COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT U.S. HOUSE OF REPRESENTATIVES WASHINGTON, D.C. - - - - - - - - - - - - - - - x : In the matter of: : : WHITE HOUSE TRAVEL : DEPOSITION OF : BERNARD NUSSBAUM : : - - - - - - - - - - - - - - - x Thursday, July 11, 1996 Washington, D.C. The deposition in the above matter was held in Room 2203, Rayburn House Office Building, commencing at 1:00 p.m. Appearances: Staff Present for the Government Reform and Oversight Committee: Barbara Olson, Chief Investigator; Barbara Comstock, Special Counsel; Laurie Taylor, Investigator; Ronald Stroman, Minority Deputy Staff Director; Donald Goldberg, Minority, Assistant to Counsel; and Daniel Hernandez, Minority Professional Staff Member. For BERNARD NUSSBAUM: JAMES F. FITZPATRICK, ESQ. Arnold & Porter 555 Twelfth Street, N.W. Washington, D.C. 20004-1202 YOCHEVED COHEN, ESQ. and LAWRENCE B. PEDOWITZ, ESQ. and ROBERT B. MAZUR, ESQ. Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019-6150 Ms. Olson. We are back on the record today. Mr. Nussbaum was previously deposed, and if there is agreement of Mr. Nussbaum and counsel that the previous opening scope that we gave would apply to this, of course with the reservations that were also stated by Minority counsel as well, and that Mr. Nussbaum would continue to be under oath as he was in the last deposition. Mr. Mazur. That's fine. Mr. Pedowitz. My sense is the last deposition really didn't end, you continued it to another day. Ms. Olson. Thank you. [Witness previously sworn in earlier deposition.] EXAMINATION BY MS. OLSON: Q Is that okay with you, Mr. Nussbaum? A Yes. Q Okay. Mr. Nussbaum, there was a political questionnaire that was shown to you at our hearing. I have marked that as Deposition Exhibit No. 7. Since then, the White House has sent us other questionnaires, one of which is going to be a part of Deposition Exhibit No. 7, and it is Bates stamped No. CGE 47851 on White House stationery which says: "Personnel Data Statement Questionnaire, from Bernard Nussbaum, Counsel to the President." And then there is also a security package which is going to be a part of Deposition Exhibit No. 7, which begins with Bates stamp No. 48092. I will give you a copy of those and give you a second just to refresh your recollection and look at some of them, since they are new. [Nussbaum Deposition Exhibit No. 7 was marked for identification.] Mr. Mazur. Which one of these things did you refer to as the political questionnaire? Ms. Olson. All three are questionnaires that contain -- Mr. Mazur. That contain some political information? Ms. Olson. Yes. BY MS. OLSON: Q The one that was at the hearing was the one that on the front page refers to Craig Livingstone that does not have a Bates stamp number. It says Deposition Exhibit 7 on it. A I see. Q The other one with a Bates stamp number does not have Craig Livingstone's name, it was Edgar Bueno, or B-U-E-N-O, in the place of where Mr. Livingstone's name was, but has Mr. Nussbaum's name on it. A No. Ms. Olson. Let me actually remove that. That is not supposed to be a part of that exhibit. Mr. Mazur. You don't have other copies of this? Ms. Olson. No. I have a copy for the witness. The Witness. Is there a question? BY MS. OLSON: Q I wanted to ask you, the first one that has Mr. Livingstone's name, which is the one that is marked as Deposition Exhibit No. 7, do you know who in the White House that questionnaire went to, and by who, I mean, did it go only to political appointees, or did it also go to career employees? A I have no memory at this point. I look at the first line and it says, "As part of the clearance procedure for your prospective position," that would indicate to me that it was going to people, new people who were being hired. Is it possible that it went on other people as well? Yes, it's possible. Do I have knowledge that it went to others, others being others who were already hired, I have no such knowledge, but it clearly is possible. But looking at it, it would appear that it went to new people who were being hired for new positions. Q And would that include new positions that were political appointees as well as the career slots? A Well, I'm not sure. Most of the positions in the White House at least, the Office in the White House itself are, while there may be some career people in them, they are called political positions in the sense that the President, you know, a new President coming in can appoint his own people if he wishes. So I am not sure I understand the distinction. Q I guess I am going to distinguish between the political appointees and the accepted service, the accepted service individuals also obviously do serve at the pleasure of the President, but they have a little more of a permanence to their position than the purely political slots. A I am not the best one at this point to answer who it went to. I was not personally involved in either creating these questionnaires or distributing these questionnaires. This was done lower down in my office. It would have been done under the aegis of Mr. Foster and then Mr. Kennedy, and then below Mr. Kennedy, Mr. Livingstone or Edgar Bueno who worked for Mr. Kennedy. Q Okay. A I should note on Deposition Exhibit -- Q This is all a part of Deposition Exhibit No. 7, and I will go into the one that you are looking at, which is the page beginning CGE 47851 and going through 47857. A Yes. Q Which is -- A Well, it contains a signature. It is not my signature, obviously. It appears that Edward Bueno put my initials on it. Q And what was the position of Mr. Bueno? A He worked with Mr. Kennedy. He was one of Mr. Kennedy's -- he wasn't in the Counsel's Office, he wasn't an Assistant Counsel to the President. The hierarchy in the Counsel's Office was the Counsel, the Deputy Counsel, the Associate Counsel, of which Mr. Kennedy was one, the Assistant Counsel, and then you had the personnel at the White House, Personnel Security Office which reported to Mr. Kennedy, and people in that office reported to Mr. Livingstone who was the head of that office. I'm not sure whether Mr. Bueno was in the White House Personnel Security Office or was in Mr. Kennedy's purview. Q Do you know if he was a paralegal? A No, I don't know. He was a paralegal type. He assisted in the vetting process. That's what I remember. Q He did -- it does appear that he did initial your name. Did he have authority to initial your name to documents? A I never gave him authority to initial my name to documents, but Mr. Kennedy may have. And since I had total reliance on Mr. Kennedy, I would -- you know, I would support whatever decision Mr. Kennedy made in that regard. But I have no recollection of ever giving him authority to initial my name. Mr. Pedowitz. Could I just ask a question that may clarify the record? You seemed to indicate in a statement that you made a moment ago that these three documents are all part of Deposition Exhibit 7; is that right? Ms. Olson. Yes. Mr. Pedowitz. Okay. So just so the record is clear, we are dealing with three separate packages of documents or sets of documents here, only one of which has Deposition Exhibit 7 handwritten on it. Ms. Olson. I identified each one at the beginning, that there are three documents. Mr. Pedowitz. Yes. Ms. Olson. Thank you. BY MS. OLSON: Q On this document which has your name typed on it, and then I guess it has "BN" with a slash and an "EB" under it written, on page 5, question No. 23 it says: "Please list current and past political party affiliations." Do you know if this document went out to all current White House staff? A I don't know, but I doubt it. I think it was designed primarily for new hirees. Q Can you tell me why you doubt it and think it was designed for new hirees? A For two reasons: One, just the first line talks about prospective positions, and I think that sort of indicates to me it is for new hirees. Two, I never heard any discussion when I was at the White House that we should send to the cooks or the gardeners questionnaires asking for their political party. I mean, it was of no interest to me as Counsel to the President, and I don't -- and as far as I know, it was of no interest to the President or the First Lady or anybody at the senior levels at the White House. Certainly I never heard any such discussion that we should find out the political affiliation of people already working there in fairly low-level positions. So that's why I believe it was designed just for new employees. Q So do you believe that all new employees into the White House were required to list their current and past political party affiliation? A Probably, yes. I believe that, yes. Q Can you explain how that policy developed within this administration? A No, I -- I didn't have anything to do with making up this questionnaire. I don't know if there was a similar questionnaire in prior administrations. There may have been, there may not have been. Normally I must say that any questionnaire we developed or any procedure we followed was normally based on what we knew the prior administration did. This was the first Democratic administration in a long time, and basically we were trying to follow past practices. Now I'm not saying this was a past practice in the Bush administration; I don't know one way or another. Q Do you know if people in the White House resident staff were required to fill out a questionnaire which stated their past and current party affiliation? A I don't know. Q The last item, or the third item that is a part of Deposition Exhibit No. 7, is a document which I previously stated is CGE 48092 and goes through CGE 48113, and it is titled: Security Package. A Yes. Q It similarly, on page CGE 48112, asks whether the individual is "registered to vote," and "if yes, what is your party affiliation?" I believe this packet is also one that went to volunteers. Do you have any knowledge of all volunteers and/or interns coming into the White House being asked to state their party affiliation? A No, I have no knowledge. Q During a deposition of Matt Moore who worked in the White House, there was a statement made that no one was trusted until they proved themselves loyal to the Clinton administration. Do you know if that was a policy that was handed down to Mr. Moore or was that a general view of individuals that worked in the White House toward others that had been at the White House? Mr. Mazur. Or none of the above. BY MS. OLSON: Q Or none of the above, Mr. Nussbaum. Do you have any information about why Mr. Moore would tell us that no one was trusted until they proved themselves loyal to the Clintons? A I have no information with respect to that. I think it's sheer nonsense. Ms. Olson. I have a document which I have marked as Exhibit No. 1, and it is a February 17th, 1993 memorandum which is to all of the White House staff, and it is from Vince Foster and William Kennedy. [Nussbaum Deposition Exhibit No. 1 was marked for identification.] The Witness. Wait a minute. Was this the Mr. Moore who worked at OMB? Ms. Olson. No. This is Matt Moore, he worked for David Watkins. The Witness. Okay. Mr. Mazur. You say this is Deposition Exhibit 1. We have already got Deposition Exhibit 1 from the first day of this deposition. Ms. Olson. I know. These exhibits will be kept separately with this deposition copy. Each copy is going to be done. Mr. Mazur. Okay. Ms. Olson. It probably would have been more efficient to continue the numbers. Mr. Mazur. I just didn't want there to be confusion. BY MS. OLSON: Q My question pertains to this Deposition Exhibit 1 which asks all staff to remind them that they have to complete their Form 86s, which is the "Questionnaire for Sensitive Positions" and supplement, and then to be interviewed, and paperwork. Were there any problems that had been brought to your attention as of February 1993 that the FBI was having concerning receiving interviews with those in the White House or getting the paperwork filled out? A Yeah. I had heard from time to time, either from Mr. Foster or Mr. Kennedy, that certain people, certain people weren't being as prompt as they should be in filling out their paperwork, and that this was, you know, a problem from time to time. And Foster and Kennedy were two tough guys and they did their best to lean on people as best they could. And I think we complained from time to time, as well as to the Chief of Staff for his office to do its best. And I think his office probably did its best. But we did have problems from time to time getting people to fill out their paperwork. Q Did Mr. Foster or Mr. Kennedy ever tell you about a meeting that they had with FBI Agent Gary Aldrich and Dennis Sculimbrene about problems they were having getting interviews and paperwork from individuals in the White House? A No, I don't remember them ever telling me about a meeting. Q Do you know if this memorandum that is Deposition Exhibit 1 is the result of any problems being raised by FBI agents? A No, I don't know. You can ask Mr. Kennedy who would be in a position to best answer the question. Q The last paragraph of this memo talks about that there were only a few weeks left to complete the paperwork before the temporary clearances expired as of February 17th, 1993. Were you aware of temporary clearances expiring and being renewed throughout the entire year of 1993? A Yes, I was generally aware. You know, it was a combination of problems. It was partly people not filling out their paperwork, which was important; it was partly not having enough staff to do the necessary vetting; it was partly the FBI couldn't -- was overwhelmed. I'm talking not only in the area of White House personnel passes, but as well as the appointment process. When a new administration with hundreds and hundreds of new appointees, all of those things -- the FBI had problems coming up with prompt investigations and reports. So all of those things combined to have the temporary clearance process extended, in effect, or to have temporary clearances extended. Q As you are aware, every -- at least every 8 years, there is a new administration in the White House, sometimes in 4 years, where the FBI are required to do all of the clearance processing and get all of the SF-86s. Are you aware of any other administration that ever extended White House temporary passes for over a year into an administration on a regular basis? A I would be surprised if it did not happen, but if you ask me if I'm aware, I'm not aware. Q And can you just -- A And it is true that every 8 years is a new administration, but it so happens since from 1968 to 1992, there was one, I believe, Democratic administration; President Carter from 1976 to 1980. So the Republicans have basically held control of the White House from 1968 to 1992. While there is changeover, when George Bush replaces Ronald Reagan, you know, there are people changing, but not to the same extent and the same pressures as when a Democratic administration replaces a Republican administration, especially for the first time in 12 years. So I think it is understandable that there would be backlogs and extensions of temporary clearances which were not desirable. I mean, we weren't happy about it, and Kennedy and Foster and I did our best to urge people to complete their paperwork and we pleaded with the Chief of Staff of the White House to provide us with the manpower to enable us to do these things. As I testified at the hearing, I think you heard me, in response to a question from a Democrat, the fact is that 25 percent staff cut which President Clinton instituted upon taking office was, in my view, not wise. Q And wasn't it also stated that the majority of that staff cut occurred in the Office of Drug Policy, I believe with an 80 percent cut? What type of cut were you suffering in your office due to the 25 staff cut, and that would also include your use of detailees and numbers of people that you -- A No. Because of the -- Mr. Mazur. Is that -- do you want to break that out? I will break it out if you like me to. The Witness. No, I will answer it. There were staff cuts in the Counsel's Office. You will see memoranda going back and forth fighting about staff cuts. There were staff cuts in the Counsel's Office. There was a much greater workload in the Counsel's Office because of a Democratic administration replacing a Republican administration. That required the use of detailees, and that's how that all came about. BY MS. OLSON: Q But your numbers remained consistent if you added in your detailees; isn't that true? A Yes. If we added in the detailees, we barely kept even or we may have kept even with what the prior administration had, but with a lot more work. Q Similar to what the Reagan administration had when they changed over from the Carter administration; isn't that true? A Well, the Reagan administration changed over from the Carter administration after a 4-year interruption, after 8 years of Republican rule. In other words, there was a lot of people from 19 -- when was it, 1968 to 1976, the Republicans had the White House, for 4 years the Democrats had the White House, and then the Republicans came in for another 12 years. So there was a continuous core of people who may have had different jobs; there was a core of people who had a lot of White House experience and who continued on from one White House to another. We didn't have that. I'm not -- we didn't have it and that created problems, backlog problems when we try to deal with that as best we can. It took a year or so to clean them up, but I think by and large we did a fairly good job. Obviously, we didn't do a perfect job. It would have been a lot easier if there was no staff cut and a lot easier if we didn't have to use detailees. Q And so if I have you correct, there was a larger turnover than had been in the Reagan White House that they had kept on Carter people, and the Clinton administration did not keep on any of the Bush people? A No, no. I don't think the Reagan people kept on Carter people as much as the fact that there were people available from the Nixon administration who had just worked in the White House 4 years before ready to go in and to assist the Reagan people. That's the difference. The difference is we took over after 12 years, and really when you look at it, almost a quarter of a century, and the Reagan people came in after 4 years of Democratic rule, but the previous 8 years had been Republican rule. It's a lot easier to do that. Ms. Olson. I have a document I have marked as Deposition Exhibit 1a, and it's Bates stamped No. 47903 and goes through 47905, and it is dated September 29th, 1993, which is -- this particular front page is to David Gergen from William Kennedy regarding security forms, and once again talks about the issuance of a permanent pass and the need to receive paperwork. [Nussbaum Deposition Exhibit No. 1a was marked for identification.] BY MS. OLSON: Q On September 29th, 1993, did you still have senior staff people such as David Gergen who had not completed their paperwork? A David Gergen came on in June, he didn't start in January, so it's not as if he was the worst offender. He probably is not the worst offender. I don't remember who Dianna Pierce was, but Jody Greenstone I think came in with David Gergen. She was one of his people. I think Dianna Pierce was probably one of his people, too. Q So 4 months later? A So it is a 3- or 4-month period. That's a long time. I'm not excusing it, but this is not from January. And it shows, what it shows is the effort of Kennedy and of Livingstone to really push these people. These are very senior -- David Gergen was a very, very senior person in the White House, was in contact with the President every day. And yet, you know, we are pushing the most senior people to do what they had to do. People had to fill out this paperwork. That is wrong. They should fill it out. Also, Gergen, by the way, as you know, worked in prior White Houses, had been investigated presumably then, and therefore, it was not as if he was some new person who never was looked into. Having said that, he should have filled out his papers right away. Q Well, is it your understanding that Mr. Gergen as of September 29th, 1993 had been in the White House 3- to 4-months and hadn't filled out his SF-86, his personal data statement, with access to the President, but that that was not a priority? A Oh, it was a priority. We tried to get them to do it. That's why we wrote this memorandum. We tried to push him to do it and he eventually did it. Q Did you attend any meetings with the FBI or were you aware of meetings with the FBI where they were very concerned that very senior people with the access to the President did not have their paperwork in and therefore, did not have their background clearances to have that kind of access to a President of the United States. Mr. Mazur. There is two questions there. One is if you attended meetings with the FBI, the other is if you are aware of any? The Witness. And the answer to both questions is no. I neither attended meetings with the FBI on that subject, nor was I aware of any such meetings. BY MS. OLSON: Q And by aware, I'm asking if Mr. Kennedy or anyone else ever notified you that they were meeting with the FBI concerning this problem? A I don't remember them notifying -- ever telling me that. Obviously, I know they are in contact with the FBI with respect to issues like this, but I don't remember having any conversation that the FBI was complaining that David Gergen shouldn't have access to the President because he hadn't filled out his SF-86. Q Well, or had his background investigation completed? A Or had his background investigated completed. I'm sure there were a number of Democrats in the White House who didn't want Gergen to have access to the President either. Ms. Olson. I have a document which I have marked as Deposition Exhibit No. 13, and it is dated September 16th, 1993. It is marked CGE 48121 and goes through CGE 48123. It is a memo to Chief of Staff Mack McLarty from yourself as Counsel to the President and Roy Neel, Deputy Chief of Staff, and establishes a White House access policy. [Nussbaum Deposition Exhibit No. 13 was marked for identification.] BY MS. OLSON: Q Do you recall the circumstances under which you created this memo? A Well, I didn't create the memo. The memo was -- I wasn't personally dealing with these issues. They were important issues, I'm not deprecating their importance, they are important issues, but I wasn't dealing with these issues. Q If we were to try to talk with the person who had the most personal involvement in dealing with these issues at a high level, who would that be? A Bill Kennedy and probably Beth Nolan in my office would be the two senior people who dealt with these issues. I had tremendous respect for both of them and continue to have tremendous respect for both of them. They were the ones who were trying to come up with a sensible access policy. Q Was it the practice then, since your name is on a lot of these memos, that your name would go on the memos that they had created and/or discussed and finalized, rather than their names? A Yes. Well, my practice actually was -- this is interesting, this memo is interesting. My practice was, which was a change from prior practice, actually, prior practice is just the name of the Counsel to the President goes on memos. I believe the people who did the memos and did the hard work should get the credit also if there was to be credit. I guess today, everybody is happy their name is off the memo, and therefore that name should also be listed. So normally a memo from me to the President, even as well as to anybody else, which would be drafted by another person, normally in the first instance would contain my name as well as the person who drafted the memo, normally associate counsel. So you would have two names. That name would always indicate to me who did the work and who drafted the memo. I may have made changes. I mean, I may have had significant input on some of these memos, but I would rarely, if ever, do a first draft of a memo. In some cases, like this case, where you are sending a memo to McLarty and Roy Neel for some reason wanted to be on the memo, I'm sure he didn't draft this memo either, wanted to be on the memo, then it is sort of silly to put three or four names on top, so the name of the associate counsel who drafted this memo would drop off. I saw virtually every memo that went to anybody else, I'm talking about these kind of memos, not the printed forms that Marceca sent to the FBI, but any memo, any memo drafted creating a policy, would not be sent without me looking at it. So I'm not suggesting people could just put my name on a memo and send it to McLarty or to the President or anybody else in the White House, I would look at those memos, and normally I would initial those memos. Q Do you believe that is also true about Deposition Exhibit No. 7, which has your name on it, which is that Personnel Data Statement Questionnaire? A No. This is more like a form. It's possible I did see it. I'm not saying I didn't see it. You know, it's possible he did show it to me, but I consider this to be sort of like a form that developed probably similar to one that they had in the prior administrations. So that one I may not have seen, but this one, it is inconceivable that I wouldn't see it if this memo was sent out to the Chief of Staff. Q In Deposition Exhibit No. 13, it does discuss a new policy for hard badges, and goes into some detail about family members of the First Family as well as individuals from the Democratic National Committee who are consulting with the President. Was there any particular event, that you recall, requiring a policy concerning those individuals who are providing consultation to the President and his staff or the First Family? A Well, the whole -- this indicates that the White House Travel Office Management Review raised this issue, of, you know, who should properly have access to the White House and what kind of passes they should have. And then there were stories in the newspaper which, you know, which talked about people walking in and out of the White House, friends of the President's, people like Harry Thomason, people like that who were very close to the President. So this issue arose, and we -- and the White House undertook in the management review to come up with what would be a sensible access policy, and this was an effort to do that. Ms. Olson. Okay. Deposition Exhibit No. 5, which contains two documents. One is a draft of cross-cutting and policy issues, which begins at CGE 48172. And then at CGE 48131, it looks like a more final copy of the same item that this Deposition Exhibit No. 5 discusses, the White House pass problem of delays in getting White House staff their permanent passes, and specifically, that these people were having access to the White House without any preliminary security check. I believe the date, although the memo is not dated, the date that it was faxed to the Office of General Counsel looks like it was March 16th, 1994. [Nussbaum Deposition Exhibit No. 5 was marked for identification.] BY MS. OLSON: Q Are you aware of these problems extending into March of 1994? A Well, I am aware of that, vaguely aware of that, and a lot of the problem lay with the FBI. Not that the FBI deliberately was creating a problem, the FBI just could not handle the workload that we were throwing at them. The workload being not only doing background investigations with respect to White House staff, when you are talking about people having access to the President or access to the White House, but at the same time we are trying to fill up the Federal Government itself, the other departments, with key appointees. So we inundated the FBI with a lot of work to do background checks, and they really couldn't do it. There was a lot of problems. I mean -- Q What is the basis for your statement that the FBI couldn't do it? A Well, clear memory that in conversation after conversation with Vince Foster first, and then Bill Kennedy -- and I even believe I spoke to the FBI about this. This is something I did speak to the FBI. I think after the new director came in, Louie Freeh, there was communication either with me directly to him or with me to somebody, you know, just urging the FBI to put additional resources. They had their own problems. I mean, this was a time of budgetary restraints and cutbacks and things like that and everybody was trying to operate leanly and efficiently. I remember having conversations with people just pleading with the FBI to put more people on this thing so we can get these background checks done. And this indicates, you know, this document indicates, it takes on the average of 3- to 4-months to complete all phases of the process. Much of that time, approximately 2 months, consist of the full-field background check conducted by the FBI. Actually it took more than 2 months in a lot of cases. That was a great frustration. I remember the frustration particularly, not so much with respect to White House staff, many of whom had temporary passes and were working, I are really remember the frustration much more with respect to people we wanted to appoint to positions who would have to be confirmed. This delay prevented them from functioning, from working. Some of them became consultants and there are certain things you can do as a consultant, there are certain things you can't do. It was a tremendous problem and it was because of the FBI's inability to do just the massive job that had to be done. Q Is it your belief that if the FBI had more people it would take less than 2 months to do a full-field background check on an individual? A Oh, yes. Sure. You can do a full-field background check in, you know, 30 days. If you run into problems, yes, obviously, if you come up against problems in somebody's background, you might have to extend your investigation. But most people have no problems, or nothing significant, and you can do a background check. You can do it in 2 weeks or 3 weeks. If you have one agent working 3 weeks, 8 hours a day, you can do a background check. If a problem comes up, that's a little different. But what happens is these agents, they had too much work. Q Mr. Nussbaum, are you aware that a background check goes to agents in the field office of every town the individuals lived in, the town the individual was born, that interviews all of the individual's friends? It is not one agent working 8 hours, it is quite often five or more agents working. A It is one agent running it and contacting agents in the field, that's correct. If you have enough personnel, it can be done quickly. With nothing, there is no black magic about doing background investigations. They can be done in 2 to 4 weeks if you have the personnel to do it, they can be done in 2 to 4 weeks. If you run into a problem, it can take longer than that. And the FBI wasn't sufficiently set up to produce these things very fast, and -- Q Taking 2 months? A And when they were inundated they took more than 2 months. When they were inundated both with requests to investigate White House personnel as well as requests to investigate new appointees to other agencies and departments, it was tough. Again, this is not a criticism. I'm not blaming them. They did their best. It's not as if they weren't working. They were working their best. They just didn't devote enough resources. And Freeh at one point, I have a memory at some point promising that he would devote more resources and make sure it was operating as efficiently as it could be operated. Q Mr. Freeh was appointed on -- you were one of the people that recommended him, weren't you? A Correct. Q Did you have a professional relationship with Mr. Freeh previous to him coming to the FBI? A I knew of him professionally in New York, but I had no professional relationship with him. Q How did you know of him? A Because he was a prominent lawyer in New York, a prominent government lawyer in New York. He was Assistant United States Attorney of the Southern District of New York. He was highly respected among all elements of the bar, both the prosecutors, the agents, as well as defense attorneys, which is very unusual. If you are a prosecutor, prosecutors may like you. If you are a defense attorney, defense attorneys may like you, but prosecutors don't like you. Louie Freeh was one of those rare people who people had good things to say about people in all branches of the bar, as well as the judges who he tried cases before. Q So your recommendation was based upon more of a general reputation than a very personal -- A That's correct. I met him perhaps two or three times in my life, and mostly at social-type of occasions. I never appeared before him when he was a judge, because I think he became a judge just as I was leaving. Q I want to refer you to the first page of Exhibit No. 5, if I may. You had said that the FBI was having problems with manpower, and I believe at the bottom half of the page, it says of the 493 individuals in the White House, 239 had permanent passes and 165 have favorably adjudicated background investigations. A Uh-huh. Q Only 67 out of those had background investigations pending. The 165 that had had their background adjudicated, but did not have their permanent pass, of that number, do you know why they still didn't have permanent passes? A When was this written, by the way? Q This was in March of 1994. A Yes. It is almost a year. So this is about the time I resigned. Mr. Pedowitz. We know it was written on that date. Before you said that you saw a fax line on there that said something about March of 1994. Mr. Mazur. 3-10-94. Ms. Olson. It looks like 3-15. Mr. Mazur. That could have been written any -- The Witness. Yes, earlier. BY MS. OLSON: Q That's the only date that I have. A I do know that once an FBI background investigation comes in, this "B-I", it has to be looked at by people -- by Kennedy. Q It said it had been favorably adjudicated? A Or at least the FBI -- I don't know. Q It is your understanding the FBI does not adjudicate background investigations? A That's correct. They just send in the data. So it just meant that the paperwork was still -- the final paperwork had not yet been done. Q And would that have been with Mr. Kennedy? A I'm not sure. I'm not sure. Maybe not. Q So out of 493 individuals, 165 with their FBI completed paperwork, do you know why they didn't have their passes? A Well, why they didn't have their permanent passes? Q Uh-huh. By the way, this is a document that was created by the White House; isn't that true? A Apparently, yes. Q So these are the numbers from -- A No, the numbers are -- well, what this shows is -- if this is written about March of 1994, this is a very favorable document. It shows basically, yes, theoretically the final paperwork hadn't been done in the past, but now you have 235, 239 and 165 who have been investigated and approved, in effect. Q Fifty percent of your people had permanent passes at this time, approximately? A Yes, but 85 percent or 80 percent have been investigated and the investigation came up with nothing that would prevent them from getting a permanent pass. Maybe they didn't have the actual hard pass, but 80 percent had already been cleared. Q No. They had been favorably adjudicated? A Well, that's what it means. It means basically it is going to get their pass. There is nothing to stop it anymore. Q Do you know why they didn't have their passes? A I don't know. Maybe it was just a delay of doing the paperwork. But the fact is, the key is, what makes this an optimistic figure is that 80, 85 percent of the people who work in the White House have been investigated and found not wanting. It is the 67 who -- it is the 22 and the 67 which should not exist, except maybe people, you know, were hired near the end of the year. Harold Ickes is hired in January of 1994. He may be among the 22 or the 67. But the fact is, by March of 1994, if that's the date, 80 or 85 percent of the people basically had been investigated and found, you know, that there is nothing to prevent them from getting a hard pass. Q Are you aware of a memo that Mr. McLarty sent out the first of March telling people if they didn't finish their paperwork immediately they would be put on unpaid administrative leave? A Yes, I'm vaguely aware of that. Do you have the memo? I'm vaguely aware of that, because that is consistent with what I have been telling you before. We were getting frustrated, you know, I would talk to certain senior people to try to urge them -- although mostly Kennedy, Kennedy would do it and Foster would do it when he was alive, and then I do remember finally urging McLarty, the Chief of Staff himself, to take dramatic steps in this regard, and finally he did. Q And isn't that why the paperwork outstanding was down to 22 by mid-March? A Well, maybe, maybe. Q I have a document that -- were you aware of a request from the Vice President's Office to receive all of the copies of the FBI background summaries on the Clinton administration people? A Was I aware of that at the time? No, I was not. Q Back in, I guess, June of 1993, did the FBI ever contact you that the Vice President, Al Gore's office had asked them for all background summaries on Clinton administration people? A No, they never did, and I'm sure that Bill Kennedy would have not -- I mean, would have stopped something like that. Ms. Olson. I have a document that has been marked as Deposition Exhibit No. 2. It's CGE 47962 and, in fact, it is a June 19th, 1993 memorandum to a Joanne Hilty in the Office of the Vice President from Mr. Kennedy, stating about FBI background summaries and SCI clearances. The memo was CC'd to you and Craig Livingstone as well as Bob Manzanares, M-A-N-Z-A-N-A-R-E-S, Director of the National Security Council Administration. Basically, the memo stated that the FBI informed Mr. Kennedy that the Office of the Vice President requested copies of FBI background summaries prepared for the administration. [Nussbaum Deposition Exhibit No. 2 was marked for identification.] BY MS. OLSON: Q Was there any meetings with individuals in the Vice President's Office about the propriety of them asking for those backgrounds? A I did not attend such meetings and don't remember any such meetings. But Kennedy did absolutely the right thing. If somebody from the FBI reports -- to my knowledge, and this sort of confirms it, actually, or kept very tightly held, Kennedy was the person that I looked to and relied on and trusted, and still trust with respect to this thing, and I was very happy when Vince Foster recommended that Kennedy be brought on. I didn't look at FBI reports, nor do I think Foster looked at very many FBI reports. We relied on Kennedy. And the idea that somebody from outside the Counsel's Office, from the Vice President's Office would seek reports was clearly the wrong kind of thing to do and Kennedy stopped it. I'm sure it was a mistake. Q By tightly held, you mean that they were in the Office of Personnel Security in the vault under the guise of Craig Livingstone? A Under the guise of Craig Livingstone? Guidance. Q Under the guidance of Craig Livingstone. A Yes, yes. Q As well as detailees? A Yes. They were in the vault, and I know of no breach, despite all of this smoke to the contrary, of any security procedures. I do know now of this mistake that we talked about at the last hearing that Mr. -- Q You said you know of no breach of security procedures; did you know of security procedures when you were in the White House that were being proposed for that office? A I knew generally the security procedures to be proposed for that office. I knew FBI reports would be tightly held and that Kennedy was the person who would look at them and make decisions about them. Q Did you know that Craig Livingstone was looking at them and interviewing individuals below presidential senior level and talking to individuals about derogatory information as a part of his job? A No, I don't know that. I didn't know that took place and I still don't know that it took place. Q Craig Livingstone testified in our hearing that that was part of his job? A That he talked to individuals about derogatory information, individuals -- you mean third-party individuals? Q No, in the White House, that that was part of his job as director of the office to go and talk with individuals who had derogatory information in their file? A In their own reports? Q Uh-huh. A Well, Livingstone was working for Kennedy and if Kennedy delegated him to do that, you know, it would have been appropriate for Livingstone to do that, if Kennedy delegated him to do that. Q Do you believe that that was the procedure in prior administrations, that the Director of the Office of Personnel Security would go talk to staff at the White House about derogatory information? Mr. Mazur. In their own files. Ms. Olson. In their own files. The Witness. You are not talking about talking to a third party about another person? BY MS. OLSON: Q Craig Livingstone was tasked to go out and talk to individuals about their own files rather than it coming from the White House Counsel's Office? A I'm not sure that's true. Q I will make it part of the record, Mr. Livingstone's testimony. A Yes. Let me hear it. Mr. Pedowitz. Can we take a short break while -- BY MS. OLSON: Q I have a page from the testimony of our hearing. It is page 120. There was a question that was said: Did you ever tell anyone that you would read their background files or knew information about them in a matter that might be interpreted by that individual that you could use this information against them at some time? Answer: As a course of my job it was common for me on a daily basis to talk with individuals about information in their backgrounds. Let me show you that page. [Brief pause for document examination]. The Witness. Let me just tell you what my understanding was. It was my understanding that Livingstone's job was basically an administrative job. He had access to the FBI background reports and could read them, but any things of any concern that he thought would create a problem, it was his function to pass it immediately to Kennedy and then Kennedy would decide what the appropriate thing is to do. That was my understanding of Mr. Livingstone's job in this regard. BY MS. OLSON: Q So it was not your understanding that he would actually interview people on a daily basis about their background files and discuss -- A That's correct. That was not my understanding. Q Okay. Ms. Olson. I will make a part of the hearing transcript, page 120, as Deposition Exhibit No. 14. [Nussbaum Deposition Exhibit No. 14 was marked for identification.] The Witness. If Mr. Kennedy asked him to see somebody or talk to somebody, obviously he would follow Mr. Kennedy's instructions. It was my understanding that any information on background, if it raised any question of sorts, would have to come to Mr. Kennedy. Mr. Pedowitz. Can we take a break? Ms. Olson. Sure. [Recess.] BY MS. OLSON: Q To finish up this area we were talking about with Mr. Livingstone, during his transcript of the testimony, he was asked by Mr. Stroman if the flow of paperwork was from the Counsel's Office to your shop, meaning Mr. Livingstone's shop and not the other way around; Mr. Livingstone said yes. Mr. Mazur. Could we see what you are talking about. Ms. Olson. Okay. [Document tendered.] Ms. Olson. We will make it the same part of that Deposition Exhibit. This is I believe -- actually it is a question on page 64, and this is just a preliminary to a question that I'm going to ask. [Document tendered.] Ms. Olson. These are Mr. Livingstone's responses. The Witness. Okay, yes. BY MS. OLSON: Q In Mr. Kennedy's deposition on page 20, in response to a question of could he describe how Craig would -- what he would do in reviewing these files, how he would pass them on to you. Mr. Kennedy says: Those files did not come to me unless there was a problem that he, meaning Craig Livingstone, felt like he needed to discuss with me. The next question is: So Craig Livingstone was adjudicating the files completely? Mr. Kennedy says: No. If he felt like he had a problem that needed to come to my attention, there was a substantive problem in someone's background, he would usually bring those to me and say, I think this is a problem, do you agree. But, he was adjudicating backgrounds, yes. That was his job. [Document tendered.] The Witness. Yes. What's the question? BY MS. OLSON: Q Were you aware that Mr. Kennedy had tasked Mr. Livingstone to adjudicate backgrounds which included interviewing individuals about their background investigation? A I was not aware that Mr. Livingstone was interviewing people about their background investigations. I consider Mr. Kennedy was making the final decisions on background. It may well be that -- and I don't think Mr. Kennedy's testimony is inconsistent with that. If there was a problem, it would come to Mr. Kennedy. In the first instance, Mr. Livingstone looked at backgrounds, but I think you have to distinguish between backgrounds, too, because a lot of things are being muddled here. There are backgrounds for people on the White House staff for access to the White House. That's what I understand Mr. Livingstone was primarily concerned with. There are then backgrounds on appointees to significant offices that -- which is the bulk of Mr. Kennedy's job. In no way do I believe Mr. Livingstone was adjudicating those backgrounds. It may be on the cooks or gardeners or anybody in the White House, Mr. Kennedy decided not to read every background himself but left it to Livingstone to look at them in the first instance to bring to him any problem. But on the Deputy Attorney General or the head of the FBI or a myriad of other positions that we had to appoint, he didn't give it to Livingstone and say: See if there is a problem and get back to me on that. Q Mr. Nussbaum, there is no evidence that Mr. Livingstone was doing the Deputy Attorney General. A Or any -- Q My only question to you was, were you aware that Mr. Livingstone was sitting down with White House staff and discussing their FBI background files with them and that that was a part of his job? A The answer is no, I was not aware of that. Q Were you aware that no one in the prior White House administration, and going back to the Johnson era, had ever allowed the Director of the White House Security Office to have any discussions whatsoever with White House staff about their backgrounds? A I'm not sure that's so. I'm not sure Jane Dannenhauer didn't speak to people on the White House staff about things in their backgrounds. I'm not sure that's so. Q I have a document which I am going to put in the record as Deposition Exhibit No. 14, which is the testimony of Jane Dannenhauer when she testified before this committee on June 19th. Mr. Pedowitz. This is all very interesting, but it is not testing his recollection or knowledge of the facts. I don't see any purpose in putting into the record the testimony of other witnesses. It is not going to refresh his recollection. Ms. Olson. Well, no, but Mr. Nussbaum has made a statement on the record that he is not sure that Ms. Dannenhauer has not -- and for the record, this is going to go into the record. I'm not trying to refresh his recollection. I believe it's relevant. Mr. Pedowitz. It's part of the record. It's part of the deposition record. You already have it in a deposition. I don't see any point in putting it into his deposition. BY MS. OLSON: Q In Deposition Exhibit No. 14, it states that the previous reports were viewed by her and sent to the deputy counsel or the counsel, and I believe -- A Yes. Q In your case that would have been you or Vince Foster. And for the record, I will just put in her statement? A Let me see her statement. [Document tendered.] BY MS. OLSON: Q And obviously her testimony at our hearing is also in public record. A Yeah, that's right. This is exactly the same procedure that we followed. Where is the difference? Where -- Q Mr. Nussbaum, Jane Dannenhauer never sat down with an individual and interviewed -- A Where does it say that? Q That is right. Because she did not do it. A Where in the statement does it state she never did it? Q Ms. Dannenhauer is outlining everything that she did in the process -- A Where -- Q Mr. Nussbaum, please don't interrupt. She is outlining the process of what she did. It is not in there, because she did not do that. She reviewed those back and then gave them to the counsel or the deputy counsel? A Let her finish her testimony. Q She did not meet with individuals in the White House as Mr. Livingstone and Mr. Kennedy said it was Mr. Livingstone's job? A Do you have testimony from her to that effect? Q I have her statement? A Is it the statement that you are relying on for that judgment you are just making now? Q As well as her public record in testimony for 6 hours before this committee? A Did she ever say she never sat down with White House Personnel and asked them about anything in their backgrounds? Because -- Q Mr. Nussbaum, do you have any knowledge that she did? Because my knowledge is that she did not. If you do not have any knowledge that she did -- A I have no knowledge that she did, I have no knowledge that she did not, and what it sounds like to me is that you don't have any knowledge either or she did or did not, because that statement does not confirm that. Q Mr. Nussbaum, I am not going to get into an argument with you. Mr. Pedowitz. That is exactly what you are doing when you start examining a witness and making speeches about what other people have said, you are arguing with them. That is exactly what you are doing. The Witness. You know what I suggest you do? Mr. Pedowitz. If you want to argue with him, he will argue back. Why don't we just conduct the deposition? Ms. Olson. Do you have an objection at this point? Mr. Pedowitz. Yes, I do. Ms. Olson. Why don't you state it for the roared. Mr. Pedowitz. My objection is quite simple. You are not conducting a deposition. Ms. Olson. What am I conducting? Mr. Pedowitz. You are engaging in an argument with the witness. Ms. Olson. I do not intend to engage in any arguments with Mr. Nussbaum. I will let the record speak for itself. If Mr. Nussbaum has no knowledge of whether or not Ms. Dannenhauer did, I will let the record speak for itself, as well as the public record. The Witness. I'm also willing to let the record speak for itself. Why don't you ask Ms. Dannenhauer the question explicitly and see what she says? She may say what you think she says, but she may not. Ms. Olson. Let me show you what's been marked as Deposition Exhibit No. 6. It's a July 13th memorandum which is from Bill Kennedy to all White House complex staff, Bates stamped 48215, and it discusses a problem that interns and volunteers were being requested to clear persons into the White House complex and advises that only staff holding hard badges could make appointments for entrance into the White House via the waives system. [Nussbaum Deposition Exhibit No. 6 was marked for identification.] The Witness. Right. BY MS. OLSON: Q Were you aware of a problem occurring during this period concerning volunteers or interns waiving people? A Waiving people? No, I was not aware. Q Did you have any meetings with any Secret Service agents or were you ever -- or did any Secret Service agents ever discuss any meetings they were having concerning these problems in the White House prior to July of 1993? A No. This was in Kennedy's area. He would handle it. Q At the bottom of this document, Deposition Exhibit No. 6, it says: "PT to talk to Livingstone about this." Do you know what, if anything, Mr. Livingstone had to do concerning this problem and if his interns and volunteers were waiving people into the White House? A No, I don't know what the note means. I don't know if it means that at all. What's PT? Q I assume it might be Patsy Thomasson. A It could be. Q Okay. Ms. Olson. Off the record. [Discussion off the record.] BY MS. OLSON: Q Do you know if there was a large number of volunteers that were working in the White House complex as compared to previous administrations while you were there? A I do know we had some volunteers. I don't know how it compares to previous administrations. Q Do you know if there was a 300 percent increase in volunteers in the White House complex in May of 1993? Mr. Pedowitz. He already testified that he didn't know how it compared to prior administrations. I mean, it's clear that what you are doing is trying to ask questions which put your point of view into the record. It is not proper deposition questioning. I object. Ms. Olson. Objection is noted for the record. I have a document which I have marked as Deposition Exhibit No. 3. It's a memorandum to William Kennedy from Craig Livingstone which discusses extension of Nancy Gemmell's employment in the Office of Personnel Security. It is dated May 10th. [Nussbaum Deposition Exhibit No. 3 was marked for identification.] BY MS. OLSON: Q And in the last sentence of the first paragraph it says: An action is necessary to keep Ms. Gemmell on the status through August as a result of the 25 percent staff reduction, coupled with the 300 percent increase in volunteers at the White House complex. Do you have any knowledge of that? And obviously, you do have knowledge of a 25 percent staff reduction; you have spoken of it previously, and so my question just goes to -- A No, I knew there was a -- I don't know if this 300 percent increase, what is he comparing it to? Prior administrations, prior months? I'm not sure what he is comparing it to. I don't know. Q I don't either. That's why I'm asking you. A I have no knowledge of that. I do know about the 25 percent staff cut and now I do know also from prior testimony that Craig Livingstone wanted to keep Nancy Gemmell who had worked with the prior administration on. Q Until August of 1993. I believe she retired at that time. A Yes. Ms. Olson. I have a document which has been marked Deposition Exhibit No. 4. I will ask you to read that document. It's Bates stamped No. 47888. It is dated June 10th, 1993, and it is an assignment from Bill Kennedy -- from Bill Kennedy and Craig Livingstone regarding drug use in the White House. [Nussbaum Deposition Exhibit No. 4 was marked for identification.] The Witness. An assignment from Bill Kennedy and Craig Livingstone to who? BY MS. OLSON: Q My question is, do you know what this assignment was and who it was to, since it obviously states it is from Bill Kennedy and Craig Livingstone? A No, I don't know. Q The purpose of this document is to find out what the President's legal obligations were concerning present and recent drug use in the White House, and it had a due date of Thursday, June 17th, 1993, with a focus within this document saying: We are dealing with individuals who serve at the pleasure of the President, not career civil servants. Does that matter and how so? The assignment evidently wants people to find out what the legal or regulatory rights and responsibilities are of the President with respect to individuals that came up during their background screening to either have present or prior drug use. Did you task Bill Kennedy to assign this? A No. I didn't specifically task Bill Kennedy to assign this. Obviously, Bill Kennedy operated under my general supervision and one issue that arose from time to time was, you know, what do we do when we discover prior drug use. It is fairly common among a certain generation that people in that generation would have smoked marijuana, for example, much more than people in previous generations or maybe subsequent generations. So we had to come up with, you know, with policies as well as understanding of the President's and others' legal rights and obligations, and that's what Kennedy apparently was trying to do here. But did I have a specific conversation about this assignment? No. Q Did you have any conversation with Mr. Kennedy to find out if individuals in the White House with present drug use could be kept on staff? A Yes, yes. Q Can you describe that conversation, please? A At some point I talked with Kennedy and Foster as to whether or not -- how do we deal with these kinds of issues, and basically we reached no final conclusion. What we did is, we have to take it on a case-by-case basis. If somebody smoked, and there was no way of, you know, mathematically determining it, if somebody smoked one marijuana cigarette 15 years ago in college, that is not going to prevent them from getting a job in the White House. If somebody was a cocaine dealer 3 months ago but now claims he has gone straight and will never do it again, we will keep him out of the White House or out of, you know -- what's in-between, we have to make a judgment on a case-by-case basis. Drug use per se, prior drug use per se is not an automatic disqualification. That is the only basic policy we reached, and Kennedy and Foster, and ultimately I, if it was brought to me, nothing was ever brought to me -- well, one case was brought to me. Q Was present drug use an automatic disqualification for serving in the White House under your tenure? A Absolutely. Any violation of law, including present drug use, would be an absolute disqualification. Q So it would be your position that you would not allow anyone to be in the White House who had present drug use? A Absolutely. I would not allow anybody in the White House. It was a violation -- by present drug use, I'm assuming meaning drug use which is a violation of law. Q Illegal drug use. A Illegal drug use, absolutely. Now, yes, it would be a disqualification. Q Was it ever brought to your attention by Mr. Kennedy that he had been notified that there was current drug use by one or more individuals who were in the White House? A No. I don't recall ever being notified about that. DCMN MAYER Q Did you ever deal with that issue, if you were not notified of current drug use by a senior official in the White House? A No. No, that's something I would remember. No. I mean, everybody in the White House understood that they have to obey the law when they are working in the White House. Now, some people may not have obeyed the law in the past, and then we have to make a judgment whether that is disqualifying or not. Ms. Olson. I have a document which has already been marked as Deposition Exhibit No. 8, and it includes a memo from Nancy Gemmell, through Craig Livingstone, to William Kennedy, dated July 7th. There are two copies of this. One has a Bates stamp number, CGE 47927, and it goes through CGE 47932. The other copy does not have a Bates stamp number. [Nussbaum Deposition Exhibit No. 8 was marked for identification.] Ms. Olson. The reason the copy with the Bates stamp number is accompanying the copy without the Bates stamp number is because the Bates stamp number is redacted by the White House, but we have an unredacted copy, and I include it so that you can read the whole thing. The question I was going to ask you is solely on Bates stamp number 47928 through -29, which is the redacted portion. You can find it unredacted on page 5 of our copy. Mr. Pedowitz. I think we should probably reflect that Mr. Fitzpatrick has just entered the room. Mr. Fitzpatrick is a lawyer from Arnold & Porter and also represents Mr. Nussbaum. The Witness. What do you want me to look at? BY MS. OLSON: Q At the top of page 47929, which says, "Attached are copies of two forms used to determine staff member status. Ms. Gemmell is reviewing basic guidelines previously used when considering release or review of background investigations." A Right. Q She goes on to say, "There are two forms which may be used to determine staff member status," and she says, "The first form is sent to the USSS," which is Secret Service, "to determine if the individual is still a current passholder. A second form is sent to the FBI SPIN unit to determine if the individual has ever had a background investigation, and if so, was he or she processed as a presidential staff case." She goes on to say, "Normally we would have the background investigation information" -- A Where is that? Is that in the redacted portion? Q Yes. And you also have a copy unredacted? A I do. Mr. Mazur. Are you sure these are redactions as opposed to somebody just highlighting? Ms. Olson. I'm not sure. I am saying the copy we received, it's unreadable. The Witness. Okay. I see it now. BY MS. OLSON: Q "Normally we would have the background investigation information in our files. However, at present we do not, since all previous security files departed the White House prior to January 20th, 1993. Therefore, in the future, it would not be necessary to send the attached form to the FBI once the files are reestablished." She also attaches two forms that she mentions, which are merely a piece of paper that has a place to put the name of the individual and, I assume, for the agency, the Secret Service in the first case, to put whether it is a permanent passholder, a yes or no; and whether the person is current or deactivated. And then the second form for the FBI SPIN unit is to list the name and the type and date of investigation. Are you aware if Mr. Livingstone ever used these forms that Ms. Gemmell told Mr. Kennedy, through Mr. Livingstone, about? A No, I'm not aware one way or another. I'm just not aware. Q Are you aware of any change in policy not to use forms that had been used in previous administrations to find out if a staff status was active or inactive and whether they were current passholders? A No, I'm not aware of any such change in policy, if there was such a change in policy; I'm not sure there was. My basic belief was that, by and large, we were following the policies that had been followed by the prior administration with respect to these matters. Q Were you following the policy that Ms. Gemmell stated in that memo, or I believe she called it "guidelines" that she provided to Mr. Kennedy? A All I can testify is that generally I believe we were following the policies of the prior administration. Q Okay. Going back to the Deposition Exhibit No. 4, which was the assignment from Bill Kennedy and Craig Livingstone, Mr. Livingstone testified in his deposition that he had used various drugs until 1985. Do you know if Mr. Livingstone was making this assignment concerning his own background? A No, no, I don't know that. Q In the forms that are in the Deposition Exhibit -- Mr. Mazur. 8. BY MS. OLSON: Q Deposition Exhibit No. 8, have you ever seen those forms before? A No. Q Or seen them used within the White House while you were there? A No. Q We received a set of Mr. Livingstone's exits and entries from May of 1996 for the entire month, and obviously, you weren't there in May of 1996, but I will make them a part of the record. They show Mr. Livingstone pretty regularly coming into the White House, and I think it's probably best shown on page 2, between 10 and 1 o'clock in the afternoon. Were you aware of Mr. Livingstone's hours during the period while you were there in the White House of his coming in to supervise the Office of Security, and do you know if his hours began at 10 or 12 or 1:30 in the afternoon? A No. It was my belief that Mr. Livingstone worked as did everybody else, long and hard days, and that he was an able and efficient and energetic worker. That was my belief at the time that I was in the White House. Q So there was no flextime arrangement with Mr. Livingstone that you are aware of? A I am aware of no flextime arrangement with Mr. Livingston. Mr. Pedowitz. Do you know what that means? I don't know what flextime means. Ms. Olson. Flextime is a new term in government that allows people sometimes to work certain days and certain hours that aren't necessarily in accordance with normal hours. A lot of times women or young fathers are afforded that time so that they can take care of family. The Witness. There was no flextime arrangement that I know of in the White House. The only time he worked in the morning -- was from 7 in the morning until midnight seven days a week. All the other time was your own. BY MS. OLSON: Q And to your knowledge, Mr. Livingstone was under that same -- A That's correct. And I believe he worked long and hard hours at that time. Ms. Olson. On Deposition Exhibit No. 10 there is a memo, which is Bates stamped number 47883, which is to David Watkins from Mr. Kennedy, and it requests a start date of employment of David Craig Livingstone to be on February 8th, 1993. [Nussbaum Deposition Exhibit No. 10 was marked for identification.] BY MS. OLSON: Q Can you please just describe what participation, if any, you had concerning his February 8th, 1993, start date? A I remember having no participation with respect to that. This was left to Foster and then to Kennedy. What I remember very clearly is having conversations with Mr. Foster about the need to make sure we had able and top-notch people in this area, and I knew that in the prior administration, the Deputy Counsel himself had spent virtually all of his time, or 90 percent of his time, on these types of matters. I didn't want Mr. Foster to spend 90 percent of his time; Mr. Foster didn't want to spend 90 percent of his time. We were going to have a different arrangement. He was to be involved in much more substantive things. On the other hand, this area was very important, the security area. So I remember saying that we have to make sure we get somebody who you trust, and I trust, to handle this and to run it in an able, efficient and secure manner. He recommended Mr. Kennedy to me. I talked to him at length about Mr. Kennedy. He knew Mr. Kennedy obviously from the Rose Law Firm; I didn't. He described him in detail to me, his strengths; and as a result of that conversation, I said, fine, we will bring Mr. Kennedy on. And then I met Mr. Kennedy, and I immediately was taken with him. Q So your earlier statement that you were running things as similar -- or I think you said even stronger than previous administrations was not correct insofar as the Office of Personnel Security was concerned? A No. Kennedy was the person -- John Smith, I think, was Boyden Gray's deputy, and he spent 90 percent of his time on this. We found somebody who would spend 100 percent of his time on that, and that somebody was going to be Bill Kennedy. Q He spent 100 percent of his time on White House Security Office matters? A On the clearance process. Namely, presidential appoint -- the vetting process, the clearance process and White House security matters. Q He spent 100 percent of his time on that? A Bill Kennedy. Q Uh-huh? A Yes, he spent 100 percent of his time on that. That was his job. Q My understanding was also that Mr. Kennedy was taking care of Whitewater matters? A No, Mr. Kennedy was not taking care of Whitewater matters. He was spending -- he was doing what John Smith was doing, the deputy counsel, associate counsel. He was doing it. And Craig Livingstone was doing what Jane Dannenhauer had done -- to my knowledge, following the same procedures -- and Ms. Dannenhauer stayed on for a while, and Ms. Gemmell stayed on for a while, and we tried to work with those people to learn what the proper procedures were, and I believe that was done. Q Do you know when Ms. Dannenhauer left? A I don't recall. Q Do you know if it was in the first month of the administration that she was asked to leave? A No, I don't know if that's so. I don't know that she was asked to leave in the first month of the administration. Q The document, Deposition Exhibit No. 10 is cc'd to you. When documents are cc'd to you, do you personally receive them, or does someone else receive them? A Well, they go to my secretaries, executive assistants, but I would receive this. Well, I shouldn't say that for sure. When a document is cc'd to me, I normally see it. I look at the paperwork that comes to me. I may just glance at it. I may just take a quick glance, but I would see it. Q There is an initial outside of Mr. Kennedy's name which looks like "WHK" and then another initial. Do you recognize the second handwriting? A No, I don't know who it is. Q Okay. It's not your initial? A Oh, no. Q And at the bottom of the cc, you were cc'd, Mr. Foster was cc'd on Deposition Exhibit No. 10, and then a person named Fehrer, F-E-H-R-E-R. Do you know who that is? A No. Q Do you know if that's a White House counsel member? A I don't believe so. Ms. Olson. Deposition Exhibit No. 11 is a memorandum, which is to you from Mr. Kennedy, dated February 23rd, 1993, and is an overview of major functions of the White House Security Office. It's Bates stamped number 47968. [Nussbaum Deposition Exhibit No. 11 was marked for identification.] BY MS. OLSON: Q I ask you if you recall receiving this memorandum. A I must have. You know, it was three years ago. I mean, do I remember right now, no. But if Kennedy sent me this memorandum, I got it. Q Did you ever have any conversations with Mr. Kennedy about the functions of the White House Security Office? A Yes, from time to time, you know, we would discuss the -- well, you said the White House Security Office. I shouldn't -- I had discussions with Mr. Kennedy about his functions, his role and what he was doing. The White House Security Office was just one part of that, which reported to -- the other parts were broader and even more complex. But I did talk to him from time to time, and he had a lot of things that he had to do. This memorandum sort of lays it out on an overall basis. But he was getting on top of it. He was energetic, he was able, and he was doing the best he could within the limitations which -- you know, of staff cuts and the difficulty of getting enough people to do what had to be done. Q The first thing that it talks about as a function is processing compartmented clearances. Were you aware that Craig Livingstone was given a compartmented clearance? A I don't remember. I don't remember one way or another whether I was aware at the time. There are all sorts of levels of clearance. Q Can you just describe what a compartmented clearance is? Is it equal to a Top Secret or above a Top Secret? A It's -- there is a Top Secret clearance and then there are clearances which are even higher than Top Secret, but they are only in specialized compartmentalized areas, like a need-to-know basis; there has to be a reason, and very few people -- you know, obviously not everybody would get those kinds of clearances. Kennedy got it; I got it at various points, but only the top level people would get it. Q Were you aware of whether or not Mr. Livingstone was given that clearance? A I wasn't aware one way or another whether he got it or not, no. Q Were you aware that another duty that Craig Livingstone did was to review IRS return information that was received in the course of a background investigation? A Well, IRS information can only be gotten if employees, as I understand it, sign waivers with respect to that. Q Do you know if Mr. Craig Livingstone was tasked to review that information? A I have no memory now one way or another. Ms. Olson. I have a document which is Deposition Exhibit No. 12. It's a memorandum which went to Vince Foster from Mr. Kennedy. It's Bates stamped number 47949, and has a cover sheet, and then there is a memorandum which is to Mr. Kennedy from Craig Livingstone, which was attached, which is 47970 through 47971. It is dated February 18th, 1993. Mr. Livingstone's attached memo is dated February 17th, 1993. [Nussbaum Deposition Exhibit No. 12 was marked for identification.] BY MS. OLSON: Q Did you have any discussions that you recall with Mr. Kennedy concerning Mr. Livingstone's work with the Internal Revenue Service as part of the security clearance process? A No. Q Do you know if Mr. Kennedy had any discussions with the IRS about access to 6103 material by an individual who had a salary level below the legally mandated amount? A No, I don't know if he had such a conversation. Q Were you aware of 6103's requirement that you had to have a certain salary level in the White House to have access to 6103 material? A No, I wasn't aware of that. Q I believe the current amount is 108,000. Do you know what the amount was -- A Since the White House cut salaries, no one, or virtually no one, including Mr. Kennedy, had a salary of $108 -- well, what did we pay Kennedy? Q It is $108,000 today in 1996. I'm not sure what it was in 1993. Do you know? A Well, very few people -- there were very few people in the White House who had salaries above $85,000 or $100,000. Q Were you ever made aware of a regulation under 6103 that did attach such access to a salary level? A No, I was never made aware of such a regulation. Q I believe it attaches it to an SES level, which is a salary level. A It may be, but I was not aware of it. Only the President then would have had access, I guess. He made $200,000. We should send all the paper to him unless he raised our salaries. Ms. Olson. There is a memo I am going to make a part of the record, which is CGE 48059. I will make it Deposition Exhibit No. 11A, since it goes with Deposition Exhibit 11. This is a memo to Judge Mikva, who obviously was the counsel after you left, from Craig Livingstone, where Mr. Livingstone is discussing his duties and talking about his work reviewing IRS records; and I'm making that just a part of the record. [Nussbaum Deposition Exhibit No. 11A was marked for identification.] BY MS. OLSON: Q It's in the second paragraph where he talks about -- I'm sorry, the third paragraph where he talks about his predecessor and that he believed that his level of work reviewing IRS records and adjudicating FBI backgrounds demonstrated that he was deserving of a pay increase. This is a date obviously after you left, but I just ask if that refreshes your recollection of any conversations you had about Mr. Livingstone adjudicating FBI backgrounds or reviewing IRS records and whether he was doing that while you were there? A No, it doesn't refresh my recollection. Q Okay. In your testimony before this committee on June 26th, you had stated that you didn't believe in your opening statement there was a misuse of private government information and that you believed it was an unintentional error? A No, no. I said -- Q Opening statement at page 20, I believe says, "There was no misuse of private government information." A "In the Clinton White House I knew, there was no enemies list, there was no deliberate misuse of private government information, there was no digging up of dirt from government files to use against political opponents." That's what I said, and that's what I believe. Q And it is very similar to your opening statement. I'm taking that from the transcript. The statement that there was no misuse of private government -- Mr. Pedowitz. He said deliberate. Ms. Olson. There was no misuse of private government information. The Witness. My statement says, "There was no deliberate misuse of private government information." In the transcript of the hearings? I think I would -- Ms. Olson. It is "deliberate." I apologize. The Witness. It says "deliberate"? Ms. Olson. Yes, it does. BY MS. OLSON: Q You also stated that there appeared to be an unintentional error after listening to the testimony? A I said -- Q And I can show you the transcript page. This is 257. A Well, I would like to see what I said. Q Sure. Here is the page of the transcript where you said it appears to be an unintentional error? A I cannot believe that they or anybody else in the White House would commit an intentional breach of privacy. This was -- this appears to me to be an unintentional -- yes, I did say that in response to a question, after listening at this point to -- Q I'm doing this as a -- it is just preliminary. You also said that you had based your opinions largely on the sworn testimony that the error was innocent, and I can show you that page. A Yes, yes, I assume I said that. Q A lot of information about Mr. Marceca, as well as Mr. Livingstone, has come to light since that testimony. Were you aware that Mr. Marceca was helping White House employees, for lack of a better word, cleanse their backgrounds in order to avoid dismissal? Mr. Mazur. I object to the form of the question. The Witness. I wasn't -- Mr. Pedowitz. What's the foundation for it at this point? You say a lot of things have come to light. And then you say, were you aware, suggesting that it's come to light. It may be that it's come to light in that respect, but I would appreciate it if you could establish that there is a foundation for your question. Ms. Olson. I will rephrase the question. BY MS. OLSON: Q Do you have any knowledge of Mr. Marceca helping White House employees cleanse their backgrounds in order to avoid dismissal? A I don't remember ever hearing Mr. Marceca's name until 4 weeks ago, so the answer to your question is no. Q Do you know if anyone in the White House Security Office was tasked to review backgrounds and suggested ways they could change their answers in order for them to get clearances and passes? A No. Q If there were a memorandum that that did in fact occur, would it have been without your authorization or knowledge? A Yes. Look, obviously, if there is a -- I would never authorize a memorandum which would outline a procedure where people could change their answers or not tell the truth in some way as a way of cleansing their background. Obviously, if there are misunderstandings and misinterpretations about something, you have a right to go to people and ask them to clarify something. There is nothing wrong with that. There is something wrong with telling people, you are going to change your answer; your answer may be true, but you can change it to pass a background check. That is something I would never authorize by memorandum or in any other way, shape or form. Ms. Olson. There is a memorandum which I will make a part of the record as Deposition Exhibit No. 17, and it is a memorandum to Craig Livingstone from "SA", which stands for Special Agent Marceca, and the subject is Analysis of Personnel Background, and it states that subjects should first fire the attorney who wrote the letter for the following reasons -- Mr. Stroman. Do you have a number? Ms. Olson. It's 17. And he lists reasons that the attorney who wrote the letter -- I assume about a personnel background -- should be fired, and then suggests the following to be included in a new letter. [Nussbaum Deposition Exhibit No. 17 was marked for identification.] BY MS. OLSON: Q And I know you had never heard of Mr. Marceca, but did you have any information that reviews of these types of documents were being made by individuals in the Security Office with suggestions for changes? A No. Q Okay. It became an issue in your hearing that Mr. Marceca had put information, namely that document as well as other lists, on a computer disk; he left the White House with that disk and, in fact, it was just turned over to the committee in June right before the hearing? A Right. Q Mr. Marceca left the White House in 1993. Were you aware -- I'm sorry, February of 1994. Were you aware that individuals on detail, or at least one individual on detail, left the White House with National Security Council information on a disk and about individuals whose background files they had reviewed and written memos to others in the White House? A Was I aware of that? I'm still not aware of that. I'm not sure it happened. But was I aware of it? No. Obviously I heard testimony. I said that. I heard that he did leave with a disk that contained some information on it. I wasn't aware of that, because I wasn't aware of him. Q Was there any procedure put in place by the Counsel's Office to make sure that individuals didn't walk out of the Security Office with confidential or even security information? A Yes. There were all sorts of -- the procedures that were followed by the prior administration were followed by our administration. People were educated and told, you know, what their responsibilities were; and obviously among their responsibilities is not to take information out of the White House which shouldn't be out of the White House. To this day, I don't know one way or another whether Mr. Marceca violated that prohibition. Ms. Olson. There is a memorandum which I have marked as Deposition Exhibit No. 17, and it is number 123. Mr. Mazur. I thought the other one was 17. Ms. Olson. Oh. I will make this Deposition Exhibit No. 17A, a memorandum from Craig Livingstone to Marceca analyzing a personnel background, and it says NSC. [Nussbaum Deposition Exhibit No. 17A was marked for identification.] BY MS. OLSON: Q Did you ever review any analysis during that period of NSC individuals, either from Mr. Marceca, Mr. Livingstone or Mr. Kennedy? A No. Q The NSC has its own security office in the White House; is that true? Are you aware of the NSC security office that is located in the White House? A Well, the NSC has a security office, but we nonetheless are involved, the Counsel's Office is involved in doing background checks with respect to NSC people. We had a -- there was a -- the NSC has its own counsel, but that counsel, pursuant to an agreement between myself and Tony Lake, was also on my staff and reported to me as well as to him. This was a compromise we reached. There was a big dispute in the Bush administration on this issue, which sort of resulted in Iran-contra and various other things, that the NSC wanted its own counsel, it didn't want to be a part of the President's Counsel's Office. He had two counsels competing with each other, basically somebody on Boyden Gray's staff and Scowcroft's staff. Tony Lake and I sought to avoid that, so we reached an agreement that we would jointly select a person, which we did -- his name was Alan Kreczko and he would be Lake's counsel, but he would also report to me and be on my staff and attend our meetings. So he had a joint responsibility to both of us. Q My question, though, goes to NSC, that they had their own security office where their personnel files were kept. A That may well be. Q Do you have any knowledge of that office? A At this point, I have no specific knowledge or no knowledge of that, but that may well be. That procedure may well have been followed. I don't know one way or another. Q Do you know why Mr. Livingstone, and under his direction, Mr. Marceca would have ordered NSC files? A Because the -- presumably the Update Project that Mr. Marceca was working on was supposed to update everybody in the White House who had access to the White House complex, access to the President. So he has working from lists of everybody who he thought had access at that particular point. NSC people have access; that's why -- Q Do you know if the NSC -- A That's why he secured -- apparently that's why he secured files on people who worked for the NSC. Q Do you know if the NSC security office orders the updates on individuals who are on the National Security Council? A No, I don't know that, no. That I don't know, and I don't believe that -- I'm not sure that's true. I certainly don't know. We would not have two security operations procedures in the White House. Q What is your understanding of the function of the National Security Council's security office in the White House? A Well, obviously to preserve, to make sure that the National Security Council remains secure. There are very sensitive issues dealing with information and data that passes through the National Security Council. Q And do you have knowledge that their personnel files are kept there for that reason? A They may very well be kept there, but the clearance process to decide who goes in and who doesn't go in, that's under the White House Counsel's Office. There is no separate -- there is no separate -- they may participate in clearance procedures, but ultimately the clearance procedures as to who can work in the White House and not work in the White House, you know, comes from the Counsel's Office. Q And as you are aware -- you are aware that many of the NSC -- National Security Council's individuals have CIA clearance; is that correct? A Many of them do, of course. Q And that was your understanding, that that was all being kept by Craig Livingstone and your -- A No, no, no. It may well have been kept, you know, in a separate office in the NSC, but there is no question that if issues arose, the White House Counsel's Office, particularly Bill Kennedy, would get involved in those issues. There is only one White House. The NSC is part of the White House. Q During your deposition here, as well as your testimony, you had said that you basically tried to follow procedures that were in prior administrations? A That's correct. Q And I think you even testified that you had listened to the testimony the week before, from June 18th, of Boyden Gray and Richard Hauser and Abby Culvahouse who had been in prior administrations? A Yes. Q Did you read Mr. Gray's testimony of the differences in the Clinton White House? A Yes. Can I take a look at that? Mr. Pedowitz. Just so the record is clear. Mr. Mazur. That "yes" was thank you for giving me this thing, not the answer to the question. Ms. Olson. I have marked the testimony, which is the prepared statement of Boyden Gray as Deposition Exhibit No. 14, and it is the statement that Mr. Gray made a part of our record during our hearing. [Nussbaum Deposition Exhibit No. 14 was marked for identification.] The Witness. Yes. I did read this in the past. Yes, I read it prior to my testimony. BY MS. OLSON: Q And do you still believe that you were basically following the procedures that were established insofar -- A Absolutely. Absolutely. I found Mr. Gray's efforts to sort of distinguish between the procedures we followed and the procedures he followed as pathetic. That's what I found his statement to be. To say that -- well, for example, first of all, he is relying on press reports, if press reports are to be believed. Q Well, obviously Mr. Gray didn't have internal information -- A Right. Q -- at this point? A So he is pontificating from press reports. And then he says, based on these press reports, he points out that Mr. Livingstone did not personally review the FBI reports, but instead, delegated that function to others, whereas Ms. Dannenhauer would personally review the reports. In fact, as you pointed out and as Mr. Livingstone has pointed out from time to time, he did review FBI reports. But the fact is -- Q And delegated it to Mr. Marceca according to the documents that we have now put in the record from Mr. Marceca as Deposition Exhibit No. 17 and No. 17A. Mr. Mazur. He didn't finish his answer about why this was pathetic. BY MS. OLSON: Q Please finish why Mr. Gray -- A The fact is that we had less staff, that the White House Personnel Security Office had less staff. In fact, the memo to Mr. Mikva from Craig Livingstone points out how -- you know, how Jane Dannenhauer had two full-time assistants working for her and he didn't have the same kind of staff to perform his functions with. And so the differences that he is talking about, with less staff, that certain people had to be detailed from outside the White House and some functions were delegated to them, that's true. Q And whose decision was it to give less staff to the Office of Personnel Security, Mr. Nussbaum? A That was a decision made by the White House. Q Who at the White House made that decision? Wasn't it your decision? A No, it wasn't my decision. Q Aren't there memos to David Watkins discussing how many people that you are going to have in that office and how many people you are going to have in your own Counsel's Office? A There was a dispute, there was a dispute which continued throughout the year 1993 that we needed more people for these jobs, for Mr. Livingstone's office as well as the general vetting process. The fact is, basically the same procedures were followed. There is nothing in Mr. Gray's decision. Q But Mr. Nussbaum, wasn't it your final decision as to how many people would be in that office? A No, it wasn't my final decision how many people would be in that office. It was a decision made by the Chief of Staff and David Watkins, head of the Office of Administration, and they made it under great pressure, because they also were subject to constraints, namely, the -- let me finish -- namely, the budgetary cuts and the staff cuts. Q Isn't it true that you were given a budget to work with for your entire office and that included the Office of Personnel Security? A The Office of Personnel Security was not -- if I remember correctly, the Office of Personnel Security -- that's one of the fights. We didn't want the Office of Personnel Security to be on our budget; we wanted to be under a separate budget. I believe most of the people in that office, other than Mr. Livingstone, were on a separate budget. Q They were later moved onto a separate budget? A That's correct. That is right. Because -- Q And isn't it true in previous administrations that they were on the Office of the Counsel's budget? A I don't know whose budget they were on in previous administrations. I do know in our administration, because of the tightness with funds and with personnel, we tried to get them on a separate budget and we did get them on a separate budget. The fact is, we had to use detailees. We didn't have enough people. We had more work and less people. We had more work than the Bush administration and less people. We did our best under those circumstances. We did use detailees more than the Bush administration did because we had more work and less people, but the procedures we followed, the procedures -- let me finish. The procedures we followed were the same procedures; and these are -- Q Such as the procedures of having background investigation of individuals in that office? A Let me finish. Let me finish. And what Boyden Gray is pointing to are quibbles. They don't show the procedures were different. What they do show is sometimes different personnel we used for certain functions because of the pressures that we were under. You asked me a question. Q Finish, Mr. Nussbaum. Keep talking. I will ask my questions when you are done. A Thank you. Now you can ask your question. I'm done. Q Did you believe that it was a quibble that people previously in the Office of Personnel Security had background investigations, that every previous administration had required all individuals in the Office of Personnel Security to have full FBI background investigations before working there? A All full-time employees and all detailees who worked at the Office of Personnel Security in our administration, I believe had full background investigations. Q There was testimony at your hearing that they did not. A You are talking about an intern or -- Q I'm talking about interns. A Did you hear what I just said, "all full-time employees and all detailees"? Q Do you know when Lisa Wetzl got her security clearance? A Did she get a security clearance? Q Did she? A Well, apparently she did. Q I'm asking if you know if she did. A I don't know whether she got her security clearance. Q Do you know if she got one? A If she was a full-time employee, she got one. Do I know when she got one? No. Q But you know for a fact she got one? A If she was a full-time employee, I believe she would have gotten a security clearance. Q Do you know if she got one while you were at the White House? A When did she start? Q She started as an intern in the White House after she graduated from college, and then she became a full-time employee in August of 1993. Do you know if she had a security clearance when she became a full-time employee in the Office of Personnel Security? A The answer is, I don't know at this point. I don't know. If she was going to be a full-time employee, she would have gotten a full security clearance at some point. Q Are you stating that from personal knowledge? A No. I'm stating it from the kind of procedures that would have been followed. Q Okay. You had, I think -- Mr. Mazur. I don't understand the whole thrust of your question. Were you representing that she never received a security clearance, or that she didn't have one before she went to work in the security clearance office? Ms. Olson. I am asking Mr. Nussbaum if he has any knowledge. I'm not making representations. Mr. Pedowitz. You are asking questions which have implied in them statements of fact. Otherwise, you are creating a very misleading deposition record. Ms. Olson. Do you have an objection? Mr. Pedowitz. Yes. I object to the forms of your questions. Ms. Olson. So stated. BY MS. OLSON: Q You had called Mr. Gray's testimony "pathetic." Do you believe -- A I think what I said -- if I said it was pathetic, what I meant was the distinctions he tried to draw were pathetic. Mr. Pedowitz. Which is what you said. BY MS. OLSON: Q His distinctions that it was critical that all FBI background investigations be handled with the utmost care, do you believe that was done in the Office of Personnel Security during your tenure in the White House? A Yes. Q So you believe that Craig Livingstone and Anthony Marceca were handling these with the utmost care? A I believe -- well, I believe that from what I have read and what I heard -- things I didn't know at the time -- that Mr. Marceca made an error, a serious error, which apparently was inadvertent, in obtaining files of people who no longer had access to the White House; and he did it on the basis of a list given to him by an employee of the prior administration, which turned out to be an inaccurate list. That's what I believe, and that's what I have heard of the testimony and that's what I believe. It was unfortunate, it was a mistake, it should never have happened; and I said people deserve an apology for that, but that's all that happened. That's all that happened. Q Can you state your basis for knowing that's all that happened? A The basis is the sworn testimony I heard the day you called me to testify before your hearing. Q That would be the sworn testimony of Mr. Anthony Marceca, who has now taken a Fifth Amendment privilege in later testimony. I just want to know in Mr. Livingston's -- Mr. Mazur. As opposed to some different Anthony Marceca? The Witness. It's the same Marceca who testified under oath, who didn't take the Fifth Amendment when he testified on that day; the same Craig Livingstone who testified; the same Lisa Wetzl who testified; and also the testimony of Nancy Gemmell and Jane Dannenhauer. On the basis of all of that testimony, I have no personal knowledge. I'm telling you just -- BY MS. OLSON: Q You understand that Jane Dannenhauer and Nancy Gemmell were not there when these FBI files, in December and January, were improperly requested? A No, but I think Ms. Gemmell testified that lists were given, or that they worked off of lists in seeking to -- in conducting the Update Project, and that, I think, jibes with what Marceca testified eventually and Livingstone testified eventually. Mr. Stroman. Barbara, can we have a 5-minute break? Ms. Olson. Sure. [Recess.] BY MS. OLSON: Q We are back on the record after a brief break. During the hearing -- I will show you the page from the transcript, page 77 of the transcript -- Chairman Clinger asked if you were aware that during the time of the White House Management Review your office obtained the personnel files of all seven Travel Office employees. You had responded, you felt that it was Mr. Podesta who had gotten those documents in connection with the White House Management Review, and you said that we were sort of conflicted out of the management review, and that is why Mr. Podesta and Mr. Stern were delegated by Mr. Panetta and Mr. McLarty to conduct the Management Review. Mr. Mazur. Can I see that? The Witness. Yes. Mr. Mazur. Just a second, Bernie. But he went on to say he didn't know that Podesta obtained the personnel files. Ms. Olson. Right. And he went on to say that he didn't know that Podesta -- Mr. Mazur. The thrust of what you were saying was -- Ms. Olson. I haven't asked a question yet. Can you make an objection once I ask a question? Mr. Pedowitz. You asked, were you aware that; and you then proceeded to suggest in your question, rather directly, that -- Ms. Olson. Can you read back my question, because I didn't think I had one. I was just merely reading Mr. Nussbaum's testimony. [The reporter read back as requested.] Mr. Mazur. Let's hear the rest of it. [The reporter read back as requested.] Mr. Mazur. My problem was, I could not find where Mr. Nussbaum said that Mr. Podesta had obtained those files; and now you are showing me the page, and it says that he said he didn't know that Mr. Podesta had obtained the files. Ms. Olson. I will make that part of the transcript, that we have the statements of Mr. Nussbaum in our hearing as part of this transcript, so that we won't rely on my characterization. Mr. Mazur. Good. BY MS. OLSON: Q My only question is, do you recall questions concerning receiving the personnel folders of the seven White House Travel Office personnel during the hearing? A I never received the personnel folders of the seven White House Travel Office employees. Q That's not my question. Do you recall those questions during our hearing? A These questions on this page? Q Yes, sir. A Yes, I do. Q And on this page, it's page -- A Page 77? Q -- 77 of our hearing transcript. A Right. I recall those questions. Q My question is, do you know if anyone in your Counsel's Office received the seven Travel Office employees' personnel records during your tenure in the White House -- not Mr. Podesta, but did anyone in your office? A I do not have any recollection of anybody in my office obtaining the personnel files of the seven Travel Office employees. If it had been done, it would have been done for somebody else. In other words, somebody would have been -- if those files were obtained, if those files were being sought, such as by Mr. Podesta or Mr. Stern, if they did see those files, I don't know if they did or not, but if they did see those files, they probably would have sought them through my office, and our office would have obtained them and sent them to them, but I don't know whether that, in fact, happened. Okay? Q Okay. A Next question. Ms. Olson. I have a document that I am going to put in the record as Exhibit Number 18. The first -- it is a two-page document. The Bates stamp number is not on it; it looks like it had one. The copy that we received did not have any Bates stamp number. The first is a June 30th memorandum for John Podesta from Mary Coutts Beck, and the subject is official personnel folders. In the memorandum she says that Andre Oliver, from the Chief of Staff's office, requested that I forward the official personnel folders of seven White House Travel Office personnel for your review, "your" being the memorandum to John Podesta. She says that they are attached. She also tells Mr. Podesta that they are covered by the Privacy Act and have restricted use and should be protected carefully. She asks Mr. Podesta to keep them in a locked place when not in use and that their contents should not be disclosed to anyone unless they demonstrate an official need. The document also has Mr. Oliver signing with a date of 6/30/93. [Nussbaum Deposition Exhibit No. 18 was marked for identification.] Mr. Mazur. Who wrote this stuff on the right-hand side there? Ms. Olson. I am going to put a clean copy in there. That's my handwriting. I will put in clean ones. This is the only copy I have right now. I have got to see if I have another one. The second document is a memo from -- Mr. Pedowitz. Sorry, was there a question? The Witness. No. She is reading the two documents. What is the second one? Ms. Olson. The second one is from July 15th, 1993 and there appears to be an e-mail to Irene McGowan from Mary Beck and the subject says, A Favor, and on the e-mail it says, Irene, "On 30 June Andre Oliver and the Chief of Staff's office signed out the OPFs on the seven Travel Office employees. Since they have had them for at least two weeks, I began tracking them down. Andre said he would turn them over to Cliff Sloan in the White House Counsel's Office. "Cliff said he turned them over to Jodie Torkelson. "This should not be happening. Please call Jodie and ask her to return the OPFs ASAP. "Thanks. Mary." Do you know why Cliff Sloan had those documents in his possession? Mr. Mazur. That assumes the truth of what the e-mail says that Andre said. Ms. Olson. That's true. BY MS. OLSON: Q Do you know if Cliff Sloan ever had those documents in his possession? A No, I don't. Q Okay. A But if he did, it would be to send them on to Podesta. But I don't know if he did or not. Q Do you think they were given to Cliff Sloan to give to Podesta after Andre Oliver had had possession of them by his signature? A Well, maybe a legal issue arose with respect to the Privacy Act or something. I don't know. Q Do you have any knowledge of any lawful reason why those documents would have been handed over to Cliff Sloan in your office? A There would have been a lot of lawful reasons why they would have been handed over, but I have no knowledge of whether or not they were. If they were handed over, it would have been for a lawful reason, yes. Q Mr. Nussbaum, do you have any specific knowledge that they were handed over for a lawful reason, because if you do, I would like to put it on the record. If you do not have any knowledge, I would just like the record to reflect your knowledge, not your guesstimates that they were lawful. Mr. Pedowitz. And the questions which imply that there might not be a lawful reason for it are as argumentative as his responses to you. So if you want to engage in argumentative questioning, he will engage in argumentative responses. Ms. Olson. For the record, I do not want an argumentative questioning. My question to Mr. Nussbaum is if he knows of any lawful reason why Mr. Sloan received those documents from Andre Oliver. Mr. Pedowitz. You haven't established -- Ms. Olson. Please do not interrupt me. Mr. Pedowitz. You haven't asked a question. Ms. Olson. Mr. Nussbaum responded that if they were handed over, there was a lawful reason. I would like Mr. Nussbaum to make a record of what he knows. If he does not have any knowledge, I would like that to be the record, not reasons that we later look at this record and wonder if Mr. Nussbaum has personal knowledge of a lawful reason. Mr. Pedowitz. I object to the form of all of your questions on this subject. They are all argumentative. They are not proper questions, and his responses have been a response to argumentative questions. If you want to ask him proper questions, ask him proper questions. Ms. Olson. So noted for the record. BY MS. OLSON: Q Mr. Nussbaum, do you have any knowledge of Mr. Sloan having the personnel files of the seven Travel Office employees? A No, I have no knowledge, but if he had them, it was a proper reason. Q Can you tell me the basis of the proper reason for you believing Mr. Sloan to have had them, if he indeed did have them? A If a legal issue arose with respect to these files, privacy issues or other issues, in which case the legal issue would be determined by the people in the Counsel's Office, and Mr. Sloan would be the appropriate person in the Counsel's Office to do it. I don't know if that happened. Mr. Pedowitz. Do you have any knowledge of Mr. Sloan and his character and reputation? The Witness. Do you know if Mr. Sloan had them for an unlawful purpose? Ms. Olson. I have not put that on the record and I do not answer questions in a deposition, nor would I put that on the record in a deposition. The Witness. Okay, good. I am glad you would put that on the record. Yes, go on. BY MS. OLSON: Q On January 20 27th, 1994, there was a copy of Billy Dale's personnel file, which was given to Neil Eggleston? A January -- excuse me. What date is that? Q January 27th, 1994. A Okay. Mr. Mazur. So you say. I mean, are you asking him what he knows about the document. Ms. Olson. I am going to put the document as another part of Deposition Exhibit -- Mr. Pedowitz. I object to the form of the question or statement or whatever you want to call it. The proper way to ask questions is to put documents, if you are going to represent what is in them, in front of him. Ask him whether or not he has seen the document before. We have no reason to accept your representations of facts nor do we have any reason particularly to credit what is in those documents at this point. Ms. Olson. Your objection is noted. Mr. Pedowitz. No, you began by making a statement. Ms. Olson. Would you please stop arguing. I have made a statement about a document which I am now marking as an exhibit, and I will show to the witness and give him as much time as he wants to look at it. There is no question pending. I am describing a document I am putting into this record, and I regularly describe documents before I put them into the record. Mr. Pedowitz. Yes, you have done that over and over again and you have also made representations in questions about what he is supposed to be aware of, and it turned out on a number of occasions to be factually incorrect. Ms. Olson. It is a very complete record, the lack of Mr. Nussbaum's knowledge of these documents. BY MS. OLSON: Q Deposition Exhibit No. 18, which is the document that I was just describing, it is a January 27, 1994, memorandum, Bates stamped CGE 22216. Mr. Mazur. Hold it. 18 is June 30, 1993. Ms. Olson. This is going to be a part of 18 also. This is another memorandum on the same issue. Is there another objection? Can one lawyer make objections on this record, so that I don't have lots of objections? Mr. Pedowitz. Well, he is describing -- Mr. Mazur. You just said it was Exhibit 18. It is not what you said. No matter who makes the objection, it is not Exhibit 18. Ms. Olson. Any other objections that would like to be voiced by any of the one, two, three, four lawyers for Mr. Nussbaum that are at this deposition? Mr. Mazur. At this point, that's it. Ms. Olson. Thank you. BY MS. OLSON: Q I will show you the document that is a part of Deposition 18. Mr. Pedowitz. It is not a deposition. You mean it's an Exhibit 18, and you are saying that this is another document which is unattached to what is presently marked as Deposition Exhibit 18. Ms. Olson. Is there any other objection any other lawyer would like to make for the record while Mr. Nussbaum reviews the document? Mr. Pedowitz. Somebody someday may care about what happened at this deposition. I would like to make it clear what it is that you are talking about. Are you calling this a part of that document? If you are, I would like a staple added to it. Ms. Olson. We don't have staples in this deposition, sir. If you have brought a staple from your law firm, then we will staple them together. The Witness. Now, you are showing me this document which is also marked Defendant's Exhibit 18, dated January 27, 1994. This is from Neil Eggleston to Mary Beck, okay. It says, "We have received a request from an investigative body for a copy of Billy Dale's entire Office Personnel File. Please provide me two copies of that file so that I may provide one to them and so that I may keep one as a file copy of what was provided to them." Yes, I see this memorandum. BY MS. OLSON: Q Were you aware of that request in January of 1994 for Billy Dale's personnel file for an investigative body? A I have no present memory. It's possible -- since I was Counsel to the President at that time, it is possible that Neil might have mentioned it to me, but I don't remember it at this point. If he did, he did. I just don't remember. It's a totally innocuous thing. Some investigative body has requested it from us, the Counsel's Office, so we get it and we send it to the investigative body. Mr. Mazur. You are making some assumptions there. The Witness. If, in fact, that's what happened, but I don't have personal knowledge is correct. Go on. Ms. Olson. I am just waiting to see if there are any other comments by your attorneys for the record. BY MS. OLSON: Q Based upon that request from an investigative body, do you have any recollection, or does that refresh any recollection of why Mr. Sloan on this paper would be receiving the personnel folders back in July of -- June, July of 1993? A No. I see no connection between the two. Q You had stated earlier that Beth Nolan, who was another individual in the Counsel's Office, would have had information about policies concerning passes and security, is that correct, or would have had some knowledge? A Yes. It's a small office and Bill would consult her, and she, you know, she was a very able lawyer. Ms. Olson. And on March 31st, 1994, I have a document that I will mark as Deposition Exhibit 19. This is a memo which is to Lloyd Cutler, who was then Counsel to the President, on March 31st, and it is from Beth Nolan; and it is, I believe, to Mr. Cutler as well as to Mr. Klein, his deputy. And on page 2, she talks about improving the process of White House clearances and states, "Given the sensitive nature of this operation," and she is talking about the White House Personnel Security Office headed by Craig Livingstone -- [Nussbaum Deposition Exhibit No. 19 was marked for identification.] Mr. Mazur. Where are you reading from? I don't follow where you are. The Witness. Over here. Go on. BY MS. OLSON: Q "I have some doubts about the appropriateness of detailees in this area, particularly if they are authorized only for a short time." Did Ms. Nolan ever raise any concerns to you when you were there about the appropriateness of detailees in the White House Office of Personnel Security? A We all, we all would have rather worked with full-time personnel. This memorandum, by the way, totally supports what I have been telling you throughout this deposition, "That office has operated with three employees in this administration, but had five employees in the past administration. It is understaffed. The consequences of understaffing are unacceptable. The best solution is to authorize at least one additional employee immediately. The second-best solution is to detail someone to assist. Given the sensitive nature of this operation and the importance of consistency, I have some doubts about the appropriateness of detailees in this area, particularly if they are authorized only for a short time. It is critical to get more assistance in this area, however, on whatever basis. We requested authorization from David Watkins for an additional employee." This stuff that Beth expressed is the stuff that I have been expressing throughout this deposition and the stuff that I had been expressing throughout the first year of the administration. Yes, we had conversations about this, about this area, these general things. My office would meet every morning, a meeting of all of the assistant and the associate counsel, Beth, of course, was a key person, as was Bill Kennedy, and we would talk about those things in those meetings. Those were the kinds of things. Now she was educating the new Counsel to the President to this problem. The procedures we followed were the same, but the personnel we had were different than prior administrations, or the amount of personnel. Q In fact, she is asking the new Counsel to the President to give her additional people; is she not? A Yes. She has asking the new -- Q Did she ever request that you put additional people in the Office of Personnel Security? A She was asking the new Counsel to the President to get the White House -- the new Counsel to the President doesn't have the power to say hire additional people and put somebody on the payroll. He has to get authorization for that from the Chief of Staff, or from the head of the Office of Administration actually, who reports to the Chief of Staff; and this was a continuing battle that we had with David Watkins and also with Mack McLarty. I'm not blaming them. They -- you know, the President had cut the staff 25 percent. The Congress was keeping our budget low, and they were trying to do the best they could within the parameters that they were working in. I'm not blaming Watkins or McLarty for this thing. But this was the problem we had, and that's why Anthony Marceca ultimately was detailed, and that's why he made -- we had a detailee who made that mistake, which has now resulted in this brouhaha. But another person finally realized the mistake was made. She stopped it. That was Lisa Wetzl. Q And what is the basis of that information about Ms. Wetzl? A Your investigation and your hearings. Q That Ms. Wetzl stopped this? I just didn't understand your answer. I just wanted you to tell me -- A Ms. Wetzl's testimony. When Mr. Marceca left, she came in and after she came in, she noticed that there was -- the requisition files on the staff lists from A to G; and she said, there has to be a mistake here, and then she stopped it. She didn't continue it. That's her public testimony. Q Mr. Nussbaum, we have a phone log which I will put in and I will make it also a part of Deposition Exhibit No. 18. There is a phone call that came -- Craig Livingstone -- that you made to Craig Livingstone. A When? Q You see, there is a one -- there is a 3:27 p.m. and our understanding of the date is that it was 1-27. Have you seen these types of phone logs before? A No. DCMN QUINTERO Q Your belief is that that number that they have is 1994, and then there is a zero, and a 1, and a 27, and that that reflects that it was January 27? A January 27, 1994? Q Yes. And that a call was made to you from Craig Livingstone on January 27th. The reason I made it a part of Deposition Exhibit No. 18 is that is the same day that Billy Dale's personnel file is being requested. Do you know if you had any conversation with Craig Livingstone? A I never had any conversation with Craig Livingstone about Billy Dale's file. Q Do you recall any conversations with Craig Livingstone during this period? Mr. Mazur. What period? Ms. Olson. January 27th, 1994. The reason I am asking it broadly, if you don't recall it being exactly on the 27th, do you have any general recollection of conversations with Craig Livingstone? A I had very few conversations with Craig Livingstone. It's hard for me to believe I called him. I was probably returning a call from him to me. I don't remember what it was about. I met him a couple of times, I saw him a couple of times, but I didn't really have very much conversation with him. Mr. Mazur. It's hard for me to believe there is any rhyme or reason to the formation of Exhibit 18 at this deposition and I object to the linking up of memos from June, memos from January and a phone record. The Witness. The point is -- Ms. Olson. So noted for the record. Mr. Mazur. Do we have any more documents to put into Exhibit 18? The Witness. So your question was did I ever have any conversation with Craig Livingstone about Billy Dale's personnel file? BY MS. OLSON: Q Or about the personnel files of any of the Travel Office individuals? A We didn't give a damn about any of the personnel files of any of the Travel Office people in the White House. There was no interest -- to my knowledge, there was no interest on the part of anybody in the White House with respect to the personnel files. Maybe in connection with the management review Podesta and Stern felt that they had to examine it, but nobody else in the White House, to my knowledge, at any other time was interested in Billy Dale's personnel file or any of the Travel Office people's personnel files. And the investigation being conducted of the Travel Office people during that time by the Justice Department was totally an independent investigation, they were making their own decisions, they were making their own calls and they made their own judgments without absolutely any interference from the White House or any input from the White House. Q Are you aware that after you left the White House monitored Billy Dale's trial every day and took notes and brought them back to the White House Counsel's Office. Mr. Pedowitz. Are you serious in asking that question? Would you expect him to know the answer to that question. The Witness. I don't know. Ms. Olson. I am asking him if he was aware. Mr. Pedowitz. Again, you sort of litter the record with innuendo and statements that we can't possibly know anything about and I have no idea whether it's true or not, and you know he is not going to be able to shed any light on that. BY MS. OLSON: Q Are you aware of that -- unless there are any more objections by any more counsels? Mr. Pedowitz. Object to the form of the question. The Witness. No, the answer is I am not aware of that. It would not surprise me that somebody would send somebody down to a trial if in fact the White House is receiving questions about that subject area, and it is a public trial. But the answer is am I aware of it? No, I am not aware of it. Ms. Olson. Also, I would like for the record to state that some of the documents the White House has refused to turn over to this committee, we have been allowed to review them, we have taken notes of them, but we do not have the actual copies. BY MS. OLSON: Q During the hearing, you made a statement concerning Chairman Clinger's press conference that he gave and a statement that was given by Chairman Clinger in his press conference? A Are you about to deliver the apology? I'm getting my hopes up since you have raised this issue. Yes, I made such a statement. Q I have your statements here from the hearing? A Yes. Q And I have marked this as Exhibit Number 15, and they are from pages 23, 24, 25, 26, and 27. I have a copy I will show you? A Sure. Q You accused the Chairman of making statements which were reckless falsehood, and although I don't have a copy in front of me, I believe you said that the Chairman had either called you a felon or said you were guilty of a felony. A What the Chairman said -- I said the Chairman -- Mr. Pedowitz. Actually, I have page 24 of the record and I can read it into the record if you wish. It says -- Ms. Olson. I don't wish you to read that into the record. I am putting it in as a part of the record and I would ask that his attorney make objections and state them for the record, but please don't answer questions or supplement the record with your reading. Mr. Pedowitz. You didn't ask a question. You suggested that he had made a statement about that subject. If you don't want to know what he said exactly, then we can proceed on the basis of your representation about what you think he said, which is inaccurate. Ms. Olson. I don't think there is a question before the witness. The witness is reading his own testimony. The Witness. I did say everything you suggested about me, Mr. Chairman, in your press conference, everything you suggested about me in your press conference was a reckless falsehood. Yes, I did say that. BY MS. OLSON: Q I believe on the bottom of page 25, you accused the Chairman of saying that you were using the FBI to dig up dirt on Billy Dale and that you were making false statements to the FBI and that you could probably be prosecuted for a felony. I have got the Chairman's statement here, and I would just ask you if you could point out where the Chairman stated that you would be prosecuted for a felony in his press conference. I am going to put that also as Exhibit Number 15. A The Chairman stated in his press conference, as I said in my statement -- White House Counsel are expected to be paragons of propriety. This is page 7. At the very least, there is a strong implication President Clinton's Counsel acted unethically in requesting confidential background checks of a former employee. At the very worst, the request may have violated the Privacy Act which protects against improper disclosure of confidential records and information about current and former employees. Q And in fact, doesn't that say that the request may have violated the Privacy Act? A And then in answers to questions, in answers to questions -- do you have the whole press conference? Let me see if I have it. Maybe I don't here. Yes, I do. Q I'd be happy to make that as a part of the record if it's an official transcript, if you want to. A In answer to a question how much trouble is Mr. Nussbaum in, Mr. Dale was not requesting access, so the reason given for requesting the documents clearly was a spurious reason. I mean, nobody was requesting access for Billy Dale. So there was another reason why this was requested. So you know, one of the things we looked at is what is it, 1001, Kevin? Kevin Sabo. False statement. That is a criminal offense. I mean, if you make a false statement, that can be a criminal offense, yes, sir. That's what your Chairman said at his press conference in response to a question. Q In fact, wasn't that in response to the form that was filled out which you state that you have not seen and we have no reason to believe you have seen, but it was a form that had your name that was requesting access for Billy Dale into the White House? A All the Chairman had to do -- Q Can you please answer my question, Mr. Nussbaum? A The Chairman called Billy Dale up. Q Mr. Nussbaum, can you answer that question? A I'm answering your question. Q Mr. Nussbaum, you are not being responsive? A I am being responsive. Q I will let you make a record as you want, I just ask you to answer my question. Mr. Stroman. Barbara, he has a right to answer the question. Ms. Olson. He is not answering my question. I will allow any statements he wants to make to talk about how the Chairman should have called him. I have asked a very simple question. Mr. Stroman. He gets to answer the question as he wants. If you don't think he answered it, then ask another question. Ms. Olson. Are you objecting to him being responsive to my question? Mr. Stroman. I am asking that he be permitted to answer the question the way he wants to answer the question. The Witness. The Chairman goes into the news conference and suggested to the entire country that I am either unethical at best or maybe a felon at worst. He never picks up the phone to call me whether I knew about this form or whether I ever made a request, but he does call Billy Dale and he does have Billy Dale stand outside the press conference probably with his lawyer so that when the press runs out of -- so when the press runs out of the press conference they talk to Billy Dale and his quotes are on the national wire, and they talk to his lawyer so that his quotes are in the national wire. That is recklessness. That is a reckless falsehood and that is why I deserve the apology I asked for. Q You are under oath. Do you have any knowledge that the Chairman had Billy Dale and/or his lawyers standing out of the press conference? A Yes, I have knowledge. Q Do you have any basis whatsoever that the Chairman had Billy Dale's attorney or himself standing out? A Yes. Q Please put it on the record. A I will. This is the Chairman talking at the end of the press conference: We cannot conjure up any legitimate reason why they -- me -- would be requesting this information except to, you know, find some material that they could leak or float or, you know, build their sense that they did the right thing in firing Billy Dale. Thank you all. As I say, this is how he ended the press conference: I think Billy Dale is outside, out in the hall there. That's what the Chairman tells the press: I think Billy Dale is in the hall. That's my basis. Q That is your basis for believing that the Chairman had brought Billy Dale and or his attorney to the press conference? A He has told the press that Billy Dale is outside. How did he know that? Did it just divine it from extra sensory perception? Q That's fine. It is on the record, your basis. A It is on the record, thank you. Q Now you said that you believe that the Chairman called you a felon. And I don't want to misstate you, if that's not correct. A He was talking -- he is suggesting. This is all implication and suggestion. Q Oh, suggesting. A As you can see in your notes, a strong implication, which says on your own note there. Q I think that is the words of the Chairman, that there is a strong implication. Mr. Mazur. Mr. Nussbaum's words were suggestion. Ms. Olson. Is there any other comments by attorneys before I ask a question? The Witness. No. As I read to you before, false statement, that is a criminal offense. BY MS. OLSON: Q Is not a false statement a criminal offense? A He is saying: Nobody was requesting access for Billy Dale, so there is another reason why this was requested. One of the things we looked at is what is it, 1001, Kevin? Answer, yes. Kevin Sabo is talking about Title XVIII, United States Code, Section 1001, that is a false statement section. The Chairman is suggesting I made a false statement. He then says, that is a criminal offense. If you make a false statement, that can be a criminal offense. That is what he is doing. And you know what happens then? You know what happens when the wires go out, when it goes out over the wire? This is the story then. Q Mr. Nussbaum? A Could I finish my answer. You brought up the subject. Let me finish my answer. Q I would like to ask a question in-between all of your answers, but go ahead, based on Minority's request, just go ahead and answer it whatever way you want to? A Minutes after the press conference, then what goes out over the wires is, then White House Counsel Bernard Nussbaum, this is an AP wire, asked for and received FBI background material on fired Travel Office Chief Billy Dale 6 months after Dale was kicked out of his post, a Congressman disclosed today. Nussbaum's written request turned over last week to a White House committee incorrectly states that the presidential lawyer -- me -- was asking for the material so that Dale could gain access to the White House. U.S. Representative William Clinger, Republican of Pennsylvania, suggested -- this is the press telling what they just heard from him -- that the written request, from Nussbaum, might be a false statement that could be prosecuted as a felony. Q The written request, the form that asked for Billy Dale to have access to the White House, do you believe that was a true request? Do you believe that was a false statement that the White House wanted access for Billy Dale? A No. Obvious -- Q Do you think that was a false statement? A No, it was not a false statement. Q That was a true statement that the White House wanted to get Billy Dale to have access and was asking for his previous report? A Marceca was working -- now you know what happened. Q Mr. Nussbaum, I have asked a question. Mr. Mazur. Let him answer the question. You asked him whether it was a true question. Let him answer. The Witness. The person that sent that form believed it to be a true statement. The person that sent that form believed it to be a true statement. Marceca was working from a list -- let me answer now. Marceca was working from a list which he thought was a list of people who had continued access to the White House. BY MS. OLSON: Q What is your basis? A Mr. Marceca's testimony. James Baker was on that list, Marlin Fitzwater was on that list, and Billy Dale was on that list, it was a list from A to G. Marceca thought these people are all seeking access. He was wrong. It was a silly mistake. It was wrong. He had an erroneous list, but he thought he was making a truthful statement to the FBI. That's what he thought. Now, he sends this form which has been in use for 30 years with the counsel's name typed on it and he thought he was making a true statement. That wasn't a false statement by Marceca. He thought, I'm basing it on his testimony, he thought he was making a true statement. It happens to be incorrect, he was incorrect. Billy Dale was not seeking -- did not have access, nor did Baker, nor did Fitzwater, nor did other people on that list, but he thought he was making a true statement. It was an error. It was a silly, foolish error. It was unfortunate, and people who are on that list have a right to feel hurt by it. But that's all it was, and that's all it will ever be. You can have all the depositions you want and all the hearings you want, but unless you come up with something else that disputes that, you know, that's all it was, and that's all I believe it to be, as a result of the testimony I've heard. Q Are you finished, Mr. Nussbaum? A Yes. Q The form that had your name on it that requested access for Billy Dale in order to get his previous report, was that a truthful statement contained in that form? I know you have described what was in Mr. Marceca's brain quite eloquently, absent from your belief of what was in Mr. Marceca's brain, was that form a truthful statement? A Unbeknownst to the person who sent the form, it was erroneous. Q Was it a false statement? A No. Mr. Pedowitz. Under USC Section 1001? The answer is no. Ms. Olson. Wait a minute. Do you have an objection? I do not want you to testify. I am not asking for 18 USC, and I know you are very upset and very concerned and all of the lawyers are jumping in, but I think Mr. Nussbaum can handle the question. Mr. Pedowitz. I think he is handling it, too. I am not upset. You are asking a question about whether or not it is a false statement. You were talking before about a statute. It talks about false statements. It is not a false statement within 18 USC Section 1001. The Witness. Correct. It is not a false statement because there was no intent to deceive anyone. Ms. Olson. I will restate my question. The Witness. He believed it to be true when he made the statement. It was an incorrect statement, but it wasn't a false statement within the meaning of Title 18. The section that Chairman Clinger mentioned in his press conference, no, it wasn't a press conference. BY MS. OLSON: Q I will stay here all day until I get an answer. If you want to keep answering questions in whatever way you want to, I will now allow it based on Minority's objection, but I am going to keep asking questions, and your attorney can answer and you can answer, but I am going to ask them again until I get an answer? A Sure. Ask the question again. Q Was it true that the White House was seeking access for Billy Dale when that form went over to the FBI to get his previous report? A You are muddling two things together. Mr. Marceca believed that Billy Dale was still on an access list to the White House. That was the situation. Q Okay. Now you have testified to what was in Mr. Marceca's mind and you are basing it on what you believe to be his truthful sworn statement? A Yes. Q I am asking you if that document which was the document that was in the possession of Chairman Clinger when he made his statements, if that document was a truthful document that the White House was seeking access for Billy Dale? Mr. Mazur. I object to the form of the question. Ms. Olson. Any other objections that would like to be put on the record for Mr. Nussbaum? The Witness. The document was not a false document within the meaning of the statute. DCMN MAYER BY MS. OLSON: Q I didn't ask within the meaning of the statute. A But the White House was not seeking access. If you ask me as a matter of fact, was the White House, when the document was sent, seeking access for Billy Dale, the answer is no, the White House was not seeking access for Billy Dale, but that doesn't make the document a false document. Q And based upon your knowledge of these forms, do you believe that Billy Dale would know whether or not he was seeking access for the White House during the period of time that a document was sent to the FBI saying he was seeking access? A I believe Billy Dale would know whether he was seeking access, yes. Q And do you agree that a call to Billy Dale would be a very efficient way to find out if, in fact, he was seeking access into the White House at the end of 1993? A Yes. There is nothing wrong with calling Billy Dale. I thought that was -- what is wrong is only calling Billy Dale and not calling anyone else, and then setting up a press conference with him waiting outside and then suggesting that the person's name that is on this form maybe was committing a felony. That's what is wrong. This was a setup. That's what's wrong. And it is not consistent with Chairman Clinger's prior reputation for probity and propriety, and I'm surprised that he did it, and I think he is probably ashamed of himself. Q Are you aware of debriefings of your counsel concerning other depositions that you have taken -- that you have given to Congress? Mr. Mazur. I object to the form of the question. The Witness. Debriefs of my counsel by people at the White House? Ms. Olson. Yes. BY MS. OLSON: Q Have you instructed your counsel to debrief the White House on your deposition? A I have instructed my counsel to cooperate with the lawyers for the White House. This is a normal, typical thing done in litigation that lawyers talk to each other, because it is a way of finding out the facts and a way of providing accurate testimony to congressional committees and their staffs. This is what is done all the time in the real world. It is a useful and proper thing to do, and I am aware that my attorneys have been in touch with attorneys for the White House. Q And, in fact, when you were Counsel to the President in the White House, did you see any problem with asking lawyers to give you briefings on confidential depositions being conducted by Congress? A There was nothing confidential -- Mr. Mazur. What kind of confidential deposition? Ms. Olson. Any depositions being conducted by a congressional committee. Mr. Mazur. Is this a confidential deposition? Ms. Olson. Yes, it is. Mr. Pedowitz. We are prohibited from leaving this room and telling people what happened in this room? Ms. Olson. We ask that debriefings not occur. Obviously, you have your own decisions to make, but we have asked witnesses not to go back -- Mr. Mazur. Let me just say that that request has never been made by you to us, nor would we abide by any such request. Mr. Pedowitz. Nor to my knowledge has it ever been asked by any other counsel who has taken Mr. Nussbaum's testimony, and it hasn't even been asked in connection with grand jury testimony. Ms. Olson. Well, although it is not going to be abided by, as one of your counsel has now said, we do request that debriefings not be given to the White House. We are investigating the Counsel's Office. We believe that it harms future testimony and that, in fact, witnesses come in with preconceived answers that they otherwise would not have and that the testimony is not their own but then becomes a mixture of testimony of other witnesses. I understand that your counsel disagree. The Witness. Well, I also disagree with that. It is a perfectly appropriate thing for counsel for various witnesses to talk to each other. The job of a lawyer is to try to find out what the facts are and to present, obviously, the facts in the best possible light to be sure for his clients, but to find the facts. The job of a lawyer is not to have his client testify erroneously or mistakenly or falsely. The way you find the facts, you should talk to other people, you talk to other lawyers for other people. There is nothing wrong with that; there is everything right with that. Mr. Mazur. Is it also the rule -- Ms. Olson. I'm sorry. I am going to ask questions of this witness. I don't really want to ask questions of the attorneys. If you want to have a conversation, then go ahead, there is enough of you have to a conversation. Mr. Mazur. Is it with respect to your request that we not communicate anything about this deposition to anybody outside of this room. Ms. Olson. That is a general request that has been made certainly of all witnesses, and if it has not been made to you, then I apologize. It is a general request. We would like witnesses not to be repeating what they are heard from previous witnesses, but their own knowledge. Mr. Mazur. Is it also a request that is made of members of the committee and members of the staff, that they are not to communicate any content of this deposition outside of the staff and members of the committee? Does it work both ways? Ms. Olson. I am not going to go through our procedure. I have got my rules. I will give you a personal copy of our rules that conduct our activities on this deposition. I will be more than happy to get every single person here a copy of our rules, so I can answer your question. I would just like to ask Mr. Nussbaum a couple of questions. The Witness. Sure. BY MS. OLSON: Q The notes that we have which we have not been allowed to receive possession of by the White House show that Mr. Craig Livingstone was using Mr. Foster's car phone in his car following his suicide and that Mr. Kennedy was present. Is that an issue that you are aware of, or do you know anything about that? A The only thing I know is that Kennedy asked Livingstone to accompany him, I believe, to the morgue to identify Foster's body. It may well be that they were given possession at that point of Foster's car, and they had to call people, and there was a phone in the car, so they may have called people. You know, this was a very terrible evening, a very terrible night. But do I have personal knowledge of any of what I just said? The answer is no. I mean, I have heard that Kennedy accompanied -- or rather Livingstone accompanied Kennedy to view the body, but I didn't know anything about the telephone call. Q Do you know if White House Counsel William Kennedy and Craig Livingstone are given their own personal White House telephones, cellular phones? A I'm pretty sure Kennedy had one. Q Do you know any reason why Mr. -- A Livingstone may have had one, too. Q -- why Mr. Livingstone would feel it necessary to go into Mr. Foster's car and use his telephone? A Maybe he didn't have his own cellular phone with him. Q Do you have any specific knowledge? A The answer is no. Q Jim Hamilton contacted Mr. Foster about representation and we discussed it at the last deposition? A Right. Q Do you know if Jim Hamilton was contacted to represent the White House Counsel's Office, rather than Mr. Foster personally? A I never authorized Jim Hamilton to represent the White House Counsel's Office. That was a subject that Foster and I discussed, whether or not we should hire new people to handle these issues that have arisen, should we hire an outside firm to represent the Counsel's Office, and Jim Hamilton would have been high on the list for that; or whether Foster should hire his own lawyer. I was in the process of considering those issues when Foster killed himself. Foster, prior to committing suicide, I believe did talk to Hamilton about representing him. I don't believe he talked to Hamilton about representing the Counsel's Office, because I hadn't reached any conclusion as to whether that should be done, and I was leaning against it and Foster knew that. Q Do you know if the communications between Vince Foster and Jim Hamilton concerned solely private representation of Vince Foster or concerned general representation of the Counsel's Office? A I don't know. Jim Hamilton is the one that would have to tell you what he talked with Foster about. It's possible Foster talked to him about representing the Counsel's Office generally, but obviously I would have the final say on that, and I never reached that conclusion that that is the way we should proceed. Indeed, I was leaning against it, as I said. Q And a final question. You had said that you had called Neil Eggleston at one point to tell him about Mr. Foster's notebook, and we had a long discussion of it at the last deposition. A Right. Q Is it true that you did that only after it was revealed in a grand jury that there was a Vince Foster notebook? A No. It was done -- I was the one who told the Independent Counsel about the Vince Foster file, Travel Office file. Q And did you then call Mr. Eggleston as a result of having revealed that to an Independent Counsel? A No, no. I called Mr. Eggleston as a result of having received a subpoena from an Independent Counsel, which, on its face, sought every document that was in Foster's office at the time of his death; and then I called Eggleston to make sure that he knew that when I left the office, I had placed in the Travel Office files Vince Foster's Travel Office file, the Travel Office file which I discovered on July 22nd, 1993, and held up and showed and described in a general way to the FBI, to the Department of Justice, and the Secret Service and everybody else in the room. Q Would your showing the file to everyone in the room have included Cliff Sloan and Bill Burton, who were the individuals closest to you when you were reviewing that file? A No. I showed it to everybody. It was a very small room. Bill Burton was there, Cliff Sloan was there, the Secret Service was there. Stafford was there, as his notes reflect; Sloan was there, as his notes reflect. You know, I showed that file to a lot of people. Q So certainly -- I believe Bill Burton was standing very close to you; is that true? A Bill Burton actually went in and out, and I'm not sure he was there every minute. He may have been there when I pulled out the stuff from the briefcase. Q And Cliff Sloan? A Cliff Sloan was there throughout. Ms. Olson. That's all I have. Mr. Stroman. Just one statement, and that's that this deposition is being conducted as if it were being conducted in executive session. Under the Rules of the House, there is no prohibition on a witness testifying in executive session going out and discussing with anybody what that testimony was. There are prohibitions on staff revealing that information. So that Ms. Olson and I are restricted, but there is no restriction -- Ms. Olson. And, in fact, that is why I was offering the rules which will state that, that we can be brought up on ethics charges, which is why I am saying that you are not prohibited from discussing, but we do ask that counsel and witnesses not discuss, and we can only ask. Thank you very much. The Witness. Thank you. [Whereupon, at 4:12 p.m., the deposition was concluded.]
