Investigators Shift Focus on Efforts to Aid Hubbell

When Webster L. Hubbell first found himself out of a job and in the cross hairs of Whitewater prosecutors three years ago, the embattled former law partner of Hillary Rodham Clinton was embraced by a network of presidential aides and supporters who tended to his financial needs.

The network performed spectacularly, steering 14 or more deals and other benefits to Hubbell, worth about a half million dollars.

But what motivated this extraordinary effort? That has become a central question for independent counsel Kenneth W. Starr, whose probe of the Whitewater controversy is about to enter its fourth year. Evidence now being evaluated will affect how long the overall investigation continues--and whether anyone involved with helping Hubbell will face charges of obstructing justice.

Recently, prosecutors and congressional investigators have begun to focus on a small number of people whose previously overlooked efforts for Hubbell, concerning a controversial deal with the city of Los Angeles, could shed fresh light on the motivations at play. Unlike others who helped Hubbell, not all of these benefactors were his longtime friends or colleagues.

And unlike other patrons who insisted they had no inkling that Hubbell was enmeshed in a criminal matter when he left his No. 3 position at the Justice Department in the spring of 1994, this group provided help in 1995. This was months after Hubbell had pleaded guilty to bilking his law firm and clients and had publicly emerged as a potential witness in the Whitewater investigation of the Clintons.

By illuminating these efforts, investigators are seeking new insight into whether the help for Hubbell was aimed only at rescuing a well-liked man in distress--or if it also was part of an orchestrated plan to discourage a witness from providing testimony damaging to the First Family.

Report on Unusual Lobbying Deal

Both Starr’s staff and the House Government Reform and Oversight Committee are reviewing a report by the office of Los Angeles Controller Rick Tuttle on Hubbell’s unusual lobbying arrangement with the city airport department. The controller’s report, and supporting documents, verify the 1995 efforts to help Hubbell, who at the time of his earlier guilty plea pledged to cooperate with Starr’s investigation.

According to the documents, in 1995 several Clinton supporters, including a senior White House aide, discussed a delay by the Los Angeles controller’s office in paying Hubbell. At the time, auditors were questioning the legitimacy of paying Hubbell, who was hired in 1994 through a no-bid oral contract. His six-month contract had been terminated after three months, following his guilty plea.

According to the testimony gathered by the controller, those who in 1995 discussed Hubbell’s difficulty in getting paid included Mary E. Leslie, Clinton’s former chief fund-raiser in California; Los Angeles lawyer Kim Wardlaw--whom Clinton would nominate to a federal judgeship in August 1995; and Marsha Scott, a senior White House aide. Wardlaw, for instance, suggested that Leslie call the controller directly to inquire about the payment.

Another person who expressed interest in Hubbell’s predicament was Los Angeles lawyer Lisa Specht, who was neither a former colleague nor a friend of Hubbell’s.

Specht called Tuttle regarding the matter. She told The Times that she acted out of compassion, placing the calls to Tuttle in mid- to late 1995.

“I have a lot of friends in Washington that are friends with [Hubbell’s] family, and I just heard his family was really hurting,” said Specht, a former law partner of Mickey Kantor, the then-Clinton Cabinet member who helped quarterback financial assistance for Hubbell’s family. “I was being a good Samaritan.”

However, ethics experts contacted by The Times questioned the propriety of efforts to secure money for Hubbell at a time when he was an admitted felon who had pledged to cooperate with the ongoing Whitewater investigation.

Efforts at such a time could raise suspicions about possible tampering, compounded by the fact that public money was involved.

“This disturbs me greatly, this use of friendship, in a way that subordinates the interest of the government entity,” said Michael Josephson, president of a Los Angeles-based institute that counsels public agencies and corporations on ethics. “If they were successful in getting Tuttle to release the money, you have then used your persuasive skills, your contact, in a way that compromises the city.”

Investigators’ suspicions about the aid effort for Hubbell have been heightened by his inability to remember details of a real estate transaction at the heart of the Whitewater affair. Prosecutors had hoped to learn more about the transaction as a result of Hubbell’s plea bargain. The transaction included legal work performed by Mrs. Clinton when she and Hubbell were partners at the Rose Law Firm in Little Rock, Ark.

In the Los Angeles contract, Tuttle’s office, after delaying for months any payment to Hubbell, issued him a check, for $24,750, on Sept. 14, 1995. In his report last month, Tuttle concluded that Hubbell possibly violated the law by vastly overstating the services he provided. Tuttle urged city attorneys to “take appropriate action to recover the City funds paid to Mr. Hubbell.”

Far-Flung Efforts to Help Family

The far-flung efforts by Clinton aides and supporters to steer jobs or other help to the Hubbell family began in 1994 and included the Los Angeles deal.

Sorting out the motives has been difficult for investigators because many persons involved were longtime friends or associates who insisted they were concerned solely about his family’s plight. They said they believed Hubbell was innocent of wrongdoing and did not learn otherwise until his later guilty plea.

The Los Angeles case provides a rare look at help that was provided under changed circumstances.

According to the testimony in the controller’s inquiry, soon-to-be Judge Wardlaw advised Leslie to personally “contact Rick Tuttle” regarding Hubbell’s payment. White House aide Scott, according to the testimony, raised the matter in another conversation.

“I had many conversations about it because it was obviously a point of interest among many people,” Wardlaw testified, adding that she had known Hubbell “hardly at all.”

Until Clinton named her a U.S. district judge in late 1995, Wardlaw had served as an unpaid advisor to Los Angeles Mayor Richard Riordan; Leslie, a former Clinton appointee in the Small Business Administration, worked for Riordan in 1994 and 1995 as a deputy mayor, specializing in winning federal funding. Leslie and Wardlaw did not respond to phone messages this week.

Leslie, along with her husband, consultant Alan Arkatov, encouraged the hiring by Los Angeles of Hubbell after he left the Justice Department. Arkatov, in his testimony, recounted that Scott, the White House aide, had remarked “how unfortunate it was” that the city was delaying payment to Hubbell.

And, it was after the city controller’s office delayed Hubbell’s payment that Specht called Tuttle regarding Hubbell’s payment once and perhaps twice in 1995, according to Tuttle’s testimony.

“It was a call of inquiry about the payment to Mr. Hubbell and was in the context of also mentioning that he had a family in need,” Tuttle testified.

Asked why she contacted Tuttle, Specht told The Times that she had learned of Hubbell’s plight at a 1995 Washington dinner party with a circle of friends who knew Hubbell.

Specht, who remains a partner at the politically connected Century City firm of Manatt, Phelps & Phillips, declined to say who those friends were.

People at the Washington dinner party, she said, were “talking about how awful this was . . . and how he wasn’t getting paid. And so, I mean, I came back, and I just picked up the phone and called Rick, and said, ‘God, this guy isn’t getting paid. He did the work, apparently.’ . . . I didn’t call to pressure him, or tell him he had to pay it. I didn’t know anything about it, other than that.”

Lawyer Had Worked Under Mickey Kantor

Specht worked for several years at Manatt, Phelps & Phillips in a five-lawyer unit headed by Kantor, who chaired Clinton’s 1992 campaign and until January served in the president’s Cabinet. Kantor has said that he took various steps to help Hubbell’s family in 1994, strictly out of friendship.

Asked specifically whether Kantor was among those at the dinner party who discussed Hubbell’s difficulty in getting paid, Specht said: “I’m not going to comment.”

Kantor did not return calls this month seeking his recollection.

Government telephone records obtained by The Times under a Freedom of Information Act request show several contacts between Kantor and Specht, and Kantor and Hubbell, in 1995.

At the time of those calls, Hubbell was preparing to enter federal prison--and was fighting for the payment from Los Angeles.

Kantor is among several people whom House committee investigators have notified over the last two weeks that they want to question regarding the assistance provided to Hubbell.