OIC Cites 'Inaccurate' Hillary Testimony

Oct. 18, 2000 -- In his final report on the matter, Independent Counsel Robert Ray has concluded that first lady Hillary Rodham Clinton gave “factually inaccurate” testimony about her role in the firings of seven White House travel office employees.

Ray’s report on the so-called Travelgate inquiry, released today, states that Mrs. Clinton played a role in the 1993 firings, but is not subject to criminal charges because she was not aware that her discussions of the matter with aides were interpreted as a demand to fire the workers.

In June, Ray released a memo summarizing his conclusions, in which he made clear that he would not seek to prosecute the first lady, but claimed she had “ultimately influenced” the course of the matter.

In a rebuttal to Ray’s finding, included as an appendix to the report, Mrs. Clinton’s lawyer, David Kendall, objected to Ray’s conclusion, terming it “highly unfair and misleading.”

According to Kendall, “The suggestion that Mrs. Clinton’s testimony was ‘factually inaccurate’ as to her role in this matter is contradicted by the final report itself, which recognizes she may not have even been aware of any influence she may have had on the firing decision.”

Campaign Implications?

The release of Ray’s report comes less than three weeks before the conclusion of Mrs. Clinton highly visible campaign for New York’s open Senate seat against Republican congressman Rick Lazio.

When asked about the report today, Lazio criticized the first lady, saying “we believe that character counts in public service.”

The GOP nominee, trailing Mrs. Clinton by a few points in the polls, added that “the rule of law applies to all of us and not just to some of us.”

Mrs. Clinton has had to contend with public reports on the overlapping inquiries of the Office of the Independent Counsel during the course of her campaign.

In March, Ray, who took over as independent counsel from Kenneth Starr in 1999, cleared the first lady of wrongdoing in the so-called Filegate case, in which the Clinton administration had obtained FBI files on former White House employees.

Last month, Ray cleared Mrs. Clinton of wrongdoing in connection with the Whitewater land deal she and her husband, President Clinton, struck in Arkansas in the 1970s.

The first lady, campaigning today in New York City and Syracuse, did not have an immediate response to the release of the report.

Mrs. Clinton Denies Making Demand

Starr began his inquiry into the travel office matter in January 1996, when a memo by David Watkins, then the White House’s administration chief, stated that Mrs. Clinton was behind the firings.

In the memo, Watkins said he “knew that there would be hell to pay if … we failed to take swift and decisive action in conformity with the firstlady’s wishes” about resolving the travel office situation.

The first lady, however, has insisted that she did not demand the firings.

“I had no decision-making role with regard to theremoval,” Mrs. Clinton stated in written testimony she provided to Congress in 1996.

In 1994, Mrs. Clinton had also denied ordering the dismissals in written answers a White House lawyer submitted on her behalf to the General Accounting Office, the investigative arm of Congress.

Ray Claims Indirect Influence

But Ray has said his investigation found that Mrs. Clinton held discussions about the travel office with Watkins, former deputy White House counsel Vince Foster, Thomas F. McLarty III, the White House chief of staff at the time, and Harry Thomason, a good friend of the Clintons.

Ray concluded those contacts “ultimately influenced Watkins’ decision to fire the travel office employees.”

For this reason, Ray wrote, “The independent counsel concludes that Mrs. Clinton’s sworn testimony that she had no input into Watkins’ decision or role in the travel office firings is factually inaccurate.”

The workers were initially replaced by employees of a firm with ties to Thomason. The White House later conducted an internal review of the firings and issued a public apology, saying the matter had been mishandled.

But in his final report, Ray concludes that the decision to fire the employees was legal, and that there was evidence of financial mismanagement in the office, which justified the criminal investigation into the matter launched by the FBI at the time.

Ray submitted his final report to the three-judge panel thatoversees the OIC several weeks ago. The panel released the reporttoday after giving the parties named in it time to assess the document and respond to it.

—ABCNEWS’ Stephen Yesner and The Associated Press contributed to this report.