Accuracy in Media

Independent Counsel Robert Ray’s final report documents the dishonesty and crimes of the Clintons and some of their cohorts, but nearly all of it comes to naught. To the delight of those who admire Bill and Hillary Clinton, he repeatedly exonerates them, claiming that there was insufficient evidence to convict them of any wrongdoing. The media coverage of his massive five-volume opus has been limited and uncritical. Comment from Clinton supporters has been loaded with claims that it proves that Bill and Hillary never really did anything that would justify the estimated $70 million cost of the eight-year investigation. New York Times columnist Paul Krugman said flat out in his column on March 29 that the investigation “never did find any evidence of wrongdoing by the Clintons.”

The New York Times devoted 32 column inches to Ray’s report on page 25, leading with the statement that the counsel’s office had said there was “insufficient evidence to show that either (of the Clintons) had committed any crimes.” It went on to say that “there was no credible evidence that the Clintons either knew of or participated in” the fraudulent acts committed by their Whitewater partner, James B. McDougal. It did say that Mr. Clinton may have known of two fraudulent loans, but “that evidence was, ultimately, of insufficient weight and insufficiently corroborated to obtain and sustain a criminal prosecution beyond a reasonable doubt.”

The Times said the report accused Hillary Clinton of testifying that she had not worked on an option agreement that was drafted to conceal a sham real estate transaction in McDougal’s Castle Grande real estate project that was being used to prop up his failing savings & loan. It noted that there was documentary evidence to the contrary, but Ray said there was no evidence that she knew of “the wrongful purpose of the document.” A Wall Street Journal editorial had a different view. It said, “Mr. Ray cites evidence that Mrs. Clinton worked on an option agreement that cloaked the sham transactions, though he could find no evidence that one of America’s 100 best lawyers [Hillary] knew the document had an illicit purpose.”

Speaking of the disappearance of Hillary’s billing records of her work on the Castle Grande project, the Times reported that a copy had turned up in the White House residence 18 months after they had been subpoenaed. It said that Hillary had insisted she had nothing to do with their disappearance or their reappearance. Ray reported that a jury could conclude that Mrs. Clinton had the billing records all along, but he said “the evidence was insufficient to obtain and sustain a conviction beyond a reasonable doubt.” The Wall Street Journal’s editorial comment was, “In a strictly legal sense, the Ray report is proof of how much a determined president can get away with.”

Fleecing The Feds

The Washington Post’s story focused mainly on the missing billing records, but it also said that $50,000 of a $300,000 government-guaranteed loan that Susan McDougal had obtained by fraud had gone to the Whitewater Development Corp., which was owned jointly by the Clintons and the McDougals. The Post did not report that David Hale, whose company, Capital Management Services [CMS], made the loan, and Jim McDougal both testified that Bill Clinton had participated in the decision to request the federal government guarantee.

Ray says that Bill Clinton had denied that under oath. Susan McDougal served time in prison for contempt of court for refusing to testify about this and other matters. Her silence was rewarded with a pardon by President Clinton in the last hours of his presidency. The Independent Counsel concluded that Clinton’s denial under oath outweighed the testimony of David Hale and Jim McDougal and Susan McDougal’s silence. Ray bent over backwards to avoid charging the Clintons with perjury. He says that there was sufficient evidence to establish that some of their statements were factually inaccurate, but he claims that it was not sufficient to establish beyond reasonable doubt that they “knowingly gave false statements, committed perjury or otherwise obstructed investigations.” However, he is shy about describing the evidence sufficiently to enable the readers to judge for themselves.

It is hard to believe that two savvy graduates of Yale Law School paid no attention to the finances of the Whitewater Development Corporation and were never told that they were the beneficiaries of the McDougals’ generosity in covering 36 percent of their Whitewater loss. Ray would have us believe that they didn’t notice that from 1982 to1986 they were not called upon to put up any money to keep Whitewater afloat. The McDougals and entities they controlled put $134,294 into their partnership with the Clintons, of which at least $88,000 came from Madison Guaranty’s federally insured deposits.

The February 1996 American Spectator reported that a $135,000 bank loan made to the McDougals in 1985 by a small bank in Stephens, Arkansas had been co-signed by Hillary Clinton, making her liable for its repayment. The loan was supposed to be used to help finance a McDougal real estate development called Flowerwood Farms. Investigators discovered that some of it was used to make an illegal campaign contribution to Bill Clinton and to cover a $24,560 overdraft in the Whitewater Development Corporation’s checking account. This might explain why Hillary was willing to co-sign it.

Bill Clinton was said to have participated in the conspiracy to obtain funds to repay this loan in April 1986. This was accomplished by getting the federal Small Business Administration (SBA) to guarantee a $300,000 loan made to Susan McDougal by Capital Management Services, the small- business investment corporation owned by David Hale. The loan was made to Susan McDougal, doing business as Master Marketing, a sham advertising company with no assets. The SBA guarantee was supposed to be limited to loans to “disadvantaged” borrowers. Ray’s report says that “every material assertion in the loan application was false,” but the SBA appoved the guarantee. The loan was never repaid.

David Hale, who was indicted for fraud in the management of CMS, charged that Bill Clinton and his partner, Jim McDougal, pressured him to make this fraudulent loan. At first, McDougal supported Bill Clinton’s denial that he knew anything about it, but he later testified under oath that Clinton was involved. Hale’s check for $300,000 to Susan McDougal’s Master Marketing was dated April 3, 1986. Three days later, Madison Guaranty, the McDougal’s S&L, issued a cashier’s check to the Stephens bank for $111,542, the balance due on the Flowerwood Farms loan. Another $50,000 went into the Whitewater Development Corp. That, plus the amount that had been diverted to Whitewater from the Flowerwood Farms loan, brought the Whitewater share of the SBA-guaranteed loan to $74,560.

Ray insists that a jury could not be convinced that the Clintons were committing perjury if they swore under oath that they did not know that these funds were obtained by fraud. There are no records of the use made of more than a third of this loan, but notes made by Bill Clinton’s confidant and adviser, Bruce Lindsey, suggest that Clinton had a good idea of how it was used. Lindsey’s notes show that according to Hale’s lawyer Clinton asked Hale, “Do you know what that f———- whore Susan did with the money? You should talk to Jim.”

None of the media reports we saw questioned the accuracy of Ray’s claim that the evidence was insufficient to prove that the Clintons were guilty of any wrongdoing with respect to this loan. They didn’t give their readers the facts that would enable them to judge for themselves, such as the fact that a large part of it was used to repay a large loan for which Hillary shared liability. It doesn’t require a law degree to see that she and Bill would be curious about how this feat was to be achieved.

Independent Counsel Donald Smaltz knew that it would be dif-ficult to convict former Secretary of Agriculture Mike Espy of accepting illegal gifts even though nine of the gift-givers had been found guilty. Like Espy, all but one of the jurors he faced in the D.C. court was black. Smaltz did not duck doing his duty by claiming that the evidence was insufficient to win a conviction. The problem was not with the evidence, it was with the jury that ignored the inconsistency between finding the recipient of illegal gifts innocent when the givers had been found guilty. It would probably have been equally difficult to get a D.C. jury to convict the Clintons of anything, but blaming it on the insufficiency of evidence is a poor excuse for not trying.

A Better Venue, A Better Case

Kenneth Starr got around this problem in the Lewinsky case by handing it to the House of Representatives. In his referral he said, “OIC investigators and prosecutors recognized parallels between Mr. (Vernon) Jordan’s relationship with Ms. Lewinsky and his earlier relationship with a pivotal Whitewater-Madison figure, Webster L. Hubbell. Prior to January 1998, the OIC possessed evidence that Vernon Jordan-along with other high-level associates of the President and First Lady-helped Mr. Hubbell obtain lucrative consulting contracts while he was a potential witness and/or subject in the OIC’s ongoing investigation. This assistance took place, moreover, while Mr. Hubbell was a target of a separate criminal investigation into his own conduct. The OIC also possessed evidence that the President and the First Lady knew and approved of the Hubbell-focused assistance.”

Starr explained, “On the day prior to Mr. Hubbell announcing his resignation, White House Chief of Staff Thomas ‘Mack’ McLarty attended a meeting at the White House with the President, First Lady, and others, where Mr. Hubbell’s resignation was a topic of discussion. At some point after the White House meeting, Mr. McLarty spoke with Vernon Jordan about Mr. Jordan’s assistance to Mr. Hubbell. Mr. Jordan introduced Mr. Hubbell to senior executives at New York-based MacAndrews & Forbes Holding Co. Mr. Jordan is a director of Revlon Inc., a company controlled by MacAndrews & Forbes. The introduction was successful; MacAndrews & Forbes retained Mr. Hubbell at a rate of $25,000 per quarter. Vernon Jordan informed President Clinton that he was helping Mr. Hubbell. (Jordan’s House testimony, 7/24/97, at 46)”

Starr said that by late 1997, he was investigating “whether a relationship existed between consulting payments to Mr. Hub-bell and his lack of cooperation (specifically his incomplete testimony) with the OIC’s investigation.” He relegated to a footnote this information: “From April through November 1994, 17 different persons or entities retained Mr. Hubbell as a consul-tant. In 1994, he collected $450,000 for this work (sic). In 1995, he collected $91,750, despite beginning a 28-month (sic) prison term in August of that year.” (The term was 21 months.)

President Clinton testified before a grand jury on August 17, 1998. Starr’s referral discussed his testimony about whether or not he had sexual relations with Monica Lewinsky and concludes that he lied under oath three times. Starr made no mention of ever having taken testimony under oath from the President or the First Lady about their involvement in the payments to Hubbell. However, Ray’s report states that there was insufficient evidence “to prove beyond a reasonable doubt that Mrs. Clinton gave false testimony about Webster Hubbell’s post-resignation employment and related matters.” It does not say what questions were asked, but Mrs. Clinton apparently denied having played a role in raising the money paid to Hubbell when she testified before the grand jury.

For three years she and the President insisted that when Hubbell resigned they thought his problem with his old law firm was just a billing dispute. They told this lie to show that they had no reason to try to buy his silence. The truth is that in March 1994, they knew that Hubbell was in deep trouble, and at the meeting in the White House mentioned in Starr’s referral, it was decided that he had to resign. Ray’s report says that when the meeting ended, Chief of Staff Mack McLarty told Mrs. Clinton, “We’re going to try to be supportive of Webb,” and she said she appreciated that. McLarty and other high government officials launched a drive to get big Democratic donors and friends of Bill to help Hubbell by hiring him as a consultant after he resigned.

Starr’s referral to the House refers to the payments to Hubbell as “consulting payments” and payments for “work.” This was after the House Government Reform Committee had found that the total amount paid was $720,000, not $541,750, the figure given in Ray’s report. In most cases no work was required and in those where it was expected, little was performed.

The Times Calls It Hush Money

A New York Times editorial on April 3, 1997 had suggested that evidence pointed to an effort by the White House to obstruct justice by paying Hubbell not to cooperate with Independent Counsel Starr. It said the behavior of the Clintons fueled suspicion that they were concealing knowledge that hush money had been paid. Noting that top government officials had tried to line up “work” for Hubbell, it said this was improper and that it was “either incredibly naive or a calculated effort to protect the President and his wife.”

The largest payment was from a Hong Kong firm controlled by the Lippo Group, an Indonesian company owned by the Riady family. It was arranged by James Riady, a longtime Clinton friend and donor to the Democrats. After visiting the White House five times in five days and meeting with the President at least once, Riady agreed to make a lump sum payment of $100,000 to Hubbell at the end of June 1994. He got U.S. support for a power-plant project in China, most-favored-nation treatment for China and a job in the Commerce Department for John Huang, one of his trusted employees. Lippo did not require Hubbell to do any work.

The Times said these disclosures showed the need for an investigation by an independent counsel. It advised Starr to use a grand jury to find out if Hubbell was paid hush money. It followed up a month later with a front-page story, another editorial and a column by its retired executive editor, A.M. Rosenthal, all suggesting that the Clintons were involved in arranging the payment of hush money to Hubbell. Rosenthal said in his May 6, 1997 column that this opened the door to an “obstruction of justice charge, the accusation that led to Richard Nixon’s resignation.”

Starr negotiated a plea bargain with Hubbell that allowed him to plead guilty to one felony count and one misdemeanor. Hubbell was given the minimum sentence under the guidelines-21 months in prison on both counts, to run concurrently. He agreed to cooperate with the Starr, but it turned out that the Clintons had bought his silence with the hundreds of thousands of dollars their friends paid him. Ray’s report reveals that the donors were questioned before a grand jury about their motives in making the payments. Not surprisingly, none said it was to keep Hubbell from talking, and that was probably true. Most made the payments to curry favor with the White House or to get a favor in return.

The favors bought with the $100,000 check from the Riady-owned Hong Kong firm were probably negotiated directly with the President and carried out on his orders. Clinton’s golfing pal, Vernon Jordan, made sure the President knew he had obtained money for Hubbell. Other donors may have been told that Clinton would be informed of their generosity. Ray’s report does not say whether or not they were asked about this, nor does it indicate that the government officials who solicited the funds were asked about their motives, what they told donors and what they reported to Mr. and Mrs. Clinton.

“Roll Over One More Time”

The risk that was taken and the effort that was put into raising the money to buy Hubbell’s silence indicates that someone placed a high value on the information he had. The Government Reform Committee released a taped phone conversation between Hubbell and his wife when he was in prison. On the tape, Hubbell’s wife tells him that the White House is pressuring her to get him to drop his plan to counter sue his former law firm. She tells him that she will lose her well-paid job at the Department of the Interior if he goes ahead with the lawsuit. Hubbell tells her, “I’m hearing the squeeze play. So I need to roll over one more time.”

Ray’s report mentions this, saying that when Hubbell was asked about it, he said he meant “he would confess judgment without fighting the lawsuit.” That ambiguous explanation seems to have satisfied Ray, even though Hubbell was obvious-ly saying that once again he would have to do what the White House was demanding.

White House Monitors Hubbell

Jane Sherburne, a special counsel to the President, compiled a 12-page list of tasks for herself and other White House lawyers in dealing with 39 problems. (It can be found on pp. 760-771 of the House Committee on Government Reform and Oversight Report on the Investigation of White House Travel Office Firings and Other Matters.) It was dated Dec. 13, 1994, just one week after Hubbell had entered his guilty plea and had agreed to cooperate with Starr. The 10th item on Sherburne’s list was “Hubbell,” and the two tasks listed under his name are “(a) monitor cooperation, and (b) determine press strategy/develop talking points.”

Monitoring Hubbell’s cooperation with Starr was given high priority. Ray says McLarty and his staff director, Bill Burton, called Hubbell about once a week after he resigned. The press strategy was to hide the fact that hundreds of thousands of dol- lars were being paid to Hubbell, ostensibly for consulting and other services, with the knowledge and approval of the President and the First Lady. Ray’s report recognizes that very little work was performed, and the donors were currying favor with the White House. This was cloaked in secrecy, but Ray’s report says there was insufficient evidence to prove that this was responsible for Hubbell’s failure to cooperate with the OIC investigation. Ray overlooks the fact that in court filings with the Circuit Court of Appeals for the District of Columbia in January 1999, Starr himself described the payments to Hubbell as “hush money.” Two of the three appellate judges agreed.

If Starr had investigated to find out why Hubbell did not keep his commitment to cooperate with him, he could have exposed the hush-money scandal and referred it to the House as an impeachable offense. Compared to the Lewinsky case, the impeachment of President Clinton by the House and his conviction by the Senate would have been a slam-dunk. It could have been accomplished in 1995 or 1996, sparing the nation the tawdry Lewinsky ordeal.

The OIC Role In The Cover-up

Hubbell could have revealed many damaging secrets about the Clintons, relating to their misdeeds in both Washington and Arkansas. Right after Vincent Foster was found shot to death, Hubbell told one of his former partners at the Rose Law Firm that despite whatever he may have heard, Foster did not kill himself. He subsequently backed away from that, but he was in a good position to know that the evidence pointed to homicide, not suicide and that the White House orchestrated a cover-up.

Robert Ray’s report is seriously flawed by omissions and misrepresentation in recounting the evidence in the Foster case. The OIC itself has played a major role in covering up the cover-up, refusing to release hundreds of important documents bearing on Foster’s death. Accuracy in Media is suing to obtain 284 of the 710 documents we had requested under the Freedom of Information Act.

A federal district court judge let the OIC get away with its claim it could not find 284 of the identified documents AIM sued to obtain. She dismissed AIM’s FOIA suit on summary judgment last December without providing any explanation of why the loss of so many documents should be excused. Ray’s report exposes the OIC’s dishonesty by citing one of these “missing” documents and six related documents that we had not requested because we didn’t know they existed. These are 1994 interviews of CNN makeup artist Rose Procopio (identified only as confidential witness CW), Greta Van Susteren, and five White House officials-Mack McClarty, George Stephanopoulos, Dee Dee Meyers, Mark Gearan and Bill Burton.

Ray’s report says that the confidential witness, Rose Procopio, who was in the White House to make up President Clinton for his appearance on “Larry King Live” on July 20, 1993, the day Foster died, saw the five White House officials listed above in the Map Room between 9:15 and 9:45 p.m. She said she heard one of the men say that a note had been found. All five were interviewed by agents of special prosecutor Robert Fiske, and they all denied having made such a statement. Greta Van Susteren, a long-time CNN star who is now with Fox News Channel, confirms that Rose Procopio told her about this the very next day. Fiske turned over most of his documents on the Foster case to the Senate Banking Committee, which published them. The Procopio interview was not among them, but we knew it existed and we put it in our FOIA request. We knew nothing about the others.

The Procopio story could explain the lies told by the White House about the time that the Secret Service, White House officials and the President learned of Foster’s death. Foster was found shot to death by a Park Police officer and rescue workers at 6:14 p.m. His White House photo ID was under his jacket on the front seat of his unlocked car, and he had on his belt a pager identifiable as belonging to the White House. The Park Police at the scene should have recognized that he was a White House official in a matter of minutes and notified the Secret Service. The OIC report claims that they didn’t notify the Secret Service until 8:30 p.m. and that the President was not informed until after he finished doing the Larry King Live show at 10 p.m.

There is evidence that the Park Police obtained Foster’s Washington address and phone number from the Secret Service at around 6:40 p.m. David Watkins, the Assistant to the President for Management and Administration, told the FBI that the Secret Service notified him at around 7:30 and that he called Chief of Staff Mack McLarty, who would have informed the President promptly. Why did the White House lie about the time it learned of Foster’s death?

Procopio’s story suggests that there was a search earlier in the evening that they didn’t want to disclose. This could explain a meeting that Patsy Thomasson, David Watkins’ deputy, had in her office at 7:10 with a Secret Service technical team that may have been called to open a safe. Watkins was not told about this when he called Thomasson hours later to ask her to search Foster’s office for a note. If Procopio’s story is false, the ques-tions about the time-line lies remain, with this addition: Why does Ray’s report repeat instead of exposing them?

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