Starr defends legal practice while probing Whitewater Federal prosecutors concede that witness Hale has changed his story

April 09, 1996|By LOS ANGELES TIMES

LITTLE ROCK, Ark. -- Independent Counsel Kenneth W. Starr defended himself yesterday against a growing number of critics who say he should not be representing legal clients while investigating the Whitewater scandal involving President Clinton.

Mr. Starr, in a speech to a bar association group in San Antonio, argued that the law creating independent counsels does not require them to work exclusively for the government. He noted that all but one of his 16 predecessors as independent counsels had continued to be associated with a law firm.

"The independent counsel was never expected to become a full-time employee of the government and leave his or her law firm," Mr. Starr said.

"To the contrary, it was expressly contemplated that individuals, while giving careful attention to the demands of their official duties, would remain within their law firms."

Mr. Starr is the first independent counsel who has continued to act as a defense attorney in numerous high-profile cases while heading up an investigation of alleged wrongdoing by a top government official. He collects a salary from his law firm and the government.

As he spoke, his assistants in the independent counsel's office were continuing to try the central case in the Whitewater scandal. In that case, Arkansas Gov. Jim Guy Tucker, James McDougal and his former wife, Susan, are charged with conspiring to commit fraud.

Government attorneys acknowledged after the day's proceedings that their chief witness, David L. Hale, has changed his story slightly during two weeks on the witness stand.

But Ray Jahn, one of Mr. Starr's principal deputies, insisted that the changes in Hale's story were unimportant.

Among other things, Hale claims he was pressured by then-Governor Clinton in the mid-1980s to make an improper loan from his government-backed small-business investment firm to the McDougals, who were Mr. Clinton's investment partners in an Ozarks resort development known as Whitewater.

It was their joint investment in Whitewater that precipitated this investigation into whether the Clintons benefited improperly from it.

According to Hale, Mr. Clinton offered to put up the Whitewater property as collateral for the loan. At the same time, he said the then-governor insisted that he did not want his name associated with the transaction.

While cross-examining Hale, attorney George Collins, who is representing Mr. Tucker, noted that it would be inconsistent for Mr. Clinton to offer land in his name as collateral if he did not want his name associated with the loan. But Hale insisted there was no inconsistency.

Mr. Starr, who earns a salary in excess of $1 million as a lawyer for a Washington law firm, has never appeared in the courtroom during this trial, which began in early March. Instead, he continues to practice law while supervising the independent counsel's office.

According to Debbie Gershman, Mr. Starr's spokeswoman, the independent counsel is paid on an hourly basis for his work for the government. His hourly salary is based on an annual rate of $115,000 a year, she said.

Just last week, Mr. Starr, acting as a private attorney, represented the tobacco industry in a major class-action suit being heard by the U.S. Appeals Court in New Orleans.

The previous week, he argued a labor law case in the U.S. Supreme Court.

He acknowledged yesterday that his predecessor as Whitewater prosecutor, Robert B. Fiske Jr., whom he replaced in July 1994, took a leave of absence from his law firm to do the job. But he noted that Mr. Fiske was appointed by the administration, while he was appointed by the courts.

Pub Date: 4/09/96

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