A Woman in Charge (58 page)

Hubbell was at the White House that day for the announcement of Ruth Bader Ginsburg's nomination to the Supreme Court, which Vince had helped speed through the vetting process. Foster and Hubbell celebrated—then Vince said how concerned he was about the internal review of the Travel Office difficulties and other matters.

“Hillary saw us and came over,” Hubbell recalled. “She linked arms with both of us, the way we had…so long ago.”

“When are we going out, guys?” she said. “Let's go eat Italian.”

Hubbell and his wife, Suzy, had finally moved in to their house in Spring Valley, a well-to-do neighborhood of large brick homes just inside the D.C.-Maryland line. Everyone should come by for drinks on Saturday, he said, and then they'd go eat Italian in the neighborhood. Bill, Hillary, Vince, Lisa. “Hillary said that would be great, and Vince and I gave her a hug. He seemed genuinely excited now, almost the polar opposite of the way he had been just moments before.”

The Secret Service arrived Saturday morning to check out Hubbell's house and the surrounding area for the arrival of the president and first lady. That evening, Vince and Lisa arrived, expectant. Webb showed them around, and they then sat down for drinks in the living room. The phone rang. The White House operator put Hillary through. She said
Parade
magazine intended to report the next day, Father's Day, that Bill had a half-brother he'd neither met nor heard of. The
Washington Post
's Style section was on to the story. One of a dozen or so boxes of sensitive files that Betsey Wright had turned over to Hubbell after the campaign contained records relating to Bill's birth father. “Hillary asked if I knew where that file was, and I told her I guessed it was downstairs,” said Hubbell. “I said I would go look and call her back…. Vince and I went to the basement to search through the boxes.” They couldn't find the file, and called Hillary back to tell her. Webb told her he'd look again and call her back; she suggested the next day would be fine.

“Webb, you all go on to the restaurant. I'll still try and meet you. Bill is a little stressed out and I doubt if he'll be coming,” she said. The president had to reach his mother to tell her there was a story that would reveal that the father recorded on his birth certificate, William Blythe, had had at least two other marriages before he'd met her.

The Fosters and Hubbells left for the restaurant. Hillary called soon after their arrival, said Hubbell, and told him she couldn't make it. In her memoir, which is consistent with what she later told investigators, Hillary said she remembered it differently. She wrote that Vince had picked up the phone at Webb's house.

“‘Oh, I'm sorry,'” Hillary quoted Vince as saying to her, disappointed that she and Bill wouldn't be at dinner.

“‘So am I. You know, I'm just so sick of this [the sensational stories about their lives].' That's the last time I remember talking to Vince.”

At the restaurant, Vince went into what Suzy called a “sulk” and said barely anything through the rest of the evening. He had pulled his chair from the table, and was turned away from the others. “It was so uncharacteristic of him,” she said. Hubbell described him as resembling “a child who had been promised quality time with a parent, only to have the parent renege when business had called him away.”

When Hubbell called to talk the next day, he recounted, Vince “opened up some about what was bothering him”—Hillary. “It's just not the same, Hub,” he said, and, for the second time, told him how she'd say, “Fix it, Vince!” or “Handle it, Vince!” He was unhappy they could never talk. To Hubbell it sounded “in the nature of a lament,” rather than anger.

Foster's funeral was in Little Rock at St. Andrew's Catholic Cathedral. The Washington contingent was mixed in among the many people Foster had known since kindergarten and grade school. Clinton gave the eulogy about Foster's honor, friendship, and service to the country. He quoted from Leon Russell's “A Song for You”: “I love you in a place where there's no space or time. I love you for my life you are a friend of mine.”

Hillary was crying at the church. She spontaneously hugged a mutual friend of hers and Foster's, whom Hillary herself had never treated with great warmth. The friend thought that perhaps Hillary was literally trying to grasp on to her closeness with Foster.

 

H
ILLARY WAS BACK
in Washington when, on July 26, an associate White House counsel found in Foster's briefcase what appeared to be the scraps of a torn-up suicide note. They apparently hadn't been noticed in the initial search of Foster's office, and in fact were the remnants of the list Foster had written at his wife's behest to describe his frustrations.

“I can't deal with this thing. Bernie, you deal with it,” Nussbaum later said Hillary told him when he tried to show her the scraps of the note.

Later that day, Hillary walked into the counsel's suite while Nussbaum and others were piecing together the scraps of paper, but quickly left after she realized what they were doing.

With Hillary's knowledge and—investigators suggested—possibly at her command, the White House held on to what they believed was a suicide note for thirty hours before handing it over to the authorities. While they were deciding whether to turn it over at all, Hillary insisted that the president not be told about the note. She summoned Susan Thomases back to Washington.

The Justice Department and Park Police released the text of Foster's note two weeks later, as part of their report declaring his death a suicide. There would eventually be four additional inquiries that came to the same conclusion.

Foster's suicide, the president told friends and aides, had “destroyed” Hillary. “I think she just bled deep inside,” a close friend of Foster observed. “I don't think she ever really quite recovered from that.” “She was so far down,” David Gergen said, “you just sort of felt like you wanted to reach out, and say, ‘It's okay. You'll be okay.' Because she opens herself up then, and it's a very real woman with vulnerability. And there's nothing false about it. It's just there.”

She would be haunted “that the actions and reactions concerning the travel office helped drive Vince Foster to take his own life,” Hillary would later write.

In
Living History,
Hillary described going on “automatic pilot” for the six months following Foster's death, feeling a “private” pain and getting by on “sheer willpower.”

Hillary had always had a tendency to look at people and events with almost biblical judgment. “She often weighed matters in terms of good and evil,” noted an old friend in Fayetteville, architect Dick Atkinson. After Vince's death, she “found more to judge as evil,” Atkinson could see. “There seemed to be something basic that was reinforcing her view of good and evil, an element of embitterment there, and the notion of conspiracy. There was no reason to have that so early in her life. But it existed.” Yet Atkinson also believed she was forming “a dangerous attitude—not just with Republicans and enemies, but even toward people like [George] Stephanopoulos: ‘Are you with us or are you against us?' And that led to more demonizing, more judgment of evil around her. It seemed more potent because of self-justification fueled by these Old Testament judgments of good and evil.”

 

I
N MID-
A
UGUST,
with health care now finally put on the calendar—there would be congressional hearings in the fall, though there still was no plan—Hillary and Bill took their first real vacation in four years. They spent eleven days on Martha's Vineyard. Clinton read, jogged, golfed, and took Chelsea horseback riding. Hillary used the vacation as an opportunity to talk to Bill about her health care plans—without his economic advisers present.

Ira Magaziner and his aides were well along in drafting the legislation, and he and Hillary had told the president that he had to make some final choices about the bill's content so it could arrive on Capitol Hill when Congress returned after the Labor Day recess. Before leaving, the president had been besieged by Rubin, Bentsen, Rivlin, and Shalala, who continued to warn that the deficit would be in danger of exploding if he listened to Hillary. They saw the plan she was developing as too big and too costly. The Clinton presidency would historically succeed, they advised, only if he would scale back his wife's grandiose ideas about reform and settle on a more manageable and incremental approach. In frustration, Clinton had said he would reach a final decision after his vacation at Martha's Vineyard.

The Clinton family made the social rounds as well. Since the inaugural they had become increasingly attracted to the glitterati, and being on the Vineyard presented many opportunities to further their courtship. The Clintons dined at the homes of Carly Simon and Vernon Jordan, and they sailed around the nearby islands with Jacqueline Kennedy Onassis, her friend Maurice Tempelsman, Caroline Kennedy, and Senator Ted Kennedy and his wife. Aboard Tempelsman's $1 million yacht, Hillary continued her dialogue with Jackie about how to raise a child under the White House spotlight.

The Clintons could reflect on the fact that Bill's job approval rating was still below 50 percent, as it had been since May. Polls showed that even after the historic passage of Clinton's economic plan by one vote, Al Gore's, on August 6, 1993, 48 percent of the country disapproved of the bill. The collective mood of the country was bleak. Seven out of ten people, according to the polls, agreed that the country was “pretty seriously off on the wrong track.” A majority didn't trust their leaders in government, and thought their tax dollars were being wasted. The Clintons' mood was nearly as sour. They were exhausted and frustrated with the way the administration's agenda was moving, even given the economic plan's approval by Congress. And the dark cloud of Vince Foster's death had not lifted.

Hillary now urged her husband to look at the big picture: to consider what to convey to the nation about the deeper goals of his presidency and the legacy he hoped to leave. She told him that he had been elected to steer the car, not to fix everything under the hood.

The fact that novelist William Styron and his wife, Rose, owned a summer home on the Vineyard may have influenced the Clintons' choice of vacation spot (the Clintons had originally considered going to Wyoming). Styron had written about his own suicidal depression in his book
Darkness Visible,
and Hillary had read it after Vince Foster's suicide. As Hillary and Styron hiked the woods, Styron said he “got the impression the book had helped her understand what [Foster] must have been going through.

“I recall telling her that I felt it need not have happened, that he got the wrong advice…he was steered in the wrong direction, had he sought counsel, therapy of some sort, he probably wouldn't have ended up the way he did….

“Hillary was not teary…. It was nothing as dramatic as that…. She was upset…. It hung over her…. I had the feeling that she just felt grieved by the whole thing…. I was only able to offer my best wisdom as to what had taken place with him….

“She absorbed what I was saying; I don't recall her saying anything specific about Washington; but even then she was beginning to be aware of what [later] became evident in large sense, of an unbelievable amount of hostility against them by those people she later accused rightly of being a vast right-wing conspiracy….

“They were absolutely taken aback by the ferocity of the kind of hostility that was looming around them…. She seemed to be constantly aware of this menace, of what was turning out to be this war against the White House.”

14

Not a Crook, Not a Degenerate

It was too much. I wondered if what Bill was trying to do for the country was worth the pain and humiliation.

—Living History

F
OR ALMOST TWO DECADES,
Hillary, aided by Betsey Wright, lawyers, other friends, and aggressive private detectives, had struggled to keep Bill's sexual compulsions from contaminating his political viability. Upon the Clintons' arrival at the White House, both seemed confident that the ugliness was behind them. The notion that their failed $200,000 investment in an old real estate deal would lead to the president's impeachment for lying about his sexual conduct was inconceivable.

After their return from Martha's Vineyard, their administration would become a series of crises, uninterrupted and overlapping, pervaded by a leering special prosecutor and by their past in Arkansas. These crises would define the Clinton presidency and shape Hillary's character and future even more than her husband's. The Clintons would be blindsided at times, but they absolutely refused to surrender—even when others pronounced them dead politically, or, when it was clear they would survive, condemned them as incapable of rehabilitation.

The word “Whitewater” came to assume many meanings during Bill Clinton's two terms as president. First and foremost, if for only a short while, it referred to the details of a once obscure land transaction that the Clintons had consummated in the third year of their marriage, and that, after scarcely a year of the Clinton presidency, launched an unbound inquiry by a special federal prosecutor into every aspect of their lives, galvanized their enemies, and convinced editors and reporters at the nation's three best newspapers—the
New York Times,
the
Washington Post,
and
The Wall Street Journal
—that Hillary and Bill were neck-deep in corruption.

In truth, the “Whitewater story” became overblown almost from the moment the
New York Times
first wrote about it, during the campaign, in a series of articles and editorials that were increasingly long on innuendo, short on context, and in some important ways unfair to the Clintons. The Clintons' response was not straightforward, and served only to create more suspicion. The initial
Times
story was a model of restraint compared with the coverage of “Whitewater” that followed in the press free-for-all during the next eight years.

Mark Fabiani, the presidential lawyer entrusted by Hillary with the rapid press-response capability for the White House in 1995 and 1996, understood the entire nature of Whitewater as well as anyone in the administration. Fabiani said he was told by Jeff Gerth, the
Times
reporter who wrote the first Whitewater story, that Gerth believed it was a good “campaign story” that “never deserved to be the subject of years of long independent counsel work.”

Fabiani's view was that, the Clintons' protestations to the contrary, it was a reasonable issue to explore in a presidential campaign: “[The] governor of a state who had regulatory authority over a savings and loan was in business with the owner of the savings and loan…. And the owner of the savings and loan was probably carrying more than his share of the costs of the business, the piece of land owned jointly with the Clintons.”

It was also obvious, almost from the beginning, that Hillary, as a lawyer representing the looted savings and loan while her husband was governor, had engaged in the kind of conflict of interest that she should have steered clear of, even though that kind of incestuous relationship was common practice in Little Rock and, increasingly in the 1980s and 1990s, Washington. But in retrospect, it's shocking how much was made out of that mistake. Their joint partnership with the savings and loan owner and his wife in a piece of land never worth its purchase price grew into a federal case that was not resolved until after the Clinton presidency had ended and the office of the special prosecutor had been forced to acknowledge—after six years of investigation, $52 million, and the Senate trial of a president—that there had been no violation of law by either Hillary or Bill surrounding the land transaction (or in the Travel Office affair for that matter). The allegation that stuck was that Bill Clinton lied about sex.

As Hillary angrily predicted to her husband when he acceded to demands from the press, important Democratic leaders and Republican opponents, that a special Whitewater prosecutor be appointed, the investigation triggered by Whitewater consumed their lives and the Clinton presidency, perhaps even more than she could have imagined.

It is obvious that the Clintons, especially Hillary, had sought to obscure some of the facts, withhold information, and keep investigators away from other matters, many of them sexual, some financial, and all of which seemed hardly criminal. Far more than the numbing details of tax deductions and interest payments on a piece of land in the small town of Flippin, these other matters—including Hillary and Bill's remarkable clumsiness in playing fast and loose with the facts—would provide grist for their enemies and fuel for the press.

New ground was being broken: the actions of a sitting president—actually his wife's, more than his—while governor overshadowed his actions as president (at least until the investigation led to the discovery of the Lewinsky relationship). Had Lyndon Johnson, or either of the George Bushes for that matter, been similarly investigated
in office
about their pre-presidential past, it is interesting to contemplate what the results, and precedent, would have been.

Six years after the initial mention of Whitewater in Gerth's
Times
report, when the president was impeached there was not one word in the charges about Whitewater.

 

T
HE GREATEST POWER
of the presidency, and the essential tool put to use by modern American presidents, was the ability to set the national agenda, to maintain it, and to adapt it to changing circumstances.

The joint Clinton presidency lost the ability to set the national agenda perhaps as no other modern presidency had, even Nixon's. Whenever Clinton was able to regain control of the agenda, he was almost always successful: the economic plan, NAFTA, welfare reform, and a series of orders and actions toward the end of his administration that made higher education available to almost any American who sought it. His craft and skill and perseverance in winning the major achievements of his presidency were extraordinary.

But from its very outset, and certainly after Vince Foster's death, until Clinton's acquittal in the Senate trial, the terms of national debate were more often set by the press, the Clintons' enemies, the Republican opposition, and the special prosecutor than by the president. The best efforts of the Clintons, their top aides, and an army of lawyers were spent in response to endless investigations and the maintenance of secrets: secrets that, at any moment, could have made matters even worse, if revealed. The Clinton presidency was sapped of its almost limitless potential, including ironically its aim of ending partisanship. The Clintons had to fight for the levers of power constantly.

In displaying her least-appealing traits—the demand for absolute loyalty, the first-strike mentality, the truth-trimming—Hillary was in fact doing what she had always done, clearing a way for her husband to do what he did best: to think and act in terms of policy and implementation of their goals and ideas arrived at over a lifetime. Her method brought both success and failure. It also brought more pain. And then it brought a circuitous restoration of dignity and stature.

All of this was again on the table, in Hillary's view, because of the press. For the first time since Vince Foster's death, Whitewater had reappeared in the news in a major way on October 31 in the form of a story by
Washington Post
reporter Susan Schmidt. The front-page story said that Resolution Trust Corporation, a Treasury Department agency created to liquidate the assets of failed savings and loans, had asked federal prosecutors to look into whether funds from Madison Guaranty—the S&L mismanaged by Jim McDougal—had been illegally used to finance political campaigns in Arkansas in the 1980s, including one of Governor Clinton's. The referral included specific questions about whether checks written on Madison accounts wound up in Clinton's reelection campaign fund and whether such money was paid either from overdrawn accounts or from loans made ostensibly for other purposes and directed to the governor's campaign.

The Clintons' Whitewater land deal and their relationship with Jim and Susan McDougal were nothing new. But the referral for criminal investigation was more than sufficient to resurrect—rather sensationally, of course, now that the Clintons were in the White House—questions about the business dealings and associations in their Arkansas past. Adding to the journalistic combustion, just days after the
Post
story ran, David Hale, a former judge in Arkansas who was trying to broker a better deal with federal prosecutors regarding his own fraud indictment, complained to newspaper reporters that the Justice Department wasn't taking serious note of his allegations that then Governor Clinton had pressured him to lend $300,000 to a phony marketing firm owned by Susan McDougal. Hale claimed he was told by Jim McDougal that the money would “help conceal earlier favors for the governor,” but investigators found no evidence to corroborate the assertion.

Schmidt's initial story (as opposed to some of her later ones, based uncritically on leaks from the office of Independent Counsel Ken Starr) was real news. Both Hillary and Bill had been listed in the RTC referral as witnesses. Meanwhile, Bernard Nussbaum began making phone calls to monitor whatever investigations were underway in the Treasury Department and in the criminal division of the Justice Department.

Bill and Hillary had no choice but to hire an outside attorney. After interviewing three other candidates, Nussbaum and his deputy, William Kennedy, recommended David Kendall, of Williams & Connolly, the same firm as Bob Barnett, the Clintons' lawyer on other personal business affairs. Hillary, who took more care in weighing the matter, and Bill felt comfortable with Kendall's selection. The arrangement would make for smooth communication and counsel across the board.

Years later, Hillary remarked that when she read Schmidt's story on Halloween, she realized that what happened in Arkansas would continue to haunt their lives, but nothing would come of the ghostly allegations, she predicted.

“From [the Clintons'] point of view, they're convinced they did nothing wrong,” Harold Ickes said not long after Whitewater and its ramifications had become the staple of presidential news. “This was a twenty-year-old land deal in Arkansas that had nothing to do with current events. And they were just absolutely taken aback…. I think mystified is the best word, initially mystified by the focus that was [being] given to Whitewater, commodities trading, to the conspiratorial theories that were being cooked up about Vince's death. They came here to do good. They thought they were on the right track. And they were just completely befuddled and mystified by the energy and the focus that was put on what they considered raggedy-ass and trivial issues, especially in contrast to some of what some other presidents had reportedly done. So, that in turn gave way to a real bitterness toward the press. They were already very unhappy with the press when they came here, and this just solidified it.”

Yet as a lawyer, Hillary must have recognized at least the appearance of her own conflict of interest, no matter how benignly she viewed her motivations. In 1985, after the Federal Home Loan Bank Board had released a report about bad loans and other practices that had led to Madison's insolvency, the Rose Law Firm was hired by McDougal to represent the S&L in presenting its recapitalization plan to the Arkansas Securities Department. That same year, McDougal held a fund-raiser to help Governor Clinton pay off his campaign debt from the previous year. And as part of the Rose firm's representation, Hillary wrote a letter to Beverly Bassett Schaffer, who recently had been appointed state securities commissioner by Bill, seeking permission for Madison to try two new approaches to raise funds and stay in business. Schaffer, the sister of Woody Bassett, the Clintons' former law student and aide to Bill in all his Arkansas campaigns, obliged the request, but the money was never raised, and by 1986 federal regulators insisted McDougal be removed and the government took over the S&L.
^*15

According to Betsey Wright, the Clintons had a soft spot for Jim McDougal. “He was this pathetic, [psychologically] sick person who they had loved and didn't want to disavow and somehow or other were trying to keep him from surprising them with stuff like not paying the taxes.
^†16
I mean, he was a problem always. Always. And they felt a certain sense of responsibility to take care of him.”

Bill Clinton met McDougal in 1968 when McDougal was working for Senator J. William Fulbright, and Bill interned in Fulbright's office. The two became friends. When, in 1978, Jim suggested that Bill and Hillary join them in an investment deal, they jumped at the chance. The two couples created Whitewater Development Corporation when Bill was governor in 1979, and then borrowed $200,000 to invest in 230 acres of land along the White River. The idea was to subdivide the property and sell it to older couples who were retiring in northwest Arkansas. Clinton had invested a few thousand dollars on another McDougal deal and had made a profit, so the Clintons thought, Why not?, according to their later explanations.

“He was working for Fulbright, and he bought some hill of land for a hundred dollars an acre or some ridiculous price and cut it up into smaller tracts and sold it and made money,” Jim Blair said of McDougal. “And he thought he had discovered the Holy Grail, and so he did this three or four times…. Really all he was looking for was a finance vehicle, and he got to thinking he was a developer. Well, he was never a developer. Anyhow, he had made a few of these and I think in some casual conversation with the Clintons one time when he was making money he said, Why don't you do this and we'll make all this money? And they agreed to this Whitewater deal…. He just never, ever separated in his mind his investments and his partners'. It was all his. It was all his idea. He moved money around anytime he wanted. He wrote checks. He did all kinds of crap. They had no idea. At the end of the day, if you take the literal deal that they were full partners and then full shareholders once they incorporated, did he steal from them? Yes. Did he embezzle from them? Yes.”