August 4, 1994 - Part 3
August 4, 1994 - Part 3
(11:35:20) Senator ROTH. Are you aware that George Stephanopoulos called Josh Steiner, the Chief of Staff at Treasury, and complained about the hiring of Jay Stephens as Counsel on the Madison Guaranty case? Mr. MCLARTY. I am aware that Mr. Stephanopoulos called Mr. Steiner on February 25th. Senator ROTH. In fact, you talked to Stephanopoulos sometime after the call. In your deposition you testified that at a later time you asked Mr. Cutler to review this matter from the Counsel's Office. Is this correct? Mr. MCLARTY. Yes, sir, it is. I asked Mr. Cutler, as I said in my opening comments, to review these matters thoroughly, which he has done. Senator ROTH. Was that because you felt that the very first call that was made might have violated the Nussbaum ethics memo? Mr. MCLARTY. The very first call that was made, Senator? Would you please clarify that? Senator ROTH, Well when Stephanopoulos called Josh Steiner. Mr. MCLARTY. No. I asked Mr. Cutler to review all of the contacts as White House Counsel, which he has done. Senator ROTH. Because you felt there was a question as to whether they were in accord with the Nussbaum memorandum? Mr. McLARTY. Well I think in a broader sense they have become a matter of public inquiry, much like Secretary Bentsen directed the Office of Government Ethics and the Treasury. I followed a similar approach in the White House for Mr. Cutler coming aboard. Senator ROTH. Do you feel that kind of contact raised a question of violating the Nussbaum memorandum? 312 Mr. MCLARTY. It could have. And of course Mr. Cutler, Senator, as you know has rendered his report, as have the Office of Government Ethics, and Mr. Cutler will be here Friday, but I think Mr. Cutler concludes that this contact was understandable and no ethical impropriety was involved. That was his conclusion. And I believe the Office of Government Ethics reaches a similar conclusion in their report. Senator ROTH. How do you reconcile that with the memo which clearly states that any such contact should be made through the Office of the White House Counsel rather than from staff to staff? Does that not on the surface appear to be in conflict with the purpose of the Nussbaum memorandum? Mr- McLARTY. Senator, your point is well made, that any contacts with regulatory agencies that might be perceived as a contact regarding a matter under review or investigation, as Mr. Cutler did point out in his report, should be channeled through the White House Counsel's Office and, even better, as I said again in my opening comments, channeled Counsel to Counsel. I would note that most of the contacts did have White House Counsel involved, and many of course, as Senator Bryan or someone had suggested, were initiated by people at the Treasury. Senator ROTH. Now there was a similar joint call by Harold Ickes and George Stephanopoulos to Roger Altman at Treasury on February 25, 1994, complaining about the Stephens appointment. Does that not raise the same ethical question under the Nussbaum guideline? Mr. McLARTY. I believe that call was perhaps about the manner that Mr. Altman had chosen to recuse himself, Senator, if I understand the facts correctly. Senator ROTH. But the purpose of the Nussbaum memorandum was to be a guideline for all contacts between the White House and agencies where there were investigative, adjudicative, and similar regulatory matters before them, was it not? Mr. McLARTY. That is correct, Senator. Senator ROTH. Now I would like to turn briefly to another question There has been a lot of talk about something called a "de facto recusal" by Roger Altman in the Madison Guaranty case. Now it is my understanding, Mr. McLarty, you recused yourself from dealing with any issue since coming to Washing-ton from Arkansas-or let me put it this way. It is my understanding that during the Presidential transition you recused yourself from all RTC issues because your former company. Arkla, was a defendant in an RTC lawsuit? Is that correct?