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August 3, 1994 - Part 3
(13:13:01) Hearing host NINA TOTENBERG segues to House Banking Committee Hearings where ROGER ALTMAN is testifying - this House hearing footage runs to the end of the tape
August 3, 1994 - Part 6
(16:57:52) Testimony of JEAN HANSON, JOSHUA STEINER, DENNIS FOREMAN, and JACK DEVORE before House Banking Committee
August 3, 1994 - Part 6
(17:29:52) Hearings hosts NINA TOTENBERG and DON BODE comment on hearings from tv studio and segue back to Senate Banking Committee hearings (17:31:25) Senate hearings resume: If you go to the deposition on page 30 it says did the conversations you had- this is the deposition of you Mr. Mein. Did the conversations you had with Mr. Nussbaum in which Mr. Nussbaum told you of his opinion of Ellen Kulka come up in the context of Mr. Nussbaum telling you that he preferred, he would prefer it if Mr 119 Altman did 'not recuse himself? And your answer is the question "did Mr. Nussbaum say you prefer he not recuse," that Mr. Altman not recuse-and you went on a little more and then you said "I think two facts are in my mind clear. He did not think Altman should capitulate to pressure and he was concerned about the fact that if Altman did not, if Altman did recuse that Ellen Kulka would then be in charge." "Question: So it was clear to you based on your conversations with Mr. Nussbaum that Mr. Nussbaum preferred to have Roger Altman making the decisions at the RTC in the Madison case as opposed to Ellen Kulka?" Your answer, "that's correct," Now then you turn to another deposition and this is the deposition of you, Mr. Eggleston, page 136. And the question was "did Mr. Ickes tell Ms. Hanson that it would be better if that information did not get out?" This is the information about Ms. Hanson saying that there should be a recusal but the conversation incidentally in Ms. Williams's office to the effect that he was not going to recuse himself. And your answer in this, Mr. Eggleston, was "I don't remember him saying that, but I think that was the import of his question. I don't actually remember him saying that but I think that's what he meant by the question." I "Question: In other words you interpreted what Mr. Ickes said to mean that he thought it would be better if nobody knew that Ms. Hanson had recommended recusal?" You answered that the concern Was a leak and so forth and you went back and forth. Now, when you add these up and then add them still further to another area in your deposition, Mr. Eggleston, on page 74 you said that the concern in the White House was whether or not Altman should recuse himself, a consideration and whenever that started .0 get raised on the Hill it got raised in the White House. There seems to be a sense left with us and I want you to have plenty of time to answer it that that there was political judgment being exercised here. Maybe the best thing to do is kind of explain if it was clumsy, if it was not the best judgment then we can really understand this better, but I sense that that's what's happening here. Now, the biggest dilemma is this, and I've asked you two questions on that biggest dilemma. If indeed there was to use this new term, a de facto recusal and I've seen it throughout the record here, Altman himself saying in talking points prepared by Ms. Hanson, Mr. Altman saying it to us and Ms. Hanson saying it to us, I'm not going to make a decision. I'm not involved." Now, if he wasn't going to make a decision and was not involved, there's a real dilemma in understanding why Mr. Nussbaum would feel more comfortable with him there than Ellen Kulka and how it is that he could be then viewed in the White House as being the one to make the decisions instead of Ellen Kulka while at the same time truly not being involved. And this may be the nub of this whole thing, that there was somehow a presence there, a perception of a chilling effect or something that might go away. Obviously it would go away on March 30th because on March 30th he was anyway. Can you explain all of that?
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August 3, 1994 - Part 6
(17:35:38) Mr. EGGLESTON. Well, let me try. You've raised a number of different issues. Let me see if I can touch on each of them. 120 My sense of this when I say that it was a-let me start this way. I did not think, I'm only one person who talked to Mr. Nussbaum, but I did not think that Mr. Nussbaum intended to affect the out. come of whatever it was that the RTC was going to decide. I never had that feeling. He had a personal problem with Ellen Kulka. She's been described as tough. It is fair to say that he thought that she was unreasonably tough. I don't know how much this Committee knows about the Kaye, Scholer matter, but from Mr. Nussbaum's perspective and from the perspective of most of the Bar that practiced against the OTS and the RTC, the decisions involving that law firm were all but extor. tion, that the OTS had all but shut down the law firm. In order to extort $40 million out of the law firm. That was the perception, and that this Committee will probably remember, I can't remember whether there were hearings after that or not. But there were certainly sort of seminars all around the country. He thought she was unreasonably tough. He had-my sense of this is that he had a personal problem with Ellen Kulka. I did not particularly think-and you can ask him and ask others-I did not particularly think that anybody else in the White House shared that. She was his opponent in a very bitter litigation. Very bitter litigation. And I think that he had a bitter reaction to her arising out of litigation. It was personal, but I think it was personal to Bernie Nussbaum. I do not think-I didn't hear anybody else in the White House say anything about Ellen Kulka or particularly care about Ellen Kulka- This, to me-and again, you'll talk to others, I can just give you my perception, this was a Bernie Nussbaum issue arising out of a litigation that he had had. I did not think that he had intended to affect the outcome. He had a real problem with her because he thought her judgment was bad in that particular matter. I do not think and I did not think that he thought somehow that by having- I did not think that he thought that the outcome would be different if Mr. Altman remained in his position. And I think that's true for a number of different reasons. One is that Mr. Altman said it. The second is that it's pretty clear to anybody in Washington and I think it was clear to me, at least at the time, if Mr. Altman had done anything whatsoever, anything whatsoever to interfere with the decision that Mr. Ryan and Ms. Kulka made, I think Ms. Kulka told you she wouldn't be at the RTC anymore. And I think we can imagine that she would do more than slip quietly into the night . I thought as a practical matter this "de facto recusal"--this was real, this was real even if Mr. Altman didn't want to do it, But I did not think that Mr. Nussbaum thought that there was going to be alteration in the outcome as a result of it. That was-that's just my perception at the time. You're going to ask others. The CHAIRMAN. Well, you know this is pregant for follow-up, but we're so far over the time I'm reluctant to do that. If we do-- Senator KERRY. Mr. Chairman, I'll even give up some of my next,: time or something. Could I just have the privilege of making a 30- second comment? The CHAIRMAN. Let me inquire on this side. Senator BENNETT. Mr. Chairman, I intend to follow this up as well, but I would be delighted to have. 121 Senator KERRY. Just a follow-up. Senator DAMATO. By the way, if I might make an observation, Mr. Chairman. It is moments like these that I think are important and I understand why the Chair ruled that we should give 10 minutes to our colleagues, the latitude to pursue a line of questioning. And I'm happy to yield to the gentleman. Senator KERRY. I don't want to play by any special rules, Senator DAMATO. I don't think it's a special rule. I think it's comity and I'm delighted. Senator KERRY- Let me say in fairness, and I say to my colleagues, I think the answer is a very important answer and a legitimate answer, but I'm even surprised that there isn't more statement. I think my colleagues have to be fair to understand that the White House was operating with the perception of an RTC that had already leaked and they had a perception of conceivable abuse here. In addition, there was a process of a demand for recusals going on that had no basis on legality or ethical standards. And so I think we have to really understand the dynamics and the full flavor of what was happening. And I simply want to say I think that when you do you begin to understand this a little bit better in fairness to what happened. eThe CHAIRMAN. Yes, Mr. Eggleston, you wanted to add a point and I'll let you do that.
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