A Vast Conspiracy Read online

  Though Jackson peddled the trooper story only to Rempel and David Brock, he shared David Hale more widely. In the fall of 1993, Jackson arranged for Hale to talk to The Washington Post and The New York Times as well as to Rempel, and the stories in all the various outlets dribbled out throughout the fall. “Clinton told reporters last week that he and his wife had done nothing improper,” Rempel and Frantz wrote in one such story. “But such allegations, raising questions of possible conflicts of interest and abuse of office by the then-Governor of Arkansas, continue to be nettlesome.” All of the reports in all the papers contained some version of this disclaimer. There’s no proof Clinton did anything wrong—but the existence of the inquiries remained a problem.

  One thing that wasn’t entirely clear in these stories was David Hale’s motivation in coming forward. Hale had one goal—to see an independent counsel appointed in the case. Throughout the fall of 1993, Hale was being investigated by the United States attorney in Little Rock in connection with a variety of fraud charges, most particularly the theft of $3.4 million from the Small Business Administration—a case that had nothing to do with Clinton. Hale’s lawyer was trying without success to negotiate a plea bargain with the United States attorney in Little Rock that would allow Hale to avoid jail time. (Hale had other problems as well, including investigations of his involvement with a burial insurance fraud and a kickback scheme with suppliers at his own courthouse.) Hale did not succeed in avoiding indictment. The grand jury in Little Rock charged him in the SBA case on September 23. But his hopes of lenient treatment still rested in getting a new, independent prosecutor placed in charge of the case. Hale had been caught stealing thousands of dollars; his tale about Bill Clinton was, he hoped, his ticket to leniency.

  The interviews that Jackson arranged for Hale succeeded in keeping the story alive in Washington. As Jackson knew they would, The Washington Post, The New York Times, and the Los Angeles Times spent the rest of the fall battling one another for preeminence in the story—which at this point consisted mostly of determining which investigative body was investigating Whitewater (the U.S. attorney or the Resolution Trust Corporation) and how much, if anything, Clinton administration officials knew about these investigations. Had the RTC—the government agency charged with examining bankrupt savings and loans—made a “referral” suggesting a criminal investigation of Whitewater? Who knew of it—and when? To be sure, the Clinton officials botched their handling of the inquiries in the winter of 1993 by acting unduly defensive. White House aides—at the direction of Bill and Hillary Clinton—refused to make public all of the first family’s documents on their investments. George Stephanopoulos protested the appointment of Jay Stephens, a prominent Republican, by the RTC to investigate Whitewater.

  In light of these disclosures, the underlying events of the Whitewater transaction all but disappeared from the news coverage. By December, when news broke that White House lawyers had removed some documents about Whitewater from Vince Foster’s office after his death, Whitewater had turned into a bona fide media frenzy. (The lawyers said they removed the documents because they believed they contained privileged communications between Foster and his clients, the Clintons.) Congressional hearings on the subject were planned for the spring. Through it all, the evidence against the Clintons bordered on the nonexistent. (This was true even after the Whitewater documents finally were released—and after Stephens made his report, which exonerated the Clintons.)

  Throughout December, members of Congress began calling on Attorney General Janet Reno to appoint a special prosecutor in the case. The law governing independent counsels had expired in 1992, when Republicans who were upset with Lawrence E. Walsh’s conduct of the Iran-contra prosecution blocked its renewal. Reno wanted to wait to make any appointment of a prosecutor until the law was renewed, which was expected to be in mid-1994. But during the second week in January, when Clinton set off on a major tour of Central Europe and the former Soviet Union, virtually all the questions that followed him involved Whitewater and the appointment of a special prosecutor. On January 11, in the Ukraine, Clinton sat for a brief interview with Jim Miklaszewski of NBC News, who asked him only about Whitewater. Clinton waxed indignant, saying, “I’m sorry you’re not interested in this trip. My thinking is this is a situation without precedent in American history. I mean, all these people say, ‘We don’t believe this man’s done anything wrong. There’s no evidence that he’s done anything wrong. There’s never been a credible charge that he’s done anything wrong.’ ”

  Still, that night, the president and his advisers bowed to political reality. In a conference call between the president’s party in Europe and his legal team gathered around the Oval Office in Washington, only one adviser spoke out against asking Reno to make the appointment. According to James Stewart, White House counsel Bernard Nussbaum warned that asking for a special prosecutor when there was no evidence of wrongdoing on the part of the president would amount to a historic blunder. “The frustration of finding nothing in Whitewater will make them investigate every one of your friends,” Nussbaum said. “They will broaden the investigation to areas we haven’t even contemplated.”

  “But this is about Whitewater,” someone said to Nussbaum.

  “No,” he replied forlornly. “This will be a roving searchlight.… They will chase you, your family and friends, through the presidency and beyond.”

  Clinton’s political advisers overrode Nussbaum and persuaded Clinton to request the appointment of a special prosecutor. This was a tremendous victory for both David Hale and Cliff Jackson. Hale would achieve his goal of cutting a plea-bargain deal that would lead to lenient treatment for his crimes. Jackson accomplished even more. By the end of February 1994, Jackson had set in motion both the Paula Jones case and the Whitewater independent counsel—which would, in time, converge and then nearly consume Bill Clinton’s presidency.

  On January 12, with the president still overseas, Stephanopoulos made the official announcement that the president would ask Reno to appoint a special prosecutor. He hoped that the appointment of a special prosecutor would bring the matter to “a speedy and credible resolution.”

  In 1875, just five years after the Department of Justice was created, President Ulysses S. Grant appointed the first outside independent prosecutor (who was also the secretary of the treasury) to investigate the St. Louis Whiskey Ring, a scandal within his administration. Grant ultimately forced the prosecutor to resign because of his aggressive tactics. In 1952, President Harry Truman’s attorney general appointed a Republican special prosecutor to examine possible wrongdoing within the Department of Justice. Two months later, that prosecutor, too, was fired. In 1973, Attorney General Elliot Richardson appointed Archibald Cox, a Democrat, to investigate Watergate. On October 20 of that year, President Nixon fired Cox in what became known as the Saturday Night Massacre.

  The need for and the problems with special prosecutors have long been a part of American history. The dilemma at the heart of the issue can be simply stated. In cases of possible wrongdoing by senior members of a president’s administration, or by a president himself, his subordinates may have a conflict of interest in conducting the investigations. But if “independent” prosecutors are appointed, who is to supervise them? Can any check be imposed on their power without creating the same kinds of conflict of interest that necessitated their appointments in the first place?

  Congress tried to answer these questions with the Ethics in Government Act of 1978, which created the modern independent counsel system. Passage of the law served in many ways as the unofficial beginning of the era when the legal system took over the political system. The idea behind the law was to use judges to depoliticize high-profile investigations; the role of the judges, the theory went, would protect everyone involved from charges of conflicts of interest. The experience of Watergate was still fresh in the legislators’ minds when they wrote the law, and the Saturday Night Massacre was the danger they most wanted to avoid. They wor
ried more about abuses of the prosecutor than by the prosecutor.

  In this one respect—avoiding more Saturday Night Massacres—the law was successful. In virtually all others, however, the law failed, and it expired, unmourned, in 1999—a monument both to the law of unintended consequences and to the cost of good intentions. The structure of the law changed little over two decades. When the attorney general found “reasonable grounds to believe that further investigation is warranted” of the president and certain other high-ranking officials, she was required to apply for the appointment of a prosecutor to a panel of three senior federal judges, who were, in turn, preselected by the chief justice of the United States. The three judges, known as the Special Division, then selected the prosecutor and defined his or her jurisdiction. To guarantee their independence and to prevent their targets from waiting them out, the prosecutors themselves would determine how long their investigations should take. (A midcourse change in the nomenclature offered a hint of the more substantive problems with the law. In 1978, the law used the title “special prosecutors,” the designation that had been used for Cox. But in 1982, worried that “prosecutor” sounded too accusatory, Congress changed the name of the office to “independent counsel.”)

  In one of many ironies surrounding the law, it actually hastened the politicization of the legal process it was designed to combat. In part this was an inevitable by-product of a more skeptical age. It became more difficult to present any decision by anyone, including a judge, as neutral or apolitical. Still, the law itself seemed designed almost willfully to make these problems worse. All of its attempts to depoliticize decision-making seemed only to inject more politics into the process. The press, of course, with its zeal for confrontation and investigation, served as an important constituency in favor of the law. The prospect of politicians in jail always made a better story than the usual work of the federal government, so the news media could always be counted on to provide a forum for those who wanted investigations begun and prosecutors appointed.

  Still, even on its own terms, the law never worked. For example, notwithstanding the hopes of the authors of the law, there was nothing self-evident about how to determine when an independent counsel should be appointed. The Whitewater controversy in late 1993 was only the first of many times during the Clinton administration when Republicans charged that the attorney general was ducking the appointment of an independent counsel to protect her boss, the president. Instead fomenting arguments about the propriety of the underlying behavior, the law encouraged this kind of proxy politics—endless, enervating debates about whether prosecutors should be appointed. Again contrary to the naïve hopes of the bill’s framers, the method for appointing independent counsels also politicized the process, for judicial participants in the independent counsel process could scarcely be seen as Olympian neutrals. Chief Justice William H. Rehnquist served as a Republican political operative before he came on the bench, and there he opposed Clinton’s agenda in almost every way he could. Therefore it was not surprising that he named, as head of the Special Division, a judge named David B. Sentelle, an even more avid anti-Clinton partisan from North Carolina. Decisions made by Sentelle had no greater claim to political neutrality than those made by Clinton’s attorney general. And the biggest fallacy of all behind the law was that independent counsels themselves would perform better—and earn more public respect—than the prosecutors they replaced.

  None of these flaws in the independent counsel law were secrets in 1993 when the Clinton administration began to weigh whether to apply the law to itself. At that moment, Lawrence E. Walsh, who had been appointed by the Special Division to investigate the Iran-contra affair, was finally winding down his seven-year investigation. By the time it concluded, Walsh’s probe offered a primer on the ills of the law—undue length, unwise prosecutions, excessive zeal on the part of the prosecutors. (I served as an associate counsel on Walsh’s staff for the first three years of his investigation.) In the politicized environment of independent counsel investigations, few Democrats protested Walsh’s excesses. Similar excesses by a Republican prosecutor would lift the scales from Democratic eyes. At that point, however, their protests drew little sympathy from the other side of the aisle.

  So, on January 12, 1994, the president announced that he wanted a special counsel appointed in the Whitewater affair. It was up to Attorney General Janet Reno to name the prosecutor.

  The situation was analogous to that which faced Attorney General Elliot Richardson in 1973. Because the independent counsel law had expired—it would be reauthorized six months later—Reno had complete freedom to select a Whitewater prosecutor. Richardson chose Cox. Whom would Reno select?

  She convened her top advisers, and the list was narrowed to a familiar list of big-shot lawyers and ex-prosecutors. Reno asked her deputy, Phillip Heymann, to sound out the leading candidates. He spoke to former senator Warren Rudman, former FBI and CIA director William Webster, former deputy attorney general Donald Ayer—and Kenneth Starr and Robert Fiske.

  There was never any real contest for first choice. Fiske was the class of the field. Under President Ford, he had been named the United States attorney for the Southern District of New York, and he was kept in that sensitive position by President Carter. In recent years, he had worked as a white-collar criminal defense attorney at the New York law firm of Davis Polk & Wardwell. Fiske was a throwback to another era, when lawyers dipped in and out of public service and maintained some independence from the political process. He was sixty-three years old, prosperous, and content. He was not gunning for another job in the future. In a press conference to announce his selection on January 20, Reno called him “the epitome of what a prosecutor should be.” Reno had made the perfect selection—and she had done so without the cumbersome superstructure of the independent counsel law.

  Fiske, in turn, also started out the right way. He announced he was taking a leave from his firm and moving to Little Rock. He hired a team of seasoned prosecutors, and when he gathered the group together for the first time, he had two words of advice for them: “Lawrence Walsh.” By that he meant that he was not going to repeat Walsh’s mistakes. He was not going to bring marginal cases, he was not going to see his investigation politicized, and most of all he was not going to take seven years. They were going to work fourteen hours a day seven days a week, determine if there were any crimes to prosecute, bring their cases, and then go home.

  At the press conference with Reno announcing his appointment, Fiske had said he was going to investigate the death of Vince Foster as well as the Whitewater land deal. Foster’s death had become a mainstay of the right-wing-conspiracy industry—Pat Matrisciana did an entire documentary on the subject—but Fiske didn’t waste any time reaching a conclusion. In a report released on June 30, 1994, six months into his tenure, Fiske said that Foster had indeed committed suicide. By coincidence, that same day, President Clinton signed the reauthorization of the independent counsel statute. Almost as a formality, Reno sent a request to the three-judge Special Division to ratify her appointment of Fiske as special prosecutor in the Whitewater case. Fiske had an impeccable reputation, his investigation seemed off to a promising start, and there was no reason to think the court would want a new prosecutor to start from scratch.

  The independent counsel law contained essentially no provision for how the prosecutors were to be selected. The law simply left the decision up to the Special Division. Yet these judges were almost intentionally ill-suited to the task. For one thing, the law called for appeals court judges to serve on the Special Division. Prosecutors and defense lawyers practice mostly before trial court judges, so the Special Division was unlikely to have any firsthand knowledge of the skills of the people they appointed. The Special Division judges were also supposed to be old—by law. The statute called for the appeals court judges to be “senior,” that is, semiretired. But older judges were even less familiar with the talent pool than their younger colleagues. The law had no provision
for standards, for applications, for judicial review of the hiring decision, or for public disclosure of how or why any appointment of an independent counsel was made.

  So there was no warning from the Special Division of the action it would take on August 5, 1994. On that day, the Special Division rejected Reno’s request to appoint Fiske as independent counsel. Instead, the three judges fired him and replaced him with Kenneth W. Starr as the new prosecutor in the Whitewater case. In its brief statement accompanying the change, the three-judge court stated, “It is not our intent to impugn the integrity of the Attorney General’s appointee, but rather to reflect the intent of the [Independent Counsel] Act, that the actor be protected against perceptions of conflict.” Thus, in Washington’s endless loop of perceived and actual conflicts of interest, Fiske was both hired and fired to avoid conflicts of interest.

  Because the appointment process of independent counsels was kept from public view, only one fact became publicly known about how the Special Division came to replace Bob Fiske with Kenneth Starr. An anonymous eyewitness told The Washington Post that on July 14, Judge David Sentelle had lunched at the Capitol with both of the senators from his home state of North Carolina—Jesse Helms and Lauch Faircloth. Both Helms and Faircloth were ferocious critics of the president’s, especially on Whitewater, and Faircloth in particular had argued that Fiske had gone too easy on the Clintons. The timing of the lunch suggested that the senators were lobbying Sentelle to dump Fiske—which the judge promptly did. All three participants issued denials that they had discussed the Whitewater case at all during the lunch. According to Helms, they had talked of “Western wear, old friends, and prostate problems.”