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August 3, 1994 - Part 4
(15:05:33) But the one thing I ought to make clear, sir, is that the question was asked in a room of a hundred people listening to a seminar; it was extremely noisy. I think there were probably children there. This is the best of my recollection at that time. Senator BOND. Again, that's troublesome, but you contacted members of the White House Counsel's Office, Ms. Hanson's office and others, is that correct, in following up on the discussion you had with the President? Mr. LUDWIG. After having the question posed to me by the President, I wanted to give it considered attention. I could have been reflexive. I mean, the reflexive answer is I'm a regulator, I can't have any contact. But after all it was the President who posed the question to me. As a lawyer for many years, I wanted to give it considered attention. Senator BOND. Isn't that why you have the protection of an ethics officer in the agency? Doesn't that give you the cover? Nobody wants to tell the President no, but isn't that why you have an ethics officer, so you make somebody else the fall guy, or woman, if the case may be, to say no, to help you say no? Mr. LUDWIG. Well, I spoke to the lawyers. Jean Hanson is the Chief Counsel of the Treasury. She is the chief attorney to whom our chief attorney reports. It seemed to me that was the place to start. Senator BOND. But at that point, did she give you the advice not to carry it further? Mr. LUDWIG. As I say, sir, she was negative. As I remember it, she had a cautionary tone. She gave me minuscule advice or information about Madison. Senator BOND. Did she give you any specific ethics advice? 73 Mr. LUDWIG. No. As I say, she had a cautionary tone, but I do not remember a specific absolutely not or absolutely yes statement. She was cautionary. Senator BOND. But then even after having done that, you went ahead and made a follow-up call later on. After you said no improper contacts occurred, you made a follow-up call to Maggie Williams' office, and offered them your general advice. Mr. LUDWIG. Senator, it was clear to me if I were to get involved in a discussion with the President to give advice of whatever kind, I would have a tendency as a lawyer to want to know all the facts and circumstances and that can lead you into areas of impropriety or at least the appearance of impropriety. On the other hand, there are certainly some things one could say that clearly would violate nothing, that would be not inappropriate. It seems to me that giving the advice "disclose everything," which I did with Ms. Williams, not with the President, seems to me to be appropriate. Senator BOND. I think not only do lawyers have the problem of wanting to know all the facts, they want to give advice and I think that sometimes gets us into trouble. I'm not saying that there is anything wrong with your conduct, I would just say that this is why an ethics counsel, who can be the abominable "no" man, can be held in protection in these situations. But as I conclude, I would only note that really the tone of the contact to you, contact to you by the President is the one which has set the tone that I think has raised questions throughout this hearing. I appreciate your candor, and I would just say that there has to be a heightened sensitivity to the work and the role of ethics officers in the Federal Government, something different than perhaps in the private sector. The CHAIRMAN. Thank you, Senator Bond. Let me just say for the record that I'm now going to include in the record Mr. Ludwig's memo of March 11, his recusal memo of February 24th and the two F01A requests, number 1183 to 86. Let me also indicate to my colleagues on this side, I've talked to Senator D'Amato and other Senators have questions. They have completed their questioning at this point on this side so when we finish, we'll be able to go on to the next panel unless others indicate otherwise and want to be recognized. Senator Dodd. Senator DODD. Thank you, Mr. Chair-man.
August 3, 1994 - Part 4
(15:10:17) Let me pick up on Senator Bond's point. I think we may agree here. I don't think it's a question, frankly, of Government. I think it's also true of the private sector and nonprofits. Very few people around this place make any decisions any longer without calling the ethics office; and my fear is what we're doing, the notion of personal responsibility in both public and private life is being relegated to the decisionmaking of somebody else, and if somebody else says it's OK, whether or not we think it is, it becomes permissible, and that becomes the standard by which we conduct our affairs. I think that's permeating our society, and I think it's dangerous, So I think that's the point Senator Bond was making, at least in the sense of governmental affairs, but I think it's also true in other aspects of life as well. 74 Second, I want to underscore the point Senator Sarbanes was making about these recusal decisions. Senator Ben Nighthorse Campbell made the point earlier today in discussion with Secretary Bentsen that nobody wants to be responsible for anything and any way we can get out of making decisions, we do it. So 1 understand what your thinking was here, but we've got to put the brakes on this a bit or, you know, we're not going to have any decisions made. So I just want to underscore that point. I appreciate the fact you have, but as I look at this and look at your testimony today, I don't see any reason why you should have. But you've done it in my view, and I suspect it's done as the old CYA, and I won't explain what CYA is because we're on public airways and I think most of us know what we're talking about here. We just take ourselves out of the picture entirely and I worry about that. Third, I have no difficulty-it sounds to me that the contact with the President that-I just want you to reemphasize this point. It's your understanding, Mr. Ludwig, that the President of the United States asked you if it was proper for you to give him advice, not for the advice, Would you state again for us, because it's a very important point. It's been raised before. I think it needs to be emphasized. Are you clear about that? Mr. LUDWIG. Yes, sir, absolutely clear. The President asked me whether I could advise him, that is to say whether it would be permissible for me to advise him. My recollection is clear on this, and I don't think there's anything inappropriate in that. Senator DODD. I appreciate that. Now, with regard to these FOIA inquiries, you may have responded to this-but I thought I heard you say there was nothing to respond to in these inquiries. There was no information you had at the FDIC that would excuse me, that required response to The Baltimore Sun or The Washington Post. Mr. LUDWIG. I would guess, but I don't know, that the FDIC has responded to those inquiries. I've had nothing to do with them. Other than the fact that they were sent to me unsolicited, the only information or the only piece of paper I ever sent off was the inquiries themselves, not any documents, not any response to inquiries, just the public documents, the inquiries, which were, as I say, sent to me unsolicited. Whether the FDIC has responded to those inquiries or not, I don't rightly know. I think there's been some note in the paper that they have. Senator DODD. These were addressed to the FDIC, both of them were addressed to the FDIC? Mr. LUDWIG. Yes. They were both addressed to the FDIC. Senator DODD. There was no request in here that you pass these on to the White House. You made that decision on your own. Mr. LUDWIG. I made that decision on my own. Senator DODD. I'm sure you endeared yourself to the White House in retrospect by sending these along. Would you admit, and I say this with respect, this was a pretty dumb idea to send these to the White House? It's not a hard question. it Mr. LUDWIG. As I say, they were public documents that I didn't have anything to do with Senator BOXER. Would the Senator yield to me for a second? 75 Senator DODD. Yes. senator BOXER. It is my understanding that if an individual is the subject of a FOIA request, that that individual can find that out. So if an ordinary citizen can find out this information, does the President gives up the right to be an American citizen? Senator DODD. These weren't directed to the President. They were directed to the FDIC. Senator BOYER, The agency that gets the FOIA request can inform an American citizen if there has been such a request.
Five male Dancers in turbans
Five men in turbans stand in front of building possibly in Kutch or Rajasthan. Men dance with hand cymbals and which are decorated with a long tassel of red. They dance creating more interest in their movement their movements not always co-ordinating. Mostly always a wide frontal shot. END 01:05:34 Section of film removed for client transfer. Remainder of roll transferred later on this master tape.
Kashmiri men "dance-march"
Brief mountain landscape with path coming down 01:05:40 Not formally attired but in the traditional garb of kurta-pajama (long shirt and loose pants) group of men in file of circular formation begin to dance with arms above heads. They are walking in what looks like a lumberyard. END 01:05:52 Section of film removed for client transfer. Remainder of roll transferred later on this tape.
Old couple in Garden
Old couple walking in flower garden, woman points at something. They go across as if looking for something. 01:06:10 Repeat take: Start from initial position. The couple stand to one side and the woman points at something. She starts to walk towards the direction where she pointed. The man follows. They both stand and watch. Section of film removed for client transfer. Remainder of roll transferred later on this tape.
Woman in Kitchen and Marionette
Woman in apron washes potatoes in kitchen sink and fills pot to cook them; gets approached by odd-looking marionette puppet (looking like a space alien with strings attached), who apparently tells her to add less water. Talk about cheesy... but fun. 01:07:09 CU container of salad greens, woman starts making salad, then turns on big boxy radio, dancing a little bit to the music. Shot shows hands and vegetables with wooden bowl. Pan to space alient puppet (marionette) dancing on stove. Camera pans again to woman's hands making salad
Fruit crates and gift baskets on assembly line
Fruit crates and gift baskets moving down assembly line, grapefruit & citrus wrapped in paper Section of film removed for client transfer.
Kids Wrestling . Section...
Kid jumps and grabs the other kid from behind a bench. They both roll around on the bench wrestling without much violence. Clean cut blonde and in white T-shirts and jeans they seem to be foolin around. The first boy turns around and we see him smiling. 01:09:42 They enact the whole take again END 01:09:51 Section of film removed for client transfer.
Orchids
Vanda OrchidHonolulu in backyard
Orchids
Orchid Tree
Pond Lilies & Misc.
Pride of Barbados
Pond Lilies & Misc.
Cat-tails(Chenille)
Pond Lilies & Misc.
Miscellaneous Flowers
Pond Lilies & Misc.
Flowers
Pond Lilies & Misc.
Red Water lilyLong shot of pond
Pond Lilies & Misc
Single Red Pond Lilly
August 3, 1994 - Part 4
(15:15:06) Senator DODD. My point is, if you had to do it over again, would you send them down here? Mr. LUDWIG. I don't know, Senator. They were public documents. I had nothing to do with them. I want to emphasize that I checked with our counsel to make sure that they were public documents, and I'm not sure how I would Senator DODD. I'm not going to dwell on it, but it seems to me, the kind of transmissions of those things-lastly, I was intrigued going back to the inquiries that you made, and it sounded to me like you did the right thing calling various people to determine whether or not the questions, and inquiries to you were something you could respond to and you talked to a number of people. You mentioned you talked to Jean Hanson at the Treasury Department, and I'm particularly interested in that conversation. We've had a lot of talk up here the last several days, as you are no doubt aware, about Ms. Hanson. Now, as I understand it here, she seemed to have some reservations and cautioned you against giving the President advice on this matter. That's your testimony; is that not correct? Mr. LUDWIG. Yes, She had a cautionary note in her voice, as best I can recollect, and then suggested that I speak with Bernard Nussbaum, the Counsel to the President. Senator DODD. This was sometime between Christmas and New Year's 1993? Mr. LUDWIG. This was just prior to New Year's 1993. Senator DODD. Did Ms. Hanson say to you that at any point before I talk to you, I may have to check with someone here in the Treasury Department? Was there any reluctance on her part to discuss this issue with you? Mr. LUDWIG. As best I recollect, she didn't seem to know a great deal about the facts, Senator DODD. That was not my question. Was she reluctant in any way to discuss this matter with you? Mr. LUDWIG. It was such a brief conversation and really the import of which was to pass me on, more than anything else, to Mr. Nussbaum. Senator DODD. Did she seem reluctant to talk to Mr. Nussbaum? Did you get any indication she knew Mr. Nussbaum fairly well, that she was comfortable making that suggestion? Mr. LUDWIG. No. It was a very brief conversation, and I had a feeling she was uncertain as to who to speak with and passed me on to Bernard Nussbaum, that she said just to call him. Senator DODD. Mr. Chairman, thank you. The CHAIRMAN. Senator Bond. 76 Senator BOND. Just a couple quick follow-up questions. I was going over notes as you were talking. You mentioned having reviewed the testimony of Mr. Sloan; is that correct? Mr. I did not review the testimony of Mr. Sloan. I don It think I said that. Senator BOND. I wrote down, that you said you read the deposition of Mr. Sloan. Mr. LUDWIG. Oh, no, I never said I read the deposition of Mr. Sloan. I am aware that Mr. Sloan was deposed--either from the newspaper or- I'm not sure where-maybe it was because at my deposition, Counsel to the Majority or Minority inquired of me in respect of Mr. Sloan's recollection. I think that was it, But I certainly have never read Mr. Sloan's deposition or testimony or anything like that. Senator BOND. I just wanted to check on that. And one final point, when the President spoke with you briefly in that crowded room, do you recall him saying anything about a op-ed piece? Mr. LUDWIG. I don't recall that, sir. Senator BOND. Thank you, Mr. Chairman. The CHAIRMAN. Senator Shelby. Senator SHELBY. Mr. Ludwig, your current job now, and was when you were at Renaissance Weekend is, Comptroller of the Currency? Mr. LUDWIG. Yes. Senator SHELBY. As Comptroller of the Currency, you're the top regulator of the national banking system, are you not? Mr. LUDWIG. Yes, sir. Senator SHELBY. And before this, you were an active lawyer in Washington, DC dealing with banking regulation work, were you not? Mr. LUDWIG. Yes, sir, Senator SHELBY. Before you were nominated and confirmed for that? Mr. LUDWIG. Yes, sir, I practiced banking law and did some teaching in this area. Senator SHELBY. Adjunct professor. Mr. LUDWIG. Yes, that sort of thing. Senator SHELBY. Where did you teach? Mr. LUDWIG. I gave lectures at Harvard I Yale and Georgetown. Senator SHELBY, In regulatory law? Mr. LUDWIG. Banking regulatory matters. Senator SHELBY. Now, you knew the President of the United States. I'm not saying you knew him from-you've known him since you were 5 years old and so forth, but you went to Oxford with him and you went to Yale Law School with him. Mr. LUDWIG. Yes, sir, I did. Senator SHELBY. And you were involved, to some degree, in his presidential race. Mr. LUDWIG. I was, sir.
August 3, 1994 - Part 5
(15:47:10) Hearing host NINA TOTENBERG segues back to Senate Hearings: Do you swear the testimony you're about to give is the truth, the whole truth and nothing but the truth, so help you God. The WITNESSES. I do. The CHAIRMAN. I understand that Mr. Klein is the senior person at the table that you have a statement that you want to make 86 and then some of the others-I gather some of the others may have as well. Mr. Eggleston, do you have one? Mr. EGGLESTON. I do. The CHAIRMAN. Mr. Sloan? Mr. SLOAN. Yes. The CHAIRMAN. Ms. Nolan? Ms. NOLAN. I do. The CHAIRMAN. You all have statements, so we'll start with you, Mr. Klein, and we'll come down the table. TESTIMONY OF JOEL 1. KLEIN, DEPUTY COUNSEL TO THE PRESIDENT Mr. KLEIN. Thank you, Mr. Chairman. Mr. Chairman and Members of the Committee, my name is Joel Klein and since December 1, 1993, 1 have served as Deputy Counsel to the President- first under Bernard Nussbaum and then under Lloyd Cutler. My only direct involvement in any of the socalled White House-Treasury contacts relates to the matter that Mr. Ludwig just testified about. In late December of last year, my family and I were attending a Renaissance Weekend in Hilton Head, South Carolina, at which the President was also in attendance. At about 4:00 p.m, on December 30th, I received a call' from Associate White House Counsel, Neil Eggleston, who stated that Eugene Ludwig, the Comptroller of the Currency, had called Cliff Sloan, also an Associate White House Counsel, and requested information concerning the Whitewater/ Madison Guaranty matter, indicating that the President had asked to speak to him about it. Mr. Eggleston said he and Mr. Sloan thought that even though Mr. Ludwig was not involved in the matter, it would be better that the President not talk to Mr.Ludwig, given his position as Comptroller. I agreed and told Mr. Eggleston that I would take care of it. I then went to see the President who was at the time at a Renaissance session and after the session I took him aside and I said that my office had been called and had indicated to me that Mr. Ludwig had requested information so that he could talk to the President about Whitewater. The President responded to me that Mr. Ludwig must have misunderstood him because he had only wanted to ask for the names of people knowledgeable in banking I and real estate who might be able to explain Whitewater to the public in simple terms.
August 3, 1994 - Part 5
(15:55:37) I also participated in the February 2, 1994 meeting with Mr. Altman and others in the White House. During that meeting, I learned nothing whatsoever about the substance of the RTC civil investigation into Madison. The meeting principally concerned the procedures the RTC would follow in deciding whether to bring civil actions or to seek a tolling agreement to prevent the running of the then-applicable statute of limitations. With regard to the subject of Mr. Altman's consideration of the recusal issue, I recall that was discussed during the meeting, and I recall that three points were made. First, that if Mr. Altman had a legal or ethical obligation to recuse himself, he would do so immediately. Second, that regardless of whether he formally recused himself, he was going to be recused de facto since he stated that he would follow whatever recommendation was made to him by the career officials at the RTC. And third, at the conclusion of that meeting, the decision of whether Mr. Altman should or should not recuse himself was left entirely up to him. Finally, with regard to the February 24, 1994 RTC oversight hearing before this Committee, I participated with others in the White House in an effort to ensure that Mr. Altman give a full account of the White House-Treasury contacts. Mr. Chairman, I have been subject to a deposition of more than several hours duration by the staff of this Committee, and I have discussed with them in that deposition in great detail my knowledge of the White House-Treasury contacts. I am prepared to answer any questions that any Member of this Committee may have of me. Thank you , sir. The CHAIRMAN. Thank you, Mr. Eggleston. Mr. Sloan, CLIFFORD M. SLOAN, ASSOCIATE COUNSEL TO THE PRESIDENT Mr. SLOAN. Mr. Chairman and Members of the Committee, MY name is Clifford Sloan. I want to thank you for the opportunity to appear today before this Committee. I have been an Associate Counsel to the President since June 1993. In the course of my duties in the White House Counsel's Office, I was contacted by officials of the Department of the Treasury connection with press inquiries and interest in Madison Guaranty I Savings & Loan. These conversations consisted of a brief mention 89 by Jean Hanson, the General Counsel of the Treasury, after a meeting at the White House on a different subject on September 29, 1993; a few subsequent telephone calls from Ms. Hanson in the days thereafter; and a meeting of White House and Treasury officials on October 14, 1993. A few months later, on December 30, 1993, the Comptroller of the Currency, Mr. Eugene Ludwig, also called me briefly concerning Madison. As I know you are aware, I recently spent several hours in a deposition with both the Majority and Minority staff of this Committee, answering their questions about this matter. And of course, I will be happy to answer any questions here today as well. Before I do so, I would like to make just a couple of brief points. Neither I nor anyone else in the White House ever sought to influence or even to comment upon the decision to refer the Madison matter to the Justice Department for further investigation, nor did I or any White House personnel ever seek to influence or comment about the manner in which the referral was worded or who was mentioned in it. Likewise, to my knowledge, no Treasury or RTC official ever sought or invited any comment by the White House at any time about whether a referral should be made or what form it should take, From the first mention of the Madison referral by Ms. Hanson on September 29, each of these conversations was in the context of actual or potential press interest in the matter. I will be happy to help the Committee in any way I can. Thank you. The CHAIRMAN. Thank you very much, Ms. Nolan, we'd be pleased to hear from you now. sBETH NOLAN, ASSOCIATE COUNSEL TO THE PRESIDENT