HILLARY'S PAST: TRAVELGATE

Memo Places Hillary Clinton At Core of Travel Office Case

By DAVID JOHNSTON - NEW YORK TIMES

Published: January 5, 1996

WASHINGTON, Jan. 4— A memorandum by a former Presidential aide depicts Hillary Rodham Clinton as the central figure in the 1993 travel office dismissals, a politically damaging episode that the aide said had resulted from a climate of fear in which officials did not dare question Mrs. Clinton's wishes. 

The newly released draft memorandum, written by David Watkins, the former top administrative aide at the White House, also sharply contradicts the White House's official account of Mrs. Clinton as merely an interested observer in the events that led to the dismissal of the White House travel staff and their replacement with Clinton associates from Arkansas. 

In the memorandum, apparently intended for Thomas F. McLarty, who was the White House chief of staff, Mr. Watkins wrote that "we both know that there would be hell to pay" if "we failed to take swift and decisive action in conformity with the First Lady's wishes." 

Mr. Watkins, a close Clinton associate from Arkansas, wrote the memorandum to respond to criticism of his role in the dismissal of all seven employees of the travel office in May 1993. He was dismissed himself in 1994 after using a Government helicopter for a golf outing, and White House officials said today that his description of Mrs. Clinton's role was inaccurate. 

In the memorandum, Mr. Watkins gives a detailed account that says the pressure for action came directly from Mrs. Clinton and indirectly through two close Clinton friends: Harry Thomason, a Hollywood producer and part-owner of an air-charter consulting firm, and Vincent W. Foster Jr., the deputy White House counsel who committed suicide in July 1993. 

"Once this made it onto the First Lady's agenda," Mr. Watkins wrote, "Vince Foster became involved, and he and Harry Thomason regularly informed me of her attention to the travel office situation -- as well as her insistence that the situation be resolved immediately by replacing the travel office staff.

"Foster regularly informed me that the First Lady was concerned and desired action -- the action desired was the firing of the travel office staff. On Friday, when I was in Memphis, Foster told me that it was important that I speak directly with the First Lady that day." 

He wrote that he had called Mrs. Clinton that evening and that she had conveyed "her desire for swift and clear action to resolve the situation." 

A White House report on the affair, issued in July 1993, said Mrs. Clinton had been informed of problems at the travel office and had asked questions but had done little more.

By contrast, in Mr. Watkins's account, written in fall 1993, the dismissals were precipitously pushed through almost entirely at Mrs. Clinton's insistence, despite his preference for a gradual reorganization. 

He would have resisted, he said, but he was afraid of dismissal. 

In explaining that fear, Mr. Watkins referred to an earlier incident in which he said Mrs. Clinton had become furious over his failure to transfer Secret Service agents whom she blamed for disclosing an unflattering story to a news magazine. 

"If I thought I could have resisted those pressures, undertaken more considered action, and remained in the White House, I certainly would have done so," he wrote. "But after the Secret Service incident, it was made clear that I must more forcefully and immediately follow the direction of the First Family." 

Mr. Watkins said he had spoken directly with Mrs. Clinton about the matter once, five days before the travel office dismissals, after Mr. Foster told him he should speak directly with her. During that conversation, according to the memorandum, Mrs. Clinton told him that "she thought immediate action was in order" because the company that had handled the Clinton campaign's charters could pick up the work. 

In a statement issued on Wednesday evening, Mr. Watkins said he had talked directly to Mrs. Clinton about the travel office only once. 

Mr. Watkins also hinted in the draft memorandum that he might not have told the full story to investigators who reviewed the dismissals. He referred to his memorandum as a "soul cleansing" and "a first attempt to set the record straight, something I have not done in previous conversations with investigators -- where I have been as protective and vague as possible." 

The memorandum was released by the White House to The Associated Press on Wednesday night after Administration officials turned it over to the Republican-led Congressional committee that has been investigating the travel office affair. White House officials said the document was found on Friday in the stored files of Patsy Thomasson, an aide to Mr. Watkins. 

This afternoon, the Whitewater independent counsel, Kenneth W. Starr, who has also examined the the travel office incident, criticized the White House for failing to give the memorandum to prosecutors promptly. In a letter to the White House counsel, John Quinn, Mr. Starr complained that he had got the document after reporters had. 

White House officials tried to play down the significance of the memorandum today, saying that it dealt with events that had been fully investigated and that it added little.

"We have always said that the First Lady was concerned about financial mismanagement in the travel office and that she told people that they should look into it and, if necessary, deal with it," said Mark Fabiani, a White House spokesman. 

Mr. Fabiani said Mrs. Clinton had left with subordinates the issue of how to correct any problems.

For their part, Republicans seized on the memorandum to renew charges of impropriety.

"There was a cover-up here," Representative William F. Clinger, the Pennsylvania Republican who heads the House Government Reform and Oversight Committee, said at a news conference today. While no crime was committed, Mr. Clinger said, "there seems to be a convenient lapse of memory" by Mrs. Clinton and White House aides. 

Mr. Clinger said his panel would hold hearings on the affair and send written questions to the First Lady, subpoena documents from Mr. Thomason and Mr. Watkins, and seek to question Mr. Watkins.

Aides to Mr. Clinger also released other documents today that they said showed a fear among White House staff members that their report might be seen as a cover-up. 

Those documents are notes written by Todd Stern, a White House aide who worked on the initial review of the affair. They refer obliquely to potential problems that might be raised if the report failed to answer the question of who had pushed for the dismissals and who had approved them.

Mr. Stern wrote: "The problem is that if we do any kind of report & fail to address these Qs, press jumps on you wanting to know answers; while if you give answers that that aren't fully honest (e.g. nothing re Hillary) you risk hugely compounding the problem by getting caught in half-truths. You run risk of turning this into 'cover-up.' " 

Tonight, Mr. Fabiani, the White House spokesman, said Mr. Stern's notes were preliminary jottings, written on May 27, as the work on the White House report was getting under way. He said they were meant to guide the authors on how they should prepare the review to avoid the appearance of a cover-up. 

Mr. Watkins's undated memorandum is stamped as a "DRAFT" and as "confidential," and it does not indicate to whom it was sent. But White House officials said today that its language suggested that the intended recipient had been Mr. McClarty, Mr. Watkins's superior. 

Mr. McLarty issued a statement tonight disputing the memorandum's veracity and saying he had never received it. 

After the travel office dismissals, White House officials acknowledged that they had acted rashly, and they rehired some employees. 

The Federal Bureau of Investigation inquiry on the travel office resulted in the indictment of Billy R. Dale, the office's director, in December 1994, on charges of embezzling $68,000 paid by news organizations for Presidential trips. In November, a jury acquitted Mr. Dale.