Time: Thu Dec 04 05:19:56 1997 To: From: Paul Andrew Mitchell [address in tool bar] Subject: SLS: Kantor Questioned about Hubbell before Grand Jury (fwd) Cc: Bcc: sls References: <snip> > >http://www.latimes.com > >Los Angeles Times >Wednesday, December 3, 1997 > >Kantor Questioned About Hubbell Before Grand Jury > >Ex-Cabinet member is asked why Clinton aides arranged assistance for >official after he left Justice Department. > >By DAVID WILLMAN, Times Staff Writer > >WASHINGTON--Former Clinton administration Cabinet member Mickey Kantor >was questioned before a grand jury Tuesday by prosecutors investigating >why top aides and supporters of the president arranged financial >assistance for Webster L. Hubbell after Hubbell resigned as the No. 3 >official in the Justice Department and came under investigation in the >Whitewater affair. > Kantor, a prominent lawyer in Los Angeles before joining the >Clinton White House, has acknowledged soliciting trust fund >contributions to pay for the private schooling of Hubbell's youngest >children and helping to land two separate jobs, one within the >administration, for Hubbell's son. > Kantor did not return phone calls seeking comment after his >testimony, which lasted more than two hours. > Kantor's appearance came as new fallout emerged regarding a >disputed consulting engagement that Hubbell won three years ago with the >city of Los Angeles. The deal was one of more than a dozen that Hubbell >obtained in 1994 after he resigned from the Justice Department. > Los Angeles City Controller Rick Tuttle has been called to testify >Thursday about the deal before the Whitewater grand jury in Washington. >His office issued a report in June that concluded Hubbell won payment of >$24,750 from the city after submitting a "materially false" account of >his work. > Tuttle said he was questioned in Los Angeles as recently as two >weeks ago by staff of independent counsel Kenneth W. Starr regarding the >city's engagement with Hubbell. > The fact that he has now been subpoenaed to testify before the >grand jury, Tuttle said, indicates that Starr's staff is weighing >whether to prosecute Hubbell in connection with the Los Angeles deal. > "My basic position is [Hubbell] defrauded the city," Tuttle said in >an interview. > The Los Angeles city attorney's office has formally sought >reimbursement of the money from Hubbell, according to sources familiar >with the matter. The city Board of Airport Commissioners has scheduled a >discussion of the issue for Thursday as an item of "anticipated >litigation." >* * * > People with knowledge of the situation told The Times that Hubbell, >through his lawyers, has offered to make restitution. If the airport >board approved the proposed settlement, Hubbell, who reportedly received >a $400,000 advance for a just-published book, might be able to offset >some of the outrage that prosecutors would hope to convey to jurors in a >criminal case. > Reached for comment, Senior Assistant City Atty. Breton K. Lobner >said the city controller's report recommended that municipal lawyers >consider seeking recovery of the money. > "What we're doing on Thursday is in line with that," he said. >Lobner would not comment on any proposed settlement. > Among the unanswered questions is whether Hubbell would be forced >to pay not only the $24,750, but also the costs of the city controller's >investigation. > Any settlement with Hubbell would probably further inflame city >officials' relations with Starr, whose staff is continuing to >investigate whether any of Hubbell's deals were orchestrated to >discourage him from providing damaging information about the Clintons. A >deputy to Starr wrote City Controller Tuttle almost a year ago, >requesting that he refrain from interfering with the independent >counsel's investigation. >* * * > Hubbell, who until coming to Washington in 1993 had been a law >partner of First Lady Hillary Rodham Clinton in Little Rock, Ark., >pledged to cooperate with the Whitewater investigation when he pleaded >guilty Dec. 6, 1994, to fraud and tax evasion. The charges stemmed from >Hubbell's bilking of $482,410 from his former law firm. But Hubbell's >inability to recall details of certain transactions at the heart of the >Whitewater investigation frustrated Starr, who recommended that Hubbell >receive no leniency in sentencing. > The deals and consulting work obtained by Hubbell after his >resignation brought him about $500,000. > Kantor said last spring that whatever help he extended was offered >solely out of friendship. > Kantor, who first served in Clinton's Cabinet as U.S. trade >representative and then as Commerce secretary, solicited money for the >Hubbell children's education. Kantor also gave Hubbell's son a summer >job at the trade representative's office just weeks after the elder >Hubbell left the Justice Department to face criminal investigation in >1994. Kantor later helped secure the son a full-time job with the >Federal National Mortgage Assn. > Kantor has insisted that he played no role in securing any of the >varied consulting deals won by Hubbell in 1994. > However, White House Chief of Staff Erskine B. Bowles has said he >began making phone calls to associates who might hire Hubbell on the >basis of a conversation he had in the spring of 1994 with Kantor. And >Hubbell, in his new book, said Kantor was among those with whom he >conferred as he left the Justice Department on April 1, 1994. > Hubbell also wrote that as he and his lawyer struggled to find a >way to avoid his resigning in the spring of 1994, he conferred >repeatedly with Kantor. It was Kantor, Hubbell wrote, who informed >Clinton on March 14, 1994, that Hubbell was announcing his intention to >resign. > Hubbell, who was in the Los Angeles area Tuesday promoting his >book, was not available for comment. > Times staff writer Beth Shuster in Los Angeles contributed to this >story. > >Copyright Los Angeles Times > <snip>
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