Washington Post Staff Writers
Friday, May 1, 1998; Page A22
He may have been in jail, but Webster L. Hubbell still saw himself as a Clinton loyalist.
Talking to his wife in 1996 while in a federal prison serving out his sentence for embezzling from his former clients and partners at Little Rock's Rose Law Firm, Hubbell repeatedly expressed concern for one of those former partners: Hillary Rodham Clinton.
"I will not raise those allegations that might open it up to Hillary," Hubbell told his wife Suzanna in one phone call, responding to a White House friend's fear that his dispute with the law firm could create problems for the first lady. "So I need to roll over one more time."
That loyalty is one of the most striking themes to emerge in a series of recorded, behind-bars conversations Hubbell had in 1996 with his closest confidants selectively edited portions of which were made available yesterday by the Republican majority of the House Government Reform and Oversight Committee.
Hubbell's insistence that he would stand by the president and first lady who brought him from Arkansas to Washington as the third-ranking official in the Justice Department came at a time when his prospects appeared bleak. He was already serving an 18-month federal sentence on fraud and tax evasion charges, and knew that more problems lay ahead.
Hubbell told his lawyer as much on Oct. 26, 1996. "The hard part is the realization that you have all your friends come up to you and say that this will be over in a week, and you know it's not true," Hubbell told his attorney John M. Nields.
At the time, prosecutors for independent counsel Kenneth W. Starr were already examining hundreds of thousands of dollars in consulting fees that Hubbell took in while he was under investigation. Starr has still not completed his probe into whether the payments were intended by people close to the Clintons to buy Hubbell's silence about Whitewater matters, but yesterday Hubbell was charged in a new indictment with tax evasion related to some of the payments.
Government Reform and Oversight Republicans, who have been investigating the payments to Hubbell as part of their campaign finance inquiry, obtained the tapes from the Justice Department and released the excerpts yesterday over the strenuous objections of Democrats, who insist that even the edited versions violate Hubbell's privacy and the conditions under which the tapes were obtained from Justice.
In many of the conversations, the Republicans produced their own paraphrasing of the discussion.
Rep. Henry A. Waxman (D-Calif.), the ranking Democrat on the committee, complained last night that Chairman Dan Burton (R-Ind.) did not allow the minority to review the transcripts before releasing them. The GOP, he added, is "trying to smear Webb Hubbell" by producing selective portions that could be open to interpretation.
The calls from the federal prison in Cumberland, Md., present an unusual glimpse into the prison anxieties and strategies of Hubbell as he discussed a whole range of matters now under investigation both by Starr and the committee from the Clintons' Whitewater land deal to the Rose Law Firm and payments from the Lippo Group in Indonesia.
The tapes show that Hubbell and his wife hoped some of the same influential White House officials and Democratic fund-raisers who had helped him financially in 1994 by lining up consulting fees for which he did little or no work would assist him again when he got out of prison.
Hubbell was aware that his calls were being monitored, and he occasionally reminded those he talked to of that fact at one point, he warned his wife, "We're on a recorded phone, Suzy." Sometimes his comments seem guarded; other times, they appear to be remarkably candid.
The prison tape recorders captured Hubbell in discussions with his closest confidants. Among them: his wife; his lawyer, Nields; his accountant, Michael Schaufele; and his friend Marsha Scott, a White House aide who is also longtime friend of President Clinton. Suzy Hubbell and Schaufele were indicted along with Hubbell yesterday on charges related to alleged tax evasion.
Through their talks, a picture emerges of a man who had been publicly humbled but privately remained confident that his powerful friends would continue to come to his financial aid. A recurring theme throughout was Hubbell's stated desire to remain loyal to his friends in particular, to Bill and Hillary Clinton, referred to on the tapes only as "our friends." And he promised to keep secrets out of a book he had contracted to write eventually, and appropriately, called "Friends in High Places."
Hubbell's concern for Hillary Clinton was evident in several conversations on the tapes from the spring of 1996. At the time, Hubbell was feuding with former Rose partners over repaying money he had embezzled in an overbilling scheme. Rose had threatened to sue him, and Hubbell was considering filing a countersuit that he said could embarrass his former partners.
But Scott had conveyed a message to Hubbell through his wife: He is "'not going to get any public support if you open up Hillary to all this.'" Said Suzy Hubbell, "Well, by public support I know exactly what she means. I'm not stupid."
Hubbell responded: "I told you I will not do that. I will not raise those allegations that might open it up to Hillary."
Scott also warned, according to Suzy Hubbell, that his wife a political appointee at the Interior Department would lose support at the White House if he sued Rose. "I'm hearing the squeeze play," said Suzy Hubbell.
Hubbell said: "So I need to roll over one more time."
Then, his wife asked if exploring overbillings would create problems for Hillary Clinton.
He didn't answer, saying, "We're on a recorded phone, Suzy."
His wife's concern was her Interior post: "I've got to have, keep this job. I have to have the support of the people, of my friends at the White House to keep, not necessarily, but if anything happened, I need that to keep this job. When the election is over and things are better, I need to have done a good job and have friends there who will let me get a better job."
Loyalty also figured into a call that same day March 25, 1996 between Hubbell and Scott.
Said Hubbell: "Have I ever been disloyal?"
"Oh, God, no," Scott replied.
"And I am not going to be here," he added.
Suzy Hubbell worried about Hubbell's job prospects after his release. Despite the consulting fees that Hubbell received in the months before he went to jail, the family needed money, she told him in September 1996.
Worried about where her husband would find work, his wife said she would call several friends many of them Washington heavy-hitters. Among those she named: Democratic lobbyist Michael Berman, head of the Duberstein Group; lawyer Michael Cardozo, who headed President Clinton's first legal defense fund; Clinton friend Vernon E. Jordan Jr.; lobbyist and former White House congressional liaison Howard Paster; Tyson Foods lobbyist Jack Williams; and Democratic fund-raiser Nathan Landow.
Hubbell worried such a concerted effort to secure him financial aid could look bad and should be kept low-key, telling his wife, "We have to be very careful about this . . . editorials are all talking about how all this is designed to keep me . . . quiet. We have to make sure that it's our personal friends that are helping."
Even so, in a conversation in October 1996, Scott offered her assistance and mentioned that top Justice Department official Frank Hunger, a relative of Vice President Al Gore, had offered help as well. "Your friends are all talking about what you are going to do next and how they can help," she said.
Still, Hubbell worried: "I'm a little leery of making phone calls right now because the wolves are at the door."
The Lippo Link
Reports began to appear in the news media in October in the waning days of the presidential campaign suggesting that Hubbell had received hush money from the Lippo Group, the Indonesian conglomerate owned by the Riady family. "I'm not telling anybody what I did or what they paid me," Hubbell told his wife.
Later, Hubbell discussed the Riady matter with one of his attorneys, Laura Shores: "I had to say to Suzy there is a reason why we aren't going to say anything . . . Our friends are wanting to know certain answers, and that needs to come through John [Nields] or you."
But Nields had bad news for Hubbell soon after: The independent counsel's office had notified Nields that it planned to investigate the sources of Hubbell's income from the time he left Justice to the time he started serving his sentence. It was that examination, of course, which eventually led to yesterday's indictment.
© Copyright 1998 The Washington Post Company