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Office of the Press Secretary

For Immediate Release July 26, 1994
                            Before the
                   U.S. House of Representatives
          Committee on Banking, Finance and Urban Affairs

                           July 26, 1994

Chronology of Contacts Between the White House and Treasury Officials on the Subject of the

RTC Investigation of Madison Guaranty Savings & Loan

The following is a narrative description of the contacts between White House and Treasury officials in connection with the RTC investigation of Madison Guaranty Savings & Loan. This description is based on an internal review undertaken by the Office of White House Counsel.

Contacts Relating to RTC Criminal Referrals.

On September 29, 1993, Ms. Jean Hanson, General Counsel of the Department of Treasury, participated in a meeting of Treasury officials reporting to Mr. Bernard Nussbaum, Counsel to the President, on the investigation of the Waco matter. After the Waco meeting, Ms. Hanson told Mr. Nussbaum of an RTC criminal referral involving Madison Guaranty that incidentally mentioned the Clintons and the Clinton for Governor Campaign. Ms. Hanson said she was reporting this information to Mr. Nussbaum because she expected press leaks and did not want the White House to be taken by surprise. Ms. Hanson also told Mr. Nussbaum that Mr. Roger Altman, then the acting Chief Executive Officer of the RTC, had previously sent him some materials relating to the subject, but Mr. Nussbaum had no recollection of this. Mr. Nussbaum located a telecopy in his files from Mr. Altman to Mr. Nussbaum on March 24, 1993 of a March 9, 1992 The New York Times article, "Clinton Defends Real-Estate Deal." This apparently was the material to which Ms. Hanson was referring, but Mr. Altman does not remember sending it and Mr. Nussbaum does not remember receiving it.

Mr. Nussbaum called Mr. Clifford Sloan, an attorney in the Office of White House Counsel who had attended the Waco meeting, back into his office and asked Ms. Hanson to repeat for him what she had just told Mr. Nussbaum. Mr. Sloan had the impression from Ms. Hanson that the referral already had occurred. Mr. Nussbaum understood it had already been made or was about to be made. Mr. Nussbaum asked Ms. Hanson to call Mr. Sloan if there were further press developments. These conversations with Ms. Hanson were completed in less than five minutes. Either Mr. Nussbaum or Mr. Sloan reported the conversation to Senior Advisor Mr. Bruce Lindsey, who asked only to be kept informed. At that time, Mr. Lindsey handled press inquiries regarding Arkansas-related matters, such as Whitewater, for the White House.

Ms. Hanson called Mr. Sloan at least twice with more information about the increasingly detailed press inquiries about the referral. Mr. Sloan involved Mr. Neil Eggleston, a new lawyer in the Counsel's Office, in the matter and Mr. Eggleston may have participated with Mr. Sloan in a call from Ms. Hanson on October 7. During the October 7 conversation, Ms. Hanson described the "RTC Early Bird," a circular that reported on press inquiries made to RTC. She said that a recent issue (September 30) described press inquiries made by The Washington Post and the Associated Press relating to multiple referrals, which Ms. Hanson understood to be concerning Madison Guaranty. Ms. Hanson described some of the inquiries being made by The Washington Post.

On October 4 or 5, while traveling with the President, Mr. Lindsey received news from a source outside the government who had helped the Clinton presidential campaign respond to questions about Whitewater that Mr. Jeff Gerth of The New York Times and perhaps other reporters had been making inquiries related to the criminal referrals. The reporters were asking about checks written on Madison Guaranty accounts to the Clinton gubernatorial campaign. They indicated these checks were somehow at issue in nine criminal referrals made by the RTC. This information was consistent with what Mr. Lindsey had learned from Mr. Sloan and Mr. Eggleston. Later, Mr. Lindsey told the President about these press inquiries. The President did not ask Mr. Lindsey to do anything and Mr. Lindsey did not suggest there was anything that could or should be done about the criminal referrals.

On October 7, Mr. Sloan and perhaps Mr. Eggleston told Mr. Lindsey about the additional information received from Ms. Hanson. Mr. Lindsey asked whether it was appropriate for the White House to be getting the information that Ms. Hanson was providing. Messrs. Sloan and Eggleston, who had considered this question already, said they had concluded it was, especially because Ms. Hanson was providing information that was coming to her from the press.

Apparently in response to intensifying press interest, on or about October 13, Mr. Jack DeVore, the Treasury Assistant Secretary for Public Affairs, arranged a meeting with White House communications and legal staff to discuss their press response. The meeting took place on October 14 and was attended by Mr. DeVore, Ms. Hanson, Secretary Bentsen's Chief of Staff Mr. Joshua Steiner, Mr. Nussbaum, Mr. Lindsey, White House Communications Director Mr. Mark Gearan, Mr. Eggleston and Mr. Sloan.

At the meeting, Mr. DeVore described the press inquiries they had received over the past several weeks from Ms. Susan Schmidt of The Washington Post and Mr. Gerth. Contemporaneous handwritten notes of that meeting taken by Mr. Lindsey and Mr. Gearan confirm that Mr. DeVore described the inquiries in detail. Mr. DeVore indicated that he had spoken with reporters, and that Ms. Schmidt had been to see Ms. Jean Lewis, an RTC investigator handling the Madison matter out of Kansas City. Mr. DeVore said that Mr. Gerth had asked him to obtain the referral and determine who endorsed four checks identified in the referral that were Clinton gubernatorial campaign contributions drawn on Madison Guaranty S&L accounts. Mr. Lindsey subsequently called the custodians of the campaign contribution records in Little Rock and requested copies of the four checks asked about by Mr. Gerth.

Mr. DeVore reported that Mr. Gerth also wanted to know why the criminal referrals had been sent from the Kansas City RTC office to the RTC in Washington, D.C., rather than directly to the U.S. Attorney's office in Little Rock. He also wanted to know whether the referrals by this time had, in fact, been sent to Little Rock. Mr. DeVore said he wanted to confirm to Mr. Gerth that the referrals had been sent to the U.S. Attorney before Mr. Gerth made his inquiry in order to avoid any inference that the referrals would have been held up in Washington but for his call.

No White House official took any action based on the information discussed during this meeting other than preparing to respond to press inquiries. All of the staff members involved to this point had the clear impression that the referrals already had been accomplished.

On October 31, The Washington Post published a detailed story by Ms. Schmidt about the Madison Guaranty criminal referrals. On November 2, The New York Times published a detailed story by Mr. Gerth about the referrals. These reports included the same subjects reported by Treasury to White House officials during the preceding period.

Contacts Involving Eugene Ludwig.

On December 30, 1993, Mr. Eugene Ludwig, Comptroller of the Currency and head of the OCC (the agency with principal regulatory authority over national banks), had a brief exchange with the President during the Renaissance Weekend in Hilton Head. Their recollections differ somewhat, but they agree the President said he wanted to have a further talk with Mr. Ludwig about the Madison Guaranty/Whitewater matter. Mr. Ludwig called Ms. Jean Hanson, the Treasury General Counsel, for guidance. She referred him to the White House Counsel's Office. He reached Mr. Sloan at home and told him that he was attending Renaissance Weekend and that the President had mentioned the Madison matter to him. Mr. Ludwig requested material from Mr. Sloan that would educate him about Madison so he could converse with the President on the subject more knowledgeably. Mr. Sloan told Mr. Ludwig that he or someone else from the White House Counsel's Office would call him back. Mr. Ludwig also telephoned Mr. William Kennedy of the Counsel's Office about his conversation with the President. Mr. Kennedy suggested that Mr. Ludwig discuss the matter with Mr. Joel Klein, Deputy White House Counsel, who also was attending Renaissance Weekend.

Mr. Sloan conferred with Mr. Eggleston and they agreed it would be unwise for Mr. Ludwig to have further conversations with the President about the Madison matter. Mr. Eggleston reached Mr. Klein who agreed. Mr. Klein spoke to the President who said that he had intended to ask Mr. Ludwig if he could recommend financial or real estate experts who could review publicly available information about Whitewater and write about it for the press in a way that would take the mystery out of it. The President agreed with Mr. Klein that any conversation with Mr. Ludwig could be misconstrued and that he should have no further conversations about Whitewater with Mr. Ludwig. Mr. Klein later told Mr. Ludwig that he should not pursue further discussions with the President on the subject.

At some later point, Mr. Ludwig telephoned Mr. Nussbaum and mentioned that he had spoken to the President about Whitewater at Renaissance Weekend. Mr. Nussbaum told Mr. Ludwig that he agreed with Mr. Klein that it would be unwise for Mr. Ludwig to have further discussions with the President about the matter. Mr. Nussbaum later mentioned this conversation to the President, who told Mr. Nussbaum he continued to agree that further conversations with Mr. Ludwig should not occur.

Later in January, Mr. Ludwig called Ms. Margaret Williams, Mrs. Clinton's Chief of Staff, to offer his unsolicited advice about how the White House should be handling the Whitewater matter. Ms. Williams listened to Mr. Ludwig, thanked him for sharing his thoughts, and did nothing with his suggestions.

Independent Counsel Deliberations.

During the early part of January 1994, the White House was considering whether, when, and how to ask the Department of Justice for the appointment of an Independent Counsel to carry on the investigation of the criminal referrals that had been made in connection with Madison Guaranty/Whitewater. The President requested the appointment of an Independent Counsel on January 12.

Mr. Altman and Ms. Williams worked together on health care issues. On January 4 or 11, Mr. Altman made a diary entry concerning Ms. Williams' comment to him that press questions about Whitewater were affecting time Mrs. Clinton had available for health care. He also recorded an impression that the White House was trying to negotiate limits on the scope of a putative Independent Counsel's jurisdiction if one were to be appointed by the Attorney General. Mr. Altman confirmed to us that neither Ms. Williams nor anyone else at the White House ever told him or implied that the White House was trying to negotiate such limits. We found no evidence of any such efforts.

     Contacts Relating to Statute of Limitations and Mr. Altman's
     Recusal Deliberations.                                               

     In January 1994, Republican Members of Congress drew 

attention to the approaching February 28 expiration of the statute of limitations on any potential civil claims that could be brought by the RTC arising out of the failure of Madison Guaranty. In response to Congressional interest, the RTC provided at least one briefing to Congressional staff on the procedural options available to the RTC in the absence of legislation extending the limitations period. During this same period, and in anticipation of the RTC's need to make a decision about how to proceed with the Madison Guaranty claims, Mr. Altman began considering whether he should formally recuse himself from participating in any action relating to Madison Guaranty.

Questions about recusal also arose with the nomination of Ms. Ricki Tigert as Chairman of the FDIC. At her confirmation hearing on February 1, 1994, Ms. Tigert was asked if she would make a blanket recusal as to any matters related to the President. She declined to commit to a blanket recusal, saying she would evaluate the need to recuse on a case-by-case basis.

Mr. Altman sought a meeting with White House officials on February 2 for the purpose of providing the same information related to the statute of limitations issue that the RTC had been providing to the Congress and the press. Mr. Altman said he intended to bring Ms. Hanson to the meeting. The White House participants were Deputy Chief of Staff Mr. Harold Ickes, Mr. Nussbaum, Ms. Williams and Mr. Eggleston, none of whom recalls being aware of the purpose for the meeting before they arrived. Although the meeting was held in Mr. McLarty's office, he did not participate in the meeting.

Mr. Altman spoke from talking points prepared for him by Ms. Hanson. He outlined the procedural options available to the RTC if the statute of limitations for the Madison civil matter was not extended, noting that eight Republican Senators and Congressmen had asked the RTC to seek tolling agreements from the President and Mrs. Clinton. The participants did not discuss the substance or merits of the Madison matter and the White House officials offered no opinions or guidance on how the RTC should handle any potential civil case, including the statute of limitations issue. Ms. Williams inquired whether Mr. Altman intended to provide the same information to the Clintons' private lawyers. (Any decision to be taken on a tolling agreement properly would be made by the individuals involved in consultation with their private lawyers.) Mr. Altman said he assumed so. No White House official made any other inquiries or requests of Mr. Altman related to the statute of limitations issue. No White House official took any action to influence the way in which the RTC considered the procedural options presented by Mr. Altman.

After completing his briefing on the statute of limitations, Mr. Altman raised the subject of his recusal. None of the White House participants in the meeting was aware in advance of the meeting that Mr. Altman would be discussing recusal. Recollections differ as to whether Mr. Altman had decided to recuse himself from Madison-related matters before the February 2 meeting. Mr. Altman told us that he had not done so, and that he had not planned to raise the subject of recusal with the White House at the statute of limitations meeting on February 2. Ms. Hanson, however, apparently understood that Mr. Altman had made a decision to recuse the preceding day and that he was planning to announce his decision to the White House at the February 2 meeting.

The participants vary in their accounts of whether Mr. Altman actually announced a decision to recuse or said only that he was considering recusal. Ms. Hanson believes that Mr. Altman read the talking point that she had prepared for him, which states "I have decided that I will recuse myself from the decision making process, as interim CEO of the RTC. . . ." Mr. Altman told us that he said "I have been advised to recuse myself and I intend to take that advice." None of the White House participants in the meeting understood Mr. Altman to have announced a decision already made. All White House participants understood Mr. Altman to say he was considering recusal.

Mr. Altman told the group that he had been advised that he had no legal or ethical obligation to recuse. He said, however, that Ms. Hanson and Treasury Secretary Lloyd Bentsen had recommended that he recuse. In any event, he said, it would make no difference because he intended to accept the recommendation of the RTC's Acting Deputy CEO, Mr. Jack Ryan, and RTC General Counsel, Ms. Ellen Kulka, regarding any Madison-related decision that had to be made before the statute of limitations expired. Mr. Altman said that Mr. Ryan and Ms. Kulka had come to the RTC from the Office of Thrift Supervision and that he had confidence in them.

Most participants agree that Mr. Nussbaum was the principal respondent. By his own account, corroborated by others present, Mr. Nussbaum expressed a view that Mr. Altman should certainly recuse if he had a legal or ethical obligation to do so, but he should consider whether he ought to recuse if he did not. Mr. Nussbaum's remarks were motivated by his belief that political appointees have an obligation to serve and should avoid that obligation only if there is a legal or ethical requirement to do so. Mr. Nussbaum also was concerned about developing a precedent in the Clinton Administration for recusals based on nothing more than the fact that the recusing individual was a political appointee of the President. In particular, Mr. Nussbaum was concerned that a decision by Mr. Altman to recuse would undercut the stand taken by Ms. Tigert during her confirmation hearings the previous day.

Mr. Nussbaum also observed to Mr. Altman that even were Mr. Altman to rely on a recommendation from Mr. Ryan and Ms. Kulka, his presence would have a positive effect on the care and professionalism with which they developed their recommendation. Mr. Nussbaum had a prior unfavorable experience on an OTS matter in which Ms. Kulka had been involved.

Mr. Ickes said he did not think Mr. Altman needed to recuse himself because of his relationship with the President, but that recusal was entirely up to Mr. Altman. Ms. Williams asked Mr. Altman why it was necessary to recuse if he planned to accept the staff recommendation anyway.

All of the participants understood, either explicitly or implicitly, that the White House considered that the ultimate decision on recusal was Mr. Altman's, alone, to make. Mr. Altman said he intended to consider the subject further.

Mr. Steiner, who did not attend the February 2 meeting, developed an impression of what had happened by talking to Mr. Altman. On February 12 and again on February 27, Mr. Steiner described the February 2 recusal discussion in his diary, commenting that Mr. Altman was under "intense pressure" by the White House not to recuse and that the White House officials present at the meeting -- Mr. Nussbaum, Mr. Ickes and Ms. Williams -- had told Mr. Altman that recusal was "unacceptable." Notwithstanding these characterizations in his diary, Mr. Steiner told us that he did not understand that the White House applied "intense pressure" to discourage Mr. Altman from recusing and that both that phrase and the term "unacceptable" were his, not Mr. Altman's. Mr. Steiner also told us that he knew only that Mr. Ickes and Ms. Williams were present at the meeting and could not fairly attribute any views to them.

The following day, February 3, Mr. Altman determined that he would not recuse himself from the Madison matter. He reported his decision to each of those who had attended the meeting the day before. After Mr. Altman had informed Mr. Ickes, Ms. Hanson recalls encountering Mr. Ickes, who asked her who was aware of her earlier recommendation to Mr. Altman that he recuse. She also recalls giving several names. Mr. Eggleston recalls hearing this colloquy, but Mr. Ickes does not remember it. Sometime later, Mr. Altman had a brief conversation with Mr. McLarty on the subject. Mr. McLarty recalls that Mr. Altman described himself as still weighing the issue.

At about this same time, Ms. Hanson called Mr. Nussbaum about a letter written to Mr. Altman by Congressman Leach on February 3, asking that Mr. Altman consult ethics officers about recusal. Ms. Hanson said that Treasury was researching the ethics issue. Mr. Nussbaum suggested that Mr. Foreman, Treasury's ethics officer, talk to Ms. Beth Nolan, the White House ethics expert and a lawyer whose judgment he trusted.

After his conversation with Ms. Hanson, Mr. Nussbaum alerted Ms. Nolan that Mr. Foreman would be calling her. Mr. Nussbaum told Ms. Nolan that he had concerns about leaving decision-making to Ms. Kulka if it turned out that Mr. Altman had an ethical obligation to recuse.

Mr. Foreman called Ms. Nolan on or about February 4. They discussed the ethics standards that might apply to a presidential appointee whose recusal was requested by Congress or was otherwise being considered. Mr. Foreman identified three issues he expected to consider: Vacancy Act requirements, legal and ethical standards applicable to any executive branch appointee, and an appearance of impropriety standard.

Ms. Nolan and Mr. Foreman did not discuss how a recusal by Mr. Altman would affect the Madison case. They specifically agreed that they would not discuss the merits of the Madison case, and observed that neither of them knew anything about the merits. Ms. Nolan agreed that Mr. Foreman was considering the right issues. The call ended with the understanding that Mr. Foreman would call the Office of Government Ethics and the ethics official at the RTC to get assistance in determining whether Mr. Altman had an obligation to recuse. Ms. Nolan declined to participate in Mr. Foreman's follow-up conversations with the Office of Government Ethics and the RTC.

Mr. Foreman called Ms. Nolan again the following week, on or about February 9. Mr. Foreman raised the question whether Ms. Tigert's decision to recuse from any matter affecting the President and Mrs. Clinton, which she had announced the day before, affected any decision with respect to Mr. Altman. Ms. Nolan had no recommendation on the matter. During this conversation, Mr. Foreman told Ms. Nolan that both OGE and the RTC were inclined to conclude that there was no ethical requirement that Mr. Altman recuse and the decision could be left to him.

At some later point, the date of which he does not recall, Mr. Ickes believes that, in the course of discussing a number of subjects, he briefly informed the President of the February 2 meeting and Mr. Altman's subsequent decision not to recuse. He recalls a similar conversation with Mrs. Clinton, on a date he does not recall, and also in the course of discussing a number of subjects. Neither of these conversations lasted much longer than a minute. The President and Mrs. Clinton do not recollect these conversations.

     Contacts Relating to the February 24 RTC Oversight Board 

     On February 16, Mr. Steiner stopped by the office of Senior 

Advisor Mr. George Stephanopoulos to discuss Mr. Steiner's concern that the subject of Mr. Altman's recusal would be raised at the Senate Banking Committee's RTC Oversight Board hearings scheduled for February 24. Mr. Steiner told Mr. Stephanopoulos that he believed Mr. Altman should recuse prior to the hearing. Mr. Stephanopoulos said that would be fine. Mr. Steiner said that others in the White House may not agree. Mr. Stephanopoulos offered to "shop" the
issue in the White House to determine if there was any opposition. Mr. Steiner discouraged him, saying he wanted to check with Mr. Altman first. By this time, the statute of limitations already had been extended and no Madison-related issue would be presented for a decision before Mr. Altman's appointment was scheduled to expire on March 30. According to Mr. Steiner, Mr. Altman told him that he already had decided not to recuse himself and that he did not want to revisit the issue. As a result, Mr. Steiner did not pursue the issue with Mr. Stephanopoulos. Mr. Stephanopoulos has no specific recollection of this contact.

In the days preceding the hearing, Mr. John Podesta, White House Staff Secretary, was assigned the task of monitoring hearings potentially involving Whitewater-related matters, including the upcoming RTC oversight board hearings. In this context, he consulted with Mr. Mike Levy, Treasury's Assistant Secretary for Legislative Affairs. Mr. Podesta discussed with Mr. Levy Mr. Altman's need to be prepared to answer questions about his non-recusal -- particularly because Ms. Tigert recently had agreed to a blanket recusal. Mr. Podesta also had telephone conversations with Mr. Steiner about the upcoming hearing. At some point, Mr. Steiner told Mr. Podesta that Mr. Altman was considering announcing in his opening statement at the hearing that he expected to step down as head of the RTC on March 30, regardless of whether there was a pending nomination. Mr. Podesta relayed this information to others in the White House.

On February 23, Mr. Altman had a chance encounter with Mr. Nussbaum and they briefly noted that the nomination of Mr. Larry Simons to be head of the RTC would go to the Hill shortly. Also on February 23, Mr. Altman called Mr. Ickes. Their recollections of this conversation are different. Mr. Altman's memory is that he told Mr. Ickes he expected to announce during his testimony the following day that he would step down as the interim head of the RTC on March 30, regardless of whether a permanent CEO had been nominated by the White House. Mr. Ickes recalls that Mr. Altman said he would be testifying the following day and that he was thinking about announcing his recusal. Mr. Ickes may have assumed that Mr. Altman was referring to recusal when he said he was thinking about "stepping down." Mr. Ickes asked whether there had been any change of circumstances between the February 2 meeting and the impending hearings, and observed that if there had not, he did not understand why there would be a need for Mr. Altman to change his decision on recusal. However, he repeated that the decision was up to Mr. Altman.

Mr. Altman said he was leaving to go to an evening event and wanted Mr. Ickes to think about the issue. Mr. Altman said he would call again when he returned at about 8:30 p.m. After about 10 minutes, Mr. Ickes decided he did not want to wait for Mr. Altman's call. He called Mr. Steiner, told him about the phone call with Mr. Altman, and said he had nothing more to add to what he had said already. Mr. Ickes repeated to Mr. Steiner that any decision on recusal was up to Mr. Altman.

Before the February 24 hearing, Mr. Podesta learned that the February 2 meeting had occurred and believes he spoke to Mr. Steiner to ensure that Mr. Altman was prepared adequately to answer questions about it. Mr. Eggleston, who also was involved in preparation for the hearings, consulted Ms. Hanson on the same question. She read him a Q&A and Mr. Eggleston believed the response adequately described the meeting, as it included both the statute of limitations issue and recusal.

RTC Oversight Board Hearing Follow-up.

Mr. Altman testified on February 24. Following the hearing, Mr. Eggleston, who had been present at the hearing, expressed concern to Mr. Nussbaum, Mr. Podesta and others about the way in which Mr. Altman had responded to a question from Senator Gramm asking him to describe the substance of the communication that occurred on February 2. Mr. Altman had not mentioned recusal as one of the subjects discussed at the February 2 meeting. Mr. Sloan expressed concern that Mr. Altman also had not mentioned the September 29 and October 14 meetings in response to a question from Senator Bond about whether the RTC had ever advised the White House of the criminal referral. And Mr. Nussbaum became concerned when he was told that Mr. Altman had testified that he had arranged the February 2 meeting with Mr. Nussbaum. After a series of conversations among various White House officials concerning Mr. Altman's testimony, they concluded on March 1 that Mr. Podesta should call Mr. Altman to tell him the White House had concerns about the completeness of his testimony.

The same day, Mr. Podesta called Mr. Altman and expressed the concerns identified by the White House group. Mr. Altman told Mr. Podesta that he was considering an appropriate way to supplement his testimony regarding the February 2 meeting, although he believed that the recusal discussion could be considered as falling within his description of the procedure for reaching a decision on the statute of limitations. Mr. Altman told Mr. Podesta that he was unaware of the Fall 1993 meetings and believed his response to Senator Bond's question had been accurate. He agreed with Mr. Podesta's recommendation, however, that he discuss with Ms. Hanson whether she had additional information that would require him to supplement his testimony in response to Senator Bond's question. Mr. Altman told Mr. Podesta that he did not think his remark about Mr. Nussbaum's role in arranging the February 2 meeting required clarification.

At about this time, Mr. Lindsey learned that the Treasury press office had called the White House press office about how Treasury should respond to an inquiry from ABC News directed to Mr. Altman. The press was asking whether the White House had pressured Mr. Altman to have the RTC provide a briefing to Mr. David Kendall, the Clintons' personal lawyer, on the statute of limitations issue. Mr. Lindsey called Mr. Altman, who told him about the February 2 meeting. Mr. Altman told Mr. Lindsey that Ms. Williams had asked if
the private attorneys would be briefed on this process and that he had told her he assumed so. Mr. Altman told Mr. Lindsey that this was put as a question, and that he had received no instructions from anyone at the meeting to do anything. Mr. Lindsey suggested that Mr. Altman call the reporter back and tell him that. Mr. Altman agreed.

Mr. Altman's Recusal and Discussions About Mr. Jay Stephens.

The accounts of how Mr. Altman reached his recusal decision vary. It is undisputed, however, that he recused himself on February 25, the day after the hearing. Mr. Steiner telephoned Mr. Podesta and told him that Mr. Altman had recused himself during a conversation with an editor of The New York Times. Mr. Podesta conveyed that news to Mr. Stephanopoulos in a brief conversation that Mr. Stephanopoulos does not recall, although Mr. Stephanopoulos does recall receiving the same information directly from Mr. Steiner.

Mr. Stephanopoulos complained to Mr. Steiner about the manner in which the recusal decision had been announced. He does not recall telling Mr. Steiner that the President was angry at the manner of the announcement and he did not suggest that Mr. Altman reconsider his decision. In the course of this conversation, Mr. Stephanopoulos also said he had heard the RTC had retained Mr. Jay Stephens to represent the RTC with respect to Madison civil claims. He conveyed anger and frustration that Mr. Stephens could have been retained in view of his public political attacks on the President. Mr. Stephanopoulos wondered how anyone could have determined that Mr. Stephens was impartial and without conflicts under these circumstances. Mr. Steiner explained that Mr. Stephens and his law firm had been selected by an independent board of experts. He said that the retention of Mr. Stephens was a done deal and advised that it would be unwise to pursue the matter further. Mr. Stephanopoulos agreed. He did not ask Mr. Steiner to take any action regarding the Stephens appointment.

Also on February 25, Mr. Ickes and Mr. Stephanopoulos called Mr. Altman and expressed irritation about the manner in which Mr. Altman had accomplished his recusal, but they did not seek to reverse it. Mr. Stephanopoulos suggested that Mr. Altman write a letter to the President explaining his actions and Mr. Altman said he would. Mr. Stephanopoulos and Mr. Ickes also may have asked Mr. Altman about the hiring of Mr. Stephens. Mr. Altman said he did not know Mr. Stephens or that the RTC had retained him. Neither Mr. Stephanopoulos nor Mr. Ickes asked Mr. Altman to do anything about the Stephens appointment.

About the same time, Mr. Ickes also discussed the retention of Mr. Stephens with the President. The President expressed concern about Mr. Stephens' ability to be fair and impartial. The President did not direct Mr. Ickes to take any action with respect to Mr. Stephens and Mr. Ickes took no action. -30-30-30-