PERSPECTIVE: "OUR TRUST IS SERIOUSLY ERODING..."

Missouri Senator Kit Bond addressed the Senate Thursday morning about improper meetings between Clinton White House officials and those investigating various financial deals that include Bill and Hillary Clinton.

Mr. President, I want to take a few minutes of the Senate's time to outline where we are in terms of the on-going disclosures of the White House and the Resolution Trust Corporation regarding Madison Guaranty.

As my colleagues know, Madison Guaranty was a Little Rock savings and loan which was owned by James McDougal -- the business partner of the Clintons in the Whitewater real estate deal.

Madison Guaranty was a classic S&L story of insider dealing, reckless loan policies and ultimate failure with the U.S. taxpayers picking up the tab. But in this case there was a small twist -- many of its benefactors were in politics and Government.

The tangled web of Madison and Jim McDougal has led to two criminal referrals by the RTC, an on-going civil action investigation by the RTC, a conflict of interest case for the Rose Law Firm, and a trial which is about to start concerning David Hale.

It has also led to the appointment by the Attorney General of Special Prosecutor Robert Fiske who is looking at all these issues to see what happened, who was involved, who benefited, and was there a cover-up.

In the middle of all this action, Republicans in the House and Senate have been attempting to get the facts -- not to interfere, impede or delay the investigation -- but in order to fulfill our obligation of oversight over those who are now running the Government.

This means asking questions of the RTC, the FDIC, the OCC and others about whether they are receiving outside pressure, is the White House staff attempting to get information that these so-called "independent" agencies would never give to anyone else, is this information being provided? If so, by whom? And to whom?

And as my colleagues know, it was in the courses of asking these types of questions -- questions some of my colleagues don't believe should even be asked -- that we first discovered from the acting head of the RTC Roger Altman that he had briefed White House staff on the status of the RTC investigation.

Now for those of you who are saying -- stay out of the way, the Special Counsel is on the case -- perhaps you would be interested to know that this meeting took place two weeks after Mr. Fiske was named.

Mr. President, let me tell the Senate about this episode, which should go a long way toward explaining why the Republicans signed and sent a letter to the Majority Leader stating we want a hearing on this.

When Mr. Altman was before the banking Committee on Feb. 24, I asked him a series of questions about how he, and the RTC had been handling the case. Given the sensitivity of the case -- with the President and the First Lady been named in the criminal referral by the RTC regional office -- I asked Mr. Altman:

"Are there special measures taken in the resolution of a failed thrift when you find it to be affiliated with a high-profile individual? Someone in government for example?"

He replied:

"The procedures, Senator which the RTC follows are intended to be identical in each case; and they certainly have been identical in the case discussed this morning."

He went to say:

"When the possibility of a criminal referral was brought to me, I took one step. That was to instruct all the relevant RTC personnel to handle criminal judgments in the same exact fashion that they would handle any other PLS matter with no deviation whatsoever."

Mr. President, I should note for the record that Mr. Altman answered these question before he had divulged the meeting at the White House in February. I should also point out that in the course of this discussion with me when he was assuring me and the Senate that the RTC was treating Madison case in an "identical" manner, and that the staff should treat the criminal referral "in the exact same fashion" with "no deviation whatsoever" -- that Mr. Altman didn't see fit to tell us about how they had not followed the exact same or identical procedures.

But it only gets worse.

Later in the hearing I asked Mr. Altman:

"When did you become aware of the RTC recommendation that further criminal prosecution be taken against Madison?

He replied:

"Last fall, I was advised that a question of referral to the Justice Department was under consideration at the RTC. And as other member of the RTC will attest, I said that normal procedures with no deviations whatsoever should be pursued, including chain of command, in terms of reaching that conclusion."

I then asked him:

"Were you aware that the Regional Office had asked the National Office to make a determination as to whether the Clinton's name should be in the new expanded referral?"

Altman replied:

"No. I was simply informed that this issue was on the table, and my reaction was -- and I only had one conversation about it -- the normal procedure should be followed. That is the way we are going to handle it from beginning to end."

I then asked: "How was the White House notified of the referral?

Altman replied:

"They were not notified by the RTC, to the best of my knowledge.

I followed up with:

"Nobody in your agency, to your knowledge advised the White House staff that this was going to be a major -- this could be a major source of concern?"

Altman replied:

"Not to my knowledge".

Now Mr. President, what we have just heard is the repeated assurances that the RTC did nothing different in the Madison case from any other case. That the head of the RTC had instructed his people from the moment he was aware of Madison's new criminal referral to treat the case no differently than all the others.

But we now know this is simply not true. Not only did the head of the RTC brief the White House staff,.....and it bears repeating that by briefing Bernie Nussbaum and Maggie Williams, Mr. Altman was briefing the very people who stand accused of taking Whitewater/Madison files out of the late Mr. foster's office, and then attempting to conceal that they existed -- and that these files are certainly one's that the RTC's own investigators would want to review.

But now we find out that at least two additional meetings were held, both late last year as the RTC was putting together their second criminal referral. According to the Washington Post -- and this was confirmed to me by Mr. Altman in a conversation last evening -- Jean Hanson, the General Counsel of the Treasury briefed Bernie Nussbaum in last September, and told him that the Clinton's would be named in the criminal referral.

The second meeting occurred in October, and again included Jean Hanson, plus two other Treasury political appointees, and was held in Nussbaum's office. Also in attendance according to the Post were the White House Communications Director Mark Gearan, and the designated Whitewater spokesman for the White House, Bruce Lindsay.

Before the meeting, Hanson was briefed by RTC senior V.P. Bill Roelle.

Mr. President -- something is very wrong.

Either Mr. Altman deliberately misled the Committee -- which I don't believe he did -- or the political appointees beneath him deliberately did not brief him, did not correct his record, nor tell the Secretary of Treasury what his General Consul was up to, so he could correct the record when he was before the Senate Banking Committee just four days later.

Mr. Altman has recused himself -- better late than never. And the President's chief of staff Mack McLarty has now laid down the law -- no more meetings, and again better late than never, but this is not something that should have to be explicitly stated.

But has Ms. Hanson recused himself?

After all, she has had three meetings -- and she is the general counsel, the chief lawyer of the Department of Treasury?

Did she suggest to Altman that a February briefing was in order? Did she set up other meetings that have not yet come to light? Why was she involved in the first place? Is it true she has been acting as the general counsel of the RTC as there is no one currently in that position?

We now have five examples of what it takes to get the Administration to see conflicts of interest -- they have to be caught in the act.

Mr. President, for those of us in Congress, who work with the Administration on a daily basis -- trust is a very important commodity. Unfortunately, it is easy to lose and hard to regain, and the Administration handling of Whitewater/Madison has seriously eroded the trust of many of us in this body.