APRIL 2, 1997
With the release of new White House documents, Webster Hubbell, the man who President Clinton once described as his closest friend, appears to be increasingly at the center of political scandals that dog the White House. Margaret Warner takes a closer look with two reporters covering the issue.
A RealAudio version of of this segment is available.
The Senate Judiciary hearings on the release on classified FBI files to the Whitehouse, and a discussion with Senators Biden and Grassley.
Regional Commentators discuss the release of FBI files on Republican staffers to the Clinton White House.
A NewsHour discussion about Whitewater and Hillary Rodham Clinton's involvement.
For more about this administration, browse our White House and our Federal Agencies index pages.
MARGARET WARNER: Webster Hubbell was one of a handful of Arkansans who came to Washington with newly elected President and Mrs. Clinton. The President once called Hubbell his closest friend. Hubbell and First Lady Hillary Clinton had been friends and partners at the Rose Law Firm in Little Rock where they both involved in a project that would later come under scrutiny in the Whitewater investigation.
MARGARET WARNER: The President so valued Webster Hubbell that he named him to the Justice Department's No. 3 post, associate attorney general. Even before Hubbell was confirmed he was overseeing the Justice Department for the White House in an unofficial capacity. Then in March 1994, just 10 months after taking the job, Hubbell announced he was resigning. He said he needed time to sort out a billing dispute with his former Rose Law Firm partners in Arkansas. Even though he was also being pressed for information in the Whitewater probe Hubbell insisted that his resignation had "nothing to do with Whitewater."
In December of that year Hubbell pleaded "guilty" to tax evasion and mail fraud in the Rose Law Firm affair. Prosecutors said he had bilked his former clients and the law firm out of more than $480,000. Hubbell spent 16 months in prison. Now, more than two years later, news stories have appeared reporting that in the months after Hubbell left the Justice Department a network of Clinton friends and associates, including several top administration officials, took steps to assist him financially. Some tried to help him get legal business, and others helped family members with jobs and donations. Among those who pitched in were Mack McLarty who was then White House chief of staff; Erskine Bowles, then head of the Small Business Administration, now White House chief of staff; Mickey Kantor, then U.S. Trade Representative; and Washington lawyer Vernon Jordan, a close Clinton friend and adviser. Some of their efforts to get Hubbell business panned out.
In the nine months between his resignation and his guilty plea Hubbell earned more than $400,000 in legal retainers and other business. Some of the payments came from major donors to the Democratic Party and the President, including $100,000 from an affiliate of the Lippo Group, and Indonesian conglomerate controlled by longtime Clinton supporter James Riady; $18,000 from American Income Life Insurance Company, headed by Texas insurance magnate and Clinton financial backer Bernard Rapoport; and an undisclosed amount from Truman Arnold, a Texas oil executive and longtime Clinton supporter.
MARGARET WARNER: Now for the latest on the Webster Hubbell story and its implications we have two reporters who've been covering it: Glenn Simpson of the Wall Street Journal and David Willman of the Los Angeles Times. Welcome, both of you. David, the White House finally came out yesterday and publicly dealt with this matter. What did they add that was new?
DAVID WILLMAN, Los Angeles Times: What they added that was new was that the then chief of staff to the President in 1994, Mack McLarty, and Erskine Bowles, who is the current chief of staff, made phone calls seeking to arrange employment engagements for Mr. Hubbell at about the time he was leaving the Justice Department and was facing a criminal investigation from the Whitewater special counsel.
MARGARET WARNER: And was there also some--there was also something about that at least Mack McLarty had mentioned this to the First Lady.
DAVID WILLMAN: Yes. There was a meeting in the residence at the executive mansion on March 13, 1994, that was related to a stream of developments in the Whitewater affair that were besieging the administration, and at the conclusion of that meeting according to what Mr. McLarty recalls, he informed the First Lady that he, Mr. McLarty, was going to be seeking to provide assistance of some form for Mr. Hubbell.
MARGARET WARNER: What's significant about the White House disclosed or acknowledged yesterday in terms of this whole story?
GLENN SIMPSON, Wall Street Journal: Well, the legal significance potentially is that Ken Starr, the independent counsel on the Whitewater affair, is pursuing the possibility that there was an orchestrated attempt to get financial assistance to Mr. Hubbell to discourage him from providing information to Mr. Starr. So this potentially would be new, powerful information to support that possibility.
MARGARET WARNER: Now, what does the White House say is the reason these various officials tried to help?
GLENN SIMPSON: Because they're old friends of Hubbell's, and for the most part that's true. Mack McLarty and Webb Hubbell do go back 20 years. The exception would be Mr. Bowles, who as far as I know didn't know Mr. Hubbell prior to coming into the Clinton campaign in 1992.
MARGARET WARNER: Now, even if they were old friends, would it have been, I mean, legally would there be a problem if they also knew that he was talking to, or that the Whitewater special counsel was trying to talk to them? In other words, what did the White House say about what these officials knew about the status of the Whitewater probe?
DAVID WILLMAN: The statement from White House officials and the lead spokesman, of course, on this matter is Lanny Davis, who's special counsel to the White House, is that those within the administration who were acting on Mr. Hubbell's behalf accepted Mr. Hubbell's representation that this was merely a billing dispute between Mr. Hubbell and his former partners at the Rose Law Firm in Arkansas. There are certainly--there's reason to question whether everyone in the administration would have accepted that on its face. There were news reports at the time, in mid March of 1994, that Mr. Hubbell's billing "dispute" was being referred by the Rose Law Firm to the Arkansas supreme court for possible disciplinary action, and immediately the then Whitewater special counsel, Robert Fiske, made it clear that he was putting Mr. Hubbell's conduct under investigation.
MARGARET WARNER: All right. Explain briefly, if you can, why is Hubbell--you wrote in your story today, Glenn, that prosecutors still think--I think you said--that Mr. Hubbell may hold the key to their Whitewater probe. Why? Why is he a central figure for them?
GLENN SIMPSON: Well, it's my understanding they think he may have important knowledge with respect to several matters that they have focused on. One that you referenced in the lead-in is land deal known as Castle Grande that Mrs. Clinton worked on when she was at the Rose Law Firm, there's part of that transaction was an option agreement with Mr. Hubbell's father-in-law that Mrs. Clinton worked on, and they think that Mr. Hubbell may know some things about that option agreement which it has been suggested was potentially fraudulent. He also played a role in some of the documents. He got ahold of some of the Rose Law Firm documents related to Mrs. Clinton.
MARGARET WARNER: These are the famous billing records--
GLENN SIMPSON: Right.
MARGARET WARNER: --that were missing and then showed up again.
GLENN SIMPSON: Right. It's murky how involved he was in all of that, but that's another area where they think he may have knowledge. And then finally there is the issue of how much he knows about the President's relationship with the Lippo Group and James Riady, which is of course, you know, the controversy right now.
MARGARET WARNER: And explain, David, the connection here now really through the Lippo Group between the Whitewater Affair and the more recent probe involving campaign money raising.
DAVID WILLMAN: Sure. Well, unwittingly, Mr. Hubbell describes both the Whitewater Affair and the current controversy concerning campaign donations to the Democratic National Committee, and the suspicion that perhaps foreign interests were unduly seeking to influence United States policy, and that's because, as Glenn has just explained, Mr. Hubbell's involvement with dealings that concerned a failed savings & loan, that it's at the heart of the Whitewater prosecutions and convictions, and then Mr. Hubbell, shortly after leaving the Justice Department on April 8th of 1994 is hired in mid ‘94 by what he has described as an affiliate of the Lippo Group to perform services that he has declined under oath to describe, and we are led to believe that it was a significant sum of money that he's received. There's no document out there that verifies the amount of money, but to think that it's $100,000 or more I don't think is unreasonable speculation.
GLENN SIMPSON: And what needs to be pointed out is that John Huang, who is at the very center of the illegal foreign money controversy, was an executive of the Lippo Group.
MARGARET WARNER: He was the once Commerce Department official who became the chief DNC fund-raiser, who then was involved in raising all this money from Asian-Americans?
GLENN SIMPSON: Correct. And he was in constant contact with the Riadys while he was at the Commerce Department with the Lippo Group, so all of this suddenly becomes a big web.
MARGARET WARNER: No pun intended. And so is Kenneth Starr, the Whitewater independent counsel, focusing, from your understanding, on both of these, on both the Whitewater angle and then also the campaign fund-raising angle?
DAVID WILLMAN: Well, clearly, Mr. Starr has been intensifying his efforts with subpoenas that are raining down, if you will, on current and former members of the administration trying to get at the heart of why Mr. Hubbell was retained by the Lippo Group at this crucial period of time. What he's doing with campaign donations that is not within his original charge, and I'm not aware of his going after campaign donations per se.
MARGARET WARNER: And briefly, Glenn, what has the President said, or what has been said about what the President knew about these efforts to get Webb Hubbell work?
GLENN SIMPSON: When he was originally asked about it, he was asked only about the Lippo job, and he said he didn't know anything about it in advance; he learned about it from the papers. He suggested that it was inappropriate and that whoever did it was doing something wrong. He never mentioned the fact at that time that he did know around the same time that Mr. Hubbell got these jobs that his friends were helping Mr. Hubbell in other ways, that Truman Arnold had hired Mr. Hubbell.
MARGARET WARNER: This came out subsequently. All right. Well, thank you both very much.