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http://www.house.gov/reform/neg/reports/whodb/depositions/arnold.html
RPTS COCHRAN
DCMN KRISTOFFERSEN
EXECUTIVE SESSION
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C.
DEPOSITION OF: TRUMAN ARNOLD
Friday, July 18, 1997
Washington, D.C.
The deposition in the above matter was held in Room 2203, Rayburn House Office Building, commencing at 10:10 a.m.
Appearances:
Staff Present for the Government Reform and Oversight Committee: Barbara Comstock, Chief Investigative Counsel; J. Keith Ausbrook, Senior Counsel; Jay Apperson, Special Counsel; Jennifer Swartz, Majority staff; Kenneth Ballen, Minority Chief Investigative Counsel; Matthew H. Joseph, Minority Counsel; Kristin Amerling, Minority Counsel.
For MR. ARNOLD:
RICHARD BEN-VENISTE, ESQ.
Weil, Gotshal & Manges, LLP
1615 L Street, N.W., Suite 700
Washington, D.C. 20036
HOLLY LOISEAU, ESQ.
Weil, Gotshal & Manges, LLP
1615 L Street, N.W., Suite 700
Washington, D.C. 20036
DAMON YOUNG, ESQ.
Young & Pickett
P.O. Box 1897
Texarkana, Texas 75504
Also present: Representative Turner.
Ms. Comstock. Good morning. We will go on the record here for the deposition of Truman Arnold. On behalf of the members of the Committee on Government Reform and Oversight, I appreciate and thank you for appearing here today.
This proceeding is known as a deposition. The person transcribing this proceeding is a House reporter and notary public. I will now request that the reporter place you under oath.
THEREUPON,
TRUMAN ARNOLD,
a witness, was called for examination by Counsel, and after having been first duly sworn, was examined and testified as follows:
Ms. Comstock. I would like to note for the record those who are present at the beginning of this deposition. I am Barbara Comstock, the designated Majority counsel for the committee. I am accompanied today by Jennifer Swartz, who is also with the Majority staff. Ken Ballen is the designated Minority counsel for the committee, and he is accompanied by --
Mr. Ballen. Matthew Joseph.
Ms. Comstock. And other Minority staff present.
The deponent is represented by Damon Young and Richard Ben-Veniste, who is also accompanied by Holly Loiseau. And Congressman Jim Turner is also present here this morning.
Although this proceeding is being held in a somewhat informal atmosphere, because you have been placed under oath, your testimony here today has the same force and effect as if you were testifying before the committee.
If I ask you about conversations you have had in the past and you are unable to recall the exact words used in the conversation, you may state that you are unable to recall those exact words, and then you may give me the gist of the substance of any such conversation to the best of your recollection.
If you recall only part of a conversation or only part of an event, please give me your best recollection of those events and parts of conversations that you recall.
If I ask you whether you have any information about a particular subject and you have overheard other persons conversing with each other regarding it or have seen correspondence or documentation regarding it, please tell me that you do have such information and indicate the source, either a conversation or documentation or otherwise, from which you have derived such knowledge.
Before we begin the questioning, I would like to give you some background this morning about the investigation and your appearance here. Pursuant to its authority under House Rules X and XI of the House of Representatives, the committee is engaged in a review of possible political fund-raising improprieties, possible violations of law, and related matters under the committee's jurisdiction.
Pages 2 through 4 of House Report 105-139 summarize the investigation as of June 19, 1997, and encompass any new matters which arise either directly or indirectly in the course of the investigation. Also, pages 4 through 11 of the report explain the background of the investigation. All questions related either directly or indirectly to these issues or questions which have a tendency to make the existence of any pertinent fact more or less probable than it would be without the evidence are proper.
The committee has been granted specific authorization to conduct this deposition pursuant to House Resolution 167, which passed the full House on June 20, 1997. Committee Rule XX outlines the ground rules for the deposition.
Majority and Minority counsel will ask you questions regarding the subject matter of the investigation. Minority counsel will ask questions after Majority counsel has finished, and then questioning will continue in rounds.
Members of Congress who wish to ask questions will be afforded immediate opportunity to ask their questions at any time. When they are finished, committee counsel will then resume questioning.
Pursuant to the committee's rules, you are allowed to have an attorney present to advise you of your rights. Any objection raised during the course of the deposition shall be stated for the record.
If the witness is instructed not to answer a question or otherwise refuses to answer a question, Majority and Minority counsel will confer to determine whether the objection is proper. If Majority and Minority counsel agree that a question is proper, the witness will be asked to answer a question. If an objection is not withdrawn, the chairman or a Member designated by the chairman may decide whether the objection is proper.
This deposition is considered as taken in executive session of the committee, which means it may not be made public without the consent of the committee, pursuant to clause 2(k)(7) of House Rule XI. You are asked to abide by the rules of the House and not discuss this with anyone, other than your attorney, about this deposition and the issues and questions raised during this proceeding.
Finally, no later than 5 days after your testimony is transcribed and you have been notified that your transcript is available, you may submit suggested changes to the chairman. The transcript will be available for your review or your counsel's review at the committee office. If you need other arrangements, we can make those accordingly.
Mr. Young. I think we discussed that. It was my understanding we would make other arrangements.
Mr. Ben-Veniste. I understand you are willing to send us the transcript, since Mr. Arnold does not live in this area, so that he will not have to come here to review it.
Ms. Comstock. Right. The way we do that, since it is in executive session, we ask that you review it and sign an affidavit that you send it back without any copies being made to the committee, so that all the copies of it are maintained in the committee premises.
The Witness. Okay.
Mr. Young. That is agreed.
Ms. Comstock. Committee staff may make any typographical and technical changes requested by you. I may add, that will get us beyond the 5 days, and that is fine also, as we previously discussed.
Substantive changes, modifications, clarifications, or amendments to the deposition transcript submitted by you must be accompanied by a letter requesting the changes and a statement of your reasons for each proposed change. A letter requesting any substantive changes, modifications, clarifications, or amendments must be signed by you. Any substantive changes, modifications, clarifications, or amendments shall be included as an appendix to the transcript, conditioned upon your signing of the transcript.
Do you understand everything we have gone over so far?
The Witness. Yes.
Ms. Comstock. Do you have any questions about anything we have gone over so far?
Mr. Ben-Veniste. I would like to make a statement, if that is all right. First of all, Mr. Arnold is appearing here voluntarily without subpoena, and we appreciate your accommodating Mr. Arnold's schedule in doing that within the parameters of the time frame that you had requested.
I have a question, because I didn't catch it while you were reading the material you went through as to the jurisdiction of the committee and what you were looking into. I heard you mention fund-raising, but could you go back over that, please?
Ms. Comstock. Actually, I referred to a Rules report which encompasses a number of the areas of the report -- of the investigation, I am sorry. This is the House Rules Committee Report 105-139 that was referred to in the opening.
Mr. Ben-Veniste. And the subject matter into which you are inquiring?
Ms. Comstock. Do you want me to read through that?
Mr. Ben-Veniste. You summarized it in your prepared remarks, and I just didn't catch it all. If you would just go back over that, I would appreciate it.
Ms. Comstock. Possible political fund-raising improprieties, possible violations of laws and related matters within the committee's jurisdiction, and then the House committee report outlines a number of those areas to date which are summarized in House Committee Report 105-139.
Mr. Ben-Veniste. Okay. Could you point me to that, the highlighted section?
Ms. Comstock. It begins here on page 2 and goes through page 4, and then the background goes through page 4 through 11.
Mr. Ben-Veniste. Just the areas of possible illegalities. Okay.
Ms. Comstock. I just wanted to go through a few more ground rules also. If you don't understand a question, please say so, and I will repeat it or rephrase it so you do understand the question.
Do you understand that you should tell me if you do not understand the questions that I ask?
The Witness. Yes.
BY MS. COMSTOCK:
Q The reporter will be taking down everything we say and will make a written record of the deposition. You must give verbal, audible answers, because the reporter cannot record what a nod of the head or other gesture may mean. Do you understand that?
A Yes.
Q Thank you. If you can't hear me, please say so, and I will repeat the question or have the court reporter read the question to you. Do you understand that?
A Yes.
Q If you don't know the answer to the question, please say so. We are not asking for mere speculation or guesses. Please wait until I finish each question before answering, and I will wait until you finish your answer before I ask the next question. Do you understand this will help the reporter make a clear record because he cannot take down what we are both saying at the same time?
A Yes.
Q Your testimony is being taken under oath as if in court. Do you understand that if you answer a question, it will be assumed that you understood the question and the answer was intended to be responsive to it?
A Yes.
Q And as your counsel noted earlier, you are here voluntarily today; is that correct?
A Yes.
Q Do you have any questions before we begin?
A No.
Ms. Comstock. Congressman, did you want to have some questions this morning?
Mr. Turner. No, not at this time. Thank you.
BY MS. COMSTOCK:
Q Okay, if you could please state your name for the record?
A I am Truman Arnold.
Q Okay. And give us your home address.
A I live at [redacted]
Q Could you give us your work history from college forward?
A I graduated from college at Lamar University in Beaumont and was employed by Conoco in Houston, and after spending 3-1/2 years with Conoco, I formed my own oil business back home in Texarkana, and since that time I have had the same job, February 1964; I have been president and CEO of a private family company, the Truman Arnold Company.
Q Could you describe what your current position with that entails?
A I get to sign all the notes personally, twice. And we had a petroleum distribution company, wholesale marketing company, that operates in about 26 States in the Southeast. It also embraces seven general aviation facilities, known as fixed-base operations in the aviation industry, and have a chain of convenience stores that were sold in 1989, and since that time have been fairly active in investments, passive investments within the company.
Q Do you have any foreign business?
A No.
Q Do you have any government contracts?
A Yes.
Q Could you describe those?
A In the aviation business, we have government contracts at each airport facility that are bid to provide fuel, government fuel, to any government facilities passing through. We sell under contract to governmental entities on a bid basis in the States that we operate in. I don't know specifically; we bid them virtually daily or weekly, and they are public-bid type contracts.
Q Do you have any other government contracts?
A Federal Government contracts?
Q Yes, sir.
A I believe just in the sale of fuel would be the only ones that we have.
Q Do you have any business with Mexico or any partnerships?
A No.
Q How many employees do you have?
A We presently have approximately 300.
Q Can you estimate what percent of your business is government contract related?
A It varies, depending upon the contracts. They are usually short-term. But I would think on an annual basis it would be less than 2 or 3 percent. And that number may be 5. I am not sure what the number is. It is not what you would call significant. The total volume of the company is about 600 million in sales, and I would think that the sales would be less than $30 million on an annual basis, but I am not positive of that.
Q When did you first become involved in the Clinton-Gore campaign?
A It would have been maybe October of '91.
Q Could you tell us how you became involved?
A The President called me, and I have a second home in California, and he called me in California and asked if I would help him raise money in Texas, that he was considering a run for the Presidency. I agreed to participate with him at that time.
Q Did you know the President, President Clinton, prior to that?
A Yes.
Q When had you first met?
A It would have been when he was running for Attorney General, maybe like he was 28 years old. That would have been -- that would be 22 years ago, 22 and a half. He would have been --
Q In '78?
A '77-78, yes, when he was running for Attorney General. I think he was 26 years old or something; 27, 28 maybe.
Q And did you do fund-raising for him in that campaign?
A I participated. I was not a fund-raiser, but we had a mutual friend in Mr. McLarty. Mack McLarty and his family are lifetime acquaintances and friends of mine. And Mr. McLarty asked me to contribute to his campaign.
Q And you said you knew Mr. McLarty as a lifetime friend?
A Yes.
Q Your families were friends?
A Yes. Texarkana is 30 miles from Hope, Arkansas. Mack is 10 years younger than I am, but I knew his father. They were acquaintances and business associates.
Q And did you work with Mr. McLarty in any business deals over the years in the oil business?
A No. We sold them fuel. They were a car dealer and truck leasing business, so we did some business with them and they did some business with us, and it was just a business friendship, I guess you would call it.
Q And after the Attorney General campaign, did you continue to assist Mr. Clinton with any fund-raising over the years?
A Yes.
Q Can you describe that generally?
A Mostly contributed, helped to raise money in our region of the State for him, joined in with the local political operatives in our area and within the State to help him.
Q Would you work in the State when you --
A Just unofficially, just as a businessman and a volunteer.
Q You have a home in Arkansas?
A In Texas. Texarkana is a border city, so the route that I gave you is a Texas address, but the State line runs through -- it is a ranch, and the State line runs through the middle. So half of the ranch is in Texas and half is in Arkansas. I graduated from Texas High, and my wife graduated from Arkansas High. So it is a border city. You can't tell where the State line stops and starts.
Q Who did you work with in 1992 when you were working on fund-raising?
A I evolved into being the finance chairman for Texas for the campaign, and Gary Morrow was the State chairman.
Q Was he who you reported to?
A Mr. Morrow, yes. I was, as I say, a volunteer, so I worked closely with Mr. McLarty and Mr. Lindsey and my Arkansas friends.
Q If you could just give us generally some of the Arkansas friends that you worked with and that you have known over the years from your work with the Clinton campaign?
A How much time do we have? Arkansas is a small State, you know, and there may be 200 names in Arkansas that I would recognize that have been involved with the President through the years.
Q Why don't I go through a list and you tell me if you know them. It might be helpful.
A Okay.
Q Do you know Mr. Lindsey?
A Yes.
Q How long have you known him for?
A 20 years, maybe 15. Since he graduated from college and was on Senator Pryor's staff. I knew him at that time.
Q Marsha Scott?
A I have known Marsha, I have known her by reputation for a long time. I have known her socially since '92, the '92 campaign.
Q Mark Middleton?
A Since the '92 campaign.
Q William Kennedy?
A I just knew Mr. Kennedy casually, very casually.
Q Bill Burton?
A Since '92 -- well, really longer than that. He is from Texarkana. I may have known Bill for 15 years.
Q Nancy Hernreich?
A I have known Nancy for as long as she has been with Mr. Clinton, which I think is maybe 15 years. She was in the Governor's office.
Q The others I want to ask you about who are not Arkansas related, do you know Mr. Erskine Bowles?
A Yes.
Q How long have you known him?
A Since the '92 campaign.
Q John Emerson?
A Since the '92 campaign.
Q Harold Ickes?
A Since '95. 1995.
Q Were you involved in the Clinton Inaugural in 1993, in planning that in any way?
A No.
Q Were you involved in contributing or providing funds to the Inaugural?
A I was a contributor.
Q Did you raise help raise any money?
A It would have been within the context of the DNC and the Texas fund-raising. I don't recall raising money specifically for the Inaugural, but as a contributor to the DNC, part of that came within the benefits of the Inaugural. So I guess you could say -- maybe you could say that that is active in the Inaugural. I didn't have a specific position. I didn't raise money specifically for the Inauguration.
Q How long have you known Mr. Hubbell for?
A I have known of Mr. Hubbell since he was at the University of Arkansas and playing football there. I have known of him, his name. I met him through the years. That would be 25 years, 20 years -- over 20 years.
Q Can you describe your relationship with him over the years?
A Meeting him at political functions, knowing him politically, I guess you would say, up until '92 and '93. And then we became social friends and political friends.
Q Can you generally describe the nature of those social contacts?
A Just political events, social events in other peoples' homes, social functions in Washington.
Q And you have a home here in Washington?
A I did at one time, but I don't any more.
Q Okay. What time frame did you have your home here?
A I believe the House was bought in March, maybe March of '93, and was sold in maybe June or July of '95.
Q Did you have business in Washington at that time?
A With President Clinton's election, I was in Washington a lot at the time, and I was appointed to the National Petroleum Council by the Secretary of Energy, and that required some time to be here. And my wife was appointed to the Kennedy Center Board, and it was a part of our charity and required some time here. We were in and out of here a lot and bought the House for convenience.
Q Could you just tell me what the National Petroleum Council does?
A It is a quasi-governmental agency that is self-supporting, appointed by the Secretary of Energy, that consists of the major chief executive officers of, I believe, 250 petroleum companies represented, of all cross-sections of the energy industry, in an advisory capacity to the Secretary of Energy.
Q How often does it meet?
A It meets, I believe, twice a year, unless there are functional committees working. It meets spring and fall, and then if there are functional committees or studies under way, it would meet as needed.
Q Do you receive documents or records as part of that?
A Usually it is involved in studies, a requested agenda that the Secretary of Energy would put together for internal energy studies. One of the active once I was involved in was the 1990 Oil Pollution Act and the impact on the industry and the economy and the Nation as a whole.
Generally the Secretary of Energy, there's ongoing studies at the behest of the Secretary of Energy.
Q Did you receive copies of those studies?
A Yes.
Q And what would be your function in receiving those?
A As a member of the committee or a member of the working committee, the study committee, you were preparing the study. I was a part of preparing the study, and they are widely distributed, public information. They are distributed to all Members of Congress and the administration. Everything is public information. There is no proprietary information that the Council is involved in.
Q In the spring of 1993, in the first months of the administration, did you meet often with people at the White House?
A I would come and go. How often would be, I think you would probably have a log. I was in and out of the White House fairly regularly.
Q Who were the people that you would usually meet with?
A Usually people in Mr. McLarty's office, Mr. Burton, Mr. Middleton.
Q And for what purpose would you meet with them?
A I had evolved in an unofficial capacity as a liaison between the State of Texas and the administration for political appointments. Normally that is a function that the senior Senator performs and his staff performs, but with Senator Bentsen going on the Cabinet and a Republican Senator from Texas, we were left without a Republican Senator, and the dean of the congressional delegation later was defeated. So there wasn't anyone to carry the Texas mail, so I would sort of come in and ask about the appointments and keep a progress report for the Governor and for the chairman, the dean of the Texas delegation.
Mr. Ben-Veniste. I think you may have misspoke. "Left without a Democratic Senator," I think you meant to say. I think you said "Republican Senator."
The Witness. Okay. I didn't have a Senator. I didn't have a Senator left. Thank you.
BY MS. COMSTOCK:
Q Did you speak with them about any energy matters or petroleum matters?
A No.
Q Any other business matters that you had?
A Never of a personal nature, no.
Q During the spring of 1993, did you have any occasion to talk with Mr. Hubbell about any legal problems in his law firm in 1993?
A No.
Q During his confirmation process for associate attorney general, did you ever hear of any problems that he had related to the Rose Law Firm?
A I never discussed any with him.
Q Did you ever hear from any other source?
A Only what was in the press.
Q All right. I am referring to 1993.
A Yes, I think there was some press during that time. Whatever was in the press I knew. I knew of nothing other than what I read in the paper.
Q When did you first -- do you recall generally when you first heard of Mr. Hubbell having a dispute with his former law partners at the Rose Law Firm?
A I don't recall. Whatever public information there was on it.
Q So the first time you heard about it was in press reports?
A Yes.
Q Did you talk to him about that at any time after the press report?
A No.
Q Did you talk --
A Not during that time I didn't.
Q Did you talk with anyone at the White House about --
Mr. Ballen. Excuse me, Counsel. What time frame?
The Witness. 1993.
BY MS. COMSTOCK:
Q I am talking about now actually when you first learned that he did have some problems, which you pinpoint as when there were press accounts. I guess maybe we should move into 1994. March of 1994 is when he actually announced his resignation. I believe there were press reports prior to that time.
A Yes.
Q But at that time, so in the spring of 1994, did you speak with anybody at the White House about Mr. Hubbell's legal problems?
A My first discussion would have been --
Mr. Ben-Veniste. The question was with respect to legal problems.
The Witness. Yes.
The Witness. Would have been mid-to-late March of '94.
BY MS. COMSTOCK:
Q And what were the circumstances of those conversations?
A Mr. McLarty called me about Mr. Hubbell and said that he would be stepping down, and as a friend, could I put his name on the street, he is going to be opening a legal practice and consulting practice in Washington. He was choosing to stay in Washington, and if I knew of any Texas friends that might need counsel or consulting work in Texas, that he was available. And he said at that time that he was resigning because of the billing dispute, and he needed time to clarify that and clean his personal problems up so as not to bring any embarrassment to the President.
So within the context of legal with the White House, that is the first discussion I ever had with anyone about his legal, his Rose Law Firm.
Q Do you recall if that conversation was before or after Mr. Hubbell publicly announced he was resigning?
A It would have been within the same time. I don't know whether it was rumored in the paper whether it was officially done, but it was pretty much common knowledge during that time. It was on the street. It was in the press that he was leaving. Now, I don't remember when he officially resigned, what the dates were.
Q Did Mr. McLarty mention to you any other people who he had asked to help Mr. Hubbell?
A He said -- I believe he said, I think I will call Vernon, and I am calling some others. He may have mentioned Vernon's name at the time, or maybe I later learned it. But that is the only one.
Q Did he mention Mr. Mickey Kantor assisting?
A No.
Q Did he mention Harold Ickes assisting Mr. Hubbell at any time?
A No.
Q What did Mr. McLarty tell you about, if anything, about Mr. Hubbell's problems?
A Our conversation was just about as long as I have related to you, what I have already said.
Q Did Mr. McLarty mention any conversations that he had with the President about Mr. Hubbell's situation?
A No.
Q Did you ask him any questions about the situation?
A No, other than just I get a lot of referrals for jobs in my business and make referrals, so I just considered it as a referral and character reference for someone starting a practice here.
Q What exactly did he tell you that Mr. Hubbell wanted to do in the shop that he was opening up?
A We didn't get into that. He said, "If you want to talk to Web, you can talk to Web about it."
Q Did Mr. McLarty mention whether he spoke with anyone else at the White House about Mr. Hubbell?
A No.
Q Did he mention whether he talked with the First Lady --
A No.
Q -- about helping Mr. Hubbell?
A No.
Q Did he ever mention to you any meeting that there had been at the White House about discussing helping Mr. Hubbell?
A No.
Q Other than Vernon Jordan, then you were not aware of any other people that Mr. McLarty spoke to about helping Mr. Hubbell?
Mr. Ben-Veniste. To be clear about it, the testimony was, he said he would or might be calling Mr. Jordan. He didn't say in that conversation that he had done so.
BY MS. COMSTOCK:
Q Right. Did he mention anybody else? Did Mr. McLarty mention anybody else that he was going to --
A No.
Q Following this conversation, what was the next thing that you did, if anything, to follow up on the conversation with Mr. McLarty?
A As I talked to my friends, I would just put his name out to people who might have a need or I thought might have a need or an interest in a lobbyist or a consultant or an attorney in Washington whose business interests might be appropriate for him.
Ms. Comstock. I am showing the witness EOP 020325, a March 30th, 1994, letter to Mack McLarty from Webster Hubbell, and attached is a bio of Mr. Hubbell, which is 20326. I have another copy from your production that is a little different of this. I will give you both of them so you can look at both of them.
The Witness. Okay.
Mr. Ben-Veniste. Off the record.
[Discussion off the record.]
Ms. Comstock. Another copy of the same letter, March 30, 1994, is marked TA(H) 000001 through 2, which was produced by Mr. Arnold's attorneys.
Mr. Ballen. Can the Minority have a copy of that as well, please?
BY MS. COMSTOCK:
Q Do you recognize these letters?
A Yes.
Q What I am going to refer to is the one you produced, TA(H) 1 through 2. When you spoke with Mr. McLarty, did you ask him to provide you with that information?
A Yes, I obviously said, "Mack, send me a resume and I will put it on the street."
Q Did Mr. Hubbell call you during this time frame, in March of 1994?
A I am not sure when we first talked. It would have been subsequent to this, maybe early April. It seems that we had a conversation. I think I probably called him.
Ms. Comstock. We will make TA(H)1 Deposition Exhibit Number 1.
[Arnold Deposition Exhibit No. 1
was marked for identification.]
BY MS. COMSTOCK:
Q Earlier you said you spoke with some people about Mr. Hubbell. Did you share this biography with anybody?
A Yes, I would have probably -- some of them knew him. If asked, I think I may have sent it to one or two people. I don't recall. But I had it on file if they asked for it or needed it, or I probably offered, if you want it or need it. I may have sent it to others. I am not sure.
Q Did Mr. McLarty call you at any time after that initial conversation in March or so and prior to receiving this letter?
A I have talked with Mr. McLarty fairly frequent, maybe once or twice a week, maybe two or three or four times, maybe every day. He never called me specifically about anything with Web. He never called me to ask about progress or report back. There wasn't anything of that nature.
Q Did you ever discuss -- why don't we go back to, who did you discuss providing assistance to Mr. Hubbell to?
A There were a number of people just in the course of everyday conversations, because I talked to a lot of folks. So the ones I specifically remember are Mr. Rapoport, Mr. Reaud, Mr. Conn, who ultimately retained him, I think the record reflects. I talked to some others. I talked to two others who did not retain him.
Q And who was that?
A Total Petroleum and the First Commercial Bank of Little Rock, First Commercial Corporation.
Q And do you recall what you talked to Mr. Rapoport about?
A The same thing that I just stated: Web is going to stay in Washington, he is starting a legal practice and going to do some lobbying and consulting; if you have a need for Washington counsel or lobbying, he will be available. And I pretty much said the same thing, and they would say: What can he do? And I would say: Well, that is really between you and him as to what he can do. I think he wants to work on a retainer of some type. And somewhere along the way in the conversation, I had retained him, and I related they would ask for what are you going to do, and I related my relationship with him.
Q Okay. Did you tell them how much he was charging for a retainer?
A I told him what my arrangement was with him.
Q Okay. And that was?
A It was $3,000 a month for 6 months, a retainer of $18,000.
Q And what did you hire Mr. Hubbell to do specifically?
A To consult, to lobby, just to be available for what need I may have.
Q Who was he going to be lobbying?
A At that time it was unknown, whatever my company needs might be or my region of the State might be.
Q Would it be agency officials or Congress?
A He told me that he could lobby anyone but Justice under the terms of his resignation, the Government regulations on lobbying and access, whatever that is. I am not a lawyer, so I don't understand the terminology, other than the fact he said he could do anything but lobby Justice.
Q Did you have any specific tasks that you had in mind when you hired him to work on?
A We had some things that were important to our region, highways, major government projects that I thought might be helpful, river projects. I didn't know what would evolve.
Q Are you aware of any meetings that he had on any of those subjects that you have just identified?
A No, nothing evolved that I needed, either fortunately or unfortunately.
Q So you are not aware of him doing any work then for the retainer?
A I never asked him after that time. We never had anything to come up, and then his situation became such that, after about 4 to 5 months, that I would have been hesitant to have asked him for anything.
Q And why is that?
A Well, with all the public information about his possible indictment and his own personal situation accelerating, the public knowledge and the press, whatever is in the press. I think sometime after July and August, he became much more visible and his problems became larger.
Q How did you arrive at the $18,000 figure?
A I think he probably set the number. I asked him, and he set the number as a nominal fee to be available, and then if anything that I had would occupy more of his time or monopolize his time, we would have changed the structure.
Q Okay. From the production that we got from you pursuant to the subpoena the committee issued, you had no documents reflecting any work that Mr. Hubbell did; is that correct?
A That is correct.
Q Did he ever give you any phone reports or anything or discuss with you any possibilities of any work you might see for your company?
A It would have been something I would have asked of him, and so he didn't bring it up and I didn't mention it. I would see him during this period of time socially. He was a social friend, he and his wife are social friends of ours, but there wasn't anything that came up that I needed it for. There were a couple of possibilities, but they didn't come about.
Q Did you ever talk with him about what the possibilities were or what you envisioned him doing?
A Just in general, but I never asked him to do anything about them.
Mr. Ben-Veniste. Can we have a moment?
[Discussion off the record.]
BY MS. COMSTOCK:
Q Can you describe the -- strike that.
I am showing the witness TA(H) 5 which was produced to the committee by Mr. Arnold. It is a check request form for Web Hubbell for $18,000 for legal fees dated April 20, 1994.
A Yes.
Q Did you make this request, or somebody at your company?
A Yes.
Q And what had you told Mr. Hubbell about how you were going to be paying him?
A I think he mentioned the $3,000 a month, and rather than just write a check each month, when I met with him I just paid the whole amount up front.
Q And did you personally give him this initial retainer of $18,000?
A I am not sure whether it was mailed or whether I personally gave it to him. I don't remember.
Ms. Comstock. Okay. This will be Deposition Exhibit Number 2.
[Arnold Deposition Exhibit No. 2
was marked for identification.]
BY MS. COMSTOCK:
Q You said you had spent some time at social occasions with Mr. Hubbell during this 6 months where he was on retainer.
A Yes.
Q Did he ever discuss with you any of his building legal problem?
A No.
Q Did he ever discuss with you anything having to do with the Rose Law Firm?
A As these problems that I have alluded to earlier escalated in the press, I am not sure of the exact time frame, but it was late summer. He had told me earlier that it was just an internal billing dispute, that they were going to be able to resolve it with no problems. And then at some point in there, maybe -- as I say, it was in the paper, so the time line would be public information -- he said that his problems had escalated and it looked like he would not be able to resolve the dispute with the Rose firm.
Q Did he say why he wouldn't be able to resolve it?
A We didn't get into any details.
Q Were you aware of his having any conversation with the President about them?
A No.
Q Or the First Lady?
A No.
Q Mr. McLarty?
A No.
Q Or Bruce Lindsey?
A No.
Q Any other White House officials?
A No.
Q Were you aware of him talking with the President or First Lady's attorneys about these matters?
A No. And the lines get a little blurred, Ms. Counsel. At some point in time he discussed with me the options of defending himself or pleading. So some discussions came about, but my recollection is after our retainer and professional relationship had run out. So I am not being evasive; it was just the lines blurred as to exactly when some of these conversations took place.
I knew his problems escalated at some point in time, and my best recollection is that would have been in August or September. I know I didn't retain him again. My retainer would have run out somewhere around October. So at some time during late August, the public information was escalating, September, October, and then maybe I only learned of his indictment. I saw it on CNN, I think, around Thanksgiving. So I am not sure when I learned all of this information, but as his problems were escalating. We did discuss it, very infrequently discussed it.
Q So was there any discussion of extending the retainer prior to that information --
A No.
Q -- coming out publicly?
A No. If anything, any business, had evolved prior to that, we would have been happy to have extended it. Maybe I should add, until we knew of his criminal wrongdoing, we would have extended it.
RPTS WRIGHT
DCMN GALLACHER
Q What was your reaction to that when you learned of his plea in December of '94?
A I was shocked.
Q Did you discuss that with him?
A His discussion with me was that that was his best option, and that he didn't have the resources to defend himself, and that he thought for his family this was his best option, that the matter was far less than what he was pleading to.
Q Did you have any discussions with anybody at the White House about his plea?
A I don't remember any with anyone.
Q You never discussed it with Mr. McLarty?
A No. I think everyone was saddened -- only that -- I had no specific discussion with him. If somebody said, well, it's really bad about Webster, sorry to hear this about Webster, that type of situation, that may have happened with somebody, or Mr. Middleton, but that would have been the only one.
Q Did you ever discuss with Mr. Hubbell his cooperation with Mr. Starr or what he was doing in those months?
A No.
Q Why don't I return to the individuals you mentioned, the other individuals you said you talked to about hiring Mr. Hubbell. You mentioned Mr. Rapoport --
Mr. Ben-Veniste. Excuse me, Miss Comstock. I don't want to be picky, but for accuracy sake, these are people whom Mr. Arnold said he called about Mr. Hubbell.
Ms. Comstock. Yes, I'm sorry.
BY MS. COMSTOCK:
Q Mr. Rapoport was an overnight guest at the White House at or around early April of '94. Do you know if you met with him when he was here in D.C. to discuss Mr. Hubbell or if you talked with him on the phone?
A I talked to Mr. Rapoport sometimes every day, sometimes once a week. He makes a lot of phone calls. We talk to each other about a lot of things. He is a good friend and a very honorable man. And I didn't -- there is nothing in my record. I don't think I knew that he spent the night. It didn't surprise me he stayed over at the White House, he was a good friend of the President, but there wasn't any connection with anything with Mr. Hubbell. And after I spoke to Mr. Rapoport about Mr. Hubbell, well, then, whatever he did and they did was their own business; I never knew what the relationship was after that.
Q Okay. He has been reported to have said that you told him, we need to help Webb. Is that generally accurate as to what you said to him?
A It could have been. That is something he would say to me. He would call and say, hey, we have somebody coming down, we need to help. I don't know that that would be my words. It doesn't sound like -- I may have said, hey, Webb is available if you need anything. Mine is not one of aggressively -- mine is an approach to here is what is out there and, you know, it is not a personal favor to me to do anything. I don't think I ever said, we need to help, that may be his characterization of the conversation, but I would have said Webb has a family to support and he is trying to start a practice, and if you have a need or if you know of anyone who may have a need, no different than a personal recommendation for anyone that would be a friend.
Q And did you tell Mr. Rapoport how much you were paying Mr. Hubbell?
A He probably asked. I don't remember telling. Unless he asked me, I wouldn't have told him because I didn't know, you know, what his needs might be or what his interests may be with Mr. Hubbell. He probably asked me, you know, what are you doing, what are you going to do, and I would have told him.
Q And are you aware of any needs that he had for Mr. Hubbell, any kind of work that he was thinking of having Mr. Hubbell do?
A No. Mr. Rapoport has a very large business, an active business, and I never discussed his personal relationship, what his needs with Mr. Hubbell may have been or what his arrangement was.
Q Did there come a time when you learned that he had retained Mr. Hubbell?
A I think he told me he had retained him at a subsequent time, but I didn't know what the business arrangement was.
Q Do you have any knowledge of any of the work that Mr. Hubbell did for Mr. Rapoport?
A No.
Q And you mentioned you also talke |
