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Opening Statement of George Stephanopoulos

May 21, 1993

The White House has received a final report by the accounting firm of Peat Marwick regarding its study of the White House Travel Office. We are making this report available to the FBI and the public this afternoon. The FBI has determined from the information it has already obtained that additional criminal investigation is warranted.

Before summarizing the findings of the Peat Marwick Report, let me begin by explaining why the White House has been moving aggressively to reform the operations of this office.

The White House Travel Office is responsible for travel arrangements, such as chartering aircraft, for the Members of the White House Press Corps and staff who accompany the President on trips. The Office handled $11 million in the last sixteen months, reimbursements from news organizations which participated in trips. It appears now that these funds were handled without any adequate handling at all.

Even though these funds belong to private corporations, and not the public, the White House believes that this operation, like every other, must function with professional business practices, efficiency, and integrity. We have and will continue to review all White House and Executive Branch operations, as we have done since the transition, to ensure that these offices are in compliance with these standards.

In the course of working at the White House and reviewing our operations, we began to accumulate information indicating that the White House Press Travel Office was not being run in a professional or efficient manner.

For example, when arranging for travel by the White House press corps, the Travel Office did not typically accept competitive bids from charter companies -- the effect of which would have brought down the cost of this travel. We believe that is wrong, and we have changed this practice. Because we have moved to a competitive bidding process, the White House Press Corps will travel with the President tomorrow on a better plane than the current company operates with savings of $8,000. Such savings will multiply with each trip made by the Press corps.

Similarly, as the Wall Street Journal reported this morning, in booking individual airline trips for White House staff, the Travel Office did not generally seek the lowest possible price for the tickets being purchased.

Because we have a fiduciary responsibility to the media operations whose money is spent by that office -- and because the President has a responsibility to the public to ensure that all White House operations are run efficiently -- we chose to engage an independent accounting firm whose job it was to verify whether the practices and procedures of the office met professional standards.

Given the nature of the initial information we had collected, the Office of the White House Counsel sought the advice of the FBI.

After meeting with the accounting firm's representatives on Saturday, the FBI determined there was sufficient reason to pursue a criminal investigation. The next step in that investigation is for the FBI to review the report from Peat Marwick. Let me take a moment to review the findings.

There is a lack of basic accounting systems or records you would expect to exist when you are handling money.

The record keeping is informal, sloppy, and disorderly.

The office had no general ledger, no cash receipts book, and no accounts payable system.

The office is missing documentation in several areas, in particular petty cash transactions. Eight checks from 1992-1993 totalling over $18,200 were written to cash; there is no supporting documentation available to determine the status of this money.

There was an absense of documentation between the WHTO and the principal charter company: no contracts, nothing to spell the terms and conditions fo the arrangement. Such documentation did exist with regard to international travel.

These and other findings are written into the Peat Marwick report.

It is never easy to terminate employees who serve at the pleasure of the President, especially after long tenures in their jobs. We could not, however, fail to act in the face of X,Y,Z -- indeed, it would be irresponsible not to act. That is why we called for the review, that is why we acted upon the review, and that is why the FBI is investigating today. The White House has acted diligently and deliberating in dealing with problems that, at their minimum, suggest a long period of mismanagement in this office.