Hubbell Tax Case Challenged by Judge
Washington Post Staff Writer
Saturday, June 27, 1998; Page A03
A federal judge yesterday challenged the way that independent counsel Kenneth W. Starr built his pending tax-evasion case against Webster L. Hubbell, saying that some of the key documents may have been obtained improperly.
U.S. District Judge James Robertson questioned whether prosecutors can legally use financial and tax records they got from Hubbell in 1996 while he was under a grant of limited immunity. Saying he found some of the arguments by Starr's legal team "scary," Robertson said at yesterday's hearing that he will study a defense motion to dismiss the 10-count indictment.
Hubbell, his wife and two longtime associates are scheduled to stand trial Oct. 5 on allegations they conspired to hide hundreds of thousands of dollars in income that Hubbell received as a consultant. All have denied wrongdoing.
Much of the case was built on materials that Hubbell provided to Starr and a federal grand jury in the fall of 1996, when Starr's investigators were attempting to determine if White House aides and Democratic fund-raisers had sought to buy Hubbell's silence on Whitewater matters by arranging consulting payments for which he did little or no work. Hubbell is a longtime friend of President Clinton's and is a former law partner of Hillary Rodham Clinton's.
John W. Nields Jr., Hubbell's lawyer, said at yesterday's hearing that Starr's prosecutors used the documents as leads in violation of Hubbell's Fifth Amendment right against self-incrimination. All told, Hubbell turned over 13,120 pages of financial and tax records and appointment calendars, including documents identifying his clients and fees.
Prosecutor Stephen Binhak contended that the immunity given to Hubbell extended only to any testimony he gave to the grand jury. Binhak said the materials could be used as long as the jury was not told that Hubbell provided them.
But Robertson forcefully disagreed. "You are asserting a power on the part of the independent counsel to subpoena any citizen, saying, 'Give me all of your records,'" the judge said. "And I'm going to go through them and read them, and if I find something in them that is going to give rise to a criminal prosecution, I'm going to prosecute you. Now I'm not going to tell anybody where I got these documents and the jury will never know where I got them, and the jury won't know that they're yours, but now that I know what's in them, I know the information that I can use to prosecute you. Are you basically conceding that argument?"
"Yes," Binhak said. "And let me explain."
"That's really scary," Robertson said.
Hubbell was a partner with Hillary Clinton at the Rose Law Firm in Little Rock and worked there until January 1993, when he moved to Washington to become associate attorney general. He left the Justice Department in March 1994 amid an investigation into billing irregularities at the law firm.
He served an 18-month sentence after pleading guilty in December 1994 to embezzling from the firm's clients and partners. As part of that plea, Hubbell agreed to cooperate with Starr's office in its Whitewater investigation. Prosecutors were not satisfied with what Hubbell told them, however, and began the probe that led to his April 30 indictment.
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