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Africa III - Grant's Gazelle
(Tape One) Grant's gazelle thrashing a plant with horns to itch behind his ears, goes over to smell another plant, starts to rip leaves off and eat, walks
August 2, 1994 - Part 5
(15:51:30) Hearing resumes: AFTERNOON SESSION The CHAIRMAN. The Committee will come back into session and our witness this afternoon will be Mr. Roger Altman. Do you want to come on up to the table, Mr. Altman. Let me just say as you I re being seated that I know you have a statement to make and all the Members of the Committee, I believe, now have a copy of that statement before. them. Let us now, in the normal order of things, ask you to stand and raise your right hand. Do you swear that the testimony you're about to give is the truth, the whole truth, and nothing but the truth, so help you God. TESTIMONY OF ROGER ALTMAN, DEPUTY SECRETARY OF THE TREASURY, U.S. DEPARTMENT OF THE TREASURY; FORMER ACTING CHIEF EXECUTIVE OFFICER, RESOLUTION TRUST CORPORATION, WASHINGTON, DC Mr. ALTMAN. I do. The CHAIRMAN. Very good. You have a statement for us and we're going to make the full statement a part of the record. You deliver whatever part of it you want at the outset and then we'll go to questions. Mr. ALTMAN. Good afternoon. The CHAIRMAN. Incidentally, before you begin, let me just say that these mikes sometimes have been working strongly and sometimes not. I would encourage you to pull it as close to yourself as you can so you can be heard throughout the room. Thank you. Mr. ALTMAN. Mr. Chairman and Members of the Committee, my name is Roger Altman. Senator SHELBY. Mr. Chairman, can he pull the mike. Thank you. Mr. ALTMAN. My name is Roger Altman. On January 21, 1993, 1 was unanimously confirmed by the Senate as Deputy Secretary of the Treasury and have served in that capacity since then. That was the second time I was unanimously confirmed to serve in the Treasury. Over the 4 years of the Carter Administration, I served as Assistant Secretary for Domestic Finance and had the privilege of working closely with this Committee at that time, especially on the Chrysler and on the New York City rescues. I feel privileged to have served in these capacities. Public service has always been an important part of my life, as it was for my parents. Over those years, and in those positions, I may have made some poor decisions or other mistakes, but my integrity has never been questioned. Now, Mr. Chairman, I read that I've already been convicted and sentenced even though the trial hasn't taken place. I hope and I believe today's process will be fairer than that. I intend to demonstrate convincingly that I conducted myself properly, and I testifi- 406 fied accurately and when I finish today, I believe reasonable Members of this Committee will reach the same conclusion. Let me address, first, the very basic issue as to whether a:% effort was made by the Treasury or White House staff to impede or alter in any way the criminal or civil processes of the RTC as they relate to Madison Guaranty. I include within that question the issue of whether any information was improperly imparted to the White House. To the best of my knowledge there was no effort on the part of any White House or Treasury staff to impede or affect in any way the- RTC investigations. Moreover, no Member of the RTC or Treasury staff to my knowledge, improperly imparted any information about Madison Guaranty to the White House. I did not do so myself and I am not aware of anyone else doing so.
August 2, 1994 - Part 5
(15:55:46) Three independent investigations have addressed these questions. First, we had the results of the legal investigation by the Independent Counsel, Mr. Fiske. All issues involved in his investigation were fully and thoroughly investigated including a review of my testimony -before this Committee. And we are all familiar with his conclusions. There was also the report of the Office of Government Ethics, which Secretary Bentsen released on Sunday. This concluded that there bad been no unethical activities on the part of any Treasury personnel, The Office of Government Ethics is an independent body. As with Mr. Fiske, it had access to all documents and took testimony under oath from all those involved, including your witnesses. There is also the report of Mr. Cutler, White House Counsel, on the question of any unethical behavior by White House staff, He concluded there was none. These investigations have confirmed that the Clinton Administration did not interfere in any aspect of the Madison Guaranty case. There is no evidence, Mr. Chairman-I repeat-no evidence that either the criminal or civil aspects were compromised, delayed, or altered in any way. Simply none. I believe that the conclusions of these three separate investigations are absolutely correct. And I ask the Committee to bear in mind the larger context of my involvement in the handling of the Madison matter by the RTC. Most importantly, I never made any decisions of any kind with respect to the Madison case. I was committed, as I told the White House staff and others, to have the RTC General Counsel, Ellen Kulka, make whatever determination was necessary with respect to any civil claims arising from Madison. My meeting with the White House staff on February 2 was cleared by both Treasury General Counsel and the Designated Treasury Ethics Officer. I obtained two written ethics opinions stating that my recusal was not required, and I recused myself from the Madison matter on February 25 without ever having made any decision in that case. Second, let me turn to what I believe is the most important issue between this Committee and me, namely my testimony before you on February 24. Mr. Chairman, I do not have perfect recall, and I may have heard or understood questions in a way that was not intended by the Senator asking the question. And if I did so, I sincerely apolologize to all Members of the Committee. But I do want to be clear. In no way did I intend to mislead or not to provide complete and 407 forthright answers. I have too much respect for this Committee, for our system of Government and for the need for full and forthright communications between the Executive and the Legislative Branches. Let me add here that I understand how a reasonable person reading my testimony and listening to all the testimony which has come before this Committee could believe I was not as forthcoming as I should have been. The burden is mine to explain that I was doing the best I could at the time and I intend to do that today. Let me turn to describing the interaction between the Clinton Administration and the RTC. First, when Mr. Casey resigned as CEO in March 1993, the Administration had only taken office 5 or 6 weeks beforehand and had not yet chosen its nominee for this position. Indeed, only two U.S. Treasury officials had even been confirmed, Secretary Bentsen and me.
August 2, 1994 - Part 5
(16:00:39) Secretary Bentsen asked me to assume this position until a permanent CEO was nominated and confirmed. As others will attest I neither sought nor wanted this assignment, but I accepted it because there was no one else. And during the discussions about my appointment, there was never any mention by anyone of Madison Guaranty. In June of last year we submitted a nomination for permanent Chairperson of the RTC. Our expectation was that he would be promptly confirmed, and I could leave the agency. Our nominee was a Republican, and an active one. He was well qualified for this position and the Administration supported his nomination throughout the congressional session, but the nomination was not taken up by the Senate. After Congress completed its work last fall, be withdrew his name from further consideration. Let me make an observation, if I may, about this situation. The Administration nominated an active Republican for the top RTC job. That is not consistent with trying to exert undue control over the agency or any of its investigations. When I became RTC Chairman, the agency was managed on a day-to- day basis by its two senior vice presidents, Bill Roelle and Lamar Kelly. Almost all members of the RTC staff reported to one or the other. These two men were appointees of Mr. Casey, who in turn had been appointed by President Bush. They were thoroughly professional and they were retained throughout all of 1993. Each then left at his own initiative to rejoin the FDIC. Retaining the two senior vice presidents whom we inherited is also not consistent with trying to exert political control over the agency. Moreover, these two individuals bad no motivation to show favoritism on Madison Guaranty, and I do not believe that they did so, During my tenure at the RTC, I was also serving as Deputy Secretary of the Treasury. In that role, I was deeply involved in policy initiatives ranging from passage of the President's economic plan to cochairing the U.S.-Japan framework negotiations. These responsibilities permitted me limited time for RTC matters. My involvement there typically related to broad public issues, like the long struggle last year to pass the RTC Completion Act. At no time, Mr. Chairman, did I ever ask to be briefed, nor was I briefed, on any investigation or the status or the outlook for any case, not once. My role was to provide general oversight at twice 408 senior staff meetings. These involved 8 to 10 RTC officials, and they were the only RTC employees with whom I ever had any personal contact of any kind. Last fall, Bill Roelle or Jean Hanson or both, advised me because of impending publicity, that the RTC was considering referring the Madison matter to the Justice Department for criminal investigation, and that the referral could mention the President and First Lady in some capacity. I had never asked to be involved in Madison son-related matters or any other RTC investigation. Indeed, until that time, I had known nothing at 11 about Madison except through the press. And, as I said. I believe they advised me because publicity was imminent. I was also advised that such referral decisions are typically made at the regional office level. I responded by saying that this referral decision should be made in exactly the same fashion as in any other case. If that meant the regional office level, then that's where the decision should be made. There were no further conversations with me on that subject. ultimately learned through the press that the case indeed had been referred to the Justice Department.
August 2, 1994 - Part 5
(16:10:50) On February 2, Jean Hanson and I went to the White House. She attended because, as Treasury's senior lawyer, she had been helping me on various RTC legal matters, and the subject matter was inherently legal. She saw nothing wrong with providing this information to the White House. I later learned that she also bad the good judgment to check the ethical issues with Dennis Foreman, Treasury's Chief Ethics Officer, who also saw nothing improper. Mr. Foreman, I might add, is a career appointee who preceded the Clinton Administration. In other words, Mr. Chairman, Treasury's General Counsel and its Senior Ethics Officer both approved this meeting. And as you know, the Office of Government Ethics has also rendered its verdict on that meeting, which is a favorable one. The meeting lasted no more than 20 minutes. Initially, Ms. HanSon and I described the generic procedures which the RTC used in this or any other case facing an expiring statute of limitations. We recited the three alternatives, following talking points which she had prepared. And this Committee, of course, has a copy of those. This was the total information provided which related to the RTC investigation of Madison, We provided no information on the status or outlook for the case. That would have been impossible because we possessed none. The Office of Government Ethics, which took testimony under oath from all participants. said in its report 410 that "nothing suggests that this part of the -meeting involved a disclosure of nonpublic information." Toward the end of the February 2 meeting, I also raised the question of recusal. And let me now address that. Mr. Chairman and Members of this Committee, the issue of recusal is a false one. Whether I recused my self or not would have had no impact on the investigation, none whatsoever. The facts are that I began thinking about recusal around February 1. And that on February 25, 1 did recuse myself. No matter came to me for decision on any case including Madison in that period. Moreover, prior to recusing myself, I was de facto recused. Deci. sions on cases never came to me at any time during my RTC tenure. And I had specifically reaffirmed to the RTC General Couns el before the February 2 meeting that she would be making all deci- sions related to Madison, not me. Indeed, I had told her that more than once, and with others present, and as you know, she testified before you to that effect. On February 2, when I informed the White House that I was thinking about recusal, I told them that it was irrelevant because the RTC General Counsel would be making all decisions on Madison, not me. The Office of Government Ethics confirms my de facto recusal. It states in its report that "recusal is just another word for nonparticipation " and I had already chosen nonparticipation. Nine days after the February 2 meeting, Congress passed a 2-year extension of the statute of limitations on Madison Guaranty9 days later. That made recusal entirely moot. My term as RTC Chairman was to expire and did expire on March 30. And with such additional time, it was almost certain that the RTC would not be making any Madison decisions by my March 30 termination date. In retrospect, I perhaps should have recused myself right off the bat. Some of this controversy would have been avoided. But before February 2, 1 had been advised that there was no legal or ethical requirement to recuse myself. I later receive two written opinions from ethics officers to that effect. Two written opinions
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August 3, 1994 - Part 4
(14:20:36) Even so, earlier this year I recused myself both as Comptroller of the Currency, and as a director of the FDIC from any matter involving the President or Mrs. Clinton in a personal capacity, including Whitewater and Madison, Beyond what any American can read in the newspapers, I have no knowledge of Whitewater or Madison. Despite my lack of involvement in these matters, I have had contacts with the White House or the Treasury relating to Whitewater or Madison on three occasions. I described all three in my memorandum to Mr. Edward Knight, Executive Secretary to the Sec(61) 62 retary of the Treasury, dated March 11, 1994. 1 prepared that memorandum in response to the Grand Jury subpoena to the Treasury Department from the Off- ice of Independent Counsel, Mr. Fiske. Treasury Department has provided a copy of it to the the Committee I am happy to go through these events again with you here today. The first of the three occasions I described in my memorandum involved two Freedom of Information Act requests relating to Madison or Whitewater. Reporters at The Washington Post and The Baltimore Sun submitted these requests to the FDIC. Somebody at the FDIC sent copies of the requests to me. I'm uncertain about who sent them. I think it may have been the Acting Chairman of the FDIC, Skip Hove. These were public documents. Upon receiving copies of the inquiries, I faxed copies to Under secretary of the Treasury, Frank Newman, Treasury, Chief of Staff Josh Steiner, and Bruce Lindsey and David Dreyer in the White House press office, on December 2, 1993. To the best of my recollection, I did this because I thought they might want to know about press interest in these matters. I knew no more than I had read in the newspapers about the matters referred to in the FOIA requests. I never asked anybody to send this material to me. Nobody at the Treasury Department or the White House asked me to send it to them. I never asked about these matters. And, to the best of my recollection, I never discussed these FOIA requests with anybody at the White House or the Treasury, either before or after I sent out the copies. The second occasion occurred during the week between Christmas and New Year's 1993, at the Renaissance Weekend conference. The Renaissance Weekend is a series of symposia and presentations on topics ranging from international relations, economics and business to the arts, Hundreds of people attend. I was sitting in a large seminar listening to a presentation; I think it had something to do with international relations. The President entered the room and sat down near me at the table. Because I know that what happened next is of interest to this Committee, I've tried hard to remember it as accurately as I can. As I recall, the President was reading a newspaper, and we were commenting to each other on and off about the seminar. At one point, the President said something to the effect that he could not understand all the fuss about Whitewater. He expressed the belief he had done nothing wrong, and he indicated he had lost money on the transaction. He then asked me whether I thought I could advise him. I do not recall responding specifically. Our conversation moved on and shortly thereafter, the President left the room. I assumed we would touch base with regard to his question later during the Renaissance Weekend. Our entire exchange relating to Whitewater lasted perhaps 30 seconds.
August 3, 1994 - Part 4
(14:26:10) Let me make two points about the President's question because press reports may have created some confusion. First, my recollection is not that the President asked me to advise him. My recollection is that he asked me whether I thought I could advise him, that is, whether it would be permissible to give him advice. It was clear to me that the President did not expect and did not want me to do anything inappropriate or improper. 63 Second, some press accounts suggest that the President and I remember our conversation differently. I do not remember exactly what he said that gave me this impression, but I understood the President to be asking whether I could properly provide advice related to financial institutions regulation. The President and White House Counsel Cutler have recently said that the President's interest was narrower, that he only wanted names of people who might comment publicly on these matters. That is not what I understood, but it may well have been what the President intended. Our exchange on this point was brief, perhaps 30 seconds. It took place in a noisy room with many distractions. We could easily have miscommunicated. After the seminar, I went back to my hotel room. I was not sure how to followup on the President's question. I had not followed Whitewater closely in the newspapers, and I did not know much about it, Because he is the President, I wanted to be responsive to him. But having practiced law in Washington for 20 years, I understood the importance of being cautious and careful in responding to such an inquiry. I felt I needed some basic information about the subject. I also wanted to get the sense of others about whether it would be appropriate for me to advise the President on this subject. I wanted to give a well-founded and reasoned answer. My first call was to Josh Steiner at the Treasury Department. As best I can recall, I called him just as a starting point-somebody who could point me in the direction of the right people to speak with about these matters. I think I was also trying to figure out how to reach Jean Hanson, the General Counsel of the Treasury Department. My conversation with Mr. Steiner was extremely brief As best I remember, Mr. Steiner just suggested that I speak to Ms. Hanson. I reached Jean Hanson and had another brief conversation. I told her, as I told others I spoke with later, that I did not want information that was not public. I do not remember exactly what Ms. Hanson said, but I understood from her that the Whitewater matter involved a personal loan of the Clintons, I came away with the impression she did not know much about it. I also recall that she seemed to have reservations about the idea of my providing advice to the President. She suggested that I talk to White House Counsel Bernard Nussbaum.
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August 3, 1994 - Part 4
(14:30:34) I tried to call Mr, Nussbaum, but I did not get through. Instead, I got passed along from one person to another in the White House Counsel's Office. I amnot sure I remember all the people I spoke with in this series of phone calls. I know Cliff Sloan has testified that he spoke with me at some point in this series of calls. This is entirely possible, but I do not recall it. I do recall speaking with Bill Kennedy and Joel Klein. In my conversation with Mr. Kennedy, I again sought a general sense of what Whitewater was about and whether I could appropriately advise the President about it. I do not remember getting any new information from Mr. Kennedy. I do recall that lie, too, seemed to have reservations about my advising the President on this subject. Mr. Kennedy recommended that I speak to Joel Klein. I believe Mr. Klein was not available when I first tried to reach him, and that he subsequently called me back. I then learned that 64 he was also attending the Renaissance Weekend. I do not remember clearly whether we finally spoke in person or on the telephone, We were both part of a large informal dinner group that evening, and the conversation could have occurred then, but my best recollection is that we spoke by phone. I do clearly remember that he was very negative about the idea of my advising the President on these matters. Reflecting on the President's question and the reactions of Jean Hanson, Bill Kennedy and Joel Klein, I concluded that I could not appropriately give the President legal or regulatory advice relating to Whitewater. I felt, in the end, that any effort to provide informed advice could lead me into discussions with the President and others that might be inappropriate for me as a regulator and director of the FDIC. The next day, I literally bumped into the President and Mr. Klein in the hallway near a seminar room. Without further discussion, we all agreed that I should not provide advice to the President about these matters. That was the end of it. The President did not ask me to advise him about Whitewater, but rather whether it would be permissible for me to advise him. Upon reflection, within less than a day, we all concluded that I should not. And I did not. Everyone involved, including the President, took great care to avoid any inappropriate actions. No advice was given. No confidential information changed hands. The third occasion on which I recollect contact with a White House or Treasury official regarding Whitewater-aside from occasional passing references in the course of other discussions-was January 19, 1994. 1 was concerned about the steady trickle of news stories about Whitewater. I concluded that I could properly offer the White House one piece of advice drawn from my years of legal practice in Washing-ton: disclose everything. I called Margaret Williams, Hillary Clinton's Chief of Staff, to say just that. I had no way of knowing if anything remained undisclosed at that point. I also told her I thought they should put at least one person to work full-time on the matter, if they had not already done so. I do not recall Ms. Williams saying anything other than "thank you." I did not ask for and we did not exchange any information. There were no follow-up communications.
August 3, 1994 - Part 4
(14:35:55) These three occasions-the faxes, some brief discussions at RenaissaDee Weekend, and a short phone call to Margaret Williamsare the sum andsubstance of my contacts with the Treasury Department and the White House relating to Whitewater and Madison Guaranty. I have done my best to recall them as accurately and completely as I can. I hope my recollections are useful to you. I will be pleased to answer any questions you might have. The CHAIRMAN. Thank you Mr. Ludwig. I want to take up the first item in your statement, these FOIA items that somebody sent you unsolicited. When would that have happened? I don't see a date as to when you got that. You sent them over to the White House Mr. LUDWIG. Late in November---early December, I think it was early December. 65 The CHAIRMAN. And so you got them and then you-you do know you sent them over on December 2nd so Mr. LUDWIG. They would have been received then the same day it was December 2nd, December 1st or December 2nd. The CHAIRMAN. Now, what were these FOIA items? Mr. LUDWIG. These were two press inquiries, Freedom of Infor mation Act requests, sent to the FDIC. As I said in my statement they were public documents. I even checked with our Chief Coun sel, as best I remember, to make certain they were, in fact, public documents. The CHAIRMAN. OK. Now I've got them in front of me and you provided them to the Committee. Actually, the White House provided these to us for our work here. One is a letter from Susan Bear of The Baltimore Sun going to a Doyle Robinson at the FDIC, and the other is a letter on the letterhead of The Washington Post by Susan Schmidt to a Mr. Jack Smith, Deputy Counsel, General Counsel of the FDIC. Now, how often would it have been your practice to get FOIA items and send them on to the White House? Mr. LUDWIG. This was unusual, The CHAIRMAN. Is it the only time it ever happened? Mr. LUDWIG. This is the only time it ever happened. The CHAIRMAN. So this was a unique event? Mr. LUDWIG. This was a unique event. The CHAIRMAN. Why did you feel compelled to do this? Mr. LUDWIG, Well, as I said, Senator, I determined these were public documents. I had nothing to do with Whitewater or Madison. It had never come up The CHAIRMAN. Right.Mr. LUDWIG [continuing], At the board, it had never come up at had nothing to do with them, but they were public documents, it seemed to me that it was appropriate to send them along to people who might have something to do with them. I certainly didn't. So I sent them on. The CHAIRMAN. I guess I'm still curious as to why, in the normal course of events, if there is some reason for these people to have these documents, and I guess we ought to talk about-just describe briefly what these documents cover. Don't read them verbatim, but what are the thrust of these two items? Do you remember? Mr. LUDWIG. I don't have them in front of me, but they're inquiries relating to Madison and Whitewater. The CHAIRMAN. Well, they cover a lot of things, do they not, related to Madison Guaranty, the Rose Law Firm, the FDIC's lawsuit, various other things that's in The Baltimore Sun letter. I guess when I look at this in the context of this general inquiry that we've been assigned to do here, I'm wondering why, when this is not your normal practice, you would take these two documents and send them out to four different individuals. You send one to the Treasury Undersecretary, you send one to the Chief of Staff, so Mr. Newman, Josh Steiner, then Bruce Lindsey and David Dryer in the White House press office. You fanned this out in four directions and I'm just wondering what-you say this was not a common practice. What was your purpose in doing that?
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