Independent counsel: First lady gave 'factually false' testimony

WASHINGTON - Independent Counsel Robert Ray concluded Hillary Rodham Clinton gave ''factually false'' testimony when she denied having a role in the White House travel office firings. His final report Wednesday gave ammunition to her Senate rival three weeks before Election Day.

Ray said he decided not to prosecute Mrs. Clinton because he could not prove she intended to deceive or even knew that her contacts with White House aides had instigated the May 1993 firings.

But he wrote that the evidence established beyond a reasonable doubt that Mrs. Clinton, during eight separate conversations with senior presidential aides and advisers, helped prompt the firings of seven White House travel office workers.

The dismissals spurred one of the earliest controversies of her husband's presidency.

''Mrs. Clinton ... played a role in the decision to fire the employees and ... thus, her statement to the contrary under oath to this office is factually false,'' Ray concluded in a report that divulged testimony she gave to prosecutors.

Ray wrote that she made ''factually inaccurate'' statements to criminal investigators and Congress about the matter.

Locked in a tight race for a Senate seat from New York, Mrs. Clinton dismissed the findings during a campaign stop in Syracuse, N.Y. ''Most New Yorkers and Americans have made up their minds about this,'' she said.

Asked if she was concerned about the report's release so close to the election, she added: ''That's something I have no control over.''

Her attorney, David Kendall, immediately assailed the prosecutor's conclusions as ''highly unfair and misleading.''

''The suggestion that Mrs. Clinton's testimony was 'factually inaccurate' as to her role in this matter is contradicted by the final report itself, which recognizes she may not have even been aware of any influence she may have had on the firing decision,'' Kendall wrote in reply to the report.

Rep. Rick Lazio, Mrs. Clinton's Republican opponent in the Senate race, seized on the report to raise new questions about credibility.

''We believe that character counts in public service and ... we believe that integrity needs to be restored in our public servants,'' Lazio said.

The report cited several former White House officials for being uncooperative, among them former White House chief of staff Mack McLarty; former deputy chief of staff Harold Ickes; Lisa Caputo, Mrs. Clinton's former press secretary; Patsy Thomasson, a former deputy in the White House Office of Administration; and Jeff Eller, a former deputy press secretary.

Ickes told prosecutors he recalled nothing about a two-hour meeting eight days before the travel office firings with Hollywood producer Harry Thomason, a key figure in the controversy. At the time, Ickes was a private attorney. Prosecutors said Eller claimed a lack of memory more than 200 times in less than two hours of grand jury testimony. In a written rebuttal accompanying Ray's report, McLarty insisted he had been ''completely forthcoming and truthful at all times'' with investigators, who asserted that McLarty had given varying accounts of a conversation with Mrs. Clinton.

Ray's predecessor, Kenneth Starr, zeroed in on the travel office in January 1996 when a memo by former White House administration chief David Watkins surfaced stating that Mrs. Clinton had been behind the firings.

''We ... knew that there would be hell to pay if ... we failed to take swift and decisive action in conformity with the first lady's wishes,'' Watkins wrote in the memo.

Five months earlier, Mrs. Clinton testified to Starr's investigators during a deposition at the White House that she had had no part in the purge.

Portions of Mrs. Clinton's testimony were released Wednesday for the first time. ''Who ultimately made the decision, to the extent that you know, to fire the employees from the travel office?'' Starr's investigators asked on July 22, 1995.

''Well, the best I know is David Watkins and (then-White House chief of staff) Mack McLarty, I assume, based on what I have learned since and read in the newspapers,'' Mrs. Clinton answered.

''Did you have any role in it?'' Starr's investigators asked Mrs. Clinton.

''No, I did not,'' she replied.

''Did you have any input with either Mr. McLarty or Mr. Watkins as to that decision?''

''I don't believe I did, no,'' the first lady said.

Ray submitted his final report in June to the three-judge panel that oversees his investigation. The panel released the report after giving parties named in it time to review it and respond.

The White House travel office workers who were fired served at the pleasure of the president and could have been terminated without any reason. But a White House lawyer who worked for then-deputy White House counsel Vincent Foster, who later committed suicide, contacted the FBI to pass along rumors of financial improprieties before the workers were fired.

Republicans accused the White House of using the FBI to justify the firings.

The White House conducted an internal review and issued a public apology, saying the firings had been mishandled. It recommended that five of the seven ex-employees be given new government jobs and reprimanded four presidential aides. The former head of the office was prosecuted and acquitted of financial wrongdoing.

The White House noted Wednesday that the report did substantiate financial irregularities inside the travel office, which arranges travel for reporters covering the president on trips.

As evidence of what it called ''financial mismanagement,'' Ray's report pointed to a travel office petty cash fund that was not itemized. Outside auditors in 1993 identified at least $18,200 in missing checks and improperly recorded or unrecorded petty cash transactions in the travel office.

''The report recognizes that Mrs. Clinton was rightfully concerned about the financial improprieties in the travel office, and it begrudgingly acknowledges that she did not intend to influence the firing decision,'' White House press secretary Jake Siewert said.

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On the Net:

Independent Counsel report: http://icreport.access.gpo.gov/