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May 1999 - Volume 31 Issue 5


Hillary's Big Mistake
The decision that spawned impeachment
by George Stephanopoulos

A revealing episode in George Stephanopoulos' White House memoir All Too Human confirms what many of us have long suspected: Hillary Clinton made the fatal decision to stonewall on Whitewater in 1993. Here's the story of that crucial moment, one that was to become what Winston Churchill calls "a hinge of fate." By refusing to divulge the relatively trivial sins of the Whitewater land deal, she fed rumors of a major political scandal, and triggered the appointment of an independent counsel - the beginning of a long scavenger hunt that led to impeachment. It didn't have to be that way. As Lanny Davis explains in the article that follows this one, the best policy with bad news at the White house is to get it out in a way that minimizes the damage.


The hoofbeats were closing in. This time they came from the Ozark home of the busted land deal that began when I was a senior in high school and Bill Clinton was attorney general of Arkansas. Whitewater. After an early 1992 flurry precipitated by a New York Times investigation, the issue had faded when our campaign commissioned an audit that documented how much money the Clintons had lost on the investment. The republicans couldn't effectively exploit the issue because President Bush's son Neil Bush had come under fire for his own involvement with a failed savings and loan. But late in 1993, the Resolution Trust Corporation (the government agency established to manage the aftermath of the 1980s S&L crisis) asked the Justice Department to open a criminal investigation of Madison Guaranty, the S&L managed by Jim McDougal, the Clintons' Whitewater partner. David Hale, a former judge and business associate of McDougal's who was trying to worm his way out of a fraud indictment, offered prosecutors and the press a new hook by alleging that Governor Clinton had pressured him to lend McDougal money.

These new developments, coupled with the miasma of mystery surrounding Vince Foster's suicide, piqued the interest of the Times and The Washington Post. They asked again to review all the Whitewater documents, and a series of faxed questions from the Post sat in the White House for weeks without a formal response. Busy with NAFTA, Somalia, and the crush of other business, I didn't attend the few October and November meetings on the matter. To me Whitewater was old news, the obsession of a few conspiracy theorists. But by early December, the Post was convinced we were hiding something sinister. Executive editor Leonard Downie made a series of extraordinary personal requests for the documents, and Ann Devroy warned me that the paper would go on the warpath unless we answered their questions and released the documents.

I wish we had. If a genie offered me the chance to turn back time and undo a single decision from my White House tenure, I'd head straight to the Oval Office dining room on Saturday morning, Dec. 11, 1993. The night before, Bernie Nussbaum, David Kendall (Clinton's private attorney), and Hillary had persuaded the president to stonewall the Post. All three were tough trial attorneys who were determined to follow a close-hold strategy more appropriate for corporate litigation than presidential politics. The possibility that the Clintons would be implicated in wrongdoing by any investigation of Madison Guaranty was extremely low, but the lawyers were taking nothing for granted. Hillary also feared that the Post inquiry was an invasive fishing expedition that would only create more inquiries. They all underestimated, however, the media reality that reporters want most what they're told they can't have, the political reality that a president's right to privacy is limited by the public's right to know, and the cultural reality that the country probably wouldn't care about the ins and outs of an old land deal as long as it didn't look as if the Clintons had something to hide.

On Saturday morning, just after the radio address, Mack gave Gergen and me one last chance to convince Clinton the only way to kill the story was to cooperate with the Post.

The president was sitting at the head of his small oval table, sipping a mug of decaf, with a pile of folders in front of him. Gergen and I were on either side. For once, though, the two of us were arguing the same case. Although we often clashed on policy matters, we both insisted now that turning over the Whitewater documents was the only way to manage the story. The president seemed to agree. "I don't have a big problem with giving them what we have," he said, almost apologetically, his mind elsewhere (that weekend, he was preparing to replace Secretary of Defense Aspin). "But Hillary "

Saying her name flipped a switch in his head. Suddenly, his eyes lit up, and two years' worth of venom spewed out of his mouth. You could usually tell when Clinton was making Hillary's argument: Even if he was yelling, his voice had a flat quality, as if he were a high school debater speeding through a series of memorized facts. The anti-press script was familiar to me by now. "No, you're wrong," he said. "The questions won't stop. At the Sperling breakfast, I answered more questions about my private life than any candidate ever, and what did that get me? They'll always want more. No president has ever been treated like I've been treated."

Gergen did his best to calm Clinton down. Having worked for Nixon, Ford, and Reagan, he'd seen what happens when a president is accused of covering up. He also tried to make the case that the Post would treat Clinton fairly. "Mr. President," he replied, "in 25 years, I've never seen better first-year coverage of a president." Gergen was doing exactly what he'd been hired to do - serving as a kind of emissary from the Washington establishment to the outsider from Arkansas. Still battle scarred from the campaign scandals and the snafus of our first six months, I tried a different tack, hoping to convince Clinton by invoking our shared experience. "Mr. President, you're right," I said. "You have gotten a raw deal from the press, and the stories they write will be unpleasant. But they can't really hurt you because they're all about the past, and you didn't do anything wrong. If we don't give them what they want, they'll say we're covering up. The pressure will build, and we'll end up answering the questions later anyway. Better to flush it out over the holidays when no one's paying attention."

For a moment, I thought our rare double-team effort had worked. Clinton didn't make a counterargument; the pol in him knew we were right. If only we'd dialed Downie right then and handed the phone to Clinton. But even that might not have worked. On this issue, Clinton wasn't commander in chief, just a husband beholden to his wife. Hillary was always the first to defend him on bimbo eruptions; now he had to do the same for her. Gergen and I didn't know what was in the Whitewater documents, but whatever it was, Hillary didn't want it out - and she had a veto. The president ended the meeting by saying he wanted to think about it some more. Later that afternoon, Mack called Gergen to tell him we were standing firm.

Needless to say, Hillary's strategy failed. Over the next week, successive stories began to suggest that the White House was orchestrating a cover-up. Newsweek, Dec. 15 '93: "The White House strategy last week appeared to be to try to contain the story by treating it with contempt." The Washington Post, Dec. 19 '93: "But the full financial history of Whitewater may never be known. White House officials have declined over the past several weeks to answer detailed questions about Whitewater's finances." The New York Times, Dec. 20 '93: "Based on what's publicly known, there's probably not a crippling scandal here. But the White House is behaving as if there were." Exactly right.

A few days before Christmas, the controversy approached critical mass. Then two successive disclosures triggered an explosion. First, The American Spectator and The Los Angeles Times reported that as governor of Arkansas, Clinton had used state troopers to procure women, and that he had recently called some of those troopers in an attempt, the articles suggested, to offer them federal jobs in return for their silence. When I asked Clinton about the rumors a few days before the story broke, his abrupt shift to fast-talking, lawyerly, hyperexplanation mode convinced me something was up. "I never offered anyone a job," he insisted. But he didn't deny calling the troopers (and as I soon learned, he had discussed the subject with at least one of them), which gave me a sickening sense of déja vu. I was back in Little Rock, hearing Clinton's voice on the Gennifer tapes. How could he be so reckless? He's so sure he can talk his way out of anything that he doesn't even think about the consequences. What if they have a tape? Why can't he just leave these things alone? A few stupid presidential phone calls now threatened to transform an old Arkansas story into an Oval Office scandal.

The press was still queasy about sex stories, however - especially with Hillary defending her husband surrounded by mistletoe and holly. But when the Washington Times reported that in the hours following Vince Foster's suicide a Whitewater file had been removed from Foster's office and given to the Clintons' private attorney instead of the investigators, the repressed energy stirred up by the trooper story was sublimated straight into the "Whitewater cover-up." Republicans jumped on the revelation and began to agitate for an independent investigation, and the editorial pages escalated calls for public release of the potentially incriminating files. Backpedaling, we agreed on Dec. 23 to hand over what we had to the Justice Department but not the press, which only raised more suspicions. The drumbeat for full disclosure continued through Christmas.

On the first Sunday of the new year, I appeared on "This Week with David Brinkley", and the first question Sam Donaldson asked me was, Would the White House oppose an independent counsel to look into the Whitewater Land Development Corporation affair?

Mr. Stephanopoulos: "This is being investigated by the Justice Department. The president has turned over all the documents to the Justice Department. It was exhaustively looked into during last year's campaign. The president was part of a real estate deal many years ago where he lost a lot of money. Those are the facts. No laws were broken. The Justice Department investigation will show that, but there's no need at this time for an independent counsel."

Four follow-up questions later, George Will finally changed the subject, but by the next day both Newt Gingrich and Bob Dole had publicly called for the appointment of a special prosecutor, and the White House press corps was pressing Clinton for his response. A mistake I had made on "Brinkley" made matters worse. When I said that we had turned over the Whitewater documents to the Justice Department, I thought I was telling the truth. I assumed it was true because we had previously pledged to turn over the files between Christmas and New Year's. But as Felix Unger used to say on "The Odd Couple", "When you assume, you make an ass of you and me." We hadn't delivered the files yet, because the lawyers were still cataloging them. Dee Dee had to spend the morning cleaning up my mess. Harold Ickes, who had just joined the White House staff to work on health care, was tasked instead with managing damage control on Whitewater.

All day Tuesday, we held a rolling Whitewater meeting in Mack's office. Although I had delivered the party line against a special prosecutor on "Brinkley", inside I was arguing that we had to request a special counsel before it was forced on us. Ever since Watergate, whenever a president or other high-level government official was accused of wrongdoing, an outside counsel had been appointed. (In Jan. 1994, the independent counsel law had expired. So we were arguing for the attorney general to use her authority to appoint a special counsel as was done under President Carter when questions were raised about his peanut warehouse business.) After the first couple of hours, we reached consensus; only Nussbaum was holding out. Joel Klein, his deputy, was dispatched to broach the matter with Hillary, but she shut him down. Two hours later, Harold and Mack tried again. The answer was still no.

When they returned with the news, about a dozen of us were scattered around Mack's office. Some sat at the conference table in the far corner, some by the fireplace; I was folded over the wingback chair by Mack's desk, facing the door, griping openly about the magnitude of our mistake. Then she walked in. The whole room dropped dead silent.

"Well," said Hillary crisply, taking a seat on the couch by the door. "I think this is a meeting I ought to be at."

Because I had been talking, I felt as if everyone was looking at me. The old "Life" cereal commercial passed through my head: Two older boys don't like the looks of their new breakfast, so they pawn it off on their little brother - "Let Mikey try it. He'll try anything." I prided myself on not being afraid to make a tough argument to the principals, and I'd look like a wimp now if I didn't continue.

"Well, I might as well go on with what I was saying," I said. Sitting up straight and staring right at Hillary, I made my case: "Assuming we did nothing wrong, the best thing is to have a special counsel say so. There's an air of inevitability to this. If we don't ask for one from the attorney general, we're going to get an independent prosecutor. Congress will keep the drumbeat going; they'll pass the Independent Counsel Act, and the Appeals Court will appoint one. I know we didn't do anything wrong, but it looks like we did because we're not being forthcoming. More important than anything else, this is going to kill health care if we don't get it under control. This debate will sap us for the next 30, 60, 90 days - as long as we keep up the fight. If you want us to fight, Hillary, we will. We can beat this back. But it will take all our time, all our staff resources, and, most important, all our political capital, which we need every bit of to pass health care."

I thought the final argument was the coup de grace - the killer point that she couldn't counter. Instead it struck at her deepest fear - that after all of her hard work, after all of her sacrifice, after all the indignities of the campaign and the frustrations of the first year, the project that would make it all worthwhile would be crippled by scandal. Cornered, she struck back: "What do you mean, the Congress won't stop? You told me that if we gave everything to the Justice Department that would end it. It didn't end it. Now the Congress wants them? If we were as tough as the Republicans, we'd band together and beat them back."

I tried to stay calm, answering point by point.

"The Democrats are still holding firm." (Republican Senators Alfonse D'Amato and Bob Dole had demanded Whitewater hearings, but Democrat Banking Committee chairman Don Riegle was holding them off.) "But I can't promise that they'll be with us in a month. It's beyond the Congress now: It's in the editorial pages; it's everywhere. We don't get the benefit of the doubt because we're not being forthcoming, and we are being defensive."

Whatever I said was exactly wrong. Tears strung the corners of her eyes, and I imagined Hillary's fear-induced fury - at the republicans for trying to destroy health care by destroying her, at the press for its small-minded, obsessive scrupulousness when issues affecting real people were at stake, at her husband for getting her into this stupid land deal with his shady friends in the first place and then expecting her to clean it up, at her best friend, Vince, for killing himself, at herself for letting the situation spiral out of control. All of that fury, for a moment, was directed at me.

"You never believed in us. In New Hampshire, it was just me and Susan [Thomases] and Harold [Ickes] who believed in us. If we wouldn't have fought, we would never have won. You gave up on us "

She paused, her voice fell, and Hillary started to cry. "We were out there alone, and I'm feeling very lonely right now. Nobody is fighting for me."

We all seemed stuck to our chairs, not knowing whether to be unnerved, afraid, or consoling. I was too stunned to respond. Harold, who had been explicitly absolved from the accusation of disloyalty, tried to rescue me with one final plea for reconsideration.

"I don't want to hear anything more," Hillary snapped, back in control. "I want us to fight. I want a campaign now." Looking back at me, she took one last shot: "If you don't believe in us, you should just leave." Then she walked out the door.

A dead moment passed. I fixed a crinkly smile on my face. Once I was sure Hillary was long gone, I rose to leave. "Nice try," Dee Dee whispered. I walked the few steps to my office, closed the door behind me, and broke down.

Excerpted from All Too Human by George Stephanopoulos. Copyright © 1999. Reprinted by permission of Little, Brown and Company, Inc. All rights reserved.


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