Hubbell likely to plead guilty

Deal could avert trial probing first lady's role in Ark. development

June 29, 1999|By NEW YORK TIMES NEWS SERVICE

WASHINGTON -- Webster L. Hubbell has reached a deal in which he will plead guilty to a felony charge of lying about the role he and Hillary Rodham Clinton played in a questionable land deal, political and legal sources said yesterday.

In exchange for the plea, Whitewater independent counsel Kenneth W. Starr will recommend that Hubbell serve no time behind bars for the felony, the sources said.

The plea agreement will likely avert a trial, scheduled for August, that was likely to explore Clinton's conduct as a lawyer in the land deal, which federal regulators characterized as a sham and which led to the collapse of a savings and loan institution.

Clinton might have been called as a witness in the trial, which would have taken place at the same time as the beginning of her expected campaign for the U.S. Senate from New York.

Although he will plead guilty to the felony charge and to a misdemeanor charge in a separate tax-evasion case, Hubbell is not expected to cooperate with Starr in providing additional information about President Clinton or Mrs. Clinton, the sources said. Nonetheless, the sources said, Starr will not seek additional time behind bars for Hubbell, who was released from prison two years ago.

Whether Hubbell is sentenced to prison depends on the judge in the fraud and tax cases, U.S. District Judge James Robertson, who will also decide whether to accept the plea agreement.

The two Hubbell cases were the last to be brought by Starr. The last two cases prosecuted by his office, against Susan McDougal and Julie Hiatt Steele, ended in hung juries. The Hubbell plea agreement means that the independent counsel is close to the end of his five-year investigation.

In reaching the agreement, it appears that Starr has relented in his efforts to press Hubbell to produce information damaging to the Clintons.

An associate of Starr's, not in the prosecutor's office, said the decision to dispose of the Hubbell cases reflects Starr's eagerness to complete the long and difficult investigation of the Clintons and close the office.

Report coming up

Although his office is still investigating a few matters involving the Clintons, the main task remaining for Starr is to issue a report about his activities. Some of Starr's associates have said he is tentatively planning to issue a report that could be highly critical of the Clintons' behavior, especially that of Mrs. Clinton.

Under the independent counsel law, Starr is required to issue a report on his activities to the three-judge panel that appointed him. But it is unclear under a 1994 amendment how much he is allowed to criticize people who have not been indicted, like the Clintons.

Starr's years-long pursuit of Hubbell, whom he had indicted three times, had become for critics of Starr and the independent counsel statute a prime example of prosecutorial overreach. Starr's supporters have said Hubbell was pursued so vigorously because his case was an example of stonewalling by the Clintons' associates.

Law to expire

The independent counsel law, enacted in the aftermath of Watergate, expires at midnight tomorrow. Although Congress held many hearings, in the end there was no interest in extending the statute.

Starr is not obliged to close his office because of the law's demise, but he has testified before Congress that he believes the law, which was supposed to insulate high-profile prosecutions from politics, has not worked because independent prosecutors invariably are accused of being political by associates of the subjects of the investigations. As a result, he, too, thinks the law should lapse, he said.

Two years in prison

Hubbell, a former chief justice of Arkansas and once the No. 3 official in the Clinton Justice Department, spent nearly two years in prison after pleading guilty to charges brought by the independent counsel that he bilked his partners in the Rose Law Firm of Little Rock, Ark., where he had once worked with Mrs. Clinton. As a felon, he is not permitted to practice law.

The felony charge to which he is expected to plead guilty does not involve the Whitewater land development but a lesser-known and more complicated land deal in Arkansas known as Castle Grande.

Castle Grande was funded by Madison Guaranty Savings and Loan, which was owned at the time by James B. and Susan McDougal, the Clintons' partners in Whitewater. Federal regulators attributed Madison Guaranty's eventual failure in part to its involvement in the Castle Grande development.

The indictment of Hubbell did not mention Mrs. Clinton by name but refers more than 30 times to the "1985-86 billing partner" on the Madison Guaranty account, a description of her role in the transaction.

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