EXCERPTS: Clinton Supports ‘Clearing the Way for Hearings’

Following are excerpts from President Clinton’s news conference Thursday:

. . . I know that many people around America must believe that Washington is overwhelmingly preoccupied with the Whitewater matter. But our Administration is preoccupied with the business we were sent here to do for the American people.

The investigation of Whitewater is being handled by an independent special counsel whose appointment I supported. Our cooperation with that counsel has been total. We have supplied over 14,000 documents, my tax returns dating back to 1978, and made available every Administration witness he has sought.

I support the actions of the House and the Senate clearing the way for hearings at an appropriate time that does not interfere with Mr. Fiske’s responsibilities, and I will fully cooperate with their work as well.

Tax Returns to 1977

Tomorrow, I will make available my tax returns dating back to 1977 when I first held public office. Cooperation, disclosure and doing the people’s business are the order of the day. . . . Question: You just said that you would release your tax returns back to 1977. Questions also have been raised about whether you made money or lost money in your Whitewater investment. Do you still believe that you lost about $70,000, and do you have any reason to believe that you owe any back taxes?

Answer: I am certain that we lost money. I do not believe we owe any back taxes. If it is determined that we do, of course we will pay. I am now sure that we lost something less than $70,000 based on an interview I heard on television--or I heard about on television with Jim McDougal on one of the networks where he said that he felt that one of the loans I had taken from a bank where we also borrowed money for the land development corporation--he said he thought one of those was a personal loan.

So I started racking my brain to try to remember what that might have been. And by coincidence, I was also rereading the galleys of my mother’s autobiography, just fact-checking it, and I noticed that she mentioned there something that I had genuinely forgotten, which is that I helped her to purchase the property and what was then a cabin on the place that she and her husband, Dick Kelly, lived back in 1981, and that I was a co-owner of that property with her for just a few months.

After they married, he bought my interest out. So that’s where that--I borrowed the money to go in in that investment. I paid the money back with interest. That was unrelated to Whitewater.

All the other losses we have documented to date we believe clearly are tied to the investment Hillary and I made in Whitewater. So we in fact lost some $20,700 less than the Lyons report indicated because that loan came from a different place, and then--or came for different purposes. And there was another $1,500 payment I made on it, so whatever the total in the Lyons report was should be--you should distract--or subtract from that $20,700 and another $1,500. And we believe we can document that clearly. . . .

Question: Do you know of any funds, any money--Whitewater seems to be about money--having gone into any of your gubernatorial campaigns or into Whitewater, particularly federally insured money? Do you know of any money that could have gone in?

Answer: No. I have no knowledge of that. I have absolutely no knowledge of that.

Question: You just mentioned James McDougal, your former business partner. A lot of questions have been raised about his business practices. Can you tell us what drew you to him to begin with and whether or not you still have faith now that he was--that he is an honest businessman?

Answer: Well, I can tell you that, when I entered my relationship with him . . . I knew Mr. McDougal and had known him for many years. I met him in the late ‘60s when he was running Sen. Fulbright’s office in Arkansas. I knew that sometime around that time, perhaps later, he got into the real estate business. . . .

Money Loss No Surprise

The reason we lost money on Whitewater is not surprising. A lot of people did at that time. Interest rates, as you’ll remember, went through the roof in the early ‘80s. People stopped immigrating to my state to retire, at least in the numbers they had all during the ‘70s. And the market simply changed.

So we didn’t sell as many lots, and the venture was not successful. So we lost the money. Principally the money I lost was on the interest payments I had to make on the loans which were never reimbursed because the venture never turned a profit. . . .

Question: Congressman Leach made some very dramatic charges today. He said the Whitewater is really about the arrogance of power. And he didn’t just mean back in Arkansas. He said that federal regulators tried to stop investigators for the Resolution Trust Corp. in Kansas City from putting Whitewater into their criminal referrals. That would amount to a cover-up and possibly obstruction of justice. Do you have any knowledge of that?

Answer: Absolutely not. . . . It’s my understanding that Mr. Leach was rather careful in the words that he used, and apparently he didn’t even charge that any political appointee of our Administration had any knowledge of this. So he may be talking about an internal dispute within the RTC from career Republican appointees, for all I know.

Keep in mind, until I came here all the appointees of the RTC were hired under previous Republican administrations. There has never been a Democratic President since there’s been an RTC. And I can tell you categorically I had no knowledge of this and was not involved in it in any way, shape, or form.

Question: In light of all that’s happened, do you think you made any mistakes in the initial investment and in the way the White House has handled this?

Answer: I certainly don’t think I made a mistake in the initial investment. It was a perfectly honorable thing to do. And it was a perfectly legal thing to do. And I didn’t make any money, I lost money. I paid my debts. And then later on . . . Hillary and I tried to make sure that the corporation was closed down in an appropriate way and paid any obligations that it owed after we were asked to get involved at a very late stage and after Mr. McDougal had left the S&L.; . . .

Question: You’ve been kind of tough at times on people you felt made out during the ‘80s and didn’t pay their fair share. Can you tell us here tonight that you have abided by the very high ethical standard--

Answer: Absolutely.

Question: --To which you’ve sought to hold others? And also, if it turns out that you do owe something in back taxes, will you be prepared perhaps to revise some of those judgments you’ve made about others?

Answer: No, not at all. I ask you to tell the American people what percentage of my income I paid in taxes in every year where I reported my tax returns. And let me tell you what my wife and I spent the ‘80s doing. I was the lowest-paid governor of any state in the country. I don’t complain about it, I was proud of that. I didn’t do it for the money. I worked on creating jobs and improving education for the children of my state.

Every year I was governor, my wife worked in a law firm that had always done business with the state. She never took any money for any work she did for the state and, indeed, she gave up her portion of partnership income that otherwise came to the firm, and instead, every year gave an enormous percentage of her time to public service work, helping children and helping education and doing a lot of other things, giving up a lot of income. . . .

I would remind you that we, like most middle-class folks, we turned our records over to an accountant, we did everything--I always told the accountant to resolve all doubts in favor of the government, I never wanted any question raised about our taxes.

When it turned out in our own investigation of this Whitewater business that one year we had inadvertently taken a tax deduction for interest payments when in fact it was a principal payment, even though the statute of limitations had run, we went back and voluntarily paid what we owed to the federal government. And if it turns out we’ve made some mistake inadvertently, we will do that again. . . .

Question: So many things have happened since this Whitewater story broke or resurfaced, depending on your point of view. Your counsel has resigned. A number of your top aides have been subpoenaed because of their contacts with Treasury officials in on the investigation. I’m curious. Who do you blame more than anything else for the Whitewater mess that the Administration is in now?

Answer: I don’t think it’s useful to get into blame. I think what’s important is that I answer the questions that you have that are legitimate questions, that I fully cooperate with the special counsel, which was requested widely by the press and by the members of the Republican Party and who is himself a Republican, that we fully cooperate. And we’ve done that. . . .

Enough Blame to Go Around

And then I get back to the work of getting unemployment down, jobs up, passing a health care bill, passing the crime bill, moving this country forward. I think the worst thing that can happen is for me to sort of labor over who should blame--who should be blamed by this. There will probably be enough blame to go around. . . .

Question: You and your wife have both used the phrase “bewildered, confused” about why all the interest in Whitewater. Yet in the Arkansas savings and loan business your wife represented Madison Savings & Loan before the Arkansas savings and loan board, whose head was a former lawyer who had done work for Madison Savings & Loan. Do you not see any conflicts of interest in your action or your wife’s actions which would appear to contradict what you just said about her not doing any work before the state that would cause people to question her actions?

Answer: No, that’s not what I said. I said that when my wife did business, when her law firm represented some state agency itself--state agencies all over America use private lawyers--if she did any work for the state, she never took any pay for it. . . .

Was there anything wrong with her representing a client before a state agency? And if you go back and look at the facts, basically the firm wrote the securities commissioner a letter saying “Is it permissible under Arkansas law to raise money for this S&L; in this way?” And it showed that she was one of the contacts on it. And the securities commissioner wrote her back and said it’s not against the law. . . . These kinds of things happen when you have married couples who have professions, and the most important thing there is disclosure. There was no sneaking around about this, this was full disclosure. . . .

Question: You said a few minutes ago that the people in the RTC who are involved in Congressman Leach’s allegations are all career Republican officials. But aren’t they members of your Administration, and do you plan to take any action in speaking either to Mr. Bentsen or Mr. Altman about taking action and investigating Mr. Leach’s charges?

Answer: I think the last thing in the world I should do is talk to the Treasury Department about the RTC. You all have told me that that creates the appearance of impropriety. I don’t think we can have a--it’s not just a one-way street, it’s a two-way street. Mr. Leach will see that whatever should be done is done, but I can tell you I have had no contact with the RTC, I’ve made no attempt to influence them, and you can see by some of the decisions that they have made that that is the furthest thing, it seems to me, that ought to be on your mind. . .

Questioning the First Lady

Question: . . . When do you think it would be proper for the First Lady to answer questions about Whitewater?

Answer: . . . The First Lady has done several interviews. She was out in three different places last week answering questions exhaustively from the press. I think she will continue to do that. And if you have questions you want to ask her about this, I think you ought to ask the questions.

Question: I take it that the tax returns you’re putting out tomorrow are the ones that have already gone to the special counsel. If the special counsel wanted to question you about that, would you answer a subpoena? Would Mrs. Clinton? And what about congressional hearings? What would be the protocol on going before Congress to explain it to them?

Answer: We decided in addition to putting out the ’78 and ’79 returns we should go ahead and put out the ’77 returns, that that would be an appropriate starting point, because that’s the year I first entered public life. . . .

In terms of the information, I expect that the special counsel will want to question me and will want to question the First Lady. It’s my understanding that typically in the past it’s been done in a different way. I mean, I will cooperate with him in whatever way he decides is appropriate.

Similarly, if Congress wants any information direct from us, we will of course provide it to them in whatever way seems most appropriate. Again, I understand there are certain protocols which have been followed in the past which I would expect would be followed here, but I intend to be fully cooperative so that I can go back to work doing what I was hired to do. . . .