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August 3, 1994 - Part 8
(19:05:15) Senator HATCH. And as I understand it, in your deposition, you did say "Mr. Ryan, of whom he had no opinion. Of course, actually it was my understanding with Ryan, she is just involved in the process, but I don't want to overdo this. " You were asked the question "did Mr. Nussbaum state a concern that absent Mr. Altman's involvement in Madison-related matters it would be left in the hands of Mr. Ryan, whom he didn't know, and Ms. Kulka, of whom he had a low opinion?" And your answer was "yes-I mean I should say--and earlier I sort of qualified this--I think these conversations were pre-February 2nd, my best recollection is that these were pre-February 2nd." Then the next question was, "was this an issue that Mr. Nussbaum appeared to be concerned about? "Answer: I can only tell you what he said. "Question: You can't tell us in your experience whether he was more concerned than he was about most issues or less concerned? "Answer: I can't. It was just an issue. "Question: Did any other White House staff members, to your knowledge, state similar views or concerns before February 2, 1994? "Answer: Not that I recall. I don't think anybody else had any knowledge of Ms. Kulka or Mr. Ryan," et cetera. Now, you took part in the meeting with John Podesta and Todd Stern regarding the hiring of Jay Stephens by the RTC? Mr. EGGLESTON. Yes. I'm saying yes, I sort of vaguely remember. Senator HATCH. You were there? Mr. EGGLESTON. Yes. Senator HATCH. OK. And in this meeting, Mr. Podesta wanted to find out if Mr. Stephens had been hired; right? Mr. EGGLESTON. Sir, I remember making a call to Ms. Hanson either on the 24th or on the 25th to ask about that question. I'm sorry, sir, I don't quite remember this meeting. I probably would have made that call at the request of somebody. It may well have been Mr. Podesta'. Senator HATCH. Did you understand from this meeting that Mr. Podesta would have preferred that Mr. Stephens not be working for RTC on the Madison Guaranty matter? Mr. EGGLESTON. I can only describe it this way. People were generally stunned that the RTC would have hired Mr. Stephens, and I don't think that anybody I heard said we should do something about it or something like that. People around the White House were stunned that they would have hired Jay Stephens. Senator HATCH. Would have hired Jay Stephens. Mr. EGGLESTON. Yes, sir. Senator HATCH, On February 25, the day Mr. Altman decided to recuse himself from the Madison Guaranty matter, you called Jean Hanson, as you just said to confirm that Jay Stephens had been hired? Mr. EGGLESTON. Yes, sir. Senator HATCH, And you expressed to Ms. Hanson the White House's displeasure? Mr. EGGLESTON. I don't think I did. Senator HATCH, You don't think you did. 140 Mr. EGGLESTON. I think I just-I was very sensitive to this issue by the morning of the 25th. I think I called her. I asked her whether it was public information. I told her that it was-that Mr. Alt man had testified the day before that it was Pillsbury, Madison & Sutro. I called to ask her whether it was Jay Stephens, the attor- ney, and I think I said to her, I assume that's public information, By the morning the of the 25th I'm sensitive to what information I'm getting from the Treasury about this issue, and I don't think I did convey back to her that we were unhappy. Senator HATCH. Did you discuss with Ms. Hanson who at the RTC would be making the--who actually would be making the de cisions in the Madison Guaranty matter now that Mr. Altman had recused himself? Mr. EGGLESTON. I did not. Senator HATCH. I believe you said earlier that you had discussions with several White House officials about the hiring of Jay Stephens. Could you name with whom you've had those discussions? Mr. EGGLESTON. The ones that I really think about that I talked to--I indicated to you earlier I couldn't remember having a meeting. I remember talking about it with Mr. Podesta and Mr. Stern. Mr. Stem is Mr. Podesta's Deputy. They have off-ices next to each other. Senator HATCH. Sure. Let me ask you some questions about a February 28, 1994 memo from you to Harold Ickes, the White House Deputy Chief of Staff. First, let me ask you, are you aware that the very next day, March 1st, Mr. Ickes forwarded your memo to the First Lady? Mr. EGGLESTON. I am now aware. I was not aware of that then. Senator HATCH. You testified that Mr. Ickes asked you to prepare your February 28th memo. Did you also talk with Mr. Nussbaum about this memo? Mr. EGGLESTON. I don't recall. I would have prepared a memo like this only at the request of Mr. Ickes. I would not have necessarily checked it with Mr. Nussbaum. Senator HATCH. Would Nussbaum have seen it? Would he have approved it? Mr. EGGLESTON. He would not necessarily-I'm sorry? Senator HATCH. But he looked at it? Mr. EGGLESTON. He would not have necessarily approved it. I may have given him a copy. Senator HATCH. The reason I ask you is because you said in the last paragraph here, "we intend to nominate a person for the position of CEO for the RTC within the next few weeks," and you said you learned that from Bernie Nussbaum himself. Mr. EGGLESTON. Yes, I think that's right, but I think I learned that not in connection with the preparation of this memo. I think I knew that independently. Senator HATCH. On the last page, page 6 of your memo, it addresses the question "who at the RTC would be the decisionmaker in whether to bring a civil action arising out of the failure of Madison Guaranty?" Now, this question had been a subject of intense interest at the White House ever since Mr. Altman first raised the prospect that he would recuse himself-, isn't that right? 141
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August 3, 1994 - Part 8
(19:10:37) Mr. EGGLESTON. Well, yes, although---certainly, yes, sir. Senator HATCH. Now, your memo points out that both Jack Ryan and Ellen Kulka are "career officials." Right? Mr. EGGLESTON. Yes, sir. Senator HATCH. That means, doesn't it, that they were not appointed by President Clinton? Mr. EGGLESTON. They were not appointed by President Clinton. I think that they got their jobs-I think that their hiring into their jobs as head of RTC-I think, sir, and you should ask someone else-but I think that they got their jobs in the RTC during the Clinton Administration but they Senator HATCH. But they were not appointed by the President? Mr. EGGLESTON. They were not appointed to the OTS by the President. I think the White House had some role in them being moved to their jobs at the RTC, sir, I believe. Senator HATCH. What it means by "career officials" is that they have job security, they can't be fired. Mr. EGGLESTON. What I meant by it is that they were long-term Government officials. That's what I meant. Senator HATCH. And you pointed out in your memo that Mr. Ryan and Ms. Kulka were career officials. Isn't the reason you did is because you wanted Mr. Ickes, and anyone else at the White House who read your memo, to understand that neither of these officials could actually be counted on to protect the interest of the White House? Isn't that basically true? Mr. EGGLESTON, Well, sir Senator HATCH. I'm not trying to put words in your mouth, but, I mean, basically that's what you're pointing out to them. Mr. EGGLESTON. On that issue, sir, I have to disagree. I think that they were going to decide whatever they had to decide. I don't think we were asking anybody to protect Senator HATCH. But that was the in-between-the-lines message that you as an attorney were sending, that, look, these are not people you can rely on, these are career employees. And you may have even known that Mr. Nussbaum thought that Ms. Kulka was a tough, aggressive lawyer from his private sector experience. Mr. EGGLESTON. I did know that, but I was not trying to send some message between the lines, I was just saying who they were. Senator HATCH. But you obtained that knowledge that they were career officials from Jean Hanson; right? Mr. EGGLESTON. Sir, I first obtained this information in a Legal Times article that was written about Ms, Kulka in January of 1094. There was a big story about how she had gotten her job and that was the first time I really learned about who Ms. Kulka was and who Mr. Ryan was, There was a Legal Times of Washington story in January. Senator 14ATCH I notice my time is up. I have two more ques- tions Mr. Chairman. I have two more questions that would tie this down, but I The CHAIRMAN. Pardon? Senator HATCH. I notice my time is up but I have two more questions that would tie this down, The CHAIRMAN. How long do you think they'll take, Senator Hatch? 142 Senator HATCH. I hope not much more than a minute, minute and a half. The CHAIRMAN. Why don't you take them, then, Senator HATCH. I think it might be good to do that. You next point out in your memo that if the person soon to be nominated were to recuse himself from the Madison Guaranty matter, then Mr. Ryan and Ms. Kulka would remain in charge; right? Mr. EGGLESTON. Yes, sir. Senator HATCH. And your purpose in making that point, again, seems to me would be to highlight that the White House might. want to address the issue of recusal with any potential nominee of the CEO of the RTC before naming that person as CEO; right? Mr. EGGLESTON. Sir Senator HATCH. Because you don't want to get into that again., Mr. EGGLESTON. Sir, I assumed that whoever came up who was a Presidential appointee was going to be asked by the Senate to recuse themselves from that matter. That's actually what I'm con. veying here. I thought whoever got nominated by the President would be forced to recuse themselves so that the decision would remain with Ms. Kulka and Mr. Ryan. That's actually what I thought was going to happen. Since we haven't nominated somebody, it hadn't happened. Senator HATCH. You pointed out that your February 28th memo is a revised version. Can you tell me how it differs-in what respect it differs from the original version and did Mr. Ickes review the original version and ask you to make changes and, if so, what changes? Mr. EGGLESTON. I was asked this earlier, and I'm pretty vague on this Senator DODD. Mr. Chairman, I interrupt. I think this is one area that, I think, does get into the scope question. I would just ask the Chair Senator HATCH. It does? Just let me limit it to the last part, then. Mr. EGGLESTON. It's not going to get into the scope because I don't remember the answer, I don't remember. I think that-my best recollection, which may not be accurate, is that Mr. Ickes looked at it, had a few more questions and asked me to add some stuff I don't remember what he asked me to add, and 1 don't have a copy of the unrevised version. I've looked in my files and I don't have them. Senator HATCH. Thank you for your indulgence, Mr. Chairman. The CHAIRMAN. Thank you. Senator Moseley-Braun. Senator MOSELEY-BRAUN. Thank you, Mr, Chairman. To this panel, I must say we were very fortunate to have so forthright a panel, given the fact that we were here so late last night and so I want to add my thanks and congratulations to the members of this panel for the testimony that you've given this afternoon. I'd like to pick up where Senator Roth left off. And actually put for the record, because I don't know, Mr. Chairman, if it was actually received for the record, the ethics memoranda issued by the Counsel for the President, Mr. Nussbaum-well, several of them, actually, that were issued-I'd like to have them received for the record and by that, I mean the February 22nd ethics memo, the 143 March 9 ethics, memo, the May 4th ethics memo and the follow-up of July 2.
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August 3, 1994 - Part 8
(19:15:50) The CHAIRMAN. Without objection, so ordered. Senator MOSELEY-BRAUN. Thank you. Senator Roth asked Ms. Nolan a couple of questions and I'd like to follow up because I think there may have been a little miscommunication about these memoranda. Specifically, on page 5 of the February 22nd ethics memoranda, prohibited contacts with agencies. When it talks about the Department of Treasury, the memoranda says "in light of the sensitive nature of matters before some of the component agencies of the Department of Treasury"it goes on to essentially say "any written or oral communication to the White House concerning pending investigations or cases must be directed to the Counsel to the President." And then it goes on. The policy does not provide, Ms. Nolan or I'd like your response-there was an implication in the earlier question that the policy prohibits contact by White House personnel with agencies of the Department of Treasury. And that is not I don't think that's the reading that I get from the context, the full context of these memos, and I would like to ask if that was your understanding. Ms. NOLAN. Yes, Senator. Generally, the memoranda, the four memoranda put together that you just mentioned provide that in certain cases, communications with the agency must go through the Counsel to the President or must be approved by the Counsel to the President. But they generally don't prohibit contact all together, I'd also-since we're on this topic, if I may-just say as part of the perils of answering questions that you haven't had a chance to research yet, I think I might have said that I thought criminal referrals were adjudicative, and I really think those are probably investigative matters rather than adjudicative. Senator MOSELEY-BRAUN. So with regard to that issue-that was going to be my second question, because there was some question about the response you had given earlier, specifically regarding RTC and Treasury procedures, and I think it's important for the record that that clarification be made. I would then ask the question with regard to the procedures, and I'm just going to ask a question, and I'd like your answers seriatim, or one at a time, with regard to your own involvements and contacts with the agencies we have discussed. Did you follow the procedures set out by the White House Counsel in these four memoranda? Ms. NOLAN. My contact with Mr. Foreman was initiated or re- quested by Mr. Nussbaum, and therefore, if it falls within the cat- at all, which I'm not sure it does, but if it does, it was cer- tainly authorized by the Counsel to the President. Mr. SLOAN. The answer is yes. Mr. EGGLESTON. For me, the same answer as Ms. Nolan. Mr. KLEIN. Same answer for me. Senator MOSELEY-BRAUN. All right. Mr. Sloan, with regard to--- received a phone call-you had a contact on the 29th of September with Ms. Hanson-actually, Mr. Eggleston and Mr. Sloan had a contact with Ms.-no, I'm sorry. Ms. Hanson grabbed Mr. .Nussbaum on the 29th of September, and he brought you, Mr. Sloan, into the conversation? 144 Mr. SLOAN. That's correct, Senator. Senator MOSELEY-BRAUN. Was that-you thereafter had a contact with her following that conversation on the 30th of September? Mr. SLOAN. That's correct. Senator MOSELEY-BRAUN. And the 6th of October? Mr. SLOAN. I think it's the 7th of October. Senator MOSELEY-BRAUN. Seventh of October. Did you advise or report to Mr. Nussbaum with regard to each of those contacts? Mr. SLOAN. Yes, I did. Senator MOSELEY-BRAUN. And then finally, with regard to the October 14th meeting, were the procedures of the--the White House procedures followed with regard to that meeting as well? Mr. SLOAN. Yes, they were. The request for the meeting was directed to Mr. Nussbaum, the Counsel to the President. I also received a call from Ms. Hanson saying that the press people had set up the meeting, and then I informed Mr. Nussbaum. He already knew about it. Senator MOSELEY-BRAUN. And with regard to the February 2nd meeting, were the procedures followed in regards to that meeting as well? Mr. EGGLESTON. That's probably-yes, well, Mr. Nussbaum attended the meeting and was notified about the meeting shortly before it took place.