Grand Jury Indicts Hubbell, Wife
'We will fight these charges,' he tells reporters
WASHINGTON (AllPolitics, April 30) -- Webster Hubbell, a longtime friend of President Bill Clinton and a former No. 3 official at the Justice Department, was indicted Thursday on tax evasion charges by a Whitewater grand jury.
Hubbell, who has already served an 18-month prison sentence on other charges, vowed to fight the new accusations, which he called an attempt to pressure him into testifying falsely about the Clintons in the continuing Whitewater probe.
"We will fight these charges," he told reporters outside his N.W. Washington home. (480K wav sound)
Charles Bakaly, a spokesman for Independent Counsel Ken Starr, said the indictment charges that Hubbell and his wife owe more than $894,000 in taxes, interest and penalties to the U.S. government and Arkansas. (576K wav sound)
The 10-count indictment includes charges of "conspiracy to violate the Internal Revenue laws, tax evasion, impairing and impeding the due administration of the IRS and tax and mail fraud," Bakaly said.
Hubbell's wife was also indicted, as was the couple's tax lawyer, Charlie Owen, and accountant, Mike Schaufele.
Hubbell accused the Starr's office of trying to pressure him.
"Obviously, it's apparent to me that they think by indicting my wife and my friends that I will lie about the president and the first lady," an emotional Hubell said. "I will not do so. And my wife would not want me to do so.
"I want you to know that the Office of Independent Counsel can indict my dog, they can indict my cat, but I'm not going to lie about the president," Hubbell said. "I'm not going to lie about the first lady or anyone else. My wife and I are innocent of the charges that have been brought today."
Hubbell's attorney, John Nields, accused Starr's office of a malicious prosecution. "Our clients plan to defend," Nields said. (640K wav sound)
The accusations involve alleged tax fraud related to money -- by some estimates, $700,000 -- that Hubbell accepted for legal work after he left government service but before he went to prison. The indictment claims Hubbell performed "little or no work" for some of the money he received.
Starr has been trying to determine whether any of the compensation was "hush money" intended to buy Hubbell's silence about the Clintons' dealings at a time when Hubbell was being investigated.
In a statement issued by the White House, the Clintons' expressed regret over the indictments.
"The president and first lady are very saddened by the developments in this matter and feel bad for Webb and Suzy Hubbell, Mike Schaufele, Charlie Owen and all of their families," White House spokesman James Kennedy said.
Schaufele and Owen helped prepare Hubbell's taxes and his wife signed the forms in dispute.
Nields accused prosecutors of punishing Hubbell because they were unhappy with his level of cooperation in the Whitewater probe.
"He has now paid his debt to society," Nields said. "He has confessed. He has been punished and his family has been brought to financial ruin and as he tries to pick himself up off his knees, the office of independent counsel comes around and tries to prosecute him again."
Nields said Schaufele and Owen were tax professionals who helped Mrs. Hubbell deal with the IRS when Webster Hubbell was in jail.
Nields said they were "tax professionals who were charging no fee and were acting solely out of the goodness of their heart to help a family in distress."
Chris Todd, Schaufele's lawyer, said his client was "the good samaritan, yet he is now the victim of a political squabble he does not understand."
"If mistakes were made by anyone, they were plainly and clearly honest mistakes," Todd said.
"The charges brought by Kenneth Starr are particularly unfair to Mike Schaufele because must of the purported evidence that Mr. Starr's staff is using against Mr. Schaufele was voluntarily provided by him during his complete and total cooperation with Mr. Starr's office," Todd said.
"Mr. Schaufele is shocked and saddened that he could be charged with wrongdoing when he merely did his best to help friends who had difficult IRS problems," Todd said.
The 18 members of the grand jury were in the Washington courtroom Thursday afternoon to present the indictments to U.S. Magistrate Deborah Robinson.
In the earlier case, Hubbell stole money by billing legal clients and the Rose Law Firm for personal expenses. Over four years, Hubbell stole an estimated $150,000 from clients and another $340,000 from his partners at Rose.
"There is no excuse for what I did," Hubbell wrote in his 1997 memoir "Friends In High Places." "I committed a crime, and no one made me do it." He served 18 months in a federal prison camp.
Hubbell quit the Justice Department to try to work out the billing fraud with Rose. After his departure, he also put out the word to lawyers, lobbyists and consultants in Washington that he was available to consult. Hubbell has continued to keep his silence on who his clients were and what he was paid during that period.
"I never once dreamed that my doing legal and consulting work could be viewed as some sort of 'hush money,'" Hubbell wrote. "For three years, I answered every question the independent counsel put to me."
The Associated Press contributed to this report.
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