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Saturday, Jul 4, 2009
The independent counsel's report concedes there was no Clinton scandal, but details another one -- the role the first Bush administration played.
Mar 21, 2002 | The final report on the Whitewater investigation released Wednesday by the Office of Independent Counsel (OIC) confirmed what had been known for some time -- that after all the tens of millions of dollars and eight years of investigation, the OIC found no evidence of any criminal activity on the part of Bill or Hillary Clinton in the various dealings that fell under the catchall heading of "Whitewater."
The highlights of the report -- as judged by the headlines of the major national dailies -- were Robert Ray's criticism of President Clinton for disparaging the Starr-Lay investigation, and Ray's claim of inaccuracies in now-Sen. Hillary Clinton's testimony about billing records for Madison Guaranty, the failed S&L whose owners, the McDougals, were partners with the Clintons in a real estate company named Whitewater.
But both missed the real shocker in the report: new details of how the scandal was fueled in its early days by the Justice Department of George H. W. Bush, who was facing a daunting election against the upstart governor from Arkansas.
While the aim of the report was clearly to defend the integrity of the investigation that produced it, tucked away toward the end is information that points to an opposite conclusion. Critics of the Starr and Ray investigations have long held that the Whitewater probe was partisan from the start, born in dirty tricks and manipulation that began with the first Bush administration. Now the OIC itself is presenting facts that substantiate those claims.
According to the report, in the late summer of 1992 a referral file from the Resolution Trust Corp. came before U.S. Attorney Charles A. Banks and local FBI officials in Little Rock, Ark. It was a potential case of check kiting against Jim McDougal, Susan McDougal and Lisa Aunspaugh. It also mentioned Bill and Hillary Clinton as possible witnesses in the case. And as all the players in the drama realized, that made all the difference in the world.
The 50-odd pages in this section of the report reveal how political appointees at the highest level of the first Bush administration actually intervened in the normal process of the investigation, not to slow it down but to speed it up -- and with the pretty obvious intention of getting the matter before the public prior to Election Day, 1992. This is not the first time this story has been told (it was previously pointed out in "The Hunting of the President," by Joe Conason and Gene Lyons). But it is the first time it's been told in such detail, with so much sworn testimony, and from a source that will be difficult for supporters of the OIC to question.
From the start, Banks, a former Republican candidate for Congress whom the first President Bush had recently nominated to the federal bench, had misgivings about the quality of the potential case, and he was suspicious about its timing. But there is no evidence, as even the OIC report concedes, that Banks treated the matter in anything but a proper manner.
At around the same time, though, people at the highest levels of the Bush administration found out about the Whitewater referral and started in motion a series of actions intended to speed up the handling of it. According to the report, on Sept. 17, 1992, Edie Holiday, the secretary to the Cabinet in the Bush White House, contacted then Attorney General William Barr and -- after some awkward back and forth -- asked Barr if he "would be aware of a pending matter in Justice (she may have said it was a criminal referral) about a presidential candidate or a family member of a presidential candidate."
At around the same time, according to the report, then-White House counsel C. Boyden Gray also apparently took action. He inquired about the status of the referral with the head of the Resolution Trust Corp. (RTC), the agency from which the referral to the U.S. attorney originated.
Washington is replete with rules prohibiting or discouraging contact that might create the appearance of a conflict of interest. And most cover inappropriate contact between the political side of the executive branch and the law enforcement side of the executive branch, for obvious reasons. During a later phase in the Whitewater investigation, the general counsel at the Treasury gave White House lawyers a heads up about a possible upcoming indictment of Jim McDougal and possibly President Clinton, which was being reported in an internal RTC newsletter called the "early bird report." That incident was enough to get several White House officials hauled before a federal grand jury and led to the eventual resignations of White House counsel Bernie Nussbaum and Deputy Treasury Secretary Roger Altman. The series of incidents noted in Wednesday's Whitewater report are considerably more serious: political appointees trying to use their influence over the executive law enforcement agencies for political gain.
And it has former Clinton staffers steamed.
