The Most Dangerous Man In Washington

HUNTER AND QUARRY, KENNETH Starr and Bill Clinton came face to face one afternoon in April 1995. Starr and his team of prosecutors arrived at the White House and were ushered into the president's personal study. They had come for an unusual event--to question Clinton about the Arkansas land deal that gave the Whitewater investigation its name. The atmosphere was tense at first, sources tell NEWSWEEK, but Clinton was a gracious host. Showing his visitors around the room, he pointed out a bust, a painting of Lincoln and the table where Lincoln's cabinet met. Starr was keenly interested, and nodded approvingly. Here were two striving sons of the small-town South--Clinton of Hope, Ark., and Starr of Thalia, Texas--taking each other's measure. After a few minutes, they assembled around a table and the questioning began. One of Starr's deputies realized Clinton hadn't been sworn in--and passed the independent counsel a note reminding him to do so. When the session was over, Clinton shook hands with Starr. ""Feel free to walk around and see the Lincoln Bedroom,'' he said, and Starr did.

The polite exchange masked tensions that make Starr the most feared man in Washington--a special prosecutor whose wide-ranging investigative mandate could one day jeopardize the Clinton presidency. Whitewater has become much more than a probe of dealings between Bill and Hillary Clinton and their friends back in Arkansas. It is now a sprawling inquiry that has lasted nearly three years, cost $24 million and reaches into the White House itself. It is a tough slog, and Starr, who has been neither a criminal lawyer nor a prosecutor during his highflying legal career, candidly admits he doesn't like the job. But in an exclusive interview with NEWSWEEK, he also insisted that he and his staff are ""actively moving forward'' and are ""very far along'' in their pursuit of those he suspects may have broken the law.

STARR, IN SHORT, IS promising to deliver. But he realizes it won't be easy. After winning convictions against the First Family's long-ago Whitewater partner Susan McDougal, Starr and his staff hoped she would provide damning testimony implicating the Clintons in a variety of frauds surrounding the failure of Madison Guaranty Savings and Loan in Arkansas, a collapse that cost taxpayers $60 million. But Susan McDougal isn't talking, and Starr is becoming increasingly frustrated, not only at McDougal but at Democratic charges that his prosecution is a partisan witch hunt. He is undertaking an unusual PR campaign, giving speeches around the country defending his inquiry. And he granted NEWSWEEK extraordinary access, sitting for a three-hour interview and allowing a photographer to take behind-the-scenes pictures--raising his profile and drawing attention to his investigation into the Clintons. ""My message to all persons who have relevant information is come forward,'' he told NEWSWEEK. ""It's in the interests of the country.''

Despite the McDougal roadblock, Starr is moving on several fronts. NEWSWEEK has learned that within the next three months, he plans to decide whether to bring indictments that could very possibly alter the course of Bill Clinton's second term. Among the issues: Did White House aides obstruct justice in the handling of documents removed from the late Vincent Foster's office? Did Hillary Clinton lie about her role in the firing of the White House Travel Office staff? Did she seek to conceal her legal work on an Arkansas land scam known as Castle Grande? Did someone conceal the billing records of Mrs. Clinton's legal work for convicted swindler James McDougal's savings-and-loan documents that mysteriously reappeared in the White House family quarters in 1995? Did White House staffers use hundreds of confidential FBI background files to collect dirt on Republicans? Did Clinton himself participate in a conspiracy to obtain a fraudulent $300,000 loan?

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Given the explosive implications of these questions, it is only natural that Whitewater has become something of a blood feud. Clinton aides have been increasingly vocal about what they see as Starr's partisanship and ethical failings, and though Starr insists he has ""a thick skin,'' sources close to the investigation say he and his deputies are angry. ""My experience is, people who don't have anything to hide aren't out there attacking you,'' says Hickman Ewing, Starr's chief deputy in Little Rock. ""When you hear this sort of thing, it just makes you work harder.'' The White House's latest counteroffensive began when PBS anchorman Jim Lehrer asked Clinton if he thought Starr was ""out to get you.'' ""Isn't it obvious?'' Clinton replied. James Carville, the president's longtime political adviser, told NEWSWEEK he will mount an all-out ""public-education campaign,'' complete with direct-mail fund-raising and newspaper ads, to attack Starr as a right-wing Clinton hater. Though some White House aides don't like the idea--""I think it's dumb,'' said one--nobody is calling Carville off.

There is a lot to shoot at. Before becoming independent counsel, Starr agreed to represent a conservative women's group that was challenging the president's claim of immunity in the Paula Jones sexual-harassment suit. At a recent speech at the Detroit Economic Club, he smiled broadly as his host--a GM executive--introduced him as ""the troll'' under Clinton's ""Bridge to the 21st century.'' In October, he gave a talk at a luncheon sponsored by Regent University--and his host, evangelist Pat Robertson, is one of Clinton' most outspoken critics. Starr feels personally wounded by the attacks, and has taken to likening the Clintonites to the Nixon White House. In an address in Oklahoma City, Starr recalled that Nixon once ordered his staff to blast Watergate special prossecutor Archibald Cox for ""trying to conduct a partisan political vendetta.'' The implication is that what resulted then--the manipulative Nixon firing the noble Cox in the ""Saturday Night Massacre''--could happen between this president and this special prosecutor.

The irony is that Starr and Clinton in fact have much in common. Starr was born in north Texas, not far from Clinton's boyhood home in Arkansas. Both came from modest backgrounds, both pursued careers in law and politics and both are intensely ambitious. But there are crucial differences. Starr's father was a Church of Christ minister who presided over an austere household in which alcohol and profanity were not tolerated. This strict upbringing had lasting effects. Paul Cappuccio, one of Starr's law partners, recalls a meeting only last year at which Cappuccio said ""Goddamn.'' Starr took him aside to say, ""Now, now, Brother Paul. Don't use the Lord's name in vain.'' Planning to follow his father into the ministry, Starr enrolled at tiny Harding College in Searcy, Ark., where he spent two years and earned money selling Bibles door to door in the summers.

But Starr--who proudly recalls passing out leaflets in Texas for George Bush's 1964 U.S. Senate campaign--also had a strong interest in politics. In 1966 he transferred to George Washington University in downtown Washington and took a job on Capitol Hill with Texas Republican Rep. Robert Price. (These were the same years Clinton was at nearby Georgetown, and doing his own Hill apprenticeship for Democratic Sen. William Fulbright.) Already a conservative, Starr wore suits and ties to classes and supported the war in Vietnam. But he flunked a draft-board physical because of a chronic skin condition and did not serve. He went to summer school at Harvard, where he met his wife, Alice, and graduated from Duke University Law School in 1973.

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HIS LEGAL CAREER--LIKE Clinton's in politics--advanced rapidly. Starr clerked for Chief Justice Warren Burger, served as chief of staff in the Reagan Justice Department and became the youngest judge in the history of the U.S. Court of Appeals for the District of Columbia. In 1989 he was named U.S. solicitor general, the federal government's primary advocate before the Supreme Court. There his courtesy and eagerness to be liked earned him the moniker ""solicitous general.'' (Dressed in his ceremonial tailcoat, Starr once tried to chat up scraggly flag-burners he was to oppose in court.) Soft-spoken and scholarly, Starr was on the short-list for a Supreme Court vacancy in 1990 but lost out to David Souter. It was a bitter blow for Starr: he had been vetoed by hard-line conservatives who disagreed with some moderate positions he had taken on the Court of Appeals and as solicitor general.

In 1993 he went back to private practice with Kirkland and Ellis, a Chicago-based legal giant. Despite the burden of his job as independent counsel, he maintains a busy practice, earning $950,000 last year. He has been criticized for this work, particularly his representation of tobacco companies and a conservative foundation. Citing a legal loophole, Starr did not list his private clients on his most recent financial disclosure forms. (When NEWSWEEK asked Starr to release the names of his clients last week, he did so.)

Starr says there have been ""sensitive'' new developments at the Arkansas end of his Whitewater probe--the web of clubby business, legal and political relationships that led to the convictions of James and Susan McDougal and former governor Jim Guy Tucker. Starr refuses to provide details, and it's far from clear how much headway he and his staff have truly made. They have been confident before--so much so that they considered naming the president as an ""unindicted co-conspirator'' in the McDougal case. In the end they decided that was too risky a strategy. Their next best hope was flipping Susan McDougal, but that isn't happening. One of her brothers, Jim Henley, told NEWSWEEK that Susan was so ""humiliated'' by the hardball treatment she received from Starr's staff that she has vowed never to give evidence for the prosecution. Susan McDougal is now in jail for contempt of court for refusing to testify before the Whitewater grand jury. ""They're never going to get her to talk--not in six months, not in 18 months, not ever,'' Henley said. Starr is left with a poor substitute: Susan's ex-husband, Jim, who is talking to prosecutors but whose felony convictions, manic depression and memory loss make him a potentially unreliable witness.

Back in Washington, Starr is still trying to sift through allegations about the First Lady and the White House staff. He is, for example, now dealing with the consequences of his 1994 refusal to plea-bargain with former deputy attorney Webster Hubbell. If he had, critics say he might have had more leverage to persuade Hubbell to tell all he knew about Whitewater. Starr still suspects that Hubbell knows more than he is saying about an array of Clinton scandals, and may yet bring new charges.

There are plenty of other pending matters. One involves the Rose Law Firm billing records that detail Mrs. Clinton's work for McDougal's savings and loan. These computer printouts simply vanished when investigators were looking for them, and they stayed lost for nearly two years. Then they showed up in the White House family quarters--and the Clintons have never produced a credible explanation. Another issue is Travelgate, the wholesale firing of the White House Travel Office staff at a time when some friends of Bill and Hillary were trying to get the travel business. Investigators have a memo by a former White House staffer saying that Hillary Clinton was involved in the mass ouster--an assertion Mrs. Clinton has denied.

STARR HAS RESOLVED ONE MATTER: the Foster suicide. NEWSWEEK has learned that Starr has decided, after an exhaustive examination of the forensic evidence, that the White House lawyer in fact shot himself at Fort Marcy Park, Va. That is the same conclusion reached by the Park Police and by Robert B. Fiske Jr., Starr's predecessor as the Whitewater special prosecutor.

Ultimately, no one outside Starr's staff knows how strong the evidence may be against Mrs. Clinton--or any other member of the Clinton crowd. And no one besides Starr himself knows whether he is prepared to take the enormous step of filing criminal charges against a sitting president or his wife. Like Clinton, Starr is a complex, hard-driving personality who has his eye on history. ""Ken craves a certain level of acceptance, and he wants to be recognized . . . as a principal figure in the American legal establishment,'' one longtime friend says. Others say Starr has always been a cautious, detail-minded lawyer who likes to have his ducks in a row before pushing ahead--which in some ways is the very opposite of the way experienced prosecutors ply their gritty trade. So while Whitewater's outcome will depend on the strength of the evidence, Starr's character plays a crucial rule as well. This is gut-check time for a somewhat reluctant special prosecutor--and the nation will be watching the results.

In an exclusive interview, Starr on partisanship, the difficulties of his job--and what's ahead

NEWSWEEK: Is it reasonable that Whitewater should hang over the second Clinton term?

STARR: It's our duty to do our job as quickly as we can. What is the job? To fulfill the mandate we have been given. I think we have made very good progress. We can't just stop before we've gotten to the end of the process of understanding what happened.

Is there an end in sight?

It is extraordinarily difficult to predict, given where we are. Where are we? We are very far along. We've had the [Little Rock] trial and the convictions [of the McDougals and Jim Guy Tucker]. We have had developments since the convictions, but it is sufficiently sensitive that I don't think I should be speculating. But I have no intention of this going into the next millennium or anywhere near it.

Susan McDougal isn't cooperating with the investigation. Do you have a message for her?

My message to all persons who have relevant information is come forward. In the interest of the country.

Do you resent the fact that Clinton supporters, led by James Carville, depict you as a right-wing partisan?

I have a thick skin . . . The impugning of motives is as old as the hills.

Was it a good idea for you to contribute to your firm's political-action committee, which in turn contributed to the Dole campaign?

I did not know then and I never reviewed what the political-action committee does. I am a good partner of my law firm. I do what all partners in fact do at that firm.

Can you see how your speaking at Pat Robertson's Regent University would be troubling to some people? He is a vociferous political enemy of the president's.

Context is critical. I was invited by the dean to celebrate the 10th anniversary of that law school, several of whose faculty members I've known for a long time. I was asked to speak about the future of judicial decision making. Those are issues I love to think about. And so I spoke at a lunchtime gathering of lawyers, judges, students, faculty members, people from other law schools... It was the polite thing to do.

Are you enjoying this job?

No. It really is a burden to have to carry on in another jurisdiction [Little Rock]. I have a wife and children here [in Washington]. So that certainly is a form of personal hardship. That's affected the kinds of activities I would like to do. I have not coached Little League in two years. I don't teach Sunday school now. There are things I used to do and find personal satisfaction and fulfillment in doing that I do not do now.

Are you giving any thought to running for office?

Zero. Nada.

President Bush almost nominated you to the Supreme Court. Does that job still interest you?

I felt very honored to be considered. I have a basic philosophy of life, that Providence moves in the way it will move, and that is a source of great assurance to me. It really is.

Defeating Bob Dole may have been the easy part. Now the president, the First Lady and the White House staff are facing numerous ethics investigations, most of them controlled by special prosecutor Kenneth Starr. A look at the administration's potential troubles:

Whether then-Governor Clinton conspired to get partner Susan McDougal an illegal $300,000 loan from David Hale's federal lending agency.

Clinton, who says he lost money on the Whitewater land deal, denies wrong-doing and says accusations that he pressured Hale for money "are simply not true; they didn't happen."

Starr's inquiry, which has already led to convictions of the McDougals and former Arkansas Governor Jim Guy Tucker, is at a critical stage. "We are very far along," Starr says.

Whether Mrs. Clinton and other senior White House aides lied about their role in the 1993 firing of the White House Travel Office staff.

A sworn White House response to the allegations about the Travel Office fiasco said Mrs. Clinton "had no role in the decision to terminate the [Travel Office] employees."

A memo from former White House aide David Watkins said there'd be "hell to pay" from Mrs. Clinton if the staff was not fired. Starr will weigh the memo against the First Lady's word.

Whether the White House tried to hide Rose Law Firm billing records detailing the legal work Mrs. Clinton did for Jim McDougal's S&L.

They have no explanation of how the records, which were under subpoena since 1994, wound up in the White House family quarters, where a staffer found them in August 1995.

Investigators are trying to determine if the records, covered with the scrawlings of the late Vince Foster and Mrs. Clinton's fingerprints, were deliberately concealed in the White House.

Why White House staff members obtained 900 FBI background files, including records of high-rankings officials from previous GOP administrations.

The president called the incident a "completely honest bureaucratic snafu." But the White House placed the man in charge, Craig Livingstone, on leave, He quit a week later.

Starr, who is also investigating this matter, is looking into whether Mrs. Clinton helped Livingstone get his White House job and if Bernard Nussbaum covered up her alleged role.

Whether the DNC improperly raised large sums of money from East Asian sources in exchange for influence in U.S. trade and foreign policy.

Clinton admits that he met fund raiser John Huang at the White House and discussed Far East policy with donor James Riady, but the president says the talks did not influence policy.

Since the scandal broke, the DNC has returned much of the Huang-raised money, and Attorney General Janet Reno may name a special counsel to further investigate the matter.

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