Sudan makes bogus offer of al-Qaeda intelligence to US
- March - April: Sudan apparently offers to extradite Osama bin Laden to the US or anywhere the US designates. Reportedly, Major General Elfatih Erwa, the Sudanese Minister for Defense, offers to extradite him to the US. Erwa agrees to keep a close eye on bin Laden for the US, and also offers to take him into custody and hand him over to American authorities. As it turns out, Sudan's offer isn't legitimate, mostly because they never had the evidence they claimed to have, but one source claims that the US chooses not to extradite bin Laden because it feels there isn't enough legal evidence to charge him with a crime. Saudi Arabia is mentioned as a possibility, but the Saudis don't want him. The US eventually insists that bin Laden be expelled from Sudan and go anywhere except Somalia. One CIA agent declares, "We kidnap minor drug czars and bring them back in burlap bags. Somebody didn't want this to happen." Bin Laden leaves under pressure two months later. CIA Director Tenet later denies Sudan made any offers to hand over bin Laden. In April, the US again refuses to accept Sudanese intelligence files on bin Laden and his operations. According to one person involved in the negotiations, negotiations were progressing well when another, unnamed US agency intervened and negated the transaction. "I've never seen a brick wall like that before," said the negotiator in a later interview. The Sudanese offer the material to British intelligence and are again rebuffed. Sudanese officials declare the offer remained open until after 9/11, when US intelligence will finally accept the material. As it turns out, the story of the Sudanese intelligence comes from a single source, Pakistani-American Mansoor Ijaz, who claims to serve as a middleman between the US and Sudan. National security director Sandy Berger meets with Ijaz, an investment banker in Sudanese oil, once and determines that he is an unreliable freelancer who is pursuing his own financial interests. Ijaz will profit handsomely if he can persuade the Clinton adminstration to lift its sanctions against Sudan (laid down for Sudan's sponsorship of global terrorism). NSC counterterrorism Daniel Benjamin later says of Ijaz, "Either he allowed himself to be manipulated, or he's in bed with a bunch of genocidal terrorists." Ijaz's claim that Sudan wanted to turn over bin Laden was not supported by a single Sudanese government official, and thusly the offer was rejected. As for Ijaz, he will later land a job as a foreign affairs analyst for Fox News. (CCR, Project Censored, Observer/9-11 Congress, Al Franken)
Key Whitewater witness David Hale lies under oath
- March: During the McDougal-Tucker Whitewater trial, OIC attorney Ray Jahn claims that the OIC cannot locate David Hale when the defense asks that he be subpoenaed for his testimony. In reality, the OIC has Hale stashed away and is providing his living expenses, an illegal act perpetuated by the OIC. Susan McDougal learns that the crux of the case is the $300,000 loan from Hale's SBIC company to Madison. Her former husband Jim McDougal had put the money, without endorsing the check, directly into his and Susan's account, where it had gone mostly for living expenses -- not for a land purchase. Susan is therefore charged with misapplication of loan funds, conspiracy to defraud a financial institution, wire fraud, and mail fraud. She explains that she didn't know the loan money was being used for Jim's and her expenses because her husband constantly moved money back and forth between the personal account and any number of business accounts. "All I cared about was that if I wrote a check, it was covered," she testifies.
- According to Hale, $50,000 of this loan supposedly went to help the Whitewater investment, a charge that, if true, would mean the Clintons took that money from the government and used it to help themselves, a certain felony. Unfortunately for Clinton-haters, the allegation is completely false. The $50,000 in question is actually two chunks of money. The first, a $24,455 loan to Jim McDougal from Stephens Security Bank, was placed in the Whitewater account a full year before Hale's bad $300,000 loan, and further, was repaid by McDougal before the Hale loan took place. The second chunk, $25,000, was used by McDougal to buy land near the Whitewater project, but was never in the Whitewater account; instead, it "messed up Whitewater's balance sheet...adding a huge liability" and actually causing the Clintons to lose money on their Whitewater investment. Juror Colin Capp later says that Hale is "an unmitigated liar [who] perjured himself. David Hale invoked the president's name for one reason: to save his butt. We all thought that way."
- Kirby Randolph, a Madison officer, testifies, "susan wouldn't have known if there was three dollars or three million dollars in the account." The trial goes very badly for Jim McDougal, who is blitzed by one witness after another testifying that he had absolute and total control of Madison's financial transactions. He begins smoking large amounts of marijuana in the evenings after the trial sessions, and is downing tremendous amounts of Prozac.
- When David Hale testifies, it is a serious blow to the prosecution, mostly because Hale is more than willing to admit to his own string of criminal wrongdoings. As it turns out, Hale faces a term of sentences totaling life in prison for stealing millions of dollars from the federal government and a number of other felonies, but is testifying for the OIC in return for a much lighter sentence (less than two years in jail, as it turns out). Hale contradicts himself on the stand several times while testifying that the $300,000 loan was actually for Clinton, not for the McDougals; he even claims that he joined McDougal and Clinton at McDougal's sales office to discuss it. (Originally he claims that Clinton, an avid jogger, jogged to and from the sales office, and changes his story after it's proven that Clinton would have had to jog over 20 miles, most of it along the interstate; Hale then says that the governor's limo transported him to and from the office.) To counter the records that showed none of the $300,000 had gone anywhere near the Clintons, Hale tells a tale of being accosted at a Little Rock shopping mall by the governor, who screams for all to hear, "Do you know what that f*cking bitch Susan McDougal did? She spent all the money. The bitch took all the money."
- Hale is later proven to have been provided large amounts of money from the Arkansas Project all along. (Right-wing billionaire Richard Mellon Scaife will later be proven to have funded the Project to the tune of at least $1.7 million.) Hale's payments, much of which were channeled through the accounts of the American Spectator, precipitated an attempted audit by Spectator co-founder Ronald Burr; instead of allowing the audit, Spectator and Project officials force Burr to resign. (Burr's severance package, put together by Project lawyer Theodore Olson, swears Burr to secrecy.) Project cohort Parker Dozhier also funneled Scaife money to Hale, though he strenuously denies it; when Salon reporters inform Dozhier that he was seen giving money to Hale by eyewitness Joshua Rand, Dozhier observed that Rand "was destined to be a chalk outline somewhere." (Dozhier, who himself received at least $35,000 from Scaife and, according to four eyewitnesses, much, much more, also leaked confidential grand jury information obtained from Hale to two Wall Street Journal reporters, typing up the information while wearing surgical gloves so as not to leave fingerprints. Dozhier trolled for interested reporters in the classified ads of the Arkansas Democrat-Gazette,, and landed two reporters from the WSJ, Bruce Ingersoll and Ellen Pollack. Hale ultimately received over $68,000 in taxpayer money from Starr, and was provided the use of a car by the Arkansas Project. The Justice Department demands that Starr investigate these allegations of payola and witness tampering; because of Starr's refusal to acknowledge his own conflicts of interests, an independent investigator, former senior DoJ official Michael Shaheen will investigate the Starr investigation.
- The US Attorney's office was not impressed with Hale's compendium of lies, but after Hale has his story promulgated by the "Arkansas Project" through the right-wing media (and later the mainstream media), Starr's OIC transforms Hale from "an indicted scam artist to the government's pampered star witness." The OIC provides Hale with free room and board, transportation, over $50,000 in "walking-around money," and the free services of lawyer Theodore Olson, a former law partner of Starr's and the former Solicitor General of the US under former president Bush. Hale, after having met over 50 times by his own testimony with OIC attorneys to prepare for his court appearance, is very polished and effective in court. Susan writes, "One would think that simply telling the truth wouldn't require quite so much preparation." Hale claims that McDougal knew exactly what the loan was for, which is false, and originally claimed that she didn't ask any questions of him about it. When it is pointed out that to be guilty of defrauding a federally backed financial institution, she would have had to have known that the loan was coming from such an institution and not from Hale, he changes his story and says that indeed she did ask about that very thing. The presiding judge throws out four of the eight counts against Susan; the other four continue. McDougal admits that she said some indefensibly belligerent things to the media that hurt her credibility during the trial.
- Former Madison Guaranty employee and independent consultant Sarah Hawkins is prepared to testify in Susan McDougal's defense. Hawkins, who initially cooperated with the Starr investigation, instead is told by Starr's investigators that she will either plead guildy to a felony or will be charged with the much more serious crime of bank fraud. Hawkins refuses Starr's ultimatum and is harassed for months by Starr's investigators, who continually threaten her with indictment and prosecution. It is months later, after Hawkins's consulting business was destroyed, that Starr's investigators admitted they had not a single shred of evidence to warrant Hawkins's indictment. Sam Dash, Starr's own ethics advisor, will call Hawkins's persecution "vicious." Nevertheless, Starr will pursue similar tactics against other witnesses, including McDougal, Webster Hubbell, Julie Hiatt Steele, and Monica Lewinsky. The list of intimidated and persecuted witnesses also includes Steve Smith, a University of Arkansas professor later convicted of a misdemeanor in the Whitewater investigation; Smith was pressured to lie to the Whitewater grand jury about the Clintons' involvement in Whitewater. The document that Starr's investigators demanded he sign "contained things I had told them time and time again were not true. They kept trying to get me to say things that weren't true. They told me to sign a document they had written that was simply not true!" (Starr's deputy denies that any such document was produced.) Smith was even pressured by threats that his mother, who was 70 years old and completely uninvolved with anything relating to Whitewater, would be subpoenaed and interrogated. Starr's investigators even went so far as to subpoena Rob Hill Jr., the 16-year old son of one of Starr's targets, at the boy's school. The boy's lawyer said that the obvious intention of Starr's investigators were "meant to intimidate." (Susan McDougal, Nieman Institute/James Carville, Arkansas Democrat-Gazette/James Carville, Arkansas Times/James Carville, New Yorker/Los Angeles Times/Washington Post/Time/Reuters/James Carville)
- March 4: The trial of Jim Guy Tucker and the McDougals begins in Little Rock. As detailed in earlier entries, Judge Henry Woods throws out Starr's indictment of Tucker as having no relation to Whitewater; Starr successfully appeals the decision and gets Woods thrown off the case because critical newspaper and magazine articles cause the "appearance" of a conflict of interest. Woods later demands an investigation into the "Arkansas Project" after he is shown evidence of the smear campaign orchestrated against him; no investigation will ever be mounted. (Washington Post, H.R. Clinton)
- March 25: Pulitzer Prize-winning author James Stewart's book Blood Sport is published to great media fanfare. The book purports to be an insider's view of "the president and first lady as they really are." The book, more of a "docudrama" than an actual work of fact, includes dramatized scenes and imaginary dialogue supposedly revealing the innermost thoughts of people whom Stewart had never interviewed and in some cases never even met. The book, naturally, earns a great deal of criticism, mostly because it is impossible for the reader to tell what is factual, what is embellished from others' memories, and what is merely invention by Stewart himself. It's also notable that everyone who agreed to serve as a source for Stewart is treated far better than those who refused -- and that includes both Clintons and many of their closest friends and associates. The book is filled with easily correctable inaccuracies, such as when the book gives us a scene showing Hillary Clinton receiving the news of Vince Foster's death while at "the Rodham home in Little Rock, where Hillary was visiting her mother and father, who was ill." Hillary's father Hugh Rodham had died three months earlier. Another scene shows a young Bill Clinton visiting "kingmaker" Jim McDougal in 1975, hoping for McDougal's help in running for Pryor's Senate seat. Not bad, except Pryor was Governor, not Senator, in 1975, and McDougal was hardly powerful enough to be any sort of "kingmaker." White supremacist Jim Johnson, the virulent Clinton-hater who accused Clinton of being, among other things, a "n*gger-lover," and served as one of Stewart's sources, is portrayed as a genial "Democrat-turned-Republican" whose racial hatreds are never mentioned. Other errors abound. Judge David Hale, the businessman and convicted embezzler, is said to have been appointed to the bench by Clinton, when in fact it was Frank White, Clinton's predecessor, who appointed Hale. Hale is also portrayed as breaking the law by loaning money to his "Democrat friends," when in fact Hale made far more loans to Republicans than Democrats, and he broke the law by embezzling over $2 million from the federal government. Stewart's primary source seems to be Jim McDougal. The real estate wheeler-dealer, who suffered from manic-depression and was convicted of multiple felonies and died in prison, is a notorious liar who lied under oath to more than one court and federal investigator. Stewart also seems completely unaware of the Pillsbury Report, the RTC investigation that completely exonerated the Clintons of any wrongdoing in 1995 (see the 1995 entries), and instead relied completely on the then-ongoing Kenneth Starr investigation. Stewart ignores completely the well-documented body of evidence proving that McDougal committed a raft of financial crimes, and tries to pin the criminal wrongdoings on the Clintons without citing any evidence. Perhaps worst of all, he tries to link the Vince Foster suicide to Whitewater. This was disproven time and time again -- by the Park Police investigation, by the FBI, by Robert Fiske's independent counsel, and by Kenneth Starr himself. Stewart makes at least one more egregrious error. Shortly after the book's publication he went on "Nightline" to accuse Hillary Clinton of submitting a false loan report relating to Whitewater. He says she submitted the loan report without filling out key sections. Yet in his own appendix, Stewart reprints the loan document, which, if you bother to turn it over and read the other side, shows that Hillary did indeed complete the loan document properly. Stewart never bothered to flip the document over and read the back. (Joe Conason and Gene Lyons)
- March 26: Little Rock traffic judge Bill Watt takes the stand for the prosecution in the Jim Guy Tucker conspiracy case, which began on December 12, 1995 (see that entry). Watt, a former business partner of David Hale's and a political ally of Bill Clinton, bludgeoned his way into receiving immunity from prosecution from Kenneth Starr's OIC after being named as a co-conspirator in Hale's multiple felonies, just as Hale has named Jim Guy Tucker, Jim McDougal, and Clinton, among others. Watt had realized early on that Hale was crooked, extricated himself from any business dealings with Hale, and informed the authorities that he believed Hale was defrauding the federal government. His record helps him win immunity, though media pressure results in Watt losing his position on the bench and his pension. Hale has already been thoroughly denigrated as a criminal, a liar, and a con artist during the trial; since Hale is the government's star witness against Tucker, and since the judge has denied Tucker any ability to show political motivations for the charges brought against him, his only defense, besides trying to prove his innocence, is to blast Hale's credibility. Watt, though a prosecution witness, doesn't shore up Hale's credibility at all -- his dislike of Hale is so intense that he once challenged Hale to a fistfight -- but Watt's real purpose on the stand is to bring evidence against Bill Clinton. Hale once told Watt that Clinton was involved in a loan that was part of Hale's criminal schemes, and Watt is there to bring this up in court. The judge overrules Tucker's objections that Clinton is not a defendant in this case, and that Watt's testimony is double hearsay and thus inadmissible; prosecutor Jackie Bennett gets the testimony in by claiming it goes to Hale's "state of mind." The issue isn't whether Clinton actually was part of the loan deal, but whether Hale thought he was, argues Bennett. Documents exonerating Clinton from any participation in the loan, in Watt's possession, are denied by the judge for presentation. Unlike the double-hearsay evidence that smears Clinton, the solid evidence that would exculpate him apparently has no place in this trial.
- The result is exactly what the OIC wants: another round of headlines accusing Clinton of financial impropriety. Watt also wants to testify that at least twice he had tried to get Clinton to talk about Hale, but the then-governor had nothing to say about the man. Watt is convinced that everything Hale is saying about Clinton and his so-called business deals with him are lies. "David would drop names," he later tells Salon reporter Murray Waas. "He would lie and manipulate people. He was a pathological liar. He was trying to convince me to do something. And in my mind I knew that I've been with Clinton on at least two occasions where nothing was said...about Hale. Nothing was said about the deal. Nothing was said about the people involved." But since Watt had never discussed Clinton with the FBI investigators, Starr's lawyers say nothing about this part of the scenario, and Tucker's lawyers know nothing about it, partially because when Watt tried to meet with Tucker to discuss the case before Watt was subpoenaed, Tucker refused to meet with him. Documents that were never entered into the case show that as early as February 1988 he had warned title companies and clients that Hale was "kiting" bogus loans from his Capital Management services into other shell companies. He quit doing business with Hale, and in July 1988 tried to warn Washington officials of the Small Business Administration that Hale was a crook and a liar, to no avail. Watt kept extensive records of everything he had done; had these papers been revealed to the defense, as the law requires, Clinton, and perhaps Tucker, would have been exonerated of everything Hale alleged. But the OIC lawyers refused, and the jury never sees any of the documents. (Joe Conason and Gene Lyons)
- March 31: The New York Times prints an editorial criticizing Kenneth Starr for continuing his million-dollar a year law practice while conducting the Whitewater investigation. Starr has already come under fire for representing the State of Wisconsin in an effort to uphold its school voucher program, a program opposed by the Clinton administration, and accepting fees from the right-wing Bradley Foundation. Starr also was investigating the RTC at the same time the RTC was investigating his law firm, Kirkland & Ellis; the RTC investigation directly impacted Starr's own investigation into Whitewater and Madison Guaranty. Starr also represented several tobacco companies against government prosecutors. These are clear conflicts of interest that should have resulted in Starr's resignation or firing, but no actions are ever taken. (H.R. Clinton)