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                        HOUSE OF REPRESENTATIVES

 2d Session                                                 Vol. 3 of 4

                           VIOLATIONS OF LAW


November 5, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


  Mr. Burton, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              SIXTH REPORT

                             together with


    On October 8, 1998, the Committee on Government Reform and 
Oversight approved and adopted a report entitled, 
``Investigation of Political Fundraising Improprieties and 
Possible Violations of Law.'' The chairman was directed to 
transmit a copy to the Speaker of the House.



                           CHAPTER V, PART A






    In the course of the Committee's investigation, we learned 
of another source of foreign money--South America. The 
Committee learned that the New York District Attorney's Office 
conducted an investigation into the banking activities of the 
Castro family of Venezuela, and had uncovered evidence of 
illegal campaign activities by that family. The District 
Attorney's Office turned this investigation over to the Justice 
Department, which failed to pursue any charges against the key 
individuals involved. The Committee followed up on the New York 
District Attorney's investigation, and brought to light the 
facts of the Castro case.

                           I. The Key Players

                        A. Orlando Castro Llanes

    Born in Cuba, Castro Llanes was head of a wing of that 
nation's communist party until fleeing the island in 1959 
following an alleged dispute with Fidel Castro.\1\ After 
landing in Haiti, Castro Llanes went to Miami, and in 1961 or 
1962, depending on the account, arrived in Caracas, Venezuela 
with just $150 in his pocket.\2\ By the 1980s, Castro Llanes 
had become an influential businessman in Venezuela, earning a 
fortune in the insurance business. He began aggressively 
expanding his financial empire, becoming active in banking, 
real estate, finance companies, radio stations and 
newspapers.\3\ Ultimately, his Grupo Impresas Latinamericanos 
included among its holdings, the Banco Progreso in Venezuela, 
the Banco Progreso de Internacional de Puerto Rico, and the 
Banco Latinamericano in the Dominican Republic.\4\
    \1\ Ramon Maceiras, Orlando Castro: La Historia Apasionante de un 
Coloso de las Finanzas Venezolanas, (1991) at 49-65.
    \2\ Id. at 10.
    \3\ See generally id.
    \4\ Id.
    In March 1991, following allegations of money laundering, 
U.S. Customs inspectors ordered the Banco Progreso accounts at 
New York's Bank America International frozen, along with those 
of a number of other banks.\5\ Castro Llanes turned to his 
long-time legal advisor and business associate, Charles 
Intriago, for assistance. Mr. Intriago had known Castro Llanes 
for over a decade, and had acted as his principal legal advisor 
on matters related to the United States. In fact, they were so 
close that Castro Llanes provided $80,000 in start-up capital 
for Intriago's Money Laundering Alert newsletter.\6\ In 
addition, Castro Llanes was reportedly seeking to have Intriago 
appointed U.S. ambassador to Venezuela.\7\ Intriago also 
organized a defense team for the Banco Progreso matter which 
ultimately convinced U.S. Customs to release the accounts.\8\
    \5\ Peter Truell, ``Too Close for Comfort?; Inquiry Touches Money 
Laundering Expert's Backer,'' New York Times, Apr. 4, 1996, at D1.
    \6\ Id.
    \7\ Interview of James Kindler and Joseph Dawson, Dec. 26, 1997 
(``Kindler-Dawson Interview'').
    \8\ Id.
    In 1994, following the collapse of the Venezuelan banking 
system, Castro fled to the United States and settled in Miami. 
Venezuelan banking regulators seized Banco Progreso that 
December. Castro was later charged in absentia with bank fraud, 
embezzlement, and conspiracy by the Venezuelan government.\9\
    \9\ Id.
    On April 4, 1996, Castro Llanes was indicted in New York 
along with his son and grandson on charges of a scheme to 
defraud in the first degree. He was convicted on grand larceny 
charges on February 19, 1997, and in April of that year 
sentenced to a term of 1 to 3 years in prison. The larceny 
involved defrauding depositors of the Banco Progreso 
International de Puerto Rico of as much as $55 million. His 
crime also cost the government of Venezuela more than $8 

                        B. Orlando Castro Castro

    The U.S.-educated son of Castro Llanes, and uncle of Jorge 
Castro Barredo, Orlando Castro Castro was president of the 
Banco Progreso in Caracas, Venezuela. He was convicted along 
with his father and nephew by the Manhattan District Attorney 
on charges of bank fraud involving the theft of millions of 
dollars from a Puerto Rican bank the family controlled. He was 
sentenced to a term of 2\1/3\ to 7 years in prison.\10\
    \10\ Id.

                        C. Jorge Castro Barredo

    The grandson of Castro Llanes, Castro Barredo worked in his 
grandfather's banking empire as president of the Banco 
Latinamericano in the Dominican Republic. In 1992, Castro 
Barredo made $25,000 in illegal foreign conduit contributions 
to the Democratic party. According to his sworn testimony, 
these contributions were made at the direction of family lawyer 
and DNC Trustee, Charles Intriago. Bank documents show that the 
contributions were reimbursed shortly thereafter by a 
Venezuelan firm owned by his grandfather.\11\ Castro Barredo 
was also charged in the Banco Progreso fraud case.\12\
    \11\ Id.
    \12\ Id.
    The bank fraud case was precipitated when an insurance 
company controlled by the Castro family overdrew its account at 
their Dominican Bank, and local banking authorities required 
the institution to increase its deposits by $3 million. Castro 
Barredo improperly withdrew $3.26 million from the family's 
Puerto Rican bank and deposited itin the Dominican Republic 
institution, using a portion of the money to purchase a yacht.\13\ 
Castro Barredo provided testimony to representatives of the Justice 
Department concerning his knowledge of illegal foreign conduit campaign 
contributions and his testimony was corroborated independently by 
documentary evidence obtained by the New York District Attorney's 
    \13\ Id.
    \14\ Venezuelan Money and the Presidential Election, Hearing, 
Committee on Government Reform and Oversight, Apr. 30, 1998 (``Castro 
Hearing'') at 77-78 (Testimony of Joseph J. Dawson).
    Notwithstanding documentary and testimonial evidence, the 
Justice Department chose not to bring any charges related to 
the Castro conduit contributions.\15\ On February 19, 1997, 
Castro Barredo was convicted on the unrelated bank fraud and 
larceny charges. On December 15, 1997, he was sentenced to a 
term of 3\1/2\ to 10\1/2\ years in prison.\16\
    \15\ See Letter from Lee J. Radek to Richard T. Preiss, Oct. 17, 
1997 (Exhibit 1).
    \16\ Castro Hearing at 9 (Testimony of Jorge Castro Barredo).

                          d. Maria Sire Castro

    Maria Castro is the aunt of Castro Barredo, and the wife of 
Rafael Castro, another one of Castro Llanes's sons. She made a 
$20,000 illegal foreign conduit campaign contribution to the 
DNC, and a $5,000 illegal conduit contribution to the Maryland 
State Democratic party in 1992.\17\
    \17\ Id. at 10, 14 (Testimony of Jorge Castro Barredo).

                          E. Charles Intriago

    The relationship between Castro Llanes and Intriago goes 
back nearly two decades. After first meeting in 1980, Castro 
Llanes soon became one of Intriago's clients.\18\ Jorge Castro 
Barredo testified about his social ties with Intriago, making 
reference to their attending Florida Marlins baseball games 
together.\19\ Castro Barredo also told Committee investigators 
that Intriago was paid a monthly retainer by Castro Llanes of 
$20,000 to $25,000 per month and acted as his legal advisor on 
all matters related to the United States. He further stated 
that on one occasion, during the Venezuelan banking crisis of 
1994, he was instructed to pay Intriago $100,000 by either 
Castro Llanes or his associate Luzmenia Briceno.\20\ In 1989, 
with the help of an $80,000 investment from Castro Llanes in 
exchange for a 15 percent interest in the venture, Intriago 
founded the Money Laundering Alert newsletter.
    \18\ Interview of Jorge Castro Barredo, Jan. 19, 1998 (``Castro 
Interview I'').
    \19\ Castro Hearing at 39 (Testimony of Jorge Castro Barredo).
    \20\ Castro Interview I.
    After getting caught up in a bitterly contested hostile 
takeover fight for control of the Banco de Venezuela in 1990, 
Castro Llanes turned to Intriago for help. He soon faced 
another potentially critical problem and again turned to 
Intriago. In March 1991, U.S. Customs officials, suspicious of 
transactions taking place in accounts held by a number of 
Venezuelan banks in New York, moved to freeze the funds held by 
those banks. Banco Progreso's account at the Bank America 
International was among those affected. Intriago put together 
what Jorge Castro Barredo described as a ``Dream Team'' \21\ of 
attorneys and political operatives to obtain release of the 
funds and was ultimately successful.\22\
    \21\ Interview of Jorge Castro Barredo on Sept. 15, 1998.
    \22\ Id.
    After being subpoenaed to appear before an executive 
session of this Committee, Intriago declined to answer 
questions, invoking the Fifth Amendment to virtually all 
questions posed.\23\ Intriago's attorney, did, however, submit 
a letter on behalf of Intriago to the Committee, stating in 
    \23\ Deposition of Charles A. Intriago, Feb. 20, 1998 (``Intriago 

        Mr. Intriago is not a government official. He has never 
        held a high elected or appointive government position. 
        He has never been an employee of, or consultant to, the 
        Democratic National Committee. He is not a ``friend'' 
        or ``associate'' of the President, the Vice President, 
        or any other high ranking Democratic Party official. He 
        has not applied for, been interviewed for or considered 
        for a government job. He has never had or sought a 
        government contract. Mr. Intriago simply is a respected 
        private lawyer with a previously unblemished record of 
    \24\ Castro Hearing at 36 (Statement by Robert Plotkin, Counsel for 
Charles Intriago).

    This statement, is at best, misleading. According to DNC 
documents obtained by the Committee, Intriago is listed as an 
``applicant'' for a Federal appointment. The documents indicate 
that he was involved in the 1992 Florida Presidential campaign, 
and that the recommendation was forwarded on December 16, 
1992.\25\ It indicates his ``JOB PREF./AREA OF INTEREST'' as 
``LEGL,'' likely indicating a legal job preference. It 
indicates his ``AGENCY/DEPARTMENT PREFERENCE'' as ``Just,'' 
likely indicating the Department of Justice.\26\ The notation 
also indicates under the title ``Job Level'', the initials 
``SL,'' indicating a senior level position.\27\
    \25\ See DNC Document 076440, a review of applicants for political 
appointments by the newly elected Clinton Administration (Exhibit 2).
    \26\ Id.
    \27\ Id.
    Similarly, the contention that Intriago has never been a 
``high government official'' understates his actual employment 
history. He was a senior congressional staff member early in 
his career, and served as a Special Assistant to the Governor 
of Florida, playing a major role in the development of that 
state's racketeering laws. He also served as an Assistant U.S. 
Attorney in Florida.
    Mr. Intriago's name also is listed in another DNC document 
which is a compilation of recommendations for a delegation to 
attend the 1994 Salvadoran election. Intriago's name is first 
on the list which also includes such dignitaries as Secretary 
of Energy Bill Richardson, then mayor of Albuquerque Martin 
Chavez, and prominent DNC donor Walter Kaye.\28\ The Committee 
also obtained a letter dated December 2, 1992, from Intriago to 
then DNC Chairman Ron Brown addressed ``Dear Ron,'' and 
    \28\ Memorandum from Martha Phipps to Dana Wyckoff, Feb. 23, 1994 
(Exhibit 3).

        Just a brief note to tell you that I enjoyed meeting 
        you during the campaign in Little Rock and Middleburg. 
        Apparently, I am now a ``trustee'' of the DNC and am 
        looking forward to assisting you in any way I can.

           *       *       *       *       *       *       *

        So that you will know a little more about me, I enclose 
        a couple of recent issues of my publication, Money 
        Laundering Alert, together with some background 
        information. I think this is an issue on which 
        President Clinton can make some headway in dealing with 
        the drug and white collar crime problems.\29\
    \29\ Letter from Charles Intriago to Ron Brown, Dec. 2, 1992 
(Exhibit 4).

                   II. Castro's Illegal Contributions

    On September 15, 1992, Charles Intriago called Jorge Castro 
Barredo at his office in the Dominican Republic, and asked him 
to make several contributions to the DNC.\30\ Castro Barredo 
recalls that Intriago said either that ``we are going to make 
some contributions to Clinton's campaign,'' or that ``your 
grandfather wants to make contributions to Clinton's 
campaign.'' \31\ Intriago told Castro Barredo that he and his 
uncle, Rafael Castro, should make the contributions, because 
they were U.S. citizens.\32\ At this point, Castro Barredo told 
Intriago that Rafael did not have a bank account, but that 
Rafael's wife, Maria Sire Castro, had a bank account, and was a 
U.S. citizen.\33\ Intriago then told Castro Barredo that he 
should write one check to the DNC for $20,000, and another 
check to the Ohio State Democratic party for $5,000.\34\ 
Intriago also told Castro Barredo to have Maria Castro write a 
check for $20,000 to the DNC, and a check for $5,000 to the 
Maryland State Democratic party.\35\ After Castro Barredo's 
telephone conversation with Intriago, he requested that his 
uncle have his aunt draft the two checks that Intriago had 
    \30\ Castro Hearing at 13.
    \31\ Castro Interview I.
    \32\ Id.
    \33\ Id.
    \34\ Id.; see Checks of Jorge Castro Barredo to Ohio Victory Fund, 
DNC Victory Fund '92, and Kentucky Democratic party (Exhibit 5).
    \35\ Id.; see Check of Maria Sire Castro to DNC Victory Fund 
(Exhibit 6); Check of Maria Sire Castro to Maryland Victory Fund 
(Exhibit 7).
    \36\ Id.
    Castro Barredo was slightly confused, however, by 
Intriago's instructions, and he asked Intriago to send a fax 
with written instructions for how to draft the checks.\37\ 
Castro Barredo received the fax the following day. On the fax, 
Intriago listed out each contribution that Castro Barredo and 
Maria Castro were supposed to make. At the bottom of the fax, 
Intriago wrote in Spanish: ``I want you to send me these today 
by Federal Express.'' \38\
    \37\ Id.
    \38\ See Committee Exhibit of fax cover sheet (Exhibit 8); see also 
Fax Message from Charles Intriago to Jorge Castro, Sept. 16, 1992 
(original) (Exhibit 9).
    At the time that he made the contributions, Castro Barredo 
knew that he and his aunt would be reimbursed.\39\ Castro 
Barredo had no interest in politics, had never voted, and had 
no interest in giving $25,000 to support any political 
party.\40\ Most importantly, during their telephone 
conversation about the contributions, Intriago assured Castro 
Barredo that he and his aunt would be reimbursed by ``one of 
his grandfather's companies.'' \41\
    \39\ Castro Hearing at 12-13 (Testimony of Jorge Castro Barredo).
    \40\ Castro Hearing at 12.
    \41\ Castro Hearing at 12-13.
    Several days after Castro Barredo sent the requested checks 
to Intriago, Intriago called him and requested that he send a 
new check. Intriago told Castro Barredo that he was not going 
to use the $5,000 check Castro Barredo had written to the Ohio 
state party, and instead, asked Castro Barredo to write a new 
$5,000 check to the Kentucky State Democratic party.\42\ On 
September 29, Castro Barredo did so, and sent the check to 
Intriago. However, days later, Intriago called again, and told 
Castro Barredo that he would not use the Kentucky check, and 
instead, asked Castro Barredo to draft a $5,000 check to the 
Florida Democratic party.\43\ Castro Barredo, exasperated, 
asked why he had to keep writing new checks.\44\ Intriago 
responded ``that's the way they want it.'' \45\ Castro Barredo 
did not ask for any further explanation, and sent the requested 
check to Intriago.
    \42\ Castro Interview I; see Exhibit 6.
    \43\ Id.; see Check from Jorge Castro Barredo to Florida Democratic 
party (Exhibit 10).
    \44\ Castro Hearing at 26.
    \45\ Id.
    On September 24, 1992, Castro Barredo received a wire 
transfer to his account for $24,990.\46\ Records indicate that 
the wire transfer came from Inversiones Latinfin, a company 
owned by Orlando Castro Llanes.\47\ Castro Barredo testified 
that Inversiones Latinfin does no business in the United 
    \46\ See Account Statement of Jorge F. Castro, International Bank 
of Miami, September 1992 (Exhibit 11); Wire Transfer Information, 
NationsBank, Sept. 24, 1992 (Exhibit 12).
    \47\ Wire Transfer Statements (Exhibits 13-14). See also Trust 
Statement for Banco Industrial de Venezuela (listing Inversiones 
Latinfin as one of Orlando Castro Llanes' companies).

                  A. The Castros' Red Carpet Treatment

    After his family contributed $50,000 to the Democratic 
party, Castro Llanes received red carpet treatment from the 
Clinton Administration over the coming year. Immeditaely after 
Bill Clinton's election in 1992, Castro Llanes told Castro 
Barredo that they were hopeful that Intriago would be appointed 
as ambassador to Venezuela.\48\ While this goal did not come to 
fruition, Intriago did give the Castro family increased access 
to Washington, DC, after President Clinton's election.
    \48\ Castro Interview I at 4.
    Castro Llanes, Intriago and Castro Barredo all attended the 
January 1993 inauguration of President Clinton.\49\ In October 
1993, Castro Llanes, Intriago, Castro Barredo, and Castro 
Castro returned to the United States. The first day that the 
group was in Washington, Castro Llanes and Intriago went to the 
White House for a reception for DNC donors.\50\ At this event, 
Castro Llanes had a picture taken with President Clinton.\51\ 
Castro Barredo was not invited to this event, even though it 
was he, not Castro Llanes, who had contributed $25,000 to the 
    \49\ Castro Hearing at 29.
    \50\ Castro Hearing at 29-31.
    \51\ Photograph of Orlando Castro Llanes and President Clinton, 
Oct. 14, 1993 (Exhibit 15). A set of photos of Charles Intriago and 
Orlando Castro Llanes were sent to Intriago by the DNC. See Letter from 
Eric Sildon to Charles Intriago, June 21, 1995 (Exhibit 16).
    The following day, the Castro group traveled to the State 
Department, where they met with State Department officials 
Perry Ball and Monica Adler.\52\ It was Castro Barredo's 
understanding that Intriago had set up the meeting at the State 
Department.\53\ The purpose of the meeting was to discuss the 
ongoing investigations of the Castro family and the various 
allegations that had been leveled against the family about 
money laundering.\54\
    \52\ Castro Interview I.
    \53\ Id.
    \54\ Id.

               B. Intriago's Ties to the Democratic party

    Intriago himself made over $52,000 in contributions to the 
DNC during the 1992 election cycle. These include contributions 
to the Democratic State Central Committee of Maryland, the 
Democratic Congressional Campaign Committee (``DCCC''), the 
DNC, the Colorado Democratic party, Senator Tom Harkin, the 
Illinois Democratic party, the Nebraska Democratic Future Fund 
Committee, and the Ohio Democratic party.\55\ After raising 
more than $10,000 at a Miami dinner honoring Vice President 
Gore in 1993, Intriago became a member of the DNC's Business 
Leadership Forum.\56\
    \55\ See FEC website,
    \56\ See Memorandum from Team Florida to Nancy Jacobson, Laura 
Hartigan, Jan Hearst, Sam Newman, May 7, 1993 (Exhibit 17).
    In the course of attending various DNC fundraising events, 
Intriago had the opportunity to come into close contact with 
other members of the DNC's elite. One of the most important of 
these was Charles ``Bud'' Stack, a DNC Trustee, who, along with 
Intriago was a major donor to an April 29, 1993, dinner 
honoring Vice President Gore. Intriago received help from Stack 
in arranging a meeting between Castro Llanes and President 
Clinton.\57\ Intriago became a DNC Trustee in 1992, evidenced 
by a letter written by Intriago on December 2, 1992.\58\
    \57\ Truell, Peter, ``Too Close For Comfort,'' the New York Times, 
Apr. 4, 1996.
    \58\ Exhibit 5.

          III. The New York District Attorney's Investigation

    In December 1994, the Latin American banking community was 
rocked by the collapse of three major financial institutions, 
the Banco Progreso in Venezuela, the Banco Progreso 
Internacional de Puerto Rico, and the Banco Latinamericano in 
the Dominican Republic. These institutions were all part of 
Group Impresas Latinoamericanos, Orlando Castro Llanes' 
financial empire.\59\ Following the collapse of these financial 
institutions, the New York District Attorney's Office initiated 
an investigation into possible violations of banking law by the 
Castro family.\60\ In the course of the investigation, an 
Assistant District Attorney and several investigators were 
granted permission to examine the files of the Banco 
Latinamericano in Santo Domingo, one of the Castro family 
banks. Banco Latinamericano's president was Jorge Castro 
Barredo, Castro Llanes' grandson.\61\
    \59\ Kindler-Dawson Interview.
    \60\ Kindler-Dawson Interview.
    \61\ Castro Hearing at 75 (Testimony of Joseph J. Dawson); see also 
Kindler-Dawson Interview.
    While conducting their search, the New York investigators 
discovered a number of documents in the office of Castro 
Barredo's secretary, including the fax dated September 16, 
1992, from Intriago instructing Castro Barredo to make conduit 
contributions. The New York investigators also discovered 
copies of checks showing Castro Barredo's contributions to the 
Democratic party.\62\
    \62\ See Exhibits 5-7.
    Later, upon their return to New York, the District 
Attorney's Office subpoenaed a number of bank records including 
those of Jorge Castro Barredo and Maria Sire Castro. The bank 
records showed that both of the $20,000 checks to the DNC 
Victory Fund 1992 Federal Account had been cashed, but that 
Castro Barredo's first two state party checks had not been 
cashed. They did confirm, though, that Castro Barredo's $5,000 
check made out to the Florida Democratic party had been 
cashed.\63\ More importantly, the records showed that on 
September 24, 1992--just 8 days after the fax--both Jorge 
Castro Barredo and Maria Sire Castro received wire transfers to 
each of their accounts in the amount of $24,990.\64\ Taken 
together, these documents support the assertion that an illicit 
transaction consisting of a conduit contribution reimbursed by 
a non-U.S. entity took place.
    \63\ See Exhibit 10.
    \64\ See Wire transfer documents (Exhibits 13-14).

        IV. The Justice Department's Handling of the Castro Case

    The New York District Attorney's Office had uncovered 
convincing evidence of a serious violation of Federal campaign 
law, and they decided to refer the matter to Federal 
prosecutors. Since most of the criminal acts involved in the 
case had occurred in Miami, the District Attorney's Office 
referred the matter to the Federal prosecutors in the Southern 
District of Florida. In the referral letter, Assistant District 
Attorney John Moscow wrote to Richard Gregorie, Senior 
Litigation Counsel in the U.S. Attorney's Office in Miami, to 
inform him of what had been discovered:

        [T]he checks and wire transfer relate to a series of 
        violations of the laws relating to campaign financing. 
        That is, two people sent $25,000 each to a political 
        party and received reimbursement for those political 
        contributions from an off-shore company.\65\
    \65\ Letter from John W. Moscow to Richard Gregorie, Oct. 9, 1996 
(Exhibit 18).

Mr. Moscow also forwarded copies of the documents which had 
been obtained in the course of the bank fraud investigation. At 
this same point in time, the District Attorney's Office also 
referred another aspect of the Castro investigation, involving 
customs law violations, to Federal prosecutors in the Southern 
District of New York.
    Mr. Moscow followed up on the letter by meeting with 
Gregorie in Miami on October 17, 1996.\66\ Further follow-up to 
this meeting took the form of two letters sent to the Miami 
Assistant U.S. Attorney on October 28, 1996, and October 29, 
1996.\67\ On February 24, 1997, two additional packets of 
documents were forwarded to Miami by the New York District 
Attorney. These packets included:
    \66\ Castro Hearing at 77 (Testimony of Joseph J. Dawson).
    \67\ Letters from John W. Moscow to Richard Gregorie, Oct. 28, 1996 
(Exhibit 19) and Oct. 29, 1996 (Exhibit 20).
           The fax from Alert International discovered 
        in Santo Domingo.
           Copies of checks issued by Jorge Castro 
        Barredo and Maria Sire Castro to DNC ``Victory Funds.''
           A wire transfer document showing that on 
        September 13, 1994, Castro Barredo sent Intriago 
           Two canceled checks issued by Castro 
        Barredo, one for $20,000 to the DNC Victory Fund '92 
        Federal Account and one for $5,000 to the Florida 
        Democratic party Federal Account.
           Account statements from the International 
        Bank of Miami N.A. for the account of Jorge Castro 
        Barredo showing the checks were cashed.
           Two canceled checks issued by Maria Castro, 
        one in the amount of $20,000 to the ``DNC Victory Fund 
        1992 Federal Account'' and one for $5,000 to the 
        Maryland Democratic party Federal Account.
           The NationsBank account statements for Maria 
        Sire Castro showing that the check was cashed.
           Wire transfer documents showing that $25,000 
        was wired to both Jorge Castro Barredo and Maria Sire 
        Castro from Banco Latino by order of Inversiones 
        Latinfin on September 24, 1996.
           Shareholder documents showing that 
        Inversiones Latinfin was owned by Castro Llanes.\68\
    \68\ Letter from John W. Moscow to Richard Gregory Esq. [sic], Feb. 
24, 1997 (Exhibit 21).
On March 11, 1997, Joseph Dawson of the New York District 
Attorney's Office spoke with a Miami Federal prosecutor and 
discussed the issue of the statute of limitations for 
prosecuting the campaign law case against Castro. The 
prosecutors agreed that since the fax transmission occurred and 
the checks were written in the fall of 1992, the statute would 
expire in the fall of 1997.\69\
    \69\ Id.

                          A. Castro Cooperates

    At the same time that the New York District Attorney's 
Office was discussing the conduit contributions case with the 
Miami U.S. Attorney's Office, they were also holding 
discussions about obtaining Jorge Castro Barredo's cooperation. 
Castro Barredo had been convicted, along with his grandfather 
and uncle, on February 19, 1997. An agreement was ultimately 
reached, and Jorge Castro Barredo agreed to be debriefed by the 
New York District Attorney's Office.\70\
    \70\ Id.
    The debriefings took place on March 20, 1997 and April 3, 
1997. In the course of the debriefings, Castro Barredo stated 
that he made contributions of $20,000 to the DNC, and $5,000 to 
a state Democratic party at Intriago's instructions, and that 
he was reimbursed for the contribution by one of his 
grandfather's companies.\71\ According to Castro Barredo, Maria 
Sire Castro also made a $20,000 contribution to the DNC and a 
$5,000 contribution to a state Democratic party at Charles 
Intriago's direction, and was similarly reimbursed by Castro 
Llanes.\72\ Castro shared with the prosecutors the entire story 
of how he had come to contribute to the Democratic party, how 
he had been reimbursed, and what the family had received for 
the contributions. The testimony given by Castro to the 
prosecutors was the same that he gave the Committee in 
interviews, and in its hearing.\73\ In the Committee's hearing, 
the District Attorney working on the case confirmed that Castro 
was truthful throughout interviews and debriefings with their 
    \71\ Id.
    \72\ Id.
    \73\ Castro Hearing at 82.

          Counsel. Has Mr. Castro ever told you anything about 
        conduit contributions that has later proven to be 
          Mr. Preiss. No.\74\
    \74\ Id. at 82 (Testimony of Richard T. Preiss).

    Following the debriefing of Castro Barredo by the New York 
prosecutors, they arranged for Castro Barredo to meet with 
Federal prosecutors on May 28, 1997.\75\ Just prior to the 
meeting, Preiss spoke with Assistant U.S. Attorney Bruce Udolf 
from the U.S. Attorney's Office in the Southern District of 
Florida and again expressed his concern over the potential 
statute of limitations problem.\76\ They agreed that the likely 
statute of limitations for a prosecution relating to the Castro 
contribution expired on September 16, 1997, or 5 years from the 
date of Intriago's fax to Castro Barredo.\77\ Roughly 1 week 
after Castro Barredo talked with the Federal prosecutors, a 
Federal prosecutor in Miami called Preiss, thanking him for the 
cooperation and courtesy provided by the New York District 
Attorney's Office.\78\ He also stated that his office intended 
to pursue the matter, and that its investigation could be 
completed before the statute of limitations expired.\79\
    \75\ Id. at 79 (Testimony of Richard T. Preiss).
    \76\ Id.; see also Kindler-Dawson Interview.
    \77\ Interview of Richard Preiss and Joseph Dawson, Jan. 19, 1998 
(``Preiss-Dawson Interview'') at 1.
    \78\ Castro Hearing at pp. 79-80.
    \79\ Id.

      B. The Castro Case is Taken by the Public Integrity Section

    In late June or early July 1997, Preiss received a phone 
call from Castro Barredo's attorney, Marc Nurik, stating that 
the Justice Department's Public Integrity Section had taken the 
Castro case away from the prosecutors in the Southern District 
of Florida.\80\ Nurik said that he had spoken with the head of 
the Justice Department's Public Integrity Section, Lee Radek, 
and was concerned that Radek had nothing substantive to say 
about the Justice Department's plans for the case.\81\ Nurik 
feared that the Justice Department would allow the statute of 
limitations to expire, leaving his client with nothing to show 
for his cooperation.\82\
    \80\ Preiss-Dawson Interview.
    \81\ Id.
    \82\ Id.
    After confirming that the case had been transferred, Preiss 
attempted to speak to Lee Radek. Preiss spoke with Radek's 
assistant, but the assistant refused to put Preiss through 
unless he had a ``referral number'' for the case.\83\ Preiss 
then asked that whoever was handling the case contact him.\84\ 
An exchange between the Committee Counsel and Mr. Preiss 
concerning his attempts to contact Radek raises serious 
questions about the responsiveness of the Justice Department to 
the apparent violation of law which was connected to a DNC 
    \83\ Id.
    \84\ Castro Hearing at 88-89 (Testimony of Richard T. Preiss).

          Counsel. Now, Mr. Preiss, did you try and have a 
        conversation with Mr. Radek?
          Mr. Preiss. Yes.
          Counsel. What was the result?
          Mr. Preiss. I was not put through to him.
          Counsel. Now, it's my understanding--correct me if 
        I'm wrong--that you were told that Mr. Radek would not 
        speak to anyone unless they had a referral number for 
        the case, correct?
          Mr. Preiss. That's correct.
          Counsel. And do you know whether Mr. Castro's lawyer 
        had such a referral number?
          Mr. Preiss. If he did, he didn't give it to me.
          Counsel. Did anybody ever give you a referral number 
        for this case?
          Mr. Preiss. No, I don't think we were ever given a 
        referral number. I don't think anybody had a referral 
        number. Maybe there was a referral number inside the 
        Department of Justice, but, again I wouldn't be privy 
        to that, so I don't know.
          Counsel. Right, but Mr. Castro's attorney was not an 
        employee of the Department of Justice, so he had the 
        same status as you.
          Mr. Preiss. No he was not an employee of the 
        Department of Justice.
          Counsel. OK. And I don't know whether this is a 
        question you can answer or not, but were you concerned 
        at the time that Mr. Castro's attorney was given more 
        attentive treatment at the highest levels of the 
        Department of Justice than you?
          Mr. Preiss. Well, I thought at the time, I think I 
        said in the conversation that I couldn't understand why 
        the defense attorney's phone call could be taken the 
        day before, but mine couldn't be and I was the 
        prosecutor and he was the defense lawyer. I think 
        that's what I said to the person who answered the 
    \85\ Id. at 89 (Testimony of Richard T. Preiss).

The willingness of Mr. Radek to accept a phone call from a 
defense attorney and at the same time refuse to accept a phone 
call from a New York Assistant District Attorney who referred 
the case is curious. At the same time, however, it is not the 
most troubling aspect of the case. Of particular concern is the 
decision of Justice Department officials in Washington to 
ignore evidence which strongly suggests that not only was an 
illegal conduit contribution made, but that it was made in 
close coordination with a prominent Democratic contributor who 
is a lawyer and who was getting directions from another unknown 

                        C. The Castro Case Dies

    Roughly 1 week later, Preiss was called by Peter Ainsworth, 
a trial attorney from the Justice Department's Campaign Finance 
Task Force. Ainsworth told Preiss that he was handling the 
Castro case, and had in his possession the notes and documents 
from the meeting the other Federal prosecutors had had with 
Castro Barredo.\86\ Preiss offered to make Castro Barredo 
available for an interview, and stated that he was willing to 
request a sentencing delay if necessary. The attorney told 
Preiss that he did not want to speak with Castro Barredo, but 
did want to speak with the New York prosecutors and to review 
some documents.\87\
    \86\ Preiss-Dawson Interview.
    \87\ Castro Hearing at 80 (Testimony of Richard T. Preiss).
    On July 23, 1997, Ainsworth came to New York accompanied by 
an FBI agent, spoke with the New York prosecutors, reviewed the 
documents which corroborated Castro Barredo's testimony, and 
took with him photocopies of some of the documents.\88\ At this 
meeting, Preiss and Dawson told Ainsworth that they were 
willing to delay Castro Barredo's sentencing pending the 
Justice Department's review of Castro Barredo's 
contributions.\89\ The New York District Attorneys recommended 
the delay in sentencing so that Castro Barredo would continue 
to have an incentive to cooperate. Requesting such a delay in 
sentencing was the standard prosecutorial practice that they 
had followed in the past.\90\ In addition, while Ainsworth was 
at their office, Preiss and Dawson both reminded Ainsworth that 
the statute of limitations on the Castro case likely expired on 
September 16, 1997.\91\
    \88\ Id.
    \89\ Id.
    \90\ Castro Hearing at 103-104.
    \91\ Preiss-Dawson Interview.
    The following month, the New York prosecutors asked for and 
received a stay in Castro Barredo's sentencing.\92\ On August 
19, 1997, and then again on September 23, 1997, the New York 
District Attorney's Office requested delays in Castro Barredo's 
sentencing.\93\ Preiss also provided additional information to 
Ainsworth after Castro Barredo's sentencing was delayed.\94\ In 
his letter to Ainsworth, Preiss again asked that the Justice 
Department let him know what their plans were concerning this 
    \92\ Castro Hearing at 80.
    \93\ Id.
    \94\ Letter from Richard T. Preiss to Peter Ainsworth, Sept. 4, 
1997 (Exhibit 22).
    \95\ Id.
    After returning from a vacation in late September 1997, 
Preiss called the Task Force attorney several times to find out 
what the status of the case was.\96\ He was concerned that the 
perceived September 16 deadline would pass without any action 
from the Justice Department.\97\ Eventually, he received a 
voice mail message thanking him for his patience. Despite the 
lack of response from the Justice Department, the New York 
District Attorney again requested that sentencing be delayed 
once more, and it was, this time until October 20, 1997.\98\
    \96\ Preiss-Dawson Interview.
    \97\ Id.
    \98\ Castro Hearing at 81 (Testimony of Richard T. Preiss).
    Preiss wrote to Ainsworth again on October 10, 1997, 

        Jorge Castro Barredo is currently scheduled to be 
        sentenced on October 20, 1997. We referred a matter to 
        the Department of Justice in late 1996 and Castro 
        Barredo is a witness who has been interviewed by 
        representatives of the Department of Justice in 
        connection with an investigation of Charles A. 
    \99\ Letter from Richard Preiss to Peter Ainsworth, Oct. 10, 1997 
(Exhibit 23).

           *       *       *       *       *       *       *

        Please advise us whether the Department of Justice 
        intends to make any submissions regarding Castro 
        Barredo's cooperation or lack of cooperation in your 
        investigation and send us a copy before October 20, 
        1997. If you wish us to request a delay in the 
        sentencing of Castro Barredo, please advise us 
        immediately how long a delay you would like us to 
        request and the basis for the delay in order that we 
        may convey that information to the court.\100\
    \100\ Id.

    A week later, Castro Barredo's attorney called Preiss, 
stating that he had received a copy of a letter from Lee Radek, 
chief of the Justice Department's Public Integrity Section to 
Preiss advising him that the Department would neither be asking 
for a further postponement of Castro Barredo's sentence, nor 
submitting a letter on his behalf. In the letter, Radek stated:

        [W]e have concluded that there is at this time no 
        further role for him [Castro Barredo] to play in 
        matters under investigation by the Task Force.\101\
    \101\ Memorandum from Marc S. Nurik to Richard T. Preiss with 
attached letter from Lee J. Radek, Oct. 17, 1997 (Exhibit 24).

Castro Barredo was sentenced on December 15, 1997, to between 
3\1/2\ to 10\1/2\ years in prison on bank fraud charges. No 
charges have ever been filed against Charles Intriago by the 
Justice Department. When he was called to testify by the 
Committee, Mr. Intriago invoked his Fifth Amendment 
    \102\ See Intriago Deposition.
    The frustration of the New York District Attorney's Office 
with the Justice Department was clear from the testimony of 
Preiss and Dawson before the Committee. In fact, at one point 
during their dealings with the Justice Department, the District 
Attorney's Office considered taking the Castro case back from 
the Justice Department. Mr. Dawson testified to this fact 
before the Committee:

    Counsel. Just one last question, and I'll address this to 
you, Mr. Dawson. Did you at any time have great enough concerns 
that you discussed or contemplated trying to take the case back 
and have your own office do something with the conduit 
contributions case?
    Mr. Dawson. Yes, we had conversations about it.

           *       *       *       *       *       *       *

    Mr. Burton. Let me followup on that. When you had 
conversations about it, were those conversations involving Mr. 
    Mr. Dawson. Well, I'm reluctant to answer the question only 
because it involves questions between--I mean conversations 
between Assistant District Attorneys in our office, and the 
question whether to basically take back a matter that had 
already been referred is sort of a touchy area.\103\
    \103\ Castro Hearing at 107.


    The Castro case represents one small episode in a large 
pattern of illegal campaign contributions in the 1992 and 1996 
elections. However, the Castro case stands out from the others 
for the way it was so obviously mishandled by the Justice 
Department. The Justice Department was presented with clear 
evidence that a major DNC fundraiser was involved in directing 
conduit contributions to the DNC. Moreover, they had evidence 
that Mr. Intriago was receiving guidance on how to direct those 
contributions from some higher authority, presumably within the 
Democratic party. Inexplicably, the Justice Department failed 
to pursue this case, and let the statute of limitations on the 
case expire, effectively preventing anyone else from pursuing 
    A key point in the testimony of the New York District 
Attorneys, Dawson and Preiss, came during an exchange with 
Chairman Burton:

          Mr. Burton. You thought Mr. Intriago should have been 
          Mr. Dawson. That the matter should have been 
          Mr. Preiss. We thought the matter should have been 
          Mr. Burton. Including Mr. Intriago.
          Mr. Dawson. Well, to be honest with you Mr. Chairman, 
        we had already looked into some of Mr. Intriago's 
        transactions ourselves, and we had referred all of this 
        stuff. So, I guess it's no secret that this was among, 
        I suppose, that he would be among the matters we had 
          Mr. Burton. You thought it was worth them looking at.
          Mr. Preiss. Absolutely, that's why we referred 
    \104\ Id. at 88 (Testimony of Joseph J. Dawson and Richard T. 

    The investigation into the illegal conduit contributions of 
the Castro family leaves many unanswered questions. Among the 
most pressing unresolved issues are:
           The role Charles Intriago played in 
        funneling illegal conduit contributions to the DNC and 
        its various state affiliates.
           The possibility that the solicitation of 
        such contributions was coordinated with senior 
        officials of the DNC.
           The circumstances surrounding the transfer 
        of the Castro family case from the Southern District of 
        Florida to the Justice Department's Public Integrity 
           Why the Justice Department chose not to 
        prosecute a case where there was clear and compelling 
        evidence to show that several crimes had been 
           Why the FEC failed to act on the clear 
        evidence of election law violations presented in the 
        Castro family case.
           Why, for more than 2 months, the Attorney 
        General has denied the request of the Committee to 
        interview Richard Gregorie, the Assistant U.S. Attorney 
        involved in the investigation of the Castro case before 
        it was taken away by the Public Integrity Section. 
        Gregorie likely has detailed information about the 
        reasons that the Castro case was taken to Public 
        Integrity, but the Attorney general has never responded 
        to multiple requests made by the chairman to interview 
        Mr. Gregorie.
    It is the opinion of the Committee that the Public 
Integrity Section of the Department of Justice was derelict in 
its duty to pursue clear evidence of crimes including wire 
fraud, mail fraud, conspiracy and campaign finance violations 
related to the Castro case. The Justice Department's failure to 
act on this case prevented the American people from learning 
the truth about illegal campaign fundraising activities going 
back to the 1992 presidential election. The Committee was able 
to uncover only part of the truth, the story of how Jorge 
Castro and his aunt made $50,000 in illegal contributions to 
the DNC. However, there are two more critical questions that 
the Committee has been unable to answer: why did the Castro 
family make the contributions, and who was telling Charles 
Intriago how to direct these contributions? These are facts 
that could have been discovered by a timely prosecution of 
Charles Intriago. However, because of the Justice Department's 
malfeasance in the Castro case, the truth may never be 
    [Supporting documentation follows:]


                           CHAPTER V, PART B




FEC Enforcement Practices and the Case against Foreign National Thomas 
    Kramer: Did Prominent DNC Fundraisers Receive Special Treatment?

                            I. INTRODUCTION

    Another foreign contributor who came to the Committee's 
attention was Thomas Kramer. Mr. Kramer, a German citizen with 
considerable real estate holdings in the South Beach area of 
Miami, illegally contributed over $322,600 to national, state, 
and local candidates of both the Democratic and Republican 
parties.\1\ The Tampa Tribune noted the donations and published 
an article in September 1994 questioning whether or not Kramer 
was eligible to make political contributions.\2\ The following 
week, Kramer ``voluntarily'' disclosed his illegal activity, 
claiming ignorance as to the illegality of his campaign 
    \1\ The Committee's investigation focused only on the state and 
national contributions.
    \2\ Louis Lavelle, ``Developer's donations questioned,'' Tampa 
Trib., Sept. 28, 1994, at Florida/Metro 1.
    Upon learning that Kramer's contributions might not be 
legal, almost all of the contributed money was returned to 
Kramer by the parties involved.\3\ The FEC ultimately fined 
Kramer, his secretary (Terri Bradley), the law firm of 
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. 
(``Greenberg Traurig''), and the Republican Party of Florida 
(``RPF'') for giving or receiving Kramer's contributions. The 
penalties associated with the Kramer contributions totaled 
$503,000. Mr. Kramer was individually fined $323,000--the 
largest penalty of its kind ever assessed by the FEC.\4\
    \3\ The Republican Party of Florida [RPF] did not return $95,000 of 
the $205,000 it received. The RPF successfully argued that the money 
had been placed in a redistricting account that it was legally 
permitted both to receive and spend money contributed by foreign 
nationals. The FEC agreed with the RPF's position. Conciliation 
Agreement, In the Matter of Republican Party of Florida (federal/non-
federal accounts) and James H. Stelling, as treasurer, MUR 4398, Feb. 
20, 1997, at 1.3 (Exhibit 1).
    \4\ Robert Jackson, ``German Given Record Fine in Campaign Donation 
Case,'' L.A. Times, July 19, 1997, at A16.
    The two individuals most closely identified with soliciting 
Kramer's contributions were Marvin Rosen, the former Finance 
Chairman of the Democratic National Committee (``DNC''), and 
Howard Glicken, a former Vice Finance Chairman of the DNC and 
close political associate of Vice President Gore. Mr. Glicken 
was charged on July 9, 1998, by the Department of Justice's 
Campaign Financing Task Force and pled guilty to two 
misdemeanor violations stemming from his role in the Kramer 
solicitations.\5\ The FEC fined Greenberg Traurig--the law firm 
hired by Kramer to handle immigration matters and which counts 
Marvin Rosen as a partner--$77,000 for soliciting illegal 
contributions from Kramer with knowledge of his foreign 
national status. When asked who at the firm besides Rosen 
solicited contributions from Kramer, the FEC reported that:
    \5\ Jane Bussey, ``Political money probe nabs Miamian,'' Miami 
Herald, July 10, 1998, at 9A.

        The only Greenberg-Traurig individual specifically 
        identified as a solicitor of Mr. Kramer's contributions 
        in the file of this matter is Marvin Rosen.\6\
    \6\ Federal Election Commission Enforcement Actions: Foreign 
Campaign Contributions And Other FECA Violations Before the House 
Committee on Government Reform And Oversight, 105th Cong., 2d sess. 114 

    During the course of the Committee's investigation, the 
explanations given by FEC staff members only served to raise 
further skepticism as to the conviction with which the FEC 
pursued the Rosen and Glicken investigations. Indeed, the FEC 
has never adequately explained why it failed to bring a case 
against Rosen individually, or why it initially failed to 
pursue a case against Glicken. Notwithstanding the fact that 
neither Rosen nor Glicken was fined by the FEC--despite 
evidence demonstrating that these two individuals were the only 
solicitors who had reason to know that Kramer was ineligible to 
make contributions--FEC General Counsel Noble stated on March 
31, 1998, that no one at the FEC ever even called Rosen or 
Glicken about the contributions.\7\ It should be further noted 
that Kramer was not contacted by the FEC until a year and a 
half after first disclosing his illegal contributions to the 
commission. Yet, in announcing that it would not conduct 
enforcement proceedings against Glicken, the FEC made the 
following statement in December 1997:
    \7\ Id. at 80 (statement of FEC General Counsel) (emphasis added).

        [B]ecause of Mr. Glicken's high profile as a prominent 
        Democratic fundraiser, including his potential 
        fundraising involvement in support of Vice President 
        Gore's expected presidential campaign, it is unclear 
        that this individual would agree to settle this matter 
        short of litigation.\8\
    \8\ General Counsel's Report, In the Matter of Greenberg, Traurig, 
Hoffman, Lipoff, Rosen & Quentel, P.A., et al, MUR 4638, Dec. 19, 1997, 
at 2.3-2.4 (Exhibit 2).

    FEC counsels and Commissioners, in both the FEC 
conciliation agreement and in subsequent testimony before the 
Committee, argued that this statement referred to a statute of 
limitations that was about to expire at the time Glicken's name 
was discovered in conjunction with his solicitation of 
Kramer.\9\ They argued that discovering Glicken's name at such 
a late point made bringing a case against Glicken difficult for 
the Commission and would complicate the settlement process for 
the other involved parties.\10\ This position, however, cannot 
explain away the fact that Kramer submitted an affidavit in 
December 1994--approximately 4 years before the statute of 
limitations would expire--which put the FEC on notice that a 
key fundraiser for the Democratic party may have knowingly 
solicited his illegal contributions.\11\ Furthermore, the FEC's 
statement linking Glicken to Vice President Gore as an apparent 
reason for not pursuing the matter appears to be a particularly 
ill-considered message that the FEC does not prosecute cases 
when met with resolve and political connections. 
Notwithstanding the fact that many of the recipients of 
Kramer's donations had no knowledge of his foreign national 
status, the Thomas Kramer matter demands vigorous attention for 
two reasons:
    \9\ Federal Election Commission Enforcement Actions, supra note 6 
at 80-81 (statement of FEC General Counsel). General Counsel Noble 
stated that the FEC ``did not find Mr. Glicken's name until July 1997, 
and that particular contribution, where there was a suggestion that it 
was a contribution in the name of another, or solicited as a 
contribution in the name of another, the statute of limitations would 
have run at the end of April of this year.'' Id. at 81.
    \10\ Id. at 82.
    \11\ Affidavit of Thomas Kramer, Dec. 27, 1994 (Exhibit 3); see 
also Letter from Roger M. Witten to Joan McEnery and Mary L. Taksar, 
Dec. 27, 1994 (Exhibit 21).
          (1) Kramer's first and third federal contributions 
        were conduit contributions made at the request of, and 
        with the knowledge of, very prominent Democratic 
        fundraisers; and
          (2) the FEC appears to have missed the mark 
        entirely--prominent national fundraisers should be 
        penalized heavily if they encourage others to break the 
    An analysis of FEC practices and procedures relevant to the 
Thomas Kramer matter follows this chapter as Appendix 1.

            II. Thomas Kramer: High Profile German Developer

                             A. Background

    Thomas Bernhard Kramer was born in Bad Soden, Germany on 
April 27, 1957. He worked at Shearson Lehman Hutton Inc. in 
Frankfurt from 1983 until 1988, leaving Germany the following 
year after his plan to buy up East German pre-reunification 
real estate proved unsuccessful. He settled in Miami during the 
early 1990s and remains in the United States as a resident on a 
tourist visa.\12\
    \12\ Christine Evans, ``Kramer vs. Kramer,'' Miami Herald, May 9, 
1993, at 9. Notwithstanding requests to the Department of Justice for 
immigration information on Thomas Kramer, this Committee has not 
received as much cooperation as expected.
    Mr. Kramer's lack of U.S. citizenship would certainly not 
surprise anyone remotely familiar with the Miami South Beach 
scene. Leading a high profile life colored with self-promotion, 
Kramer was often described in newspapers and national magazines 
by such monikers as ``the impulsive German whiz kid'' \13\ or 
``the German multimillionaire.'' \14\ During the early 1990s, 
he amassed more than $40 million in property on South Beach and 
Star Island--often paying cash for his acquisitions. The Miami 
Herald once ran a full color picture of Kramer on the cover of 
its Tropic insert describing Kramer as ``The German Tycoon Who 
Wants To Rebuild South Beach in His Own Image.'' \15\
    \13\ Evans, supra note 12.
    \14\ Christine Evans, ``The Mysterious Stranger,'' Tropic, Jan. 3, 
1993, at 11.
    \15\ Tropic Magazine Cover, Jan. 3, 1993 (Exhibit 4).
    FEC General Counsel Lawrence Noble stated in testimony 
before this Committee that, to his understanding, Kramer was 
definitely known to be a German investor in the South Beach, 
Miami area. Mr. Noble further pointed out that Kramer's 
immigration status ``was a question of whether or not it was 
obvious or not he was a foreign national and whether or not he 
was what's called a green card holder in this country.'' \16\ 
Mr. Noble's statement shows that Kramer's immigration status 
was thus something certainly in need of scrutiny. 
Notwithstanding public information that might have led 
potential solicitors to question Kramer's nationality, the 
evidence obtained by the Committee demonstrates that Marvin 
Rosen and Howard Glicken clearly had knowledge that Kramer was 
ineligible to make political contributions. The sections of 
this chapter discussing the roles played by Rosen and Glicken 
in the Kramer solicitations will explore such evidence in 
    \16\ Federal Election Commission Enforcement Actions, supra note 6 
at 35 (statement of FEC General Counsel).
            The DNC and Kramer's Questionable Immigration Status
    The Committee uncovered additional evidence demonstrating 
that the DNC was on, at a minimum, constructive notice of 
Kramer's questionable immigration status. Notwithstanding the 
aforementioned newspaper articles describing Kramer's foreign 
national status, documents show that the DNC conducted 
background NEXIS research on the Miami-based developer which 
turned up a Forbes magazine article describing Kramer as a 
``German investor.'' \17\ The DNC's own ``Event Form'' for 
Chairman David Wilhelm for a June 10, 1993, Vice Presidential 
dinner described Kramer as being ``[b]orn in Germany.'' \18\ 
The form did not mention Kramer's exact immigration status, 
leaving the legality of his ability to make political 
contributions a matter of uncertainty.
    \17\ DNC Major Donor Screening Form for Olympus Holdings, Inc. and 
corresponding background information (Exhibit 5).
    \18\ Event Form for Chairman Wilhelm, June 10, 1993 (Exhibit 6).
    Despite his questionable status, Kramer earned a DNC 
Business Leadership Forum position due to the fundraising 
efforts he undertook for an April 29, 1993, dinner for Vice 
President Gore.\19\ A DNC memo dated May 7, 1993, to party 
finance directors demonstrated why Kramer was considered an 
attractive target for campaign funds:
    \19\ Charles Intriago, another South Florida Democratic Fundraiser 
and DNC Trustee was also in attendance. See ``Charles Intriago and 
Illegal Political Contributions from Venezuela'' section of this 

        Tom Kramer--Gave $25,000 to the event. Is the developer 
        who will build much of South Miami Beach and is worth 
        tens of millions. Make him a Trustee and stroke him and 
        he'll do more than $50,000 for the program.\20\
    \20\ Florida Donors Memorandum, May 7, 1993, at 7.5 (Exhibit 7).

    Other employees at the DNC also targeted Kramer directly. 
Eric Sildon, Director of Membership Services for the DNC, 
included Kramer on a list of potential invitees to a Florida 
event for President Clinton ``because things like this might 
get him jazzed-up to start writing those big checks.'' \21\ Mr. 
Kramer's name appeared on call sheets for both Laura Hartigan, 
Director of the DNC's Trustee Program, and for David Wilhelm, 
the then-DNC Chairman.\22\ Mr. Wilhelm also drafted a letter to 
Kramer and his wife on May 27, 1994, inviting them to a June 
1994 DNC National Presidential Dinner.\23\ National Finance 
Chairman Terry McAulliffe also invited Kramer to the DNC's 1994 
Business Leadership Forum's Issue Conference and to the DNC's 
National Presidential Dinner.\24\ As a result of such targeted 
solicitation, Kramer eventually attained DNC Managing Trustee 
status.\25\ Along with his numerous contributions and 
invitations to various DNC causes and events, Kramer also began 
to gain access to both the Vice President and the First Lady: 
Mr. Kramer likely attended a private dinner with the Vice 
President on June 10, 1993, at the Four Seasons Hotel in 
Georgetown \26\ and was also scheduled to be seated at the 
First Lady's table at another DNC event.\27\
    \21\ Clinton in Florida Memorandum, Sept. 20, 1993 (Exhibit 8).
    \22\ Laura Hartigan Calls (Exhibit 9); see also Call Sheet for 
Chairman David Wilhelm, Nov. 16, 1993 (Exhibit 10).
    \23\ Chairman David Wilhelm Letter to Mr. and Mrs. Tom Kramer, 
dated May 27, 1994 (Exhibit 11).
    \24\ Invitation to Thomas Kramer to the 1994 Business Leadership 
Forum's Issue Conference (Exhibit 12).
    \25\ Invoice Dates DNC Managing Trustees, at 13.7 (Exhibit 13).
    \26\ NMR Event Brief, June 10, 1993 (Exhibit 14). Kramer was slated 
to sit at Chairman Wilhelm's table. Table Diagram (Exhibit 15).
    \27\ The First Lady's Table (Exhibit 16). Mark Jimenez, who is also 
currently under investigation for campaign fundraising abuses, was also 
listed on the diagram. Id.

                            B. Contributions

    Mr. Kramer made numerous contributions to national and 
state candidates of both the Democratic and Republican parties 
between April 1993 and March 1994. He made the contributions in 
his own name, in the name of his companies, in his wife 
Catherine Burda Kramer's name, and in his secretary Terri 
Bradley's name. In an affidavit filed with the FEC, Kramer 

        [N]o one who solicited or accepted my candidate 
        contributions ever asked me about my immigration 
        status, advised me that I was illegal to contribute, or 
        rejected my political contributions because of my 
    \28\ Affidavit, supra note 11.

    The Committee's investigation uncovered no evidence 
contradicting this claim for the majority of recipients. Two 
facts, however, stand out. First, Marvin Rosen's law firm--
Greenberg Traurig--did immigration work for Kramer, thereby 
putting Rosen and his colleagues on clear notice that Kramer 
was not eligible to make political contributions. Second, there 
appeared to be clear and convincing evidence that Kramer was 
counseled on how to break the law by Howard Glicken. Because 
Glicken coached Kramer on making conduit contributions through 
Kramer's secretary, it is appropriate to assume that he 
understood that Kramer himself would not make the 
    On August 5, 1996, Kramer entered into a conciliation 
agreement with the FEC stating that ``[r]espondent Thomas 
Kramer made a total of $322,600 in contributions either 
directly, through his secretary, through unknown 
intermediaries, or as an officer through his various 
corporations which were used in connection with elections for 
local, State and Federal office, in violation of 2 U.S.C. 
Sec. Sec. 441e and 441f.'' \29\ The two conduit contributions 
made through his secretary Terri Bradley, the first and third 
contributions made by Kramer,\30\ are detailed in the chart 
    \29\ Conciliation Agreement, In the Matter of Thomas Kramer et al. 
MUR 4398, Aug. 5, 1996 (Exhibit 17).
    \30\ See Affidavit, supra note 11 at 3.3.

                              Contributions Made in the Name of Terri Bradley \31\                              
               Date                       Recipient          Amount         Returned?             Solicitor     
3/20/93...........................  Mitchell for Senate..     $1,000  Yes.................  Marvin Rosen \32\   
4/28/93...........................  DSCC.................    $20,000  Yes.................  Howard Glicken \33\ 
\31\ Bradley is no longer employed by the Portofino Group.                                                      
\32\ Sandler Letter to Rodriguez, Sept. 3, 1997, at 18.3, 18.11 (Exhibit 18).                                   
\33\ DSCC Finance Division Check Tracking Memorandum (Exhibit 19).                                              

    Kramer focused on these two contributions in his December 
1994 affidavit. The contributions are distinct from his other 
illegal contributions in that they involve violations of two 
Federal election law provisions--2 U.S.C. Sec. 441e, making 
illegal contributions by a foreign national and Sec. 441f, 
making illegal contributions in the name of another. This 
chapter will show that both Rosen and Glicken sought 
contributions from Kramer knowing he was a foreign national and 
that Glicken encouraged him to make contributions through a 
conduit. Anyone soliciting a contribution from Kramer knowing 
he was a foreign national or encouraging him to make the 
contribution through a conduit would thus be conspiring to 
violate Federal election law provisions.

                   C. The Case Against Thomas Kramer

    On September 28, 1994, the Tampa Tribune published an 
article entitled ``Developer's donations questioned,'' bringing 
into question the more than $500,000 contributed by the 
``flamboyant German developer.'' \34\ Shortly thereafter, 
Kramer brought the matter to the attention of the FEC. The 
somewhat unorthodox method by which the case arrived at the FEC 
was noted by FEC Commissioner McGarry during one of the Pre-
Matter Under Review, or Pre-MUR, hearings:
    \34\ Lavelle, supra note 2.

        I'm convinced also in my own mind that if it weren't 
        for the Tampa Tribune we wouldn't be seeing this case. 
        It is sua sponte yes, but I always am less sympathetic 
        when someone is accelerated, eh, to jump in and do 
        something and bring it to our attention when it's 
        publicized in a major newspaper.\35\
    \35\ FEC Pre-MUR 307/MUR 4398 proceedings, June 25, 1996.

    On October 4, 1994, Kramer's counsel wrote to FEC General 
Counsel Lawrence Noble expressing his client's desire to 
voluntarily disclose his violations of the Federal Election 
Campaign Act (``FECA'').\36\ The case was docketed as Pre-MUR 
307 (which later became MUR 4398 as the investigation 
continued). A longer letter and an affidavit from Kramer 
disclosing the contributions he made to the DNC and to the 
Republican party of Florida followed in December.\37\ In the 
affidavit, Kramer cited the September 1994 Tampa Tribune 
article, which spotlighted his illegal contributions, as 
providing the impetus for his decision to come forward. Kramer 
claimed that he was ``not knowledgeable about federal campaign 
finance laws'' at the time he made his political 
contributions.\38\ Both the letter and the affidavit state that 
Kramer was never advised that a foreign national could not make 
candidate contributions.
    \36\ Letter from Roger M. Witten to General Counsel Noble, Oct. 4, 
1994 (Exhibit 20).
    \37\ Letter from Roger M. Witten and Margaret L. Ackerley to the 
Office of the General Counsel, Dec. 27, 1994 (Exhibit 21); see also 
Affidavit, supra note 11.
    \38\ Affidavit, supra note 11.
    The fact that the FEC did not discover the identities of 
the solicitors of Kramer's illegal contributions until over 
2\1/2\ years after receiving Kramer's admissions, together with 
the FEC's General Counsel citing a then-expiring statute of 
limitations as a reason not to pursue a case against the 
solicitors, brings into question the FEC's management of this 
case. Indeed, FEC Commissioner Joan Aikens acknowledged a 
problem during one of the MUR hearings:

        My first objection to this was to the length of time 
        this was sitting around for a sua sponte complaint.\39\
    \39\ FEC Pre-MUR 307/MUR 4398, supra note 35.

Commissioner Aikens further noted:

        I understand the misfortunes that befell the matter, 
        but I do find it distressing to have a sua sponte 
        matter involving both corporate and foreign national 
        contributions delayed this long. It would seem that 
        something like this should be flagged to be sure that 
        it doesn't fall between the cracks.\40\
    \40\ Id.

    The FEC ultimately discussed the cases in Executive Session 
on four occasions,\41\ and handed down the following fines: 
Terri Bradley was fined $21,000 in July 1996; Kramer $323,000 
in August 1996; the Republican Party of Florida $82,000 in 
March 1997; and the law firm Greenberg Traurig $77,000 in 
February 1998. At the time, Kramer's fine was the largest ever 
assessed by the FEC for an illegal campaign contribution by an 
individual.\42\ The FEC decided to concentrate its case against 
these four entities in order to maximize the possibility of 
entering into conciliation agreements. For various other 
reasons--reasons which will be examined and explored in this 
chapter--the FEC decided not to pursue a case against Marvin 
Rosen or Howard Glicken, both closely involved with the Kramer 
conduit contributions. (The personal involvement of these 
individuals will be discussed in detail in the ``Marvin Rosen, 
Howard Glicken and Their Solicitations of Thomas Kramer'' 
section of this chapter).
    \41\ Noble Memorandum to the Commission, May 4, 1998 (Exhibit 23).
    \42\ Jackson, supra note 4.

     D. The Case against the Republican Party of Florida (``RPF'')

    On February 20, 1997, the RPF voluntarily entered into a 
Conciliation Agreement with the FEC for contributions it 
accepted from Kramer. The agreement noted that the party 
accepted the following contributions from Kramer: (1) Separate 
contributions of $100,000 and $5,000 from the Kramer-owned 
Portofino Group on June 4, 1994; and (2) $100,000 from Kramer 
on March 3, 1994, $5,000 of which was deposited into the 
party's Federal account with the balance being transferred into 
a non-Federal account and then transferred into a segregated 
redistricting account. The RPF argued, and the FEC later 
agreed, that it did not need to return $95,000 of the $205,000 
it received because it had been legally placed into a 
redistricting account. The FEC noted in the agreement that 
funds used solely for non-campaign related redistricting issues 
are exempt from the foreign national prohibition at 2 U.S.C. 
Sec. 441.\43\ The $95,000 transferred by the party was thus, 
according to the FEC, legally permissible under campaign 
finance law. Nothing in this agreement pointed to any evidence 
whatsoever that anyone within or related to the RPF knowingly 
solicited contributions from the foreign national or had direct 
knowledge of Kramer's status as a foreign national.
    \43\ In the Matter of Republican Party of Florida, supra note 3. 
The Committee believes that this aspect of Federal election law should 
be evaluated to determine whether it is appropriate.

                 E. The Case against Greenberg Traurig

    Because of the FEC's inability to reach a settlement with 
Greenberg Traurig as part of the broader Kramer-related MUR 
4398--and so as to not adversely prejudice the successfully 
completed portion of MUR 4398--the Commission severed the 
activity concerning Greenberg Traurig into a separate matter 
and launched an investigation into the law firm's involvement 
in Kramer's contributions.\44\ The investigation into Greenberg 
Traurig's actions was assigned the MUR number 4638.
    \44\ General Counsel's Report, In the Matter of Greenberg, Traurig, 
Hoffman, Lipoff, Rosen & Quentel, P.A., MUR 4638, Oct. 27, 1997, at 
23.2 (Exhibit 23).
    The FEC's case against Kramer from the outset, according to 
FEC Associate General Counsel Lois Lerner, targeted Greenberg 

        Our focus . . . was to proceed against him [Kramer] and 
        the law firm. Ordinarily in the past, we had not really 
        proceeded against solicitors in these kinds of cases, 
        but here we had very specific information regarding the 
        law firm[.] \45\
    \45\ Federal Election Commission Enforcement Actions, supra note 6 
at 39 (statement of FEC Associate General Counsel).

According to Lerner, ``Mr. Kramer had said that it was 
individuals in the law firm that had solicited him and that was 
how we had proceeded.'' \46\ Kramer's secretary, Terri Bradley 
informed the FEC that a named partner at Greenberg Traurig had 
solicited Kramer for illegal contributions. (For a discussion 
of the FEC's case against Rosen--whom the Committee suspects 
may be the ``named partner'' in question--see the ``Marvin 
Rosen'' portion of the following section.)
    \46\ Id.
    The FEC has not been clear about the frequency with which 
it proceeds against the solicitors of illegal foreign or 
conduit contributions. In an exchange before this Committee, 
FEC Associate General Counsel Lerner suggested that it was 
virtually unprecedented for the FEC to target the solicitors:

          Mr. Burton. Let me just follow up, if I might. You 
        have gone after individuals who illegally or 
        unethically solicited contributions that were not 
        legal, have you not?
          Ms. Lerner. Foreign national contributions, I believe 
        there's only been one other instance where we have 
        pursued a solicitor.
          Mr. Burton. Is that right? Only one other?
          Ms. Lerner. I believe so.

Yet according to arguments made by FEC Staff Attorney Jose 
Rodriguez to the Commissioners during the FEC's MUR hearing:

        There is a violation for someone who solicits the 
        foreign national contributions, but not for the 
        conduit. And having looked at some of our past practice 
        through the MURS, I don't believe we've actually held 
        anyone in violation of the foreign national prohibition 
        for simply being a conduit. We have held people 
        certainly for soliciting funds on behalf of the 
        [political] committee, but not for being a conduit.\47\
    \47\ FEC Pre-MUR 307/MUR 4398, supra note 35 (emphasis added).

    Greenberg Traurig was presumably targeted because of its 
particular and indisputable knowledge of Kramer's foreign 
national status. Yet it was Marvin Rosen--the DNC Finance 
Chairman, the lawyer who held Kramer as a client, and the 
actual solicitor of some of Kramer's contributions--who was in 
a unique and significant position. These factors make the 
reality that the FEC targeted Greenberg Traurig, rather than 
Rosen individually, even more difficult to comprehend.
    Greenberg Traurig eventually expressed a desire to settle 
the matter, and did so based on the $91,000 the firm admitted 
soliciting from Kramer.\48\ The agreement noted that the firm 
lawyers working on the immigration matters were aware of 
Kramer's foreign national status.\49\ The agreement did not 
detail which contributions the respondent solicited or which 
specific lawyers at the firm were aware of his immigration 
    \48\ Certification and Conciliation Agreement, In the Matter of 
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., et al. MUR 
4638, Dec. 31, 1997, at 24.3 (Exhibit 24).
    \49\ Id.
    It should be noted, however, that the FEC may have actually 
given Greenberg Traurig (and Marvin Rosen) an unfair advantage 
when it decided to split the case into two investigations. By 
splitting the case, the FEC was allowed to place into the 
public domain all of the facts involving all of the parties 
except Greenberg Traurig. The law firm, with which Kramer had 
placed his trust to advise him of the laws of this country and 
which in turn advised him to break the law by making illegal 
contributions, was thus given a chance to further distance 
itself from Kramer by splitting itself off into a far less 
public investigation.
    It should be further noted that Kramer's attorney objected 
to splitting off the Greenberg Traurig case. In a letter 
written to the FEC on June 20, 1997, Kramer's counsel wrote:

        We are advised that the Commission has taken the very 
        rare, if not unprecedented, action of severing the 
        above-referenced MUR [MUR 4398] to create a new MUR for 
        one respondent that has failed to reach a conciliation 
        agreement with the Commission.

           *       *       *       *       *       *       *

        We have been told that in severing this matter into two 
        separate MURs, the Commission will redact from the 
        public record of MUR 4398 certain facts that are 
        essential to a fair understanding of the case as it 
        concerns our client, Thomas Kramer. Specifically, we 
        understand that references in our December 27, 1994 
        voluntary disclosure letter and in Mr. Kramer's 
        accompanying affidavit to his having made contributions 
        at the suggestion and with the advice of counsel will 
        be omitted. . . . The planned deletions would omit a 
        critically relevant fact--that Mr. Kramer made many of 
        his contributions at the suggestion of a law firm that 
        knew of his foreign national status. Because the 
        omissions will obscure the fact that Mr. Kramer had 
        every reason to believe he was acting within the law 
        when he made campaign contributions, the public's 
        understanding of the facts will be skewed in a manner 
        grossly unfair to Mr. Kramer.\50\
    \50\ Letter from Roger M. Witten and Margaret L. Ackerley to 
General Counsel Noble, June 20, 1997 (Exhibit 25).

    Kramer's counsel further pointed out that at no time did 
Kramer ever advocate selectively publishing the facts 
surrounding his contributions. On the contrary, Kramer 
advocated full disclosure. Whether by intention or by accident, 
the splitting of the case into two separate MURs may have 
placed Kramer--who voluntarily came forward and disclosed all 
his improprieties completely and accurately--at a disadvantage, 
while placing Greenberg Traurig in a more favorable position.

 III. Marvin Rosen, Howard Glicken, and Their Solicitations of Thomas 

                     A. Marvin Rosen's involvement

1. Background

    Marvin S. Rosen is a shareholder in the Miami-based law 
firm Greenberg Traurig. He has a long history of political 
fundraising. He personally raised more than $300,000 for Walter 
Mondale's pre-nomination campaign in 1984.\51\ Mr. Rosen also 
served as chairman of Michael Dukakis' national finance board 
of directors in 1988 and was one of former Florida Governor 
Reubin Askew's chief fundraisers.\52\ He has also raised money 
for a number of Democratic Senators. He was elevated by the DNC 
to trustee status after raising more than $50,000 for an April 
1993 dinner in Miami honoring Vice President Gore.\53\ He 
served as a fundraiser for the Summit of the Americas 
conference in Miami and as head of the DNC Business Council.
    \51\ Jackson, Brooks, ``Dukakis Nears a Fund-Raising Record With 
Big Boost From Greek-Americans,'' Wall Street Journal, Sept. 21, 1987, 
at A1.
    \52\ Kenneth S. Allen, ``Costly decision: Askew pays price for 
leaving race,'' St. Pete. Times, May 12, 1988, at 1B.
    \53\ Florida Donors Memorandum, supra note 20.
    Mr. Rosen became Finance Chairman of the DNC in September 
1995. He did not, however, take a leave of absence from his 
private practice upon assuming the chairmanship--resulting in 
criticism from some of his colleagues for mixing personal and 
party business.\54\ As Finance Chairman, Rosen oversaw a staff 
of 110 people--setting broad strategy for raising funds, 
deciding where to hold Clinton fundraisers, and soliciting 
money from donors. He has since sought to distance himself from 
the investigation of campaign finance violations, stressing his 
chairmanship position was voluntary and claiming that others 
had day-to-day management responsibilities.\55\ Press accounts 
have reported that the DNC is paying his legal bills.\56\
    \54\ Michael Weisskopf and Susan Schmidt, ``Some Clouds Over a 
Rainmaker; As Democratic party Finance Role Grew, So Did Lobbying 
Firm,'' the Washington Post, Jan. 26, 1998, at A8.
    \55\ Id.
    \56\ Susan Schmidt, ``Democrats Renew Attacks on House Panel After 
Staff Turmoil in Political Funds Probe,'' the Washington Post, July 3, 
1997, at A4.
    According to then-DNC Chairman Don Fowler, Rosen conducted 
his fundraising under the control of Deputy White House Chief 
of Staff Harold Ickes: the finance division reportedly ``took 
their mission and charter from the White House and seemed to do 
what the White House wanted done.'' \57\ In November 1995, 
Rosen allegedly estimated that 20 telephone calls by Clinton 
and 15 calls made by Gore would raise $1.2 million,\58\ and two 
lists of potential donors were prepared for the President and 
Vice President.\59\ Mr. Rosen may have also been involved with 
setting up coffees with the President: an unidentified 
fundraiser stated in a newspaper article on February 26, 1997, 
that Rosen said ``[u]se the coffees to get the money,'' thereby 
acting against White House guidelines.\60\
    \57\ ``Democrats' Fowler: Donors Got Access On White House Word,'' 
Inv. Bus. Daily, Sept. 10, 1997, at A1.
    \58\ Don Van Natta, Jr., ``Fundraising fell short, report says,'' 
New York Times, Sept. 29, 1997, at A8.
    \59\ David Dahl, ``Lawyer Implies Clinton may have made calls,'' 
St. Pete. Times, Sept. 22, 1997, at A1.
    \60\ Lena H. Sun, ``Grand Jury Begins Hearing Testimony in DNC 
Fund-Raising Probe,'' the Washington Post, Feb. 27, 1997, at A17.

2. A. Pattern of Questionable Fundraising

    Although he was the key DNC finance official during the 
1996 campaign, Marvin Rosen has to date been largely overlooked 
in the campaign finance investigation. During his tenure as DNC 
Finance Chairman, Rosen was connected and involved with a 
number of questionable activities:
           Rosen's law firm was retained by Mark 
        Jimenez and his company Future Tech International, Inc. 
        Jimenez, Future Tech International, and his employees 
        donated $800,000 since 1993 to President Clinton, 
        Democratic causes and other related groups. Jimenez 
        says that he was introduced to the world of political 
        fundraising through the Miami firm. Future Tech began 
        making contributions to the DNC in 1993.\61\ Mr. Rosen 
        solicited $50,000 from Jimenez as detailed on a March 
        24, 1994, DNC Executive Finance Summary. Jimenez 
        visited the White House 12 times beginning in April 
        1994. Twenty-two employees of Future Tech each gave a 
        $1,000 contribution to Clinton-Gore '96 at a Bal 
        Harbour fundraiser in September 1995. Many or all of 
        these appear to be conduit contributions.\62\ Jimenez 
        was Florida's largest DNC contributor in 1996.\63\
    \61\ Jill Abramson, Jonathan Friedland, and Marcus W. Brauchli, 
``Latin Connection: DNC Donor with Ties to Paraguay Presses Its Case in 
White House,'' Wall Street Journal, Feb. 20, 1997, at A1. Jimenez was 
born in the Philippines and is a legal resident of the United States. 
He has links to the Paraguay government. Tom Squitieri, ``White House 
link to Paraguay probed,'' USA Today, Feb. 24, 1997, at 6A.
    \62\ William March, ``Feds examine campaign largess,'' Tampa Trib., 
Dec. 3, 1997, at 1.
    \63\ Id.
          On September 30, 1998, Jimenez was indicted by the 
        Justice Department Campaign Financing Task Force. The 
        17 count indictment was for, ``organizing, making and 
        concealing illegal conduit contributions to a number of 
        Democratic campaigns, including the 1996 Clinton/Gore 
        primary committee.'' \64\
    \64\ Press Release, Department of Justice, Sept. 30, 1998.
           Rosen was personally directed by President 
        Clinton to hire controversial fundraiser John Huang 
        after the DNC had ignored the suggestion of Joe Giroir 
        to hire Huang. Giroir was a friend of both the 
        President and of the Riady family. Ickes called Rosen 
        twice in the autumn of 1995 before Huang was finally 
        hired.\65\ Former DNC Finance Director Richard 
        Sullivan, before the Senate Governmental Affairs 
        Committee, testified that: ``My sense of it at the time 
        was that Harold had called Marvin on--twice about it 
        over the period of a couple of weeks, and that is when 
        Marvin acted on it.'' \66\ Rosen was prompted to hire 
        Huang after President Clinton approached him on 
        November 8, 1995, at an event held at the Historic Car 
        Barn: Rosen, in a deposition before the Senate 
        Committee on Governmental Affairs, stated that ``I 
        believe as part of the conversation, [the President 
        said] something along the lines that he came highly 
        recommended or something, but I did believe that it was 
        an approving comment at the time.'' \67\ Rosen and 
        Fowler soon thereafter gave Huang the title of Vice 
        Finance Chairman, the No. 2 or No. 3 position at the 
        DNC (according to Sullivan).\68\
    \65\ Don Van Natta, Jr., ``President Linked to Urgent Enlisting of 
Top Fundraiser,'' New York Times, July 7, 1997, at A1.
    \66\ Investigation on Illegal or Improper Activities in Connection 
with the 1996 Federal Election Campaign Part I Before the Senate 
Committee on Governmental Affairs, S. Hrg. 105-300 92 (1997) (statement 
of Richard Sullivan).
    \67\ Id. at 1663 (statement of Marvin Rosen).
    \68\ Id. at 99 (statement of Richard Sullivan).
           Rosen reportedly approved of the inclusion 
        of Wang Jun, head of a Chinese arms-trading company 
        under investigation for alleged involvement in weapons 
        smuggling, at a February 6, 1996, coffee because now-
        indicted fundraiser Charlie Trie and Ernie Green, a 
        friend of the President's and a Managing Trustee of the 
        DNC, were helping Huang raise money for a then-upcoming 
        fundraiser.\69\ Rosen also gave John Huang the go ahead 
        for the July 30, 1996, dinner at the Jefferson Hotel 
        which raised $488,000 for the President.\70\
    \69\ Alan C. Miller and Glenn F. Bunting, Ex-DNC Official May Pose 
Biggest Party Threat, July 9, 1997, at 1.
    \70\ See generally Tom Squitieri, ``Democrats knew Huang might be 
trouble,'' USA Today, Feb. 19, 1997, at 09A.
           Rosen's firm was also hired by Roger Tamraz, 
        an Egyptian-American oil financier wanted in Lebanon on 
        embezzlement charges. Tamraz hired Greenberg Traurig 
        and donated money to the Democratic party to promote 
        himself and his proposal to build a $2.5 billion oil 
        pipeline from the Caspian Sea region of Central Asia to 
        Western markets. Tamraz contributed about $300,000 to 
        Democrats in 1995 and 1996. A Federal grand jury is 
        seeking to determine if anyone tried to bribe or 
        pressure any Clinton administration officials into 
        supporting Tamraz and his plan.\71\
    \71\ David B. Ottaway and Dan Morgan, ``Senate panel to study saga 
of access and oil,'' Austin American-Statesman, Sept. 9, 1997, A8.
          Tamraz claimed that the firm was hired for legal 
        advice on regaining some of his properties seized in 
        Lebanon. The connection evidently came through Tamraz' 
        hiring of Greenberg Traurig lawyer Victoria Kennedy, 
        wife of Senator Ted Kennedy.\72\ Rosen and Sullivan met 
        with Tamraz at the Four Seasons Hotel in Washington, DC 
        on October 6, 1995. Tamraz complained that he had been 
        frozen out from the White House. Rosen promised to look 
        into it. Tamraz was later admitted to four White House 
    \72\ Edward Walsh, ``Tamraz Defends Political Donations; Access to 
Top Officials Was `Only Reason' Pipeline Promoter Testifies,'' the 
Washington Post, Sept. 19, 1997, at A1.
    \73\ Gregory Vistica and Michael Issikof, ``A Shadowy Scandal,'' 
Newsweek, Mar. 31, 1997, at 34.
          Tamraz testified before the Senate Committee on 
        Governmental Affairs during its campaign finance 
        inquiry. When asked by Senator Joseph Lieberman whether 
        he thought he got his ``money's worth'' for the 
        $300,000 he gave, Tamraz replied, ``I think next time 
        I'll give $600,000.'' \74\
    \74\ Investigation on Illegal or Improper Activities in Connection 
with the 1996 Federal Election Campaign Part VII Before the Senate 
Committee on Governmental Affairs, S. Hrg. 105-300 184 (1997) 
(statement of Roger Tamraz).
           The DNC assumed $25,000 in bills incurred at 
        Chicago's Four Seasons Hotel during the 1996 Democratic 
        Convention. Greg Cortes, an attorney from Puerto Rico, 
        had picked up the tab for Rosen's $3,000-a-night suite, 
        as well as part of the tab for treasurer Scott 
        Pastrick, after the hotel refused to provide free 
        rooms. Much of the bill was paid through wire 
        transfers. The DNC was concerned that the wire transfer 
        may have come from Cortes's South American business 
        associates and thus decided to pick up the tab. The DNC 
        also failed to report Cortes' payment as an in-kind 
        contribution to the party in its FEC filings.\75\
    \75\ Charles Babcock, ``DNC Assumes Hotel Bills First Paid by 
Business Consultant,'' the Washington Post, Jan. 8, 1997, at A14.

3. Marvin Rosen and the Kramer Solicitations

    Terri Bradley told the FEC she was able to identify the 
Greenberg Traurig partner who solicited contributions from 
Kramer, and was aware of both telephone and fax solicitations 
evidencing such solicitation.\76\ This information was conveyed 
during a telephone conversation between her lawyer and Jose 
Rodriguez, the staff attorney assigned to the case, in 
September 1997. Rodriguez was asked about this information 
during a Committee hearing:
    \76\ Office of the General Counsel Memorandum of Telephone Call or 
Visit, Sept. 11, 1997 (Exhibit 26).

          A: We had some discussion about the language that we 
        could include. Of course, what they wanted was some 
        language showing that the client relied on, uhm, legal 
        advice from the law firm. If I understand correctly, we 
        told them that we would provide some of this language. 
        We would not identify the law firm of course. Nor would 
        we include language showing that the law firm solicited 
        a number of the contributions. But we would allow some 
        language showing the client's reliance on legal 
    \77\ FEC Pre-MUR 307/MUR 4398, supra note 35.
          Q: And I guess my question is up until 1997, what was 
        done to try to deal with this very clear, specific 
        request and, obviously a violation of the law because 
        Ms. Bradley did, in fact, make a $20,000 conduit 
        payment, didn't she?
          A: Yes she did.
          Q: OK. And what steps did you take to try to find out 
        who this person was?
          A: The steps that were taken were taken during the 
        conciliation process, and I can't go into detail 
        because it's confidential information.
          Q: I understand.
          A: We sought to gain further information on this 
        transaction during the negotiations for conciliation. 
        We did not--the conciliation negotiations went quickly 
        incidentally, settlement was reached quickly. Later on 
        in the investigation when we could not find settlement 
        or reach settlement with the law firm, we inquired 
        further, and that brings us to the conversation you saw 
        earlier on the Telecon and other information that you 
        have in your possession.\78\
    \78\ Federal Election Commission Enforcement Actions, supra note 6, 
at 60.

    Associate General Counsel Lerner testified before this 
Committee during the same hearing that ``there's also 
information that there were other people in the law firm who 
were also involved in the solicitations, not just Mr. Rosen.'' 
\79\ Yet in a statement provided to the Committee after its 
March 31, 1998, hearing, the FEC reported that:
    \79\ Id. at 40 (statement of FEC Associate General Counsel).

        The only Greenberg-Traurig individual specifically 
        identified as a solicitor of Mr. Kramer's contributions 
        in the file of this matter is Marvin Rosen.\80\
    \80\ Id. at 114.

Based on evidence provided to the Committee by the FEC itself, 
it thus appears that Rosen was the ``named partner'' to whom 
Bradley was referring. Unfortunately, the Committee was not 
able to learn the identity of the ``named partner'' directly 
from Bradley because she asserted her Fifth Amendment rights 
before this Committee.
    The Committee also discovered that Rosen solicited $60,000 
from Kramer at an event in March 1994 and another $65,000 from 
Kramer through his companies. Both of the contributions 
violated 2 U.S.C. Sec. 441e.\81\
    \81\ DNC Check Tracking Form for 35 Star Island Inc. (Exhibit 27); 
Executive Summary for Mr. Tom Kramer (Exhibit 28); DNC Finance System 
report on Tom Kramer (Exhibit 29); DNC Response to Committee 
Interrogatories, Mar. 30, 1998 at 30.3 (Exhibit 30); see also Karpel, 
Craig, ``Al Gore's Ties to Dirty Money in Miami,'' Apr. 4, 1994, at 1.

                    B. Howard Glicken's involvement

1. Background

    Howard M. Glicken was born on November 16, 1943, in Miami. 
He serves as the Chairman of the Board of the Americas Group 
and is the former chairman of the Commonwealth Group,\82\ the 
College Democrats of America, and Jillian's Entertainment 
Corporation.\83\ He was fired from a Miami bank in 1983 after 
accepting a commission that his boss considered to be a 
kickback.\84\ Mr. Glicken also once headed MetalBanc Corp.,\85\ 
a precious-metals trading company indicted in a case involving 
laundering drug money.\86\ The charges were dropped, but in a 
settlement agreement Glicken created a subsidiary that agreed 
to pay the government $375,000. Mr. Glicken was never charged, 
but testified under a grant of limited immunity at the trial of 
his former partner, Harry Aaron Falk.\87\ Mr. Falk is currently 
serving a 27-year sentence.\88\ Committee investigators learned 
that another partner indicted in the MetalBanc investigation, 
Duvan Arboleda, was murdered in Colombia in early 1998.\89\
    \82\ The business addresses are: Alhambra Plaza, Suite 620, Coral 
Gables, FL 33134; 1 Massachusetts Ave. NW, Suite 850, Washington, DC 
20001; One Boston Street, 30th Floor, Boston, MA 02108.
    \83\ Jillian's owns a chain of billiard parlor/restaurants in 
Miami, Seattle, Cleveland, and Boston. Jillian's was formerly known as 
Carom. Carom was one of two Miami companies indicted by an Atlanta 
based grand jury on charges of money laundering as part of Operation 
Polar Cap. Polar Cap was a nationwide attack on the financial end of 
the Medellin cocaine cartel. David Sedore, ``Carom and Analysts Say 
Indictment Misses the Mark,'' S. Fla. Bus. J., Dec. 2, 1991, at 1. Falk 
and Duvan Arboleda, former chairman of the Orexana Corp. (another 
company indicted by the grand jury) were named in the indictment. Id. 
Arboleda was murdered in Colombia in spring 1998.
    \84\ Phil Kuntz and Jill Abramson, ``Glicken Raises Millions, 
Visits the White House Often, Arranges Introductions,'' Wall Street 
Journal, Apr. 29, 1997, at A1.
    \85\ MetalBanc bought Jillian's by paying an undisclosed sum for a 
51 percent interest in the chain of pool halls. Patrick Danner, ``Banc 
Shot: MetalBank Prepares to Take on Billiards Industry,'' S. Fla. Bus. 
J., Mar. 26, 1990, at 1. MetalBanc started Metal Resources Corp. in 
1987 as a mean to capitalize on opportunities in Brazil and other 
markets. ``Public Offering Set by Dealer of Precious Metals,'' S. Fla. 
Bus. J., July 6, 1987, at 1.
    \86\ Phil Willon, ``Fundraiser for Gore Reaps Dividends,'' Tampa 
Trib., Feb. 11, 1998, at 6.
    \87\ Phil Kuntz and Jill Abramson, ``Access Granted: A Fund-Raiser 
for Gore Retools His Career With an Aura of Clout,'' Wall Street 
Journal, Apr. 29, 1997, at A1.
    \88\ Id.
    \89\ Phone Interview of Cynthia Arboleda, Ex-Wife of Duvan 
Arboleda, in Washington, DC (June 2, 1998). Mrs. Arboleda attended the 
funeral of her ex-husband with her two children. According to Mrs. 
Arboleda, Duvan Arboleda was murdered in Envigado, Colombia on May 9, 
1998. His cause of death was attributed to multiple gunshot wounds. Id.

2. Prominent Fundraiser With Strong Ties to Vice President Gore

    Mr. Glicken has known Vice President Gore since 1987, 
serving as the Florida Finance Chairman during then Senator 
Gore's 1988 Presidential campaign. The license plates on 
Glicken's two Jaguars were, at one point, ``Gore 1'' and ``Gore 
2.'' \90\ He is known to show photos of a $6,000 pool table 
that he arranged to have donated to Vice President Gore's 
home.\91\ In addition, his son, Monte Glicken, once worked for 
Mr. Gore during his tenure as Vice President.\92\ According to 
a newspaper article, Glicken ``frequently advises the Vice 
President on ways to attract young people into the party.'' 
\93\ A request for a West Wing Tour made by Eric Sildon at the 
DNC noted such strong ties to Vice President Gore: ``Howard is 
one of our strongest supporters and has been a close friend of 
the Vice President's for many, many years.'' \94\
    \90\ Tamara Lytle, ``Friend of Gore avoids fine for illegal 
donations,'' Orl. Sentinel, Feb. 12, 1998, at A8.
    \91\ Id.
    \92\ Id.
    \93\ Hillary Stout, ``Gore Lays Strong Groundwork for the Future,'' 
Wall Street Journal Eur., Jan. 9, 1996, at 2.
    \94\ West Wing Tour Memorandum, Oct. 22, 1993 (Exhibit 31).
    Over the years, Glicken has developed an expertise in Latin 
American business and reportedly counsels the Vice President on 
Latin American affairs.\95\ He testified before a July 1994 
joint House International Relations Committee hearing on trade 
and the Western Hemisphere.\96\ Mr. Glicken was also hosted in 
Argentina by Ambassador James Cheek and twice stayed as a guest 
of U.S. Ambassador to Chile Gabriel Guerra Mondragon at the 
official residence.\97\ Mr. Glicken even accompanied the late 
Commerce Secretary Ron Brown on a 1994 export promotion tour 
through Latin America. His mere presence troubled some 
delegation members: Mr. Glicken's ``wheeling and dealing'' 
reportedly ``evoked squeamishness among a number of officials 
at Commerce.'' \98\ His inclusion thus raised the specter of 
political considerations possibly affecting Commerce Department 
decisionmaking.\99\ Despite such controversy, Glicken prepared 
a memo for the Vice President upon returning from the trip. 
This memo appeared to raise some concerns by staff members 
based on handwritten notes written on the letter's face.\100\
    \95\ Hillary Stout, ``Gore Lays Strong Groundwork for the Future,'' 
Wall Street Journal Eur., Jan. 9, 1996, at 2. Glicken also serves/
served on the board of the Make-A-Wish Foundation of South Florida. 
Peter Bernard, ``Legal Aid Builds Its Staff With Promotions, Hiring,'' 
Sun-Sentinel (Ft. Lauderdale Fla.), Feb. 1, 1995, at 7.
    \96\ The Summit of the Americas Hearing Part I: Prospects for or 
Trade within the Hemisphere Before the Subcommittee on Economic Policy, 
Trade and Environment and the Subcommittee on the Western Hemisphere of 
the House Committee on International Relations, 103d Cong., 2d sess. 
    \97\ Kuntz, supra note 87 at A8.
    \98\ Paul Blustein, ``A Cloud Over Commerce; Politics May Have 
Tainted Choices, Policy,'' the Washington Post, Dec. 22, 1996, at A1.
    \99\ Id.
    \100\ Glicken Letter and Memorandum to Vice President Gore, May 10, 
1994 (Exhibit 32). Two notations, which appear to be written in 
different handwriting, read ``David--We Better Discuss In Person--
Thanks J.Q.'', and ``Jack/David: Will you pls. Handle this--politics of 
whether we mention this to Secy. Brown. Beth.''
    The Miami businessman has also been considered for 
administration appointments. Mr. Glicken's nomination to the 
President's Export Council was approved by President Clinton in 
a March 1994 memo.\101\ After additional FBI information on 
Glicken arrived, however, his candidacy was withdrawn. No 
reason was listed for the application's withdrawal.\102\ Mr. 
Glicken was also considered a ``strong candidate'' and a ``good 
fit'' for the Delegation to the Inauguration of the new 
Colombian President.\103\ The recommendation memo noted that 
``Howard is on the Executive Board . . . of the Maimi (sic) 
Coalition for a Drug Free Community--a famous international 
drug interdiction and prevention program. He served in this 
organization with Janet Reno until she was appointed Attorney 
General.'' \104\ Mr. Glicken was also considered a priority for 
participation in the Miami Hemispheric Conference, according to 
a DNC memo.\105\
    \101\ Candidate for Presidential Appointment Memorandum, Mar. 22, 
1994 (Exhibit 33).
    \102\ Individual Information Sheet on Prospective Presidential 
Appointees, May 5, 1997 (Exhibit 34).
    \103\ Delegation to Columbia [sic] Memorandum, July 28, 1994 
(Exhibit 35).
    \104\ Id.
    \105\ Hemispheric Conference Memorandum to Laura Hartigan, Aug. 16, 
1994 (Exhibit 36). Marvin Rosen was also considered a priority. Id. 
Mark Jimenez was also a suggested participant and Thomas Kramer and 
Neal Harrington were considered as general priority. Id.
    Mr. Glicken has also been an active party fundraiser. He 
helped raise money for the Democrats in 1992 and raised $2 
million for the party in 1996. He was elevated to trustee 
status (along with Rosen) after raising more than $50,000 for 
the April 29, 1993, Miami dinner honoring Vice President 
Gore.\106\ He served as Co-Chairman of the December 1994 Miami-
based Summit of the Americas' business contingent.\107\ He 
attended coffees with both the President and the Vice 
President, flew on Air Force One, and visited the White House 
on at least 70 occasions--staying overnight in the Lincoln 
Bedroom at least once.\108\ He co-chaired a March 1994 Miami 
dinner honoring the President and Mrs. Clinton, which raised 
$3.4 million. Senator and DNC Chairman Chris Dodd wrote Glicken 
a letter on February 27, 1995, expressing his pleasure at 
seeing him at a White House dinner and appreciating his 
``diligence and hard work as a Managing Trustee of the 
Democratic party.'' \109\ President Clinton thanked Glicken 
personally--who was seated in the front row--during his opening 
remarks at the fundraiser. President Clinton also thanked 
Glicken in his remarks given at an April 1996 Miami fundraising 
event. In total, Glicken raised $2 million for the 1996 
Clinton-Gore team. Vice President Gore thanked him personally 
for his role in a Miami fundraiser which raised $3.4 million.
    \106\ Florida Donors Memorandum, supra note 20 at 7.2.
    \107\  M. Delal Boer, ``Latin American Free Trade Stumbles,'' Wall 
Street Journal, Asia, Nov. 2, 1994, at 6.
    \108\ Howard Glicken: Democratic Events Attended (Exhibit 37).
    \109\ Dodd Letter to Glicken, Feb. 27, 1995 (Exhibit 38).
    Apart from his role as a fundraiser, Glicken appears to 
have combined his political activities with his business 
ventures. In 1996, he founded the Americas Group (which counts 
former Senator George Mitchell as a board member) as a vehicle 
to encourage business deals between the United States and Latin 
America.\110\ Mr. Glicken reportedly took a group of South 
American businessmen and politicians to meet President Clinton 
at a December 1996 reception at Miami's Biltmore Hotel.\111\ He 
also met with officials from the personnel and political 
affairs offices, the NSC, and the Presidential and Vice 
Presidential staffs.\112\ On another occasion in 1996, Glicken 
brought a client from Brazil to meet Ronald Klain, Vice 
President Gore's Chief of Staff.\113\
    \110\ The SEC objected to the merger of Americas Group, which 
Glicken founded in 1996, with Advanced Electronic Support Products in 
1996. A group of shareholders amounting to 18 percent of the fund are 
suing Americas Group for ``blatant self-interest.'' See S. Fla. Bus. 
J., Dec. 2, 1991, at 1.
    \111\ Kuntz, supra note 87.
    \112\ Kuntz, ``Democratic Fund-Raiser Glicken Visited White House 
Officials Scores of Times,'' Wall Street Journal, May 5, 1997, at A20.
    \113\ Id.

3. The Case Against Howard Glicken

    Mr. Kramer's secretary, Terri Bradley, made a $20,000 
contribution to the Democratic Senatorial Campaign Committee 
(``DSCC'') after someone unknown to Bradley--later revealed to 
be Glicken--approached Kramer. According to Staff Attorney 
Rodriguez, in testimony before this Committee and in documents 
produced by the FEC, Bradley overheard a conversation between 
Kramer and another individual who asked Kramer if there was 
``anyone else who could make the contribution in your place.'' 
\114\ The solicitor promised that the ``requested contribution 
would make Mr. Kramer a member of the `inner circle' with 
various accompanying perks.'' Bradley told the FEC that she 
would divulge the name of the Democratic fundraiser suggesting 
the illegal scheme in exchange for immunity from 
prosecution.\115\ The Committee attempted to interview Bradley 
but, as previously noted, she asserted her Fifth Amendment 
rights before the Committee. The plea agreement Glicken entered 
into focused on Bradley's DSCC contribution--the questionable 
contribution referenced along with the ``prominent fundraiser'' 
language that resulted in tremendous public criticism and which 
played a significant part in the Committee's March 31, 1998, 
    \114\ Office of the General Counsel Memorandum of Telephone Call or 
Visit, supra note 76.
    \115\ Tamara Lytle, supra note 90.
    Despite all of the controversy surrounding this Democratic 
party insider, the FEC decided in December 1997 not to pursue a 
case against Glicken. This decision was made in the face of 
strong evidence demonstrating that Glicken had knowingly 
solicited an illegal contribution from a German national 
through a conduit straw donor. In an unusual announcement, the 
FEC cited ``Mr. Glicken's high profile as a prominent 
Democratic fundraiser'' and ``potential fundraising involvement 
in support of Vice President Gore's expected presidential 
campaign'' as reasons not to pursue a case against 
Glicken.\116\ During testimony before this Committee, the FEC 
General Counsel stated that his office first learned Glicken's 
name only a few months before the statute of limitations 
governing the case would expire. Yet, as previously noted, the 
FEC was first provided with information by Kramer himself that 
someone within the Democratic party knowingly solicited the 
illegal contribution as early as December 1994.
    \116\ General Counsel's Report, supra note 8 at 2.3-2.4.
    When asked during the Committee's March 1998 hearing why 
the FEC did not pursue a case against Glicken more 
aggressively, FEC General Counsel Lawrence Noble stated:

        We did not pursue the investigation of Mr. Glicken 
        because it was--most of the activity at issue was 1993 
        activity; some was 1994. We have a 5-year statute of 
        limitations. Mr. Glicken's name came up late in the 
        process. We have not found reason to believe against 
        Mr. Glicken. We would have had to start from the 
        beginning with Mr. Glicken. The statute of limitations 
        on the main part of a solicitation runs this 
    \117\ Federal Election Commission Enforcement Actions, supra note 6 
at 67-68 (statement of FEC General Counsel).

           *       *       *       *       *       *       *

        What we were interested in with Mr. Glicken was the 
        suggestion that he may have suggested to somebody that 
        they make a contribution in the name of another. And 
        that took it up to another level which is why we held 
        on to that part of the case, thinking that we might be 
        able to do something about it. But by the time that--
        that was in the DSCC information. We did not find Mr. 
        Glicken's name until July 1997, and that particular 
        contribution, where there was a suggestion that it was 
        a contribution in the name of another, or solicited as 
        a contribution in the name of another, the statute of 
        limitations would have run at the end of April of this 
    \118\ Id. at 81.

It should be noted that the FEC did not ``find Mr. Glicken's 
name until July 1997'' because, in actuality, it did not send a 
subpoena to the DSCC until June 10, 1997.\119\ Documents 
produced in response to this subpoena revealed that Glicken had 
solicited the Bradley contribution. No explanation given by the 
commission has adequately addressed why the FEC waited until 
2\1/2\ years after receiving Kramer's affidavit (which 
highlighted the DSCC contribution) \120\ to send 
interrogatories to the DSCC. It is thus the Committee's opinion 
that this explanation--given the amount of money involved, the 
fact that the case was brought sua sponte, and the involvement 
of two of the most prominent Democratic fundraisers--is simply 
    \119\ Letter from Marc E. Elias to Rodriguez (Exhibit 39).
    \120\ See Affidavit, supra note 11 at 3.3.

    IV. The Department Of Justice's Involvement In The Kramer Matter

    On July 22, 1997, FEC Staff Attorney Jose Rodriguez wrote 
an e-mail requesting that ``LL check with Justice to determine 
if they have any interest in pursuing the reported Kramer/
Bradley activity criminally.'' \121\ ``LL'' was a reference to 
FEC Associate General Counsel Lois Lerner. Ms. Lerner responded 
to Rodriguez' e-mail 3 days later, noting that she had spoken 
to Craig Donsanto (her contact at the Department of Justice). 
She stated that Donsanto thought that the Department was no 
longer pursuing the law firm (Greenberg Traurig), Kramer, or 
anyone else involved in the case.\122\ Ms. Lerner noted that 
Donsanto would check with the U.S. Attorney in Florida ``to be 
sure.'' Lerner conveyed her belief that Donsanto thought that 
he might be able to get the department to ``sign off on as to 
our potential witness.'' \123\ The Committee believes that 
Terri Bradley was this ``potential witness.''
    \121\ ``Bradley Issue'' e-mail, July 22, 1997 (Exhibit 40).
    \122\ Kramer e-mail, July 25, 1997 (Exhibit 41).
    \123\ Id.
    An e-mail exchange during September suggests that the FEC 
was at least attempting to obtain immunity for Bradley.\124\ In 
December, however, the FEC signed off on its General Counsel 
Report and decided against pursuing a case against Howard 
    \124\ ``Latest from Bradley'' e-mail, Sept. 15, 1997 (Exhibit 42).

        While this Office would generally recommend a reason to 
        believe finding against Mr. Glicken and conduct an 
        investigation into the two DSCC contributions, because 
        of the discovery complications and time constraints 
        addressed above, and the fact that the transactions at 
        issue take place during the 1993-1994 election cycle, 
        this Office does not now recommend proceeding against 
        this identified individual or the DSCC.

        Similarly, this Office does not recommend further 
        proceedings concerning the two DNC contributions 
        apparently solicited by Mr. Glicken. Unlike the DSCC 
        contributions, the larger of these two contributions 
        would not be time barred until March 1999--
        approximately a year and 4 months from now. However, 
        because of Mr. Glicken's high profile as a prominent 
        Democratic fundraiser, including his potential 
        fundraising involvement in support of Vice President 
        Gore's expected presidential campaign, it is unclear 
        that this individual would agree to settle this matter 
        short of litigation. Therefore, rather than continuing 
        this matter for an unspecified period in pursuit of one 
        participant and because of the low prospect for timely 
        resolution, the age of the matter and the already 
        successful resolution concerning all principles in this 
        case, this Office does not recommend further 
        proceedings concerning these two DNC contributions 
        either. Instead, this Office recommends closing of the 
        entire file in MUR 4638.\125\
    \125\ General Counsel's Report, supra note 8 at 2.4.

    Once the conclusion about Glicken and his association was 
reported in a major newspaper, the interest of the Department 
of Justice in the matter was notably increased. Such interest 
is obvious in an e-mail sent by Lois Lerner to Lawrence Noble 
on February 12, 1998:

        Donsanto just called. They've seen the ``offending 
        language.'' While he was sure there must be more to the 
        story than this was Gore's friend, he wanted to know 
        why this hadn't been referred to DOJ. He said that Task 
        Force would be revving up an investigation unless he 
        could provide them with something clarifying this. 
        While I have no problem with them investigating, I 
        thought it would be useful to provide them with 
        whatever statement we make to the press.\126\
    \126\ ``GREENBERG TRAURIG (sp?)'' e-mail, Feb. 12, 1998 (Exhibit 

    Despite the Justice Department's previous lack of interest 
in these matters, the Task Force did indeed `rev up' an 
investigation and entered into a factual proffer and plea 
agreement with Glicken on July 9, 1998--3 months after this 
Committee held itshearing reviewing the FEC's management of the 
Kramer matter--in which Glicken admitted to criminal violations of FECA 
by soliciting political contributions from a foreign national and by 
causing a political contribution to be made in the name of 
another.\127\ Based on the agreement, Glicken potentially faces up to 2 
years in prison and a fine of $200,000. The Justice Department 
recommended a fine of $80,000 and a minimum of 500 community service 
hours. Mr. Glicken also ``expressed a desire to provide substantial 
assistance to the Government in the investigation and prosecution of 
others after entering his guilty plea'' \128\ and that he ``shall 
cooperate fully with federal law enforcement authorities.'' \129\ Mr. 
Glicken also promised to ``make himself available to all Government 
agencies[.]'' \130\ If Glicken's guilty plea agreement is accepted by 
the Court, and Glicken fulfills each of the terms within the agreement, 
    \127\ United States of America v. Howard Glicken Factual Proffer 
and Plea Agreement, (D. D.C. July 9, 1998), at 1 (Exhibit 44).
    \128\ Id. at 44.10-44.11.
    \129\ Id. at 44.2-44.3.
    \130\ Id. at 44.11.

        [T]he Government agrees that it will not further 
        prosecute defendant for his conduct that is the subject 
        of this plea agreement or for any other election code-
        related conduct known to the Government as of the date 
        of defendant's guilty plea pursuant to this agreement, 
        or which becomes known as a result of his cooperation 
        pursuant to this agreement.\131\
    \131\ Id. at 44.4-44.5.

    Taking into account the weight of the evidence against 
Glicken, it appears as if the Miami businessman entered into 
what potentially could be an overly favorable plea agreement. 
Mr. Glicken's role in soliciting contributions from other 
Florida-based campaign contributors on behalf of the DNC and 
other Democratic causes has yet to be fully investigated by 
this Committee. However, the Committee has uncovered evidence 
showing that Glicken also solicited contributions from Neal 
Harrington and Calvin Grigsby's company, Fiscal Funding \132\--
contributions which led to the indictment of both Harrington 
and Grigsby, along with Carmen Lunetta, in the June 1998 Port 
of Miami conduit contribution scandal.\133\ Whether or not such 
evidence was available to the Department of Justice at the time 
it entered into the plea agreement with Glicken, which would 
determine whether or not such action would fall within the 
aforementioned immunity agreement, is not known by the 
Committee. Glicken asserted his Fifth Amendment rights before 
the Committee unless granted immunity.
    \132\ 1994 Florida Presidential Dinner Donors, at 45.3 (Exhibit 
    \133\ United States of America v. Carmen Lunetta, Calvin Grigsby 
and Neal Harrington (So. D. FL June 3, 1998) (Exhibit 46). Messrs. 
Glicken and Harrington, along with Charles Intriago and Mark Jimenez 
(both of whom have asserted their fifth amendment rights before our 
Committee) were noted guests at a December 1994 Brickell Key dinner 
hosted by Vice President Gore. Vice President's Guest List, Dec. 11, 
1994 (Exhibit 47).
    Because Glicken has exercised his Fifth Amendment rights in 
regards to the Committee's inquiry, the Committee's 
investigation into further misfeasance on Glicken's part has 
been impeded. This is not the cooperation that Glicken promised 
upon signing his plea agreement. The Committee has not been 
able to explore why the two additional illegal Kramer 
contributions solicited by Glicken--a $25,000 contribution at 
Vice President Gore event and $40,000 contribution at a 
President Clinton fundraiser--were passed over by both the FEC 
and the Department of Justice.\134\ The Committee is also not 
privy to information the Department of Justice may have in its 
possession regarding any additional campaign fundraising 
improprieties that may have been committed by Glicken. The 
Committee is thus not aware of which improprieties would be 
covered by the immunity agreement if it were to be upheld by 
the U.S. District Court for the District of Columbia.
    \134\ DNC Response to Committee Interrogatories, Mar. 30, 1998 at 
30.3 (Exhibit 30).

                             V. Conclusion

    FEC's handling of the Kramer matter brings into serious 
question the Commission's goals and effectiveness. Several 
points need to be emphasized. Notwithstanding the knowledge 
that a high-profile Democratic party fundraiser was allegedly 
involved, the case received little attention by the FEC for 
nearly 1\1/2\ years after Kramer first disclosed his 
improprieties. In actuality, the FEC did not send an inquiry to 
the DSCC regarding the contribution until 2\1/2\ years after 
receiving Kramer's affidavit. Perhaps more important, the FEC 
appears to have done nothing to pursue the allegations of 
wrongdoing against Marvin Rosen. Although the Committee 
recognizes that the FEC must prioritize its many cases, few 
things would rival in importance the possibility that one of 
the titular heads of either the Democratic or Republican 
parties is involved in criminal conduct that cannot be 
explained away by ``fuzzy'' or ``complicated'' election laws.
    In addition, the case ultimately resulted in over $500,000 
in fines, including the largest personal fine of its type. Such 
fines, however, barely totaled more than the contributions 
themselves (all of which were returned to the contributors).
    Finally, the FEC made a public statement in which it 
seemingly admitted that it was not pursuing a case against 
Glicken because of his prominence and strong ties with Vice 
President Gore. Prominent national fundraisers should face the 
same consequences as any other citizen if they encourage others 
to break the law. The FEC, in neglecting to investigate and 
pursue such blatant violations of campaign fundraising laws, 
appears to have been derelict in its mandated statutory 

                               Appendix 1


    In order to understand the means by which the FEC conducted 
the Thomas Kramer investigation, a brief explanation of FEC 
practices and procedures is necessary. The statutes relevant to 
the Kramer matter are 2 U.S.C. Sec. 437g, dealing with the 
enforcement of Federal election campaign laws generally, 2 
U.S.C. Sec. 441e, prohibiting contributions by a foreign 
national, and 2 U.S.C. Sec. 441f, prohibiting contributions in 
the name of another. The FEC provided to the Committee 
statistics showing case disposition by fiscal year for cases 
involving conduit payments and contributions by foreign 
    \1\ Case Disposition by Fiscal Year: Cases Involving Conduit 
Payments under Section 441f (Exhibit A-1) and Case Disposition by 
Fiscal Year: Cases involving Foreign National Contributions Under 
Section 441e (Exhibit A-2).

                      A. Prioritization procedure

    In the early 1990s, the FEC began to reinvigorate its case 
management system. In 1992, the Commission adopted a criteria 
worksheet, or ``rating sheet,'' that provides numerical ratings 
for its cases.\2\ The following year, the FEC ``launched 
substantial enforcement reform by adopting a comprehensive 
prioritization system designed to produce timely resolution of 
major cases.'' \3\ Known as the Enforcement Prioritization 
System (``EPS''), the specific elements of the system included:
    \2\ Introduction to the Enforcement Prioritization System (Exhibit 
    \3\ FEC Press Release, Dec. 13, 1993 (Exhibit A-4).

         Creating a detailed and objective method for 
        ranking cases that allow the Commission to identify 
        those which best warrant the use of the FEC's limited 
         Determining, based on resources, the total 
        number of cases the enforcement staff can actively and 
        efficiently pursue at one time.
         Establishing realistic time goals for 
        resolving targeted cases (preferably within an election 
        cycle or less).
         Managing and tracking cases through periodic 
        priority evaluations so that staff assignments can be 
        adjusted as needed and cases that warrant no further 
        resources can be identified for closing.
         Creating a central enforcement docket system 
        (``CED'') to process incoming cases and assign them as 
        staff become available.\4\
    \4\ Id.

    The FEC based its prioritization procedures mostly on 
confidential standards, some of which include: whether there 
was knowing and willful intent to violate the law; the apparent 
impact of the alleged violation on the election process; the 
amount of money involved; the age and timing of the violation; 
and whether a particular area of the law that needs attention 
is involved.\5\
    \5\ Remarks by Scott E. Thomas, Chairman of the Federal Election 
Commission, Dec. 13, 1993 (Exhibit A-5).
    General Counsel Noble told Committee investigators that the 
focus of the EPS has changed over the years. According to 
Noble, things like the $25,000 contribution limit used to be a 
``big deal'' to the FEC, but now things like contributions made 
by a foreign national are given higher priority.\6\ While the 
Committee recognizes the FEC's limited resources, the fact that 
the Commission periodically changes the degrees of priority for 
violations of campaign laws inevitably forces oversight bodies, 
such as this Committee, to question the Commission's 
enforcement objectivity. In controversial cases such as the 
Kramer matter, the FEC can thus argue that seemingly flagrant 
violations of law were not considered as a priority by the 
Commission based on standards and criteria which remain 
confidential to everyone outside of the FEC staff.
    \6\ Interview with Lawrence Noble, General Counsel of the Federal 
Election Commission, in Washington, DC (July 2, 1998).

                           B. Case management

    Any action by the FEC generally begins upon the filing of a 
complaint alleging violations of Federal election campaign 
laws. Within 5 days of receiving a complaint, the Commission 
notifies any person alleged in the complaint to have committed 
such a violation. Before the FEC votes on the complaint, other 
than a vote to dismiss, any notified person has the opportunity 
to demonstrate to the Commission that no action should be taken 
against such person on the basis of the complaint.
    If the Commission, by an affirmative vote of four of its 
commissioners, finds that it has reason to believe (``RTB'') 
that a person has committed, or is about to commit, a violation 
of Federal campaign laws, the Commission shall, through the 
chairman or vice chairman, notify the person of the alleged 
violation. The FEC then conducts an investigation of the 
alleged violation. If the Commission determines, by an 
affirmative vote of four of its commissioners, that there is 
probable cause to believe (``PCTB'') that any person has 
committed, or is about to commit, a violation of Federal 
campaign laws, the Commission attempts, for a period of at 
least 30 days, to correct or prevent such violation by informal 
methods of conference, conciliation, and persuasion, and to 
enter into a conciliation agreement with any person involved. 
Any attempt to correct or prevent any violations may continue 
for a period of not more than 90 days. The Commission may not 
enter into a conciliation agreement unless pursuant to an 
affirmative vote of four of its members. A conciliation 
agreement, unless violated, is a complete bar to any further 
action by the Commission.

       C. Fines, penalties, defenses, and mitigation of offenses

    If the Commission believes that a violation has been 
committed, a conciliation agreement may include a requirement 
that the person involved in such conciliation agreement shall 
pay a civil penalty which does not exceed the greater of $5,000 
or an amount equal to any contribution or expenditure involved 
in such violation. If the Commission believes that a knowing 
and willful violation has been committed, a conciliation 
agreement entered into by the Commission may require that the 
person involved in such conciliation agreement pay a civil 
penalty which does not exceed the greater of $10,000 or an 
amount equal to 200 percent of any contribution or expenditure 
involved in such violation.
    If the FEC by an affirmative vote of four commissioners, 
determines that there is PCTB that a knowing and willful 
violation has occurred or is about to occur, it may refer such 
apparent violation to the Attorney General of the United 
States. The FEC cannot legally refer a case to the Department 
of Justice unless it reaches this PCTB threshold. Both the 
standards set to reach thresholds of either RTB or PCTB are, 
for the most part, known only to the FEC staff.
    In any case in which a person has entered into a 
conciliation agreement with the Commission based on the PCTB 
threshold, the FEC may institute a civil action for relief if 
it believes that the person has violated any provision of such 
conciliation agreement. For the Commission to obtain relief in 
any civil action, the Commission need only establish that the 
person has violated, in whole or in part, any requirement of 
such conciliation agreement.
    If the Commission is unable to correct or prevent any 
violation, the Commission may, upon an affirmative vote of four 
commissioners, institute a civil action for relief, including a 
permanent or temporary injunction, restraining order, or any 
other appropriate order (including an order for a civil penalty 
which does not exceed the greater of $5,000 or an amount equal 
to any contribution or expenditure involved in such violation) 
in the district court of the United States for the district in 
which the person against whom such action is brought is found, 
resides, or transacts business. In certain civil actions 
instituted by the FEC, the court may grant a permanent or 
temporary injunction, restraining order, or other order, 
including a civil penalty which does not exceed the greater of 
$5,000 or an amount equal to any contribution or expenditure 
involved in such violation, upon a proper showing that the 
person involved has committed, or is about to commit (if the 
relief sought is a permanent or temporary injunction or a 
restraining order), a violation of relevant provisions.
    Any person who knowingly and willfully commits a violation 
of relevant Federal campaign laws--which involves the making, 
receiving, or reporting of any contribution or expenditure 
aggregating $2,000 or more during a calendar year--shall be 
fined, or imprisoned for not more than 1 year, or both. The 
amount of the fine shall not exceed the greater of $25,000 or 
300 percent of any contribution or expenditure involved in such 
violation. In the case of a knowing and willful violation of 
Sec. 441b(b)(3), the penalties shall apply to a violation 
involving an amount aggregating $250 or more during a calendar 
year. Such violation of Sec. 441b(b)(3) may incorporate a 
violation of Sec. 441c(b), Sec. 441f, or Sec. 441g.
    In any criminal action, a defendant may evidence their lack 
of knowledge or intent to commit the alleged violation by 
introducing as evidence a conciliation agreement entered into 
between the defendant and the FEC which specifically deals with 
the act or failure to act constituting such violation and which 
is still in effect. The court shall take into account, in 
weighing the seriousness of the violation and in considering 
the appropriateness of the penalty to be imposed if the 
defendant is found guilty, whether the specific act or failure 
to act which constitutes the violation for which the action was 
brought is the subject of a conciliation agreement entered into 
between the defendant and the Commission, the conciliation 
agreement is in effect and the defendant is, with respect to 
the violation involved, in compliance with the conciliation 
    [Supporting documentation follows:]


                               CHAPTER VI

                      THE HUDSON CASINO REJECTION


                      THE HUDSON CASINO REJECTION


    This section of the report focuses on the rejection by the 
Department of the Interior (DOI) of an application to take a 55 
acre parcel of land into trust with the ultimate objective of 
establishing an off-reservation gaming facility. This 
application was made by three impoverished Wisconsin Indian 
tribes who anticipated going into partnership with the owner of 
an already existing class III gaming facility. After complying 
with all of the requirements placed upon the tribes by the 
Department of the Interior, the Bureau of Indian Affairs (BIA) 
regional office in Ashland, Wisconsin, and the area office in 
Minneapolis, Minnesota, both recommended that the application 
be approved. After those closest to the proposed site 
recommended the approval of the application on November 14, 
1994, a 32 page report was sent to Interior's central office in 
Washington, DC for final review.\1\
    \1\ See Denise Homer's Recommendation to the Assistant Secretary 
for Indian Affairs (Exhibit 1).
    For the three tribes this was a day to celebrate because, 
as DOI spokeswoman Stephanie Hanna noted, the DOI has never 
overturned an Area Office recommendation to take land into 
trust for gaming purposes.\2\ The 32 page report from the 
Minnesota area office discussed a number of factors supporting 
approval of the application. These included: an agreement for 
government services, consultation with the city of Hudson, 
public response to the proposal, impact on the neighboring 
tribes, environmental impact, and impact on the infrastructure 
including traffic, lighting, and water. Nevertheless, on July 
14, 1995, the Department decided against the recommendation of 
both the regional and area offices and rejected the tribes' 
    \2\ See Cary Spivak, Did White House Kill a Casino?, Milwaukee 
Journal Sentinel, Sept. 14, 1997.
    \3\ Letter from Michael Anderson to Rose Gurnoe, Alfred Trepania, 
and Arlyn Ackley, Sr., July 14, 1995 (Exhibit 2).
    In the weeks and months following the rejection, it became 
apparent that it was possible that campaign donations and 
political considerations may have influenced the Department of 
the Interior's decision. As the Committee reviewed various 
campaign finance issues, an investigation into the 
decisionmaking process was commenced. During the investigation, 
the Committee deposed and/or interviewed officials from the 
White House, the Department of the Interior, lobbyists on both 
sides of the application and representatives from the three 
applicant Wisconsin Indian tribes. The Committee also 
subpoenaed documents from various sources including the 
Department of the Interior, law firms, and lobbyists involved 
with the application, and a number of individuals close to the 
case. Additionally, the Committee received relevant documents 
from the ongoing Federal and state litigation surrounding the 
Department's decision.
    On January 21, 22, 28, and 29, 1998, the Committee held 
public hearings on the issue of whether undue political 
influence led to the rejection of the application. The 
Committee heard from witnesses including: the Chairmen of the 
three adversely affected tribes, Patrick O'Connor (a lobbyist 
opposed to the application), Secretary of the Interior Bruce 
Babbitt and a number of officials from the Department of the 
Interior. These hearings focused on the process by which the 
Department of the Interior came to reject the recommendations 
of its area office and the influence of outside entities on the 

                      EVENTS LEADING TO THE DENIAL

    In late 1993, three impoverished \4\ Wisconsin Indian 
tribes--the Mole Lake Sakaogon Chippewa, the Lac Courte Oreille 
Band of Lake Superior Chippewa, and the Red Cliff Band of Lake 
Superior Chippewa--applied to have the U.S. Government, through 
the Department of the Interior, take land into trust in Hudson, 
Wisconsin, for the purpose of gaming.\5\ An existing Class III 
gaming facility already on the parcel of land required very 
little modification to add additional gaming devices.\6\ The 
structure was originally built as a greyhound racing park and 
included a 10,000 car parking lot to accommodate a capacity 
crowd. A four lane roadway had already been built by the 
developer of the existing track to relieve potential congestion 
problems that could be created by a crowd attending a specific 
event at the race track. Furthermore, the expected usage of the 
casino was not greater than that originally anticipated for the 
greyhound facility.
    \4\ According to Arlyn Ackley, Sr., the chairman of the Mole Lake 
Sokaogon Chippewas, the unemployment rate for his tribe was over 40 
percent, and the average household income was approximately $8,000 per 
year. George Newago, the chairman of the Red Cliff Chippewa, indicated 
that his tribe faced over 50 percent unemployment and a household 
income of $5,300 per year. Committee interviews with Chairman Arlyn 
Ackley, Sr., and Chairman George Newago, Dec. 16, 1997.
    \5\ This is the normal process used by Native American tribes under 
Section 20 of the Indian Gaming Regulatory Act (IGRA) for the 
acquisition of ``off reservation'' land. See 25 U.S.C. Sec. 2719 
    \6\ In an interview with Committee investigators, Mr. Fred 
Havenick, the owner of the existing dog track in Hudson, WI, confirmed 
that no external construction was necessary or planned if the 
application had been approved.
    The applicant tribes moved the application forward 
according to the prescribed guidelines of the Indian Gaming 
Regulatory Act (IGRA). After an exhaustive review by both the 
regional office and the area office of the BIA, including 
consultation with area officials and the surrounding tribes, 
the Area Director sent a 32 page recommendation for approval to 
the central office in Washington, DC.
    Once the application arrived in Washington, a number of 
native American tribes who felt that new competition might 
jeopardize their casino profits hired lobbyists to bring 
political pressure on those who might be in a position to 
reverse the earlier decisions. The tribes hired Patrick 
O'Connor, a well known lobbyist, former fundraiser for Bruce 
Babbitt's Presidential bid in 1988, and former DNC treasurer. 
O'Connor, a name partner at the law firm of O'Connor and Hannan 
based in Minneapolis, wasted no time in applying significant 
pressure on the Democratic National Committee (DNC), the 
President, White House staff, Members of Congress, and the 
Department of the Interior.
    On February 8, 1995, O'Connor set-up a meeting in Minnesota 
Congressman Jim Oberstar's office with members of the Minnesota 
Congressional delegation, John Duffy, who served as Counselor 
to Secretary of the Interior Babbitt, and George Skibine, the 
head of the Indian Gaming Management Staff (IGMS).\7\ The 
meeting resulted in a great benefit to the tribes opposed to 
the application because Duffy agreed to extend the comment 
period which the Area Director had closed prior to sending her 
recommendation to Washington. Duffy would later set an April 
30, deadline for the comment period. However, he failed to 
notify the applicant tribes of this special extension, thereby 
giving the opponents of the application an unfair advantage.\8\ 
Given that the Department was required to treat all parties 
evenhandedly, this was a troubling decision.
    \7\ Memorandum from Larry Kitto to Lewis Taylor, Feb. 6, 1995 
(Exhibit 67). This memorandum states: ``Pat O'Connor of our firm is 
working with Secretary Babbitt's office to confirm his participation in 
the meeting that will be held on Wednesday, February 8, 1995 at 1:30 
p.m. in Congressman Oberstar's office.''
    \8\ An undated letter to Secretary Babbitt from the applicants 
indicates that they were never informed by the Department of Interior 
about the extension of the comment period (Exhibit 3). John Duffy, 
Secretary Babbitt's Solicitor, later notified the tribes in a Mar. 27, 
1995, letter to Arlyn Ackley, Sr., almost 7 weeks after the period was 
opened (Exhibit 4). In fact, this notification might never have 
occurred if Ackley had not found out about the extension from other 
sources. Once this came to light, the Department had no choice but to 
let both sides respond.
    The February 8, 1995, meeting in Representative Oberstar's 
office was followed 5 weeks later by another high level contact 
between the lobbyists against the application and 
representatives from Secretary Babbitt's office. On March 15, 
1995, Patrick O'Connor and former Congressman Thomas Corcoran 
(a law partner of O'Connor) met with Tom Collier, Secretary 
Babbitt's Chief of Staff, and Heather Sibbison, Special 
Assistant to Secretary Babbitt's Counselor John Duffy.\9\ One 
of the matters discussed at this meeting was ``the politics of 
the project.'' Collier also told O'Connor and Corcoran that 
``the final decision would be made by him or Secretary Babbitt 
`depending on the level of controversy this application 
generates.' '' \10\
    \9\ Memorandum from Thomas Corcoran to Larry Kitto, Mar. 17, 1995 
(Exhibit 68).
    \10\ Id.
The President is asked for assistance
    As early as April 1995, Patrick O'Connor tried to contact 
Loretta Avent, Special Assistant to the President for 
Intergovernmental Affairs, the person in the White House who 
handled Native American issues.\11\ He faxed material to the 
White House which discussed his client's opposition to the 
Hudson application and asked that Avent intervene with 
Secretary Babbitt on the Hudson application.\12\ According to 
Avent, she did not return O'Connor's call or answer his fax 
because of legal advice she had received and thus ``would not 
speak with him or any lobbyist or lawyer'' about these 
issues.\13\ Although his initial calls appear not to have been 
returned, O'Connor capitalized on an opportunity to speak 
directly with President Clinton when he met with the President, 
Bruce Lindsey and Linda Moore at a small fundraising reception 
in Minneapolis on April 24, 1995.\14\
    \11\ See Patrick O'Connor's Datebook, Apr. 10 and 17, 1995 (Exhibit 
    \12\ Memorandum from Michael T. Schmidt to Cheryl Mills, Apr. 24, 
1995 (Exhibit 6).
    \13\ Memorandum from Loretta Avent to Harold Ickes, Apr. 24, 1995 
(Exhibit 7).
    \14\ See Patrick O'Connor's Datebook, Apr. 24, 1995 (Exhibit 5).
    The April 24 entry in O'Connor's calendar reads, ``Meeting 
w/the President on the Hudson Race track issue with Bruce 
Lindsey and Linda Moore of the White-House staff.'' \15\ This 
meeting with the President was the breakthrough the tribes and 
lobbyists had been looking for. O'Connor explained in his state 
court deposition \16\ that President Clinton was receptive to 
O'Connor's problem:
    \15\ Id.
    \16\ Patrick O'Connor's deposition was taken in a civil law suit 
filed by the applicant tribes after DOI rejected the application.

        When he [the President] got to me, I said ``Mr. 
        President, the Indian tribes I represent are concerned 
        about a possible casino going in near Hudson, Wisconsin 
        which is across the river.'' And that's what I said. At 
        that juncture, he said ``Bruce.'' And Bruce [Lindsey] 
        came over . . . [The President] said, ``Bruce, talk to 
        O'Connor about his concerns about tribes that he 
        represents.'' That was it.\17\
    \17\ State Court Deposition of Patrick O'Connor, Apr. 18, 1997, p. 
61 (Exhibit 8).

    Ann Jablonski, a lobbyist for the St. Croix Tribe, 
confirmed through Tom Corcoran, O'Connor's partner, that 
O'Connor began to ``launch into the matter and Clinton called 
Lindsay [sic] over to script the story and operationalize a 
response or resolution. He was apparently the one who decided 
it was a problem Ickes would/could/should take care of.'' \18\ 
Jablonski also received confirmation that the President was 
aware of the Hudson situation: ``[a]nother partner in the 
O'Connor and Hannan firm, Tom Schneider, allegedly an FOB 
[Friend of Bill] who socializes with Bill and Hillary, has 
confirmed in a conversation with Clinton that Clinton is aware 
of the Hudson dog track issue.'' \19\
    \18\ Memorandum from Ann Jablonski to Brady Williamson, May 23, 
1995 (Exhibit 9).
    \19\ Id.
    Once the President became involved, the White House reacted 
with a flurry of activity. Lindsey called back to the White 
House once he returned to Air Force One in order to determine 
what was happening with the former DNC Treasurer's problem, and 
why Avent had not returned his calls.\20\ O'Connor testified:
    \20\ See Memorandum from Michael T. Schmidt to Cheryl Mills, Apr. 
24, 1995 (Exhibit 6).

        I told Bruce the concern we had . . . And I said, ``I'm 
        trying to get our side of this matter, this issue, 
        across to the--to the people in Interior because'' and 
        I explained . . . ``I don't believe we're getting 
        through, although we've been trying.'' . . . And he 
        [Bruce Lindsey] said, ``Well,'' he said, ``I'll get 
        someone to call you on this.'' I said, ``I haven't''--
        that Loretta Avent call came afterwards. I said, ``I 
        haven't been able to get anywhere with Loretta.'' And 
        he didn't say anything. He said, ``I will have someone 
        call you.'' And that was it.\21\
    \21\ State Court Deposition of Patrick O'Connor, Apr. 18, 1997, p. 
61 (Exhibit 8).

    This brief meeting with the President was the catalyst for 
White House activity regarding the Hudson casino application. 
It is likely that Lindsey contacted Ickes shortly before or 
after his call to Avent because Ickes placed a call to O'Connor 
that same day.\22\
    \22\ Id. at 79.

Warning of illegal and improper involvement

    It appears that the conversation between Lindsey and the 
White House staff on April 24 made an impression, prompting the 
two key White House staffers on Indian issues, Loretta Avent 
(Special Assistant to the President for Intergovernmental 
Affairs) and Michael Schmidt (Senior Policy Analyst in the 
White House Office of Policy Development) to prepare memoranda 
on the issue. Both memoranda outlined legal, ethical, and 
political reasons that the White House could not get involved 
and intervene in the application before the Department of the 
Interior. It appeared that these memoranda were attempts to 
explain why the White House should not get involved in the 
decisionmaking process at Interior. The only reasonable 
explanation for such quick and forceful opposition to White 
House involvement was that Lindsey may have suggested such 
    Ms. Avent's memorandum to Harold Ickes explains the 
improper nature of White House intervention in an Interior 
decision. Avent relied upon advice of the White House counsel's 
office to arrive at the conclusion that involvement by the 
White House was improper and illegal:

        I just got a call from Bruce in reference to a person 
        named Pat O'Connor, whom I don't know, who has called 
        me on numerous occasions. . . . Following the legal 
        advice we have received concerning these kinds of 
        issues, I have not and would not speak with him or any 
        lobbyist or lawyer. Irrespective of [who] lobbyists and 
        lawyers say they know in this Administration, my first 
        responsibility is to the pres[ident]. Because I am 
        aware of the politics and press surrounding this 
        particular situation, it is in our best interest to 
        keep it totally away from the [W]hite [H]ouse in 
        general, and the pres[ident] in particular. This is 
        such a hot potato (like Cabazon) \23\--too hot to 
        touch. The legal and political implications of our 
        involvement would be disastrous. . . . This is a 
        Department of Interior and Justice Department [matter] 
        and that's where it should stay. . . . I explained this 
        to Bruce and he understands the way I operate and I 
        assured him that I would make the call directly to 
        advise the party that called. I will do this as soon as 
        my meeting is over. I'll call later and give you an 
        update. The press is just waiting for this kind of 
        story. We don't need to give it to them.\24\
    \23\ The Cabazon Band of Mission Indians were involved in 
litigation with the Federal Government for the operation of slot 
machines. They also reportedly funneled over $750,000 into the State of 
California's Attorney General's race. When asked in her deposition 
before the Committee about her reference to the Cabazons, Avent 
replied: ``just that it was in court, it was a big court case, and I 
don't have specifics on it, because I wasn't particularly interested in 
it other than I just knew it was dealing with gaming and I am not an 
expert on gaming and I have no expertise in the legal arena at all.'' 
(Avent Deposition, Dec. 5, 1997, p. 18). Mark Nichols, the Chief 
Executive Officer of the Cabazon Band, was indicted in June 1998, and 
accused ``of laundering thousands of dollars in illegal contributions 
to six Democratic candidates, including President Clinton . . .'' 
(Rosenzweig, David, California and the West 2 Casino Executives Accused 
of Laundering Politics, Los Angeles Times, June 19, 1998).
    \24\ Memorandum from Loretta Avent to Harold Ickes, Apr. 24, 1995 
(Exhibit 7).

    Michael Schmidt also drafted a memorandum in response to 
Lindsey's call. He sent his memo to Cheryl Mills in the White 
House Counsel's office:

        This e-mail is to fill you in more detail about a call 
        that Loretta and I were on with a Lobbyist/Fundraiser 
        named Pat O'Connor . . . Pat called Loretta last week 
        on this issue. As you know, last year WH counsel 
        advised Loretta that she should not meet with lobbyists 
        or lawyers on Indian issues. . . . The White House 
        should not be involved in this issue! . . . As you 
        know, we legally cannot intervene with the Secretary of 
        Interior on this issue. Please have Harold call Don 
        Fowler and explain that there are no secrets in Indian 
        Country, that word of this conversation is already 
        getting out and it would be political poison for the 
        President or his staff to be anywhere near this 
    \25\ Memorandum from Michael Schmidt to Cheryl Mills, Apr. 24, 1995 
(Exhibit 6).

    Although these two memoranda indicate that the White House 
staffers understood that they should not get involved in the 
Hudson issue, the sentiments contrast with an overlooked 
sentence in Loretta Avent's memorandum, where she stated: ``I 
am on my way into a meeting with five of our strongest tribal 
leaders (because of their significant voter turnout)[.]'' \26\ 
It is somewhat curious that Avent would react so negatively to 
the Hudson issue and, at the same time, single out Native 
American leaders--based on partisan political concerns--for 
special White House treatment. The concern regarding ``secrets 
in Indian country,'' referred to by Schmidt, appears to have 
been overridden in this political situation.
    \26\ Memorandum from Loretta Avent to Harold Ickes, Apr. 24, 1995 
(Exhibit 7).
    As the following pages make clear, others at the White 
House did not follow the course suggested by Avent. There were 
numerous subsequent contacts between the Secretary of the 
Interior's office and White House Deputy Chief of Staff Harold 
Ickes' office.

The DNC becomes involved

    After meeting with the President, O'Connor moved to 
increase the pressure on the Department of the Interior by 
involving the DNC. As early as March 1995, O'Connor was 
attempting to meet with people at the DNC and Interior.\27\ On 
April 23, 1995, David Mercer called O'Connor to notify him that 
a meeting with DNC Chairman Fowler was set for a time after his 
[O'Connor's] meeting with the Department of the Interior's 
Chief of Staff Tom Collier.\28\ On April 28, 1995, Patrick 
O'Connor and representatives of tribes opposed to the Hudson 
project met with Don Fowler, White House staff, and staff from 
various Senate offices.\29\ Speculating on why lobbyists would 
meet with the money raising wing of the Democratic party, Judge 
Barbara Crabb of the U.S. District Court for the Western 
District of Wisconsin stated in a published opinion: ``I cannot 
assume that Fowler met with these tribes merely to socialize. 
They must have expected that Fowler had some ability to affect 
the decision on plaintiffs' application.'' \30\
    \27\ Patrick O'Connor Datebook, Mar. 15, 1995 (Exhibit 5).
    \28\ Fax from O'Connor & Hannan to Patrick O'Connor, Apr. 23, 1995 
(Exhibit 10).
    \29\ Sokaogon Chippewa Community v. Bruce Babbitt, 961 F. Supp, 
1276, 1282 (W.D. Wis. 1997).
    \30\ Id.
    As it turned out, Judge Crabb appears to have correctly 
articulated the purpose of the meeting. As one lobbyist who 
also attended the April 28, 1995, meeting with Don Fowler 

        The purpose for this meeting is to discuss our position 
        on the Wisconsin Dog Track Fee to Trust proposal with 
        influential democrats in Washington. The people we are 
        meeting with are very close to President Clinton and 
        can get the job done.\31\
    \31\ Memorandum from John McCarthy to all tribal leaders, Apr. 25, 
1995 (Exhibit 11).

    The purpose of the April 28, 1995, meeting with the DNC 
Chairman was also clearly outlined in a memoranda from lobbyist 
Larry Kitto to the opposing tribes.

        The purpose of the meeting was to request the DNC and 
        the Committee to re-elect the President, to help 
        communicate with the White House and the President 
        about why the Department of the Interior should not 
        approve the fee-to-trust land transfer for the Hudson 
        Dog Track. The message was quite simple: all of the 
        people against the project both Indian and non-Indian 
        are Democrats who have a substantially large block of 
        votes and who contribute heavily to the Democratic 
        party. In contrast, all of the people for this project 
        are Republican. Fowler assured the group that he would 
        take this issue up with high ranking officials in the 
        White House[.] \32\
    \32\ Minnesota Legislative Update Apr. 24-28, 1995 (Exhibit 12). 
This lobbying report prepared by Larry Kitto mistakenly notes the 
meeting as Apr. 18, 1995.

Both Chairman Fowler and David Mercer, the Deputy Finance 
Director of the DNC, understood the potential of helping people 
who ``contribute heavily to the Democratic party.'' Lewis 
Taylor, head of the St. Croix tribe, mentioned in a State Court 
Deposition that contributions to the DNC were discussed. Taylor 
commented: ``I told Mr. Fowler that, you know, that we've got a 
number of heavy-duty issues that we needed help on and our 
friends are the Democrats and therefore I think we should 
donate to assist in some of these causes.'' \33\ Tom Krajewski, 
a lobbyist working on behalf of the Hudson opponents, passed on 
information from Kitto, O'Connor's partner and a principal 
lobbyist for the tribes, that Fowler listened, took notes, 
asked questions and got the message: ``It's politics and the 
Democrats are against it and the people for it are 
Republicans.'' \34\ When asked about any discussion of campaign 
contributions, Fowler did not recall and defended himself by 
saying that he had ``no memory.'' \35\
    \33\ State Court Deposition of Lewis Taylor, Dec. 17, 1996, p. 71 
(Exhibit 13).
    \34\ Memorandum from Tom Krajewski to JoAnn Jones, May 3, 1995 
(Exhibit 14).
    \35\ Testimony of DNC Chairman Don Fowler before the Senate 
Committee on Governmental Affairs, Sept. 9, 1997, p. 108.
    It is difficult to believe that Fowler would have a 
different perception of this meeting. After all, the message 
was as Larry Kitto said, ``quite simple.'' After the 
discussions of campaign contributions, Fowler not only promised 
to contact the White House, but also promised to urge Harold 
Ickes, White House Deputy Chief of Staff, to press Secretary 
Babbitt to ``make a closer examination of impact of the [Hudson 
casino].'' \36\ The above excerpts clearly show a belief on the 
part of the lobbyists that campaign donations were to be 
exchanged for policy decisions.
    \36\ Memorandum from Carl Artman to Scott Dacey, May 1, 1995 
(Exhibit 15).
    In a document obtained by the Committee from the Democratic 
National Committee, it seems clear that both Chairman Fowler 
and David Mercer understood the possible fundraising potential 
of opponents of the Hudson application. Mercer outlined calls 
for Chairman Fowler, and under the heading ``Pat & Evelyn 
``Evie'' O'Connor'' stated:

        The O'Connors are on the hook with Peter Knight to 
        raise $50k for the re-election. I'm meeting with them 
        tonight to talk to them about bringing in the American 
        Indian money of $50k for the Gala[.] . . . Pat is 
        certain to inquire about the status of the Indian 
        gaming issue at Interior.\37\
    \37\ Memorandum from David Mercer to Chairman Fowler, May 19, 1995 
(Exhibit 76).

From this it is clear that the DNC had very clear fundraising 
goals related to O'Connor, and there was a clear understanding 
that the lobbyist was interested in a policy issue far from the 
legitimate purview of the DNC.

DNC contacts the White House and Department of the Interior

    True to his word, Fowler focused his efforts on the White 
House and the Department of the Interior. In his testimony 
before the Senate he stated: ``I called Mr. Ickes, explained to 
him the situation, and I called someone at the Department of 
the Interior . . . I simply asked that the situation and the 
facts in that situation be reviewed.'' \38\ However, a memo 
from DNC counsel Joe Sandler and Neil Reiff to the DNC finance 
staff updating the ``basic legal guidelines for fundraising,'' 
specifically states that:
    \38\ Testimony of Don Fowler before Senate Committee on 
Governmental Affairs, Sept. 9, 1997, p. 107.

        [I]n no event should any DNC staff ever promise a 
        meeting with or access to any government official or 
        agency in connection with a donation, or ever imply 
        that such contact or access can be arranged, or ever 
        contact an Administration official on behalf of a donor 
        for any reason.\39\
    \39\ Memorandum from Joe Sandler and Neil Reiff to the DNC Finance 
Staff, Nov. 11, 1995 (Exhibit 16).

Although this memorandum was updated after Fowler's action, 
Fowler admits that he was also instructed by White House 
counsel Jack Quinn and House Political Director Doug Sosnik 
that such contact on behalf of a donor was inappropriate as was 
White House involvement in the decision of an independent 
    \40\ Senate Deposition of Don Fowler, May 21, 1997, pp. 260-261.
    Ignoring the warnings he received about the impropriety and 
illegality of such conduct, Fowler continued to contact the 
White House. On May 5, 1995, he sent a memorandum to Harold 
Ickes following up on a previous conversation they had about 
the Hudson casino proposal.\41\ Fowler acknowledged in this 
memo the politics involved and the stance of the DNC 
    \41\ Memorandum from Don Fowler to Harold Ickes, May 5, 1995 
(Exhibit 17).

        Below is an outline of the issues raised during my 
        meeting with several tribal leaders and DNC supporters 
        who oppose the project. I've also attached a Peat 
        Marwick impact study forwarded by our supporters. 
        Please let me know how we might proceed. . . . The 
        proposal to convert a dog track to a casino is being 
        pushed by American Indian tribes who are supporters of 
        Governor Thompson[.] \42\
    \42\ Id.

Continued pressure on the White House

    Fowler's calls and memorandum only added to the pressure 
placed upon the White House to intervene on the issue. Ickes 
had tried to contact O'Connor on a number of occasions but 
appears to have been unsuccessful.\43\ O'Connor's May 8, 1995, 
letter to Ickes, where he expressed his concern that the steps 
being taken by the officials at the Interior Department were 
not in his client's best interests, only solidifies the belief 
that the lobbyists, the DNC and perhaps the White House were 
working to pressure a decision from Interior:
    \43\ See Letter to Harold Ickes from Patrick O'Connor, May 8, 1995 
(Exhibit 18).

        I have been advised that Chairman Fowler has talked to 
        you about this matter and sent you a memo outlining the 
        basis for the opposition to creating another gaming 
        casino in this area. . . . I am concerned that those at 
        Interior who are involved are leaning toward creating 
        trust lands.\44\
    \44\ Id.

O'Connor then put the issue into terms Ickes, President 
Clinton's chief fundraiser at the White House, could not easily 
miss: ``I would also like to relate the politics involved in 
this situation: . . . All of the representatives of the tribes 
that met with Chairman Fowler are Democrats and have been so 
for years. I can testify to their previous financial support to 
the DNC and the 1992 Clinton/Gore Campaign Committee.'' \45\ 
O'Connor's purpose in writing the memo admittedly was ``to 
alert Ickes as to the politics involved.'' \46\ When asked 
whether he thought the Department of the Interior was required 
to review the political factors mentioned, Patrick O'Connor 
testified, ``I don't imagine they were.'' \47\ If these were 
not areas that the Department of the Interior would be 
considering for the application, it seems reasonable to 
conclude that O'Connor was looking to exert political influence 
upon the Department of the Interior's Hudson decision.
    \45\ Id.
    \46\ State Court Deposition of Patrick O'Connor, Apr. 18, 1997, pp. 
128-129 (Exhibit 8).
    \47\ Id.
    On May 14, 1995, Tom Schneider, another O'Connor & Hannan 
partner, met with President Clinton and Harold Ickes and 
elicited Ickes' assurances that he would ``follow up'' on 
O'Connor's requests relating to the Hudson application.\48\ 
Notwithstanding Schneider's denials that he met with the 
President on this matter,\49\ he did bill his clients for a 
``meeting with senior White House staff and POTUS [President of 
the United States] re expansion of gaming and the dog track and 
opposition to so doing.'' \50\
    \48\ Deposition of Thomas J. Schneider, Dec. 10, 1997, p. 17.
    \49\ Deposition of Thomas Schneider, Dec. 10, 1997, p. 15.
    \50\ O'Connor and Hannan Billing Records (Exhibit 31).

Harold Ickes' staff contacts the Department of the Interior

    Harold Ickes, apparently, did keep his promise. Indeed, 
Ickes and his staff kept a close eye on the application from 
the White House. On May 18, 1995, Ickes' assistant, Jennifer 
O'Connor,\51\ prepared a memorandum for Ickes updating him on 
the information received from Patrick O'Connor and where the 
Department of Interior was in the decisionmaking process.\52\ 
It is clear from this memorandum that Jennifer O'Connor was in 
contact with staff familiar with the application at the 
Department of the Interior. Jennifer O'Connor also was privy to 
information that Interior was looking to reject the application 
and advised Ickes that the information ``is not public and is 
confidential at this point.'' \53\
    \51\ Jennifer O'Connor is no relation to Patrick O'Connor.
    \52\ Memorandum from Jennifer O'Connor to Harold Ickes, May 18, 
1995 (Exhibit 19).
    \53\ Id.
    This would not be the last time the White House would 
contact Interior to receive confidential information kept from 
the applicant tribes. On June 6, 1995, David Meyers, an 
employee in Ickes' office, indicated that he had spoken with 
Heather Sibbison, Special Assistant to Secretary Babbitt, and 
that Interior planned to ``make an announcement in the next two 
weeks.'' \54\ Sibbison relayed confidential information that 
Interior was ``95% certain that the application will be turned 
down. . . . [and] they will probably decline because of their 
``discretion'' in this matter.'' \55\ Sibbison also mentioned 
the fact that there was local opposition to the application, 
but noted that ``much of the opposition, however, was a by-
product of wealthier tribes lobbying against the 
application[.]'' \56\ The recognition that local opposition was 
a by-product of lobbying efforts by ``wealthier tribes'' is 
particularly troubling. The regional office and the area office 
had both concluded that local opposition was not sufficient to 
deny the application. Only after wealthy opponents became 
involved--and the Department of the Interior had accorded their 
tribes preferential treatment in the form of an extended 
comment period--did local opposition become a dispositive 
issue. Even then, as will be discussed in later sections of 
this chapter, the ``opposition'' failed to articulate 
substantive reasons for denial of the application. The 
Department's obvious favoritism tends to undermine the 
Secretary's assertion that the denial of the application was 
    \54\ Memorandum from David Meyers to Jennifer O'Connor, June 6, 
1995 (Exhibit 20).
    \55\ Id. The quotation marks around the word ``discretion'' are 
found in the original. One of the central concerns in the rejection of 
the Hudson application is whether the Department made its decision 
according to articulated standards and past practices. It is curious 
that someone on Harold Ickes' staff would use quotation marks to 
describe something the Secretary of the Interior was about to do. 
Contextually, it seems as though Meyers recognizes that it would not be 
appropriate in this case to ignore the law, ignore the facts, and 
decide based on discretion.
    \56\ Id.

Further communication between the White House and the Department of the 

    Harold Ickes' office appears to have been the primary 
contact at the White House for the Department of the Interior. 
Ickes, in an effort to distance himself from the application, 
testified that he was ``peripherally involved'' and ``Jennifer 
O'Connor on my staff was the primary person on [the Hudson 
application].'' \57\ Heather Sibbison and Jennifer O'Connor 
continued communications between the Department of the Interior 
and the White House, even though O'Connor did indicate that she 
prefaced all of her conversations with Interior stating ``I'm 
making a status inquiry, don't want to influence anything, 
don't tell me anything you're not supposed to tell me.'' \58\ 
In addition, Jennifer O'Connor was also in contact with John 
Duffy's office. At the time, Duffy was Counselor to the 
Secretary and one of the top political appointees involved in 
the decisionmaking process. O'Connor called Duffy's office on 
at least two occasions known to the Committee. One conversation 
was in response to a call from Duffy. The message slip received 
from Duffy's office records reads ``returned your call.'' \59\ 
Additionally, it is important to note that the ``disposition'' 
column read ``done'' which most likely means that Duffy 
returned O'Connor's call.\60\
    \57\ Testimony of Harold Ickes before the Senate Committee on 
Governmental Affairs, Oct. 8, 1997, pp. 46-47.
    \58\ Deposition of Jennifer O'Connor, Sept. 15, 1997, pp. 96-97.
    \59\ Department of the Interior telephone record, May 25, 1995 
(Exhibit 21).
    \60\ Id.
    On June 26, 1995, Jennifer O'Connor faxed a letter to 
Sibbison inquiring about the Chippewas' application. The next 
day, Sibbison faxed back two responses--one indicating that the 
Department would reject the Chippewa application and the other 
indicating that the Department was reviewing the matter.\61\ 
This raised strong suspicions of political impropriety in the 
eyes of Judge Crabb, who stated:
    \61\ Letter from Heather Sibbison to Jennifer O'Connor, June 27, 
1995 (Exhibit 22).

        [T]he fact that [Sibbison] sent two letters to the 
        White House with different messages implies that the 
        White House had been involved in the matter already. 
        Also, the mere fact that Sibbison sent two somewhat 
        contradictory letters suggests that the department was 
        aware of the need for some subterfuge in the process to 
        allow Ickes to advance political ends. The letters seem 
        almost to allow Ickes to choose which direction he 
        wanted the Department to take. The more troubling 
        aspect of Sibbison's June 27 response is that it means 
        the Department had reached a decision on plaintiffs' 
        application by that date. This undermines the 
        department's assertion that Deputy Assistant Secretary 
        Anderson was the one making the decision on plaintiffs' 
    \62\ Sokaogon Chippewa Comm., 961 F. Supp, at 1283.

Judge Crabb's remarks appear particularly well-founded 
considering what was happening at the staff level. For example, 
on July 5--just 2 weeks after the ``subterfuge'' of the 
diametrically opposed letters--Troy Woodward, a lawyer in the 
Solicitor's office, sent the following e-mail:

        Tom [Hartman], George [Skibine] said you were working 
        on an analysis of the Hudson Dog Track proposal and 
        whether the proposed gaming would be in the best 
        interests of the Tribes and not detrimental to the 
        surrounding community. Can you please send me an 
        electronic copy of your analysis before 1:30? \63\
    \63\ E-mail from Troy Woodward to Tom Hartman, July 5, 1995 
(Exhibit 65).

This communication is remarkable for two reasons. First, it 
shows that 9 days before the decision was made, the key non-
political staff had not reached a conclusion about the fate of 
the application.\64\ Second, and perhaps more important, it 
shows that there was still no analysis that indicated the 
application was detrimental to the surrounding community. 
Nevertheless, 9 days later a political appointee rejected the 
application, stating: ``Because of our concerns over 
detrimental affects on the surrounding community, we are not in 
a position, on this record, to substitute our judgment for that 
of local communities directly impacted by the proposed off-
reservation gaming acquisition.'' \65\ Given the 
extraordinarily arbitrary nature of the decision, Judge Crabb 
was certainly justified when she speculated that ``the 
Department was aware of the need for some subterfuge in the 
process to allow Ickes to advance political ends.'' \66\
    \64\ All produced copies of memoranda prepared by Tom Hartman show 
that far from finding that the application was a detriment to the 
surrounding community, he concluded the opposite--that the application 
was not a detriment to the surrounding community. See, e.g., Memorandum 
from Indian Gaming Management Staff to Director, Indian Gaming 
Management Staff, June 8, 1995 (Exhibit 44); see also Memorandum from 
George Skibine to Assistant Secretary--Indian Affairs, undated (Exhibit 
45). Both of these memoranda are marked ``draft.'' However, no other 
memoranda were produced as final work product, and there are no other 
staff memoranda to the contrary prior to the rejection letter.
    \65\ Letter from Michael Anderson to Rose Gurnoe, Alfred Trepania, 
and Arlyn Ackley, Sr., July 14, 1995 (Exhibit 2).
    \66\ Sokaogon Chippewa Comm., 961 F. Supp, at 1283.
    Ultimately, communication between the White House and 
Interior reached a level where according to David Meyers, 
Sibbison went so far as to ask Jennifer O'Connor for any 
``feedback'' she might have had on the application.\67\ In an 
extraordinary memorandum from one Ickes staffer to another 
Ickes staffer, David Meyers writes to Jennifer O'Connor: 
``[Sibbison] stated that they will probably decline without 
offering much explanation, because of their `discretion' in 
this matter. She asked that if you have any feedback please 
call her with your thoughts.'' \68\ As already discussed, the 
use of quotation marks for ``discretion'' is curious. More 
important, the fact that the Secretary of the Interior's 
Special Assistant was telling Harold Ickes' staff that Interior 
would reject the application ``without offering much 
explanation'' cannot be given an innocent explanation. Given 
the weight of all the evidence before this Committee, the real 
reason that the rejection would be made ``without offering much 
explanation'' is that there was no evidence to offer. Mere 
incompetence cannot explain why the government would reject an 
application without properly justifying its decision. Not only 
is such action the definition of ``arbitrary and capricious,'' 
it is also, given the almost-certainty of litigation when a 
decision is not supported by valid reasoning, contemptuous of 
the taxpayer who must pay for the agency's misfeasance in 
    \67\ Memorandum from David Meyers to Jennifer O'Connor, June 6, 
1995 (Exhibit 20).
    \68\ Id.
    The communication which has received the most speculation 
and attention, however, appears to have been from Harold Ickes 
to Secretary Babbitt himself.

Additional significant communications prior to the denial

    Although evidence shows frequent communication between the 
White House and the Department indicating the application would 
be denied, there was no such communication with the applicant 
tribes. The applicants had a number of contacts with Interior 
officials and were not informed of any significant--let alone 
fatal--defects in their application. Indeed, in May 1995, Paul 
Eckstein,\69\ a lawyer and friend of Secretary Babbitt's who 
worked on behalf of the Chippewas, had a conversation with 
Secretary Babbitt during which Babbitt reportedly promised to 
meet personally with the tribal Chairmen and Eckstein if a 
problem with the application arose.\70\
    \69\ Paul Eckstein is a long time friend of Secretary Babbitt. The 
two met at Harvard Law School in 1962 and returned to Arizona to 
practice law. In 1967, Babbitt was hired by a small law firm in Phoenix 
where Eckstein was working. In 1974, Babbitt left the firm when he was 
elected Arizona Attorney General. In 1978 Babbitt was elected Governor 
of Arizona. Throughout Babbitt's political career, Paul Eckstein has 
been a part of his inner circle of advisors. For example, Eckstein ran 
Babbitt's re-election for Governor in 1982. Needless to say Eckstein 
and Babbitt were close friends. (Committee Staff Interview with Paul 
Eckstein; see also Senate testimony of Paul Eckstein, Oct. 30, 1997, 
pp. 13-14).
    \70\ Testimony of Paul Eckstein before the Senate Committee on 
Governmental Affairs, Oct. 30, 1997, p. 18; see also Senate Deposition 
of Paul Eckstein, Sept. 30, 1997, p. 29.
    On May 17, 1995, tribal representatives, Fred Havenick, and 
Paul Eckstein met with John Duffy. In this meeting Duffy did 
not identify any specific problem with the application. 
Nevertheless, he did convey that he did not believe the 
application would be a ``slam dunk.'' \71\ This was one of the 
only comments made by Duffy in the meeting. In an effort to 
look deeper into the matter, the group met with George Skibine 
and Thomas Hartman that same day. In this meeting the group 
discussed the technical aspects of the application and no 
problems were identified.\72\ That night, however, staff at 
Interior met and reported to the White House that a preliminary 
decision to reject the application had been reached.\73\ Not 
only was this not communicated to the applicant tribes, they 
had not even been given a clear understanding of what they 
needed to do to correct any perceived defects in the 
application. Given the Department's previous efforts to work 
with applicant tribes to perfect applications--including in one 
situation hiring mediators to broker applicant/community 
harmony--there has yet to be advanced a reasonable explanation 
for the Department's approach to this application. If the 
decision was made under appropriate circumstances, as Secretary 
Babbitt has repeatedly argued, there would have been no reason 
to withhold critical information from the applicants, while at 
the same time favoring the opponents.
    \71\ Senate Deposition of Paul Eckstein, Sept. 30, 1997, p. 88. In 
his deposition before this Committee, John Duffy remembered the phrase 
``not a slam dunk,'' but did not recall having had any discussions 
about problems with the application with ``the applicant tribes or any 
other representatives.'' Deposition of John Duffy, Jan. 26, 1998, pp. 
    \72\ Id. at 35-36.
    \73\ See Memorandum from Jennifer O'Connor to Harold Ickes, May 18, 
1995 (Exhibit 19).
    George Skibine and Thomas Hartman had the opportunity to 
articulate any perceived problems when they met again with Paul 
Eckstein and Fred Havenick on May 31, 1995. Interestingly, 
there were no problems identified and Eckstein and Havenick 
left believing the application was on its way to approval.\74\ 
Either Skibine and Hartman did not know that a decision had 
been made, or they refused to help the applicant tribes. 
Hartman, however, may not have known about the preliminary 
decision, because as late as June 16, 1995, he relayed to 
Eckstein that the staff report was just passed to Skibine and 
there were no problems that could not be cured.\75\ Eckstein 
later called George Skibine on June 26, 1995, seeking an 
additional status report. To Eckstein's surprise, Skibine 
refused to talk about the application for fear that he would 
lose his job.\76\ Again, this adds to the concern that the 
Hudson decision was not made on the merits.
    \74\ Committee Staff interview with Fred Havenick.
    \75\ Affidavit of Paul Eckstein, Jan. 8, 1996 (Exhibit 23).
    \76\ Id. This is Eckstein's recollection of the exchange.

Inconsistencies in Secretary Babbitt's statements

    There is substantial evidence that Ickes called Secretary 
Babbitt in order to influence the Department's decision on the 
Chippewa's application. Paul Eckstein testified in a sworn 

        Later that day, on July 14, 1995, I met with Secretary 
        Babbitt. I asked the Secretary if he would delay the 
        release of the decision of the Tribes' application 
        until the following Monday to allow time for the Tribes 
        to attempt to respond to the political pressure being 
        exerted against the application. Secretary Babbitt said 
        that the decision could not be delayed because 
        Presidential Deputy Chief of Staff Harold Ickes had 
        called the Secretary and told him that the decision had 
        to be issued that day.\77\
    \77\ Id.

    When word of Eckstein's assertion was disseminated, 
Secretary Babbitt denied the account. Babbitt immediately 
denied any contact with Ickes or that Ickes played any role in 
the decision. Secretary Babbitt even denied ever using Ickes' 
name in front of Eckstein. In an August 30, 1996, letter to 
Senator John McCain, Secretary Babbitt stated:

        I must regretfully dispute Mr. Eckstein's assertion 
        that I told him that Mr. Ickes instructed me to issue a 
        decision in this matter without delay. I never 
        discussed the matter with Mr. Ickes; he never gave me 
        any instruction as to what the Department's decision 
        should be, nor when it should be made.\78\
    \78\ Letter from Secretary Bruce Babbitt to Senator John McCain, 
Aug. 30, 1996 (Exhibit 24).

    Judge Crabb, in the Federal law suit filed in Wisconsin 
against the Department of the Interior, correctly noted: ``[i]t 
would be improper to dismiss Eckstein's assertion just because 
Babbitt denies it.'' \79\ Indeed, Secretary Babbitt, upon 
further reflection, gave Senate Governmental Affairs Committee 
Chairman Fred Thompson another contradictory statement about 
what happened:
    \79\ Sokaogon, 961 F. Supp, at 1284.

        [W]hile I did meet with Mr. Eckstein on this matter 
        shortly before the Department made a decision on the 
        application, I have never discussed the matter with Mr. 
        Ickes or anyone else in the White House. Mr. Ickes 
        never gave me instructions as to what this Department's 
        decision should be, nor when it should be made. I do 
        believe that Mr. Eckstein's recollection that I said 
        something to the effect that Mr. Ickes wanted a 
        decision is correct. Mr. Eckstein was extremely 
        persistent in our meeting, and I used this phrase 
        simply as a means of terminating the discussion and 
        getting him out the door.\80\
    \80\ Letter from Secretary Bruce Babbitt to Senator Fred Thompson, 
Oct. 10, 1997 (Exhibit 25).

In testimony before the Committee on Government Reform and 
Oversight and the Committee on Governmental Affairs, Babbitt 
indicated that his statements were not only truthful but 
consistent.\81\ A simple reading, however, would lead to the 
opposite conclusion.
    \81\ Testimony of Secretary Bruce Babbitt before the Committee on 
Government Reform and Oversight, Jan. 29, 1998, p. 797; see also 
Testimony of Secretary Bruce Babbitt before the Committee on 
Governmental Affairs, Oct. 30, 1997.
    One of the most damaging and troubling pieces of Eckstein 
testimony revolved around the alleged rhetorical question asked 
of Eckstein by Secretary Babbitt. The question involved 
campaign contributions given to the Democratic party.\82\ 
Secretary Babbitt is said to have indicated that ``these tribes 
[donated] on the order of half a million dollars, something 
like that.'' \83\ This statement, if true, constitutes an 
illegal sale of government policy for campaign contributions. 
Secretary Babbitt has said he has ``no recollection'' of 
mentioning contributions with anyone from the White House, the 
DNC, or anyone else.\84\ However, the difference between his 
correspondence to Senator McCain and then to Senator Thompson--
combined with direct evidence of White House contacts with the 
Secretary's office and direct and circumstantial evidence 
relating to improper decisionmaking at the Department of the 
Interior--make the Secretary's statement less than credible. 
Furthermore, Secretary Babbitt's willingness to make 
misrepresentations about smaller matters--for example, Governor 
Thompson's position on the application or whether the decision 
was based solely on Section 20 of the Indian Gaming Regulatory 
Act--adds to the sense that he has not been candid about his 
involvement in the Hudson matter.
    \82\ Senate Deposition of Paul Eckstein, Sept. 30, 1997, p. 53.
    \83\ Id.
    \84\ Testimony of Secretary Bruce Babbitt before the Committee on 
Government Reform and Oversight, Jan. 29, 1998, p. 791; see also 
Testimony of Secretary Bruce Babbitt before the Committee on 
Governmental Affairs, Oct. 30, 1997.

``Possible DOJ involvement''

    In a document produced to the Committee pursuant to 
subpoena, Scott Keep, an employee in the Solicitor's office, 
sent the following e-mail to Heather Sibbison, Hilda Manuel, 
Michael Anderson, Tom Hartman, Paula Hart, George Skibine and 
Troy Woodward:

        DOJ [Department of Justice] has found a reference in 
        one of the documents or testimony to possible DOJ 
        involvement in the Hudson dog track matter. Are any of 
        you aware of any involvement by anyone at DOJ in the 
        Hudson dog track matter prior to the decision on July 
        14? . . . If anyone has any recollection of a contact 
        from DOJ, please advise me.\85\
    \85\ E-mail from Scott Keep to Heather Sibbison, Hilda Manuel, 
Michael Anderson, Tom Hartman, Paula Hart, George Skibine, Troy 
Woodward, Nov. 17, 1997 (Exhibit 72).

    Apart from this one reference, the Committee is not aware 
of any Department of Justice involvement with the Hudson 
application prior to the rejection of the application on July 
14, 1995. It is entirely possible, however, that such a contact 
would have relevance to the Committee's investigation.


Large contributors got what they wanted

    During the 1996 election cycle, tribes opposed to the 
Hudson application donated at least $356,250 to the DNC and 
other Democratic party causes during the 1995-1996 election 
cycle.\86\ This figure does not include money donated by the 
lobbyists paid by the opponents or other ``intangibles,'' such 
as the fundraiser held in the home of lobbyist Tom Schneider 
which raised $420,000 for Clinton Gore '96 the night before the 
decision to deny the application was made.\87\
    \86\ See Committee on Government Reform and Oversight Chart 
(Exhibit 26).
    \87\ See Vern Shen and Karl Vick, ``Schaefer and Bentley's Latest 
Pitch,'' the Washington Post, July 20, 1995.
    Prior to the fundraiser at his home, Schneider had elicited 
Ickes' promise to ``follow up'' on Patrick O'Connor's requests 
regarding the dog track in Hudson, Wisconsin.\88\ According to 
Schneider: ``my experience, due to sort of a personal 
relationship with the White House, is when people say they are 
going to follow up, they usually will follow up.'' \89\
    \88\ Deposition of Thomas Schneider, Dec. 10, 1997, pp. 16-17.
    \89\ Id.
    These large donations from Native Americans were not merely 
coincidental. On the contrary, the Democratic National 
Committee and Clinton/Gore '96 campaign staff were actively 
soliciting such contributions from Native American tribes.
    It is also interesting to note the pattern of wealthy 
Native American contributors getting what they wanted where 
off-reservation gaming was concerned. The Sault Ste. Marie 
Chippewa gave at least $384,964 to the Democrats in 1995-1996 
\90\ and received approval from the Department of the Interior 
to open a gaming facility over 300 miles from their 
reservation.\91\ The Mashantucket Pequots gave over $409,625 in 
1995 and 1996 to the Democrats and the Department of the 
Interior not only approved their application, but hired 
mediators to try to alleviate some of the extraordinary local 
opposition to the expansion of gambling. Indeed, the Committee 
received one document from the DNC on August 28, 1998--7 months 
after the Committee held hearings on this subject--which shows 
that Richard Hayward, the Chairman of the Mashantucket Pequots, 
is listed as: ``Wrote $500,000 +'' to the DNC.\92\
    \90\ A ``movie list'' of attendees at White House movies was 
produced to the Committee which lists ``Bernard (Chippewa Indians)'' 
along with Ted Sioeng, Charlie Trie, Arief Wiriadinata and 16 others. 
See movie list (Exhibit 27). At one point, the DNC appeared to be 
feeling great urgency regarding matters pertaining to this tribe. In a 
call sheet dated Feb. 22, 1996, Mark Thomann called Richard Sullivan 
and the following message was recorded: ``[c]an we overnight a Finance 
Board packet to his Indians.'' (Exhibit 28).
    \91\ The tribe's casino application was vetoed by the Governor of 
Michigan and therefore the casino was not built.
    \92\ This is a sum far greater than that known prior to the recent 
production of documents (Exhibit 29).
    The opposing tribes in the Hudson matter contributed 
(through Patrick O'Connor) at the same time that opposition 
tribe lobbyists were meeting with White House and DNC staff 
(through O'Connor) on the Chippewas' application.\93\ Patrick 
O'Connor also testified that he met with David Mercer, the 
Deputy Finance Director of the DNC, several times after his 
April 28 meeting with Chairman Fowler to discuss ``how many 
Indians we could get to attend the presidential gala'' ($1,000 
or $1,500 donation required) in June.\94\ Patrick O'Connor had 
a goal to raise $25,000 from the Tribes for that 
fundraiser,\95\ and he also recalled that he and Larry Kitto 
met with Terry McAuliffe, the National Finance Chairman of the 
Clinton/Gore '96 Committee, and was asked for more $1,000 
donations from members of tribes opposed to the 
application.\96\ O'Connor was also responsible for a fundraiser 
on October 23, 1996, in Minneapolis, Minnesota, honoring Vice 
President Gore, in which 17 of the 20 attendees were members of 
tribes opposed to the Hudson casino, or their lobbyists.\97\ 
Thus, the Vice President went to a fundraiser that was--with 
the exception of only three attendees--composed exclusively of 
beneficiaries of the Hudson decision.
    \93\ State Court Deposition of Patrick O'Connor, Apr. 18, 1997, pp. 
71-72 (Exhibit 8).
    \94\ Id.
    \95\ Id.
    \96\ Id. at 87-88.
    \97\ VPOTUS Reception list, Oct. 23, 1996 (Exhibit 30).
    In testimony before the Senate Governmental Affairs 
Committee, when asked about the contact Patrick O'Connor had 
with Deputy Finance Director David Mercer while the Hudson 
application was under consideration at the Department of the 
Interior, Fowler could not remember anything about Mercer's 
contacts with those opposed to the application.\98\ However, 
Chairman Fowler admitted that ``one could infer that the casino 
matter was discussed[.]'' \99\ Although O'Connor has denied any 
link between DNC solicitations and his clients' donations, a 
review of his daybook would reasonably lead to a different 
conclusion. Because O'Connor billed his Native American clients 
for the time he spent discussing and coordinating campaign 
donations with the DNC and Clinton/Gore '96 staff,\100\ it is 
reasonable to conclude that Patrick O'Connor believed that 
these contributions were intertwined with defeat of the 
Chippewas' application before the Department of the Interior.
    \98\ Testimony of Don Fowler before the Committee on Governmental 
Affairs, Sept. 9, 1997.
    \99\ Id.
    \100\ See O'Connor & Hannan billing records (Exhibit 31).
    A review of O'Connor's calendar is one of the clearest 
indications that campaign dollars were exchanged for influence 
in the decisionmaking process at the Department of the 
Interior. On the day the application was denied, Patrick 
O'Connor wrote in his daily planner: ``need to follow up with 
Harold Ickes at the White House, [Don] Fowler at the DNC and 
Terry Mac [Auliffe] at the Committee to reelect--outlining 
fundraising strategies.'' \101\ In addition to the entry in 
O'Connor's calendar he also billed the St. Croix tribe for the 
fundraising discussions with Ickes, Fowler, and McAuliffe.\102\ 
The fact that O'Connor was engaged in ``follow up'' discussions 
on the very day the Hudson application was denied indicates 
that fundraising dollars played a larger role in the decision 
than anyone is willing to admit.
    \101\ Patrick O'Connor Datebook, July 14, 1995 (Exhibit 5).
    \102\ O'Connor & Hannan billing records, July 14, 1995 (Exhibit 
    Given the direct and circumstantial evidence indicating a 
political decision, it is hardly surprising that O'Connor's 
clients and the lobbyists against the Hudson application began 
contributing after the Chippewas' application was denied, and 
O'Connor had cemented the ``fundraising strategy'' with the 
White House, DNC and Clinton/Gore '96. Furthermore, 2 months 
later, on September 14, 1995, Patrick O'Connor and Larry Kitto 
sent out personal invitations encouraging opposition tribe 
members to attend $1,000 per person Presidential and Vice 
Presidential fundraisers.\103\ In the invitation, O'Connor and 
Kitto reiterated their belief that President Clinton and his 
staff intervened on behalf of the opposing tribes: ``As 
witnessed in the fight to stop the Hudson Dog Track proposal, 
the Office of the President can and will work on our behalf 
when asked to do so.'' \104\ This feeling was also shared by at 
least one of the tribes who wrote to thank both the President 
and the DNC Chairman. The President of the Ho-Chunk Nation 
wrote to Chairman Don Fowler:
    \103\ Letter from Patrick O'Connor and Larry Kitto, Sept. 14, 1995 
(Exhibit 32).
    \104\ Id.

        On behalf of the Ho-Chunk Nation, I want to thank you 
        for your help in the successful effort to defeat the 
        Hudson casino. Numerous people contributed to the 
        Department of Interior decision. You were particularly 
        instrumental in helping the Department understand the 
        significance and importance of their decision.\105\
    \105\ Letter from JoAnn Jones to Don Fowler, Aug. 3, 1995 (Exhibit 

President Clinton's efforts also did not go unappreciated: ``On 
behalf of the Ho-Chunk Nation, I want to thank you for your 
role in the decision to deny the request to approve the Hudson 
casino.'' \106\ Shortly before the decision to reject the 
application was made, at the time that the White House was 
getting involved in the Hudson application, Chairman Fowler 
received a memorandum from one of his staffers. This memorandum 
states: ``Craig Smith, White House Assistant to Political 
Affairs, and Judy DeAtley, DNC Western Political Desk, met this 
week with Indian representatives to discuss political and 
campaign strategies.'' \107\ This memorandum indicates much 
greater coordination with Native Americans than previously 
known. It also includes material from Kevin Gover--then a 
lawyer/lobbyist in the private sector and now the Assistant 
Secretary for the Bureau of Indian Affairs--stating that: 
``[t]he tribes can be major financial players in California, 
Minnesota, Wisconsin, Florida, New Mexico, and Washington.'' 
    \106\ Letter from JoAnn Jones to President Clinton, Aug. 3, 1995 
(Exhibit 34).
    \107\ Memorandum from Alejandra Castillo to Don Fowler, June 23, 
1995 (Exhibit 35).
    \108\ Memorandum from Kevin Gover and Cate Stetson to Craig Smith 
and Judy DeAtley, June 19, 1995 (Exhibit 36).
    It appears to be far from coincidental that this flurry of 
political activity involving Native Americans was taking place 
as the Department of the Interior was deciding to reject the 
advice of its own area and regional offices.

The applicant tribes were not given the opportunity to cure any of the 
        application's alleged defects

    While the opponents celebrated their victory and sent 
letters of appreciation to the President, the decision to 
reject the application took the applicant tribes by surprise. 
The applicant tribes have consistently complained that they 
were never consulted in advance about the alleged problems the 
Department of the Interior found in the application. This is a 
critical point, and the record supports this position.
    The statutory language of Section 20, reads: ``[land may be 
placed into trust if] the Secretary, after consultation with 
the Indian tribe . . . determines that a gaming establishment . 
. . would be in the best interest of the Indian tribe and its 
members, and would not be detrimental to the surrounding 
community[.]'' \109\ It is true that members of the Interior 
Department met with tribal leaders, but the tribal leaders were 
not consulted about any problem which would have jeopardized 
the application. Indeed, the consultation that did take place 
resulted in both the Area and Regional office approving the 
application. There was no subsequent consultation that put the 
applicants on notice that the Secretary's office had identified 
problems that had not already been addressed or solved at the 
Area and Regional levels. Furthermore, there was no indication 
that the Department was going to change its policy just for the 
Hudson application and discard the standard that opposition, to 
be considered, had to be supported by ``factual 
documentation.'' \110\ Given the Department's role in the Sault 
Ste. Marie and Pequot applications to help facilitate 
accommodations with the local communities, there are strong 
indications that the decision may have been driven by political 
    \109\ Section 20 of the Indian Gaming Regulatory Act has been 
codified at 25 U.S.C. Sec. 2719(b)(1)(A) (emphasis added).
    \110\ Hilda Manuel, in a letter to Representative Gunderson, stated 
that ``any opposition should be supported by factual documentation.'' 
Letter from Hilda Manuel to Representative Steve Gunderson, Mar. 2, 
1995 (Exhibit 38). This issue is discussed fully in the next section of 
this chapter.
    The conclusion appears to be inescapable: where 
contributors of large amounts of money were involved, the 
Secretary's office appears to have helped the contributors. In 
the Hudson application, the Secretary's office again helped the 
large contributors--this time by failing to notify the 
applicants that the comment period had been reopened and then 
denying the application without informing the applicants of 
defects or providing a chance to cure the alleged defects.
    David Jones, the Assistant U.S. Attorney representing the 
Department of the Interior in the ongoing law suit regarding 
this matter, identified the problem that the Department would 
face when it became clear that the applicant tribes had not 
been consulted about potential problems with the application. 
Jones wrote:

        Now that we have reviewed the administrative record in 
        greater depth, we have determined that the alleged 
        problems with the 2719 [Section 20 of IGRA] process are 
        significant. We are primarily concerned about our 
        ability to show that the plaintiffs were told about and 
        given an opportunity to remedy the problems which the 
        Department ultimately found were outcome-determinative. 
        Area Directors are told to give applicants an 
        opportunity to cure problems, and it will be hard to 
        argue persuasively that applicants lose this 
        opportunity once the Central Office begins its 
    \111\ Letter from David Jones to Scott Keep, Feb. 14, 1996 (Exhibit 

Jones goes even further to note:

        The administrative record, as far as we can tell, 
        contains no record of Department meeting or 
        communications with the applicant tribes in which the 
        Department's concerns were expressed to the 
    \112\ Id.

The reason that there was nothing in the record is that the 
Department simply failed to identify such problems in advance. 
Had there been a problem that would appropriately have led to 
the rejection of the application, the Department of the 
Interior would have had some record of the problem. 
Furthermore, it is likely that at least one employee of the 
Department of the Interior would have told the applicants that 
there was a problem that would prove fatal unless cured.
    The following exchange from George Skibine's deposition 
confirms David Jones' conclusion that the applicants were not 
given an opportunity to cure defects:

          Q: To clarify the meaning of my question, here were 
        three poor tribes that had presented an application to 
        the Department of the Interior, and you were making a 
        determination as to whether to approve the application 
        or deny the application. If you, as the director of the 
        IGMS staff, identified a particular problem that might 
        lead to the rejection of the application, did you 
        consider it important to communicate that directly to 
        the applicant tribes to give them an opportunity to 
        cure the problem?
          A: Good question. I don't think that I did that on 
        this application, the first application I considered as 
        head of the gaming office. If I were to do that again 
        different now, you know, it might be different, it 
        might be something I would consider doing, but at that 
        time, I didn't do it. In other words, we did not[.] 
    \113\ Deposition of George Skibine, Jan. 13, 1998, p. 61 (Exhibit 

Skibine elaborated further in the following exchange during his 

          Q: Now if you had shared the June 29 draft with the 
        applicants, is it possible they might have come back 
        and offered accommodations to the problems you 
          A: If we had done more consultation with them and 
        told them, yes, it's possible. We didn't do that in 
        this instance.\114\
    \114\ Id. at 121.

    If the Department of the Interior was acting in good faith, 
it would have given the tribes an opportunity to cure the 
alleged defects. Because Interior acts as a middleman--the 
collector of information supporting or opposing the 
application--it has historically been responsible for keeping 
the tribes informed of problems. In other situations where 
political considerations were not driving the decision, 
Interior kept the applicants informed of the issues. In one 
case they even hired a mediator to solve the problems between 
the applicants and the local opponents.\115\ Particularly given 
the fact that George Skibine recognized that the local 
opposition was ``largely generated'' by lobbyists opposed to 
the application,\116\ it is legitimate to ask why a mediator 
would be hired in one case and not in another. One answer that 
naturally suggests itself is that to hire a mediator for the 
Mashantucket Pequots benefited Democratic contributors, and to 
hire a mediator for the three Chippewa applicants would have 
worked against Democratic contributors.
    \115\ See Deposition of Hilda Manuel, Jan. 6, 1998, pp. 81-82.
    \116\ E-mail from George Skibine to Heather Sibbison, Paula Hart, 
Tom Hartman, Troy Woodward and Kevin Meisner, June 30, 1995 (Exhibit 
    In the Hudson application, no one from DOI's central office 
even visited the proposed site in Hudson, Wisconsin, to see any 
of the alleged problems first hand. As for the central tenet of 
the rejection--opposition by the surrounding communities--the 
Department of the Interior went so far as to misrepresent to 
this Committee and to a Federal judge the facts pertaining to 
support for the application.\117\
    \117\ As will be discussed later in this chapter, the Department of 
the Interior significantly misrepresented the amount of support for the 
application in the record submitted for the purposes of the Federal 
litigation in Wisconsin. The Department of the Interior also failed to 
inform the court that their own Solicitor's office found opposition by 
elected officials to be irrelevant. See e-mail from Kevin Meisner to 
Heather Sibbison, Mar. 23, 1995 (Exhibit 56). In this e-mail, Meisner 
states that he is also sending the e-mail to another Department of the 
Interior lawyer named Tim Elliot ``who should be able to shed some 
further light on this question.'' No documents were produced to this 
Committee regarding Mr. Elliot's position on this matter. 
Notwithstanding Mr. Elliot's potential role as a witness in this 
matter, however, Elliot represented all Department of the Interior 
employees in depositions taken by this Committee.

The Department changed its policy regarding off-reservation 
        applications just before deciding Hudson

    It is clear that the Department would have acted 
appropriately if it made a finding, supported by fact, that the 
proposed Hudson casino would have been a ``detriment to the 
surrounding community.'' Because the record did not support 
such a finding, the Secretary's office changed the approach to 
evaluating off-reservation gaming applications, and decided 
that unsupported opposition within the community would be 
enough for a finding that the proposal would be a detriment to 
the surrounding community. In its rejection of the application, 
the Department has morphed the Section 20 ``detrimental to the 
surrounding community'' standard into a policy that the 
existence of opposition to an application is a ``detriment to 
the surrounding community.''
    The Department of the Interior has not publicly discussed 
this policy change. In communications obtained by this 
Committee pursuant to subpoena, however, Department officials 
have admitted that a new policy was used to decide the Hudson 
application. Furthermore, it is clear that the applicants were 
not informed of the new ground rules for deciding their 
    One clear statement that a new policy was used to decide 
the Hudson application is found in an internal communication 
between Secretary Babbitt's Special Assistant Heather Sibbison, 
and Michael Gauldin, a Department spokesman responsible for 
answering questions about the Hudson decision. Almost 2\1/2\ 
years after the decision was made, Sibbison--who was also the 
go-between with the White House for the Hudson matter--made the 
following statement in a confidential internal e-mail:

        [I]t has been our position, first articulated in 
        Hudson, that expressed opposition from local elected 
        officials essentially is prima facie evidence of 
    \118\ E-Mail from Heather Sibbison to Michael Gauldin, Dec. 16, 
1997 (emphasis added) (Exhibit 54).

    David Jones, the Department of the Interior's own attorney 
in the civil litigation in Wisconsin, adds to our understanding 
of Sibbison's statement:

        The second, and related, problem is that the Department 
        appears to have changed its past policy of requiring 
        ``hard'' evidence of detriment to the community. The 
        plaintiffs will therefore argue that they had no 
        notice, either through past policy or through direct 
        Departmental communication, that the ``soft'' concerns 
        expressed by local officials would jeopardize their 
    \119\ Memorandum from David Jones to Scott Keep, Feb. 14, 1996 
(emphasis added) (Exhibit 37).

    Even more enlightening is George Skibine's explanation of 
the role of Counselor to the Secretary John Duffy. Skibine 

        The Department (Duffy) made a decision that the 
        opposition of the local communities was evidence per se 
        of detriment, and that the Department was not going to 
        require the communities for detailed evidence to back 
        up their opposition.\120\
    \120\ Memorandum from George Skibine to Scott Keep, Assistant 
Solicitor, Aug. 5, 1996 (Exhibit 51). Heather Sibbison characterizes 
Duffy as the person ``most centrally involved'' in the decision. 
Although he did not have the actual decisionmaking authority, Sibbison 
answered in the affirmative when asked if Duffy ``was much more 
involved in meetings and deliberations about this particular 
application than Mr. Anderson.'' Deposition of Heather Sibbison, Senate 
Committee on Governmental Affairs, Sept. 26, 1997, p. 118-119. In a 
memorandum prepared by Troy Woodward, Duffy's role is further 
explained: ``Duffy thinks that the local communities may veto off-
reservation Indian gaming by objecting during the consultation process 
of Section 20. I expressed the opinion, advocated by George [Skibine] 
and which we have used to evaluate objections in the past, that the 
consultation process does not provide for an absolute veto by a mere 
objection, but requires that the objection be accompanied by evidence 
that the gaming establishment will actually have a detrimental impact 
(economic, social, developmental, etc.).'' Memorandum by TMW [Troy 
Woodward], July 6, 1995 (Exhibit 77).

This was a departure from Department practice and established a 
new standard to assess trust applications. It is certainly a 
departure from Acting Deputy Commissioner of Indian Affairs 
Hilda Manuel's letter to Representative Gunderson--drafted just 
4 months before the rejection--which pointed out that ``any 
opposition should be supported by factual documentation.'' 
\121\ Thus, in the Hudson case, Babbitt's counsel established a 
new policy--one not articulated anywhere or shared with any of 
the applicants.
    \121\ Letter from Hilda Manuel to Representative Steve Gunderson, 
Mar. 2, 1995 (Exhibit 38).
    Further illustrating the departure from what was standard 
practice up until the Hudson application, Kevin Meisner, an 
attorney at the Department of the Interior, disagreed with 
Duffy's decision and wrote a memorandum to a number of 
Department employees involved in the Hudson decision (Troy 
Woodward, George Skibine, Paula Hart, Tom Hartman, and Larry 
Scrivner). Meisner stated:

        My view on this matter is that the bald objections of 
        surrounding communities including Indian tribes are not 
        enough evidence of detriment to the surrounding 
        communities to find under Section 20 of IGRA that the 
        acquisition for gaming will be detrimental to the 
        surrounding communities.

        Specific examples of detriment must be presented by the 
        communities during the consultation period in order for 
        us to determine that there will be actual detriment. A 
        finding of detriment to surrounding communities will 
        not hold up in court without some actual evidence of 
        detriment. In this case the gaming office did not think 
        that the information obtained during the consultation 
        period was enough to show actual detriment to the 
        surrounding community.\122\
    \122\ Memorandum from Kevin Meisner to Troy Woodward, George 
Skibine, Paula Hart, Tom Hartman, and Larry Scrivner, July 6, 1995 
(Exhibit 52).

    In addition to making the point about unsupported 
objections not being sufficient to establish detriment to the 
community, Meisner provides a clear window into what actually 
happened prior to the revisions and political cover-up 
following the decision. By pointing that the ``gaming office 
did not think that the information obtained during the 
consultation period was enough to show actual detriment to the 
surrounding communities,'' a dispassionate observer can only 
wonder what Secretary Babbitt meant when he told this Committee 
that ``the Department based its decision solely on the criteria 
set forth in Section 20 of the Indian Gaming Regulatory Act.'' 
\123\ If Section 20 requires a finding that an application not 
be a detriment to the surrounding community, and Secretary 
Babbitt maintains that the decision was based on Section 20 of 
IGRA, and his own staff stated 8 days before the rejection that 
the gaming office did not have evidence of actual detriment, 
there should be little surprise that this Committee has a 
significant problem with the following language from the 
rejection letter: ``Because of our concerns over detrimental 
effects on the surrounding community, we are not in a position, 
on this record, to substitute our judgment for that of the 
local communities directly impacted by this proposed off-
reservation gaming acquisition.'' \124\
    \123\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 776.
    \124\ Letter from Michael Anderson to Rose Gurnoe, Alfred Trepania 
and Arlyn Ackley, Sr., July 14, 1995 (Exhibit 2).
    Two significant problems flow from this policy change: (1) 
the applicants were not informed that new rules were being 
invented for, and applied to, their application; and (2) the 
abrupt shift in policy defied a valid Presidential directive 
prohibiting the Department from changing policy without 
providing advance notification to the tribes.\125\ Indeed, the 
change of policy conflicts with Section 20 of IGRA, which 
requires ``consultation with the Indian tribe'' \126\ prior to 
a determination that the proposal would be a detriment to the 
surrounding community. It can hardly be argued that the 
Secretary consulted with the applicants if they were unaware 
that a new policy was being used to consider the application.
    \125\ President's Memorandum for the Heads of Executive Departments 
and Agencies: Government-to-Government Relations With Native American 
Tribal Governments, 59 Fed. Reg. 22951 (1994). In pertinent part, this 
Memorandum states: ``In order to ensure that the rights of sovereign 
tribal governments are fully respected, executive branch activities 
shall be guided by the following: . . . (b) Each executive department 
and agency shall consult, to the greatest extent practicable and to the 
extent permitted by law, with tribal governments prior to taking 
actions that affect federally recognized tribal governments. All such 
consultations are to be open and candid so that all interested parties 
may evaluate for themselves the potential impact of relevant 
proposals'' (Exhibit 66).
    \126\ 20 U.S.C. Sec. 2719(b)(1)(A).
    George Skibine, allegedly the key decisionmaker in the 
rejection of the application, lends support to a statement by 
Sibbison that the Department had changed its policy. In an e-
mail to Hilda Manuel, Bob Anderson, Heather Sibbison, Michael 
Anderson, Scott Keep, Dave Etheridge, Tom Hartman, and Nancy 
Pierskalla, dated March 17, 1997, he states:

        Plaintiffs informed us that a pivotal question in their 
        decision to resubmit an application is whether the 
        Department again stand by its position that the 
        ``naked'' political opposition of the surrounding 
        communities without factual support is enough for the 
        Secretary to refuse to make a finding that the proposed 
        acquisition is not detrimental to the surrounding 
        community. . . . We told them we would confer with 
        policy makers within the Department and let them know 
        the outcome. . . . I think that it is a fair question 
        for plaintiffs to ask.\127\
    \127\ E-Mail from George Skibine to Hilda Manuel, Mar. 17, 1997 
(Exhibit 57).

It is significant that Skibine does not take issue with the 
fundamental premise of the question. This admission that 
``factual support'' was absent from the decision goes directly 
to the question of whether the decision was improperly made, 
and whether the Department has tried to cover up this fact. The 
Committee is left with a significant question: Why would 
``naked'' political opposition without factual support ever be 
a legitimate reason to deny an application? Prior to Hudson, it 
was not a sufficient reason and nowhere in the record is there 
a discussion of why the Department felt compelled to change the 
policy without even notifying the parties that there had been a 
change. Again, the circumstantial evidence points to an 
improper motive.
    Secretary Babbitt made his position clear in a statement to 
the New York Times: ``This department does not force off-
reservation casinos upon unwilling communities.'' \128\ 
However, prior to the Hudson decision, mere opposition was not 
enough--there had to be an objective showing of detriment. For 
example, in her letter to Representative Gunderson, Hilda 
Manuel stated:
    \128\ Secretary of the Interior Bruce Babbitt, Letter to the 
Editor, the New York Times, Jan. 4, 1998.

        You request clarification on whether or not the Bureau 
        of Indian Affairs (BIA) considers the views of parties 
        opposing a fee-to-trust acquisition by a tribe for 
        gaming purposes. Because of the contentious nature of 
        fee-to-trust acquisitions for gaming purposes, public 
        sentiment and concerns of the negative impacts of 
        casino gambling are two of the several issues that are 
        common. The Department of the Interior (Department) is 
        sensitive to these issues. Consequently, we want to 
        take this opportunity to assure you that comments 
        opposing fee-to-trust acquisition receive the highest 
        consideration during the review process. However, it is 
        important to point out that any opposition should be 
        supported by factual documentation. If the opposing 
        parties do not furnish any documented evidence to 
        support their position, it is difficult, if not 
        impossible, to make a finding that the acquisition is 
        not detrimental to the surrounding community as 
        required by the Indian Gaming Regulatory Act (IGRA), 25 
        U.S.C. Sec. 2719.129
    \129\ Letter from Hilda Manuel, Acting Deputy Commissioner of 
Indian Affairs, to Hon. Steve Gunderson, Mar. 2, 1995 (emphasis added) 
(Exhibit 38).

    The commonsense rationale for this standard is obvious: 
opposition based on racism, for example, would hardly be an 
acceptable reason for rejecting an application. Thus, to be a 
part of the decisionmaking process, ``factual documentation'' 
of opposition was always required prior to Hudson. George 
Skibine, during his deposition, understood this concept. When 
asked whether he would accept a claim of opposition and a claim 
of harm ``without any research,'' he replied:

        No; I think that we would need to look at what 
        justification you submit.\130\
    \130\ Deposition of George Skibine, Jan. 13, 1998, p. 44.

    The weakness of the Department's position regarding the 
Hudson application is illustrated by an exchange between 
Committee counsel and Mr. Skibine during his deposition:

          Q: [A] longtime Hudson business person wrote in 
        support [of the application] and states that the 
        opposition to the acquisition is receiving money from 
        opposing Indian tribes. Is this an observation that you 
        investigated at the time you were analyzing whether to 
        approve or reject the application?
          Skibine: No, it was not an allegation we 
          Q: Do you know whether it is correct or incorrect?
          Skibine: No, I don't know whether it is correct or 
          Q: Would it make a difference if it was correct?
          Skibine: I think that if it was correct, it would 
        make a difference, yes.\131\
    \131\ Id. at p. 133.

Given that the Department of the Interior was basing its 
rejection--at least according to the Department--on opposition 
from the local community, it would seem that fundamental 
fairness would have required an inquiry into whether it was 
true that people were receiving money for their opposition to 
the application. Forced to admit that it would have made a 
difference if the allegation were true, Skibine has essentially 
conceded the Department's case--the Department failed to 
examine a potentially dispositive factor, which makes it well-
nigh impossible to argue that ``the right decision was made in 
the right way and for the right reasons.'' \132\
    \132\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 769.
    Indeed, the Department's intellectual position is even 
worse. By changing the policy to allow opposition to constitute 
a prima facie case of detriment to the community, as Sibbison 
stated in her e-mail to Michael Gauldin,\133\ the Department is 
conceding that it would be acceptable in future cases if the 
opposition was bought by a special interest or, in the extreme, 
the opposition was grounded on a racist reaction to the 
applicant. In the final analysis, the failure of the 
decisionmakers to look beneath the surface of the opposition 
makes it appear that they were less interested in a fair 
decision than in arriving at a predetermined goal, by whatever 
means necessary.
    \133\ E-mail from Heather Sibbison to Michael Gauldin, Dec. 16, 
1997 (Exhibit 54).
    In the Hudson application, there was certainly opposition. 
There was also, however, support for the application, and it 
appears that quantitatively there was more support than 
opposition. Perhaps more important to the making of a 
principled decision, there is hardly any ``factual 
documentation'' to back up the opposition. Furthermore, to 
return to the point emphasized in the previous section, there 
was no opposition that was beyond cure if the applicants had 
been informed of the basis for the opposition. In addition, as 
will be discussed later, the Department misrepresented the 
amount of support for the application before this Committee and 
a Federal court. Given the importance placed on community 
opposition, this leads to a serious concern that the quantity 
of support and opposition was manipulated in order to validate 
the pre-determined outcome of the Hudson application denial.

The reasons advanced for the rejection of the application are 
        contradicted by information obtained by this Committee

    A review of the recommendations prepared by the career 
professionals working for the Department of the Interior gives 
insight into not only what the career civil servants were 
thinking, but also what the applicant tribes were expecting 
from their meetings with Interior officials. The Finding of No 
Significant Impact (``FONSI''),\134\ the first Area Office 
recommendation,\135\ the second Area Office 
recommendation,\136\ the recommendation from the Indian Gaming 
Management Staff (IGMS), signed by Thomas Hartman (the IGMS 
economic specialist) \137\ and George Skibine's re-draft of the 
IGMS memorandum,\138\ all support the conclusion that the 
application was on its way to being approved by the career 
professionals at the Department of the Interior. The only 
letter or memorandum to the contrary is Michael Anderson's 
three page rejection letter written on July 14, 1995.\139\ 
Indeed, it is particularly troubling that there are no 
memoranda recommending that the application be rejected. One 
reasonable conclusion as to why no such memoranda were prepared 
is that the facts, as developed, did not support such a 
position being committed to paper.
    \134\ Finding of No Significant Impact, Sept. 14, 1994 (Exhibit 
    \135\ Memorandum from Denise Homer, Area Director to Ada Deer, 
Assistant Secretary--Indian Affairs, Nov. 15, 1994 (Exhibit 42).
    \136\ Memorandum from Denise Homer, Area Director to Ada Deer, 
Assistant Secretary--Indian Affairs, Apr. 20, 1995 (Exhibit 43).
    \137\ Memorandum from Indian Gaming Management Staff to the 
Director of the Indian Gaming Management Staff, June 8, 1995 (Exhibit 
44). Although it was marked ``draft'' it was signed by Thomas Hartman.
    \138\ Memorandum from George Skibine to Assistant Secretary--Indian 
Affairs, undated (Exhibit 45). Skibine denies that he had any input 
into this memorandum.
    \139\ Letter from Michael Anderson to Rose Gurnoe, Alfred Trepania, 
and Arlyn Ackley, Sr., July 14, 1995 (Exhibit 2).
    The three page rejection letter signed by Michael Anderson 
points to ``detriment to the surrounding community'' as the 
reason for the denial. However, George Skibine, allegedly the 
most important of the decisionmakers, made the following 
statement in an internal memorandum after the decision was 

        It is true that extensive factual findings supporting 
        the local communities' objections are nowhere to be 
    \140\ Memorandum from George Skibine to Scott Keep, Aug. 5, 1996 
(Exhibit 51).

This is a crucial point considering that Skibine acknowledges: 
``The point here, and a very crucial one, is that the 
Department has to rely on the record, and the opposition of the 
local communities in the record is the evidence relied upon.'' 
    \141\ Id.
    Supporting Skibine's after-the-fact recognition that 
``extensive factual findings supporting the local communities' 
objections are nowhere to be found,'' \142\ is an 
acknowledgment by him that as of June 30, 1995, just 2 weeks 
before the rejection, the IGMS had tentatively reached the 
conclusion that the application would not be detrimental to the 
surrounding community:
    \142\ Id.

        Tom Hartman of my staff also prepared a memo regarding 
        the section 20 ``not detrimental'' analysis. 
        Unfortunately, I have not been able to finish the 
        review because of computer difficulties. Our tentative 
        conclusion is that the record permits us to make a 
        finding that a gaming establishment at that location 
        will not be detrimental to the surrounding 
    \143\ E-mail from George Skibine to Heather Sibbison, June 30, 1995 
(emphasis added) (Exhibit 46).

Of particular interest to the Committee is the timing of this 
e-mail when compared to other correspondence from the 
Secretary's office. On June 6, 1995, before Skibine stated that 
the record indicated that the proposal would not be detrimental 
to the surrounding community, Heather Sibbison, Special 
Assistant to Secretary Babbitt, relayed to the White House that 
Interior was ``95% certain that the application [would] be 
turned down.'' \144\ On June 27, 1995, Sibbison wrote to the 
White House indicating that the application would be denied, 
and the decision ``may be made public at the end of the week.'' 
\145\ This leads to a fundamental question: how could the 
decision based on Section 20 have followed the recommendations 
of career officials if 3 days after Ms. Sibbison had confirmed 
the application's denial to the White House, Skibine indicated 
that the IGMS position was that the application would ``not be 
detrimental to the surrounding community.''
    \144\ Memorandum from David Meyers to Jennifer O'Connor, June 6, 
1995 (Exhibit 20).
    \145\ Memorandum from Heather Sibbison to Jennifer O'Connor, June 
27, 1995 (Exhibit 22).
    Skibine's statement about ``our tentative conclusion'' is 
consistent with representations made in the record about impact 
on the community. For example, the Indian Gaming Management 
Staff (IGMS) made the following observations about ``detriment 
to the community'':

        Staff finds that detrimental impacts are appropriately 
        mitigated through the proposed actions of the Tribes 
        and the Agreement for Governmental Services. It finds 
        that gaming at the St. Croix Meadows Greyhound Racing 
        Park that adds slot machines and blackjack to the 
        existing Class III pari-mutuel wagering would not be 
        detrimental to the surrounding community[.] \146\
    \146\Memorandum from the Indian Gaming Management Staff to the 
Director of the Indian Gaming Management Staff (George Skibine), June 
8, 1995. (Exhibit 44) The memo was signed by Mr. Hartman even though 
there is a stamp located on the bottom of the document indicating 
``Draft.'' Additionally, Mr. Hartman in his deposition indicated that 
the memo was a compilation of views from a number of the staff. See 
Deposition of Thomas Hartman, Dec. 8, 1997, pp. 81-82.

Inconsistencies such as the one between this statement and 
Michael Anderson's rejection letter lead to the justifiable 
suspicion that the decision was made for reasons other than 
those publicly advanced. Furthermore, how could the applicants 
have addressed the perceived ``defect'' if the record did not 
support an argument that the ``defect'' existed?
    Another clear contradiction of the rationale advanced in 
the July 14, 1995, rejection is found in an e-mail from George 
Skibine to Heather Sibbison, Paula Hart, Tom Hartman, Troy 
Woodward, and Kevin Meisner. Skibine states:

        I also sense that even if the Town of Hudson and the 
        Town of Troy embrace the proposal, we may still not 
        change our position because of political opposition on 
        the Hill, largely generated by the Minnesota and 
        Wisconsin Tribes who oppose this acquisition.\147\
    \147\ E-mail from George Skibine to Heather Sibbison, Paula Hart, 
Tom Hartman, Troy Woodward and Kevin Meisner, June 30, 1995 (Exhibit 

This admission makes a mockery of Secretary Babbitt's assertion 
that the decision was ``the right decision made in the right 
way and for the right reasons.'' \148\ After spending so much 
effort in attempts to convince Congress that the decision was 
predicated on local opposition, this e-mail shows that Skibine 
understood that the Department of the Interior was prepared to 
disregard the views of both Hudson and the closest neighboring 
town. Indeed, even the Governor of Wisconsin understood that 
there was support for the application. When asked if the 
December 1992 referendum in Hudson indicated local support, 
Thompson replied ``Yes.'' \149\
    \148\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 769.
    \149\ Doug Stohlberg, Thompson Says He ``Won't Stop'' Casino at Dog 
Track, Hudson Star Observer, Feb. 10, 1994 (Exhibit 71).
    Heather Sibbison also expressed concerns that it might not 
be wise to include references to other Native American 
opposition to the Hudson application. In an e-mail 2 weeks 
before the rejection, she stated:

        [W]e may not want to include in our rationale the 
        opposition of the other tribes, because I think it is 
        possible that if the three Tribes came back with 
        stellar support from their local towns and Congressman, 
        we might look at the proposition in a new light--but 
        even in that case, the Minnesota tribes will still be 
        against it. And also, I agree with Collier's uneasiness 
        about some tribes getting all of the goodies at the 
        expense of other tribes--theoretically they all should 
        have equal opportunities.\150\
    \150\ E-mail from Heather Sibbison to George Skibine and Troy 
Woodward, June 30, 1995 (Exhibit 75).

Sibbison's observation is curious because it stresses political 
factors and not legal factors. Her concern that there would be 
a problem with the perception of certain tribes ``getting all 
the goodies'' appears to have no place in a principled 
decision, made on the merits.
    The record provides no indication of what came to light 
between June 30--when Skibine stated that ``our tentative 
conclusion is that the record permits us to make a finding that 
a gaming establishment at that location will not be detrimental 
to the surrounding community''--and July 14, when Anderson 
rejected the application. Because there is no indication in the 
record of what could have changed the minds of the staff, it is 
reasonable to conclude that ``detriment to the surrounding 
community'' was the pretext for the rejection, and that the 
failure to announce that the Department was changing its policy 
in this case was necessary because the debate would have become 
infinitely more complicated, and the grounds for appeal to 
Federal court would have been strengthened.

Political considerations appear to have influenced the decision

    Secretary Babbitt has said publicly that the Hudson 
decision was the ``right decision made in the right way for the 
right reasons.'' \151\ A review of the above material does not 
support this statement. It is simply inexplicable for the 
Department to have made a decision without support in the 
record for that decision. Furthermore, but for political 
considerations, it seems the Department could have delayed the 
final decision in order to provide the applicants a chance to 
remedy any alleged defects.
    \151\ Testimony of Secretary Bruce Babbitt, Jan. 29, 1998, 769.
    In addition, lobbyists' notes of meetings with Interior 
staff call into question the integrity of Interior's 
decisionmaking process. In a May 25, 1995, memo lobbyist Scott 
Dacey discussed meetings with Mike Anderson, George Skibine, 
and Thomas Hartman. In these meetings the process for reviewing 
the application under section 20 of IGRA was discussed. As of 
this meeting Michael Anderson apparently not only did not want 
to establish a precedent against tribes wishing to bring land 
into trust into the future, he also acknowledged that the law 
was not on their side.\152\
    \152\ Memorandum from Scott Dacey to Debbie Doxtator, May 25, 1995 
(Exhibit 53).
    Dacey went on to explain that ``[r]eaching the 
`detrimental' standard is difficult [to establish]. According 
to Tom Hartman, all of the economic impact statements are of no 
value in this assessment. The addition of a new Indian gaming 
establishment to the market area brings `normal competitive 
pressures.' '' \153\ When asked about competitive pressure and 
the role it played in finding ``detriment,'' Hartman had the 
following response:
    \153\ Id.

        The only policy I was aware of, and it was articulated 
        verbally by the Deputy Commissioner of Indian Affairs, 
        was that economic competition was ``not detrimental,'' 
        that we couldn't pick one tribe out over another. And 
        even from a business standpoint, the reason you have a 
        McDonald's on one corner and a Burger King on another 
        and a Wendy's on the third corner is because there are 
        synergisms in a lot of these, so you can't--it is very 
        difficult from an econometric standpoint to say, when 
        you add another casino that it ruins everybody else's 
        business. If that was the case, then the second person 
        moving into Las Vegas would have ruined it for 
        everybody, and I think we know that that is not the 
    \154\ Deposition of Thomas Hartman, Dec. 8, 1997, p. 37.

According to Dacey, Mike Anderson relayed that the Department 
was ``trying to keep this issue on the merits'' and would ``try 
to thread the needle on this request.'' \155\ The memo 
    \155\ Memorandum from Scott Dacey to Debbie Doxtator, May 25, 1995 
(Exhibit 53).

        Things might change when the politicians like Babbitt 
        and Duffy become involved, but without the law on their 
        side it will be difficult to ``kill the deal.'' \156\
    \156\ Id.

    On July 14, 1995, the Department of the Interior did in 
fact ``kill the deal.'' The Department relied upon a finding of 
detriment in the face of the career professionals who had 
stated that there was no articulated detriment. Interestingly 
enough, Dacey noted in his memo that if Babbitt were to come 
out against the Hudson application he would ``find his excuse 
in Section 151.'' \157\ It is significant that a lobbyist for 
the opponents was being briefed on the legal analysis at the 
Department, while the applicants were being told nothing. 
Indeed, given what was discovered during the Committee's 
investigation, it is reasonable to speculate that Interior 
officials did not inform the applicant tribes about perceived 
problems because either the problems were not supported by past 
practice and current fact, or the concern that by identifying 
``problems,'' the applicants would have an opportunity to cure. 
Given the obvious preferential treatment given the opponents of 
the application, there appeared to be little interest in 
allowing the applicants an opportunity to address the 
Department's concerns. Although George Skibine now states that 
he would have done things differently, it is hard to believe 
that Interior officials would not have worked with the 
applicant tribes--unless the ulterior motive was to help the 
opponents achieve their objective.
    \157\ Id.
    It is significant that the Department was prepared to take 
the unprecedented step of rejecting the application for off-
reservation gaming using a 151 analysis. Kevin Meisner 
confirmed this when he wrote on July 11, 1995, ``I thought 
after the Friday meeting that everyone (except Duffy who we had 
not yet consulted) agreed that there was not enough evidence 
supporting a finding of ``detriment'' to the surrounding 
community under section 20 and therefore we would decline to 
acquire the land under 151.'' \158\ Notwithstanding the fact 
that ``everyone'' agreed the decision could not be made under 
Section 20, Secretary Babbitt has repeatedly said that the 
Department based its decision solely on the criteria set forth 
in Section 20.\159\
    \158\ E-mail from Kevin Meisner to George Skibine and Troy 
Woodward, July 11, 1995 (Exhibit 55).
    \159\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 776.
    Perhaps even more revealing, the Department of the Interior 
was prepared to reject the Chippewas' application even if the 
local officials were uniformly behind the application. George 
Skibine, in an e-mail to Sibbison, Hart, Hartman, Woodward, and 
Meisner stated: ``I also sense that even if the Town of Hudson 
and the Town of Troy embrace the proposal, we may still not 
change our position because of political opposition on the 
Hill, largely generated by the Minnesota and Wisconsin Tribes 
who oppose this acquisition.'' \160\ This is a curious 
conclusion in that the question of congressional participation 
had already been addressed by the Department's solicitors 
office. Kevin Meisner, an attorney for the Department, stated 
prior to the final resolution: ``I think the question of 
whether a Congressman can participate in the state consultation 
process for taking land into trust for gaming under IGRA (25 
U.S.C. 2719(b)(1)(a)) should be answered in the negative. . . . 
My feeling is that it would not be appropriate for Federal 
Congresspersons to comment[.]'' \161\ Skibine's statement that 
the application would be rejected even if there was complete 
support from the affected towns, shows the transparency of the 
Secretary's claim that the Department made the right decision 
for the right reasons.
    \160\ E-mail from George Skibine to Heather Sibbison, June 30, 1995 
(Exhibit 46).
    \161\ E-mail from Kevin Meisner to Heather Sibbison, Mar. 23, 1995 
(Exhibit 56). It is somewhat ironic that discussion of this matter 
during Committee hearings often that such opposition by elected 
leaders. Meisner's position that such opposition was not relevant is 
the only expression of Department policy produced by the Department 
pursuant to the Committee's document request and subpoena, and it is 
curious that many argued such opposition was relevant when the 
Solicitor's office at Interior indicated that it was not.
    Thomas Hartman stated under oath that Interior was 
concerned about the political ramifications of Interior 
approving the application and a Republican Governor rejecting 
it. Hartman had the following to say:

        In the meetings I had been in, the negatives of taking 
        the land into trust had certainly been discussed. A 
        concept that had been tossed out was that in a 
        Democratic administration and a Republican governor, to 
        ignore the local input and impose a casino on an 
        unwilling community and then have the Republican 
        governor say, well, look at those ridiculous Democrats 
        doing this again, was not viewed as being the best 
        position to be in. So I know when they say ``probably a 
        bad idea to create a land trust,'' there were plenty of 
        ideas thrown out to indicate that some people in those 
        meetings thought it was a bad idea to create a land 
        trust in this case.\162\
    \162\ Deposition of Thomas Hartman, Dec. 8, 1997, p. 54.

Whether Democrats would suffer political consequences for 
following the law and past Department of the Interior practice 
should never have even been considered as a factor in the 
decisionmaking process.

Michael Anderson--decisionmaker or political puppet?

    When asked whether he was the decisionmaker in the Hudson 
case, Michael Anderson, the Deputy Assistant Secretary for 
Indian Affairs, stated ``That is correct.'' \163\ Despite this 
assertion, evidence reviewed by the Committee showed that 
Anderson appeared to play little or no role in the actual 
decision. Anderson admitted that he spent only 4-5 hours on the 
Chippewas' application and that he did not read or review the 
32 page recommendation to approve the application provided by 
the Department's area office.\164\
    \163\ Deposition of Michael Anderson, Jan. 14, 1998, p. 38.
    \164\ Senate Deposition of Michael Anderson, Sept. 26, 1997, pp. 
    Anderson did, however, express a concern about the 
detrimental impact that the casino would have on the nearby St. 
Croix Chippewa. When asked about this, he had the following 

          A: I believe the nature of the concern was that they 
        had developed a market for the casino in that area, and 
        that they felt that there would be a detrimental impact 
        to their market if another casino was located nearby. I 
        believe they also may have provided studies to that 
        effect as well.
          Q: So correct me if I'm wrong, it is a valid 
        opposition for an opposing tribe to object on economic 
          A: Yes, and the letter states that as a factor.\165\
    \165\ Deposition of Michael Anderson, Jan. 14, 1998, pp. 24-25.

    After Committee lawyers pressed Anderson, he admitted that 
he was aware that the St. Croix tribe gaming operation was 
``very profitable.''\166\ Although Anderson was aware of the 
general financial status of the St. Croix tribe he testified 
that he did not review any of the market information provided 
to the Department regarding the impact of the Hudson 
application and relied solely on the staff for this 
    \166\ Id.

          A: I didn't review specific market information. I was 
        informed by the staff, the Indian Gaming Management 
        Staff, that there was an impact and that was also 
        contained in the letter, the decision letter as well. 
        There may have been discussions about the location and 
        the market area that was developed by St. Croix, but I 
        don't recall any specifics.
          Q: Do you recall who on the Indian Gaming Management 
        Staff told you that, or communicated that to you?
          A: I don't remember who the major staff advisors on 
        the market impact would have been. George Skibine and 
        Tom Hartman.\167\
    \167\ Id. at 28.

This testimony is of particular interest because Hartman, the 
economic specialist for the Indian Gaming Management Staff, has 
testified that a casino in Hudson would not have had a 
detrimental impact on the surrounding community. Hartman also 
signed a memorandum compiled by the Indian Gaming Management 
Staff to this effect and included an analysis of the detriment 
on surrounding tribes.\168\ Michael Anderson, however, had 
never seen or been told of this analysis before he signed the 
rejection letter on July 14, 1995.\169\ If Anderson was not 
aware of the analysis compiled by the staff responsible for 
reviewing these applications, he must have received direction 
from another source.
    \168\ See memorandum from Indian Gaming Management Staff to 
Director Indian Gaming Management Staff, June 8, 1995 (Exhibit 44).
    \169\ Deposition of Michael Anderson, Jan. 14, 1998, p. 29.
    There are numerous additional examples of Anderson being 
unaware of significant information. For example, he was not 
aware of a contract for services signed by the applicant tribes 
and the community authorities in Hudson, Wisconsin, which would 
have mitigated a number of the concerns and objections 
mentioned in the actual rejection letter.\170\ Anderson also 
was unaware that Heather Sibbison had sent letters to the White 
House indicating how the decision would be made.\171\ This is 
critical because Sibbison sent these letters to the White House 
before George Skibine had prepared his first draft of the 
denial letter on June 29, 1995. Anderson testified that not 
only did Heather Sibbison not consult him on these letters, but 
he was unaware that the Department of the Interior's position 
had ever been communicated to the White House.\172\
    \170\ Id. at 70-71. See also Agreement for Government Services 
(Exhibit 70). Attached to the Agreement is a letter from the Mayor of 
Hudson stating: ``I think you will find, as you review the attached 
material, that the City of Hudson has a strong vision and planning 
effort for the future and that this proposed Casino can apparently be 
accommodated with minimal overall impact, just as any other development 
of this size.'' Also attached is a referendum showing that a majority 
of those who cast ballots were supportive of the proposed casino.
    \171\ Senate Deposition of Michael Anderson, Sept. 26, 1997, p. 29.
    \172\ Id. at 29-31.
    Notwithstanding his representations to the contrary, it 
appears that Anderson's role in the decisionmaking process was 
limited. His conduct in this matter is consistent with that of 
someone who was going along with a decision already made, and 
his failure to inquire about any of the salient facts, and his 
obvious concern for the wealthy Democratic contributors opposed 
to the application, raise serious questions about his 


    In addition to the major contradictions already discussed, 
including the contradiction between Secretary Babbitt and Paul 
Eckstein regarding contacts with Harold Ickes, whether the 
Secretary mentioned political contributions by the opposing 
tribes to Democratic organizations, Secretary Babbitt's belief 
that his letters to Senator McCain and Senator Thompson were 
consistent, and Babbitt's statement that the decision was based 
solely on section 20 of IGRA, there are a number of other 
contradictions which require further explanation.

Was the President contacted about the Hudson application after the 
        initial meeting with Patrick O'Connor?

    There is contradictory testimony over whether Tom 
Schneider, a lobbyist at O'Connor & Hannan and good friend of 
the President's, communicated with the President about the 
Hudson dog track application. O'Connor & Hannan billed a total 
of $4,000 to their clients for Tom Schneider's time on the dog 
track matter, a fact that was initially withheld from this 
Committee.\173\ In fact, the billing entry unambiguously reads: 
``meeting with senior White House staff and POTUS [President of 
the United States] re. Expansion of gaming and the dog track 
and opposition to doing so.'' \174\
    \173\ See O'Connor & Hannan billing records (Exhibit 31).
    \174\ Id.
    Schneider has testified that O'Connor asked him to stop by 
an event at the Mayflower hotel because the President was there 
for an event.\175\ Schneider did stop by the event: ``I talked 
to [the President] for a few minutes, did not say anything 
about the Hudson Dog Track, and saw Harold Ickes there. Ickes 
said ``that he had told Pat that he was going to look into it. 
I said to Harold that I thought that it deserved looking into 
and I would appreciate it if he would.\176\ He further 
clarified his communication with the President by stating: ``I 
absolutely did not talk to the President then or ever about the 
dog track and the Indians.\177\
    \175\ Deposition of Thomas Schneider, Dec. 10, 1997, p. 15.
    \176\ Id.
    \177\ Id. at 19.
    Schneider's story is contradicted by Thomas Corcoran, a 
former member of Congress and fellow partner of Schneider's at 
O'Connor & Hannan. Corcoran noted:

        The only other contact that I know of with respect to 
        anybody from O'Connor & Hannan with the President was a 
        casual contact, not really a lobbying contact, that Tom 
        Schneider told me about, as I recall a day or so after 
        it happened. Mr. Schneider is a good friend of the 
        President. He was attending a reception, I believe at 
        the White House, and they were just chatting. And in 
        the course of that chat the President indicated that 
        Pat O'Connor had mentioned this dog track to him. They 
        both had a pretty good laugh about the fact that the 
        President of the United States had been informed about 
        a dog track in Wisconsin, and I must say that Tom and I 
        had a pretty good laugh about it as well.\178\
    \178\ Deposition of Thomas Corcoran, Dec. 10, 1997, p. 30.

    This version of events is supported by Schneider's billing 
records at O'Connor & Hannan. The billing entry reads as 
follows: ``Indian matter regarding racetrack gaming and Hudson 
dog track. Telephone discussion and meeting with senior White 
House staff and POTUS [The President] re[garding] expansion of 
gaming and the dog track and opposition to so doing.'' \179\
    \179\ O'Connor & Hannan Billing records, Oct. 2, 1995 (Exhibit 31).

Fred Havenick was told that the DNC and Clinton/Gore '96 played a 
        significant role in the Hudson rejection

    Fred Havenick, the owner of the existing dog track in 
Hudson, Wisconsin, attended a Democratic fundraiser in Florida 
on August 15, 1995. At this fundraiser, Havenick spoke with 
Terry McAuliffe, the Clinton/Gore '96 Finance Chairman. The 
following is Fred Havenick's sworn testimony before the 
Committee on Government Reform and Oversight:

        [J]ust a month after the rejection. I was at a fund-
        raising event in Florida where I ran into Terry 
        McAuliffe, chairman of the finance committee for the 
        President's re-election campaign. After the meeting, I 
        went to say hello to Terry. I've known Terry for quite 
        some time, mostly through his political activities. At 
        the same time, Terry approached me with a large smile 
        on his face and said, what's doing in doggiedom? I said 
        that we were having an enormous problem with an Indian 
        gaming project in northern Wisconsin. He said, oh, I 
        know all about that; to which I responded, come into my 
        office, a private corner of the meeting room. I recall 
        that Terry said, I took care of that problem for you. I 
        was baffled and asked him what he meant. I recall that 
        he said, I got Delaware North's Indian casino project 
        killed, the one that would have competed with you. I 
        set up the meeting with Fowler and others and turned it 
        around. I told Terry that was my project and I was the 
        one who owns the track in Hudson. His face dropped. He 
        was clearly in shock and said little else.\180\
    \180\ Testimony of Fred Havenick, Jan. 21, 1998, pp. 117-118 
(emphasis added). Terry McAuliffe was not deposed by this Committee. He 
did, however, dispute the accuracy of Havenick's account.

McAuliffe clearly thought he was helping a Democratic 
contributor when he helped ``kill'' the application. Terry 
McAuliffe had known Havenick for quite some time through his 
activity as a Democratic contributor. This relationship began 
in the mid-1980s when Havenick and McAuliffe were both members 
of the Democratic Senatorial Campaign Committee. Havenick also 
came into contact with McAuliffe at numerous Democratic 
fundraising events.\181\
    \181\ Id.

A meeting at Lac Courte Oreilles produced diametrically opposed 
        affidavits from the Department of the Interior and the 
        applicant tribes

    On December 3, 1996, George Skibine went to a meeting at 
the La Courte Oreilles reservation to meet with members of the 
applicant tribes. This meeting was set up because of a 
potential settlement arrangement with the law suit filed by the 
tribes against the Department of the Interior. According to a 
number of people who attended the December 3, 1996, meeting the 
following exchange occurred:

          Q: How did [the application] not get approved the 
        first time?
          A: We approved it, but when it got to the Secretary's 
        office politics took over.\182\
    \182\ See Affidavits of Frederick R. Roach, Fred Havenick, Mary Ann 
Polar, Peter A. Liptack, J.W. Cadotte, Arlyn Ackley, Sr., and DuWayne 
Derrickson (Exhibit 58).

Frederick R. Roach, Fred Havenick, Mary Ann Polar, Peter A. 
Liptack, J.W. Cadotte, Arlyn Ackley, Sr., and DuWayne 
Derrickson all signed affidavits to this effect. In response to 
these sworn affidavits, the Department of the Interior produced 
affidavits from individuals with a differing recollection of 
events.\183\ Skibine in his testimony had this to say about the 
    \183\ See Affidavits of Nancy Pierskalla, Troy Woodward, Tim 
LaPointe, Paula Hart, and Robin Jaeger (Exhibit 59).

        We were contacted by the Lac Courte Oreilles tribe to 
        come to Wisconsin to discuss with them the problems 
        that the Wisconsin tribes had with the upcoming 
        renegotiation of their Class III gaming contracts with 
        the State of Wisconsin. And we agreed to come there to 
        make a presentation about compact negotiation. At the 
        same time, the tribes asked us to come and discuss with 
        them, the three tribes, either the day before, to 
        discuss with them and give technical advice on placing 
        land in trust, in general. We clarified to them that we 
        could not and would not discuss the Hudson--the 
        litigation involving the Hudson Dog Track at this 
        meeting . . . we made that absolutely clear to the Lac 
        Courte Oreilles tribe that this was not going to 
        happen. And they told us that they would inform the 
        other two tribes there that the litigation and whatever 
        happened during the litigation of the Hudson Dog Track 
        would not be discussed.\184\
    \184\ Testimony of George Skibine before the Committee on 
Government Reform and Oversight, Jan. 22, 1998.

Skibine's explanation before the Committee is undermined by a 
letter from Ray Wolf, the Vice-Chairman of the LCO Governing 
Board. Wolf wrote:

        George Skabine [sic], the Director of the BIA Office of 
        Indian Gaming Management and Nancy Pierskella, Land 
        Acquisition Specialist for his office, have suggested 
        they come to Wisconsin on Tuesday, December 3 to meet 
        only with the Chippewa tribes interested in acquiring 
        off reservation land for the purposes of establishing a 
        casino, specifically, Hudson.

        The purpose of the BIA meeting is to provide technical 
        assistance to Mole Lake, Red Cliff, and Lac Courte 
        Oreilles. Mr. Skabine [sic] is aware of the need for 
        discretion as his office is scheduled to meet the next 
        day with all of the Wisconsin tribes to provide 
        technical assistance on gaming compact 
    \185\ Letter from Raymond Wolf to Arlyn Ackley, Sr., and Rose 
Gurnoe, Nov. 7, 1996 (Exhibit 60).

In interviews with Mark Goff, lobbyist for the applicant 
tribes, and J.W. Cadotte, a member of the Lac Courte Oreilles 
tribe, Committee investigators learned that there were two 
meetings held on December 3, 1996. The first meeting was a 
smaller meeting held at the council headquarters, and the 
second was a large meeting held at the LCO bingo hall. This is 
an important fact which can explain why the two sets of 
affidavits are diametrically opposed. Most of the Interior 
officials who signed affidavits regarding a December 3, 1996, 
meeting did not attend the initial meeting at the tribal 
headquarters.\186\ This is a fact that should have been known 
to the attorneys preparing the affidavits, and to Mr. Skibine, 
who apparently attended both meetings and failed to reflect 
this fact in his affidavit.
    \186\ Committee interview with Mark Goff and J.W. Cadotte, Dec. 15, 
    Shannon Swanstrom, attorney for the Red Cliff tribe, took 
notes at the December 3, 1996, meeting with George Skibine. In 
these notes, Ms. Swanstrom wrote a quote from Skibine as 
follows: ``I find that [Hudson] in best interests of tribes and 
not to detriment of surrounding community, will send letter to 
governor.'' \187\ This information places Skibine's testimony 
before this Committee in question.
    \187\ See Notes taken by Shannon Swanstrom, Dec. 3, 1996 (quotation 
in the original) (Exhibit 61).

The Department of the Interior misled the Committee and a Federal 
        district court in Wisconsin with the information contained in 
        the administrative record

    The administrative record detailing this case was compiled 
by the Department of the Interior for the ongoing litigation 
over this matter in Wisconsin. The Committee reviewed the 
material and believes that Interior officials may have tried to 
mislead those who received the record. First, the record does 
not adequately reflect support for the application to take land 
into trust. A review of the material received by the Committee 
pursuant to its subpoena revealed the following support: a 
petition totaling 114 pages of signatures,\188\ another 
petition of 38 full or partial pages,\189\ 207 cards,\190\ and 
127 letters.
    \188\ Petition of General Support (Exhibit 62).
    \189\ Letter to Secretary Babbitt from petition signatories, Jan. 
26, 1994 (Exhibit 63).
    \190\ Letter from Wisconsin resident to George Skibine (with 
attached cards), June 5, 1995 (Exhibit 64).
    The record prepared for the litigation, however, reflects a 
lesser amount of support and inaccurately indicates that there 
was more opposition than support. The Department's Solicitor 
took affirmative steps at a hearing conducted by this Committee 
to provide misleading information about the extent of the 
support for the application. The following exchange occurred 
before this Committee:

          Mr. Horn. Mr. Secretary, your counsel, to be 
        charitable about it, misrepresented the record in terms 
        of that document when he said it was referred to the 
        court. We got the document finally and what is in the 
        court's binder is not that document. Here is the 
        difference: 797 cards, letters and petition signatures 
        are on that computerized document to which your 
        counsel, the Solicitor of Interior, I think, referred, 
        and we have in the original document, which is not in 
        the court record, 1,413 petition signatures. In other 
        words, counsel is saying it was all the same and it is 
        just some were typed and Xeroxed and what not and some 
        were in hand, and that means 616 people were left out. 
        And I don't particularly appreciate that 
        misrepresentation . . .
          Mr. Leshy. I am told by staff that Mr. Hartman, who 
        had the handwritten signatures converted to type 
        script, eliminated duplicate signatures so that these 
        716 or however many there were taken out were actually 
        in there twice.\191\
    \191\ See Jan. 29, 1998 hearing testimony before the Committee on 
Government Reform and Oversight, pp. 932-933.

This testimony is particularly interesting when compared with 
the memo authored by George Skibine, the head of the IGMS, 
which states: ``Several thousand cards, letters, and petition 
signatures have been received in support of an Indian casino at 
the Hudson dog track.'' \192\ Mr. Leshy's statement, given 
every benefit of the doubt, does not explain how ``several 
thousand cards, letters, and petition signatures'' were 
represented by 797 names compiled by the Department to provide 
the Federal Court in Wisconsin a sense of how much support 
there was for the application. The record, read at face value, 
misrepresents the facts and support associated with this 
application. The 38 page petition alone would probably have had 
more than 797 signatures. Because the full 38 pages have not 
been included in either the record compiled for litigation, or 
the material produced to this committee, it is not possible to 
determine the precise number. The figure of support rises when 
the additional 114 page petition and other forms of support are 
included. Although it is curious that the Department appears to 
have actively misrepresented the lack of support for the 
application, it is consistent with the need to make this point 
so as to support the theory of the rejection.
    \192\ Memorandum from George Skibine to Assistant Secretary--Indian 
Affairs, undated (Exhibit 45).

The Department of the Interior provided misleading information to 
        Congress prior to the decision to reject the application was 

    At least one representative who came out in opposition to 
the application apparently received false information from 
Secretary Babbitt's office, perhaps in an effort to ``educate'' 
individuals in order to encourage them to oppose the 
application. In a letter to Secretary of the Interior Bruce 
Babbitt, Representative Steve Gunderson stated: ``According to 
your office, since Congress passed the IGRA in 1988, the 
Secretary of Interior has never approved the acquisition of 
off-reservation land to be used for casino gambling.'' \193\ 
The information provided to Representative Gunderson--that 
``the Secretary of the Interior has never approved the 
acquisition of off-reservation land to be used for casino 
gambling''--is false. Hilda Manuel, Deputy Commissioner at BIA, 
when asked about Congressman Gunderson's assertion stated 
``It's not correct.'' \194\
    \193\ Letter from the Honorable Steve Gunderson to Secretary Bruce 
Babbitt, Apr. 28, 1995 (emphasis in the original) (Exhibit 47).
    \194\ Deposition of Hilda Manuel, Jan. 6, 1998, p. 50.
    Once again, the veracity of Department of the Interior 
representations about the Hudson decision is called into 
question when one considers that false information was provided 
to Congress even before the application was rejected. There 
certainly appears to be a self-fulfilling aspect to the 
Secretary's office response to Congress--the information 
provided appears now to have helped pave the way for the 
decision to reject.

The role of Section 20 in the decision

    In the rejection letter, Michael Anderson also informed the 
applicants that even if the Section 20 problems were satisfied, 
the Secretary would reject the application under another 
statutory provision known as Section 151. There is no 
indication in the record, however, that the Department ever 
analyzed the application according to the provisions of Section 
151. Furthermore, Secretary Babbitt told this Committee: 
``[T]he Department based its decision solely on the criteria 
set forth in Section 20 of the Indian Gaming Regulatory Act.'' 
    \195\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 776.
    On review, however, this statement does not appear to be 
entirely correct. Perhaps the most direct indication is from 
George Skibine, the head of the Indian Gaming Management Staff, 
who made the following statement in a deposition before this 

          Q. If I asked you the question, the decision to 
        reject the Hudson Dog Track application was based 
        solely on section 20 of the Indian Gaming Regulatory 
        Act, would you say that that was correct or false?
          A. It would be false.\196\
    \196\ Deposition of George Skibine, Jan. 13, 1998, p. 17. In a 
document that runs counter to many of the other important documents 
related to the Hudson matter, George Skibine makes the following 
request of lawyers in the Solicitors office: ``As you know, I am 
drafting a document relating to the acquisition of the Hudson dog track 
by three Indian tribes in Wisconsin. The letter will decline to take 
the land into trust pursuant to the IRA and Part 151 relying on the 
discretionary authority of the Secretary not to take such land into 
trust. The acquisition is for gaming purposes, but we want to avoid 
making a determination under Section 20 of IGRA.'' E-mail from George 
Skibine to Dave Etheridge, Kevin Meisner and Troy Woodward, June 6, 
1995 (Exhibit 73). This communication is particularly strange because 
others on Skibine's staff were not aware of the decision in early June, 
and all indications are that the record had not provided support for a 
finding that the application was a detriment to the community. 
Furthermore, it is curious that Skibine would come right out and say 
that there was a desire to avoid making the decision under Section 20 
of IGRA. One can speculate that he wanted to avoid setting a precedent 
by making the decision under Section 20 without employing the 
traditional Section 20 criteria.

    The confusion over how the application would be rejected is 
seen in an exchange of e-mails in the days before the decision 
was made. In an e-mail to Skibine and Heather Sibbison, Kevin 
Meisner states:

        Why are we changing our analysis to deny gaming under 
        Section 20? I thought after the Friday meeting that 
        everyone (except Duffy who we had not yet consulted) 
        agreed that there was not enough evidence supporting a 
        finding of ``detriment'' to the surrounding communities 
        under Section 20 and therefore we would decline to 
        acquire the land under 151.\197\
    \197\ Exchange of e-mails between Kevin Meisner and Heather 
Sibbison, George Skibine and Troy Woodward, July 11, 1995 (Exhibit 74).

In an indication that John Duffy was the driving force behind 
the ultimate decision on how the rejection would be made, 
Meisner sent the following message to Troy Woodward:

        Troy: Apparently Bob Anderson did review the letter 
        late Monday. I checked with him Tuesday and he thought 
        that since Duffy wanted the Section 20 finding so badly 
        that we would let the letter go through. I still think 
        that there was not enough evidence for a section 20 
        finding of detriment.\198\
    \198\ Id.

Once again, this exchange of e-mails shows that there were 
significant concerns about whether there was evidence to 
support a finding under Section 20 of IGRA. Given the strong 
feelings that there was not enough evidence to make such a 
showing, it is all the more curious that Secretary Babbitt 
continues to maintain that the decision was based ``solely on 
the criteria set forth in Section 20 of the Indian Gaming 
Regulatory Act.'' \199\
    \199\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 
29, 1998, p. 776.

The Department of the Interior mischaracterized Governor Thompson's 
        public position against the expansion of gambling

    Notwithstanding representations from a number of Department 
officials that Governor Thompson was opposed to the Hudson 
application, he stated: ``I will not promote and I will not 
block. I'm on the tail end of the process, and if everyone 
else, including the local people, approves it before me, I 
won't stop it.'' \200\ Although there is nothing in the record 
to indicate anything to support his position, Babbitt has 
stated that the Governor opposed the dog track.\201\
    \200\ Doug Stohlberg, ``Thompson Says he ``Won't Stop'' Casino at 
Dog Track,'' Hudson Star Observer, 2/10/94.
    \201\ See Testimony of Secretary Bruce Babbitt before the 
Government Reform and Oversight Committee, Jan. 29, 1998, p. 946.
    Governor Thompson did make statements about opposition to 
the spread of gambling. However, in this case, he had 
apparently discussed a deal where the tribes would each give up 
their rights to a second casino if the Governor would approve 
the Hudson casino. Thus, there would be fewer casinos allowed 
in Wisconsin if the Hudson application were approved. Fred 
Havenick explained the proposal before the Committee:

        If you wanted to say that you were against the 
        expansion of gambling, there are currently 17 casinos 
        operating in Wisconsin. This really would have reduced 
        that number by 3 . . . it would be almost a 20 percent 
        reduction in the total number of casinos[.] \202\
    \202\ Testimony of Fred Havenick before the Government Reform and 
Oversight Committee, Jan. 29, 1998.

    The record contains no indication that the Department made 
an effort to obtain Governor Thompson's views on the Hudson 
application. Therefore, it seems inappropriate that it would 
make representations about whether he would, or would not 
support the application.


    On August 20, 1997, the Department of the Interior was 
asked to provide documents pertaining to the Hudson matter. The 
compliance date for this request was September 8, 1997. 
Unfortunately, however, Interior failed to respond adequately 
to this Committee's legitimate request.
    On October 23, 1997, Interior provided one file of records. 
On November 3, 1997, another file of records was produced. At 
this point, the Committee was under the impression that 
production of records--with the exception of a record prepared 
for litigation in Wisconsin, which the Committee initially 
elected not to receive--was complete.
    On December 11, 1997, during a deposition before this 
Committee, Robin Jaeger, the Superintendent of the Regional 
Office in Wisconsin had the following exchange with Committee 

          Q: When did you receive communication that you are 
        requested to produce documents about the Hudson dog 
        track matter?
          A: Yesterday.\203\
    \203\ Deposition of Robin Jaeger, Dec. 11, 1997, p. 11-12.

This revelation prompted the Committee to take the unusual step 
of issuing a subpoena to a government agency. On December 12, 
1997, Interior received a subpoena to produce all documents 
related to the Hudson matter. The compliance date for this 
subpoena was January 2, 1998.
    The following is a list of dates and productions received 
from the Department of the Interior after it received this 
Committee's subpoena:

        December 17, 1997:  One file containing records.
        January 2, 1998:  Six boxes of records.
        January 13, 1998:  One file containing records. 
        Information included records related to Ada Deer, whose 
        deposition was taken that day.
        January 16, 1998:  One file containing records.
        January 17, 1998:  One file containing records.
        February 13, 1998:  Copies of e-mails.

    But for the deposition of Robin Jaeger, and the belated 
discovery that the Department of the Interior had failed to 
produce all relevant documents, the Committee would have been 
denied significant, probative material.


    The White House appeared to be particularly concerned about 
turning over to the Committee a number of documents that 
indicated the President had some level of familiarity with the 
Hudson application. Many months were consumed while the White 
House argued that some documents responsive to legitimate 
requests made by the Committee were ``subject to executive 
    The Committee did ultimately receive relevant documents 
from the White House. The original of one document with the 
following message has still not been provided to the Committee: 
    \204\ Exhibit 78.

        What's the deal on the Wisconsin tribe Indian dispute?

The author of this note is the President, and the White House 
argued that Congress should not receive this document. Both 
this Committee and the Congressional Research Service \205\ 
disagreed with the Counsel to the President's legal analysis 
that executive privilege applied to this document, and to the 
other documents withheld for a considerable period of time.
    \205\ Memorandum from American Law Division, Congressional Research 
Service, to Honorable Dan Burton, Dec. 3, 1997 (Exhibit 79).


    Evidence obtained by this Committee indicates that the 
decision to reject the Hudson application did not comport with 
factual evidence and past practice. The fact that the 
Department of the Interior has continued to misrepresent how 
and why the decision was made makes Secretary Babbitt's alleged 
comments to Paul Eckstein about Harold Ickes' role in the 
decision and the importance of Native American political 
contributions seem an accurate reflection of the facts. 
Secretary Babbitt's protestation that he did not make the 
statement about contributions and that he did not mean the 
statement about Ickes ring hollow in the face of the candid 
statements of his staff about what was really going on in the 
Department's decisionmaking process.
    [Supporting documentation follows:]


                              CHAPTER VII




                               I. Budget

    The Committee on Government Reform and Oversight was 
allocated funds from the Reserve Fund established by the House 
of Representatives to carry out its additional responsibilities 
entailed in the campaign finance investigation. These funds 
were used to hire additional staff, purchase additional 
equipment, and pay for travel associated with the 
    In 1997, the first year of the investigation, the Committee 
was allocated $3.8 million from the House Reserve Fund. The 
Committee spent approximately $2.4 million on the 
investigation.\1\ In 1998, the Committee was allocated an 
additional $1.8 million from the Reserve Fund, and it expects 
to spend approximately two-thirds of that amount.\2\ The 
minority was allocated 25 percent of the Committee's 
investigative funds and permanent funds.
    \1\ See Letter from Chairman Dan Burton to Congressman Henry 
Waxman, May 11, 1998.
    \2\ See Letter from Chairman Bill Thomas to Chairman Dan Burton, 
Mar. 25, 1998.
    The Ranking Minority Member has made a number of public 
statements regarding the amount of money spent by the Committee 
on the investigation. Congressman Waxman stated on several 
occasions that the Committee spent $6 million on the campaign 
finance investigation. The Chairman has publicly corrected the 
Ranking Member, and pointed out that less than $4 million was 
spent on the investigation by the majority and minority staff 

                           II. Subpoena Power

    Throughout the 105th Congress, the Chairman has had the 
power to issue subpoenas pursuant to Committee Rule 18, which 
reads in relevant part as follows:

          The chairman of the full committee shall:

           *       *       *       *       *       *       *

          (d) Authorize and issue subpoenas as provided in 
        House Rule XI, clause 2(m), in the conduct of any 
        investigation or activity or series of investigations 
        or activities within the jurisdiction of the committee. 
        . . .\3\
    \3\ House Committee on Government Reform and Oversight Rule 18.

House Rules XI, clause 2(m), in turn, states:

          The power to authorize and issue subpoenas under 
        subparagraph (1)(B) may be delegated to the chairman of 
        the committee pursuant to such rules and under such 
        limitations as the committee may prescribe.\4\
    \4\ House Rule XI(2)(m)(2)(A).

    The Committee rule was adopted at the Committee's first 
organizational meeting of the 105th Congress, on February 12, 
1997. The rules, including the subpoena rule, were adopted by 
unanimous voice vote.\5\ No Democrat objected to the Committee 
rules, and only one amendment to the rules was offered by 
Congressman Waxman. His amendment was accepted by unanimous 
voice vote.\6\ Congressman Waxman took notice of the subpoena 
provision in the Committee rules, but did not object to it. 
Rather, he asked that the Chairman consult with the minority a 
sufficient period of time before the issuance of the subpoena, 
stating that ``I assume that in order for consultation with the 
minority to be a real opportunity, that you will try to contact 
us in sufficient time so we can have an opportunity to discuss 
it.'' \7\ The Chairman indicated that he intended to inform the 
minority in advance of his intent to issue a subpoena, and has 
done so throughout the course of the investigation.\8\
    \5\ Organizational Meeting, House Committee on Government Reform 
and Oversight, Feb. 12, 1997, at 23.
    \6\ Id. at 22.
    \7\ Id. at 17.
    \8\ Id. at 16-17.
    The power delegated to the Chairman by the Committee is 
consistent with the past practices of the Government Reform and 
Oversight Committee, as well as a number of other House 
committees. For example, in the 105th Congress, the Committee 
on International Relations and the Committee on Small Business 
both had substantially similar rules.
    In April 1997, the Committee approved a Document Protocol. 
The Protocol established procedures for maintaining documents 
as well as rules for the issuance of subpoenas, and created a 
working group to review the release of documents. The Document 
Protocol made clear that the Committee minority would be 
consulted prior to the issuance of all subpoenas, unless they 
were issued on an emergency basis.\9\ Although the Document 
Protocol merely codified the practices that had been agreed to 
at the February business meeting, Congressman Waxman changed 
his position and at that time objected to the Chairman's power 
to issue subpoenas. During the April 10, 1997, business 
meeting, Congressman Waxman claimed that if the protocol were 
adopted, it would:
    \9\ Protocol for Documents, Apr. 10, 1997, at (A)(2) (Exhibit 1).

        Give Chairman Burton unprecedented power that no Member 
        of Congress has ever had; and, in fact, nobody in the 
        country has had the power that he would have invested 
        in him. . . . I want to emphasize that no other 
        investigation by a committee of the Congress has ever 
        had such powers in its chairman.\10\
    \10\ Business Meeting, House Committee on Government Reform and 
Oversight, Apr. 10, 1997, at 10-11.

Congressman Waxman then offered an amendment to the Document 
Protocol that would require a Committee vote on any disputed 
    Congressman Waxman's arguments regarding the nature of the 
Chairman's power to issue subpoenas were false. Not only did a 
number of other Committees in the 105th congress have the same 
power, but past congressional committees conducting 
investigation had the same power. The committees conducting the 
Iran-Contra, October Surprise, Filegate, and Travelgate 
investigations all had this same subpoena power.
    Under the procedures established by the April 10, 1997, 
Document Protocol, the Chairman provided notice to the minority 
when he intended to issue a subpoena.\11\ Within a 24-hour 
period, the minority was to provide the Chairman with any 
suggestions regarding how it sought to improve or modify the 
subpoena.\12\ After that 24-hour period, the Chairman could 
issue the subpoena.\13\ The Protocol also allowed the Chairman 
to issue subpoenas without prior notice if delay would hinder 
the Committee's ability to obtain certain documents or 
testimony.\14\ This authority was rarely used by the Chairman.
    \11\ Protocol for Documents, Apr. 10, 1997, at (A)(2)(a) Exhibit A.
    \12\ Id.
    \13\ Id.
    \14\ Id. at (A)(2)(b).
    The Committee operated under this procedure until June 
1998. At that time, the minority insisted upon a change in 
Committee rules as a condition for voting in support of 
granting immunity to four witnesses. The Chairman, after 
consultation with several members, offered a compromise package 
of rules changes, and on June 23, 1998, the Committee adopted 
them. With regard to subpoenas, these provisions similarly 
required the Chairman to provide subpoenas to the minority for 
a 24-hour period during which the minority could suggest 
modifications or object to the subpoenas.\15\ If the minority 
objected to a subpoena, the Chairman was required either to 
convene a meeting of the Subpoena Working Group, or bring the 
subpoena to a vote of the Committee.\16\ The Subpoena Working 
Group was a group composed of the Chairman, the Ranking 
Minority Member, the Vice Chairman, a member selected by the 
Chairman, and a member selected by the Ranking Minority 
Member.\17\ The Working Group was to discuss subpoenas before 
it, and, if it was unable to reach consensus, hold a vote on 
whether the Chairman should issue the subpoena.\18\ The 
Chairman agreed to be bound by the decision of the Working 
Group.\19\ This procedure has been used by the Committee since 
June 23, 1998.
    \15\ Protocol for Documents, June 23, 1998, at (A)(2)(a) (Exhibit 
    \16\ Id.
    \17\ Id.
    \18\ Id.
    \19\ Id.

                         III. Document Protocol

    The April 10, 1997, Document Protocol also addressed the 
procedures used by the Committee to store and release documents 
obtained by the Committee in the course of the campaign finance 
investigation. The Protocol was later changed in June 1998 in 
such a way as to modify the document release provisions.
    As initially adopted, the Protocol allowed the release of 
nonpublic documents through one of three means: (1) agreement 
between the Chairman and Ranking Minority Member; (2) agreement 
or vote of the Document Working Group; or (3) vote of the full 
Committee.\20\ Under the first provision, the Chairman could 
notify the Ranking Minority Member of his intent to release 
documents, and if the Chairman and Ranking Member agreed, the 
documents could be released.\21\ If the Chairman and Ranking 
Minority Member could not agree on the release of documents, 
the Chairman could convene a meeting of the Document Working 
Group to consider the release.\22\ The Working Group was 
composed of the Chairman, the Vice Chairman, the Ranking 
Minority Member, and two members selected by the Chairman and 
Ranking Minority Member, respectively.\23\ The Working Group 
was to consider the release of documents, and attempt to reach 
consensus about the release of documents.\24\ If it was unable 
to reach consensus, the Chairman could request the Working 
Group to render a vote regarding the release of documents.\25\ 
This vote was to be binding upon the Chairman.\26\
    \20\ Protocol for Documents, Apr. 10, 1997, at (C)(3).
    \21\ Id. at (C)(3)(a).
    \22\ Id. at (C)(3)(b).
    \23\ Id.
    \24\ Id.
    \25\ Id.
    \26\ Id.
    The procedure outlined in the April 10, 1997, Document 
Protocol was used successfully by the Committee for over 1 
year, until it was modified by the Committee on June 23, 
1998.\27\ The vote of the Committee on June 23, 1998, modified 
the Protocol to eliminate the Document Working Group, and to 
allow only two means of document release: (1) agreement between 
the Chairman and Ranking Minority Member; or (2) vote by the 
full Committee.\28\
    \27\ See Business Meeting, House Committee on Government Reform and 
Oversight, June 23, 1998.
    \28\ See Protocol for Documents, June 23, 1998, at (C).

                        IV. Deposition Authority

    On June 20, 1997, the House of Representatives passed H. 
Res. 167 to provide special investigative authorities for the 
Committee's campaign finance investigation. This resolution 
provided the Committee with the power to take depositions and 
interrogatories from witnesses in the investigation. Chairman 
Burton requested this authority to assist the Committee in its 
work of gathering information relevant to the campaign finance 
inquiry. The powers granted to the Committee by the House of 
Representatives were consistent with investigative authorities 
granted to investigative committees in the past.
    The Committee met on June 18, 1997, to adopt Committee 
rules 20 and 21, which governed the taking of depositions, 
interrogatories and letters rogatory.\29\ The Committee passed 
the new rules by a vote of 22 to 17.\30\ Later on June 18, 
Chairman Burton and Congressman Waxman testified before the 
Rules Committee on H. Res. 167. The Rules Committee then passed 
H. Res. 167, which was considered on the House floor on June 
20, 1997. H. Res. 167 passed the House by a vote of 216 to 
    \29\ See Business Meeting, House Committee on Government Reform and 
Oversight, June 18, 1997.
    \30\ Id. at 234.
    \31\ Congressional Record, June 20, 1997, at H4091.
    The major power granted to the Committee by H. Res. 167 was 
to conduct staff depositions. Under the procedures established 
by H. Res. 167 and Committee Rule 20, the Chairman had the 
authority to order the taking of depositions of witnesses after 
consulting with the Ranking Minority Member.\32\ This power was 
consistent with the power granted to chairmen in the 
congressional investigations relating to the Assassinations 
Investigation, Iran-Contra, and October Surprise.\33\ The 
resolution also authorized the Chairman to issue 
interrogatories to witnesses, to be answered under oath.\34\ 
Finally, it authorized the Committee to apply for the issuance 
of letters rogatory and other forms of international 
    \32\ House Resolution 167 at 2; House Committee on Government 
Reform and Oversight Rule 20.
    \33\ See Hearing, House Committee on Rules, June 18, 1997, at 8-11 
(testimony of Chairman Dan Burton).
    \34\ House Resolution 167 at 2.
    \35\ Id.

                         V. Rules Requirements

                      A. Committee Action and Vote

    Pursuant to clause 2(l)(2) (A) and (B) of House Rule XI, a 
majority of the Committee having been present, the resolution 
recommended in this report was approved by voice vote.

    B. Statement of Committee Oversight Findings and Recommendations

    Pursuant to clause 2(l)(3)(A) of House Rule XI and clause 
2(b)(1) of House Rule X, the findings and recommendations of 
the Committee are contained in the foregoing chapters of this 

         C. Statement on New Budget Authority and Related Items

    Pursuant to clause 2(l)(3)(B) of House Rule XI and Section 
308(a)(1) of the Congressional Budget Act of 1974, the 
Committee finds that no new budget authority, new spending 
authority, new credit authority, or an increase or decrease in 
revenues or tax expenditures result from an enactment of this 

            D. Statement of CBO Cost Estimate and Comparison

    Pursuant to House Rule XI(2)(l)(3)(C) and Section 403(a) of 
the Congressional Budget Act of 1974, the Committee finds that 
a statement of Congressional Budget Office cost estimate is not 
required as this resolution is not of a public character.

                E. Statement of Constitutional Authority

    Pursuant to House Rule XI(2)(l)(4), the Committee finds 
that a statement of Constitutional authority to enact is not 
required as this resolution is not of a public character.

                       F. Changes in Existing Law

    Pursuant to House Rule XIII(3), the Committee finds that a 
statement of changes in existing law is not necessary, as the 
resolution does not alter existing law.

                G. Statement of Committee Cost Estimate

    Pursuant to House Rule XIII(7)(a), the Committee finds that 
a statement of Committee cost estimate is not necessary as this 
resolution is not of a public character.

                    H. Statement of Federal Mandates

    Pursuant to the Unfunded Mandates Reform Act and Section 
423 of the Congressional Budget Act of 1974, the Committee 
finds that a statement of Federal mandates is not necessary as 
this resolution is not of a public character.
    [Supporting documentation follows:]



    Throughout the Committee's investigation into illegal 
campaign fundraising, the Committee's Democratic minority has 
engaged in a pattern of making public statements that are 
purposefully misleading. The ``Preliminary Minority Views on 
the Campaign Finance Investigation,'' handed out to reporters 
at the Committee's business meeting on Thursday, October 8, are 
rife with assertions that are misleading at best and 
deliberately false at worst.
    As Chairman of a committee conducting an investigation of 
the Clinton Administration, I expected that the Committee on 
Government Reform and Oversight--and myself personally--would 
be subjected to unfair and partisan attacks. Many chairmen of 
prior committee investigations have learned that it comes with 
the territory. This is, after all, the same Administration 
which attacked its own FBI Director when it became known that 
he endorsed an independent counsel for the campaign finance 
investigation. And a member of the minority, Mr. Lantos, even 
resorted to attacking a Committee witness, Independent Counsel 
Donald Smaltz, by comparing him to a Nazi.\1\
    \1\ Representative Lantos was roundly criticized for his highly 
inappropriate comments in numerous editorials including the Washington 
Post, ``. . . And the Assault on Mr. Smaltz,'' Dec. 14, 1997; and the 
Wall Street Journal, ``Ms. Reno's Carapace,'' Dec. 12, 1997.
    I cannot help but recall earlier broadsides leveled at my 
predecessor, Congressman Bill Clinger of Pennsylvania, as 
honorable and statesmanlike a figure as one could hope to find 
in the Congress. I remember the parting comments Mr. Waxman had 
for the gentlemanly Chairman Clinger 2 years ago: ``I leave 
this committee with absolute disgust for it and its Chairman.'' 
    \2\ Nancy E. Roman, ``GOP feels bite of `bulldog' Waxman,'' the 
Washington Times, May 6, 1998.
    One of the more disappointing legacies of this Committee's 
investigation has been the failure of even one member of the 
minority party to stand up and challenge the wrongdoing and 
excesses of its own party. Despite the fact that over 120 
people connected with fundraising for the President's campaign 
either took the Fifth or fled the country, and despite the 
Committee's receipt of volumes of evidence of illegal 
contributions and stunning access to the White House by people 
who went on to be indicted, not a single Member of President 
Clinton's party on the Committee rose to the occasion in the 
tradition of Howard Baker in the Watergate hearings or Warren 
Rudman during the Iran/Contra hearings. To the contrary, 
Members of the minority party in this investigation often acted 
more like defense attorneys rather than investigators on the 
chief oversight committee in the U.S. House of Representatives.
    A broad look at the minority's preliminary views 
distributed on October 8, 1998, makes an important statement 
about the priorities of the Democratic minority in this 
investigation. The minority devotes 80 pages and 366 footnotes 
to partisan attacks against the majority. In most cases, the 
criticisms are blatantly false, intentionally misleading, or 
petty in nature.
    As for charges of illegal campaign activities by the 
Clinton Administration, the Democratic National Committee, and 
high-level Democratic donors accused of funneling foreign money 
into Democratic campaigns--the substance of the investigation--
the Democrats devoted only 12 pages with a sparse 8 footnotes. 
The implications are clear: despite the mountains of 
documentary evidence, and the existence of a list of 120 people 
connected with fundraising for Democratic campaigns who either 
took the Fifth or left the country, the Democratic minority 
chose to devote the lion's share of its resources to political 
attacks against the Republican majority. This sets a poor 
precedent for the conduct of the minority party in future 
Congressional investigations.
    The frequency with which the truth is stretched in the 
minority's preliminary views makes it nearly impossible to 
respond fully to all of the distortions. The Committee's 
majority report sets out in detail the fundraising 
improprieties by the key DNC fundraisers and is backed up by 
extensive documentation. Given the lack of seriousness with 
which the minority's criticisms seem likely to be treated, a 
point-by-point refutation seems unnecessary. In the interest of 
brevity, I will only respond here to some of the more egregious 
assaults on the truth.

 I. The Democrats Acted as Defense Counsel for the DNC and Key Foreign 
                             Money Figures

    In its initial response to the Committee report on campaign 
finance matters, the minority wrote extensively on the lack of 
bipartisanship on the part of the majority. Congressman Waxman 
cited the Watergate and Iran-Contra investigations as models of 
bipartisanship. Yet what Congressman Waxman failed to mention 
is that it was a cooperative Republican minority examining its 
own party which made the previous investigations bipartisan. 
Frequently minority members and staff during the campaign 
finance investigation have employed tactics more typical of an 
aggressive defense attorney rather than serious Congressional 
investigators with important Congressional oversight 
responsibilities. The following examples illustrate this point.

 a. the minority's preliminary response to chapter 3 of the committee 
  interim report defends democratic retention of illegal and suspect 
                  contributions and ignores the facts

    The minority's response to chapter 3 of the Committee's 
Interim Report can be summed up by the following statement (in 
their own words): ``The DNC has returned contributions when it 
has had a good faith basis to believe that the contributions 
are illegal or otherwise inappropriate.'' The facts tell a 
different story as the majority outlined in extensive detail in 
Chapter 3 of the Committee's Interim Report. The minority's 
preliminary views had no credible defense for the continued 
retention by the DNC and Democratic entities of hundreds of 
thousands of dollars in illegal and/or suspect contributions.
    The minority states that ``perhaps around $100,000'' of the 
$1.8 million in suspect or illegal contributions appear to 
warrant further scrutiny by the DNC. While $100,000 is a start, 
the facts show the figure to be approximately 18 times that 
amount. In fact, K&L; International's$150,000 contribution to 
the DNC alone surpasses the minority's figure. The majority concluded 
that K&L;'s contribution was illegal after interviewing witnesses, 
reviewing checking account records, wire transfer information, 
cashier's check information, and publicly available corporate 
information. The minority simply ignores the evidence.
    Furthermore, on several occasions the majority 
characterized contributions as ``suspect'' instead of 
``illegal'' because the Committee lacked the information 
necessary to conclude without hestitation that the contribution 
was illegal. One such example was the three $15,000 
contributions made by Lippo subsidiaries Hip Hing Holdings, San 
Jose Holdings, and Toy Center Holdings. In the case of the 
subsidiaries' 1993 contributions totaling $45,000, the DNC has 
retained them based upon the fact that the subsidiaries were 
not reimbursed for the contributions by a foreign source, 
namely the Lippo Group. At the time the Committee's Interim 
Report was released, the minority report and the DNC position 
may have been tortured, but arguable.
    However, documents produced to the Committee the day after 
the Interim Report was released indicate that shortly after 
their contributions were made, all three subsidiaries were 
reimbursed $15,000 each--the full amount of their 
contributions--with funds originating from the Lippo Group of 
Jakarta, Indonesia. This evidence validates the work of the 
majority investigators and serves to confirm what the majority 
believed: the three $15,000 contributions were made illegally.
    Despite the fact that many of the contributors whose 
contributions have been questioned have either left the country 
or taken the Fifth Amendment, there should be little doubt that 
evidence will continue to emerge that will enable the Committee 
to shift contributions from the suspect category to the illegal 

 B. The Minority Repeatedly Defended Major DNC Fundraiser Charlie Trie

    The preliminary minority views released by the ranking 
minority member are consistent with the minority's position 
throughout this investigation. The minority has continually 
tried to minimize Trie's offenses. However, even the minority 
did not attempt to defend Trie against the conclusive evidence 
offered in the Committee's report detailing Trie's central role 
in making and orchestrating conduit contributions to the DNC.
    Oddly, the minority faults the Committee's report for 
failing to prove that Trie was a Chinese spy.\3\ However, few 
have ever alleged that Trie was a spy. Rather, allegations have 
been made, and substantial evidence has been uncovered, showing 
that Trie received large amounts of money from sources 
connected to communist China. Trie then used this money to 
funnel political contributions to the DNC. There is also strong 
evidence indicating that Trie and his associate Antonio Pan may 
have received funds from the Lippo Group to funnel political 
contributions to the DNC. These are the allegations that have 
been made against Trie, and they have been corroborated by the 
Committee's investigation.
    \3\ Preliminary Minority Views on the Campaign Finance 
Investigation, Oct. 8, 1998, (``Preliminary Minority Views'') at 86.
    The Committee has also uncovered substantial evidence 
indicating that Trie did attempt to influence United States 
foreign policy to benefit the PRC. This evidence was detailed 
in the Committee's report, and was conveniently ignored in the 
minority's preliminary views.\4\ While it is unknown if Trie 
was acting as an agent for the Chinese government, Trie's 
statements at meetings of the Bingaman Commission and written 
statements indicate that he was attempting to influence the 
United States to treat the PRC more favorably.
    \4\ See Preliminary Minority Views at 86-87.

       C. The Minority Defended Major DNC Fundraiser Ernie Green

    The minority's preliminary report again came to the defense 
of another figure in the campaign finance scandal, Ernie Green. 
The minority claimed that ``speculation'' was the sole basis 
for the allegations against Green, and that the report 
presented ``no evidence'' to rebut Green's denials of 
wrongdoing.\5\ Again, the minority has ignored the substantial 
evidence of wrongdoing detailed in the Committee's report. The 
report contains extensive evidence relating to Mr. Green's 
highly unusual financial transactions that coincided with his 
efforts, and those of Charlie Trie, to have the Chairman of 
CITIC, Wang Jun, invited to a White House coffee. Green 
deposited over $38,000 in cash into his bank in a number of 
small deposits, and has not offered any definitive explanation 
for the source of these deposits, despite repeated invitations 
to do so by the Committee.
    \5\ Preliminary Minority Views at 87.
    The minority also ignored the fact that Green likely 
offered false testimony before the Committee. Green recieved 
$11,500 from Charles Trie, despite his sworn statements that he 
never recieved money from Charlie Trie. Evidence received since 
the Committee approved its report proves that at least $9,500 
of the money that Trie gave to Green originated with Chun Hua 
Yeh, a Chinese businessman with extensive ties to the Chinese 
    \6\ See NationsBank wire transfer report (Exhibit 1) (showing 
transfer of $9,500 from Manlin Foung to the Green/McKenzie Group); 
Account Statement of Manlin Foung, January 1996 (Exhibit 2) (showing 
deposit of $30,000 before wire transfer to Green/McKenzie); Cashier's 
Check for $30,000 to Yah Lin Trie (Exhibit 3) (showing that the $30,000 
cashier's check came from Trie); Cashier's Check for $30,000 (Exhibit 
4) (showing that the cashier's check was drawn on American 
International Bank account 008453489); signature card for American 
International Bank account of Chun Hua Yeh (Exhibit 5).
    The minority report makes it clear that they accept Green's 
denials at face value, despite the fact that Green has 
repeatedly misled the Committee. They also ignore the facts 
regarding Green's unusual financial transactions and summarily 
dismiss questions about whether these transactions may have 
been connected in any way with his political contributions. The 
minority relies primarily on two facts to support this 
conclusion: first, that Green could afford to make sizable 
political contributions; and second, that Green has ``a history 
of making political contributions.'' \7\ Both of these claims 
are misleading. First, it is true that Green does have 
substantial assets. However, many individuals proven to be 
conduit contributors in this investigation have had adequate 
assets to cover their contribution--they have simply opted not 
to use those resources to make their contribution. The 
minority's reliance on Green's ``history of contributions'' is 
also misleading. While Green had raised hundreds of thousands 
of dollars for the DNC from other donors, he had never made a 
contribution greater than $3,700 before he met Charlie Trie.\8\ 
Then, after he met Trie, he gave two contributions totaling 
$56,000. There are a number of disturbing inaccuracies and 
inconsistencies in Green's testimony regarding these 
contributions that have not been explained. It is disappointing 
that the minority has shown no desire to ask the serious 
questions that are raised by the activities of this long-time 
Democratic party supporter.
    \7\ Preliminary Minority Views at 87.
    \8\ See FEC Records of Contributions of Ernest G. Green,

     D. The Minority Defended Major DNC Fundraiser Charles Intriago

    Ever since the Committee began investigating the illegal 
campaign contributions made by the Castro family of Venezuela 
in 1992, the Committee minority has attempted to defend the 
major Democratic figure implicated by the Castros, Charles 
Intriago. Intriago is a prominent Florida attorney, and a major 
supporter of the Democratic party. Despite the evidence against 
Mr. Intriago, who took the Fifth before the Committee, the 
Democrats defended him vigorously. In this case, the defense 
offered by Congressman Waxman and his staff has been valuable 
to Mr. Intriago, since he has taken the Fifth, and has remained 
silent since the Committee's investigation began.
    At the Committee's hearing on the Castro contributions on 
April 30, 1998, Congressman Waxman introduced into the record a 
statement by Robert Plotkin, counsel for Mr. Intriago.\9\ In 
this statement, Plotkin denied any wrongdoing by his client. 
Congressman Waxman also defended Intriago's decision to take 
the Fifth: ``Mr. Intriago didn't come here because he didn't 
think it would do him any good. Mr. Castro is here because he 
thinks this might do him a lot of good.'' \10\ Apparently, 
Congressman Waxman thinks that witnesses are justified in not 
cooperating with Congressional investigations if it doesn't 
``do them any good.''
    \9\ Venezuelan Money and the Presidential Election, Hearing, 
Committee on Government Reform and Oversight, Apr. 30, 1998, (``Castro 
Hearing'') at 35.
    \10\ Castro Hearing at 44.
    In addition to its heavy reliance on the self-serving 
statements of Intriago's lawyer, the minority repeatedly 
attacked Jorge Castro, who offered substantial evidence 
implicating Intriago in illegal activity.\11\ At the hearing, 
and again in their preliminary views, the minority has attacked 
Castro's credibility, and clearly taken sides with Charles 
Intriago. In doing so, Congressman Waxman and many other 
Democrats have ignored substantial documentary evidence that 
confirms Jorge Castro's account. They have also ignored the 
sworn testimony of two career prosecutors from the New York 
District Attorney Robert Morgenthau's office, who testified 
that Castro's testimony was consistent with everything that 
Castro had always told them, and that Castro had never told 
them anything about his political contributions that later 
proved to be false.\12\
    \11\ Castro Hearing at 38-55.
    \12\ Castro Hearing at 82.
    The minority's preliminary views make the claim that the 
Castro family received no special treatment in return for their 
illegal contributions to the DNC.\13\ However, the record shows 
that Charles Intriago set up a meeting between the patriarch of 
the Castro family and two high-level State Department officials 
at the time that the Castros were under investigation for 
involvement in money laundering. The Castros took advantage of 
this meeting to promote themselves with the U.S. Government and 
discredit allegations of money laundering which were plaguing 
them at the time. The minority refers to this visit as a 
``courtesy meeting,'' vastly understating the importance of 
this meeting to the Castros.\14\
    \13\ Preliminary Minority Views at 90-91.
    \14\ Id. at 91.
    Finally, the minority's preliminary report claims that the 
Department of Justice is still investigating the allegations 
made by Castro against Intriago.\15\ While it may be true that 
the Justice Department is investigating Mr. Intriago for a 
number of potentially illegal acts, it is not clear that his 
role in arranging Jorge Castro's illegal political 
contributions is among them. The statute of limitations for 
such a prosecution has passed, and if the Justice Department is 
still investigating Castro's allegations against Intriago, it 
merely provides further evidence of the disorganized state of 
the Justice Department's campaign finance investigation.
    \15\ Id.

  e. the minority employed questionable tactics against a witness who 
          testified unfavorably about dnc official john huang

    During the campaign fundraising investigation the minority 
attacked a witness whose testimony was not favorable to the DNC 
or the White House. David Wang was a witness at the Committee's 
first hearing. Under a grant of immunity, Wang testified that 
he made two conduit contributions at the request of John 
Huang--one from his own bank account and one from the bank 
account of his friend, Daniel Wu, who lived in Taiwan.\16\
    \16\ David Wang testified that he was solicited by John Huang and 
Antonio Pan to make $10,000 in contributions to the DNC in his and his 
associate's name. Wang was then reimbursed by Pan with $10,000 cash, 
making the transaction a conduit contribution. ``Conduit Payments to 
the Democratic National Committee: Hearing Before the House Committee 
on Government Reform and Oversight,'' 105th Cong., 1st sess. (1997).
    In an attempt to discredit Mr. Wang, the minority placed in 
the Committee record what purported to be a summary of an 
interview with David Wang's father, James Wang, conducted by 
two minority counsel. David Wang had testified in his 
deposition that his father was with him when John Huang came to 
his house and asked for the contributions. As Mr. Wang's father 
did not speak English well, minority counsel attempted to 
communicate with him in broken Mandarin Chinese. The staff 
summary said in part, ``James Wang told us that he was neither 
present at any meetings nor aware of any conversations in which 
John Huang asked David Wang to make a campaign contribution.'' 
    \17\ Id., Exhibit 128, p. 354.
    What the minority did not inform the majority members of 
the Committee or the public was that they had faxed a similar 
statement to James Wang and asked him to sign it. David Wang's 
lawyer informed the Committee that James Wang refused to do so 
because it was not correct. Subsequently, David Wang's attorney 
submitted a handwritten statement from James Wang confirming 
that he was at the meeting with John Huang, and that John Huang 
did ask David Wang to make the contributions in question.\18\ 
It is disappointing that the minority would submit a statement 
for the record that they knew was disputed by the witness 
without informing the Committee of that fact. Furthermore, it 
is disturbing that minority counsel attempted to intimidate Mr. 
Wang to sign the minority affidavit even after he told the 
committee it was inaccurate.
    \18\ Id., Exhibit 127, p. 353.
    The minority insisted that it was impossible that John 
Huang met with and solicited David Wang in Los Angeles on the 
date about which Wang testified, August 16, 1996. The minority 
then distributed several statements and receipts allegedly 
indicating that John Huang was in New York between August 10-
19, 1996. These statements were not sworn testimony before the 
Committee. In fact, John Huang's attorney assisted the 
Democrats in gathering the statements. John Huang refused to 
personally refute Wang's testimony, as Huang had asserted his 
Fifth Amendment right against self-incrimination.
    Mr. Wang's attorney addressed the Committee regarding the 
minority's assertions:

        First, the notion that Mr. Wang would perjure himself 
        on this question seems to me so facially implausible as 
        not to be seriously entertained.

        To say that somebody would falsely say that he was a 
        conduit for John Huang is absurd. I can't think of any 
        person in the world that you would want to associate 
        yourself with less that John Huang.

        If Mr. Wang could have possibly said that he didn't 
        know Mr. Huang and had not engaged in illegal 
        transactions with him, I assure you, he would have done 
        so. He would not be here today. He would not be in 
        front of the grand jury, and he would not be in the 
        largest problem he has ever faced.\19\
    \19\ ``Conduit Payments to the Democratic National Committee: 
Hearing Before the House Committee on Government Reform and 
Oversight,'' 105th Cong., 1st sess. 276 (1997) (Statement of Michael 
Carvin, attorney for David Wang.)

Although the minority might have argued that Wang was mistaken 
about the dates, as Wang's attorney argued, it is beyond 
comprehension that Wang would lie when he was already admitting 
to illegal acts. In any event, all the records show that the 
money given to the DNC was illegal, a fact from which the 
minority sought to divert attention.

II. The Democrats Defended Sioeng Family Contributions to the DNC While 
 Engaging in a Blatantly Partisan Attack on Senate Candidate Matt Fong

    During the course of the Committee's investigation of Ted 
Sioeng, 28 people either asserted their Fifth Amendment rights, 
fled the country, or refused to testify. During that time the 
minority made little or no effort to participate in the 
investigation of Sioeng.
    The minority has alleged that ``. . . Chairman Burton 
ignored Republican abuses even while investigating parallel 
allegations against Democrats.'' \20\ This statement overlooks 
the fact that during the course of the majority's investigation 
of Ted Sioeng several Republican entities and candidates were 
either deposed, interviewed, or had their bank records 
subpoenaed. The majority staff deposed or interviewed, with the 
minority, several witnesses with connections to the Republican 
party. These included Matt Fong, the current Republican 
candidate for Senate in California, Steven Walker, Jr., former 
Comptroller of the National Policy Forum, Daniel Wong, former 
Republican mayor of Cerritos, California, and Julia Wu, a 
Republican from southern California with connections to Matt 
    \20\ Preliminary Minority Views on the Campaign Finance 
Investigation, Committee on Government Reform and Oversight at 5.
    The minority has continually attempted to minimize the 
efforts of the Committee in order to further its own political 
purposes. At times, the minority has contradicted itself in 
obvious ways. One of the most glaring examples involves 
Representative Waxman's comments concerning the testimony of 
Kent La, a key figure in the Sioeng investigation. In a floor 
statement made on May 19, 1998, Representative Waxman stated 
the following:

        The Department of Justice does have serious 
        reservations about immunizing Kent La. In a letter 
        dated April 22, 1998, the Department of Justice 
        expressed its view that ``if Mr. La were to testify 
        publicly at this time, the Department's criminal 
        investigation could in fact be compromised. Even if Mr. 
        La were to testify in a closed session, any disclosure 
        or leak of that testimony, whether intentional or 
        inadvertent, could seriously compromise the 
        investigation and any subsequent prosecutions.'' The 
        numerous leaks of information during the course of 
        Committee's investigation suggests that the 
        confidentiality that the Department of Justice has 
        requested could not be maintained.\21\
    \21\ 144 Congressional Record H3452-02.

    The Department of Justice has requested that the Committee 
not release the deposition of Kent La, for fear that doing so 
would compromise an ongoing criminal investigation.\22\ Yet, 
despite Mr. Waxman's protests concerning leaks and the 
Department of Justice's concerns, it was Mr. Waxman himself who 
violated that agreement when he characterized Mr. La's 
testimony during a Committee hearing. Mr. Waxman, who at the 
time had not read or heard Mr. La's testimony, stated that 
there was nothing relevant in the testimony,\23\ which appears 
inconsistent with the position of the Department of Justice and 
violates the terms of the Committee's agreement.
    \22\ Letter from L. Anthony Sutin to Chairman Burton, Aug. 28, 
    \23\ House Committee on Government Reform and Oversight, ``Hearings 
on the Need for an Independent Counsel in the Campaign Finance 
Investigation,'' 105th Cong., 2d sess., 67 (Aug. 4, 1998).
    The minority's preliminary report states that ``none of the 
12 witnesses whose depositions have been made public provided 
testimony supporting the allegations that Mr. Sioeng was an 
agent of the Chinese government, engaged in lobbying for the 
Chinese government, or made political contributions on behalf 
of the Chinese government.'' \24\ This statement completely 
ignores many aspects of the testimony gathered by the majority 
staff. In fact, several witnesses testified about Mr. Sioeng's 
connections to officials at the PRC embassy, consulate and 
central government.\25\
    \24\ Preliminary Minority Views on the Campaign Finance 
Investigation, Committee on Government Reform and Oversight at 89.
    \25\ See Deposition of Daniel K. Wong, 3/12/98; Deposition of 
Robert Prins, 1/27/98; Deposition of Johnny Ma, 2/12/98.
    The minority also ignores Mr. Sioeng's strong connections 
to the PRC government through his business ventures. The 
majority has documented that Mr. Sioeng operates a cigarette 
distribution and production network in Singapore in partnership 
with the PRC government. Sioeng and his partner, the PRC's 
largest tobacco company, produce and export Hongtashan (Red 
Pagoda Mountain) cigarettes.

  a. democrats mount a partisan defense of sioeng's dnc contributions

    The majority report presented a cogent and thorough 
analysis of the $400,000 in foreign and other questionable 
contributions made to the DNC by Ted Sioeng, his family, and 
his business associates. The minority response entirely 
sidestepped the majority's analysis. In response, the minority 
retreats behind issues of fact it knows the Committee cannot 
conclusively resolve due to the stonewalling campaign waged by 
Ted Sioeng's family and its attorneys and business associates. 
But the Potemkin village created by the minority cannot obscure 
the results of the Committee's painstaking investigation, which 
determined that $310,000 of the $400,000 contributed by Sioeng 
to the DNC appears to have been funded from bank accounts in 
Hong Kong and Indonesia.
    The minority's tortured struggle to defend the DNC is 
evident in its inconsistent stances on the foreign money Sioeng 
funneled into the political system. First, the minority writes, 
``there is not evidence in the record indicating that the 
Sioeng-related contributions to the DNC were illegal.'' Later, 
the minority backs away from this blanket assertion and 
acknowledges that foreign money transferred into Sioeng-family 
accounts ultimately funded contributions to the DNC. The 
minority's preliminary report states, ``Although the U.S. bank 
accounts of Ms. Elnitiarta and the Panda companies received 
foreign wire transfers, this does not necessarily mean that 
political contributions drawn from these accounts are 
    In distilled form, the minority's position is that 
demonstrating the DNC contributions were funded by transfers 
from Hong Kong and Indonesia is not enough to prove they are 
illegal, or even that they should be returned by the DNC. This 
argument misses the mark for several reasons. First, the 
Committee has shown that under FEC regulations and practice, 
the $100,000 contributed to the DNC by Panda Estates is illegal 
because it was funded with foreign money, not domestic 
receipts. The minority has not and cannot challenge this point 
directly. Second, as explained in the Committee report, the 
$250,000 in DNC contributions made or directed by Sioeng's 
daughter Jessica are likely illegal due to Ted Sioeng's 
probable involvement in the decisionmaking process.\26\ This 
point, as well, is unchallenged by the minority. Third, the 
contention that Sioeng's DNC contributions are ``not 
necessarily'' illegal is unfair. The reason the Committee 
cannot ascertain for certain whether some of the contributions 
are illegal is that the information needed to make such 
determination is being fiercely guarded by Sioeng, his family, 
and their lawyers. All of this is spelled out in great detail 
in the Committee's report--the 28 persons who asserted their 
privileges against self-incrimination, fled the country, or 
otherwise refused to speak to the Committee, the promises of 
cooperation made and broken by the family's lawyers--and stands 
    \26\ See The Sioeng Family's Contributions and Foreign Ties, 
Section VII. Note that the $250,000 figure includes the $100,000 
contributed to the DNC by Panda Estates.

B. The Minority Engaged in Transparent and Unfair Attack of Matt Fong, 
 who in contrast to the Democats promptly returned money linked to Ted 

    In contrast to the vigorous defense the minority mounts of 
the Sioeng contributions to the DNC, the minority spends 
considerable time attempting to smear Republican Senate 
candidate Matt Fong. In its preliminary report and an article 
in the October 22, 1998 issue of Roll Call, the minority 
accuses Mr. Fong of providing conflicting testimony to the 
House and Senate and concludes the Sioeng-related contributions 
he received were illegal.\27\
    \27\ Amy Keller, ``House Democratic Report Targets Fong,'' Roll 
Call, Oct. 22, 1998, p. 3.
    Not once does the minority report mention that Mr. Fong 
returned all of the $100,000 in contributions he received from 
Sioeng and Panda Estates and that he did so a year-and-a-half 
ago--almost immediately upon learning of the questionable 
nature of Sioeng's contributions. Nor does the minority point 
out that the DNC has kept all $400,000 in Sioeng-related 
contributions it received during the 1996 election cycle, 
including $150,000 from the same Sioeng company from which Matt 
Fong received funds, Panda Estates. Nor does it mention that 
California law contains no prohibition on receiving 
contributions from foreign nationals and that, hence, Mr. 
Fong--in stark contrast to the DNC--returned money he legally 
may have been able to keep.
    Instead, the minority attempts to divine inconsistencies 
from the testimony of a Senate candidate, locked in an 
extremely close race, and who voluntarily agreed to be deposed 
on three separate occasions by the House and Senate and 
returned all of the Sioeng money in stark contrast to the DNC. 
What the minority has not done is spell out any supposed 
``inconsistencies'' or explain their significance.
    The minority report refers to a supposed inconsistency 
relating to ``how [Mr. Fong's] campaign came to receive a 
second contribution from Mr. Sioeng.'' In both his Senate and 
House depositions, Mr. Fong stated clearly that he did not know 
how the second check made its way to his campaign offices. He 
testified that it may have been messengered or dropped off, or 
in it may have been in the sealed envelope Sioeng handed Fong 
when he went to pick up the first check.\28\ Moreover, the 
Committee sees no significance in how the check ended up in Mr. 
Fong's campaign offices given that his testimony is abundantly 
clear on the point that he never saw it.
    \28\ Compare House Fong Depo., Vol. I, at 32; 11-14 & 35; 10-17 
with Senate Fong Depo., at 37; 6-9 & 40: 13-15.

   C. The Minority Mischaracterizes Sioeng's Contribution to the Non-
                Profit National Policy Forum as Illegal

    The minority alleges that federal law bars foreign 
nationals from contributing to ``any campaign for elected 
office, state or federal.'' \29\ In addition, the minority 
implies that a $50,000 contribution from Panda Industries, 
Inc., to the National Policy Forum was somehow disbursed to the 
Republican National Committee.\30\ As a result, the minority 
contends that the ``NPF contribution is another example of a 
foreign contribution to the RNC.'' \31\
    \29\ Preliminary Minority Views on the Campaign Finance 
Investigation, Committee on Government Reform and Oversight, at 115.
    \30\ Id. at 116.
    \31\ Id.
    Nothing could be further from the truth. The comments are a 
clumsy attempt to shift the focus from wrongdoing by the 
Democratic National Committee and the Clinton-Gore campaign. 
Moreover, they are again calculated politically to damage Matt 
Fong, who is running for a U.S. Senate seat in California.
    The Committee notes that ranking minority member Waxman 
made numerous comments decrying the investigation as a waste of 
time, money, and resources since--in his view--the Committee 
was duplicating the work of the Senate Governmental Affairs 
Committee's Special Investigation. Nevertheless, Mr. Waxman 
chooses to respond to the interim report by rehashing 
discredited allegations against the National Policy Forum first 
aired during 3 full days of Senate hearings over a year ago. 
The Thompson Committee also conducted more than a dozen 
depositions on the topic, and reviewed literally thousands of 
pages of documents.
    Aside from the partisan bent, there are several problems 
with the minority's views regarding the NPF. First and 
foremost, there is ample evidence and testimony that the NPF 
was separate and distinct from the RNC. Haley Barbour, who 
served as NPF chairman, addressed that very point in testimony 
before the U.S. Senate Governmental Affairs Committee, Special 
Investigation. Mr. Barbour stated that NPF had ``its own 
separate board of directors . . . its own separate management, 
its own separate staff, its own separate offices, had its own 
separate bank accounts, had filed its own separate tax returns, 
[and] had its own separate books.'' \32\ Mr. Barbour is 
supported by both witness testimony and the documentary record. 
For example, the former Comptroller of the NPF, under 
questioning from minority counsel in his House deposition, 
discussed in detail the great lengths to which NPF went to 
ensure a separation from the RNC.\33\
    \32\ S. Hrg. 105-300, Part III at 156.
    \33\ See Deposition of Stephen A. Walker.
    Also rebutting the minority's contention is the fact that 
NPF was a non-profit corporation established under Section 
501(c)(4) of the U.S. Tax Code.\34\ Such entities can legally 
accept donations, gifts, and loans from U.S. persons, foreign 
nationals, domestic corporations, and foreign corporations.\35\ 
If, as the minority alleges, it was illegal for the NPF to 
accept $50,000 from Panda Industries, it was equally unlawful 
for Vote Now '96, a non-profit group linked to the Clinton-Gore 
campaign,\36\ to accept $100,000 from a Philippine 
national.\37\ However, the minority made no such demands about 
Vote Now '96, a group which directed funds that ultimately 
helped Democratic candidates.
    \34\ S. Hrg. 105-300, Part III at 215.
    \35\ Section 501(c)(4) of U.S. Tax Code.
    \36\ Deposition of Harold Ickes conducted by the U.S. Senate 
Governmental Affairs Committee, Special Investigation, June 27, 1997, 
at 39.
    \37\ S. Rept. 105-167, Vol. 3, at 3666.
    Finally, three sections from two congressional reports find 
no evidence that the Panda Industries' contribution to the NPF 
was made with foreign funds.\38\ One of those sections was 
written by minority members of the Senate Governmental Affairs 
Committee. An obvious question is whether the minority is 
ignoring the views of their Senate colleagues in an effort to 
score political points against Mr. Fong.
    \38\ See S. Rept. 105-167, Vol. I, at 972; S. Rept. 106-167, Vol. 
4, at 5573; See Chapter 4D, ``The Sioeng Family's Contributions and 
Foreign Ties.''

                             d. conclusion

    The minority's attempt to tar Matt Fong is a transparent 
attempt to assist the campaign of his opponent, Senator Barbara 
Boxer. The minority's unsubstantiated attack against a 
Republican candidate who promptly returned questionable Sioeng-
related contributions and cooperated with the Committee stands 
in stark contrast to their refusal to question the DNC's 
indefensible decision to keep more than $300,000 in clearly 
illegal contributions from Sioeng's family and friends--all of 
whom have refused to cooperate with the Committee's 

 III. The Hudson Casino Rejection--Misrepresentations by the Democrats

    Committee Democrats argue that because the central figures 
in the Hudson casino rejection tell us that they acted 
appropriately, then surely it must be so. This Luddite 
application of Congressional oversight is consistent with the 
minority practice of taking all denials of impropriety by 
Democrats at face value, changing the subject and putting up 
roadblocks. It is also consistent with the minority tactic of 
sweeping under the carpet that which begs legitimate inquiry.
    In its interim report, the majority points to significant 
problems with the Department of the Interior decisionmaking 
process over the Hudson casino application. At the very least, 
these problems stand for the proposition that the process was 
unfair to the applicants, that the decisionmakers failed to 
follow Department of the Interior policy and that the Secretary 
ignored a Presidential directive. At their worst, they stand 
for the proposition that Department of the Interior personnel 
were involved in illegal conduct. In either case--whether the 
government is being unfair to citizens or whether the law was 
broken--there is no doubt that Congress has a reason to 
exercise its oversight authority.
    The Democratic minority has apparently decided to ignore 
the problems identified by this Committee's investigation. For 
the record, it is worth reviewing the ``Preliminary Minority 
Views'' section on the Hudson casino decision in order to point 
out what the minority Democrats chose to ignore and what they 
chose to misstate.

  a. what the minority failed to mention regarding the hudson casino 

    First. The Democratic minority appears unconcerned that 
Paul Eckstein has testified that Secretary of the Interior 
Bruce Babbitt told him that Harold Ickes was responsible for 
the timing of the rejection. Eckstein is a man whose life-long 
ties of personal friendship to Secretary Babbitt would normally 
make him privy to candid observations and whose reputation for 
veracity has never been questioned.
    Second. The Democratic minority finds it unremarkable that 
the Secretary of the Interior allegedly referred to large 
campaign contributions to Democratic interests during a meeting 
on the Hudson matter.
    Third. The Democratic minority ignores the fact that 
wealthy contributors, led by a lobbyist who had once been the 
Democratic National Committee's top money man, were given an 
unfair advantage over the Hudson applicants. They find it 
unremarkable that the Secretary of the Interior's Counsel would 
reopen a comment period for opponents of the application--who 
also happened to be significant political contributors--and not 
even inform the applicants.
    Fourth. The Democratic minority, whose preliminary views 
are infused with references to imaginary examples of unfairness 
to witnesses, fails to comment on the fact that the policy used 
to make the Hudson decision had never been used before and had 
never been articulated prior to the decision. The fact that the 
three poor tribes involved in the Hudson application were not 
advised of the decisionmaking criteria is disturbing, and goes 
against principles of fundamental fairness. Indeed, the 
Department of the Interior's own lawyers recognize that ``the 
administrative record, as far as we can tell, contains no 
record of Department meeting or communications with the 
applicant tribes in which the Department's concerns were 
expressed to the plaintiffs.'' \39\ This is inexcusable. Even 
George Skibine--the man described by the minority as ``the 
career civil servant who recommended that the application be 
rejected'' \40\--admitted that the Department failed to tell 
the applicants why the Department had concerns with the 
    \39\ Letter from David Jones to Scott Keep, Feb. 14, 1996.
    \40\ Preliminary Minority Views on the Campaign Finance 
Investigations, p. 67.
    \41\ Deposition of George Skibine, Jan. 13, 1998, p. 61.
    It is hard to fathom how the minority, so concerned about 
``fairness'' in its preliminary views, would be so eager to 
participate in the cover-up of the Department of the Interior's 
conduct in the Hudson matter.
    Fifth. The fact that the Department of the Interior failed 
to give the applicant tribes an opportunity to remedy the 
perceived deficiencies in their application is also of little 
consequence to the minority Democrats. Other Native American 
tribes who were large contributors to the DNC were given 
opportunities to cure problems. Therefore, it is curious that 
the Interior Department did not at any stage give the 
applicants an opportunity to cure perceived deficiencies. The 
failure to provide an opportunity to cure can only reasonably 
be explained in the context of improper motive.
    Sixth. The fact that the Department of the Interior planned 
in advance to reject the application ``without offering much 
explanation''--and that they shared this intelligence with 
Deputy Chief of Staff Harold Ickes's office--also proved to be 
unremarkable to the Democratic minority. Given the obvious need 
for agencies to avoid charges that they have acted in an 
arbitrary fashion, and given the dictates of fundamental 
fairness that agencies provide an indication of the criteria 
upon which decisions are based, it is hard to understand why 
the minority would not be troubled by this fact.
    Seventh. The Democratic minority argues simplistically that 
``local officials from the Hudson town council up to the 
Republican Governor Tommy Thompson opposed [the application], 
as did the local congressman, Republican Steve Gunderson.'' 
This ignores the reality that George Skibine admitted that ``it 
is true that extensive factual findings supporting the local 
communities' objections are nowhere to be found.'' \42\ It 
ignores the fact that Representative Gunderson was provided 
erroneous information provided to him by the Secretary of the 
Interior's office. It misstates Governor Thompson's position. 
It ignores the fact that a Hudson referendum had supported the 
application. It ignores that fact that the Town of Hudson had 
even entered into a contract for services in the expectation 
that the application would be approved. It even ignores the 
fact that the witness who testified about the community 
opposition had herself attempted to get a contract to run a 
concession at the proposed casino.
    \42\ Memorandum from George Skibine to Scott Keep, Aug. 5, 1996.
    Most important, the minority ignores the extraordinary 
revelation by George Skibine that he sensed ``that even if the 
Town of Hudson and the Town of Troy embrace the proposal, we 
may still not change our position because of political 
opposition on the Hill, largely generated by the Minnesota and 
Wisconsin Tribes who oppose this acquisition.'' \43\ This 
observation provides an indication of what is most obviously 
wrong with the Department of the Interior's conduct. The 
failure to tell the applicants that the perceived opposition 
was to be the determinative factor--particularly when the only 
Interior employees to ever visit Hudson had come to a different 
conclusion--coupled with the admission that the Department was 
willing to disregard support from local citizens, makes a 
mockery of everything the Department has said about this 
matter. How could it be the ``right decision . . . made in the 
right way and for the right reasons'' as Secretary Babbitt has 
argued,\44\ if the Department was unwilling to treat the 
applicants fairly?
    \43\ E-mail from George Skibine to Heather Sibbison, Paula Hart, 
Tom Hartman, Troy Woodward and Kevin Meisner, June 30, 1995.
    \44\ Testimony of Secretary of the Interior Bruce Babbitt, Jan. 9, 
1998, p. 769.
    Consider the words of Secretary Babbitt's Special 
Assistant, Heather Sibbison:

        [W]e may not want to include in our rationale the 
        opposition of the other tribes, because I think it is 
        possible that if the three Tribes came back with 
        stellar support from their local towns and Congressman, 
        we might look at the proposition in a new light--but 
        even in that case, the Minnesota tribes will still be 
        against it. And also, I agree with Collier's [Chief of 
        Staff to Secretary Bruce Babbitt] uneasiness about some 
        tribes getting all the goodies at the expense of other 
        tribes--theoretically they all should have equal 
    \45\ E-mail from Heather Sibbison to George Skibine and Troy 
Woodward, June 30, 1995.

    The minority is not troubled by this admission that the 
Hudson applicants were not given the same opportunities as 
other tribes. An admission that this Administration gives 
wealthy DNC contributors better opportunities and that the 
contributors to the DNC are ``getting all of the goodies'' 
would normally be of interest to Congressional investigators.
    Eighth. There is an allegation in the record that local 
opposition to the application was being financially 
underwritten by wealthy contributors to the DNC. Even though 
George Skibine admitted that this would be relevant to 
determining how to weigh community support or opposition, the 
Department of the Interior failed to investigate this charge. 
As with other significant matters, the Democratic minority 
failed to find fault with the Department. Indeed, they fail to 
comment on this matter.
    The list of problems in the decisionmaking process could be 
extended for many pages. As is clear in the Majority interim 
report, these problems would suggest to a non-partisan observer 
that something was seriously amiss at the Department of the 
Interior. As Judge Barbara Crabb noted in the section of a 
published opinion that discussed actions taken by the Secretary 
of the Interior's Special Assistant, Heather Sibbison, the 
action ``suggests that the department was aware of the need for 
some subterfuge in the process to allow Ickes to advance 
personal ends.'' \46\ As might be expected, the minority 
Democrats failed to refer to this observation by a Federal 
judge appointed by President Jimmy Carter.
    \46\ Sokaogon Chippewa Community v. Bruce Babbitt, 961 F. Supp, 
1276, 1283 (W.D. Wis. 1997).
    Overall, the problems identified lend support to the sworn 
testimony of Paul Eckstein that the Secretary of the Interior 
said he was influenced by the White House, and that he was 
thinking about campaign contributions when he was involved in 
the decisionmaking process.

        B. Distortions and Incorrect Statements by the Democrats

    The minority Democrats made a number of statements in their 
preliminary views that simply are not true. The following are 
some of the attempts to mislead.
    First. The minority states that depositions taken 
``established that the decision was based on the merits.'' This 
is a ludicrous reading of the depositions which, overall, lend 
support to the concern that there was something grievously 
wrong in the Department's decisionmaking. Taken together, the 
depositions provide support for Secretary Babbitt's statement 
to Paul Eckstein that the White House was involved in the 
decisionmaking and that campaign contributions were a factor.
    Second. The minority states that ``the evidence showed that 
the Department had sound reasons for rejecting the casino 
application.'' In fact, the evidence shows the reasons 
articulated for the rejection were not supported by the record. 
It further shows that the Department of the Interior gave 
advantages to wealthy contributors that were not given to non-
contributors, misled at least one Congressman, and failed to 
notify anyone that the Department was changing its 
decisionmaking criteria just for the Hudson case. The record 
also shows that the Department misled a Federal court in 
    Third. The minority states that Governor Thompson of 
Wisconsin opposed the application. In making this claim, they 
ignore Governor Thompson's own statement--made in Hudson to 
Hudson residents--that he would not stop the application.
    Fourth. The minority states categorically that ``the land 
would have been used for casino gambling, which is illegal 
under Wisconsin law.'' However, there are numerous casino 
gambling venues in Wisconsin, and such a blatant attempt to 
mislead can only be understood in terms of the need to bend the 
truth for partisan purposes.
    Fifth. The minority states that the majority conceded that 
``the decision was correct on the merits.'' This is simply not 
true. Many members noted their opposition to gambling, and 
indicated that they might not have been supportive of the 
application because of their opposition to gambling. The same 
members, however, recognized that state and Federal laws permit 
gambling in some areas, and that the issue before the Committee 
was whether the Department of the Interior had followed the 
law, its own regulations, and its own past practices. The 
failure to grasp the difference between opposition to gambling 
and the duty of legislators to uphold the law is stunning.
    Sixth. In its constant attempt to marginalize evidence, the 
minority states that Fred Havenick's allegation that George 
Skibine once stated that the Hudson application was killed 
because of politics was supported ``by affidavits from two 
officials of the disgruntled applicant tribes.'' In fact, there 
were seven affidavits, not two.

                             C. Conclusion

    The Attorney General of the United States felt compelled to 
appoint an Independent Counsel to examine Secretary Babbitt's 
statements and the Hudson matter in general. Given the Attorney 
General's aversion to appointing Independent Counsels--seen so 
clearly in the campaign finance scandal--it is difficult to see 
why minority Democrats expend so much time and effort defending 
the indefensible. If even Attorney General Reno recognized that 
an Independent Counsel might have to investigate the Department 
of the Interior conduct surrounding the Hudson rejection, then 
surely the Democratic minority could at least follow her lead 
and maintain a semblance of objectivity.

IV. The Democrats Engaged in a Pattern of Making False Statements About 
    the Majority's Investigation and Mischaracterizations About the 
                           Majority's Actions

            A. False Statements About the Committee's Budget

    The false statements that the minority has made about the 
Committee's budget are a case study of how the minority has 
manufactured information in order to advance partisan 
interests. At a March 31, 1998 hearing, ranking member Henry 
Waxman asserted that the Committee had spent $5 million over 
the first year of the investigation.\47\ At a subsequent 
hearing on April 30, Mr. Waxman inflated his figure, accusing 
the majority of having spent $6 million on the 
    \47\ Hearing on FEC Enforcement Actions, Committee on Government 
Reform and Oversight, Mar. 31, 1998, p. 16.
    \48\ Hearing on Venezuelan Money and the Presidential Election, 
Committee on Government Reform and Oversight, Apr. 30, 1998, p. 11.
    Both figures grossly overstated the funds spent by the 
Committee. Congressman Waxman's repeated mischaracterizations 
caused reporters to use erroneous figures in news articles. The 
Wall Street Journal reported, ``Democrats estimate that, 
overall, Mr. Burton has spent more than $5 million on the 
investigation . . .'' \49\ Along the same lines, Roll Call 
Newspaper printed a chart in its July 13, 1998 edition, listing 
Mr. Waxman's estimate of $6 million for the Committee's 
expenditures on the investigation.\50\
    \49\ Jeanne Cummings, ``Burton's Campaign-Finance Probe is Drawing 
Criticism for Mounting Costs and Slow Progress,'' the Wall Street 
Journal, Mar. 27, 1998.
    \50\ Rashidah Goodwin and Jim Vanderhei, ``Democrats' Report 
Doesn't Add Up,'' Roll Call, July 13, 1998.
    However, Roll Call, in an article entitled ``Democrats' 
Report Doesn't Add Up,'' lampooned Democrat generated cost 
estimates for Congressional investigations included in a 
partisan report produced by House Minority Whip Richard 
Gephardt. The article stated, in part:

        The Democratic price tag ignores committee funds 
        allocated to Democrats (typically one-quarter to one-
        third of each panel's budget); assumes incorrectly that 
        some GOP staffers are spending 100 percent of their 
        time working on investigations; and includes millions 
        of dollars that Republicans have not spent, according 
        to a review of the report.'' \51\
    \51\ Id.

    Mr. Waxman's efforts were clearly part of a larger 
Democratic leadership effort to spread disinformation about 
legitimate investigations into an Administration which already 
has had seven Independent Counsels appointed by its own 
Attorney General. Mr. Waxman even had the General Accounting 
Office waste $300,000 to determine how much it cost for 
agencies to respond to appropriate oversight requests from 
    \52\ Letter to the Honorable Dan Burton from Theodore C. Barreaux, 
Associate Director, General Accounting Office, Oct. 23, 1998.
    Even after the majority provided a detailed accounting of 
the Committee's expenditures, Congressman Waxman continued to 
misstate the amount of money the Committee had spent. On May 
11, 1998, Chairman Burton wrote a letter to Congressman Waxman 
providing him with an itemized accounting of the Committee's 
investigative expenditures for 1997--$2.4 million.\53\ The 
figure included the salaries of all Committee staff who worked 
on the investigation, both from the Committee's permanent 
budget and its separate investigative budget. It also broke 
down the spending into nine separate categories, including 
equipment, overtime, travel, consultants, and supplies.
    \53\ Letter to Congressman Waxman from Chairman Burton, May 11, 
    Even after receiving the detailed accounting he had 
requested earlier, Mr. Waxman and his staff continued to 
mislead the public about the Committee's expenses. The 
minority's preliminary views, prepared by Mr. Waxman's staff 
for the Committee's October 8 meeting, stated that the 
Committee had spent $7.4 million on the illegal fundraising 
investigation,\54\ a figure that is wildly exaggerated and 
misses the mark by more than $3 million. The minority report 
incorrectly asserted that $5.7 million had been expended on 
staff salaries alone. This figure was apparently based on an 
estimate that the majority had 50 staff working on the 
investigation at any given time \55\--a number that was 
provided without attribution and apparently made up out of 
whole cloth.
    \54\ ``Preliminary Minority Views on the Campaign Finance 
Investigation,'' Oct. 8, 1998, p. 44.
    \55\ Id. p. 45.
    In fact, at its peak, the majority had no more than 35 
staff working on the investigation. At the beginning of 1997, 
and following the August recess of 1998, the number of majority 
staff was significantly lower. For instance, in 1997, the 
Committee's investigative budget of $3.8 million was not 
approved by the Committee on House Oversight until March 25, 
1997. Prior to this, the investigative staff numbered less than 
one dozen. The investigative staff was gradually augmented 
through the spring and summer, and did not reach its peak of 35 
until the fall.
    The accurate figures for investigative staff salaries and 
overtime are:
          1997: $1.56 million
          1998: $1.33 million \56\
    \56\ Committee payroll records through August 1998.
    The combined total through August 1998 equals $2.9 million, 
a far cry from the minority's estimate of $5.7 million. What is 
more, 25 percent of those funds were set aside for minority 
staff. Only 75 percent of those funds were expended for 
majority staff.
    The minority also neglected to state instances in which the 
Committee did not spend or returned significant amounts of 
money allocated to the investigation. For instance, in 1997, $1 
million of the Committee's $3.8 million investigative budget 
was allocated for investigative detailees. Most of these funds 
were left unspent after Congressman Waxman blocked the 
Committee from obtaining FBI detailees.\57\ In 1998, the 
Committee was allocated $1.8 million from the House Oversight 
Committee's Reserve Fund. Of that amount, the Committee 
returned $500,000 in unused funds to the House Oversight 
    \57\ Letter from Representative Waxman to Chairman Burton, July 18, 
1997. In most instances, Federal agencies require a Memorandum of 
Understanding signed by both the chairman and the ranking member before 
detailing personnel to congressional committees.
    \58\ Letter from Chairman Burton to Chairman Thomas, Oct. 8, 1998.
    In total, the Committee spent approximately $2.4 million on 
its investigation into illegal fundraising activities in 1997. 
While it is difficult to determine an exact amount spent to 
date in 1998 because recording and payment of official expenses 
are typically delayed by several months, the Committee expects 
to spend less in 1998 than it did in 1997. A reasonable 
estimate of the Committee's total investigative expenditures 
for the 2 year period would not exceed $4 million to $4.25 
    It is hard to understand why the Committee's ranking member 
would continue to publicize false estimates of the Committee's 
expenditures, even after being notified in May of this year 
that his figures were inaccurate. This is an example of the 
purposeful use of falsehoods to deflect attention from the 
campaign finance scandal and the facts uncovered by the 

             B. False Statements About the Committee's Work

    The minority views published by Congressman Waxman did not 
stop at trying to deceive the American people about the 
Committee's expenses. They also tried to deceive the public 
about the Committee's work. For instance, the minority played 
elaborate word games to try to make it appear that the 
Committee had held fewer hearings than it had. In listing the 
number of hearings held by other investigative committees, the 
minority listed ``days of hearings held.'' For instance, the 
minority report states that the Senate Governmental Affairs 
Committee held 33 days of public hearings.\59\ However, when 
describing the number of hearings held by the House Government 
Reform and Oversight Committee, the minority report states that 
only 9 hearings were held.\60\ It neglects to explain that the 
Committee's hearings on Interior Secretary Bruce Babbitt and 
allegations of corruption at the Interior Department lasted 4 
days, or that hearings into Johnny Chung's unusual access to 
the White House lasted 2 days.
    \59\ ``Preliminary Minority Views on the Campaign Finance 
Investigation,'' Oct. 8, 1998, p. 45-46.
    \60\ Id.
    Along the same lines, the minority views were misleading 
about the subject matter of the hearings. For instance, the 
minority report states that, ``in 1998, the Committee did not 
hold a single day of investigative hearings on the role of 
foreign contributions in the 1996 campaign.'' \61\ The wording 
of this sentence was carefully crafted to avoid recognizing 
hearings the Committee held on foreign money in the 1992 and 
1994 campaigns.\62\ Furthermore, the minority fails to 
recognize the numerous instances in which the Committee 
released documents or other information to the public when 
hearings could not be held because witnesses had either 
asserted their Fifth Amendment rights not to incriminate 
themselves or fled the country.
    \61\ Id.
    \62\ The Committee held hearings on Mar. 31, 1998 and Apr. 30, 1998 
regarding foreign money in the political system.
    It is disappointing that the minority would feel compelled 
to use such petty tactics in an investigation into a matter as 
important as the role of illegal foreign money in our 

                    C. False Statements About Leaks

    The Democratic minority has also falsely accused the 
majority of leaking. At the Committee's August 6, 1998 meeting, 
Congressman John Tierney inserted a document into the Committee 
record titled, ``History of Committee Leaks.'' \63\ The 
document, prepared by Congressman Waxman's staff, was 
circulated to reporters attending the meeting.
    \63\ Hearing on Whether to Hold the Attorney General in Contempt of 
Congress, Committee on Government Reform and Oversight, Aug. 6, 1998, 
p. 120 of the committee transcript.
    However, not a single instance cited in the two-page 
document was actually a Committee leak. For instance, the first 
incident cited in the document occurred on another Committee 
during a previous Congress. Congressman Burton had not yet been 
elected Chairman of the Government Reform and Oversight 
Committee, and the Committee had not yet commenced its 
investigation of campaign finance improprieties and possible 
violations of law. What is more, the documents in question, 
John Huang's phone logs from the Commerce Department, were not 
classified or covered under any protocol or confidentiality 
    The minority similarly mischaracterized other incidents 
they defined as leaks. For instance, Congressman Waxman accused 
the majority of leaking information from staff interviews. 
However, it is a well-established principle that staff notes of 
informal interviews are considered staff work-product and are 
not covered under the Committee's document protocol. Chairman 
Burton informed Congressman Waxman of this fact in writing in 
March 1998.\64\ It is profoundly disappointing that the 
minority would persist in promulgating false and misleading 
information months after being informed in a clear and 
unambiguous way that their facts were wrong.
    \64\ Letter from Chairman Burton to Congressman Waxman, Mar. 27, 
    In another instance, the ``Talking Points'' handed out by 
the minority on August 6, 1998, asserted:

        The most repugnant leak occurred when Chairman Burton 
        leaked subpoenaed Bureau of Prisons tape recordings of 
        Webster Hubbell's private phone conversations with his 
        wife and others.\65\
    \65\ Hearing on Whether to Hold the Attorney General in Contempt of 
Congress, Committee on Government Reform and Oversight, Aug. 6, 1998, 
p. 120 of the committee transcript.

    However, the Hubbell prison tape recordings were not 
leaked. Two prison tape recordings of Mr. Hubbell's 
conversations were entered into the Committee record and made 
public on December 9, 1997.\66\ Chairman Burton informed 
Congressman Waxman of this fact by letter on March 27, 1998 
after Congressman Waxman publicly accused him of leaking the 
tapes.\67\ Additional tapes were made public by a vote of the 
Committee's 5-person working group on April 15, 1998, as 
authorized by the Committee's document protocol.
    \66\ Hearing on the Current Implementation of the Independent 
Counsel Act, Committee on Government Reform and Oversight, Dec. 9, 
1997, p. 212-213.
    \67\ Letter from Congressman Waxman to Chairman Burton, Mar. 20, 
1998; Letter from Chairman Burton to Congressman Waxman, Mar. 27, 1998.
    Mr. Hubbell, who resigned under a cloud from the Justice 
Department in March 1994, received hundreds of thousands of 
dollars in fees from friends and supporters of the President at 
a time that he was under criminal investigation and his 
testimony was being sought in the Whitewater matter. Among the 
lucrative arrangements Hubbell secured was a $100,000 
consulting fee from the Lippo Group in June 1994. This fee was 
paid at a time when James Riady and John Huang had numerous 
meetings at the White House, including a visit with the 
President. At the same time, James Riady also met with Webster 
    \68\ See Chapter 4A of the Committee majority report for further 
discussion of the connections between the Riadys, John Huang and 
Webster Hubbell.
    Mr. Hubbell was one of the first witnesses called by the 
Committee, and among the first to assert the Fifth Amendment in 
refusing to cooperate. His refusal to cooperate led the 
Committee to seek other avenues to determine why the Riady 
family paid Hubbell, who asked them to do so, and what they 
sought in return. One source of information to which the 
Committee turned were hundreds of hours of tape recordings of 
Mr. Hubbell's telephone conversations from prison. The tapes 
included discussions Hubbell had about his contacts with John 
Huang and discussions he had with White House official Marsha 
Scott. Mr. Hubbell also discussed factual matters related to 
his legal case with his wife throughout the tape recordings. As 
in all Federal penal institutions, prisoners are made aware by 
large signs that their conversations are being recorded.\69\ 
The Committee's subpoena for these tapes was lawful and 
warranted and the public release of the documents was done 
through proper committee procedures.
    \69\ Mr. Hubbell himself acknowledged that he knew he was being 
taped when in a Mar. 25, 1996 tape recording, Mr. Hubbell specifically 
reminded his wife that they were on a ``recorded phone.'' Mr. Hubbell 
also cautioned one of his benefactors, Bernard Rapoport, in an Oct. 13, 
1995 letter about his calls: ``You can't call, but I can call you if 
you are willing to take a collect call. . . . Also understand that all 
my calls are monitored and recorded.''
    The mischaracterizations and misinformation about the 
release of the tapes were again, in large part a partisan 
distraction to run from troubling facts. Once questions arose 
about the informal transcript logs provided by the Committee as 
a guide for the press when the tapes were released, the 
Committee released the tapes in their entirety when questions 
arose in order to clear up any misunderstandings. There was 
never any intent or effort to omit any information for 
political purposes. In fact, from the first days the tapes were 
released, reporters were encouraged to listen to the prison 
tapes themselves. Inadvertent errors on the committee's 
informal logs should not minimize the importance of the 
information in the tapes themselves. While the Washington Post 
raised questions about the release of the tapes and the 
editing, the editorial board still acknowledged the importance 
of the tapes to the public debate:

        Still, with all the caveats, the tapes appear to raise 
        questions both about Mr. Hubbell's conduct and about 
        the White House's behavior toward the former associate 
        attorney general while he was in prison.\70\
    \70\ ``The Hubbell Tapes,'' the Washington Post, May 3, 1998.

Again on May 6, the Washington Post editorialized:

        The White House spin--that the errors in the 
        transcripts somehow render the tapes themselves 
        insignificant--is unconvincing.\71\
    \71\ ``Mr. Burton's Transcripts,'' the Washington Post, May 6, 

    In a May 5, 1998 appearance on ``Nightline,'' even 
Congressman Waxman was compelled to admit that, ``there are 
things in those tapes that are disturbing to me, but I don't 
know the answer to them.'' \72\ However, to date, the serious 
questions about payments to Mr. Hubbell remain unanswered by 
Mr. Hubbell, the Riadys, and John Huang--all key players in a 
highly questionable $100,000 payment to Mr. Hubbell when he was 
a target in a serious criminal investigation related to the 
President and First Lady.
    \72\ ``Nightline,'' ABC News, May 5, 1998.
    The Democrats did not just erroneously claim that the 
Hubbell prison tape recordings were ``leaked,'' they also 
falsely claimed the tapes themselves were ``doctored.'' This 
falsehood was routinely repeated by Democrats. The minority had 
their own copies of the actual tapes for months and knew that 
no physical alterations were ever made to any tape recordings. 
Unfortunately, the false accusation that the tapes were 
``doctored'' continues to be perpetuated by Democrats. For 
example, Judiciary ranking Democrat John Conyers perpetuated 
this falsehood in a May 10, 1998 appearance on ``Fox News 

          Brit Hume. Congressman Conyers, what do you think 
        that Webb Hubbell meant when he said on a conversation 
        he knew was being taped that I guess I'll have to--I 
        think the quote was ``roll over again.'' What do you 
        think he meant by roll over again?
          Rep. Conyers. Sir, the tapes that were released by 
        the Chairman Dan Burton, my friend from Indiana, were 
          Mr. Hume. There was no doctoring of any tapes, sir. 
        There was an edited transcript. The tapes were released 
        in full. My question to you is what do you think he 
        meant by roll over again?
          Rep. Conyers. I said--I said the tapes were doctored.
          Mr. Hume. Yes, you were incorrect about that. They 
        were released in their entirety. What was edited were 
        the transcripts. My question for you, what do you think 
        he meant when he said roll over again?
          Rep. Conyers. I have absolutely no idea.
          Mr. Hume. Would you like----
          Rep. Conyers. What do you think he means?
          Mr. Hume. Would you like to find out sir?
          Rep. Conyers. Well I don't have any reason to find 
        out. I mean, what do I need to know for? \73\
    \73\ ``Fox News Sunday,'' May 10, 1998.

    As was often the case with the Democrats, their zeal for 
avoiding the facts, made them less than active participants in 
any real search for the truth. As for other misrepresentations 
about supposed ``leaks,'' in their preliminary minority views 
issued on October 8, the Democrats made a tacit admission that 
many of their earlier accusations of leaks were false. Many of 
the same incidents labeled leaks in the August 6 document 
released by the minority were reclassified under a more 
ambiguous heading in the minority views of October 8. However, 
the minority persisted in classifying several authorized 
releases of information which served the public's right to know 
the facts as leaks,\74\ in the face of all of the evidence to 
the contrary.
    \74\ ``Preliminary Minority Views on the Campaign Finance 
Investigation,'' Oct. 8, 1998, p. 40-41.

             D. False Accusations About Abuse of Witnesses

    The Democratic minority's accusations about abuse of 
witnesses have bordered on the absurd. At one point in its 
minority views, the minority complains that the Committee 
deposed an Interior Department employee who is a diabetic. The 
minority had the audacity to suggest that the deposition 
interfered with the employee's ability to monitor his insulin 
with absolutely no basis in fact.\75\
    \75\ Id. p. 30-31.
    Obviously, the deposition posed no risk to the health of 
the employee, George Skibine, who was afforded frequent 
opportunities to take breaks. For the minority to suggest that 
someone who suffers from diabetes is physically incapable of 
participating in a deposition is an insult to people who cope 
with diabetes on a day-to-day basis. Furthermore, the fact of 
the medical condition was not brought to majority counsel's 
attention until the proceeding was well underway. As soon as 
the condition was disclosed, Mr. Skibine was offered any 
accommodation that he considered necessary.
    Along the same lines, after an investigative trip to Los 
Angeles in August 1997, Congressman Waxman attacked the 
majority investigators for knocking too loudly on people's 
doors, wearing suits and ties, and ``sitting in a full-sized 
Chevrolet'' as they waited for an individual to return home 
from work.\76\ It is unclear to this day whether Mr. Waxman's 
objections rested on the size of the car or its make and model.
    \76\ Letter from Congressman Waxman to Chairman Burton, Sept. 4, 
    During this same trip, Congressman Waxman accused majority 
staff of ``bullying,'' ``staking out,'' ``accosting,'' and 
``interrogating'' Felix Ma.\77\ Of course, this description 
does not bear even the faintest resemblance to what actually 
happened. In reality, Committee staff had a brief and cordial 
discussion with Mr. Ma outside his house when he arrived home. 
Mr. Ma told the staff that he wished he could introduce them to 
his wife, and he did so when she arrived home a few minutes 
later. Mr. Ma also told the investigators that he was happy to 
have the opportunity to clear up the fact that he was not the 
Felix Ma who worked for the Lippo Group and contributed $25,000 
to the DNC. Mr. Ma explained that he had also been contacted by 
numerous reporters and Democratic fundraisers seeking 
additional contributions.\78\
    \77\ ``Preliminary Minority Views on the Campaign Finance 
Investigation,'' Oct. 8, 1998, p. 18-19.
    \78\ Letter from Chairman Burton to Congressman Waxman, Sept. 30, 
    The minority also accused the majority of ``squandering 
taxpayer dollars'' by sending three Committee staff to Florida 
``to retrieve a computer disk that could have been mailed to 
the Committee for the cost of first-class postage.'' \79\ What 
the minority failed to mention was that the primary purpose of 
the trip was to interview the individual who had possession of 
the disk, something which obviously could not be done through 
the mail. To compound the problem, after his staff supported 
making the trip and agreed to keep the trip confidential, 
Congressman Waxman held a press conference to criticize it.\80\
    \79\ ``Preliminary Minority Views on the Campaign Finance 
Investigation,'' Oct. 8, 1998, p. 47.
    \80\ Letter from Chairman Burton to Congressman Waxman, July 23, 
    Following this series of irresponsible, misleading and 
highly partisan attacks, it should come as little surprise that 
the majority decided to conduct separate investigative travel 
and interviews.

  E. False Statements about the Committee's Vote Holding the Attorney 
                          General in Contempt

    The minority has made repeated false claims about the 
Committee's efforts to compel the production of documents from 
the Justice Department. In July 1998, the Committee issued a 
subpoena calling for production of both the Freeh and La Bella 
memoranda which advised the Attorney General that the law 
required the appointment of an independent counsel in the 
campaign finance investigation. The minority has consistently 
opposed the Committee's efforts to conduct legitimate oversight 
of the Department of Justice and has misrepresented key facts 
and the law throughout the Committee's oversight process. The 
Committee has had a number of concerns about the Justice 
Department's campaign finance investigation, and has held two 
hearings about that investigation.
    The Attorney General has never complied with the 
Committee's subpoena for the Freeh and La Bella memoranda. She 
has never raised any claim of privilege to justify her failure 
to comply with the Committee's subpoena. Rather, she has simply 
refused to produce the required documents, citing various false 
rationales that compliance with the subpoena would jeopardize 
the Justice Department's investigation. The Committee's 
subpoena specifically called for grand jury information to be 
    In their preliminary report, the minority claims that the 
Attorney General's refusal to comply with the Committee's 
subpoena was ``consistent with 100 years of precedent.'' \81\ 
This claim is yet another example of the type of misleading 
statement that the minority is willing to make to serve their 
political purposes. Documents such as the memoranda subpoenaed 
by the committee have been produced to investigative committees 
repeatedly throughout the last 80 years. The details of these 
cases have been discussed extensively at Committee business 
meetings, and in the Committee's contempt report.\82\
    \81\ Preliminary Minority Views at 35.
    \82\ See ``Report by the Committee on Government Reform and 
Oversight together with Additional Views, Minority Views, and 
Additional Minority Views on the Refusal of Attorney General Janet Reno 
to Produce Documents Subpoenaed by the Government Reform and Oversight 
Committee,'' Sept. 17, 1998, H. Rept. 105-728, 105th Cong., 2d sess.
    While the minority's misrepresentations are disturbing, it 
is the minority's complete lack of interest in overseeing the 
Justice Department that is more troubling. The Committee has 
uncovered substantial evidence indicating that the Justice 
Department is not thoroughly investigating the campaign finance 
scandal. Furthermore, at least one senior official at the 
Department of Justice has shown a clear disdain for the law and 
the campaign finance investigation. On October 2, 1998, the 
Washington Post reported the following:

        A Senior Justice Department official said that some 
        investigators have concluded that Huang does not have 
        information that would support the prosecution of the 
        Democratic officials who received and spent the funds 
        he raised or the White House officials who promoted his 
        career in Washington.\83\
    \83\ Roberto Suro, ``Prosecutor's Approach to Huang Signals Shift 
in Campaign Probe,'' the Washington Post, Oct. 2, 1998, A17.

    Given that the Department has apparently not even talked to 
John Huang according to news reports, it is troubling that 
statements such as this are attributed to the Department of 
Justice. Although General Reno has recently informed the 
Committee that an Office of Professional Responsibility 
investigation has been opened over this statement, this is not 
reassuring given the fact that the target of the investigation 
may be one of the key decisionmakers when the Department 
decides whether to appeal recent rulings regarding criminal 
indictments of DNC fundraisers Charlie Trie and Maria Hsia. 
Given these facts, it is disturbing that, rather than be part 
of a bipartisan effort to ensure that the executive branch does 
what it is trusted to do, the minority has attempted to impede 
the Committee's work.

    V. Democrats Made Tortured Arguments Alleging ``Asian Bashing''

    The Democratic minority makes a tortured argument that the 
investigation of illegal campaign contributions is insensitive 
``to the concerns of Asian-Americans.'' This is consistent with 
their failure to focus on the people who put so many in legal 
jeopardy. According to Representative Lantos, ``there is a 
grave danger that stereotyping and Asian bashing will become 
and, in many instances, have become part and parcel of this 
investigation.'' \84\ The Committee, however, focused on 
illegal conduct and those who attempted to break the law. While 
it is regrettable that so many Democratic operatives exploited 
Asian-Americans, it is certainly not the fault of Republicans 
on this Committee.
    \84\ House Committee on Government Reform and Oversight, Committee 
Vote on Immunity, 105th Cong., 1st sess., 18-19 (1997) (quoted in 
Preliminary Minority Views on the Campaign Finance Investigation, p. 
    In their cynical effort to characterize this Committee's 
work as racist, minority Democrats also quoted Francey Lim 
Youngberg. However, the minority failed to point out that 
Youngberg is hardly a disinterested party--the group she 
headed, the Congressional Asian-Pacific American Caucus 
Institute--received $35,000 from Charlie Trie, one of the 
central figures in the campaign finance scandal.
    During the course of the investigation, the minority also 
made harsh allegations of racial impropriety against the 
Committee's inquiry into a $10,000 contribution made on August 
18, 1996, by Helen Chien. On Sunday, October 5, 1997, a 
reporter on the television program ``Face the Nation'' 
commented on this Committee's concern over the Chien 
contribution: ``Committee Democrats are in a furor about this, 
because they say all of it took place after the Democrats 
checked out the couple and found they had done nothing wrong; 
their contribution was perfectly proper. Committee Democrat Tom 
Lantos says the couple was subjected to abusive questioning 
just because they had Asian surnames[.]'' Representative Lantos 
continued to assert that the majority was acting improperly in 
a ``Dear Colleague'' letter dated October 9, 1997: ``We must 
all take the experience of this couple--who gave a perfectly 
legal donation--to heart. This couple have [sic] been subjected 
to repeated interviews and abusive questioning by investigators 
working for Dan Burton.''
    Notwithstanding the overwrought protestations of minority 
Democrats, on March 25, 1998, the DNC in a letter to the FEC 
acknowledged that the $10,000 contribution from Helen Chien was 
in fact returned for cause:

        Based on our analysis of allegations contained in the 
        indictments returned in the cases of United States v. 
        Yah Lin ``Charlie'' Trie et al, U.S. District Court for 
        the District of Columbia, Jan. 28, 1998, and United 
        States v. Maria Hsia, U.S. District Court for the 
        District of Columbia, Feb. 18, 1998, the DNC has 
        determined that it now has information suggesting that 
        certain contributions that at the time they were 
        received, did not appear to be unlawful, were in fact 
        contributions made in the name of another . . . A list 
        of these contributions is attached.\85\

    \85\ Letter from Joseph E. Sandler, Esq., to Lawrence Noble, Esq., 
Mar. 25, 1998; see also Federal Grand Jury Indictment of Yah Lin 
``Charlie'' Trie, U.S. District Court for the District of Columbia, 
Jan. 28, 1998; Federal Grand Jury Indictment of Maria Hsia, U.S. 
District Court for the District of Columbia, Feb. 28, 1998.

    The list of contributions included that of Helen Chien in 
the amount of $10,000. The majority has not heard from Mr. 
Lantos regarding the DNC's action in this regard. Aside from 
the inappropriate and partisan zeal to play the race card to 
discredit a legitimate investigation, there is no reason to 
have made the race-baiting accusations against the majority 
when we raised questions about contributions which the DNC has 
itself now deemed necessary to return. Such conduct has been an 
extremely disappointing aspect of the minority's participation 
in this investigation.
    The minority also failed to take into account a comment by 
former White House Deputy Chief of Staff Harold Ickes:

        I think this current flap is very, very minor. What you 
        basically have is a group of people, Asians, who are 
        just beginning to participate in the political system, 
        who are not fully aware of all the rules. They are used 
        to doing business in a different way in their 

    \86\ An Insider Looks Back--Harold Ickes Faces Uncertainty, 
Newsday, Dec. 26, 1996.

Such self-serving and patronizing comments ignore the fact that 
those who encouraged the giving were certainly in a position to 
know what was right and what was wrong. John Huang, for 
example, is a highly educated individual who was placed in a 
senior Commerce Department position. He had direct access to 
the President of the United States. Other fundraisers under 
scrutiny--Charlie Trie, Maria Hsia, Charles Intriago, Howard 
Glicken, Marvin Rosen, Johnny Chung, Gene and Nora Lum, to name 
but a few--are also for the most part highly educated and 
politically savvy. The only ``homeland'' they are used to doing 
business in is the United States, and it is absurd to say that 
they were just beginning to participate in the political 
process. John Huang had been very active in fundraising in 
1992, and others had been involved years earlier. Charlie Trie, 
for example, began contributing to Bill Clinton's campaigns in 
the 1980s. These individuals used others for their own improper 
ends, and for anyone to be cynical enough to blame those who 
were exploited as conduits is patronizing and indicative of the 
blame-everyone-else-and-cover-your-tracks mindset that the 
Committee has been faced with.
    Those who would attempt to distract would do well to take a 
look at a document produced by the Democratic National 
Committee (``DNC''). Generated by the DNC's office of Asian 
Pacific Affairs, it is titled ``Affinity Group Endorsement 
Project (Slice & Dice).'' \87\ Here is how the ``Slice and 
Dice'' program characterized the ``special interests'' of 
various ethnic groups: Hmong--Bungee Jumpers, Japanese--
Golfers, Hawaiian--Cigar Smokers, Chinese--Senior Citizens, 
Korean--Gay/Lesbian. The apparent stereotyping of ethnic groups 
by special interests along the lines envisioned by the DNC 
would appear to be a far more fruitful avenue for an 
investigation of racial insensitivity than the Committee's 
efforts to determine whether there were illegal efforts to 
influence U.S. elections. Rather than defend those who point to 
how Asian-Americans ``are used to doing business in a different 
way in their homeland,'' the scrutiny should properly be on how 
Harold Ickes and the DNC did business in their homeland.
    \87\ DNC Document F 0047206 (Exhibit 6).
    It is disappointing that the Minority would attempt to 
exploit race, while at the same time cover up the DNC's sordid 
efforts to ``Slice & Dice'' American citizens into absurd 
special interest groups.

                                                        Dan Burton.
    [Supporting documentation follows:]


    Mr. Chairman, in a desperate attempt to focus attention 
away from the Clinton foreign money scandal, the Democratic 
minority is attempting to find a scandal where none exists.
    Representative Henry Waxman alleges that House Majority 
Whip Tom DeLay was involved in a scheme to raise illegal 
campaign funds for the congressional campaign of Brian Babin in 
Texas. Mr. Waxman bases this contention on the credibility and 
charges of one Peter Cloeron.
    Mr. Cloeron claims that at a Babin campaign event in 1996 
that Representative DeLay was present, DeLay and his staff in a 
lunch meeting encouraged him to undertake an illegal campaign 
to fund the election efforts of Brian Babin.
    Representative DeLay has repeatedly and unambiguously 
denied these outrageous claims. DeLay has said that he has 
never encouraged, solicited or proposed any effort to 
circumvent Federal campaign laws, and he never would.
    Peter Cloeron's claim is false, unsubstantiated, and 
potentially libelous--and the minority knows it. His claims 
against Congressman DeLay are nothing more than an attempt to 
inflict the maximum political damage possible to the campaign 
of Brian Babin.
    A quick scan of Mr. Cloeron's public statements about this 
affair demonstrates his lack of credibility.
    It should be known that Mr. Cloeron has been convicted of 
criminal violations of Federal law. He admitted multiple 
violations of the Campaign Finance Reform Act, and has been 
subject to civil penalties by the Federal Election Commission. 
He is looking for someone, besides himself, to blame for his 
illegal activities.
    Mr. Cloeron's own contradictory statements raise further 
questions about his credibility. For example, on November 1, 
1997, the Houston Chronicle reported that Mr. Cloeron said that 
he was contacted directly by ``Triad officials,'' rather than 
by Mr. DeLay or his staff, with respect to making illegal 
contributions to organizations that would, in turn, make 
contributions to the Babin campaign.
    In the same article, Mr. Cloeron indicated that he was 
``contacted by Triad officials because he was a conservative 
who had given to a number of Republican campaigns, including 
that of Majority Whip Tom DeLay.'' As FEC records clearly 
indicate, Mr. Cloeron is not now, nor has ever been, a 
contributor to DeLay. It appears that the truth is not an 
obstacle in Cloeron's campaign of deceit and destruction.
    Similarly, in an August 6, 1998 article in the Houston 
Chronicle, Mr. Cloeron modified his earlier allegation and was 
now saying that his alleged discussion with Congressman DeLay 
was not as specific as he earlier suggested. According to 
Cloeron, ``my discussion with DeLay on this, over lunch, lasted 
two or three minutes. It was not like we spent a lunch hour.''
    Indeed, in this article, Mr. Cloeron indicated that ``it 
wasn't like [DeLay] was saying `Hey, you were up against the 
wall (having given the maximum contribution), but we've got a 
different way to do this and here's the way you do it.' It was 
more a statement to the effect of Babin being outspent by his 
    Now Cloeron has changed his story again and Mr. Waxman 
doesn't seem to care.
    Given the contradictory public statements made by Mr. 
Cloeron in the media, his motivations, and the efforts of the 
minority to desperately change the subject from the Clinton 
scandals, it becomes apparent that the minority is attempting 
to engage the American people in a rouse. The American people 
won't fall for it. These charges appear baseless.

                                                     Pete Sessions.