A Vast Conspiracy Read online

  In fact, behind the scenes, the three-judge panel was engaged in a decorous struggle over the Whitewater independent counsel—one that, again, revealed the political roots of this fight. Sentelle and Judge Joseph Sneed, who were both Republicans, wanted Fiske replaced with Starr. They thought the appointment by Reno had fatally compromised Fiske, giving his continued supervision of the case the “appearance of impropriety,” but they saw no such problems with appointing an outspoken Republican opponent of Clinton’s like Starr. John Butzner, the one Democrat on the panel, believed there was no need to replace Fiske, a man of impeccable credentials and impartiality. If someone new had to be brought in, Butzner favored naming a former federal appeals court judge named John Gibbons, who agreed, as did Starr, to be interviewed for the job. But when Gibbons came to Washington to meet with the judges, he said that he felt he had a conflict of interest because he was involved in an unrelated case in which the firm of White House counsel Lloyd Cutler had also appeared. It was a remote conflict, far less dramatic than the many instances where Starr’s political and personal agenda had clashed with Clinton’s. But with Gibbons out, Butzner had little choice but to go along with the offer to Starr—who accepted with alacrity.

  Within a few days of his appointment, Ken Starr gathered Fiske’s prosecutors around a conference table in their offices in suburban Little Rock. Fiske had staffed the case leanly, hiring fewer than a dozen lawyers, mostly people he had known from the U.S. Attorney’s Office or Davis Polk. Starr, who had never met any of them before, began by noting the awkwardness of this first meeting. He said he understood their loyalty to, and affection for, Fiske.

  “I love this man,” Starr said of his predecessor.

  The remark only increased the fury that several of the Fiske lawyers already felt toward Starr. The Whitewater prosecutors believed that Fiske would conduct a fair and thorough investigation. They regarded the Special Division’s act as an abomination, an unjustified slap at a decent and honorable man. By accepting the job, Starr had made himself party to the hijacking of their work. They wanted no part of anyone who would have done such a thing.

  But there was another reason the prosecutors were angry. In the days before he was fired, Fiske had told his staff that he was considering hiring an outside lawyer to handle some appeals on behalf of the office. Under his charter from Reno, Fiske had the right to file civil suits against the president, and the prosecutor knew that Clinton was claiming, in the Paula Jones case, that he was immune from being sued. Fiske told his staff that he was talking with the lawyer who had been so outspoken against Clinton on the issue of presidential immunity in the Jones case—a fellow named Ken Starr. In other words, at the same time that Starr was negotiating with Fiske about handling appeals, Starr was also talking with the Special Division about taking Fiske’s job. Starr had never disclosed to Fiske that he had been approached by the Special Division, and Fiske’s staff regarded this omission as a particular betrayal. “I love this man,” indeed.

  But Fiske had promised that he and his staff would assist Starr, so they began briefing the new independent counsel on the progress of their investigation. They had progress to report on two fronts. Earlier in 1994, Webb Hubbell, the associate attorney general, had resigned amid charges that he had overbilled his clients and defrauded his partners at the Rose Law Firm, where he and the first lady had worked before Clinton’s election. Fiske’s lawyers said that Hubbell was ready to plead guilty and cooperate with the Whitewater investigation. Second, the lawyers said they were making good progress on the case at the root of most of the Whitewater stories in the press—the one based on David Hale’s fraudulent $300,000 loan to Susan McDougal, who with her husband, Jim, were the Clintons’ partners in the original Whitewater project. (Fiske had already worked out a plea-bargain deal with Hale himself, meaning that the former judge and church pew entrepreneur had gotten what he wanted out of the appointment of a special prosecutor.) The idea behind all of Fiske’s actions was the same simple notion underlying most investigations of white-collar crime. The prosecutors would convict these lesser figures and then offer them leniency if they would testify against higher-ups, specifically the president and first lady.

  “We won’t write our 5K letters until we see whether these people cooperate,” one of the lawyers said to Starr.

  “What’s a 5K letter?” the new independent counsel replied.

  There was really no reason Starr should have known about 5K letters, but the prosecutors were stunned nonetheless. Since the federal sentencing guidelines went into effect in 1987, judges have had much less leeway to set the length of prison terms in cases before them. The guidelines determine the sentences, unless prosecutors make a motion to reduce the prison terms under guideline section 5K1.1. These motions—known as 5K letters—are the way prosecutors reward cooperators. By 1994, they were as familiar to criminal lawyers in the federal courts as speed limits were to highway drivers. But until he was hired by the Special Division to investigate the president of the United States, Starr had never prosecuted or defended a criminal case. So the prosecutors explained 5K letters to him. As Starr was the first to acknowledge, he would need a lot of help from his staff.

  Much later, Kenneth Starr became one of the most reviled men in America when his opponents in the Clinton White House succeeded in defining an indelible public image of the man. He was Babbitt with a badge—a minister’s son from San Antonio who shined shoes for fun as a kid, jogged to the cadence of hymns as an adult, and then called down legal hellfire and brimstone as a prosecutor. In one of the impromptu press conferences that Starr liked to give in the driveway of his home, in McLean, Virginia, he compared himself to Joe Friday, but his awkward public manner could scarcely have differed more from the just-the-facts-ma’am Dragnet detective’s. Unable to talk about the evidence in his job as independent counsel, Starr instead offered pious lectures. “There’s no room for white lies. There’s no room for shading,” he said, standing in his driveway. “You cannot defile the temple of justice.”

  In fact, Starr did fit an archetype, but it is neither Joe Friday nor Inspector Javert. Starr was a consummate Washington careerist who navigated the capital more by self-interest than by ideology. His defining attribute—more important even than his piety (which was real), his intelligence (which was considerable), or his energy (which was phenomenal)—was his ability to attract powerful mentors. In 1975, he clerked for Chief Justice Warren Burger. Then he spent four years in the law firm of President Reagan’s first attorney general, William French Smith. In 1983, when Starr was just thirty-seven years old, Burger and Smith engineered his appointment to the United States Court of Appeals for the District of Columbia, the second-most-important court in the nation.

  On the court, Starr had a chameleon-like ability to mix with every faction and clique. Once, after an oral argument in the courtroom, Starr found himself in the middle of a real argument between liberal and conservative colleagues, who looked like they might come to blows. “When we went into the robing room after the argument, Judge [Laurence] Silberman and I got into a famous contretemps. We really got into it, and he threatened me with bodily harm,” Abner Mikva, who went on to become White House counsel, recalled. “The whole time, Ken kept looking at the ceiling. You could see it was like he was saying to himself, ‘I’m not here. I’m not seeing this.’ He was a gentle person who looked to avoid controversies.” In 1989, President Bush persuaded Starr to step down from his lifetime judicial appointment and become solicitor general—the government’s chief advocate before the Supreme Court. Nicknamed the Solicitous General for his deferential style in front of the justices, Starr argued for a series of conservative positions, particularly on abortion and affirmative action. Yet Starr, like Bush himself, never convinced the hard-core right that he was one of them. In 1991, he lost out on an appointment to the Supreme Court because conservatives in the Justice Department branded him a “squish”—an unreliable conservative. (The seat went to Clarence Thomas inste
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  After Clinton was elected in 1992, Starr became a partner in the Washington office of the law firm Kirkland & Ellis, where he earned more than $1 million a year. In the fall of 1993, just as the Whitewater stories were starting to break, Starr was summoned from his profitable exile for a different, sensitive assignment. The Senate Ethics Committee was investigating Robert Packwood for sexual and other misconduct, and the presiding Democrats asked Starr to review Packwood’s diaries for material relevant to the case. In announcing Starr’s assignment, The Washington Post observed, “Even those who regularly crossed swords with him credited him with being fair. He was not seen as ideologically driven.” In the days before Monica Lewinsky, the Packwood case passed for pretty salacious stuff, yet there was never a leak from Starr or a complaint about him in the course of his work.

  Far from limiting himself to his law practice and the short stint with the Ethics Committee, Starr showed an almost compulsive desire to join organizations, give speeches, and stay in the mix. He lived, it seemed, to fulfill the old saying that if you want to get anything done, ask the busiest man in town. Starr served as an active member of a breathtaking number of professional associations, including the American Bar Association, the American Law Institute, the American Bar Foundation, and the American Judicature Society. In light of his experience as a former judge, he agreed to serve as president of the Institute for Judicial Administration. He taught a class on constitutional law one day a week at New York University School of Law. He even found time to direct an obscure organization called the Council for Court Excellence. In light of this record of compulsivity, it was no surprise that Starr would simultaneously negotiate for a position with Fiske—and for Fiske’s job.

  Yet all of Starr’s frantic volunteerism could not obscure a fundamental fact about him. He was a committed political conservative who stood outspokenly opposed to Clinton on virtually every controversial issue of the day. Before 1994, he had served in prominent jobs, but never in any that included close scrutiny by the press. Because of this, his personal style may have caused almost everyone to misjudge him. By nature, he deferred to others. Lips pursed, almost leaning backward during most conversations, Starr was polite to the point of obsequiousness. In a city full of (literally) snarling partisans, Starr’s manner set him apart. There was a time in Washington when lawyers could move up in the profession—to judgeships, high administration positions, and the like—in a largely nonpartisan way. But Starr came of age at the time when the legal and political systems were merging and one had to take a stand with one side or the other to chart a route for personal advancement. Politely but unmistakably, Starr had done just that, and by the time he was named independent counsel, he had long ago signed on with many of the people who wanted Bill Clinton destroyed.

  Indeed, while Starr was no ideologue himself, he had always surrounded himself with them. He may have been a member of the middle-of-the-road ABA, but his real friends belonged, as did Starr, to the Federalist Society, the partisan fellowship that provided the intellectual energy behind the Reagan revolution in the courts. He had been hired by the right-wing Bradley Foundation—which financed, among other things, The American Spectator—to defend a school-choice program in court. Starr served on the legal-policy advisory board of the Washington Legal Foundation, another conservative think tank. In his work at Kirkland & Ellis, he represented Brown & Williamson and Philip Morris, two tobacco companies whose interests clashed with the Clinton administration’s at every step. He had, of course, already spoken out against the president’s legal position in the Paula Jones case, and he was on the verge of submitting a brief in her case on behalf of still another conservative organization, the Independent Women’s Forum. Starr had even offered advice to Gil Davis, Jones’s lawyer, about how to handle the issue of presidential immunity from civil suits. None of this activity was improper or even surprising. It simply reflected the legal world in which Ken Starr lived before he answered the Special Division’s summons in August 1994.

  The nature of that world was, in fact, what Phil Heymann learned about Starr when he first examined his record at Janet Reno’s request. No one doubted Starr’s intelligence or his integrity. But Heymann also heard a warning: Look at the people around him. Starr was a man who had never prosecuted a case in his life. Someone would have to teach him the rules. As Heymann and anyone else with experience in the criminal justice system knew, many of these rules—about fairness, judgment, and proportionality—weren’t written down, and some prosecutors followed them more closely than others. Starr would be more dependent than most potential prosecutors on the people he hired. More than almost any independent counsel in history, Starr’s destiny would be in the hands of his staff.

  Where, Heymann worried, would Starr get his advice?

  5

  A Really Big Crush

  “Today is October fifth, exactly eight weeks since I became IC,” Starr would begin a typical meeting of his staff in Little Rock during 1994, “and this is what I have not accomplished. We’re not going to be Lawrence Walsh. I’m not going to be here forever.”

  Almost without exception, the Fiske prosecutors fled their jobs as soon as decency permitted. But Starr surprised the stragglers—and the new arrivals as well. His staff nearly matched Fiske’s in their experience and professionalism. In his Washington office, the top people included Mark Tuohey III, the former president of the District of Columbia Bar Association; Roger Adelman, a former high-level prosecutor in Washington; and John Bates, who had just left a senior position in the United States Attorney’s Office in Washington. In Little Rock, Starr recruited the husband-and-wife team of Ray and LeRoy Jahn, who were experienced federal prosecutors from San Antonio, and Bradley Lerman and Amy St. Eve, both veterans of the U.S. Attorney’s Office in Chicago. Several of these lawyers had the perspective of having worked as defense attorneys as well as prosecutors. Starr even adopted Fiske’s obsession with Walsh. Like his predecessor, Starr vowed a quick and fair resolution of the matters before him. He asked his staffers for commitments of just one year, because he believed—and here his inexperience showed—that was all it would take to finish the investigation. (Unlike Fiske, Starr did not take a leave from his firm, so he continued making his seven-figure salary during his first four years as independent counsel.)

  On the whole, Starr successfully capitalized on the cases Fiske’s staff had begun. On December 6, 1994—just four months into Starr’s tenure—Webster Hubbell pleaded guilty to defrauding the Rose Law Firm and its clients of more than $400,000. On June 7, 1995, Starr indicted Jim Guy Tucker, Clinton’s successor as governor of Arkansas, and two others in a bankruptcy-fraud case. (After a protracted series of appeals on legal issues, all of the defendants eventually pleaded guilty in the case, which concededly had nothing to do with the Clintons.)

  Then, on August 17, 1995, just after the first anniversary of his hiring, Starr unveiled the results of his Whitewater investigation. Starr’s grand jury in Little Rock charged Tucker and James and Susan McDougal in a conspiracy case involving Madison Guaranty Savings & Loan. Starr’s staff called it “the 825 case,” because the complex chain of events began with a loan of $825,000. The theory was that Tucker and Jim McDougal conspired to have Madison Guaranty Savings & Loan lend this amount to a third party, who, in turn, shared the proceeds with David Hale. Hale’s company—which was supposed to make loans to minorities—then used this money to obtain a fraudulent loan of $1.5 million from the Small Business Administration. The only link to Clinton concerned his famous (and disputed) conversation with Hale in February 1986. There, Hale claimed that Clinton asked him to lend some of the $1.5 million to the McDougals, whose business ventures included the shared investment in Whitewater. Of course, Clinton claimed that this by then nine-year-old conversation never took place, and in any event the alleged conversation scarcely related to Starr’s conspiracy case. But that purported David Hale conversation was as close as Starr could get to the president.

  A
ll in all, the 825 case was a typical, if rather small, federal white-collar-crime prosecution—complex, unsexy, and based on the testimony of a cooperating witness (Hale) who was probably more culpable than anyone who went to trial. And as the months devoted to pretrial preparation passed, the prospect of tying the president into this conspiracy faded even more. Hale’s uncorroborated word would never suffice to bring down a president. Jim McDougal—an eccentric, mercurial man whose financial reverses had driven him from a life of white suits and Jaguars to a new home in a trailer—was publicly defending Clinton and denying Hale’s charges. His ex-wife, Susan, was not speaking out in public, but her lawyer was saying she also rejected Hale’s accusations. Even if the two McDougals would eventually flip on Clinton (and Jim did), their words would likely mean little. The experienced prosecutors in Starr’s office began to realize that their Whitewater case would begin—and end—with the trial of Tucker and the McDougals. Starr’s prosecutors had gone to where the evidence had taken them—and it wasn’t very far.

  In a peculiar way, these early days of the Starr investigation almost helped the Clinton presidency. Because of Starr’s probe, all the important evidence was protected by the shield of grand jury secrecy, and there were never any leaks of consequence (perhaps because there was so little incriminating evidence to leak). Starr was considering using most of the Whitewater witnesses in the grand jury or at trials, so he deprived the multiple congressional investigations of Whitewater of these potential stars. The hearings on Whitewater—which included those chaired by Alphonse D’Amato, of New York, and Jim Leach, of Iowa—attracted little interest outside of Washington.