Clin­ton files van­ish fol­low­ing warn­ing

The Washington Times Weekly - - Front Page - By Jerry Seper

Hil­lary Rod­ham Clin­ton’s Rose Law Firm billing records, found in the White House res­i­dence in Jan­uary 1996 two years af­ter they had been sub­poe­naed by gov­ern­ment reg­u­la­tors, dis­ap­peared shortly af­ter the first lady was warned that the firm’s billing prob­lems were “very se­ri­ous” and the then-on­go­ing White­wa­ter in­ves­ti­ga­tion could re­sult in crim­i­nal charges, newly ob­tained records show.

More than 1,100 pages of grand jury tes­ti­mony, in­ves­tiga­tive re­ports, memos, charg­ing doc­u­ments, chronolo­gies, nar­ra­tives and draft in­dict­ments, pre­vi­ously undis­closed but now be­ing “pro­cessed” at the Li­brary of Congress, say Mrs. Clin­ton knew con­sid­er­ably more about the firm’s billing prob­lems and their po­ten­tial ram­i­fi­ca­tions than she pub­licly ac­knowl­edged at the time.

Ac­cord­ing to the doc­u­ments, given to the Li­brary of Congress by the es­tate of Sam Dash, for­mer ethics ad­viser to White­wa­ter In­de­pen­dent Coun­sel Ken­neth W. Starr, Mrs. Clin­ton also knew that her for­mer Rose part­ner Web­ster L. Hubbell was both the fo­cus of the firm’s billing con­cerns and a fed­eral con­flict-of-in­ter­est in­ves­ti­ga­tion, in which he was sus­pected of ly­ing in a sworn state­ment to reg­u­la­tors about the firm’s rep­re­sen­ta­tion of a failed Arkansas sav­ings and loan.

While Mrs. Clin­ton told the pub­lic at the time that Mr. Hubbell’s

March 14, 1994, res­ig­na­tion as as­so­ci­ate at­tor­ney gen­eral in­volved an “in­ter­nal billing dis­pute” with his Rose part­ners that “likely would be re­solved,” three months ear­lier she had been ad­vised by an­other Rose part­ner, Allen Bird, that the “billing prob­lems were very se­ri­ous,” ac­cord­ing to the newly dis­closed records.

The records also said Mrs. Clin­ton was aware that the Fed­eral De­posit In­sur­ance Corp. (FDIC) and the Res­o­lu­tion Trust Corp. (RTC) had be­gun an in­ves­ti­ga­tion in De­cem­ber 1993 into a sus­pected con­flict of in­ter­est in­volv­ing a $400,000 pay­ment to the Rose firm to de­fend the busi­ness prac­tices of Lit­tle Rock’s Madi­son Guar­anty Sav­ings and Loan As­so­ci­a­tion. At the time, Mrs. Clin­ton was pub­licly dis­miss­ing the se­ri­ous­ness of ac­cu­sa­tions against Mr. Hubbell, which were be­ing widely re­ported by the me­dia.

Madi­son was at the heart of the White­wa­ter in­ves­ti­ga­tion, which per­sisted through most of the eight years of the Clin­ton ad­min­is­tra­tion but even­tu­ally was shut down with­out charges against ei­ther Pres­i­dent Clin­ton or Mrs. Clin­ton. Four­teen other per­sons pleaded guilty or were con­victed.

Mrs. Clin­ton is now the ju­nior sen­a­tor from New York and a Demo­cratic pres­i­den­tial-pri­mary can­di­date. Her cam­paign has dis­missed the new doc­u­ments.

“This is a base­less ac­cu­sa­tion which was looked into over a decade ago in an in­ves­ti­ga­tion that took $71.5 mil­lion and eight years to de­ter­mine there was no case,” said spokesman Jay Car­son.

A Feb. 28, 1994, memo by White House As­so­ci­ate Coun­sel W. Neil Eg­gle­ston de­scribed Mr. Hubbell’s ex­ten­sive role in the Rose firm’s le­gal rep­re­sen­ta­tion of Madi­son, con­tra­dict­ing his sworn tes­ti­mony to the RTC.

The memo, for­warded to Mrs. Clin­ton on March 1, 1994, by White House Deputy Chief of Staff Harold Ickes, noted con­cerns by the FDIC and the RTC as to whether the Rose firm had dis­closed its prior le­gal rep­re­sen­ta­tion of Madi­son in an FDIC law­suit against the thrift’s for­mer au­di­tors.

That same month, the RTC is­sued its first sub­poena for Rose firm doc­u­ments, in­clud­ing billing records for var­i­ous Madi­son projects. The doc­u­ments show that both Mr. Hubbell and Mrs. Clin­ton were in­volved in do­ing le­gal work for the fail­ing thrift de­spite Mrs. Clin­ton’s pub­lic de­nials.

The Eg­gle­ston memo said an “ul­ti­mate find­ing” of nondis­clo­sure would mean that “Mr. Hubbell was not truth­ful in his rec­ol­lec­tion.” It also said that while it was “not clear” whether the FDIC or the RTC would re­view the ac­cu­sa­tions un­der an ac­tual con­flict stan­dard, there was the pos­si­bil­ity of sanc­tions in the case, in­clud­ing “crim­i­nal li­a­bil­ity.”

On Jan. 5, 1996, the White House re­leased copies of the billing records show­ing Mrs. Clin­ton’s work for Madi­son and its projects while a part­ner at the Rose firm af­ter they were dis­cov­ered in the White House by Carolyn Huber, spe­cial as­sis­tant to the pres­i­dent.

Un­til that time, the White House had said they never ex­isted, since Mrs. Clin­ton did lit­tle, if any, le­gal work for Madi­son.

Mrs. Huber, for­mer of­fice man­ager at the Rose firm who moved to Wash­ing­ton in 1992 with the Clin­tons, later told the Spe­cial Se­nate White­wa­ter Com­mit­tee she ini­tially and un­ex­pect­edly found the lon­glost copies in Au­gust 1995 on a ta­ble in the White House res­i­dence’s “book room,” whose ac­cess was lim­ited to the pres­i­dent, Mrs. Clin­ton and “se­lected house­guests.”

“They just ap­peared there,” Mrs. Huber said, not­ing that she vis­ited the room reg­u­larly in the course of her White House du­ties ev­ery two or three days. “I thought they had been left there for me to take down to put in the file.”

She said she left them where she found them un­til their re­dis­cov­ery five months later.

The com­mit­tee had sought the records af­ter hear­ing tes­ti­mony in De­cem­ber 1995 from Clin­ton con­fi­dante Susan Thomases, a New York lawyer, who said Mrs. Clin­ton — con­trary to her pub­lic state­ments of “lit­tle or no” in­volve­ment in the Madi­son case — had nu­mer­ous con­fer­ences with Madi­son of­fi­cials, re­viewed doc­u­ments, made calls to dis­cuss a pre­ferred stock plan aimed at keep­ing the fail­ing thrift afloat, and “did all the billing.”

Mrs. Huber said she did not re­al­ize un­til she looked at the records again on Jan. 4, 1996, that they were the same doc­u­ments that had orig­i­nally been sought by the RTC in Fe­bru­ary 1994 and by the White- wa­ter com­mit­tee un­der sub­poena since Oc­to­ber 1995. She said she was sure the records were not in the room “two or three days” ear­lier.

“I don’t think I could have missed them,” she said, adding that she had “no idea” who might have left them sit­ting on books on the cor­ner of a ta­ble in the cen­ter of the room.

The Rose firm’s orig­i­nal billings for Madi­son have never been found, but the new doc­u­ments show the White­wa­ter in­ves­ti­ga­tors thought that White House Deputy Coun­sel Vin­cent W. Fos­ter Jr. had col­lected copies of them dur­ing the 1992 pres­i­den­tial cam­paign. Notes in red ink and in Mr. Fos­ter’s hand­writ­ing are on the copies and ap­peared to be ad­dressed to Mrs. Clin­ton.

Mr. Fos­ter, whose July 1993 death at Fort Marcy Park in Vir­ginia has been ruled a sui­cide, also served at the time as the Clin­tons’ per­sonal at­tor­ney. He had ex­pressed con­cern over the Clin­tons’ in­volve­ment in White­wa­ter De­vel­op­ment Corp., an Arkansas real es­tate ven­ture that also in­volved Madi­son’s own­ers, James and Susan McDou­gal, and he is thought to have been in­volved in re­mov­ing records from the Rose firm in 1992 that later turned up at the Clin­ton cam­paign head­quar­ters.

The Clin­ton ad­min­is­tra­tion never ex­plained how Rose billing records got to the White House nor why they were not pro­duced in re­sponse to sep­a­rate sub­poe­nas by the RTC, Mr. Starr’s of­fice and the White­wa­ter com­mit­tee.

Ron­ald M. Clark, man­ag­ing part­ner at the Rose firm, told the Se­lect Se­nate White­wa­ter Com­mit­tee that the billing records showed Mrs. Clin­ton was in­volved with Madi­son and a project known as Cas­tle Grande that fed­eral reg­u­la­tors later de­scribed as a “sham.” He said the records showed that she charged more than her usual $125-an-hour rate for the work.

Mr. Clark also said he had not found the orig­i­nal billing records de­spite an ex­ten­sive search, that he did not know how they got to the 1992 Clin­ton pres­i­den­tial cam­paign, and that Mrs. Clin­ton never told her law part­ners about her busi­ness deal­ings with Mr. McDou­gal or the White­wa­ter ven­ture.

Mr. Hubbell pleaded guilty on Dec. 6, 1994, to de­fraud­ing his Rose firm part­ners and clients of $482,410 in over­billings and of fail­ing to pay $143,747 in fed­eral in­come taxes. He was sen­tenced to 21 months in prison un­der a plea bar­gain and re­leased af­ter serv­ing 16 months. In the agree­ment, he promised to co­op­er­ate in the White­wa­ter in­ves­ti­ga­tion, al­though fed­eral au­thor­i­ties have de­scribed that co­op­er­a­tion as less than ex­pected.

Court records said some of the over­billed funds were used by Mr. Hubbell for ques­tion­able per­sonal ex­penses, in­clud­ing pur­chases at a lin­gerie shop.

As­so­ci­ated Press

Elec­tion, USA: Kanawha County poll worker Peter Gallo ap­plies fin­ish­ing touches prior to the open­ing of West Vir­ginia precincts for the 2008 pri­mary elec­tion in Charleston, W.Va. on May 13.

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