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Webster Hubbell
Webster Hubbell
(Dayna Smith / The Post)

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Related Links
_ Full Coverage: Clinton Accused

_ Webb Hubbell's Sorry Story (Nov. 24, 1997)

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Hubbell Got $700,000 for Little or No Work, House Probe Shows

By Susan Schmidt
Washington Post Staff Writer
Friday, April 24, 1998; Page A06

Webster L. Hubbell received more than $700,000, most of it from friends of President Clinton and Democratic Party supporters, at a time when he was under pressure from independent counsel Kenneth W. Starr to provide information about Clinton in the Whitewater investigation, congressional investigators have determined.

That amount is at least $200,000 greater than what has previously been known about Hubbell's income after leaving his post as associate attorney general amid accusations that he had defrauded his former clients and partners at the Little Rock law firm where he worked with Hillary Rodham Clinton. Hubbell served an 18-month federal sentence after pleading guilty in late 1994 to tax evasion and mail fraud.

In addition to turning up more payments to Hubbell, the House Government Reform and Oversight Committee found new details about them, including evidence that Hubbell received money for his daughter's college tuition from the head of the Lippo Group, an Indonesian conglomerate, and offered to secure a government appointment for another client even after his conviction.

Even as the House panel has investigated him, Hubbell faces the possibility that Starr will bring new tax and fraud charges against him relating to the funds. Grand juries in Little Rock and Washington have for months heard testimony from a steady parade of witnesses about his consulting fees, including the question of whether the funds were intended to buy Hubbell's silence with prosecutors investigating the Clintons.

Starr's office has been investigating the role of Clinton advisers in helping Hubbell sign up clients. Among those who came to Hubbell's aid were then-U.S. Trade Representative Mickey Kantor, who is now a key member of Clinton's legal defense team in the Monica S. Lewinsky matter, and Vernon E. Jordan Jr., who helped Lewinsky line up a job at Revlon and Hubbell obtain a consulting contract with its parent company, MacAndrews & Forbes Holdings Inc.

Hubbell, a former law partner of Hillary Clinton and the late Vincent W. Foster at the Rose Law Firm in Little Rock, might have information relevant to several areas of Starr's wide-ranging Whitewater inquiry. For example, Hubbell and Hillary Clinton were both involved in legal work connected to the Castle Grande project, a large-scale land fraud scheme put together in the 1980s by the late James B. McDougal, the Clintons' former Whitewater business partner.

Starr has investigated whether Hillary Clinton testified truthfully about her work on the project.

The new information about Hubbell's consulting payments was subpoenaed from his clients by investigators for the House committee. The records show he did little or no work for most of the $593,442 he received from 18 companies and individuals, including $61,667 from HarperCollins for a book that was never completed. Three trust accounts established to pay his family's living expenses, education costs and his legal bills took in $110,710.

The House panel found Hubbell's consulting contracts would have paid him more than $850,000 had most clients not ended their arrangements with him when he entered his guilty plea in December 1994. His income after he left his $123,000-a-year Justice post totaled $704,152. All the payments came in 1994 and early 1995, except for the HarperCollins funds, which were in 1995 and early 1996.

Hubbell's lawyer, John Nields, declined to comment yesterday on Hubbell's income or the prospect of new charges being brought against his client. In a memoir published last year, "Friends in High Places," Hubbell discussed his consulting income and said "it wasn't hush money."

The House panel, chaired by Rep. Dan Burton (R-Ind.), has been looking into Hubbell's consulting fees as part of its investigation into campaign finance irregularities. The Indonesia-based Lippo Group and its former employee, ex-Democratic National Committee fund-raiser John Huang, have been important figures in the campaign finance inquiry, and they were among those who came to Hubbell's aid in June 1994.

A Lippo subsidiary paid Hubbell $100,000 on June 27, 1994, shortly after receiving a request from Little Rock lawyer Douglas Buford, a former law partner of both President Clinton and White House aide Bruce R. Lindsey. Lippo owner James Riady also helped pay Hubbell's daughter's college tuition while he was in jail, records gathered by the House committee show. A company jointly owned by Riady and C. Joseph Giroir, a former Rose partner of Hubbell's, contributed $12,000 to an education trust set up by Hubbell's Little Rock accountant, Michael Schaufele.

On Dec. 7, 1995, Hubbell tried to tap Riady again. "Webb asked me to contact you to see if James will help with Caroline's second semester tuition payment. The trust has only received a small donation since your last contribution," Schaufele wrote to Giroir in a letter obtained by the committee. Giroir confirmed that he and Riady contributed $12,000 to the trust but said they refused the second request.

In another new payment found by the House panel, Nicholas Stonnington, a Merrill Lynch vice president in Los Angeles and Democratic Party contributor, paid Hubbell $18,000 in August 1994. In a Feb. 10, 1995, letter from Hubbell to Stonnington – sent two months after Hubbell had entered his guilty plea – Hubbell promised to help Stonnington line up a federal appointment.

Hubbell told Stonnington that Bob Nash, newly named head of White House personnel, was an old friend from Arkansas. He urged Stonnington to consider a short-term appointment, perhaps on a commission on the Internet. "This would give you exposure with several people while we worked on the other possibilities. I am putting that in motion as a possibility," he told Stonnington.

Two companies that had competing interests in the telephone business, Sprint Corp. and Pacific Telesis Group Inc., both hired Hubbell in the fall of 1994 to consult on a dispute between the Justice Department and the Federal Communications Commission.

A source close to Pac-Tel said the company did not know Hubbell was working for its competitor too. Records show he took in $112,000 from the two companies.

© Copyright 1998 The Washington Post Company

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