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Richard Mellon Scaife
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Key Player: Richard Mellon Scaife

Whitewater Tampering Probe Begins (Washington Post, Aug. 22)

Anti-Clinton Billionaire Goes Before Grand Jury

By John Mintz
Washington Post Staff Writer
Tuesday, September 29, 1998; Page A8

Conservative billionaire Richard Mellon Scaife earlier this month appeared before a federal grand jury in Fort Smith, Ark., investigating whether a group of anti-Clinton researchers financed by Scaife tried to influence the testimony of one of President Clinton's chief Whitewater accusers with cash payments, informed sources said.

The grand jury is looking into allegations that Arkansas businessman David Hale, a key witness in independent counsel Kenneth W. Starr's four-year investigation of the president's financial dealings, received thousands of dollars from people working with American Spectator magazine on an anti-Clinton research project funded by Scaife.

The probe is proving to be an embarrassment for Scaife, a secretive scion of the Mellon family known for his generosity to conservative causes. It also raises questions about Hale, who served 20 months in jail after pleading guilty to defrauding the Small Business Administration. As part of the agreement, Hale became a cooperating witness for Starr and has accused Clinton of pressuring him into making a fraudulent $300,000 loan to a former business partner of the Clintons.

The Arkansas grand jury was empaneled by Michael J. Shaheen, a former Justice Department government ethics investigator who was retained by Starr in June to examine the complex allegations. He hired several assistant prosecutors and federal agents, and will report to a panel of retired judges.

The grand jury is meeting for several days each month to hear testimony about political intrigue in an unlikely setting: a bait-and-tackle shop on a remote lake in Hot Springs, Ark., where Hale frequently stayed in the mid-1990s while serving as a witness for Starr.

At the time Hale, who was destitute, was visiting an old friend, bait shop owner Parker Dozhier. Dozhier moonlighted then as a researcher for an anti-Clinton research initiative called "the Arkansas Project" that was organized by the American Spectator. From 1993 to 1997, Scaife gave the magazine $1.8 million for the project, plus an additional $600,000 to dig up more information undermining the president, although there is no indication that Scaife had any idea how the money was spent.

Dozhier's former girlfriend, funeral home employee Caryn Mann, and her teenage son Josh Rand said that Dozhier paid Hale as much as $5,000 in small increments from the bait shop's cash register during that period and gave Hale free use of his car. Dozhier denies giving Hale the money, and Hale has made the same claims about Clinton since before any alleged payments were made.

Dozhier says Mann is a Democratic-allied believer in the occult given to wild fantasies and bent on ruining him. But some people who know Dozhier say he is a hard-line right-winger obsessed with destroying Clinton.

In addition to Scaife, Mann, Rand and Dozhier, Shaheen's prosecutors have questioned several other people connected to the project, the sources said. Two of them are former public relations executive Dave Henderson and attorney Steve Boynton, who together ran the Arkansas Project and paid bait-shop owner Dozhier $48,000 to be their "eyes and ears" for anti-Clinton tips.

Shaheen's team also is investigating a sum of more than $8,000 in Scaife funds, separate from the Arkansas Project, that Boynton gave to one of Hale's Little Rock lawyers, Jay Bequette, in 1996. "Boynton felt sorry for Hale, who didn't even know about the payment until later," said one person knowledgeable about the matter.

Boynton told Hale the payment was a loan, but Hale has not repaid it because he's broke, said Hale's attorney, David Bowden.

Scaife's attorney, Yale Gutnick, declined comment on Scaife's testimony. Henderson, Boynton and representatives of the Spectator also declined comment.

Much of Shaheen's investigation so far has centered on the flow of money from two Scaife foundations through the magazine, to the project controlled by Boynton and Henderson, and then to Dozhier. The agents also are scrutinizing Hale's finances during that time.

Scaife ended his support for the magazine last year after it ran a scathing review of a book by journalist Christopher Ruddy, a Scaife favorite who has worked for the Pittsburgh newspaper owned by the billionaire. Ruddy has written conspiracy-laden articles suggesting White House aide Vincent W. Foster and Commerce Secretary Ron Brown were murdered.

© Copyright 1998 The Washington Post Company

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