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Judicial Watch • NARA Whitewater OIC report pg 78-154

NARA Whitewater OIC report pg 78-154

NARA Whitewater OIC report pg 78-154

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business Rose: HUBBELL notes that MADISON was HILLARYs client, she the one
who brought MADISON into the-firm.as client, that why she became the billing partner.
127
Hubbell was asked about this statement the grand jury:
ii.
Watt Greeocy
Watt Gregory, 128 senior member the securities section Rose, remembers that there
was some general discussion within the firm about whether the firm should undertake
representation Madison. 129 Gregory remembers talking Mrs. Clinton about whether
should shouldnt [represent Madison], what some the issues might connection with_
the ability the savings and loan raise capital that particular method. 130 Gregory testified
that Mrs. Clinton was instrumental introducing the client the members the firm 131
790-00000020 (emphasis added). See also Thomases GJ, 2129196, 45.
127
Hubbell 302, 211/95,
128
Watt Gregory left Rose 198 and later formed the law firm Giroir
Gregory with former Rose attorney Joe Giroir. Gregory 302, 5/24/95,
129
Gregory GJ, 113196, Gregory testified that while remembers some
discussion, cannot remember names, places, dates such discussions. Id..
interview .with the OIC 1985, Gregory remembered that one party the discussions was
David Knight. Gregory 302, 5/24/95,
130
Gregory GJ, 1/3/96, 25-26.
131
Id.. 6-7 (emphasis added). What Gregory meant the term introducing
unclear. His interview with the OIC 1985 reads follows: RLFs opportunity represent
Madison Guaranty Savings Loan (MGSL) came through Hillary Clinton the mid 1980s.
Gregory 302, 5/24/95,
FOIA(b)3 Rule 6(e), Federal Rules Criminal Procedure
NW: 15416 Docld: 70001585 Page
------32
Gregory remembers two specific concerns about representing Madison prior its undertaking the representation. 133 The first concern was whether Rose should represent Madison all: Gregory felt that Rose, which had riot represented any savings and loans, did not have the
expertise handle such representation; also, Gregory believed that the business potential
representing Madison was small and the risks were great because understood that savings and
loans general and Madison particular were having financial difficulties, didnt
perceive Madison have particularly attractive risk/reward ratio for our firm new
client. 134 The second concern was that what Madison wanted substantively was
unprecedented and there was bright-line, black-letter statement the Arkansas statutes that
would say you can have two classes stock. Gregory has memory any discussion
the origination the retainer about Madison having outstanding bill. 136 When asked about
how Massey came assigned the project, Gregory said, have some recollection that he,
one point, mentioned friendship acquaintanceship with this John Latham. 137
132
133
... ____.
........
liL. 13, 15-16 (But know that there was open discussion about the
client, ibe potential client, well the substantive issue, could state-a
Id.. 8-10.
J3S
....:----- ...
liL. 13-14.
136
liL. 18.
137
Id.
FOIA(b)J Rwle 6(el, Federal Rules Criminal Procedure 154 Docld: 1585 Page 1987-1992: RLF Conflicts/Ward Madsion/U.S. McDougal [The RLFs
conflict interest representing the RTC Madison Frost detailed Dreiband Myers,
Summary Rose Conflicts, April :1998.]
Borod Hu~~ins Report July 11, 1986, the FHLBB ordered James McDougal and Madison President John
Latham removed from Madison Guaranty. Shortly thereafter, Madisons board hired the
Memphis Jaw firm ofBorod Huggins investigate Madison Guaranty. Borod Huggins
issued report March 1987, anq that report discusses various matters related
McDougal use Madison Guaranfy benefit himself and other insiders. The Borod
Huggins Report also identified nume~ous person,s including Seth Ward having engaged
apparent criminal violations.
Madison sent criminal referral the United States Attorneys office Little Rock and
attached copy the Borod Huggins Report. The Federal Bureau oflnvestigation
investigated the matter, and that invdtigation led the indictment McDougal, Latham, and
others November 1989 for matters :related Castle Grande. 138
Borod Huggins issued second supplemental report August 31, 1988.
Coincidentally, August 31, 1988 same day the jury returned verdict Seth Wards favor the Ward case.
See FBI Madison case file, 29A~2459, Serials 10, 13, and 52; and 105-00071012 seq. (which copy the Borod Huggins Report that Rose produced the OIC).
138
NW: 15416 Docld: 70001585 Page
Rose
Be~ao
Work For The FSLIC December 1985. December 1985, the Rose Law Firm began its representation the government
connection with failed savings and loan institutions. represented the Federal Home Loan Bank
Board (FHLBB) and its agent, the FSLIC, the takeover Guaranty Savings Loan
Harrison, Arkansas. Vincent Foster served billing partner and lead counsel for the FSLIC.
The Guaranty matter proved quite lucrative for Rose, and Mr. Foster, Rose member Herb Rule,
and other Rose attorneys made repeated efforts during 1986 and 1987 obtain more FSLIC
business. Hillary Clinton billed the FSLIC for work the Guaranty matter. Webb Hubbell did
not bill the FSLIC for matters related Guaranty, but did receive memoranda about Roses
representation FSLIC. 139
FirstSouth and Joseph Giroir
During the Fall 1986, the FHLBB began prepare for the imminent failure
Arkansas savings and loan institution named FirstSouth, which Hubbell described the largest
savings and loan Arkansas. 140 The FHLBB began negotiate with various law firms for
work the FirstSouth receivership, including the Rose Law Firm. The FHLBB learned that
Rose had serious conflict interest with FirstSouth. The FHLBB threatened sue Rose. The
FHLBB also threatened sever its relationship with Rose.
The conflict involved Joe Giroir, senior Rose attorney, and Giroirs work with
139
See, e.g., July 14, 1986 memorandum from Mr. Foster Mrs. Clinton, Mr. Hubbell and
others Rose which attached copy appellate opinion the Guaranty matter. 264-
00022363-76.
140
2625-00001113.
NW: 15416 Docld: 70001585 Page
FirstSouth prior its failure. Webb Hubbell negotiated and signed million settlement
agreement with the FHLBB/FSLIC, and Rose managed salvage the business.
Mr. Foster, Mr. Hubbell, and Hillary Clinton began meeting Mrs. Clintons office
almost daily. 141 Mr. Hubbell later wrote:
Hillary was angry, too. She had participated several Vinces phone calls
the FSLIC assuring them that had conflict. She felt betrayed. She also
worried that $10 million claim would finally put the oldest law firm west the
Mississippi out business. Years later, she would tell that the years 1987-88
were the two hardest years her life. 142 November 10, 1994, Hillary Clinton told the FDIC-OIG when asked about FirstSouth
that there were issues involving Joseph Giroir, former Rose partner, but [she] was unaware what those issues may have been. She stated she had involvement with the FSLIC and any
negotiations involving FirstSouth Mr. Giroir. 143
Additionally, Hubbell testified 1996 that may have taken hls FirstSouth files from
Rose when left Rose and came Washington January 1993. 144
Seth Ward Madison Guaranty mid-1987, Seth Ward begari complain that Madison owed him commissions for
the sale the JDC/Castle Grande land warehoused for Madison Guaranty and Madison
Financial. June 1987, the FHLBB issued subpoena Ward part its investigation
141
Friends, 132.
143 .R. Clinton FDIC-OIG Statement, 11/10/94, (emphasis added). noted above, Mr.
Hubbells book, Friends, suggests that Mrs ..Clintons statement- that she was unaware the
First South issues-- false.
144
Hubbell Senate Testimony, 2/7/96, 158.
NW: 15416 Docld: 70001585 Page
Madison Guaranty. 145
.....
--~~~~~~~~~~~~~~~~~~~
Shortly
thereafter, Ward decided sue Madison Guaranty Savings Loan and Madison Financial
Corporation.
Ward filed lawsuit against Madison Guaranty and Madison Financial September
1987. Wards complaint sought payment commissions Ward claimed that Madison owed
him for his work the !DC/Castle Grande matter. Wards attorney for the initial part the
case was Alston .Jennings Wright, Lindsey Jennings.
Wards ranous agreements with Madison Financial, his sham loans and from Madison,
the May 1986 option agreement drafted Hillary Clinton, and the history his dealings with
Madison wert; issue the case. The case was tried before jury August and August 31,
1988, and the jury returned verdict Wards favor. Hubbell attended least portions the
trial, allegedly because wanted h~ar Alston Jennings give his closing argument.
Fr~m
September through November 1988, after the jury returned its verdict, Hubbell
served and filed series documents related writs garnishment behalf Skeeter Ward,
Skeeters wife, and POM. 147 Skeeter Ward and POM had loans outstanding Madison
Guaranty. means the writs garnishment, Hubbell and the Wards sought have the trial
court ~rder Skeeter Ward and POM pay Seth Ward the monies Skeeter and POM owed
Madi$on Guaranty. The writs eventually became moot the p~ies entered into escrow See Exs. and the FDIC-OIG Supp. Rep., 9/20/96; ..............
147
RTC-OIG Rep., 8/3/95~Ex. 123
........ .... ....... ..... ..... ......
FOIA(b)3 Rule 6(e), Federal Rules Criminal Procedure
NW: 15416 Docld: 70001585 Page
,-......,
agreement while the case was appeal October 1989, Hubbell learned that the state appellate court dismissed the appeal
Wards case. HubbeJI called Alston Jennings relay the news the dismissal, and Jennings
then retrieved the escrowed money and gave Ward. The FDIC and RTC;however, removed
the case federal court Madison was conservatorship and Wright, Lindsey Jennings
had agree indemnify the RTC for the escrowed money while the case was appeal the
federal courts. Wright, Lindsey Jennings withdrew from the case, but demanded that Ward
agree indemnify the firm Ward agreed, and Hubbell negotiated indemnification agreement
between Ward and Wright, Lindsey Jennings.
The case continued appeal until 1993, when the parties settled the case. part the
settlement, Ward returned the money obtained result the jurys verdict. 148 Hubbell
advised Ward the settlement (although Ward primarily used another lawyer, Thomas Ray).
Hubbell concealed his involvement the Ward case from the FDIC and the RTC.
Hubbell said that did not tell Breslaw about this representation because was
insignificant. 149
Roses Work For The FDIC
Rose began its work for the FDIC approximately July 1987. Vince Foster served
the billing partner and lead attorney FSLIC matters, while Mr. Hubbell served that function
,,_~~~~~~~~~~--
,./
149
Hubbell FDIC-OIG Interview, 3116/95,
264-00009841-90.
for FDIC matters. Mr. Hubbell worked with associ~te Rick Donovan case which involved
professional liability matters related Corning Bank. The Corning Bfilik matter came Rose
because the prior law firm, the Little Rock firm Wright, Lindsey Jennings, had conflict
interest. 151 December 1987, April Breslaw was the responsible FDIC attorney for the Coming
Bank matter. Breslaw worked with Mr. Hubbell and Rose associate Rick Donovan the matter.
November 1988: Rose Attempts Oua!ify FSLIC Fee Counsel
During October and November 1988, Vince Foster and Rose attempted qualify
act fee counsel the FSLIC for six Arkansas savings and loan institutions which were about enter conservatorship receivership. One those institutions was Madison Guaranty. Monday, October 31, 1988, Foster received the conflicts check lists for the six
Arkansas institutions. 152 The conflicts list for Madison Guaranty contained references Jim and
Susan McDougal, Frost partner James Alford, and Castle Grande. listed law firms and lawyers
which FSLIC knew had performed legal work for Madison Guaranty. Those firms included
Little Rocks Mitchell, Williams, Selig Tucker and the Memphis firm Gerrish McCreary
(which was the successor Borod Huggins). 153 The Madison Guaranty conflicts list did not
mention Rose.
The next day, Tuesday, November 1988, Foster circulated memorandum all Rose
151
Hubbell RTC-OIG Interview, 4/20/95, 11-12.
1320
15J
FOIA(b)3 Rule 6(e), Fecleral Rules Crim inal Procedure
NW: 15416 Docld: 70001585 Page
attorneys which attached the conflicts check lists. Foster also sent Hindes letter which
informed Hindes that Rose represented party adverse the FSLIC case called Universal Savings Loan Association First Investment Securities. 154 Hindes called and asked about the
Universal Savings matter and advised that the representation might constitute conflict which
could disqualify [Rose] from being considered. The next day, Hindes called again and
advise[d] that this representation was deemed conflict such nature disqualify
[Rosel from being fee counsel any new receivership. 156 Thursday, November 1988, Foster circulated another memorandwn Rose
attorneys. That memorandum stated relevant part:
Stop the presses. Because the finn represents Defendants action
savings and loan which now receivership FSLIC (although was not
the time widertook the representation), wider current FSLIC policy are
disqualified from receiving any new business while that case pending.
Accordingly, you should ignore the coriflicts memorandum circulated earlier
regarding Arkan~ savings and loan institutions which are prospects for
receivership. should focus our efforts trying represent buyers instead
receivers. 157
Foster persisted. Tuesday, November 1988, Foster sent FSLIC attorney James
Lantelme lette
--------
158 Monday, February 21, 1988, Hindes sent Foster letter which stated
mRTC-OIG Rep. 8/3/95, Vol. III, Ex. 96._I_ ___.
m281-024945; RTC-OIG Rep., 8/3/95, Ex.
.11______,
!r-- 15-9_
Fosters letters did not disclose the Rose Law Finns prior work for Madison Guaranty,
and one has ever found any document which would indicate that FSLIC, the FDIC, the
RTC ever learned Roses prior work for Madison Guaranty before press reports that work
during the 1992 campaign, and then during the investigations which began the fall 1993.
Fosters letters also did not disclose Hillary Clintons business partnership with the McDougals,
Roses work Castle Grande, Roses legal work for Jimmie Alfords company, Precision
Industries. any case, regulatory change occurred which required Rose solicit the FDIC for that
work. February 28, 1989, response the regulatory changes that occurred during January
and February 1989, Vince Foster sent solicitation letters the FHLBB/FSLIC and the FDIC. did not mention the Rose Law Firms prior work for Madison Guaranty those letters. 160 August 1989, Congress and the President enacted the Financial Institution Reform,
Recovery and Enforcement Act (FIRREA). 161 Among other things, FIRREA abolished the
FSLIC, and created the RTC manage failed savings and loan institutions.
Hubbell Began Lawyering With vengeance Early 1989.
151______.
160
281-00003361-3369; 264-00025765-81; 264-00025889-902; 281-00001578-86; 281.029581-89 (emphasis added).
:.---
161
Pub. No. 101-73, 1.03 Stat. 364.
NW: 154i:ID~)fil~ ~0Wli(i~,5=P~l~ules Criminal Procedure
--- January 1989, Rose members told Hubbell they wanted [him] out finn
management altogether. 162 FOIA Mr. Hubbell resolved build [his]
L....---------------------------- with vengeance. act ice, increase [his] billings[, and] began lawyering
163
Along with Vince
Foster, Mr. Hubbell focused obtaining more FSLIC and FDIC work, was the process trying dramatically increase [his) billings the firm. 1e short, his judgment was
clouded.w
FDIC/RIC/Madison Guaranty Frost Company
Mr. Hubbell accepted the Madison Guaranty Frost case time when the only
measure that counted how much you were billing [he]
was the low man the totem
pole. 166
_......,
The Frost case, Hubbell wrote 1997, has become part the industry known
Whitewater. 167 predicted, ominously: The way all this keeps evolving, expect Madison
Frost eventually linked with Lee Harvey Oswald and Deep lbroat. 168
The
Ori~jos
162 Madison Frost
Friends, 145.
163
Jd. 145.
164
Friend, 147.
165 147.
166
167
Friends, 145.
Friends, 148
168
Friends, 149.
NW: 15416 Docld: 70001585 Page
After the Borod Huggins law firm issued its 1987 report, concluded that Madison
Guaranty had viable claim against Frost Company, the accounting firm which performed
audits Madison Guaranty for the years 1984 and 1985. February 29, 1988, Madison
Guaranty filed complaint Arkansas state court against Frost Company, and other
individuals, including Jimmie Alford. Mr. Alford was the Fros! partner charge the 1984
and 1985 audits Madison Guaranty. 169 Madison Guaranty alleged that Frost was negligent
when performed the 1984 and 1985 audits.
April Breslaw Decided Hire Rose for the Frost Case. February 28, 1989, the FDIC was named conservator Madison Guarant). 170 April
Breslaw, FDIC attorney, became responsible for the Frost case. Ms. Breslaw determined that
Borod Huggins successor, Gerrish McCreary, had too many conflicts ofinterest. 171 She
.,---..
contacted Rick Donovan Rose and asked Rose could tak~ the case. Mr. Donovan directed
her Mr. Hubbell. 172 March 21, 1989, Mr. Hubbell circulated other Rose attorneys memorandum about
conflicts interest related Madison Frost. 173 Mr. Hubbell was aware that Mrs. Clinton
169
105-070547-52; 281.;01612; Alford OIC-302, 2/6/98, 1-2; Alford RTC-OIG
Statement, 917 /94, 1-2.
110 05-00022985 (3/2/89 letter Beverly Bassett from FHLBB/FSLIC representative).
171
Breslaw Senate Banking Comm., 11/30/95, 24-25; Breslaw Grand Jury Testimony,
6/16/94, 7-10.
172
lnterview with Webster Hubbell Jack Smith and John Downing, 1/11/94.
173
Hubbell House Banking Comm., 8/10/95, 47; House Banking Comm. Index, 8/10/95,
242
NW: 15416 Docld: 70001585 Page
had been the billing attorney 1985 and 1986 ... [and] that for period time, [Rose] had
done some work for Madison. 174 Mr. Hubbell admitted testimony before the House Banking
Committee that Rick Massey disclosed that there had been prior work done the Securities
Department, either the fall 1988 after Hubbell circulated his March 21, 1989
memorandum. Hubbell did not disclose that infonnation April Breslaw. testimony
before the Senate, Mr. Hubbell admitted that did not tell Ms. Breslaw any details about Roses
prior representation Madison Guaranty:
Mr. Chertoff.
Did you tell Ms. Bresla~. for example, that the Rose Law
Firm had represented M~dison Guaranty Savings
connection with the acqiusition some property and known the Arkans~ Industrial Development
Corporation property?
Mr. Hubbell.
No, sure did not ~at specifics.
Mr. Chertoff.
Did you notify Ms. BresJaw that, fact, the law finn had
represented Madison Guaranty trying obtain approval
from Beverly Bassett-S~paffer order issue preferred
stock raise the capital l:levels the bank?
Mr. Hubbell.
No, did not.
Mr. Chertoff.
Did you indicate that ~onnection with this same
property, this Industrial Development Corporation property
acquisition, that the Ros~ Law Finn had given regulatory
advice Madison G~ty concerning certain regulations
that governed water utili~ies and sewer utilities?
Mr. Hubbell
174
No, sure did not.
Hubbell House Bankin Comm. 8/10/95 47. See als
175
Hubbell House Banking Comm., 8/10/95, 59.
Mr. Chertoff. what exactly you told Ms. Breslaw about the nature your previous representation Madison?
Mr. Hubbell. far telling M~. Breslaw, believe the words were
something the effect that didnt have any conflicts,
could take on. There had been three matters that had
specifically addressed and this inay have been less than
30-second conversation the primary one being whether
the firm would take the litigation against Frost since
had other clients who were still being audited Frost
Company.
Mr. Chertoff. this 30-second conversation, you said that the firm
had taken three matters for Madison
Mr. Hubbell.
No, no, didnt say that, Mike.
Mr. Chertoff.
What did you say the 30-second conversation?
Mr. Hubbell.
Mike, trying remember. What trying say,
very short context, was that mind, there were three
issues. One was father-fo-law, one was prior work for
Madison and the primary one being the Frost issue itself.
knew that there had been more complete disclosure
concerning our representation Madison the FDIC. probably improperly assumed that she knew about that. 176
Mr. Chertoff.
Well, what did you tell Ms. Breslaw?
Mr. Hubbell. told her that did not have any conflicts.
Mr. Chertoff.
Did you tell her that there had been earlier representations Madison the Rose Law Firm?
Mr. Hubbell.
Yes.
Mr. Chertoff.
Did you describe them?
176 have found absolutely evidence which supports Mr. Hubbells assertion thatthere
had been more complete disclosure concerning our representation Madison Guaranty the
FDIC.
NW: 15416 Docld: 70001585 Page
Mr. Hubbell. think said had done some minor lending work for
Madison.back the early 80s.
Mr. Chertoff.
Minor what does minor lending work mean?
Mr: Hubbell.
There would some loans that would have been
counsel Madison on.
Mr. Chertoff.
You mean collecting loans?
Mr. Hubbell.
No, no, meant like closing loans.
Mr. Chertoff.
And did you did she ask you for any details about that?
Mr. Hubbell
No.
Mr. Chertoff.
Now, did you refer her some prior conversation that
someone from the .firm had had about what these transactions were?
Mr. Hubbell.
No, did not.
Mr. Chertoff.
Did you yourself give consideration whether these
transactions were conflicts?
Mr. Hubbell. looked the context the Frost litigation and
whether there would conflict, and did not see
conflict the prior representation since were,
some extent, standing the shoes the institution.
Mr. Chertoff.
Well, lets get into the nature the prior representations
and analyze that for second. Were you familiar with the
fact that 1986, the Federal Home Loan Bank Board,
which was reviewing Madison Guaranty, had described the
acquisition this Industrial Development Corporation
property fictitious involving fictitious sale?
Mr. Hubbell.
Was aware the time was talking April?
Mr. Chertoff.
Yes,
Mr. Hubbell.
No, was not aware that 1989.
NW: 15416 Docld: 70001585 Page
Mr. Chertoff.
Were you aware the fact that the firm had represented
Madison Guaranty co~ection with that acquisition?
Mr. Hubbell.
Yes; was. dont know that had remembered 89,
but was aware it. 177
Ms. Breslaw tells slightly different story: have recollection ever being told
anyone the Rose Law Firm that the Ros~ Law Firm had previously represented Madison
before closed. 178 Furthermore, she says, [w]hen retained the Rose Firm work
Madison the Madison accounting case, disclosed conflicts interest.
179
Mr. Hubbell later admitted that exercised very poor judgment taking the [Frost
case). 180 Mr. Hubbell decided accept the Frost case even though some Rose partners objected the grounds that Rose and Frost had common clients and did not believe Rose should sue
local accounting firm behalf the federal regulators. 181 Mr. Hubbell disregarded his
partners objections and accepted the case.
Mr. Hubbell later wrote: was angry because even though they wanted start
billing, every time came with case they found reasons for not reasons that
were for their benefit, not mine. wasnt accommodating mood. took Madison
177
Hubbell Senate Testimony, 12/1/95, 98-102.
178
Breslaw Senate Banking Committee Deposition, 7/28/94, 26-29.
~reslaw Senate Banking Comm., .11/30/95, 25.
180
Friends, 146.
See. e.g Friends, 147;.__
/I_____,_,at..... ______________________
181
....J
..-
NW: 15416 ~~b)WOOuli~EijaJg~rol
Rules Criminal Procedure
,..,.--...,
Frost. 182
Madison Employees Complained About the Hubbell-Ward Relationship. June 1989, approximately three months after the FDIC hired Rose, noticeably
agitated Madison Guaranty employee, Sue Strayhorn, informed Paul Jeddefoh, Madisons
intervention attorney, that Mr. Hubbell, Seth Ward, and Seth Ward were in-laws. 183 June 1989, Mr. Jeddeloh wrote letter Ms. Breslaw which highlighted Mr.
Hubbells in-law relationship with Seth Ward, and with Seth Ward II. 184 his letter, Jeddeloh
explained that both Seth Ward and Seth Ward had lawsuits pending against the Madison
Conservatorship. Mr. Jeddeloh also explained that Hubbell was present the trial the Seth
Ward matter and appears have been interested (indirectly) participant the Ward
proceedings. 186
.--
Ms. Breslaw spoke with Rick Donovan about the Ward matter June 20, 1989. 187 Ms:
Breslaw asked Donovan Hubbell was Wards father-in-law, and Donovan confirmed that
Breslaw and Hubbell were in-laws. 188 Shortly after her conversation with Donovan, Breslaw
182
Friends, 147.
183
Breslaw House Testimony, 8/10/95, Ex. FDIC-OIG Rep., 7/28/95 (Jeddeloh
FDIC-OIG Statement, 3/15/94).
184
Ex. RTC-Rep., 8/3/95, vol. III.
mEx. RTC-Rep., 8/3/95, vol. III.
186
Ex. RTC-Rep., 8/3/95, vol. III.
187
Donovan Little Rock G.J 1/21198, 18-29; GJE 1651 (notes Donovan June 20,
1989 conversation with Breslaw).
188
Donovan Little Rock 1/6/98, 93-94.
NW: 15416 Docld: 70001585 Page
spoke with Hubbell. She described her conversation with Hubbell follows
[Mr. Hubbell] explained that was not representing Seth Ward left with the
impression that did not have aparticularly close relationship wii:h his father-in-law believe suggested that his father-in-law was relatively staunch Republican and
Hubbell nself had been involved Democratic politics for ~ome time. believe
was Mayor Little Rock. has own Democratic political connections.
And the way represented was and his father-in-law had different political
ideas. went some lengths make have the impression that was not
particularly close his father-in-law and that was not representing his father-in-law
and that would not represent his father-in-law the future. said, please put that
writing. Confirm what youve just said writing and send letter that effect.
And believe did that June 1989. Once had, view, confirmed
writing that there was conflict, other words, that was not representing Ward any matter against and had promised not the future, seemed that there was conflict interest and was not did not conclude that would
necessary replace the Rose Law Firm simply because Hubbell was related
marriage someone who was unrelated litigation, who was involved
unrelated litigation. 189
Ms. Breslaw generally recall[s] being irritated that [the Seth Ward potential conflict]
had not been disclosed initially. 190 One Ms. Breslaws considerations for keeping the Frost
case the Rose Law Firm was the fact that Mr. Hubbell represented her that Mr. Ward was
9Breslaw Senate Banking Committee Deposition, 616195, 23-24 See also, e.g. Breslaw
Senate Banking Comm. Dep., 10/23/95, 246 (same).
190
8reslaw Senate Banking Committee Dep., 0/23/95, 40.
Ms. Breslaw also testified that:
[PauJ] Jeddeloh informed about this family relationship, and contacted
Hubbell ask him about it. And that point, confirmed that was related
marriage the Ward family. But told that did not represent Ward. And
recollection the conversation that told me, not only that did not represent
Ward, but that would not represent Ward the future.
Id.
NW: 15416 Docld: 70001585 Page
not client the firm. 191
Mr. Hubbell concealed Roses work the !DC/Castle Grande matter from the FDIC and
the RTC. 192 Mr. Hubbell only denies, weakly, that ever told April Breslaw that and Seth
Ward were not close:
Mr. Chertoff.
And did you indicate Ms. Breslaw that your relationship
with yoilr father-in-law, Mr. Ward, [was] not dose one?
Mr. Hubbell.
Not that khow of.
Mr. Chertoff.
And want read you from line the statement given Ms. Breslaw page 200. few months after had
hired the Rose Firm, learned that Seth Ward was Webster
Hubbells father-in-law and that Ward was litigation with
Madison. Under the ethical rules, adverse interest
in-law not imputed lawyer. not conflict
interest. Nevertheless, asked Mr. Hubbell about the Ward
matter. Mr. Hubbell told that was not representing
Mr. Ward and that would not the future.
also told that his relationship with his father-in-law was
not close one. recall him saying that Mr. Ward was
ardent Republican and that was active Democrat.
want ask you, did you tell Ms. Breslaw that your
relationship with your father-in-law was not close one?
Mr. Hubbell. dont remember that, Mr. Chertoff. 193
191
Breslaw Senate Banking Comm. Dep., 10/23/95, 249. See also believe that ifl
had understood June 1989 that Hubbell did represent Ward Wards interests, that would
have taken that with supervisors. And dont know what they would have advised
do.).
192
Breslaw Senate Banking Comm., 11/30/95, 36-37, 40, 42-43. See also id. 32-45
for fuller reading Ms. Breslaw Senate testimony regard Roses work Castle Grande
and Mr. Hubbells nondisclosure the Rose-Madison Guaranty relationship.
193
Hubbell Senate Testimon 217196, 14-17. See also,
NW: 15416~~(~3 Z