Time: Thu Dec 04 05:19:56 1997
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Kantor Questioned about Hubbell before Grand Jury (fwd)
Bcc: sls

>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
>* * *
>     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
>     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
>     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
>Copyright Los Angeles Times

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