- The Washington Times - Sunday, May 18, 2008

ANALYSIS/OPINION:

The historically inaccurate, demonstrably false tales recently told by Democratic presidential candidate Hillary Rodham Clinton about dodging sniper fire in 1996 when then-first lady visited Bosnia represent the latest installment in Mrs. Clinton’s long history of conveying self-serving disinformation to the public.

Jerry Seper, the chief investigative reporter for The Washington Times, has recently revealed details in 30 once-secret documents that chronicled the internal deliberations of federal prosecutors as they reviewed hundreds of pages of evidence suggesting that Mrs. Clinton had concealed information and misled a federal grand jury about her work for Madison Guaranty Savings and Loan Association, an insolvent thrift whose owners were partners with the Clintons in the infamous Whitewater land-development scheme. The heretofore secret documents and records total more than 1,100 pages. Shedding light on the internal debate about whether Mrs. Clinton should have faced criminal charges while first lady, the documents were donated to the Library of Congress by the estate of Sam Dash, the lifelong Democrat who served as the ethics adviser to Whitewater Independent Counsel Kenneth Starr.

When details of the Whitewater scandal first emerged in March 1992 during the heat of the Democratic nomination fight, Mr. and Mrs. Clinton denied that she had ever “earned a penny” representing Madison and its owner, Jim McDougal. According to a June 1998 draft indictment of Webster Hubbell, a former partner with Mrs. Clinton in the Rose Law Firm who became associate attorney general, Mrs. Clinton did legal work for Madison “continuously” from April 1985 to July 1986. At the time, regulators were considering closing Madison, which was judged to have been insolvent following an examination by the Federal Home Loan Bank Board (FHLBB) in January 1984. That was more than five years before the federal government finally closed Madison in 1989 at a cost to taxpayers of $60 million.

The timing of Mrs. Clinton’s representation of Madison is crucial to the eventual cost of Madison’s failure to taxpayers. In May 1985, with Mrs. Clinton, the wife of the governor, representing Madison before a regulator appointed by the governor, Madison received approval of its unique plan to issue $3 million in preferred stock to satisfy capital requirements demanded by the FHLBB. But that plan was never implemented. However, during the second half of 1985, Madison’s mortgage loans increased from $47.6 million to $79.6 million. A 1986 FHLBB examination charged that Madison’s “management blatantly disregarded numerous regulations, including the growth regulation,” and concluded that Madison was once again “insolvent.” In 1986 federal officials removed Mr. McDougal, the Clintons’ Whitewater partner and sugar daddy, as head of Madison.

The documents donated to the Library of Congress by Mr. Dash’s estate and reviewed by Mr. Seper and The Washington Times also revealed that Rose Law Firm billing records involving Madison, which mysteriously resurfaced in the White House in January 1996, disappeared after the first lady was warned in late 1993 that the firm’s billing problems were “very serious” and that the then-ongoing Whitewater investigation could result in criminal charges.



Investigators for the Resolution Trust Corp. (RTC) first sought the billing records in February 1994. A Feb. 28, 1994, memo by White House Associate Counsel W. Neil Eggleston described Mr. Hubbell’s extensive role in representing Madison, contradicting his sworn testimony to the RTC. Then-Deputy White House Chief of Staff Harold Ickes Jr., who is not a high-level official in Mrs. Clinton’s presidential campaign, forwarded Mr. Eggleston’s memo to the first lady the next day. A few months earlier, according to the documents reviewed by Mr. Seper, Mrs. Clinton had been advised by Allen Bird, another Rose partner, that the “billing problems were very serious.”

Nevertheless, after Mr. Hubbell resigned as the third-highest official in the Justice Department on March 14, 1994, Mrs. Clinton told the public that his dilemma involved an “internal billing dispute” with his Rose partners that “likely would be resolved.” (Mr. Hubbell was later convicted of numerous felonies.) It was not the first time — nor the last — that Hillary Rodham Clinton told an inaccurate tale that proved to be as demonstrably false as it was disinformational and self-serving.

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