Judge Dismisses Indictment Against Hubbell
Charges against Hubbell's wife, accountant and tax lawyer also dropped
WASHINGTON (AllPolitics, July 1) -- A federal judge dismissed tax evasion charges against former Justice Department official and presidential friend Webster Hubbell, calling the indictment brought by Independent Counsel Ken Starr "the quintessential fishing expedition."
Throwing out the case, U.S. District Judge James Robertson ruled that Starr had overstepped his jurisdiction and that the prosecution violates Hubbell's Fifth Amendment rights against self-incrimination because immunity had been previously granted.
The judge's decision is another in a string of recent legal defeats for Starr, whose Washington grand jury indicted Hubbell last April.
Also cleared were Hubbell's wife Suzanna, his accountant Michael Schaufele, and his tax attorney Charles Owen, the court confirmed.
Speaking to reporters with his wife, a happy but subdued Hubbell said he had not read the judge's decision yet or spoken with to his lawyers, but that he was "excited and grateful," adding that "the last five years have been very difficult."
Mrs. Hubbell echoed those sentiments, saying she was "grateful to God that maybe, hopefully, this is all finally over."
Hubbell, known for his Southern manners, ended on a final jovial note for the gathered horde of journalists and camera crews, saying "hopefully y'all won't have to come back here again."
Starr's office issued a statement reacting to the dismissal: "Our pleadings and oral arguments to the District Court reveal our respectful disagreement with the District Judge's decision regarding the Independent Counsel's jurisdiction and the 'act of production immunity' in the Hubbell tax prosecution.
"With respect to the jurisdiction issue, the District Judge's opinion expressly sets itself in disagreement with two other rulings in the District Court for the District of Columbia. With respect to the 'act of production immunity' issue, the District Judge's opinion rejects the reasoning of the Seventh Circuit Court of Appeals. We will seek prompt review of this ruling," the statement reads.
Charges against the four defendants included conspiracy to violate internal revenue laws, tax evasion, impairing and impeding the due administration of the Internal Revenue Service and mail fraud. Hubbell and Schaufele were also charged with assisting in the preparation of false tax returns.
The judge said the charges had nothing to do with Starr's original mandate to investigate the Whitewater land deal and faulted the independent counsel for not getting Attorney General Janet Reno's permission to expand his investigation against Hubbell.
In addition, Robertson also said Starr had violated the immunity agreement he made with Hubbell. As part of that agreement, Hubbell had been required to turn over thousands of pages of records which were then used as the basis for the new indictments.
Starr had "built his case against Mr. Hubbell using 13,120 pages of records that Mr. Hubbell was compelled to produce under subpoena," the judge said in his decision.
Those documents "allowed the independent counsel to build a case against Mr. Hubbell different in all material respects from the case for which they had been subpoenaed. Mr. Hubbell thereby turned into the primary informant against himself" which violated his Fifth Amendment right against self-incrimination.
"The subpoena served on Mr. Hubbell was the quintessential fishing expedition," Robertson said. "The independent counsel freely admits that he was not investigating tax-related charges when he issued it."
During a hearing last Friday on the dismissal motion, Robertson signaled his displeasure, at one point characterizing the legal reasoning by one of Starr's prosecutors as "scary."
But prosecutor Stephen Binhak asserted that the prosecution had the right to use the records to press new charges, despite the immunity agreement, as long as the findings could be independently verified and the jury was not told that Hubbell had provided the documents himself.
Robertson told Binhak he found that line of reasoning "scary" and stated that Starr's office was "asserting a government power" in pressing charges on information culled from documents provided by Hubbell under the earlier agreement.
Critics have charged that Starr was vindictively trying to squeeze the Hubbells for information against the first family.
White House aides reacted with jubilation Wednesday to word of the judge's decision for onetime presidential golf buddy Hubbell. The aides privately called it a major setback for Starr, but were ordered to keep their public comments to a minimum.
White House Counsel Jim Kennedy said: "We believe the judge's written decision speaks for itself."
"We don't need to say anything. The judge said it best when he said Ken Starr overstepped his authority," said one official involved in the post-ruling
Another official told CNN: "So much for Ken Starr's winning streak. It seems the independent counsel is having a bit of a losing streak."
This official was referring to recent Starr setbacks, including his loss at the Supreme Court to obtain the notes of an attorney for the late deputy White House counsel Vince Foster, and the release from prison of Whitewater figure Susan McDougal.
The decision was released as the president was sleeping in Shanghai, China. A White House official tells CNN that senior Clinton adviser Rahm Emanuel called the traveling presidential party and informed deputy White House counsel Bruce Lindsey of the judge's decision.
Lindsey is a close friend of the Hubbells' and among the top White House aides and advisers who have tried to help Hubbell find work after he was forced to resign a senior Justice Department post in disgrace, after coming under investigation for overbilling private law clients in Arkansas.
Hubbell, who has already served an 18-month prison sentence on other charges, vowed to fight the tax charges, which he called an attempt by Starr to pressure him into testifying falsely about the Clintons in the continuing Whitewater probe.
At the time of the latest indictment, Hubbell said, "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 has been a major figure in the Whitewater investigation. As Hillary Clinton's former partner at the Rose Law Firm, prosecutors suspect he has information about Mrs. Clinton's involvement in a related land deal that also involved Hubbell's father-in-law. Prosecutors also suspect that Hubbell took sensitive documents from the firm in order to protect the Clintons.
In the dismissed charges, prosecutors claimed the Hubbells tried to avoid paying taxes on money that Clinton supporters gave them, allegedly in return for silence in the Whitewater investigation. The records Hubbell turned over to the prosecution showed that he left some consulting fees off of his tax returns, evidence which the prosecutors say supports their charges.
Some of the fees that were in question are said to come from James Riady, the Indonesian banker with controversial ties to the Clinton administration.
Hubbell is also suspected of writing off personal expenses and hiding assets. In all, he was charged with owing $895,000 in federal and state taxes and fines.