Treasury Lawyer Takes Blame for Testimony : Whitewater: Hanson says she didn’t correct Altman’s information at the time. She is criticized by Senate panel.

The Treasury’s top lawyer admitted Monday that she knew on Feb. 24 that her boss, Deputy Treasury Secretary Robert Altman, was giving inaccurate testimony to Congress about his Whitewater-related discussions with the White House but she did nothing to correct him.

In testimony before the Senate Banking, Housing and Urban Affairs Committee, Treasury General Counsel Jean Hanson appeared to take responsibility for Altman’s failure to fully inform the panel about his discussions with the White House. Nevertheless, her admission only fueled charges that Hanson and Altman had acted improperly.

Altman, an old friend and former classmate of the President’s, is scheduled to be questioned by the committee today about his failure to testify fully last February about the extent of discussions between Treasury and White House officials after he learned that President Clinton and First Lady Hillary Rodham Clinton had been named as possible witnesses in the investigation of a failed Arkansas savings and loan.

Treasury officials had recognized that word of the investigation by the Resolution Trust Corp. was sure to be embarrassing for the Clintons because they had been partners with James B. McDougal, owner of the S&L;, in an Ozark real estate venture called Whitewater Development Corp. The RTC was looking into allegations that money from McDougal’s Madison Guaranty Savings & Loan had been diverted to Whitewater.

Like other Administration officials, Hanson insisted that the Treasury did nothing wrong when it alerted the White House that the Clintons’ names had come up in connection with an investigation. She also downplayed as “not significant” the differences between her recollections and those of Altman about contacts with the White House.

But Democrats as well as Republicans criticized the Treasury’s decision to alert the White House and Hanson’s failure to correct Altman’s testimony.

Committee Chairman Donald W. Riegle Jr. (D-Mich.), who until now has defended the Administration’s actions, severely admonished Hanson for failing to correct Altman’s testimony, if not at the Feb. 24 hearing, at least in the days that followed.

“I don’t think there’s a plausible explanation why this record wasn’t corrected very, very promptly,” Riegle said. “If information is asked for by a senator and (an) incomplete answer is given, getting the information later is not the same thing as getting the information in real time. . . . If you’re sitting there and you have the information and it is withheld, that is improper.”

Earlier in the day, former RTC official William Roelle testified that he told Hanson in late 1993 that the President’s name was mentioned in letters from the RTC to the Justice Department regarding possible criminal conduct by Madison owners. He said he warned her that the information was confidential. He told the committee that she should not have shared it with the White House.

Members of the Senate committee agreed with Roelle. Democratic senators--as well as Republicans--rejected Hanson’s assertion that she needed to tell the White House about it because the President’s aides needed to be prepared for press inquiries.

Hanson replied that it never occurred to her that contacts with the White House later would be viewed by the President’s critics as evidence of a possible cover-up. She emphasized that the Administration took no action to interfere with the inquiry after learning about it.

“I have no doubt about the propriety of my actions,” Hanson said. “I have no reason to doubt the propriety of anyone else’s actions.”

After learning about the RTC investigation from Roelle, Hanson said that she alerted Altman, who was then serving in the dual role of RTC chief executive officer and deputy secretary of the Treasury. At Altman’s direction, she said, she also told then-White House Counsel Bernard Nussbaum that the President had been linked to the investigation.

Altman has said that he does not recall telling Hanson to inform the White House. But Hanson said their differing recollections are not significant because her call to the White House was entirely proper.

“I take full responsibility for the decision to do so,” she said.

In all, Treasury and White House officials had as many as 40 contacts about the RTC investigation from September, 1993, to February. Among them was a meeting Feb. 2 by Altman and Hanson with White House officials. The deputy Treasury secretary discussed his subsequent decision to disqualify himself from dealing with the Madison investigation at that meeting.

When Altman was called to testify before the Senate Banking panel about RTC matters on Feb. 24, Hanson accompanied him and sat in a chair behind him while he fielded questions.

When the committee asked him whether Treasury officials had discussed the Madison case with the White House, Altman mentioned only the Feb. 2 meeting. He did not acknowledge any of the other Treasury contacts nor did he tell the committee that during the Feb. 2 meeting he had discussed the issue of disqualifying himself.

Hanson said she was aware of the omissions, but she decided to say nothing. “Without discussing the matter with Mr. Altman and others at Treasury, I did not believe that I could suggest to Mr. Altman on the spot that he change his response,” she said.

Hanson argued that, while she intended to correct the record at a later date, her opportunity to do so was eliminated when she was subpoenaed on March 4 by a grand jury investigating the White House-Treasury contacts. The subpoena legally prevented her from discussing the case with anyone.

But members of the Senate committee challenged her explanation, noting that Altman wrote four subsequent letters to the panel in the days after Altman’s testimony and never mentioned that the Feb. 2 White House meeting had dealt with the issue of whether he should disqualify himself.

In fact, Altman decided on Feb. 25--the day after he appeared before the panel--to officially disqualify himself from the Madison matter. Although Hanson acknowledged that she assisted him with the disqualification, she said she never mentioned to him then that he had testified inaccurately to the Senate committee.

Sen. Alfonse M. D’Amato (R-N.Y.) questioned Hanson about why Altman had not been prepared to testify fully about the White House-Treasury contacts. Hanson replied that Treasury officials had prepared answers for Altman on a wide range of issues but had not been aware that he would be questioned about the White House-Treasury contacts.

But D’Amato disclosed for the first time that he had warned Altman in a telephone conversation the night before his testimony that he would be asked about the White House contacts.

Although Democrats were almost as tough in their questioning of Hanson as were Republicans, they were careful to emphasize that there is no evidence to suggest White House officials made any effort to intervene in the RTC inquiry.

White House officials have admitted, however, that Nussbaum tried on Feb. 2 to dissuade Altman from disqualifying himself from the Madison Guaranty case and that he postponed his decision for nearly a month as a result of Nussbaum’s advice.

Democrats also sought to defend the propriety of the White House-Treasury contacts by emphasizing that Republicans, too, had asked the RTC about the Madison inquiry.

Under questioning, Roelle said he was disturbed to learn that then-White House Counsel C. Boyden Gray contacted then-RTC Chairman Albert V. Casey during the 1992 presidential election to inquire about the Madison case and the Clinton connection to it. When Casey, a Bush appointee, asked what he could tell Gray, Roelle said he told Casey that “it would be inappropriate to discuss it with the White House.”

“Mr. Casey said, ‘OK, I’ll tell them that,’ ” Roelle recalled.

In addition, Democrats noted that D’Amato had contacted the RTC early this year, seeking to learn when the legal statute of limitations would expire on the Madison case. In response, John E. Ryan, then RTC’s acting head, traveled to Capitol Hill to brief D’Amato on the issue.

Administration officials contend that Altman and Hanson briefed the White House on the statute of limitations on Feb. 2 because D’Amato had already been provided with a similar briefing.

The RTC is continuing to investigate potential civil law violations at Madison Guaranty, and special counsel Robert B. Fiske Jr. is looking into possible criminal violations. Congress voted in February to extend the statute of limitations in the RTC case until the end of 1995.