The following is Kenneth Starr's prepared statement for the Judiciary Committee. In the first section, he examines the case against the president and outlines what he sees as a pattern of obstruction of justice. In the second section, Judge Starr examines the jurisdiction of his investigation and elaborates on the state of other issues he has investigated. Finally, he concludes by discussing the work and techniques of his staff.
Given the serious nature of perjury and obstruction of justice, regardless of its setting, it is obvious that the actions of the president and Ms. Lewinsky to conceal the truth warranted criminal investigation. Let me explain how the investigation came to be handled by our office rather than by the Department of Justice or some new independent counsel. The explanation is straightforward.
On January 8, an attorney in my office was informed that Linda Tripp, who had been a witness in prior investigations, had information she wanted to provide. A message was conveyed back that she should provide her information directly. Ms. Tripp called our office on Jan. 12. In that conversation and later, she provided us a substantial amount of information.
Let me pause here and emphasize that our office, like most law enforcement agencies, has received innumerable tips about a wide variety of matters over the past four years – from Swiss bank accounts to drug smuggling. You name it. We have heard it. In each case, we must make an initial assessment whether it is a serious tip or a crank call, as well as an assessment of jurisdictional issues.
We handled the information from Ms. Tripp in this same manner. When we confirmed that the information appeared credible, we reached out to the Department of Justice, as we have done regularly during my tenure as independent counsel. We contacted Deputy Attorney General Eric Holder within 48 hours after Ms. Tripp provided us information. The next day, we fully informed the deputy attorney general about Ms. Tripp's information. About Ms. Tripp's tapes and the questions concerning their legality under state law. About the consensual FBI recording of Ms. Tripp and Ms. Lewinsky. About the indications that Vernon Jordan was providing employment assistance to a witness who had the potential to harm the president – a fact pattern that we had seen in the Webster Hubbell investigation, as I shall describe presently.
We discussed jurisdiction. We noted that it is in everyone's interest to avoid time-consuming jurisdictional challenges. We stated that the Lewinsky investigation could be considered outside our jurisdiction as then constituted. We stressed that someone needed to work the case: the Justice Department or an independent counsel.
Later that evening, the deputy attorney general telephoned and reported that the attorney general had tentatively decided to assign the matter to us. Before her decision was final, we reviewed the evidence in detail with two experienced career prosecutors in the department. One senior Justice Department prosecutor listened to portions of the FBI tape. The attorney general made her final decision on Friday, Jan. 16. That day, through a senior career prosecutor, the attorney general asked the three-judge special division to expand our jurisdiction. The special division granted the request that day.
In short, our entry into this investigation was standard, albeit expedited, procedure.
IV. Referral Standards
Seven months later, after conducting the factual investigation and after the president's grand jury testimony, the question we faced was what to do with the evidence. Section 595(c) of Title 28 in the independent counsel statute requires an independent counsel investigating possible crimes to provide to the House of Representatives – in the words of the statute – "substantial and credible information that may constitute grounds for an impeachment."
This reporting provision suggests a statutory preference that possible criminal wrongdoing by the president be addressed in the first instance by the House of Representatives. It also requires an analysis of the law of impeachment.
As we understood the text of the Constitution, its history, and relevant precedents, it was clear that obstruction of justice in its various forms, including perjury, "may constitute grounds for an impeachment." Even apart from any abuses of presidential authority and power, the evidence of perjury and obstruction of justice required us to refer this information to the House.
Perjury and obstruction of justice are, of course, serious crimes. In 1790, the first Congress passed a criminal law that banned perjury. A violation was subject to three years' imprisonment. Today, federal criminal law makes perjury a felony punishable by five years' imprisonment.
In cases involving public officials, courts treat false statements with special condemnation. United States District Judge Royce Lamberth recently sentenced Ronald Blackley, former chief of staff to the former secretary of agriculture, to 37 months' imprisonment for false statements. The court stated that it "has a duty to send a message to other high-level government officials that there is a severe penalty to be paid for providing false information under oath."
Although perjury and obstruction of justice are serious federal crimes, some have suggested that they are not high crimes or misdemeanors when the underlying events concern the president's private actions. Under this theory, a president's obstruction and perjury must involve concealment of official actions. This interpretation does not appear in the Constitution itself. Moreover, the Constitution lists bribery as a high crime or misdemeanor. And if a president involved in a civil suit bribed the judge to rule in his favor or bribed a witness to provide favorable testimony, there could be no textual question that he had committed a high crime or misdemeanor under the plain language of Article II even though the underlying events would not have involved his official duties. In addition, virtually everyone agrees that serious crimes such as murder and rape would be impeachable even though they do not involve official duties.
Justice Story stated in his famous Commentaries that there is not a syllable in the Constitution which confines impeachment to official acts. With respect, an absolute and inflexible requirement of a connection to official duties appears, fairly viewed, to be an incorrect interpretation of the Constitution.
History and practice support the conclusion that perjury, in particular, is a high crime or misdemeanor. Perjury has been the basis for the removal of several judges. As far as we know, no one questioned whether perjury was a high crime or misdemeanor in those cases. In addition, as several of the scholars who appeared before you testified, perjury seems to have been recognized as a high crime or misdemeanor at the time of the founding. And the House manager's report in the impeachment of Judge Walter Nixon for perjury stated, "It is difficult to imagine an act more subversive to the legal process than lying from the witness stand." And finally, I note that the federal sentencing guidelines include bribery and perjury in the same guideline (2Jl.3), reflecting the common-sense conclusion that bribery and perjury are equivalent means of interfering with the governmental process.
For these reasons, we concluded that perjury and obstruction of justice, like bribery, "may constitute grounds for an impeachment." Having said that, let me again emphasize my role here. Whether the president's actions are, in fact, grounds for an impeachment or some other congressional sanction is a decision in the sole discretion of the Congress.
A final point warrants mention in this respect. Criminal prosecution and punishment are not the same as – or a substitute for – congressionally imposed sanctions. As the Supreme Court stated in a 1993 case, "The framers recognized that most likely there would be two sets of proceedings for individuals who commit impeachable offenses – the impeachment trial and a separate criminal trial. In fact, the Constitution explicitly provides for two separate proceedings. The framers deliberately separated the two forums to avoid raising the specter of bias and to ensure independent judgment."
V. The Office of Independent Counsel: 1994-1998
Our job over the past several years has involved far more than simply the Monica Lewinsky matter. The pattern of obstruction of justice, false statements, and misuse of executive authority in the Lewinsky investigation did not occur in a vacuum.
In August 1994, 1 took over the Madison Guaranty investigation from Bob Fiske. Over the ensuing years, I have essentially become independent counsel for five distinct investigations; for Madison and Whitewater, for Foster-related matters, for the Travel Office, for the FBI files matter, and for the Monica Lewinsky investigation – as well as for a variety of obstruction and related matters arising from those five major investigations. A brief overview of those investigations may assist the committee in its assessment of the president's conduct.
First, some statistics. Our investigation has resulted in conviction of fourteen individuals, including the former Associate Attorney General of the United States Webster Hubbell, the then-sitting Governor of Arkansas Jim Guy Tucker, and the Clintons' two business partners Jim and Susan McDougal.
We are proud not only of the cases we have won, but also of our decisions not to indict. To take one well-known example, the Senate Whitewater Committee sent our office public criminal referrals on several individuals. The committee stated in its June 21, 1996, public letter that the testimony of Susan Thomases was "particularly troubling and suggests a possible violation of law." But this office did not seek charges against her.
Apart from our indictments and convictions, this office also has faced an extraordinary number of legal disputes – on issues of privilege, jurisdiction, substantive criminal law and the like. By my count, at least 17 of our cases have been decided by the federal courts of appeals, and we have won all 17. One privilege case arising in our Travel Office investigation went to the D.C. Circuit where we prevailed 2-1 and then to the Supreme Court where we lost 6-3.
We had to litigate in the courts as our investigation ran into roadblocks and hurdles that slowed us down. It is true that the administration produced a great amount of information. But unlike the prosecutors in the investigations involving presidents Reagan and Carter, we have been forced to go to court time and again to seek information from the Executive Branch and to fight a multitude of privilege claims asserted by the administration, every single one of which we have won.
In sum, this office has achieved a superb record in courts of law – of significant and hard-fought convictions, of fair and wise decisions not to charge, of thorough and accurate reports on the Vincent Foster and Monica Lewinsky matters, of legal victories in various courts. We go to court and not on the talk show circuit. And our record shows that there is a bright line between law and politics, between courts and polls. It leaves the polls to the politicians and spin doctors. We are officers of the court who live in the world of the law. We have presented our cases in court, and with very rare exception, we have won.
B: Madison Guaranty: President Clinton and Susan McDougal
The center of all of this – the core of our Arkansas-based investigation – was Madison Guaranty Savings and Loan. Madison was a federally insured savings and loan in Little Rock, Ark., run by Jim and Susan McDougal. Like many savings and loans in the 1980s, Madison was fraudulently operated. Mrs. Clinton and other lawyers at the Rose Law Firm in Little Rock performed legal work for Madison in the 1980s.
Madison first received national attention in March 1992 when a New York Times report raised several issues about the relationship between the Clintons and the McDougals in connection with Madison. Federal bank regulators examined Madison in 1992 and 1993. The regulators sent criminal referrals to the Justice Department, and the Justice Department launched a criminal investigation of Madison in November 1993. In part because of the relationship of the Clintons to the McDougals, Attorney General Reno appointed Bob Fiske in January 1994. I was appointed independent counsel in August 1994 to continue the investigation.
Madison exemplified the troubled practices of savings and loans in the 1980s. The failure of the institution ultimately cost federal taxpayers approximately $65 million. Congresswoman Waters put it this way in a 1995 hearing: "By any standard, Madison Guaranty was a disaster. ... It gambled with investments, cooked the books and ultimately bilked the taxpayers of the United States. Madison is a metaphor for the S&L crisis."
The McDougals' operation of Madison raised serious questions whether bank funds had been used illegally to assist business and political figures in Arkansas such as Jim Guy Tucker and then Governor Clinton. As to the Clintons, the question arose primarily because they were partners with the McDougals in the Whitewater Development Company. The Whitewater corporation initially controlled and developed approximately 230 acres of property on the White River in Northern Arkansas. Given Jim McDougal's role at the center of both institutions and given Whitewater's constant financial difficulties, there were two important questions: Were Madison funds diverted to benefit Whitewater? If so, were the Clintons either involved in or knowledgeable of that diversion of funds?
These questions were not idle speculation. In early 1994, a Little Rock judge and businessman David Hale pled guilty to certain unrelated federal crimes. As part of his plea, David Hale told Mr. Fiske's team that he had received money as a result of a loan from Madison in 1986 and that his company loaned it to others as part of a scheme to help some members of the Arkansas political establishment.
One loan of $300,000 went to Susan McDougal's make-believe company, Master Marketing. Based on our investigation, we now know that some $50,000 of the proceeds of that loan went to benefit the Whitewater corporation. David Hale stated that he had discussed the Susan McDougal loan with Governor Clinton, including at a meeting in 1986 with Jim McDougal and the governor.
In August 1994, when I first arrived in Little Rock, we devised a plan. First, based on the testimony of David Hale and others, as well as documentary evidence, we would take steps, if appropriate, to seek an indictment of Jim and Susan McDougal and others involved in what clearly appeared to be criminal transactions. If a Little Rock jury convicted the McDougals or others, we would then obtain their testimony and determine whether they had other relevant information – including, of course, whether the McDougals possessed information that would either exonerate or incriminate the Clintons as to Madison and Whitewater matters.
This approach was the time-honored and professional way to conduct the investigation. We garnered a number of guilty pleas in my first year, including from Webster Hubbell, who had worked at the Rose Law Firm and was knowledgeable about its work with Madison, including that of Mrs. Clinton. In addition, Robert Palmer, a real estate appraiser, pled guilty to fraudulently doctoring Madison documents to deceive federal bank examiners. Three other associates of McDougal pled guilty and agreed to cooperate.
In August 1995, a year after I was appointed, a federal grand jury in Little Rock indicted Jim and Susan McDougal and the then-sitting Governor of Arkansas Jim Guy Tucker. The case went to trial in March 1996 amid charges by all three defendants – and their allies – that the case was a political witch hunt. Some predicted that an Arkansas jury would never convict the sitting governor. Those expectations were heightened when President Clinton was subpoenaed as a defense witness. The president testified for the defense from the Map Room of the White House. During his sworn testimony, the president testified that did not know about the Susan McDougal loan nor had he ever been in a meeting with Hale and McDougal about the loan. He also testified that he had never received a loan from Madison. This was important testimony. Its truth – or falsity – went to the core issue of our investigation.
On May 28, 1996, all three defendants were convicted – Jim McDougal of 18 felonies, Susan McDougal of four felonies, and Governor Tucker of two felonies. Governor Tucker announced his resignation that day.
After his conviction, Jim McDougal began cooperating with our investigation. We spent many hours with him gaining additional insights and facts. He informed our career investigators and prosecutors that David Hale was accurate. According to Jim McDougal, President Clinton had testified falsely at the McDougal-Tucker trial. Jim McDougal testified he had been at a meeting with David Hale and Governor Clinton about the Master Marketing loan. And Jim McDougal testified that Governor Clinton had received a loan from Madison. Jim McDougal said on one of his first sessions with our office that the president's trial testimony was, in his words, "at variance with the truth."
In late 1997, we considered whether this evidence justified a referral to Congress. We drafted a report. But we concluded that it would be inconsistent with the statutory standard because of the difficulty of establishing the truth with a sufficient degree of confidence. We also weighed a prudential factor in reaching that conclusion. There were still two outstanding witnesses who might later corroborate – or contradict – the McDougal and Hale accounts: Jim Guy Tucker and Susan McDougal.
In 1998, we were finally able to obtain information from Governor Tucker. It had taken four long years to hear from the governor. He pled guilty in a tax conspiracy case. When Governor Tucker ultimately testified before the Little Rock grand jury in March and April of this year, he had little knowledge of the loan to Susan McDougal's fictitious company and the president's possible involvement in it. He did shed light on the overall transactions involving Castle Grande and Madison. Importantly, as to one subject, Governor Tucker exonerated the president regarding long-standing questions whether the president and Governor Tucker had a conversation about the Madison referrals in the White House in October 1993.
The remaining witness who perhaps could shed light on the issue was Susan McDougal. And therein lies a story that has caused literally years of delay and added expense to the investigation.
Because the proceeds from the fraudulent loan Susan McDougal received had benefited the Clintons – the proceeds were used to pay obligations of the Whitewater Development Company for which the Clintons were potentially personally liable – Susan McDougal was subpoenaed to testify before the grand jury in August 1996 and asked several questions at the heart of the investigation, including:
"Did you ever discuss your loan from David Hale with William Jefferson Clinton?"
"To your knowledge, did William Jefferson Clinton testify truthfully during the course of your trial?"
Susan McDougal refused to answer any of the questions. District Judge Susan Webber Wright then held her in civil contempt, a decision later upheld by the United States Court of Appeals.
The month of September 1996 thus was a crucial time for our office in its attempt to obtain Susan McDougal's truthful testimony. On Sept. 23, 1996, just two weeks after Ms. McDougal had been found in contempt by Judge Wright, President Clinton was interviewed on PBS. The president said, "There's a lot of evidence to support" various charges that Susan McDougal had made against this office. But the president cited no evidence.
The president's comments can reasonably be described as supportive of Ms. McDougal's decision to disobey the court order. So far as we are aware, no sitting president has ever publicly indicated his agreement with a convicted felon's stated reason for refusing to obey a federal court order to testify. Essentially, the president of the United States, the chief executive, sided with a convicted felon against the United States, as represented by United States District Judge Susan Webber Wright, the United States Court of Appeals for the Eighth Circuit, and the Office of Independent Counsel.
The president was also asked in this interview whether he would consider pardoning Ms. McDougal. The president refused to rule out a pardon.
The president's answers to these questions were roundly criticized. A New York Times editorial captured the point well, stating that the president's remarks "undercut a legal process that is going forward in an orderly way."
C. Madison Guaranty: Mrs. Clinton and Webster Hubbell
A separate area of our original investigation concerned the Rose Law Firm's work in 1985 and 1986 for Madison. It appeared that Rose may have assisted Madison in performing legal work concerning a piece of property (IDC/Castle Grande), which involved McDougal, Madison, and fraudulent transactions. The complicated real estate deal known as Castle Grande was structured to avoid state banking regulatory requirements and involved violations of federal criminal law.
Grand jury subpoenas were issued in 1994 and 1995 to the Rose Law Firm and to the president and Mrs. Clinton seeking all documents relating to Madison and Castle Grande. We ultimately learned that Mrs. Clinton had performed some work related to Madison's IDC/Castle Grande transactions, but the whole issue remained partially enshrouded in mystery as our office and the Senate Whitewater Committee investigated the issue in 1995.
The problem was that some of the best evidence regarding Mrs. Clinton's work – her Rose Law Firm billing records and her time sheets for 1985 and 1986 – could not be found. The missing records raised suspicions by late 1995 and became a public issue. Webster Hubbell and Vincent Foster had been responsible during the 1992 campaign for gathering information about Mrs. Clinton's work for Madison. Yet the billing records could not be found. The Rose firm's work for Madison could not be fully pieced together. The Rose firm no longer had the records.
On Jan. 5, 1996, the records of Mrs. Clinton's activities at Madison were finally produced under unusual circumstances. The records detailed Mrs. Clinton's work on a variety of Madison issues, including the preparation of an option agreement that Madison used to deceive federal bank examiners as part of the Castle Grande deal. After a thorough investigation, we have found no explanation how the billing records got where they were or why they were not discovered and produced earlier. It remains a mystery to this day. Then, in the summer of 1997, a second set of these billing records was found in the attic of the late Vincent Foster's house in Little Rock. The time sheets for Rose's 1985-86 Madison work have never been found.
We should note that Webster Hubbell may have additional information pertaining to Castle Grande – whether exculpatory or inculpatory – that we have been unable to obtain. Mr. Hubbell was at the Rose law firm at the relevant time in 1985 and 1986, he gathered information about the Madison issue in the 1992 campaign, and his father-in-law Seth Ward was involved in the Castle Grande deal.
Two other important facts suggest that Mr. Hubbell may have additional information. First, on March 13, 1994, after a meeting at the White House where it had been discussed that Mr. Hubbell would resign from the Justice Department, then-Chief of Staff Mack McLarty told Mrs. Clinton that "We're going to be supportive of Webb."
As this criminal investigation was beginning in 1994 under Bob Fiske and later my office, Mr. Hubbell received payments totaling nearly $550,000 from several companies and individuals. Many were campaign contributors. These individuals had been contacted through the White House chief of staff, Mr. McLarty. In June 1994, during a week in which he made several visits to the White House, Indonesian businessman James Riady met with Webster Hubbell and then wired him $100,000. One of the individuals who arranged for Mr. Hubbell to receive a consulting contract was Vernon Jordan. The company that he convinced to hire Hubbell was MacAndrews & Forbes, parent company of Revlon – the same company that later hired Monica Lewinsky upon Mr. Jordan's recommendation. As he was destined later to do with Monica Lewinsky, Mr. Jordan personally informed the president about his assistance to Mr. Hubbell.
Most of the $550,000 was given to Mr. Hubbell for little or no work. This rush of generosity obviously gives rise to an inference that the money was essentially a gift. And if it was a gift, why was it given? This money was given despite the fact that Mr. Hubbell was under criminal investigation for fraudulent billing and was a key witness in the Madison Guaranty investigation.
Second, as is known to the public, on certain prison tapes while Mr. Hubbell was in prison, he said to his wife: "I won't raise those allegations that might open it up to Hillary." On another tape, Mr. Hubbell said to White House employee Marsha Scott that he might "have to roll over one more time."
Mr. Hubbell's statements – when combined with the amount of money he received and the information he was in a position to know – raise some very troubling questions. Mr. Hubbell is currently under federal indictment, and it would be inappropriate to say more about that at this time.
D. Travel Office.
Let me add a few brief words about the Travel Office matter. This phase of work arose out of investigations by others of the 1993 firings of Billy Dale and six career co-workers. We do not anticipate that any evidence gathered in that investigation will be relevant to the committee's current task. The president was not involved in our Travel Office investigation.
As to the status of that investigation, it was on hold for quite a while, in part because of litigation. The investigation is not terminated, but we expect to announce any decisions and actions soon.
E. FBI Files
As to the FBI files matter, there are outstanding issues that we are attempting to resolve with respect to one individual. But I can address two issues of relevance to the committee's work. First, our investigation, which has been thorough, found no evidence that anyone higher than Mr. Livingstone or Mr. Marceca was in any way involved in ordering the files from the FBI. Second, we have found no evidence that information contained in the files of former officials was used for an improper purpose.