May 17, 1995 CONGRESSIONAL RECORD — SENATE S6771

See, we have this idea that Democrats rejected about 40 years ago, and

that is families can do a better job of

spending their own money than you do

for them.

Now that sounds alien in Washington, DC, but in Little Rock, AR, people

are beginning to think maybe that is

the way we ought to do things.

Mr. DORGAN. I wonder if the Senator from Arkansas would yield to me?

Mr. PRYOR. I do not have the floor,

actually.

Mr. GRAMM. I have to go to a hearing on Legal Services, to let them

know the bad news.

The PRESIDING OFFICER. The

Chair would say, the hour of 10:30 having arrived, morning business was to

close.

Mr. PRYOR. Mr. President, seeing no

other Senators desiring recognition, I

ask unanimous consent that the Senator from North Dakota be allowed to

proceed for 3 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DORGAN. Mr. President, I was

curious about the question asked by

my colleague from Arkansas.

Our colleague, Senator GRAMM from

Texas, said that at this fundraiser they

were not giving anybody anything. I

assume he forgot, probably, that in the

vote in the House of Representatives

on the Contract With America, just to

name one little piece of that, they

eliminated the alternative minimum

tax for corporations.

You remember those stories in the

old days about a big corporation that

earned $3 billion in earned income, net

profit, and paid zero in Federal income

tax. Well, the Federal Government said

they wanted to correct that, so they

set up what was called an alternative

minimum tax, so you could never zero

it out, talking about the real big corporations now.

Well, in the House of Representatives, in the tax bill under the contract, they zero it out and they say,

‘‘No more alternative minimum tax.

You big companies, you make $5 billion, it is all right if you pay zero in

taxes.’’ But at same time they do that,

they say, ‘‘But we can give those companies’’—incidentally, about 2,000 companies—‘‘the equivalent of $2 million

each in tax breaks. We can afford to do

that, but we cannot afford to provide

student aid, as we used to, so we will

have to ask kids who are going to go to

college who do not have any money to

pay for it, we will make if harder for

kids to go to college because we cannot

afford investing in kids who go to college, as we used to, but we do have the

money to provide the equivalent of a $2

million tax break for each of 2,000 corporations by saying to those corporations, You no longer have to worry

about a little thing called the alternative minimum tax. You can zero it

out, if you like.’’

I am guessing the Senator from

Texas just forgot about that.

And there are a dozen more like it,

little old things that I am sure folks

would show up to show their appreciation for, but they are the kinds of

things that represent priorities—the

priorities that say we really believe in

the big interests here, we really think

the big interests need a lot more help

because if we rain on big interests

somehow it will all seep down to the

little folks that are trying to send

their kids to college. That is what I

think has been forgotten in this equation and this discussion between the

Senator from Texas and the Senator

from Arkansas.

Mr. President, I yield the floor.

CONCLUSION OF MORNING

fBUSINESS

The PRESIDING OFFICER. Morning

business is closed.

Under a previous order, the Senate

will now proceed to the consideration

of a resolution to be submitted the

Senator from New York [Mr. D’AMATO].

Mr. PRYOR. Mr. President, I suggest

the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The bill clerk proceeded to call the

roll.

Mr. D’AMATO. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. D’AMATO. Mr. President, I have

a resolution which I will shortly be

sending to the desk. May I ask, what is

the pending business?

The PRESIDING OFFICER. The

pending business is the resolution to be

considered by the Senator from New

York.

Mr. D’AMATO. I believe we have

agreed that there will be no more than

2 hours.

The PRESIDING OFFICER. That is

correct, from the time you bring it up.

Mr. D’AMATO. Will the time start to

run as of now?

The PRESIDING OFFICER. It is

when the Senator submits the resoluESTABLISHING A SPECIAL COMtion to the desk.

MITTEE TO INVESTIGATE WHITEfWATER DEVELOPMENT CORP.

AND OTHER MATTERS

Mr. D’AMATO. Mr. President, I send

the resolution to the desk on behalf of

myself and Senator DOLE—and I know

others would like to join—and I ask for

its immediate consideration.

The PRESIDING OFFICER. The

clerk will report.

The bill clerk read as follows:

A resolution (S. Res. 120) establishing a

special committee administered by the Committee on Banking, Housing, and Urban Affairs to conduct an investigation involving

Whitewater Development Corp., Madison

Guaranty Savings & Loan Association, Capital Management Services, Inc., the Arkansas Development Finance authority, and

other related matters.

The PRESIDING OFFICER. Is there

objection to the immediate consideration of the resolution?

There being no objection, the Senate

proceeded to consider the resolution.

Mr. D’AMATO. Mr. President,

Whitewater is a very serious matter.

Some questions raised by Whitewater

go to the very heart of our democratic

system of government. We must determine whether the public trust has been

abused. We must ascertain whether

purely private interests have been

placed above the public trust. The

American people have a right to know

the full facts about Whitewater and related matters.

After the Banking Committee’s hearings last year, many important questions still remain. The American people have a right and a need to know the

answers to these questions.

Congress has the responsibility to

serve as the public’s watchdog. We

would be derelict in our duties if we did

not pursue these Whitewater questions.

The Senate must proceed in an evenhanded, impartial, and thorough manner. We have a constitutional responsibility to resolve these issues.

Mr. President, we now bring before

the Senate a resolution that authorizes

a special committee administered by

the Banking Committee to continue

the Whitewater inquiry that was started but not completed during the last

Congress.

I thank my distinguished colleague,

Senator SARBANES, for his hard work

and cooperation in the preparation of

this resolution. We have jointly prepared a resolution that is balanced and

fair and that will allow the special

committee to search for the truth. I

am confident that Senator SARBANES

and I will continue the Banking Committee’s bipartisan approach to the

Whitewater matter.

Mr. President, our pursuit of these

questions must be and will be fair,

straightforward, and responsible. The

American people expect and deserve a

thorough inquiry committed to the

pursuit of truth. That is the American

way.

Last summer, the Banking Committee met these vigorous requirements.

Our examination of the Whitewater

matter was impartial, balanced, and

thorough. That is our goal in this Congress. I am confident that we will meet

these goals.

During last summer’s hearings, many

facts were uncovered. We learned that

certain top administration officials

were not fully candid and forthcoming

with the Congress. That is an undisputed fact. The public has a right to

expect more from those in positions of

trust. We also learned that senior

Treasury Department and Clinton

White House officials mishandled confidential law enforcement information

concerning Madison Guaranty. That is

another undisputed fact. Madison is

now defunct; it is a defunct S&L at the

heart of the Whitewater matter. The

failure of this Arkansas S&L eventually cost American taxpayers more

than $47 million.

Mr. President, the American people

have a right to know the answers to
S6772 CONGRESSIONAL RECORD — SENATE May 17, 1995

many serious questions still remaining

about Whitewater and related matters.

We have a constitutional obligation to

seek the answers to these questions.

That is why I am offering this resolution today.

Now I will briefly outline some of the

matters that this resolution authorizes

the special committee to investigate.

We will begin with the handling of the

papers in deputy White House counsel

Vince Foster’s office following his

death. Who searched Mr. Foster’s office

on the night of his death? What were

they looking for? What happened to

Mr. Foster’s papers? Were any papers

lost or destroyed? And who authorized

the transfer of Mr. Foster’s Whitewater

file to a closet in the First Family’s

residence? The public has a right to the

answers to these questions.

Mr. President, this resolution encourages the special committee to coordinate its activities with those of the

independent counsel, Kenneth Starr.

Senator SARBANES and I have met with

the independent counsel. Judge Starr

has indicated to us that he has no objection to the special committee’s plan

to inquire into the handling of Mr. Foster’s papers. Senator SARBANES and I

are committed to coordinating the

committee’s activities with those of

the special counsel.

This resolution authorizes the special

committee to pursue answers to other

questions raised during the Banking

Committee’s hearings last year.

We will explore the scope and impact

of the improper dissemination of confidential law enforcement information

concerning Madison Guaranty. How

widely did the Clinton administration

officials communicate this confidential

information? Did any high-ranking officials inform targets of criminal investigations? If so, did this impact any ongoing investigations? The public has a

right to know the answers to these

questions.

The special committee will also examine whether there were any improper contacts between the Clinton

White House and the Justice Department regarding Madison Guaranty.

We know that Paula Casey, the U.S.

attorney in Little Rock, declined to

pursue criminal referrals involving

Madison. That is an undisputed fact.

We also know that Webster Hubbell,

who has pleaded guilty to mail fraud

and tax evasion, was the No. 3 official

at the Justice Department at this critical time. This is another undisputed

fact.

The committee will ascertain whether Mr. Hubbell contacted Paula Casey

about Madison. And who else, if anyone, knew about these contacts with

the U.S. attorney. The public has the

right to know.

Mr. President, this resolution authorizes the special committee to explore whether the Resolution Trust

Corporation and other officials in

Washington tried to interfere improperly with RTC staff in Kansas City responsible for investigating wrongdoing

at Madison. If such interference occurred, who authorized it, and why?

The public deserves answers to these

questions.

During last summer’s hearings, the

Banking Committee learned that the

Treasury inspector general furnished

the Clinton White House, at the White

House counsel’s request, transcripts of

the inspector general’s depositions.

That is an undisputed fact.

The committee will now look into

whether these deposition transcripts

were used to coach administration witnesses before they appeared in front of

the committee. That would be wrong.

The public has a right to know if it

happened.

All of these matters that I have discussed so far involve events that occurred after January 1993 when President Clinton took office. There are also

serious questions regarding events that

occurred in Arkansas in the 1980’s when

President Clinton was Governor. This

resolution also authorizes the special

committee to examine these matters.

Some of these Arkansas matters are

complex and will require the committee’s close review of many thousands of

pages of documents.

We will review the operations and

regulations of Madison Guaranty. Did

James McDougal, Madison’s chairman

and Governor Clinton’s business partner, improperly divert Madison’s funds

to himself and others? Did any of this

money find its way into the White

House real estate project in which

McDougal and Governor Clinton were

partners? Did McDougal misuse Madison funds to cover any losses the First

Family suffered on their Whitewater

investment? The public has a right to

know the answers to these questions.

Mr. President, the resolution further

authorizes the special committee to examine the Rose law firm’s representation of both Madison and RTC, and senior partners at the Rose law firm, including Larry Rodham Clinton, Webster Hubbell, and Vince Foster. The

committee must ascertain whether the

Rose law firm properly handled the

RTC civil claims concerning Madison.

Did the firm have a conflict of interest, and did American taxpayers lose

money in the process?

We will also examine Capital Management Services and its president,

David Hale, a former Arkansas judge

and Clinton appointee. Hale has publicly charged that the President pressured him to make Small Business Administration loans that were used to

prop up Madison.

Did this happen? Did Hale also make

improper Small Business Administration loans to current Arkansas Gov.

Jim Guy Tucker?

Then there is the matter of the financing of the 1990 Arkansas gubernatorial campaign. We now know that

the president of the Perry County

Bank, Neal Ainley, has pleaded guilty

to violating Federal laws in connection

with the handling of certain large cash

transactions for the Clinton campaign.

Ainley claims he did so at the direction

of campaign officials. The public has a

right to know who authorized this activity and why.

Mr. President, this resolution will

authorize the special committee to examine these and related matters. We

will take every reasonable step to complete this inquiry promptly. We hope

that the administration cooperates

with us in this regard. But we also intend to be thorough and comprehensive.

This resolution provides $950,000 to

fund the special committee through

February 29, 1996. If additional money

is needed, the special committee will

make a recommendation not later than

January 15, 1996, and the majority and

minority will meet to determine the

time for any vote.

Mr. President, we expect to hold public hearings into the handling of the

papers of Vince Foster’s office in late

June or early July. We will continue

our inquiry by subject matter until it

is completed. In doing so, we will make

every effort not to interfere with the

independent counsel’s criminal investigation.

Mr. President, the American people

deserve to know the full facts about

Whitewater and related matters. As I

said at the outset, we will conduct this

inquiry in a fair, evenhanded, and impartial manner.

That is what the American people

want, expect, and deserve. I urge the

approval of this resolution.

I see that my distinguished colleague

and ranking member, Senator SARBANES, is here. We have allocated up to

2 hours, equally divided.

I yield the floor.

Mr. SARBANES. Mr. President, may

I ask what the time situation is?

The PRESIDING OFFICER (Mrs.

HUTCHISON). There are 2 hours, of which

15 minutes has already been used.

Mr. SARBANES. There is an hour

now remaining on this side?

The PRESIDING OFFICER. That is

correct.

Mr. SARBANES. I thank the Chair.

Madam President, it is not my intention to use the entire hour. I hope at

some point both sides might be able to

yield back time and proceed to final

consideration of the resolution.

Let me say at the outset that the resolution we are considering today,

which authorizes a special committee

to be administered by the Committee

on Banking, Housing, and Urban Affairs, is really a carrying out of resolutions that were adopted last year by

this body. I think it is important to

consider this resolution in the context

of those resolutions—actions taken by

the Senate last year.

On March 17, 1994, a little over a year

ago, the Senate adopted a resolution by

a vote of 98–0 expressing the sense of

the Senate that hearings should be

held on all matters relating to Madison, to Whitewater, and to Capital

Management.

Then, to carry out that resolution, at

least in part, on June 21 of last year,
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6773

the Senate agreed to Senate Resolution

229, which authorized hearings to be

held into certain areas. Those hearings

were done last summer. We had 6 days

of public hearings. We had extensive

analysis of documents that were provided to the inquiry committee in

order to enable it to carry out its responsibilities.

Now, one of the things that was authorized to be looked into by the June

21 resolution was the handling of the

Foster documents. That was later deferred, in response to a request from

the independent counsel who contacted

the committee and indicated that,

given the nature of his inquiry, it

would be preferable if the Committee

did not go ahead with that hearing. Accordingly, we held off.

Now the distinguished chairman has

indicated that it would be the first

item which will be considered in the

hearings that will now take place

under the resolution we are considering

here today.

So this resolution is in effect a continuation of our earlier work. It authorizes the completion of work specified in last year’s resolution, as well as

matters developed during and arising

out of the hearings that were held last

summer, and also a number of matters

my colleague has enumerated that

carry forth on the sense-of-the-Senate

commitment last year to investigate

all matters pertaining to Madison.

I want to go through some other aspects of this resolution, just to lay

them out on the record. The chairman

of the Banking Committee, Senator

D’AMATO, has gone through a number

of matters that have been provided for

in this resolution to be examined by

the special committee. The special

committee, administered by the Banking Committee, shall consist of all of

the members of the Banking Committee plus two members added from the

Judiciary Committee. The chairman

and ranking members of the Committee on the Judiciary, or their designees, will join with the members of

the Banking Committee to constitute

the special committee which will be

administered by the Banking Committee. So it is essentially—or primarily,

let me say—a Banking Committee activity, since most of the areas to be examined clearly fall under the jurisdiction of the Banking Committee. But we

did add from the Judiciary Committee

last year. A member came on in order

to help carry out the inquiry. And

there are some matters that are contained in the resolution, to be examined that, it could well be argued, are

under the jurisdiction of the Judiciary

Committee. So, to bring that together,

we are bringing on two members from

the Judiciary Committee, the chairman and ranking member or their designees. They will be designating someone else to handle this responsibility if

they choose to do so, and I do not know

at this point what Chairman HATCH

and ranking member BIDEN intend to

do in that regard. But obviously we

will abide by their decision.

We have also provided in the resolution which is now before us, and which

shortly will be adopted, for rules and

procedures of this committee which essentially will be the rules and procedures of the Senate, the Standing

Rules of the Senate, and the rules of

procedure of the Committee on Banking, Housing, and Urban Affairs. That

is, in effect, the rules framework, procedural framework within which we

will operate. There are in the resolution sections that cover aspects of the

process that the special committee will

follow; these are matters it was deemed

important that we spell out in the resolution how they were going to be

dealt with. Those involve questions of

subpoena powers, questions of how the

hearings will be conducted—important

questions about immunity. I want to

underscore that because that is a matter we have had to address before.

We provide that to grant a witness

immunity—I want to read this section

because it is an important matter. The

special committee has the power: ‘‘To

grant a witness immunity under section 6002 and 6005’’ of title 18, United

States Code, ‘‘provided that the independent counsel has not informed the

special committee in writing that immunizing the witness would interfere

with the ability of the independent

counsel successfully to prosecute

criminal violations.’’

We also provide for staffing of the

committee. There is power to appoint

special committee staff including consultants, assistance from the Senate

legal counsel, assistance from the

Comptroller General. There is a provision whereby the committee can draw

on other Government agencies, Government personnel, and on other congressional staff. And we hope, through a

combination of all of these sources,

that we will have an adequate staff to

carry out a proper inquiry and investigation.

There is also, of course, special provision for the protection of confidential

information, since we will be interacting with the independent counsel and

others and we think it is important to

have such provisions.

Finally, the money asked for in this

resolution, just under $1 million,

$950,000, is to cover the salaries and

other expenses of the special committee carrying out this inquiry, beginning on the date of the adoption of this

resolution—I assume today—and ending February 29, 1996.

If it is judged that additional money

is needed, that the inquiry needs to go

forward and additional money is required in order to fund it, the special

committee will recommend that. Of

course there will have to be a further

vote for the providing of additional

moneys to the special committee.

Mr. President, let me just make a

couple of further, more general observations. I have very quickly gone

through the resolution and I think

most of it is straightforward. I think

Members of the Senate upon reviewing

it will conclude that is the case. Many

of the provisions are what one might

call boilerplate for such an inquiry,

and track previous provisions that

have been used in various Senate resolutions establishing committees to

carry out inquiries or investigations of

the sort that is being authorized here.

I listened to the chairman with great

interest and I was particularly encouraged by his very strong statement of

the need to conduct impartial, balanced and thorough hearings, which is

exactly what I think needs to be done.

There are a lot of allegations that are

swirling around and there are a lot of

questions that are being raised. We see

them from time to time raised in the

press and in the media. And, of course,

one could sit around all day long and

conjure up one question after another.

It is not difficult, it is very easy. It is

not difficult just simply to say, ‘‘Well,

suppose this happened or suppose that

happened; or if this or if that.’’ Of

course, one of the purposes of these

hearings is to get a good, tough-minded

examination of these various allegations to see if there is anything to

them. It needs to be appreciated, that

it is very easy to make the allegations.

Whether the allegations are in fact

substantiated by the facts is a tougher

question to determine, and that does

require an impartial, balanced and

thorough hearing. In fact, the President himself has said the best way to

address these matters is to look at the

facts candidly, and that is what I very

much hope and expect that this committee will be able to do.

I do think last summer we conducted

hearings that were perceived by all as

being thorough and fair and impartial.

We went at it, in effect, to find out

what the facts were, to ascertain the

truth. I think we pressed that issue in

a resolute manner, and I would expect

the special committee will do so in the

case that is—in the instance that is before us.

These hearings will make an effort to

get the facts out fully and impartially.

We anticipate that the administration

will cooperate with this effort. They

certainly have indicated that is what

they intend to do. Last year they made

every document available that was requested, as I recall. I think I am correct in that statement. Now the time

has come to move forward, to begin our

hearings, to begin, in effect, to examine these various questions and allegations and ascertain with respect to

each of them whether there is any factual grounding behind them or whether

they simply raise questions that people

can ask. And that, of course, is the purpose of the inquiry which we will be

undertaking here with this provision of

$950,000 to carry out this investigation

in the period between now and February 29. The resolution provides that

the special committee shall make

every reasonable effort to complete,
S6774 CONGRESSIONAL RECORD — SENATE May 17, 1995

not later than February 1, 1996, the investigation, study, and hearings authorized by section 1.

This resolution does provide the basis

for carrying out a full and proper, impartial, and balanced hearing.

I think our challenge now is to move

ahead in carrying out our responsibilities in the special committee. It is a

heavy burden to add to the responsibilities that Members already have but is

one that obviously we are charged with

responding to.

As I said, we adopted resolutions last

year addressing this matter. This, in

effect, carries forward on those resolutions. It is a continuation, in effect, of

that work. But I hope that if we apply

ourselves to it over the coming

months, we will be able to work

through all of these matters and, in effect, bring this issue to closure in the

sense that the Members of the Senate

and the American people know that the

various questions have been raised and

thoroughly examined, that it has been

done with a great deal of balance and

fairness and impartiality, and that

these are what the facts are as a consequence of that investigation and inquiry.

Madam President, I yield the floor.

Madam President, I suggest the absence of a quorum. Will time be equally

charged?

The PRESIDING OFFICER. Only by

unanimous consent.

Mr. SARBANES. I ask unanimous

consent to put in a quorum call and

that the time be equally charged to

both sides.

The PRESIDING OFFICER. Is there

objection? Hearing none, it is so ordered. The time will be charged to both

sides equally.

The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. FAIRCLOTH. Madam President,

I ask unanimous consent that the order

for the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. FAIRCLOTH addressed the

Chair.

The PRESIDING OFFICER. Who

yields time to the Senator from North

Carolina?

Mr. D’AMATO. I yield to the Senator

from North Carolina whatever time he

needs, Madam President.

The PRESIDING OFFICER. The Senator from North Carolina is recognized.

Mr. FAIRCLOTH. Madam President,

I want to begin my remarks by saying

that I plan to enthusiastically support

the Whitewater resolution.

I think it is a good resolution. I am

concerned, however, that a few key

things have been left out of it. Nevertheless, I think that before the hearings are over, we will wind up working

them in.

Nothing in this resolution allows us

to probe the circumstances surrounding the death of Vince Foster. When we

held the hearings last year in the Senate, a key witness, Captain Hume, simply did not show up at the hearings the

day he was supposed to be there. The

hearings had been planned for months.

Captain Hume was out of town that

day. He was supposed to be there. Our

ranking member at the time demanded

that they bring him back for several

days. But they did not bring him back.

The hearings adjourned and we never

heard from him. I do not think this was

a thorough airing of the issues, and I

think we need to do it again.

I understand that Mr. Starr is looking at this again. I hope that he will,

given the miserable job that Mr. Fiske

did of investigating.

Madam President, the Congress also

needs to probe the $100,000 profit in the

commodities market that came to Mrs.

Clinton courtesy of Red Bond and Jim

Blair, the general counsel of Tyson

Foods. This is not mentioned in the

resolution, and it should be.

Just recently, I discovered that a

friend of the Clintons, Barbara Holum,

was conveniently installed as acting

head of the CFTC before the story of

Mrs. Clinton’s commodity trades

broke.

There are many confusing issues.

Now we find that Red Bond, who did

the commodity trading, who is practically bankrupt, was able to pay off $7

million in back taxes just 2 months before the commodity trading story became public. To me, the evidence on

this is just too much to believe that all

of this is a coincidence.

Madam President, this resolution

does not allow us to probe the failure

of First American Savings & Loan in

Illinois.

If you can believe this, Vince Foster

and Mrs. Clinton were hired by the

Federal Government to sue Dan

Lasater. The same Dan Lasater that

was a close friend of the Clintons. That

is right, Mrs. Clinton was hired by the

Federal Government to sue Dan

Lasater in connection with the failure

of First American Savings & Loan in

Illinois. Mrs. Clinton participated in

the decision to lower the amount of

money the Government would recover

from Dan Lasater from $3.3 million to

$200,000, and we do not know yet what

percentage of that went to her as attorney’s fee because the records were

sealed.

The Government spent over $100 billion to resolve the savings and loan crisis. With crooks like Dan Lasater involved and with Mrs. Clinton acting on

behalf of the taxpayers, suing a friend,

it is no wonder the cost was so high.

I want to again state my strong support—and I say this not necessarily in

the language as we often use in the

Senate—but of my good friend, fellow

member of the Banking Committee and

our chairman, ALFONSE D’AMATO. He

truly is a good friend, and he has given

us the leadership we need.

I hope, and I know that before this

hearing is over, under his leadership,

we will have probed all aspects of

Whitewater in a fair manner so that

the American people understand what

happened, when it happened, and who

knew it when it happened. I look forward to the hearings.

Mr. D’AMATO addressed the Chair.

The PRESIDING OFFICER. The Senator from New York is recognized.

Mr. D’AMATO. Madam President, I

know of my good friend, Senator

FAIRCLOTH’s concern that there be

ample scope to look into all of the

matters that are relevant, and I share

that concern. I think that this resolution very fairly embodies us with the

authority—and I would refer to page 4.

As my friend raises, we did not attempt to spell out every single area.

Page 4, line 12, says:

Subsection 3. To conduct an investigation

and public hearings into and study all matters that have any tendency to reveal the

full facts about . . .

Then we go through all of the various

areas. There are other Senators who

are going to speak, but I believe it is

important to summarize those areas.

Senator SARBANES has. The fact is that

we include the ability to look into the

bond underwriting contracts between

the Arkansas Development Finance

Authority and Lasater & Co., and all of

those activities to which my friend has

referred. But there must be a connection, and if there is a connection, well,

then, we will look into the area, and I

will touch on these areas in more detail before our time is up.

So I share my friend’s concern. This

will be thorough. It will be thoughtful.

And when subpoenas are issued—and I

must tell you that the specific instance

that he raises is troubling, that of a

witness who failed to respond to a subpoena, especially one who works for

the Government, who was given notice,

and who gave the committee, either

the majority or the minority or our

staff, no reason to believe that he

would not be there. That will not be

tolerated. If we run into a situation

like that, I can assure you, and I know

that the ranking member shares this

same concern, we want people to respond to subpoenas. We will not issue

them frivolously.

I think in that case a subpoena might

not have even been issued because we

assumed that he was going to be there.

So it is not a bad track record to have

almost everybody respond, including

even those who were not subpoenaed.

But, we will remain vigilant in seeking

this kind of cooperation.

I see that Senator BOND is in the

Chamber, and he is on the Banking

Committee and was an integral part of

last year’s hearings, and I yield to him

10 minutes from my time.

The PRESIDING OFFICER. The Senator from Missouri is recognized.

Mr. BOND. Madam President, I thank

my good friend, my colleague from New

York.

Madam President, as we begin the debate on this resolution authorizing a

second round of Whitewater hearings, I

thought it would be helpful to review

why the Senate and the committee

need these issues to be aired.
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6775

I wish to summarize for my colleagues some points that are particularly important to me and have come

from my experience with the first

round of hearings and also with the

hearing back in February where we

asked the questions that began some of

the process in finding out what has

gone on in the administration.

As most of the Nation now knows,

Madison Guaranty was a Little Rock

savings and loan which went belly-up

at the cost of nearly $50 million, and

was owned by James McDougal—the

business partner of the Clintons’ in the

Whitewater real estate deal.

Madison Guaranty was the classic

S&L story of insider dealing, reckless

loan policies and ultimate failure with

the U.S. taxpayers picking up the tab.

It is a part of the $105 billion cost of

the S&L debacle, and in that way is a

story repeated in many communities

around the country.

But one part of this case has made it

famous—many of its borrowers, directors, and counsel were prominent figures in Arkansas politics and government.

The tangled web of Madison, Jim

McDougal, and the Clintons has led to

two sets of criminal referrals, an ongoing civil liability investigation by the

RTC, a potential conflict of interest

case for the First Lady’s former law

firm, a conviction of a Little Rock

judge who improperly loaned SBA

money to McDougal and Whitewater,

several other recent guilty plea agreements and an ongoing investigation by

independent counsel Starr.

Since these issues first came to light,

I have said over and over that the

American people have a right to know

what happened to the millions of dollars lost, and we, in Congress, must fulfill our obligation and get the facts out

into the open.

Last year the Senate was engaged in

a lengthy struggle over what questions

and areas the Banking Committee

would be allowed to address as

Whitewater—Madison hearings begin.

Unfortunately, the Democratic leadership at that time did everything in

their power to limit the scope of the

hearings, and to block our efforts to

get at the truth—particularly as it relates to what Clinton administration

officials have done to control or interfere with investigations.

The questions we asked last year remain as relevant today as they did last

May:

Did Whitewater Development Corp.

benefit from taxpayers insuring of

Madison Guaranty deposits?

Did any of Madison’s federally insured funds go to benefit the Clinton

campaigns?

Were the bank regulatory agencies

operating in an impartial and independent manner as they handled Madison Guaranty?

How did the Resolution Trust Corporation handle the criminal referrals

on Madison—both under the Bush administration as well as the Clinton administration?

How did the Resolution Trust Corporation and the FDIC handle potential

civil claims against Madison—both

under the Bush administration as well

as the Clinton administration?

How did the Department of Justice

handle the RTC criminal referrals it received, again both under the Bush administration and the Clinton administration?

What were the sources of funding and

lending practices of Capital Management Services, and how did the SBA

regulate and supervise it, particularly

as it related to loans to Susan

McDougal and her company, Master

Marketing.

Full hearings on the WhitewaterMadison affair are needed so that all

these questions can be fairly asked and

answered. What happened in Arkansas,

what happened in the 1992 Clinton campaign in their efforts to keep the lid on

about the actions in Arkansas, and

what has the administration done to

manage the Madison-Whitewater issues

since they took office.

If we are to finally get to the bottom

of the story as to what happened with

the criminal referrals, I believe that we

need to start with the first criminal referral on Madison Guaranty which was

already in the Justice Department

awaiting action when the Clinton administration took office.

Remember, Madison Guaranty had

failed in 1989 and had been first taken

over by the FDIC, and then in August

1989 when Congress passed the S&L

bailout bill the newly created RTC

took over Madison.

The RTC’s mission was to close down

failed thrifts, sell the assets, pay off

the depositors and then seek out criminal or civil wrongdoing that may have

occurred. If they found criminal wrongdoing—fraud, or attempts to enrich,

they referred their findings to the Department of Justice for further action.

If they found civil wrongdoing—for

example, law firms or accounting firms

who helped institutions stay open by

providing misleading, incomplete or incorrect information to regulators or

the S&L’s board members—the RTC

would pursue those cases.

Thus from August 1989 the RTC had

Madison Guaranty on its plate. No action was taken by the RTC on potential civil claims, but several criminal

referrals were developed. In one case

Jim McDougal and two others were accused of fraud, but were acquitted, in

another case a board member plead

guilty to falsifying documents.

Then came March 1992 when the New

York Times reported a series of potential misdealings in Madison Guaranty

and spurred the RTC to take another

look at the institution. This second

look caused the first criminal referral

to be sent to Justice in the fall of 1992,

and it was this referral which awaited

final action when the Clinton administration came into office in January

1993.

I give this brief history in order to

put things into perspective. Last year,

Senator SPECTER and I offered amendments to the Whitewater Committee

resolution which would have allowed

the Banking Committee to pick up

story at this point, and follow the trail

of the first referral as it made its way

through the Government, and then to

follow the trail of the second referral

as it was developed throughout 1993, up

to and including the improper contacts

by Treasury officials with White House

staff. This of course would entail questioning the RTC officials involved, Justice Department officials involved, as

well as Treasury and White House

staff.

Because we must remember that on

the day that the Clinton administration officials walked in the door on

January 21, 1993, a criminal referral on

Madison Guaranty was sitting in the

Department of Justice.

I for one still want to know:

How did the Department of Justice

handle this referral?

Was the White House informed and if

so when and by whom?

Who in Justice was assigned to monitor the Madison case, and what actions did they take?

And then, as we know now, just

months after taking office, a second set

of referrals was being developed—and it

too was sent off to the Clinton Justice

Department by RTC officials in Kansas

City.

I want to know why the RTC decided

to stay on the case. What happened to

get a series of RTC officials reassigned

and taken off the case? Is there a pattern of special treatment for politically sensitive cases? And again, how

did the Department of Justice handle

the second referral?

I want to know why did the Clinton

appointed Little Rock U.S. attorney

Paula Casey, along with Webb Hubbell,

delay their recusals until after the decision not to prosecute Madison was

made? I also want to know the details

about Paula Casey and Webb Hubbell’s

phone contacts during the period when

Casey was deciding what to do with the

referrals, and did either one of them

have any contact with the White House

on the referrals at any time?

And now, just in the past weeks we

have seen reported by the Associated

Press that:

Preparing for televised Whitewater hearings last summer, White House attorneys

consulted confidential depositions from a

Treasury investigation in an effort to reconcile differing accounts of administration

officials who were about to testify.

Former White House counsel Lloyd Cutler

acknowledged this week that the depositions

were used to identify discrepancies in the

recollections of presidential aides before the

congressional hearings.

White House lawyers would then

‘‘confront’’ the aides with information they

had obtained from the depositions without

revealing the sources, he told The Associated

Press.

‘‘If we found inconsistencies, we would go

back to White House officials, and go back

over testimony they gave us,’’ Cutler explained. ‘‘and then we would say ‘we have

heard other reports.’’’
S6776 CONGRESSIONAL RECORD — SENATE May 17, 1995

This of course brings into play several other issues which I have been following since the close of the hearings

last August. As we know now, confidential information was again turned over

by Treasury to the White House—this

time under the guise of a Treasury Department inspector general’s investigation.

This calls into question not only the

independence of the IG, but also the

willingness of this administration to

politicize what is supposed to be an internal watchdog.

It also calls into question the entire

testimony offered by White House officials before the Senate Banking Committee—as they were given another

heads up in order to best tailor their

testimony to help the boss.

Last November I wrote to then Chairman Riegle and ranking member

D’AMATO about what I had discovered.

In my letter I stated:

As you know, over these past several

months I have continued my efforts to resolve outstanding questions which were

raised during the Banking Committee’s

Whitewater hearings. Initially I became concerned upon discovering during our hearings

that the Treasury Inspector General had

turned over to the White House—at Lloyd

Cutler’s specific request—transcripts of all

the testimony taken by the investigators a

full week before the Office of Government

Ethics (OGE) report was made public. At the

time we learned this, several former Inspectors General expressed amazement at this

unprecedented action. However, no further

review of the incident was undertaken.

During my investigation of this disclosure,

I discovered that not only were the documents released to the White House at the

specific request of White House Counsel

Lloyd Cutler, but, in doing so, the Treasury

turned over confidential RTC information to

the White House.

On Saturday, July 23, 1994, the Department

of the Treasury gave the White House all of

the sworn depositions of Treasury, White

House, and RTC personnel. These depositions

were unedited.

According to the RTC, it was not until

July 26 or 27 that the RTC became aware of

the fact that RTC depositions had been provided to the White House.

July 26, after reviewing the information

provided by the Treasury I.G., Lloyd Cutler

testified before the House Banking Committee.

July 28 and 29, Counsel to the RTC Inspector General Patricia Black redacted all the

Treasury, RTC, and White House depositions

in order to remove confidential RTC information.

July 31 the OGE report, with edited testimony, was provided to Congress and subsequently made public.

Given that the focus of our hearings this

past August was the improper transmittal of

confidential information from the RTC to

the White House regarding Madison Guaranty and the Clintons, I must tell you I am

appalled that the same Treasury Department, acting under specific direction from

Secretary Bentsen, would again provide

nonpublic information about the Madison

Guaranty case directly to the White House.

In addition, I found it extraordinary that

the White House, which was itself under investigation, would be given nonpublic information prior to Congressional hearings—particularly when Congress itself was not given

the information.

And now of course we have discovered that Mr. Cutler and others used

this information not only to assist in

the drafting of Mr. Cutler’s testimony—but to help White House staff

with the inconsistencies in their own

stories.

I find this entire episode just another

example of the extraordinary lengths

the White House was willing to go to

keep the facts from Congress, keep the

facts from the American people, and

ultimately to protect the administration.

As I have said on this floor before,

breaching the public trust is as serious

an offense as committing a crime, or

being found liable for financial penalties. Governments in free societies

have a fundamental pact with the governed. In exchange for the powers and

responsibilities which is given the Government, the people expect fairness,

evenhanded justice, impartiality, and

they held the innate belief that those

in power can be trusted to be good

stewards of their power.

Our form of democracy relies on

checks and balances to keep too much

power from ending up in just one

place—and Congress, as the people’s

closest link to their Government has

the responsibility to keep a sharp eye

out for abuses and breaches of the people’s trust.

Thus every Member of Congress

takes an oath of office, to uphold the

Constitution—and certainly part of

that duty to be ever watchful for

abuses of power. Interestingly, and not

surprisingly, it nearly always falls to

the party out of power to be the more

diligent in watching out for abuses.

No one disputes this.

But one other fact should also be

noted. As important it is for the general public to believe in and trust that

their elected leaders are performing

their jobs in an ethical, truthful, and

fair manner—we, in Congress, must

also believe that those in high positions of responsibility are telling us

the truth. When we ask questions or

make inquiries we must trust that administrations will tell the truth, will

be honest, and that when we get an answer, it is a full and complete one.

Unfortunately, Madam President, it

is this standard that inevitably some

administration officials seem unable to

comprehend.

Instead of cooperation and truthfulness we have seen evasions, omissions,

misstatements, and possibly outright

lies.

And the story of potential abuse of

the public trust, the politicization of

independent agencies and investigations, the use of confidential material

for political gain—it only seems to get

worse the deeper you look.

Madam President, the next rounds of

hearings will go a long way toward

clearing the air, and I commend the

chairman of the Banking Committee

for brining this matter back into the

public eye.

I reserve the remainder of my time

and I yield the floor.

Mr. DODD addressed the Chair.

The PRESIDING OFFICER. Who

yields time?

Mr. SARBANES. Madam President, I

yield 5 minutes to the distinguished

Senator from Connecticut.

The PRESIDING OFFICER. The Senator from Connecticut is recognized for

5 minutes.

Mr. DODD. Thank you, Madam President, and I thank my colleague from

Maryland.

Madam President, let me begin these

brief remarks by commending our colleagues from New York and Maryland

for what I think is a very fair and balanced resolution. Obviously, matters

such as this are a source of deep controversy and can get out of hand. The

fact that they have presented us with a

resolution that is balanced and fair is a

credit to both the Senator from Maryland and the Senator from New York.

Any discussion of this ought to begin

with an expression of appreciation on

the part of all of us in this body, particularly those of us who will serve on

the special committee and who will be

working during this calendar year to

carry out the mandates and requirements of this resolution. Now I would

like to make a few brief observations

about the resolution.

As my colleagues know, Madam

President, there was a vote by 98 to 0

on March 17 of last year to look into

these matters, and what we are talking

about here is a continuation of that

process. This resolution is simply another step in a process designed to help

the American public know the facts

about Whitewater.

Second, I would like to point out,

Madam President, that the President

has fully cooperated in this process. We

ought to commend him for this unprecedented level of cooperation.

Many of us recall other Presidents

who, when confronted with similar situations, have clogged up the courts of

this land, fighting everything along the

way. This administration has not done

that. In fact, the administration has

been entirely forthcoming.

As we discuss these matters, it is important to make it clear that, unlike

previous situations where there was a

constant conflict between the executive branch and the legislative branch

over documents and testimony, that

has not been the case here. The administration has complied with every document request, answered every question that has been submitted to it, and

I am confident is ready and willing to

cooperate in this second stage of the

proceeding.

I think that is an important point to

make because, as we look down the

road, there is the potential for a prolonged and nasty conflict between the

executive and legislative branch.

Third, Madam President, I think last

year’s hearings, despite moments of

passion and emotion, were credible and

fair. I think it is important to point

out and to state emphatically that it

was the conclusion of the committee
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6777

last year that there had been no violation of criminal statutes or ethical

standards.

Of course, individual Members may

have their own particular opinions on

those matters, and certainly that is

their right. But, as a conclusion of the

committee, let me restate, Madam

President, there were no violations of

any criminal statute or any ethical

standards. That was the conclusion of

last year’s hearings.

Now we are going to go to a second

phase. I have listened to some who are

suggesting that there must have been

some wrongdoing, or, even worse, they

have already reached the conclusion

that there was wrongdoing. Quite simply, that is inappropriate. The purpose

of the hearings is to determine whether

there was wrongdoing—we must not

prejudge the matter.

We do not want to end up appearing

like that famous character from the

West, Judge Roy Bean. Everyone will

remember Judge Roy Bean. He used to

say, ‘‘We’ll hang ’em first and try ’em

later.’’

Sometimes that can happen in congressional proceedings, and I know it is

not the intention of anyone on the

committee to have that be the case.

So let us avoid partisan wrangling

and get the facts on the table. Now the

presumption of innocence may not

apply to congressional hearings in the

same way as in our court system, but

there ought to at least be an effort to

fully consider matters, and let people

have their say, before we reach any

conclusions.

Last year, the Senate held thorough

hearings, as I mentioned earlier. The

committee heard from 30 witnesses,

generating 2,600 pages of testimony; 38

witnesses were deposed, generating

some 7,000 additional pages of testimony.

It is very difficult to sort through

that much material and I want to

thank the staff for the work they did.

That was a herculean effort. Both the

majority and minority staff had to

work extremely long hours on this

matter, Madam President, and they deserve our appreciation.

Obviously, Madam President, the

Senate’s integrity and credibility are

at stake. The American public has a

right to know the facts about

Whitewater and the Senate has a constitutional obligation to see that they

do.

Last year, the facts were presented

fully and impartially. That must be

our goal this year. The public, in my

view, is fed up with the partisanship

that seems to cloud every issue.

As we go through this process, I urge

my colleagues to avoid that partisan

pitfall. Because we are entering a presidential campaign cycle, that may be

difficult for some. But we must all try.

The President is sadly correct, and I

suspect most of my colleagues, regardless of their political persuasion, would

agree when he says that the politics of

personal attack are alive and well. I

agree with the President that the best

way to put this matter behind us is to

address the facts candidly.

Madam President, I ask for 2 additional minutes.

Mr. SARBANES. I yield whatever

time the Senator requires.

Mr. DODD. I thank my colleague. I

will wrap this up.

Madam President, the public wants

us to present the facts impartially,

come to our conclusions and then move

on. And it bears repeating that after

going through such a process last year,

the Banking Committee concluded that

there had been no violation of criminal

statutes or ethical standards.

During this next stage, we must not

get into political diversions and drag

this thing out. The American people

want us to get on with the business of

creating jobs and expanding economic

opportunity, of dealing with health

care issues and education. They want

us to tackle the hard problems that

they face every day.

I think it was there sense of frustration with politics as usual, more than

anything else, that created the changes

in the Congress. We now have a Republican leadership, and every committee

is chaired by that party. They now

have an even greater responsibility to

the public. They must elevate the good

of the nation above politics and I hope

that they will do so in proceeding with

this matter.

Once again, I commend Senator

D’AMATO and Senator SARBANES for

putting together a fair resolution and

for stating their determination to wrap

this matter up by February of next

year. I hope we can stick to that schedule and finish this job efficiently.

Finally, while the subject of the independent counsel statute is not the subject of this particular resolution,

Madam President, I want to suggest

that we revisit that legislation as soon

as we can.

The idea of appointing an independent counsel was to keep politics out of

these issues. Unfortunately, it seems

that the statute may invite fishing expeditions. We need to be very careful

about spending the taxpayers dollars in

this way. Otherwise we will have some

questionable expenditures. I was told

the other day that someone was looking at a witnesses’ grade school and

high school transcripts. I hope that report is inaccurate because there is just

no way to justify that kind of expenditure.

There is the potential for an independent counsel to run wild and we

need to carefully monitor these matters. I caution those who would like to

use independent counsels for political

gain—regardless of whether it was a

previous administration or this administration—that whatever goes around

comes around. We would be well advised, in my view, to take a hard look

at how some of these operations are

being run.

Of course, Congress spends a great

deal of money on these investigations.

The Banking Committee spent about

$400,000 last year, and this resolution

authorizes another $950,000. But even

that amount is only a fraction of what

the independent counsel is spending.

We are looking at almost $10 million

spent by the independent counsel and

that is just the beginning of it. That

figure will go higher.

Of course, the Federal Government

must investigate serious accusations of

wrongdoing to maintain the public

trust. But when it appears there are

more Federal agents operating in Little Rock than there are in high-crime

areas in certain parts of our country,

then one ought to pause and look carefully at what we are doing.

Again, I know that the independent

counsel statute is not the subject of

this resolution. I do not want to inject

a whole new subject of debate. But I

think we ought to take another look at

that law and make sure it is operating

properly.

Again, I commend the chairman of

the Banking Committee, my friend

from New York, Senator D’AMATO, and

my colleague and friend from Maryland, Senator SARBANES, for the fine

job they have done in working out this

resolution. We have a very difficult job

in front of us. Hopefully, we will conduct our work thoroughly, fairly, and

promptly, and in a manner that brings

credit to this great body. I look forward to the effort.

Several Senators addressed the

Chair.

The PRESIDING OFFICER. The Senator from New York.

Mr. D’AMATO. Madam President, at

this time, I ask for the yeas and nays.

The PRESIDING OFFICER. Is there a

sufficient second?

There is a sufficient second.

The yeas and nays were ordered.

Mr. D’AMATO. I yield to the Senator

from Pennsylvania 10 minutes.

The PRESIDING OFFICER. The Senator from Pennsylvania has 10 minutes.

Mr. SPECTER. Madam President, I

thank the distinguished chairman for

yielding me this time. I support the

resolution and commend the chairman

and the ranking member of the Banking Committee for presenting a resolution which I understand will have wide

bipartisan support.

I believe it is important to have a

congressional inquiry on this in the

broad terms which are described in the

resolution. It is with some regret, I

note, that it has taken us more than a

year to get to this point. But it is better late than never, and these are matters where congressional oversight is

important.

I recognize the sensitivity of a congressional inquiry on a matter which is

being handled by an independent counsel, also known as the special prosecutor. But the functions are very, very

different where you have an investigation which is handled through grand

jury proceedings which are secret and

which are directed at indictments. I

know that field with some detail, having been a district attorney myself and
S6778 CONGRESSIONAL RECORD — SENATE May 17, 1995

having run grand jury investigations.

That is very, very different from a congressional inquiry where we are inquiring into matters in the public record

for the public to see what is going on in

Government with a view to legislative

changes.

The thrust and focus are entirely different between a grand jury investigation conducted by independent counsel

and a congressional inquiry which will

be handled through the Banking Committee. I am glad to see that the composition of the committee will be expanded to include the chairman and

ranking member of the Judiciary Committee, or their designees.

Madam President, the issues involved

here have long been a concern of many

of us in this Chamber, and I refer to

statements which I made last year

dated March 17, June 9, June 16, and

June 21. I will not incorporate them because that would unduly burden the

RECORD, but a good many of my

thoughts were expressed last year on

the matter.

I was particularly concerned about

issues involving the RTC as to their inclusion, which was not handled last

year, and I am glad to see that the Resolution Trust Corporation is included

in the scope of the inquiry which we

are about to undertake.

This matter was one that I focused

on when we had an oversight hearing

on the Department of Justice on July

28 of last year, and I ask unanimous

consent, Madam President, that a number of documents be printed in the

RECORD which have not been made a

part of the RECORD heretofore: My letter dated July 26, 1994, to Attorney

General Reno; the attachment of a list

of documents which I had wanted to inquire into during the proceedings before the Judiciary Committee; the response which was made by Robert

Fiske, who was then independent counsel; and a portion of the transcript

dated July 28, 1994 before the Senate

Judiciary Committee.

The PRESIDING OFFICER. Without

objection, it is so ordered.

(See exhibit 1.)

Mr. SPECTER. I thank the Chair.

Madam President, these documents

will show on their face concerns which

were on the record and which were apparent from such documents: that

there were considerable issues to be investigated in the RTC at that time. It

is unfortunate, in a sense, that there

has been the long delay, because we all

know, as a matter of investigative procedure, that leads grow cold and witnesses’ memories diminish and that the

best investigation is a prompt investigation. But the time factor is something that cannot be altered at this

time, and at least now we will have a

congressional inquiry which will move

forward into these very, very important matters.

I agree with the distinguished Senator from Connecticut when he talks

about the presumption of innocence. I

think that is indispensable as a matter

of fairness to all concerned. But these

are questions which need to be answered, and questions do not imply an

answer of any sort; they raise issues

which ought to be answered. We ought

to let the chips fall where they may.

And in a Government based on a Constitution which elevates the separation

of powers among the Congress in article I, and the executive branch in article II, and the judiciary in article III,

the congressional oversight function is

a very, very important function. Now,

finally, we will be in the context where

we will be able to inquire into these

matters and to find out what those answers are.

I am confident that there will be a

fair, judicious, quality inquiry conducted by the committee, and this resolution is one which I think ought to

be supported broadly by the U.S. Senate.

I thank the Chair and yield the floor.

EXHIBIT 1

U.S. SENATE, COMMMITTEE ON THE JUDICIARY,

WASHINGTON, DC, JULY 28, 1994

(The following is a partial transcript of the

above proceedings)

Senator SPECTER. Thank you, Mr. Chairman. Attorney General Reno, as you know, I

had intended to ask you questions about the

handling by the Department of Justice in the

matter involving David Hale in this oversight hearing, and I may be able to cover the

principal points of my interest without

undue specification, or at least undue specification from your point of view.

At the outset, I would like to put into the

record my letter to you dated July 26, 1994,

together with the chronology of events and

all the attachments which I sent over to you,

except for numbers 20 and 21. I may get into

20 and 21. I think the balance have been in

the record in one form or another, and even

if they haven’t I think they are appropriate

for the public record.

[The letter referred to follows:]

U.S. SENATE,

COMMITTEE ON THE JUDICIARY,

Washington, DC, July 26, 1994.

Hon. JANET RENO,

Attorney General, Department of Justice, Washington, DC.

DEAR ATTORNEY GENERAL RENO: I have just

noted that you are scheduled to testify before the Judiciary Committee on Thursday,

July 28, at 2:00 p.m. at an oversight hearing.

In that hearing I intend to ask questions

on the Justice Department’s role in investigations of Madison Guaranty and/or

‘‘Whitewater.’’ While I have not had access

to many of the relevant documents, I have

seen a few and am alerting you to those documents which will formulate at least some of

the basis for my questions.

Some of the documents are referred to in

my floor statement on June 21. Other documents that I may refer to are listed on the

attached index.

Sincerely,

ARLEN SPECTER.

Senator SPECTER. I would also want to put

into the record the faxed letter from Robert

Fiske, Independent Counsel, to me, dated

July 27, 1994.

[The letter referred to follows:]

U.S. DEPARTMENT OF JUSTICE,

OFFICE OF THE INDEPENDENT COUNSEL,

Little Rock, AR, July 27, 1994.

Hon. ARLEN SPECTER,

U.S. Senate, Committee on the Judiciary, Washington, DC.

DEAR SENATOR SPECTER: The Department

of Justice has sent over to me a copy of your

letter of July 26, 1994 to Attorney General

Reno, together with the index of documents

enclosed with it.

It is apparent from a review of the documents on that index that they relate to the

handling by the Department of Justice of a

particular criminal referral from the RTC.

Based upon interviews we have had with representatives from the Kansas City Field Office of the RTC, we are currently actively investigating this matter. Accordingly, I

would respectfully request that you not go

into this subject with the Attorney General

at your hearing tomorrow since to do so

might prejudice our ongoing investigation.

(For similar reasons we request that you not

go into the matter referenced by documents

#20 and #21.)

We have made a similar request to both

the Senate Committee on Banking, Housing,

and Urban Affairs and the House Committee

on Banking, Finance and Urban Affairs

which, as you know, are in the process of

conducting Whitewater hearings. Both of

those Committees have agreed not to go into

this subject until we have completed our investigation.

Respectfully yours,

ROBERT B. FISKE, Jr.,

Independent Counsel.

Senator SPECTER. At the outset, I want to

say for the record that I do not agree with

the deference which the Congress has accorded the independent counsel because I believe that Congress has independent status,

and at least equal status, if not more important status, on matters of public policy than

the criminal prosecutions. But the Senate

has decided otherwise as a political matter,

in my opinion.

As I reviewed the charter of Mr. Fiske, it

seemed to me that questions about oversight

on what happened with David Hale were not

within his charter, his charter being to investigate matters of possible criminal or

civil wrongdoing. I am advised to the contrary on that, and we may get into that in

some specificity.

So let me start in an effort to ask the

questions in a generalized way, but candidly

as they arise on David Hale’s matter. I refer

to a memorandum from RTC investigator

Jean Lewis to Richard Iorio which quotes officials within the Department of Justice,

which is why I ask you about this; specifically, Ms. Donna Henneman in the Office of

Legal Counsel. Without making anything

more specific as to the Hale matter, my

question to you as a general matter is, any

time a referral comes in to the Department

of Justice that would make the Department

look bad or has political ramifications, it

goes to the Attorney General. Is that true?

Attorney General RENO. I don’t know

whether any time something comes in to the

Department that would make the Department look bad it comes to the Attorney General.

Senator SPECTER. Well, if you don’t know,

who does, Attorney General Reno?

Attorney General RENO. I would suspect

that each one of the 95,000 people who hear

something that might make the Department

look bad. I think your question is a little bit

broad. I cannot answer it. As I have tried to

say from the very beginning, when I appointed Mr. Fiske I tried to make sure that

he was as independent as possible. I have

continued to try to do that, and I think the
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6779

worst thing that I could do would be to comment or talk about matters that he is pursuing. I should be happy, because I have great

respect for the Senate and for you, at the

conclusion of the matter to try to respond to

anything, including the specifics.

Senator SPECTER. Well, I don’t think that

is sufficient, Attorney General Reno, because

I think this is a legitimate matter for Judiciary Committee oversight, and we don’t

have very much of it. But I accept your point

that my question was too general, so I will

be specific.

The investigator, L. Jean Lewis, of RTC,

had many conversations with representatives of the Department of Justice, as reflected in the number of the memoranda

which I sent on to you. So if it is too general

as to whether any time a referral comes in

that would make the Department look bad

or has political ramifications it goes to the

Attorney General, I would ask you, were you

personally informed about the referral from

the RTC on the check kiting case involving

Madison Guaranty?

Attorney General RENO. As I indicated to

you, Senator, I made a determination when I

appointed Mr. Fiske that I would not comment or make any comment. He has expressed to you that he would prefer that I

not comment on the specific matters. I do

not want to do anything that would impair

has independence. I do think you have an

oversight function with respect to the Department of Justice, and when it would be

appropriate for me to comment I would look

forward to the opportunity to do so.

Senator SPECTER. Well, tell me, Attorney

General Reno, has would it impair Mr.

Fiske’s investigation or prosecution for you

to answer a question as to whether you had

personal knowledge of a referral to the Department of Justice?

Attorney General RENO. I can’t tell you,

sir, because I have tried to do everything in

my power to make sure that Mr. Fiske’s investigation is independent and I don’t know

what his investigation involves. Therefore, I

am not going to say anything that could possibly interfere with his investigation.

Senator SPECTER. Well, my question to you

is how could it possibly interfere with his investigation to answer a question as to when

you had knowledge of a referral to the United States Department of Justice.

Attorney General RENO. I don’t know, sir,

because I am not going to take the chance of

interfering with it. You would have to ask

Mr. Fiske because I don’t want to do anything at this time that would interfere or

impair that investigation. I do not know the

nature of the process of that investigation

and it would be inappropriate for me to comment, but I do——

The CHAIRMAN. Put another way, Senator,

how would it shed any light in this oversight

if the Attorney General answered that question? What the hell difference does it make

now?

Senator SPECTER. Well, the hell difference

that it makes now is on an earlier question

which I asked that whenever there is a matter with political ramifications that it goes

to the Attorney General—and I asked that

question in its broadest terms and was told

that it was too general, so that is when I

came back to the specific question.

The CHAIRMAN. Let me ask the question

the other way to the Senator. Mr. Fiske’s investigation in this matter is likely to be

wrapped up. He has been moving expeditiously. Does it matter to the Senator

whether or not the Attorney General speaks

to this issue today or in two weeks or a

month, or whenever it is when Mr. Fiske settles this part of his investigation? I don’t

know when he is going to settle that, but I

mean he has been moving very rapidly.

In terms of oversight for next year’s budget and last year’s actions, it seems to me the

Senator would have plenty of time to ask

these questions as it would impact on the

outcome of the Senator’s view as to what the

Attorney General should or shouldn’t do in

the future.

Senator SPECTER. Well, I would be glad to

respond to the chairman. It does make a difference to me, and it makes a difference to

me because this is an oversight hearing and

the request to the committee chairman to

have oversight on these matters was declined. There has been a charter which is

very, very narrow before the Banking Committee, and this does not involve, to my

knowledge, a matter which is within the

charter of Mr. Fiske until when I sent a letter to the Attorney General, I suddenly find

a reply from Mr. Fiske.

I had two detailed conversations with Mr.

Fiske, the thrust of which—and I would be

glad to detail them—led me to the conclusion that there was absolutely no interference with the criminal prosecution, a subject that I have had some experience with.

So when I asked the Attorney General a

question as to when she has knowledge of a

referral, I can’t conceive that it interferes

with an investigation, and that is why I am

asking an experienced prosecutor who is now

the Attorney General how could it conceivably interfere with a pending investigation.

Attorney General RENO. An experienced

prosecutor, Senator, doesn’t comment about

something that she doesn’t know about. I

don’t know about the details of Mr. Fiske’s

investigation. But if Mr. Fiske doesn’t have

any problem with it, what I would suggest

that we do is prepare the questions, submit

them to Mr. Fiske. If he has no objection to

my answering them, then we will try to answer them because I honor your oversight

function and I would want to be able to

honor that and to not interfere with Mr.

Fiske’s investigation.

Senator SPECTER. Attorney General Reno,

I did not say that Mr. Fiske did not have a

problem. He specifically told me that he

would like the field to be totally left alone.

What I said to you was that after talking to

Mr. Fiske, I had no doubt that these questions were appropriate, in my judgment, on

oversight by the Judiciary Committee.

Let me ask you this, Attorney General

Reno. In terms of the charter that Mr. Fiske

has about investigating matters which may

involve a violation of the criminal or civil

law, is the handling by the Department of

Justice of David Hale’s matter something

that falls within that charter?

Attorney General RENO. I have tried to,

again, let Mr. Fiske define that based on the

charter that we described so that I would not

in any way impair his independence.

Senator SPECTER. Well, do you have any

interest in whether any current employees of

the Department of Justice are subject to an

investigation which might be within Mr.

Fiske’s charter for possible criminal

wrongdoings?

Attorney General RENO. Yes.

Senator SPECTER. Well, if that were so,

would you have a duty as the head of the Department of Justice to take some action on

those matters before a long investigation

was concluded?

Attorney General RENO. It depends on

what they are, sir.

Senator SPECTER. Well, suppose they were

obstruction of justice?

Attorney General RENO. It depends on the

nature of the facts and the circumstances,

sir

Senator SPECTER. Well, do you know anything about that on the Hale matter?

Attorney General RENO. Again, sir, I can’t

comment on the Hale matter.

Senator SPECTER. I am not asking you to

comment on the Hale matter. I am asking

you whether you know anything about the

Hale matter.

Attorney General RENO. That would be

commenting, sir, and what I would suggest,

if we want to pursue this, is that you pose

the questions and then let’s see whether Mr.

Fiske thinks that they would in any way

interfere with the investigation. I am delighted to answer them if they don’t interfere.

Senator SPECTER. Well, I am not going to

follow the way you would like me to proceed.

I make a judgment as to what I think a Senator ought to do by way of oversight, and if

you have a concern about that I am prepared

to discuss it with you, but I am not prepared

to take your instruction or your suggestion.

The question that I pose on an investigation by Mr. Fiske as independent counsel

within his charter to investigate crimes, obstruction of justice, within the Department

of Justice is not something which bears on

anything which could conceivably implicate

the underlying facts on what David Hale is

doing.

Is Ms. Paula Casey—I understand that she

is, but can you confirm for me that she is

still the United States attorney?

Attorney General RENO. Yes, sir, she is.

Senator SPECTER. Is she the subject of a

criminal investigation by Mr. Fiske?

Attorney General RENO. You would have to

talk to Mr. Fiske.

Senator SPECTER. Do you know whether or

not she is the subject of a criminal investigation by Mr. Fiske?

Attorney General RENO. You would have to

talk to Mr. Fiske. I have avoided having anything to do with Mr. Fiske’s investigation in

terms of any information that he may have

so that I do not impair his independence.

Senator SPECTER. Would you continue a

United States attorney operating actively if

that United States attorney were the subject

of a criminal investigation?

Attorney General RENO. It would depend

on the circumstances.

Senator SPECTER. Well, under what circumstances would you terminate such an attorney?

Attorney General RENO. It would depend

on the circumstances. Again, you get into a

situation of hypotheticals and it is far better

that we look at the actual facts, and I would

be happy at the appropriate time to do that

with you.

Senator SPECTER. Well, Attorney General

Reno, I consider your responses, as I see

them, totally unsatisfactory, and I consider

them totally unsatisfactory because I am

not asking you anything about a pending investigation. I am asking you questions as to

what came to your knowledge as the Attorney General of the United States Department of Justice.

I am asking you questions about what you

know and about what your policy would be if

there were charges of criminal wrongdoing,

and I don’t ask these questions in a vacuum

or for no purpose. I ask these questions in

the context of having initiated an inquiry on

oversight on something which is outside the

charter of the independent counsel.

The CHAIRMAN. In your opinion, Senator,

right, is that correct? In your opinion?

Senator SPECTER. Everything I say is in

my opinion. You can add that to everything.

I don’t speak for anybody but myself, but I

do speak independently for myself.

I took a look at an extensive series of correspondence which has gotten to the Department of Justice and gotten to the FBI and

gotten to the United States attorney’s office

and gotten to the executive office and gotten

to the Office of Legal Counsel, according to

these documents, which I sent to you as soon
S6780 CONGRESSIONAL RECORD — SENATE May 17, 1995

as I knew there would be this hearing so you

would have an opportunity to review them. I

promptly advised the chairman as to what I

intended to do there would be no surprises

about it.

The CHAIRMAN. That is correct.

Senator SPECTER. When I pursue the matter and find I have a telephone call and a letter from the independent counsel, I call him

and then I am told that it is within his charter, that there is an investigation which is

underway for obstruction of justice.

As I review the facts of this matter, I am

struck with wonderment as to how officials

in the United States attorney’s office decline

to have immunity granted to David Hale,

and then independent counsel comes in and

in a short time has a grant of immunity.

Then officials in the United States attorney’s office in Little Rock recuse themselves

in a later matter, and I wonder how can they

recuse themselves in a later matter without

having recused themselves in an earlier matter, given their relationship to subjects of

the investigation.

I ran a big office myself as a prosecutor,

and if I had any reason to believe anybody in

my office had any problem, I wouldn’t wait

for anybody to cleanse it totally and thoroughly and immediately. I do not believe

that the charter to the independent counsel

takes away any of the authority or the responsibility of the Attorney General to act

in that circumstance.

In my opinion—everything I say is in my

opinion—the questions which I have asked

you are entirely appropriate questions, and I

give some additional background because I

think these are matters which ought to be

answered, and I intend to pursue them and I

don’t intend to wait.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

General, I think you have answered totally

appropriately, in my opinion. I think were

you to do otherwise, in light of Mr. Fiske’s

comments, you would be excoriated by Mr.

Fiske and anyone else. I guarantee you, you

would have an article saying that you have

interfered if you went in and, quote,

‘‘cleansed,’’ were there a need to cleanse.

You would be accused of whitewashing to

avoid Mr. Fiske being able to fully look at

the matter.

You are answering, in my opinion, totally

appropriately, and you have done what I

don’t know many others have been willing to

do. You have said to this committee, without

having to have some big show on the floor,

that when Mr. Fiske says he is finished with

this phase of the investigation you will come

back and you will answer questions. It seems

to me you are being totally appropriate, but

that is why there are Democrats and Republicans, chocolate and vanilla, good and bad,

right and wrong, different points of view.

Our opinions are different.

I respect this man. He did notify me. Stick

to your guns, don’t answer his questions, in

my opinion.

Senator SPECTER. If I might have just one

sentence?

The CHAIRMAN. Yes. You may have more

than one sentence.

Senator SPECTER. I don’t think this matter

has anything to do with good and bad or

chocolate and vanilla.

The CHAIRMAN. Well, it may not have to do

with good and bad, but it has to do with

what one considers to be the appropriate way

for you to respond. I think you are responding appropriately because I think you are in

the ultimate catch-22 position. At the request of all of us in the Senate, you appointed a Republican named Fiske. Now, the

Republican named Fiske tells you, please

don’t respond to anything having to do with

this. You are being asked to respond to

something having to do with this, and if you

respond or don’t respond, you are in deep

trouble in the minds of whoever wants to

view you as being in trouble. I think you are

doing just fine. My view is worth no more,

probably a little less in this circumstance,

than the Senator from Pennsylvania’s, but

good job, General.

INDEX

1. RTC Chronology of Criminal Investigation.

2. Letter of September 1, 1992 from L. Richard Iorio (RTC-KC) to Steve Irons (FBI)

transmitting criminal referral.

3. Letter of September 1, 1992 from L. Richard Iorio (RTC-KC) to Charles A. Banks

(DOJ) transmitting criminal referral.

4. RTC Internal Memorandum, May 3, 1993.

Background remarks and conversation with

AUSA Bob Roddey’s Office re: Madison Guaranty Savings referral.

5. RTC Internal Memorandum, May 19,

1993. Additional conversation with Office of

Legal Counsel for U.S. Attorney’s U.S. Justice Department, Washington, D.C. No record

of Madison criminal referral at Washington

DOJ.

6. RTC-KC E-Mail, May 19, 1993. Madison

matter forwarded to Donna Henneman in

‘‘Legal Counsel.’’ Referral submitted to that

office ‘‘because of the political ramifications

and political motivations.’’

7. RTC-KC E-Mail, May 26, 1993. Follow-up

call from Donna Henneman (DOJ). RTC advised by an FBI agent in Little Rock that it

was a ‘very solid case of check kiting, and

was highly prosecutable.’’ Henneman was

growing increasingly frustrated by the situation, because she had seen the information,

knew that it had come in, and couldn’t understand why she was having such a hard

time tracking where the referral and exhibits had gone.

8. RTC-KC E-Mail, June 8, 1993. Conversation with Donna Henneman (DOJ). Madison

Referral has reappeared on her desk. Criminal Division has sent memo to Doug Frazier

(in Depty. Atty. General Heyman’s office)

advising him that there was ‘‘no identifiable

basis for recusal of the U.S. Attorney in the

Eastern District of Arkansas.’’ Referral sent

to Frazier for review and final decision.

9. RTC-KC E-Mail, June 23, 1993. Conversation with Donna Henneman (DOJ). Package

returned from Frazier. Frazier appointed

U.S. Attorney in Florida.

10. RTC-KC E-Mail, June 23, 1993. Further

conversation with Donna Henneman (DOJ).

Spoke with Doug Frazier. Decision made to

return the referral back to the Arkansas U.S.

Attorney. No basis for recusal.

11. RTC-KC E-Mail, June 29, 1993. Source

indicates Madison referral has been returned

to Little Rock. Acting U.S. Attorney will

not act on referral. It is being held until U.S.

Attorney designee Paula Casey takes office.

12. RTC-KC E-Mail, September 23, 1993.

Conversation with Donna Henneman (DOJ).

Washington DOJ would like to be copied on

all future transmittal letters concerning

Madison referrals with an additional one

paragraph summary of the content of the referrals with the transmittal letters, so that

Henneman will be aware of those with ‘‘sensitivity issues.’’

13. RTC-KC E-Mail, September 29, 1993.

Conversation with Donna Henneman (DOJ).

DOJ would like copies of all future Madison

referrals sent to Washington in addition to

sending to U.S. Attorney in Little Rock.

Henneman will confirm this in writing.

14. RTC-KC E-Mail, September 29, 1993.

Conversation with Donna Henneman (DOJ).

Washington DOJ withdrawing request for referrals to be sent directly to Washington, but

would still like copies of transmittal letters

with addendum summary paragraph.

15. RTC-KC E-Mail, October 27, 1993. Conversation with Donna Henneman (DOJ). Inquiry on whether declination letter had arrived from Little Rock U.S. Attorney.

16. Letter of October 27, 1993 from Paula J.

Casey (U.S. Attorney) to L. Jean Lewis

(RTC). Declination letter on the Madison referral.

17. Letter of November 1, 1993 from L. Jean

Lewis (RTC) to Paris J. Casey (U.S. Attorney). Confirmation of declination letter and

the stipulation from October 27th letter that

the matter was concluded prior to the beginning of Paula Casey’s tenure and that the

RTC had never been advised of such result.

Chronology of correspondence between RTC

and DOJ.

18. RTC-KC E-Mail, November 15, 1993.

Transmittal of white paper outlining chronology of events related to 1992 Madison referral. Challenges news article indicating

that decision to decline Madison referral had

been prior to Paula Casey’s appointment.

19. RTC-KC E-Mail with attachment, January 6, 1994. Discussion of contact with reporter.

20. Letter of September 15, 1993 from Randy

Coleman (David Hale Attorney) to Paula

Casey. Coleman has been trying to negotiate

a plea and senses that Casey is reluctant because of ‘‘political senitivity.’’

21. Letter of September 20, 1993 from Randy

Coleman to Michael Johnson. Reiterates interest in plea negotiations, offering David

Hale’s information and willingness to participate in undercover activities.

Mr. SARBANES. What is the time

situation, Mr. President?

The PRESIDING OFFICER. The Senator from Maryland has 31 minutes; the

Senator from New York has 20 minutes.

Mr. SARBANES. Mr. President, I

yield 10 minutes to the Senator from

Arkansas, Senator PRYOR.

Mr. PRYOR. Mr. President, we have

come to a point in this debate when we

are about to vote on this particular

resolution. If I might, I would like to

talk for a few moments about the

public’s right to know, as the distinguished chairman of the Banking Committee from New York has made reference to.

He says the public has a right to

know what happened in the Whitewater

matter. The public has a right to know

who did what, when, and whatever. I

can assure you that the Senator from

Arkansas does not disagree.

But I think also the public has a

right to know something else. I think

the public has a right to know in this

case exactly how much money of the

taxpayers’ dollars we are spending in

the so-called Whitewater matter. I

think the public has a right to know

that with this resolution, if it passes

and if the funding goes through—and

we all assume it will—the Senate alone

will have spent, up through January or

maybe February of next year, in the

Whitewater matter $1.350 million of

Senate money to investigate this matter. I do not have available the amount

of money the House of Representatives

has spent and will spend in the future.

And we do not know exactly how much

the cost of the independent counsel

will be. But here are some figures I

might throw out for the RECORD at this

time. To the best of our knowledge, Mr.
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6781

President, thus far, as of August 31.

1994, the independent counsel, Mr.

Starr and Mr. Fiske, combined, spent

$1.879 million. Projected funding for

the independent counsel for the 1995

fiscal year is $6.3 million, which is a

subtotal of $8.129 million, and a total,

adding all the figures up, Mr. President, for both the Senate and the independent counsel to investigate socalled Whitewater, comes to almost $10

million in taxpayers’ dollars.

Mr. President, I think there is something else the public has a right to

know. I think the public has a right to

know that this White House, this

President, this First Lady, this administration, has never one time been accused of lack of cooperation. In fact,

our President has pointed out, as one

of our colleagues has already mentioned, that to be candid and truthful

in this matter is going to be the

quickest and best way to get to the

bottom of it.

In the first round of hearings last

summer, the committee heard from 30

witnesses generating 2,600 pages of testimony, deposing 38 witnesses, generating 7,000 pages of testimony.

The administration has produced

thousands of pages of documents for

committee review. This administration

has complied with every document request. They have answered every question posed to it. The administration is

ready and willing to cooperate on this

second round of hearings and it bears

emphasis, I think, that after the long

days of hearings and pages of documents reviewed, that the Banking

Committee concluded at the end of this

hearing, in phase 1, that there had been

no violation of a criminal statute and

no violation of an ethical standard.

Mr. President, I think, too, it needs

to be added that at no time during any

of these investigations or any of these

hearings, whether it be in Little Rock

or Washington, the Banking Committee or the special counsel, wherever, to

the best of our knowledge, not one witness, not one person has taken the fifth

amendment.

I think that this speaks loudly and

clearly about this administration’s position, wanting to get on with the important business of our country.

Mr. President, let me compliment

our friend, Senator SARBANES, for

working out what I think—and going

forward with—is a fairly reasonable

proposal in trying to attack this problem and to set up these hearings. I

think that there are some things, however, that I must state that I do not

feel are fair. I do not feel that it is fair

for one of the members of the committee, as he did earlier in this debate, to

come to the floor and say what should

have been within the scope of this

hearing and then start talking about

those particular issues as if to condemn them, even though they are not

in the scope of these particular hearings.

Mr. President, I think for a Senator

to come to the floor who is a member

of the Banking Committee and to make

a statement like he knows for a fact, or

he has knowledge that Kenneth Starr,

the special counsel, is now going to

reinvestigate the death of Vince Foster, I think the public has a right to

know how that particular Senator from

North Carolina has knowledge of this

so-called fact, Mr. President. I think

the Senator from North Carolina needs

to explain how he knows Mr. Kenneth

Starr is now looking or relooking at

the death of Vincent Foster.

Mr. President, we hope that these

hearings will be fair. We hope they will

be soon. We hope that they will be done

in a very efficient manner. I am just

hoping above all, Mr. President, that in

this hearing, these issues are not going

to be bogged down in the political morass that we have seen some other

hearings conclude with. I would like to

say, also, Mr. President, that I think

for us to go back to the 1990 Governor’s

campaign, I think is stretching it a bit.

I do not know what that has to do with

Whitewater. I think some of my colleagues would like to see us investigate

Bill Clinton when he was the attorney

general of Arkansas. Maybe we would

like to go back to look at his campaign

of 1974 when he ran for the U.S. Congress and was defeated. There might be

some who have no limits on how far

back in time we should go.

I hope we can keep our eye on the

ball. I am hoping, Mr. President, that

we can keep our eye focused on the

issue of Whitewater and the particular

mission under which carefully this resolution has basically pointed out would

be the scope of this particular hearing.

I am also concerned that one of our

colleagues has referred to the ‘‘the miserable job of Mr. Fiske.’’ Those remarks were made earlier on this floor.

Of course, they refer to Mr. Fiske, who

was allegedly fired from this investigation as special counsel because he was

not finding out enough, bringing forward enough, to satisfy some of our

colleagues.

Mr. President, I will conclude once

again, as I have done other times on

this floor, by quoting a note that Vince

Foster wrote. It is his last note. It was

his last sentence in this note, when he

said ‘‘Here’’—reference to Washington—‘‘ruining people is considered

sport.’’ Those were the words written

by the late Vincent Foster.

I am hoping, Mr. President, that

when this investigation begins, every

person involved with that investigation, from top to bottom, will realize

these are human beings; they have

families; they have hopes and desires;

they have beliefs; and they have reputations. Hopefully, we will not treat

lightly those reputations, and hopefully we will make certain that the

character and the nature of these hearings seek fairness and justice.

I yield the floor.

Mr. SARBANES. Mr. President, I

yield such time as he may consume to

the minority leader.

Mr. DASCHLE. Mr. President, I

thank the ranking member. Let me

say, I did not have the opportunity to

hear all of his remarks, but let me

commend the distinguished Senator

from Arkansas for what I have heard

him say. Let me associate myself with

each and every one of his words. He

speaks from the heart, and he certainly

speaks for all Members in representing

what we hope will be the ultimate goal

of this committee as we begin this ever

once more.

This resolution provides a sum of

$950,000 for the purpose of completing

the work on the Whitewater matter. I

think it needs to be emphasized again,

as we consider the funding, that this

resolution includes every issue related

to Whitewater that has any credence

whatever. There ought not be any question about its work, its scope, and the

effort undertaken after today by the

Banking Committee.

The funding will expire on February

29 of next year. It is an adequate

amount to fund and an ample allowance of time to permit comprehensive

and thorough hearings, while providing

also for the completion of this issue.

In the 103d Congress, the Senate

voted on March 17, 1994, on a bipartisan

vote of 8 to 0, to authorize hearings on

the Whitewater matter. Senate Resolution 229, adopted in June of last year,

authorized a first round of hearings

which were subsequently held by the

Banking Committee.

The new resolution creates a special

committee, administered by the Banking Committee, to conduct the final

round of these hearings. The committee will be comprised of the full membership the Banking Committee, with

the addition of one Republican and one

Democratic member of the Judiciary

Committee.

Chairman D’AMATO will also chair

this special committee. Senator SARBANES will serve as the ranking member.

Last year, the Banking Committee

heard from a substantial number of

witnesses and took thousands of pages

of testimony. Last year’s hearings were

thorough, fair, and bipartisan. They

are the model which this year’s hearings must emulate.

The majority, which conducted the

hearings last year, were fair and judicious in their approach. The new majority in this Senate has the obligation

to follow that record in exactly the

same manner.

It is important to be thorough and

comprehensive, because the American

people have a right to know all the

facts about this matter; but it is equally important that hearings be fair and

responsible. We must all strive to remember and draw the distinction between an unproven allegation and a

known, verifiable fact.

What is at stake is the integrity and

credibility of the U.S. Senate. The last

Senate recognized this by voting

unanimously to authorize hearings

when questions were raised that deserved examination. This Senate

should follow that example.
S6782 CONGRESSIONAL RECORD — SENATE May 17, 1995

The Senate has the constitutional

obligation to see that the facts are

brought out. It has the moral obligation to do so fully and impartially. If

we do less, we risk reinforcing the unfortunate impression that Senators

care more about partisanship than

about conducting the Nation’s business

in the best interests of all the people.

The President has said that in an era

of attack politics, the best way to put

this matter behind America is to address the facts candidly. He is entirely

right.

The administration cooperated fully

and extensively with hearings last year

and stands ready to do so again this

year. Last year, the President ordered

his administration to cooperate and all

parties did so. Every document request

was honored. Every question raised by

the committee was answered.

Americans have the right to know

the facts of Whitewater. But Americans care about other matters which

are also on the Senate agenda a great

deal more than they do about this.

Americans are now facing a budget

which seeks to dramatically alter Medicare and student aid programs, as well

as virtually every other thing the Government does. They are anxious about

the future, because so many millions of

Americans are either Medicare enrollees or have parents who are Medicare

enrollees. They are anxious to see the

Senate begin the debate over the budget soon.

Americans expect the Senate to devote the bulk of our efforts to the issues that are of most importance to

the majority of American people. I

agree. That should be our priority.

Today, no issue is more critical than

resolving the budget debate.

Mr. President, I urge prompt action

on this resolution. I hope it allows for

completion of this matter with fairness

and impartiality, so that Senators can

focus their attention on the issues that

deserve it most, the problems facing

the American people.

I thank the ranking member for

yielding.

Mr. D’AMATO. Mr. President, I did

not mean to unduly delay acting on

this resolution, because I think most

things that have been said summarize

where we are at, what we are attempting to do, and the scope of the investigation and the manner in which we

hope to conduct it.

I think is important to point out that

what one of my colleagues, the Senator

from North Carolina, Senator

FAIRCLOTH, pointed out is a matter of

public record. That is that Judge Starr

is reexamining all matters reviewed by

Special Counsel Fiske, including Vincent Foster’s death.

I think he alluded to that, and I

think he did so in that context. That is

not an area we intend to revisit unless

there are some very special circumstances, which I certainly do not

envision. However, I think we have to

at least put it in that context.

As it relates to what the committee

did and did not find last year, I think

it is important to note that the Republican minority did make findings on

the three major areas where there were

questions of misconduct and malfeasance. I will not attempt to enunciate

all of them now, but that was a very

strong finding.

I would also like to point out that

the majority made some findings and

recommendations as it related to the

need to indicate very clearly that before Congress, all executive branch

members and others who testified are

‘‘required to be fully candid and forthcoming,’’ and testify ‘‘truthfully, accurately, and completely.’’

The committee recommends that the

President issue an Executive order reinforcing this obligation and setting forth procedures requiring the prompt correction, amplification and/or supplementation of congressional testimony to ensure that it is accurate, thorough and completely responsive.

Why did they do that? Without going

through the entire history, it was because it was clear and evident—and, by

the way, we have sent to Mr. Fiske and

to his successor, Mr. Starr, those areas,

we being the Republicans on the committee, the minority—that those areas

of concern, that, at the very least,

there was testimony that was disingenuous, if not outright false. And that is

being reviewed.

So, to say that there were no findings

of any wrongdoing, that everything

was OK, or to imply that there was

nothing wrong, is simply an oversimplification and is not an accurate or

fair representation of the situation.

Now, I do not intend, nor is it my job

and duty, to defend the work of the

special counsel. The special counsel

was appointed because the Attorney

General concluded that it was necessary. It was not this Congress. I

thought it was. I believe it was. There

were leading Democrats who spoke to

the necessity—Senator MOYNIHAN, Senator BRADLEY, and others—as it relates

to dealing with this. But as it relates

to the expenditures of money, let us

look at the record.

This committee, I think, has been

very judicious. The Democratic leadership working with Republicans last

year authorized $400,000. We only spent

$300,000. This year we have set $950,000.

I hope we spend less than that. We have

been very judicious in using taxpayers’

money. So to date we have spent

$300,000. Although that is not an inconsequential sum, we have been extremely judicious.

With regard to the expenditures and

what has taken place with the special

counsel, let me just indicate, first, that

David Hale pleaded guilty. He was a

municipal judge and has made some extremely serious allegations. The special counsel is reviewing his allegations with respect to why he made certain loans that were illegal or inappropriate, who asked him to do so, and so

forth.

Webster Hubbell, the third ranking

official in the Attorney General’s office, pleaded guilty to charges that

emanated, again, from this investigation.

Neil Ainley, president of the Perry

County Bank, where large sums of

money, $180,000, were taken out to fund

campaign activities, pleaded guilty.

Chris Wade, a real estate agent who

was the sales agent for Whitewater Development, pleaded guilty in a bankruptcy matter. Robert Palmer, last December, a Little Rock real estate appraiser, pleaded guilty to conspiracy

charges relating to backdating and falsifying appraisals for Madison Guaranty.

I make these remarks because I do

not believe that it is fair to leave the

impression that this has just been a big

waste of time and that there was no

wrongdoing. Five individuals, at this

early and preliminary stage of these investigations, have already pleaded

guilty, some in very high, responsible

positions. That is the work of the special counsel. He has to defend the appropriateness of the expenditures

which he makes.

However, I think for the record it is

fair to reflect that several individuals

have pleaded guilty to various charges.

As it relates to our work, I am going to

reiterate that I believe this committee

has properly set forth the venue, the

scope and the way in which it intends

to move forward in a bipartisan manner to find out the truth and get the

facts. Was there an attempt to impede

legitimate investigations undertaken

at RTC? Why were certain people taken

off the case? Why were certain RTC investigators disciplined? Why was information about confidential criminal referrals made public? Was there a failure to go forward? These are legitimate

questions. There may be appropriate

reasons. But, then again, we might discover inappropriate action.

So these areas are within the scope.

We are not going to attempt to dig up

something that does not appear to be

really connection to the matters that

we have set forth. And it is our hope,

depending upon the schedule of the special counsel as he goes through the materials, that we can wind this up sooner

rather than later, and conduct the

business of the people in a manner

which reflects credibly on our constitutional obligations as Senators.

Mr. President, I am prepared to yield

the remainder of my time. My colleague may have something to do. I am

prepared to vote on the resolution.

The PRESIDING OFFICER. The Senator from Maryland.

Mr. SARBANES. Mr. President, I will

take just a couple of minutes, I say to

my distinguished colleague from New

York.

First of all, I want to underscore the

positive and constructive way in which

the chairman of the Banking Committee and members of his staff interacted

with us in trying to address the question of working out a resolution that

we would bring to the floor of the Senate. Obviously, it is not an easy thing

to do, and Members of the Senate have
May 17, 1995 CONGRESSIONAL RECORD — SENATE S6783

differing views about this matter. But I

do think we were able to, in the end,

work out a rational approach to this

inquiry and investigation, which I indicated in a sense had been committed to

last year.

Obviously, you always have to work

out carefully the scope questions,

which has been done in this resolution,

because the scope could be infinite, in

a sense, if you leave it to people’s

imagination. So there were candidates

for scope that I think went beyond the

horizon, and they are not included. But

we have tried to, in effect, put a focus

here.

In fact, some of the questions the distinguished Senator from New York just

raised, that he felt emerged out of the

previous hearings—and he made reference to last year’s minority statement in the report—have in fact been

spelled out here as matters that could

be looked into under this resolution.

There were other candidates, of

course, that were not included. We

have tried to be rational here. We have

tried to be reasonable. The matters

specified herein have been the outcome

of that process.

Second, I want to say the resolution

has been put together in a way that

presumes that the two sides will work

together cooperatively in carrying out

the inquiry, that the staffs will interact in that fashion, that material will

be generally available and so on. We

are trying to get an inquiry here in

which everyone is joined in trying to

find out what the facts are. A lot of

questions are raised, and will be looked

into. If you did not raise questions, you

would not have an inquiry, so I recognize that. But our job, I think, is to

probe the factual matter behind those

issues.

I was interested that my colleague

earlier used the word ‘‘allegations,’’

and that is what it is until you actually get the facts that sustain it. And

that is the process we are going to engage in. Some things, you know, when

you finally examine them, turn out to

be fairly innocent. At least I think. We

had this point about Captain Hume,

who did not appear when he was supposed to be a witness.

Well, what happened—obviously

there was a slip-up, but I think that is

what it was, a slip-up. Captain Hume

was deposed. He had over 300 pages of

deposition testimony. Apparently at

his deposition he said he was about to

take a—go on a vacation. After that

the hearing date was set. Everyone sort

of assumed that Captain Hume could be

brought back in for the hearing. A subpoena, I do not think, was issued for

him.

Mr. D’AMATO. I do not think it was

issued.

Mr. SARBANES. I do not think it

was issued for him so he did not, as it

were, ignore a subpoena. And he went

on a hunting and fishing trip and could

not be located, is what happened.

In the end, I think it was judged that

given we had 300 pages worth of deposition it was not worth having another

hearing simply to bring Captain Hume

in. I mean it is a small matter, but I

only mention it to show that sometimes when you really examine the

facts you discover that something that

looked amiss at first has a very simple,

plausible, and reasonable explanation

for it.

We expect, as I understand it, now to

move forward with this. I know that

the chairman and his staff will be talking with our staff to begin to plan the

first set of hearings which I think will

probably be in the next month or so,

and then we can proceed from there as

we schedule other matters which have

been stipulated here in the resolution

as being within the scope of the inquiry

which this special committee will now

undertake.

But I do again want to underscore

the, I think, responsible way in which

the chairman and members of the staff

have worked with us in order to try to

frame a resolution which we could

bring to the floor of the Senate today

which I think carries forward the legitimate requirements imposed upon us

in terms of carrying out an investigation without straying beyond what

most people regard as reasonable

bounds.

Mr. President, with that, I made my

statement. I see the distinguished Senator from Arkansas, and I would like

to yield time to him.

Mr. President, how much time is remaining?

The PRESIDING OFFICER. Ten minutes.

Mr. SARBANES. Mr. President, I

yield 4 minutes to the Senator from

Arkansas.

The PRESIDING OFFICER. The Senator from Arkansas.

Mr. BUMPERS. Mr. President, I

thank the distinguished Senator from

Maryland for yielding.

Mr. President, when I was a student

in law school I remember studying

criminal law. There never had been a

lawyer in my family. So I knew nothing about any kind of law. But I remember the professor about the second

day said, ‘‘Remember, the presumption

of innocence is the hallmark of our system of criminal jurisprudence.’’ It is

not presumption of guilt.

I asked the question, ‘‘Should I defend somebody if they came into my office and told me they were guilty?′′

He said that will be a personal call,

but you bear one thing in mind. That

person may not know whether he or

she is guilty under the law. They may

think they are and are not.

I am going to vote for this resolution. I have no objection whatever to a

fair, open hearing giving everybody a

chance to answer the questions of this

committee. But I have heard some

names thrown around here this morning.

Mr. President, in cases like this, all

you have to do is throw out a name. Oftentimes you have destroyed a person

or at least destroyed their reputation.

And there has been entirely too much

of that surrounding this case.

So let me admonish my friends in

the U.S. Senate, and especially on

this special committee, lawyers and

nonlawyers, to ask yourself when you

are making some of these speeches and

you are throwing out names, why did

not this happen, why did not that happen? Well, hindsight is a wonderful

thing. But ask yourself when you are

throwing names around and wondering

whether or not you are destroying that

person, a perfectly innocent person for

life, you ask yourself this question:

‘‘How would you like to be in that

somebody’s shoes and hear your name

bandied around on the floor of the Senate which carries with it the connotation of some wrongdoing or some

guilt?’’

I hope the Members of this body will

rise above that sort of thing, and when

they say something and use some of

these names in regard to this hearing,

make awfully sure they are not destroying some innocent person needlessly and wrongfully.

I look forward to the hearings. I look

forward to the people having an opportunity to say what they want to say

and answer the questions of the Members of this committee. But for God’s

sakes do not prejudge everybody that

is going to be called as a witness before

they get there and have an opportunity

to answer the questions.

I yield the floor.

Mr. SARBANES. Mr. President, I

yield 2 minutes to the Senator from

Arkansas.

The PRESIDING OFFICER. The Senator from Arkansas.

Mr. PRYOR. Mr. President, I thank

the distinguished chairman for yielding me 2 minutes. I had not planned to

speak again. But the distinguished

chairman of the committee made reference to three or four individuals who

have either pled guilty or have been indicted, et cetera. I would like to talk

about some of those.

Neil Ainley worked with a bank in

Perryville about 50 miles from Little

Rock. He pled guilty to four counts,

but not one of those counts related to

Whitewater; not even close to

Whitewater. One was his so-called failure to file with the Internal Revenue

Service a withdrawal of cash for the

1990 Clinton campaign; nothing whatsoever to do with Whitewater.

The second individual the distinguished chairman mentioned is Chris

Wade. If I am not mistaken, Chris

Wade was a real estate broker I believe

in Mountain Home near the

Whitewater development area. Chris

Wade, subsequent to these many years

of dealing with the lots at Whitewater,

filed bankruptcy; not related to

Whitewater in any way. But in the

bankruptcy filing he failed to disclose

either an asset or a debt. I do not know

all the facts but this matter is unrelated, totally unrelated to Whitewater;

no relationship whatsoever to the

President and Mrs. Clinton. But yet
S6784 CONGRESSIONAL RECORD — SENATE May 17, 1995

the prosecution has now had him plead

guilty.

The third person referred to was

Webb Hubbell. We know that case.

Webb Hubbell has pled guilty. It is a

sad day. He is a good friend. But it

was nothing that related to

Whitewater Development Corp., absolutely nothing that related to Madison

Guaranty, nothing whatsoever. Web

Hubbell pled guilty to overbilling his

clients; nothing to do with the RTC,

nothing to do with Whitewater; totally

irrelevant.

If we continue spreading this dragnet

out further, if we go after every person

that has ever had contact with Bill

Clinton or Hillary Clinton or James

McDougal or whatever, if they have

ever made a phone call to them, if they

have ever borrowed money or given

them a campaign contribution, Lord

only knows how long this investigation

is going to go. It will go beyond the

year 2000.

I just hope that our colleagues on the

Banking Committee will realize that

we must focus this investigation as it

relates to Whitewater and to its original mission.

Mr. President, I thank the distinguished Senator, ranking member, and

the distinguished chairman for yielding me this time.

I yield the floor.

Mr. SARBANES. Mr. President, I am

prepared to yield back time.

Mr. D’AMATO. Mr. President, we

yield back the remainder of our time.

The PRESIDING OFFICER. All time

having been yielded, the question is on

agreeing to the resolution.

On this question, the yeas and nays

have been ordered, and the clerk will

call the roll.

Mr. FORD. I announce that the Senator from Massachusetts [Mr. KENNEDY] is necessarily absent.

The legislative clerk called the roll.

The PRESIDING OFFICER (Mr.

SANTORUM). Are there any other Senators in the Chamber who desire to

vote?

The result was announced—yeas 96,

nays 3, as follows:

[Rollcall Vote No. 171 Leg.]

YEAS—96

Abraham

Akaka

Ashcroft

Baucus

Bennett

Biden

Bond

Boxer

Bradley

Breaux

Brown

Bryan

Bumpers

Burns

Byrd

Campbell

Chafee

Coats

Cochran

Cohen

Conrad

Coverdell

Craig

D’Amato

Daschle

DeWine

Dodd

Dole

Domenici

Dorgan

Exon

Faircloth

Feingold

Feinstein

Ford

Frist

Gorton

Graham

Gramm

Grams

Grassley

Gregg

Harkin

Hatch

Hatfield

Heflin

Helms

Hollings

Hutchison

Inhofe

Inouye

Jeffords

Johnston

Kassebaum

Kempthorne

Kerrey

Kerry

Kohl

Kyl

Lautenberg

Leahy

Levin

Lieberman

Lott

Lugar

Mack

McCain

McConnell

Mikulski

Moseley-Braun

Moynihan

Murkowski

Murray

Nickles

Nunn

Packwood

Pell

Pressler

Pryor

Reid

Robb

Rockefeller

Roth

Santorum

Sarbanes

Shelby

Simpson

Smith

Snowe

Specter

Stevens

Thomas

Thompson

Thurmond

Warner

Wellstone

NAYS—3

Bingaman Glenn Simon

NOT VOTING—1

Kennedy

So the resolution (S. Res. 120) was

agreed to.

Mr. D’AMATO. Mr. President, I move

to reconsider the vote by which the

resolution was agreed to.

Mr. SARBANES. I move to lay that

motion on the table.

The motion to lay on the table was

agreed to.

Mr. THURMOND addressed the Chair.

The PRESIDING OFFICER. The Senator from South Carolina.

Mr. THURMOND. Mr. President, I

ask unanimous consent to speak as in

morning business.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. THURMOND. I thank the Chair.

(The remarks of Mr. THURMOND pertaining to the introduction of S. 812 are

located in today’s RECORD under

‘‘Statements on Introduced Bills and

Joint Resolutions.’’)

Mr. DOLE addressed the Chair.

The PRESIDING OFFICER. The majority leader is recognized.

Mr. DOLE. Mr. President, it has been

our hope that we could work out some

agreement on H.R. 483, the so-called

Medicare Select bill. I know Senator

ROCKEFELLER has some concerns about

it. What we would like to do is bring

the bill up, and if anybody has amendments, they can offer the amendments

and see if we cannot complete action.

It is a program that expires on June 30.

I am not an expert on the program itself. I think Senators PACKWOOD and

CHAFEE will be happy to manage the

bill. I will not do that.

I would like to ask unanimous consent that we turn to the consideration

of H.R. 483, the Medicare Select bill,

but I am not going to make that request yet.

Is the Senator from West Virginia

prepared to object to that?

Mr. ROCKEFELLER. I am afraid I

will have to.

UNANIMOUS-CONSENT REQUEST

Mr. DOLE. Mr. President, I ask unanfimous consent that the Senate turn to

consideration H.R. 483 under the following time agreement: 1 hour on the

bill to be equally divided between the

chairman and ranking member of the

Finance Committee, with one amendment to be offered by Senator ROCKEFELLER relative to Medicare, 1 hour for

debate to be equally divided in the

usual form, and that no motion to

table be in order; further, that following disposition of the Rockefeller

amendment, the bill be advanced to

third reading and that final passage

occur without any intervening action

or debate.

The PRESIDING OFFICER. Is there

objection?

Mr. ROCKEFELLER. I do object.

The PRESIDING OFFICER. Objection is heard.

EXTENDED USE OF MEDICARE SELECTED POLICIES—MOTION TO

fPROCEED

Mr. DOLE. In light of the objection,

I move to proceed to the consideration

of H.R. 483.

The PRESIDING OFFICER. The

question is on the motion to proceed.

Is there debate on the motion?

Mr. ROCKEFELLER addressed the

Chair.

The PRESIDING OFFICER. The Senator from West Virginia.

Mr. ROCKEFELLER. Mr. President,

this is not one of the most broadly understood issues. But it is a very important one, Medicare Select. There are, I

guess, two issues that concern me.

One—and this is less important, but

nevertheless important to me—is the

area of process. I had written Senator

DOLE, the majority leader, a number of

months ago asking for a hearing on the

subject of Medicare Select. I was told

in a letter back from the majority

leader that we would have hearings on

Medicare, obviously, and that Medicare

Select would be a part of those hearings. The Finance Committee has not

had any hearings on Medicare Select

and, therefore, that constitutes a problem.

Second, there is a study on Medicare

Select which is going to be completed

by the end of the summer, and it is not

a frivolous study or a frivolous problem. It is a serious problem involving

seniors and Medicare supplementary

insurance. Currently, 15 States are participating in the 31⁄2-year experimental

Medicare Select Program. This bill

would expand Medicare Select to all 50

States for 5 years.

One of the States that has Medicare

Select is, in fact, the State of Florida.

I cosponsored legislation sponsored by

Senator GRAHAM that would temporarily expand Medicare Select for another year. So this is not just a question of those States that have Medicare

Select wanting to continue to expand

it, or to make it permanent, or whatever. We have genuine concerns.

There are other issues involved. One

of the conclusions of the preliminary

evaluation of this study which I have

been referring to, which will be completed at the end of the summer—and

that is why I hoped we could wait until

that time, this being the first year of a

2-year session—was that about half of

the savings in the form of cheaper

MediGap premiums for beneficiaries

came about as a result of discounting

payments to hospitals.

Now, theoretically, if seniors are

having their care actually managed,

the Medicare Program would realize

savings from the lower use of health

care services.