Hubbell Investigation Ends With Plea
Washington Post Staff Writers
Thursday, July 1, 1999; Page A3 Signaling the end of his five-year pursuit of President Clinton and the first lady, independent counsel Kenneth W. Starr yesterday accepted a plea bargain with Webster L. Hubbell that allowed the former associate attorney general to proclaim--as he has all along--that he knows of no wrongdoing by either of the Clintons.
Starr invoked the public's exhaustion with scandal in explaining his eagerness to accept the deal and suggested that, had he gone forward with a trial, it would have been difficult to find a jury unbiased by preconceptions formed during Clinton's impeachment.
"It is in the public interest, we believe, to find an appropriate and, we believe, just disposition of these matters and to try to bring our work to as orderly a conclusion as possible," Starr said on the courthouse steps.
Hubbell, appearing after the plea hearing yesterday, said, "The Office of Independent Counsel has finally agreed to leave me, my family and my friends alone, and our lives can begin again."
Under federal sentencing guidelines, Hubbell could have faced at least six months in prison, but the deal spares him any jail time.
The agreement was concluded on the very day that the independent counsel law lapsed because Congress declined to reauthorize it. Starr is authorized to keep functioning, but with the law expired, it leaves him as a legal lame duck.
Given that status, Starr said, "it behooves us to seek to bring matters of our jurisdiction to a prompt and fair resolution. That is particularly so, in the light of the uniqueness of our own experience. The events of recent months have found their way, and profoundly so, into the hearts and minds of prospective jurors."
Starr told reporters that the Hubbell deal concluded the Whitewater aspect of his multi-part investigation of the Clintons, and his comments strongly suggested that he is unlikely to bring any further prosecutions. The major task that remains is to write reports on his investigations as mandated by the now-expired law.
Hubbell has been a close friend of the Clintons since the mid-1970s and was Hillary Rodham Clinton's partner at the Rose Law Firm in Little Rock. After Clinton became president in 1993 he was one of the first appointees to a major office, associate attorney general, and after Starr became independent counsel he was one of the prosecutor's first targets.
In 1995 Hubbell pleaded guilty to two felonies for bilking his partners at Rose and was sentenced to 21 months in prison. All along, Starr has insisted that Hubbell was holding back potentially incriminating information about the Clintons, but with yesterday's deal, the prosecutor gave up his quest.
"I recently answered limited questions by the independent counsel's office," Hubbell said in a statement. "That process has now been completed. I told the Office of Independent Counsel, as I told them five years ago, that I had no knowledge of any wrongdoing on the part of Mrs. Clinton or the president."
Like two veteran prize-fighters entering the boxing ring for one last match, Hubbell shook Starr's hand as he entered the packed courtroom. But unlike a boxing bout, no clear winner emerged from yesterday's proceedings.
The deal allowed Starr to claim guilty pleas in the last two prosecutions he had pending. In one, Hubbell accepted a misdemeanor charge of tax evasion and in the other he pleaded guilty to a single felony count of making false statements to federal officials.
Hubbell, however, was only required to provide the court with information about a rather peripheral aspect of the events alleged in the felony count. His sole factual admission was that when the Federal Deposit Insurance Corp. and the Resolution Trust Corp. hired him as counsel in a lawsuit, he failed to disclose a conflict of interest arising from his law firm's representation of another party in the suit.
"It has nothing to do with Hillary Clinton," said Hubbell's defense lawyer John W. Nields Jr. "It has nothing to do with land deals in Arkansas."
Under the count to which he pleaded guilty, Hubbell was accused of repeatedly lying to federal banking regulators over a five-year period about work that he, Hillary Clinton and their law firm did in the mid-1980s for Madison Guaranty Savings and Loan and its owner, the late James B. McDougal, the Clintons' Whitewater business partner. Much of the work involved the scam Castle Grande land deal that helped lead to the thrift's bankruptcy.
The tax case stemmed from some of the more than $700,000 in payments Hubbell received from Clinton supporters after his resignation as associate attorney general in 1994. The indictment contended that Hubbell did little or no work for some of that money. It alleged that Hubbell, his wife, Suzanna, their accountant and their lawyer conspired to hide the income from the Internal Revenue Service and duck payment on nearly $900,000 in tax debts.
Hubbell pleaded guilty to one charge of tax evasion and promised to attempt to pay off $761,000 in back taxes, penalties and interest. In return, Starr dropped charges against the other three defendants.