The RTC Investigation
In one of its last actions, the now-defunct Resolution Trust Corporation (RTC) issued a $4 million report by the San Francisco-based law firm Pillsbury, Madison & Sutro concluding no grounds existed for suing the Clintons over their Whitewater investment. Released in December 1995, the report also found no reason to sue Madison Guaranty owner Jim McDougal or any Rose Law Firm partners, while supporting the Clintons' longstanding claim they were passive investors in Whitewater.
'It largely corroborates... if not explicitly corroborates, exactly the version of events as the president has provided them consistently and as numerous documents, testimony and discussion of this matter has also tended to confirm.'
The Clintons have frequently pointed to the RTC report as vindication whenever Whitewater matters are raised. However, from the get-go, the RTC investigation, and the administration's effort to police itself on Whitewater matters, were fraught with controversy and allegations (mostly from Republicans) of obstruction of justice and cover-up.
Testifying before the Senate banking committee in February 1994, then-deputy Treasury Secretary Roger Altman (a college friend of Clinton's) conceded he had given top White House officials, including then-White House counsel Bernard Nussbaum, a "heads-up" on nine RTC criminal referrals that in one instance targeted Clinton's 1985 gubernatorial campaign, and named the Clintons as witnesses in others.
Eight days after the "heads up," Clinton met with former Arkansas Gov. Jim Guy Tucker in the Oval Office.
Clinton advisors George Stephanopoulos and Harold Ickes also came under fire following revelations they called Altman to protest the choice to head the RTC probe, Pillsbury partner Jay Stephens, a former Bush-appointed U.S. attorney fired by Clinton in 1993.
Usually mild-mannered GOP Rep. Jim Leach of Iowa, then the House banking committee's ranking minority member, became the president's sharpest Whitewater critic. He charged that the RTC was illegally withholding Whitewater documents that would incriminate the Clintons, and that regional RTC criminal investigators were being controlled by the Washington office. Leach took to the House floor in March 1994 to air his concerns.
As GOP pressure mounted, Democrats scheduled separate House and Senate hearings (controlled by the Democrats) for the summer of 1994. A parade of administration officials claimed under oath not to have remembered the Treasury-White House contacts, even though Joshua Steiner, the 28-year-old Treasury chief of staff, had noted them in his diaries. Government investigators eventually concluded at least 40 contacts occurred.
Providing relief to the administration, Robert Fiske concluded in July 1994 that the White House-Treasury contacts had not run afoul of the law, though Nussbaum and Altman were ultimately forced to resign. Further, congressional lawmakers felt that Fiske wasn't thorough, and some observers speculate Kenneth Starr might bring obstruction of justice charges related to the Treasury-White House contacts.
Interest in Whitewater died down in late 1994, but ascendant Republican majorities kick-started hearings in the summer of 1995. In the House, lawmakers heard testimony from Jean Lewies, the RTC investigator who made the Madison criminal referrals, who testified under oath that her RTC superiors were biased towards the Clintons. "There was a concerted effort to obstruct, hamper, and manipulate the results of our investigation of Madison" Lewis testified.
Lewis' "smoking gun" was a taped conversation between herself and RTC attorney April Breslaw, who said, "the head people...would like to be able to say Whitewater did not cause a loss to Madison." Breslaw, defended by banking committee Democrats, disputed Lewis' interpretation that she had been attempting to dictate the results of Lewis' probe in any way.
"Frankly, I hope the Clintons are vindicated in the end, but I don't think this report does it."
When the RTC released the Pillsbury report in December 1995, congressional Republicans were skeptical and contended that crucial witnesses had been ignored. Pillsbury senior partner Charles E. Patterson himself was quoted in the Los Angeles Times as saying the report "was neither a castigation nor vindication" of the Clintons.