It is not as bad as it looks

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It is not as bad as it looks

How the New York Times, The Washington Post and the Independent Counsel Law Screwed Bruce Babbitt

By Robert Worth


Republican congressman rearely wax rhapsodic about The New York Times in the middle of a committee hearing. But that is exactly what Rep. Christopher Cox did on Jan. 21, during the House investigation of Bruce Babbitt. He singled out the Times for "bringing out the facts in connection with this matter, which have led most people to predict that an independent counsel will be required to investigate" Babbitt's role in the alleged sale of a Departmental decision on an indian casino for Democratic campaign donations.

Congressman Cox didn't know how right he was. When Attorney General Janet Reno submitted her request for an independent counsel three weeks later, she referred twice to news reports as the basis for her decision. The AG is forbidden by a provision of the independent counsel statute from using any of the traditional fact-finding methods -- subpoenas, grand jury, and immunity -- in determining whether allegations against public officials have any merit. Working under these constraints and the 90-day time limit imposed by the statute, Reno was scarcely better informed than the ordinary citizens who have read about the accusations against Babbitt in the Times and The Washington Post.

It is therefore no exaggeration to say that the Times and the Post, which determine newspaper and television news coverage throughout the country, helped to squeeze the notorious "hair trigger" of the independent counsel (IC) statute. In so doing, they opened up the third major investigation of the Babbitt affair -- an investigation that is certain to be far longer, more costly, and more destructive to the people involved than either of the previous two. As one senator said about IC investigations: "Reputations are savaged, effectiveness in office is crippled, and there is lingering suspicion even though an investigatory target is exonerated." Most important, from the perspective of the Republican congressmen who targeted him, is that Babbitt will in all likelihood be struck from the top of Clinton's list of replacements for Chief Justice William Rehnquist, who is likely to retire from the Supreme Court soon.

That would be appropriate if any of the evidence uncovered so far pointed to malfeasance on Babbitt's part. After all, everyone agrees that the 1996 campaigns hit a new low in money-grubbing by both parties. If there were indications that a Cabinet official had actually altered policy in exchange for donations, it would be worth every penny spent to find the culprits and punish them severely. There's just one problem: There is no such evidence. The House and Senate investigating committees have ascertained that lobbyists tried to influence the decision about the casino. But as the Monthly reported last December, the civil servant who made the final call -- George Skibine -- appears to have done so on the project's merits, without political interference.

That hasn't stopped the Times and the Post. In the past six months, the Times has run 23 stories and editorials about the Babbitt affair, the Post 24. The Skibine explanation appears in only three stories in the Times and three in the Post, almost always in the last paragraphs. Both papers have also ignored or underplayed a considerable body of other exculpatory evidence about the casino decision. The overwhelming impression has been of a "torrent of memorandums and testimony that strongly suggest," as one Times story put it, that Babbitt was complicit in a quid pro quo. The editors of the Times appear to want blood from the Clinton administration, and they are not particular about how they get it.

"Look Beyond Bruce Babbitt," opined the Times editorial page after Reno announced her decision. Apparently the editors of our paper of record believe Clinton's cabinet is so thick with guilt that there's no need to even aim: Just keep firing, you're bound to hit someone guilty sooner or later. Never mind that the casualty, in this case, is a public servant legendary for his honesty, or that the potential beneficiaries of Reno's decision include the gambling industry and the shady financiers who hide behind the facade of "indian gaming." The story of Bruce Babbitt's downfall is a morality tale about how our obsession with political scandal blinds us to the real dangers of bad law and bad policy.

Dangerous Gaming

There's no question that the Babbitt affair looks fishy when viewed from the outside. The undisputed facts are as follows: On July 14,1995, the Interior Department's Bureau of Indian Affairs denied an application by three indian tribes to take land in trust for an off-reservation gaming casino in Hudson, Wis., at the site of a failing dog track. The casino was opposed by several other tribes with lucrative casinos in the same area, who had hired lobbyists to press their cause with the White House, and ultimately contributed $ 282,500 to national Democratic campaign committees. On the day the casino was turned down, Secretary Babbitt agreed to meet briefly with Paul Eckstein, an old friend and former campaign manager, who was working at the time as a lobbyist for the casino applicants. Eckstein testified a few months later (in a suit filed by the casino applicants against the Interior Department) that Babbitt had told him he was under pressure from White House Deputy Chief of Staff Harold Ickes to make a decision about the casino. In a letter to Sen. John McCain in 1996, Babbitt denied that he had ever spoken to Ickes about the casino, or that he had told Eckstein of any specific pressure from Ickes. A year later, in a letter to Sen. Fred Thompson, Babbitt acknowledged that he might have "said something to the effect that Mr. Ickes wanted a decision ... simply as a means of terminating our discussion and getting him out the door."

The story got scant attention until 1997, when Harold Ickes became a focus of widespread allegations of campaign finance abuse during the '96 elections. Suddenly Babbitt's alleged mention of Ickes began to look like the "smoking gun" Sen. Fred Thompson and other Republicans on the Senate Governmental Affairs committee were hoping for. Eager to break a major corruption story, the Times and the Post went on the offensive. They published stories highlighting the efforts of anti-casino lobbyists (who were indeed granted far too much access to White House officials). They implied that the department's decision to turn down the casino application was highly suspect, since it had been approved by the regional BIA office in Minneapolis. They cited documents uncovered by the Thompson committee allegedly showing that at least one BIA staffer in Washington appeared inclined to approve the application only a month before the decision was announced. Times columnist William Safire went much further, asserting in a Dec. 31 article that the staff at Interior had agreed to approve the application but were reversed by Babbitt and his cronies in the White House.

Meanwhile, the Post consistently described the defeated casino applicants as "impoverished tribes" up against the hired guns of "casino-rich" tribes. The Times editorial page claimed that Babbitt had told Eckstein that "Ickes wanted the decision made in favor of the Democratic donors," suggesting that the fix was part of a general trend of corruption by the Clinton administration during the '96 campaign. One Post story even implied that Clinton himself pressured Ickes and DNC Chairman Don Fowler to kill the casino application. In short, the story that emerged in the papers was a variation on a theme as old as Manifest Destiny: Uncle Sam screws the indians and then lies about it.

These are the allegations that led Janet Reno to turn the IC dogs loose on Babbitt. How do they hold up? Let's start with what Babbitt did do wrong. First, it's plausible that Babbitt would invoke Ickes (who was the White House contact person for many Interior matters, and whose father's portrait hangs outside Babbitt's offices) to get a pesky lobbyist out of his office. But it was stupid. Even more stupid was his failure to be up front about having done so when McCain first asked him about it.

But the Times and the Post magnified Babbitt's error, making it sound like he flat-out lied or "offered several contradictory accounts of his role," as one Post story put it. They also obscured the fact that Eckstein changed his own story more substantially than Babbitt ever did. When he first testified in 1996, Eckstein made no mention of Babbitt having said anything about campaign donations, even though it would have been crucial to the case against Interior. Only in 1997, two years after the conversation and after campaign finance had become a subject of scandal, did he claim that Babbitt had asked him if he knew how much the opposing indian tribes (or indian tribes generally, Eckstein wasn't sure) had given to Democratic candidates.

Moreover, Eckstein never claimed that Babbitt said Ickes wanted the decision made any particular way, and he testified before Congress that he did not think Babbitt was implying that campaign donations had determined the decision. Somehow, the editorialists of the Times missed those points. They also failed to note that all but $ 5,000 of the campaign donations were made after the decision to deny the casino was made -- some of them as much as 16 months later (after the election). Even if one assumes Ickes and Babbitt are corrupt enough to sell out, it's hard to imagine they wouldn't ask for more of the money up front.

As for the newspapers' claim that denying the casino was inherently suspicious: First of all, the authority for these decisions rests with the Washington office, not the regional bureaus. It is true that in five of the nine comparable cases on record, the Washington staff has ultimately agreed with the local office's recommendation, and in only two (not counting Hudson) have they actually overruled it. But the Hudson casino is a prime example of this type of case. The newspapers virtually ignored the fact that the casino was opposed by the mayor, the town council, the governor, the local congressman and senator, the state assemblymen and the political delegations from neighboring Minnesota, not to mention the vast majority of the local people and businesses. Many of these opponents are Republicans, unlike the Democratic donors who made front-page news. The record is replete with letters, phone calls, petitions, and delegations to Congress, all pleading for a denial. In 1993 the people of Wisconsin had actually ratified a constitutional amendment against more casino gambling.

But what about the three tribes who wanted the casino -- don't they count? Well, no. Here's another detail the papers skipped or buried: The applicant tribes already have casinos on their reservations. And those reservations are 85,185, and 200 miles away from the proposed casino site in Hudson.

So how did a group of destitute, off-site tribes have the money and the clout to hire Paul Eckstein and Patton, Boggs to lobby for them? Answer: They didn't. The real force behind the casino application was the owner of the Hudson dog track, a tremendously wealthy Florida gambling family named Hecht that has been linked to organized crime. Their local corporate identities were intentionally confusing, but all can be traced to Southwest Florida Enterprises, founded by the family patriarch Isadore Hecht, who was a friend and business associate of the late great gangster Meyer Lansky. Hecht died in 1975, but his son-in-law Neal Amdur appears to have followed in his footsteps. In 1995 Amdur was forced to resign from the board of the Hudson dog track's parent company when the Wisconsin Gaming Commission discovered his stake in a Florida gaming company with mob ties. Since that time Fred Havenick, another Hecht son-in-law, has been the front man for the dog track and casino applications.

It was Havenick, and not the "poor tribes", who hired and paid Eckstein (a fact that was often obscured in the Times and the Post). Havenick is also funding lawsuits against the city of Hudson for $ 175 million, as well as the Interior Department, in a desperate effort to reverse the decision. Why? Because the Hechts have sunk some $ 40 million into the Hudson dog-track, and they are desperate for a way to recoup their losses. They thought they had one in 1993 when they discovered a loophole in the Indian Gaming Regulatory Act (IGRA), Congress' effort to control indian gaming, that allowed for off-reservation casinos in certain circumstances. They even found three local tribes who were willing to act as a front for the deal. Poor and inexperienced in business, the tribes failed to notice when the Hechts included a provision in the casino contract that saddled them with a hefty share of the dog-track's staggering debt, along with a 25-year, non-cancellable lease on a parking lot that could easily have left them even further in the hole.

In short, the Hudson casino contract was a throwback to the bad old days of indian gaming, when mafia stool pigeon Stewart Siegel testified before Congress with a hood over his head about widespread mob influence in indian casinos. Even without criminal involvement, deals between off-site, inexperienced tribes and management companies have often ended badly. In one extreme case, the Mohawks of New York State fell into a brief but bloody civil war over gaming profits stolen by their non-indian management team. Since then, most tribes haw become far more savvy about managing their gaming operations, and some of the most successful tribes prefer to run the halls themselves rather than risk conflict with outsiders.

In light of this bitter history, how could the local BIA office have recommended approval for the Hudson casino in the first place? "Local BIA offices almost always approve applications," says Interior Department spokesman Michael Gauldin. This is partly because the BIA has an automatic bias in favor of gaming, which has brought massive revenues to a number of tribes. Gross revenues from indian gaming totalled $ 5.5 billion in 1996 (compare that to $ 6 billion for all of Las Vegas in the same year). "Nothing was really effective for the tribes until gaming," says William Eddington of the University of Nevada, who studies indian economic development strategies.

Still, the fact that the Hudson casino got as far as it did is a testament to the weaknesses of the BIA -- which failed to see the massive holes in the application -- and the indian gaming law, which should never have allowed off-reservation casinos in the first place. As it happens, the Hudson case was a critical test of the law's usefulness in determining how, if at all, such casinos should be approved.

Which brings us to William Safire's claim that the Washington indian gaming staff recommended approving the application and was reversed from above. This is sheer fabrication. (Safire did not return our phone calls.) However, the two Times reporters who covered the story (and defended the fairness and accuracy of their reporting in a lengthy written statement to the Monthly) rightly claim that there do appear to be inconsistencies in the decision-making process, and that "a meritorious decision can still be clouded by influence-peddling." They also claim that one document in particular suggests that one staff member "seemed inclined to approve the casino" late in the game. Specifically, the document in question deals with one of two necessary tests under Section 20 of the Indian Gaming Regulatory Act, regarding possible detriment to the community where the casino is to be located. The staffer who wrote the memo vehemently denies that it was intended as an endorsement of the casino, and virtually the entire staff agreed that the casino was a bad idea to begin with.

Still, the Times reporters have a point: Why was there any uncertainty about these details if the staff already intended -- as they insist they did -- to deny the application? Moreover, the secretary has broad powers to deny applications without giving a reason. Why was his staff even worrying about the fine print of the IGRA so late in the game?

The answer is that the staff was indeed responding to political pressure -- not from Harold Ickes, but from Congress, where there was a movement among gambling opponents to gut the gaming law altogether. Recognizing the strength of this movement, the BIA staff at Interior saw that the Hudson case was a pivotal one. If they could find no language within the IGRA to prevent a casino from being forced on an unwilling community, gambling opponents would have just the ammunition they needed to kill the law. "When the Hudson case came along," says one former staff member, "we saw it as an opportunity to say: 'IGRA is not that bad. It does contain enough discretion to prevent indian gaming from being shoved down communities' throats.'" Hence the internal confusion over exactly how to kill the Hudson casino, which William Safire and most of the press corps mistook for a stifled effort to approve it.

Legal Weapon

Of course, even if all these allegations of influence-peddling am cleared away, Babbitt will still be in trouble. Few of the people who read about him in the papers will understand that Babbitt isn't even being investigated for bribery. The charge against him is perjury -- that is, the independent counsel will determine whether the dissonance between Babbitt's first, incomplete account of his conversation with Eckstein and the second account is enough to indict him on.

Janet Reno would have liked to avoid this festival of pettiness, but she could not, thanks to another brilliant provision in the IC law. The law states that an attorney general who suspects that the target is guilty only of clumsiness, or of accidentally tripping over one of the countless minor regulations that apply to public officials, cannot prevent a full-scale investigation unless she has "clear and convincing evidence" that the official's motives were benign. Given the time limits and the constraints on her own investigation, it's almost impossible for her to obtain that evidence. This is the legal twig on which the Thompson and Burton committees -- with some help from the Times and the Post -- have successfully hung Bruce Babbitt.

Therein lies the sad lesson of the Babbitt affair: The independent counsel statute, which was designed to take justice above politics, has only made it more deeply and poisonously political. The roots of this legal swamp, like so much of our current obsession with political scandal, are in Watergate. After the "Saturday Night Massacre" of 1973, when Nixon fired special prosecutor Archibald Cox for trying to subpoena the Watergate tapes, Congress felt public pressure to create a legal authority that would be independent of the attorney general and the president. In fact, there was no evidence that the Justice Department couldn't do the job on its own. After Nixon fired Cox, another prosecutor (Leon Jaworski) took his place, held hearings, and prepared charges against the president. Nonetheless, there remained a public desire for a visibly independent prosecutor As Sen. William Cohen put it during a Senate hearing on the IC law in 1993: "The appearance of justice is just as important as justice itself, in terms of maintaining confidence in our judicial system."

In practice, the public nature of IC investigations has cast an unnaturally harsh glare on the prosecutors who carry them out, making their activities a political football for partisans in Congress. As a result, the independent counsels are bound to protect themselves from accusations of laxity by proving that they have pursued every angle Oliver Stone could dream up, no matter whose boardrooms and bedrooms it leads them through. Unlike ordinary U.S. attorneys, IC's have a blank check and unlimited time to pursue their investigations. Since 1990, eight IC's have spent more than $ 80 million of taxpayer money. As Gerard Lynch, former associate counsel in two IC investigations, and author Philip Howard put it: "In the ordinary case, the U.S. Attorney has to ask himself: Is it fair to treat this case as a felony, as compared to how we treat other, similar cases where the defendant was not politically prominent? The special prosecutor has no such concerns. He has only one investigation to pursue, and the unnatural intensity skews the decision. The smallest infraction takes on a life of its own."

Their targets, meanwhile, must pay for their defense out of their own pockets, and often at the cost of their careers, health, and sanity. Assistant Attorney General Theodore Olsen, who was never ultimately charged with any crime, spent $ 1.3 million defending himself and took to "jogging by flashlight in the middle of the night" to relieve the stress induced by the investigation. In the Babbitt case, many of the Interior Department officials who have already testified for many hours for the earlier investigations will now be forced to defend themselves again, at their own expense. As one Interior official puts it: "Maybe you were being a little sarcastic one day in an email with a co-worker. And suddenly you have to wonder whether you'll be facing a criminal investigation. It's Kafkaesque."

But Babbitt and his deputies aren't the only ones who will suffer from the insanity of the IC law. "We are ruining the Justice Department by constantly saying to people that it cannot investigate public officials," says former independent counsel Joseph diGenova (who is no friend to the Clinton administration, as anyone who has watched TV coverage of Monicagate knows). And the sight of congressmen furiously accusing cabinet officials of offenses they and their peers committ regularly is not exactly an advertisement for public service. "This is having a horrendous effect," says diGenova. "People don't want to go into government."

Like a number of other prosecutors, diGenova favors dropping the law and returning high-level investigations to their traditional home in the Justice Department. Another option would be to restrict the law to the president, vice-president, and attorney general for offenses committed in office only, and grant the AG the power to conduct an initial investigation before appointing an independent counsel.

These reforms would save us from another political circus like Monicagate or the Babbitt affair. They would also help to clear up one of the most disturbing aspects of the IC law: its tendency to corral reporters into high-profile witch-hunts and away from the issues that really matter. In the Babbitt case, instead of asking how a shady Florida gambling empire successfully turned the tables on a cabinet secretary, the editors of the Times and the Post were happy to follow the scandal machine wherever it led. And instead of asking whether every "appearance of impropriety" requires us to launch another legal juggernaut, they jumped on the bandwagon -- and failed to notice that the evidence wasn't there.

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