICELLI. And when did you join Public Integrity in

a senior position?

Mr. GANGLOFF. Well, I joined the Public Integrity Section in

1981. In approximately 1987, I became the Director of the Conflicts

of Interest Crimes Branch, and then in about 1992 I began to serve

as an acting deputy and then in a period of time—— Senator TORRICELLI. So you obtained two senior positions in the

Reagan and Bush administrations?

Mr. GANGLOFF. Senator, I am embarrassed to say it exactly this

way, but I never associated—— Senator TORRICELLI. I am not holding it against you.

Mr. GANGLOFF. I never associated the political powers with what

was happening in my career.

Senator TORRICELLI. No. I am developing a time line here.

Mr. GANGLOFF. Oh, right.

Senator TORRICELLI. Work with me.

Mr. GANGLOFF. And then in 1993, I became Acting Chief during

about a one-year period and—— Senator TORRICELLI. So, in fact, in the advancement of your career, the political affiliation of the Attorney General has had no impact on your career and is of no particular moment?

Mr. GANGLOFF. None that I am aware of.

Senator TORRICELLI. Indeed, regardless of whether if Attorney

General Reno had stayed or left last January, you were staying in

Public Integrity in a senior position?

Mr. GANGLOFF. That is absolutely true.

Senator TORRICELLI. During your experience at the Department

of Justice, could you cite for me which Attorney General you have

worked with who has actually named more independent counsels

than Janet Reno?

Mr. GANGLOFF. Well, no, certainly not.

Senator TORRICELLI. Indeed, wouldn’t it be fair to say that Janet

Reno has appointed more independent counsels than all of her

predecessors combined?

Mr. GANGLOFF. That is my recollection.

Senator TORRICELLI. In your experience, in past decisions to

name independent counsels, were all of the Attorneys General, advisers, the FBI, and other people involved in the decision-making

process all of one mind as to whether or not a particular indeVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00084 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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pendent counsel should be named or have you witnessed division

in the past?

Mr. GANGLOFF. Well, actually, up until this point I wasn’t really

aware of the FBI playing a role with respect to the recommendation on appointment because, as I think I indicated earlier in my

testimony, many of us have a passing understanding—certainly,

you have more than that here, but many people have a passing understanding of what the independent counsel statute required.

But the fact is that it was a very technical statute and that very

frequently the judgment that was being made was one that simply

looked at legal requirements and stacked information against that

to determine whether it was specific, whether it was credible, et

cetera. So my recollection is, and specifically with respect, for example, to the Whitewater matter, that the FBI did not play any

role, certainly, vis-a-vis the—— Senator TORRICELLI. Typically, the Attorney General would get

advice from her own staff and from senior department heads within

Justice that might be relevant to a case?

Mr. GANGLOFF. Right.

Senator TORRICELLI. But not necessarily the FBI?

Mr. GANGLOFF. Well, not at—not mixing it in at the section level.

So far as I know, there was no kind of preliminary—— Senator TORRICELLI. But Mr. Freeh’s memo actually refers to the

fact that he had provided advice with regard to the Cisneros matter.

Mr. GANGLOFF. That may be true.

Senator TORRICELLI. Do you know whether or not he provided

advice with regard to the Espy matter?

Mr. GANGLOFF. I don’t know that, I don’t know that.

Senator TORRICELLI. And the outcome of the Cisneros matter was

what?

Mr. GANGLOFF. Well, there was an appointment made.

Senator TORRICELLI. And what was the outcome of the case

Mr. GANGLOFF. It was prosecuted.

Senator TORRICELLI. To what end?

Mr. GANGLOFF. I don’t know where you want to take me on this.

Senator TORRICELLI. Well, I will get you there directly. Attorney

General Reno has not only appointed more independent counsels

than any of her predecessors, but some have been remarkably unsuccessful. And some of us would be of the mind that there has

been a tendency to name independent counsels when they were not

required and perhaps never should have been named.

Mr. Cisneros, for example, had an independent counsel that consumed millions of dollars of the taxpayers’ money, compromised individuals’ reputations, destroyed a public career, and he pled to a misdemeanor and a $10,000 fine. Mr. Espy went through a similar

process, consuming millions of dollars, destroying a great public career, interrupting the work of this Government and this administration, and was acquitted.

This would appear to me to be an Attorney General who was not

naming independent counsels with the greatest reservation, but indeed used the law to its fullest extent. I would argue to excess. Perhaps the bar had not been high enough. In light of this history and

her past use of the statute, it is incredible that anyone would argue

82

that indeed it should have been used more than it has already

been, since in some cases where it probably was questionable to do

the statute was employed.

Would you like to respond to that?

Mr. GANGLOFF. Well, as you noted, I have served under Democratic and Republican administrations, and I will tell you that

there always was at least some point OK amusement at the level

of conversation about the statute because traditionally the Republicans were not in favor of the independent counsel statute. And

certainly under Republican administrations, there were fewer appointments.

And one of the ironies of that were that those of us who were

familiar with the statute certainly were aware that if you took the

thing and lowered the threshold and basically did not do some kind

of a comprehensive initial investigation, you would ultimately

make so many referrals that the system would collapse. And as a

matter of fact, when the reauthorization was being discussed, one

of the things that we discussed was the irony of the fact that the

way to undo that statute was actually to use it the way that it was

really written because it didn’t make any sense.

Senator TORRICELLI. Well, indeed, that ultimately is what happened. I have never discussed it with the Attorney General, and I

do not pretend to speak for her, but I would assume that someone

in the Attorney General’s position, having named seven independent counsels, several of which resulted in no recommendation

for prosecution would think carefully before doing so again.

The Attorney General might have been thinking that in approaching yet another one of these judgments, she wanted to be

sure, to a higher degree of certainty, that the facts and the law actually warranted an independent counsel. Indeed she might have

wanted to be sure that there was at least a chance that that independent counsel’s investigation would result in a successful action

by the Department of Justice because the record to date had not

been very good in justifying the public expenditure and the allocation of the Department’s resources.

Mr. GANGLOFF. Well, if I could just make this point without reflecting whether those of us involved in the law thought it was a

good idea or not, the fact is that when the Attorney General initially took office, she was a strong proponent of the independent

counsel statute. And the fact is that her proposal would have actually broadened the reach of this statute, as I had mentioned earlier, with respect to covering matters as well.

And I think the fact also is that had the statute covered matters

as opposed to individuals, it would have been much less—the

threshold, the standard, whatever you want to call it, would have

been much less, and there would have been, I think, a very much

stronger argument that could be made that an independent counsel

was required if, in fact, you were focused on matters, which is what

she advocated initially.

Senator TORRICELLI. Now, let’s turn our attention to the day of

this meeting where this discussion took place that has resulted in

these unfortunate allegations.

How many people were in the room on that day, and could you

identify them?

83

Mr. GANGLOFF. See, I can’t because I don’t know the specific

meeting. I know that I have had meetings with those individuals.

And as I said, one of the problems is I was dealing with Mr.

Esposito on a frequent basis on other matters as well.

In fact, when I first learned that I was at this meeting with Mr.

Radek, or it was suggested that I might be, I was surprised when

it showed up in his calendar because my recollection was that if I

had been there with Mr. Radek, I probably had met him over there

or been there on other business and that we just walked in.

Senator TORRICELLI. Well, I believe the allegation is that Mr.

Esposito, Mr. Gallagher, Mr. Radek, and yourself were in this

meeting.

Mr. GANGLOFF. Right, but they may—for example, if I had had

such a meeting, I would have a difficult time in my own mind recalling whether their general counsel was present.

Senator TORRICELLI. You cannot say with any certainty that you

were there.

Mr. GANGLOFF. Right.

Senator TORRICELLI. If you were there, given the nature of the

conversation that is alleged, you will testify to a certainty you

would have remembered it because it would have been so extraordinary and out of your experience?

Mr. GANGLOFF. Well, the only reservation I want to take with

that is the conversation as it has been reported in other people’s

testimony is not something I am familiar with. What I am familiar

with is this memorandum and the way that it has been purported

to read.

Senator TORRICELLI. I understand.

Mr. GANGLOFF. And what I am saying is the nexus between one

statement and another that appears——

Senator TORRICELLI. You would have recalled it?

Mr. GANGLOFF. I would recall it.

Senator TORRICELLI. So you do not have a specific memory of

being at the meeting, but if you had, you would have recalled it because of the alleged nexus between the two comments?

Mr. GANGLOFF. I think that is true.

Senator TORRICELLI. Mr. Radek does not remember the comment

at all, and Mr. Gallagher remembers it in a different context and

seems to attribute to it a different meaning then that now being

suggested. So we have four professional people allegedly in the

same room listening to the same conversation, and only one of

them—albeit Mr. Esposito—who has been a fine public servant

whom I actually know personally and think is a fine man—only

one of the four has the recollection to which the majority of this

committee is now attaching such a great importance, as opposed to

three of you have who have either a different interpretation, no interpretation, or even no memory.

Mr. GANGLOFF. Well, I just want to say I have worked with Mr.

Esposito for a long time and I respect him very much.

Senator TORRICELLI. Well, I do, too. This is not an attack on Mr.

Esposito. I am simply pointing out that we have very conflicting information here.

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Mr. GANGLOFF. Well, the additional point that I would go to,

though, is I don’t know, frankly, whether he has made direct statements to the committee, and so what I am saying is——

Senator TORRICELLI. Well, we haven’t heard from him yet.

Mr. GANGLOFF. Right, and what I see in this memo—I would just

again issue the caveat, the careful way we tend to deal with things,

which is he is not the one who wrote this.

Senator TORRICELLI. I think that is a good and a fair point.

In the heart of the matter, having now read many of these

memoranda over the course of recent weeks, the statement has

been clearly made by some of your colleagues that in looking at the

people specifically covered by the Act and the allegations made that

the threshold was not reached.

Do you as a professional in the Department continue to share the

judgment that the threshold requirement, as the Attorney General

determined, was not reached as required by the Act?

Mr. GANGLOFF. Yes, I think that that is true. In fact, to the extent that I do try to pay attention to these things, I still—to maybe

take the risk of going beyond things, what I have always seen as

sort of the point of misunderstanding with respect to the views of

the Bureau and ourselves and those who think of appointment and

not is the difference between actually reading the statute and applying it consistently and looking for the specific allegations, the

credible allegations against specific individuals, and the other approach which is simply to say this is a hot potato and I think in

my gut that xyz is true and xyz is false.

The fact is there is a difference traditionally, I think, certainly

in my experience, between the way that investigators and prosecutors view cases. Investigators are supposed to act from the gut,

pursue the leads, ask the questions, and basically push.

The prosecutor is the one who basically has to say is the evidence

there to support a particular conclusion.

Senator TORRICELLI. Is that one of the reasons why indeed

throughout the history of the Independent Counsel Act in both

Democratic and Republican administrations, the FBI as a matter

of routine—the investigators were not in the process, but ultimately decisions through various administrations of both the interpretation was left to prosecutors or senior Justice Department officials because they had to apply the law to the facts as they appeared?

Mr. GANGLOFF. Well, I don’t—I am not in charge of making those

decisions, but that is certainly——

Senator TORRICELLI. I am asking you your experience.

Mr. GANGLOFF. I would think that that certainly is my experience. And, in fact, my experience and my frustration myself in

being involved with this particularly at the early levels is just as

I think I have expressed, but it was really discussions about two

separate things.

Prosecutors—and I have heard this citation to, you know, career

prosecutors who came out a different way. But the fact is I am not

aware—even including some analysis that was done by our own appellate division in trying to assess the specificity of these allegations, et cetera, I am not aware of any career prosecutor who had

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familiarity with the statute reaching a conclusion contrary to the

one that was ultimately reached. And, in fact, as I say, the——

Senator TORRICELLI. In Mr. Radek’s memo, he used the word

‘‘consensus’’ of opinion with regard at least to the Vice President.

So indeed, in your experience, you were really independently coming to the same conclusion. You are unaware—it is your testimony—of no prosecutor who held a different judgment.

Mr. GANGLOFF. No, that is not true. It is not any prosecutor. The

fact is there were two sets of prosecutors who were involved, those

who had worked with the statute before and were analyzing something, as I saw it at least, under the statutory requirements. Then

there was another group of prosecutors who really didn’t have any

familiarity with the statute at all.

The first day that I ever met Mr. La Bella was in Mr. Radek’s

office, and I do recall it because it was one of those kind of conversations you tend to recall where he came and said—I made

some remark about the complexity of the matter and he said, well,

I will be gone in 90 days because we will make the appointment.

And I said, welcome to Washington, you will spend 90 days walking back across the street because there is going to be a lot of meetings on this thing.

Senator TORRICELLI. All right. So to narrow the issue, then, your

judgment of this consensus then is that you do not know of a contrary view in the Department from people who knew and had

worked with the statute and applied the facts with regard to the

election allegations who reached a different conclusion than yourself or Mr. Radek.

Mr. GANGLOFF. Well, again, I want to be precise on this. There

are two standards under the statute. One is mandatory, one is discretionary. The Attorney General or others may have been getting

advice that said, as a discretionary matter, this is a hot potato, you

should get rid of it, or whatever.

But, certainly, under the mandatory provisions what I saw as the

point of frustration in dealing with it was that the people who were

unfamiliar with the statute were arguing from a non-statutory

standard. Basically, this is a mess, it is at a high level, et cetera,

et cetera. And I believe it is true unanimously—certainly, in my

recollection it is—that those who had worked with the statute and

understood that we were applying a very specific statutory test

were constantly asking the specific question, which is with respect

to an individual——

Senator TORRICELLI. And they unanimously came to the same

judgment Mr. Radek came to that the facts and the application of

the statute based on their familiarity with it did not, on a mandatory basis, require the naming of an independent counsel.

Mr. GANGLOFF. That is my recollection.

Senator TORRICELLI. Thank you very much for your testimony.

Senator SPECTER. Before yielding to Senator Sessions, just a

comment or two. We will come back in my questioning, if Senator

Sessions doesn’t pick it up, about the competency of Director Freeh

as an attorney, as a judge; Mr. Litt having recommended independent counsel as to Vice President Gore; Mr. Robinson having

recommended preliminary inquiries on a couple of those situations.

86

And with respect to only one of the four witnesses, Mr. Esposito,

we really haven’t heard from him. We have his hearsay document,

but I think Mr. Gallagher testified very positively about Mr. Radek

having made the comments, with the connection. And you have Mr.

Radek’s own testimony about the subject, having said both things,

but disagreeing on the connection, and your own testimony as to

lack of recollection.

With respect to all of these independent counsel, I went at some

length the last hearing to point out that independent counsel were

appointed in some cases totally unjustifiably, the Alexis Herman

case being a really remarkable example where the Attorney General’s own finding cites lack of credible information, which I questioned her about in this room—she wouldn’t answer the questions—and then the appointment of Starr to pick up the Lewinsky

charges. I said publicly at the time in about January 1998 that

with all the public talk about a vendetta, what questionable judgment in bringing Starr into the case.

But all of these prior independent counsels—and this subcommittee is going to examine them one by one, even the one that

we had gratuitously offered to us about an independent counsel

consideration as to Director Freeh on some testimony he gave before a House committee. We hadn’t asked for that, but we got that.

We haven’t gotten all the information on many of the other independent counsels, but we intend to, to probe the question as to

whether there was a pattern of appointing all these independent

counsels without real justification so that Senators could later say,

look how she appointed all these independent counsels; she didn’t

under-use the statute.

Senator Sessions.

Senator SESSIONS. Thank you. Well, there are a lot of questions

I would like to ask, but I will just focus primarily on the issue at

hand here.

It was in October 1996, Mr. Gangloff, that the stories broke and

the L.A. field office, the U.S. attorney’s office there, commenced

some effort to develop an investigation of the Buddhist Temple

fundraiser. It became big news in the newspapers.

You were aware of it, were you not?

Mr. GANGLOFF. Yes.

Senator SESSIONS. This was, what, a month before the election,

the presidential election?

Mr. GANGLOFF. Well, if it is October, that is right.

Senator SESSIONS. A big deal, right? You remember that, don’t

you?

Mr. GANGLOFF. Well, I don’t remember the timing specifically,

but I remember——

Senator SESSIONS. And you remember this thing broke within a

month of the election?

Mr. GANGLOFF. Elections are—Senator, I don’t mean to be impertinent, but elections are in November and you just told me the

other event happened in October.

Senator SESSIONS. October, right.

Mr. GANGLOFF. How many times can I say that they are close to

each other in time?

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Senator SESSIONS. I just want you to admit that it was a big

deal.

Mr. GANGLOFF. I admit that October and November are a month

apart, Senator. I am sorry to push it this way, but I admit that.

Senator SESSIONS. I agree, it is a month apart. So here we are

on November 20—well, on October 31, Mr. Radek stops the investigation by the U.S. attorney’s office and commences the 30-day review. Is that correct?

Mr. GANGLOFF. I don’t know the specific date, but that would be

consistent with my recollection.

Senator SESSIONS. At the request of Senator John McCain and

a group of Congressmen from the House who asked for an independent counsel review, and he took over the case—Public Integrity did, and presumably commenced an investigation.

In the press, it was being suggested that the FBI was involved

in that. That obviously offended Mr. Freeh and he put it in his

memorandum. Department of Commerce inspectors general were

doing it. His people weren’t involved. He would have a reason to

be somewhat concerned about that, would he not?

Mr. GANGLOFF. What is reported in the newspaper, I don’t know

whether it is accurate or not.

Senator SESSIONS. Well, it wasn’t accurate. The newspaper said,

for whatever reason, that he was involved in it and he wasn’t. He

felt like he should be, or he wanted to clear the air. So we have

this meeting on November 20, not long after this election, and you

don’t remember being there?

Mr. GANGLOFF. Well, let me say this. First—— Senator SESSIONS. No. I just asked you, do you remember being

in this meeting?

Mr. GANGLOFF. No.

Senator SESSIONS. Well, Mr. Gallagher was here and he said

where everybody sat in the room, and detailed some of the conversation.

Mr. GANGLOFF. Excuse me, Senator. Did he say where I sat in

the room?

Senator SESSIONS. I don’t recall. He said where people sat in the

room, as I recall. But you don’t remember even being there?

Mr. GANGLOFF. Excuse me. As best I know—and, again, I didn’t

review the testimony, but the reason I didn’t expect even to be

called was because my understanding was that Mr. Gallagher

didn’t even recall whether I was there or not.

Senator SESSIONS. Well, let me ask you this. Are you saying you

do not recall and you do not believe you were there?

Mr. GANGLOFF. I am saying I don’t have a specific recollection of

a meeting held on that date.

Senator SESSIONS. Well, that is a good lawyer word, ‘‘don’t have

a specific recollection.’’ I am asking you your best judgment here

before this body. Were you there or were you not?

Mr. GANGLOFF. Senator, my best judgment and my best answer

is that where I was 31⁄2 years ago for a meeting that would have

been a routine meeting during the course of my duties—I don’t

have a specific recollection as to whether I attended that meeting.

Senator SESSIONS. Well, am I wrong to suggest that after Mr.

Radek stopped the Los Angeles investigation around November 1—

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here we are, the 20 of November—was that the first and most important meeting involving this investigation?

Mr. GANGLOFF. What you are wrong to suggest is that Mr. Radek

stopped the investigation. Under the statute and under the procedures that have been in place in the Department for as long as the

Independent Counsel Act has been there, as soon as it was realized

that a U.S. attorney was involved in a matter that might warrant

treatment under the independent counsel statute, that U.S. attorney would be told to step down, not to issue subpoenas, not to use

the grand jury, not to use search warrants, not to immunize anyone. And not only that, they would be told that under departmental

policies and practices, those matters were handled by the Department.

Senator SESSIONS. And that was done, and the Department had

a duty to commence an investigation if it was going to take it over,

did it not?

Mr. GANGLOFF. We had a duty to perform the analysis within the

requirements and restrictions of the independent counsel statute.

Senator SESSIONS. And who was in charge of it?

Mr. GANGLOFF. Mr. Radek.

Senator SESSIONS. And what role did you have in it?

Mr. GANGLOFF. I was his principal deputy. So as I mentioned, I

was out of the country when these allegations first came in and he

called me and alerted me to the fact that important allegations had

arisen and that when I got back we would be handling those.

Senator SESSIONS. What role would you have specifically in handling this matter?

Mr. GANGLOFF. It would depend. When you say ‘‘would I have’’—

what role did I have?

Senator SESSIONS. Did you have.

Mr. GANGLOFF. Prior to Laura Ingersoll’s appointment, as I recall, or her designation, I was working closely with Mr. Radek in

looking at the incoming information, reviewing the analyses that

would have been done as to the nature of the allegations.

And I believe that one of the very first things that we did was

to actually look at the statutes that were involved and to reach out

to the FEC to try to find out what the statutes actually meant. But

I don’t know that that was in the context specifically of the Buddhist allegations or just generally.

I am sure you appreciate, Senator, that not only is this something where, looking back, we can say this was a certain event, the

fact is the next many years were filled with other events on this

same issue of importance. And the other fact is that there are

many, many matters of importance in the Public Integrity Section

at any given time.

Senator SESSIONS. Well, as I understand your testimony, you and

Mr. Radek were doing the investigation prior to the submission of

his recommendation to the Attorney General that an independent

counsel not be appointed. Is that correct?

Mr. GANGLOFF. That is your understanding, yes.

Senator SESSIONS. My understanding or yours?

Mr. GANGLOFF. No, it is not. You make it sound as though we

were exclusively doing something. I am telling you I don’t recall——

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Senator SESSIONS. Well, who else was? You took it from the U.S.

attorney’s office.

Mr. GANGLOFF. We have a deputy who has been involved in independent counsel matters since the inception of the Act who would

have been involved in terms of analysis.

Senator SESSIONS. Well, who made—— Mr. GANGLOFF. Excuse me, Senator. We have a director of an

Election Crimes Branch who would have been involved in performing analysis. At some point, I recall that we requested that the

appellate section do an analysis of certain aspects of the statute,

so they would have been involved in it.

We would certainly have had attorneys who were involved in reviewing documents or figuring out what kinds of questions—so to

say me and Mr. Radek, you know, marched forward and did something I just think is not really realizing how much work was being

done by how many people.

Senator SESSIONS. I am sorry it is taking so long, Mr. Chairman,

but I would like to pursue this to a conclusion.

Somebody has to be in charge of an investigation. You took it

from the Los Angeles office. Mr. Radek took charge, is that correct?

Were you his chief deputy or were these other people his deputy?

Mr. GANGLOFF. That is correct.

Senator SESSIONS. You were his chief deputy?

Mr. GANGLOFF. That is correct.

Senator SESSIONS. So the two of you were in charge of the investigation. Now, he initiated the 30-day review on the last day of October or November 1. Mr. Esposito and Gallagher recall this meeting to be November 20, 20 days later, and on November 30 Mr.

Radek recommended to Attorney General Reno that an appointment of the independent counsel not be made.

Do you disagree with that?

Mr. GANGLOFF. I don’t disagree.

Senator SESSIONS. And did you concur in that recommendation?

Mr. GANGLOFF. It was made at that time, yes.

Senator SESSIONS. All right. Now—— Mr. GANGLOFF. I concur with that recommendation as of today.

Senator SESSIONS. My question is to you, what was done of an

investigative matter between the time that case was taken over by

you and Mr. Radek from the U.S. attorney’s office and the time

that recommendation was made to the Attorney General?

Mr. GANGLOFF. There is two parts to that answer. The first is I

don’t specifically recall what specific steps were taken, but the

other is that the independent counsel analysis and investigation is

a matter that evolves, so that if new facts come in—it is not as

though you make a determination and say no independent counsel

should be there and that freezes things forever.

All it does is says that we are going to proceed in this other way,

and if something comes up or something develops, then, you know,

we can make a different recommendation. So I am sure some investigation was done, but we could have—— Senator SESSIONS. You are sure some investigation was done?

This was an important recommendation on a matter that was

front-page news throughout the country, and you don’t remember

whether you had any investigation?

90

Mr. GANGLOFF. I am sure that a thorough and appropriate investigation of what could have been gathered up until that point was

done just as a matter of routine, Senator. But I don’t recall specifically what took place within the first 30 days that we had that

case, as opposed to which investigative steps took place in the several years that followed that.

Senator SESSIONS. Are you aware of an investigation under your

supervision of national importance, what witnesses were interviewed and what documents were examined during this 30-day period?

Mr. GANGLOFF. No. Today, I do not have a specific recollection

of that.

Senator SESSIONS. Mr. Chairman, I think that indicates to me

from what we have been able to evaluate and study that no investigation was done. And the man in charge of it to say it is 3 years

ago and can’t remember a case like this—I can remember a case

15 years ago, less important than this one.

Mr. GANGLOFF. I remember the case vividly, Senator.

Senator SESSIONS. I am not asking a question at this point. I am

making a statement.

Mr. GANGLOFF. Yes, but you are directly attacking my character,

and I will point out that you didn’t recall Mr. Gallagher’s testimony

as to whether I was at the meeting or not and that was just a few

days ago.

Senator SESSIONS. Well, you don’t recall being at the meeting, I

think, is important.

My view is that this was poorly handled at best, and that by denying an independent counsel on a matter of this nature—the Department of Justice has great responsibility to conduct an investigation with expertise, aggressiveness, and completeness, which

was not done. And the embarrassment is going to linger and it is

going to hurt respect for justice in this country, and I hate that.

Thank you.

Senator SPECTER. Thank you, Senator Sessions.

Just a couple more questions, Mr. Gangloff. I believe I wrote this

down correctly when you said that no career prosecutor reached another conclusion. You had been asked by Senator Torricelli whether

the threshold was met for independent counsel, and you said it had

not been, and that no career prosecutor reached any other conclusion.

Did I accurately quote you?

Mr. GANGLOFF. No. I believe that if you look at your notes, you

will see that I made two distinctions. One was making a distinction

under the mandatory and discretionary provisions of the Act, and

the other was career prosecutors familiar with the Act who had

worked with the Act.

Senator SPECTER. No, my notes don’t show that, and you did not

make a reference to it as to career prosecutors familiar with the

Act. But let’s examine that. A lawyer prosecutor can become familiar with the Act by studying the Act. And when you say that no

career prosecutors—and take your addendum—familiar with the

Act thought that the threshold had been reached, would you say

that Director Freeh, a career prosecutor before he became a judge

and an FBI Director, fell into the category of someone not familiar

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with the Act, even though he had concluded the threshold had been

met?

Mr. GANGLOFF. I had no direct conversations with Secretary— with Director Freeh. My conversations were with the general counsel of the FBI, and it was my opinion at the time that the FBI’s

analysis, insofar as it was being expressed in my presence, was erroneously focused not on the technical requirements of the Act

which focus on allegations against individuals, but on the more

general matter allegations.

And that is the point that I was trying to make earlier, and I

am sorry if I am being redundant, but obviously it didn’t get

through that the point of my frustration was that those who had

dealt with the Act and were familiar with it were constantly looking at the statutory language and basically taking the facts and

putting it against the statutory language. And the critical result of

that is that you look for information against an individual that

meets a certain threshold.

On the other hand, when you are in the discretionary field, and

also when you don’t quite understand the Act in its specifics, in its

technical aspect, you have an impression that basically says, oh,

this matter involves the President or this matter involves the Vice

President. Well, the fact is, under the Act, that is not a basis for

mandatory appointment.

Senator SPECTER. Well, let’s come back to my question. Do you

think that Lou Freeh doesn’t understand the Act?

Mr. GANGLOFF. I think that the information that I received from

the FBI in terms of legal analysis under the Act reflected that

those who were engaged in analyzing the Act did not understand

the central language of the Act. That is correct.

Senator SPECTER. Well, let’s pursue that. There are a lot of people in the FBI besides Director Freeh. Come back to my question.

Do you think Director Freeh doesn’t understand the Act?

Mr. GANGLOFF. I don’t have an opinion as to whether—I don’t

have a basis for opinion——

Senator SPECTER. OK, fine, so you don’t have an opinion. So you

are not saying that—— Mr. GANGLOFF. If he believed—— Senator SPECTER. Wait a minute, wait a minute. So you are not

saying he doesn’t understand the Act. You don’t have an opinion.

Mr. GANGLOFF. No. I have an opinion as to——

Senator SPECTER. As to whether Director Freeh understands the

Act?

Mr. GANGLOFF [continuing]. The information I received from the

Bureau.

Senator SPECTER. Does anybody understand the Act besides you

and Mr. Radek?

Mr. GANGLOFF. Yes. And, Senator, I think that you understand

the Act, and I think that you are able to make the distinction between a matter and an individual.

Senator SPECTER. Well, I am a career prosecutor.

Mr. GANGLOFF. Yes, I am familiar with that.

Senator SPECTER. Are you familiar with the fact that Director

Freeh recommended independent counsel?

Mr. GANGLOFF. Yes.

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Senator SPECTER. But you are not prepared to say that Director

Freeh understands the Act?

Mr. GANGLOFF. I am not prepared to say that he knowingly recommended it under the mandatory provisions of the Act. He may

very well have done it under the discretionary provisions, and he

may very well have done it with reference to the matter as opposed

to with respect to individuals.

Senator SPECTER. Do you think there is clear and convincing evidence that he didn’t do it knowingly?

Mr. GANGLOFF. Clear and convincing evidence. I don’t have a

basis to make that judgment.

Senator SPECTER. Good. How about Mr. Parkinson? He recommended independent counsel. Does he understand the Act?

Mr. GANGLOFF. I thought at the time that his arguments did not

address the central portion of the Act which goes to individuals as

opposed to matters.

Senator SPECTER. So he did not understand the Act either?

Mr. GANGLOFF. I think that if you read his analysis, you will see

the distinction made that I have explained.

Senator SPECTER. I couldn’t hear the last part.

Mr. GANGLOFF. If you read the analysis that was prepared by the

FBI——

Senator SPECTER. I have, I have.

Mr. GANGLOFF [continuing]. You will see that the distinction that

I have made, namely that the allegations against individuals were

not sufficient to satisfy the threshold of the Act, is not addressed

within those papers. And, certainly, although I haven’t seen all of

the papers that were done behind the scenes, certainly in the arguments that I heard him make orally I thought that they were missing this very fine distinction.

Senator SPECTER. OK, so Larry Parkinson doesn’t understand

the Act.

You testified—— Mr. GANGLOFF. He may have made the recommendation based on

the discretionary portion, as I say, and he also may have understood the Act in a different way than the arguments that he made

if, as you propose, Mr. Freeh was making those arguments and telling him to express that opinion.

Senator SPECTER. But from what you saw of Mr. Parkinson, General Counsel of the FBI, longstanding lawyer, as he applied the

Act, it was incorrectly applied, so that you conclude that as to what

you saw him do, he didn’t understand the Act?

Mr. GANGLOFF. He did not—in my opinion, he did not appreciate

the mandatory provisions of the Act.

Senator SPECTER. OK, I will take that as not understanding the

Act. The threshold wasn’t reached.

Did Mr. Litt understand the Act when he recommended independent counsel as to Vice President Gore?

Mr. GANGLOFF. Frankly, I would not have been privy to the specific recommendation, certainly in written form, and analysis. And

I believe that Mr. Litt’s position was such that he also may have

been involved in the discretionary aspect of it to a greater degree.

But my general opinion would be that Mr. Litt did understand the

Act, yes.

93

Senator SPECTER. Well, and he did recommend independent

counsel as to Vice President Gore.

Mr. GANGLOFF. Yes, and I don’t know whether that was done, as

I say, under the mandatory or the discretionary provisions.

Senator SPECTER. Well, the Act has both. But as to one or the

other, since he did recommend independent counsel as to Vice

President Gore, you think he did understand the Act?

Mr. GANGLOFF. No, I didn’t say that. And what I am suggesting,

though, is if the mandatory requirements of the Act are met and

no referral is made, then I think that a judgment can be made that

the Attorney General has acted improperly. If, on the other hand,

you are in the discretionary section of the Act, then it is discretionary to the Attorney General. So if she exercises that discretion,

it is, by definition, not improper under the Act.

Senator SPECTER. Well, do you know whether Mr. Litt made a

recommendation under the mandatory provisions?

Mr. GANGLOFF. I don’t—I may have known that at some time,

but I don’t have a specific recollection of that. Also, Senator, let me

point out I don’t know over a period of time. As I said, it is a continuing process, an investigation that may lead to the appointment

of an independent counsel. So, you know, Mr. Litt may have said— reached one recommendation at one time and later modified that

recommendation. I just don’t know that. I don’t recall it.

Senator SPECTER. Well, at one point Mr. Litt recommended to the

Attorney General that independent counsel be appointed, and you

don’t know whether that was under the mandatory or discretionary. So he may have made a recommendation under the mandatory provisions, which would have led to his conclusion that the

Attorney General was wrong not to appoint independent counsel as

to the Vice President.

Mr. GANGLOFF. I don’t know whether that occurred or not. That

is right.

Senator SPECTER. What would the argument be, Mr. Gangloff,

about not appointing independent counsel to Vice President Gore

under the mandatory provisions?

Mr. GANGLOFF. Senator, rather than give you that off the top of

my head, I think you have probably seen the analysis. The argument at bottom would be that there wasn’t specific and credible information of the violation of a statute—excuse me—of a criminal

law that is covered under the Act on the part of Mr. Gore.

Senator SPECTER. Isn’t it information, not evidence?

Mr. GANGLOFF. Well, let me say yes just for the purpose of saying yes. I don’t know that I have ever really made the distinction

between information and evidence. But you know as a prosecutor

information is evidence, and the question is how much probity does

it have.

Senator SPECTER. Well, the Congress, on going forward with a

preliminary inquiry, used the word ‘‘information,’’ which is a lower

standard, at least in the Congressional view, than evidence.

But where you have the issue as to whether the Vice President

knew that he was raising hard money, and you have four witnesses

who testify to it—Strauss, who has a memorandum reflecting 35

percent hard money; Panetta, who said that the Vice President was

focused and, ‘‘knew what the hell was going on;’’ and two other witVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00097 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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nesses testify about hard money—and you have 13 memoranda

coming from Ickes to the Vice President and you have Ickes at a

meeting where he discontinues the meeting when the Vice President walks out on the issue of drinking iced tea and having rest

room breaks, and you have the Vice President saying that he has

been a campaigner for 16 years and has lots of experience, and you

have the Vice President saying that the materials that were in the

Ickes memoranda were gone over with the President and the Vice

President, isn’t that sufficient for further investigation, not for an

indictment, not for deciding to prosecute, but for further investigation under the independent counsel statute?

Mr. GANGLOFF. First, that is a hypothetical without other pertinent facts perhaps there. But I think that—and, again, I don’t

want to be at all unhelpful here, but I haven’t reviewed the record

on this. As I explained, I knew yesterday that I was coming and

I understood we were going to stay on this memorandum. And perhaps this inquiry is relevant to it, and to the extent that it is, you

know, I apologize, but I am not in a position to redo an analysis

based on oral representations.

Senator SPECTER. OK, fair enough. It is not a hypothetical question, it is in the record. But it is true that this goes beyond the

memorandum, and I pursued the question because you affirmatively testified that the threshold wasn’t met. If you say I don’t

know that the threshold is met and I am not prepared to answer

the question, I wouldn’t broach it with you.

OK, thank you very much, Mr. Gangloff.

Senator TORRICELLI. Mr. Chairman, could I ask a few questions?

Senator SPECTER. Oh, by all means, sure.

Senator TORRICELLI. Mr. Gangloff, now concluding your testimony, I thought we should put it somewhat in perspective.

A great deal has been made about your presence at this meeting

in which you have no particular memory. It should be noted for the

record, since Mr. Gallagher is not sitting next to you at this time,

that on May 24, 2000, before this committee, the following exchange took place which may put in perspective the value of your

testimony with regard to the allegations concerning the Attorney

General and her political position.

Mr. Gallagher speaking: ‘‘I have a specific recollection of Mr.

Radek, who I have dealt with extensively during the same time period on other investigative matters, but I have a less specific but

general recollection that there may have been some reference to

pressure on the FBI, and walked away from the meeting with a

sense that, again, this would have been a very sensitive and critical

investigation.’’

Mr. Gallagher, later: ‘‘There may have been some general discussion as to the fact that the Attorney General had not yet been selected by the President to continue in his Cabinet.’’

Mr. Gallagher again: ‘‘If it will help Lee Radek, I was sitting on

the sofa in Bill Esposito’s office. Bill Esposito was in the wing chair

to my left, Lee Radek was in the wing chair to my right. The three

of us were the primary participants in the discussion. I have a

vague recollection that he may’’—my emphasis, ‘‘may’’—‘‘have had

a deputy off to the side.’’

95

Then Senator Torricelli speaking: ‘‘Do you remember who was in

the room?’’ Mr. Gallagher: ‘‘I remember Lee Radek, myself, and Bill

Esposito.’’ Senator Torricelli again: ‘‘But not whether there were

any others?’’ Mr. Gallagher: ‘‘At most, there was a fourth person.

If it was, he sat off to the side and did not actively participate in

the discussion. So while I give you his name, in complete candor,

as to who could have possibly been in the room, that is the only

person who may have been in the room.’’ So, Mr. Gangloff, if your memory seems sketchy, it appears to be

because there appears to be no one who is certain you were in the

room. You would be entitled to not have complete recollection. And

indeed from what I am told, you may not actually have been Mr.

Radek’s only deputy; there are others in the division. It may have

been you, it may not have been you. But I thought before we closed

the record on your testimony, that should be included.

Mr. GANGLOFF. Well, if I could just make one point on the context of that, which is that assuming I was in the room, the note

that I did not—or the person there did not actively participate in

the conversation would also indicate why, if I were there, I would

not really have a full recollection of the meeting.

Senator TORRICELLI. Exactly.

Mr. GANGLOFF. Thank you.

Senator TORRICELLI. Thank you, Mr. Gangloff.

Thank you, Mr. Chairman.

Senator SPECTER. So having not participated much, as Senator

Torricelli has questioned, as you put it, you may not, ‘‘have a full

recollection of the meeting.’’ Mr. GANGLOFF. I guarantee I don’t have a full recollection of that

meeting.

Senator SPECTER. You do not have a full recollection of the meeting?

Mr. GANGLOFF. That is correct.

Senator SPECTER. OK, so some things might have been said that

you don’t recollect.

Mr. GANGLOFF. That is correct.

Senator SPECTER. Thank you very much.

Mr. Esposito, will you step forward, please? Would you raise your

right hand?

Do you solemnly swear that the evidence you will present to this

subcommittee of the Judiciary Committee of the U.S. Senate will

be the truth, the whole truth, and nothing but the truth, so help

you God?

Mr. ESPOSITO. I do.

Senator SPECTER. Mr. Esposito, back on November 30, 1996,

what was your position?

STATEMENT OF WILLIAM ESPOSITO, FORMER DEPUTY DIRECTOR, FEDERAL BUREAU OF INVESTIGATION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

Mr. ESPOSITO. I was the Assistant Director of the Criminal Division of the FBI.

Senator SPECTER. And what is your occupation today?

Mr. ESPOSITO. I am a senior executive vice president with a company up in Wilmington, DE.

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Senator SPECTER. Do you recollect a meeting on November 30,

1996—November 20, 1996?

Mr. ESPOSITO. Yes, I do, sir.

Senator SPECTER. Who was there?

Mr. ESPOSITO. It was in my office. I was there. My deputy, who

at that time was Neil Gallagher, was there. Lee Radek was there,

Chief of Public Integrity, and Joe Gangloff was there.

Senator SPECTER. What was the purpose of the meeting?

Mr. ESPOSITO. There were two purposes of the meeting. The first

purpose was to formally request that we receive some kind of formal referral on the matter involving campaign finances. The second

purpose of the meeting was to discuss with Mr. Radek the Bureau’s

input into whatever conclusion was made on the recommendation

to the Attorney General as far as recommending an independent

counsel.

Senator SPECTER. And what was said at the meeting, by whom?

Mr. ESPOSITO. The meeting—and Mr. Gallagher was correct; I

specifically remember where we were sitting. And Mr. Gangloff was

seated to the right, my right, of Mr. Radek, on the couch also.

And the meeting—we discussed those two points. It was a very

cordial meeting, and the indications were that we were going to receive a formal referral on this matter, and that we would work together as far as input, as far as recommendations to the Attorney

General.

At the end of the meeting, if I—do you want me to finish

what—— Senator SPECTER. Go ahead, yes.

Mr. ESPOSITO. At the very end of the meeting, the meeting was

breaking up and we were—and I had known Mr. Radek and Mr.

Gangloff for many years and we worked together on many different

matters. And like I said, it was a cordial meeting, and at the end

of the meeting, as a matter of fact, I think I was out of my chair

at that time and I think Mr. Radek, as I remember it, was even

rising out of his chair.

And the topic came up about the pressure that was put on both

organizations, but specifically Public Integrity because they had to

make the recommendation in this matter. And Lee did make the

statement that, as a matter of fact, the Attorney General’s job

could hang in the balance. I do remember that specifically.

Senator SPECTER. Did you make any response to that statement?

Mr. ESPOSITO. I can’t recall exactly what I said, but something

to the fact that I am sure you will do the right thing.

Senator SPECTER. And what was the context——

Mr. ESPOSITO. And we walked out of the room.

Senator SPECTER. Where was Mr. Gangloff, as best you recollect,

at the time Mr. Radek said that?

Mr. ESPOSITO. If I can construct the seating arrangements in my

office, there is a couch, and on each side of the couch there is wing

chairs. On the right side, if you are looking at the couch, is where

I was sitting. Neil Gallagher was to my right. Across from me was

Mr. Radek, who was in the opposite wing chair, and to his right

was Mr. Gangloff.

Senator SPECTER. This comment by Mr. Radek was said at the

very conclusion of the meeting?

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Mr. ESPOSITO. Yes, it was, just as we were getting ready—as a

matter of fact, I was already out of my chair, I believe. And right

after that, they walked out my door.

Senator SPECTER. And specifically where was Mr. Radek at the

time? You were out of your chair and where was Mr. Radek?

Mr. ESPOSITO. He was in his chair, in the same wing chair.

Senator SPECTER. And where was Mr. Gangloff?

Mr. ESPOSITO. Sitting on the couch.

Senator SPECTER. Was Mr. Gangloff within earshot of what Mr.

Radek was saying?

Mr. ESPOSITO. Yes. I mean, I was much further away and I could

hear it, so——

Senator SPECTER. And where was Mr. Gallagher?

Mr. ESPOSITO. He was sitting on the couch, to my right.

Senator SPECTER. And was Mr. Gallagher within earshot?

Mr. ESPOSITO. Yes, he was.

Senator SPECTER. What was your reaction to Mr. Radek’s statement?

Mr. ESPOSITO. My reaction was that I immediately after the

meeting went down and reported it, reported the results of the

meeting, including the statement, to the Director.

Senator SPECTER. Did you consider Mr. Radek’s statement an unusual one?

Mr. ESPOSITO. Well, I think it indicated to me the thought that

he had to put into this decision.

Senator SPECTER. What was the context of the public discussion,

if you recall, at that time, November 20, 1996, about the Attorney

General staying on in a second Clinton administration term?

Mr. ESPOSITO. The general knowledge I have—this was not discussed at any meeting I was at, but general discussion in the

media around this period of time was the Attorney General had not

been renamed to be Attorney General for the next 4 years, or for

the next administration.

Senator SPECTER. And whom did you report this conversation to

in the FBI, if anyone?

Mr. ESPOSITO. To Louis Freeh, the Director of the FBI.

Senator SPECTER. And how soon after the meeting did you make

that report to Director Freeh?

Mr. ESPOSITO. That was probably with—my recollection is that

we did it almost right away.

Senator SPECTER. Did you go straight from that meeting to Director Freeh’s office?

Mr. ESPOSITO. My recollection is that after Mr. Gangloff and Mr.

Radek left the office that Mr. Gallagher and I discussed personnel

that we would assign to this investigation, and then I walked down

to Mr. Freeh’s office.

Senator SPECTER. Did Mr. Radek’s comment surprise you about

pressure and the Attorney General’s job being on the line?

Mr. ESPOSITO. Yes, it did. Yes, it did.

Senator SPECTER. Did you discuss that with Mr. Gallagher contemporaneously with the event?

Mr. ESPOSITO. I don’t recall if I did or not. I know I discussed

it with Mr. Freeh.

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Senator SPECTER. And how long after the meeting, as best you

can tell, did you report that to Director Freeh?

Mr. ESPOSITO. It had to be within 30 minutes, I would say.

Senator SPECTER. And what, if anything, did Director Freeh say

to you when you reported that to him?

Mr. ESPOSITO. He indicated to me that he thought this was a

very serious matter and he was going to have to have a discussion

with the Attorney General. Subsequently, whether it was that

night or the next day, we had a further discussion about this conversation.

Senator SPECTER. Whom do you mean by ‘‘we?’’ Mr. ESPOSITO. The Director and I; Mr. Freeh and myself.

And I asked him specifically if he wanted me to put the discussion of this meeting in an FD–302, which is a form that most Federal prosecutors are familiar with. A 302 is a form that Bureau

agents put reports on. And Mr. Freeh told me that, no, do not. He

was going to have a meeting with the Attorney General and then

he would construct a memo, which he subsequently did.

Senator SPECTER. And did the Director then send you a memorandum?

Mr. ESPOSITO. Yes, he did.

Senator SPECTER. And what did that memorandum say, in essence?

Mr. ESPOSITO. Well, it is the memo—— Senator SPECTER. Do you have the memorandum with you?

Mr. ESPOSITO. Yes, I do. It is the memo of December 9 that Senator Sessions referred to earlier. It is a memo from the Director of

the FBI to me, Mr. Esposito; subject: Democratic national campaign matter.

Do you want me to read the—— Senator SPECTER. Just read it. It is a short memo. Put it in the

record.

Mr. ESPOSITO. Let me put my glasses on, sir. ‘‘As I related to you this morning, I met with the Attorney General on Friday, 12/6/96, to discuss the above-captioned matter. I

stated that DOJ had not yet referred the matter to the FBI to conduct a full criminal investigation. It was my recommendation that

this referral take place as soon as possible.’’

‘‘I also told the Attorney General that since she had declined to

refer the matter to an independent counsel, it was my recommendation that she select a first-rate DOJ legal team from outside Main Justice to conduct the inquiry. In fact, I said that these

prosecutors should be ‘junkyard dogs,’ and that in my view, PIS

was not capable of conducting the thorough, aggressive kind of investigation which was required.’’

‘‘I also advised the Attorney General of Lee Radek’s comment to

you that there was a lot of pressure on him and PIS regarding this

case because the ‘Attorney General’s job might hang in the balance’

(or words to that effect). I stated that those comments would be

enough for me to take him and the Criminal Division off the case

completely.’’

‘‘I also stated that it didn’t make sense for PIS to call the FBI’’

the lead agency’ in this matter while operating a task force with

DOC IG’s,’’ meaning Department of Commerce, ‘‘who were conVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00102 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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ducting interviews of key witnesses without the knowledge or participation of the FBI. I strongly recommended that the FBI and

hand-picked DOJ attorneys from outside Main Justice run this case

as we would any matter of such importance and complexity.’’ ‘‘We left the conversation on Friday with the arrangement to discuss the matter again on Monday. The Attorney General and I

spoke today,’’ which is Monday, ‘‘and she asked for a meeting to

discuss the ‘investigative team’ and hear our recommendations.

The meeting is now scheduled for Wednesday, 12/11/96, which you

and Bob Litt will also attend.’’ ‘‘I intend to repeat my recommendations from Friday’s meeting.

We should present all of our recommendations for setting up the

investigation, both AUSA’s and other resources. You and I should

also discuss and consider whether, on the basis of all the facts and

circumstances, including Huang’s recently released letters to the

President, as well as Radek’s comments—whether I should recommend that the Attorney General reconsider referral to an independent counsel.’’ ‘‘It was unfortunate that DOJ declined to allow the FBI to play

any role in the independent counsel referral deliberations. I agree

with you that based on DOJ’s experience with the Cisneros matter,

which was only referred to an independent counsel because the FBI

and I intervened directly with the Attorney General, it was decided

to exclude us from this decisionmaking process. Nevertheless,

based on information recently reviewed from PIS/DOC, we should

determine whether or not independent counsel referral should be

made at this time. If so, I will make the recommendation to the Attorney General.’’ Senator SPECTER. That concludes the memo?

Mr. ESPOSITO. Yes, sir.

Senator SPECTER. What did you take the Director’s reference to, ‘‘junkyard dogs,’’ to mean?

Mr. ESPOSITO. Well, I have discussed this with the Director because I remember discussing it with him at the time. And my interpretation of a junkyard dog is somebody who latches—a dog that

latches onto somebody, like an ankle, and won’t let loose. And I

think in this context, what I took it to mean is somebody who will

latch onto this and overturn every stone to find out what actually

happened.

Senator SPECTER. The Director has quotes around, ‘‘Attorney

General’s job might hang in the balance,’’ ‘‘(or words to that effect).’’ What is your best recollection as to the specific language

which Mr. Radek used in that respect?

Mr. ESPOSITO. The quote I remember is Attorney General’s job

might hang in the balance. I remember that specifically. I think

why he put ‘‘(or words to that effect)’’ is because I cannot remember

if he said pressure or stress. But we had discussed this memo 31⁄2

years ago and I had not seen it until about a month ago.

Senator SPECTER. Do you know if this memo was made available

to any oversight committee of Congress?

Mr. ESPOSITO. I am not aware of that, sir.

Senator SPECTER. Did you then attend a meeting with the Director and the Attorney General on December 11?

Mr. ESPOSITO. Yes, I did.

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Senator SPECTER. And is that meeting reflected in your diary?

Mr. ESPOSITO. It is my 1996 calendar, and I do have—I do have

an entry on December 11: at 2:15 p.m., meet with AG re campaign

finance reform with Director.

Senator SPECTER. When you use the word ‘‘reform,’’ what do you

mean by that?

Mr. ESPOSITO. Well, this is—my secretary had put that note in.

I think what that specifically means is the campaign finance investigation.

Senator SPECTER. And what was the substance of that meeting?

Mr. ESPOSITO. I believe this meeting was—— Senator SPECTER. First of all, who all was present and where

was the meeting held?

Mr. ESPOSITO. I believe the meeting was held at the Attorney

General’s conference room, at Department of Justice. I believe the

Attorney General was there, Bob Litt was there, I was there, Director Freeh was there. Other than that, it would just be speculation

on my part as far as who was there. I know there could have been

others.

Senator SPECTER. And who said what to whom?

Mr. ESPOSITO. I can’t recall the exact specifics, but I think the

basis of the meeting was to set up groundwork, or talk about the

groundwork to set up for the task force to begin this investigation.

Senator SPECTER. Was there any discussion at that time about

any pressure on the Public Integrity Section?

Mr. ESPOSITO. No, there was not.

Senator SPECTER. Was there any discussion about the Attorney

General’s job hanging in the balance or being on the line, or words

to that effect?

Mr. ESPOSITO. No, there was not.

Senator SPECTER. Was there ever any following discussion with

Mr. Radek or anybody else from the Department of Justice about

pressure on campaign finance investigations or potential prosecutions?

Mr. ESPOSITO. Not to me, no.

Senator SPECTER. Any other discussion with Mr. Radek or anybody else of the Department of Justice about the Attorney General’s job hanging in the balance or being on the line?

Mr. ESPOSITO. No, there wasn’t.

Senator SPECTER. Senator Sessions.

Senator SESSIONS. Is it fair to say, Mr. Esposito, that this statement about the job hanging in the balance troubled you enough

that you went rather directly to the Director of the FBI to discuss

that with him?

Mr. ESPOSITO. Yes.

Senator SESSIONS. And did it trouble him, also?

Mr. ESPOSITO. Yes, it did.

Senator SESSIONS. And that was the primary reason—or was

that a factor in his deciding to go to see the Attorney General?

Mr. ESPOSITO. That was one of the reasons, yes.

Senator SESSIONS. You mentioned that the purpose of this meeting was two-fold. One was to request a formal referral. Now, a matter comes up and potentially a crime is reported that is a potential

crime. At some point, someone has to be the lead agency to invesVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00104 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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tigate it, to be the person charged, the agency charged with the investigation.

Is that what you meant, that it would be referred to the FBI formally as the agency in charge of the investigation?

Mr. ESPOSITO. That is part of it. What I actually meant was that,

as I recall, there were numerous articles appearing daily in the

paper about the work that was being done by the inspector general’s office at Department of Commerce regarding Mr. Huang. Although it was referred to as the FBI was the lead agency, we had

not received any formal request from anybody to do anything.

The Director normally holds morning briefings, around 8 a.m. in

the morning, at this particular time, and it was discussed at that

meeting that I thought that since we are being bandied about in

the paper as the lead agency but we have not received any formal

referral, which is usually the way it occurs, from DOJ, that I was

going to call Mr. Radek and set up a meeting.

I do recall calling Mr. Radek and ask him to stop by my office

sometime today. This was the day in question. And I seem to recall—my memory tells me that Public Integrity Section at that

time,—and I don’t know if they still are because I have been retired

for 2 years and 9 months—their offices were not at Main Justice.

And I seem to recall that Mr. Radek told me that he was either

going to go—and I can’t remember specifics, but he was either

going to a meeting at DOJ or coming back from a meeting at DOJ

and we would meet at my office. And according to my calendar, it

shows a meeting at 4:30 in the afternoon.

Senator SESSIONS. But it was important for the FBI, if they were

going to be publicly identified with this investigation, to be in

charge of it, or not, have that matter clarified?

Mr. ESPOSITO. Well, we felt that eventually somebody was going

to ask us to be in charge of it and we wanted to get moving on it.

Senator SESSIONS. And the second request was to ask for input

into the independent counsel decision. Of course, the Department

of Justice has the ultimate authority to decide the call or not. That

is the Attorney General’s call.

Mr. ESPOSITO. That is correct.

Senator SESSIONS. But as a Federal prosecutor for a long time,

I was never offended or in any way reluctant to receive any memorandum or suggestions from the FBI or any other law enforcement

agency. And you were going to ask that you be allowed at least to

provide some input from the FBI on this matter?

Mr. ESPOSITO. That is correct.

Senator SESSIONS. Were you allowed to do so?

Mr. ESPOSITO. Yes, we were.

Senator SESSIONS. What about the preliminary investigation decision that was entered into that concluded on, I believe, the November 30, 10 days after this meeting? Were you involved in that

recommendation? Did you know that decision was going to be

made?

Mr. ESPOSITO. I don’t think we were, sir.

Senator SESSIONS. Well, isn’t it a fact, Mr. Esposito, that sometimes you have got to move promptly on cases?

Mr. ESPOSITO. That is correct.

102

Senator SESSIONS. And isn’t it a fact that quite a number of witnesses who were present at the Buddhist Temple are no longer in

the country and have never been interviewed?

Mr. ESPOSITO. I believe once we started on the investigation, it

was determined that some had left the country, yes.

Senator SESSIONS. Ed Siong was one of those. Do you recall?

Mr. ESPOSITO. I couldn’t tell you the specific names, sir.

Senator SESSIONS. And are you aware that there were records

shredded in this case?

Mr. ESPOSITO. No, I am not.

Senator SESSIONS. Testimony, I believe, in the House committee

from individuals who did not flee that records were shredded.

But let me go back to this point. According to the facts we have,

Senator McCain and a number of House members requested an

independent counsel as a result of this fundraising event at the

Buddhist Temple, and they detailed quite a number of complaints

they had, and bases for that request.

At that point, Mr. Radek at Public Integrity stopped the initial

investigation that was ongoing in Los Angeles, or at least being

prepared to go forward in Los Angeles by the U.S. attorney’s office,

and undertook to make a 30-day review. And I guess my question

to you is, did you participate in doing any evidence-gathering to

help him make that decision 10 days later from your meeting, November 30?

Mr. ESPOSITO. I think as was stated earlier, this was the very

first meeting we had about this matter where we asked for a formal referral. I think the next—— Senator SESSIONS. Did you even know that the Attorney General

was going to make a decision a few days later, and that Mr. Radek

was going to make a recommendation as to whether an independent counsel should be appointed?

Mr. ESPOSITO. I believe not, sir.

Senator SESSIONS. And to your knowledge, no investigation was

done by the FBI during that period?

Mr. ESPOSITO. Correct, unless it was the Los Angeles office, but

they had not—I am sure they would have forwarded that to me.

Senator SESSIONS. Well, I just wonder how you make a decision

if you don’t interview witnesses and gather evidence, unless you

just read the newspaper. And going back and reading law books is

not the way to do an investigation.

In fact, Mr. Esposito, based on your experience with the FBI,

isn’t it true that a lot of times a case begins on a rather maybe significant but not particularly shocking criminal allegation, and that

aggressive investigation uncovers a whole can of worms and a pattern of criminality?

Mr. ESPOSITO. Yes, that happens, sir.

Senator SESSIONS. And isn’t that why, when you do an investigation of this kind, you need an absolutely independent prosecutor

and investigative team?

Mr. ESPOSITO. Yes. There was no—there is no mixing of words

here. The FBI was pretty adamant in its position that they thought

early on that this should be referred to an independent counsel.

Senator SESSIONS. And isn’t it a fact, also—well, I guess I want

to get——

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Senator SPECTER. Senator Sessions, I am reluctant to interrupt

you, but the House has their proceedings set for one o’clock, and

there are people waiting. So to the extent we can expedite the balance of our questioning, I think they would appreciate it.

Senator SESSIONS. Well, I will ask one more question.

In the memorandum, Mr. Freeh referred to meeting with the Attorney General again to discuss the investigative team. Did he report to you what kind of commitments the Attorney General had

made to establishing an independent investigative team of skilled

prosecutors who were used to litigating?

Mr. ESPOSITO. My recollection is that—and this is a question

that should be directed to Mr. Freeh, but we had a conversation

about the—Director Freeh and I had a conversation about his conversation with the Attorney General, and he pretty much told me

that she was going to not seek somebody outside of the Department, of Main Justice, and was going to give this to the Public Integrity Section.

Senator SESSIONS. Which would have been contrary to his recommendation?

Mr. ESPOSITO. Yes, sir.

Senator SESSIONS. Thank you, Mr. Chairman.

Senator SPECTER. Thank you, Senator Sessions.

Mr. Radek, would you step forward?

Mr. Gallagher, would you pull your chair forward?

Both of you men have been sworn in at the last proceedings, so

you understand, Mr. Gallagher, you are still under oath?

Mr. GALLAGHER. Yes, I do.

Senator SPECTER. Mr. Radek, you understand you are still under

oath?

Mr. RADEK. Yes, I do.

Senator SPECTER. To try to boil this all the way down, Mr. Gallagher, we hadn’t expected you to be here, but we thank you for

being here. You were on your way to Ireland last week. I want to

read you just two questions and two answers. I think that would

be the fastest way to handle your testimony today.

Your testimony at page 38 of the record, you said, ‘‘During this

discussion, there was a statement made by Mr. Radek that, as reflected in the memorandum, there was a lot of pressure on him and

on the Public Integrity Section, and this was attributed to the fact

that the Attorney General’s job may hang in the balance.’’ My question to you: ‘‘Are you sure that conversation occurred.’’ ‘‘I am certain of the conversation.’’

And then similarly, at page 39, my question: ‘‘And you are sure

the conversation occurred where Mr. Radek used the language

pressure on the Public Integrity Section because the Attorney General’s job hangs in the balance?’’ And you said, ‘‘Yes, Senator; yes,

Senator.’’ My question: ‘‘Sure of that?’’ Your response: ‘‘I am positive.’’

Do you reaffirm that testimony?

Mr. GALLAGHER. Yes, Senator, I do.

Senator SPECTER. Is it absolutely clear, Mr. Gallagher, in your

mind that the two issues, the pressure and the Attorney General’s

job hanging in the balance, were linked?

Mr. GALLAGHER. Yes, Senator.

104

Senator SPECTER. Mr. Esposito, is it absolutely clear in your

mind that the two issues, the pressure and the Attorney General’s

job hanging in the balance, were linked?

Mr. ESPOSITO. Yes, sir.

Senator SPECTER. Mr. Radek, we discussed this issue at some

length on the 24, and as I had read your testimony earlier, you

said that you may have used the word ‘‘pressure’’ and you may

have talked about the Attorney General’s job hanging in the balance, but there was no link between the two.

Are you absolutely certain that there was no link between the

two, Mr. Radek?

Mr. RADEK. Sir, if I may reiterate my testimony—— Senator SPECTER. Yes, you may.

Mr. RADEK [continuing]. I have no recollection of the meeting and

I have no recollection of the conversation. The speculation that I

engaged in was speculation about things that I would have said because they were true.

What was not true at the time, and so therefore my conclusion

is I would not have said it, is that there was any link between anything having to do with the Attorney General’s job status and any

pressure on the Public Integrity Section. I acknowledged at that

testimony as I acknowledge now that there was press speculation

that the Attorney General’s job was in such a state that she might

not serve a second term. And I clearly acknowledge and was willing

to tell anyone at the time that the Public Integrity Section was

under a lot of pressure to do a good job in this investigation.

Senator SPECTER. So those two factors were true, pressure on the

Public Integrity Section and the Attorney General’s job hanging in

the balance?

Mr. RADEK. Well, hanging in the balance necessarily relates to

something and makes that connection. What I testified to was I

was aware that there were press reports that she might or might

not be chosen to serve a second term.

Senator SPECTER. But the pressure on the Public Integrity Section was not due to trying to protect the Attorney General’s job?

Mr. RADEK. That is correct.

Senator SPECTER. Senator Sessions.

Senator SESSIONS. Is it your testimony that—well, do you remember a phone call from Mr. Esposito to you asking you to come

over to discuss this matter at the FBI office?

Mr. RADEK. I do not. I do remember that it was a cause of some

concern that while the investigation was going forward—and I believe FBI agents were actually working on the case; I may be

wrong, but I believe that is true—no formal referral had been received from the Bureau by the Department. And that very often

happens. We will get a case started with a phone call, followed by

a formal referral later.

Senator SESSIONS. Well, that does happen, but it was appropriate

at this point to do it formally, was it not?

Mr. RADEK. Yes.

Senator SESSIONS. It was a fair request of the FBI?

Mr. RADEK. Yes, and—— Senator SESSIONS. Bandied about in the paper, and they needed

to be either in or out?

105

Mr. RADEK. There was no disagreement about that, yes, sir.

Senator SESSIONS. And do you recall that you were requested to

allow the FBI to have input into the appointment of the independent counsel?

Mr. RADEK. I do not remember that specifically, although it does

not surprise me to hear that I would have been asked that. It

seems natural. The history of the independent counsel deliberations in the Department was generally that the decisions were

made without input as to the final recommendation by the FBI.

I think that changed in the Cisneros matter because the FBI had

an institutional interest there. They were the organization that

was lied to, and so the Attorney General involved them quite a bit.

And I think from that time on, they stayed involved in every independent counsel matter that I have been involved with.

Senator SESSIONS. But with regard to the recommendation that

you made on November 30, or thereabouts, against an independent

counsel to the Attorney General?

Mr. RADEK. I am not sure which recommendation—— Senator SESSIONS. The 30-day initial inquiry. Did you offer them

an opportunity to participate in that?

Mr. RADEK. I am just not sure what recommendation you are referring to, Senator, if there is a document there. I don’t recall specifically making a recommendation on November 30 on any independent counsel matter. There was a letter, a congressional letter,

which under the statute had to be answered at that time which rejected a lot of independent counsel suggestions or demands, recommendations from the Congress. Is that what you are referring

to?

Senator SESSIONS. Well, yes. The Congress made that recommendation. You took over the case under the rubric of the 30-

day review, did you not, from the U.S. attorney’s office in Los Angeles? Mr. Gangloff said you took it over because you had a request

for an independent counsel.

Mr. RADEK. You are confusing this matter, the entire campaign

finance matter, with a small part of it, which was the Hsi Lai Temple matter. The Hsi Lai Temple matter is a discreet matter that

fell under the rubric of campaign finance, but the allegations that

we were investigating and looking at initially were much broader

than that.

Senator SESSIONS. Well, in our last——

Mr. RADEK. So when you say this case, yes, I reached out and

stopped the Hsi Lai Temple matter, but that wasn’t the entire campaign finance matter and that wasn’t the beginning of it.

Senator SESSIONS. Well, I know our time is short. I guess the last

time you testified here, you talked about recommending not having

an independent counsel, and apparently the Attorney General at

that point did so.

Mr. RADEK. On a number of specific matters, I have made recommendations to the Attorney General. Some of them have been

not to have an independent counsel, and some of those she has

agreed with.

Senator SESSIONS. Well, Mr. Radek—— Mr. RADEK. On the Hsi Lai Temple matter, we examined quickly,

once we received the information, whether or not the independent

106

counsel statute was triggered. We determined it was not because

there was no specific and credible allegation against the Vice President.

Senator SPECTER. Senator Sessions, we are going to have Mr.

Radek back a week from today. We had sought to limit his testimony to just the memorandum, but these matters are familiar. But

I just wanted to call to your attention that we are going to go into

a number of matters where Mr. Radek had taken control of investigations under the rubric, as you two have worked out the term— you agreed upon a term—under that rubric, and we are going to

be discussing those next week, so that you will have ample opportunity to go into detail.

I say that because your trusted deputy just brought you a big

sheaf of materials and the House members are waiting, and as a

matter of comity, we ought to liberate the witnesses.

Senator SESSIONS. That is all I have.

Senator SPECTER. Thank you very much, Senator Sessions.

Thank you, Mr. Gangloff, Mr. Radek, Mr. Esposito, Mr. Gallagher.

Mr. RADEK. Thank you, Mr. Chairman.

[Whereupon, at 1:13 p.m., the subcommittee was adjourned.]

(107)

THE 1996 CAMPAIGN FINANCE

INVESTIGATIONS

WEDNESDAY, JUNE 21, 2000

U.S. SENATE,

SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT

AND THE COURTS,

COMMITTEE ON THE JUDICIARY,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:05 p.m., in room

SD–226, Dirksen Senate Office Building, Hon. Arlen Specter presiding.

Also present: Senators Grassley, Sessions, and Torricelli.

OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S.

SENATOR FROM THE STATE OF PENNSYLVANIA

Senator SPECTER. Well, it is a little past 2 p.m., so we are going

to begin these hearings. We had wanted to wait for others who had

committed to be here by 2:00 p.m., but it is 2:05 p.m. and we have

a great many witnesses who have other commitments. So we will

proceed.

This hearing is another in our line of subcommittee oversight on

the Department of Justice to inquire into the practices of the Department on enforcing the campaign laws. We have a long group

of witnesses today. We are going to be dealing with a number of

the specific cases where the Public Integrity Section had intervened

and inquire as to their reasons for intervening in cases and why

they did not pursue them.

We are going to be inquiring into the allegations of Common

Cause in 1996, and we have the Chairman and Vice Chairman of

the Federal Election Commission here today to comment about

what happened in 1996. And Common Cause has given public notice of an intention to pursue complaints again this year. The officials from Common Cause could not be here today because of board

meetings, but we have a letter from Mr. Fred Wertheimer, President of Democracy 21, and Mr. Scott Harshbarger, President of

Common Cause. It was written in response to the subcommittee’s

request for them to appear as witnesses, and I am going to read

a portion of the letter to start the proceeding. ‘‘In response to your recent inquiry, we are writing to confirm

that Common Cause and Democracy 21 will shortly ask the Justice

Department to conduct an investigation of the illegal use of soft

money in the 2000 presidential campaigns by both major party candidates and their political parties.’’

108

‘‘These soft money funds are being used by the presidential campaigns to run ads promoting the Gore and Bush candidacies in the

guise of being so-called political party ‘issue ads.’ ’’

‘‘In fact, the ads are clearly campaign ads to promote the presidential candidates, are created by members of the respective presidential campaigns, are targeted to run in key presidential battleground states, and are without question for the purpose of influencing the presidential campaign.’’

‘‘As such, it is illegal to fund these ads with soft money. If this

practice, which has just begun for the 2000 presidential election, is

not stopped, massive violations of the federal campaign finance

laws will occur this year, in amounts even greater than the similarly massive violations that occurred in the Clinton and Dole 1996

presidential campaigns.’’

Skipping ahead, ‘‘In our view, the Gore for President Committee

and the Bush for President Committee, and their agents, along

with their respective national political parties, are engaging in an

illegal scheme to violate the prohibitions of corporate and labor

union contributions, and the limits on individual contributions, in

presidential campaigns.’’

Skipping further, ‘‘In October 1996, Common Cause filed a complaint with the Justice Department charging that the Clinton and

Dole campaigns similarly were using ad campaigns to illegally inject millions of dollars in soft money into the presidential campaigns.’’

‘‘The Justice Department originally responded by stating in a letter that the allegations ‘warrant careful consideration by the Department.’ The letter also stated, ‘the facts you allege in your letter

and the points you raise will be carefully reviewed and considered.’ ’’

‘‘Recently released Justice Department documents, however, establish that this commitment was never kept.’’

‘‘These documents highlight the fact that key Department officials—including Louis Freeh, the Director of the FBI, and Charles

La Bella, appointed by Attorney General Reno to head the task

force investigating campaign finance charges—raised serious concerns about the Department’s failure to conduct an investigation of

the Common Cause allegations.’’

I know Senator Sessions plans to be here. He has an amendment

pending on the Foreign Operations appropriations bill, and I just

talked to Ranking Member Senator Torricelli a few minutes before

2 p.m., and I know he intends to be here. But because of the long

list of witnesses and other commitments, we are going to proceed

at this time. Now I call on my distinguished colleague from Iowa,

Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR

FROM THE STATE OF IOWA

Senator GRASSLEY. Thank you, Mr. Chairman. I think it is fair

to say that, given the documents that we have been provided for

this investigation and specifically for this hearing, an independent

counsel should have been appointed for the campaign fundraising

violations. There were many prominent players in the decisionVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00112 Fmt 6601 Sfmt 6601 E:\HR\OC\A735.XXX pfrm03 PsN: A735
109

making process who wanted it. Those that did not—and Mr. Radek

was chief among them—really had to stretch the logical arguments.

In the end, Mr. Radek bought hook, line, and sinker the argument peddled by the President’s attorneys and advice of counsel argument which basically says that my lawyers made me do it.

From documents that we have read, many people in the process

were trying to do the right thing. They were calling them as they

saw them. There should have been an independent counsel for the

Vice President and for Mr. Ickes, and I would say that at a minimum. But the Public Integrity Section really was operating with

a mind of its own, and it rubbed just about everyone the wrong

way as it went through this process. Even James Robinson and

Robert Litt disagreed with Public Integrity on the key issues involving an appointment. The FBI Director and everyone in the FBI

from top to bottom believed with passion that an independent counsel should have been appointed, and the Attorney General’s own

hand-picked attorney, Charles La Bella, and his lieutenants supported it with equal passion.

And this tells me a lot, Mr. Chairman. It appears that Mr.

Radek, who is known in the investigative community as ‘‘Dr. No,’’ had cases from the field transferred to Main Justice and placed

under his control. It is quite obvious those cases languished. He

butted heads with the task force’s lead attorney, Mr. LaBella. He

referred the cases to the FEC with a memorandum of understanding between the Department of Justice and the FEC that

clearly stated that the cases were in the Department of Justice’s

jurisdiction.

He kind of wrote a scorch-and-burn memo to his superiors blasting the work of the task force. Some attorneys of that task force

even resigned in protest. One of those attorneys, Steve Clark, we

have yet to hear from. He was brought in to investigate the Common Cause allegations, yet he was prevented from even commencing the investigation.

Mr. Clark wrote this upon his exit, ‘‘Never did I dream that the

task force’s efforts to air this issue would be met with so many behind-the-scenes maneuvering, personal animosity, distortions of

fact, and contortions of law.’’

The single most egregious non-act performed by Mr. Radek was

his failure to allow the Common Cause allegations to be investigated, and for nearly 2 years that was the case. His office is

called Public Integrity for a reason. The allegations charged a massive fraud being perpetrated on the American taxpayers. The Public Integrity Section’s response was to abrogate its responsibilities

to preserve public integrity. Its response was to look the other way

to frustrate the process, to lawyer the case to inaction.

So, Mr. Chairman, I believe that today’s hearing will bring out

much of this story contained in the documents that we have been

provided, and I would like to commend you for your diligence in

pursuing this and look forward to today’s testimony.

110

Senator SPECTER. Thank you very much, Senator Grassley.

For the record, without objection, we will introduce the Common

Cause letter to Attorney General Reno dated October 9, 1996, and

the letter from Mr. Harshbarger and Mr. Wertheimer to me, dated

June 20, 2000.

[The letter to Attorney General Reno follows:]

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[The letter to Senator Specter follows:]

JUNE 20, 2000.

Senator ARLEN SPECTER,

711 Senate Hart Building,

Washington, DC.

DEAR SENATOR SPECTER: In response to your recent inquiry, we are writing to

confirm that Common Cause and Democracy 21 will shortly ask the Justice Department to conduct an investigation of the illegal use of soft money in the 2000 presidential campaigns by both major party candidates and their political parties.

These soft money funds are being used by the presidential campaigns to run ads

promoting the Gore and Bush candidacies in the guise of being so-called political

party ‘‘issue ads.’’ In fact, the ads are clearly campaign ads to promote the presidential candidates,

are created by members of the respective presidential campaigns, are targeted to

run in key presidential battleground states, and are without question for the purpose of influencing the presidential campaign.

As such, it is illegal to fund these ads with soft money. If this practice, which has

just begun for the 2000 presidential election, is not stopped, massive violations of

the federal campaign finance laws will occur this year, in amounts even greater

than the similarly massive violations that occurred in the Clinton and Dole 1996

presidential campaigns.

The argument that these ads are legal as long as they are run as ‘‘political party’’ ads and do not contain so-called magic words, such as ‘‘vote for’’ or ‘‘vote against,’’ has no basis in law.

In fact, when the Supreme Court established the magic words test, it did so for

outside groups only, and explicitly made clear that it was not creating this test for

either candidate or political party ads.

Furthermore, the political parties here are merely conduits, providing thinly

veiled cover for the fact that the presidential campaigns design, create, target and

control the ad campaigns, which are no different in kind or approach than other

campaign ads being run by the Gore and Bush campaigns.

In our view, the Gore for President Committee and the Bush for President Committee, and their agents, along with their respective national political parties, are

engaging in an illegal scheme to violate the prohibition of corporate and labor union

contributions, and the limits on individual contributions, in presidential campaigns.

The Gore and Bush presidential campaigns are also engaging in an illegal scheme

to violate the disclosure requirements of the federal election laws.

And the Gore campaign is engaging in an illegal scheme to violate the presidential primary spending limits. Governor Bush did not opt to take public funding

in the primaries and thus did not agree to comply with a primary spending limit.

Furthermore, both the Gore and Bush campaigns will also be in violation of the

presidential general election spending limits if they accept presidential general election public financing and continue these soft money funded ads during the general

election period.

Any such scheme to knowingly and willfully spend ‘‘soft money’’ to influence a federal election, to knowingly and willfully violate the federal disclosure requirements

and to knowingly and willfully exceed the presidential primary spending limit is a

criminal violation of the federal election laws.

We also intend to file a complaint with the Federal Election Commission, which

has jurisdiction over civil violations of the federal election laws.

In October 1996, Common Cause filed a complaint with the Justice Department

charging that the Clinton and Dole campaigns similarly were using ad campaigns

to illegally inject millions of dollars in soft money into their presidential campaigns.

The justice Department originally responded by stating in a letter that the allegations ‘‘warrant careful consideration by the Department.’’ The letter also stated, ‘‘the

facts you allege in your letter and the points you raise will be carefully reviewed

and considered.’’

Recently released Justice Department documents, however, establish that this

commitment was never kept.

These documents highlight the fact that key Department officials—including

Louis Freeh, the Director of the FBI, and Charles La Bella, appointed by Attorney

General Reno to head the task force investigating campaign finance charges—raised

serious concerns about the Department’s failure to conduct an investigation of the

Common Cause allegations.

According to a November 1997 memo sent by Freeh to Reno:

[T]he Campcom Task force has failed to address an overarching issue:

whether the Clinton/Gore campaign (as well as the Dole campaign) engaged

148

in an illegal scheme to circumvent the federal campaign finance laws. This

issue was first raised by Common Cause in October 1996, long before the

Task force was even constituted, but it has never been pursued.

See Memorandum attached to Letter of November 24, 1997 from Louis J. Freeh, Director of FBI to Attorney General Janet Reno, at 10.

According to a June 7, 2000 article in the Washington Post referring to task force

head La Bella:

La Bella, in a December 1997 memo, complained that he had been foreclosed from pursuing a complaint, filed by the watchdog group Common

Cause, alleging that both the Clinton and Robert J. Dole campaigns had

violated the law by having their political parties run millions of dollars’

worth on ‘‘issue advocacy’’ advertising in their behalf.

La Bella noted in his interim report:

One could argue that the Department’s treatment of the Common Cause

allegations has been marked by gamesmanship rather than even-handed

analysis of the issues.

INTERIM REPORT AT 38

Similarly, the FEC twice reviewed this matter, once in the context of an audit repayment determination, and once in the context of an enforcement action. In both

cases the professional staff of the FEC, including the general counsel and the audit

staff, concluded that the Clinton and Dole soft money funded ad campaigns violated

the campaign finance laws.

The FEC Commissioners both times failed to approve these conclusions, the second time—in the case of the proposed enforcement action—by a tie vote of 3 to 3.

In 1996, tens of millions of dollars of soft money were illegally used by the two

presidential candidates to conduct ad campaigns that clearly were intended, and

clearly had the effect, of promoting their candidacies and influencing the presidential election.

The abject failure by both the Department of Justice and the FEC to take action

against these massive illegalities is now being improperly seen as a license for further illegal conduct, such as the soft money funded ad campaigns recently begun

by Gore and Bush.

We intend to strongly urge the Justice Department and the FEC to properly and

promptly carry out their enforcement responsibilities and prevent tens of millions

of dollars of soft money from being illegally contributed to and spent by the 2000

presidential campaigns.

Sincerely,

FRED WERTHEIMER,

President, Democracy 21.

SCOTT HARSHBARGER,

President, Common Cause.

Senator SPECTER. I will call the first two witnesses: the Honorable Darryl R. Wold and the Honorable Danny L. McDonald, Chairman and Vice Chairman of the Federal Election Commission. If you

gentlemen would step forward and raise your right hands, our

practice in the subcommittee is to swear in all witnesses. Do you

each solemnly swear that the testimony you will give in this proceeding before the subcommittee of the Judiciary Committee of the

U.S. Senate will be the truth, the whole truth, and nothing but the

truth, so help you God?

Mr. WOLD. I do.

Mr. MCDONALD. I do.

Senator SPECTER. Thank you very much. Be seated.

First, the subcommittee expresses its appreciation for your willingness to come on short notice. Let me turn to you, first, Chairman Wold, for any opening statement you care to make.

149

STATEMENT OF DARRYL R. WOLD, CHAIRMAN, FEDERAL

ELECTION COMMISSION, WASHINGTON, DC

Mr. WOLD. Thank you, Mr. Chairman. Good afternoon. And, Senator Grassley, good afternoon. I’m Darryl Wold. It’s my privilege to

be the Chairman this year of the Federal Election Commission, and

with me, as you noted, at the table, is our Vice Chairman this year,

Commissioner Danny McDonald.

We are pleased to be here, primarily, I understand, to answer

questions, so I will keep any remarks I have very brief. We have

provided you with a couple pages of materials that explain some of

the provisions of the Federal Election Campaign Act and how it is

applied that might help put any questions you might have in context and provide us a point of reference if we need to refer to that

in explaining or answering any questions.

The first of those documents, of course, explains the hard money

contributions limits. The cover letter also explains the prohibitions

of the Act against receipt of contributions from prohibited sources— primarily corporations, labor organizations, and foreign nationals.

So I think everyone understands that when we’re talking about

hard money, those are the limitations that we are talking about.

And soft money, of course, is donations of money that do not meet

those limitations of the Act.

An issue that has arisen in several contexts that I believe this

committee is interested in and that has also arisen in our enforcement actions is the question of a communication paid for by a political party or an advocacy organization, some independent organization, that has been coordinated with the candidate. That is not explained in great detail in the chart that you have, but it does appear there. But what doesn’t appear is what constitutes the coordination.

Of course, the Act recognizes that the coordinated expenditure—

that is, one made in cooperation, consultation, or at the request of

the candidate—is a coordinated expenditure, and that makes it a

contribution to that candidate.

The Supreme Court in Buckley v. Valeo recognized and acknowledged that the Act has that effect, that an expenditure made by an

organization, including a political party, in coordination with the

candidate is deemed to be a contribution to that candidate. And it

is in that context that many of the difficult issues that we have had

to face recently have arisen.

So, with that, maybe that puts our position in a little context and

gives us a framework of reference. I think at that point I will ask

the Vice Chairman if he has anything he would like to say, and

then we’d be glad to entertain any questions the committee might

have.

Senator SPECTER. Thank you, Mr. Wold.

Mr. McDonald.

STATEMENT OF DANNY L. MCDONALD, VICE CHAIRMAN,

FEDERAL ELECTION COMMISSION, WASHINGTON, DC

Mr. MCDONALD. Mr. Chairman, Senator Grassley, thank you,

only to say that I’ll be happy to answer any questions. I think the

Chairman has more than adequately covered the ground, and we’d

be happy to answer any questions you have.

150

Senator SPECTER. Mr. Wold, did the Federal Election Commission undertake an investigation of the activities of both the Democratic and Republican nominees for President in the year 1996?

Mr. WOLD. We did, Mr. Chairman. We are required to audit the

campaigns of every candidate for President that receives matching

funds in the primary under the Presidential Primary Matching

Payment Act. So we conduct—first, we conduct those mandatory

audits of every candidate for President who has received Federal

funds in the primary. So we conducted those audits. Our audit staff

made reports and recommendations to the Commission.

Then at the same time we also received complaints from outside

the Commission based on certain activities undertaken by those

candidates. And the investigation was, in effect, our audit. Our

general counsel’s office did conduct a further investigation in support of the audit and in response to those complaints before it

made recommendations to us.

So the short answer is, yes, we did investigate. I just want to

make it clear, though, we did a good part of that investigation as

part of our mandatory audit process.

Senator SPECTER. And what was the conclusion of the Federal

Election Commission as to the campaign of President Clinton and

Vice President Gore for 1996?

Mr. WOLD. Well, we reached a number of different conclusions

because there were a lot of issues that were raised in those audits.

I couldn’t begin to describe or to list the variety of conclusions that

we did reach. But before we pursue that further, I should note that

we regard the campaigns in the primary for the nomination as separate from those in the general because they’re under two different

parts of the law. I think the complaints that we received from the

outside were directed at the primary campaigns conducted respectively by the Clinton-Gore campaign committee and by Senator

Dole’s campaign committee.

Senator SPECTER. Well, did the Federal Election Commission undertake any enforcement action as to either Clinton-Gore or DoleKemp?

Mr. WOLD. We did undertake enforcement actions, but they did

not result in any determination of a violation that I recall in any

respect.

Senator SPECTER. So there was no determination of violation by

either Clinton-Gore or by Dole-Kemp.

Mr. WOLD. Not in the enforcement track, no. I cannot recall if

in approving the audits, if there were determinations that reimbursements should be made or other actions taken. I’m sorry, I just

don’t recall. But that was not in the enforcement track.

Senator SPECTER. Well, the general counsel of the FEC did make

a recommendation for enforcement as to both campaigns?

Mr. WOLD. Yes, he did.

Senator SPECTER. And what was the Commission response by

way of voting on the general counsel’s recommendation?

Mr. WOLD. I can’t recall if there were more recommendations

than the recommendations concerning the media ads run by the

national parties in support of their respective nominees or future

nominees. The principal focus of the general counsel’s report, the

one that has received the most attention, anyway, concerned the

151

media ads run by the national party committees, the Democratic

National Party’s Committee and the Republican National Committee, respectively, in support of the Clinton-Gore campaign and

the Dole for President campaign during the primary election period.

Senator SPECTER. Did the Commission split 3–3 on each of those

votes?

Mr. WOLD. Yes, it did.

Senator SPECTER. The Commission is composed of six members?

Mr. WOLD. Six Commissioners, yes.

Senator SPECTER. And three from each of the parties, Republican

and Democratic Parties?

Mr. WOLD. That’s right. The law provides that no more than

three Commissioners may be of the same party. There are, in fact,

three Democrats and three Republicans serving as Commissioners.

Senator SPECTER. The report that I have from your general counsel is dated January 12, 2000, and my question to you is: Notwithstanding the grave complexities involved, is there any way that it

can be expedited? Why does it, in fact, take so long for a 1996 election to have the general counsel’s recommendation in the year

2000?

Mr. WOLD. Well, there are a number of factors that go into that.

The audit process that takes place first begins shortly after the

campaigns are over. In the case where a candidate in the primary

wins that party’s nomination, the audit does not begin until after

the general election. So the audits of these two campaigns would

have begun sometime after the November 1996 general election.

We have a target now of completing those audits within 2 years

after the election. That process is time-consuming because it involves our auditors going out into the field and reviewing the

records of these campaigns; after a Presidential campaign is over,

records are sometimes not in the best condition that one would

hope and it just takes time to go through that process.

But our auditors did meet our target date of providing an audit

report to us within 2 years after the general election. We got those

reports in late 1998. It took the Commission then a period of some

months to digest these, to vote on various aspects of those audits

reports, on the various issues that were raised by them, and to

adopt a final audit report reflecting the Commission’s views on the

issues raised by our audit staff.

Senator SPECTER. The Commission is the sole agency which has

authority to apply for injunctive relief to stop violations of the Federal campaign laws?

Mr. WOLD. The Commission does have statutory authority to do

that under the Federal Election Campaign Act, yes. I cannot say

that we’re the only entity that could seek injunctive relief. I don’t—

I simply haven’t——

Senator SPECTER. Well, I believe the statute does make that provision, and I will give you a citation in a moment. We’re going to

have to go vote, and I want to give Senator Grassley some time to

question here before we go to vote. But the question that I would

like to focus on—a vote has been called. We will have to leave for

a few minutes, and we will be back as fast as we can. But the question I would like you to focus on in the interim is that, given the

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ads which have already started by both Presidential campaigns,

and given the findings of your general counsel last time, and given

the fact that you have authority to seek injunctive relief to stop the

process, what are the prospects that the Commission might be able

to undertake that in a meaningful way, it now being June 21 and

these ads are now proliferating.

Let me give you time to ponder that question, which is substantial, and let me turn to Senator Grassley.

Senator GRASSLEY. I don’t have any questions of these two witnesses. Mine are going to be for witnesses later on.

Senator SPECTER. Well, fine, Mr. Wold. Then answer the question. [Laughter.]

Mr. WOLD. I appreciate the time you’ve given me, Senator.

Senator SPECTER. Well, I think it is a very fundamental question.

Mr. WOLD. It is.

Senator SPECTER. The Federal campaign laws provide at Chapter

14, ‘‘The Commission shall have exclusive jurisdiction with respect

to civil enforcement of such a provision.’’ And the difficulty obviously is that to come in long after the fact, the horse is out of the

barn—I see Vice Chairman McDonald nodding in the affirmative—

that injunctive relief is very important which could stop violations.

And this is a tough question of complexity of the issues, but you

have been through a lot of them. It is a question of resources, and

I want to come to that, as to whether you have adequate resources,

because that is an issue for the Congress. And what are the realistic possibilities that the Commission could come to grips with this

matter now in June and consider injunctive relief?

Mr. WOLD. Should I start on the answer now?

Senator SPECTER. Please do.

Mr. WOLD. All right. Well, Senator, as you noted, it is a complex

area, and overlaying the complexity of the Act itself and the facts

of any particular violation are considerations of the First Amendment. As a lawyer, I have a concern about any law that infringes

on First Amendment rights of speech and with any judicial procedures that interfere with those. And seeking injunctive relief in

this area raises the specter of or the prospect of it being a prior

restraint. And I’m not sure how the courts would deal with that.

I’m not aware of any action that any time the Commission has, in

fact, sought injunctive relief, that is, of any time that it has exercised that authority it has under the statute. But assuming

that——

Senator SPECTER. Well, Chairman Wold, when you talk about

prior restraint, you are talking about Near v. Minnesota. You are

talking about going in, stopping—Pentagon Papers cases, about

going in and stopping publication of something which hasn’t been

disclosed, and that is a prior restraint.

But here you have a long record of what has been the practice,

and now you have advertisements which have already been in the

public domain. So that you are in a position to say not that you

shall not advertise, but that you shall not advertise as you have

advertised on the advertisements which constitute advocacy ads or

intent to influence an election, a statutory term.

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Let me ask you to ponder that question because we are close to

the end of this vote, and we will stand in recess for a few minutes,

and we will return as fast as we can.

[Recess 2:30 to 2:54 p.m.]

Senator SPECTER. Chairman Wold, coming back to the point of

the last question, where you have a pattern of conduct and you

have had an analysis that they are ads which are intended to influence an election, and they have all the other indications of violation

of Federal election law, wouldn’t you think that that kind of a situation would be appropriate for injunctive relief where you may

have information as to the next ads which are coming because they

are repeating themselves or they are being repeated, wouldn’t that

be an appropriate basis for injunctive relief, notwithstanding the

great concern which I share with you about First Amendment and

customary prior restraint?

Mr. WOLD. Well, Senator, I can understand the appeal of that,

of the Commission seeking injunctive relief. On the face of it, that

sounds like a very appealing route to go.

One impediment to that is the somewhat, I might candidly say,

very cumbersome enforcement procedure that we have to go

through under the Act that is mandated by Section 437(g) of the

Act. And it’s my understanding that that would apply to an action

for injunctive relief as well as to our actions seeking penalties.

Senator SPECTER. Well, what are those cumbersome procedures?

Perhaps we could legislatively act on them to simplify them.

Mr. WOLD. That could certainly be done.

Senator SPECTER. What would you like to see done so that you

would have some effective injunctive powers?

Mr. WOLD. Well, I guess the answer would be to bypass some of

those procedural steps that we are required to go through, but——

Senator SPECTER. Well, what are they?

Mr. WOLD. After we receive a complaint or a matter comes to our

attention through our internal processes, the first stage is we get

a report from our general counsel advising us whether we have sufficient allegations of a violation to find what the Act refers to as

‘‘reason to believe’’ that there has been a violation. We then have

a Commission meeting to consider that, and assuming we do find

that there is reason to believe that there has been a violation—I

should add that if the complaint comes from the outside before we

can find reason to believe, we have to send the complaint to the

respondent and give the respondent the opportunity to file a brief

showing why we should not find reason to believe. But assuming

we do find reason to believe, then the general counsel can begin an

investigation. Counsel has the usual typical civil discovery tools at

his disposal to conduct that investigation. When the counsel feels

he has enough facts under the applicable law to advise that we

should proceed to the next stage, the next stage that is given to us,

mandated by the statute, is to find ‘‘probable cause to believe’’ that

there has been a violation.

Before we do that, though, the general counsel has to prepare a

brief supporting that finding, send it to the respondent, and give

the respondent time to reply to the general counsel’s brief with

their own brief. Then the Commission meets and considers the

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issues, the arguments raised on both sides, and at that point we

can find probable cause to believe that there has been a violation.

If we do cross that threshold and find that there is probable

cause, then the statute mandates a conciliation period of at least

30 days before we can—during which time we have to try to reach

an agreement on a penalty, or in this case on an injunction. And

if we do not reach an agreement during that period of time, then

our remedy is to file suit in the Federal district court to ask the

court to impose the penalty, civil monetary penalty or in this case

an injunction. And then that starts the typical proceedings in court.

So injunctive relief, while it has some appeal on the face of it,

would be subject to these very time-consuming steps that we have

to go through that have time periods built into them that we have

to respect. So by the time we would get around to actually—if we

didn’t conciliate—filing suit in the Federal district court and getting the court to order the injunction, even if the court acted on an

expedited basis, as they sometimes do in giving injunctive relief——

Senator SPECTER. Well, there are—— Mr. WOLD [continuing]. It would be months before we would get

a result there.

Senator SPECTER. There are timetables for all of the filings. If

you talk about conciliation, we might make some legislative

changes on that. It would be appreciated if you would give, the

Commission would give us your thinking on what we might do to

speed it up.

Do you have adequate resources, Chairman, to handle these matters? Would additional resources be of assistance to you in moving

along this chain, this timetable in a more expeditious manner?

Mr. WOLD. Well, we have wrestled with the question of adequate

resources each year in our budget process. I can say that for our

fiscal year 2001 budget request we have not requested additional

resources in our enforcement staff because we have, I think, been

doing a pretty good job of staying on top of the enforcement actions

that we have. The number of cases that we have had to dismiss

because we haven’t been able to get to them in a timely manner

has dropped considerably in the last couple of years.

In our current year’s budget, fiscal year 2000, we had an increase

of four in our enforcement staff between our audit division and our

general counsel’s office, which is only a couple less than we had actually asked for. So Congress gave us basically what we asked for

there.

In the previous year’s budget, fiscal year 1999, Congress had

given us a very substantial increase in our enforcement staff that

we took a long time—it took a long time to actually hire up to that

level. But as I say, the real test is how many cases we are not able

to get to in a timely manner, and that number has been dropping

quite dramatically in the last couple of years.

So, generally speaking, I think we have had adequate resources.

We have not told Congress that we need more at this point.

Now, if an additional task was given to us to seek injunctive relief, that’s a time-consuming, time-intensive job. I know that as a

private attorney. I’m sure you do, also, Senator. And we would almost undoubtedly need additional staff to handle that, because anVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00158 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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other aspect of that is actually the facts of coordination. You know,

we can look at the ads, we can say that that ad running on television is obviously for the purpose of influencing a Federal election,

but that doesn’t mean it was coordinated. We still have to do that

investigation and get the depositions, get the testimony, get the admissible evidence to show that was, in fact, the case.

Senator SPECTER. Well, if you would take a look and give us your

suggestions, we would appreciate it. It may be that some of those

procedures like conciliation might be eliminated or we might not

give you exclusive jurisdiction, let other parties come in.

Vice Chairman McDonald, I see you nodding in the affirmative.

Do you think that would be a good approach to take away your exclusive jurisdiction?

Mr. MCDONALD. I hope we can have an opportunity to follow up

on the discussion, because we would like to look for ways that we

might be able to move more rapidly in all these areas, not only this

area of injunctive relief.

Senator SPECTER. Mr. McDonald, moving to another subject for

just a moment before yielding to the ranking member here, what

is your thinking about having a Commission which is six, an even

number, which has resulted in so many 3–3 decisions? Do you

think Congress might be well advised to structure a Commission

so that we do not have the political composition and might come

to some resolution of some of these issues?

Mr. MCDONALD. Well, I think it presupposes something, Mr.

Chairman, that I don’t think the record actually reflects. For example, in the case you alluded to at the outset of this hearing, that

vote was along party lines. Now, you—— Senator SPECTER. No, no. I know—— Mr. MCDONALD [continuing]. Didn’t indicate that, but I’m just

saying as a practical matter, when we hear—— Senator SPECTER. I did not—I know it wasn’t along party lines.

But sometimes there is speculation that there may be an accommodation here so that it is not along party lines but really is.

Mr. MCDONALD. Well, if the issues are about speculation and accommodation, no matter how many Commissioners you have,

whether you have six, seven, nine, or five, I think you’re always

going to have that problem, if the issue is trying to anticipate speculation.

I think what’s really more realistic about what you find at the

Commission is that you have individuals who have a thorough

knowledge of the law and they legitimately differ over a number

of very fundamental issues. And I think the Chairman did a very

good job indicating the battleground in one sense, which is over the

First Amendment and just how far you can or cannot go.

Senator SPECTER. Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman. I really only

have one area of inquiry, and that is that while the focus of this

committee and, indeed, the Justice Department is on previous elections, the Nation is now in the midst of a new election cycle. And

in my judgment, whatever abuses there were of soft money or other

problems in 1996 could pale in significance with what is unfolding

before us at the moment with the misuse of the Tax Code and 527

organizations.

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Soft money was important to the 1996 election, but the sum total

of all improper money that entered the 1996 election, in my judgment, was not decisive in the outcome of any races of which I am

aware. Laws were either violated or stretched to their limits, but

it has not to my mind yet undermined the integrity of the process.

I am not convinced by the time the 2000 elections are over we

will come to the same judgment. I am already witnessing in my

own State that the misuse of the Tax Code for 527 elections are

proving decisive.

Does the Commission believe it is in its jurisdiction to look at

these organizations or the proliferation of other organizations that

are a clear effort to evade the campaign finance limitations and

structural limitations? And if you do, do you feel you have jurisdiction and means to deal with the problem, or is it a law enforcement

problem that should be dealt with elsewhere?

Mr. MCDONALD. I’ll be happy to respond, Senator. We just actually had in an open meeting session about 3 weeks ago this very

discussion. One of my colleagues put forth a proposition, Commissioner Sandstrom, on this very issue of 527’s. I indicated in that

public session I do think we have the authority. I think we currently have the authority. Now, there is honest disagreement about

whether we do or whether we don’t, and I’ll admit to you that it’s

always a tough call. I think we have the authority based on the nature of what I think the 527’s are doing.

My concern about any group, whether it’s 527’s or anyone else,

as a practical matter is the issue of secrecy. In that particular format, what you have, quite frankly, is substantial sums of money

going into what surely most people would consider is the political

process, and yet there is no indication of where the money’s coming

from.

I have spent years trying to work on issues of people’s rights in

terms of human rights and their ability to have free and fair elections around the globe. So I’m always somewhat chagrined when

people talk about what their interpretation of my interpretation of

the First Amendment is.

I’m real strong for the First Amendment. I don’t believe any of

us at the Commission are not. But the First Amendment, and secrecy, I don’t find it in there.

As a practical matter, I think we currently do have the authority

to proceed in those matters, and I think we should. Although soft

money is a major issue and it is another issue the Commission is

trying to grapple with and come to grips with, at least there is a

record.

One of the most ironic things historically about the soft money

issue is that the Commission in 1991 started requiring the disclosure of soft money. The irony is that without disclosure, as a practical matter, we probably would not be having this debate today because people were not cognizant of the amount of soft money being

spent before it was recorded via disclosure.

At a minimum, I would hope we would do the same thing in the

area of 527’s because, again, there is a substantial amount of

money, it appears to me, being put into the political process. I

think anyone ought to be able to participate in the process.

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Senator TORRICELLI. Let me pose the contradictions for you if I

can. Here is my concern. I raise this with you not simply as a member of this committee, but as the chairman of the Democratic Senatorial Campaign Committee.

I watch these campaigns across the Nation every day. Here is the

reality that we face. I know the Commission’s reluctance to become

engaged in investigations and these judgments during the course

of a political campaign. Indeed, the FEC and the Justice Department, I think, should always err on the side of suspending investigations during the middle of a Presidential or other campaign.

You can influence the outcome simply by the inquiry. It is best

left. That has been your policy. I believe it should be your policy.

However, this is an instance where the composition of the U.S.

Congress and potentially the Presidency can be influenced by

whether or not these 527 organizations proliferate. This is not a

marginal question. This is not like soft money in 1996 that can

have some ancillary impact. Races are being won and lost now because of organizations that, in my judgment, are created for the

sole purpose of evading campaign finance laws, where within the

current political culture and the laws that are being interpreted

and applied, either foreign money or great individual wealth are

being channeled into these organizations in what at least appears

to be coordination with political entities in violation of the law.

I am outlining for you a dilemma, not an answer. I believe you

err on the side of not interfering in the process by investigating

during a campaign. I think that is true for you, and I think it is

for the Justice Department.

However, if you do not, we are going to be having hearings in 2

years about how the U.S. Senate and the U.S. House of Representatives were altered in their composition because of patently illegal

acts and you did not investigate and you did not act during an election campaign, and we will all be regretting that it happened. We

will be discussing new laws to deal with it, or we will be chastising

you or people in the Justice Department because you did not act,

but the fact is the damage will be permanent and irreparable.

Mr. WOLD. Senator, if I could jump in on this. I recognize the

concern that the Senator has and that many people have about

these entities that have tax-exempt status under section 527 and

are not subject to the reporting requirements of the Act. The limits

on organizations that we can bring under the coverage of the Act,

though, is defined in the Act as being for the purpose of influencing

a Federal election, and on the expenditure side, anyway, the U.S.

Supreme Court has said that we have to apply a bright line test

to determine whether an expenditure is for the purpose of influencing a Federal election. That bright line test, they articulated is

what we call the express advocacy standard.

If an organization is not engaged in that kind of express advocacy, expressly advocating the election or defeat of a clearly identified candidate by using the words ‘‘of advocacy’’ that the court listed or the functional equivalent of those words, I do not think that

the Act enables us to say that they should be subject to the reporting requirements of the Act and to the limitations of the Act.

Senator TORRICELLI. Let me interrupt you for a second because

I think we can narrow what I am looking for.

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So, indeed, you may not actually have the current authority to

deal with the problem that is now concerning me, and that is an

advertisement is placed in television or on the radio or through

mail that is advocating a position and, consistent with the interpretation by the Supreme Court, is not an express advocacy. Therefore, you have either limited ability or no ability to audit the source

of those monies or to investigate coordination.

Mr. WOLD. We can investigate coordination because, if the coordination has been with the candidate and we receive a complaint

that a candidate coordinated with some entity, even if that entity

is not under our jurisdiction, we can investigate that coordination

because that would be a contribution to the candidate, and that is

within our jurisdiction. But if the organization is operating independently of a candidate and engaging in its own speech that falls

short of expressly advocating the election or defeat of a candidate,

then I have very substantial doubt that that could be brought within the coverage of the Act.

As the vice chairman said, there are reasonable people that disagree on that, but that is my basic concern.

Senator TORRICELLI. My concern—with all due respect to you and

the people at the Justice Department, you have studied this as a

matter of law and you followed these issues. Sometimes what looks

to you like it does not meet the threshold, to some of us it does not

get past the laugh test.

I am seeing campaigns every day where a former chief of staff

leaves the office and establishes a 527. The same media consultant

is used for both campaigns. Remarkably, they stress the same

issue, and all of a sudden, the candidate has very little money in

their own campaign, is spending millions of dollars on a tax-free

basis and nobody knows where the money comes from or how this

happened.

That, understandably, may not meet your threshold, look like a

violation of the election laws, but to anyone engaged in these campaigns, this is the most transparent laundering of money on an illegal basis to evade reporting requirements in a coordination that

one could witness.

If you do not have the authority or it does not meet your threshold, I understand, but somewhere in this Government, somebody

has to recognize this or I am telling you the campaign finance laws

of this country in the next 90 days are going to collapse around our

ankles. We are close to no governing authority.

While you audit campaigns of 4 years ago, the Justice Department looks at what Al Gore or Bill Clinton may or may not have

said 4 years ago, the campaign finance laws of the country are

crumbling.

What I want to know is if you do not have that authority and

you cannot deal with it, I understand, but we need somewhere in

this Government, somebody, from the Attorney General on down,

who has got to decide someone is going to get engaged.

Mr. MCDONALD. Senator, it is interesting. It is an ongoing debate

at the Commission, and the chairman is a true good and valued

friend of mine. We obviously have a fundamental difference of opinion.

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I do not believe the law says simply that you have to have express advocacy to find a violation. For the purpose of influencing

the election is the standard in the statute. And personally I think

we do have the authority to regulate in this area. It is a close call

on either side. I will be the first to say that.

But let me point out one other thing that is happening which is

unfortunate. By the way, there are a number of 527’s, I think, that

certainly play by the rules of the game. That is the other side of

this issue, and I would not want to leave that out.

Senator TORRICELLI. I do not want to leave the impression that

some do not either. I may not like the rules of the game, but some

of them, undoubtedly, comply.

Mr. MCDONALD. But the other side of it is that, ironically, I

think at some point, it is going to start hurting the two political

parties. Why would I go to a political party and put myself in jeopardy of being on the public record, when I can get the same result

and I really do not have to be on the public record unless I want

to?

Again, my concern about it is that the element of secrecy is a

pretty serious matter. But, I have said this on numerous occasions,

and so it is not a closet secret. Periodically, on some of these matters, I think we appear to be the only people in town that do not

know what is going on. I do not mean that negatively. I just think

we stretch and strain at a time we do not need to. And with the

full understanding, with the differences I have with my colleagues,

all of us try to get to these problems the best we can. But, realistically, from my vantage point, what we see out there, I do think we

have the authority and I have always thought we had the authority. Otherwise, what you are basically saying is someone would just

have to be incredibly naive to overstep the bounds. You would have

to want to write out a statement, it seems to me, that yes, this,

is express advocacy, and, therefore, I just want to tell you I am

going to do that. I do not know anybody who would do that in this

day and time. But, I think it hurts the political parties because

they may start getting left out of the process, too.

Senator TORRICELLI. Thank you very much.

Mr. WOLD. Senator, if I could add one comment about this, also.

One dilemma that we have considered is if we did—if the incentive

to bring what we refer to as 527 organizations under the coverage

of the Act, is driven by the need for disclosure, that is something

that I don’t believe that we can do under the present structure of

the Act. We don’t have any means of defining an organization that

is subject only to disclosure requirements, but not to the limitations of the Act.

So, by interpreting the provisions of the Act to cover these organizations, we are automatically—the Commission would automatically be imposing not only the disclosure requirements, which have

a relatively mild effect on the First Amendment rights of an organization, but we would also be imposing the limitations of the Act

on the amounts of contributions and the sources of contributions.

Senator SPECTER. Mr. Wold, I think most of us would agree that

you need some statutory change, and that is something we are

going to be pursuing after the hearing.

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I want to turn to Senator Sessions because we have got a great

many witnesses, but before I do, I want to say that I agree with

what Senator Torricelli has said about the campaign laws in a

state of collapse as to the 527’s. I think we are virtually in a state

of collapse as to the proliferation of soft money if it accumulates

as it did in 1996, but those are issues we will take up further.

Let me turn now to our distinguished colleague, Senator Sessions.

Senator SESSIONS. Mr. Chairman, I thank you for offering me the

time and for your leadership. I have been on the floor of the Senate

and was not able to be here, and I would not ask any questions

at this time. So you can go on to your next subject.

Senator SPECTER. OK. I just have one final question. This may

intrude upon your deliberations. So I am treading lightly. I think

it is an appropriate question, but I shall not press it, but if you

would care to answer it—Commissioner McDonald, Commissioner

Thomas raised a public issue in his opinion statement of reasons

in the Dole for President, Clinton-Gore, et cetera, and I quote from

his printed public record, ‘‘As I consider the varying approaches of

others on these matters, I might focus on my criticism on my friend

and colleague, Commissioner McDonald, who always heretofore has

joined me in finding similar party communications to be in-kind

contributions or coordinated expenditures.’’ That appears at page

17.

An answer may be intrusive. So I am not going to press you for

an answer, but I would like to give you an opportunity to respond

to that, if you care to.

Mr. MCDONALD. I would be happy to, and he will still be my

friend. I don’t need to look it up. I believe I have read that.

Yes, I would be happy to discuss it, Senator. Actually, it was

something I wanted to say at the outset when we first—when you

opened the hearing this afternoon.

First of all, he is right about the history at least in relationship

to myself in terms of trying to come to grips with these coordination issues. What transpired, though, I must say to you—and I

think it may be a key component to what is discussed later here

this afternoon—in 1996—I’m sorry—in 1998, I guess in about December—I will have to look back through my notes just a second,

but the Commission on December 10, 1998 by a vote of 6 to nothing, unanimously, rejected the audit recommendations for repayment of public funds, unanimously, not 3 to 3, unanimously.

The day before that vote, several of my colleagues—in fact, a majority of my colleagues, rejected a precedent which is understandable. I didn’t happen to agree with it, but they rejected the precedent of repayment which we always had throughout the history of

the Commission.

Subsequently, we had other matters that involved pretty much

the same issue. We had a case in Wyoming—I’m sorry, my lawyer

is whispering to me, Montana, and she is right. We had another

case that, from my vantage point, was exactly the same in terms

of the issues; that is to say, the participants of the National Committee on public record had gotten together with their candidates

to arrange particular ads to be run.

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I might say, Mr. Chairman, I had also voted for reason to believe

for the first time around on the Clinton-Gore case. As you know we

brought this case, the Clinton-Gore matter at least, through the

process on two different occasions. It became very clear to me, after

rejecting a program we had used for about 25 years in relationship

to repayment determinations, and striking down Advisory Opinions

1915 and 1914, in which we used the shorthand version of the electioneering message standard, quite frankly, other than the names

of the players, I could see no distinctions in the other two cases.

It appeared to me we have a very serious notice problem. I don’t

care what the rules of the game are, and I don’t think the regulated community does as long as they feel they are consistent. And,

I have an honest disagreement with some of my colleagues about

how we applied the law.

If you tell me tomorrow a touchdown is worth 3 points and a

field goal is worth 7, that is fine. I will just start practicing kicking.

But I think you are entitled to know when you are in the regulated

community what the rules of the game are.

It became clear to me, after being in a number of public sessions—I think the Justice Department may have had representatives there as well—the one thing that the six Commissioners

agreed on was that there was no agreement on the rules of the

game. Now, I am referring to the ads very specifically in the case

you made reference to. We voted unanimously not to proceed for repayment in those matters.

I didn’t feel in good conscience I could turn around after we had

done that in a public session, which I might point out parenthetically that a major part of the action in the 1995–1996 case with

the Clinton-Gore Campaign in particular focussed on 1995. And,

two where we took no action at all in 1996, those were activities

during the election year itself.

I think notice is a very important matter. I go back to something

that Senator Torricelli said earlier. I would prefer to err on the side

of being realistic about what we are saying to the regulated community, and Commissioner Thomas was right in his assessment of

the history of my record at the Commission.

When I concluded that we were no longer applying the same

rules that we have applied for the first 25 years of the Commission,

and certainly in the first 16 or 17 years of my term, I could not

go forward in the Clinton-Gore matter. I saw this from my own

vantage point, I pass no judgment on my colleagues. My direction

is not at my colleagues, but how I thought the regulated community would look at it.

I think it is incumbent on the Commission to come up with some

sort of bright line test that we can get an agreement on out of the

context of a particular political matter. I think failure to do that

lends itself to the kind of problems you have alluded to from the

outset in this process.

We said very clearly in the meetings in December 1998—and

there was not a Commissioner, including Commissioner Thomas,

who did not say that this has been a tortured, difficult, and unclear

path. I think that being the case, it may well be why we voted 6

to nothing not to proceed. I hope we won’t find ourselves in that

posture anymore. In relationship to my vote, however, I am comVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00165 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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fortable with it only in the sense I really didn’t see any alternative

because I do think notice and the ability for parties to have some

understanding of what they get into is absolutely critical.

Mr. WOLD. Senator, if I could add a couple comments, just briefly. Since I was on the same 6–0 side of that vote, as was the vice

chairman, I did not see any connection between that vote to not require a repayment—that is, not to reach a repayment determination—and the issue of whether the ads run by the parties had been

coordinated with the candidates. At least from my standpoint—and

I know that of at least a couple other Commissioners—our reason

for not voting for a repayment determination was based on our

reading of the Presidential Primary Matching Payment Act as it

applies to the limitation on spending by a candidate who receives

public funding in the primary. The Act itself did not provide for repayment as a remedy for exceeding the cap, as contrasted to that

remedy which is provided for exceeding the cap in the general election. So I did not see any connection between the vote not to require a repayment and the issues of whether those media ads were

coordinated.

In fact, the Commission at the same time also voted 6–0 to specifically leave that question of coordination open for a determination in the enforcement track. We said the Commission has not

reached any conclusion regarding the staff’s in-kind contribution

analysis; that is, whether those expenditures were coordinated. So

I didn’t reach the same conclusion that the vice chairman did that

that decision not to seek repayment confused the question or even

bore on the question of whether the expenditures were coordinated.

Mr. MCDONALD. Senator, I would be happy to continue the debate, if you would like. I am not shy about any vote I have ever

cast. I would be happy to read you some more, if you would like.

Senator SPECTER. I would not like that, but I think Senator Sessions has one more question.

Senator SESSIONS. There was a lot of hard feelings about the

Commission. Some people believed it was not fair in a lot of different ways, and I know Mr. McDonald in one vote in 1997 on the

1996 campaign, you abstained. The reason you gave for abstaining

was because you were at that time negotiating to be chairman of

the Democratic National Committee.

Mr. MCDONALD. I wasn’t negotiating, Senator, but my name had

been mentioned.

Senator SESSIONS. All right. And later, though, you did not hesitate to vote to prosecute, which failed on a 3-to-3 vote, the Republicans.

Mr. MCDONALD. I am not sure what you have made reference to.

Prosecute and what? I’m sorry.

Senator SESSIONS. Out of the 1996 campaign.

Mr. MCDONALD. I voted to proceed in a number of Democratic

matters, if you want to look—if you would like for me to submit

that for the record. If the inference is I have only proceeded against

the Republicans, that is just simply not so. I would be happy to answer any question about a specific vote, and I will be happy to supply the committee any vote you would like.

163

Senator SESSIONS. This was a Republican Senatorial Committee

vote, Republican Senate vote, tied 3 to 3 at any rate. You voted on

that.

I must note I also—— Mr. MCDONALD. Would you have preferred I had voted in that

matter or recuse myself? I thought recusal was the best approach

to take. Is that the criticism of me?

Senator SESSIONS. No. My criticism is you abstained or recused

yourself from the Democratic vote, but you voted to prosecute the

Republicans.

Mr. MCDONALD. Should I have voted in the matter when I was

talking to the national party? I just didn’t think that was appropriate.

Senator SESSIONS. I am not saying you shouldn’t have voted. I

am saying that one of the problems we have had with the FEC is

there is some concern about its objectivity.

I also would just note for the record, Mr. Chairman, that the day

after the Commission voted 3 to 3 not to prosecute the DNC, Mr.

McDonald voted not to prosecute. You were announced to a reappointment to a 5-year term as vice chairman of the Commission.

Mr. MCDONALD. No, I had been nominated long before that, Senator.

Senator SESSIONS. Had you?

Mr. MCDONALD. Yes, I had. And let me be very clear, if you don’t

mind me saying.

Senator SESSIONS. I will be glad for you to clarify that. If I am

in error, I would like you to clarify that.

Mr. MCDONALD. Yes. That is just simply not so. I had been nominated earlier. My nomination had been up for some time as a practical matter. It is on the record.

Senator SESSIONS. Well, at any rate, I believe that we do have

to be careful about these issues because they are so intense and

there is so much fudge room in some of this campaign disclosure

stuff that scares everybody that is in the business. I think we need

to be careful that our nominees can stand the test of objective scrutiny.

Mr. MCDONALD. I think it is an awfully important question. I am

kind of glad you raised it.

I would be willing—and I think even my colleagues who disagree

with me—I hope that is the case—will take the position I have

tried to be fair and objective.

One of the things you failed to mention there, and I guess you

simply don’t have it, but as a practical matter, one of my colleagues

left immediately from the Commission and went over to represent

the Republican National Committee. Another went from the Commission to work in the Reagan White House. We had another lawyer who left, a Commissioner, to go over and represent the party

directly from the Commission. So I think it is not unheard of. I am

hopeful that out of the thousands of votes I have cast—and that

has gotten a lot of celebration, ironically, for not casting a vote—

I, was puzzled by that.

The other thing about that particular vote, as you may know, actually a Republican joined in that vote, and that is why the case

didn’t move forward as a practical matter, but, ironically, I am surVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00167 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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prised. And, I think you are absolutely right. I totally agree with

you. I think the business about people’s integrity is pretty important. I know you take it important. I know something about your

background. I take it important, but I would certainly not want to

be in a position of casting a vote when my name was being mentioned at all. I just felt that was just not something I would be

comfortable in doing. And I also knew, quite frankly, that I was

going to get it either way.

Now, I must tell you, the bigger surprise was there were votes

to move forward on that case previously without my vote, and the

shocker wasn’t the fact that I didn’t vote, but that a Commissioner

changed their mind and actually that was on the Republican side.

Senator SESSIONS. Well, I guess my only concern is it is all right,

I think, for staff members to move and go back and forth, but the

Commissioners, while they are sitting there, when they are negotiating to be chairman of a committee that is under investigation

maybe should tell us all that we ought to be concerned about the

appointment process.

I mean, it is all right to appoint someone who is involved in politics, I think, but to the degree that we could maintain some objectivity and maybe someone who is out of the business or has retired

or a Howard Baker type or some people like that might be a better

approach than people who are actively engaged at the very time

these issues are coming before them.

Thank you, Mr. Chairman.

Mr. MCDONALD. Mr. Chairman, if I might on that point, I don’t

disagree with the Senator. Actually, there is a real irony to this.

The reason I got a call to begin with was I was at the Commission,

as you may recall. The committee was having some difficulty at

that point with the FECA, and the consideration was maybe someone with my background could go over there and try to work to correct the problems they had. So, you know, maybe that is not the

right approach. There wasn’t any negotiation. I am kind of glad I

was elevated in the press—not by you, but in the press. I sounded

a lot closer than I was, but it was true I did get a call about that,

and the question was, look, obviously we have got some problems.

My record is very clear. I am extremely comfortable for any member of the committee to look at my record. I have proceeded against

both sides. I have been criticized by both sides on numerous occasions, and I am awfully comfortable with my record.

Senator SPECTER. Thank you very much, Senator Sessions.

Thank you very much, Chairman Wold and Vice Chairman

McDonald.

What the subcommittee would like to do would be to have staff

pursue with your staff some of the issues we have discussed here

today to see if there might be a streamlining, also to get your recommendations as to whether there ought to be an odd number, so

you have 4-to-3 decisions as opposed to 3-to-3 decisions, and to pursue the issue also on the memorandum of understanding with the

Department of Justice. They have left to you a great ambit of authority. We have not gotten into that because we have so many

other witnesses. Where the Department of Justice has responsibilities to enforce the criminal laws, it is curious that they have delegated to the Federal Election Commission baseline judgments beVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00168 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
165

fore they will undertake to have enforcement responsibility, but

these are very important subjects which I think could be usefully

discussed at the staff level, and we may be asking you to come

back.

Thank you very much, Mr. Wold. Thank you, Mr. McDonald.

Mr. Wold. Thank you, Mr. Chairman, Senators.

Commissioner McDonald is absent from another engagement he

has this afternoon. Are we excused for the afternoon?

Senator SPECTER. Oh, absolutely. You certainly are, yes. Thank

you.

Mr. MCDONALD. Thank you very much.

Senator SPECTER. Mr. Robert Conrad, step forward, please. Mr.

Conrad, would you raise your right hand. Do you solemnly swear

that the testimony you will give before this subcommittee of the

Judiciary Committee of the U.S. Senate will be the truth, the whole

truth, and nothing but the truth, so help you God?

Mr. CONRAD. I do.

Senator SPECTER. Mr. Conrad, you submitted an opening statement. Would you care to read it or otherwise make an opening

statement?

Mr. CONRAD. Yes, sir, I would.

Senator SPECTER. Please do.

STATEMENT OF ROBERT J. CONRAD, JR., SUPERVISING ATTORNEY, CAMPAIGN FINANCING TASK FORCE, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

Mr. CONRAD. Mr. Chairman, other members of the subcommittee,

my name is Bob Conrad.

I have been an Assistant U.S. Attorney for over 11 years. I was

originally hired by the U.S. Attorney’s Office in the City of Charlotte in the Western District of North Carolina by U.S. Attorney

Tom Ashcraft in January 1989. From August 1992 until my

present detail, I was chief of the Criminal Division in the U.S. Attorney’s Office in the Western District of North Carolina.

I have served in both Republican and Democratic administrations as chief of the Criminal Division. In that capacity, I have

been responsible for supervising hundreds of prosecutions involving

white collar crime, public corruption, narcotics trafficking, firearms

violations, and a wide variety of other types of Federal crimes. I

have personally tried numerous cases ranging from bank robberies

to capital litigation.

The U.S. Attorney’s Office in the Western District of North Carolina is known for its aggressiveness, consistently ranks high in all

categories of Federal prosecution nationwide, and I am proud of its

accomplishments over the last 10 years.

Since the day after Christmas in 1999, I have been the supervising attorney in charge of the Justice Department’s Campaign Financing Task Force. I am personally committed to aggressively

pursuing all violations of the campaign finance laws.

Today, I would like to announce to this committee the filing of

two plea agreements in the task force cases. Pauline Kanchanalak

and Georgie Kronenberg have filed plea agreements this morning

to campaign finance violations. Those plea agreements bring to five

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the number of defendants this month who have pled guilty and

agree to cooperate in the ongoing task force investigations.

I am appearing here today voluntarily in response to your request to answer the committee’s questions about the Campaign Financing Task Force. I do so mindful of the admonition to open your

mind before you open your mouth, as well as a two-fold caveat.

Frankly, I will not disclose information about pending criminal

matters, ongoing investigations. I would not want to say anything

today that would potentially compromise ongoing investigations,

violate grand jury secrecy rules, or otherwise jeopardize the integrity of an investigation. My obligation as a prosecutor requires

that.

I also want to emphasize at the outset that I started with the

task force more than 6 months after the Independent Counsel Act

expired. I played no role in any independent counsel decisions and

have only a general familiarity with the now-defunct Independent

Counsel Act. I have had no input in specific Independent Counsel

Act decisions which were made by the Attorney General well before

I became involved with the task force. I do not feel qualified to

render any opinion regarding its applicability to any matter occurring before my tenure, having had no opportunity to study the statute or apply it in a concrete factual context.

Because I am not competent to discuss matters occurring before

my tenure nor able to talk about ongoing matters, I think my testimony may be of limited value to you. In this respect, I feel like

someone from the movie, ‘‘Dumb and Dumber.’’ Nonetheless, I am

happy to answer any questions you have.

Senator SPECTER. Thank you, Mr. Conrad, and congratulations to

you on working through the plea agreements. We would like to

take a look at those to see precisely what is involved, and we like

the sound of both Ms. Kanchanalak and Ms. Kronenberg agreeing

to cooperate in further investigations.

Mr. CONRAD. Yes, sir.

Senator SPECTER. Is that the similar situation with Mr. Charlie

Trie?

Mr. CONRAD. I understand that Charlie Trie’s plea agreement included cooperation provisions. Yes, sir.

Senator SPECTER. And cooperation from Johnny Chung?

Mr. CONRAD. I understand that as well. Yes, sir.

Senator SPECTER. And John Huang?

Mr. CONRAD. Yes, sir.

Senator SPECTER. And Maria Hsia?

Mr. CONRAD. Maria Hsia was convicted after trial, and there is

no cooperation agreement with respect to her.

Senator SPECTER. Is Maria Hsia cooperating?

Mr. CONRAD. No, sir.

Senator SPECTER. Mr. Conrad, you have left a very narrow—I

was about to say you have left a very narrow ambit for responding,

but you really have not left any ambit at all. But I do believe, difficult as these matters are, that this subcommittee has a duty to

find out what is going on, and we intend to do just that.

We believe we have a right to know what is happening within

the Department of Justice upon the issue of special prosecutors,

which is the replacement now for independent counsel, and we

167

have reviewed the long line of authorities with the Department of

Justice on the precedence which give congressional oversight authority on pending matters. We have pursued the recommendations

of the Department of Justice on this issue of recommending independent counsel and similarly a special prosecutor from Mr. Radek

who is chief of the Department of Justice Public Integrity Section.

We have the recommendation from Mr. Litt, who will be a witness

here later, who was Principal Associate Deputy Attorney General.

We had the recommendation from Charles La Bella who was head

of the task force. We had the recommendation from Director Freeh,

and through a torturous route, we have secured the memoranda

and the writings on those recommendations and we are interested

in your recommendations.

We have a good bit of information as to what happens because

this is a town where at least I found nothing is secret. Have you

in your capacity as chief of the task force had occasion to personally question people under investigation?

Mr. CONRAD. Yes, sir.

Senator SPECTER. And whom have you questioned?

Mr. CONRAD. I feel comfortable in stating because the people who

were examined have issued press releases concerning the examinations, but on April 18, I personally examined the Vice President of

the United States, Albert Gore. On April 21, Good Friday, I personally examined the President of the United States, Bill Clinton.

Both of those examinations were disclosed to the public via a press

release issued by the White House.

Senator SPECTER. Have you made or attempted to make a recommendation as to either of those matters with respect to special

prosecutor?

Mr. CONRAD. That, I don’t feel comfortable discussing in public.

I would perceive whether I have done that or not as something that

pertains to an ongoing investigation.

Senator SPECTER. When you say you do not feel comfortable

doing it in public, were you suggesting you would do it in private?

Mr. CONRAD. No, I am not suggesting that. I am suggesting that

my obligations as a prosecutor would prevent me from discussing

that.

Senator SPECTER. Well, both of the individuals whom you mentioned have been the subject of extensive hearings by this subcommittee. Are you conducting to be even handed any investigation

as to Senator Dole who was a candidate for the Presidency?

Mr. CONRAD. You asked me—Senator, you asked me questions

about whether I had examined people personally, and I felt comfortable answering your questions because the two individuals that

I mentioned had issued press releases saying that I had done that.

I don’t feel comfortable talking about any other potential matter.

Senator SPECTER. Well, I want to ask the question, and I have

asked the question, so that it is asked in both directions in an

even-handed manner.

This subcommittee is interested in knowing whether you have

made a recommendation as to either the President who has made

the press release and as to the Vice President who has made the

press release, and we would cite as our authority in the practice

of the Department of Justice, which has responded, to subpoenas.

168

Actually, the subpoena was not directed at the Department of Justice. It was directed to Mr. Freeh and Mr. La Bella, but the Department of Justice then made available not only their records, but also

the records of Mr. Radek and Mr. Litt and the recommendations

of others. So we think we do have the precedent of what this Department has done and the precedent of the authority to get a response to that question.

Mr. CONRAD. My only involvement in that process was to screen

those documents prior to their issuance to you or pending-matter

concerns, and I was involved in that process.

The question you are now asking me deals with matters—subject

matter of the examinations of both the President and the Vice

President are pending-matter concerns, and so my answer to you

plays the same role as my process was—my role in the process was

earlier, to screen from disclosure things that might affect pending

investigations.

Senator SPECTER. Well, Mr. Conrad, are you saying that the matters under investigation as to the President, which he has publicly

disclosed, do not relate to matters which have previously been

under investigation? I am probing now on the question as to the

subject matter. My judgment here is that they are, and that they

have been responded to on the question of whether there should be

independent counsel/special prosecutor as to the President. So, if

you are telling me they are different matters, then I might see

some distinction, but if they are the same, I would press you for

an answer. Are they the same?

Mr. CONRAD. As to the subject matter of the examinations, I

think the examinations dealt with pending matters which I am not

comfortable answering.

Senator SPECTER. Well, are those matters different from the ones

which have been the subject of the investigation before for the

President which have been in all these documents we have seen

from La Bella and Freeh and Radek and everybody else?

Mr. CONRAD. Not being totally familiar with all of that, what has

gone on before me, I know that the matters I inquired into on April

18 and April 21 were matters that are pending matters.

Senator SPECTER. Well, the question is, Are they the same? As

to the Vice President, aren’t they the same as before?

Mr. CONRAD. I don’t feel at liberty to discuss the subject matter

in that examination, no, sir.

Senator SPECTER. Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman.

Mr. Conrad, you were polite in your introduction, but for a fellow

under oath may have been only marginally frank with the committee. You said that you had limited knowledge of the matters

dealing with an independent counsel.

Mr. CONRAD. Yes, sir.

Senator TORRICELLI. Wouldn’t indeed it have been more accurate

to say since you never attended meetings discussing the independent counsel, never wrote memorandums for the discussion of

appointment of independent counsel, had no contemporaneous

knowledge on the question of appointing independent counsel, that

you didn’t have limited knowledge, in fact, you have no knowledge

169

of the events surrounding the decision to appoint independent

counsel?

Mr. CONRAD. My limited knowledge dealt with the Act itself and

its application to certain facts. I do have some knowledge, having

been in this position for 6 months and read some of the things that

you have read, about—— Senator TORRICELLI. But the focus of the committee’s questions,

that is, how Attorney General Reno reached her judgment, the advice that was given to her, the meetings that were held, is it not

true that you were at a safe distance in North Carolina at that

point and participated in none of these deliberations?

Mr. CONRAD. That’s true. I had no personal participation in any

of them.

Senator TORRICELLI. Therefore, as to contemporaneous knowledge or firsthand experience with the actual judgment of the Attorney General whether or not to appoint independent counsel, you

really have nothing to offer this committee?

Mr. CONRAD. No, sir.

Senator TORRICELLI. Now, let us deal for the moment, Mr.

Conrad, with whether or not the process of justice has been compromised by there not being an independent counsel as opposed to

the task force exploring these matters, and whether that has

meant the process is not proceeding with integrity. What is the

sum total of appointments that you have received by direct appointment of President Clinton or Vice President Gore?

Mr. CONRAD. I have not been directly appointed to any position

by either one of those two—— Senator TORRICELLI. Do you have any political association with

either campaigns or either individual?

Mr. CONRAD. No, sir.

Senator TORRICELLI. Is there any reason why this committee or

the Attorney General or the American people should have a lack

of confidence in your objectivity, fairness, impartiality, as a partisan matter in pursuing this investigation?

Mr. CONRAD. Not that I’m aware of, no, sir.

Senator TORRICELLI. It seems to be in the mind of some that having the task force now proceed with these matters—and, indeed, I

am not asking you to discuss any of the matters with regard to the

President or Vice President—that somehow the public interest is

not being served by the task force doing so as opposed to an independent counsel.

Is there reason to believe that if an independent counsel were

pursuing this matter as opposed to the task force that somehow the

people on the independent counsel’s staff would have greater

knowledge, more experience, or greater expertise than those now

available on the task force?

Mr. CONRAD. Well, the Independent Counsel Act has expired, so

there would be no——

Senator TORRICELLI. I understand that.

Mr. CONRAD [continuing]. Possibility of that situation.

Senator TORRICELLI. But let’s speak theoretically. The American

people are entitled to know this is being pursued aggressively and

impartially. I want you to give a frank accounting through us to

the American people that indeed, if there were an independent

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counsel, if theoretically it were possible, if the Attorney General

had named one before the statute had expired, it would be your

judgment that you now have the expertise, you have the manpower, you have the support of the Department to vigorously pursue these cases wherever they might go, and that in sum and substance that does not differ from if there had been an independent

counsel.

Would you share your own judgment with the committee on that

question?

Mr. CONRAD. I don’t know what value my judgment would be—— Senator TORRICELLI. Well, it entertains me, and it may prove

persuasive with Senator Specter.

Mr. CONRAD. I can say this: that I have a reputation for aggressiveness, I have a reputation for serious—pursuing serious violations of the criminal law. I would attempt in any leadership position I was in to do that and to inspire others to do that.

Senator TORRICELLI. And how many attorneys do you have now

at your disposal?

Mr. CONRAD. Approximately a dozen.

Senator TORRICELLI. Have you asked for any resources by your

superiors at the Justice Department of any appreciable nature and

been denied?

Mr. CONRAD. No, sir.

Senator TORRICELLI. Have you asked for cooperation from the

FBI in investigations and been denied cooperation?

Mr. CONRAD. No, sir.

Senator TORRICELLI. Have you felt that at any point, as someone

with no partisan affiliation, that there has been an interference

with your judgment, other than the advice that you would naturally receive from experienced superiors, that in any way compromised your ability to perform responsibly?

Mr. CONRAD. I don’t believe my ability to perform the tasks that

I have conducted to date has been compromised in any way, no, sir.

Senator TORRICELLI. Therefore, can I assume it would be your

testimony that even if there were still an independent counsel statute or if the Attorney General had appointed an independent counsel before the law expired, in sum and substance you have no reason to believe that violations of the law would be pursued any more

or less aggressively or any more or less fairly than you are now

doing?

Mr. CONRAD. I really would have no opinion on that. I just

wouldn’t.

Senator TORRICELLI. OK. Mr. Conrad, thank you very much.

Senator SPECTER. Before turning to Senator Sessions, Mr.

Conrad, I want to say that you have an outstanding professional

record. There is no doubt about it. And everything I hear about you

is very good, and I have a pretty good idea of what it is like to be

a prosecutor for 11 years. I was one for 12 years, and I know the

sort of things you face. So—— Mr. CONRAD. I hope I make it to your tenure.

Senator SPECTER. Oh, you will. Whatever happens, you will. The

odds are strong that you will exceed it.

So that on the professional level, you have an outstanding record,

and it is a curious town, it is a curious world; when people know

171

you are coming in to testify, people come to volunteer about what

a straight shooter you are. And there have been volunteers who

have spoken for you. A person’s reputation goes a long way. That

is to say nothing of the questions which I have asked you and will

repeat, but let’s turn now to Senator Sessions.

Senator SESSIONS. Thank you, Mr. Chairman. And I have heard

good things, also. As I get older, reputations usually turn out to be

fairly good indices of the character of a person. And your office is

a good office. I am familiar with the statistical production of the

Western District of North Carolina over the years, and it has always been at the top in the United States.

Mr. CONRAD. Thank you.

Senator SESSIONS. And even beat the Southern District of Alabama.

Senator TORRICELLI. That is extraordinary.

Senator SESSIONS. That is. We were all in the top four, three or

four consistently.

Well, let me say this: You bring with you a lot of experience. You

have been through some tough cases in your career. You have had

to deal with pressures and political attacks and other things that

go with the territory of being a prosecutor.

Are you ready for this one? Let me ask you that: Are you ready

to see this one through if that becomes your cup to drink?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. And are you prepared to call it as you see it

and to defend your position even if others who may think they have

more experience disagree?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. Do you feel an obligation, if you were asked

to take actions that you did not believe were justified within the

parameters of honest dispute, would you speak out on that if need

be?

Mr. CONRAD. I’m trying to understand your question so I can answer it appropriately. I wouldn’t do anything that violated my own

ethical or conscientious beliefs. I would stand for that which I believe to be the right thing to do in the appropriate setting.

Senator SESSIONS. As a career Assistant U.S. Attorney, your

basic training is that you do the task you are assigned, you do it

fairly and objectively, you fight for what you think is right. But if

someone higher up makes a decision and they have the responsibility ultimately of making that decision, you take it and try to do

the best you can with it.

Mr. CONRAD. Yes, sir.

Senator SESSIONS. Is that fair to say?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. So by being in the Department of Justice,

being a career employee, there is some ability for the Department

to affect your decisionmaking process or the decisionmaking process in the case.

Mr. CONRAD. Yes, sir; in particular cases, without getting into

management, as a general rule, I’ve won some battles and lost

some battles.

Senator SESSIONS. Have you ever been——

Mr. CONRAD. That’s both in the district and here.

172

Senator SESSIONS. Have you ever been overruled by the bureaucrats in Washington?

Mr. CONRAD. Well, if I had an attorney here, he might object to

the characterization. But I have not——

Senator SESSIONS. Well, there are good lawyers in Washington in

any case. I mean, a lot of your decisions are reviewed in North

Carolina by the Department of Justice. Isn’t that correct?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. But if they say no, you have to go along with

what they say. Isn’t that correct?

Mr. CONRAD. Yes, sir. I recognize my role in a hierarchical organization.

Senator SESSIONS. Well, what would happen if—now, are you operating under Mr. Radek?

Mr. CONRAD. No, sir. My chain of command would be up through

the Assistant in charge of the Criminal Division and ultimately the

Attorney General.

Senator SESSIONS. So you have a direct reporting link to the Assistant Attorney General for Criminal?

Mr. CONRAD. There’s a Deputy Assistant Attorney General between me and the Assistant Attorney General, yes, sir.

Senator SESSIONS. And who is that person?

Mr. CONRAD. That would be Alan Gershel.

Senator SESSIONS. Gershel?

Mr. CONRAD. Gershel, G-e-r-s-h-e-l.

Senator SESSIONS. And he would answer to Mr. Robinson?

Mr. CONRAD. Yes.

Senator SESSIONS. And he to the Attorney General?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. But in any decision to indict a person of prominence, you would expect the Attorney General would be briefed on

this, would you not?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. If there came to be a point in which there

were serious disagreements, would you be prepared to recommend

to the Attorney General an independent counsel should be appointed?

Mr. CONRAD. That statute having lapsed 6 months before I came

here, I would not be in that situation. If you’re talking about the

potential for a special counsel——

Senator SESSIONS. A special prosecutor, a special counsel, would

be the correct phrase.

Mr. CONRAD. The language used by Senator Specter, I would call

it as I saw it, yes, sir.

Senator TORRICELLI. I am sorry, Mr. Conrad. I didn’t hear that.

Mr. CONRAD. I would call it as I saw it.

Senator SESSIONS. In other words, if you felt that it was the right

thing to do, you would recommend it?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. I don’t know what you can say about this. I

am just looking at an article from the New York Post. The first

paragraph says this: ‘‘Vice President Al Gore blew his top when he

was grilled last week by funny-money investigators.’’ Is that you?

173

Mr. CONRAD. That article was brought to my attention by Jim

Neill, an attorney in Nashville, TN.

Senator SESSIONS. OK. Blew his top because they asked about

his illegal Buddhist Temple fundraiser for the first time, sources

say. Gore seemed stunned, fumed that the questions were ‘‘outrageous’’ and the session was contentious.

It is a free country. If that happened, it happened. First of all,

can you confirm or deny that?

Mr. CONRAD. I’ve read that article.

Senator SESSIONS. Would you. [Laughter.]

You can confirm that article exists?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. The best of your knowledge. Well, I am really

trying to get at this thing we are talking about here. The reason

an independent counsel is important is this is the Vice President

of the United States. You are trained to respect that office, and all

of us are. If a serious allegation is afoot, then you work for the Department, you work for the Attorney General, the chief of the

Criminal Division, and you answer to them and they are ultimately

answerable to the President of the United States, who is a friend

of the Vice President, who picked him for his Vice President, and

who supports him to be the next President. So it just creates an

awkward situation, would you not agree?

Mr. CONRAD. There is the potential for that, yes, sir.

Senator SESSIONS. And particularly if the persons higher up, to

some degree, in your ultimate chain of command are contentious

and hostile and blow their top and reject—and are not totally forthcoming with matters, it would make it more difficult.

Mr. CONRAD. Are you asking me if—— Senator SESSIONS. Yes, I am asking you.

Mr. CONRAD. A hypothetical situation?

Senator SESSIONS. Hypothetically.

Mr. CONRAD. I wouldn’t want to comment on anything that happened in either one of the examinations that I took, but I understand all the points you have made with respect to the awkwardness of the situation in a hypothetical sense.

Senator SESSIONS. See, we represent the people of the United

States at this deal. We no longer have an independent counsel law.

And the people of this country have got to know that—they have

got to know that you, Mr. Conrad, find yourself on the hot seat primarily at this very moment, are going to do what a professional

prosecutor would do. And the Vice President would be treated like

anybody else. True, if the facts are there, or if they are not there,

you call it as you see it. But you have to obtain the facts and do

your duty, and I think there is cause for concern when the ultimate

decisions are made well above your level on most of these matters.

Let me ask you about the team at your disposal, the attorneys

at your disposal. Were they working on the case before you arrived? And did you select any of them yourself, or was that the

group that was previously involved?

Mr. CONRAD. Most of the attorneys on the task force are attorneys that have—that were members of the task force prior to the

time that I came. I have hired two attorneys in the 6 months that

I have been the chief of the task force.

174

Senator SESSIONS. Were those attorneys people you knew previously?

Mr. CONRAD. One of the attorneys was an attorney from my district, which our U.S. attorney was generous enough to detail to us

for a year. The other attorney worked for one of the independent

counsels prior to the time he was hired by me to join our task force.

Senator SESSIONS. And those attorneys you chose, basically?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. Have you investigated the Hsi Lai Temple

matter? Can you tell us that?

Mr. CONRAD. I would feel uncomfortable testifying about specific

matters that I’ve investigated.

Senator SESSIONS. So we are just left with the New York Post.

Thank you, Mr. Chairman.

Senator TORRICELLI. Could I, Mr. Chairman——

Senator Specter. Go ahead.

Senator TORRICELLI. Thank you, Mr. Chairman, very much.

Mr. Conrad, first, I want to thank you for being here today. I

think your testimony has been very helpful. With the exception of

knowing that you read the New York Post, you have certainly increased my confidence in the task force and——

Mr. CONRAD. I thought I made it clear that Attorney James Neill

brought that article to my attention. [Laughter.]

Senator TORRICELLI. Well, then, you have fully restored my confidence.

I wanted only to address the question that I raised with the

Commissioners from the Federal Election Commission, and that is,

not looking back but looking forward, and not with any specific

matter but with a theoretical problem. You are in the Nation’s

highest political debating society, and you could not help but notice

real consternation in this institution about the fact that our campaign finance laws are now not only being violated, in my judgment, wholesale, but may be at the point of near collapse. The Tax

Code is being misused to establish parallel organizations that, in

my judgment, are unquestionably in some instances being coordinated.

As I was corrected by Mr. McDonald, that is clearly not true in

all instances. But in my experience as the chief political organizer

of the Democratic side of the aisle in this institution, it is happening in many instances.

It appears to me from the testimony of the Federal Election Commission they either do not think they now have the mandate or the

resources to deal with this problem, and yet I repeat to you, as I

suggested to them, us having this hearing 2 years from now is

going to prove very inadequate for many of these problems. If these

laws are violated in the next few months, it is going to change the

composition of this Congress. And once these laws are violated to

this extent, I don’t think we are ever going to restore respect generally for the disclosure and the separation of these organizations.

My question to you, in spite of that rather complex build-up, is

really very simple. Is it in your mandate, do you believe you have

the authority, to look at these organizations and conduct investigations if you have reason to believe the law might be violated?

175

Mr. CONRAD. I don’t think the 2000 election is within my mandate. I think that would be a Public Integrity issue at this—— Senator TORRICELLI. So that ultimately is Mr. Radek’s responsibility, in your—— Mr. CONRAD. Yes, sir.

Senator TORRICELLI. Thank you, Mr. Conrad.

Senator SPECTER. Mr. Conrad, just a couple more questions.

What would be the procedure if you obtained information that

there was a need to have a special prosecutor? Whom would you

recommend that to?

Mr. CONRAD. I think I would recommend—hypothetically, I think

I would recommend that up through my chain of command. That

would be, first level, Jim Robinson, the Assistant Attorney General

in charge of the Criminal Division, and Alan Gershel, his Deputy,

and up through them to the Attorney General.

Senator SPECTER. Are there guidelines that you are operating

under as to when—do you call it special counsel now as opposed

to special prosecutor?

Mr. CONRAD. Yes, sir.

Senator SPECTER. Are there guidelines that you are operating

under, written guidelines?

Mr. CONRAD. There are special counsel regulations which would

inform the recommendation and the decision. There is a practice of

a regular meeting with the people I’ve described to you and myself.

So there are now—as I understand it, there are no formal steps

that I would take, but such a decision would—the situation would

be created on a regular basis for me to bring it to the attention of

the people I needed to bring it to.

Senator SPECTER. If there were an allegation of campaign finance

violations as to Governor George W. Bush, would it fall to you to

investigate, or would that come under the Public Integrity Section?

Mr. CONRAD. My understanding at this point is that would be a

Public Integrity matter. I have not been given any 2000 election

cycle—— Senator SPECTER. Your authority is just under the 1996 election

cycle?

Mr. CONRAD. Prior to 2000, yes, sir.

Senator SPECTER. So that involves matters from 1998 as well?

Mr. CONRAD. The mandate is really the 1996 election cycle. As

part of our investigation of that election cycle, there have been

matters that occurred both prior to 1996 and subsequent to 1996.

But it would not extend as far as the 2000 election cycle.

Senator SPECTER. Or the 1998 election cycle?

Mr. CONRAD. That’s correct.

Senator SPECTER. Are there any memoranda or other writings,

Mr. Conrad, on any of your recommendations for appointment of

special counsel?

Mr. CONRAD. I would not feel comfortable answering your question and would respectfully decline.

Senator SPECTER. Thank you very much.

Senator SESSIONS. Mr. Chairman, may I ask him two questions?

Senator SPECTER. Go ahead, Senator Sessions.

Senator SESSIONS. With regard to Maria Hsia, has that case gone

to sentencing, been sentenced yet?

176

Mr. CONRAD. No, sir. The conviction was in January. There have

been post-trial motions filed by the defendant. They include posttrial motions to dismiss, motions to disqualify the district court

judge presiding over that case, and other motions. As I’m sure

you’re aware from your past experience, there is also the process

whereby a pre-sentence report is prepared by the probation office,

and parties have an opportunity to file objections to that report.

And that whole process has not been completed.

My best recollection is that sentencing in that case is scheduled

for September of this year.

Senator SESSIONS. Now, that case would be under your supervision?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. And are you able to tell us, has there been a

public memorandum, sentencing memorandum, by the Department

of Justice setting forth what the Sentencing Guidelines range

should be in that? And could you tell us what that is?

Mr. CONRAD. I could tell you we have not yet filed our sentencing

memorandum because of the stage and the process that we’re in.

We’re waiting for the pre-sentence report.

Senator SESSIONS. Now, you have tried that case. The defendant

has been convicted, assuming it is upheld by the judge. I would expect that you would pursue vigorously the sentencing phase of that

case and that you personally would oversee it. Will you?

Mr. CONRAD. Yes, sir.

Senator SESSIONS. I think that is important because, for the edification of others, sometimes the sentence a person is facing can be

affected by the skill of the prosecutor, and I have seen some cases

previously involving these very matters in which I believe the Department of Justice was not sufficiently aggressive toward sentencing. And a person can achieve a downward departure—let me

ask you this: The only way a person who has been tried and convicted can get a downward departure under normal circumstances

is to provide evidence that they have cooperated fully with the

prosecution. Is that correct?

Mr. CONRAD. That’s the most usual way. I believe the Sentencing

Guidelines allow district court judges other latitude, but——

Senator SESSIONS. Under certain circumstances.

Mr. CONRAD [continuing]. They’re very circumscribed, yes.

Senator SESSIONS. But I would expect that you would treat this

like any other case, that unless the defendant was prepared to testify fully and completely and provide information that you can

verify, that you would not accept a recommendation of any downward departure?

Mr. CONRAD. In fact, with respect to substantial assistance,

downward departures, we would actually have to make a motion

before the district court even had the authority to depart, and we

would not make that motion in this or any other case unless the

information provided had been valuable.

Senator SESSIONS. But if you thought that the cooperation had

been partial and Mr. Robinson, your supervisor, said, well, that is

good enough for me, file for downward departure, what would you

do then?

177

Mr. CONRAD. I would anticipate that if the recommendation of

the line attorneys and myself was that the—I would anticipate that

our evaluation of the cooperation would be deferred to, in much the

same way that if you pursued a case in the appellate courts, there

would be an abuse of discretion standard. I would not anticipate

our decision on an issue like that being overruled by someone who

has less contact with the case than we do.

Senator SESSIONS. You wouldn’t normally expect that, but we

have seen some odd things, in my opinion, as we have gone

through these cases.

Well, I hope that you will use your best judgment, your experience, and that you will follow those standards of dealing in a plea

and sentencing.

Mr. Chairman, thank you.

Senator SPECTER. Thank you very much, Mr. Conrad.

Mr. CONRAD. Thank you.

[The prepared statement of Mr. Conrad follows:]

PREPARED STATEMENT OF ROBERT J. CONRAD, JR.

Good Afternoon, Mr. Chairman and other members of the Subcommittee. My

name is Bob Conrad. I have been an Assistant United States Attorney in the Western District of North Carolina for over eleven years, having been originally hired

by USA Tom Ashcraft in January, 1989. From August, 1992 to my recent detail as

Chief of the CFTF, I was Chief of the Criminal Division in the U.S. Attorney’s Office. I have served as chief of that criminal unit under both Republican and Democratic administrations. In that capacity I have been responsible for supervising hundreds of criminal prosecutions involving white collar crime, public corruption, narcotics trafficking, firearms violations, and a wide variety of other types of federal

crimes. I have personally tried numerous cases ranging from bank robberies to capital litigation. The USAO for the WDNC is known for its aggressiveness. It consistently ranks high in all categories of prosecution and I’m proud of its accomplishments over the last ten years.

Since, the day after Christmas, 1999, I have been the Supervising Attorney, in

charge of the Justice Department’s Campaign Financing Task Force. I am personally committed to aggressively pursuing all violations of the campaign finance laws.

Today, I would like to announce the filing of two plea agreements in task force

cases. Pauline Kanchanalak and Georgie Kronenberg filed plea agreements this

morning to campaign finance violations. That brings the number of defendants to

five who have this month pled guilty and agreed to cooperate in the ongoing task

force investigations.

I am appearing here today voluntarily, in response to your request, to answer the

Committee’s questions about the Campaign Financing Task Force. I do so mindful

of the admonition to ‘‘open your mind before you open your mouth’’ as well as a two

fold caveat.

Frankly, I will not disclose information about pending criminal matters. I certainly would not want to say anything today that could potentially compromise ongoing investigations, violate grand jury secrecy rules, or otherwise jeopardize the integrity of an investigation. My obligation as a prosecutor requires that.

I also want to emphasize at the outset that I started with the Task Force more

than 6 months after the Independent Counsel Act expired. I played no role in any

independent counsel decisions and have only a general familiarity with the now

defunct Independent Counsel Act. I have had no input in any specific Independent

Counsel Act decisions, which were made by the Attorney General well before I became involved with the Task Force. I do not feel qualified to render any opinion regarding its applicability to any matter occurring before my tenure having had no

opportunity to study that statute or apply it in concrete factual context.

Because I am not competent to discuss matters occurring before my tenure, nor

able to talk about ongoing matters. I think my testimony may be of limited value

to you. Nonetheless, I am happy to answer your questions.

Senator SPECTER. I would like to call now Mr. Stephen Mansfield. Step forward, please.

178

Mr. Mansfield, would you raise your right hand? Do you solemnly

swear that the testimony you will give to this subcommittee of the

Judiciary Committee of the U.S. Senate will be the truth, the whole

truth, and nothing but the truth, so help you God?

Mr. MANSFIELD. I do.

Senator SPECTER. Thank you for joining us here today, Mr.

Mansfield. Would you care to make an opening statement?

STATEMENT OF STEPHEN MANSFIELD, FORMER ASSISTANT

U.S. ATTORNEY, U.S. DEPARTMENT OF JUSTICE, LOS ANGELES, CA

Mr. MANSFIELD. No, Senator. I’m happy to answer any questions

you may have.

Senator SPECTER. Mr. Mansfield, you were an Assistant U.S. Attorney in Los Angeles, California?

Mr. MANSFIELD. Yes, sir.

Senator SPECTER. Tell us a little bit about your background, education, practice, tenure with the U.S. Attorney’s Office, present occupation.

Mr. MANSFIELD. Yes, Senator. When I graduated law school, I

came to Washington, DC, and served as a law clerk to Judge

Thomas Lyden in the U.S. Claims Court. After that I worked as an

associate at a law firm here in Washington, DC, Freed, Frank,

Harris, Shriver and Jacobson. After about 3 years, I moved to Los

Angeles to begin a career as a Federal prosecutor where I served

for 11 years.

At the U.S. Attorney’s Office in Los Angeles, I specialized in public corruption and white-collar crime prosecutions. During my tenure, I tried a lot of cases in that area, supervised a large number

of investigations. For a period of time, I served as a deputy chief

in the Criminal Division responsible for public corruption cases,

and I also served as a senior litigation counsel for a period of years

in that office.

One of the cases that I handled involved a Member of Congress

and resulted in the conviction of the Member of Congress for campaign finance fraud violations as well as the——

Senator SPECTER. And who was that?

Mr. MANSFIELD. Congressman Jay Kim. His campaign committee

was also convicted, as was his campaign treasurer and five Koreabased corporations.

Senator SPECTER. Mr. Mansfield, you had occasion to participate

in the investigation of the so-called Hsi Lai Temple case?

Mr. MANSFIELD. Well, I think we probably need to define the

term ‘‘investigation.’’ I opened a file in the Los Angeles U.S. Attorney’s Office in mid-October 1996 and began preliminary steps in an

investigation relating to the temple and another entity that had

been mentioned in press accounts.

Senator SPECTER. Would you repeat the last part of that, relating

to what?

Mr. MANSFIELD. Another entity that had been mentioned in

press accounts.

Senator SPECTER. And what entity was that?

Mr. MANSFIELD. Cheong Am.

179

Senator SPECTER. And what happened during the course of your

investigation?

Mr. MANSFIELD. Well, basically, it started because there were a

number of news accounts that alleged possible violations of campaign finance rules. I had been, as I mentioned, in the midst of a

campaign finance fraud investigation involving Congressman Kim,

and I had at that point in time prosecuted, I believe, four of the

Korea-based corporations based on campaign finance violations.

And in reading these stories, it appeared that there might be evidence of violations of the campaign finance laws, and so I consulted

with my U.S. attorney about the possibility of beginning an investigation relating to what had been described in the newspaper accounts. The U.S. attorney agreed——

Senator SPECTER. Who was the U.S. attorney?

Mr. MANSFIELD. I’m sorry?

Senator SPECTER. Who was the U.S. attorney?

Mr. MANSFIELD. Norma Minella.

I also conferred with the Public Integrity Section and advised

them that we were going to take this action as well. And so at that

point——

Senator SPECTER. What happened to your investigation?

Mr. MANSFIELD. I began accumulating news accounts from various papers around the country to get a handle around what the

allegations were and where the allegations pointed. I conferred

with the FBI agent who had been working with me on the Congressman Kim investigation, who assisted me in pulling together

some of this basic factual information. I also conferred with an individual at the FEC, Kent Cooper, who was helpful in providing to

me various FEC reports that related to individuals mentioned in

those press accounts. And so we were also analyzing that material

from the FEC.

I also obtained FEC advisory opinions that related to issues concerning foreign national contributions and began to prepare an outline for investigative steps in terms of issuing subpoenas and interviewing witnesses.

In that regard, I was conferring with another FBI agent who had

been assigned to the case out of the Los Angeles office of the FBI.

Senator SPECTER. And what happened with this investigation?

Were you able to complete it?

Mr. MANSFIELD. Well, I received an instruction from the Public

Integrity Section—I think it was on October 31—to stop work on

the investigation because they were going to handle it.

Senator SPECTER. You are quoted in the New York Times to this

effect, Mr. Mansfield—it might be faster if I simply read it and

asked you if it is accurate. ‘‘ ‘I wanted to move very quickly to gather evidence by issuing subpoenas, interviewing witnesses, and considering the execution of search warrants,’ said Mr. Mansfield, who

had extensive experience prosecuting campaign finance cases. ‘But

it got yanked off my desk, and as far as I know, nothing happened

for many, many months. The consequence of a strategy of sitting

back and doing nothing means you effectively make the matter go

away. It is so much harder to develop. Speed is everything in a

highly publicized case.’ ’’

180

Then the story goes on to say: ‘‘In the months that elapsed, several figures involved in the temple fundraising fled the country.’’ Were you accurately quoted, Mr. Mansfield?

Mr. MANSFIELD. Yes. Those quotes are accurate, but I would like

to explain and clarify the final segment of that quote.

Senator SPECTER. Please do.

Mr. MANSFIELD. Because I think it’s important.

Senator SPECTER. Yes.

Mr. MANSFIELD. The final segment of the quote says something

to the effect—I don’t have it in front of me—the consequence of

moving slowly can hurt an investigation. Perhaps you could read

the last—— Senator SPECTER. It says, ‘‘Speed is everything in a highly publicized case.’’ The last thing you said says this. I will read it all. ‘‘But it got yanked off my desk, and as far as I know, nothing happened for many, many months. The consequence of a strategy of

sitting back and doing nothing means you effectively make the

matter go away. It is so much harder to develop. Speed is everything in a highly publicized case.’’ Mr. MANSFIELD. The segment of the quote starting with ‘‘The

consequence of a strategy of sitting back and doing nothing,’’ that

quote was in response to a generic hypothetical question from the

reporter. Specifically, the reporter said: What if there was a highprofile case and prosecutors didn’t do anything for months? I made

the point to the reporter—I’m not commenting in any way on what

the Department of Justice did with respect to this investigation because, frankly, I have no knowledge of what they did. So my quote

was basically answering the hypothetical that was put to me, that

if there was a high-profile case that was publicized and prosecutors

didn’t move quickly, you really jeopardize making the case. And

that is precisely my belief about these matters, having worked on

them for many years, which is why, going back to the first part of

the quote, it was my strategy to move quickly on the investigation.

It was a strategy that I had used really for 11 years as a prosecutor in Los Angeles.

An example was in the Congressman Kim case, which started

similarly in a sense with a newspaper story. There had been a L.A.

Times story in that case that had detailed allegations, rather specific allegations of wrongdoing by the Congressman’s campaign

committee. And so as a result, what we did in that case was within

a couple, 3 weeks, issued grand jury subpoenas, and then within

a couple of months we executed search warrants. And I think by

moving quickly we were able to gather a lot of the important documentary evidence in that case.

Senator SPECTER. And that is what you wanted to do in this matter?

Mr. MANSFIELD. Yes, sir.

Senator SPECTER. Well, did your hypothetical answer as such

apply factually in this case, that when you didn’t move there was—

the matter, in effect, went away?

Mr. MANSFIELD. I really can’t answer that because I don’t know

what happened once the case was taken over by Public Integrity.

I don’t know what they did or did not do, so I think they are in

the best position to respond to that.

181

Senator SPECTER. Are you aware that some 18 witnesses left the

country shortly after this matter was removed from your desk to

Public Integrity?

Mr. MANSFIELD. I’m not aware of details. I’ve read, you know,

press accounts occasionally over the years, but I’m not aware of the

details.

Senator SPECTER. Mr. Radek, would you step forward, and let’s

talk about this case with Mr. Mansfield here. Thank you for joining

us today, Mr. Radek.

As I know you know from your experience as a trial lawyer, you

are still under oath.

Mr. RADEK. Yes, I do, Mr. Chairman. Thank you.

Senator SPECTER. Thank you. Mr. Radek, I have the letter dated

November 1, 1996, addressed to Mr. Stephen E. Ziperstein, Chief

Assistant U.S. Attorney, which says in pertinent part on page 2,

‘‘Your office should take no steps to investigate these matters at

this time.’’ Signed by—purporting to be signed by you. Is, in fact,

that your letter?

Mr. RADEK. It is my letter.

Senator SPECTER. What was this case all about, Mr. Radek?

Mr. RADEK. Well, at the time I wrote the letter, we weren’t sure.

Mr. Mansfield, as he has testified, contacted Mr. Donsanto, who informed me that Mr. Mansfield was beginning to conduct this investigation. At the same time, press reports were coming to our attention as well as a letter from five Members of Congress alleging that

there was some type of misconduct involving the Hsi Lai Temple

event that the Vice President spoke at. And Mr. Mansfield had

communicated to Mr. Donsanto that there was in the press reports

some indication that possibly conduit contributions were involved.

Senator SPECTER. And what happened after you issued instructions to the U.S. Attorney’s Office in Los Angeles to take those

steps to investigate these matters?

Mr. RADEK. Well, I think it’s important for the committee to understand why I sent that letter, and it was because of really two

factors, the first being I was instructed by my superiors in the

Criminal Division, Mr. Litt and Mr. Richard, to take the matter

over for the task force, which was then just being started, and I

was also informed by them after a discussion with me to inform the

U.S. Attorney’s Office in Los Angeles that the matter needed to be

examined to see whether there was any allegation which constituted specific and credible information against Vice President

Gore, that is, to do an independent counsel scrub on it.

Senator SPECTER. And you determined as a matter of your judgment that independent counsel should not be appointed?

Mr. RADEK. It was determined somewhat later after an analysis

of the materials that Mr. Mansfield sent and the materials that we

were gathering at the same time, that there was no allegation

amounting to specific and credible allegation against the Vice

President, specific and credible information.

Senator SPECTER. Well, was the matter pursued on any investigative level, then, either by the Public Integrity Section or by the

U.S. Attorney’s Office in Los Angeles or by anybody else?

182

Mr. RADEK. Oh, yes. As I’ve said, it was anticipated, and, in fact,

it was taken over by the task force, which was then under the Public Integrity Section.

Senator SPECTER. And what happened?

Mr. RADEK. Well, for one, Maria Hsia has been convicted in that

investigation and is now awaiting sentencing. Other indictments

were returned, and the matter was pursued most vigorously, I assure you.

Senator SPECTER. And why was it taken over by the task force

instead of being handled by the U.S. Attorney’s Office in Los Angeles?

Mr. RADEK. Well, first of all, let me say that our office had a long

relationship with Mr. Mansfield, and we recognized that he was a

very good prosecutor, and it had absolutely nothing to do with his

abilities to carry it out. And, in fact, I’m sure that had he been left

in charge of the matter, it could have been and would have been

handled more quickly.

The problem is that the independent counsel statute required

that we do an examination without issuing subpoenas and without

issuing immunities. And so in each and every case where we had

an allegation that was potentially an independent counsel matter,

we would instruct the U.S. Attorney’s Office to stop their investigation, not issue subpoenas, not issue immunities, not engage in plea

bargaining, and that’s what I did here with Mr. Mansfield and Mr.

Ziperstein.

Senator SPECTER. Well, Mr. Radek, the task force wasn’t even in

existence until sometime substantially after November 1. You had

your meeting with Mr. Esposito November 20. The matter was in

abeyance for a period of time. What—— Mr. RADEK. Well, I’ve heard that—— Senator SPECTER. Excuse me. Let me ask you the question.

Mr. RADEK. I’m sorry. I thought you were finished, Mr. Chairman.

Senator SPECTER. What losses were there for the speed of this

prosecution? Mr. Mansfield has described what was necessary during the intervening weeks before the task force was set up?

Mr. RADEK. I’m sorry. What’s the question? What losses were

there?

Senator SPECTER. Right.

Mr. RADEK. Well——

Senator SPECTER. Was anybody working on this case from the

time you took it from Mr. Mansfield until the task force was set

up?

Mr. RADEK. Yes, sir. Somebody was working on it from the time

we took it over.

Senator SPECTER. But it wasn’t the task force.

Mr. RADEK. Well——

Senator SPECTER. You didn’t have a task force.

Mr. RADEK. It was the task force. It was what was to become the

task force. There was, as has been testified here, a group of attorneys who were doing these matters, who later came to be referred

to as a task force, headed by Ms. Ingersoll, who was in place at

that point. But you have to understand, what was done here first

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sel analysis to see whether there was specific and credible information against the Vice President. That took some time.

Senator SPECTER. Well, while that analysis was undertaken, was

this matter being investigated by the task force or by the people

that later became the task force? Because you didn’t have a task

force at that time.

Mr. RADEK. We couldn’t issue subpoenas or do other investigative

matters that were prohibited by the independent counsel statute.

But, clearly, this matter was under analysis, the same type of analysis that Mr. Mansfield was doing, with an eye towards investigating it, which investigative steps were begun in December.

Senator SPECTER. Well, Mr. Radek, do you agree with the thrust

of what Mr. Mansfield is quoted as saying, even be it hypothetical

or applicable to this case, that the consequence of a strategy of sitting back doing nothing means that you effectively make the matter go away, much harder to develop, speed is everything in a highly publicized case? Beyond that, isn’t it true that some 18 witnesses

moved out of the country?

Mr. RADEK. I don’t know that 18 witnesses moved out of the

country. I talked to the trial attorney who handled this matter and

was assured by him that there were no losses of evidence due to

witnesses leaving the country. So I’ve read that in places. I don’t

know where that comes from, Mr. Chairman.

Senator SPECTER. Well, how long did it take after November 1,

when this letter was written, and the Los Angeles U.S. Attorney’s

Office got out of the case, to have a full-scale investigation going

where you could use the grand jury subpoenas, search warrants, et

cetera?

Mr. RADEK. I’m prohibited from saying exactly what the investigative steps were by grand jury secrecy rules, but by the middle——

Senator SPECTER. All I have asked you for is how much time was

lost.

Mr. RADEK. By the middle of December, investigative steps were

taken.

Senator SPECTER. So 6 weeks was lost?

Mr. RADEK. Well, again, we wanted for Mr. Mansfield to provide

us whatever evidence we got, and I got a letter from him on the

November 13. Again, the analysis was being done on the independent counsel matter, so we couldn’t issue subpoenas, engage in

immunities, or whatnot. So some time was lost, absolutely, and it

was due to the independent counsel statute. You can say it’s 6

weeks, you can say it’s 4 weeks, you can say it’s 2 weeks. I don’t

know. You may want to ask Mr. Mansfield how quickly those subpoenas would have gotten out. I’m sure they would have taken a

little time, but, yes, some time was lost. There’s no doubt about it.

Senator SPECTER. He has a question for you, Mr. Mansfield. How

quickly would those subpoenas have gotten out if he left it with

you?

Mr. MANSFIELD. Well, I mean, you’re asking me to pinpoint the

time it would take to issue subpoenas on something I looked at 4

years ago. When you’ve figured out where you want to go in your

investigation and who you want to contact for information, it takes

a matter of minutes to issue a subpoena, and then the question is

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how long does it take to get it served. The Bureau in my experience—— Senator SPECTER. It doesn’t take you minutes if you’re on the Judiciary Committee.

Mr. MANSFIELD. I’ve been happy to comply with your subpoena.

I think we were about a few days, a week. It’s hard to say exactly. But we had begun—I had been working with an agent from

the Westwood office of the FBI, and we were putting together an

investigative outline. We identified various individuals and entities, and we were prepared to issue those subpoenas promptly.

Frankly, one factor that we were considering—and I believe I had

some discussion, perhaps with Craig Donsanto about this. But one

factor that we took into consideration was that we didn’t want to

issue subpoenas prior to the election to have any sort of unfair influence on the election, because, obviously, once you take the step

of issuing subpoenas, you make a grand jury investigation potentially public if the subpoenas party publicizes the information.

So we were about at the time—I don’t remember the date that

the election was in November that year, but on the 31, when we

were—when the case was transferred to Public Integrity, we were

probably a few days to a week away, I would guess.

Senator SPECTER. Senator Torricelli.

Senator TORRICELLI. Thank you, Mr. Chairman, very much.

Mr. Mansfield, could you refresh for me who Mr. Donsanto is?

Mr. MANSFIELD. Craig Donsanto is a career prosecutor who has

worked for many years in the Department of Justice and has a specialty and expertise in campaign finance law.

Senator TORRICELLI. Do you have high confidence in him?

Mr. MANSFIELD. I certainly defer to Mr. Donsanto on a lot of

questions and areas on campaign finance, although there were

times in cases that we worked together that we disagreed in terms

of the application of law to fact.

Senator TORRICELLI. A man of integrity?

Mr. MANSFIELD. Yes, I think so.

Senator TORRICELLI. Mr. Donsanto claims in a memorandum

dated November 1 that you claimed that subpoenas were, ‘‘prepared and ready to serve yesterday afternoon.’’ He actually cites

that several times in his memorandum. Did you tell him on November 1 or the days before that that you had subpoenas prepared

and ready to serve?

Mr. MANSFIELD. Absolutely not. I did not have any subpoenas

prepared, and they certainly weren’t ready to be served because

that would have been prior to the election.

What I did have was—again, what is the date of the memo he’s

referring to?

Senator TORRICELLI. November 1.

Mr. MANSFIELD. As of November 1, I would have had an outline

prepared, because I believe I had prepared an investigative outline

with the FBI agent. And in the outline, we had identified names

of entities and individuals who were going to be subpoenaed, as

well as I think there were references to the types of documents and

materials—— Senator TORRICELLI. This is Mr. Donsanto’s statement: ‘‘He’’—

meaning Mr. Mansfield—‘‘then told me that in his view these subVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00188 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
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poenas were needed to prevent records from being destroyed, and

he asked me whether he could serve them.’’ Mr. MANSFIELD. It’s true that the reason to issue subpoenas

promptly is to ensure that evidence would not be destroyed and

also, obviously, to gather the evidence.

Senator TORRICELLI. That I understand, Mr. Mansfield. We all

went to law school. But the point is this—a man that you have now

claimed is a man of integrity, a superior in the Department of Justice, a man in whom you have confidence, who has claimed in his

memorandum that you said that subpoenas were prepared and

ready to be delivered.

Mr. MANSFIELD. Well, if he is saying that in a memo, I’ve never

received the memo. He’s absolutely—— Senator TORRICELLI. Well, the memo is not to you—— Mr. MANSFIELD. Excuse me, Senator. I’m trying to respond to

your question. You’ve asked me a question—— Senator SPECTER. Senator Torricelli, let the witness respond.

Senator TORRICELLI. I will let him respond but—— Senator SPECTER. Senator Torricelli, let the witness respond.

Senator TORRICELLI. Mr. Chairman, is this time not allocated to

me for me to engage the witness?

Senator SPECTER. Yes, it is, and as chairman, it is my responsibility to see that there is fairness to the witness. And he is in the

process of responding.

Senator TORRICELLI. He can’t respond without my clarifying the

question, because he, I think, is not understanding the paper that

is before me. This is a memorandum that is to Mr. Radek, from Mr.

Donsanto to Mr. Radek, so it was not to you. You would not have

seen it.

Mr. MANSFIELD. Right. He could have copied me, but he chose

not to, apparently, with this letter.

Senator TORRICELLI. All right. Now, that is Mr. Donsanto’s statement on November 1.

Mr. MANSFIELD. Yes, I’d like to respond to the question that was

pending before that digression. It is absolutely incorrect that I told

Craig Donsanto I had subpoenas prepared. I did not have subpoenas prepared. I was working on an investigative outline with

the FBI agent to get to the point where we could issue subpoenas.

The reason we wanted to do that was to be ready so that shortly

after the election we could begin issuing the subpoenas so that we

could gather the evidence and avoid any possible document destruction.

Senator TORRICELLI. Well, indeed, you seem to have made an impression on him because not only did he claim that you said that

subpoenas were prepared and ready to be delivered, he on three instances in his memorandum comes to the conclusion that, though

you have claimed this, he does not believe you. He says, ‘‘My guess

is that there are no subpoenas and that this call was designed to

give him ammo to charge that the change in jurisdiction was designed to prejudice the investigation of whatever crimes may have

been present.’’ Rather prescient thought, don’t you think? Your reaction—— Mr. MANSFIELD. Am I entitled to that question, Senator?

Senator TORRICELLI. Please.

186

Mr. MANSFIELD. That’s absolutely untrue, as far as I’m concerned. There were no subpoenas prepared during the time that I

had this matter before it was removed from me. The reason there

were no subpoenas prepared is because we were not planning—and

I had discussed with Mr. Donsanto this issue. We were not planning to issue subpoenas prior to the election, for one very good reason: it would have been a bad thing to do. It would have politicized

an investigation just prior to a Presidential election, and that’s not

a good way to begin a criminal investigation.

So we had made the decision not to issue subpoenas until after

the election. I did not have subpoenas prepared before the election.

We weren’t ready to serve them before the election. In fact, what

we were doing, as I explained earlier, was trying to get our arms

around the facts. New facts were coming out in press accounts

every day. We wanted to make sure that we had prepared a strategic investigative plan that allowed us to go to Point A before

Point B in a logical way to maximize the evidence that we obtained. So we were not going to rush in some blunderbuss fashion

to issue subpoenas willy-nilly. We were trying to do it in a strategic

way, but also being aware of the need to move quickly. So that’s

what we were trying to do.

Senator TORRICELLI. Let me bring your attention to Mr.

Donsanto, who in a later recollection writes, on July 30, 1999, that

he pressed you on the question of the subpoenas. ‘‘He was very thin

on what these subpoenas sought on his theory that data they were

to obtain would be lost forever if the subpoenas were not served immediately. I remain unpersuaded that he had the subpoenas ready

to serve when he placed this November 1, 1996, call to me.’’

It should be very troubling to have a superior in the Justice Department who on two occasions expresses a lack of confidence in

your credibility and a call you are making on official business

about an investigation which you are conducting.

Mr. MANSFIELD. Well, if Mr. Donsanto had questions about

whether we were ready to issue subpoenas, Senator, they were

never communicated to me before the case was removed from me

or, significantly, after. And, frankly, I would have thought that either Mr. Donsanto or someone else in his section who took over the

case would have called at some point to discuss what our thinking

had been. I don’t know whether they consulted with the agent I

worked with. There were actually two agents. But I never received

a call from them about where I thought subpoenas ought to be

issued or as a follow-up to the investigative outline that I had prepared.

Senator TORRICELLI. But the call that——

Mr. Chairman, may I ask just one—interject one point?

Senator SPECTER. Will you yield, Senator Torricelli?

Senator TORRICELLI. Yes.

Senator SESSIONS. Have you seen these memos that Senator

Torricelli is referring to? Have you been given a copy of them?

Mr. MANSFIELD. This is apparently a memo that Mr. Donsanto

makes statements about the investigation, but he did not copy me

on it. I’d like an opportunity to review them if there are going to

be more questions about them.

187

Senator SESSIONS. Well, my question was: Have you had a

chance to read it and study it before you are being asked about it?

Mr. MANSFIELD. I may have seen this memo in the last few days.

The one that’s been placed before me I have not reviewed.

Senator SESSIONS. Well, just do the best you can. I just wanted——

Senator SPECTER. Do you have a copy of it now, Mr. Mansfield?

Mr. MANSFIELD. I have a copy of a memo with no date that says

‘‘Lee’’ on the top. Is that the memo to which we’re referring?

Senator TORRICELLI. That is, and that is from November 1, 1996.

Senator SPECTER. Senator Torricelli, is your copy—the memorandum is dated on page 2.

Senator TORRICELLI. Yes.

Senator SPECTER. At the bottom.

Senator TORRICELLI. It is.

Senator SPECTER. Single line on page 2.

Senator TORRICELLI. Did this telephone call, Mr. Mansfield, from

Mr. Donsanto, in fact, take place? ‘‘Mr. Mansfield called me at 1:50

p.m. I returned the call at 2:05 p.m. and spoke with him for 5 minutes.’’

Senator SPECTER. Let’s give Mr. Mansfield just a moment to read

the memorandum.

[Pause.]

Mr. MANSFIELD. I was never provided a copy of this memo at the

time that it was apparently drafted.

Senator TORRICELLI. Did the telephone conversation actually

take place, Mr. Mansfield?

Mr. MANSFIELD. I’m sure that I spoke with Mr. Donsanto after

the case was removed. I don’t have a particular recollection of the

date and time, but I know that—I would guess that I spoke with

him on the day the case was removed, which would have been October 31. This seems to be dated November 1, but I don’t have a

specific recollection. I think it was about 4 years ago.

Senator TORRICELLI. Well, Mr. Mansfield, this is obviously a

troubling situation to have someone in the Justice Department as

your superior who seems intimately involved and knowledgeable of

your work in several instances in two different memorandums over

the period of 3 years raise questions about your credibility on an

issue that is so important as your reporting to the Department of

Justice on whether or not you have indeed drafted subpoenas or

not. But, fortunately, the question is ultimately resolved by you on

November 13, when you send correspondence under your own name

and that of Norma Minella, who is the U.S. Attorney at that point

in your district. Is that correct?

Mr. MANSFIELD. The point being November of 1996?

Senator TORRICELLI. I am asking you to identify Norma Minella.

Mr. MANSFIELD. For November 1996?

Senator TORRICELLI. That is correct.

Mr. MANSFIELD. Yes.

Senator TORRICELLI. In that letter, you write, ‘‘No subpoenas

have been drafted or served, and no interviews have been conducted by this office or the FBI in Los Angeles in connection with

this matter.’’ Do you have a memory of that correspondence?

188

Mr. MANSFIELD. Let me take a look. Is this document in the

binder before me?

Senator TORRICELLI. No, it is not.

Mr. MANSFIELD. Can I see a copy of it, please?

Senator TORRICELLI. Of course, now I don’t have a copy of it, but

we will share.

Mr. MANSFIELD. Yes, this is an accurate letter that I sent to Mr.

Radek, and it responds to the letter that was formally sent to my

office about removing the case. It does not include what I recall

being attached, which was an outline of investigative steps, and as

I recall, the reason it’s dated November 13 is the letter that was

sent to my office went to Stephen Ziperstein, who was the chief assistant, not to me. And by the time I got it, apparently a number

of days had elapsed. But—— Senator TORRICELLI. In any case—— Mr. MANSFIELD. It is my letter, and there was attached to it an

outline of investigative steps.

Senator TORRICELLI. I understand that. Thank you. But in any

case, on November 13, it would then be accurate that indeed you

did confirm, as indeed it was Mr. Donsanto’s suspicion previously,

that, in fact, not only had no subpoenas been served, but none had

been drafted previously.

Mr. MANSFIELD. It was not only Mr. Donsanto’s suspicion, it was

absolutely true that no subpoenas had been drafted. I have never

maintained otherwise to Mr. Donsanto or anyone else. We were not

going to issue subpoenas before the Presidential election. We were

using our time to get our hands around the facts, which were unfolding every day. It’s 4 years later. People know a lot more

now——

Senator TORRICELLI. Of course.

Mr. MANSFIELD [continuing]. About all these events. At the time,

if I can complete my answer, new facts were coming out every day,

many new facts. And so we were assimilating that information and

working with the FEC In terms of getting information from public

records as well as advisory opinions about foreign national finance

rules, and putting together an investigative plan to issue subpoenas.

I believe Mr. Donsanto was aware of that. Why he is saying in

a memo that I would have prepared subpoenas ready to serve before a Presidential election, I do not know.

I also noticed in his memo he said that in his experience documents don’t get trashed. Well, I was a Federal prosecutor for 11

years, and I can tell you that it is certainly a risk in every case

involving documents and Federal violations that there is a significant risk of people destroying evidence or trashing it. So I would

disagree with Mr. Donsanto on that point as well.

Senator TORRICELLI. Mr. Mansfield, you were involved in the

prosecution of the Kim case in California?

Mr. MANSFIELD. Yes, sir.

Senator TORRICELLI. Are you aware that Mr. Donsanto has stated criticism of your handling of that case?

Mr. MANSFIELD. No, I’m not, because Mr. Donsanto approved

each prosecutive decision made in the case in terms of indictment

decisions, plea agreement decisions, and sentencing decisions. Each

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time a critical decision needed to be made in that case, I conferred

with Public Integrity and specifically with Mr. Donsanto. Each

time he concurred with the recommendation that we ultimately

pursued in that case.

Senator TORRICELLI. Would it surprise you to know that in his

memorandum of July 30, 1999, he wrote that his memory was that

you had been calling every other day complaining that your superiors were undermining your investigation and the strategy in the

case?

Mr. MANSFIELD. I don’t know what memo you’re referring to in

1999. I wasn’t even in the Department of Justice in 1999.

Senator TORRICELLI. This is Mr. Donsanto’s recollection of his experiences with you and the Kim case.

Mr. MANSFIELD. In 1999, you’re telling me that Mr. Donsanto

was writing a recollection of what had happened 3 years or 4 years

earlier?

Senator SPECTER. Excuse me. Let’s make a copy of that memorandum available to Mr. Mansfield.

Senator TORRICELLI. Mr. Mansfield, admittedly, Mr. Donsanto’s

memo was written several years later, but it was one year closer

in time than what you are expressing to the committee right now.

So, indeed, it cannot be claimed not to have any credibility whatsoever.

Senator SPECTER. Let’s just take a moment to give Mr. Mansfield

a chance to read the memo.

[Pause.]

Mr. MANSFIELD. I have never seen this before, and I don’t know

why in July 1999 Mr. Donsanto would be writing a memo unless

it had to do with the fact that congressional committees were investigating decisions by Public Integrity.

Senator TORRICELLI. Mr. Mansfield, you and I are the only ones

here who have the advantage of reading this. I don’t know if—do

you, Senator Sessions, have it?

Senator Sessions. I have a copy, yes.

Senator TORRICELLI. And Senator Specter does. For those others

who are listening, the reason is clear on this. He received a press

question about the handling of this matter, so he is reconstructing

contemporaneously at that time his recollection of events, just as

we are asking you to do so orally today.

Now, there are several things in this memorandum that bear on

this question, and in a moment I will explain why I am raising

them. But one of those is whether or not—indeed, Mr. Mansfield,

I regret to raise—you have a pattern of raising questions as to

whether you are being undermined by your superiors. It would appear to be, at least the inference from your testimony today, that

in this matter being removed to Mr. Radek’s office, this somehow

was not in the interest of justice and was undermining an investigation.

Mr. MANSFIELD. That’s absolutely incorrect, and that is not my

testimony, Senator. I’ve never——

Senator TORRICELLI. So you believe that——

Mr. MANSFIELD. Excuse me——

Senator SPECTER. Let him finish.

190

Mr. MANSFIELD. Excuse me, Senator. I’d like to respond to the

point you’ve just made. It is incorrect to say that I have information to believe the investigation was undermined. I do not. I was

not involved in the investigation that occurred when the case was

taken from me. I have no information—— Senator TORRICELLI. So would it be your testimony—— Senator SPECTER. Senator Torricelli, let the—— Mr. MANSFIELD [continuing]. What was done—— Senator TORRICELLI [continuing]. Witness finish his—— Senator Specter, I—— Senator SPECTER. Excuse me, Senator Torricelli. The witness has

been repeatedly interrupted, and I think unfairly.

Senator TORRICELLI. Senator Specter, if I cannot conduct an

interview of a witness as I as a member of this committee want to

do so in the limited time that I have to elicit the best answers I

believe are appropriate, not only will this examination not continue, but neither I nor a member of my party will remain in this

committee. This witness is here to testify. He is under oath. He has

important information about the integrity of Mr. Radek, a senior

official at the Justice Department, the Attorney General of the

United States, and the President of the United States. This is a

matter of great seriousness.

I have never and would never interfere with your examination of

a witness. I have not been rude to him. I have not been abusive

to him. I am not leading him. I am trying to focus his testimony

on documents in the limited time that I have available. And I

would like to proceed, with all due respect, to do so.

If at any point you find I am abusive to him, misleading him,

confusing him, by all means, interrupt my testimony because that

is not my intention. But if I am doing so politely and properly in

procedures of this committee, I would like to proceed. I only have

a few minutes left, and I have three more matters I would like to

get his testimony on.

Now, it appears from Mr. Mansfield’s testimony I may have misunderstood him. He has now said that he does not question the integrity of the judgment, that indeed if I am now understanding him

properly, it may not have been improper in his opinion for this

matter to be transferred from Los Angeles to the Justice Department. If that is his testimony, it is welcome. If I have misunderstood him for that, I apologize. But, indeed, it would be helpful to

this committee.

So if I could restate the question, is it——

Mr. MANSFIELD. Can I——

Senator TORRICELLI. I am restating the question for you. Is it,

therefore, your testimony that given what the committee now

knows about procedures in the independent counsel law, that their

judgment about not interfering with the electoral process, the

issuance of subpoenas, the resources available in Washington,

whatever other reasons Mr. Radek may cite, that indeed in your

judgment it was not improper and indeed was in the public interest

to transfer this matter to Mr. Radek’s office?

Senator SPECTER. Before you answer, I want to respond to Senator Torricelli briefly. You may have as much time as you like with

Mr. Mansfield. No one is saying you have been abusive or in any

191

way discourteous. I have been a party to many, many proceedings

and hearings and in court, and a witness is always permitted to

finish an answer. It may be that on some occasions a witness may

be interrupted if he has finished a thought and if—there is a wide

latitude which the questioner has, especially a Senator questioner.

And as far as I am concerned, you have very, very broad latitude.

But a witness also has a right at a point to finish an answer. That

is my only point.

Senator TORRICELLI. That right will be respected by me, Senator

Specter, and indeed I will not prohibit any answers from coming.

But I simply want to focus the question, because—let’s clear up

this matter. Is it your testimony, then—— Mr. MANSFIELD. May I respond?

Senator TORRICELLI [continuing]. That that was proper?

Mr. MANSFIELD. Well, that is a very large question, and let me

do my best to answer it based on the limited knowledge I have, and

so there is no misunderstanding about my testimony at all, Senator.

I do not have information that can be critical of the way the Public Integrity Section handled the investigation after it was taken

from me because I don’t know what they did or did not do. I was

not involved in that. So I have never been critical of what they

have done or not done in terms of investigation, and I have never

had a basis to opine about their position on Independent Counsel

Act review. I was not involved in that. I did not have any information. The matter was simply taken off my desk effective October 31.

That is my testimony. It is as narrow as that.

I don’t know if that responds to your question.

Senator TORRICELLI. Therefore, you do not have anything to offer

this committee or any reasons to believe that this matter was not

pursued aggressively or with integrity or that there was any reason

to remove this matter from the Los Angeles office other than Mr.

Radek’s judgment of his interpretation of the independent counsel

law, his resources, experience with the matter, and that he thought

justice was better served by this matter being handled in Washington?

Mr. MANSFIELD. Well, I don’t have any reason to doubt Mr.

Radek’s good-faith decisions about the case. I did what I thought

was the right thing to do during the short, approximate 2-week period I had the matter. I had worked as a prosecutor by that time

for 9 years. I had made a lot of complex cases as a prosecutor. I

saw the need to put together an investigative plan and hit the

ground running after election with a full-scale investigation to preserve evidence and move forward on certain targeted subjects

based on our analysis of what was coming out at that point. That’s

what I did, and I think, frankly, we did the right thing.

Now, if the case was taken by Public Integrity and the Department of Justice and there are questions about how it was handled

once taken by them, I’m simply not in a position to answer those

questions because I don’t know what was done or not done.

Senator TORRICELLI. That is very helpful. Now let me just for a

moment put the committee in Mr. Radek’s position. Mr. Radek sees

these allegations about matters in the midst of a Presidential campaign in 1996. It is Justice Department procedure, and indeed I beVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00195 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
192

lieve in the best interest of justice in the middle of a Presidential

campaign, not to conduct investigations or have the risk of things

becoming public that would interfere with the electoral process.

He then receives reports on November 1 from a trusted subordinate that makes several claims: one, stating his own belief that, in

fact, there were not subpoenas ready; therefore, there was not an

interference with anything that was ongoing; second, this subordinate apparently was of the belief that in the handling of the Kim

case there was a failure of focus, that is, the case which you handled had dealt with subordinate and side issues which had detracted from the main matter, meaning Congressman Kim.

Now, this may or may not be an accurate portrayal of the situation, but I am trying to re-create the situation in which Mr. Radek

found himself.

Mr. MANSFIELD. Well, let me—I have never—I was not a party

to this memo that was created last year by Mr. Donsanto, but if

you’d like to talk about the Kim case, I can fill you in on what went

on in that case because it was actually a very, from my standpoint,

interesting and ultimately successful investigation and prosecution.

I believe both Mr. Radek and Mr. Donsanto would agree with that.

It was a long-haul investigation. It is incredibly difficult and

time-consuming to make campaign finance prosecutions, and—— Senator TORRICELLI. It is not my intention to criticize your handling of the case.

Mr. MANSFIELD. No, but you raised questions about the investigation and whether there was a focus, and I wanted to respond

to that statement about the focus of the investigation.

There were times in the course of that investigation that, frankly, there was an interest in closing it down, in shutting it down,

because it did take a lot of time to complete. And, frankly, I did

disagree. At times I think Mr. Donsanto thought we should wrap

it up. I think at times there may have been people in my office who

thought maybe we should wrap it up. The agent and I who had

been working with it were, frankly, dogged. We wanted to get to

the bottom of it. We continued to pursue it. And as we got to the

fifth foreign company, Hitai, the fifth one that we obtained a conviction, it was at that point that we actually had a very significant

amount of cooperation in the deal that broke the case. And had we

shut it down—just so I can finish because you raised this, had we

shut it down earlier, we would not have gotten that cooperation

from Hitai, the fifth corporation we convicted. That cooperation led

to the conviction of the campaign treasurer, the campaign committee, and ultimately the Congressman.

So I think at the end of the day, Mr. Donsanto and I know Mr.

Radek would agree, it was a successful prosecution. It was ultimately the largest campaign fraud prosecution ever brought

against a Member of Congress.

Senator TORRICELLI. Indeed, Mr. Mansfield, it may have all been

done properly, and it may be a model of prosecution. I am trying

to re-create Mr. Radek’s situation in November 1996. He was faced

with a judgment on what is potentially the most important campaign finance question in history dealing with the President of the

United States. He was dealing with Justice Department procedures

not to proceed with a case in the midst of an election because it

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could influence the electoral process. He was dealing with a subordinate indicating that he had a conversation with you right before

the election in which the subordinate expressed doubts whether

you were dealing with him frankly and whether or not, in fact, you

had prepared subpoenas. It now appears by your own correspondence that subordinate was correct, you had not done so.

He is dealing with criticism from a subordinate who is claiming

in the only other major campaign finance case that you had handled that there was a lack of focus and criticism of the case, criticism which may or may not be well founded but, nevertheless, was

making its way to Mr. Radek. And then Mr. Radek was dealing

with the independent counsel law, which does not envision subpoenas or offering immunity but had specific procedures which

were better handled in Washington.

He then, I assume, was making the judgment he had the expertise and the proper resources to handle this matter correctly and

bring it to its proper conclusion. And you—— Mr. MANSFIELD. I don’t quarrel—— Senator TORRICELLI [continuing]. Are not quarreling with—— Mr. MANSFIELD. I don’t quarrel with the idea that Public Integrity believed it should handle the case or that it wanted to take the

case away from the U.S. Attorney’s Office.

Senator TORRICELLI. I recognize—— Mr. MANSFIELD. I don’t quarrel with it because it doesn’t matter

who the person is working a case. It really doesn’t. And it’s not

about the individual. It’s about doing things right. And if the case

is handled properly, it doesn’t matter who’s handling it, whether

it’s someone out of D.C. or in Los Angeles.

I’m very proud of the office I was with for 11 years. I know the

caliber of work product and the caliber of AUSA in that office, and

I know that we’ve always done a great job on our cases. So I am

always confident that my former office can handle a case well.

But it’s not to say that it couldn’t be handled by the Public Integrity Section or other U.S. Attorney’s Offices around the country. I

don’t quarrel with that at all, and if there is a question about

whether things were done properly once the case was assumed by

Public Integrity, they’re really the ones in the position to respond

to that, not me. I’ve never offered an opinion of it, and I don’t quarrel with the fact that the case needed to be handled in some way

by some prosecutor at all.

Senator TORRICELLI. Very good. I think that testimony is helpful.

I think it puts perspective on Mr. Radek’s judgment, makes clear

that you are not questioning the judgment in doing so. I think it

lays the facts out properly, and I think your testimony is very helpful, and I thank you.

Senator SPECTER. Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM

THE STATE OF ALABAMA

Senator SESSIONS. Mr. Chairman, I think it is important for us

to refocus a bit, and I will make a few opening comments, and I

think I can clarify some of this confusion that is going on here.

I know Mr. Donsanto well. I don’t know how many cases he has

tried. I know how many Mr. Mansfield apparently has tried. And

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as to the judgment of a case, I would tend to favor the discretion

and judgment of the one who is living with it on the field, who has

got to stand in court before a judge and defend it.

And I would just comment on the memos of Mr. Donsanto. They

were a little bit of a cover-your-fanny mentality about them, pretty

dramatic, I think.

In 1996, people were raising money for the campaign. This was

late in the campaign. The evidence—a newspaper broke the story

that there had been a fundraiser at the Buddhist Temple, the Vice

President had been there, that foreign money had been contributed.

It is illegal to give foreign money to a campaign. That was big

news. It actually became a significant issue in the latter days of

the campaign. Everybody in this country had some knowledge of it

who paid any attention to the issues, and it was discussed whether

or not one of the sources was the People’s Republic of China and

whether or not the People’s Republic of China was participating in

a determined effort to influence this campaign.

The Democratic National Committee, which handles much of the

fundraising for the Clinton-Gore campaign, returned over $2 million in illegally raised money from many foreign sources, including

the People’s Republic of China.

An examination of the fundraising for that election, most of

which, of course, was legitimate, must include an examination of

the 1996 Buddhist Temple event which Vice President Gore attended. Who were the people surrounding him at that event? Were

the people involved in this event involved in illegal foreign-source

contributions? What was the role of the Vice President’s staff and

the DNC staff in raising these monies? What was the Vice President’s role regarding the event?

The questions arising from the funding of the 1996 Presidential

campaign in general and the Buddhist Temple in particular are so

important to the integrity of our process that they resulted in a series of investigations. And so Mr. Mansfield testified how he started his investigation.

And so I would just say this: There are two issues involved in

this campaign of real significance. The first is the legal question,

which we have been discussing for some time, of whether the Attorney General should have appointed an independent counsel to investigate Vice President Gore, who would have been the relevant

covered person. Second, what was the weight of the proof of the

facts that show that a violation may have occurred and whether or

not that required an independent counsel?

So that is the matter we are dealing with. It is not an itty-bitty

one. It was a big deal. I think it is appropriate for us to analyze

the decisionmaking process of the Department of Justice.

Now, let me ask you, Mr. Mansfield, a few things here. From

what you have studied in the newspaper, you were concerned about

it. You had a number of years of expertise in white-collar fraud and

public corruption cases. Is that correct?

Mr. MANSFIELD. Yes, sir.

Senator SESSIONS. And you thought something should be done.

Mr. MANSFIELD. Yes, sir.

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Senator SESSIONS. I believe in your book there, your binder,

there is a document. Is there a document there that you prepared?

My staff I think handed it to you.

Mr. MANSFIELD. Oh, yes.

Senator SESSIONS. Yes. Now, all this talk about you issuing a

subpoena and Mr. Donsanto saying you issued a subpoena and you

looked right at us befuddled and say you never issued one, sometimes a telephone conversation can get a little bit confused, and it

is easy to happen. People hear different things.

Is Mr. Donsanto kind of excitable?

Mr. MANSFIELD. Well, I’ll leave that to those who have met him

and worked with him to answer—— Senator SESSIONS. Well, you met with him and worked with him.

Does he get excited sometimes?

Mr. MANSFIELD. Yes, I think it might be fair to say that he’s excitable.

Senator SESSIONS. All right. Well, at any rate, he is a good person. I have known him for many years. But I guess what I would

say to you is: It wasn’t untrue that you had begun to think about

subpoenas and had actually done some paperwork as of October 30,

the day before this phone call reported, to begin commencing drafting subpoenas. Is that correct?

Mr. MANSFIELD. Absolutely right. I mean, the point here is that

there was a need to begin an investigation, a need to do it properly,

and a need to do it in a strategic, organized way. We were on the

path to do that.

The question about whether someone had subpoenas on a particular day versus another day is really a red herring. The question

is——

Senator SESSIONS. I can’t understand why that—— Mr. MANSFIELD [continuing]. Was there a proper investigation

proceeding to gather and preserve evidence. We were on that track

for the 2 weeks that we had it, and if subpoenas were issued or

prepared by Mr. Donsanto on the day that he took the case over

or someone else, that is for Mr. Donsanto and others to answer. I

no longer had the case. It was taken from me. But during the time

period that my office had the case, I believe we proceeded expeditiously and properly in trying to move forward.

Senator SESSIONS. Well, and you even as of that date, October

30, had prepared a list of some potential people to be subpoenaed

and some of the documents to be requested, had you not?

Mr. MANSFIELD. This was a partial list, and it’s something that

prosecutors do, and I know that Senator Specter, who has me beat

by one year as a prosecutor, I’m sure did this in his cases as well.

You begin a working outline.

Senator SESSIONS. Right. That is all I am saying.

Mr. MANSFIELD. And it changes over time.

Senator SESSIONS. You had begun to think about the question of

subpoenas. In your professional judgment and experience, it was

important to subpoena the records, either you or somebody else, before they got destroyed——

Mr. MANSFIELD. Absolutely.

Senator SESSIONS [continuing]. Removed or otherwise been disposed of.

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Mr. MANSFIELD. Yes.

Senator SESSIONS. And you were aware that many of the people

in the Buddhist Temple were not American citizens and had the

potential to flee the country or leave the country.

Mr. MANSFIELD. There was that risk.

Senator SESSIONS. And if you don’t interview people like that before they go back to Red China, you are not going to ever be able

to interview them. Isn’t that correct?

Mr. MANSFIELD. Well, once they leave the country, it is exceedingly difficult to ever, you know, make the case with those witnesses. That’s true.

Senator SESSIONS. Wasn’t it prudent and sensible to you to think

that the matter, whether there was any merit to the complaints or

not, the investigation needed to go on and get started promptly?

Mr. MANSFIELD. Yes. I did agree, though, with the proposition

that we ought to not issue the subpoenas until after the election

because I thought that was the responsible way to proceed.

Senator SESSIONS. Well, all right. That is a judgment call that

I would respect. You could take another position, too. Why wait

just because the guy is running for President of the United States?

Why does he get a break that an average guy wouldn’t? But I can

understand your——

Mr. MANSFIELD. The decision wouldn’t be made to give a person

a break but, rather, a weighing of the risks of what effect the

issuance of the subpoena might have.

Senator SESSIONS. ‘‘Give him a break’’ was my term. But there

was no law that told you you should wait until after the election.

It was a courtesy, a respect for the system that you decided outweighed the other choice.

Mr. MANSFIELD. Yes, it was a balance, and I think it’s the correct

balance. You’re right that, you know, these are judgment calls. I

think it was the correct balance because you have to go back in

time, I mean, this was all unfolding on a daily basis and——

Senator SESSIONS. Well, I am not criticizing you for that.

Mr. MANSFIELD. And what we were—we were trying to piece it

together, and we had a couple of weeks. And, frankly, we needed

a couple of weeks to make sense of it all and put together an outline for subpoenas and interviews. And that’s really what we were

doing.

Senator SESSIONS. In this memo, I see in the third or fourth

paragraph, Mr. Donsanto says, you told me—Donsanto—‘‘that in

his view’’—I will just read it—‘‘he’’—talking about Mansfield—

‘‘then told me that in his view these subpoenas were needed to prevent records from being destroyed.’’ Is that a concern of yours that

you may have expressed with Mr. Donsanto during that conversation?

Mr. MANSFIELD. Yes.

Senator SESSIONS. Later on, ‘‘I asked him whether he had any

specific exigent circumstances suggesting to the contrary’’—that is,

destruction—‘‘and he did not, although he restated his view that

the stuff would be trashed if his subpoenas were not served.’’ Does

that sound like something you may have told him in that conversation?

197

Mr. MANSFIELD. It does in the sense that—I mean, I’m not sure

those would have been my words, but, you know, I did have concern about document destructions, and I did have a concern about

moving at an expeditious rate to secure the documents. And there’s

a concern about loss of documents. I mean, I frankly had cases

early as a prosecutor where massive amounts of documentary material had been destroyed. In fact, it became a count in the indictment, an obstruction of justice count.

So it does happen. I disagree strongly with what’s written in this

memo that document destruction is not something to be concerned

about in campaign finance fraud cases. I think it’s just completely

inaccurate, and I think the job of a prosecutor is to vigorously enforce the law and to conduct thorough, informed investigations, and

you need simply to secure the evidence. You can’t, you know, make

decisions not to secure the evidence.

Senator SESSIONS. Well, let me ask another, a different question.

This Congressman Kim, he was a Republican Congressman, was he

not?

Mr. MANSFIELD. Yes, sir.

Senator SESSIONS. And you pursued that investigation to its end,

and he was convicted.

Mr. MANSFIELD. Yes, sir.

Senator SESSIONS. Are you suggesting that at points during the

process that Mr. Donsanto and others didn’t feel like the case was

going to succeed and wanted to pull back? Is that what you were

suggesting?

Mr. MANSFIELD. In the Kim case?

Senator SESSIONS. Yes.

Mr. MANSFIELD. Well, I’m trying to make sense of Mr. Donsanto’s

statements in these memos about the case not being focused and

there being some disagreement with superiors.

I do recall—and I don’t criticize Mr. Donsanto for this. I mean,

you know, being a prosecutor is a very demanding job, and you

have to make judgments.

Senator SESSIONS. He has the advantage over——

Mr. MANSFIELD. And there are times—there are times when it

makes sense to simply decline a case or stop proceeding on a case,

on an investigation. And so it’s a healthy debate and it’s an important debate, and it’s one that, you know, prosecutors and supervisors need to have on a regular basis.

In the Kim case, I can tell you—and I had to be the ‘‘I told you

so’’ mode, but there were people who wanted to shut it down at

various points in time. I don’t say that because they had some bad

intent, but it was their sense that it was taking longer than they

thought it should take. And I can tell you, these cases are extraordinarily difficult to make. They’re hard to make, they take a lot of

time, and there’s just an immense amount of political and other

loyalties involved that you don’t see in other cases. And it makes

it very difficult to flip witnesses and build cases, so it does take

time.

In our experience in the Kim investigation, what we found is

that by being dogged and moving forward—and in this case it was

on the fifth corporation that we convicted—we finally got the coVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00201 Fmt 6601 Sfmt 6602 E:\HR\OC\A735.XXX pfrm03 PsN: A735
198

operation we needed and the documents we needed to close out the

case.

Senator SESSIONS. Well, we need to move on, but I would just

suggest that you had to take some of these contributors which he

criticized you for in that memorandum and prosecute those, and it

took the fifth one before they confessed and admitted the scheme

and you were able to really make the case. And I think that shows

sometimes that the person on the front line who’s trying the case

has a better perspective than a line attorney, an attorney back in

Washington.

I also would note, Mr. Chairman, the tenor of this memo shows

why it is hard for even career attorneys—Mr. Mansfield had been

there a number of years—to ever speak out. They are sort of victims of their superiors. This is what Craig Donsanto wrote: ‘‘I responded to him and ended my conversation by telling Mansfield

that he and I are both soldiers in this matter, that there is nothing

personal this, he should not consider this personal, that we needed

to follow whatever the marching instructions are, and do so without discussing the matter outside the circle of Federal law enforcement, that as one particularly sensitive to such issues, I saw nothing sinister in the reassignment of the particular matter to Public

Integrity,’’ et cetera, et cetera. There are several other notes there.

So there is a lot of discipline within the Department, and people,

professionals, don’t like to criticize their supervisors, and they are

overruled, they take it and go about their business day after day

and don’t get involved in that.

Mr. MANSFIELD. I appreciate that, Senator, and could I just add

something to that?

Senator SESSIONS. Please.

Mr. MANSFIELD. This wasn’t a personal decision from my standpoint. I mean, I had enough work on my plate at the time. I had

the Kim investigation at the time. There was an investigation of

a Federal judge, and there were other corruption investigations I

was involved in.

This wasn’t personal to me. I didn’t need another case. There

were other prosecutors who could have handled this, either in my

office or in other parts of the Department of Justice. So I don’t

have any quarrel with the notion that the case is going to be assigned to someone else to work.

If there are questions about what was done during my handling

of it, I’m happy to answer all those. But the questions about what

was done after it was taken from me need to be answered by the

people who had the case then.

Senator SESSIONS. Well, Mr. Radek—well, let me just say this:

I do believe there is evidence at the time that you possessed, that

all of you possessed, that the Vice President exercised bad judgment and was involved with a cast of characters we now know are

criminals. Many of them have been convicted. I have got a poster

here I would just like to show. This is what occurred at that Buddhist Temple. This is a photograph of the group that was there.

It shows a picture of the Vice President. To his far right is Maria

Hsia, his long-time friend and fundraiser of more than 10 years,

who was subsequently convicted on five felony counts. Her conviction stemmed directly from the Buddhist Temple fundraiser.

199

To Vice President Gore’s immediate left is Ted Sioeng, who fled

the country as soon as he was implicated in the fundraising scandals, as Mr. Mansfield suggested might happen, and who we believe is still under criminal investigation.

Behind and to Vice President Gore’s right is John Huang, a vice

chairman of the Democratic National Committee staff who helped

the Vice President plan the temple event. Mr. Huang also subsequently pleaded guilty to a felony charge. He raised over $1 million

in illegal foreign-source campaign contributions.

Finally, behind the Vice President and to his far right is Man Ho

Shih, a Buddhist nun, who admitted to another committee of the

Senate that she and others set about destroying documents at the

fundraiser, the temple fundraiser. Those documents were destroyed

because they ‘‘did not want to embarrass the Vice President.’’ She

also fled the country before she was scheduled to testify in a court

of law.

There was a video of that event showing what happened. That

video has disappeared.

Moreover, the Senate Governmental Affairs Committee has stated that Maria Hsia is ‘‘an agent of the Chinese Government, that

she acted knowingly in support of it, and that she attempted to

conceal her relationship with the Chinese Government.’’ The committee concluded that Ted Sioeng ‘‘worked and perhaps still works

on behalf of the Chinese Government.’’ These conclusions have

never been satisfactorily refuted and must be thoroughly investigated.

I believe that the Vice President owes an explanation to the

American people about this. More importantly, for this hearing, it

is important for us to know why the planned investigation by the

Los Angeles U.S. Attorney’s Office was stopped, but, more importantly, why no investigation occurred after that investigation was

stopped. That was what was really wrong, in my opinion. So I hope

our hearings will focus on that.

Mr. Radek, to follow up on what Senator Specter asked you,

again, as of approximately a month after you wrote to Mr. Mansfield in the U.S. Attorney’s Office and took over that case, you recommended to the Attorney General that there be no independent

counsel. You took over the case under the theory that you were investigating whether or not an independent counsel appointment

should be made. And my question to you is: Did you issue any subpoenas for any documents? Did you interview any witnesses at the

Buddhist Temple who had been there before you made that recommendation? And if you did any other investigation, please share

it with us.

Mr. RADEK. Senator, first let me point out that all those people

are convicted felons because of the work of the campaign finance

task force. All right? So let’s give a little credit where credit’s due.

Now, let’s talk about what we did. There was an immediate investigation done, but first there was an independent counsel analysis done. And what was done there was to look at the allegations.

There were no interviews conducted. There were no subpoenas

issued. The independent counsel statute doesn’t let us do it.

And so what happened was we analyzed a letter from Congress,

five Members of Congress, the material that Mr. Mansfield had

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sent, which wasn’t just that outline, which sort of laid out and gave

some leads, but also the press accounts that he had accumulated

that he sent, the press accounts that we had accumulated. We

looked at all that information to see if there was an allegation

against the Vice President. Is there something here that says he

committed a crime? And does that amount to specific and credible

information? The answer was no, Senator, and——

Senator SESSIONS. OK. Well, let me ask you this——

Mr. RADEK. And then we started an investigation of the Hsi Lai

Temple matter, and that was as vigorous an investigation as you

could ever want to see.

Senator SESSIONS. You said this special prosecutor act doesn’t

allow you to investigate—interview witnesses?

Mr. RADEK. No. I said it didn’t allow us to issue subpoenas. I was

referring to the second problem——

Senator SESSIONS. But the U.S. Attorney’s Office could have, and

you stopped them.

Mr. RADEK. No, sir. Once we started an independent counsel

analysis, that had to be stopped, and it was done on many other

occasions with other U.S. Attorney’s Offices on other independent

counsel matters. That’s what the statute required.

Senator SESSIONS. But you could have interviewed witnesses?

Mr. RADEK. Oh, yes, sir, we could have.

Senator SESSIONS. And none were interviewed?

Mr. RADEK. None were interviewed during the one month that

we were doing the analysis on the independent counsel statute.

Senator SESSIONS. No investigation was done other than from

your own letter to the Attorney General or the Attorney General’s

declination of a special prosecutor. All you did was review the letter from Congress and the newspaper reports. You don’t say you

considered any other evidence before you suggested that they—you

denied an independent counsel?

Mr. RADEK. I’m glad you used the term ‘‘evidence.’’ We considered all the information that was before us. We considered everything we had to see whether any of that amounted to an allegation

that the President—Vice President had committed a crime. And we

came up no.

Senator SESSIONS. Well, do you deny that witnesses fled the

country and that evidence was destroyed before your investigation

got untracked?

Mr. RADEK. I am aware that the two clerics, Man Ho and Yi Chu,

have testified before a congressional committee that they were destroying documents shortly after the matter hit the newspaper and

also in November.

Senator SESSIONS. Do you know how many people that were at

that temple fundraiser have fled the country and are now unable

to be interviewed?

Mr. RADEK. I don’t know how many witnesses have fled the country and weren’t able to be interviewed. I asked the trial attorney

in charge of this matter, and he told me that he was confident that

they didn’t lose any evidence due to people fleeing the country.

Now, the two clerics that you talked about that fled, that were

unavailable for trial and under indictment for having not shown up

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for trial, their evidence was obtained. We know what they said.

They’re the ones who told us that they were destroying documents.

Senator SESSIONS. But they have now fled and are not available

for testimony—— Mr. RADEK. That’s right, but Ms. Hsia was—— Senator SESSIONS [continuing]. In any trial or prosecution

that——

Mr. RADEK. Ms. Hsia was convicted anyway.

Senator SESSIONS. Well, there are others that might be charged

in this case. Isn’t that correct?

Mr. RADEK. That’s correct, and that’s why the investigation is

proceeding.

Senator SESSIONS. Well, do you deny that you received a letter

from five Members of Congress, you stopped the prosecutor who

was ready to do investigations, you conducted no independent investigation yourself, and then you advised the Attorney General

and she declined a special prosecutor?

Mr. RADEK. She declined to appoint a special prosecutor based

upon the letter from Congress. At the time she made that decision,

we gave her all the information we had, which was not investigative information but was press reports and the other information

that Mr. Mansfield provided.

Senator SESSIONS. Well, it would be my view that before you advise the Attorney General on a matter of this import, just as a person who has been involved in prosecutions, I would think you

would interview some witnesses. I think you would go and talk to

the people at the temple and ask them what happened. I think you

might even have interviewed the Vice President. It seems to me almost beyond belief that you would not do that, and as a result of

that, evidence was lost, in my view.

Mr. RADEK. Well, I’m sorry, I question that as a result of that

the evidence was lost. And if it was, it’s unfortunate. But that was

the requirement of the independent counsel statute.

Senator, what you’re saying is you wanted the decision made

after an investigation, and that’s exactly what we tried to do. We

started the investigation. We conducted it, and had any evidence

come up that was specific and credible against a covered person,

we would have triggered the independent counsel statute, as indeed the Attorney General did on several occasions.

Senator SESSIONS. What about the first time the Vice President

was interviewed about this matter, about the temple? How long

was it before he was even interviewed about it?

Mr. RADEK. I don’t know. As I testified previously, the one interview I conducted, he was not asked about this.

Senator SESSIONS. Well, it was 4 years, according to our records,

and that does not suggest to me, Mr. Chairman, that we are handling this matter wisely. I do not dispute that Mr. Radek may have

had the authority and maybe even the right—if not the right, the

ability to take over the case and pursue it. Maybe that was even

the right thing to do for him. But if he were going to do that, he

should have done the things an investigation required. Those were

not done. The Attorney General herself was not given the kind of

evidence that she needed to make a good decision, and I believe a

bad decision was made. And it has hurt the Department of Justice.

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Whether or not there was any criminal wrongdoing by any covered

person, I believe this decision should have been made outside the

Department.

Senator SPECTER. Thank you, Senator Sessions.

Mr. Radek, moving on to some other subject matters——

Mr. RADEK. Yes, Mr. Chairman.

Senator SPECTER. And, Mr. Mansfield, that concludes your portion, so we thank you, and you are free to go. Thank you very

much.

Mr. MANSFIELD. Thank you, Senator.

Mr. RADEK. Mr. Chairman, may I get a glass for water?

Senator SPECTER. Of course, yes. Would you like a break, Mr.

Radek?

Mr. RADEK. I’m fine. I just need a drink.

Senator SPECTER. OK. Back to the inquiries made as to Mr.

Terry McAuliffe, on March 13, 1996, you submitted a memorandum

to Mr. Keating, which the essential part is, ‘‘I have concluded for

the reasons set forth below that McAuliffe is not a covered person.’’

Subsequent to that memorandum, on September 30, 1997, there

was an issue raised as to Mr. McAuliffe being the subject of a Federal criminal investigation in the Southern District of New York.

The memorandum says this: ‘‘Because McAuliffe is a subject of a

Federal criminal investigation of the Southern District of New

York, we advise the U.S. Attorney’s Office for SDNY’’—meaning

Southern District of New York—‘‘that it was required to hold any

investigation that encompassed activities by McAuliffe in abeyance

pending results of the inquiry into McAuliffe’s status under the

law.’’

Now, the issue or the question has been raised as to your removing the New York U.S. Attorney’s Office from the case in order to

stymie that investigation. What reason was there to call off the

Southern District of New York U.S. Attorney when you had already

made a determination that Mr. McAuliffe was not a covered person?

Mr. RADEK. Well, Mr. Chairman, if I may go into the statute——

Senator SPECTER. By all means.

Mr. RADEK [continuing]. This was one of the most troubling parts

of the independent counsel statute. It defined campaign officials in

a sort of amorphous way, and I think the congressional intent was

to keep campaigns from avoiding the strictures of the Act by redesignating in terms of title so the Act wouldn’t name anybody in particular.

It called for a person to be covered if they were a national officer

or an officer of the campaign exercising national authority. I can’t

find the language right here, but it’s something close to that effect.

Senator SPECTER. Mr. Radek, before you go too deeply into that—

and I will give you a full chance to do that. By the way, it is now

5:38 p.m., and we have been notified that there are going to be two

votes at 6:10 p.m., and we have a fair amount of ground to cover.

But I will hear you out on the point you are making, but let me

just ask you a very narrowly focused question. Whatever the statute defines a covered person to be, you had already determined

that Mr. McAuliffe was not a covered person.

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Mr. RADEK. That’s because he was holding a different position in

the first memo than the second memo, and the coverage is dictated

by the position.

Senator SPECTER. What position was he holding at the time of

the first memo?

Mr. RADEK. If you’ll let me read the memo so I know——

Senator SPECTER. I will read it along with you, whether——

Mr. RADEK. The first one was the 1992 election campaign.

Senator SPECTER. Well, this is March 13, 1996.

Mr. RADEK. No, but his position was in the 1992 election campaign.

Senator SPECTER. Well, you define Mr. Terence McAuliffe as ‘‘the

Finance Chair of the Clinton-Gore Re-election Campaign,’’ and in

your letter of September 30, 1997, you define his——

Mr. RADEK. Honorary Campaign Co-Chair.

Senator SPECTER. Wait just a minute. As the Finance Chair and

then Honorary Campaign Co-Chair of the Clinton-Gore Re-election

Campaign.

Mr. RADEK. Right. And it was the change in status to that second

one that caused the re-evaluation. And, Mr. Chairman, may I say,

I didn’t take this case away from New York. I temporarily halted

their investigation while this analysis was done.

Senator SPECTER. How long did you halt it?

Mr. RADEK. Not very long. I can’t remember but it was a matter

of weeks, I think.

Senator SPECTER. So you are saying that the status as Honorary

Campaign Co-Chair led you to question whether that would make

him a covered person. Both times he was the Finance Chair, but

the second time he was also an Honorary Campaign Co-Chair. And

you are saying that the title of Honorary Campaign Co-Chair required an analysis as to whether he was a covered person and to

remove that matter from the New York U.S. Attorney’s Office even

for some period of time.

Mr. RADEK. I still argue with your term ‘‘remove,’’ Senator. I

asked them to stop—I asked them to stop while I made that analysis. And, yes, any kind of national title like that would cause us

concern and cause us to do a quick analysis.

Senator SPECTER. How quick was the analysis?

Mr. RADEK. Again, I don’t remember, but I’m quite confident it

was very brief.

Senator SPECTER. Mr. Radek, turning to the inquiry as to Charlie

Trie, a subpoena was issued by the Governmental Affairs Committee in March of 1997, and there was a trash cover—and I am

trying to boil this down to a focused essence to move as quickly as

we can. Testimony by FBI Agent Smith before the Governmental

Affairs Committee was this: ‘‘As we continued the investigation, a

trash cover of Mapill’s residence revealed documents in the case,

checks with Asian-sounding names all in the amount of $1,000 payable to the ‘Presidential Legal Expense Trust’ were being destroyed. And I was told that departmental attorney Laura Ingersoll

stated this matter would not be pursued. And, further, she was of

no obligation to advise the Senate Ms. Magdali was routinely destroying documents covered by a Senate subpoena.’’

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As a result of this testimony, the chairman of the Governmental

Affairs Committee, Senator Thompson, had some very harsh comments. My question to you is: First of all, was Laura Ingersoll

under your Department at that time?

Mr. RADEK. Yes, she was.

Senator SPECTER. Well, why did she do what she did, saying that

the matter would not be pursued and not even to advise the Senate

Governmental Affairs Committee about the document destruction?

Mr. RADEK. Well, the quote that you cite from Mr. Smith deals

with the Presidential Legal Expense Trust. And it was the FBI’s

theory in Arkansas that it would be a Federal crime for the Presidential Legal Expense Trust to accept foreign contributions.

We disagreed, and so I’m sure what is here is a memorialization

of Laura Ingersoll’s legal opinion that this was not a Federal offense.

Senator SPECTER. Was there an ultimate determination made as

to whether there was a possible violation by Mr. Trie on that subject?

Mr. RADEK. On the Presidential Legal Expense Trust?

Senator SPECTER. Yes.

Mr. RADEK. The determination was made early that it’s not a

crime to obtain foreign funds for the Presidential Legal Expense

Trust. It’s not regulated by the Federal Elections Campaign Act.

Senator SPECTER. And it is your position that when the FBI

wanted to obtain a search warrant that it was an inappropriate application?

Mr. RADEK. No, Senator. The FBI wanted a search warrant to

find evidence of campaign finance violations possibly on the part of

Mr. Trie.

Senator SPECTER. It is that which was turned down, though,

by——

Mr. RADEK. By Ms. Ingersoll and me.

Senator SPECTER. Laura Ingersoll.

Mr. RADEK. And me, Senator, and this was a subject of a hearing

before Senator Thompson’s committee. I’m sure you’ve read the

proceedings.

The problem was that an agent was proceeding to Little Rock

without an attorney review of a search warrant affidavit, and by

the time that search warrant affidavit arrived in Little Rock and

was being reviewed—and it, in my opinion had some serious problems—we learned that an attorney had removed the records that

were supposedly the subject of the search warrant and had called

the FBI—an attorney had called the FBI and said, ‘‘I’m ready to

produce these documents.’’ In my opinion, probable cause went

away at that moment. And I’m sure I would have been before the

full Judiciary Committee had I seized records from an attorney before he had a chance to turn them over to the FBI.

Senator SPECTER. Why was the FBI so upset about this matter,

if you know?

Mr. RADEK. Well, there were a lot of disagreements, and that

eventually is what led to the Attorney General taking the move she

did. You know, you’ll have to ask the FBI that question.

We, the Public Integrity Section, had had some dealings with Mr.

Smith when he was here in Washington, and Special Agent Parker

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was sort of off there on her own. And it seemed to me highly inadvisable to have an FBI agent going to take an affidavit to a judge

for a search warrant when an attorney had not approved it. Sometimes mistakes are made, and it seems to me that in every case

an attorney ought to approve that.

Senator SPECTER. Shifting to one other subject, Mr. Radek, FBI

Deputy Director Robert Bryant, in a memo in May 1997, raised a

question about the Public Integrity Section attorneys investigating

White House activities, even though it has insufficient predication.

And the memo says, ‘‘If the attorneys truly believe that predication

is lacking, it is difficult to justify the use of grand jury subpoenas

and other criminal investigative tools.’’ Now, this was just a month after the Attorney General had declined a preliminary investigation. And my question to you is:

What was the justification for proceeding if, in fact, Deputy Director Bryant is correct that there was no sufficient predication?

Take whatever time you need, Mr. Radek, to—— Mr. RADEK. I have the document here, Senator, but I don’t see

that part. Can you cite me to a paragraph or page?

Senator SPECTER. The paragraph reads as follows: ‘‘On more

than one occasion’’—perhaps my staff can pinpoint it for you— ‘‘Public Integrity Section attorneys have stated that the task force

is investigating certain White House activities even though it has

insufficient predication.’’ And then there is some information deleted. Continuing: ‘‘If the attorneys truly believe that predication is

lacking, it is difficult to justify the use of grand jury subpoenas and

other criminal investigative tools.’’ Mr. Radek, the point here is that if it in quest of an independent

counsel, you can’t use the grand jury. And the secondary issue is

the insufficient predicate.

Mr. RADEK. Well, they are separate issues, Mr. Chairman. It is

true that the independent counsel statute prohibits us from using

grand jury subpoenas, immunities, or plea bargaining while we

conduct our preliminary investigation.

This issue is one that is more general, and the problem was this:

The Attorney General had serious and repetitive marching orders.

I mean, she looked each of us in the eye and said, ‘‘Leave no stone

unturned. You have to gather all the facts. Don’t miss anything.’’

That was constant. She hammered us with that.

That left a charter, a universe to investigate a lot of things, a lot

of scandal, some of which were not crimes. We had to sort through

and it was difficult to in the end sort of focus on what was crimes.

It was one of the most difficult things we had to do both as attorneys and agents.

Senator SPECTER. OK, Mr. Radek. But if the question is whether

independent counsel should be appointed, you can’t use the grand

jury.

Mr. RADEK. Correct.

Senator SPECTER. That is precisely the time where you have to

turn it over to somebody who is impartial. And if you found reason

to pursue the matter, to turn over the stones because further investigation was required, isn’t that precisely the purpose of the independent counsel statute, that you should not do that but an independent counsel should do that?

206

Mr. RADEK. I don’t dispute that the purpose of the independent

counsel statute was to take matters away from the Department of

Justice when there was certain statutory requirements met. And it

accomplished that to a limited extent. What it didn’t do was to say

any time that the Department of Justice feels that there is an appearance of a problem on any matter, it should appoint an independent counsel, which is, I think, what you suggest and what you

take from this.

The fact is what the statute says is, if there is specific ad credible information on a person, you must conduct a preliminary investigation. That person can either be covered under the independent counsel statute or create a conflict for the Department of

Justice.

Then at the end of that preliminary investigation, the Attorney

General has to make a decision. She has to decide if further investigation warranted. If she says yes, the statute requires an independent counsel. If she says no, it doesn’t. And don’t forget, the Department of Justice came to this body and asked for jurisdiction

under the discretionary clause over matters, and the Senate refused—and the Senate and the House refused to do it.

Senator SPECTER. Well, I don’t know if the last part is relevant,

and I am not going to get into that. But I am going to come back

just one last time to the point that once you get around to issuing

subpoenas, you have a basis for doing so, and that it must have

met the minimal test of specific and credible information. So that

at that point—and I am just going to make a statement because

I have heard you out and I just can’t accept—I will give you a

chance to reply, however—can’t accept your justification for proceeding there without going to independent counsel once you think

there is a sufficient basis for issuing the grand jury subpoenas.

Mr. RADEK. Perhaps the misunderstanding is this says certain

White House activities. This does not say an investigation of the

President or the Vice President. And, clearly, we were investigating

White House activities. We were investigating how much the White

House was involved in the campaign financing crimes that were involved that we were uncovering. We never came up with specific

and credible information against a covered person where the Attorney General did not trigger, and she did trigger on a couple of occasions.

Senator SPECTER. Mr. Radek, in 1997, the November 21, 1997,

memorandum to Mark Richard, you had made the point that the

media fund suffered from a shortage of Federal hard funds. And in

a memorandum on November 17, 1998, you had shifted and said

that there was no need to differentiate between hard and soft funding.

Now, that distinction is important because the Vice President

would not be implicated on the facts available in 1997 if there were

a shortage of hard funds. But once the issue arose to his soliciting

hard funds, then it became relevant or perhaps some would say

convenient for you to say that it didn’t matter whether they were

hard or soft. So that when he was soliciting the money, he would

have no motivation to solicit for hard funds instead of soft funds.

And the question to you is why the change of position from— there was no shortage of—the media fund suffered from a shortage

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of hard funds in 1997 to exactly the opposite that dovetailed and

helped the Vice President’s defense, exoneration, and declination to

appoint independent counsel.

Mr. RADEK. Senator, as I sit here—and I haven’t seen the remark to which you refer—I don’t believe there was a shortage of

hard funds in the media fund. I think the opposite was true. I

think there was a shortage of soft money. Can you point to where

I said that?

Senator SPECTER. Well, this is your November 21, 1997, memo

to Mark Richard. Our staff can pinpoint it, but you say that the

media fund suffered from a shortage of Federal hard funds. If they

did suffer from hard funds, Mr. Radek, there would have been a

reason for the Vice President to raise hard funds and to solicit hard

funds. But in 1997, there was no indication—this hard fund/soft

fund category was not relevant. But then in 1998, you change your

position, and you say that it didn’t matter whether they were hard

funds or soft funds, so that the Vice President would have no reason to have specific hard funds.

It is a convenient change of position which helped you say there

was no basis for proceeding to get independent counsel as to the

Vice President.

Mr. RADEK. The point here is a little obscure for me, and I’m

sorry, I just don’t recall it, Senator. All I can say is my belief today

is that there was not a shortage of hard funds. There was a line

of credit for hard funds for that media fund use. And, by the way,

the fund was not a separate fund. And I don’t think I ever changed

my position. I’m citing something here that Harold Ickes said, and

I just don’t—I’d have to read before and after a little bit more to

get it in context.

But my impression is that the media fund did not suffer

from—— Senator SPECTER. The hour is growing late. Give us a response

in writing on it, would you, please?

Mr. RADEK. Sure.

Senator SPECTER. With respect to the investigation into Loral— and now I am referring to a memorandum which you wrote on August 5, 1998—‘‘It is true that with regard to the Loral matter the

task force is examining a transaction without a predicate. That

happens from time to time when there is substantial public concern

about a matter.’’ Now, Mr. La Bella in his memo said that if there is going to be

an investigation as to Mr. Bernard Schwartz, CEO of Loral, then

there had to be an investigation as to the President as well, requiring independent counsel. When I had questioned Mr. La Bella

about that in his hearing, I did not know of a supplemental memo

which he had—at that time we had to keep all the documents in

S-407—where he had said that there was no evidence as to Mr.

Schwartz, and, therefore, there wouldn’t be any reason to have any

investigation as to anybody. But he did say that if you were going

to proceed as to Mr. Schwartz, you should have proceeded as to the

President, because you can’t have a quid pro quo without having

people at two ends of the quid and the quo.

Now, focusing on the part I just read to you, how can you possibly initiate an investigation without a predicate, where there is

208

no basis to do so, because of newspaper articles, which embodies

the public concern concept?

Mr. RADEK. Well, I didn’t initiate it. Chuck La Bella did at the

Attorney General’s instruction. And the reason he did it was that

the Attorney General has some discretion in this area. While our

investigation was a criminal investigation—and I argued on the

other side of that issue. I thought that we shouldn’t be conducting

investigations without predication. But the Attorney General had

some discretion, and so she wanted this matter looked into. Again,

her standing order——

Senator SPECTER. So who recommended it?

Mr. RADEK. I don’t know that anyone recommended it. I think

the Attorney General told Chuck to investigate it.

Senator SPECTER. Told Chuck La Bella to investigate it.

Mr. RADEK. Yes.

Senator SPECTER. Well, Mr. Radek, here you are in this memo

in black and white justifying an investigation without any basis to

investigate. That is essentially what you are saying.

Mr. RADEK. What I’m saying to you—what I said there and what

I’m saying to you is the Attorney General has some discretion. To

the extent that there are matters that need investigation—and

may I suggest to you that any crimes committed at Waco, the statute of limitations is long past, and yet there’s an investigation of

that. Sometimes there are matters that require investigation. The

Attorney General reached beyond the normal purview of what a

criminal investigation is in order to satisfy herself and, I presume,

the American people that this matter was investigated. And so she

ordered it to be investigated.

That’s a totally different standard from the independent counsel

statute which says you have to have specific and credible information.

Senator SPECTER. Well, I know you will be glad that I am not

going to take your opening of the door on Waco to get into that subject today. And I disagree with you when you start to talk about

the Attorney General’s discretion to start an investigation without

any basis. I disagree with you totally. But I am not going to argue

the point; I am just going to give you a principle of my understanding of the law with some experience in the field. Public prosecutors, Attorneys General, and district attorneys do not start investigations without a basis. You don’t put somebody through an

investigation unless you have a basis. And if you have a newspaper

account, that is not a basis.

And to say that the task force is examining a transaction without

a predicate just seems to me to be incorrect. I won’t characterize

it beyond that.

Would you care to comment? You are welcome to.

Mr. RADEK. Well, I tend to—I know exactly where you’re coming

from, Mr. Chairman, and I tend to agree with you. But there are

extraordinary circumstances where the Department of Justice investigates things that will never be prosecutable. That is an unusual circumstances, but it is done. And I think that’s what was

done here.

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Senator SPECTER. That happens all the time. You investigate

matters which you can’t prosecute, which you don’t prosecute, but

you have some reason to investigate.

Mr. RADEK. Well, but you know at the beginning that it’s not

going to be prosecutable. Some of the biggest scandals, it was at

the very beginning known that there would never be a criminal

case come out of them, and yet it’s investigated because of a lot of

reasons, but mainly because the Attorney General in this case

wanted it investigated.

Senator SPECTER. Senator Sessions.

Senator SESSIONS. I would just conclude my thoughts, Mr. Chairman, by noting that since Mr. Conrad has been on board, apparently they have gotten five guilty pleas, two of them I guess today

or yesterday, and the case is moving. And I find it unacceptable,

however it developed, that with all the activities that went on that

the Vice President was 4 years being interviewed. Had that been

done promptly, maybe this thing would have been laid to rest and

be over with.

I do not know of evidence that convicts the Vice President of any

crime. I would expect and hope that he never was aware of the illegal shenanigans that were going on around him. I hope and pray

that was true. And would expect that it would be that he did not

know.

However, the Department of Justice is required to find the facts

and do an investigation and let the American people know the

truth, and this thing has not gone well. I believe it is worthwhile

for you to labor through these issues to discuss what kind of standards and activities we will expect out of the Department of Justice

in the future. And thank you for your leadership.

Senator SPECTER. Mr. Radek, as a final point here, a good bit of

the disagreement comes down to what was expressed by Mr. La

Bella in his memorandum about your analysis. And some might

say that there is room for disagreements, that reasonable people

can differ. But many of us have been troubled why the analysis

which you have gone through, which draws different sets of inferences and varying legal standards at variance with what the statute says, all which come out to the conclusion that you don’t need

an independent counsel. You and I went through at some length

your—you concede a bias that you don’t like the independent counsel statute. Am I correct, quoting you correctly on that?

Mr. RADEK. I didn’t like it. Yes, Senator.

Senator SPECTER. OK. Well, and La Bella says this: ‘‘The type of

analysis involved in determining whether the Vice President was

part of a scheme to solicit soft money knowing that it would be

turned into hard money for the media campaign is subjective and

open to debate.’’ And now he refers to what you have done: ‘‘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 allegation. When

you look to the facts, the memos, the meetings, and the DNC practice, it is hard to say that there is only one conclusion to be

reached.’’

210

And FBI Director Freeh said it somewhat differently: ‘‘Based on

the facts, the Attorney General simply cannot reach such a conclusion.’’ And at another point, ‘‘The Department of Justice has invited

substantial criticism by appearing to resolve these untested legal

issues at the outset of the investigation before the facts are fully

developed.’’ Which you did, except that from time to time you conducted more investigation, which under the statute really was the

purview of somebody who was outside of the Department of Justice,

an independent counsel.

Would you care to comment?

Mr. RADEK. Well, the fact that Mr. La Bella and Director Freeh

and I disagreed, of course, is not news. I called those shots as I saw

them. I never stretched the law. I never engaged in inferences favorable to anybody. I looked at that stuff as objectively as I think

anybody in the world. And let me assure you, Mr. Chairman, so did

the Attorney General.

There was the vigorous debate, and the fact that people disagreed with me and disagreement with me in the Department I

think is both healthy and natural. It is probably not healthy and

natural to have disputes—and it was a shame to see the formerly

good relationship between Mr. Mansfield and Mr. Donsanto

dragged out here. But I do appreciate that there is a need for oversight.

All I can say is, yes, people disagreed but, no, no inferences were

drawn improperly. And if you disagree with my conclusions, I respect you for that. But I think my conclusions were right, and I

stand by them. And those were the recommendations I made to the

Attorney General. But ultimately she made the decisions, and as

everybody has testified, she did it free from politics.

Senator SPECTER. OK. Thank you very much.

Mr. RADEK. Thank you.

Senator SPECTER. Mr. Litt, would you step forward, please?

Mr. LITT, do you solemnly swear that the evidence you will give

before this subcommittee of the Judiciary Committee of the U.S.

Senate will be the truth, the whole truth, and nothing but the

truth, so help you God?

Mr. LITT. I do.

Senator SPECTER. Mr. Litt, I know you have an extensive opening statement. It is now 6:07 p.m. and we are going to start a vote

at 6:10 p.m. It will be made a part of the record in full. To the extent you wish to present it, we are prepared to listen to you.

STATEMENT OF ROBERT S. LITT, FORMER PRINCIPAL ASSOCIATE DEPUTY ATTORNEY GENERAL, U.S. DEPARTMENT OF

JUSTICE, WASHINGTON, DC

Mr. LITT. Mr. Chairman, I will rely, thank you, on the submission of the written statement with one exception, and that is that

there is one matter that I didn’t cover in the written statement

that I would like to just briefly address orally.

Senator SPECTER. That would be fine.

Mr. LITT. You read as part of your opening statement a letter

from Common Cause, which, as I understood it, suggested or alleged that the Department had never looked into the allegations

211

that were set forth in the 1996 letters from Common Cause to the

Attorney General.

And as you know from the materials that have been provided to

you, that is incorrect. There was an extensive legal analysis done.

Many memoranda were prepared. I had the unfortunate assignment of being the person who was responsible for trying to make

sense out of all these complicated legal issues and preparing a

cover memo to the Attorney General that I think has been provided

to you.

And the fact of the matter is that the issue that was before the

Department of Justice was not whether the use of soft money for

issue advertisements was a good thing or a bad thing for the American political process. The issue was whether this was a crime

under the Federal election laws.

And as you heard from the Chairman and the Vice Chairman of

the Federal Election Commission, the FEC, which is the body that

is charged by Congress with the primary interpretation of the election laws, the FEC did not conclude that these ads violated the

election laws for the purposes of a civil remedy. And, indeed, I

think that the initial decision of the FEC on the audit indicate that

the conclusion of the Commissioners, or at least the majority of

them, was that the legal standard applied was so vague that nobody could possibly understand it.

Criminal violations require an even higher standard. A criminal

violation of the election law requires that there will be a willful violation of a known standard. The decision not to prosecute or not

to investigate these matters criminally I think was an entirely appropriate one given the facts that were known and the legal standard. And I believe that there was a full analysis of this done, and

the analysis assumed all the facts that Common Cause set forth in

their letter, which is to say they assumed that the advertising campaigns done by the DNC and the RNC were completely controlled

by the candidates and, nonetheless, concluded—correctly, in my

view—that that was not a crime under the Federal election laws.

Senator SPECTER. Well, Mr. Litt, you recommended independent

counsel as to the Vice President. You did so in a very lawyerly, judicious way, saying that you thought there would not be a prosecution, but the statute required independent counsel, as you saw it.

Is that an accurate paraphrase of what you said?

Mr. LITT. Yes, that’s correct.

Senator SPECTER. If at the end of the rainbow, at the end of the

whole process, there is no statute, no definable criminal violation,

what is the point of any of it?

Mr. LITT. I’m sorry. I don’t understand your question.

Senator SPECTER. Well, are you saying that the campaign finance

laws are so vague that you can’t have a prosecution under them?

Mr. LITT. I’m not saying that with respect to the campaign finance laws in general. I’m saying that specifically with respect to

the issue of the legality or illegality of the use of soft money to finance issue ads in the 1996 election campaign. But there are many

areas of the campaign finance laws where there are clear and

bright lines and a prosecution is possible, as the actions of the task

force have demonstrated.

212

Senator SPECTER. Mr. Litt, how can the Attorney General, in a

memorandum of understanding with the Federal Election Commission, delegate to the Commission what may turn out to be essential

judgments for whether there can be a prosecution or not? I don’t

have to say to you that the Attorney General has the responsibility

for prosecuting all the Federal criminal laws. And there is a criminal law attached to the Federal election law. But how can there be

a delegation of reaching issues which impact upon what is essentially her job?

Mr. LITT. I think, Mr. Chairman, that this goes back to what— I think it was—I forget whether it was the Chairman or the Vice

Chairman of the FEC was talking about earlier, and that is the

question of notice. As I mentioned before, under the applicable

cases, a criminal violation of the Federal election laws requires

that there be a willful violation of a known legal standard. In areas

of ambiguity and unclarity in the Federal election laws, the FEC

is given the responsibility for fleshing those ambiguities out. And

I think that’s appropriate because we’re dealing with matters here,

political advertising and political campaigns, that are absolutely at

the heart of the First Amendment. And I think that it is appropriate for the criminal prosecutive process to tread carefully in this

area so that prosecutions are brought only when people have clearly violated known legal standards.

When there is no known legal standard, I think it is appropriate

for the Department of Justice to defer to the FEC to establish that

standard.

Senator SPECTER. Well, I agree with you totally about treading

very, very carefully, but not to delegating to anybody outside of the

Department of Justice to make judgments as to whether there is

adequate notice or what is the appropriate basis for a criminal

prosecution.

We questioned the Attorney General about that at length. This

is a matter which has gone on since the spring of 1997. In this

room I asked her the questions about those ads which——

Mr. LITT. I remember.

Senator SPECTER. Which have all the indicia of advocacy ads. We

asked her for the Freeh memorandum within a week after he wrote

in late 1997, November 1997, and the La Bella memo a few days

after he wrote it in July 1998. So we have been looking at this matter for a long time.

But the Attorney General is the chief law enforcement officer of

the country, and it seems to me she cannot defer to anybody else

to set the standards.

Mr. LITT. Mr. Chairman, I would respectfully disagree with you

to this extent, and that is, you did, as I recall, ask the Attorney

General—at the very first hearings in this matter, you read to her

the text of some advertisements, and you asked her, ‘‘Doesn’t this

contain an electioneering message?’’ And I think the fact of the

matter is, as we heard earlier, the FEC, which has a staff whose

job it is to make this kind of analysis and has experience and expertise in the area that neither the FBI nor the Department of Justice has, the FBI has looked at—the FEC has looked at these and

has not recommended either a repayment under the audit or an enforcement action.

213

Senator SPECTER. Well, they may be right, but I would be a lot

more comfortable if the Department of Justice made the judgment.

When we heard the testimony of Mr. Gangloff, he said that those

who—this is sort of a sweeping statement, but I think it is one I

would like your comment on. He said that those who recommended

the Independent Counsel Act did not understand the Act. But you

recommended that independent counsel be appointed for the Vice

President. He also said at one point that I probably understood the

Act. But the question that I have for you was: What made you conclude that independent counsel should have been appointed for the

Vice President?

Mr. LITT. If I can back up a minute to summarize what the issue

was there, originally, in 1997 or so, the Department conducted a

preliminary investigation under the Independent Counsel Act of

whether the President and the Vice President had violated Section

607 of Title 18 by making fundraising telephone calls from the

White House. She ultimately concluded that independent counsel

was necessary. One of the reasons for that determination—and

there were several—was a conclusion that the telephone calls that

were made were raising soft money rather than hard money. And

she relied on a number of facts to support that conclusion. One of

the facts was a statement that the Vice President made that he did

not understand that the media fund for which they were raising

this money had a hard money component.

Subsequently, in the summer of 1998, the Vice President’s lawyers turned over to the Department some documents which suggested that the Vice President had been present at a meeting at

which somebody had said that there was a hard money component

to the media campaign, and this raised the possibility that the Vice

President’s statement had not been accurate.

The Department again commenced a preliminary investigation

that was really—it was quite extensive. They interviewed I think

everybody who was present at that meeting. They reviewed a lot

of documents. And at the end of the day, I think everybody came

to the conclusion—I don’t think there was anybody who was part

of this process, as I think Senator Sessions referred to earlier, who

thought there was actually a prosecutable case against the Vice

President here.

The question was sort of the technical one of whether the standard of the Independent Counsel Act that further investigation was

required was met. In my judgment, that standard was met, although I believed it was a question that was very close to the line.

There were a lot of people whose judgment I respect very greatly,

including my boss, Eric Holder, the Deputy Attorney General, who

is a former public corruption prosecutor and a judge, including career lawyers like Lee Radek and Dave Vicinanzo, who was then the

head of the task force, they disagreed with me and ultimately the

Attorney General did as well.

Senator SPECTER. Is it your view that a section 1001 violation,

false statements, would have to be investigated by someone other

than the Public Integrity Section? In other words, if it comes up

now, would it have to go to special counsel, special prosecutor?

214

Mr. LITT. I can’t say that with respect to any potential 1001 violation, and I’m not familiar, frankly, with the regulations that are

in effect today.

Senator SPECTER. Well, as to one involving the Vice President.

Mr. LITT. As I said, I’m not familiar with the regulations. I believe they’re discretionary with the Attorney General and not mandatory, but I just don’t know that.

Senator SPECTER. Turning for just a moment to the waiver

signed by the President, you and I have talked about this before.

Mr. LITT. Yes, we have, Mr. Chairman.

Senator SPECTER. I would like to put it on the record. Our discussion was an informal one, as I say. At that time, the Department

of Justice objected to a waiver on the ground that it would have

a potentially detrimental effect if there were a criminal prosecution

brought as to Loral and Hughes. Would you state the background

and your participation in that matter?

Mr. LITT. I’ll try to remember. To begin with, I wouldn’t characterize it as an objection by the Department. I received a phone call

from Mr. Ruff, who was counsel to the President, who informed me

that there was a waiver decision pending and he had learned that

there was a grand jury investigation pending, and he wanted the

Department’s views on what impact the granting of a waiver would

have on the pending criminal investigation.

I made some inquiries, and I called him back, and I said that the

judgment of the Department was that it could have an adverse impact, not on the actual conduct of the investigation but on the jury

appeal of any prosecution that might subsequently be brought because a jury might view the granting of a subsequent waiver as,

in effect, a ratification of the company’s conduct.

Senator SPECTER. So you would articulate that it could have an

adverse impact on the prosecution?

Mr. LITT. Yes. I believe I conveyed that to Mr. Ruff.

Senator SPECTER. Thank you very much.

The vote has just started. It is 6:20 p.m. We had a brief intermission for one vote at about 2:30 p.m., so we have gone a little

over 4 hours today. We appreciate very much your all coming in.

Mr. LITT. Thank you, Mr. Chairman.

[The prepared statement of Mr. Litt follows:]

PREPARED STATEMENT OF ROBERT S. LITT

Mr. Chairman, members of the Subcommittee:

I had the privilege to serve as Deputy Assistant Attorney General in the Criminal

Division of the Department of Justice from 1994 through 1997, and as Principal Associate Deputy Attorney General from 1997 through January 1999. I am now a partner in a law firm in Washington, D.C.

While I was at the Department of Justice, I participated in the Attorney General’s decisions whether to seek an independent counsel to investigate allegations of campaign finance abuses, in the establishment of a centralized task force to investigate

those allegations, and in the ongoing management and operation of that task force.

From the beginning, the Department’s campaign finance investigation was subject

to outside scrutiny and criticism to a degree that I believe is unprecedented for an

ongoing criminal investigation.

I also believe that that criticism was unjustified.

Mr. Chairman, legal decisions like those required by the Independent Counsel Act

are not like math problems. There is often no single ‘‘right’’ answer. Rather, the decisions require a careful and thorough analysis of the law and the facts, and the

exercise of sound judgment. Reasonable people can often disagree on these matters,

just as the Supreme Court often decides cases by a 5–4 vote.

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So I think that the real issue is not always who was ‘‘right’’ or ‘‘wrong,’’ but

whether the process by which the Attorney General reached her decision was proper. Did she reach a decision after hearing all of the arguments and after weighing

the law and the facts? Did she decide solely on the merits, or was she influenced

by improper considerations such as politics?

The Department’s deliberations in this matter have now been made public. The

thousands of pages of memoranda analyzing this issue which have been released to

the public make it abundantly clear that all of the Attorney General’s decisions were

made solely on the merits, after full—indeed exhaustive—consideration of the factual and legal issues involved, and without any political influence at all.

Director Freeh and Mr. La Bella, who disagreed with her decision on several occasions, have said that. And as one who participated in some of the discussions concerning these matters, I can attest to that.

In late 1996, a number of allegations surfaced around the country of improprieties

or illegalities in the election.

The Attorney General recognized that the nature of these allegations required a

centralized task force to investigate them efficiently. It simply would not have

worked to have individual prosecutors in individual districts working individual

cases in isolation. Coordination, interchange of information, and centralized direction were required, and it was for that reason that the Attorney General established

the Campaign Finance Task Force within the Public Integrity Section, and charged

it with investigating all of these related allegations.

The Attorney General emphasized that she was placing no limits on the conduct

of the investigation. The Task Force was instructed to pursue all the evidence,

wherever it led. It was to explore all evidence, all theories, and all allegations fully.

The Attorney General also made clear that if anyone ever felt an independent counsel was required, she wanted to hear it, and she would trigger the provisions of the

Independent Counsel Act if it was required. She repeated that instruction many

times at the weekly meetings that she had with the task force leadership and the

FBI.

On a number of occasions the possibility of appointing an independent counsel

arose. These questions were reviewed by the Public Integrity Section of the Department’s Criminal Division, just as all independent counsel matters were reviewed

during the 20 or so years that the statute was in existence.

In each case, the Public Integrity Section—which is staffed and led by nonpolitical

career prosecutors such as Mr. Radek—made recommendations based on its analysis

of the facts, the law and the precedents. These recommendations have now been

made public and people can see how thorough and careful they were.

In each case, the Public Integrity Section’s recommendation was reviewed at several levels within the Department. If there was any disagreement, dissenting views

were heard in full. I participated in numerous meetings at which the Attorney General met with line attorneys, supervisors, FBI agents and FBI supervisors, up to Director Freeh, and heard a full debate on independent counsel issues. There was vigorous discussion of the facts and the law—and only of the facts and the law.

In some instances, after careful consideration, the Attorney General concluded

that an independent counsel was necessary. In others, she concluded that one was

not necessary.

As you know, on several occasions Mr. La Bella and Director Freeh recommended

that an independent counsel should be appointed. On some occasions, so did I.

But the decision to seek an independent counsel is given by law to the Attorney

General, not to me, or Mr. La Bella, or Director Freeh.

Mr. La Bella was an experienced prosecutor, but he had no prior experience with

the Independent Counsel Act. And Director Freeh, as capable and experienced as

he is, is still the director of the FBI. There are good reasons why we have these

sorts of decisions made by prosecutors rather than law enforcement agents.

In each case, the Attorney General fully considered their views, as well as the recommendations of many others involved in the investigation, including myself. But

ultimately, she made the decision, as the law required her to do, and she made it

solely on the merits.

Because it has recently been made public, I would like to discuss briefly my recommendation that the Attorney General seek the appointment of an independent

counsel to investigate whether Vice President Gore made false statements to investigators concerning his knowledge that an advertising campaign was funded in part

with so called ‘‘hard money.’’

One of the original allegations that arose at the end of 1996 was whether the

President and Vice President had made telephone calls from the White House seeking to raise money for a DNC issue advertising campaign. These calls could have

been illegal if they were made from official office space, as opposed to personal resiVerDate 26-SEP-2001 02:24 Sep 28, 2001 Jkt 074735 PO 00000 Frm 00219 Fmt 6601 Sfmt 6621 E:\HR\OC\A735.XXX pfrm03 PsN: A735
216

dence areas, and if they were solicitations of hard money contributions rather than

soft money. If they were soft money, or not made from office areas, they would not

have been illegal.

In 1997, the Department did a preliminary investigation of these allegations

under the Independent Counsel Act. They interviewed hundreds of people and reviewed many pages of documents.

At the end of this preliminary investigation, the Attorney General concluded that

there was no basis to investigate these allegations further. There was overwhelming

evidence that the calls were made to solicit soft money rather than hard money.

Moreover, there was an established Department of Justice policy—a policy that the

Department was required to follow in making independent counsel decisions— against bringing cases under this particular statute unless there were aggravating

circumstances not present in this case.

With respect to the Vice President, one of the facts the Attorney General noted

in finding that his calls were made to solicit soft money was the Vice President’s statement during the preliminary investigation that he believed that the DNC

media campaign was funded only with soft money. This fact was mentioned in one

sentence of the Attorney General’s lengthy determination, which contained an extensive analysis of the evidence and the law.

In 1998, evidence surfaced that the Vice President had been present at a meeting

where persons may have discussed the fact that there was a hard money component

to the media campaign. The Attorney General decided that this required her to determine whether an independent counsel was needed to investigate whether the

Vice President had lied. A full preliminary investigation under the Independent

Counsel Act was done, again with interviews of the people who were present at the

meeting and others with knowledge.

After this preliminary investigation, while it was a very close question, I felt that

appointment of an independent counsel was required.

It is important to remember that no one really thought that the Vice President

ought to be prosecuted. The question was only whether the technical provisions of

the Independent Counsel Act required that an independent counsel be appointed to

make that decision.

And everyone recognized that this case was very close to the line. Some people

agreed with my view. Many others whose judgment I greatly respect disagreed with

me. These included Mr. Radek, a non-political career prosecutor who had two decades’ experience with the Independent Counsel Act; Dave Vicinanzo, a career prosecutor who replaced Mr. La Bella as head of the Task Force; Jim Robinson, the Assistant Attorney General in charge of the Criminal Division; and the Deputy Attorney General, my boss, who had been a public corruption prosecutor and a judge

himself. They all concluded after a careful review of the evidence that overwhelming

proof showed that the Vice President had not been lying, and that there was no

basis to seek an independent counsel. I know that everyone who was part of this

process gave their best views, based solely on the law and the evidence.

Ultimately the Attorney General disagreed with me as well. But the record shows

that she rejected my recommendation because she thought I was wrong; that she

made the decision entirely on the merits of the facts and the law, as she did in every

case.

Mr. Chairman, as I mentioned at the outset, this case has been the subject of a

degree of Congressional scrutiny and pressure that I believe is unprecedented for

an ongoing criminal investigation.

The Congress has an extremely important oversight function, with respect to the

Department of Justice as all other parts of the Executive Branch. Congressional

oversight is a necessary check on malfeasance by Executive Branch officials and can

be essential to bring to light corruption, improper behavior, or the need for reform.

But because the purpose of Congressional oversight is ultimately to ensure the

honest and efficient workings of government, it should be exercised with due respect

for the impact that oversight has on the agencies in question.

As a matter of law and policy, criminal investigations are supposed to be conducted outside of the public eye, for very good reasons. Public exposure of an ongoing criminal investigation can hamper the investigation and tarnish the reputation

of innocent persons. And outside political pressure on prosecutors damages the legitimacy of law enforcement, by making it appear that prosecutive decisions are influenced by politics.

In this case the internal deliberations of Department employees have been exposed—deliberations that were never intended to be public—and line attorneys and

career prosecutors have been required to testify about those deliberations. This may

make it more difficult for future Attorneys General to get candid and comprehensive

recommendations from Department employees in sensitive cases.

217

There have been bitter partisan attacks on public servants who do not deserve

it—people like Lee Radek, a career prosecutor who has passed up the chance to

make considerably more money in the private sector, in order to serve the public

with distinction in both Republican and Democratic administrations. These unfounded attacks are going to make it a lot harder in the future to attract talented

people to work for the government.

And the constant political pressure with respect to this matter—and the unceasing but utterly unfounded allegations that the Department was influenced by politics—may create the dangerous perception that the law enforcement decisions are

subject to political pressure.

In short, I fear that the net effect of this congressional oversight—oversight that

is intended to improve the functioning of government—may be a damaged, less effective, more timid Department of Justice, and I do not think that would serve the

public well.

This is not a partisan issue. It is an institutional one. Over the last decade, both

parties have engaged in increasingly intrusive oversight of the Department of Justice. I would hope that thoughtful members of Congress on both sides of the aisle

would take stock of the effects of this oversight on the Department and on the public, and would make a joint decision to draw back for the long-term good of the

American people.

Thank you, Mr. Chairman. I would be pleased to answer any questions that you

have at this time.

[Whereupon, at 6:20 p.m., the subcommittee was adjourned.]

(219)

QUESTIONS AND ANSWERS

JUNE 21, 2000

RESPONSES OF LARRY PARKINSON TO QUESTIONS FROM SENATOR LEAHY

Question 1. Among the numerous documents the Justice Department has provided

to the Judiciary Committee in connection to oversight of the 1996 campaign finance

investigations is a memorandum written by Lee J. Radek, Chief, Public Integrity

Section, Department of Justice, dated September 25, 1998, to Assistant Attorney

General James Robinson of the Criminal Division, which states: ‘‘we were seeking

to obtain from the FEC copies of the Audit Division’s Exit Conference Memo on the

Dole for President and the Dole/Kemp ‘96 committees, which we understand reach

similar conclusions on the legality of issue ads run by the RNC during the 1996

election cycle. We have now received those memoranda, which similarly find that

the costs of certain RNC ads should be attributed to Dole for President and Dole/

Kemp ‘96, and that those costs would constitute unlawful contributions to and expenditures by the committees* * *[w]e have accordingly opened a criminal investigation. The issues in the RNC investigation are largely identical to the issues in

DNC investigations. The principal difference is that the facts in the RNC media

project have not been fleshed out as much.’’ (DOJ–P–00754 to DOJ–P–00755).

Question 1a. Please explain why the facts of the RNC media project had not been

‘‘fleshed out as much’’ at the time this memorandum was prepared.

Answer 1a. At the time Mr. Radek prepared his September 25, 1998 memorandum, the Campaign Financing Task Force had not undertaken a comprehensive

investigation of the Common Cause or ‘‘media fund’’ allegations relating to either

the DNC or the RNC. However, from the time of its creation in 1996, the Task Force

had investigated a variety of allegations of campaign finance violations. During the

course of the investigation, the Task Force acquired a significant amount of information about the fundraising practices of the DNC, some of which related to the DNC’s

‘‘media fund.’’ While the Task Force has also acquired some general information

about the RNC’s fundraising practices, that information was significantly less than

the DNC information. I assume this is what Mr. Radek meant when he said the

facts of the RNC media project had not been ‘‘fleshed out as much.’’

Question 1b. Has the status of the Department’s review of the above-referenced

allegations changed in any way since 1998?

Answer 1b. To my knowledge, there has been no Department of Justice review

of these allegations since 1998.

Question 2. Over the past year, the Chairman of the Senate Committee on the

Judiciary has to date been authorized to issue seven subpoenas, including four to

the Department of Justice, on a variety of oversight issues being handled by the

Subcommittee on Administrative Oversight and the Courts; the Subcommittee has

to date held six hearings and conducted about thirty interviews of Department personnel; and the Department has made numerous, continuing document productions

in response to Committee requests amounting to over 500,000 pages of documents.

Please provide a breakdown of the number of personnel diverted, the estimated cost

of and the number of hours expended to comply with the continuing oversight investigations by the Senate Judiciary Committee and its Subcommittee on Administrative Oversight and the Courts, including by personnel of the Public Integrity Section, the Campaign Financing Task Force, U.S. Attorney Offices, the Federal Bureau of Investigation and other components of the Department of Justice pertaining

to the matters set forth below: a. Waco; b. Wen Ho Lee; c. Peter Lee; d. John Huang,

Johnny Chung, Charlie Trie; e. Technology Transfers to China; f. Campaign finance

and application of the lapsed Independent Counsel statute; and g. White House electronic messages.

220

Answer 2. The cost and effort expended to comply with the various oversight requests was substantial. However, the FBI does not maintain records reflecting this

cost and effort.

Question 3. Mr. Radek testified that the use of ‘‘soft money’’ to fund issue ads was

a campaign financing strategy invented by Republicans and perfected by Democrats.

In a similar vein, Charles La Bella stated, in his July 16, 1998 memorandum, ‘‘For

its part the RNC, * * * had its fair share of abuses. The Barbour matter is a good

example of the type of disingenuous fundraising and loan transactions that were the

hallmark of the 1996 election cycle. In fact, Barbour’s position as head of the RNC

and NPF—and the liberties he took in these positions—makes the one $2 million

transaction even more offensive than some concocted by the DNC. Indeed, with one

$2 million transaction, the RNC accomplished what it took the DNC over 100 White

House coffees to accomplish.’’ (DOJ–0087). Do you agree with these assessments?

Answer 3. I cannot comment on these particular characterizations by Mr. Radek

and Mr. La Bella.

Question 4. Despite the fact that he is neither the author nor the recipient of the

December 9, 1996 memorandum referring to a meeting which took place over three

year ago, Neil Gallagher, Assistant Director of the FBI, National Security Division,

testified he was ‘‘positive’’ Mr. Radek said during that meeting that the pressure

he was feeling was ‘‘because’’ the Attorney General’s job was on the line.

Question 4a. The December 9, 1996 memorandum from Director Freeh to Mr.

Esposito (DO 03137–03138) referring to this meeting states: ‘‘I also advised the Attorney General of Lee Radek’s comment to you there was a lot of ‘pressure’ on him

and PIS regarding this case because the ‘Attorney General’s job might hang in the

balance’ (or words to that effect).’’ The word ‘‘because’’ is not in quotation marks.

Does this suggest that the statement in the memorandum was Director Freeh’s interpretation of Mr. Radek’s comments rather than a direct quote from Mr. Radek?

Answer 4a. Director Freeh was not present when Mr. Radek made his comments.

The Director’s memorandum reflected his understanding of those comments based

on what he was told by Mr. Esposito. As to whether the language in the memorandum represents a direct quote, I would refer to the previous testimony by the

participants in the meeting (Mr. Esposito, Mr. Gallagher, Mr. Radek, and Mr.

Gangloff).

Question 4b. With whom within the Department of Justice and its components did

Mr. Gallagher discuss this memorandum, including in preparation for this hearing?

Answer 4b. Mr. Gallagher did not discuss this memorandum with anyone at the

Department of Justice. Within the FBI, Mr. Gallagher recalls discussing the memorandum with Director Freeh, Mr. Esposito, Mr. Parkinson, Mr. Collingwood, and

Mr. Lampinski.

Question 5. FBI employees have testified that 1995 and 1996 memoranda from

Harold Ickes to the Vice President describing the split between hard and soft money

being solicited was sufficient to impute knowledge to the Vice President about these

matters. Yet, as Robert Litt points out in a November 22, 1998 memorandum, a different standard of imputed knowledge was apparently applied to the Director of the

FBI regarding whether he testified falsely to Congress on March 5, 1997. Specifically, Mr. Litt cites ‘‘[f]or example, in the Freeh matter there was evidence from

which one could have inferred that Director Freeh knew his statement was false (a

briefing book presented to him contained the true information), yet the Attorney

General found this outweighed . . . by other evidence showing he did not.’’ (DOJ– VP–00784). Do you agree that the Attorney General may—as any prosecutor does— draw factual conclusions about a person’s state of mind in determining whether to

bring charges or seek appointment of an independent counsel?

Answer 5. Yes.

Question 6. In a December 4, 1998 memorandum, Larry Parkinson opined that

an independent counsel referral should be made for allegations against the Dole

Presidential Campaign. (DOJ–P–01381). Please explain the basis for an independent

counsel referral for the Dole Presidential Campaign.

Answer 6. I wrote my December 4, 1998 memorandum in the context of a specific

decision facing the Attorney General at that time: whether to seek the appointment

of an independent counsel to further investigate potential election law violations in

connection with the DNC’s ‘‘media fund’’. I believed that further investigation was

warranted and that an independent counsel should conduct the investigation because of the involvement of the President and Vice President, two ‘‘covered persons’’

as defined by the Independent Counsel Act. Although the Dole campaign was not

a ‘‘covered person’’ under the Act, the allegations that had been made against that

campaign could have been referred to an independent counsel under either the Act’s

‘‘discretionary clause,’’ 28 U.S.C. § 591(c)(1), or the ‘‘related matters’’ provision, 28

221

U.S.C. § 592(d) and 594(e). In my view, if the Attorney General concluded that she

should seek the appointment of an independent counsel to investigate the DNC’s

‘‘media fund,’’ the independent counsel’s mandate also should include the RNC’s

‘‘media fund.’’ Because similar allegations had been made against the two campaigns, and the FEC had made similar findings about both, I believed that one entity should have been responsible for investigating both.

Question 7. Among the documents produced by the Department of Justice are

memoranda from FBI Director Freeh, dated December 9, 1996 and December 8,

1998, to subordinates describing conversations he had with the Attorney General regarding the campaign finance investigations, without copies being sent to the Attorney General.

Question 7a. Does the FBI Director prepare memoranda to his subordinates on

every occasion when he has a substantive conversation over the telephone or in person with the Attorney General, without forwarding a copy to the Attorney General?

Answer 7a. No.

Question 7b. If the FBI Director does not prepare such memoranda on every occasion, is this his routine practice?

Answer 7b. No.

Question 7c. If the FBI Director does not prepare such memoranda routinely,

please describe the circumstances under which the Director has prepared such

memoranda.

Answer 7c. Director Freeh frequently conveys to his subordinates the relevant

substance of conversations with the Attorney General. These communications take

a variety of different oral and written forms, in any particular instance depending

upon numerous factors, such as the schedules of the Director and the recipient of

the information, the need (or lack thereof) for prompt action, and the need (or lack

thereof) for face-to-fact discussion. As for the memoranda of December 9, 1996 and

December 8, 1998, Director Freeh prepares this specific type of memorandum only

in rare circumstances—such as these were—to memorialize a very significant series

of events involving senior leadership of the FBI.

Question 8. In 1997, the Federal Election Commission requested resource assistance from the Department of Justice to investigate the large number of cases arising out of the 1996 election cycle after the Congress failed to act on a request for

additional resources. While senior officials within the Department of Justice recommended providing resources to the FEC, the FBI opposed the request. In a November 25, 1997 memorandum, FBI Director Freeh explains that ‘‘[w]hile the Task

Force is appropriately staffed at the moment, we must maintain the flexibility to

redirect even more resources to the Task Force if the need arises.’’ (DOJ–03148).

Question 8a. Were additional resources directed to the FEC by the Department

of Justice over the FBI’s objections and, if so, when?

Answer 8a. To my knowledge, the Department of Justice did not provide any resources to the FEC.

Question 8b. Did the FBI’s objection to detailing personnel and resources to the

FEC hinder or slow down the FEC’s investigations into allegations relating to the

misuse of soft money in the 1996 election cycle?

Answer 8b. Director Freeh’s November 25, 1997 memorandum to the Attorney

General set forth in two pages the reasons why he opposed committing FBI resources to the FEC at that time. The ultimate decision on whether to commit DOJ

or FBI resources to the FEC rested with the Department of Justice. I do not know

whether the Department’s decision had an effect on the FEC’s investigation.

Question 9. The July 1998 La Bella memorandum states that ‘‘[e]very time’’ it was

suggested that the Task Force ‘‘conduct [] an inquiry or investigation of the entire

campaign finance landscape in order to determine if there exists specific information

from a credible source’’ that would trigger the Act, ‘‘it has been rejected on the theory that such an inquiry can only be conducted pursuant to a preliminary investigation.’’ A senior Justice Department official commenting on the La Bella memorandum states, in a July 20, 1998 memorandum, that ‘‘I am unaware of any occasion on which this has happened. On the contrary, the Attorney General constantly

asks whether we have uncovered information sufficient to trigger the Act, and constantly emphasizes that the Task Force must follow the evidence wherever it leads.’’

(DOJ–03149)

Question 9a. Do you concur in the observation that the Attorney General constantly asked whether the Task Force has uncovered information sufficient to trigger the Act?

Answer 9a. For a substantial period of time, I was a regular attendee at weekly

Task Force meetings with the Attorney General. During many of those meetings,

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the Attorney General asked whether the Task Force had uncovered information sufficient to trigger the Act, typically in the context of specific investigative matters

raised during the course of the meeting. In addition to the weekly meetings, I attended many other meetings with the Attorney General devoted to specific campaign

finance matters, in which the very purpose of the meetings was to discuss whether

the Act had been triggered.

Question 9b. Do you concur in the observation that the Attorney General constantly emphasized that the Task Force must follow the evidence wherever it leads?

Answer 9b. The Attorney General frequently emphasized that the Task Force

should follow the evidence wherever it led.

Question 10. In a July 20, 1998 memorandum to the Attorney General, a senior

Justice Department official states that ‘‘[o]ur decision to investigate the Loral matter was, thus, in part a response to outside pressure . . . I do not doubt that had

this matter been brought to any U.S. Attorney’s office in the country it would have

been closed without investigation. (I note that no one has expressed interest in following up criminally on the recent Wall Street Journal article setting forth numerous instances in which Senator Lott took actions favoring large contributors).’’ (DOJ–03150).

Question 10a. What was the ‘‘outside pressure’’ to which this memorandum refers?

Answer 10a. I have to defer to the author of the memorandum to explain what

he meant by ‘‘outside pressure.’’ I never saw the memorandum until after it had

been released in connection with this year’s congressional hearings, and I never

spoke to the author about this comment.

Question 10b. In your view, does it undermine confidence in the criminal justice

system and is it dangerous for political pressure to be applied to bring criminal

charges against an individual?

Answer 10b. Yes.

Question 11. In an August 3, 1998 memorandum, Lee Radek states that Mr. La

Bella ‘‘denied on a weekly basis that there was any specific and credible evidence

concerning a covered person’’ that would trigger the Independent Counsel law.

(DOJ–03156).

Question 11a. Were the ‘‘weekly’’ denials by Mr. La Bella in meetings with the

Attorney General?

Answer 11a. For a substantial period of time, I was a regular at weekly Task

Force meetings with the Attorney General. I believe it is inaccurate to say that Mr.

La Bella ‘‘denied on a weekly basis that there was any specific and credible evidence

concerning a covered person.’’ When independent counsel issues arose during the

course of those meetings, Mr. La Bella gave his opinion. As with many other participants, his opinion on whether the Independent Counsel Act had been triggered differed depending on the specific topic being discussed at any given time.

Question 11b. Was the conclusion reached by Mr. La Bella in his July 1998 memorandum regarding appointment of an independent counsel different from the recommendation he had been making to the Attorney General in regular meetings up

to that point?

Answer 11b. I did not consider Mr. La Bella’s conclusion in his July 1998 memorandum to be inconsistent with the comments or recommendations he had expressed

in previous meetings with the Attorney General.

Question 12. Chairman Hatch has stated that he is ‘‘not nearly as concerned with

the allegations about some of the occurrences within the White House with regard

to a phone call or phone calls that may have been made, although they may unknowingly have violated the law . . .’’ (Transcript of Executive Business Meeting of

Senate Committee on the Judiciary, March 6, 1997, at p. 19). Nevertheless, the La

Bella memorandum cites the Vice President’s telephone call solicitations from the

White House as grounds for seeking an independent counsel. (DOJ–FLB–0090–

0091).

Question 12a. In your view, would prior Department precedent on when prosecutions were initiated when solicitations were made from federal property be relevant

in evaluating such prosecutions?

Answer 12a. Yes, prior Department precedent would be relevant in evaluating

whether investigation or prosecution was appropriate. It is important to note that

Mr. La Bella recommended an investigation, and not a prosecution, by an independent counsel.

Question 12b. Was the Department correct to consider the precedent that in 1988,

the Justice Department learned that Republican Senator Gordon Humphrey and another Republican Senator had sent solicitation letters to employees of the Criminal

Division, but that prosecution had been declined? (DOJ–VP–00353).

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Answer 12b. I have insufficient knowledge of that 1988 matter to give a responsible answer.

Question 12c. Was the Department correct to consider the precedent that in 1976,

the Department declined prosecution when federal employees complained about receiving solicitation letters from then President Ford for Republican congressional

candidates that the Fraud section found were ‘‘patently coercive’’ in content and

tone? (DOJ–VP–00351).

Answer 12c. I have insufficient knowledge of that 1976 matter to give a responsible answer.

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FEDERAL ELECTION COMMISSION,

Washington, DC, June 21, 2000.

Hon. ARLEN SPECTER,

711 Hart Senate Office Building,

Washington, DC.

DEAR SENATOR SPECTER: In response to your invitation to us on Monday, both

Vice Chairman Danny McDonald and I will be pleased to attend the hearing of the

Judiciary Subcommittee on Oversight on Wednesday afternoon, June 21.

We understand the purpose of our appearance is primarily to respond to questions

from the Committee concerning the Commission’s application of the provisions of

the Federal Election Campaign Act, including in the context of the 1996 Presidential

campaigns. We will of course be glad to answer any questions that the Committee

has.

In advance of the hearing, I thought it might be helpful to provide some brief

written materials that may assist the Committee in putting the issues that it is concerned within the context of the provisions of the FECA.

The limitations of the FECA on the amount and sources of contributions to candidates, political parties, and other entities for the purpose of influencing a federal

election are well known as the ‘‘hard money’’ limits of the FECA. These ‘‘hard

money’’ limits have two aspects: limitations on the amount of contributions, and prohibitions against contributions from certain sources.

The first attachment shows the limitations imposed by the FECA on the amount

of contributions.

The second aspect of hard money, the prohibitions on sources, prohibits contributions from three sources that are well-known: corporations, labor organizations, and

foreign nationals. Other prohibited sources include national banks, and federal contractors.

A key question, however, is when recipients must use only hard money, and when

they may use soft money.

The second attachment describes many of the more common circumstances in

which hard money must be used, and when soft money may be used. I caution that

this chart is a general description only, and is subject to a number of caveats, including those mentioned in the endnotes.

I hope that these materials and other materials that the Commission has provided

in response to your earlier requests will be helpful. I look forward to seeing you this

afternoon.

Sincerely,

DARRYL R. WOLD,

Chairman.

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FEDERAL ELECTION COMMISSION,

Washington, DC, July 28, 2000.

Hon. ARLEN SPECTER,

U.S. Senator, Committee on the Judiciary, Subcommittee on Administrative Oversight and the Courts, Washington, DC.

DEAR SENATOR SPECTER: During the hearing before the Senate Judiciary, Subcommittee on Administrative Oversight and the Courts on June 21, 2000, you asked

the Commission to supplement the record with information on two matters. First,

you requested the Commission’s views on possible legislative amendments to expedite the enforcement process by authorizing the Commission to seek injunctive relief

earlier in the enforcement process. And, second, you asked whether a seventh Commissioner is advisable to remedy deadlocked votes at the Commission.

With respect to seeking timely injunctive relief, the Commission made a recommendation on this subject as part of its legislative recommendation package submitted to Congress in 1998. A copy of that recommendation is enclosed, including

the dissent of one Commissioner. In 1999, however, that recommendation did not

receive four affirmative votes for inclusion in our legislative recommendation package, and has not been included since.

With regard to the FEC’s structure, the Commission never has taken a position,

or discussed this issue as a policy matter. As you know, Congress carefully structured the Agency by requiring that no more than three of the six members may be

from the same political party. In addition, the statute requires at least four votes

to pursue a violation or issue a ruling. This precludes either party from gaining control of the FEC and using the Commission for partisan purposes. Commissioners

work hard to avoid 3–3 deadlocks. As Vice Chairman McDonald noted during the

hearing, however, while all Commissioners have a thorough knowledge of the law,

we legitimately differ over a number of fundamental issues.

Under the current structure, to the extent 3–3 votes occur, there is a system in

place to review the issue when it reaches the enforcement stage. As provided by the

statute, a complainant who is aggrieved by the FEC’s failure to pursue a complaint

can sue the Agency in U.S. District Court. If the court concludes the position of

those voting not to pursue the matter is contrary to law, the court may order the

FEC to act on the matter, and may even allow the complainant to sue the respondent directly. Thus, the courts can resolve 3–3 deadlocks of the enforcement process

under these circumstances.

As the public record reflects, however, these 3–3 deadlocks along partisan lines

on controversial matters are rare occurrences. For example, a study the Commission

conducted last year concluded about 2.56% of Commission votes resulted in some

sort of split or deadlock vote. Specifically, of the 4,725 Commission votes cast from

1993 through early 1999, only 121 (2.56%) resulted in a 3–2 or 3–3 deadlock. IN

addition, for your information, I have enclosed a response submitted to the House

Appropriations Subcommittee answering questions for the record last year which

address the Clinton and Dole Audits specifically.

Thank you for giving the Commission the opportunity to appear before the Committee. If the Committee has additional questions, please do not hesitate to contact

me.

Sincerely,

DARRYL R. WOLD,

Chairman.

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539

CLINTON AND DOLE AUDITS

Mr. HOYWER. You read in the Washington Post that this 3–3 vote cost us $25 million in recompense from the Dole and the Clinton campaigns. Could you comment

on that. What about the Washington Post premise (editorial)—and other premises

that, because you have this 3/3 split, you really have a toothless tiger that can’t do

anything when it readlly gets tough because the parties will sort of block up, lock

up and confirm one another and no resolution will be forthcoming. My view is it

can work if we have six honest people who want to do a job to enforce the law.

Please respond.

[The information follows:]

With respect to the recent votes in the Clinton and Dole campaign audits, it is

true the commissioners did reduce substantially the staff’s recommended public

funding repayment determinations. The staff recommended that the Dole primary

campaign repay about $2.5 million and that the Dole general campaign repay about

$14.5 million. The staff recommended that the Clinton primary campaign repay

about $7 million and that the Clinton general campaignn repay less than $.5 million.

The vast majority of the staff’s recommended repayment amounts stemmed from

spending by the party committees assertedly in coordination with or in support of

the candidate committees. The staff believed: (1) the party spending should be attributed to the candidates’ spending limitations in the nomination phase or general

phase, (2) this caused the candidates to exceed the limitations, and (3) the candidates thereby incurred repayment obligations regarding the ‘‘non-qualified’’ excessive spending.

The commissioners unanimously agreed that most of the party spending at issue

should be attributed to the primary phase based on when it occurred. This by itself

reduced the total potential Dole repayment from about $17 million to about $8 million. Then, however, the commissioners failed by a vote of 3–2 (and 1 absention) to

pass a motion to interpret the primary funding statute in a way that would preclude

the FEC from ordering repayment based on excessive primary spending. Thus, the

bulk of the remaining repayment recommended by the staff fell short of the 4 vote

majority required. The adjusted potential Dole primary repayment for excessive

spending was reduced from about $5.5 million to $zero, and the potential Clinton

campaign repayment for excessive spending went from about $7 million to $zero. A

copy of materials explaining the alternative viewpoints on the issue that led to the

3–2 vote can be found at Attachment 3 at the end of the questions.

It must be noted that one of the most controversial elements of the potential repayment amounts involved party spending for ads that included reference to one or

the other of the presidential candidates. After the 3–2 vote referred to above, there

was a unanimous vote rejecting the staff recommendation to require repayment

from the primary campaign committees stemming from all of the ads identified in

the audit reports. Different commissioners voiced different reasons for supporting

the motion, however. Clearly, at least three believed the FEC had no legal authority

to seek repayment; some believed that some, but not all, of the ads should generate

a repayment; and some believed that none of the ads should generate a repayment.

There were remaining repayment obligations, even after the foregoing votes. The

Commission approved repayments for the Dole campaign totaling about $3.7 million

and for the Clinton campaign totaling about $140,000.

With respect to whether the FEC’s structure—with 3 Democrats and 3 Republicans, historically—results in a ‘‘toothless tiger,’’ there are proponents on either side

of the debate. Perhaps the following would help assess this oft-reported charge.

Many, including Republican and Democratic party representatives, have argued

the FEC is too tough. For example, when in 1991 the FEC required parties to use

set allocation formulas for party building expenses, forbade non-federal account advance payments, and required disclosure of national party ‘‘soft money’’ receipts,

many party officials were not pleased. Moreover, given the number of compliance

cases the FEC has pursued against Republican or Democratic party entities over the

years, it would be difficult to argue the FEC has been ‘‘toothless.’’ See, e.g., MUR

4398 ($82,000 civil penalty regarding Republican Party of Florida receiving prohibited contribution); MUR 3620 ($75,000 civil penalty regarding DSCC’s tally system).

On the other hand, the FEC has been unable to reach a 4-vote consensus on several difficult, controversial issues affecting party entities or other players in the political process. For example, the FEC split 3–3 on whether the NRSC’s practice of

routing donors’ funds to particular candidates was a form of ‘‘direction or control’’

that should affect the NRSC’s own contribution limits. See, FEC v. National Republican Senatorial Committee, 966 F.2d 1471 (D.C. Cir. 1992). The FEC also split 3– 3 on whether certain contributions the 1992 Clinton campaign received after the

540

nomination were improperly treated by the campaign as general election compliance

fund proceeds. See, Gottlieb v. FEC, 143 F.3d 618 (D.C. Cir. 1998).

The structure of the FEC is designed to assure that no one political party can

force its will on other parties regarding FEC matters. The importance of that goal

probably outweighs the problems generated by occasional 3–3 split votes. It should

be noted, moreover, that 3–3 votes in enforcement matters can be brought to the

courts by an aggrieved complainant. See 2 U.S.C. § 437g(a)(9).

On balance over the years, the FEC has shown an ability to reach consensus on

most of the issues that come before it. The Commission has conducted 4,725 votes

since 1993. Only 121 (2.56%) of these votes resulted in a 3–3 or 3–2 margin. While

we have not attempted to analyze each of the 3–3 and 3–2 votes, they have not always been along party lines. These figures indicate that the phenomenon of split

votes is a relatively rare occurrence in the Commission’s overall operations. The fact

that commissioners of more than one party approve any majority vote lends credibility to FEC decisions.

Compared to the situation that existed before the FEC’s creation, the attention

to enforcement of the law is certainly greater. Whereas before the FEC’s creation

thousands of referrals of violations to the Department of Justice were simply ignored, the FEC has activated over 4,000 compliance cases and conducted over 500

full-scope audits. Over the last 10 years the FEC has collected over $7 million in

civil penalties. The auditing of publicly funded committees has yielded over $10 million in repayments. These actions, against persons and entities of all political

stripes, have proceeded with majority votes reflecting a political consensus among

the six commissioners.

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