Efforts on Hubbell’s Behalf May Be a Key to Whitewater

WASHINGTON —  As even his critics concede, Webster Hubbell is a likable man.

Standing well over 6 feet tall, with sleepy eyes and drooping lips, the former Arkansas football star is invariably described as a gentle bear of a man more apt to voice concern about others than himself.

Said a Washington lawyer who has tried, with scant success, to pry information from Hubbell under oath: “You spend several hours with the guy--you like him. He’s a nice guy.”

The point is important as investigators now lock on a question whose answer could affect the course of the Clinton presidency:

Why did people close to the president and First Lady Hillary Rodham Clinton steer employment engagements worth hundreds of thousands of dollars to Hubbell--despite that fact he was resigning from the Justice Department in the spring of 1994 to face a criminal investigation of his billing practices while a private attorney?

Friends of Hubbell defend the extraordinary efforts made to help him and his family as acts of “human compassion”; President Clinton used exactly those words Thursday. As the president and others also have noted, Hubbell was not charged with a crime until he admitted cheating his clients and associates and pleaded guilty to fraud and tax evasion in December 1994.

The more skeptical theory is of “hush money”; that underlying the lucrative engagements and other assistance provided to Hubbell was fear--fear that a financially strapped target of investigation would be less able to pay for lawyers and more apt to deliver testimony damaging to his former law partner, Hillary Clinton.

The question has achieved urgency as the long-running investigation of the Clintons appears to be reaching a turning point after three years and $28 million in expenses. It has special relevance because unlike many of the controversies that have touched the first family, this involves actions taken during Clinton’s presidency, by officials who remain in high office.

*

Already, transactions encompassing Hubbell, the Rose Law Firm, Hillary Clinton and a failed savings and loan called Madison Guaranty are central to unresolved issues at the heart of what has come to be known as the Whitewater affair. They bear directly on whether the Clintons broke the law, either in their dealings in Arkansas or in the way they have responded to questions and demands for documents since they took up residence in the White House.

Among other things, investigators are seeking to verify whether Hillary Clinton knowingly assisted what regulators have called a sham land transaction funded by Madison Guaranty and whether she has testified truthfully to a grand jury. Hubbell was familiar with the matter while at the Rose firm, and one of his clients, also his father-in-law, was a principal in the transaction. There also is a question of whether Hillary Clinton has lawfully complied with prosecutors’ requests for documents--namely billing records from the Rose firm reflecting the nature of her work in the mid- to late 1980s.

Hubbell, 49, who has known the Clintons since the 1970s, was uniquely positioned to shed light on those questions.

Hubbell, after all, had taken records related to the Whitewater controversy out of the Rose Law Firm offices during the 1992 presidential campaign as reporters began focusing on the Clintons’ investment in a land venture along Arkansas’ White River. He has acknowledged that he subsequently stored Whitewater files in the basement of his Washington home. In August 1995--near when Hubbell left Washington to report to a federal prison camp--billing records from the Rose firm that showed Hillary Clinton’s work with Madison Guaranty first surfaced in the White House living quarters.

Carolyn Huber, an aide to the Clintons who spotted those records, has said the materials resurfaced on a reading table in the first family’s quarters in January 1996.

The question of who had been handling those records and what they were doing in the Clintons’ quarters is significant because the documents had been under subpoena by the Whitewater independent counsel, Kenneth W. Starr.

*

Did the Clintons fail to comply with Starr’s subpoena and thereby expose themselves to obstruction-of-justice charges? Did Hubbell have those billing records among the documents he had stored in his basement before reporting to prison?

The Clintons say they have cooperated fully and have no idea how the records appeared in the residence. Hubbell has said under oath that the files he stored did not include the billing records.

It is against that backdrop that Starr and at least two congressional committees are examining what is now known to be a stream of deals that came Hubbell’s way in 1994, after he had resigned from the No. 3 position at the Justice Department. Hubbell was being accused by his former partners at the Rose firm of improper billings and expense accounts. In admitting his guilt, he has said that he cheated his clients and partners to support an excessive lifestyle.

The first inkling that Hubbell benefited from the actions of people close to the Clinton administration came last October, when it was learned that Mary E. Leslie, an administration appointee who had been Clinton’s chief California fund-raiser, had recommended Hubbell for a no-bid, oral contract awarded to him by the Los Angeles Department of Airports. Both Leslie and her husband said they recommended Hubbell’s hiring in part because they liked him and they thought he was facing high legal bills.

Following the The Times’ first report of that deal, 11 others, who paid him hundreds of thousands of dollars to consult on matters far afield from his previous expertise, have emerged. The deals--most of which were arranged by friends or supporters of the Clintons--paid Hubbell far more than his government position had.

Last week, President Clinton’s former and current chiefs of staff--both of whom made calls to line up deals for Hubbell--were subpoenaed to appear before a grand jury in Little Rock, Ark. What Starr must sort through is whether, apart from their compassion, Thomas F. “Mack” McLarty, Erskine Bowles or other of the president’s men, including lawyers Mickey Kantor and Vernon Jordan, were driven by any desire to keep Hubbell loyal and quiet.

It will be up to Starr and those who have the power to elicit answers under oath to determine whether the arranging of Hubbell’s deals may have broken the law. Yet for now, even supporters of the Clintons concede that the circumstances surrounding the deals raise serious questions.

For instance, it is clear that Whitewater and its perils were much on the minds of senior White House aides and the Clintons at the time of Hubbell’s resignation from the Justice Department. When members of the Clintons’ inner circle gathered at the executive mansion on Sunday, March 13, 1994, it was to discuss a wave of unsettling Whitewater developments:

No fewer than 10 administration officials had been recently subpoenaed to testify before a grand jury. The White House counsel, Bernard Nussbaum, had days earlier been forced to resign because of his combative handling of requests for Whitewater-related records.

On hand for the meeting were the president; Hillary Clinton; McLarty, then White House chief of staff; Margaret Williams, Hillary Clinton’s top aide; Deputy White House Counsel Bruce Lindsey; and David E. Kendall, the outside lawyer for the Clintons. Toward the end of the meeting, McLarty informed those present that Hubbell would resign, probably the next day.

Based on McLarty’s recollection, he then told Hillary Clinton, out of earshot of others, that he would seek to help Hubbell financially. The first lady, according to McLarty, nodded her approval.

On March 14, the day of Hubbell’s resignation, he gathered with friends, including Kantor and Michael S. Berman, a Washington lawyer-lobbyist who is close to the president and who helped Hubbell prepare for his Senate confirmation in 1993.

Kantor subsequently spoke to at least two senior administration officials about Hubbell’s need for income and raised money for trusts established for Hubbell’s four children. And Berman helped see to it that Time Warner Inc. put Hubbell on retainer as a consultant.

As for others who steered deals Hubbell’s way, they have cited varying motives--including their desire to do something that they believed would please the president.

“Taking care of Webb became like petting the new bunny,” said a senior administration official. “If you wanted to show the president you were supportive, this was a good way to do it: Pet the bunny.”

The Clintons kept tabs on how Hubbell was doing--in the months after his resignation and his Dec. 6, 1994, guilty plea, when he pledged to cooperate with Starr’s ongoing investigation of Whitewater.

An 11-page “task list” prepared Dec. 13, 1994, by a White House lawyer, Jane C. Sherbourne, mentioned the departed Hubbell. Sherbourne, whose job was to help manage the White House’s handling of Whitewater, listed Hubbell succinctly, as item No. 11.

Wrote Sherbourne below Hubbell’s name: “Monitor cooperation.”