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104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-484
REIMBURSEMENT OF FORMER WHITE HOUSE TRAVEL OFFICE EMPLOYEES
March 18, 1996.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Smith of Texas, from the Committee on the Judiciary, submitted the
R E P O R T
[To accompany H.R. 2937]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 2937) for the reimbursement of legal expenses and
related fees incurred by former employees of the White House
Travel Office with respect to the termination of their
employment in that Office on May 19, 1993, having considered
the same, report favorably thereon with amendments and
recommend that the bill as amended do pass.
The amendments are as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. REIMBURSEMENT OF CERTAIN ATTORNEY FEES AND COSTS.
(a) In General.--The Secretary of the Treasury shall pay, from
amounts in the Treasury not otherwise appropriated, such sums as are
necessary to reimburse former employees of the White House Travel
Office whose employment in that Office was terminated on May 19, 1993,
for any attorney fees and costs they incurred with respect to that
(b) Verification Required.--The Secretary shall pay an individual in
full under subsection (a) upon submission by the individual of
documentation verifying the attorney fees and costs.
(c) No Inference of Liability.--Liability of the United States shall
not be inferred from enactment of or payment under this section.
SEC. 2. LIMITATION ON FILING OF CLAIMS.
The Secretary of the Treasury shall not pay any claim filed under
this Act that is filed later than 120 days after the date of the
enactment of this Act.
SEC. 3. REDUCTION.
The amount paid pursuant to this Act to an individual for attorney
fees and costs described in section 1 shall be reduced by any amount
received before the date of the enactment of this Act, without
obligation for repayment by the individual, for payment of such
attorney fees and costs (including any amount received from the funds
appropriated for the individual in the matter relating to the ``Office
of the General Counsel'' under the heading ``Office of the Secretary''
in title I of the Department of Transportation and Related Agencies
Appropriations Act, 1994).
SEC. 4. PAYMENT IN FULL SETTLEMENT OF CLAIMS AGAINST THE UNITED STATES.
Payment under this Act, when accepted by an individual described in
section 1, shall be in full satisfaction of all claims of, or on behalf
of, the individual against the United States that arose out of the
termination of the White House Travel Office employment of that
individual on May 19, 1993.
Amend the title so as to read:
A bill for the reimbursement of attorney fees and costs
incurred by former employees of the White House Travel Office
with respect to the termination of their employment in that
Office on May 19, 1993.
PURPOSE AND SUMMARY
H.R. 2937 would reimburse the attorney fees and costs
incurred by the former employees of the White House Travel
Office whose employment in that office was terminated on May
19, 1993. Upon submission of documentation verifying the former
employees attorney fees and costs incurred as a result of that
termination, the Secretary of the Treasury shall reimburse such
fees and costs out of funds not otherwise appropriated.
On May 19, 1993, all seven White House Travel Office
employees were fired (two of these employees were later
permitted to retire and five of these employees were later
transferred to other positions within the Executive Branch).
The White House Travel Office provides travel and communication
services for the Executive Office of the President (EOP),
travel arrangements for members of the press corps who
accompany the President on trips, and ticketing and travel
services for EOP staff traveling on official business. The
White House indicated that the firings were predicated by an
audit performed pursuant to the Vice President's National
Performance Review. According to the White House, the audit
revealed mismanagement and unacceptable accounting practices
within the Travel Office. At that time, the White House also
stated that the Federal Bureau of Investigation (F.B.I.) was
looking into possible criminal violations by the seven
After the May 19, 1993, firings, several months of
independent review and oversight hearings uncovered the actual
motivation for this action. Certain individuals, wishing to
advance their own personal agendas and financial self-interest,
attempted to destroy the reputations of these employees by
accusations of kickbacks and wrongdoing. White House staff and
volunteers apparently misused their authority and initiated an
F.B.I. investigation using unorthodox methods. The
investigation was based on accusations made by persons with a
direct interest in Travel Office employment or Travel Office
The following is a chronology of events leading to the
firing of the White House Travel Office employees. It appears
the firings were driven by the statements and actions of four
people: Catherine Cornelius, a distant cousin of the President
employed at the White House; Harry Thomason, a close personal
friend of the President and First Lady, seeking business
opportunities for his aviation consulting firm; Darnell
Martens, Mr. Thomason's business partner, seeking a major
aviation consulting contract with the Federal Government
through his White House contacts; and David Watkins, the
Assistant to the President for Management and Administration.
As early as December 1992, discussions were taking place
between Catherine Cornelius and World Wide Travel, the travel
agency which served the Clinton/Gore '92 campaign, over a
possible takeover of the White House travel business.
In January 1993, David Watkins hired Catherine Cornelius
and Clarissa Cerda as special assistants in the Office of
Management and Administration. The day following President
Clinton's Inauguration, the White House Travel Office began
receiving calls asking for Catherine Cornelius, the ``new head
of the White House Travel Office.'' Darnell Martens wrote a
memo to Harry Thomason, a personal friend of the President and
his partner in the aviation consulting firm of Thomason,
Richland and Martens (TRM), suggesting that TRM be hired as a
consultant on several government projects including the White
House Travel Office.
In February 1993, Catherine Cornelius and Clarissa Cerda
provided David Watkins with a memo and ``Briefing Book and
Proposal'' on the White House Travel Office. Under this
proposal Cornelius and Cerda would be co-directors of travel
and World Wide Travel would be the outside travel agency.
During this period, Mr. Martens contacted Billy Dale, head of
the White House Travel Office, about bidding on White House
charter business and was told no outside company would get the
In March 1993, Mr. Martens sent another memo to Mr.
Thomason indicating that TRM should seek White House Travel
Office business. During a trip to Los Angeles, Mr. Martens told
Mr. Thomason about his conversation with Mr. Dale and said he
heard a rumor that there was corruption in the Travel Office.
Shortly thereafter, Mr. Thomason allegedly told the President
that he had heard there was trouble in the White House Travel
In April 1993, Mr. Watkins assigned Ms. Cornelius to the
White House Travel Office to make commercial arrangements for
the White House staff and to ``keep her eyes open'' on Travel
Office operations and report back to him by May 15. Harry
Thomason called Mr. Watkins about the Travel Office employees
and, according to Mr. Watkins' notes, told him ``(T)hose guys
are a bunch of crooks. They have been on the take for years''.
At this point, Ms. Cornelius began removing Travel Office files
to make copies and then took them home. In the meantime, Mr.
Martens and Mr. Thomason continued to promote their proposal
that the White House hire TRM to perform an audit of government
In early May 1993, Mr. Martens, through Mr. Thomason,
continued discussions with White House staff about TRM's
conducting an audit of government aircraft. According to notes
of one White House official, on May 7, Ms. Cornelius and Ms.
Cerda met with Mr. Thomason. Then on May 10, David Watkins
asked Ms. Cornelius if her memo reporting on the activities in
the Travel Office was complete and told her to speak with Mr.
Thomason for further information to place in that memo. That
same day, Mr. Thomason met with Mr. Watkins and inquired as to
what was being done about the White House Travel Office. At
that meeting, Mr. Watkins indicated that he had placed Ms.
Cornelius in that office to evaluate the situation.
On May 12, Mr. Thomason met with Ms. Cornelius about the
alleged wrongdoing in the White House Travel Office. At that
time, she showed Mr. Thomason materials concerning the Travel
Office and indicated that money seemed to be missing. Later
that morning, in a meeting involving Mr. Watkins, Mr. Thomason
and Deputy Director of the Office of Management and
Administration Jennifer O'Connor, Mr. Thomason complained that
the employees in the Travel Office were ``ripping us off'' and
indicated that getting rid of the employees would make a great
press story. At another meeting involving Mr. Thomason, Ms.
Cornelius, and Mr. Watkins, Mr. Martens again discussed his
conversation with Mr. Dale. According to notes taken by David
Watkins, Mr. Thomason met that day with the First Lady who
encouraged him to stay on top of the Travel Office situation.
At lunch, Mr. Watkins told Ms. O'Connor that Mr. Thomason had
dealings with a travel company, and that the Travel Office had
solicited kickbacks. (That allegation was found to be baseless
when the President of Miami Air, the company that supposedly
made it, denied ever having done so. Furthermore, no evidence
of any kickbacks whatsoever was ever found in the course of the
Public Integrity investigation.) Later that day at a meeting
including William Kennedy, Associate Counsel to the President;
Vince Foster, Deputy Counsel to the President; Mr. Watkins; Ms.
Cornelius; and Mr. Thomason; both Mr. Foster and Mr. Kennedy
recommended that an internal audit be performed at the Travel
Office. Mr. Watkins, however, indicated the White House had no
audit capability. It was then decided that Mr. Kennedy, who
handled internal security matters, should determine a course of
action. That evening Mr. Kennedy called F.B.I. Headquarters to
discuss what he called a problem in the White House that he did
not know how to handle. In the meantime, Ms. Cornelius
contacted World Wide Travel and told the firm to prepare to
come to the White House.
During conversations with the F.B.I. on May 13 and May 14,
Mr. Kennedy stated several times that the request for any
F.B.I. evaluation came from the ``highest levels'' of the White
House. He also indicated that if the F.B.I. failed to respond
quickly, he would call another government agency, such as the
I.R.S. The F.B.I. originally indicated to the White House
counsel's office that there was not enough evidence on which to
go forward with a criminal investigation. After meeting with
Ms. Cornelius, the F.B.I. concluded that there was a
possibility of criminal wrongdoing that warranted an
investigation. During that meeting, Ms. Cornelius informed the
F.B.I. representatives that Mr. Martens told her of
``kickback'' allegations made by Miami Air Charter. The F.B.I.
suggested bringing in outside auditors, and several discussions
were held to determine whether the F.B.I. should be present at
the audit. It was decided that KPMG Peat Marwick would conduct
a review and that that review would be identified as part of
the Vice President's National Performance Review. Vincent
Foster then informed the F.B.I. that it should not attend the
review because of the potential for bad press. The F.B.I.
The morning of the 14th, at a high-level meeting including
Mr. Foster; White House Chief of Staff Mack McLarty; and the
Deputy Assistant to the President and Director of Media Affairs
Jeff Eller; the immediate firing of the White House Travel
Office employees was discussed. That same day, Ms. Cornelius
called World Wide Travel and informed the firm that the firings
were imminent, and it should be prepared to send agents to
Washington. Mr. Watkins noted that he talked to Foster--``who
says he's getting more pressure from First Lady to act.''
(emphasis in original). Mr. Dale told Mr. Watkin's staff that
he had already put in his retirement papers and wanted to
Ms. Cornelius showed documents she had taken from the White
House Travel Office to KPMG Peat Marwick representatives and
specifically pointed to checks made out to cash. That evening,
at the urging of Vincent Foster, Mr. Watkins called the First
Lady and according to his notes was told that ``Harry says `We
can do the job with his assistance.' '' The First Lady
indicated that Mr. Thomason had told her that he could put a
more efficient structure in place in an hour's time to handle
Travel Office business. That evening Patsy Thomasson ordered
the locks to be changed on the White House Travel Office.
On May 14, the KPMG Peat Marwick's management consultants
came to the White House. On the morning of May 15, Ms.
Cornelius informed World Wide Travel that the First Lady wanted
the Travel Office employees out. Also, Patsy Thomasson, Special
Assistant to the President for Management and Administration,
called Brian Foucart, an assistant to Mr. Watkins, and told him
to talk to the Travel Office employees about the scope of their
work because they might be fired soon.
On the afternoon of May 17, Mr. Watkins and Mr. McLarty
decided to fire the employees. That evening, Mr. Dale informed
Mr. Watkins that he wanted to retire. Mr. Watkins refused to
accept Mr. Dale's resignation and told Mr. Dale to wait until
after a meeting on May 19th at 10:00 a.m.
On May 18, Mr. Watkins informed Mr. Foucart of the plan to
fire the Travel Office employees and asked that he attend the
firings as a witness.
On the morning of May 19, Patsy Thomasson informed Mr.
Kennedy that a decision had been made to dismiss the Travel
Office employees. Mr. Watkins told the White House Press
Secretary, Dee Dee Myers, about the firings and provided her
with talking points. Mr. Kennedy called the F.B.I. about the
imminent firings, and the F.B.I. warned him about the problems
the firings could cause with the F.B.I. investigation. Later,
he called the F.B.I. back to say the firings would go forward
Also that morning, Mr. Martens called his friend Penny
Sample of Air Advantage to come to the Travel Office on a
volunteer basis to arrange Presidential press charters. After
Mr. Foster held a meeting concerning the firings, he and Mr.
Kennedy instructed Mr. Watkins to delete any reference to the
F.B.I. investigation from talking points on the firings.
At approximately 10:00 a.m. that morning, Mr. Watkins and
Mr. Foucart informed the Travel Office employees that they were
being dismissed because of a review that revealed gross
mismanagement within their office. They were told they had two
hours to clean out their desks and leave. That directive was
later extended to the end of the day. Afterwards, Mr. Watkins
spoke again with Ms. Myers and was informed that she had
disclosed the F.B.I. investigation to the media. Later that
afternoon, Ms. Myers gave a press briefing about the firings,
referred to a KPMG Peat Marwick report as the basis for those
firings, and denied that there was an F.B.I. investigation.
It should be noted that KPMG Peat Marwick's first draft
report, while dated May 17, 1993, was not presented to Mr.
Kennedy in final form until late on May 21, 1993 (two days
after the firings). It was accompanied by with a cover letter
indicating that the procedures did not constitute an audit, and
that KPMG was giving no assurances on the accuracy or
completeness of the information in the report. The report was
not given to the F.B.I. until late on the evening of May 21,
1993. It was not provided to the F.B.I. Washington Metropolitan
Field Office until May 24, 1993.
In October 1993, a provision was placed in the
Transportation Appropriations bill to pay $150,000 for the
legal bills of the five White House Travel Office employees who
were subsequently placed on administrative leave and
transferred to other positions within the Federal government.
However, the $150,000 was not enough to completely cover the
five employees' legal expenses, and no provision was made for
the two other employees' legal expenses, because they were
still under investigation.
In May 1994, the General Accounting Office (GAO) sent their
report to Congress on White House Travel Office operations. In
that report, GAO indicated that while senior White House
officials said the terminations were based on ``findings of
serious financial management weaknesses, we noted that
individuals who had personal and business interests in the
Travel Office created the momentum that ultimately led to the
examination of the Travel Office operations.'' GAO also cited
the White House Management Review's recognition that ``the
public acknowledgment of the criminal investigation had the
effect of tarnishing the employees' reputations, and the
existence of the criminal investigation caused the employees to
retain legal counsel, reportedly at considerable expense.''
An investigation by the Public Integrity Section of the
Criminal Division at the Department of Justice continued over
the next two and a half years. After being indicted in December
1994, Billy Dale was tried in October and November 1995. Mr.
Dale was acquitted of all charges after a 13-day trial by a
jury that deliberated only two hours.
According to documents submitted by six of the seven former
Travel Office employees with remaining legal expenses, their
total attorney fees and costs are as follows:
Billy Dale.............................................. $425,991.76
John McSweeney.......................................... 30,234.23
Ralph T. Maughan........................................ 11,476.06
Gary Wright............................................. 6,838.70
Barney Brasseux........................................ 6,298.82
John P. Dreylinger..................................... 5,837.02
NEED FOR THE LEGISLATION
Since May 19, 1993, several separate investigations have
uncovered a concerted effort by former associates and friends
of the President and First Lady to pursue travel and aviation
business controlled within the White House. As a result of the
accusations put forward by these associates and the subsequent
F.B.I. investigation, these seven employees suffered public and
private humiliation and incurred extensive legal expenses in
their attempt to defend themselves.
On the basis of these facts, the Committee feels in the
interest of equity, these particular individuals' attorneys
fees should be reimbursed by the United States.
There has been discussion as to what type of precedent is
being set by the payment of attorney fees in this bill. It is
not the Committee's intent that this legislation set a
precedent that the attorney fees of any individual fired for
cause and later exonerated should be paid. This is a unique
case and the Committee believes each monetary claim against the
United States should be judged on a case-by-case basis.
Another point of discussion has been the definition of
attorneys fees. It is the Committee's intent that the
guidelines for appropriate attorneys fees set out by Judge
George MacKinnon, Presiding Judge of the U.S. Court of Appeals
for the District of Columbia Circuit, Division for the purpose
of Appointing Independent Counsels, in several independent
counsel attorneys fees decisions should be applied to this
situation. Therefore, the legislation uses the term ``attorney
fees and costs'', the term that Judge MacKinnon was called upon
to interpret in the independent counsel cases. This also
conforms with the standards used by the Department of
Transportation General Counsel in determining appropriate
attorney fees when disbursing the previously appropriated
$150,000 to five of the employees.
On February 29, 1996, the Subcommittee on Immigration and
Claims met in open session and ordered reported the bill, H.R.
2937, by a voice vote, a quorum being present. On March 12,
1996, the Committee met in open session and order reported the
bill H.R. 2937 with amendment by voice vote, a quorum being
VOTE OF THE COMMITTEE
Four amendments were offered en bloc by Congressman Frank
and adopted by voice vote. The first amendment restricted the
time to file a claim under this bill to 120 days. The second
amendment added a provision that payment of a claim under this
Act would be in full satisfaction of all claims against the
United States concerning this series of events. The third
amendment clarified that any money previously disbursed by the
United States to any of the claimants to pay their attorney
fees are to be deducted from their total expenses, and the
fourth amendment deleted the phrase ``legal expenses and
related fees'' and inserted instead ``attorney fees and
costs'', the term that Judge MacKinnon interpreted in the
independent counsel cases.
COMMITTEE OVERSIGHT FINDINGS
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT FINDINGS
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
COMMITTEE COST ESTIMATE
In compliance with clause 7(a) of rule XIII of the Rules of
the House of Representatives, the Committee believes that the
cost incurred in carrying out H.R. 2937 would be $486,676.59.
NEW BUDGET AUTHORITY AND TAX EXPENDITURES
Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
In compliance with clause 2(l)(C)(3) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 2973, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
Congressional Budget Office,
Washington, DC, March 18, 1996.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 2937, a bill for the reimbursement of legal
expenses and related fees incurred by former employees of the
White House Travel Office with respect to the termination of
their employment in that office on May 19, 1993. H.R. 2937 was
ordered reported by the House Committee on the Judiciary on
March 12, 1996. Based on documents submitted by the attorneys
for the former employees of the White House Travel Office to
the House Committee on Government Reform and Oversight, CBO
estimates that the bill would require the Secretary of the
Treasury to pay about $500,000 in legal expenses and fees.
Assuming enactment of the bill by June 1, 1996, we estimate
that this outlay would occur in fiscal year 1996. (If the bill
is enacted late in fiscal year 1996, some of the reimbursement
could occur in fiscal year 1997.) These payments would be
direct spending, and pay-as-you-go procedures would apply.
The bill contains no intergovernmental or private sector
mandates as defined in Public Law 104-4 and would impose no
direct costs on state, local, or tribal governments.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John R.
June E. O'Neill, Director.
INFLATIONARY IMPACT STATEMENT
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that H.R.
2937 will have no significant inflationary impact on prices and
costs in the national economy.
Section 1. Reimbursement of certain attorney fees and costs
Subsection (a) directs the Secretary of the Treasury to
pay, out of funds not otherwise appropriated, to former
employees of the White House Travel Office whose employment was
terminated on May 19, 1993, reimbursement of attorney fees and
costs they incurred with respect to that termination.
Subsection (b) directs that the Secretary of the Treasury shall
pay the individual upon submission of documentation verifying
the attorney fees and costs. Subsection (c) states that there
is no inference of liability of the United States by enactment
of this legislation or payment under this legislation.
Section 2. Limitation on filing of claims
This section directs that the Secretary of the Treasury
will not pay any claim filed under this Act later than 120 days
after its enactment.
Section 3. Reduction
This section directs that any monies previously disbursed
by the United States to any of the individuals to pay their
attorney fees are to be deducted from their total attorney fees
Section 4. Payment in full settlement of claims against the United
This section states that payment made to any individual
under this Act shall be in full satisfaction of all claims of,
or on behalf of, the individual against the United States with
respect to the termination of their employment in the White
House Travel Office on May 19, 1993.
At a January 30, 1996, press briefing, Press Secretary
McCurry indicated that the President would sign legislation to
reimburse Mr. Dale for his legal expenses. The Committee had
asked the White House for confirmation that the President would
sign legislation which also includes the other employees' legal
expenses. At this time, the Committee has received no response
from the Administration on this question.
changes in existing law made by the bill, as reported
Clause 3 of rule XIII of the Rules of the House of
Representatives requires that changes in existing law made by
the bill, as reported, be included in the report.
This bill makes no direct amendments to any Act.