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January 11, 1996
Web posted at: 3:15 p.m. EST
WASHINGTON (CNN) -- A former legal associate of Hillary Rodham Clinton testified Thursday that he did not formally initiate the business link between their law firm and Madison Guaranty Savings and Loan in the 1980s, and he did not remember formally going to Mrs. Clinton about the deal, as she has said.
But at the same time, Richard Massey told the Senate Whitewater Committee that he talked with a Madison official about doing business, and he may have had a casual conversation with Mrs. Clinton to that effect.
Mrs. Clinton has pointed to Massey as the one who brought Madison's business to the Rose Law firm in Little Rock, Arkansas. Massey told the Whitewater Committee, which is trying to determine whether Mrs. Clinton is telling the truth, that he did not recall formally asking Mrs. Clinton "to help bring in the client." (136K AIFF sound or 136K WAV sound) Massey had already given similar testimony to federal regulators.
But he said he may have had a casual conversation with Mrs. Clinton, then a partner at the law firm while her husband was the state's governor, about such an arrangement.
Massey said a Madison Guaranty senior officer, James Latham, was auditing a course Massey was teaching, and Massey at one point took Latham to lunch and made a pitch for Rose to handle the S&L's security work.
Massey said Latham appeared interested, but said his boss, James McDougal, would have to make the decision. McDougal was the Clintons' partner in a failed real estate venture known as Whitewater.
On the question of how deeply Mrs. Clinton was involved in the law firm's work for Madison Guaranty, Massey, then an associate and now a partner at the law firm, said, "These were primarily one-man jobs. In terms of who was in the trenches and doing the work, it was me."
He said Mrs. Clinton had only a supervisory role. Long-missing records released by the White House last Friday showed Mrs. Clinton billed Madison Guaranty for 60 hours of work over a 15-month period. On Wednesday, committee lawyer Michael Chertoff said Mrs. Clinton's bills showed periods of intense activity.
Massey deferred most questions about the firm's billing records to another Rose partner, Ronald Clark, who was at the hearing but was not allowed to testify Thursday, despite repeated requests by the committee's Democratic members. Committee Chairman Alfonse d'Amato, R-New York, said Clark would be called later when Republican members of the panel are ready to question him.
Massey's testimony was occasionally interrupted by verbal sparring between Democrats on the panel and d'Amato. At one point Sen. Paul Sarbanes, D-Maryland, took issue with statements made Wednesday by one of the committee's Republican staffers that Massey might face a perjury charge. "That's judgment first and facts later," said Sarbanes, noting that the comment came before Massey had even testified. (128K AIFF sound or 128K WAV sound)
Sen. Christopher Dodd, D-Connecticut, said the course the committee has taken in recent weeks "leaves little doubt that we've stopped being an impartial fact-finding panel and become the first act in the 1996 presidential campaign." He complained a $4 million study of Whitewater, dubbed the Stephens Report, has never been made public by the committee. Dodd said the report, done by a Republican law firm for the Resolution Trust Corp., concludes that there is no evidence to substantiate any liability by the Clintons.
Investigators are looking into whether federally insured depositors' funds were diverted to prop up the Whitewater project in the 1980s. The first lady has said her work for Madison was minimal but d'Amato told CNN evidence collected so far does not support that statement. (153K AIFF sound or 153K WAV sound)
Earlier, d'Amato told CNN he does not plan to call Mrs. Clinton to testify about her work as a lawyer for Madison, a failed Arkansas savings and loan.
"We're not going to bring her in -- not at this point," he said. But the New York Republican repeated his charge that the White House has been withholding information the committee had requested. Nevertheless, d'Amato said he did not want a confrontation. (136K AIFF sound or 136K WAV sound) He also said the committee might be able to wind up its probe by the target date of February 29, "but if they continue to withhold the information, we may have to go longer."
Associated Press and Reuters contributed to this report.
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