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Burden of Proof

Independent Counsel Robert Ray Closes the Books on Whitewater

Aired September 20, 2000 - 12:30 p.m. ET


GRETA VAN SUSTEREN, CO-HOST: Today on BURDEN OF PROOF: Six years after an investigation into a failed Arkansas land deal, independent counsel Robert Ray closes the books on Whitewater. Will we learn anything new from the report?


WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Even Mr. Starr said almost two years ago that there was nothing in any of that stuff, that it's just been coming out now, a year and a half later. So I think people are capable of drawing their own conclusions about that. I don't think I can serve much of the public interest by commenting. I think it's pretty obvious.


ANNOUNCER: This is BURDEN OF PROOF with Roger Cossack and Greta Van Susteren.

VAN SUSTEREN: Hello, and welcome to BURDEN OF PROOF. Roger is off today.

Today in Washington, independent counsel Robert Ray submitted a final report on the Whitewater investigation. Ray, who succeeded Ken Starr as independent counsel, sent the report under seal to a three- judge panel, which is overseeing the investigation.

In the past six years, the Whitewater dragnet has snagged former law partners of the first lady, a former Arkansas governor, and one- time partners of the Clintons James and Susan McDougal.


HILLARY RODHAM CLINTON (D), NEW YORK SENATE CANDIDATE: I'm confident that not only have New Yorkers and Americans made up their minds, but that there's nothing there to report. So, we'll wait and actually see the final document before I comment further.

PRES. CLINTON: We had a report from a truly independent source in 1996 saying that nothing wrong was done and that Hillary's billing records fully supported her account, 1996. So nothing has changed in this thing in the last few years. And I think people will just be able to draw their own conclusions.


VAN SUSTEREN: Joining us today from Los Angeles is Mark Geragos, who is the attorney for former Whitewater partner Susan McDougal. Joining us today here in Washington, Beverly Banks, CNN correspondent Bob Franken, and Sol Wisenberg, who is a former deputy to independent counsel Ken Starr. In our back row, Tom Lazzeri (ph) and Blaine Smith (ph).

Bob, first it's been going on so long, take me back. Give me an overview.


VAN SUSTEREN: Give me a history of Whitewater.

FRANKEN: It almost goes back to prehistoric America. Actually 1978, 1978 is when the Clintons, Bill and Hillary Clinton, young, very young, rising political stars in Arkansas, entered into a partnership, a real estate partnership, with Jim and Susan McDougal. He was the owner of a savings and loan, kind of a wheeler and dealer in Arkansas. It was for some land near Flippin, Arkansas, real backwoods that they wanted to develop, put condominiums up and the like that ultimately failed.

The investigation then was started because of allegations that money had been mishandled and in fact that mishandled money, illegally mishandled money, may have contributed to the failure of the savings and loan owned by Jim McDougal, which cost the federal government more than $60 million.

Critics charge that the investigation since then has cost almost that much. Of course, it expanded into a variety of areas, and here we are today, the independent counsel now is Bob Ray, he succeeded Ken Starr, who says that the evidence is, quote, "insufficient to prove to a jury beyond a reasonable doubt that either of them, meaning Mr. or Mrs. Clinton, committed any criminal offenses." That's it. The matter, he said, is now closed, sort of.

VAN SUSTEREN: Sort of. Anyway, so the headline is no criminal charges as it relates to Whitewater against the president and the first lady.

Well, let's go to the telephone. We have on the line one of the former business partners to the president and first lady, Susan McDougal, who was prosecuted in connection with Whitewater.

Susan, are you surprised by the announcement today about the independent counsel's investigation. It's over, as it relates to Whitewater and to the president and the first lady?

SUSAN MCDOUGAL, FORMER WHITEWATER PARTNER: Well, you know, I've said all along there was nothing to the allegations having to do with Whitewater.

As Bob said, it was a real estate deal that went wrong. I mean, we all lost money on it. And it never was this big criminal -- never was anything criminal about it. It should never have been investigated in the first place. But after they did and saw there was nothing there, they should have just stopped.

And you know, it would really please me, if they could just be men, if they could just be men and say there's nothing there. But they can't do that. All they can say is: Well, there is not enough evidence to support it.

You know, they said, if they found the papers that were lost, Hillary's billing records, that would do it. If they could get this witness, that would do it. Even ever I testified at my trial and answered every question they asked me, they still can't come forward and just say: There never was anything to it.

Because they are not men, they are political functionaries, and this is all about the election year.

VAN SUSTEREN: Well, let's go to your lawyer, Mark Geragos, who joins us from Los Angeles.

Mark, Susan raises an issue. It doesn't say the president and the first lady did nothing wrong, it says that there is insufficient evidence. Is that legalese or is that a covert message?

MARK GERAGOS, ATTORNEY FOR SUSAN MCDOUGAL: Well, it is clearly a covert message. I mean Susan is absolutely right, as she has been almost throughout all of this thing. Look what they do in this report, Greta, they talk about how the delays in obtaining relevant evidence included Susan McDougal's refusal to testify.

Well, an Arkansas jury ruled that she didn't obstruct justice, found her not guilty of that. Seven out of the 12 jurors also found she didn't commit criminal contempt.

They can't bring themselves to just say: There's nothing there. Instead, they phrase it in the reverse and say: There's not enough evidence to convict them under a reasonable doubt standard.

It really is duplicious on behalf of the Office of the Independent Counsel. I think that the timing of this and the way that they phrase it right before Hillary's election is also...

VAN SUSTEREN: Except, you know, Mark, you could make...

GERAGOS: ... political.

VAN SUSTEREN: ... you could make the flip thing, if Robert Ray had released it mid-November, we would all be squawking like, you know, that this was hanging over her head, and that why didn't he release it on September 20th. I mean, we would be all screaming about that?

GERAGOS: Greta, they shut down that Arkansas office about a month after Bob Franken and I left Arkansas during that trial. It's been a year since they have had any bodies down there in Arkansas. And mind you, the last year that they were there in the Arkansas office, all of those people spent all of their time preparing to try Susan on a criminal contempt case. So they have had years to do this.

VAN SUSTEREN: Mark, I will defend Robert Ray on the release because I think it was damned if you do, and damned if you don't, in terms of the report. He was always going to get criticized for that.

But Sol, let me ask you, why did this take so many investigations? I hate to put you on the hot seat against everybody else here. But we had -- There was an investigation in 1993, in which the United States attorney then in Arkansas passed on it; Jay Stevens, who was head of the RTC and who had investigated it, obviously, didn't bring charges or have charges caused to be brought against the Clinton; House Banking, Senate Banking, Ken Starr, Robert Ray, it seems like it has really been investigated.

Is this really a sign the Clintons did nothing wrong or is this just insufficient evidence?


VAN SUSTEREN: The fact that the report today, the report uses the terms that there is "insufficient evidence." It has been so heavily investigated, nobody has found anything against the first lady and the president, as it related to Whitewater.

WISENBERG: Well, I think it is pretty boilerplate language, if you look at the history of independent counsels, to phrase what is in effect a declination this way. There is unusual about it. And I agree with you that Bob Ray has acted perfectly properly here.

I do think Jay Stevens wasn't head of the RTC, he was with a law firm that had been hired. But I think it's an important point because it relates to something the president says a lot and the press never catches him on. He keeps referring to a 1996 investigation. Actually, this was conducted by a civil law firm that didn't have the kind of full investigatory powers that criminal agencies have. And what the president doesn't mention is the report from the OIG of the RTC, Office of Internal Investigations.

VAN SUSTEREN: Which is the first one that Paula Case, the U.S. attorney, passed on back then?

WISENBERG: No, no, no. This is a report that was after I believe Pillsbury Madison report, which said the option agreement that was written by the first lady was in fact used to deceive bank examiners.

VAN SUSTEREN: But it didn't say she...

GERAGOS: Wait. wait, that is so...

WISENBERG: Can I not be interrupted.

GERAGOS: Sol, Sol!

VAN SUSTEREN: Let me let Sol finish this, and then I will take the break, and I will come back to you, Mark. Finish the thought, Sol.

WISENBERG: It is a pretty simple request not to be interrupted. I want to make it clear, they didn't say that the first lady did anything intentionally. My point is, this 1996 report that gets bandied around, the OIG reports were much tougher on a number of thing.

That having been said, I think that, you know, what Bob Ray said in his report was totally boilerplate, there is no covert message.

VAN SUSTEREN: All right, we're going to take a break. We'll be right back with more on this Whitewater report. Stay with us.


ROBERT RAY, INDEPENDENT COUNSEL: It is important, even in situations in which, at the end of the day, a case is not brought, and the target or the subject of the investigation is discharged of criminal wrongdoing, for there to be, at the end of that process, a fair and thorough evaluation of what occurred.



A federal judge in Wichita Falls, Texas struck down a local law that allowed the removal of "objectionable" books from the public library.

The local law allowed for the removal of the books if 300 library card holders signed a petition.




RAY: My hope is to render findings and conclusions and judgments, and release those findings and conclusions and judgments to the public so that the public can evaluate them. The public will ultimately decide whether or not we conducted ourselves fairly and thoroughly consistent with the oath.


VAN SUSTEREN: The investigation has continued throughout most of the Clinton presidency. Today, a closing chapter was filed in the Whitewater probe. A final report was sent to a three-judge panel in Washington.

Mark, I cut you off before we went to break, you wanted to add something?

GERAGOS: Well, you know, there's portions of this report, Greta, that are just so gratuitous, the idea that as with the Travel Office investigation, they experienced delay by the White House, delay by Susan McDougal, unmeritorious litigation. They don't mention that there was meritorious litigation, namely litigation in cases in the courtroom, in the trial courts that they lost. None of this needed to be in here, it's gratuitous.

The idea that they couldn't just close this off a year ago when they shut down the Little Rock office and say there is nothing here -- you know, we're closing Little Rock, and by the way, there is nothing to Whitewater, when they announced that were no -- going to be no further indictments, I mean, the idea that they had to spend another year, investigate even further, I think, is a complete waste of taxpayer money.

And then number two, this idea that Sol raised that the Pillsbury report was somehow not as thorough, or they didn't have at their disposal all of these resources, that's eight volumes, Greta. Have you ever seen that Pillsbury report? You could use it that as a door stop.

VAN SUSTEREN: But I'll even give that to Sol, that a report may in some way be incomplete. But where I, you know, take Sol to task was the fact that we had the House Banking, the Senate Banking, we had Jay Stevens, who used to be the U.S. attorney here, we had Ken Starr, we have Robert Ray, I mean, these are the most investigative...

GERAGOS: The FSLIC, you name it.

VAN SUSTEREN: Go ahead, Bobby.

FRANKEN: Well, I just -- you know, we were talking during the break about all the FSLICs and RTCs and OIGs, and I just wanted to say you want to add to that M-O-U-S-E by the time you are through. There are all these federal agencies, they have these concentric reports, but what we probably need to focus on here is that all of those fed into the independent counsel's report and after the dust had all settled, that he concluded with all of them there was insufficient evidence of any criminal activity on the part of Bill and Hillary Clinton.

VAN SUSTEREN: And maybe he had an obligation when he took over even at a late date to at least review everything and put it to rest, and everyone was going criticize him as to when he filed his report or didn't file a report, and he couldn't win on that no matter what from his critics.

But let me go back to Susan. Susan, in the press release released today by Robert Ray -- it's a summary, I assume, of what he filed with the court -- and what he says is there is insufficient evidence that the president testified falsely when he said that he never borrowed any money from Madison Guaranty and he never caused anyone to borrow any money for his benefit. Was that true, is that true? Do you know anything about whether or not he ever was involved in any loans from Madison Guaranty?

MCDOUGAL: It's absolutely true. I always said it was true. But let me tell you, this thing that this man has just said that Hillary drew up some contract that was used to -- at the regulators at the bank to somehow, you know, pull the wool over their eyes, I cannot tell you how many times they came to me, the independent counsel's office, with different charges against Hillary Clinton.

And Mark will tell you, when I went into the grand jury, there were four or five different things they were trying to prove against her at that time, and this wasn't even one of them, this option agreement that she had drawn up. This is a totally new one that he gratuitously throws in on national television to say that she somehow had something to do with it, but she might not have known.

They won't just say they are innocent of anything having to do with Whitewater. No one, not one person ever was convicted in anything having to do with Whitewater. Jim McDougal and I were convicted on a bogus loan from David Hale that I certainly knew nothing about at the time and the Clintons definitely didn't. And the fact that they won't say that infuriates me, after $60 million.

VAN SUSTEREN: Sol, in looking back at the investigation, do you think that it has -- is there any place where you would sort of take your own staff to task, in terms of, did you go too far at all?

WISENBERG: Oh, absolutely not. Absolutely not. But I think it's important -- Mrs. McDougal actually makes a really good point, there is a distinction between Whitewater -- not across the board -- but between Whitewater and Madison Guaranty. The OIC had the authority to investigate a savings & loan institution that was rife with fraud, and that's a matter that Mrs. McDougal was convicted in relation to Mr. McDougal and Governor Tucker. That's another thing mentioned in the press release that people forget, there were about 15 convictions as a result of that investigation.

VAN SUSTEREN: But you know what the problem with it, Sol, is that the -- yes indeed there were convictions and there were pleas of guilty, but the problem is, is that every time, you know, it came back to the first lady and the president, people were so quick, at least in the media, or critics, or whatever.

And I must tell you, I don't know anyone who can withstand the level of investigation and the number of the investigations under business dealings like these two, whether even taking it emotionally or even undergoing it, I mean, it's been tremendous. And the fact -- even though the words don't come out in this press release and say they are innocent, rather it says it's inconclusive, I have to tell you, it sends a message to me that nobody could find anything, and that suggests to me they didn't do anything.

WISENBERG: Well, that's the -- typically the people who are subjects of these investigations try to interpret it that way, and that's their right to do so. I mean, I don't think Bob Ray can say, I find that they were completely innocent.

VAN SUSTEREN: And that's not his job, I mean, and I agree. I mean, that's not the prosecutor's job to go out and look for innocence. The prosecutor's job is something very different. But we're going to take a break, we'll be right back with more on this.


VAN SUSTEREN: Today in Washington, Independent Counsel Robert Ray filed the final report in the Whitewater investigation and it's getting sent over to a three-judge panel.

Bob, is that it? Or is there more?

FRANKEN: You didn't think this would ever really be over, did you? There is really -- there is some appeals pending in all of these years that have not been resolved. There is the question of the e- mails, all the missing e-mails at the White House, that's now under the jurisdiction of the independent counsel, Bob Ray, and of course there is this continuing investigation into the conduct of Bill Clinton in the Monica Lewinsky matter, trying to decide whether or not he will indict after the president leaves office.

VAN SUSTEREN: Winding down or winding up? I mean, what do you think it is?

FRANKEN: It's just winding.

VAN SUSTEREN: It's just winding?

FRANKEN: Yes. Who knows? Who knows? At some point, presumably, it will be over, but that's in the "only time will tell" department.

VAN SUSTEREN: Sol, we keep talking about this report, and I said it was submitted to the three-judge panel -- actually I don't know that it was actually done, I anticipate that that's going to be done. Once it is done, once Robert Ray does deliver it to this three-judge panel, is it automatically released to the public?

WISENBERG: Absolutely not. That's discretionary with the panel and it's also discretionary with them whether or not they send it to people who are named in the report and give them the chance to comment. But Bob makes a very important point, which is this e-mail portion of the investigation is still open, and if Bob Ray were to have completely shut down the investigation right now, he might have a difficult time saying -- bringing any kind of an obstruction count.

VAN SUSTEREN: And with the e-mail, though, as far as we know, at least publicly know, that is not directed at the first lady or the president. But that...

WISENBERG: Absolutely not.

VAN SUSTEREN: That is absolutely not. That is directed at other people who work at the White House and may have been involved.

Susan, your name, I presume, is going to be mentioned in this report. You are mentioned in the release. Do you -- if asked, do you have any objection to your name being written in that report, released to the public?

MCDOUGAL: I would prefer that my name never be on the lips of an independent counsel or in the pen of an independent counsel again, I mean, if I had my choice about the matter. But, no, I have never had anything to hide. I would have talked to anyone from the very beginning and answered all questions, as I did on the stand, with anyone reasonable, which this independent counsel is not. And I'd like to answer Mr. Wisenberg one more time, the only person convicted out of Madison Guaranty was Jim McDougal, who as insane at the time he was convicted and I don't think anyone doubted that. No other person...

WISENBERG: You weren't convicted?

MCDOUGAL: ... has ever been convicted in that...

WISENBERG: You weren't convicted?

MCDOUGAL: ... Madison Guaranty savings and loan that was rife with fraud, as he said.

WISENBERG: But what is she a felon for? She's a convicted felon.

VAN SUSTEREN: Well, let's -- let me go to Mark. Mark, what was it that Susan was convicted for?

MCDOUGAL: Not having to do with Madison Guaranty.

GERAGOS: All I know is when I represented her she wasn't convicted of anything, she was acquitted out here in Santa Monica 15 times, she was acquitted against the independent counsel, and basically the jury there found that the only people who were obstructing justice and not seeking the truth was the office of independent counsel.

WISENBERG: That's hogwash.

GERAGOS: So I don't know what -- well, Sol...

WISENBERG: They didn't find that.

GERAGOS: The jury instruction was if you found that they weren't seeking the truth, then you can acquit, and that's exactly what they did.

WISENBERG: Mark, you know she's a convicted felon. Why don't you just say so?

GERAGOS: As of right now. We'll file a 2255 based upon the office of independent counsel's misconduct in this matter and we'll see how long she remain.

WISENBERG: I guess she just forgot that.

GERAGOS: Well, Sol, she can proudly say she was convicted by Ken Starr.

VAN SUSTEREN: All right, and, Mark, you have the last word on that, because that's all the time we have for today. Thanks to our guests and thank you very much for watching.

Tonight on CNN "NEWSSTAND," we're going to hear more from our guest, Susan McDougal. Phone in with your questions and send her your e-mails at 10:00 p.m. Eastern Time.

And today on "TALKBACK LIVE": Should teachers stop giving kids homework? Weigh in with the authors of a controversial book on the topic. That's today at 3:00 p.m. Eastern Time.

And we'll be back tomorrow with another edition of BURDEN OF PROOF. We will see you then.



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