Weighing on his mind . . .

William Safire

August 17, 1993|By William Safire

IN THE weeks before Vincent Foster's death, he was working on overcoming ethical concerns about one of Hillary Rodham Clinton's assets by putting the Clintons' financial holdings into a blind trust.

The guilt-ridden deputy counsel may have mishandled a potential conflict of interest in Value Partners, an investment group in which Mrs. Clinton held nearly 1 percent; her estimated share is $100,000.

The partnership was about 14 percent invested in health care stocks at last year's end; it had "short" positions in companies, betting their prices would drop. The partnership manager, William Smith, tells me he spoke to Mr. Foster "three or four times" this year.

Mrs. Clinton's public pronouncements about health and her hints at the need for particular price controls had a direct and predictable effect on stocks in that field. Counsel Foster assured her she had no conflict-of-interest problems because she was not a government employee.

Then came the lawsuit demanding she open health-reform meetings to the public. The Federal Advisory commission Act says that such meetings can be closed if attended only by "full-time officers and employees" of government. White House Counsel won the case by claiming Mrs. Clinton was indeed a federal official for purposes of that act.

But appellate Judge Laurence Silberman put a pregnant footnote in his June 22 opinion: "We do not need to consider whether Mrs. Clinton's presence on the Task Force violates . . . any conflict-of-interest statutes."

Had Mr. Foster's victory in court subjected the first lady to a Justice Department investigation based on the Criminal Code's section 202?

Faxed about this, Counsel Bernard Nussbaum faxes back: "The decision did not purport to affect the question whether the first lady is an officer or employee for any other purposes, including application of the conflict of interest laws."

About the propriety of these holdings: "She had no role whatsoever in the investment decisions of the fund. . . . Its holdings included some assets that are health-related, but the total of these assets is a minor portion of the fund's entire portfolio -- to our knowledge, less than 10 percent. Mr. Foster was aware of these facts. The matter was not discussed with the Office of Legal Counsel."

Reasonable ethicists will grant that Mrs. Clinton's health-related holdings are, as Mr. Nussbaum writes, "clearly insubstantial, because they are both a small amount of money and an insignificant part of the Clintons' total assets."

What may well have contributed to Mr. Foster's gloom was the need to protect the first lady from the consequences of his FACA victory with legal legerdemain. His solution was to put this active official outside the reach of the law.

Section 203 specifically exempts the president and the vice president from the conflict-of-interest law. Adds the redoubtable, likable Mr. Nussbaum: "It is the view of the White House counsel, consistent with the views of prior administrations, that the first lady, like the president, is not covered by the conflict of interest statutes and regulations."

That's the Foster-Nussbaum doctrine, not the law. The noncoverage of this most governmentally energetic first lady was not sanctioned by Congress, not approved by the courts, not even reviewed by Justice.

The blind trust finalized three days after Mr. Foster's death does not clean up a half-year's dealings of an asset that a lawyer sensitive to the appearance of conflict should have ordered divested on Inauguration Day.

What must have added to Mr. Foster's mental burdens? Not the money made by Mrs. Clinton's $14,000 piece of health stocks; that's chicken feed. It was the trap set for her by her own counsel: She must seek to join the president and vice president as the only full-time government officials exempt from the conflict-of-interest law.

William Safire is a columnist for the New York Times.

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