Corruption in the Federal Government
Part 2

Transcript from Conservative Roundtable,
the public affairs television program of The Conservative Caucus
450 Maple Avenue * Vienna, Virginia 22180 * 703-938-9626
Guest: Larry Klayman, Esq.
Chairman and Founder, Judicial Watch
Friday, August 1, 1997 — Second Broadcast
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Go to Part 1

ANNOUNCER: From the Nation's Capital, The Conservative Caucus presents Conservative Roundtable, an in depth look at today's most important issues.

HOWARD PHILLIPS: Welcome to Conservative Roundtable. I'm Howard Phillips. Our guest for a second broadcast is Larry Klayman, an attorney who is the founder and chairman of Judicial Watch, which has been uncovering and following up on many of the scandals associated with President Bill Clinton and his administration.

Larry, in our previous broadcast, we talked about the degree to which people like John Huang and Charlie Trie and others compromised the Clinton administration with cash that had as its source the People's Republic of China.

To what degree do you believe that the government of Communist China had a conscious, coordinated strategy to cause the Clinton administration to change its policies in return for contributions to Clinton's reelection campaign?

LARRY KLAYMAN: Well, what we know is that much of the transfer of cash came from the Bank of China. It came through someone by the name of Mr. Wu who was tied in with the Communist Party apparatus in China (he was bankrolling Charlie Trie). We know that the Lippo Group, which contributed millions and millions of dollars to the Clintons over the years going all the way back to Arkansas, owns part of the arms trading company of the government of China — they're half owners right now.

This type of linkage obviously confirms the Chinese Communist involvement, but last week, for instance, during the Thompson hearings, a few documents were produced which showed that Charlie Trie, John Huang's cohort (they did know each other), had pumped about $700,000 into the legal defense fund within 24-48 hours of the President answering the letter that Charlie Trie wrote — now, he's not a terribly literate person in English, and it's written in fairly good English — and it asks for a series of responses to certain questions. This occurred during a time when Communist China was going through military exercises in the Straits of Taiwan, firing off missiles right over the heads of the Taiwanese...

HOWARD PHILLIPS: And, indeed, threatening to bomb Los Angeles.

LARRY KLAYMAN: ...and threatening to bomb Los Angeles. The United States sent the 7th Fleet into the area, and these questions went to U.S. intentions — in other words, how would the U.S. react to these Chinese exercises?

Now Charlie Trie runs a restaurant out of Little Rock, Arkansas. He's not someone who gets involved in strategic issues of China and the United States. The President sent this letter that Charlie Trie forwarded at the same time this cash came into the legal defense fund to the National Security Council. The response was written by Anthony Lake, and, in fact, Clinton signed the letter...

HOWARD PHILLIPS: Lake being the top man at the NSC.

LARRY KLAYMAN: ...the top man at the NSC. Clinton signed the letter, giving the Chinese reassurances that the United States was not going to go to war. Now if this isn't Chinese involvement at the top level at the same time that hundreds of thousands of dollars of cash is coming in from Chinese sources, what is? You don't have to be a...

HOWARD PHILLIPS: This would seem to be a treasonous act, if you'll pardon the expression, on the part of Bill Clinton, where, in effect, he compromised the national security of the United States by giving the most private intelligence information of the greatest moment to a foreign government with which we were in a state of hostile communication at a time when that government was, seemingly with his knowledge, transferring substantial sums of money for the benefit of his political operations.

LARRY KLAYMAN: Well, that's right, and not only did it happen at that time, but the head of the legal defense fund that we talked about during the first show, Michael Cardozo, was over in the White House meeting with White House officials — Lindsey, Ickes, Hillary Rodham Clinton — at the same time. So it clearly looks like it was coordinated, this cash coming into the legal defense fund.

Now, obviously, Clinton has had a lot of links with China. You have John Huang, you have Charlie Trie, you have Melinda Yee at the Commerce Department, who's been very active in that area (who destroyed documents in our case, incidentally — clear cut example of obstruction of justice), Ginger Liu, the general counsel.

And Ginger Lew left the Department of Commerce, went to work under Erskine Bowles during this John Huang period...

HOWARD PHILLIPS: What was Bowles' job at that time? Was he then Chief of Staff?

LARRY KLAYMAN: He was then the administrator of the SBA [Small Business Administration]. And this was something, Howard, that we uncovered in our case, and this is yet to be investigated by either Janet Reno, the Thompson committee, or any committee on Capitol Hill. We learned through a confidential source that satellite documents were taken out of the Commerce Department by an assistant of Ginger Liu, taken secretly and put in a safe at the Small Business Administration where Miss Lew was then working under Erskine Bowles.

When we found out about this, we asked Judge Lamberth in our district court case to slap a subpoena on those documents. They are now under court order. The judge required that the contents be generally listed — no one has seen these documents — but what they involve are confidential CIA reports on China, Russia now (previously the Soviet Union), and India. They also contain what appears to be satellite encryption information. Commerce Department's authority is to regulate export controls on telecommunications software and how satellites communicate with each other.

These documents walked out of the Commerce Department. This may be the first fruit of actual espionage against the United States; they're documents the Chinese would love to have. We were taking a deposition today where we confirmed that an Assistant Secretary of Commerce, Lauri Fitz-Pegado, went to work for a company which is in part owned by the Chinese. In fact, this company is involved in telecommunications networking, and would necess...

HOWARD PHILLIPS: She is the young lady who formerly was involved with Angola. Am I correct?

LARRY KLAYMAN: Correct. And she was involved with Ron Brown concerning Haiti; she helped him do lobbying.

So there may be a linkage here between actual classified information which left the Commerce Department, John Huang, Chinese satellite communications — the sky's the limit.

It's a very, very troubling situation at a minimum, and certainly these are very major issues.

HOWARD PHILLIPS: Would it not seem to be appropriate for the House Judiciary Committee to launch an inquiry to determine whether the impeachment of President Clinton might be appropriate on grounds of high crimes and misdemeanors, bribery, and treason?

LARRY KLAYMAN: At a minimum. We already have evidence of crimes being committed, and this gets us into the area of Janet Reno, the Attorney General, who refuses to appoint an Independent Counsel.

But, let's just look at the evidence as we have it right now: * selling off government services like trade missions; *overnight stays in the White House; *seats on Air Force One — there are actual brochures of the Democratic Party (which Clinton knew about) which confirm it — you don't even know a lawsuit to figure that out. And Janet Reno could be indicting Clinton, could be indicting Harold Ickes, who was in on it, could be indicting people in and around Ron Brown who are still alive, under 18 U.S.C. 600 of the criminal code — you can't sell government services for cash.

HOWARD PHILLIPS: Of course, it is not likely that a woman who, herself, is potentially subject to investigation for various reasons, and who's political visibility and tenure depends entirely on the President, it's unlikely that she would take action in this area.

LARRY KLAYMAN: Well, it's unlikely because she was reappointed, and we have a lawsuit (it's another one of our cases against the Clinton administration under very suspicious circumstances) — the White House was basically, if not explicitly, tacitly telling her that we don't want any more Independent Counsels (this was all over the press), and they were dangling in front of her the possibility of whether she would be reappointed as Attorney General. And it's clear that she cut a deal.

So we have filed Freedom of Information Act requests with Justice. They failed to respond. We filed another lawsuit. We want to get the underlying documentation of what was going on during that period to expose potential obstruction of justice on her part.

HOWARD PHILLIPS: Now, at one point she had a deputy named Philip Heyman? who resigned very discreetly without setting forth the reasons for his departure, and, of course, his departure preceded all of this.

The young lady who succeeded him as Deputy Attorney General has also departed and the visible reason was — Jamie Gorelick — that she did not get a cabinet post at a time that she wanted it.

Have you considered deposing either of these two individuals to see whether, from the perspective of past events they might be able to shed some light on what's been happening with regard to these investigations?

LARRY KLAYMAN: We ultimately will seek to do that.

We also have Eric Holder, who was the U.S. Attorney for the District Columbia. He has been the lawyer who supposedly was in charge of defending the Commerce Department in our Commerce Department case. The Justice Department lawyers in that case have been sanctioned on two occasions for obstructing the flow of information, and yet Holder (who admits that he got his job through Ron Brown as U.S. Attorney) has now been put into the position of Jamie Gorlich. Jamie Gorlich leaves. Philip Heyman leaves. And they put in place a Ron Brown confidant and friend who has been sanctioned for inequitable conduct in our lawsuit. This is part, we believe, of a huge coverup at the Justice Department to keep the truth from coming out.

HOWARD PHILLIPS: We are going to go into more detail when we come back, but one of the questions I have for your Larry, is why have the Republicans taken a dive? Another very close friend of Ron Brown was Alexis Herman, who was confirmed virtually without opposition. She was a "bag lady" for the Democratic Party and the Clinton administration and Ron Brown, and had some tales to tell which were not required of her. Without opposition, virtually, they confirmed Eric Holder, and Orrin Hatch, the chairman of the Judiciary Committee, went out of his way to tell Holder: Oh, I'm a friend of Ron Brown, too.

We're going to take a break. When we come back, the chairman of Judicial Watch, will have comments on these and related matters. Please stay with us.

(pause in tape)

Hi, I'm Howard Phillips, chairman of The Conservative Caucus. I'm inviting you to learn more about The Conservative Caucus, a grass-roots, public policy action organization that was founded in 1974. Whether you're opposed to socialized medicine, interested in making Congress more accountable, stopping the New World Order, fighting gun control, reducing taxes, or restoring America to its Biblical premises and Constitutional boundaries, we're the organization you're looking for. Please call the number on your screen to get more information about our work.

ANNOUNCER: For more information, write The Conservative Caucus, 450 Maple Avenue East, Vienna, Virginia 22180, or call 703-938-9626.

HOWARD PHILLIPS: Welcome back. This is Howard Phillips with Larry Klayman of Judicial Watch.

Larry, I think it's clear from what you've said that the government of Communist China knew what it was doing as they tried, without much opposition, to corrupt the Clinton administration. One of the key players is, of course, Janet Reno. And the question is: Has Janet Reno been compromised? Talk to us a little bit about a recent unanticipated meeting you had with Janet Reno, and your general observations.

LARRY KLAYMAN: It was bizarre. I was sitting with one of our advisory committee members at a restaurant very close to the FBI. I had just had a court hearing that morning in our Commerce Department case, and we were sitting there having dinner, and in walked Janet Reno with two women. She sat down next to us, and at the same time Senator Thompson walked in...

HOWARD PHILLIPS: This is Fred Thompson, the chairman of the hearings.

LARRY KLAYMAN: Right. And our advisory committee member said to me before I went over to talk to Mr. Thompson, she said: Why don't we send Janet Reno a martini? (she was drinking martinis). And I said, what a great idea! I took out a card, and I said "Courtesy of Judicial Watch" and we sent her over a martini.

And I went over to talk with Senator Thompson and walked over to her, and I said: Attorney General Reno, my name is Larry Klayman. Perhaps you've heard of me.

And she grabbed my hand like this, with this tremendous warmth, and looked me in the eye and said: Yes, Larry, I know all about you. You're doing a great job, keep it up! She said, But, of course, I can't accept the martini.

I said: Why not? You realize that I'm your staunch adversary.

She said: I know that; I just can't do it.

It was the most bizarre experience I've seen. It was either she had one too many martinis, or she was completely disingenuous and insincere, and that's certainly the way I wrote it off.


HOWARD PHILLIPS: Or maybe she was really rooting for you, Larry.

LARRY KLAYMAN: Or, maybe she really can't stand Clinton and hates his guts, and in fact she is being blackmailed, and hopes that someone else can get him.

But, you should have the integrity, if that's the case, to resign — being Attorney General isn't everything. She stayed in that job; she's compromised — she hasn't done her investigation. Every deposition that we have taken against the Commerce Department, except for two, we find that she has not even questioned these people. Even John Huang's secretary has not been questioned or called before a grand jury, yet she's out there crowing about her "vigorous investigation". Well, where is it?

And, of course, this week Senator Thompson and his committee found out that she's stonewalling with grants of immunity, with games with documents. We've seen it recently again — we want John Huang's diary; the court has ordered that it be produced; and she's refusing to produce it. We're now in front of the judge with a motion to compel. So, she needs to be removed. That's why we brought the lawsuit.

And the Senate needs to stand up — Orrin Hatch, head of the Judiciary Committee, needs to look her in the eye and say: unless you do this by this date, we are going to start impeachment proceedings.

HOWARD PHILLIPS: Of course, Orrin Hatch isn't going to do that. And one of the great disappointments of this Congress is the manner in which Orrin Hatch has rolled over and played dead for Bill Clinton, Janet Reno, Alexis Herman, whenever he's had the opportunity to do so. Why?

LARRY KLAYMAN: Orrin Hatch was reported to be involved in the BCCI scandal. This came up (for the people who don't know what that is, that's about an Arab-owned bank that pumped a lot of money, not just into the U.S., but around the world — it was the money-laundering operation of a number of different regimes, including the Carter regime during our history. In fact the owner of BCCI built President Carter's library, incredibly enough, where I went to school — Emory and I'm not terribly pleased when I walk in and look up on the wall...

HOWARD PHILLIPS: And Bert Lance was heavily involved in it as well.

LARRY KLAYMAN: And Bert Lance. If you ever want to know why Carter was so favorable to certain interests in the Middle East, that may have had something to do with it.

Well, to make a long story short, Orrin Hatch was somehow involved in this scandal. It came up during the time when Janet Reno was Attorney General, and he was let off the hook, and we fear that perhaps he's beholden to her in terms of his own well being in the future. And that may explain comments why he's a great friend of Ron Brown at the Holder confirmation hearing, it may explain why he will gratuitously praise the Attorney General for being a woman of great integrity (I guess having let him off the hook she's a woman of great integrity) — I hope these things aren't true. I hope that Senator Hatch is not involved in this. But, when he fails to take action, when he sits by and presents a good show for the American people without doing anything, you can't come to any other conclusion. I hope he proves us wrong.

HOWARD PHILLIPS: It may also explain why he's been so helpful with Clinton's judicial nominees. He really greased the skids for Ruth Bader Ginsburg. He's greased the skids for other Clinton appointees — not just Stephen Breyer, but other Federal court nominees — and it's hard to explain why a man who presented himself to the public as a conservative favoring judicial restraint supposedly in opposition to abortion and other policies favored by these nominees would just roll over and play dead — and I think that the theory that you've described is one that has to be considered.

But you know it isn't just politicians who've let us down — it's private companies. I was outraged, Larry, to see the part that State Farm Insurance Company has played, in effect seeking to use the money of its policyholders to curry favor with the Clinton administration.

LARRY KLAYMAN: Well, it's interesting that you raise that because this is part of the scandals — and they all fit together like pieces of a puzzle.

You see, in Washington, D.C. there are some very big lobbies. There's no bigger lobby than the insurance industry. There is no more crooked industry than the insurance industry. We've seen a lot of scandal lately with regard to vanishing premiums: that people are sold insurance policies that never ripen and mature. And, of course, State Farm is part of that insurance industry.

The insurance industry was trying to keep the banking industry out of its sector. The banks would like to come in with products that compete with life insurance, and annuities, and offer an alternative. They came up with a product called "cash deferred certificates of deposit" which are Federally insured — they're actually more secure than annuities.

It just so happens that State Farm found a way to pay the President $1 to $2 million — Chubb Insurance Company is also involved — at a time that they were seeking to exclude through regulation the banking sector from competing with it — we're talking about billions of dollars. They paid Bill Clinton $1 to $2 million to defend himself against the Paula Jones case. Now we believe this was a paper transaction to get him money, because the President discovered (now he's a lawyer and so's his wife) that all of a sudden he was insured for sexual harassment and libel thirteen months after he was sued. Now would a lawyer forget that he carried an insurance policy for thirteen months? And would you and I, Howard, have an insurance company pay for our car if it was dented thirteen months after we gave them notice? That's how long it took.

And we also know that you're not insured for intentional acts — sexual harassment and libel are intentional actions. I wouldn't be insured as a lawyer for an intentional act under my professional liability coverage.

Not only that, who do they hire? They hire Bob Bennett, who's a criminal defense lawyer. He's not an expert in insurance defense. And what's his hourly fee? $495 an hour. And what do they hire him to do? To try to delay a case until after President Clinton leaves office. Now that's a political consideration. That's not a consideration which benefits the policy holders of State Farm.

So we had a State Farm policyholder seek us out — his name is Tom Flocco — he's a music and gym teacher at Penn Valley School in Philadelphia where I went to school, ironically, when I was a kid. He came to us (very brave guy) and said: I want to sue State Farm. And we brought the lawsuit on his behalf. It's going to be a fascinating case because not only are we going to look into the inner workings of what State Farm was discussing with Clinton when they miraculously decided that he was covered (and who ever heard of an insurance company so easily rolling over to pay a million dollars to a covered person, as Clinton claims), but we are also going to look into the legal billings of Bob Bennett to see what he has been charging for.

HOWARD PHILLIPS: So this is one of the most incredible bribes in modern political history — we're talking about hundreds and hundreds and hundreds of thousands of dollars being given to the President of the United States at a time when he was considering a decision involving hundreds of millions of dollars directly affecting the entity that provided the money to him.

LARRY KLAYMAN: That's right. And tremendous stakes at issue, whether or not banks — which is very significant part of our economy — can come in and move into a sector and compete. It's ironic that it occurred at a time when Clinton was unwilling to consider any type of change to Social Security. These products give the American people a private means to support themselves as an alternative to Social Security. So it's also a scandal in terms of the American people being deprived of this product. In fact, the Clinton administration has taken actions which shut down this alternative retirement fund. So it appears that they got something for their money.

HOWARD PHILLIPS: Tell us, if you can in 30 seconds, what the residual impact of "Filegate" may be.

LARRY KLAYMAN: Well, Howard, we've been pretty active these days, and we have a lawsuit — class action — on behalf of the Reagan and Bush people, and we have sued Hillary Clinton, among the FBI, and the White House, and Nussbaum, Marceca, Livingstone. The judge rejected the motions to dismiss. We're going to be taking depositions of Hillary Clinton very, very soon.

HOWARD PHILLIPS: So, in October of 1997 Hillary Clinton will be no further from you than I am, perhaps, and you will be asking her some of the questions that I've been asking you?

LARRY KLAYMAN: Right. And we're going to be taking Dick Morris, too, who's the one who implicated in this. So it may be the first opportunity to see on video — and I'm confident that the court will allow it to be videoed — we'll be very respectful, but we're going to ask tough questions. We're not going to let her skate out, and I hope it gives us answers to a lot of the questions we've been asking.

HOWARD PHILLIPS: We have a little bit more video after these messages. Please stay with us. We'll be right back with Larry Klayman.


ANNOUNCER: In every major war of the Twentieth Century, control of the Panama Canal has been strategically crucial to America's military. Now the great U.S. Navy is no longer a two-ocean navy, and the Red Chinese military knows very well that control of the isthmus is more important than ever. That's why Red China now seeks control of the two crucial ports on each side of the Panama Canal. If Congress fails to give our military the funds to maintain U.S. bases in Panama, Red China will fill the vacuum, giving the Communist superpower a hammerlock grip on the path between the seas.

Right now, there's no money in the defense budget to keep our U.S. bases in Panama, and even as we reduce our defense spending, Red China boosts theirs with $40 billions each year coming from us as the result of the MFN (Most-Favored-Nation) status.

We, the people, along with our leaders in Congress and at the White House have a duty to preserve, protect, and defend America's vital interests.


HOWARD PHILLIPS: Welcome back. Our guest has been Larry Klayman, the attorney who is the founder and chairman of Judicial Watch, which has been comprehensively pursuing a legal inquiry into the various Clinton administration scandals and apparent violations of law.

Larry, how can people get more information about Judicial Watch? We have a newsletter, and they can reach us at 888-JW-ETHIC — that's toll free — or write us at P.O. Box 44444 (that's five "4"s), Washington, D.C. 20026. We're also on a website: www.judicialwatch.org

We do look forward to support, and, of course, we do have volunteers helping us. So if you'd like to volunteer, and roll up your sleeves and come into our office, that's how we get our resource.

HOWARD PHILLIPS: Larry, we've got two minutes. One word: drugs. Drug money is involved in some of the Clinton scandals. One of Clinton's closest associates was Dan Lasiter, who was a drug dealer who did serve time in prison for pushing drugs. He was the drug dealer to the Clinton family — Roger Clinton has admitted that. There is some indication that Bill benefitted from those transactions. Bill Clinton, as governor, insofar as the state charges were concerned pardoned Lassiter. In addition, he provided hundreds of thousands of dollars for management of bond issues and other things for Lasiter through the Arkansas Development Finance Administration. Then he named a person who had run Lasiter and Company while Lasiter was in prison — Patsy Thomasson — to be the White House Director of Administration.

How has this story been suppressed for so long? What are its implications? What can be brought to the table? — in one minute or less.

LARRY KLAYMAN: Well, it's part and parcel to everything being suppressed. Eventually we're going to have somebody come forward. We talked about Nolanda Hill in the first segment. She confirms that Ron Brown was snorting cocaine when she saw him. This is an administration which is totally lawless, but the so-called mainstream press has protected it because they fear that conservatives coming back into power is the worst thing that could ever happen to them. They are, in fact, willing to make a pact with the devil, so to speak.

HOWARD PHILLIPS: Somehow, tobacco upsets them more than hard drugs.

LARRY KLAYMAN: Well, I think that's probably the case. But it's going to come out. They can't ignore it. They like to sell papers and they like to have TV shows. There will come a point in time when the evidence is so great that this administration will come down.

Thank you, Howard.

HOWARD PHILLIPS: Larry, God bless you for your work. Thanks for watching. Join us for the next broadcast of Conservative RoundtableGo to Part 1

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