Sept. 20, 2000 -- Independent Counsel Robert W. Ray today issued the following statement on the Whitewater investigation:
This Office has now concluded, with certain limited exceptions, its investigation of the matters commonly referred to as “Madison Guaranty/Whitewater.” At this time, it is appropriate, in the public interest, and consistent with the law to inform the public of the findings and conclusions regarding the core matters within this Office’s Madison Guaranty/Whitewater jurisdiction. Except for limited pending matters, the Madison Guaranty/Whitewater investigation is now closed.
Following enactment of the Independent Counsel Reauthorization Act of 1994, this Office was established on August 5, 1994 to continue the work of regulatory Independent Counsel Robert B. Fiske Jr. to investigate the relationship of James B. McDougal and President and Mrs. Clinton to Madison Guaranty Savings & Loan Association (“Madison Guaranty”), Capital Management Services, Inc. (“CMS”), and the Whitewater Development Corporation (“Whitewater Development”). Eleven months ago, on October 18, 1999, the judges of the United States Court of Appeals for the District of Columbia Circuit’s Division for Appointing Independent Counsels appointed me as Independent Counsel with respect to all matters within the previously ordered jurisdiction of this Office, including the Madison Guaranty/Whitewater investigation. Since my appointment, this Office has concluded two matters within our jurisdiction — matters commonly referred to as the “FBI Files” matter and the “Travel Office” matter.
The Madison Guaranty/Whitewater investigation resulted in the conviction of 12 defendants, including former Arkansas Governor Jim Guy Tucker, Jim and Susan McDougal, and former Associate Attorney General Webster L. Hubbell. This Office investigated whether Jim and Susan McDougal committed any crimes in connection with Madison Guaranty, CMS, or Whitewater Development by using control of two financial institutions — Madison Guaranty and Madison Bank & Trust — to lend money to or for the benefit of Whitewater Development and to pay Whitewater Development financial obligations at a time when the McDougals and the Clintons jointly owned Whitewater Development. In May 1996, Jim and Susan McDougal were convicted in federal court in Arkansas of various crimes involving Madison Guaranty, CMS, and Whitewater Development. According to one federal bank regulatory agency, the failure of Madison Guaranty cost the taxpayers $73 million.
This Office investigated whether President and Mrs. Clinton knowingly participated in any criminal conduct related to Madison Guaranty, CMS, or Whitewater Development or had any knowledge of such conduct. This Office determined that the evidence was insufficient to prove to a jury beyond a reasonable doubt that either President or Mrs. Clinton knowingly participated in any criminal conduct involving Madison Guaranty, CMS, or Whitewater Development or knew of such conduct. The evidence relating to their testimony and conduct, in connection with this investigation and other investigations involving the same entities, was also, in the judgment of this Office, insufficient to prove to a jury beyond a reasonable doubt that either of them committed any criminal offense, including perjury (18 U.S.C. § 1621) or obstruction of justice (18 U.S.C. § 1503).
The following findings and conclusions relate to publicly disclosed matters investigated by this Office. Information obtained through grand jury proceedings or other confidential methods is not included in this statement. Upon conclusion of pending matters, this Office intends to submit to the Court a final report “setting forth fully and completely a description of the work” of the Office. 28 U.S.C. § 594(h).1
The investigation made the following findings and conclusions:
This Office investigated whether President Clinton gave knowingly false testimony when he testified in the 1996 trial of Mr. McDougal, Ms. McDougal, and Governor Tucker that he “never borrowed any money from Madison Guaranty,” “[n]ever caused anybody to borrow any money for [his] benefit,” and “[n]ever ha[d] any personal loan with Madison Guaranty at any time.”
At Susan McDougal’s 1999 trial for criminal contempt (18 U.S.C. § 402) and obstruction of justice (18 U.S.C. § 1503) for her refusal to testify about matters that included an alleged $27,600 Madison Guaranty loan to President Clinton, the government introduced two checks as evidence of the alleged loan. The first check was an actual Madison Guaranty cashier’s check, dated November 15, 1982, made out to “Bill Clinton” in the amount of $27,600 that was found, by happenstance, among other Madison Guaranty records in the trunk of a car in July 1997 following a tornado. The second check was a microfilm copy, dated August 1, 1983, from the James B. McDougal Trustee account in the amount of $5,081.82 made out to Madison Guaranty. The latter check was signed by Susan McDougal, and the government presented testimony at trial that the amount of the check was precisely equal to the amount of principal and interest remaining due on the alleged loan at the time. The memo line of the check contained the words “Payoff Clinton.” Neither check reflected a signature or endorsement by Bill Clinton. The backs of both checks contained bank stamps, indicating that they had been deposited and processed. The government presented evidence at trial that both checks were used to the benefit of Whitewater Development. A government agent testified at trial that the fingerprints on the $27,600 check were not sufficiently clear to permit a comparison to any known fingerprints. This Office determined that the evidence regarding this alleged loan was insufficient to prove beyond a reasonable doubt that President Clinton borrowed money from Madison Guaranty, caused anyone to borrow money for his benefit from Madison Guaranty, or had any personal loan at any time from Madison Guaranty. Consequently, the evidence was, in the judgment of this Office, insufficient to prove beyond a reasonable doubt that his testimony regarding the alleged loan was knowingly false.
This Office also investigated whether President Clinton gave knowingly false testimony when he testified at the same trial that he did not know of a $300,000 loan made by CMS to Susan McDougal in April 1986 that benefited Whitewater Development and that was the subject of Susan McDougal’s 1996 convictions for fraud. This Office determined that the evidence was insufficient to prove beyond a reasonable doubt that President Clinton knew of the loan or that his testimony regarding the loan was knowingly false.
This Office investigated whether President Clinton gave knowingly false testimony at the same trial regarding the circumstances of Madison Guaranty’s retention of the Rose Law Firm.
This Office determined that the evidence was insufficient to prove beyond a reasonable doubt that President Clinton’s testimony regarding these matters was knowingly false.
This Office also investigated whether Mrs. Clinton made knowingly false statements to the Resolution Trust Corporation regarding the relationship between Madison Guaranty and the Rose Law Firm, as well as her own work related to Madison Guaranty. This Office determined that the evidence, including evidence reflected in the billing records of the Rose Law Firm, was insufficient to prove beyond a reasonable doubt that her statements to the RTC regarding these matters were knowingly false.
This Office investigated whether Mrs. Clinton was involved in any effort to obstruct this or other investigations by withholding relevant evidence or information in connection with Rose Law Firm billing records.
On January 5, 1996, some 18 months after Mrs. Clinton received a subpoena for all records in her possession involving Madison Guaranty and related entities, a copy of the Rose Law Firm billing records reflecting the Firm’s and Mrs. Clinton’s representation of Madison Guaranty and related entities were produced by counsel for Mrs. Clinton. The circumstances surrounding the 18-month delay in producing the billing records could not be established. Mr. Hubbell testified in the Senate that he and former Deputy Counsel to the President Vincent W. Foster Jr. had the billing records in February/March 1992. Carolyn Huber, an assistant to President Clinton, testified in the Senate that she found certain documents in the White House residence in August 1995 and placed them in an office where they remained until January 1996. She also testified in the Senate that in January 1996, she found them again and realized that those same documents were the billing records. At that time, they were produced to this Office.
This Office determined that the evidence of the circumstances surrounding the handling of the records between March 1992 and August 1995 and January 1996 was inconclusive and thus was insufficient to prove beyond a reasonable doubt that any person, including Mrs. Clinton, knowingly and willfully possessed the billing records with the intent to obstruct justice or that any person, including Mrs. Clinton, gave knowingly false testimony regarding the handling of the billing records.
This Office investigated whether the employment of Webster L. Hubbell by supporters of the President following Mr. Hubbell’s resignation from the Department of Justice constituted a criminal quid pro quo to obstruct this investigation’s access to truthful testimony from Mr. Hubbell. This Office determined that the evidence was insufficient to prove beyond a reasonable doubt that the employment of Mr. Hubbell constituted a criminal quid pro quo and, consequently, the evidence was also insufficient, in the judgment of this Office, to prove beyond a reasonable doubt that President or Mrs. Clinton was involved in any effort to provide such a quid pro quo to Mr. Hubbell.
This Office also investigated whether contacts between White House and Treasury Department officials regarding the Resolution Trust Corporation’s criminal referrals involving Madison Guaranty and President and Mrs. Clinton constituted an effort to obstruct justice by corruptly influencing the handling of the referrals. This Office determined that the evidence was insufficient to prove beyond a reasonable doubt that any White House official, or President or Mrs. Clinton, was involved in any effort to obstruct justice in this matter.
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As in the Travel Office investigation, this Office experienced delay caused by the White House and others involving both the production of relevant evidence and the filing of legal claims that were ultimately rejected by the courts. Delays in obtaining relevant evidence included Susan McDougal’s refusal to testify, despite a court order compelling her testimony, and the failure of the White House to produce the Rose Law Firm billing records until January 1996. Unmeritorious litigation by the White House included its claim to an attorney/client privilege between an individual involved in a federal criminal investigation and a government lawyer. In re: Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (8th Cir. 1997).
Finally, the remaining matters within this Office’s Madison/Whitewater jurisdiction include pending appeals and the continuing investigation of the White House’s failure to search and produce relevant records, including electronic mail, to this and other investigations. Former Arkansas Governor Jim Guy Tucker’s second appeal of his conviction for conspiracy and mail fraud has been pending before the Eighth Circuit since oral argument on September 13, 1999. Governor Tucker’s sentence of restitution for one million dollars on his tax fraud conspiracy conviction was remanded to the Eastern District of Arkansas for resentencing, which is scheduled for October 27, 2000. Once these matters are concluded, this Office intends to file a final report promptly.
Accordingly, the Madison Guaranty/Whitewater investigation, with the exception of these matters, is now closed. The investigation of other remaining matters within the jurisdiction of this Office continues.
1. Under the Independent Counsel statute, a report filed with the Special Division remains under seal until such time, if at all, the Special Division authorizes its public release. Historically, public release occurs only after those persons named in a report are notified, pursuant to the statute, and have a full opportunity to read the relevant portions of the report that pertain to them and to prepare and file comments. This process typically takes several months after a report is filed.