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VOLUME III WASHINGTON, D.C. INVESTIGATION TABLE OF CONTENTS PAGE Part C Webster L. Hubbell's Billing Practices and Tax Filings I. INTRODUCTION ...............................................................................................................1 II. FINDINGS...........................................................................................................................3 III. FACTUAL SUMMARY.....................................................................................................5 A. Webster Hubbell Violated Federal Mail Fraud and Tax Laws While a Partner with the Rose Law Firm.................................................................5 1. After Hubbell Was Appointed Associate Attorney General, Both Civil and Criminal Investigations of His Billing Practices and Tax Filings Commenced........................................................5 2. Webster Hubbell Pleaded Guilty to Mail Fraud and Tax Evasion in December 1994 ..........................................................................8 3. Rose's Efforts to Recover its Losses from Webster Hubbell .....................12 B. Before Entering into His Plea Agreement, Webster Hubbell Started a Consulting Business Concentrating on Supporters of the President.................................................................................................................13 1. Hubbell's Contacts with Clinton Administration Members and Prominent Democratic Party Supporters.............................................13 a. Hubbell's Contacts with Administration and Former Campaign Officials ........................................................................14 b. Contact with the President and the First Lady...............................14 2. Meetings Were Held in the White House to Discuss Hubbell's Situation before He Resigned ....................................................15 3. Efforts to Help Webster Hubbell Find Post-Administration Employment Resulted in at Least Seventeen Consulting Agreements ................................................................................................17 i 4. Hubbell's Consulting Agreements .............................................................21 a. American Income Life (Bernard Rapoport)...................................22 b. C.W. Conn Industries (Carroll Wayne Conn)................................23 c. Consumer Support and Education Fund (John Phillips)..........................................................................................24 d. Entrecorp (Ben Barnes)..................................................................27 e. Hong Kong China Limited/Lippo Group (James Riady).............................................................................................28 f. John Moores...................................................................................37 g. Barbara Lindemann........................................................................38 h. Mid-America Dairymen.................................................................39 i. Nicholas Stonnington (Merrill Lynch)...........................................40 j. Pacific Telesis................................................................................41 k. Revlon (MacAndrews & Forbes)...................................................44 l. SunAmerica (Eli Broad) ................................................................47 m. Time Warner ..................................................................................49 n. Truman Arnold Companies (Truman Arnold)...............................50 o. Wayne Reaud (Reaud, Morgan & Quinn) .....................................52 p. Sprint Corporation.........................................................................52 q. City of Los Angeles Department of Airports.................................54 C. The Tax Prosecution of Webster Hubbell, Suzanna Hubbell, Michael Schaufele, and Charles Owen ..................................................................56 1. "Related to" Jurisdiction ............................................................................58 2. U.S. v. Hubbell et al., Crim. Action No. 98-0151 (JR)..............................59 a. April 1998 Indictment....................................................................60 b. Jurisdictional Issue.........................................................................62 ii c. Act of Production Immunity Issue.................................................63 d. Hubbell's June 1999 Conditional Plea Agreement ........................64 e. Supreme Court Review..................................................................65 IV. ANALYSIS........................................................................................................................66 A. Obstruction of Justice ............................................................................................67 B. Tax Fraud...............................................................................................................69 V. SUMMARY CONCLUSION ............................................................................................70 Part D Rose Law Firm Billing Records I. INTRODUCTION .............................................................................................................71 II. FINDINGS.........................................................................................................................76 III. FACTUAL SUMMARY...................................................................................................79 A. Creation and Collection of Billing Records at Rose..............................................80 1. Requests During the 1992 Campaign to Gather the Billing Records ......................................................................................................81 a. Computer Billing Records .............................................................81 b. Billing Records in Remote Storage................................................82 2. Webb Hubbell and Vince Foster Had the Billing Records in 1992............................................................................................................84 3. Attempts to Locate Mrs. Clinton's Time Sheets ........................................87 B. Transferring the Documents from Little Rock to Washington, D.C......................88 1. Moving Documents from the Governor's Mansion to the White House between 1993 and 1996 .......................................................88 a. Packing in Little Rock ...................................................................88 b. The White House Residence..........................................................89 c. Unloading at the White House.......................................................91 iii d. Moving the Files -- 1993 to 1996 ..................................................93 2. Rose Shipped Documents to the White House ..........................................95 3. Boxes from Vincent Foster's Rose Office..................................................95 4. Documents from the Presidential Campaign .............................................96 5. Documents Maintained by Webster Hubbell.............................................97 C. Search and Production of Documents to the Independent Counsel.......................99 1. Personal Records........................................................................................99 2. Mrs. Clinton's Rose Records....................................................................100 3. Hubbell/Wright Records..........................................................................100 4. Rose Billing Records ...............................................................................102 D. Huber Testified She Found the Records in Room 319A .....................................102 1. Denials of Responsibility.........................................................................103 2. Extrinsic Evidence Relating to Room 319A............................................104 a. Access to White House Residence...............................................105 b. Renovations to Residence............................................................106 c. Evidence Relating to Mrs. Clinton's Conduct in July 1995..............................................................................................108 d. Documents from Foster's Office ..................................................113 e. Mrs. Clinton's Testimony about Billing Records Found in Room 319A...................................................................115 E. Evidence Regarding Discovery of Rose Billing Records in the White House.........................................................................................................116 1. Carolyn Huber's Initial Discovery of Billing Records.............................117 2. Huber's Re-Discovery and Realization of the Billing Records ....................................................................................................119 a. Kendall, Schuelke, and Sherburne Are Notified of the Billing Records' Discovery ....................................................120 iv b. Kendall, Schuelke, and Sherburne Review Records with Huber ...................................................................................120 F. The Office of the Independent Counsel Asked the FBI to Conduct Forensic Analyses of the Billing Records............................................................123 1. Fingerprint Analysis Disclosed Mrs. Clinton's and Vince