III

103D CONGRESS

2D SESSION S. RES. 217

Establishing a special subcommittee within the Committee on Banking, Housing, and Urban Affairs to conduct an investigation into allegations concerning the Whitewater Development Corporation, Madison Guaranty

Savings and Loan Association, and Capital Management Services, Inc.,

and other related matters.

IN THE SENATE OF THE UNITED STATES

MAY 25 (legislative day, MAY 16), 1994

Mr. D’AMATO (for himself, Mr. DOLE, Mr. WALLOP, Mr. MURKOWSKI, Mr.

GRAMM, Mr. MACK, Mr. BOND, Mr. FAIRCLOTH, Mr. BENNETT, Mr. DOMENICI, Mr. ROTH, Mr. NICKLES, Mr. SIMPSON, Mr. LOTT, Mr. MCCAIN,

Mr. STEVENS, Mrs. HUTCHISON, Mr. KEMPTHORNE, Mr. SMITH, Mr.

HATCH, Mr. CRAIG, Mr. HELMS, Mr. COVERDELL, Mr. PRESSLER, Mr.

THURMOND, Mr. MCCONNELL, and Mr. COCHRAN) submitted the following resolution; which was referred to the Committee on Rules and Administration

RESOLUTION

Establishing a special subcommittee within the Committee

on Banking, Housing, and Urban Affairs to conduct

an investigation into allegations concerning the

Whitewater Development Corporation, Madison Guaranty

Savings and Loan Association, and Capital Management

Services, Inc., and other related matters.

1 Resolved,
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1 ESTABLISHMENT OF THE SPECIAL SUBCOMMITTEE

2 SECTION 1. (a) There is established a special sub3 committee within the Committee on Banking, Housing,

4 and Urban Affairs to be known as the Special Subcommit5 tee on Certain Allegations Concerning Whitewater Devel6 opment Corporation, Madison Guaranty Savings and Loan

7 Association, and Capital Management Services, Inc., and

8 Related Issues (hereafter in this resolution referred to as

9 the ‘‘special subcommittee’’).

10 (b) The purpose of the special subcommittee is—

11 (1) to conduct an investigation into, and study

12 of, all matters which have any tendency to reveal the

13 full facts about—

14 (A) the operations, solvency, and regula15 tion of Madison Guaranty Savings and Loan

16 Association, including the alleged use of feder17 ally insured funds as campaign contributions;

18 (B) the relationship among Madison Guar19 anty Savings and Loan Association, other feder20 ally insured institutions, and Whitewater Devel21 opment Corporation;

22 (C) the management and business activi23 ties of Whitewater Development Corporation

24 and its shareholders, including issues of per25 sonal, corporate, and partnership tax liability;
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1 (D) the policies of the Resolution Trust

2 Corporation, Federal banking agencies, and

3 other Federal regulatory agencies regarding

4 legal representation of the agencies, including

5 conflicts of interest and cost controls;

6 (E) the independence of the Resolution

7 Trust Corporation, Federal banking agencies,

8 and other Federal regulatory agencies, includ9 ing any improper contacts among officials of

10 the White House, the Department of the Treas11 ury, the Resolution Trust Corporation, the Of12 fice of Thrift Supervision, and any other Fed13 eral agency;

14 (F) the Resolution Trust Corporation’s in15 ternal handling of the criminal referrals con16 cerning Madison Guaranty Savings and Loan

17 Association;

18 (G) the pursuit by the Resolution Trust

19 Corporation of civil causes of action against po20 tentially liable parties associated with Madison

21 Guaranty Savings and Loan Association;

22 (H) the pursuit by the Office of Thrift Su23 pervision, the Federal Deposit Insurance Cor24 poration, and the Federal Savings and Loan In25 surance Corporation of administrative and civil
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1 causes of action against potentially liable par2 ties associated with Madison Guaranty Savings

3 and Loan Association;

4 (I) the Department of Justice’s handling

5 of the Resolution Trust Corporation’s criminal

6 referrals relating to Madison Guaranty Savings

7 and Loan Association;

8 (J) the delayed recusal of the United

9 States Attorney for the Eastern District of Ar10 kansas from the investigation or prosecution of

11 David Hale, Capital Management Services, Inc.,

12 and Whitewater Development Corporation;

13 (K) the sources of funding and the lending

14 practices of Capital Management Services, Inc.,

15 and its supervision and regulation by the Small

16 Business Administration, including loans to

17 Susan McDougal and the alleged diversion of

18 funds to Whitewater Development Corporation;

19 (L) the Park Police investigation into the

20 death of White House Deputy counsel Vincent

21 Foster;

22 (M) the operations and underwriting ac23 tivities of the Arkansas Development Finance

24 Authority;
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1 (N) the circumstances surrounding and the

2 propriety of the commodities-futures trading ac3 tivities of Hillary Rodham Clinton;

4 (O) the investment activities of Value

5 Partners I, including the compliance of these

6 activities with Federal laws governing conflicts

7 of interest;

8 (P) any other issues related to the matters

9 referred to in subparagraphs (A) through (O);

10 and

11 (Q) any issues developed during, or arising

12 out of, the hearings conducted by the special

13 subcommittee; and

14 (2)(A) to make such findings of fact as are

15 warranted and appropriate;

16 (B) to make such recommendations, including

17 recommendations for new legislation and amend18 ments to existing laws and any administrative or

19 other actions, as the special subcommittee may de20 termine to be necessary or desirable; and

21 (C) to fulfill the Constitutional oversight and

22 informing function of the Congress with respect to

23 the matters described in this section.

24 (c) For purposes of this section, the term ‘‘Madison

25 Guaranty Savings and Loan Association’’ includes any
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1 subsidiary company, affiliated company, or business

2 owned or controlled, in whole or in part, by Madison Guar3 anty Savings and Loan Association, its officers, directors,

4 or principal shareholders.

5 MEMBERSHIP AND ORGANIZATION OF THE SPECIAL

6 SUBCOMMITTEE

7 SEC. 2. (a)(1) The special subcommittee shall consist

8 of—

9 (A) 5 members of the Committee on Banking,

10 Housing, and Urban Affairs appointed by the chair11 man;

12 (B) 5 members of the Committee on Banking,

13 Housing, and Urban Affairs appointed by the rank14 ing member;

15 (C) 3 members of the Senate appointed by the

16 President pro tempore of the Senate from the major17 ity party of the Senate upon the recommendation of

18 the Majority Leader of the Senate; and

19 (D) 3 members of the Senate appointed by the

20 President pro tempore of the Senate from the minor21 ity party of the Senate upon the recommendation of

22 the Minority Leader of the Senate.

23 (2) Vacancies in the membership of the special sub24 committee shall not affect the authority of the remaining

25 members to execute the functions of the special sub-
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1 committee and shall be filled in the same manner as origi2 nal appointments to it are made.

3 (3) For the purpose of paragraph 4 of rule XXV of

4 the Standing Rules of the Senate, service of a Senator

5 as a member of the special subcommittee shall not be

6 taken into account.

7 (b)(1) The chairman and ranking member of the

8 Committee on Banking, Housing, and Urban Affairs shall

9 be cochairmen of the special subcommittee.

10 (2) A majority of the members of the special sub11 committee shall constitute a quorum for reporting a mat12 ter or recommendation to the Senate, except that a

13 quorum shall not be necessary for the purpose of taking

14 testimony before the special subcommittee or for conduct15 ing the other business of the special subcommittee.

16 (c)(1) The special subcommittee shall promptly adopt

17 appropriate rules and procedures consistent with this reso18 lution.

19 (2) The rules and procedures of the special sub20 committee shall—

21 (A) govern the proceedings of the special sub22 committee; and

23 (B) consistent with section 6 of this resolu24 tion—
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1 (i) provide for the security of the records

2 of the special subcommittee; and

3 (ii) prevent the unauthorized disclosure of

4 information and materials obtained by the spe5 cial subcommittee in the course of its investiga6 tion and study.

7 STAFF OF THE SPECIAL SUBCOMMITTEE

8 SEC. 3. (a)(1) Committee staff from committees hav9 ing jurisdiction over matters described in section 1(b) shall

10 be detailed to the special subcommittee, subject to avail11 ability, as requested by the cochairmen.

12 (2) In addition to staff detailed pursuant to para13 graph (1) and to assist the special subcommittee in its

14 investigation and study, the cochairmen, after approval of

15 the special subcommittee, may appoint special subcommit16 tee staff.

17 (3) All staff detailed pursuant to paragraph (1) or

18 appointed pursuant to paragraph (2) shall work for the

19 special subcommittee as a whole, shall report to the two

20 cochairmen and, except as otherwise provided by the spe21 cial subcommittee, shall be under the direction of the co22 chairmen.

23 (b) To assist the special subcommittee in its inves24 tigation and study, the Senate Legal Counsel and Deputy

25 Senate Legal Counsel shall work with and under the juris26 diction and authority of the special subcommittee.
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1 (c) The Majority and Minority Leaders of the Senate

2 may each designate one staff person to serve on the staff

3 of the special subcommittee to serve as their liaison to the

4 special subcommittee.

5 (d) The Comptroller General of the United States is

6 requested to provide from the General Accounting Office

7 whatever personnel, investigatory, material, or other ap8 propriate assistance may be required by the special sub9 committee.

10 PUBLIC ACTIVITIES OF THE SPECIAL SUBCOMMITTEE

11 SEC. 4. (a) Consistent with the rights of persons sub12 ject to investigation and inquiry, the special subcommittee

13 shall make every effort to fulfill the right of the public

14 and the Congress to know the essential facts and implica15 tions of the activities of officials of the United States Gov16 ernment and other persons and entities with respect to

17 the matters under investigation and study as described in

18 section 1.

19 (b) In furtherance of the public’s and Congress’ right

20 to know, the special subcommittee—

21 (1) shall hold, as either cochairman considers

22 appropriate, open hearings on specific subjects, sub23 ject to consultation and coordination within the inde24 pendent counsel appointed pursuant to chapter 28,

25 part 600, of the Code of Federal Regulations (re26 ferred to as the ‘‘independent counsel’’);
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1 (2) may make interim reports to the Senate as

2 it considers appropriate; and

3 (3) shall make a final comprehensive public re4 port to the Senate which contains a description of all

5 relevant factual determinations consistent with sub6 section (a) of this section and section 1(b)(2) and

7 which contains recommendations for new legislation,

8 if necessary.

9 POWERS OF THE SPECIAL SUBCOMMITTEE

10 SEC. 5. (a) The special subcommittee shall do every11 thing necessary and appropriate under the laws and Con12 stitution of the United States to make the investigation

13 and study specified in section 1.

14 (b) The special subcommittee is authorized to issue

15 subpoenas for obtaining testimony and for the production

16 of documentary or physical evidence. A subpoena may be

17 authorized and issued by the special subcommittee, acting

18 through either cochairman or any other member des19 ignated by either cochairman, and may be served by any

20 person designated by either cochairman or other member

21 anywhere within or without the borders of the United

22 States to the full extent permitted by law. Either cochair23 man of the special subcommittee, or any other member

24 thereof, is authorized to administer oaths to any witnesses

25 appearing before the subcommittee.
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1 (c) The special subcommittee is authorized to do the

2 following:

3 (1) To employ and fix the compensation of such

4 clerical, investigatory, legal, technical, and other as5 sistants as the special subcommittee considers nec6 essary or appropriate.

7 (2) To sit and act at any time or place during

8 sessions, recesses, and adjournment periods of the

9 Senate.

10 (3) To hold hearings, take testimony under

11 oath, and to receive documentary or physical evi12 dence relating to the matters and questions it is au13 thorized to investigate or study.

14 (4) To request a grant of immunity under sec15 tion 6005 of title 18, United States Code, after con16 sultation with the independent counsel.

17 (5) To require by subpoena or order the attend18 ance, as witnesses before the special subcommittee

19 or at depositions, of any person either cochairman

20 determines may have knowledge or information con21 cerning any of the matters the special subcommittee

22 is authorized to investigate and study.

23 (6) To take depositions and other testimony

24 under oath anywhere within the United States, to

25 issue orders by either cochairman or any other mem-
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1 ber designated by either cochairman which require

2 witnesses to answer written interrogatories under

3 oath, and to make application for issuance of letters

4 rogatory.

5 (7) To issue commissions and to notice deposi6 tions for staff members to examine witnesses and to

7 receive evidence under oath administered by an indi8 vidual authorized by local law to administer oaths.

9 The special subcommittee, acting through either co10 chairman, may authorize and issue, and may dele11 gate to designated staff members the power to au12 thorize and issue, commissions and deposition no13 tices.

14 (8) To require by subpoena or order—

15 (A) any department, agency, entity, officer,

16 or employee of the United States Government,

17 (B) any person or entity purporting to act

18 under color or authority of State or local law,

19 or

20 (C) any private person, firm, corporation,

21 partnership, or other organization,

22 to produce for its consideration or for use as evi23 dence in the investigation or study of the special

24 subcommittee any book, check, canceled check, cor25 respondence, communication, document, financial
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1 record, paper, physical evidence, photograph, record,

2 recording, tape, or any other material relating to

3 any of the matters or questions such subcommittee

4 is authorized to investigate and study which they or

5 any of them may have in their custody or under

6 their control.

7 (9) To make to the Senate any recommenda8 tions, including recommendations for criminal or

9 civil enforcement, which the special subcommittee

10 may consider appropriate with respect to—

11 (A) the willful failure or refusal of any per12 son to appear before it, or at a deposition, or

13 to answer interrogatories, in obedience to a sub14 poena or order;

15 (B) the willful failure or refusal of any

16 person to answer questions or give testimony

17 during his appearance as a witness before such

18 subcommittee, or at a deposition, or in response

19 to interrogatories; or

20 (C) the willful failure or refusal of—

21 (i) any officer or employee of the

22 United States Government,

23 (ii) any person or entity purporting to

24 act under color or authority of State or

25 local law, or
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1 (iii) any private person, partnership,

2 firm, corporation, or organization,

3 to produce before the subcommittee, or at a

4 deposition, or at any time or place designated

5 by the subcommittee, any book, check, canceled

6 check, correspondence, communication, docu7 ment, financial record, paper, physical evidence,

8 photograph, record, recording, tape, or any

9 other material in obedience to any subpoena or

10 order.

11 (10) To procure the temporary or intermittent

12 services of individual consultants, or organizations

13 thereof.

14 (11) To use on a reimbursable basis, with the

15 prior consent of the Government department or

16 agency concerned, the services of personnel of such

17 department or agency.

18 (12) To use, with the prior consent of the

19 chairman or ranking member of any other Senate

20 committee or the chairman or ranking member of

21 any subcommittee of any committee of the Senate,

22 the facilities or services of the appropriate members

23 of the staff of such other Senate committee when24 ever the special subcommittee or either cochairman

25 consider that such action is necessary or appropriate
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1 to enable the special subcommittee to make the in2 vestigation and study provided for in this resolution.

3 (13) To have access through the agency of any

4 members of the special subcommittee, staff director,

5 chief counsel, or any of its investigatory assistants

6 designated by either cochairman, to any data, evi7 dence, information, report, analysis, document, or

8 paper—

9 (A) which relates to any of the matters or

10 questions which the special subcommittee is au11 thorized to investigate or study;

12 (B) which is in the possession, custody, or

13 under the control of any department, agency,

14 entity, officer, or employee of the United States

15 Government, including those which have the

16 power under the laws of the United States to

17 investigate any alleged criminal activities or to

18 prosecute persons charged with crimes against

19 the United States without regard to the juris20 diction or authority of any other Senate com21 mittee; and

22 (C) which will aid the special subcommittee

23 to prepare for or conduct the investigation and

24 study authorized and directed by this resolu25 tion.
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1 (14) To report violations of any law to the ap2 propriate Federal, State, or local authorities.

3 (15) To expend, to the extent the special sub4 committee determines necessary and appropriate,

5 any money made available to such subcommittee by

6 the Senate to make the investigation, study, and re7 ports authorized by this resolution.

8 (16) Under sections 6103(f)(3) and 6104(a)(2)

9 of the Internal Revenue Code of 1986, to inspect

10 and receive for the fiscal years 1977–1992 any tax

11 return, return information, or other tax-related ma12 terial, held by the Secretary of the Treasury, related

13 to individuals and entities named by the special sub14 committee as possible participants, beneficiaries, or

15 intermediaries in the transactions under investiga16 tion.

17 (d) The level of compensation payable to any em18 ployee of the special subcommittee shall not be subject to

19 any limitation on compensation otherwise applicable to an

20 employee of the Senate. No employee of the special sub21 committee may receive pay at a rate of pay in excess of

22 the rate of pay payable for a position at level III of the

23 Executive Schedule under section 5314 of title 5, United

24 States Code.
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1 PROTECTION OF CONFIDENTIAL INFORMATION

2 SEC. 6. (a) All staff members and consultants shall,

3 as a condition of employment, agree in writing to abide

4 by the conditions of an appropriate nondisclosure agree5 ment promulgated by the special subcommittee.

6 (b) The case of any Senator who violates the security

7 procedures of the special subcommittee may be referred

8 to the Select Committee on Ethics of the Senate for the

9 imposition of sanctions in accordance with the rules of the

10 Senate. Any staff member or consultant who violates the

11 security procedures of the special subcommittee shall im12 mediately be subject to removal from office or employment

13 with the special subcommittee or shall be subject to such

14 other sanction as may be provided in the rules of the spe15 cial subcommittee.

16 (c) Upon the termination of the special subcommittee

17 pursuant to section 9 of this resolution, all records, files,

18 documents, and other materials in the possession, custody,

19 or control of the special subcommittee, under appropriate

20 conditions established by such subcommittee, shall be

21 transferred to the National Archives.

22 RELATION TO OTHER INVESTIGATIONS

23 SEC. 7. (a) In order to—

24 (1) expedite the thorough conduct of the inves25 tigation and study authorized by this resolution;
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1 (2) promote efficiency among all the various in2 vestigations underway in all branches of the United

3 States Government; and

4 (3) engender a high degree of confidence on

5 the part of the public regarding the conduct of

6 such investigation,

7 the special subcommittee is encouraged—

8 (A) to coordinate, to the extent practicable, its

9 activities with the investigation of the independent

10 counsel;

11 (B) to seek the full cooperation of all relevant

12 investigatory bodies; and

13 (C) to seek access to all information which is

14 acquired and developed by such bodies.

15 (b) The cochairmen shall meet with the independent

16 counsel to obtain relevant information concerning the sta17 tus of the independent counsel’s investigation to assist in

18 establishing a hearing schedule for the special subcommit19 tee.

20 (c) The Senate requests that the independent counsel

21 make available to the special subcommittee, as expedi22 tiously as possible, all documents and information which

23 may assist the special subcommittee in its investigation

24 and study.
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1 SALARIES AND EXPENSES

2 SEC. 8. Such sums as are necessary shall be available

3 from the contingent fund of the Senate out of the Account

4 for Expenses for Inquiries and Investigations for payment

5 of salaries and other expenses of the special subcommittee

6 under this resolution, which shall include sums which shall

7 be available for the procurement of the services of individ8 ual consultants or organizations thereof, in accordance

9 with section 5(c)(9). Payment of expenses shall be dis10 bursed upon vouchers approved by either cochairman of

11 the special subcommittee, except that vouchers shall not

12 be required for the disbursement of salaries paid at an

13 annual rate.

14 REPORTS; TERMINATION

15 SEC. 9. (a)(1) The special subcommittee shall make

16 a final public report to the Senate of the results of the

17 investigation and study conducted by such subcommittee

18 pursuant to this resolution, together with its findings and

19 any recommendations at the earliest practicable date.

20 (2) The final report of the special subcommittee may

21 be accompanied by whatever confidential annexes are nec22 essary to protect confidential information.

23 (b) After submission of its final report, the special

24 subcommittee shall conclude its business and close out its

25 affairs as expeditiously as practicable.
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1 SUBCOMMITTEE JURISDICTION AND RULE XXV

2 SEC. 10. The jurisdiction of the special subcommittee

3 is granted pursuant to this resolution notwithstanding the

4 provisions of paragraph 1 of rule XXV of the Standing

5 Rules of the Senate relating to the jurisdiction of the

6 standing committees of the Senate.

Æ