Rose Firm May File Complaint Against Hubbell

The Rose Law Firm has decided to file an ethics complaint against former Associate Atty. Gen. Webster Hubbell and some of the firm’s partners are urging a review of the expense account and billing records of other current and former Rose lawyers, including First Lady Hillary Rodham Clinton, sources close to the firm said.

Partners at the firm voted earlier this week to file an ethics complaint against Hubbell, a former Rose partner, with the Arkansas Supreme Court’s Committee on Professional Conduct, the sources said. That agency handles ethics complaints against attorneys licensed to practice in Arkansas.

Hubbell resigned March 14 as the No. 3 official in the Justice Department after it was revealed that the Rose firm was reviewing the billing and expense account records he kept while a partner at the firm.

James Neal, executive director of the Committee on Professional Conduct in Little Rock, Ark., said ethics complaints are not public records, and he declined to say whether the Rose firm has filed one against Hubbell.

Meanwhile, some of the firm’s partners are pressing for a review of client billings and expense account records kept by all current partners and by those who recently left the firm, including Hillary Clinton and Associate White House Counsel William Kennedy III. Both were partners at the Rose firm until President Clinton was elected. Kennedy was managing partner until he joined the White House staff.

While current Rose partners appear to have no knowledge of any questionable billing or expense account records for either Hillary Clinton or Kennedy, some of the firm’s attorneys argued that questions raised about Hubbell’s billing practices justify an examination of the rest of the professional staff’s records, including those of the two former partners.

In the wake of the internal Hubbell review, they said, the firm should make certain no other problems will be uncovered now that the firm is part of investigation by Whitewater special counsel Robert B. Fiske Jr. However, others in the firm disagree.

Ronald M. Clark, the Rose firm’s chief operating officer, denied that the firm is conducting a review of billing or expense account records for either Hillary Clinton or other past or current partners.

He added that the firm also has no plans to review billings by the late Vincent Foster, the White House deputy counsel and former Rose partner who died of an apparent suicide.

Fiske is looking into allegations that the Clintons may have benefited improperly from their association with James B. McDougal, owner of the failed Madison Guaranty Savings & Loan and a partner with the Clintons in a failed real estate investment known as Whitewater Development Corp.

He is also investigating the role played by Hillary Clinton and the Rose firm in representing Whitewater Development and Madison Guaranty. The probe also includes an examination into Foster’s death.

While the Hubbell inquiry by the Rose firm had little directly to do with the Whitewater matter, growing questions about the controversy embroiled the White House and made it impossible for Hubbell to survive in his Administration post.

If the Rose firm begins a review of Hillary Clinton’s records, it would open one more avenue of inquiry into her background at a time when she seems increasingly vulnerable because of the Whitewater controversy.

Lisa Caputo, a spokeswoman for Hillary Clinton, echoed Clark’s denial that any Rose firm review of the First Lady is under way. Kennedy refused to comment.

But the fact that some partners are urging the review is another sign of the growing bitterness within the Rose firm over the toll that the Whitewater matter and the Clinton Administration’s political problems have inflicted on the firm.

Indeed, a split within the firm is further evidence of the worsening relations between some of those who resigned to join the Administration and those who stayed behind.

Four Rose partners, including Hillary Clinton, left Little Rock for Washington after the presidential election, heightening the firm’s hopes for its future while raising questions among conservative critics about its political influence in the new Administration.

A little more than one year later, however, one of those partners, Foster, is dead, and another, Hubbell, has resigned under a cloud. Many within the Rose firm say they believe that the firm has paid too heavy a price for its connections to the Clintons.

In particular, some Rose partners have expressed anger over the way in which some Administration officials have leaked what the firm contends is misleading information about the Hubbell case. They said White House officials have exaggerated the size and scope of the Hubbell billing and expense account review by telling reporters that Hubbell left the Rose firm with as much as $1 million in liabilities.

Sources close to the Rose firm said the Hubbell matter involves no more than $100,000 in unverified expense account and client billings. The implication is that White House officials are also trying to distance themselves from Hubbell and his problems.

“I don’t know why people in the Administration are putting this information out. I don’t know what they think they will get out of it; but they are in a risky business because the truth will come out,” one source said.

At the same time, some partners said there is a search under way within the firm to determine who first leaked information about the internal review.

Some observers have argued that dissidents within the Rose firm have been seeking to distance themselves from the Clintons because of the Whitewater controversy and that such concerns prompted the firm’s investigation of Hubbell.

Yet sources close to the firm said the review was prompted by a complaint from a client last year. The firm tried for months to quietly resolve its differences with Hubbell, the sources said, giving him ample time to turn over credit card receipts and other records to verify his billing and expense account reports.

He repeatedly put off the firm, telling his former colleagues that he had just moved and that his records were packed away in boxes, these sources said.

Ultimately, after a series of partnership meetings, there was broad consensus that the firm had to take action against Hubbell, sources said.

“We had no choice,” one said. “There was no group of dissidents. We all recognized that we had to take action.”

In addition, firm attorneys have conducted a thorough review of the Rose firm’s document-shredding practices in the wake of grand jury testimony from at least two firm couriers that raised questions about whether the firm had shredded documents from Foster’s files.

“We are now 100% certain that none of the documents were from Foster’s files or had anything to do with Whitewater or Madison Guaranty,” said one source close to the firm.

Firm partners are now prepared to testify before Fiske’s Whitewater grand jury that the documents in question were unrelated papers placed in a box once used by Foster and bearing his initials.

All Madison Guaranty and Whitewater Development documents have been turned over to Fiske or are about to be transferred, the sources said.