Whitewater Hearings August 1, 1994 - Part 1
Whitewater Hearings August 1, 1994 - Part 1
(11:00:23) I believed, and continue to believe, that the overriding goal is to Pursue in a cost-effective, tenacious, and fair manner the best cases that can be brought against those whose behavior was egregious. I The RTC must bring those suits which are cost effective. It is not charged with punishing wrongdoers or prohibiting them from participating in the banking industry. That is the responsibility of other Government agencies, Overwhelmingly, those I have worked with closely in the legal division since I have come on board have exhibited extraordinary commitment, integrity, and talent. Preserving the legal division's ability to maintain the staff it needs to do its remaining work and 8 to keep morale high is one of the most important and challenging tasks I face. Thank you. The CHAIRMAN. Thank you very much. I understand, Mr. Roelle and Mr. Katsanos, that you do not have opening statements. Mr. ROELLE. That's correct. Mr. KATSANOS. Yes, The CHAIRMAN. Very good. I'm going to start, then, with you, Ms. Kulka. First of all, I think your late husband gave you good advice to come back into public service and I appreciate your statement that you've just given to us. Now, I think I should explain that all of you have earlier been cross-examined in a deposition by attorneys, and so, you've made statements prior to today. Part of what we will do is review some of those statements you made earlier. Let me start with you in that regard. I want to lay a foundation for some questions that I want to pose to you. On February 2, 1994, you were the Chief Legal Officer at the RTC. Is that correct? Ms, KULKA. Yes. The CHAIRMAN. Also on that date, February 2, 1994, you were the senior lawyer in charge of the overall investigation and evaluation of Madison Guaranty matters for the RTC. Is that correct? Ms. KULKA. That's correct. The CHAIRMAN. Also on February 2, 1994, did you then understand that the President and the First Lady, in their individual capacities, might be subject to a civil lawsuit brought by the RTC? Ms. KuLKA. I understood that their names bad been mentioned in connection with Madison Guaranty and that there were transactions involving a corporation they had a participation in that was connected with Madison Guaranty. The CHAIRMAN. Now, on February 1, 1994, did you brief Roger Altman, who then was the Interim CEO of the RTC, about the specific status of the case preparation of the Madison case? Ms, KULKA. I don't recall the exact dates when I bad meetings with Mr. Altman that would have dealt with Madison. But it is the case that, early in February, I did meet with him and discuss procedural aspects of the case. The CHAIRMAN. What about the specific status of the case preparation? Ms. KuLKA. What I discussed with Mr. Altman related to the effect of the extension of the statute of limitations as it was enacted in the Completion Act that was effective December 17, 1993, and any claims that might arise out of the Madison Guaranty failure, because Madison Guaranty had been taken over by the Federal Government, essentially, and a receiver appointed in February 1989, the statute of limitations having run in 1992. 1 understood the effect of the extender that was provided by the Completion Act meant that, with respect to claims that were fraud or intentional misconduct, there would be a retroactive reopening of the statute of limitations from the period in 1992, when it had originally run with this institution, and that it would again expire with respect to any claims that could be made with this institution 9 in February, again, the end of February 1994. 1 discussed that and other aspects of bringing a case by that date with Mr. Altman. The CHAIRMAN. Our information indicates that discussion, in all likelihood, was on February 1, 1994, but you indicate it was early in February. This question then becomes, I think, an important one. When you had that meeting with Mr. Altman about this case, did you make it clear that you were not yet ready to make a decision on the case, the agency was not ready, and that it was unlikely that you would be able to have as much information as you would need to have before the February 28, 1994, statute of limitations would expire? Ms. KuLKA. No. The CHAiRmAN, You did not say that. Ms. KULKA. No. The CHAIRMAN. All right. Now, on February 1, 1994, did Roger Altman inform you, or the date of this meeting, which we think was on that date, that he was going to the White House on February 2, 1994, to explain the information that you'd given to him? Ms. KuLKA. No. The CHAiRmAN. You bad no knowledge of an intention on his part to do that? Ms. KULKA. I had no knowledge of his having gone to the White House or of any intention to do so witb respect to anything on this sub ect until the question and answer session that we were conducting with Mr. Altman immediately prior to the Oversight Board hearing held by the Senate in late February.