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David Hale in 1994 (Reuters file photo)


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Reno Wants Inquiry on Hale's Funding

By Roberto Suro
Washington Post Staff Writer
Friday, April 3, 1998; Page A34

Attorney General Janet Reno said yesterday that federal investigators should look into allegations that Arkansas businessman David Hale received financial assistance from conservative activists while he was a key witness in independent counsel Kenneth W. Starr's Whitewater investigation.

Hale helped launch the Whitewater case by accusing President Clinton of involvement in an illegal loan scheme and then testified as the key prosecution witness in a 1996 trial that resulted in convictions of Clinton's former Whitewater business partners, James B. and Susan McDougal, and Jim Guy Tucker, who then was governor of Arkansas.

Clinton denied all of Hale's claims in testimony for the trial.

In recent weeks, FBI agents in Arkansas have interviewed a potential witness who claims that Hale received cash payments, the use of a fishing cabin and other benefits from individuals associated with the American Spectator, a magazine of conservative views that has aggressively pursued the Whitewater story, allegations of sexual misconduct and other news of scandal regarding Clinton, Justice Department officials said.

No definite evidence has arisen to show that Hale altered his testimony in exchange for the benefits or that there was an explicit attempt to influence his statements, the officials said. Nonetheless, the allegations are being treated seriously because of Hale's central role in Starr's investigation, the officials said.

"I think it must be pursued and I want to make a determination as to how it should be pursued," Reno said at her weekly news conference yesterday.

Reno is weighing whether the matter should be referred to Starr for further investigation under a section of his independent counsel mandate that authorizes him to probe any apparent efforts to tamper with his cases, the Justice Department officials said. No further investigative steps will be taken until Reno decides whether Starr has jurisdiction.

The mere possibility of crossing into Starr's territory caused federal investigators to halt and send the matter to Reno as soon as they had completed a very preliminary inquiry. As a result, several basic factual matters remain unresolved, the officials said.

A spokesman for Starr's office did not respond to a request for comment.

The key figures in the case are Caryn Mann, the assistant manager of a funeral home in Bentonville, Ark., and her former live-in boyfriend, Parker Dozhier. In recent media interviews, Mann has alleged that Dozhier gave money and other assistance to Hale while Hale was in protective custody as a cooperating witness for Starr. She also has said Hale gave Dozhier information about the course of Starr's investigation, including the details of grand jury proceedings.

Dozhier, the owner of a Hot Springs, Ark., bait shop and a longtime friend of Hale, has said in interviews that the American Spectator paid him $35,000 from 1993 to 1996 to help with the magazine's Whitewater coverage, but he denies making payments to Hale.

During Clinton's first term, the Spectator received more than $1 million from foundations controlled by Richard Mellon Scaife, a Pittsburgh millionaire and virulent critic of Clinton who has financed several anti-Clinton projects, including an investigation into widely discredited claims that White House deputy counsel Vincent W. Foster Jr. had been murdered. Starr and other federal investigators determined that Foster committed suicide.

Editors at the Spectator did not respond to a request for comment.

Hale's credibility as a witnesses remains an important issue for Starr, who said recently that the Arkansas phase of his investigation would conclude in May and that decisions were pending as to whether further indictments will be sought.

In February, Starr's office won a reduction of Hale's sentence on a federal fraud conviction based on Hale's "substantial and continuing cooperation" as a prosecution witness. Both Tucker and James McDougal also reached cooperation agreements with Starr and may have been supporting witnesses for Hale if Starr decided to seek charges against Clinton based on Hale's allegations about business deals conducted in Little Rock in the 1980s.

McDougal died last month. Starr may have to clear up the reports about Hale before Hale could become a useful accuser against the president.

© Copyright 1998 The Washington Post Company

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