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Recordings reveal Hubbell, attorney talked of pardon

As he sat in prison six days before the 1996 presidential election, Webster Hubbell and his attorneys worked frantically to amend old tax returns that had significantly understated his income. This was part of an effort, investigators now suspect, to make him an attractive candidate for a presidential pardon.

"There is some chance that the day after Election Day, they will make a move that moots everything," Hubbell's attorney, John Nields, told his client over one of the prison phones whose calls are routinely recorded by the federal Bureau of Prisons. "And I don't want to discourage it.

"I would like to make a record of complete and unvarnished forthrightness at every step of the way," Nields continued in this conversation.

Although Nields did not actually use the word "pardon," his comments were taken by investigators to mean that it was hoped President Clinton might be more predisposed toward granting a pardon if Hubbell's financial woes were cleared up, the investigators said.

At the time, there seemed no other way out for Hubbell. Prosecutors were beginning to bear down on Hubbell a second time for possible tax evasion and for taking money from Clinton supporters while maintaining his silence on Whitewater-related issues.

Clinton said Thursday that there had been no discussion about pardons for any of his friends caught up in the Whitewater investigation. Jim Kennedy, a special adviser to the White House counsel, said Friday that Hubbell's prison conversations were disclosed by Republican lawmakers in transcripts that were selectively edited and could be misleading.

Nields declined to comment about the conversation or any others he had with Hubbell, who was charged Thursday with a new round of crimes, including tax evasion, conspiracy and fraud. Hubbell served 18 months in prison for an earlier conviction for bilking his former clients and law partners in Arkansas of more than $400,000.

His conversation with Nields at a federal prison in Cumberland, Md., on Oct. 30, 1996, was one of dozens Hubbell had with his attorneys, family and friends that were transcribed and released Friday by the House Government Reform and Oversight Committee. Some of the prison tapes also were played to Hillary Rodham Clinton last Saturday during her interrogation by prosecutors from the Whitewater independent counsel's office.

Transcripts of the conversations, held throughout 1996, portray Hubbell as a fierce loyalist to the Clintons buffeted by pressure from both the White House and the Whitewater independent counsel. He is heard repeatedly insisting that he will never disclose all he knows about the Clintons, anxiously wondering where he and his wife will find income to meet their crushing debt and looking to the kindness of Clinton friends for future jobs.

The transcripts show that Hubbell was aware at times that his conversations were being recorded but give no clue as to why his comments were so unguarded.

Democrats in Congress and a top lawyer to the Clintons on Friday expressed outrage about the decision by the committee's Republican chairman, Rep. Dan Burton of Indiana, to release what they contended were private conversations.

"It offends my sense of fair play and decency that the chairman would release such personal information relating to intimate conversations that Webb Hubbell would have with his wife and personal friends about subjects that have nothing to do with our investigation," said Rep. Henry Waxman of California, the committee's ranking Democrat.

Waxman also said the Republicans had disclosed highly selective portions of the tapes and failed to release other tapes that could tend to exonerate Hubbell.

The Clintons' attorney, David Kendall, called the release of the tapes part of a "Starr-Gingrich leak-a-thon."

But Republican investigators said that they had obtained the taped conversations last summer after issuing a subpoena on the Bureau of Prisons as part of their long-running investigation into whether Hubbell received hush money from close Clinton supporters to ensure his silence on a range of Whitewater-related issues.

"These are serious allegations," Kevin Binger, the committee's staff director, said of the inquiry into Hubbell's finances. "The chairman and members of the committee felt strongly that the American people have a right to know what happened."

Binger said that the staff of the committee had edited the transcripts only to remove any personal matters.

The transcripts show Hubbell as a man who will not betray his friends at the White House. Talking about himself in the third person, he tells his wife on March 25, 1996, "He has been the most loyal friend they've ever had, and he will continue to do so. He's not where he is because he hasn't been. And he doesn't intend on changing."

Also that day, his wife tries to discourage him from countersuing his former law firm, where he was a partner with Mrs. Clinton. The firm had sued him after he acknowledged embezzling from his former partners and clients.

Mrs. Hubbell, who has a political patronage job at the Interior Department, told her husband that a counterclaim would be ill-advised. Concerns about a possible suit, Mrs. Hubbell told her husband, had been voiced by Marsha Scott, a White House official and longtime aide to the Clintons.

"She said one of the sticking points is there has been no apology on your part," Mrs. Hubbell said. "And that you are opening Hillary up to all this."

Later in the conversation, Mrs. Hubbell said "I got the distinct impression that Marsha was using the old squeeze play on us and it hurt."

Hubbell told his wife that he "will not raise those allegations that might open it up to Hillary. And you know that. I told you that."

Mrs. Hubbell replied, "Yes. Then I get all this back from Marsha who is ratcheting it up and making it sound like if Webb goes ahead and sues the firm, then any support I have at the White House is gone. I'm hearing the squeeze play."

"So," Hubbell responded. "I need to roll over one more time."

In a conversation later that day with Scott, Hubbell mentioned that his wife was worried about her Interior Department job even though he has remained loyal.

"Have I ever been disloyal?" he asked Scott.

"Oh, god no," she replied.

"And I am not going to be. The other thing, Marsha, is that Suzy has realized for one thing how important her job is. She worries that she is at risk."

"How does she feel at risk?"

"Something you said to her did make her feel that way."

"Really?"

"Yeah. That she was at risk and she would lose her support at the White House if I fought it."

"We weren't even talking about that."

"Well, maybe something else said that to her. But see, I think that is where. . . ."

"What I said was that no one is going to support a public trial on this. You know that. No one wants that."

At a different point in the conversation, Hubbell's wife asked him if he may have overbilled some clients.

"Yes, I did," Hubbell replied. "So does every lawyer in the country."

"That would be one thing that you would look into the firm for," Mrs. Hubbell replied.

"Suzy, you are getting ahead."

"No, I am just thinking out loud," Mrs. Hubbell said. "That's an area where Hillary would be vulnerable. Not unless she overbilled by time right?"

"No, you are talking and not listening," Hubbell said. "We are on a recorded phone. So I am trying to explain."

The possibility that Whitewater prosecutors were investigating Mrs. Clinton for double billing came up in a discussion between Hubbell and his accountant and friend, Michael C. Schaufele, in August 1996, according to the Associate Press.

That call was at a time when Whitewater figure James McDougal had become a cooperating prosecution witness.

Hubbell also was a cooperating witness after pleading guilty to charges he had bilked his clients and the Rose Law Firm, where he and Mrs. Clinton worked as lawyers in Arkansas.

"Is McDougal saying things? Is that what they were asking about?" Schaufele asked.

Hubbell, apparently recounting a recent session with prosecutors, talks about their interest in a real estate deal involving his father-in-law, Seth Ward, that was under investigation. Mrs. Clinton's law firm records indicate she also may have worked on the deal.

Hubbell suggests prosecutors believe he did the legal work but that both he and Mrs. Clinton billed the client for it.

"Well, it's pretty clear, at least they are speculating that someone _ I was doing the work because I was advising Seth," Hubbell said.

"Everybody knows Seth, and knows I couldn't have not advised him," Hubbell said on tape. "So I was billing it but for . . . some reason I haven't figured out why _ Hillary billed it, my time as hers. That's kind of the theory."

Kendall, Mrs. Clinton's attorney, said the first lady never double-billed.

Hubbell also repeatedly talked to friends and lawyers about keeping quiet about a number of highly sensitive issues, such as why he received $100,000 in 1994 from a prominent Indonesian family with close ties to the president.

"I talked to Suzy a little bit last night," he tells one lawyer. "And I just had to say, "Suzy, there's a reason why we're not going to say anything and my own reaction is not to say a word about anything.' "

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