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Hubbell Guilty Plea Closes Starr's Arkansas Inquiries

Courts: Clintons' friend gets probation. But overall investigation isn't done yet, independent counsel says.

July 01, 1999|ERIC LICHTBLAU | TIMES STAFF WRITER

WASHINGTON — With a guilty plea in hand from onetime Justice Department official Webster L. Hubbell, independent counsel Kenneth W. Starr declared Wednesday that his exhaustive, five-year investigation of President and Mrs. Clinton's controversial Arkansas dealings is over.

Starr's pronouncements came minutes after Hubbell, an old golfing friend of President Clinton's, pleaded guilty to two charges arising from the Whitewater controversy and was quickly sentenced to one year's probation.

The proceeding closed a painful episode for the Clintons, particularly for First Lady Hillary Rodham Clinton. Preparing to kick off her campaign for the U.S. Senate, she had faced the embarrassing prospect of having to testify in August at Hubbell's trial about legal work she and her former law partner did on what investigators maintain was a sham land deal.

But Starr refused to close the door completely on all facets of his inquiry. In a disclosure befuddling many observers, he said that his office and a grand jury are continuing to look into two other matters. Starr refused to say what those matters are.

"The matters that I'm referring to are matters before the grand jury, and therefore I just cannot comment as a matter of law," he said.

And when asked whether the Clintons remain in legal jeopardy, Starr said: "That I can't comment on."

The Clintons issued a statement wishing "a brighter future" for the 51-year-old Hubbell and his wife, Suzanna, who also had been charged in the tax-evasion case.

Hubbell was clearly eager to move forward, declaring outside the federal courthouse that "after five years, it's over. . . . As of this moment, life begins again."

Hubbell faced a maximum of five years in prison and a $250,000 fine for evading taxes and scheming to conceal legal work he did in Arkansas in the 1980s.

During a 45-minute hearing, U.S. District Judge James Robertson acknowledged that under federal sentencing guidelines Hubbell's guilty pleas, combined with a 1994 conviction stemming from the Starr investigation, normally would require incarceration.

But Robertson said that the unusual nature of the case allowed him to sign off on the no-prison plea bargain that had been worked out between Hubbell and Starr.

Under terms of that deal, the judge also declined to impose any fines and agreed to drop all charges against Hubbell's wife, his accountant and his tax attorney in connection with the alleged tax-evasion scheme. Hubbell admitted that he had failed to pay tax liabilities amounting to more than $500,000 from his consulting jobs--work that investigators have said they suspect was arranged as "hush money."

The plea bargain, Starr said, was "just and appropriate."

Starr had failed to win convictions in the recent obstruction trials of Whitewater figure Susan McDougal and Julie Hiatt Steele, a minor figure in his investigation of the relationship between President Clinton and former White House intern Monica S. Lewinsky. He said that publicity surrounding his investigation would have made it "extraordinarily difficult" to find an impartial jury and "the profound interest in finality" made a quick resolution in the Hubbell case attractive to everyone.

Not that everyone agreed on exactly what Hubbell admitted to doing.

Starr insisted that Hubbell, in pleading guilty to a broad charge outlined in an indictment brought last year, had effectively admitted that he schemed to conceal his role in a bogus Arkansas land deal known as Castle Grande. Specifically, Starr said, he failed to tell federal authorities about the true nature of legal work that he and Mrs. Clinton did on the deal at the Rose Law Firm in Little Rock, Ark.

The 1,050-acre project has proved particularly sensitive for the first lady ever since her missing billing records on Castle Grande mysteriously reappeared in the White House in 1996, some two years after Starr subpoenaed them.

But Hubbell's lawyer, John Nields, said it was "wild and inaccurate" to suggest that Hubbell pleaded guilty to anything connected with the first lady. The Castle Grande project was never mentioned in court, and Hubbell and his lawyer pointed out that the plea agreement refers specifically to Hubbell's failure to disclose to federal regulators a potential conflict of interest in an unrelated savings and loan lawsuit in which he was involved.

"Mrs. Clinton did nothing wrong, and what I pleaded to today has nothing to do with Mrs. Clinton or Castle Grande" or other matters connected to her, Hubbell said outside the courthouse.

Hubbell said that as part of the plea agreement he had recently been questioned by Starr's investigators and told them that he had "no knowledge" of any wrongdoing by President or Mrs. Clinton.

The plea bargain also ensures that Starr's office will not prosecute or investigate Hubbell again. Hubbell clearly relished that fact, noting that he, his wife and friends are "no longer in jeopardy."

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