Clinton top aides helped Hubbell Income is questioned in Whitewater probe

April 02, 1997|By Carl M. Cannon | Carl M. Cannon,SUN NATIONAL STAFF

WASHINGTON -- Two of President Clinton's most trusted aides led an effort to ensure that Clinton's friend Webster L. Hubbell found means of financial support after he left the Justice Department under a cloud, White House officials acknowledged last night.

The two aides -- Thomas F. "Mack" McLarty III, the White House chief of staff at the time, and Erskine B. Bowles, who now holds that job -- made phone calls and introductions on behalf of Hubbell in early 1994.

At the time, Hubbell was engulfed in a dispute over billing practices with the Rose Law Firm of Little Rock, Ark., where he and Hillary Rodham Clinton had been partners.

Later in the year, having resigned as the No. 3 official in the Justice Department, Hubbell pleaded guilty to bilking clients -- and the Rose Law Firm -- of hundreds of thousands of dollars.

As part of his guilty plea, Hubbell, a frequent golfing partner and confidant of Clinton, agreed to assist Whitewater prosecutors in their investigation of the Clintons' finances.

But prosecutors have found Hubbell's memory to be incomplete and have said they were underwhelmed by his level of cooperation.

Those prosecutors are now investigating whether Hubbell did any actual work to earn the $400,000 to $500,000 paid him by various businesses, law firms and Democratic contributors, and whether that money might help explain his apparent reluctance to assist prosecutors.

In fact, the money paid to Hubbell has emerged as one of the top issues being looked at by Kenneth W. Starr, the Whitewater independent counsel.

Aides to both McLarty and Bowles said neither official knew when making calls on Hubbell's behalf that Hubbell's troubles in Little Rock would ever become a criminal matter, let alone be part of the Whitewater investigation.

No attempt to influence

Lanny J. Davis, a special White House counsel, insisted last night that neither McLarty nor Bowles was trying to influence the investigation and that they were motivated solely by compassion for a man they cared about.

"During the spring of 1994, after Webster Hubbell announced his resignation from the Justice Department, his friends and colleagues were understandably concerned about his well-being and his ability to support his family," Davis said in a written statement.

"They believed at the time that Mr. Hubbell had done nothing wrong and that he was involved in an internal billing dispute with his former law partners that would likely be resolved."

McLarty called Truman Arnold, a fellow Arkansan who was later put in charge of the aggressive fund-raising efforts at the Democratic National Committee.

Arnold hired Hubbell and contacted others who did the same.

Arnold's lawyer, Richard Ben-Veniste, issued a statement last night asserting that Arnold was simply helping a friend.

Ben-Veniste said McLarty told Arnold, "Hubbell was going to stay in Washington and set up a law and consulting practice and asked [Arnold] whether he knew of anyone who might be interested in retaining Webb Hubbell.

"Truman, of course, was favorably disposed to help and, as a close friend of Mack McLarty, he would be happy to help."

In April 1994, acting independently of McLarty, U.S. Trade Representative Mickey Kantor mentioned Hubbell's plight to Bowles, Davis said.

Bowles, who at the time was head of the Small Business Administration, made several calls to his home state of North Carolina.

Davis said Bowles does not know whether the calls he made resulted in any employment for Hubbell.

Appearance of 'hush money'

In recent weeks, administration critics have asserted that the payments from the law firms and corporations to Hubbell have the appearance of "hush money."

When this allegation was mentioned to the president in a news conference this year, he bristled and said no one should make such serious allegations without specific evidence.

Clinton went on to say he did not know that Hubbell had secured lucrative consulting contracts until he read about them in newspapers.

Later, White House officials clarified the president's remarks by saying he was referring only to one specific Hubbell contract -- one with an Indonesian conglomerate called the Lippo Group that has been at the center of the Democratic fund-raising furor.

It was not the first time the White House had been forced to backtrack on the issue of Hubbell's post-Justice Department employment.

In December, Mike McCurry, the White House press secretary, said flatly that no one in the White House knew of Hubbell's contract with Lippo.

Actually, Bruce Lindsey, who is the closest aide to Clinton on the White House staff, had acknowledged six months earlier in a deposition that he knew about Hubbell's financial relationship with Lippo -- in 1994.

The question being put to the White House now was when, exactly, the president and first lady knew about the efforts to help Hubbell and whether they initiated them.

Last night, Davis answered this question by saying that around the time of Hubbell's resignation, McLarty made a vague suggestion to the first lady and perhaps the president that he was going to help Hubbell.

But Davis said McLarty does not recall telling either of the Clintons of his specific efforts to help find employment for Hubbell.

"Neither the president nor first lady ever asked for or suggested that anyone, including Mr. McLarty or Mr. Bowles, hire Webb Hubbell or assist him in obtaining employment," Davis added.

Davis said the Clintons "would not have discouraged Mr. McLarty from assisting Webb Hubbell because he was an old friend."

Pub Date: 4/02/97

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