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Hubbell Tapes Imbroglio Puts Gop Finance Probe On The Defensive

By Jackie Koszczuk, CQ Staff Writer

(CQ, May 9) -- Now that the storm over the Webster L. Hubbell tapes has abated, the House GOP leadership faces a more difficult problem: how to wind down a 15-month investigation that has cost millions of dollars but has produced few new revelations about fundraising by the Clinton White House.

The beating that Republicans took in early May as a result of the tape controversy may be just a prelude to another partisan tempest as it becomes increasingly apparent that the expensive investigation has failed to produce a firecracker, let alone a smoking gun.

One sign of the investigation's wane is chief counsel Richard Bennett's decision to return to his law practice when his contract with the House Government Reform and Oversight Committee expires in September. Bennett would have renewed his contract if there was a possibility that the committee would produce "blockbuster" revelations, said a Republican committee source. Bennett declined comment except to confirm that he plans to leave when his contract is up.

Speaker Newt Gingrich, R-Ga., is well aware of the probe's limitations and is searching for a way to let it run its course quietly, said two GOP sources close to him. A final report, which could be fodder for renewed criticism of the investigation, may not be issued until after the November elections. That would avoid giving Democrats a chance to use the investigation against GOP incumbents during the fall campaign season. The probe has cost as much as $6 million by Democratic estimates, though the committee's GOP staff insists it has spent half that.

Gingrich also wants another committee to take over most of the probe from Chairman Dan Burton, R-Ind., and the Government Reform panel. Burton is under fire from fellow Republicans for mishandling the investigation, which focuses on campaign finance abuses in the 1996 election by President Clinton and the Democratic Party. On May 5, Burton fired his friend and chief investigator, David Bossie, under pressure from Gingrich and others in the GOP.

The move capped three days of damaging headlines for Republicans after Burton released transcripts of tape recordings of jailhouse conversations of President Clinton's onetime close friend Hubbell. A former associate attorney general, Hubbell resigned and was later convicted of having overcharged his clients while he was a partner at the Rose Law Firm. He served 18 months in a federal prison and a halfway house.

The transcripts revealed Hubbell discussing with his wife the possibility of suing his former law firm, and implying that first lady Hillary Rodham Clinton, who had also been partner at the firm, may have known about the kind of client billing fraud that landed Hubbell behind bars. But the transcripts were heavily edited by Bossie, and the excerpts omitted exculpatory information, such as another Hubbell comment that the first lady knew nothing about fraudulent billing.

The controversy was the latest in a string of missteps that reflected badly on Burton, and by association, on Gingrich and House Republicans. Determined to avoid further embarrassments, the Speaker wants to lower Burton's profile even as he defends the embattled chairmen publicly, sources close to him said.

The most likely scenario at the moment is to have House Oversight Committee Chairman Bill Thomas, R-Calif., take on the immunization of key witnesses and their subsequent testimony. That way, Thomas would take over the highly visible aspect of the probe, while Burton would move to a behind-the-scenes role, running mop-up portions of the probe and beginning work on the final report, said sources close to the Speaker.

Democrats on the Government Reform panel have capitalized on Burton's miscues at every turn, and they recently rebelled against what they called heavy-handed treatment by the chairman by refusing to cast votes to immunize four of the majority's witnesses.

The move, while decried by Republicans as obstructionist, handed Gingrich an opportunity to move the witnesses and their testimony from Burton's committee to Thomas' panel. If Democrats refuse to cooperate, his argument goes, Republicans have no choice but to move the probe to a committee where Democrats have less influence.

The GOP leadership-controlled House Oversight panel is stacked 6-3 with Republicans, while the ratio on the Government Reform panel is a much narrower 24-20. Granting immunity requires a two-thirds vote, which should be automatic for the majority on Oversight.

Another Immunity Vote

Gingrich is hoping the week of May 11 to turn the focus to Democrats and their votes against immunity. He has called for a second vote on the issue in the Government Reform committee on May 13, and he has repeatedly pointed out that the Justice Department, which is also investigating campaign finance abuses, has no objection to giving the witnesses immunity. The Speaker says Democrats are engaging in a "cover-up" to protect their president.

But committee Democrats, led by Henry A. Waxman of California, are refusing to back down. They will again vote against immunizing the witnesses, Waxman said, and in an escalation of the partisan brawling, they will ask that the committee remove Burton as head of the investigation.

If the committee effort fails, Waxman said, Minority Leader Richard A. Gephardt, D-Mo., will offer a similar measure on the House floor. Gephardt said May 6: "A committee staff member should not be made the scapegoat for Chairman Burton's mistakes, missteps and misdeeds."

Waxman will also try to persuade the panel's moderate Republicans to support a reversion to what he calls more traditional committee procedures than those followed by Burton. With only three GOP defections, he could change committee rules, but his chances are slim, given the extreme polarization of the panel at the moment.

Democrats contend that Burton has assumed unprecedented powers as chairman -- and abused most of them. He can unilaterally issue subpoenas and release sensitive information, such as the Hubbell tapes, a power granted to him on a party-line vote at the outset of the investigation.

Waxman also has complained that Burton failed to obtain proper proffers from witnesses outlining what they will say. Waxman said the committee was burned last fall when Democrats went along with unlimited immunity for witness David Wang, only to find that that immunity ended up protecting him from prosecution for an unrelated immigration fraud scheme.

The new witnesses Burton wants to immunize are Irene Wu and Nancy Lee, two former employees of Johnny Chung, a California businessman who raised questionable foreign donations for the Democrats; and Larry Wong, who has admitted making conduit payments to the president's campaign with money given him by Clinton supporters Nora and Gene Lum. Potentially the most important witness is Kent La, a business associate of Ted Sioeng, whom committee investigators suspect of being a link between the Chinese government and illegal foreign donations to Clinton's campaign.

While Gingrich has no plans to try to remove Burton as chairman, the fallout from the tapes controversy infuriated Republicans, the Speaker among them. During a closed-door GOP caucus May 7, Gingrich mentioned the embarrassment suffered by Republicans. When Burton stood up to insist he was not embarrassed, according to Republicans in the room, Gingrich snapped, "Well you should be. And if you're not, there are a few members here who are embarrassed for you."

A week earlier, Gingrich had launched a major rhetorical offensive against the Clinton White House, seeking to focus attention on a president who he said evaded the truth and obstructed justice.

He cited as evidence the scores of potential witnesses connected to the president's 1996 fundraising operation who have either fled the country or invoked their constitutional right against self-incrimination. Lack of cooperation from key witnesses stymied not only Burton's probe, but a similar Senate investigation concluded earlier this year.

The Hubbell tapes imbroglio abruptly turned the tables, putting congressional Republicans on the defensive and seemingly zeroing out any gains Gingrich had made in a recent series of hard-hitting speeches. It also undercut what is arguably a persuasive case by Republicans that their campaign finance probe has been weakened not by a bumbling chairman but by witnesses with something to hide.

"This was not our finest moment, to say the least," said Christopher Shays, R-Conn.

Republicans were not altogether satisfied by Bossie's firing, and may seek further assurances that the Speaker can bring the investigation under control.

"The staff change was necessary, and I don't know if that is all that is needed or not," said Deborah Pryce, of Ohio, a member of the GOP leadership.

Troubled Transcripts

Problems with the tape transcripts made by Bossie came to light May 3, after Waxman's staff and news organizations began listening to some of the 150 hours of recorded telephone conversations between Hubbell, his family and his lawyer while he served time at a federal prison on fraud charges.

For instance, in the transcript prepared by Bossie, Hubbell is quoted as saying, "John, the Riady is just not easy to do business with me while I'm here . . . " That is an apparent reference to the Riadys, an Indonesian banking family close to Clinton whom committee investigators suspect of paying hush money to Hubbell. On the tape, however, Hubbell actually says, "John, the reality is it's just not easy to do business with me while I'm here . . . "

Federal prisoners' conversations are routinely recorded; reminder signs are posted near telephones. The tapes were subpoenaed by Burton, who as a member of Congress is exempt from federal privacy laws barring public disclosure of their contents.

Committee staff led by Bennett had argued against releasing the contents of the tapes, saying they were of nominal value to the investigation and would give Democrats the chance to attack the Republicans on the privacy issue. In one of the conversations, Hubbell's college-age daughter is heard tearfully expressing her longing to see her father, said a committee source.

But Bossie, who even before joining the panel devoted years to an informal investigation of Clinton, was determined to pursue Hubbell though he was only tangentially related to the campaign finance probe.

Burton sided with the investigator over his chief counsel. Last year, Burton accepted the resignation of three staff members, including Bennett's predecessor, rather than fire Bossie after the three complained that Bossie leaked sensitive information.

"Dan tends to go David's way because he thinks the same way David does," said a Republican involved in the probe.

There is also lingering anger among Republicans over how the tapes were distributed once Burton made the decision to release them. When a horde of reporters showed up at committee headquarters to receive copies of the tapes, Burton spokesman Will Dwyer tossed them through the air to the outstretched hands of recipients in a scene that one reporter described as "just like Mardi Gras."

The image of a committee aide tossing sensitive tape recordings, some of which contained highly personal exchanges between Hubbell, his wife and his daughters, was carried on CNN and other network news broadcasts.

Burton on May 6 circulated an apology letter to his colleagues, saying: "Although the vast majority of the material was completely accurate, some mistakes and omissions were made. I take responsibility for those mistakes."

In his resignation letter, Bossie also conceded "mistakes" but blamed the White House and its "24-hour spin machine."

Gingrich at week's end urged Republicans to put the tapes controversy behind them and to focus instead on what he called the "crimes" committed by Clinton and his aides.

© 1998 Congressional Quarterly Inc. All Rights Reserved.
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Saturday May 9, 1998

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