August 1, 1994 - Part 2
August 1, 1994 - Part 2
(12:20:30) Senator BENNETT. I understand that you were instructed by Joan Logue-Kinder to call Lisa Caputo at the White House in order to advise her that Susan Schmidt was interested in matters concerning Madison and Hillary Clinton. You believe that call occurred in late October. Is that correct? Mr. KATSANOS. Yes, sir. Senator BENNETT. In addition, you were told by Logue-Kinder that she did not want future editions of the Early Bird to mention Hillary Clinton, and that in mid-February, Howard Schloss of the Treasury also called you to direct you to, quoting from your deposition, "refrain from mentioning Roger Altman in any Early Bird items relating to Madison Guaranty." Is that correct? Mr. KATsANos, That is correct. Senator BENNETT. You said in your deposition that you stood up to Mr. Schloss and told him you would not follow those instructions unless you were given them in writing signed by Mr. Altman. Is that correct? Mr. KATSANOS. That is correct. Senator BENNETT. You also indicated that you did, in fact, make the call to the White House as pressured by Joan Logue-Kinder because you were concerned about your job. You were afraid that there might be reprisals taken against you. Is that a correct interpretation, Mr. KATSANOS. She was in a position that I felt could jeopardize had long- term employment safety Senator BENNETT. Sol you did make the call to the White House even though you had great misgivings about it. Mr. KATSANOS. I did make the call to the White House and I re layed simply the line of questions a reporter was pursuing. Senator BENNETT. But, in the case of Mr. Logue-pardon me-Mr. Schloss, you told him you would not respond to his direction unless you had instructions in writing from Roger Altman? Mr. KATsANos. That is correct, Senator BENNETT. Did you ever receive such instructions? Mr. KATSANOS. No, I did not. 35 senator BENNETT. Thank you. Now,, going back to your testimony, which I recognize is your perception, that Jean Hanson was running the legal department in the RTC. I would like to switch to Mr. Roelle for a moment. The law says that the General Counsel of the RTC shall be an employee of the FDIC. Is that correct? Mr. ROELLE. I'm not sure, sir. I'll accept that. Senator BENNETT. For the record, the citation that's given to me is 12 U.S. Code 1441A(b)(8)G that says "The General Counsel of the RTC shall be an employee of the IC." Was Ms. Hanson ever an employee of the FDIC? Mr. RoELLE. Not that I'm aware of senator BENNETT. Would you like to comment on the perception that Ms. Hanson, In effect, was the General Counsel of the RTC during that period? Mr. ROELLE. In effect, she bad an awful lot to say about RTC policy regarding legal matters. There was a dichotomy at the RTC once the Treasury, through Mr. Altman's appointment, became active. We were allowed internally for things, case-specific in most every instance, to make our own decisions. Most of the policy decisions, however, were vetted through the Treasury people that attended our meetings. Senator BENNETT. Thank you. I'll simply conclude, Mr. Chairman, with the same observation I made in my opening statement on Friday, which is that this Committee, prior to my arrival here, went to great lengths to ensure the independence of the RTC, even changing the law to make sure that the RTC would not, in fact, be an arm of the Treasury. I think what has come out of the depositions that we've taken and the testimony we've heard today is that this Administration has taken steps to move back in the other direction and turn the RTC into a politicized arm of the Treasury Department. Thank you. The CHAIRMAN. Senator Bryan. OPENING COMMENTS OF SENATOR RICHARD H. BRYAN Senator BRYAN. Thank you very much, Mr. Chairman. I, too, in my opening statement of last Friday raised some concerns about the structural relationship between the Treasury and the RTC and in had view, the untenable position that Mr. Altman was placed in, in effect wearing two hats. in addition to Mr. Katsanos, Mr. Ryan, you made a comment in Your opening statement to us, which indicates that there was certainly confusion in lines of authority, and the organizational structure in the RTC left something to be desired. I'm paraphrasing RYAN. Yes, sir, that's correct. Senator BRYAN. Mr. Roelle, you, too, have made comments with respect to the absence of the independence of the agency, saying 8 something deposition to the effect that the RTC did not in your operate independently of Treasury. Everything we do was cleared by Treasury You made that statement in your deposition.