August 4, 1994 - Part 5
August 4, 1994 - Part 5
(13:50:11) Senator FAIRCLOTH. Mr. McLarty, yesterday at the House hear- ings, Representative Leach said that there were some highly un- usual things that happened right around the time that the White House was given the September 29th "heads-up." At that time the usual practice for RTC investigators was for RTC investigators to send criminal referrals directly to the Justice Department. This was the policy; a criminal referral from RTC went straight to Jus- tice. Instead, they were sent to lawyers in Washington on Septem- ber 30th. The day after Jean Hanson gave the White House a "heads-up" that those referrals were coming to the Washington RTC office, RTC lawyers began what Representative Leach referred to as an unprecedented review of these referrals. RTC lawyers then delayed transmitting the referrals to the Justice Department for a week and they developed a legal analysis rejecting the personal in investigators' recommendation; in other words, the RTC lawyers went against their own people. They raised questions about the statute of limitation and double jeopardy for James McDougal Of Madison Guaranty Savings & Loan. A major effort was taken by RTC lawyers The CHAIRMAN. Senator Faircloth, excuse me. I don't want to interrupt you and that's why I've been listening carefully to what you say here. I think we're up against the scope problem here in terms of whether or not we're veering over the line. I don't say if we are that you are doing that intentionally but whether we're getting into any part of an active phase of the Special Prosecutor's investigation that he's asked us not to penetrate and so I'm concerned that we may be running that risk here. Senator FAIRCLOTH. Mr. Chairman, just let me ask the question, because I wanted to be up against the wall. I just didn't want to jump it. The CHAIRMAN. I understand. Senator FAIRCLOTH. They were worried about double jeopardy for James McDougal at Madison Guaranty Savings & Loan, A major effort was undertaken by RTC lawyers to debunk their own investigation. When the referrals were finally sent to the Justice Department, they went with an objecting legal analysis attached. RTC sent an objecting legal analysis from their own professional field investigators. Jean Hanson has apparently said she does not recall the events, but according to the Acting RTC General Counsel at that time, Glion Curtis-1 think that's the correct pronunciation-General Counsel at that time, Glion Curtis, said she was briefed. Mr. McLarty, according to Mr. Leach, the RTC lawyers in Washing-ton were trying to debunk the deferrals-referrals the day after the September 29th meeting. Now, White House meeting. Let me ask, were you aware of these events? The CHAIRMAN. Well, on this point, I think to ask the witnesses to comment on this, it's one thing I think for you to pose an issue that's in your mind or a concern that you have. I think to the extent that we now start to build an exchange here and put these questions to the witnesses and ask them to respond, we run smack into the injunction that we're-that we face of, I think, crossing the line into the area where there's an active investigation underway that we've been asked not to interfere with. I feel compelled to say to the witnesses at this point that, no matter how benign the answer may be or otherwise, that I don't think it's appropriate for us to engage in questioning on that right now since that is in an area that Mr. Fiske has asked us not to deal with at this point and which the Senate also has ruled out of bounds for us as I read our resolution. So if I may say, and I do that respectfully to the Senator from North Carolina, but I think you want to go right up to the line. I understand that. I think we're there. I think if they start engaging you in this line of discussion then we've gone over the line, and I can't permit that and I don't think you necessarily want that to happen either. Senator FAIRCLOTH. Well, my time is up. I've got one more quick question. Do you believe it would be significant if there was "heads-up" earlier than that which has been testified to here so far? Would that be a significant thing, Mr. McLarty? 347 348 Mr. McLARTY. Senator, I really honestly don't know how to re- spond to your question or your statement. It's obvious you know a lot more about these RTC matters than I do. And without studying a specific issue, I don't know how to respond to your question whether it would be significant or not.