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                                                 Union Calendar No. 469
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2nd Session                                                    104-862



 September 28, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                           NINETEENTH REPORT

                             together with


    On September 24, 1996, the Committee on Government Reform 
and Oversight approved and adopted a report entitled 
``Investigation into the White House and Department of Justice 
on Security of FBI Background Files.'' The chairman was 
directed to transmit a copy to the Speaker of the House.

                          I. Executive Summary

                            A. Introduction

    The committee's investigation into the unauthorized 
possession of hundreds of FBI background files by the White 
House remains in progress. There are many questions that are 
unanswered; cooperation from the White House and other 
witnesses has not been full and complete; more witnesses must 
be interviewed; and, many more documents from earlier committee 
requests are outstanding. Accordingly, this is an interim 
report to inform the public as to the status of the 
investigation in the closing days of the 104th Congress.

1. The conduct of White House officials

    The FBI files matter, or ``Filegate,'' is as serious an 
issue as the Clinton administration has encountered. The 
discovery of the unauthorized access to so many FBI background 
files on so many former White House employees is bad enough. 
These files contain the most private and personal information 
on an individual, his spouse and family. The fact that two 
individuals, Craig Livingstone and Anthony Marceca, with 
extensive political involvement and checkered pasts were in 
charge of handling the files is cause for alarm and 
    That present and former White House officials have not been 
forthcoming in revealing who hired the two central characters 
in this matter is of great concern to the committee. The 
committee intends to aggressively pursue the answers. Whoever 
was responsible for bringing them into the White House is 
ultimately responsible for these actions. Placing the public 
trust of such sensitive, private files in the hands of two 
political operatives was a disaster waiting to happen. And, it 
    In general, the FBI files issue shows a lack of respect by 
the Clinton administration for proper security procedures to 
protect both the President of the United States and the 
national security. This is all the more so since the White 
House ignored recommendations from a Democratic committee 
chairman of the U.S. Senate to take security precautions in 
response to reported security irregularities in the first years 
of the Clinton administration.
    The Clinton White House displayed a lack of respect for the 
privacy and confidentiality of private citizens. The mere fact 
that individuals lacking in professional skills and discretion 
were put in charge demonstrates the cavalier approach of the 
Clinton administration toward sensitive security matters.
    During the early revelations of the FBI files 
investigation, White House officials were quick to blame others 
rather than take responsibility. This happened even when all 
the facts were not known. First, it was touted as a routine 
mistake; then it was blamed on a low-level clerk; then the 
General Accounting Office; and then, the Secret Service. Each 
of these explanations was thoroughly discredited.
    Some White House officials, through surrogates and 
unattributed background quotes in the press, continue to blame 
the Secret Service, even after that theory was soundly 
debunked. The fact that the White House seeks to avoid 
responsibility for this matter, and instead passes the buck, 
ensures that White House accountability for its own actions 
will be elusive.
    Furthermore, the FBI files issue made it more difficult for 
the FBI and the Secret Service, the two agencies responsible 
for protecting the President and performing security for the 
White House, to trust actions of the White House. Prior to the 
files matter coming to light, these agencies cooperated with 
the White House under the presumption of a ``good faith'' 
relationship. Now, however, both have taken steps to implement 
more skeptical, arms-length processes for future interaction 
with White House officials. This unfortunate departure from 
tradition is yet another result of the growing mistrust of our 
political leaders in Washington. Undoubtedly, it is a black eye 
on this White House.

2. The conduct of the FBI

    The committee also is troubled by another serious issue 
that re-emerged during the FBI files investigation: the 
politicization of the FBI. Questions about a cozy relationship 
between the FBI and the White House surfaced during the 
committee's investigation into the White House Travel Office 
firings. At the time, in a statement by FBI Director Louis 
Freeh said, ``I told the President that the FBI must maintain 
its independence and have no role in politics.'' \1\ These 
questions raised great concern because the politicization of 
law enforcement in a democracy is a swift and sure way to 
trample over the civil liberties of private citizens. 
Consequently, the FBI Director took steps to reverse these 
perceptions of coziness. But it did not prevent the hundreds of 
files from being sent to the White House without question.
    \1\ Report of Fiscal Year 1994; Federal Bureau of Investigations; 
Louis Freeh, Director.
    In the course of the committee's inquiry into the files 
matter, this perception resurfaced. The committee uncovered 
several questionable actions by FBI General Counsel Howard 
Shapiro that we find inexplicable and inexcusable. His ``heads 
up'' to the White House Counsel had the effect of an early 
warning to the subjects of the committee's and the Independent 
Counsel's investigations of potentially damaging information. 
Shapiro's delivery of a politically controversial manuscript, 
joint editing of a White House letter to Director Freeh, and 
possession of his own personal White House pass had a similar 
    This committee witnessed blatant interference in its 
investigatory proceedings. Mr. Shapiro's justifications for his 
actions are implausible. The committee is seriously troubled by 
the interference of Mr. Shapiro in the investigations of this 
committee, as well as those of the Independent Counsel. Mr. 
Shapiro himself acknowledged that his ``heads up'' to the White 
House was inappropriate. However, his coziness with the White 
House continues. Even the perception of such a relationship 
threatens the independence of the FBI. The committee calls upon 
Mr. Shapiro to tender his resignation from the office of the 
FBI general counsel.
    The act of resignation is necessary, if the Director wishes 
to restore the arms-length relationship between the FBI and the 
White House, as well as the public's confidence. Failure by the 
Director to do so will allow the continued erosion of 
confidence in law enforcement and in the Director's own 
independent leadership.
    The committee has yet to determine whether colossal 
incompetence or a sinister motive precipitated these events. We 
have yet to learn exactly who is Craig Livingstone, who hired 
him and why. Answers to these questions are necessary to 
explain the true story of ``Filegate.''
    The committee's investigation has sufficient information to 
realize the great danger in the White House's unauthorized 
acquisition of these sensitive FBI files. We know the files 
were in the hands of political operatives, non-professionals, 
volunteers, teen-agers in proximity to a photocopier, and 
individuals without security clearances. We know there was 
virtually no supervision over this sensitive process. We know 
that some data was taken from the White House compound to the 
home of a witness who has now claimed fifth amendment 
protection against testifying before Congress. No one yet knows 
where these files have been or who looked at them. The 
potential for the abuse of the rights and privacy of hundreds 
of private citizens remains clear and present.
    The committee continues to investigate this case and 
discover the true story. In the meantime, the committee cannot 
yet assure the public that a lax attitude toward and disrespect 
for the privacy and rights of ordinary Americans has not 
gripped this White House.

                     B. The Matter of the FBI Files

1. The discovery of the files: Travelgate to Filegate

    Since May 30, 1996, the Committee on Government Reform and 
Oversight has conducted an intensive investigation into the 
actions of the White House and the Department of Justice 
concerning the White House's improper acquisition of hundreds 
of FBI background investigation files of former Republican 
officials. The genesis of this revelation of massive invasion 
of privacy was with the committee's document requests for all 
previously withheld files on Billy Dale.
    On May 30, 1996, the committee discovered that the White 
House had improperly ordered Billy Dale's FBI background file 7 
months after he was fired, when the White House finally 
produced 1,000 pages of the 3,000 pages of documents that were 
being withheld under a May 9, 1996 invocation of executive 
    The committee issued a January 11, 1996 subpoena which 
included a request for all records relating to Billy Dale. The 
documents were due to the committee on January 22, 1996. Prior 
to the subpoena, the committee had submitted several document 
requests to the White House which included document requests 
relating to Mr. Dale.
    Prior to May 30, 1996, the White House Counsel had 
represented in February 1996 that the only categories of 
documents withheld were: ``personnel'' records, attorney notes, 
and ``deliberative material'' concerning investigations of 
Congress and the Independent Counsel.
    Throughout the spring of 1996, White House Counsel withheld 
this group of documents. At no time did the White House Counsel 
make any representations that he was in possession of an FBI 
background file of Mr. Dale. In fact when Mr. Dale's file was 
forwarded on May 30, 1996, on the morning a contempt vote was 
scheduled, it was not even distinctly identified in a 
production log and was just grouped among documents emanating 
from ``The Counsel's Office.'' Since the document had been 
obtained from the Office of Records Management who received it 
from the Office of Personnel Security, the characterization of 
the source of the document was misleading.
    Yet if the document did come from the ``Counsel's Office'' 
as identified by the White House, why does the White House 
Counsel Jack Quinn claim that he told the committee about the 
document in February 1996 while Special Counsel Jane Sherburne, 
who was at the same February 1996 meeting, claims she didn't 
know about the Billy Dale file until June 4, 1996? The 
Counsel's Office has provided mutually inconsistent accounts of 
who knew about the Billy Dale file and when.
    It is important to note that the Billy Dale file only was 
produced after a vote of contempt was taken in the full 
committee on May 9, 1996. In a meeting with Chairman Clinger 
shortly before the contempt vote, Quinn informed the chairman 
that he had not even attempted to collect certain categories of 
subpoenaed documents and he had not yet undertaken a review of 
the documents for privilege issues. Quinn issued a blanket 
``protective'' executive privilege claim over the documents on 
May 9, 1996 at the behest of the President. Personnel records 
are not normally subject to executive privilege.
    ``Personnel records'' are distinctly different from FBI 
background reports and are kept in separate and distinct 
offices at the White House. Certainly the Counsel's Office, 
which handles the FBI background reports, is aware of this 
distinction. After all, the Counsel's Office reviews FBI 
background reports and it does not ordinarily review 
``personnel'' records. The White House Counsel's Office was 
misleading in how it represented Billy Dale's file to the 
committee. While the White House Counsel now tries to revise 
the history of how they characterized this file, the actions by 
Counsel staff are representative of the type of gaming that was 
typical in negotiating document productions.
    On May 30, 1996, when Billy Dale's file was produced to the 
committee, Chairman Clinger also was notified by letter \2\ 
that President Clinton was formally asserting executive 
privilege over the then remaining 2,000 pages of outstanding 
documents. Quinn claimed that Attorney General Reno reviewed 
the documents and agreed with the propriety of assertion of 
executive privilege. Although Quinn represented that this 
assertion of executive privilege was being made by President 
Clinton, the committee never was provided any documentation of 
a personal assertion by President Clinton.
    \2\ Letter from Jack Quinn to Chairman William F. Clinger, Jr., 
Committee on Government Reform and Oversight, U.S. House of 
Representatives, May 30, 1996.

2. The discovery of the Billy Dale file

    The privileged resolution was withdrawn from floor 
consideration at Chairman Clinger's request in order to review 
the new documents and determine the propriety of President 
Clinton's executive privilege claims over the remaining 2,000 
pages of identified responsive documents.
    The committee began an immediate review of the 1,000 pages 
already produced. That day, committee investigative staff 
discovered a White House memo, dated December 20, 1993, 
requesting a copy of Billy Dale's FBI background investigation 
previous report. The request for Dale's file was sent to the 
FBI a full 7 months after Mr. Dale and the White House Travel 
Office employees had been summarily fired and an FBI 
investigation announced by the White House.
    The request form found among the White House's document 
production was in memorandum format addressed ``TO: FBI, 
LIAISON'' and ``FROM: BERNARD W. NUSSBAUM.'' \3\ The form 
stated that Mr. Dale's previous report was being requested 
because he was currently being considered for ``ACCESS (S)'' to 
the White House.\4\ An attached memo indicated that the FBI 
complied with the request and forwarded the Dale file to the 
White House on January 6, 1994.\5\
    \3\ White House document CGE 43641.
    \4\ According to Anthony Marceca's documents produced under 
subpoena to the committee, (unnumbered) the ``(S)'' notation referred 
to the type of access being sought for the individual. An ``S'' meant 
that the White House was seeking access for Mr. Dale as White House 
Staff rather than for an ``I'' for intern or volunteer position.
    \5\ White House document CGE 43642.
    Although the committee had previously issued, on February 
7, 1996, a subpoena to the Department of Justice for all 
records pertaining to Billy Dale, DOJ never produced its copy 
of the document.
    The committee asked Attorney General Reno to provide 
information on the Justice Department's knowledge of its 
failure to produce its copy of the Dale file and the White 
House memo requesting it in December 1993, particularly in 
light of the fact it was responsive to other Justice Department 
requests and subpoenas. The Department of Justice responded, 
stating that the committee had not requested the Dale file. The 
memo request from Nussbaum's office was not located in its 
    When FBI Unit Chief James Bourke was asked in a committee 
deposition about DOJ's failure to produce this document, he 
testified that he had ``no idea'' why, and that it wasn't his 
responsibility.\6\ Mr. Bourke later explained that it was the 
FBI general counsel's responsibility to request document 
searches in response to congressional subpoenas and he was not 
aware of any request.\7\
    \6\ Committee deposition of James Bourke, June 17, 1996, pp. 62-63.
    \7\ Id., pp. 65-66.
    It is clear that White House officials attempted to hide 
its requisition and possession of the Dale file: first, by 
erroneously describing it as a personnel file instead of an FBI 
background file; second, by withholding it under a blanket 
executive privilege; and third, for failing to list this and 
other specific documents in its final privilege log.
    The committee has yet to find the reason why the White 
House requested the Dale file from the FBI 7 months after he 
was fired.

3. White House's changing explanations for ``Filegate''

    In the first few days following the discovery, the White 
House offered several conflicting explanations about how it 
obtained hundreds of FBI background files. The White House 
initially released statements from Craig Livingstone's attorney 
claiming that the activities of Livingstone and Marceca were 
all an ``innocent mistake.'' Why did the White House so quickly 
endorse the explanations of Livingstone and Marceca before 
getting all the facts?

4. A ``file clerk'' caused the problem--June 5, 1996

    White House Special Counsel to the President Jane Sherburne 
issued a statement on June 5, 1996, claiming that ``file 
clerks'' performing a routine recordkeeping effort ``may have 
mistakenly'' sought Mr. Dale's FBI background file.\8\ Ms. 
Sherburne refused to provide the committee with the name of the 
``file clerk'' that sought Dale's file. Unknown to the 
committee, at the time, Ms. Sherburne met with Livingstone that 
evening at the White House. Mr. Livingstone claimed to know 
nothing about this growing ``problem'' at the time. Ms. 
Sherburne testified that Livingstone was ``as confused and 
puzzled by it'' \9\ as she was.
    \8\ Statement by Jane Sherburne, June 5, 1996.
    \9\ Sherburne deposition, p. 73.

5. The General Accounting Office caused the problem--June 6, 1996

    By June 6, the White House issued another explanation for 
the improper possession of the FBI files. The White House 
stated that a ``low-level file clerk'' was not in fact at 
fault; rather, that the General Accounting Office (``GAO'') 
might have ``triggered'' a request for these files in the 
course of its investigation of the White House Travel Office 
matter. The GAO immediately denied any involvement or request 
of FBI files.\10\
    \10\ The GAO spokesperson stated that it ``never asked presidential 
aides for the FBI background file of fired Travel Office director Billy 
Dale'' and generally disclaimed that the GAO ever asked for or was 
allowed to review any FBI background files. Pete Yost, White House 
Struggles to Explain Why it Obtained Dale's FBI File, Associated Press, 
June 6, 1996.

6. ``An innocent bureaucratic mistake''--June 7, 1996

    The committee soon learned that, in addition to Mr. Dale's 
improperly sought FBI file, the White House had obtained at 
least 338 other FBI files of prior Republican administration 
officials.\11\ One of Livingstone's lawyers, David Cohen, who 
had been conducting his own investigation, telephoned 
Sherburne, and gave her the ``bad news'' that the White House 
had ordered a lot of other files beyond Dale's. Ms. Sherburne 
learned that files on former Republican administration 
officials were also ordered.\12\ White House Counsel and 
``Travelgate'' spokesman Mark Fabiani, immediately labeled this 
matter ``an innocent bureaucratic mistake.'' \13\
    \11\ Jane Sherburne later testified that the White House learned of 
this information on June 6, 1996, through Mr. Livingstone's lawyers, 
Randy Turk and David Cohen of the Washington law firm of Miller 
Cassidy, LaRocca & Lewin. Sherburne deposition, July 23, 1996, pp. 74-
    \12\ Sherburne deposition, p. 85.
    \13\ Pete Yost, Dale FBI File Part of Larger Effort to Recreate 
White House Files, Associated Press, June 7, 1996.
    Fabiani told the Associated Press on June 7, that 
Livingstone's attorney's discovery provides ``a completely 
innocent explanation.'' \14\ Fabiani also told the New York 
Times that the ``detailee'' whom he still refused to identify 
``was mistakenly given an outdated list of White House 
employees dating back to the Reagan Administration,'' and that 
``no one in the White House ever reviewed the files.'' \15\ 
Further, Fabiani informed the Associated Press that the 
ordering of numerous other files was proof positive ``that Mr. 
Dale's file was not singled out.'' \16\ Chairman Clinger sent a 
letter to the White House on June 7 requesting all official 
information on this matter, including the name of the 
``mystery'' detailee.
    \14\ Id.
    \15\ Neil E. Lewis, White House Says Requests for FBI Files Was 
Wider, New York Times, June 8, 1996.
    \16\ Pete Yost, Baker, Fitzwater, Brady Among 330 FBI Files White 
House Got, Associated Press, June 7, 1996.

7. The Secret Service caused the problem--June 10

    In a June 10, 1996 letter, Sherburne stated that the FBI 
background files were assembled in the White House Office of 
Personnel Security ``as a result of a mistaken understanding'' 
that these prior Republican administration officials 
``continued to have access to the White House compound after 
the start of the Clinton Administration.'' \17\ Ms. Sherburne 
attached to her letter a sworn statement of Anthony Marceca, 
the detailee who ordered the files. Marceca stated that he 
based his requests to the FBI on Secret Service lists of White 
House passholders. Contrary to Fabiani's statements to the New 
York Times that ``no one in the White House ever reviewed the 
files,'' \18\ Mr. Marceca revealed in his statement that he, in 
fact, did examine the contents for inconsistencies. Marceca 
told Livingstone's lawyer that he, in fact, read all of the 
files in order to pass on any ``derogatory information'' to 
Livingstone.\19\ Sherburne later explained that Livingstone's 
lawyer met with Mr. Marceca on Sunday, June 9 at his law firm's 
offices. Mr. Marceca dictated a statement to Livingstone's 
attorney in the presence of Livingstone.\20\
    \17\ See June 10, 1996 Special Counsel to the President Jane 
Sherburne, letter to Chairman Clinger, p. 1.
    \18\ Neil E. Lewis, White House Says Request for F.B.I. Files Was 
Wider, New York Times, June 8, 1996.
    \19\ John F. Harris, White House Admits Having Background Files, 
Washington Post, June 8, 1996.
    \20\ Mr. Marceca stated in his sworn deposition that he met Craig 
Livingstone earlier that day at a local flea market and they went to 
Craig Livingstone's house nearby. After Mr. Livingstone telephoned his 
lawyer, they both went to his lawyer's offices where Mr. Marceca was 
questioned and delivered a sworn statement. Marceca deposition, p. 114.
    We do not know why Mr. Marceca's attorney was not present or when 
his attorney received the copy of the sworn statement that was handed 
to the White House the following day.
    The frequently changing explanations in the early days show 
that the White House was quick to avoid accountability by 
passing the blame. It engaged in a public strategy of excuse-
making. However, each time the blame was shifted elsewhere, the 
explanation was discredited. The White House continued to cling 
desperately to the explanation of blaming the Secret Service, 
even though it, too, was debunked in the committee hearing with 
the Secret Service. In the final analysis, the White House must 
take full responsibility for this fiasco and stop trying to lay 
blame elsewhere.
    It is unconscionable that the White House shifted the blame 
from its own incompetent appointees to those of the U.S. Secret 
Service. The White House mounted a stealth campaign consisting 
mainly of background statements attributed to unidentified 
sources, to blame the Secret Service. The Secret Service 
initially refrained from defending itself, following its 
tradition of not making public statements about White House 
matters. Eventually, Secret Service witnesses were summoned 
before the committee to explain the charges leveled against 
them. Their testimony, and their extensive audit of the White 
House's systems, showed that no single ``faulty'' Secret 
Service list could provide justification for how Anthony 
Marceca obtained hundreds of FBI background files of former 
Reagan and Bush officials.
    The only list from which Marceca could have obtained all of 
the names released by the White House to date, is a master E-
Pass list, which lists all ``A,'' active and ``I,'' inactive 
passholders for approximately the past 8 years. Mr. Marceca 
testified that he thought the ``I'' next to the name on the 
list indicated an individual was an intern.\21\ Mr. Marceca 
would have had to deliberately order the files of people 
identified as ``inactive'' in order to have utilized this list. 
Mr. Marceca would have us believe that he ordered the FBI 
background files of such notable figures as Ken Duberstein, 
A.B. Culvahouse and Tony Blankley, without any recognition of 
the names, or that they were not ``holdover interns.'' The 
committee is especially skeptical of this conclusion given 
Marceca's vast political experience.
    \21\ Marceca deposition, p. 152.

8. Procedural safeguards against ``innocent snafus''

    In an attempt to get to the bottom of the cause of the FBI 
files issue, the committee held its first hearing on June 19, 
1996. In that hearing, we learned how the very sensitive 
matters of confidential background checks and security 
clearances were handled by prior White Houses, both Democrat 
and Republican.\22\ In the past, the President has appointed 
only professional, circumspect and highly responsible people to 
be put in charge of these most sensitive matters.
    \22\ Security of the FBI Files: Hearing before House Committee on 
Government Reform and Oversight, 104th Cong., 2d Sess., June 19, 1996.
    In this hearing, former Counsels to the President and 
Livingstone's predecessor in the White House Office of 
Personnel Security testified to the careful, and painstaking 
process that was followed in order to ensure the 
confidentiality of these sensitive files. We learned that this 
function was never handed over to political operatives, or 
detailees from outside agencies, and certainly not to teen and 
college age interns lacking security clearances, such as 
occurred in the Clinton White House.\23\
    \23\ Id.
    We further learned that for the past 30 years, the White 
House has engaged in a careful process of performing background 
checks and granting or rejecting security clearances on 
individuals to determine their suitability and stability for 
working at the White House and throughout the executive branch. 
The clearance and background processes exist to protect the 
President as well as the national security. The case of 
convicted spy Aldrich Ames is a painful reminder of the kind of 
problem that can arise when vigilance in national security 
matters is lacking. Given the necessity of sound procedures to 
guard against breaches of security, those who oversee security 
procedures themselves must be carefully selected and always 
above reproach.
    Nancy Gemmell, former staff assistant in the Security 
Office since 1981, testified that at the beginning of the 
Clinton administration Livingstone had numerous teenage interns 
working inside the security office and even in the vault. The 
interns did not have background investigations, security 
clearances, or proper supervision. They had access to all 
confidential FBI background files and a photocopier machine 
stood nearby.
    It is clear that supervision and accountability are 
imperative to such a sensitive process. As Washington Post 
editorial chief Meg Greenfield pointed out, ``[E]ven if the 
accident rationale holds up, it was a plenty serious and 
inexcusable accident. Neither that material nor that 
responsibility should ever have been placed in those hands.'' 
    \24\ Meg Greenfield, The White House Wants, Washington Post, June 
24, 1996.
    It is troubling, both to the Congress and the public, to 
think the President could allow such inappropriate staff to 
oversee security matters in such a careless fashion. A brief 
review of the Clinton administration's history of handling 
security issues shows other evidence of irresponsibility.
    In March 1994 the problems and delays in obtaining White 
House passes and security clearances came to light, when 
congressional inquiries delved into why hundreds of White House 
staffers did not yet have background investigations completed. 
Associate Counsel William Kennedy was assigned responsibility 
for overseeing security matters, including the issuance of 
passes and security clearances. Kennedy was subsequently 
relieved of his responsibilities in this area; yet Livingstone, 
who was directly in charge of managing security, was not.
    Later, in August 1994, Senator Dennis DeConcini, then 
Democratic chairman of the Subcommittee on Treasury, Postal 
Service, and General Government of the Committee on 
Appropriations, which provides funding for the White House, 
concluded an investigation of reported problems in 
Livingstone's office. Chairman DeConcini wrote to the President 
\25\ suggesting specific changes that were sorely needed in the 
Personnel Security office. Those changes included replacing 
Livingstone with a career professional who had a security 
background. Chairman DeConcini's recommendations were 
considered but not implemented by the White House, and for some 
reason, Livingstone remained in charge.\26\
    \25\ Letter from Chairman DeConcini to President Clinton, August 
11, 1994.
    \26\ Hearing testimony also illuminated other complaints against 
Livingstone during his tenure at the White House. Specifically, 
Livingstone was reprimanded by Evelyn Lieberman, Assistant to the Chief 
of Staff for the First Lady, for discussing the details of a background 
investigation with a young female staffer. It is not clear why the 
First Lady's staff was in the chain of command to reprimand Craig 
Livingstone, who reported to the Counsel's Office. Livingstone also had 
a police report filed against him in November 1993, when he threatened 
a female neighbor because her dog was barking. Livingstone reportedly 
said he would ``beat her face in'' if she did not quiet her dog. 
Livingstone admitted to the police officer that he did make the threat. 
Security of the FBI Files: Hearing before the Committee on Government 
Reform and Oversight, 104th Cong., 2d Sess., June 26, 1996.
    It is clear that security procedures are only as effective 
as the professionals who manage them. Following the committee's 
first hearing, two points became evident. First, there were 
serious security problems at the Clinton White House; second, 
those responsible for White House security under the Clinton 
administration were hardly professional and were a stark 
departure from past administrations.

9. Livingstone and Marceca

    Among the foremost questions the committee sought to 
investigate regarding how and why the White House obtained 
these FBI background files, was, ``Who is Craig Livingstone?'' 
``Who recommended him?'' ``Who hired him?'' and given his 
background, ``Why was he put in charge of such a sensitive job 
at the White House?'' These are seemingly simple questions, but 
complete answers to them are still not forthcoming.
    Livingstone did not have the professional background 
necessary to perform the sensitive functions of the Personnel 
Security Office. Yet he was put in charge of that office, and 
then managed to remain in that role despite the frequent 
turnover of White House Counsels. Conventional wisdom would 
suggest that management turnovers bring staff reorganizations. 
Instead, over a 3-year period, he enjoyed a 40 percent salary 
increase by touting his record as a ``team player'' \27\ while 
keeping bankers' hours.\28\ Numerous questions still remain 
about who brought Craig Livingstone into the Clinton inner 
circle as security chief. The committee has yet to piece 
together a clear picture of who is responsible for Livingstone 
working in the White House after the inauguration. Given the 
information available, did former White House Counsels Bernard 
Nussbaum, Lloyd Cutler, Abner Mikva and present Counsel to the 
President Jack Quinn really believe that the political advance 
man and ex-bouncer was the best individual for this sensitive 
    \27\ See letter from Livingstone to then-Counsel to the President 
Abner Mikva, ``It would be wrong not to approve my request . . . I 
apologize for my tone, but this is my last try to remain part of the 
team.'' August 28, 1995, White House document, CGE 48058.
    \28\ White House documents, CGE 47858-47860. Times of Livingstone's 
entry and exit White House complex.
    Mr. Nussbaum testified before this committee that he does 
not know who hired Livingstone. Instead, he suggested that the 
Chief of Staff 's office may have been involved.\29\ Mr. 
Livingstone's supervisor, Rose law firm partner William 
Kennedy, said in all committee depositions, as well as 
hearings, that he could shed little light on who brought 
Livingstone into the White House. Mr. Livingstone testified to 
the committee he does not know who recommended him. He gave an 
arguably tortured explanation of his journey into the White 
House as a permanent employee. Those who previously heaped high 
praise on Livingstone, such as the President's senior advisor 
George Stephanopoulos, virtually denied knowing him to the 
press. President and Mrs. Clinton's denials of hiring, or 
participating in the hiring of Craig Livingstone is in direct 
conflict with statements from their own senior staff to career 
FBI agents.
    \29\ Committee deposition of Bernard Nussbaum, July 11, 1996, p. 
    Both Livingstone and Marceca had extensive histories as 
campaign advance men and political operatives. Marceca was 
hand-picked by Livingstone for his White House detail through 
his personal request for Marceca to then-Associate Counsel 
Kennedy. Sworn testimony by Dennis Casey, a former Gary Hart 
campaign consultant who worked with Livingstone and Marceca on 
the campaign in 1984, shed some light on their possible motives 
for gathering information on Republican officials and fired 
Travel Office workers. Casey testified that both Livingstone 
and Marceca in the past had endorsed the utilization of 
personal information to manipulate support for their political 
    Documents show that Livingstone worked in ``counter-events 
operations'' during the 1992 Clinton-Gore campaign, and 
deployed partisan ``tricks'' to disrupt Former President Bush's 
campaign for re-election.\30\ Livingstone's police record shows 
a report filed against him during his tenure in the White House 
where he was alleged to have physically threatened a female 
neighbor. Annoyed at her barking dog, Livingstone threatened to 
``beat her face in.'' \31\ The Officer who questioned 
Livingstone reported that he admitted to making the threat. Mr. 
Marceca has had his own brushes with the law in previous jobs 
in Texas and Pennsylvania.
    \30\ Resume of David Craig Livingstone, White House document DGE 
    \31\ Montgomery County, MD Department of Police, Event Report, 
Report of Simple Assault, November 7, 1993.
    In the committee's second hearing, we learned that Marceca 
left the White House compound with computer disks, which 
included details of the confidential files of National Security 
Council staffers and other White House employees.\32\ Documents 
produced by Marceca also indicated that his duties in the White 
House encompassed more than just filling out forms. Marceca's 
memoranda to Livingstone included analyses of the backgrounds 
of individuals who could not pass muster on security 
issues.\33\ Mr. Marceca appeared to be providing legal advice 
to facilitate the ``cleansing'' of background problems. 
Although Marceca's detail at the White House was not renewed 
after his background investigation exposed some problems, he 
continued frequent entry both as a volunteer and as a visitor 
with access until June 1996. Documents produced by the White 
House suggest that Marceca played a larger role in White House 
security matters than the Clinton administration has admitted 
to the public.
    \32\ Security of the FBI Files: Hearing before the Committee on 
Government Reform and Oversight. 104th Cong., 2d Sess., June 26, 1996.
    \33\ Memorandum from Marceca to Livingstone, undated, Marceca 
document Bates Stamp No. 117.
    Further, in late 1993 and 1994, Livingstone was attempting 
to obtain a Presidential appointment for Marceca, either as an 
Inspector General or a U.S. Marshal. Even after Marceca's 
background investigation, completed in December 1993, exposed 
suitability problems, attempts to employ Marceca continued. 
When that endeavor failed, Livingstone again tried to detail 
Marceca to the Personnel Security office, contrary to Associate 
Counsel Kennedy's testimony that he thought Marceca should just 
``go back to where he was.'' \34\ Strangely, on March 17, 1994, 
it appears Livingstone withdrew his request to Secretary of 
Defense Perry for Marceca's detail.\35\
    \34\ Kennedy deposition, June 18, 1996, p. 41.
    \35\ Letter from Livingstone to Secretary Perry, March 17, 1994, 
White House document CGE 55749.
    However, that was not the end of Marceca's work for the 
White House. Phone messages Marceca left for Livingstone and 
other documents show that Marceca was employed by the White 
House on a number of advance trips for President Clinton and 
other officials. One message from Marceca stated that he had 
just returned from a trip with Secretary Perry, and wanted to 
talk to Livingstone about what he had observed. Another message 
asked if Livingstone wanted to ``be an agent working for 
Tony.'' \36\ Why were individuals with questionable backgrounds 
travelling with the President? Was Marceca asked to make 
observations of his trip with Secretary Perry? What information 
was he sharing with Livingstone? Such documents raise serious 
questions about the White House's discretion in employing 
individuals with highly questionable backgrounds for important 
security positions.
    \36\ White House document DBI 54256.
    In addition to the dubious backgrounds of Livingstone and 
Marceca, their various sworn statements about the 
requisitioning of the files appear inconsistent both within and 
between their own statements. Additionally, their statements 
conflict with sworn testimony provided by the FBI, the Secret 
Service and a former veteran employee of the Security Office, 
Nancy Gemmell. Furthermore, since Marceca's appearance at the 
committee hearing on June 26, 1996, he has refused to provide 
further testimony to the House of Representatives or the 
Senate, pleading his fifth amendment right against self 
incrimination. Livingstone was kept on in his position as 
director even after the files matter was uncovered, and was not 
placed on administrative leave until he personally made the 
request on June 17, 1996.\37\ Mr. Livingstone resigned at a 
hearing before this committee on June 26, 1996.\38\
    \37\ See June 20, 1996 letter from Jack Quinn to Chairman Clinger, 
p. 2.
    \38\ Security of FBI Background Files hearings, June 26, 1996.

10. Secret Service hearings

    The Secret Service provided numerous briefings to members 
of House and Senate committees and testified at two hearings on 
this matter. At the Government Reform and Oversight hearing, it 
was finally resolved that no possible conglomeration of Secret 
Service lists could have documented what is now believed to be 
more than 400 individuals as active passholders.
    Whatever the reason for the White House's assorted and 
conflicting explanations, it became clear that the Secret 
Service was not at fault as evidenced by Livingstone's own 
statement to Special Agent Cole on June 7, 1996 when he said, 
``We just wanted you guys to know that we weren't blaming the 
Secret Service. Using an old list was our fault, and we had the 
current stuff you guys gave us. I don't know what happened.'' 
    \39\ Cole deposition, p. 37.
    The Secret Service spent an extraordinary amount of time 
and resources carefully reviewing the quality of the 
information it provided to the White House. Countless hours 
were dedicated to examining if any material it provided to the 
White House could have been responsible for the hundreds of 
improperly requested FBI background files. In the end, the 
Secret Service could not identify any systemic problems which 
would explain how this happened.

11. FBI internal investigation and report

    Director Freeh issued a June 5, 1996 press release denying 
that he had any prior knowledge of the White House's request 
for Billy Dale's file and announcing that he had tasked the FBI 
general counsel, Howard Shapiro to conduct an investigation 
into the matter and report his findings to Independent Counsel 
Kenneth W. Starr, who had become involved on June 6, 1996, 
because of links to his Travel Office investigation.\40\
    \40\ Notification to the court pursuant to 28 U.S.C. Sec. 592 
(a)(1) of the initiation of a preliminary investigation and application 
to the court pursuant to 28 U.S.C. Sec. 593 (c)(1) for the expansion of 
the jurisdiction of an Independent Counsel.
    Director Freeh explained that any contacts between the 
White House and the FBI were governed by the Justice 
Department's July 3, 1993, post-Travel Office firing policies 
\41\ and the Attorney General's November 15, 1994 policy 
regarding White House contacts. Director Freeh assured the 
public that these policies ``are adhered to scrupulously.'' 
    \41\ Memorandum to John Collingwood, Inspector in Charge, Office of 
Public and Congressional Affairs, FBI, from Carl Stern, Director of 
Public Affairs; subject: contact with the White House and other 
executive branch agencies; June 13, 1993.
    \42\ June 5, 1996 Justice Department FBI immediate release.
    An official at FBI headquarters informed the press that 
Director Freeh intended ``to make sure that the public's 
perception is that there's not some cozy relationship between 
the White House and bureau executives.'' Another FBI agent 
added that Director Freeh ``certainly doesn't want the bureau 
mixed up in this stuff.'' \43\
    \43\ Wesley Pruden, The Limited Hangout at the White House, 
Washington Times, June 7, 1996, p. A4.
    On June 13, 1996, the FBI revealed that an additional 71 
files of prior Republican administration officials had been 
requested by and delivered to the White House by the FBI.
    On June 14, 1996, the FBI issued its ``Report on the 
Dissemination of FBI File Information to the White House,'' 
revealing that 408 files were sought by and delivered to the 
White House ``without justification.'' Director Freeh noted 
that ``the prior system of providing files to the White House 
relied on good faith and honor'' of White House employees and 
that ``unfortunately, the FBI and I were victimized.'' Director 
Freeh noted, ``Among the unquestionably unjustified 
acquisitions were reports relating to discharged Travel Office 
employees Billy Ray Dale and Barnaby Brasseux.'' Director Freeh 
also acknowledged that these were ``egregious violations of 
privacy.'' Director Freeh promised the American people that 
``it will not happen again on my watch.'' \44\
    \44\ Report of the FBI general counsel on the dissemination of FBI 
file information to the White House, June 14, 1996.
    As FBI Director Freeh stated in his report, the process has 
always relied on the ``good faith and honor'' of those 
involved.\45\ There are inherent risks involved when, instead 
of ``good faith and honor,'' political operatives, and 
inexperienced teenagers are put in charge of this highly 
sensitive process.
    \45\ Id.

12. Attorney General Reno refers FBI files investigation to Judge Starr

    Independent Counsel Kenneth Starr announced on June 18, 
1996, that he did not believe his office had authority to 
pursue the investigation of the files matter without a request 
from the Attorney General to expand the scope of his authority. 
In response, Attorney General Reno announced that day that FBI 
Director Freeh would be asked to conduct a thorough 
investigation into the matter. Following this announcement, the 
White House wrote to Chairman Clinger promising to provide full 
cooperation with the FBI's investigation and announcing changes 
being instituted in the White House concerning its procedures 
to obtain and review FBI background investigation files.\46\ 
Subsequently, on June 20, 1996, Attorney General Reno filed a 
motion with the District of Columbia Federal Circuit Court 
requesting an expansion of Judge Starr's investigative 
authority so that he could pursue this improper use of FBI 
background files. The order was signed on June 21, 1996.\47\
    \46\ FBI General Counsel Howard Shapiro stated that he did meet 
with Independent Counsel Starr's office during this short period where 
he had authority to investigate this matter. Although Mr. Shapiro did 
not provide the details of this briefing, the Independent Counsel 
provided highly confidential background information to Mr. Shapiro on 
the status of its investigation at that time. It is unclear whether Mr. 
Shapiro in turn relayed this information to the White House as an 
``interested party'' or to the Justice Department.
    \47\ Notification to the court pursuant to 28 U.S.C. Sec. 592 
(a)(1) of the initiation of a preliminary investigation and application 
to the court pursuant to 28 U.S.C. Sec. 593 (c)(1) for the expansion of 
the jurisdiction of an Independent Counsel.

13. Improper contacts with the FBI

    The committee's investigation continued. Among the many 
questions, which the committee sought to answer, was the hiring 
of Craig Livingstone. Thus, at the request of FBI Director 
Freeh, Chairman Clinger, on July 18, 1996, went to Bureau 
Headquarters to review Livingstone's FBI background file. 
Contained in the file was a 1993 agent interview of Bernard 
Nussbaum wherein Nussbaum is recorded as telling Agent 
Sculimbrene that Craig Livingstone had come ``highly 
recommended by Hillary Clinton.'' The statement is in direct 
conflict with sworn statements made by Nussbaum in a June 26, 
1996 committee hearing. In the hearing, Nussbaum stated that he 
did not know who brought Livingstone into the White House for 
the position in the security office. He also stated that he 
never spoke to the First Lady about Livingstone.\48\
    \48\ Security of FBI Files hearings, June 26, 1996, p. 57.
    Prior to the chairman's review of Livingstone's FBI 
background file, FBI General Counsel Howard Shapiro provided 
the White House with a ``heads up'' about the highly pertinent 
information related to Mrs. Clinton's involvement in 
recommending Livingstone. The committee is greatly troubled by 
the fact that Shapiro provided advance notice of this 
information to the White House. The FBI has yet to identify any 
legitimate purpose in Shapiro's actions. The FBI failed to 
contact the Independent Counsel, which had clear jurisdiction 
over this matter. Mr. Shapiro's specious argument is that ``the 
Bureau had a responsibility to advise affected parties.'' \49\ 
Mr. Shapiro ignored the Attorney General's admonition that any 
FBI involvement would create a ``political conflict of 
interest.'' Mr. Shapiro's actions potentially damaged both the 
committee's and the Independent Counsel's investigations, while 
exacerbating the already growing perception of politicization 
of the FBI.
    \49\ Letter from FBI General Counsel Howard Shapiro to Chairman 
Clinger, July 19, 1996.
    Subsequent to the revelation of the Nussbaum interview, 
Shapiro dispatched two senior FBI supervisory agents to now-
retired Agent Dennis Sculimbrene's home to formally interview 
him about the Nussbaum statement. Agent Sculimbrene got the 
impression that the White House was unhappy about his interview 
report on Bernie Nussbaum. The sending of agents to 
Sculimbrene's home involved Shapiro in an operational matter, 
which is inappropriate for the general counsel.
    Further conflicts uncovered in Shapiro's testimony before 
this committee include his hand delivery of former FBI agent 
Gary Aldrich's book, ``Unlimited Access,'' to White House 
Counsel Jack Quinn in February 1996.\50\ The book was in pre-
publication form and in the possession of the FBI solely for 
its review. Shapiro testified that in giving a copy to the 
White House he was notifying them of possible security risks 
posed by information revealed in the book. However, the White 
House has yet to produce a complete response to the committee 
on this matter.
    \50\ Security of FBI Files hearing, August 1, 1996, p. 33.
    Shapiro's frequent contacts with the White House is 
evidenced by the fact that he is the first FBI general counsel 
in over a decade to have a permanent White House pass, as well 
as his assistance to White House Counsel Quinn in drafting a 
letter to Director Freeh. Incredibly, Shapiro offered his 
advice on the letter, which attacked both the FBI and Chairman 
    In light of Attorney General Reno's determination that the 
FBI and the Justice Department refrain from investigating 
anything related to the White House's acquisition of FBI 
background files, the committee finds Shapiro's interference in 
the matter clearly and totally inappropriate. Mr. Shapiro's 
contacts with the White House appear to be in direct conflict 
with his position as general counsel of the FBI and suggest a 
far too cozy relationship between the White House and the FBI.

                              C. FINDINGS

    The committee, while investigating the matter of the 
security of FBI background files has made the following 
         FBI Background files often include the most 
        sensitive and confidential personal and financial 
        information about the individual being reviewed.
         The White House improperly requested hundreds 
        of confidential FBI background files seemingly without 
        any justification. This was a violation of the 
        constitutional rights and private lives of many 
        upstanding citizens, whose files were requisitioned and 
        reviewed by White House employees. Many of the 
        individuals were political appointees of the Reagan and 
        Bush administrations. This leads to the possibility 
        that the Clinton administration was attempting to 
        prepare a political ``hit list'' or ``enemies list'' 
        with the most sensitive and private information 
         The White House Office of Personnel Security 
        and the FBI maintained a system of mutual convenience 
        which allowed low level staff to access any file 
        without question by the FBI. The Clinton administration 
        has, on a number of occasions, failed to implement 
        safeguards that would have prevented this lapse in 
        security. Further, the longstanding policy of the FBI, 
        which relied on the honor of White house employees, was 
        exploited by Clinton administration employees.
         FBI General Counsel Howard Shapiro provided 
        confidential FBI law enforcement information about Mrs. 
        Clinton's role in bringing Livingstone to the White 
        House. When Shapiro realized that the information 
        contained in Livingstone's FBI background file could 
        damage Nussbaum and Mrs. Clinton, he immediately 
        contacted the Office of White House Counsel and read 
        verbatim the incriminating contents of Livingstone's 
         Once White House Counsel Jane Sherburne 
        learned that the information contained in Livingstone's 
        file could damage Nussbaum and Mrs. Clinton, Sherburne 
        contacted Mrs. Clinton regarding the incriminating 
         Sherburne possibly violated ethical standards 
        by informing private attorneys for Bernard Nussbaum and 
        Craig Livingstone about confidential FBI law 
        enforcement information. On the day before reports of 
        his testimony before a grand jury, lawyers for Nussbaum 
        were told about evidence uncovered in a search of 
        Livingstone's file that contradicted Nussbaum's 
        testimony before the Committee on Government Reform and 
        Oversight. Mr. Livingstone received the same 
         White House Office of Personnel Security staff 
        failed to properly secure confidential FBI law 
        enforcement files. The committee was provided with 
        testimony and evidence that staff and interns without 
        the necessary clearances had unfettered access to the 
        highly sensitive material in the FBI background files 
        including that of more than 400 former Bush and Reagan 
        administration officials.
         The FBI continued to involve itself in the 
        investigation of the FBI files matter after receiving 
        notice from the Attorney General that a conflict of 
        interest existed between the FBI and the White House 
        concerning this matter. Mr. Shapiro notified the White 
        House about the incriminating contents of Livingstone's 
        background file before the committee was allowed to 
        review it. Shapiro assisted with correspondence between 
        the White House and the FBI regarding the FBI files 
        matter and the investigation by the Committee on 
        Government Reform and Oversight.
         Army Detailee Anthony Marceca was given 
        unfettered access to confidential FBI law enforcement 
        files and allowed to remove confidential information 
        from the White House, despite his own inability to 
        receive White House clearance. Marceca's removal of 
        information in those files from the White House was 
         FBI General Counsel Howard Shapiro provided 
        the White House Counsel a pre-publication copy of Gary 
        Aldrich's book, thus allowing distribution of the book 
        to the President's political damage control operation. 
        Mr. Shapiro improperly allowed the White House access 
        to a manuscript provided to the FBI under an employment 
        agreement with a former agent without any valid basis 
        for doing so.
         The White House withheld from Congress 
        responsive subpoenaed documents that further implicated 
        individuals under criminal investigation. The White 
        House began the release of disputed documents only 
        under threat of contempt.
         The White House asserted executive privilege 
        over documents that had no nexus to the President or 
        his need to communicate with his staff concerning 
        issues involving the Presidency or national security. 
        Many of the documents received by the committee, over 
        which the President made an executive privilege claim, 
        contained routine administrative information or 
        communications on issues having no bearing on issues of 
        national security.

                           D. Recommendations

    The committee has undertaken a preliminary investigation 
into the improper release of FBI background files to the White 
House. This interim report is the result of that investigation. 
Hearings, depositions, and document review have produced 
additional questions still under review. The committee is not 
satisfied that the public has the answers to many of these 
concerns. It would therefore be imprudent to make 
recommendations on a set of incomplete facts. The only 
exception concerns Mr. Shapiro's activities. Even though a 
complete review of Shapiro's activities has not been completed, 
it is clear from the evidence available to the committee that 
Shapiro's actions were grossly inappropriate and that he 
should, therefore, resign.
    This committee owes it to the individuals whose files were 
improperly obtained by the White House to continue a thorough 
investigation of these circumstances to find out what happened 
to their most private information.
    The committee suggests a broad scope for the subsequent 
stages of this important investigation. It, therefore, puts 
forward a set of questions for the further consideration of the 
    1. Who hired Craig Livingstone?
    2. What list was used to make up the White House requests 
for FBI background files?
    3. Who reviewed the contents of FBI background files for 
Reagan and Bush administration officials?
    4. Were the contents of the FBI background files ever 
transmitted electronically to any computer database in or 
outside the White House complex?
    5. What effect do new procedures have on the White House 
pass process and FBI background checks?
    7. What standard procedures are in place to ensure that 
those without the proper clearances do not have access to 
material protected by the Privacy Act, which are stored in the 
White House?
    8. What policies should be implemented to ensure that FBI 
officials do not interfere with ongoing investigations outside 
the Bureau's jurisdiction?

              II. White House Office of Personnel Security

             A. History of the Office of Personnel Security

    The White House conducts some level of background check on 
every individual requesting access to the complex and on every 
individual who is being considered for a Presidential 
appointment. There are several ways in which this background 
check can be conducted, ranging from a name check to a full 
field background investigation. Historically, the White House 
Counsel has been responsible for reviewing the FBI background 
reports of individuals for suitability purposes. To assist the 
Counsel in processing the background reviews, the Johnson 
administration created the White House Security Office.\51\ The 
head of the office, holding the title of Assistant to the White 
House Counsel for Security, reported directly to the White 
House Counsel or Deputy White House Counsel.\52\
    \51\ Prepared written statement of C. Boyden Gray, Counsel to 
President George Bush, p. 2, in committee files.
    \52\ Id.
    From its origination up to the Clinton administration, the 
White House Security Office was responsible for coordinating 
paperwork to ensure that all of the forms that appointees were 
required to complete before an FBI background investigation 
could be initiated were in order. In addition, the office 
organized and maintained the background files and reports which 
were sent to the White House from the FBI. The Director of the 
Security Office was responsible for the initial review of the 
FBI background reports for any information which should be 
brought to the attention of the White House Counsel or his 
deputy.\53\ This position was described by a former White House 
Counsel as ``a largely thankless job, requiring long hours, 
superb organizational skills, attention to detail, and total 
discretion.'' \54\
    \53\ Id.
    \54\ Id.
    Beginning in 1972, during the Nixon administration, Jane 
Dannenhauer was appointed as the Assistant to the Counsel to 
the President with the responsibility of directing the White 
House Security Office.\55\ Ms. Dannenhauer served in her 
capacity as Assistant to the Counsel during the Nixon, Ford, 
Reagan and Bush administrations, as well as the first 2\1/2\ 
months of the Carter administration.\56\ Ms. Dannenhauer 
reported directly to either the White House Counsel or Deputy 
White House Counsel, and was the only person in the Security 
Office authorized to review the FBI background files.\57\
    \55\ Security of FBI Files hearing, June 19, 1996, p. 38.
    \56\ Security of FBI Background Files hearing, June 19, 1996, p. 
    \57\ Prepared written statement of C. Boyden Gray, Counsel to 
President George Bush, pp. 11-12.
    Previous White House Counsels testified to this committee 
that in each administration in which they served, the 
background investigation process was limited to a very small 
number of high level individuals. Those individuals included 
the White House Counsel to the President, the Deputy White 
House Counsel and the Assistant to the Counsel for Security. In 
a small number of instances, aspects of a particular FBI 
background report would have been discussed with a senior-level 
staff member on a need to know basis, without sharing the 
file.\58\ ``Background files were never shown to others in the 
White House, including the President, the Vice President, the 
chief of staff or the director of presidential personnel,'' 
according to Richard A. Hauser, Deputy Counsel to President 
    \58\ Security of FBI Background Files hearing, June 19, 1996, pp. 
    \59\ Security of FBI Background Files hearing, June 19, 1996, p. 

1. White House Security Office practice and procedures

    When a new administration takes office it must complete 
background investigations on all new appointees and employees 
with White House access. In the past, a new administration 
began the process during the transition. It is important to 
complete this process in a timely manner to insure the security 
of both the President and vast amount of sensitive national 
security information contained within the White House. This 
process began with what is called a ``name check.'' \60\ To 
complete a name check an individual's name and Social Security 
number are sent to the FBI where it is checked against various 
databases to see if there was any recent potentially illegal 
activity in the public record.\61\
    \60\ Prepared written statement of C. Boyden Gray, p. 3.
    \61\ Security of FBI Files hearing, June 19, 1996, p. 20.
    When the FBI receives the name check request, it 
disseminates the request to several internal units. These units 
check four different computer databases and the FBI central 
indices. The databases provide information on criminal 
histories, arrest records, outstanding warrants, as well as 
information on organized crime, terrorism, and foreign 
counterintelligence.\62\ In addition, a name check request 
requires the FBI to look to see whether a ``copy of a previous 
report'' is on file for the individual. An FBI research analyst 
then reviews the summary memoranda contained in an individual's 
file to determine which reports to forward to the White 
House.\63\ All of the information is then sent to the White 
House. In previous administrations, once an individual was 
cleared through the name check process, he was eligible for 
temporary access to the White House pending a full field FBI 
background investigation.\64\
    \62\ Report of the FBI general counsel on the dissemination of FBI 
file information to the White House, June 14, 1996, p. 19.
    \63\ Id., p. 20.
    \64\ Prepared written statement of C. Boyden Gray, p. 3.
    Any individual seeking repeated or permanent access to the 
White House and all Presidential appointees were required to go 
through a full field background investigation.\65\ The FBI full 
field background investigations were necessary in order to 
review the background of individuals at the White House for 
security reasons and also for the President to make a 
suitability determination.
    \65\ Id.
    To begin this process, the individual is required to fill 
out a ``Standard Form 86,'' (SF-86) which provides personal 
data on the individual and authorizes the FBI to conduct the 
background investigation. As with the FBI background 
investigations, previous administrations only permitted the 
Director of the Security Office, the White House Counsel and 
Deputy White House Counsel to review the SF-86's.\66\ In 
previous administrations, the bulk of the background 
investigations should normally be processed and reviewed during 
the first 6 months of the administration.\67\
    \66\ Security of FBI Files hearing, June 19, 1996, p. 46. (A.B. 
Culvahouse, Counsel to President Reagan, testified that out of 12 
lawyers in the White House Counsel's Office, only 2 others were 
authorized to review the forms. The Deputy White House Counsel and a 
designated Counsel's Office attorney was authorized to look at judicial 
    \67\ Former Counsel to President Bush, C. Boyden Gray stated, ``The 
inevitable backlog that results from so many investigations being 
requested at once requires the Security Office staff to spend 12-14 
hour days just to manage the paper flow.'' Prepared written statement 
of C. Boyden Gray, p. 4.

2. Updating the background files

    When an administration leaves the White House it is 
required to archive all of its papers pursuant to the 
Presidential Records Act.\68\ Among the records required by 
this act to be archived are the FBI background files of all of 
the administration's appointees and employees. These FBI files 
are archived and placed under seal in the Presidential Library 
for 20 years. When the incoming administration arrives, it must 
recreate the files for those ``holdover'' employees who would 
be continuing their employment at the White House. The task of 
recreating the files fell to the White House Security Office.
    \68\ 44 U.S.C. Sec. Sec. 2201-2207.
    In prior administrations, the Security Office only began 
the process of recreating the holdover employees' files after 
all of the paperwork on the new appointments had been 
completed.\69\ The rationale for requesting these files after 
all the new employee paperwork had been completed was twofold. 
First, the holdover employees had already been cleared for 
access by a previous administration.\70\ And second, by the 
time the paperwork had been processed on the new employees, the 
list of White House employees would be more current. It was 
necessary to obtain the FBI reports in order to update the 
background investigations of the holdover employees, who, along 
with all other White House pass holders, needed an update of 
their background investigation every 4 years.\71\ Every new 
administration begins with the same information and every new 
administration has had to recreate the files of the permanent 
White House employees.
    \69\ Prepared written statement of C. Boyden Gray, p. 7.
    \70\ Id., p. 6.
    \71\ Prepared written statement of Jane Dannenhauer, p. 1 (in 
committee files).
    The procedure which each previous administration \72\ 
followed to update its background files essentially consisted 
of four steps:
    \72\ Each administration since the Nixon administration has 
followed this procedure.
          (1) the Security Office would obtain from the Secret 
        Service and verify a current list of pass holders with 
        access to the White House complex;
          (2) the office would request from the FBI copies of 
        the previous background reports concerning those on the 
          (3) the head of the office would review the prior 
        reports to ascertain the date of the last background 
        check, and to bring any derogatory information to the 
        attention of the White House counsel; and
          (4) the Security Office would send a new SF-86 to be 
        completed by employees as they came due for an update 
    \73\ Prepared written statement of C. Boyden Gray, p. 7.
Although the Security Office would rely on the Secret Service 
lists for current and accurate information in its lists of 
individuals that still had access to the White House, it was 
normal practice to cross reference and double check the 
lists.\74\ It is solely the responsibility of the White House 
Security Office to inform the Secret Service that an individual 
should be taken off the access lists and listed as ``inactive'' 
to ensure that only present employees remain on the ``active'' 
Secret Service lists.\75\
    \74\ Id., p. 8; Security of FBI Background Files June 19, 1996, p. 
    \75\ Security of FBI Background Files hearing, July 17, 1996, p. 
    In the first year of a new administration, the Security 
Office would proceed with its updates on an office by office 
basis to determine who the holdover employees were that needed 
to have their files recreated.\76\ The Security Office would 
fill out a standard request form ordering a copy of the 
previous FBI report of the holdover employee. When the previous 
report was received in the Security Office, the Director of the 
office would personally review the file to determine and make a 
notation of the date when that the individual was due for a 
background investigation update.\77\ That individual's name 
would then be added to the list, organized on a monthly basis, 
of individuals coming due for an update of their FBI background 
report.\78\ The Director of the office would also review the 
file for derogatory information, ultimately sending the report 
on to the Deputy White House Counsel for adjudication.\79\
    \76\ Prepared written testimony of C. Boyden Gray, p. 8.
    \77\ Id., p. 9.
    \78\ Id.
    \79\ Id., p. 10.
    Because the Security Office maintained all of the 
confidential files on every individual with current access to 
the White House complex, the office was equipped with a 
separate vault room that was attached to the Security Office. 
All of the files were kept in the vault which was equipped with 
cabinets containing 70 rotating bins.\80\ The files were stored 
in the bins alphabetically. The Security Office vault could be 
accessed only by entering and going through the Security 
Office. The door to the vault had a lock with a combination 
which only a few authorized individuals were given. The only 
other persons with access to the vault were members of the 
Office of Records Management.\81\ This Office uses two of the 
four file cabinets in the Security Office vault to store its 
records. Terry Good, the Director of the Office of Records 
Management testified that his office stores materials from the 
White House office that ``ranges from items that are considered 
confidential through security classified materials.'' \82\ 
During the Clinton administration, Records Management also 
stored White House Counsel's Office files on all individuals 
being considered for appointments throughout the 
government.\83\ Although the Office of Records Management file 
cabinets have separate locks, Good testified that they are 
often left unlocked during the day.\84\
    \80\ Livingstone, June 14, 1996, p. 38.
    \81\ Good, June 25, 1996, p. 16.
    \82\ Id.
    \83\ Id.
    \84\ Id., p. 17.

3. The transition from the Bush administration to the Clinton 

    Since the end of the Nixon administration, Jane Dannenhauer 
briefed the attorneys in each new administration on what the 
Security office was and what it did. As she had done with past 
administrations, Dannenhauer met with several of the attorneys 
from the Clinton White House Counsel's Office before she left 
her position at the White House in March 1993.\85\ She 
initially met with four or five of the attorneys, none of whom 
would be supervising the Security Office.\86\ Dannenhauer then 
met with Craig Livingstone, who would ultimately become the new 
Director of the Security Office.\87\ Ms. Dannenhauer testified 
that Livingstone appeared only to work there ``part-time'' 
while she was there. Mr. Livingstone ``would come in and maybe 
be there a half a day.'' \88\ Several weeks after the 
administration took office, Bill Kennedy, the Assistant White 
House Counsel who would be supervising the office, finally met 
with Ms. Dannenhauer.\89\
    \85\ Security of FBI Background Files hearing, June 19, 1996, p. 
    \86\ Id.
    \87\ Id.
    \88\ Id., p. 82.
    \89\ Id.
    Ms. Dannenhauer's assistant since 1981, Nancy Gemmell, 
stayed on in the White House Security Office for 7 months into 
the new administration.\90\ Although the office still was not 
entirely staffed at the time she left, Gemmell assisted in 
training the new employees in the procedures of the office.\91\ 
She testified that she explained the Secret Service lists to 
the people working in the office and informed them that the 
initial list received from the Secret Service had to be 
updated.\92\ Ms. Gemmell testified that an updated list needed 
to be ordered from the Secret Service once personnel decisions 
were made, especially in offices where there would be a high 
turn-over.\93\ The Clinton administration kept Gemmell on until 
she retired on August 13, 1993.
    \90\ Id., p. 48.
    \91\ Id., p. 48.
    \92\ Id., p. 50.
    \93\ Id., pp. 50-51.

    B. Clinton administration Personnel and Operation of the Office

1. Who hired Craig Livingstone?

    Craig Livingstone, the new Director of the White House 
Security Office quickly came to the forefront of the 
investigation of the unauthorized requests of FBI background 
files. Although the office was supposed to maintain primarily 
the same functions as in previous administrations, the Clinton 
administration changed the name from the White House Security 
Office to the Office of Personnel Security (OPS) after 
Livingstone took over in early February 1993. Livingstone 
remained in this position until he resigned, announced at the 
committee's June 26, 1996 hearing.
    Mr. Livingstone enjoyed a particularly long tenure, 
outlasting three White House Counsels and numerous 
supervisors.\94\ However, nobody in the Clinton administration 
has taken responsibility for bringing Craig Livingstone into 
the White House. Livingstone himself cannot remember who hired 
him for the position of Director of OPS. He explained that he 
had been around during the campaign as an advance man, as well 
as assisting at the 1992 Democratic National Convention, 
``coordinating security'' for the Democratic Finance 
Committee's VIP operations.\95\
    \94\ Livingstone remained in the position of Director throughout 
the tenures of Counsels Bernie Nussbaum, Lloyd Cutler and Abner Mikva. 
He also outlasted his supervisors and associate counsels William 
Kennedy, Beth Nolan, and Christopher Cerf.
    \95\ Livingstone, 3/22/96 dep. p. 14. (See also, the Washington 
Post, September 9, 1996, pp. A1, A12. The Washington Post reported that 
a friend of Livingstone's stated that Livingstone's job consisted of 
posting himself at an escalator in the convention hall and saying 
``good evening'' to VIPs who walked by. ``Craig said his job was to 
meet and greet.'')
    David Craig Livingstone began his political career in 1984 
working as an advance man on the Gary Hart for President and 
the Mondale/Ferraro campaigns. Mr. Livingstone was responsible 
for ``organizing large crowd events' according to his 
resume.\96\ Mr. Livingstone testified that he then spent the 
next few years ``work[ing] in a bar and restaurant, work[ing] 
on small campaigns, Democratic initiatives.'' \97\ However, his 
resume states that during this period he was an advance man for 
the Reagan/Gorbachev Summit Meeting in Geneva, Switzerland 
where he was responsible for arranging international press 
appearances for Presidents Reagan and Gorbachev. He also claims 
to have secured a 55 minute meeting between U.S. citizens and 
the General Secretary.
    \96\ White House document CGE 46232.
    \97\ Livingstone deposition, March 22, 1996.
    Mr. Livingstone also worked for Senator Timothy E. Wirth. 
In his resume, he states that he coordinated Senator Wirth's 
transition from the House of Representatives to the U.S. 
Senate. Although it is absent from his resume, Mr. Livingstone 
worked for the Hollywood Women's Political Committee ``doing 
their Washington work.'' \98\
    \98\ Id.
    Craig Livingstone's first encounter with Al Gore was in 
1988, when he served as his trip director traveling ``daily'' 
with Mr. Gore and claims to have produced Mr. Gore's 1988 
Presidential announcement. Mr. Livingstone also failed to 
mention in his deposition or on his resume that he worked on 
the 1988 Dukakis for President campaign.\99\ Livingstone also 
worked as the operations director for the Democratic National 
Committee Convention staff in 1988 in Atlanta, GA where he 
coordinated operations for DNC Chairman Paul Kirk. He returned 
to working at bars and restaurants during the interim and 
``coordinated screenings'' for the highly controversial movie 
``The Last Temptation of Christ'' in 1988. He also worked at a 
public relations company where he claims that he ``prepared 
clients for legislative appearances.'' \100\
    \99\ Livingstone SF-86 form completed 2/16/93 to begin his FBI 
background investigation.
    \100\ White House document CGE 46231.
    Mr. Livingstone worked for Washington, DC Councilwoman 
Charlene Drew Jarvis for approximately 1 year before he began 
his first employment with the Clinton campaign doing advance 
work.\101\ From October 1991 to November 1992, Mr. Livingstone, 
according to his resume, was the ``Senior Consultant to 
Counter-Event Operations'' for Clinton/Gore '92. Mr. 
Livingstone claims to have ``successfully deployed several of 
the infamous ``Pinocchio'' and ``Chicken George'' media 
events.\102\ Mr. Livingstone also claims credit for ``Special 
Operations and Advance'' for then-Governor Clinton's successful 
primary and general election as well as assisting in the 
``creation and execution of mission objectives of the Clinton 
for President, Washington, D.C. local headquarters.'' \103\
    \101\ Livingstone deposition, p. 12.
    \102\ During President Bush's speeches figures dressed up as 
Pinocchio and as a chicken began to appear in the crowd and heckle 
President Bush.
    \103\ White House document CGE 46230.
    In between Bill Clinton winning the primary but before the 
general election, Craig Livingstone went to ``Africa to work 
training some soldiers, Democratic campaign techniques.'' \104\ 
After returning from the Angola training grounds, Livingstone 
worked with the ``VIP financial staff '' on fundraising 
projects for President-elect Clinton and Vice-President-elect 
Gore. By November 1992, Livingstone was the lead and site lead 
advance person for the Clinton/Gore '92 campaign.
    \104\ Livingstone deposition, p. 13.
    After the election, Livingstone was the director of 
security for the Presidential Inaugural Committee (PIC). He 
states that he had ``responsibility for security at inaugural 
headquarters and all events.'' \105\ In his deposition, 
Livingstone explained that his duties as director of security 
at PIC were to ensure that events were handled with the safety 
of the attendees in mind as well as producing the event in the 
manner that the Clintons would want it done.\106\ On his 
resume, he wrote that the ``Mission statement'' of his job, was 
to ``[p]rotect the integrity of the Office of the President.'' 
\107\ He also stated that he was responsible for securing the 
PIC computer network against fraud and theft.\108\ According to 
theft reports by the Federal Protective Service, more than 
$174,000 worth of the Inaugural Committee's computers, VCR's, 
radios, cellular phones, pagers and other electronic gear 
disappeared from the committee headquarters.
    \105\ White House document CGE 46230.
    \106\ Livingstone deposition, March 22, 1996, p. 18. (See also, 
Varney deposition, July 23, 1996 dep., p. 14. Christine Varney, the 
general counsel of PIC, described Livingstone's position as handling 
the logistics of transportation to and from the Navy Yard, where PIC 
was located, as well as handling passes or credentials for PIC 
employees and volunteers.)
    \107\ Id.
    \108\ Id.
    After the Inauguration, Livingstone sought to obtain a 
position at the Clinton White House. Mr. Livingstone testified 
that he was asked to assist with the advance for President 
Clinton's first Cabinet meeting at Camp David.\109\ Mr. 
Livingstone worked on advance for the Cabinet meeting from 
January 25 through 30, 1993.\110\ While organizing advance for 
the Cabinet meeting, Livingstone worked with Christine Varney, 
President Clinton's new Cabinet Secretary. Ms. Varney testified 
that she knew Livingstone prior to the Clinton campaign, ``he 
was generally known as one of the guys around town who did 
advance for Democratic party stuff.'' \111\ Ms. Varney could 
not recall whether Livingstone mentioned the job in the 
Security Office to her or whether she mentioned it to him.\112\ 
Ms. Varney did state that although she was unclear on whether 
she told Livingstone about the position, she believes it 
unlikely that she approached Livingstone about the position 
because she would not have known about it at that time.\113\
    \109\ Livingstone deposition, March 22, 1996, p. 21.
    \110\ White House document CGE 048536.
    \111\ Varney deposition, March 23, 1996, p. 15.
    \112\ Varney deposition, March 23, 1996, p. 18.
    \113\ Id., pp. 18-20. (See Livingstone deposition. Livingstone, 
however, stated that it was Varney who told him about the position in 
the Security office.)
    According to Associate White House Counsel Cheryl Mills, at 
the end of January or beginning of February, Deputy Counsel 
Vince Foster told Mills that he was planning on speaking with 
Livingstone about one of the lower-level administrative 
positions in the Security Office.\114\ Mr. Foster also spoke 
with Varney about the position for Livingstone. He described 
the work to Varney as, ``an administrative paper-pushing kind 
of job, [for] someone who knew most of the new Clinton 
employees, to sit on them to make sure they got their paperwork 
done.'' \115\ Based on Foster's description, Varney told Foster 
that Craig Livingstone would be appropriate for a position with 
that level of responsibility.\116\
    \114\ Deposition of Cheryl Mills, August 2, 1996, p. 15.
    \115\ Varney deposition, p. 19.
    \116\ Id.
    Mr. Foster and Cheryl Mills eventually interviewed 
Livingstone for what Mills described as the ``most junior 
position'' in the Security Office.\117\ She explained the 
position to Livingstone as administrative, primarily collecting 
and sending out forms. She also indicated to him that whoever 
was hired to fill Jane Dannenhauer's position as Assistant to 
the Counsel, would make the ultimate decision on whether to 
hire Livingstone.\118\ According to Ms. Mills, Livingstone 
indicated to both Foster and Mills that he viewed the job as a 
temporary position, as he was interested in a position as 
Director of the Military Office.\119\ Although many have 
suggested a role for Vince Foster in hiring Craig Livingstone, 
Mr. Livingstone failed to recall any contact whatsoever with 
Mr. Foster when he testified under oath in his deposition.\120\ 
The Security Office position for which Livingstone interviewed 
with Foster and Mills was relatively low-paying and not as 
challenging a position as Livingstone wanted.\121\
    \117\ Mills deposition, p. 16.
    \118\ Id.
    \119\ Id.
    \120\ Livingstone, 3/22/95 dep., pp. 22-23.
    \121\ Mills deposition, p. 16.
    According to White House records, Livingstone began working 
in the Security Office on February 8, 1993.\122\ On that date, 
he wrote a memo to Cheryl Mills reviewing the duties and 
personnel in the Security Office.\123\ Mr. Livingstone states 
in the memo that he ``reviewed the White House Security Office 
as requested.'' \124\ He stated that Jane Dannenhauer and Nancy 
Gemmell would be staying on for a short period of time and 
reporting to Livingstone. He also explained that he would be 
meeting with the IRS and FBI for briefings on their respective 
roles in the background process. Mr. Livingstone attached a 
proposed memo to Jane Dannenhauer to go out under the name of 
the Deputy Assistant to the President and Deputy Counsel 
directing Dannenhauer to notify her staff that effective 
February 8, 1993 Craig Livingstone would serve as the Director 
of the White House Security Office with Dannenhauer serving as 
his ``advisor'' until March 1, 1993, ``whereupon, it is 
expected she will submit her resignation.'' \125\
    \122\ White House documents CGE 053841, 046220.
    \123\ White House document, CGE 48606.
    \124\ White House document CGE 048606-608.
    \125\ Id., p. 048608.
    According to Cheryl Mills' testimony, Livingstone was to be 
an assistant in the office and a more senior person was to be 
hired to replace Jane Dannenhauer. When asked whether she 
recalls learning that Livingstone had become the Director of 
the office, she testified: ``I actually don't ever recall 
learning that fact, but I am sure there became a point in time 
later on in the year when it must just have been self-evident. 
But I don't recall learning that fact.'' \126\ In contrast, the 
February 8, 1993 memo, with her handwritten notes in the 
margin, clearly and explicitly shows that Livingstone himself 
informed her that he was the Director of the Security Office. 
Associate Counsel William Kennedy, who eventually was assigned 
the responsibility of oversight of the Security office, was not 
hired until February 10, 1993, 2 days after the memo was 
    \126\ Mills deposition, p. 16.
    \127\ White House document CGE 053841.
    Livingstone testified in his first committee deposition 
that Christine Varney introduced him to people in the Counsel's 
Office, one of whom was Cheryl Mills.\128\ Mr. Livingstone 
stated that he had a brief discussion with Mills about the 
position in the Security Office, which she described as largely 
administrative.\129\ Ms. Mills explained to him that she would 
not be overseeing the office, however someone would soon be 
appointed. Shortly thereafter, William Kennedy was appointed as 
Assistant Counsel to the President and took control of 
oversight of the Security Office.\130\
    \128\ Security of FBI Files hearing, June 26, 1996, p. 215.
    \129\ Id.
    \130\ Id.
    Former White House Counsel Bernard Nussbaum recalled yet 
another version of the hiring of Craig Livingstone. He stated, 
``at the time I arrived in the White House on January 20, 1993, 
or shortly thereafter, Craig Livingstone was acting already in 
the Office of Personnel Security. That's when Mr. Foster and I 
arrived . . . . [h]e was in the White House, I believe, when I 
got there.'' \131\ Former Assistant Counsel to the President 
Kennedy testified that Livingstone was already working in the 
Security Office.
    \131\ Security of FBI Files hearing, June 26, 1996, p. 56.

          I arrived the first week in February and went on the 
        payroll on February the 10th, I believe. When I 
        arrived, Craig was acting as Acting Director of the 
        Office of White House Personnel Security. I was 
        informed by Mr. Foster that was the position he was 
        under consideration for. I don't know who told Mr. 
        Foster that or on what basis.\132\
    \132\ Id., pp. 58-59.

Mr. Livingstone himself stated that he was working in the 
office when Kennedy arrived at the White House. Mr. Livingstone 
was not on payroll at the time, and stated that he still 
considered himself an ``advance person.'' \133\ Mr. Livingstone 
did not go on the payroll for several weeks. According to 
Kennedy's testimony, Livingstone had a probationary period 
while waiting for his FBI background investigation to be 
completed.\134\ His FBI background investigation was initiated 
on February 18, 1993 and completed on March 13, 1993.\135\
    \133\ Id., p. 170.
    \134\ Id., p. 172.
    \135\ Secret Service Documents (unnumbered) (in committee files).
    In the course of Livingstone's background investigation FBI 
Agent Dennis Sculimbrene conducted interviews on March 1-3, 
1993, of Livingstone's supervisors at the White House, 
including Bernard Nussbaum and Bill Kennedy. Agent Sculimbrene 
took contemporaneous notes of the meeting where Nussbaum 
mentioned that although he had only known Livingstone for the 
period of time since he had been employed in the new Clinton 
administration, he understood that Craig Livingstone ``had come 
highly recommended to him by HILLARY CLINTON.'' \136\ Mr. 
Nussbaum added that Mrs. Clinton ``has known his mother for a 
longer period of time.'' Mr. Kennedy told Agent Sculimbrene 
that ``he did not hire'' Craig Livingstone and was aware that 
Livingstone ``may not stay in his current position.'' \137\
    \136\ Nussbaum has denied that he ever made the statement. The 
interviewing agent, Dennis Sculimbrene, does not remember the interview 
of Mr. Nussbaum, however he stated that his usual practice was to 
transcribe his notes immediately following any interview.
    \137\ March 1-3, 1993 interviews with White House supervisors in 
the course of the FBI background check on Craig Livingstone.
    Another FBI agent who was assigned to the White House, Gary 
Aldrich, recalled a conversation with Assistant Counsel and 
Rose Law Firm partner Bill Kennedy. Mr. Kennedy asked the agent 
what type of person should be in the position of Director of 
the Security Office. Agent Aldrich answered that it should be 
``somebody squeaky clean, meticulous, careful, discreet, 
mature, someone with a depth of understanding of security 
issues.'' \138\ Mr. Kennedy later told Agent Aldrich: ``it 
doesn't matter anyway; it's a done deal. Hillary wants him 
[Livingstone] for that slot.'' \139\ Both Agent Sculimbrene and 
Aldrich testified that Kennedy told them that he had to hire 
Craig Livingstone.
    \138\ Aldrich deposition, July 18, 1996, p. 31.
    \139\ Aldrich deposition, July 18, 1996, p. 32.
    Mrs. Clinton publicly denied hiring or even knowing who 
Craig Livingstone was until this year. In response to questions 
by reporters during her trip in Helsinki on July 10, 1996, Mrs. 
Clinton said, ``I did not know him. I did not have anything to 
do with his being hired, and I do not remember even meeting him 
until sometime in the last year.'' In contrast, an intern 
working in the White House Office of Personnel Security 
informed this committee of an encounter with Mrs. Clinton that 
puts her denials of knowing Craig Livingstone in question.
    White House intern, Gina Gibson, said that she was being 
shown around the White House when she saw Mrs. Clinton 
approaching from down the hall. Ms. Gibson said that as Mrs. 
Clinton passed she said ``Hello Craig'' and kept on 
walking.\140\ Ms. Gibson interned at the White House from May 
1994 through July 1994, well before the time period Mrs. 
Clinton said she first knew who Craig Livingstone was.
    \140\ Telephonic staff interview of Gina Gibson.
    Craig Livingstone participated in numerous other activities 
within the White House where contact with President Clinton and 
Mrs. Clinton would have been likely. Craig Livingstone was sent 
to Little Rock, AR, January 1-6, 1994, to handle arrangements 
for President Clinton's mother's funeral.\141\ Included in the 
numerous other advance trips that Livingstone participated in 
was the October 22, 1993, Boston trip on which he was on 
advance for President Clinton,\142\ the April 21-25, 1994 
advance trip to Boston for President Clinton, or when he was 
the site lead for President Clinton's May-June 1994 European 
trip.\143\ These are just a few of the advance trips which 
Livingstone likely would have had contact with the President or 
Mrs. Clinton.
    \141\ White House document, CGE 54412.
    \142\ White House document, CGE 54410.
    \143\ White House document, CGE 54387. Mr. Livingstone authored a 
memo to Tricia Northcutt in preparation for this trip requesting 
numerous sets of Presidential cufflinks, Presidential hats, 
Presidential pins, Presidential key chains, a ladies stick pin, 
Presidential pens and Presidential tie bars before he departed on May 
23, 1994 for England.
    In May 1994, Livingstone wrote a memo to David Watkins 
requesting that he be provided with a cellular telephone since 
his ``duties now require that [he] be on call during the 
weekends to assist the President in whatever manner 
necessary.'' If President Clinton did not know Livingstone 
personally, why did Livingstone need to be on call for him on 
weekends? What did Livingstone believe his duties entailed in 
order to ``assist'' the President?
    Three days before the White House received Livingstone's 
background investigation, Kennedy sent a March 10, 1993 memo to 
David Watkins, Assistant to the President for Management and 
Administration, requesting that the effective employment date 
for Livingstone be established as February 8, 1993.\144\ When 
Craig Livingstone's March 1993 FBI background information was 
finally given to the Secret Service in the fall of 1993, the 
Service raised concerns with Kennedy about derogatory 
information in Livingstone's background.\145\
    \144\ White House document CGE 046220.
    \145\ Cole, 7/10/96 dep., pp 22-23.
    Secret Service Agent Arnie Cole recalled that he was not 
aware that Livingstone would be taking over the position until 
the end of February 1993.\146\ The Secret Service had stressed 
to the Clinton transition team how important the position of 
Director of the Security Office was in getting all the new 
people in and making sure everyone had a pass. Mr. Livingstone 
himself did not have his permanent White House pass until 
November 23, 1993. The FBI forwarded all of the results of 
Livingstone's background investigation to Nussbaum on March 16, 
1993 and the file was not forwarded to the Secret Service for 
adjudication until September 20, 1993. Agent Cole testified 
that he raised questions about ``derogatory information'' in 
Livingstone's background with Kennedy.\147\ Agent Cole further 
testified that he raised concerns about Livingstone with his 
superior at the Secret Service and ``asked Mr. Kennedy if he 
concurred with my concerns one way or the other, and he did 
not, and ultimately Mr. Livingstone received his White House 
pass.'' \148\ Another 2 months passed before Livingstone's 
permanent pass was finally approved on November 23, 1993.
    \146\ Id., p. 13. Secret Service Agent Arnie Cole is the supervisor 
of the White House Access Control Branch and as such, primary point of 
contact for Livingstone in his capacity as Director of the White House 
Office of Personnel Security. Mr. Livingstone did not receive his 
temporary pass until February 26, 1993.
    \147\ Cole deposition, pp. 21-22.
    \148\ Security of FBI Files hearing, July 17, 1996, pp. 99-104.
    Questions still remain as to how Livingstone was actually 
hired as the Director of the White House Security Office. 
Cheryl Mills states that he was to be an assistant in the 
office, yet she receives a February 8, 1993 memo where he 
clearly assumes the role of the Director. Messrs. Kennedy and 
Nussbaum both state that Livingstone was already in the office 
when they arrived, but neither of them questioned his 
background or qualifications for the position. Mr. Kennedy 
himself stated in a memo to Counsel to the President Bernard 
Nussbaum that Livingstone probably would not be in the position 
for long, as he was hoping to get the position as Director of 
the Military Office.\149\
    \149\ White House document CGE 048543.
    Finally, neither Kennedy nor Nussbaum mentioned that Mrs. 
Clinton had either recommended Livingstone or directed that he 
be placed in the ``slot'' of Director of the Security Office. 
In fact, both denied that Mrs. Clinton had anything to do with 
the hiring of Craig Livingstone. It remains a mystery how he 
came to the attention of former Rose Law Firm partner, then 
Deputy White House Counsel Vince Foster. What we do know is 
that both the FBI and the Secret Service voiced their concerns 
about hiring Craig Livingstone to head the White House Security 
Office. Despite these concerns and the fact that Kennedy knew 
that he did not even want the position, Livingstone was given 
absolute control.

2. Craig Livingstone's quest for the Military Office

    It was no secret that Livingstone wanted the position of 
Director of the Military Office. In a February 22, 1993 memo 
from Bill Kennedy to Bernard Nussbaum and Vince Foster, Kennedy 
addressed hiring Livingstone as the Director of the Office of 
Personnel Security. Mr. Kennedy wrote:

          [Craig Livingstone] is willing to accept the job at a 
        salary of $45,000, although reserving the right to look 
        for something better, such as becoming the Director of 
        White House Military Affairs for which he is apparently 
        being considered. That position apparently would not 
        open until sometime in June, 1993, if at all. There is 
        probably a good chance this office will lose Mr. 
    \150\ White House document CGE 048543.

After Foster interviewed him for the ``junior position'' in the 
Security Office, Mills told the committee that she asked Foster 
why Livingstone would not be appropriate as the Director of the 
Military Office. According to Mills, Foster explained why it 
would be unreasonable for Livingstone to be in that position. 
He told her that it was usually a person with a long term 
history in the military and a relatively senior retired 
    \151\ Mills deposition, August 2, 1996, p. 18.
    Mr. Livingstone approached numerous people about his desire 
to become Director of the Military Office. He spoke to Bruce 
Lindsey,\152\ George Stephanopoulos,\153\ Bill Kennedy,\154\ 
Gary Aldrich, Chuck Easley,\155\ Harry Thomason,\156\ George 
Saunders,\157\ Arnie Cole,\158\ Dennis Sculimbrene,\159\ Vince 
Foster \160\ and Cheryl Mills \161\ among others.
    \152\ Deposition of Bruce Lindsey, July 29, 1996, pp. 20-21. 
(Lindsey was asked whether Livingstone ever approached him about the 
job in the Military Office. Lindsey stated, ``Yes. We did an event at 
the Library of Congress during the Inaugural and he, I think, was doing 
an advance on the event, and I was standing outside and he told me that 
he wanted to be head of the White House Military Office. . . . I asked 
whether or not it had to be a service person. He indicated it did not. 
I don't know if I said anything else.'')
    \153\ White House document CGE 046222.
    \154\ White House document CGE 048543.
    \155\ Deposition of Chuck Easley, July 26, 1996, p. 42. (Easley 
stated that the first time he met him, Livingstone told him that he 
wanted to be the Director of the Military Office. That occurred 
sometime in early February 1994.)
    \156\ Thomason deposition, p. 71.
    \157\ Saunders, 7/13/96, p. 30. (Livingstone told Saunders that the 
job he really would like to have is head of the Military Office.)
    \158\ Cole, 7/10/96, pp. 10-11.
    \159\ Sculimbrene, 7/15/96, p. 53. (``[H]e told me, and as I 
understood from others, he was looking for another job. He told me he 
wanted to run the Military Office.'')
    \160\ See, Mills, supra.
    \161\ Supra note.
    Mr. Thomason testified that ``for some reason, all the 
employees of the White House thought if they needed to unload 
things or tell things, that they could see me.'' \162\ Although 
Thomason testified that he remembered Craig Livingstone met 
with him, he was unable to recall the context of his notes of 
that meeting where he wrote: ``Control of military office and 
SS [Secret Service] could very well derail future efforts.'' 
\163\ FBI Agent Gary Aldrich testified that he too had a 
conversation with Livingstone about the Military Office 
    \162\ Thomason, 5/17/96, pp. 71-72.
    \163\ Bobbie Faye Ferguson document, BFF 1067.

          He told me that his goal in the White House was to 
        become head of the [M]ilitary Office and that he felt 
        that the Chief of Staff, Mack McLarty, was not 
        supporting him enough in his quest to do that. And he 
        often spoke of arguments he said he had with the Chief 
        of Staff and others relative to his seeking this 
    \164\ Aldrich deposition, p. 34.

    On May 27, 1994, Livingstone wrote a note to George 
Stephanopoulos thanking him for offering to be of assistance in 
his efforts ``to further serve the President as Director of the 
White House Military Office.'' \165\ Mr. Livingstone listed 
four points which he believed should be considered in his quest 
for the office. The last of the four points, that ``the job, by 
nature, should have someone with sound political skills--
particularly as we approach N.H. [New Hampshire],'' is most 
revealing of Livingstone's lack of understanding that all jobs 
in the White House are not political.\166\
    \165\ White House document CGE 46222.
    \166\ The thank-you note produced to this committee had a cover 
page attached stating ``What should we do with this request?'' Below 
this question is written the word ``Nothing'' and it is circled. White 
House document CGE 46221.
    The Military Office is responsible for all of the military 
operations as they relate to the White House. White House 
communications, military aides, and the President's doctor all 
come under the supervision of the Military Office. The use of 
Air Force One, the helicopter as well as any other 
transportations of the President are under the control of this 
office. In essence, every military asset in the White House is 
run by the White House Military Office, an office for which a 
man of Craig Livingstone's background was not suited.

3. Livingstone's duties as Director of the White House Office of 
        Personnel Security

    After Livingstone became the Director of the Security 
Office, he requested that the name be changed to the Office of 
Personnel Security (OPS).\167\ Although the Clinton 
administration changed the name of the office, it was supposed 
to perform essentially the same duties as it had in prior 
administrations. In a 1994 memo to Jodie Torkelson, Assistant 
to the President for Management and Administration, Livingstone 
described his duties as Director of OPS:
    \167\ White House document CGE 048607.

          process security papers for Presidential appointees 
        and White House staff; handle daily contact with the 
          maintain frequent contact with attorneys on an 
        individual case basis;
          work with the Secret Service in processing applicants 
        for access and White House passes; sit on numerous 
        committees with the Secret Service;
          act as a liaison between Secret Service and staff;
          maintain clearance processes for White House Intern/
        Volunteer programs; initiate memoranda to the 
          initiate and maintain Security Interview process for 
        both staff applicants and intern/volunteers;
          act as principal liaison with all government-wide 
        department/agency security officers in assisting in 
        their clearance processes, and;
          process compartmentalized clearances for staff.\168\
    \168\ White House document CGE 048827-829.

    But in contrast to Jane Dannenhauer, his predecessor, 
Livingstone was involved in more than simply running the 
Security Office. Although Livingstone described one of his 
primary duties in 1993 as reviewing FBI background files,\169\ 
he continued to do advance work for President Clinton even 
after taking over the position as Director of the Security 
    \169\ Livingstone, June 14, 1996, p. 4.
    Mr. Livingstone would often participate in Presidential and 
First Lady advance trips, traveling ahead of the President or 
First Lady to set up and handle logistics.\170\ In fact, 
Livingstone stated, ``we [White House appointees] are asked to 
do advance from time to time, and it's something that I have 
done. I would consider that part of my job.'' \171\
    \170\ Livingstone deposition, March 22, 1996, pp. 24-25.
    \171\ Id., p. 26.
    Mr. Livingstone also told FBI Agent Gary Aldrich that he 
was the Clinton administration's liaison to the FBI and spoke 
often with the Director of the FBI, Louis Freeh.\172\ The 
committee received a copy of a letter from FBI Director Louis 
Freeh to Livingstone that appears to confirm this fact. In the 
letter, Director Freeh said that ``the President and the 
American people are indeed fortunate to have your dedication 
and service.'' After thanking Livingstone and ``Stephanie'' for 
their help with Director Freeh's sons, he said that ``we look 
forward to seeing both of you soon. Don't forget to visit us at 
the FBI.'' It was signed ``Very truly yours, Louie.'' \173\
    \172\ Aldrich deposition, July 18, 1996, p. 34.
    \173\ White House document CGE 054403.
    Mr. Livingstone altered the historical duties of the office 
in other ways as well. In a memo to Counsel to the President 
Abner Mikva requesting a raise, Livingstone wrote, ``I strongly 
believe that my level of work reviewing IRS records, 
adjudicating FBI backgrounds, conducting intake security 
interviews and developing corrective plans of action for 
individuals with problems that can be made right.'' \174\ The 
memo did not describe what kind of plans of action or problems 
would be involved in this newly developed duty. In addition, as 
individuals left the White House for other positions, they 
would be ``debriefed'' by Livingstone as part of his 
    \174\ White House document CGE 048059. (Emphasis added) (May 30, 
1995 memo from Craig Livingstone to Abner J. Mikva, re: Follow-up to 
pay adjustment request.)
    \175\ Livingstone, March 22, 1996 dep. p. 31.
    In a September 22, 1993 memo Livingstone requested a 
permanent radio and cell phone stating, ``this request is 
necessary due to the nature of my duties as Director of White 
House Security.'' \176\ He did not enumerate what those duties 
were which required him to have a radio and cell phone. As 
discussed above, the next year, in May 1994, he again requested 
a White House issued cell phone to be ``on call'' during the 
weekend ``to assist the President in whatever manner 
necessary.'' \177\ As in the previous memorandum, he did not 
describe what his duties were or what assistance the President 
needed from him on weekends. Livingstone was also attempting to 
expand his role in White House security and was planning a 
``security committee.'' \178\
    \176\ White House document CGE 054067.
    \177\ White House document CGE 048523.
    \178\ White House document CGE 054002 (Letter from Paul Connelly, 
Chief of Security and Safety Division of the White House Communications 
Agency to Craig Livingstone dated May 8, 1994. ``I was very happy to 
hear of your mandate and desire to widen your role in White House 
security and am interested in participating on the White House security 
committee you mentioned.) (Emphasis added.).
    Former White House Counsel C. Boyden Gray made clear that 
substantive judgments on the background investigations were 
reserved exclusively to the White House Counsel and Deputy 
Counsel.\179\ The responsibility for the adjudication was kept 
at the highest levels of the Counsel's Office not only to 
ensure immediate access to the President with any problems, but 
also to ensure the confidentiality of the files.
    \179\ Security of FBI Files hearing, June 19, 1996, p. 23.
    In the Clinton administration, the responsibility was given 
to an associate counsel, William Kennedy, who in turn passed 
along the responsibility to Craig Livingstone, who in turn 
passed it along to his staff which consisted of interns and 
young individuals in their first job.\180\ The confidentiality 
of all of the FBI background files was jeopardized once the 
Counsel to the President, Bernard Nussbaum, denounced any 
responsibility for this unpleasant yet necessary work. The FBI 
background investigations are conducted for the White House in 
order to protect the country in connection with potential 
security breaches, as well as to protect the President 
politically and physically. Not only did Livingstone shift his 
responsibility to review background investigations to lower 
level staff but he also was looking for creative ways for 
Clinton appointees to get around problems in their backgrounds, 
ignoring the purpose of the investigation.
    \180\ Livingstone deposition, June 14, 1996, p. 49. (Livingstone 
stated: ``I think in the first year I looked at a lot of the reports, 
but as we all got trained in our functions and our mission became 
clear, we--I trained my staff to look for certain types of information, 
and if there wasn't any of that type information, that I felt confident 
that they could make a decision if the information was derogatory or 
not.'' He then noted that he did not even train the staff, Lisa Wetzl, 
a staff assistant did, ``I believe it was 1994 when Ms. Wetzl trained 
our staff.'' Ms. Wetzl was only 22 years old when she began in the 
office and in a thank you note to Livingstone, she said it was the 
first job she ever held.)
    Mr. Livingstone's explanations of his duties in the White 
House raise questions as to whether he was authorized to 
undertake these tasks, and if so, by whom. It is clear on more 
than one occasion that his superiors were aware of what he was 
doing, as he outlined these additional duties in his memos to 
them. Mr. Livingstone's predecessor worked long hours in her 
position as Director of the Security Office. She did not have 
time to do political advance work or to expand the mandate of 
her office.
    What is important to note is that there was never a backlog 
of passes, never any security concerns raised by the Secret 
Service, and certainly never any unauthorized requests sent to 
the FBI during the tenures Livingstone's predecessors. There 
seemed to be little or no supervision of Livingstone and the 
activities he was pursuing. The Clinton administration put 
someone in this sensitive office with no experience and who 
clearly was unsuitable as recognized by both the FBI and the 
Secret Service. Not only did the White House ignore the 
importance of the suitability issue but after placing an 
unsuitable person in this position, the responsible parties, 
the White House Counsels, abdicated supervisory responsibility. 
It is not surprising then that problems would arise.

4. Livingstone's salary requests

    Mr. Livingstone was hired as the Director of the Personnel 
Security Office at a salary of $45,000 in February 1993. In a 
May 10, 1993 memo to Associate Counsel to the President Bill 
Kennedy, Livingstone requested a salary increase of 
$5,000.\181\ On October 20, 1993, Livingstone did receive an 
increase to $51,000 which was approved by Bernard 
    \181\ White House document CGE 047884. (Memo from Craig Livingstone 
to William Kennedy, dated May 10, 1993. In the same memo, Livingstone 
requested that Nancy Gemmell remain on paid status through August 1, 
1993. He also asked to bring on a receptionist at a reduced salary of 
$17,000. ``On August 1, 1993 my salary would increase TO $50,000 from 
$45,000. Based on the reduction of salary for the receptionist.'')
    \182\ White House document CGE 046144.
    Between May and August 1994, three Counsel's Office 
attorneys wrote letters on behalf of Livingstone requesting an 
increase in his salary. The Assistant to the President for 
Management and Administration, David Watkins, wrote a memo to 
Associate Counsel Beth Nolan in May 1994 noting that it had 
come to his attention that she had requested a salary increase 
for Livingstone.\183\ Mr. Watkins explained that a salary 
freeze was in effect for all salary adjustment actions.\184\ 
Nevertheless, Nolan's colleague, Associate Counsel Chris Cerf, 
wrote a memo to Deputy Chief of Staff Phil Lader on July 1, 
1994 requesting a raise for Craig Livingstone.\185\ Mr. Cerf 
wrote, ``[i]t would be an overwhelming setback if Craig's 
frustration over his salary contributed to a decision to seek 
employment elsewhere. I consider this to be a significant risk 
that we should be doing everything in our power to minimize.'' 
    \183\ White House document CGE 048509. (Memo from David Watkins to 
Beth Nolan dated May 25, 1994, re: salary adjustment. The memo was 
copied to Patsy Thomasson and Kelli McClure and read, ``EYES ONLY'')
    \184\ Id.
    \185\ White House document CGE 048622. (Memo from Christopher D. 
Cerf to Phil Lader, Deputy Chief of Staff, re: raise for Craig 
Livingstone. The memo was copied to Beth Nolan.)
    \186\ Id.
    In a third attempt to get Livingstone a raise, both Beth 
Nolan and Deputy Counsel to the President Joel Klein joined in 
a memo to Deputy Chief of Staff Phil Lader.\187\ In the memo 
they acknowledged that there was a general freeze on salaries 
but argued that an exception should be made for Livingstone, 
asking that he be given an immediate raise to $60,000.\188\ 
They cited his extraordinary effort to clear up a backlog of 
White House passes, one of Livingstone's duties as Director of 
Personnel Security.
    \187\ White House document CGE 048627. (Memo from Joel Klein, 
Deputy Counsel to the President and Beth Nolan, Associate Counsel to 
the President dated August 19, 1994, re: raise for Craig Livingstone. 
The memorandum was marked ``Personal and Confidential.'' The memo was 
forwarded to Livingstone with a handwritten note from Beth Nolan, ``our 
3rd effort, it has gone to Phil. Joel will also talk to him.'')
    \188\ Nolan and Klein stated that Livingstone had worked 18 months 
at ``an inadequate salary'' of $51,000.
    Mr. Livingstone did receive a salary increase on January 8, 
1995 to $57,500, which was approved by White House Counsel 
Abner Mikva.\189\ Nine months later Livingstone received yet 
another salary increase to $63,750.\190\ Before receiving that 
final increase Livingstone had written two memos to Counsel to 
the President Abner Mikva. The first memorandum, dated May 30, 
1995, states, ``I have done my best to be a good soldier,'' and 
requests a salary increase to $65,000.\191\ The second 
memorandum, dated August 28, 1995, takes on a much stronger and 
almost threatening tone.
    \189\ White House document CGE 046217.
    \190\ White House document CGE 046215. (The document is a ``Change 
in Employee Status'' form, change in salary requested by Abner Mikva, 
dated September 28, 1995.)
    \191\ White House document CGE 048059. (Livingstone states that at 
a salary of $57,500 he was living paycheck to paycheck and complains 
that his predecessor, who had been in the position since the Nixon 
administration, made over $60,000.)

          It would be wrong not to approve my request. Not just 
        because I was promised but because I have demonstrated 
        that I deserve it. I apologize for my tone but this is 
        my last try to remain part of the team.\192\
    \192\ White House document CGE 048058. (Livingstone also notes that 
his ``situation'' had gone on for over 2\1/2\ years, pointing out that 
he had ``seen [the] office through a few storms.'')

In this second request, his salary demand increased to 
    \193\ Attached to the authorization form for the salary increase 
was a note from Kelli McClure to Deputy Counsel to the President James 
Castellito, ``[t]he increase was approved by Judge Mikva. It is my 
understanding that it was based on a promise made when Bernie Nussbaum 
was here.'' White House document CGE 046216.
    Mr. Livingstone's final request for a raise came on May 14, 
1996, just 5 days after the committee held the White House in 
contempt for the failure to turn over subpoenaed documents. 
Among the documents that had been withheld was the White House 
request for Billy Dale's FBI background file. The Assistant to 
the President for Management and Administration, Jodie 
Torkelson, wrote a memo requesting information on Livingstone's 
salary history and any notes or paperwork on what he may have 
been promised. Ms. Torkelson states in the memo, 
``Livingstone's at it again. He's submitted paperwork for 
signature giving himself a raise and saying that he was 
promised the money by Abner [Mikva]. . . . I'd like to kill 
this before I leave.'' \194\
    \194\ White House document CGE 053840. (The increase in salary 
requested was to $70,000.)
    Craig Livingstone claimed that two White House Counsels, 
Bernard Nussbaum and Abner Mikva, promised him that he would 
get a raise to $70,000. He wrote memos directly to Counsel to 
the President Mikva stating that he deserves a raise because he 
had been a ``good soldier'' and ``weathered the office through 
a few storms.'' How was Livingstone able to secure a 40 percent 
salary increase in only 3 years? His salary rose rapidly from 
$45,000 to $63,750. Although Livingstone complained that his 
predecessor made over $60,000, he did not acknowledge that she 
had over 20 years of experience as Director of the Security 
Office. Mr. Livingstone had no background, education or 
experience in the area, yet he was given significant salary 
increases. His office was responsible for the backlog in passes 
yet he claimed credit and demanded rewards for clearing up that 
same backlog.
    His persistent demands for salary increases and ability to 
rally the Counsel's Office behind him raise even more questions 
about who Craig Livingstone really is. Although most people in 
the White House would now deny knowing him or at best admit 
that they may have seen him around, Livingstone was able to 
garner support for his cause when necessary.

5. Livingstone brings on new staff

    The White House Security Office began using interns for the 
first time in its history after Livingstone came on as 
Director. Mr. Livingstone's Executive Assistant, Lisa Wetzl, 
began as an intern in OPS in June 1993 after graduating from 
college in May of the same year.\195\ Other assistants in the 
office started as interns before moving up to staff positions. 
Ed Hughes began as an intern in February 1994 after graduating 
from college in June 1993.\196\ Jonathan Denbo, an assistant in 
the office, was an intern in the office in the summer of 1994 
and was hired in September after he graduated from college in 
May 1995.\197\ The staff in the office was generally very young 
and inexperienced. Nevertheless, all of the staff were granted 
top secret clearance by the White House and compartmentalized 
clearances from the CIA.
    \195\ Wetzl deposition, June 17, 1996, p. 7. Ms. Wetzl began as an 
OPS intern in June 1993, she was hired as a staff assistant in August 
1993 and promoted to Executive Assistant in the fall of 1994. Ms. Wetzl 
left the office in September 1995 to work as a confidential assistant 
to Secretary of the Army, the Honorable Togo D. West, Jr.
    \196\ Deposition of Edward Hughes, August 13, 1996, p. 6. (Hughes 
became Livingstone's Executive Assistant in September 1995.)
    \197\ Deposition of Jonathan Denbo, September 4, 1996, p. 3.
    During 1993 and early 1994 the Office of Personnel Security 
had an extensive backlog in paperwork. White House appointees 
were not completing their paperwork and those that were 
completed were not being sent to the FBI. By April 1993, 
Livingstone was attempting to get his friend and political 
ally, Anthony Marceca, detailed to the office to assist with 
the backlog.

           III. Detail of Anthony Marceca to the White House

                            A. Introduction

    Anthony Marceca is one of the central figures in the 
investigation of the FBI files matter. The White House claims 
that he was the individual responsible for ordering hundreds of 
files on former Reagan and Bush administration officials. First 
described as a ``low-level clerk,'' the White House refused to 
release Marceca's name to the committee for several days. 
However, the committee soon learned through press accounts that 
the so-called low-level clerk was a White House detailee 
employed as a civilian investigator in the Army Criminal 
Investigative Division (CID). President Clinton's deputy 
campaign manager, Ann Lewis, claimed Marceca was a ``non-
political staffer.'' \198\ Anthony Marceca is a longtime 
political colleague of Craig Livingstone. The two worked on 
advance for numerous campaigns since the Hart campaign in 1984.
    \198\ Ann Lewis, This was a simple mistake, USA Today, June 10, 
1996, p. A12.
    Mr. Marceca was detailed to the White House Office of 
Personnel Security in August 1993 at the request of Associate 
White House Counsel William H. Kennedy. Mr. Kennedy wrote two 
letters directly to Secretary of Defense Les Aspin regarding 
Marceca's detail.\199\ Kennedy, in one letter, stated that he 
had ``learned of Agent Marceca's unique investigative abilities 
and background and would greatly appreciate his full-time 
assistance here.'' \200\
    \199\ White House documents CGE 043814.
    \200\ White House documents CGE 043816, letter from Kennedy to 
Aspin, dated April 13, 1993, re: request for detailee.
    Once ensconced in the office, Marceca attempted to use the 
position as a springboard to a Presidential appointment. He was 
interviewing for positions as a U.S. Marshal as well as 
Inspector General positions at several different agencies.\201\ 
His plans came to a halt when the White House received his FBI 
background file and informed him that there were problems in 
his background which would prevent his detail from being 
renewed and prevent him from receiving a Presidential 
    \201\ Marceca document (unnumbered) calendar of Anthony Marceca 
dated December 27, 1993; January 7, 1994; January 14, 1994; February 2, 
1994; February 3, 1994; February 7, 1994; February 8, 1994; February 
25, 1994; and, March 2, 1994.
    \202\ Kennedy deposition, June 18, 1996, p. 41; Livingstone 
deposition, June 14, 1996, p. 60.
    Mr. Marceca continued working in the Office of Personnel 
Security until his original 6-month detail ended in February 
1994. Although he received a hard pass and had full access to 
the White House, his background investigation was not completed 
until December 1993 and he was never cleared by the Secret 
Service for a permanent pass. Along the way, his daughter also 
joined the White House, apparently assisting in the Office of 
Presidential Personnel.\203\ His son, Nathan, obtained a White 
House job as a ``gift analyst'' in the winter of 1995.\204\
    \203\ Marceca documents (unnumbered). Calendar of Anthony Marceca 
dated January 20, 1994: ``Andrea's first day in Presidential 
Personnel.'' It is not clear what his daughter was doing for the 
office. There was an FBI name check run on her; however, she did not 
have a White House pass.
    \204\ Committee interview of Jonathan Denbo, September 4, 1996, p. 
17. Mr. Denbo explained that he met Nathan Marceca when he came in to 
OPS to fill out his new employee paperwork. Mr. Livingstone told Denbo 
that Nathan was Tony Marceca's son.
    After leaving the White House, Marceca remained in contact 
with both Livingstone and the White House. He volunteered to 
answer phone calls from the ``comments line'' following the 
President's addresses to the Nation. Mr. Marceca retained a 
White House volunteer pass until May 1995 and remained on a 
volunteer access list until June 21, 1996, several weeks after 
the discovery of the FBI files and Marceca's role became 
known.\205\ According to phones message he left for 
Livingstone, Marceca also appears to have worked on several 
Presidential and Cabinet level advance trips between 1994 and 
    \205\ Easley deposition, p. 57. Mr. Easley, who replaced Craig 
Livingstone, stated, ``I learned that Mr. Marceca had a temporary 
volunteer pass that was deactivated May 1995, and since then he has 
been on the volunteer access list.'' Mr. Easley removed Marceca's name 
from the access list on June 21, 1996, after the Secret Service 
notified him of the name.
    \206\ White House documents CGE 054248-54275. (The committee did 
not receive any notice of the contact between the White House and 
Marceca until a document production on the evening of September 5, 
1996. The White House documents had been subpoenaed by the committee 
and were over 2 weeks late in being produced.)
    Anthony Marceca is far from the low-level clerk the White 
House has claimed. He and Craig Livingstone worked together as 
a political ``team'' since 1984 and continued their partnership 
up to the present. Given the backgrounds of both Livingstone 
and Marceca, it is astonishing that the Clinton administration 
would put these two individuals in the sensitive office of 
Personnel Security with access to the FBI file of any person 
who has ever had a background investigation.

B. Marceca Parlays His Political Background with Craig Livingstone into 
                         a White House Position

    Anthony Marceca testified that he met Craig Livingstone 
while they were both doing advance work for the Gary Hart 
campaign in 1984.\207\ The two had become friends and 
discovered that they worked well together.\208\ Messrs. 
Livingstone and Marceca formed an ``advance team'' where 
Livingstone would handle the public relations end of the 
advance work and Marceca would handle the logistics end.\209\ 
Dennis Casey, a political consultant from Pennsylvania, who 
worked for the Hart campaign in 1984, remembered Livingstone 
and Marceca.\210\ Casey testified that, during a campaign 
meeting, Livingstone was present and reported on ``peccadilloes 
and vulnerabilities of labor leaders and prominent public 
officials in hopes of neutralizing them or getting their 
support switched from Mondale to Hart.'' \211\ Mr. Casey 
testified that he informed Livingstone that he felt the 
gathering of such information could hurt the campaign and 
directed him to stop that type of work.\212\ Mr. Livingstone 
disagreed with Casey and angrily left the room.\213\
    \207\ Marceca deposition, p. 24.
    \208\ Id.
    \209\ Id.
    \210\ See, committee deposition of Dennis Casey, June 20, 1996.
    \211\ Id., p. 6.
    \212\ Id.
    \213\ Id.
    Mr. Casey recalled that he met Marceca at that time as 
well. Mr. Marceca spoke with Casey about the information 
Livingstone gathered and told Casey that it was time to ``play 
hardball with the dirt Mr. Livingstone had gathered.'' \214\ 
After an incident in which Marceca took $200 from the campaign 
petty cash, Casey called the Washington campaign office of Gary 
Hart and notified the office that Marceca should not be allowed 
    \214\ Id.
    \215\ Id., pp. 7-8. Mr. Casey explained that Marceca had entered 
his office and taken the $200. When Casey approached him the next day, 
Marceca explained that he needed the cash to get handbills printed and 
distributed. Mr. Marceca also explained that he needed the money to 
``pay community children or urchins to distribute the fliers door-to-
door.'' After Casey called the Washington office to inform them of 
Marceca's actions, Marceca contacted Casey and said, ``you guys got me 
good, right between the eyes.''
    The team of Livingstone and Marceca worked on several other 
campaigns. After the Hart campaign in 1984, they both moved on 
to the Mondale campaign. Mr. Marceca stated that the management 
of the Mondale campaign knew both him and Livingstone and kept 
them together as a team.\216\ In 1986 the two were asked to 
work advance for the Hart for President announcement in 
Colorado.\217\ Both Marceca and Livingstone accepted the 
invitation and worked on advance with the campaign until Hart 
dropped out of the race.\218\ In 1987, Livingstone asked 
Marceca to work with him on Al Gore's announcement.\219\ Mr. 
Marceca agreed and worked several advance trips with 
Livingstone for the Gore Campaign.\220\
    \216\ Marceca deposition, June 18, 1996, pp. 25-26.
    \217\ Id., p. 27.
    \218\ Id., p. 29.
    \219\ Id., p. 30.
    \220\ Id.
    Mr. Livingstone contacted Marceca on election night in 
1992. Now that Clinton had won the election, Livingstone was 
attempting to get the position of Director of Security for the 
Presidential Inaugural Committee (PIC).\221\ Mr. Livingstone 
contacted Marceca approximately 1 week later and asked him to 
stop by the Old Navy Yard, which was PIC Headquarters. When 
Marceca arrived at the Navy Yard, Livingstone told him that he 
had gotten the job as Director of Security for PIC and asked 
Marceca to work at PIC as the Security Coordinator.\222\ Mr. 
Marceca accepted the offer and took the position on a volunteer 
basis, taking time off from his Army CID position. According to 
Marceca, he worked directly under Livingstone planning the 
security aspect of access to Inaugural events.\223\ Mr. Marceca 
spent the day of the Inaugural in the ``command post,'' the 
Navy building, ``coordinating movements.'' \224\ After the 
Inauguration was over, Marceca went back to his job at Army 
    \221\ Id., p. 34.
    \222\ Id., p. 35.
    \223\ Id.
    \224\ Id., p. 39.
    Craig Livingstone did not have such a clear recall of his 
work with Anthony Marceca. Although Livingstone stated that he 
did meet Marceca in 1984 while working advance on the Hart 
campaign, his recollection was that he worked with Marceca only 
``on occasion.'' \225\ When asked in a deposition whether he 
knew of any other campaigns Marceca worked on, Livingstone 
stated that he knew that Marceca had worked on the Hill and he 
had a ``vague recollection'' that Marceca may have assisted at 
the Inaugural.\226\ There is a direct conflict between 
Livingstone and Marceca's testimony. Clearly, Marceca testified 
that Livingstone asked Marceca to work with him on PIC, yet he 
has no recollection of it. The two worked closely together. 
Marceca explained that he worked at PIC for at least 40 days up 
to and including the day of the Inaugural.\227\
    \225\ Livingstone deposition, June 14, 1996, p. 22.
    \226\ Id.
    \227\ Marceca deposition, June 18, 1996, p. 36.

1. Marceca's quest for a detail to the White House

    Livingstone took a position with the White House Office of 
Personnel Security on February 8, 1993. Sometime after 
Livingstone began working at the White House, Marceca contacted 
Livingstone to inquire about the possibility of a detail to the 
National Security Council at the White House.\228\ Mr. 
Livingstone checked on the National Security Council detail and 
reported back to Marceca that he did not think it was 
possible.\229\ According to Marceca, Livingstone explained that 
there was a possibility of an opening for a clerical type 
position in his office, OPS.\230\ In March 1993, Livingstone 
contacted Marceca and told Marceca that he had gotten 
permission to bring in someone to assist in the office. He 
described the position as a clerical-type position, ``going 
over people's background reports and making files and collating 
information, and it . . . did not involve 
investigations.''\231\ Livingstone asked Marceca to send him a 
resume at that time. In a deposition before the committee, 
Livingstone recalled that Marceca had told Livingstone that he 
wanted to work at the White House. Messrs. Livingstone and 
Marceca discussed general ways that Marceca might be available 
to assist the Office of Personnel Security.\232\
    \228\ Id., p. 41.
    \229\ Id.
    \230\ Id., p. 42.
    \231\ Id., p. 43.
    \232\ Livingstone deposition, June 14, 1996, pp. 24-26.

2. The White House requests Marceca

    Mr. Livingstone presented the idea of Marceca's detail to 
Associate White House Counsel William Kennedy.\233\ Mr. Marceca 
had interviews scheduled with Kennedy on March 18 and 24, 
1993.\234\ After interviewing Marceca, Kennedy wrote to 
Secretary of Defense Les Aspin on April 5, 1993 to request the 
detailing of Anthony Marceca. The detail was to be on a non-
reimbursable basis, to OPS, beginning on April 12, 1993.\235\ 
Mr. Kennedy stated in the letter, ``I have learned of Agent 
Marceca's unique investigative abilities and background and 
would greatly appreciate his full-time assistance here.'' \236\ 
The following day Kennedy received a reply from David C. Allen, 
the Director of Marceca's unit at the Army CID.\237\ Mr. Allen 
recommended Marceca for the detail, stating, ``Mr. Marceca is 
always the master of every situation,'' and ``[he] is a sound 
and logical thinker, capable of handling any number of critical 
and sensitive missions at one time.'' \238\ In his letter to 
Kennedy, Allen warned Kennedy not to be dissuaded if the 
military leadership of CID objected to the detail of Anthony 
Marceca. He further stated his readiness ``to discuss, in great 
detail, the high regard I have for Mr. Marceca both 
professionally and personally.'' \239\ On the same day, April 
6, 1993, Kennedy called Marceca.\240\
    \233\ Id., p. 25.
    \234\ Anthony Marceca document (unnumbered). Calendar of Anthony 
Marceca, dated March 18, 1993; March 24, 1993.
    \235\ White House document CGE 043823.
    \236\ Id.
    \237\ White House document CGE 043821.
    \238\ Id.
    \239\ Id.
    \240\ Anthony Marceca document (unnumbered). Calendar of Anthony 
Marceca, dated April 6, 1993.
    The letter which was sent to Secretary of Defense Les Aspin 
on April 5, 1993 requesting the detail of Marceca was then re-
sent on April 13, 1993. The text of the letter is the same, 
however the date had been changed.\241\ The next correspondence 
in the attempt to get Marceca detailed was on June 22, 1993. In 
that letter Kennedy wrote to Colonel Michael Sheffield, 
Executive Secretary to the Secretary of Defense.\242\ In this 
letter he states that Craig Livingstone had requested that 
Special Agent Marceca be detailed to the Office of Personnel 
Security (OPS).\243\ Mr. Kennedy also notes that Marceca's 
experience in reviewing and screening potential candidates 
would be invaluable to OPS in completing its ongoing review of 
military personnel assigned to the White House, as well as 
providing personnel services related to security for the staff 
of the Executive Office of the President.\244\
    \241\ White House document CGE 043816.
    \242\ White House document CGE 043819.
    \243\ Id.
    \244\ Id.
    Mr. Marceca's detail was ultimately approved on August 5, 
1993, by Deputy Assistant Secretary of Defense, Lieutenant 
General Robert M. Alexander in a memorandum to William 
Kennedy.\245\ On August 9, 1993 Marceca went to the White House 
and received his hard pass giving him access to the White 
House, although he did not begin his detail at the White House 
until August 18, 1993.\246\
    \245\ White House document CGE 043822.
    \246\ White House document CGE 043818. Detail authorization form 
for Anthony Marceca.

3. Marceca has access to the White House before his detail

    According to White House records, Marceca was placed on 
``access lists'' by Livingstone beginning as early as March 24, 
1993.\247\ White House Access lists allow an individual to 
enter the White House without appointment for the period of 
time that they are on the list.\248\ Individuals who enter via 
an access list, simply check in at any entry post, produce 
positive identification and are granted a pass to enter the 
complex.\249\ Mr. Marceca was placed on access lists by Craig 
Livingstone and granted continuous access to the White House 
complex from March 24 through July 31, 1993.\250\
    \247\ White House document CGE 047382-3. White House access list.
    \248\ Security of FBI Files hearings, July 17, 1996, p. 148.
    \249\ Id., p. 147.
    \250\ White House document CGE 047382-047631.
    The Secret Service places individuals on an access list 
based on a request from the Office of Personnel Security.\251\ 
Because Marceca was on an access list, he could have entered 
and exited the White House at any time throughout the 4 month 
period before his detail began and there would be no record of 
    \251\ Cerf deposition, August 12, 1996, p. 41.
    \252\ Security of FBI Files hearing, July 17, 1996, p. 149.
    The White House's attempts to get Marceca detailed to the 
Office of Personnel Security lasted 5 months and involved 
several attempts. Mr. Kennedy testified that he was told by 
Livingstone that the office could use Marceca's expertise in 
dealing with the numerous members of the military that have 
access to the White House.\253\ Despite all of Kennedy's 
efforts, he has a vague recollection of the complications of 
obtaining Marceca or even the outstanding qualifications that 
Marceca ostensibly possessed.\254\ Mr. Marceca, however, spent 
the majority of his time sifting through SF-86's for errors and 
working on the Update Project. It appears that a great amount 
of time was spent in getting a friend of Livingstone's detailed 
at the Army's expense. Why was it so important to detail Tony 
Marceca to the White House?
    \253\ Security of FBI Files hearing, June 26, 1996, p. 129.
    \254\ Kennedy deposition, June 18, 1996, pp. 38-44.

   C. Marceca's Introduction to the White House Office of Personnel 

1. Introduction

    The Clinton administration had problems getting through the 
paperwork necessary to obtain permanent White House passes for 
its staffers during the first year and a half of the 
administration.\255\ One of the problems was a backlog in the 
processing of the SF-86 forms, which had been filled out by new 
White House staff members. The SF-86 is a questionnaire which 
calls for sensitive and personal information from the 
appointee. Former White House Counsel A.B. Culvahouse described 
the form as ``designed to affirmatively encourage the 
furnishing of adverse or derogatory information.'' \256\ Each 
SF-86 was reviewed for errors and completeness. In previous 
administrations, only the Counsel to the President, his deputy 
and the director of the Security Office would review the SF-
    \255\ See generally GAO report on ``Personnel Security: Pass & 
Security Clearance Data for the Executive Office of the President,'' 
October 1995.
    \256\ Security of FBI Files hearing, June 19, 1996, p. 32.
    \257\ Id., p. 46.
    Once checked, the SF-86 would be sent to the FBI to begin 
the process of a background investigation. Anthony Marceca, a 
temporary detailee, took responsibility for this project when 
he began working at OPS. Mr. Marceca testified that the first 
day he began to work in OPS, the backlog of SF-86 forms was 
piled up on his desk in a stack 2\1/2\ feet high.\258\
    \258\ Marceca deposition, p. 83.
    Although Marceca began working in the White House on August 
18, 1993, prior to that, on August 9th, he went to the White 
House to get his pass and to discuss what his duties would 
be.\259\ According to Marceca, he met with Nancy Gemmell, Lisa 
Wetzl and Craig Livingstone.\260\ Mr. Marceca stated that at 
that meeting Nancy Gemmell explained to him the procedures to 
follow for the duties he would be performing while working with 
OPS.\261\ Ms. Gemmell was a holdover employee who had worked in 
OPS since 1981, the beginning of the Reagan 
    \259\ Id., p. 60.
    \260\ Id., p. 153.
    \261\ Id.
    \262\ Security of FBI Files hearing, June 19, 1996, pp. 38-39. Mrs. 
Gemmell stayed on in the Clinton administration until August 13, 1993 
to assist in training the new staff.
    During that meeting Marceca took notes of what he was 
told.\263\ Mr. Marceca stated that Nancy Gemmell showed him the 
procedures he should follow in completing the ``Update 
Project'' as well as other duties he was expected to 
perform.\264\ However when asked whether she personally gave 
Marceca the Secret Service list to continue the Update Project, 
Gemmell stated, ``[N]o sir; I had no idea who would be assuming 
that responsibility.'' \265\ Ms. Gemmell did leave behind a 
written sheet of instructions which he would be able to refer 
to after she left.\266\
    \263\ Anthony Marceca document (unnumbered). Handwritten notes of 
Anthony Marceca dated August 9, 1993.
    \264\ Marceca deposition, p. 61.
    \265\ Security of FBI Files hearing, June 19, 1996 p. 90.
    \266\ Id.

2. Discrepancies in Marceca's testimony

    In stark contrast to his testimony before the committee 
that he thought everyone on the ``update list'' was in need of 
access to the White House complex, his handwritten notes make 
it clear that he was aware that OPS was responsible for taking 
former White House employees off of the lists. He wrote: ``De-
activate (sic) former staff . . .'' \267\ Mr. Livingstone, 
Marceca's supervisor, also was aware that it was the White 
House's responsibility to inform the Secret Service who to take 
off of their lists of active pass holders. In a March 1993 
memorandum to Associate Counsel Bill Kennedy, Livingstone 
    \267\ Marceca document production (unnumbered). Handwritten notes 
dated August 9, 1993.

          Please note that there are many Bush Administration 
        employees that still have active badges. USSS [U.S. 
        Secret Service] informs me that it is WHS [White House 
        Staff] responsibility to deactivate badges. I am 
        working with WHOMA [White House Office of Management 
        and Administration] to begin this process.\268\
    \268\ White House document CGE 053677. Although the memorandum is 
undated, the information contained within clearly indicates that it was 
created in March 1993.

    In his deposition, Marceca testified that he did not know 
what a Secret Service WAVES list was, nor did he know what a 
temporary pass holder or permanent pass holder list was.\269\ 
The Secret Service would provide the Office of Personnel 
Security with an updated passholders list on a monthly basis or 
upon request.\270\ When asked whether he had ever seen Secret 
Service lists which were separated by office, Marceca testified 
that he did not think that he had gotten any lists which were 
broken down by office until January 1994.\271\ Nancy Gemmell 
stated that when she left the office in August 1993 she went to 
the Secret Service, and requested a current master Secret 
Service list separated by office.\272\ This is the list which 
Gemmell left in the office with the understanding that an 
additional list should be requested:
    \269\ Id., pp. 94-95.
    \270\ Wetzl deposition, p. 33.
    \271\ Marceca deposition, p. 98.
    \272\ Telephonic interview of Nancy Gemmell.

          Ms. Gemmell. I was very much understood that the 
        initial list the office had was just that, an initial 
        list to be used to start the first steps of the Update 
        Project. It was very well-known that many personnel 
        decisions had yet to be made and therefore that follow-
        up would have to be done.
          * * * * *
          Mrs. Collins of Illinois. So then during the regular 
        update projects in which you were involved, how often 
        would you request a list of names from the Secret 
          Ms. Gemmell. Basically, only twice, ma'am. At the 
        beginning to initiate the process, and then the second 
        time to be used as the file copy.
          Mrs. Collins of Illinois. Did you leave behind any 
        Secret Service lists of names that you had requested 
        for the Update Project when you left in August of 1993?
          Ms. Gemmell. The list that was received from the 
        Secret Service was left behind. It was still in 
        process; far from being completed; correct.\273\
    \273\ Security of FBI Files hearing, June 19, 1996, pp. 50-51.

    Mr. Marceca testified that the only regular Secret Service 
lists which he knew of were weekly pass lists which he received 
from the Secret Service and used to complete his project. He 
stated that these lists contained only a small number of people 
who were on the access lists and needed to be contacted to fill 
out an SF-86.\274\
    \274\ Id.,p. 94.
    The Secret Service did not provide the office with ``access 
lists'' in the manner that Marceca used the term. The Secret 
Service lists are quite distinctive, as the paper is oversize, 
on green and white computer printout paper with perforated 
edges. The access lists to which Marceca refers are created by 
the Office of Personnel Security based on names provided by the 
Office of Management and Administration.\275\ In hearing 
testimony however, Marceca, stated specifically that he 
recalled working with the large, green and white computer 
printout lists.\276\ Contrary to his statement, in his own 
notes Marceca writes, ``Mr. David Watkins, head of management 
and administration . . . monthly report submitted on passes.'' 
    \275\ Denbo interview, September 4, 1996, p. 9.
    \276\ Marceca deposition, p. 40.
    \277\ Marceca document production (unnumbered). Handwritten notes 
dated August 9, 1993.
    Lisa Wetzl, a staff assistant in OPS, testified that when 
Marceca arrived he took over her duties of helping to correct 
and submit to the FBI the SF-86 for new employees.\278\ Ms. 
Wetzl explained that both she and Nancy Gemmell went through 
the process with him to make sure that he understood it.\279\
    \278\ Wetzl deposition, pp. 20-21. (A.B. Culvahouse, Counsel to 
President Reagan, testified before the committee that during his tenure 
only the White House Counsel, his Deputy and the Director of the 
Security Office were authorized to review the SF-86 forms. Security of 
FBI Files hearing, June 19, 1996 p. 46.)
    \279\ Id., p. 21.
    The duties which Marceca was to perform in OPS were rather 
amorphous. Mr. Marceca testified that, ``I would work in the 
Office of Personnel Security doing updates of White House staff 
and visitors, people that had access.'' \280\ Mr. Marceca 
testified that Livingstone was his supervisor; \281\ however, 
Livingstone testified that he did not supervise Marceca. With 
regard to the Update Project, Livingstone testified, ``I didn't 
supervise this project.'' \282\ Mr. Livingstone stated, ``I 
don't believe that there was anything specific that Tony would 
have been required to talk to me specifically about. Certainly 
not in the form of projects.'' \283\ According to Livingstone, 
nobody in the office was reporting to him on the activities of 
Marceca.\284\ It appears from Livingstone's statements that 
Marceca had free reign to do whatever he wanted without 
consultation with actual staff.
    \280\ Marceca deposition, p. 59.
    \281\ Id.
    \282\ Livingstone deposition, p. 33.
    \283\ Id., p. 37.
    \284\ Id., p. 39.
    Mr. Marceca, however, testified that he was assigned the 
Update Project by Livingstone.\285\ Livingstone, the Director 
of the office, has no clear recall as to who was assigned the 
project, who was working on the project at any given time, or 
who was supervising the project.\286\ Ultimately, Livingstone 
was in charge of all activities in that office, and Marceca was 
the individual assigned to work on the Update Project.
    \285\ Marceca deposition, June 18, 1996, p. 59.
    \286\ Livingstone deposition, June 17, 1996, p. 33. (When asked who 
supervised the project Livingstone stated, ``I believe Ms. Gemmell, Ms. 
Anderson, Ms. Wetzl and Mr. Marceca.'' Ms. Gemmell had started the very 
first stages of the project before she retired. Ms. Wetzl began working 
on the project after she was promoted to Executive Assistant in late 
1994, when she felt that she had enough authority to do so. See Wetzl 
deposition, p. 66. Ms. Anderson apparently never worked on the project 
at all.)

                  D. Marceca Begins the Update Project

1. Introduction

    As discussed previously, when a new administration arrives 
at the White House, nearly all of the previous administration's 
records are removed for storage in the Presidential 
archives.\287\ Those records would include the background 
investigations and paperwork which are stored in the Security 
Office. Therefore the records for all holdover employees must 
be recreated by ordering the background investigations from the 
    \287\ Prepared written statement of C. Boyden Gray, p. 6.
    Marceca's task was to recreate these files, and he would 
spend some time each week working on the Update Project. The 
process to determine which files to order is simple. The Secret 
Service has lists of all current passholders which it provides 
to OPS. The Secret Service lists can be printed out in 
different formats, one of which is current passholders by 
office. Previous administrations would go down the lists 
office-by-office to determine who the holdovers were in each 
office. The staff would start with those offices which 
routinely would have the largest amount of holdovers, such as 
the General Services Administration and White House 
contractors. The White House Office would normally be saved for 
last as it would have the greatest turnover with the least 
amount of holdovers. (The White House Office includes those 
offices with mostly political appointees such as the Chief of 
Staff and Communications.) \288\ After determining who the 
holdovers were, the office would order those FBI background 
    \288\ Id.
    Before leaving the White House, Nancy Gemmell had begun the 
very first stages of the Update Project:

          Mr. Schiff. Can you describe what the Update Project 
        that you were working on until August 13th was?
          Ms. Gemmell. Basically, again, sir, it was just 
        simply setting up the very first stages of it, and 
        basically, that means that you were making dummy files; 
        in other words, file jackets that would be used down 
        the road. So therefore you were typing file labels, you 
        were typing subject files. As an example, if you were 
        processing the General Services Administration 
        employees, you would type a subject file for that group 
          Mr. Schiff. Did you have a way of dividing up the 
        Secret Service files--that is, GSA group or White House 
        group there or something like that?
          Ms. Gemmell. As I recall the list, sir, the list of 
        employees was by category; in other words, was by 
    \289\ Security of FBI Files hearing, June 19, 1996, pp. 90-91.

At the time Marceca started in OPS Nancy Gemmell had already 
retired. Ms. Gemmell testified that she did not know whether 
Marceca used the list she had left behind, nor did she know who 
would be assuming the responsibility for the Update 
    \290\ Security of FBI Files hearing, June 19, 1996, p. 90.

2. Marceca's understanding of the Secret Service lists

    Mr. Marceca stated that as part of the Update Project he 
was to refer to a list and open files on individuals who had 
access to the White House.\291\ He explained that his mission 
was to open a file on each individual on the list and then 
request a previous background investigation from the FBI.\292\ 
When asked whether Nancy Gemmell had ever instructed him to 
determine the accuracy of the status of the names on the list, 
Marceca answered:
    \291\ Marceca deposition, p. 61.
    \292\ Id., p. 62.

          My project was to establish--was establish a file 
        that would perform a check to find out if these folks 
        were still on staff or not on staff . . . The list that 
        I was provided was a list to my understanding that 
        everybody on that list had access.\293\
    \293\ Id., p. 66. (Later in the deposition Marceca is asked whether 
there came a time when he discovered that there were people who were 
not properly on those lists. Marceca answered, ``Not to my knowledge, 
[to] the time I left, no.'' Marceca deposition, p. 73.)

Mr. Marceca's answer is puzzling. In the first sentence, he 
states that he was to determine who remained on the White House 
staff; he then states that everyone on the list had access. Mr. 
Marceca claims to have worked from the same list throughout the 
Update Project \294\ and had discovered that certain 
individuals on that list were no longer granted access to the 
White House complex.\295\ Mr. Marceca's statements appear 
contradictory. It is unclear what Marceca actually knew about 
the Secret Service lists. We do know from his own handwritten 
notes that, in the course of processing the individual files, 
he would place all files of White House Office staff in orange 
folders, all Vice-Presidential Office staff in pink folders, 
all volunteer and intern files in red folders and all support 
staff (GSA) in blue folders.\296\
    \294\ Id., p. 98.
    \295\ Id., p. 100.
    \296\ Marceca document production. (Unnumbered.) Handwritten notes 
dated August 9, 1993.
    The master Secret Service list includes a combination of 
active and inactive passholders. The passholder names on the 
list, however, are clearly differentiated by ``A'' or ``I,'' 
meaning active or inactive. According to the Secret Service, 
the only list which Marceca could have used to request all 476 
of the names would be the master list.\297\ Mr. Marceca 
testified that he was under the impression that the ``A'' and 
`` I'' designation on the Secret Service lists stood for 
``access'' and ``intern.'' \298\ The list Marceca used also 
contains the date of birth on each passholder.\299\ If one were 
to accept Marceca's testimony regarding his belief that the 
letters stood for ``access'' and ``intern,'' then it follows 
that Marceca also believed that he was ordering background 
files on holdover interns who were 30 to 70 years old, and who 
had interned during Reagan and Bush administrations.
    \297\ See infra Section VII, for further clarification of the 
Secret Service lists.
    \298\ Marceca deposition, June 18, 1996 p. 67.
    \299\ Security of FBI Files hearing, June 26, 1996, p. 41.
    Contrary to his already incredible testimony, the request 
forms Marceca sent to the FBI on these ``interns,'' as in the 
case of Billy Dale, identified them not as interns, but as 
staff members.

3. Marceca's explanation of the Update Project

    In a hearing before the committee, Marceca again clarified 
the procedures he employed in doing the Update Project. He 
stated in the hearing that he worked from a ``set of computer 
lists'' which were kept in the vault of OPS.\300\ He added that 
he attempted to go through the names on the list in the order 
in which they appeared.\301\ For each name on the list he would 
prepare a file folder and type the request on a preprinted form 
addressed to the FBI Liaison requesting a ``copy of previous 
report.'' \302\ On those forms is a space for the purpose of 
the request. In that space, Marceca typed ``ACCESS (S).'' \303\ 
That denoted that the individual named on the form was 
requesting access to the White House. The ``S'' was an internal 
OPS designation for White House staff.\304\
    \300\ Security of FBI Files hearing, June 26, 1996, p. 39. Mr. 
Marceca's hearing testimony is contrary to his deposition testimony in 
which he stated that he used only one list for the Update Project. 
Marceca deposition, p. 61.
    \301\ Id.
    \302\ Id.
    \303\ Id.
    \304\ Id., p. 41.
    After receiving the previous report from the FBI, Marceca 
stated that he would review it to determine the suitability of 
the person for a position in the Clinton administration, and to 
check the date for the standard 5 year reinvestigation.\305\ In 
the process of determining the date of reinvestigation, Marceca 
claimed he would discover that many individuals were no longer 
employed by the White House.\306\ Once Marceca began receiving 
a number of files for individuals no longer working at the 
White House and not seeking access to the White House, he 
created a ``dead bin'' where he would put all of those 
    \305\ Id., p. 39. This is the same task which, in previous 
administrations, only the counsel, deputy counsel and the director of 
the Security Office were authorized to conduct.
    \306\ Id., p. 40.
    \307\ Id. The ``dead bin'' was a bin located in the vault which was 
empty at the time Marceca began his detail.
    Mr. Marceca also testified at the hearing about the ``set'' 
of lists which he worked from while he performed the Update 
Project. He described the list as being on green and white 
computer paper, approximately 8 inches wide which was folded 
over and had connecting pages.\308\ The list he worked off of 
was approximately an inch thick with the names of the 
individuals in the left hand column.\309\ During the hearing, 
Marceca recalled that the list was divided into subgroups 
according to office, which is contrary to his deposition 
    \308\ Id., p. 40.
    \309\ Id.
    \310\ Id., p. 41. In his deposition testimony Marceca stated that 
he did not see any lists which were divided by office until January.
    Mr. Marceca told the committee that he was told by 
Livingstone, and possibly others in the office, to work off of 
the list he had been using.\311\ Mr. Livingstone and Lisa Wetzl 
have both stated that they do not know which list Marceca was 
using for the Update Project. Nancy Gemmell has testified that 
she did not even know who would be working on the Update 
Project, therefore she did not give anyone a Secret Service 
list to use for the Update Project. In fact, she testified that 
she instructed the individuals working in the office that they 
would have to request an updated Secret Service list to 
complete the project.\312\
    \311\ Id., p. 106.
    \312\ Security of FBI Files hearing, June 19, 1996, p. 50. Ms. 
Gemmell testified, ``It was very much understood that the initial list 
the office had was just that, an initial list to be used to start the 
first steps of the Update Project. It was very well-known that many 
personnel decisions had yet to be made and therefore that follow-up 
would have to be done.''
    Although Marceca stated in his deposition that he never 
knew that there might be any problems with the list he was 
using, he later stated in the committee hearing that he 
realized there were problems, causing him to change his method 
of updating the files:

          Mr. Flanagan. You understood [the list] was current, 
        and it turns out it wasn't. Was it fair to say it was 
        an updated list?
          Mr. Marceca. No, sir. It is fair to say that I 
        believed the list was current when I had that list. 
        Later on it developed that there were people that had 
        left the White House, when I started that project they 
        had no reason to believe that list was outdated or that 
        those people did not have access to the White House.
          * * * * *
          Mr. Marceca. I believe I worked on that list until I 
        discovered, and it was not a sudden discovery, but 
        somewhere after a couple of months--well, it is being 
        pointed out it was always the same list. When I 
        discovered that there were problems with that list, I 
        then changed my approach to updating.\313\
    \313\ Id., pp. 284-286. (In his deposition testimony Marceca 
directly contradicts this statement, when asked whether there came a 
time when he discovered that there were people who were not properly on 
those lists. Marceca answered, ``Not to my knowledge, [to] the time I 
left, no.'' Marceca deposition, p. 73.)

There is no evidence to suggest that Marceca changed his 
approach to the Update Project. In fact, when asked why he 
stopped at ``G-o'' on the list, Marceca testified that was as 
far as he had gotten on the list.\314\
    \314\ Id., p. 194.
    Mr. Marceca explained his two goals as he proceeded down 
the list. First, he wished to determine that the individual was 
still at the White House, and second was to ensure that he 
``didn't prevent them from coming into the White House in case 
of an emergency.'' \315\ His actions, however, contradict his 
stated goals. Mr. Marceca did not check whether an individual 
on the list was currently employed by the White House before 
ordering his file, otherwise he would not have received the 
files of over 400 individuals not currently employed by the 
White House. It is not clear what emergency he referred to when 
explaining his second goal. He did not have the ability to 
prevent a current passholder from entering the White House 
compound by conducting the Update Project. The only way to 
accomplish that would be to notify the Secret Service to 
deactivate the individual's pass.
    \315\ Id., pp. 193-94.
    In his deposition before the committee, Marceca described 
two different procedures which he used for recreating the FBI 
background files of holdover employees. He first explained that 
he would work from the SF-86 form and then check the ``update 
list'' to determine if the name on the SF-86 were also on the 

          Answer. The very first thing I had to do was [take 
        the SF-86] go into the vault, pull out this list that 
        was in the vault, and check to see if the name was on 
        the list. Which means, that if it was on the list, then 
        they were former White House staffers. If their name 
        was on the list, I would put a check beside their name 
        . . . If they were not on the list, I would just 
        continue on. . . . This is the update list in the 
    \316\ Security of FBI Files hearing, June 19, 1996, pp. 83-84.

He then stated that he worked off of the list, not the SF-86 
form.\317\ Mr. Marceca then clarified this apparent 
contradiction by explaining that after the project was not 
advancing as planned, he began to make lists of names from the 
``Update list'' and systematically circulate those to offices 
in the White House.\318\ Attached to Marceca's lists of names 
would be a request from Marceca asking whether any of the 
individuals listed were holdovers.\319\
    \317\ Marceca deposition, p. 65. In his testimony during a 
committee hearing, Marceca testified that he worked from the list, not 
from SF-86 forms. Security of FBI Files, June 26, 1996, pp. 40-42.
    \318\ Marceca deposition, p. 99.
    \319\ Id.

4. The ``Dead Bin''

    In the process of making these requests, Marceca would be 
informed by the various offices that certain individuals on 
Marceca's list had left the White House some time ago. Marceca 

          In some cases those folks, the GSA [General Services 
        Administration] would tell me this person is still 
        here, but these people with GSA, two or three people 
        with GSA left in '87 and they are no longer here. So I 
        would go back to the file then and I would check off on 
        the list and I would not call for an SBI because I knew 
        they were not there.\320\
    \320\ Id., p. 100.

If Marceca had actually gone through the list in this manner, 
he would not have received any files of individuals who were 
not currently working in the White House. Instead, he had 
accumulated somewhere in the range of 500 files which he 
stashed in the ``dead bin.''
    Marceca defined what he considered his ``dead bin:''

          That file that the update list sat in was where files 
        were stored that were what I recall dead files, files 
        of people who no longer worked at the White House. They 
        went in that file. They went in that bin. If there 
        was--if the name was not--if the person's name was not 
        on file in that bin, that meant that I had to open a 
        file. But before I opened a file, I checked into file 
        drawers to find out if a file had already been opened. 
        And if there was no file in the file drawer, I got a 
        new file folder, and I opened a new file . . .\321\
    \321\ Id., p. 64.

The so-called ``dead bin'' which Marceca created raises some 
very troubling questions. It is implausible that, after he 
received even one file for an individual who was not presently 
working at the White House, he did not raise any questions 
about the list which he was using. Apparently he did not 
question the list after receiving over 400 files of individuals 
who were not working at the White House.
    Mr. Marceca was a career investigator, trained to ask 
questions and find answers. It is not plausible that Marceca 
would not be able to determine the reason so many names, with 
``I's'' next to them, no longer worked in the White House. Nor 
is it plausible that he was unaware of whose files he was 
requesting. When questioned why he requisitioned files on known 
prior Republican officials, Marceca responded that he had seen 
a high level Republican in the White House on one occasion. He 
therefore, did not question whether any other well known 
Republicans should be on the list as well.\322\
    \322\ Marceca stated that one day he saw Marlin Fitzwater, 
Assistant to the President and Press Secretary for President Bush, in 
the White House complex.
    Mr. Livingstone was aware that Marceca was working on the 
Update Project, but claims that they did not have any 
conversations about the project: ``I don't have a specific 
recollection of talking to anyone about when Tony started or if 
Tony was trained properly on it.'' \323\ Likewise, Ms. Wetzl, a 
staff assistant at the time, did not know what process Marceca 
was using to complete the Update Project.\324\
    \323\ Livingstone deposition, June 14, 1996, p. 54.
    \324\ Wetzl deposition, p. 26. When asked to describe what she 
observed Marceca doing on the Update project, Wetzl answered, ``I knew 
he was working on it, you know, and we were all in the same office so, 
you know, I would see him at his work station but I really didn't get 
involved in the details of what he was doing.'' (Emphasis added).
    Mr. Marceca wrote memos to Livingstone to keep him up-to-
date on the status of his projects,\325\ and he kept detailed 
lists of each previous report received from the FBI.\326\ 
Everyone who worked in the Office of Personnel Security, a one 
room office,\327\ testified that they knew Marceca was working 
on the Update Project, but never asked him about it.\328\
    \325\ Marceca document production, Bates Stamp Nos. 000096, 000155. 
In the first memo from Marceca to Livingstone, Marceca writes, ``White 
House Staff; 50 Requests for Backgrounds were sent this week and the 
previous 3 weeks to FBI. 50 Requests for Backgrounds are awaiting to be 
sent next Monday to FBI. (We are at the `D' with this project.) Next 
week; 1 Jan. 94, re investigation begins on GSA; AT&T; NSC; Credit 
Union; and ``White House Staff, for BI's which expire in 1989.'' In the 
second memo, under Re-investigations of White House Staff, Marceca 
writes, ``White House Staff Update: 43 Request for Previous backgrounds 
were this week. 50 each for the previous 5 weeks to FBI. 50 Request for 
backgrounds are awaiting to be sent next Monday to FBI. 250 Request for 
Previous Reports sent during this reporting period. (We are at the `F' 
with the Staff Update Project.'').
    \326\ Marceca document production, Bates Stamp Nos. 000004-000081. 
Lists created by Anthony Marceca dated from September 24, 1993 through 
February 10, 1994.
    \327\ Livingstone deposition, June 14, 1996, p. 12. Mr. Livingstone 
was asked about the layout of OPS, he answered, ``In 1993, it was one 
large room.'' All of the staff members of the office worked in the same 
room. Id.
    \328\ See, Livingstone deposition, Wetzl deposition and Marceca 
    All prior employees of the one room Office of Personnel 
Security are unable to recall what Secret Service list Marceca 
used for the project, including Marceca.\329\ Ms. Wetzl, 
however, destroyed Ms. Gemmell's list, and testified she does 
not believe Marceca used it for the Update Project.\330\ Wetzl 
further stated, ``Nancy had left all her stuff in one corner 
and I didn't believe that Tony had used any of that, that he 
had gotten a new list from the Secret Service and was working 
on that.'' \331\ Ms. Wetzl, Livingstone's 24-year old Executive 
Assistant, made the decision to destroy the only possible clue 
as to why the files were improperly obtained.
    \329\ See, Security of FBI Files hearing, June 24, 1996, pp. 40-41. 
Mr. Marceca explains that he does not have a vivid recollection of the 
list which he used; Livingstone explained that he was not clear on the 
details of the Update Project; however, it appeared that whatever list 
Marceca was using caused the problem. Id., pp. 30-33; Ms. Wetzl 
testified, ``I saw that it was a Secret Service list . . . I didn't 
look at in detail, so I couldn't tell you what--which format this list 
was in.'' Wetzl deposition, p. 34.
    \330\ Security of FBI Files hearing, June 24, 1996, p. 113. Wetzl 
stated, ``I did not work with her list. I threw it out.''
    \331\ Wetzl deposition, p. 45.

5. Marceca's other duties

    Committee documents show that Marceca's testimony of his 
responsibilities in the Office of Personnel Security was not 
comprehensive. Although he apparently did handle the processing 
of forms for background investigations, he provided additional 
services as well.\332\ Marceca's memoranda to Livingstone show 
that he was assisting White House employees whose background 
investigations threatened their jobs. One Marceca memo entitled 
``Analysis of Personnel Background'' contained the following:
    \332\ Among his other duties, Marceca's calendars show that on at 
least two occasions he was summoned by Counsel to the President Bernard 
Nussbaum's secretary to crack open Nussbaum's safe.

          1. Subject should first fire the attorney who wrote 
        the letter, for the following reasons:
          (a) The letter is combative and argumentative
          (b) The letter does not offer explanations, but 
          2. I suggest the following be included in a new 
          (a) Subject has paid his/her dues to society, for 
        past mistakes.
          * * * * *
          (c) The shoplifting incident occurred because the 
        subject needed money to buy food . . .
          * * * * *
          (e) [I] am very sorry for the mistakes of my past . . 
        . and I believe being fired is unfair and 
    \333\ Marceca document production.

    Why, as these documents suggest, did the Clinton 
administration employ Marceca to cleanse background problems 
for employees with criminal histories? How extensive was the 
problem of employees with background blemishes? Was Marceca 
hired specifically for that purpose? These questions raise 
further concerns about the approach taken by the Clinton 
administration toward security issues.

                        E. Marceca's Detail Ends

1. White House attempts to extend Marceca's detail

    Marceca's detail ended in February 1994. Livingstone and 
Kennedy had attempted to extend his detail; \334\ however, 
there were ``unresolved issues'' in his background which made 
Kennedy decide not to renew the detail.\335\ Livingstone 
testified he thought Marceca would have liked to continue his 
detail; however, he discussed these ``unresolved issues'' with 
Kennedy who made the final decision not to renew the 
detail.\336\ Mr. Kennedy explained:
    \334\ See, Wetzl deposition, p. 36. Ms. Wetzl was asked whether 
there were any attempts to re-detail Marceca to OPS. She answered, ``I 
don't know. There was talk of it, but I'm not--I wasn't involved in 
    \335\ Livingstone deposition, June 14, 1996 p. 60.
    \336\ Id., pp. 60-61.

          Question. [W]e have been informed by the White House 
        that [Marceca] did leave sometime in February of '94. 
        Do you know why he was not retained at the White House?
          Answer. Well, I don't remember the timing involved. 
        Okay? I simply do not know when things took place. But 
        if I remember correctly, there were two things that 
        sort of impacted this. One of which is that the White 
        House, I don't believe, wanted to pick up paying for 
        him. That's number one. Number two, Tony's background 
        had come in and there were some problems revealed with 
        it that made me think it might be better if he kind of 
        went back to where he was.\337\
    \337\ Kennedy deposition, June 18, 1996, p. 41.

A White House document shows that Livingstone and Kennedy 
requested an extension of Marceca's detail on February 28, 
1994.\338\ The request is on a non-reimbursable basis starting 
on February 28, 1994 and ending on June 27, 1994, with 
Marceca's duties outlined as assisting the Security Office with 
military adjudication. The form notes that reimbursement would 
start on April 11, 1994.
    \338\ White House production CGE 043810. The document is a form 
entitled ``White House Office PERSONNEL FROM OTHER AGENCIES. It is 
signed by William H. Kennedy, III and dated February 28, 1994.
    This document was signed by Kennedy after Marceca's 
original detail ended and after the problems in his background 
were discovered on December 17, 1993. On March 8, 1994, the 
White House Personnel Liaison contacted Livingstone asking, 
``Do you know the start date for Tony Marceca?'' \339\ Mr. 
Marceca testified that he was unaware of any attempts to have 
him re-detailed to the White House.\340\ Messrs. Livingstone 
and Marceca did discuss the problems which were developed in 
Marceca's background investigation.\341\ Even after Kennedy and 
Livingstone had received Marceca's background and knew there 
were suitability issues, they requested that he be redetailed. 
A March 17, 1994 letter, only recently produced to the 
committee, shows that Livingstone had requested, as late as 
March 3, 1994, a subsequent detail for Marceca. The March 17 
letter respectfully withdrew the request. No explanation was 
given for the change of heart on Marceca working at the White 
    \339\ White House production CGE 054258. Message from Kelli 
McClure, White House Personnel Liaison for Management and 
Administration, to Craig Livingstone, dated March 8, 1994 at 3:40.
    \340\ Marceca deposition, June 18, 1996, p. 150.
    \341\ Id., pp. 151-52.
    \342\ Letter from Livingstone to Secretary of Defense Perry, dated 
3/17/94; White House production 55749.
    Mr. Kennedy stated that the problems in Marceca's 
background were ``not problems that would have led to a 
termination sort of on the spot.'' \343\ Although Kennedy 
refused to discuss the specific problems, Marceca did tell the 
committee that a woman had filed a private claim against him in 
Texas.\344\ Marceca testified during a deposition for a civil 
case he filed, that he was charged with official oppression for 
misuse of his office.\345\ In that case, Marceca had brought 
suit for slander against Justice of the Peace Lilly A. 
Stephenson, whom the FBI interviewed during Marceca's 
background investigation.\346\ Judge Stephenson met Marceca 
while he was working for the Texas Attorney General's Office, 
Medicaid Fraud Division. During the FBI interview of Judge 
Stephenson, she stated, ``I would not hire him [Marceca] to 
serve civil papers from my Justice of the Peace Office . . . he 
is nothing but a blow hard and [I] could not recommend him for 
a position of trust and confidence with the United States 
Government.'' \347\
    \343\ Kennedy deposition, June 18, 1996, p. 43.
    \344\ Marceca deposition, p. 152.
    \345\ Marceca v. Stephenson, No. A 94-CA-775-JN, p. 10 (W.D. Tx. 
filed Nov. 1994).
    \346\ See, Marceca v. Stephenson, No. A 94-CA-775-JN, (W.D. Tx. 
filed Nov. 1994), deposition p. 10.
    \347\ Marceca v. Stephenson, No. A 94-CA-775-JN, (W.D. Tx. filed 
Nov. 1994), deposition exhibit, FBI 302 dated October 29, 1993.

2. Marceca does advance for the Clinton administration

    After Marceca's detail ended he remained in close contact 
with Livingstone and volunteered at the White House. Before 
Marceca left the White House he had a meeting with Livingstone, 
Lisa Wetzl and Mari Anderson. In that meeting Marceca agreed to 
come in on successive Saturdays and work with the others to 
finish the Update Project.\348\ Mr. Marceca claimed that he 
never completed the project because he was sent on a detail to 
Canada by CID.\349\ Upon his return, he was named acting 
Special Agent in Charge of his Washington Fraud Team, and 
stated he ``didn't have the time to do anything like that.'' 
    \348\ Marceca deposition, p. 153.
    \349\ Id.
    \350\ Id.
    Although Marceca did not have time to complete the Update 
Project, apparently he did have time to do advance work for the 
Clinton administration. On May 18, 1994, Marceca left a message 
for Livingstone about an advance trip: ``He [Marceca] just got 
off a trip w/ Perry (Sec.) [Secretary of Defense William 
Perry]. He would [like] to talk to Craig about what he 
observed.'' \351\ He had left a message for Livingstone earlier 
in the month stating that he, ``cannot go on [the] trip to 
Normandy.'' \352\ At the end of June 1994 Marceca left a 
message that, ``[he] wants to go to lunch/ also wants to go on 
trip w/ you.'' \353\ Mr. Marceca appears to have continued to 
work on advance trips through 1995 and 1996, according to phone 
messages he left for Livingstone.
    \351\ White House production CGE 054252. Message from Tony Marceca 
to Craig Livingstone, dated May 18, 1994 at 10:25 a.m.
    \352\ White House production CGE 054255. Message from Tony Marceca 
to Craig Livingstone, dated May 12, 1994 at 9 a.m.
    \353\ White House production CGE 054254. Message from Tony Marceca 
to Craig Livingstone, dated June 28, 1994 at 9:05 a.m.
    In January 1995, Marceca left Livingstone a cryptic 
message: ``If you're going on `that' trip, he'll see you are 
taken care of. Otherwise, he'll talk to you later.'' \354\ 
``That'' trip was never identified in documents produced to the 
committee. Mr. Marceca called Livingstone in September 1995 to 
request assistance getting on the advance detail of a local 
trip.\355\ Likewise, in December Marceca asked Livingstone to 
schedule him for a trip in February or March 1996. Marceca 
stated that he would be willing to take 2 weeks leave to do a 
trip.\356\ These messages suggest that Marceca stayed in 
contact with Livingstone and participated in numerous advance 
trips for the administration.
    \354\ White House production CGE 054249. Message from Tony Marceca 
to Craig Livingstone, dated January 11, 1995 at 1:41 p.m.
    \355\ White House production CGE 054265. Message from Tony Marceca 
to Craig Livingstone, dated September 13, 1995 at 10:43 a.m.
    \356\ White House production CGE 054248. Message from Tony Marceca 
to Craig Livingstone, dated December 19, 1995 at 11:43.
    Mr. Marceca also contacted Livingstone regarding issues 
with his FBI background investigation. Mr. Marceca visited 
Livingstone at the Office of Personnel Security on September 
11, 1994. During that visit, Marceca reviewed his own FBI 
background file. He explained that Livingstone did not allow 
him to read it, rather he accidentally saw it:

          Question. How did you happen to see the report?
          Answer. I was visiting the White House and I was in 
        Mr. Livingstone's office, and I pulled out a--We were 
        in a conversation. He took a telephone call and turned 
        his back, turned around to his desk. There was 
        newspaper there. He was on the phone four or five 
        minutes. And I reached up and pulled the newspaper out 
        and background investigation spilled on the floor. I 
        picked up the background investigations, and the last 
        background investigation to pick up, put back in the 
        stack, which happened to have been all rolled up, was 
        my background investigation. I opened that up, and when 
        I saw my name--and I saw--I briefly read what the FBI 
        said. I turned a couple pages back, and I saw [Mrs. 
        Stephenson], what she said . . .
          I looked at what Mrs. Stephenson said briefly. I read 
        that, and I flipped it back and I saw what Ms. Montag 
          Question. Okay. Now----
          Answer. I then put the file back underneath the rest 
        of the BI's and continued to read the newspaper until 
        Mr. Livingstone rejoined the conversation.
          * * * * *
          Question. And so what you did when you picked up that 
        report, opened it up and read it, you committed a 
        criminal act, did you not?
          * * * * *
          Answer. No sir, I was cleared to look at background 
          Question. But not yours?
          Answer. Sir, that was the fickle finger of fate that 
        [report] would fall on the floor.
          * * * * *
          Question. Is that not a violation of your code of 
          Answer. I don't believe so, sir. It was an accidental 
    \357\ Marceca v. Stephenson, No. A 94-CA-775-JN, (W.D. Tx. filed 
Nov. 1994), deposition of Anthony Marceca, February 20, 1995, pp. 114-

After Marceca's ``accidental discovery'' of his FBI file during 
his visit to the Office of Personnel Security in September, he 
contacted Livingstone about the FBI again. On October 6, 1994 
Marceca left a message for Livingstone stating, ``Got a visit 
from the FBI.'' \358\ On December 16, 1994, Livingstone 
received a message from ``Marvin:'' Will send over file on 
Marceca.\359\ No last name is indicated on the message; 
however, Marvin Krislov was an Associate Counsel to the 
President in December 1994. It is odd that Livingstone would 
have Marceca's file sitting out on a table in the vault 8 
months after his detail ended.
    \358\ White House production CGE 054268. Message from Tony Marceca 
to Craig Livingstone, dated October 6, 1996 at 12:35.
    \359\ White House production CGE 054271. Message from ``Marvin'' to 
Craig Livingstone, dated December 16, 1994 at 11:42.
    Mr. Marceca admitted under oath that he had read his own 
background investigation after he no longer worked in the 
Office of Personnel Security. The information which he read in 
his background file was the basis for the lawsuit he filed on 
November 14, 1994 against Judge Stephenson.\360\ Marceca's 
actions exemplify why it is imperative that the Office of 
Personnel Security employ only individuals who are 
professional, circumspect and have demonstrated a sense of 
responsibility and discretion.
    \360\ Marceca v. Stephenson, No. A 94-CA-775-JN, (W.D. Tx. filed 
Nov. 1994)
    After learning more about the backgrounds of the 
individuals in control of the function of requesting FBI 
background files, it is all the more difficult to believe that 
the unauthorized ordering of hundreds of FBI files of prior 
Republican officials was an innocent mistake. Mr. Marceca's 
explanations and excuses are not credible, and his actions 
merit more investigation.\361\
    \361\ Mr. Marceca's own handwritten notes show that he was aware 
that he was responsible for instructing the Secret Service to 
deactivate prior administration staff. Marceca document production 
(unnumbered). Handwritten notes of Anthony Marceca, dated August 9, 

               IV. Initial Discovery of ``Tony's Files''

    Although the public did not learn of the White House's 
unauthorized request of over 400 FBI background files until 
June 1996, White House employees knew about it since the fall 
of 1994. Lisa Wetzl, Livingstone's 22 year old Executive 
Assistant, discovered ``an awful lot of '' extra files which 
Marceca had ordered while preparing to complete the Update 
Project.\362\ There was a general understanding in the office 
that the bottom row of files in the vault, was ``Tony's row.'' 
\363\ Ed Hughes, assistant in the Office of White House 
Security, explained that he questioned Wetzl about the files, 
``I think Lisa had explained that they were simply Tony's 
files. They were files that she was not sure what they were 
doing there, but they were just kind of there, taking up 
space.'' \364\
    \362\ Wetzl deposition, pp. 41-43. Ms. Wetzl knew about the row of 
files which the office referred to as ``Tony's row'' or ``Tony's 
files.'' She was not aware that the files were of prior Republican 
administration officials until she began to review the files in the 
fall. Id., p. 67.
    \363\ Wetzl deposition, p. 65. Ms. Wetzl stated, ``The row after 
row 15 was separate. That was Tony's stuff, Tony's project. We called 
it Tony's row.''
    \364\ Edward Hughes interview, August 13, 1996, p. 17.
    When Ms. Wetzl began looking through ``Tony's files,'' she 
recognized that some of the files had been mistakenly ordered 
after identifying Marlin Fitzwater's name.\365\ She knew that 
he did not work at the White House anymore.\366\ Ms. Wetzl told 
Livingstone about her discovery: ``I said, `Craig, Tony ordered 
all these files of previous administration people that we don't 
need.' '' \367\ Ms. Wetzl testified that Livingstone had no 
reaction to her statement, nor did he instruct her to do 
anything with the files.\368\
    \365\ Marlin Fitzwater was President Bush's Press Secretary and 
Deputy Press Secretary to President Reagan.
    \366\ Wetzl deposition, p. 43.
    \367\ Id., p. 63.
    \368\ Livingstone deposition, June 14, 1996, pp. 81-83.
    Mr. Livingstone testified that he knew that his office had 
requested Billy Dale's file within ``the last year or possibly 
two.'' He also believed that he produced Dale's file to 
Associate White House Counsel Neil Eggleston in response to the 
GAO investigation of the Travel Office, which was completed on 
May 2, 1994. Mr. Livingstone admitted that he had read the 
contents of Billy Dale's file, but stated that it was in the 
course of responding to the GAO inquiry. Mr. Livingstone 
testified that he saw the request dated December 20, 1993 for 
Billy Dale's FBI report, at that time.\369\ Mr. Livingstone was 
therefore aware that Dale's file was requested 7 months after 
he was fired from the White House Travel Office.\370\
    \369\ Id., p. 81.
    \370\ Id., pp. 81-83.
    Ms. Wetzl set about her task of completing the Update 
Project, leaving the files in the vault so that she could refer 
to them if she discovered a name she might need.\371\ She never 
consulted with anyone else nor did she ever contact the FBI 
regarding the files on former Reagan and Bush officials. 
According to Ms. Wetzl, the entire row of approximately 430 
Republican FBI background investigation files in ``Tony's row'' 
simply remained in the office vault.
    \371\ Wetzl deposition, p. 66.
    Sometime between December 1994 and February 1995, Wetzl 
boxed up the files and archived them with the Office of Records 
Management (ORM).\372\ These boxes remained in ORM until ORM 
analyst Tom Taggart reviewed the documents in response to the 
committee's December 1995 request. Mr. Taggart notified 
Associate White House Counsel Natalie Williams that Billy 
Dale's FBI background file was among the documents archived by 
the Office of Personnel Security. Ms. Williams testified that 
she never reviewed the file or notified the committee that 
Billy Dale's FBI background investigation had been archived by 
Livingstone's office in December 1995.\373\ The document was 
not produced until May 30, 1996, under threat of a contempt 
vote against White House Counsel to the President, Jack Quinn.
    \372\ Wetzl deposition, pp. 67-68.
    \373\ Williams deposition, July 31, 1996, p. 24.

                       A. Lisa Wetzl's Background

1. Ms. Wetzl, who had no experience, should not have assumed the amount 
        of responsibility she undertook

    Prior to the Clinton administration, Jane Dannenhauer, the 
former Director of the Office of Personnel Security, never 
allowed detailees from outside the White House or interns to 
work in the Security Office because of the sensitive nature of 
the files and paperwork.\374\ As with the majority of 
Livingstone's assistants, Lisa Wetzl came to the Office of 
Personnel Security as one of the first interns in June 1993 
after graduating from college in May of the same year.\375\ 
Initially, Wetzl provided general office support, answering 
phones and typing forms.\376\ She quickly assumed the 
responsibility of checking the Standard Form 86 (SF-86) for 
accuracy and notifying White House staff of any errors.\377\ 
Only 2 months later, Wetzl was hired as a full-time staff 
assistant in the office.
    \374\ Security of FBI Files hearing, June 19, 1996 p. 81.
    \375\ Id., p. 7.
    \376\ Id., p. 10.
    \377\ Id.
    Ms. Wetzl testified that her responsibilities ``didn't 
significantly change except that I was now there for the long-
term so I could, you know, really get to work on things that 
needed to get accomplished.'' \378\ She continued to ``help to 
correct and to submit to the FBI the Standard Form 86 for new 
employees.'' \379\ Before Ms. Wetzl came to the White House, 
she had never even seen an SF-86, however, once Livingstone 
hired her, she was correcting them for the FBI.\380\
    \378\ Id.
    \379\ Id., p. 14.
    \380\ Id., p. 15. After Lisa Wetzl left the Office of Personnel 
Security, Jonathan Denbo, a recent college graduate, took over the 
responsibility of reviewing the SF-86 forms. Jonathan Denbo interview, 
September 4, 1996, p. 5.
    Ms. Wetzl testified that Nancy Gemmell, a holdover employee 
in the Office of Personnel Security, trained her to read SF-86 
forms.\381\ Ms. Gemmell, however, had never read an SF-86 
before the Clinton administration took office.\382\ Ms. Gemmell 
only recently learned the procedures to follow in checking an 
SF-86 for completeness. In prior administrations, only the 
Director of the office was permitted to review the FBI 
background files and SF-86 forms.\383\ Ms. Dannenhauer, 
however, was not retained on staff for a sufficient amount of 
time to train the new Director and employees, as she was during 
the transition from the Ford to Carter administration.\384\ Ms. 
Dannenhauer explained, ``[Mr. Livingstone] was not there really 
long while I was there. I only worked with him probably part-
time. He would come in and maybe be there a half a day . . .'' 
    \381\ Id.
    \382\ Security of FBI Files hearing, June 19, 1996 p. 46.
    \383\ Id.
    \384\ Id., p. 38. During the Ford/Carter transition, Ms. 
Dannenhauer and one of her assistants remained for 2\1/2\ months to 
train the new staff members and await a new Director, thereby ensuring 
a smooth transition.
    \385\ Id., p. 82.
    Mr. Livingstone did not have the proper training necessary 
to run the Office of Personnel Security. He was certainly not 
capable of training his staff in procedures that he himself did 
not know. Without practical work experience or training, Ms. 
Wetzl should not have been placed in a position of 
decisionmaking in an office which handled sensitive 
information. The fact that nobody in the office even thought to 
return the improperly obtained files to the FBI shows the lack 
of knowledge required to work in the Office of Personnel 
Security. Mr. Livingstone testified that the reason he did not 
contact the FBI about the binful of files on prior Republican 
administration officials was, ``We were never instructed to 
return materials back to the FBI.'' \386\ Neither Livingstone 
nor Wetzl had the ability to think on their own and make the 
determination that a Democratic administration should not have 
hundreds of Republican administration files.
    \386\ Security of FBI Files, hearing, June 26, 1996 p. 138.

2. Limited inquiry

    Ms. Wetzl's FBI background investigation was completed and 
the results were provided to the White House on September 3, 
1993. For reasons unknown, the Counsel's Office did not submit 
her report to the Secret Service for adjudication until 7 
months later, on April 11, 1994. She received her White House 
permanent pass shortly thereafter, on April 25, 1994. Mr. 
Livingstone requested CIA ``compartmented clearance'' for Ms. 
Wetzl and she received three clearances above the level of top 
secret in August 1994. The committee never received any 
explanation for these delays. Ms. Wetzl continued to work in 
the Office of Personnel Security throughout the year processing 
and correcting incoming SF-86 forms, processing pass requests 
and maintaining the weekly access and pass extension 
    \387\ White House document production, CGE 54939.
    On April 10, 1995, Livingstone notified the FBI of an 
``apparent discrepancy between information on Ms. Wetzl's 
Standard Form (SF) 86 and the information provided during her 
initial interview with the FBI Special Agent.'' \388\ Special 
Agent Gary Aldrich testified that he was the ``lead agent on 
the Wetzl investigation.'' A ``limited inquiry'' was initiated 
by the FBI and the results provided to Craig Livingstone on May 
26, 1995.\389\ FBI general counsel advised the committee that 
the reason for the ``limited inquiry'' was ``a discrepancy 
regarding drug usage.'' \390\ Mr. Livingstone then asked the 
CIA to review Ms. Wetzl's new limited inquiry results, and her 
three CIA compartmented access clearances continued without 
further inquiry. Ms. Wetzl left the Office of Personnel 
Security in September 1995, to take the position as the 
Confidential Assistant to the Secretary of the Army, the 
Honorable Togo D. West, Jr.\391\
    \388\ Letter from FBI general counsel, Howard Shapiro to Chairman 
Clinger, July 24, 1996.
    \389\ White House document production, CGE 54392.
    \390\ Deposition of Gary Aldrich, 7/18/96, p. 53. In response to 
committee questioning, Agent Aldrich described an instance in which:
    There was a staff member who contended that the information on the 
FBI summary was incorrect. It was on a case that I completed, and 
communication was made to me first about this, I think. This individual 
worked in the Security Office. . . . .
    Well, there was a contention, about information that I had 
submitted, that the information contained in the report was incorrect. 
I was asked to--essentially, I was asked to go back and review this in 
the context that if I could--if I could see that it could be possible 
that it was incorrect, could I change it? This was spoken to me by 
Craig Livingstone.
    I never had a request like this before, and so I went back to my--
to the case file and I pulled the report. I reviewed whatever material 
was in the file that could help me make a determination. After I 
reviewed the material, I could not determine that I had made an error, 
and so I reported back to Mr. Livingstone that I had reviewed the 
material; I didn't think I made an error.
    He then spoke to--either spoke to Jim Bourke or to Tom Renaghan or 
both about this, contending that the matter, in his opinion was not 
    I was then contacted by my supervisor, Tom Renaghan, who asked me 
once again to review it. I reviewed it. I suggested to him that there 
was no change that I could make, and that is the--that was the end as 
far as I knew. I have since learned that an agent was directed to come 
to the White House to reinterview the person. . . . Agent Greg Schwarz. 
And I can't tell you what happened after that, but I do know that this 
person had since moved shortly thereafter to another agency. Aldrich 
deposition, pp. 68-69.
    \391\ Wetzl deposition, p. 8.
    The committee has not been able to determine, due to 
Livingstone's refusal to appear at a deposition, why Mr. 
Livingstone suddenly ordered a limited inquiry on Ms. Wetzl's 
``discrepancy'' that had apparently been in her background for 
18 months. During these 18 months, she had top secret and CIA 
clearances to review the most sensitive information, apparently 
without concern by the White House Counsel's Office. Then, 4 
months before her departure to take on a position requiring the 
utmost confidentiality, Mr. Livingstone undertakes the review 
of her background to clear up the ``drug usage discrepancy.'' 
    \392\ July 24, 1996 letter from Howard Shapiro to Chairman Clinger.

                B. Lisa Wetzl discovers ``Tony's Files''

1. Wetzl to complete ``Update Project''

    Originally, Marceca planned to return to the White House 
and complete the Update Project with the assistance of others 
in the office.\393\ Mr. Marceca however, never completed the 
project and it fell by the wayside for close to 10 months until 
Lisa Wetzl took it upon herself to finish it.\394\ Ms. Wetzl 
did not feel comfortable undertaking the Update Project while 
she was only a staff assistant.\395\ She stated, ``I started--
when I was promoted to executive assistant is when I, you know, 
felt I could start this project on my own and get it over with, 
because I knew it had to be done. That was in the fall of 
'94.'' \396\
    \393\ Marceca deposition, p. 153.
    \394\ Wetzl deposition, p. 66.
    \395\ Wetzl deposition, p. 66.
    \396\ Id.

2. Marlin Fitzwater, or too many files

    Once Wetzl looked into what Marceca had been working on, 
she realized that there were problems.\397\ She described what 
she discovered when she began looking through the bin in the 
vault which Marceca used:
    \397\ Id., p. 41.

          Tony had separated his files from the rest of the 
        files, I assume for easier access for him. I looked at 
        those stacks of files and I--first thing I realized was 
        that there were an awful lot of them, considering they 
        were only A through G. And just working for the 
        office--it had been a couple of years at least--I 
        didn't think that there were that many holdovers.\398\
    \398\ Id.

When Wetzl began looking through the names on the files, she 
realized that some of them were ``mistakenly'' requested.\399\ 
Ms. Wetzl recognized Marlin Fitzwater's name on a file and knew 
that he did not work at the White House anymore.\400\
    \399\ Id., p. 43.
    \400\ Wetzl deposition, p. 43.
    Ms. Wetzl described her first reaction as that of 
exasperation when she realized that she would have to remedy 
the problem.\401\ Ms. Wetzl never stated that she was alarmed 
or concerned that files had been ordered on individuals who 
were not seeking access to the White House.
    \401\ Id.
    Similarly, when Wetzl approached Livingstone about the 
unauthorized files, he had no marked reaction.\402\ Ms. Wetzl 
testified that she told Livingstone that, ``Tony ordered all 
these extra files, what a pain.'' \403\ The only thing she can 
remember Livingstone saying was, ``Oh, Tony,'' or a statement 
to that effect.\404\ Mr. Livingstone and Ms. Wetzl were the two 
most senior staff members in the office and neither of them 
found it notable that hundreds of files were ordered on prior 
administration officials, alleging that they had no idea that 
they ought to return the files.\405\ Mr. Livingstone described 
one situation where the office would return files to the FBI:
    \402\ Id., p. 58.
    \403\ Id.
    \404\ Id.
    \405\ Wetzl deposition, p. 59. Ms. Wetzl testified, ``Nancy, like I 
said before, had briefly tried to explain to me before her impending 
departure how to do everything, and it was my understanding that we 
wanted to put in storage, it all had to go to Records Management; 
Security of FBI Files hearing, June 26, 1996, pp. 137-138. Mr. 
Livingstone testified, ``Sir, I am glad you asked that question. The 
only information that I ever got--and I can't speak for the rest of the 
people here, of course--the only information I ever got about what we 
were to do with FBI files was to safeguard them, ensure that they were 
remanded to Records Management at the end of the administration . . . 
We were never instructed to return materials back to the FBI.''

          Sir, if I could be specific, often--not very often 
        but often, we would get--for John D. Smith, we would 
        get John S. Smith's report sent to us by mistake by the 
        FBI. Now, that we would send back to the FBI if we knew 
        that we were requesting John D. Smith versus John S. 
        Smith, assuming they had no business ever at the White 
    \406\ Security of FBI Files hearing, June 26, 1996, p. 138.

Livingstone's attempts to make a distinction between the FBI 
sending the wrong file and the White House requesting files 
improperly are in conflict. It is disingenuous for Livingstone 
to maintain that he believed that the two situations called for 
a different response.

           C. The ``Update Project'' Is Redone by Lisa Wetzl

1. Wetzl destroys the Secret Service list

    Ms. Wetzl testified that upon discovering the unauthorized 
files ordered by Marceca she began to look around the vault for 
the materials which both Marceca and Nancy Gemmell used in the 
course of the Update Project.\407\ Ms. Wetzl found a list which 
she believed had been left by Nancy Gemmell, she explained, ``I 
knew immediately that it was out of date. It was extremely long 
and appeared to contain hundreds of names from past 
administrations.'' \408\ Ms. Wetzl proceeded to destroy that 
list, the only evidence which might have provided some 
explanation as to why all of these files were ordered.
    \407\ Security of FBI Files hearing, June 26, 1996 p. 46.
    \408\ Security of FBI Files hearing, June 26, 1996, pp. 46-47.
    Wetzl was questioned about why she would have destroyed the 
list in a hearing before the Senate Committee on the Judiciary:

          Senator Thompson. All right, so it could have 
        possibly been the same list that Mr. Marceca used to 
        obtain all those improper files? Is it possible?
          Ms. Wetzl. Anything is possible, yes.
          Senator Thompson. So you had the files there and you 
        had the list there, the Gemmell list?
          Ms. Wetzl. Yes.
          Senator Thompson. And you decided to destroy the 
        Gemmell list, or put it in the burn bag. Is that 
          Ms. Wetzl. Yes.
          * * * * *
          Senator Thompson. I guess I am just asking the 
        question--you had these files, you saw them, you saw 
        that there were many, many more than what was 
        appropriate, and simultaneously you had a list that 
        apparently had the same characteristics. It just occurs 
        to me that you might have wanted to compare that list 
        of the files to see whether or not you were holding a 
        list of the files that you were going to have to be 
        going through and working from, and that might have 
        helped you determine what Tony had used to get those 
          Ms. Wetzl. Well, at that point, I didn't really--the 
        mistake had already been made. I didn't care what . . . 
        Tony had done . . .
          * * * * *
          Senator Thompson. The decision as to what to put in 
        the burn bag and what to archive--is that something 
        that you were instructed on or something you made a 
        decision on yourself?
          Ms. Wetzl. It was something I made a decision on 
    \409\ White House Access to FBI Summaries: Hearings Before the 
Senate Committee on the Judiciary, 104th Cong., 2d Sess., June 28, 1996 
pp. 167-171.

Although Wetzl testified that her understanding was that ``all 
paperwork that we didn't need anymore that we wanted to put in 
storage, it all had to go to Records Management.'' \410\ The 
materials Marceca was using never went to Records Management. 
It was destroyed. With that act, Ms. Wetzl eliminated the only 
real evidence of exactly what Marceca had in his possession 
when he ordered the hundreds of files on prior Republican 
administration officials.
    \410\ Deposition of Lisa Wetzl, p. 59.

2. Process by which the project is completed

    Ms. Wetzl testified that after she discovered Marceca's 
``extra files,'' she proceeded with Project Update. She began 
working off of a list from the Secret Service ``of pass-
holders'' and went through the list to identify names that no 
longer should have access to the White House complex.\411\ When 
Wetzl discovered a name of an individual that was no longer an 
active passholder, she notified the Secret Service to remove 
the name from the list. Ms. Wetzl also cross referenced her 
list with updated lists from supervisors of the departments 
within the White House complex.\412\ Because she thought all of 
the other lists were ``hopelessly outdated,'' she simply 
started over creating her own list.
    \411\ Deposition of Lisa Wetzl, p. 53.
    \412\ Id.
    Unlike her predecessor Mr. Marceca, Wetzl testified that 
she did not read the new Project Update files that she received 
for content.\413\ She merely looked at the top of the first 
page to determine when the individual would need a 5-year 
reinvestigation and then ``filed them.''
    \413\ Id., p. 55.

3. Extra files are boxed up and archived

    The group of files ordered by Marceca were gathered 
together by Wetzl sometime between December 1994 and February 
1995. Ms. Wetzl testified that she ``mentioned it'' to 
Livingstone that files from the previous administration had 
been ordered and that she may have told him that ``Marlin 
Fitzwater's file is there.'' \414\
    \414\ Id., p. 63.
    These files remained in the White House Security Office 
vault, separated from the other files for ``a long period of 
time.'' Ms. Wetzl explained that she left them in the office 
until she figured out ``whose we needed and whose we didn't.'' 
\415\ At some point, Wetzl placed all of ``Tony's files'' in 
boxes to be taken to the archives. She typed up a list of the 
names of each individual whose file was placed in the box and 
took the boxes to the Office of Records Management located next 
door to the Office of Personnel Security. The files remained at 
the Office of Records Management until they were retrieved by 
White House Counsel Sally Paxton at the behest of Jane 
Sherburne on June 6, 1996.
    \415\ Id., p. 58.

         V. White House Counsel's Office Discovery of FBI Files

                          A. Billy Dale's File

1. Office of Records Management responds to subpoena

    On December 19, 1995, White House Special Counsel to the 
President, Jane Sherburne, Associate Counsel Natalie Williams 
and Special Associate Counsel Jonathan Yarowsky distributed a 
memorandum to selected White House staff regarding the 
committee's request for certain documents relating to the White 
House Travel Office firings.\416\ Shortly thereafter, Williams 
was notified by Tom Taggart, of the Office of Records 
Management, that in preparing documents for release to the 
committee, he had discovered the FBI background file of Billy 
Ray Dale.\417\ In a hand-written note to his file dated 
December 27, 1995, and signed by Taggart, he memorialized his 
conversation with Williams regarding Billy Ray Dale's FBI 
background investigation file:
    \416\ White House document production, CGE 42825-42827. The 
memorandum only asks for documents ``created as of May 31, 1995'' to be 
provided to the committee and provides a limited definition of the 
``White House Travel Office matter'' for purposes of determining which 
documents are responsive.
    \417\ Natalie Williams deposition, p. 19.

          Today, on 12/27/95, I notified Natalie Williams about 
        Billy Dales FBI (retired) report (background check & 
        vetting) that we received with other files from Craig 
        Livingstone. She said that this file involved personal 
        and personnel privacy issues--would not be sent to the 
        Committee, nor would it be released. She is not 
        interested in seeing file.
          /s/ (Tom Taggart, Jr.)
          12/27/1995 \418\
    \418\ Handwritten memorandum of Tom Taggart, Jr., December 27, 
1995, produced to the committee in a July 18, 1996 letter from Jane 
Sherburne to Chairman Clinger.

As the note makes clear, while both the White House Counsel's 
Office and the Office of Records Management knew of the 
existence of Dale's background investigation file, neither had 
any intention of including it in the production of materials to 
the committee.

2. White House Counsel determines that FBI file is a personnel file

    In a June 10, 1996 letter to Chairman Clinger, Jack Quinn 
alleged that he recalled telling the chairman during the 
meeting that ``Billy Dale's personnel file'' was among the 
group of personnel/vetting records being withheld by the White 
House at that time.\419\ Mr. Quinn's statement is not true. The 
discussion revolved around David Watkins personnel file, a 
central figure in the Travel Office affair. The committee was 
never told that Billy Dale's file was among the files being 
withheld and certainly was not informed that the White House 
was withholding a December 1993 request for his FBI background 
investigation file. Moreover, Quinn never distinguished between 
a ``personnel'' file and an FBI background investigation file. 
These are very different files that seem to blend together in 
the White House's explanation.
    \419\ Letter from Jack Quinn, Chief White House Counsel, to William 
F. Clinger, Jr., June 10, 1996.
    Mr. Quinn's letter, however, evidences another 
contradiction. Although the letter states that he informed 
Chairman Clinger about the Billy Dale file at a February 15, 
1996 meeting, Special Counsel Jane Sherburne deposition 
testimony conflicts with Quinn's statement. Ms. Sherburne 
testified that she did not even know about Billy Dale's FBI 
file until June 4, 1996.\420\ Ms. Sherburne attended the 
February 15 meeting with Quinn.
    \420\ Deposition of Jane Sherburne, July 23, 1996 p. 71.

3. Natalie Williams passes on information to Wendy White

    In an effort to keep documents from the committee, the 
White House conducted an extensive operation of reviewing 
documents in order to ensure that damaging information was not 
released. The White House Counsel's Office hired additional 
staff just to review, scrutinize, redact, and finally, produce 
documents the committee requested.\421\
    \421\ White House document DF 780643-654, task list created by Jane 
    Wendy White was one of those hired to assist in the 
document review. Ms. White was hired as Special Associate 
Counsel in mid-February 1996 to assist with the production of 
materials to the committee. According to White, she learned of 
the Dale file as soon as she began work at the White House.

          Shortly after I started, Natalie Williams, who had 
        been working on the subpoena response, returned to 
        private practice. Before she left, she provided me with 
        certain information I needed in order to complete the 
        production. During this transition period, she advised 
        me that the Office of Records Management maintained a 
        Billy Dale file responsive to the subpoena that should 
        be retrieved from ORM if the committee and White House 
        reached agreement that the file should be produced for 
        in camera review or otherwise.\422\
    \422\ Statement of Wendy S. White concerning production of Billy 
Dale FBI file, July 18, 1996.

In several instances where the White House produced documents 
in partial compliance with the committee's subpoena, the Billy 
Dale file was not included.

4. Wendy White's handling of Billy Dale file

            a. May 21, 1996--orders the Dale file from OPS
    In early May 1996, after the committee was forced to hold 
Quinn in contempt, the White House decided to comply with the 
committee's subpoena of January 11, 1996. Responding to this 
action, the White House began to prepare documents for release 
to the committee. Ms. White wrote of this preparation of 
documents, ``On May 21, 1996, I had the Office of Personnel 
Security retrieve the Billy Ray Dale file from the Office of 
Records Management. At my direction, the file was then copied 
and prepared for production.'' \423\ Ms. Sherburne wrote a July 
18, 1996 letter to the chairman explaining that she and Ms. 
White had no discussions about a Billy Dale FBI background 
file; rather they discussed a personnel file.\424\ Ms. 
Sherburne's own letter makes clear that she understood there to 
be a difference between personnel files and FBI background 
files, and that she did not know of the Billy Dale FBI 
background file.\425\ The White House steadfastly maintains, 
however, that at the Febuary 15, 1996 meeting they were 
discussing FBI background files, before Sherburne claims to 
have known of the Billy Dale file. White House Associate 
Counsel Natalie Williams also believes she likely told 
Sherburne about the Billy Dale file.\426\
    \423\ Statement of Wendy S. White concerning production of Billy 
Dale FBI file, July 18, 1996.
    \424\ July 18, 1996 letter from Special Counsel to the President 
Jane Sherburne to Chairman Clinger.
    \425\ Id.
    \426\ Williams deposition, p. 18.
    White told the staff of the committee, ``I gave the 
original file back to the Office of Personnel Security on May 
23, 1996 to be returned to ORM. The White House produced the 
Billy Dale file to the committee, together with the other 
documents, on the morning of May 30, 1996.'' \427\
    \427\ Jane Sherburne letter, July 18, 1996.

              B. Chairman Clinger's June 5, 1996 statement

1. The committee receives 1,000 pages

    On May 30, 1996, the White House produced 1,000 documents 
to the committee in order to avoid a vote by the House of 
Representatives on the contempt citation against Quinn. That 
production included Dale's FBI background file and the 
memorandum from Bernard Nussbaum, then Counsel to the 
President, to the FBI liaison requesting the file. That was the 
first time the committee learned of the White House improperly 
requesting, maintaining, and withholding the FBI background 
file of Billy Ray Dale.
    Investigators for the committee were reviewing the White 
House documents when they came upon memoranda of an extremely 
personal nature about Dale and his family. Affixed to these 
documents was a December 20, 1993 memorandum from Nussbaum to 
the FBI requesting a copy of a ``previously requested report'' 
for the background file of Billy Dale. Mr. Dale was dismissed 
from the White House 7 months before the request, and had no 
need for White House access.

2. Chairman Clinger's statement on the Billy Dale file

    Chairman Clinger first learned that the White House had 
obtained the FBI background file of Dale from the White House 
May 30, 1996 document production. He made no public statement 
on the matter until June 5, 1996.
    At a press conference to express his outrage on this 
matter, Chairman Clinger released the memorandum from Nussbaum 
requesting the FBI background file of Billy Ray Dale. Chairman 
Clinger asked, ``Can there be any legitimate reason why 
President Clinton's White House Counsel requested the 
confidential FBI background checks a full 7 months after, I 
repeat after, Billy Dale was fired and unjustly accused and 
smeared with allegations of wrongdoing? And yet, for a reason 
that has not yet been determined, the FBI complied with the 
request.'' \428\
    \428\ Statement of William F. Clinger, Jr., June 5, 1996.
    Out of concern for the individuals whose privacy had been 
violated, Chairman Clinger took steps to commence a full 
investigation of the White House's improper actions in 
obtaining this and possibly other FBI background files.

                VI. FBI Involvement in the Files Matter

    On June 5, 1996, Chairman Clinger telephoned FBI Director 
Louis Freeh upon discovery of the White House document 
requesting the background file of Billy Ray Dale. Chairman 
Clinger, in a press conference, notified the public of this 
event and released the request form, the document used by the 
White House to obtain FBI background investigations, from the 
White House.\429\ Director Freeh immediately sought a meeting 
with FBI General Counsel Howard M. Shapiro and Deputy General 
Counsel Tom Kelley.\430\ When he could not locate Shapiro, 
Freeh sought answers from Kelley on how background files of 
former White House employees could land in the White 
    \429\ The FBI file, itself, was never made public by the committee. 
However, before the White House finally released documents to the 
committee in compliance with the subpoena, it made many of the 1,000 
pages of documents available to the press. The committee has been 
unable to ascertain whether sensitive, background information on Billy 
Dale was included in the materials made available to the press.
    \430\ Kelley deposition, pp. 22-23
    \431\ Id.

               A. Director Freeh initiates investigation

    According to Kelley, Freeh showed him the document that 
Chairman Clinger released and asked Kelley to undertake an 
initial investigation of the White House request for Billy Ray 
Dale's file.\432\ Kelley told the committee that ``[the 
Director] asked me to come over and he explained to me that 
this release that Congressman Clinger had made, he showed me a 
copy of the document and he said he would like to determine how 
that could have happened, and dispatched me to find out.'' 
    \432\ Id.
    \433\ Id.

1. Tom Kelley's initial investigation

    Kelley recognized the source of the document as the 
memorandum used by the White House to request an FBI background 
investigation and went to discuss the document with the 
Executive Agencies Sub-unit of the Information Resources 
Division at the FBI. Kelley spoke with SPIN Unit Chief Jim 
Bourke, as well as Jan George, and Formy Duvall, of the 
Executive Agencies Sub-unit of the Information Resources 
    \434\ Id., pp. 23-25.
    David Kitchen, recently appointed Chief of the Executive 
Agencies Sub-unit, soon became involved in Kelley's inquiry. 
Mr. Kelley received the background file of Billy Dale from 
Bourke. Mr. Bourke had already retrieved the file, aware of the 
controversy surrounding it. Kelley soon learned that the file 
had been disseminated to the White House on January 6, 1994, in 
response to a December 20, 1993 request form.\435\ This was 
more than 2 years before the White House mentioned the file to 
the committee.
    \435\ Id., pp. 23-25.
    When background material is released to a Federal agency, 
it is reviewed by the FBI for information that should not be 
released. On the back of each page that is released, a stamp is 
marked indicating that information in the file, or the file, 
itself, has been released. In addition to the stamp, the date 
of the release and the initials of the analyst who reviewed the 
file for release among others, are added. Mr. Kelley noticed 
that ``there were quite a series of [pages] that were 
transmitted.'' \436\
    \436\ Id., p. 27.
    Mr. Kelley learned from Jan George that, instead of putting 
the White House request for the file in the file, itself, the 
FBI retained the form in separate files.\437\ The file of White 
House requests had been retained only for 1 to 2 years, in 
response to the growing number of files requested.\438\ No 
copies of the White House request forms had heretofore been 
    \437\ Id.
    \438\ Howard M. Shapiro, Report of the FBI General Counsel on the 
Dissemination of FBI File Information to the White House, June 14, 
1996, at charts tab 16. According to a report written by Shapiro, in 
the first year of the Clinton administration, the actual number of 
files requested by the White House was 10,197, more than 3 times the 
number requested the previous year by the Bush administration. The 
average number of files requested by the Clinton administration each 
month was 850, more than 3 times the monthly average of Bush 
administration requests.
    Mr. Kelley reported to Director Freeh and General Counsel 
Shapiro that the file had been sent to the White House. 
Director Freeh instructed Shapiro to undertake a more extensive 
investigation into the matter and prepare to release the facts 
to the public. The Director asked that the report be made to 
the Director and to the Deputy Attorney General. The Director 
told Shapiro that the general counsel's office was the best 
place to conduct the investigation, because only then could the 
Director ensure that the investigation was done ``properly and 
. . . swiftly.'' \439\
    \439\ Deposition of Howard M. Shapiro, July 30, 1996, p. 29.
    When he was first given the task of investigating the 
dissemination of FBI files, Shapiro asked Director Freeh if he 
thought that the Office of Professional Responsibility or 
Investigations Division should undertake the investigation. 
Director Freeh assured Shapiro that he should conduct the 
    \440\ Id., p. 29.
    Generally, the Office of Professional Responsibility would 
investigate allegations of wrongdoing within the FBI. The FBI 
Office of Professional Responsibility investigates allegations 
of criminal or ethical misconduct by employees of the FBI. The 
FBI also has an Inspection Division. The Inspection Division is 
charged with ensuring that the FBI conducts its business 
according to the law and regulation.\441\
    \441\ Deposition of Thomas A. Kelley, pp. 43-44.
    In addition, the Department of Justice Inspector General 
would be available to investigate the circumstances surrounding 
the improper release of Billy Dale's file. The Inspector 
General enforces criminal and civil laws, regulations and 
ethical standards within the Department of Justice by 
investigating individuals and organizations who allegedly are 
involved in financial, contractual or criminal misconduct in 
Department of Justice programs and operations. Director Freeh 
did not believe that the Office of Professional Responsibility 
or the Department of Justice Inspector General were capable of 
conducting an investigation ``properly'' or ``swiftly.'' He 
chose his friend, Howard Shapiro, to conduct the 
    \442\ Shapiro deposition, p. 28.

2. Howard Shapiro takes over the investigation

    On the afternoon that Shapiro was instructed to undertake 
an investigation of the events surrounding the specious request 
by the White House of an already dismissed employee's FBI 
background file. Shapiro watched a video tape of Chairman 
Clinger's June 5 press conference on the discovery of the White 
House request for Billy Dale's FBI background file as a way to 
acquaint himself with the issues.\443\
    \443\ Shapiro deposition, p. 25.
    According to Shapiro, Paul Cignoli, chief of the FBI's 
Civil Discovery Review Unit, took the initiative to determine 
whether or not the background files of other fired Travel 
Office employees had been disseminated to the White House.\444\ 
Shapiro learned that the background file of Brasseux had also 
been obtained by the White House. Shapiro advised Director 
Freeh of this fact and the Director advised Chairman 
    \444\ Id.
    \445\ Id., p. 24.

                             B. FBI Report

    On June 14, 1996, the FBI released the Report of the FBI 
General Counsel on the Dissemination of FBI File Information to 
the White House. The report found that the White House had 
sought and received hundreds of FBI background investigations, 
``without justification.'' Director of the FBI Louis Freeh 
stated that the White House's actions constituted, ``egregious 
violations of privacy.'' \446\
    \446\ Howard M. Shapiro, Report of the FBI General Counsel on the 
Dissemination of FBI File Information to the White House, June 14, 
1996. Statement of Louis J. Freeh, Director, Federal Bureau of 
    The report also summarized the previous practices that led 
to these violations. There was an unusuably large number of 
requests for FBI background investigations from the White 
House. The FBI report recounts the dramatic increase in 
requests from the White House during the years 1993 through 
1996.\447\ The rise in number of requests is attributed to 
several factors.\448\ At the end of each administration, all 
files are removed from the White House for placement in the 
Presidential library of the retiring President. Therefore, in 
order to reconstruct the files necessary to accommodate access 
for career civil servants in the White House, new 
administrations must obtain previous reports filed on those 
civil servants.
    \447\ Howard M. Shapiro, Report of the FBI General Counsel on the 
Dissemination of FBI File Information to the White House, June 14, 
1996. For statistical details of increase in file request from the 
Clinton administration, see supra at note 13.
    \448\ It is important to note that the Clinton administration 
underwent a much hailed 25 percent cut in White House staff. Therefore, 
the number of requests for current reports should have lessened the 
demand placed on the FBI's White House desk.
    According to the FBI report, when an administration has a 
change in party, the number of files it must order is greater 
than when the preceding and succeding parties are of the same 
political party. The FBI could provide no evidence that the 
change in political party of the administration produced a 
greater demand for background files than a change in 
administration within the same political party. Particularly 
since the request for files at issue were mostly of people in 
the political offices where there were very few holdovers, 
there should have been few requests for files of White House 
Office staff.
    Director Freeh criticized the Clinton administration's 
abuse of the FBI in the accumulation of FBI background files. 
On the occasion of the release of the report, Freeh, promising 
to prevent future abuse, said:

          The prior system of providing files to the White 
        House relied on good faith and honor. Unfortunately, 
        the FBI and I were victimized. I should have known 
        before last week about a decades old system that 
        failed. The FBI and I fell victim to my lack of 
        vigilance, and this failure to exercise proper 
        management controls also affected the privacy rights of 
        many persons. I deeply regret those problems and pledge 
        that they will not occur again on my watch. Like the 
        report on which I based my comments, I have not reached 
        any conclusions regarding the motivation of any White 
        House employee.\449\
    \449\ Statement of Louis Freeh, Director, Federal Bureau of 
Investigation, June 14, 1996.

In response to Freeh's statement that the FBI was 
``victimized,'' White House Press Secretary Mike McCurry said, 
``I do not understand those statements. There has been no abuse 
of the information in the files.'' \450\ This statement came 
soon after the White House Chief of Staff, Leon Panetta, 
apologized on national television to the ``hundreds of people . 
. . whose classified FBI personnel files were obtained by the 
Clinton administration and reviewed by an Army security 
officer.'' \451\
    \450\ Tim Weiner; Request for Files ``Victimized'' FBI, It's 
Director Says; New York Times, June 15, 1996.
    \451\ McGrory, Boston Globe, June 10, 1996.
    According to the FBI report, several offices in the White 
House can request a name check or a background investigation: 
the Executive Office of the President, the National Security 
Council, the Counsel to the President, or the Office of 
Personnel Security. The requests from the Office of Personnel 
Security, the office headed by D. Craig Livingstone, were sent 
under the name of the White House Counsel. No signature was 
affixed to the forms sent by the Office of Personnel 
    \452\ Howard M. Shapiro, Report of the FBI General Counsel on the 
Dissemination of FBI File Information to the White House, June 14, 
    The report explains that the forms are picked up by an FBI 
courier and delivered to the Special Inquiry and General 
Background Investigations Unit of the FBI's Personnel Division. 
The forms that are the subject of this controversy sought 
``copies of previous reports.'' A request for a copy of a 
previous report is submitted to the Executive Agencies Sub-Unit 
of the Executive Agencies, Personnel and Administrative Support 
Unit of the Information Resources Division. That office has a 
staff of 36: 18 research analysts; 11 file assistants; and 7 
clerks or typists.\453\ Two members of this staff are assigned 
to the ``White House Desk.''
    \453\ Id., p. 16.
    When the White House Desk receives requests for previous 
reports, it obtains the FBI file number of the subject of the 
request. Once the file number is found, all background 
investigation files are obtained by the White House Desk. 
According to Shapiro's report, these files contain all raw data 
used to compile summaries and reports. To comply with a request 
for previous reports, the analyst first confirms that the files 
received are for the person for whom the White House has 
requested information. Then, the analyst determines what 
information to send to the White House. Memoranda, interviews, 
and other documents previously prepared in conjunction with the 
file are copied, as are any letters prepared for the previous 
transmittal of this information. The original documents that 
are copied are listed on a ``pull card,'' and stamped on the 
back with the initials of the analyst on the back of the file. 
Then, the copies of the documents are sent to the White House 
with the original request.\454\
    \454\ Id., p. 18.
    Those in the office managing the White House requests for 
background files saw a significant rise in the number of 
requests. Congresswoman Morella questioned Peggy Jean Larson, 
Supervisor of the Executive Agencies Dissemination Unit, Sub-
unit, at the FBI.

          Mrs. Morella. Did there come a time in late '93 and 
        early '94 when you began to receive a large amount of 
        requests for copies of previous reports?
          Ms. Larson. Yes, Ma'am.
          Mrs. Morella. In your 32 years of experience with 
        your unit, can you recall another instance when you 
        received more than 400 requests for copies of reports 
        within a 2- to 3-month period?
          Ms. Larson. Probably not within a 2- to 3-months 
        period. It is not unusual that we would have received 
        that many requests over a longer period of time, but I 
        can't recall in that short period of time.
          Mrs. Morella. Did you report the unusual number of 
        requests to your supervisor?
          Ms. Larson. I made Mr. Thornton aware of the fact 
        that we did have an increase in the number of request 
        for prior backgrounds only. I only brought it to his 
        attention because I was going to have to get some 
        overtime. I believe it is in the record that one of my 
        employees, her husband was ill and the other analyst 
        was rather backed up.
          Mrs. Morella. Did he indicate that he would follow up 
        on this? I wondered what his response was.
          Ms. Larson. His response was, did I have enough help, 
        and how much overtime did I need, and were there any 
        problems. I said no, that just because of one of them 
        being out, that the other analyst was in need of 
        overtime. He said that was fine. But as far as the 
        nature of the request, there was no problem with 
    \455\ Security of FBI Files hearings, August 1, 1996, pp. 71-72.

In his deposition, Bourke stated that those opening the 
requests would not recognize the names of people for whom 
background investigations had been requested.

          Ms. Olson. But anything that comes in with the first 
        two boxes, previous report or name check, would go on 
        to the Name Check Unit?
          Mr. Bourke. Correct.
          Ms. Olson. Regardless of who the individual is?
          Mr. Bourke. Correct. I mean, the people who open 
        those packages wouldn't know James Baker from you, or 
        me. Well, they would know him from me. They know me 
        from him.\456\
    \456\ Bourke deposition, pp. 24-25.

People in that office, however, did recognize the name of James 

          Ms. Remington. In late 1993, early 1994, would you 
        know who James A. Baker was?
          Ms. George. I remember when we got the name check in, 
        Sherry Canter did it.
          Ms. Remington. Did she know who James Baker was?
          Ms. George. Yes.\457\
    \457\ George deposition, p. 34.

It is clear that there were FBI officials who recognized the 
high number and unusual nature of the requests for background 
investigations coming in to the FBI, but they apparently relied 
upon the ``good faith and honor'' of the White House.

C. Attorney General Janet Reno Refers the Matter to Independent Counsel 
                            Kenneth W. Starr

    Independent Counsel Kenneth Starr wrote to the Attorney 
General Janet Reno on June 18, 1996, stating his reservations 
about the Independent Counsel conducting the investigation of 
the dissemination of FBI files to the White House, because he 
felt his mandate lacked the scope.\458\ Mr. Starr had begun a 
preliminary inquiry on the first day the Dale file became 
public. Mr. Starr had heretofore conducted the investigation 
into the White House firing of seven employees of the White 
House Travel Office. Mr. Starr sought evidence regarding the 
White House retrieval of Dale's file, because it was evidence 
that the White House sought damaging information with which to 
tarnish Dale's image.
    \458\ Associated Press, Reno Orders FBI File Probe, June 19, 1996.
    On the same day that Starr wrote of his concerns to Reno, 
Shapiro was notified that he would be tasked with conducting a 
complete investigation of both FBI and White House involvement 
in this affair.\459\ At 9 a.m. on June 20, 1996, Attorney 
General Reno made a request to the U.S. District Court for the 
District of Columbia that the issue of the White House 
retrieval of FBI background investigations on former Bush and 
Reagan administration officials be added to the jurisdiction of 
the Independent Counsel.\460\
    \459\ Shapiro deposition, p. 120. Mr. Shapiro also testified that 
he met with the Office of Independent Counsel and received a briefing 
on the Independent Counsel's investigation.
    \460\ Notification to the court pursuant to 28 U.S.C. Sec. 592 
(a)(1) of the initiation of a preliminary investigation and application 
to the court pursuant to 28 U.S.C Sec. (c)(1) for the expansion of the 
jurisdiction of an Indepenent Counsel; June 21, 1996.
    In her public statement, Reno said, ``I have concluded that 
it would constitute a conflict of interest for the Department 
of Justice itself to investigate a matter involving an 
interaction between the White House and the FBI, a component of 
the Department of Justice. Therefore, I have decided today to 
seek an expansion of Mr. Starr's jurisdiction from the court, 
so that he may conduct that further investigation.'' \461\
    \461\ Statement of Attorney General Janet Reno, June 20, 1996.
    Once a matter is put within the jurisdiction of an 
Independent Counsel, it is then specifically outside the 
jurisdiction of the FBI. Title 28 of the U.S. Code, in 
Sec. 597, states that ``[w]henever a matter is in the 
prosecutorial jurisdiction of an independent counsel or has 
been accepted by an independent counsel under Sec. 594(e), the 
Department of Justice, the Attorney General, and all other 
officers and employees of the Department of Justice shall 
suspend all investigations and proceedings regarding such 
matter . . .'' The FBI, as a bureau within the Department of 
Justice, is governed by this provision of the U.S. Code. The 
FBI should have suspended its investigation or any involvement 
in the FBI files investigation. Mr. Shapiro was clearly without 
any authority to investigate this matter.

         D. FBI Contacts the White House after Reno's Referral

    As of June 20, 1996, the investigation of the release of 
FBI files to the White House was referred by Attorney General 
Reno to Independent Counsel Kenneth Starr. At that time, the 
only entities rightfully investigating the matter were the 
Independent Counsel and the Committee on Government Reform and 

1. Freeh requests that Chairman Clinger review background 
        investigations rather than question agents

    As part of its investigation, the committee sought to learn 
why personnel with largely political backgrounds were placed in 
sensitive positions in the White House Office of Personnel 
Security. Additional concerns were voiced regarding allegations 
of impropriety on the part of Livingstone and Marceca. The 
committee heard testimony regarding Livingstone's and Marceca's 
suitability for the positions they held.\462\ The committee 
initially sought to interview those agents who conducted the 
background investigations of Livingstone and Marceca.
    \462\ Reneghan deposition, pp. 62-65.
    In a July 10, 1996 letter, Director Freeh wrote that he had 
``grave concerns about having line Agents subjected to 
congressional inquiry about specific investigations and I 
respectfully ask that your committee use other means to obtain 
the information needed for your inquiry.'' \463\ Freeh was 
concerned that such interviews conducted by a congressional 
committee could have a ``chilling effect on the vigor with 
which our Agents conduct investigations.'' \464\ In the same 
letter, Freeh wrote, ``I respectfully ask that you allow the 
FBI to provide [the background files] to you through 
knowledgeable managers or that the Committee pursue the 
underlying documentation.'' \465\
    \463\ July 10, 1996 letter from Director Freeh to Chairman Clinger.
    \464\ Id.
    \465\ Id.
    Chairman Clinger acceded to Director Freeh's request 
regarding the review of Livingstone's and Marceca's background 
files. Barbara Olson, chief investigative counsel, arranged to 
view the files at FBI headquarters. On July 15, 1996, FBI 
Congressional Affairs Director Margaret Owens spoke with Steve 
Colloton of the Independent Counsel's Office to ensure that the 
Independent Counsel had no objections to making the files 
available to the chairman and approved staff of the Committee 
on Government Reform and Oversight. Mr. Colloton said the 
office of the Independent Counsel had no objections to the 
release of the files to the committee.\466\
    \466\ July 29, 1996 interview of Howard M. Shapiro by the Senate 
Committee on the Judiciary.

2. Shapiro notifies White House Counsel's Office, whom he referred to 
        as ``affected parties,'' of potential incrimination Nussbaum's 

    In preparation for that visit, Owens had the files 
retrieved. Paralegals in the Civil Discovery Review Unit 
analyzed the files, ostensibly to redact names of those in the 
files who had provided information on the condition of 
confidentiality. On July 15, 1996, Paul Cignoli, Chief of the 
Civil Discovery Review Unit, brought a document in 
Livingstone's file to the attention of Tom Kelley.\467\ Mr. 
Kelley realized its importance.
    \467\ Kelley deposition, pp. 85-86.
    The document was a portion of a memorandum of an interview 
with Bernard Nussbaum. Nussbaum, the former Counsel to the 
President, was interviewed by Special Agent Sculimbrene in 
conjunction with the background investigation of Livingstone. 
In the memorandum of that interview, Sculimbrene wrote in March 

          Bernard Nussbaum, Counsel to the President, advised 
        that he has known [Livingstone] for the period of time 
        that he has been employed in the new administration. 
        [Livingstone] had come highly recommended to him by 
        HILLARY CLINTON, who has known his mother for a longer 
        period of time. [Nussbaum] was confident that the 
        appointee lives a circumspect life and was not aware of 
        any illegal drug or alcohol problems. He said that the 
        appointee will work at the White House on security 
        matters. He said that in the short period of time that 
        the appointee has worked for him he has been completely 
        satisfied with his performance, conduct and 
        productivity. He recommended the appointee for 
        continued access in his current capacity.\468\
    \468\ Special Agent Dennis Sculimbrene, memorandum of interviews 
conducted between March 1, 1993 and March 3, 1993. The memorandum 
includes descriptions of interviews of Lori Stallings, Supervisory 
Personnel Assistant in the White House; Bernard Nussbaum, Counsel to 
the President; and William Holden Kennedy, III, Associate Counsel to 
the President. Mr. Kennedy sought assurances from Sculimbrene that any 
recommendation Kennedy made regarding Livingstone was made ``on the 
short period of time that he has known [Livingstone].'' Kennedy also 
mentioned to Sculimbrene that Livingstone sought the position of head 
of the White House Military Office.

    During hearings before the committee on June 26, 1996, 
witnesses, including Nussbaum, testified under oath that they 
did not know who was responsible for the hiring of Livingstone. 
Several members of the committee questioned the veracity of the 
witnesses. The exasperation of the committee is evidenced in 
the remarks of Congressman Christopher Shays of Connecticut. 
When the witnesses could not answer the question of who hired 
Livingstone, Shays declared, ``You know what, anybody can tell 
you--there's not a person in this room who doesn't know who 
hired them for whatever job. It's disingenuous for you guys to 
take so long [to answer the question].'' \469\ Those reviewing 
the Livingstone file apparently were aware of the controversy 
surrounding the question of who hired Livingstone, because 
Cignoli informed Kelley immediately of the contents of the 
memorandum, and then Kelley immediately notified Shapiro. \470\
    \469\ Security of FBI Background Files hearings, June 26, 1996, p. 
    \470\ Interview of Howard Shapiro; U.S. Senate, Committee on the 
Judiciary; July 29, 1996, p. 11.
    On July 15, 1996, Mr. Shapiro obtained a copy of the page 
from Livingstone's file once he learned that its contents would 
be damaging to the White House.\471\ He showed the copy to FBI 
Counsel Larry Parkinson.\472\ He discussed the contents of the 
memorandum with Margaret Owens and John Collingwood, both of 
the Office of Public and Congressional Affairs. On that same 
day, he also spoke with Director Freeh about the controversial 
document. Mr. Shapiro read the incriminating sentence, that 
Livingstone ``had come highly recommended to him by Hillary 
Clinton,'' to Dennis Corrigan, Chief of Staff to the Deputy 
Attorney General at the Department of Justice, and informed 
Corrigan that he would call the White House with this 
    \471\ Shapiro deposition, pp. 63-64.
    \472\ Id.
    \473\ Interview of Howard Shapiro; U.S. Senate, Committee on the 
Judiciary; July 29, 1996, p. 17.
    Immediately after speaking with Corrigan, Shapiro 
telephoned the White House.\474\ Mr. Shapiro called for Quinn 
and learned that he was away from his office. Mr. Shapiro spoke 
with Quinn's deputy, Kathleen Wallman.\475\ Ms. Wallman 
notified Special Counsel Jane Sherburne. In other words, almost 
1 month after the Attorney General referred the matter to the 
Independent Counsel, Shapiro relayed information uncovered in 
an investigation of the FBI files matter to the White House, 
the subject of that investigation. Shapiro recounted his 
conversation with the White House in a deposition before the 
    \474\ Id., p. 12.
    \475\ Id., p. 12.

          Answer. [I]n preparing the documents for [Chairman 
        Clinger's committee to review], my staff had identified 
        a page that I thought would be of interest to them 
        because it related to a matter that had already been 
        the subject of substantial controversy. And I read to 
        her that single sentence of the paragraph summarizing 
        the interview of Bernard Nussbaum. And she asked me in 
        what form it appeared. And I described that it was a 
        page that had three paragraphs relating to interviews 
        about three different people conducted over a couple-
        day period. Again, I read to her that sentence.
          Question. Did you tell her that it appeared that it 
        had been--the interviews had occurred from March 1 to 
        3, 1993?
          Answer. I believe I did. I am not entirely certain 
        but I think I did. I lost my train of thought for a 
          I told her--well, she asked me what limitations, if 
        any, would there be on the committee's use of that 
        information or further dissemination of it. And I said, 
        you know, I didn't purport to be an expert or a scholar 
        on matters like that; that the Privacy Act did not 
        apply to the Committee as such and that I did not think 
        there would be legal restrictions, or I was aware of no 
        legal restrictions and that it would be used at the 
        discretion of the committee chairman.
          Question. And just so the record is clear, the 
        sentence that you read to her verbatim was the sentence 
        that [Livingstone] had come highly recommended by 
        Hillary Clinton?
          Answer. Yes.
          Question. Who has known [Livingstone's] mother for a 
        longer period of time?
          Answer. Yes.
          Question. So you contacted the White House before 
        anyone on this committee ever saw that document; is 
        that correct?
          Answer. Well, as it turns out. The intent was for it 
        to be essentially contemporaneous, but yes.\476\
    \476\ Shapiro deposition, pp. 104-106.

    Chairman Clinger was alarmed to learn that the White House, 
the target of the ongoing investigations, had reviewed the 
documents before he had. In a statement to the public on August 
1, 1996, Clinger said, ``No one from the FBI called me to read 
me a verbatim account of the Nussbaum notes. Apparently no one 
at the FBI read a verbatim account of these notes to anyone at 
the Independent Counsel's Office. I did not review the file 
personally until July 18, 1996. I would note the White House 
and over a dozen present and former staff obtained the 
information in Nussbaum's interview prior to my having reviewed 
the file.'' \477\ Clinger listed numerous people in the White 
House who were notified immediately of the contents of 
Livingstone's file.
    \477\ Statement of William F. Clinger, Jr., chairman, Committee on 
Government Reform and Oversight, August 1, 1996.
            a. Sherburne's telephone tree
    Several witnesses have testified before the committee as to 
the number of people involved in discussions about the Nussbaum 
interview as relayed by Shapiro. After Shapiro notified the 
White House on July 15, communications within the White House 
and outside the White House ensued immediately.
    Once Jane Sherburne was notified of the controversial and 
damaging contents of Livingstone's file, realizing the 
importance of the damaging information, she made it a point to 
spread the word about the file to a large number of people on 
that day. Ms. Sherburne recounted the exact manner in which she 
contacted people in a deposition before the committee.
          Question. Did you discuss [the information relayed by 
        the FBI] with anyone else in the White House?
          Answer. Yes.
          Question. Who did you discuss it with?
          Answer. Well, I would have discussed it with my team, 
        with Kathy Wallman, with Evelyn Lieberman, and Harold 
        Ickes; perhaps others, but that would have been the 
        core group.
          Question. Who on your team----
          Answer. And Jack Quinn as well.
          Question. Who on your team did you discuss it with?
          Answer. Certainly Mark Fabiani, Sally Paxton, and 
        John Yarowsky. Possibly others, but those would have 
        been the primary ones.
          Question. And did these discussions occur on Tuesday 
        after you had received your call from the FBI?
          Answer. They would have been Tuesday or 
    \478\ Sherburne deposition, pp. 222-223.

The members of the White House staff that were informed by 
Sherburne of the incriminating information allowed them to 
prepare answers to questions that were sure to come at the 
release of this information. More importantly, perhaps, was the 
fact that Sherburne sought out Mrs. Clinton to relay this 

          Question. Do you know if anyone has discussed it with 
        Mrs. Clinton?
          Answer. Yes.
          Question. And who is that that discussed it with her?
          Answer. I did.
          Question. And when did you discuss it with her?
          Answer. It would have been Tuesday or Wednesday. 
        [July 16 or 17, 1996] \479\
    \479\ Id.

Sherburne continued to list the people she notified of the 
information contained in Livingstone's file.

          Question. Have you had any discussions of this with 
        anyone outside of the White House other than your 
          Answer. Yes.
          Question. And who was that?
          Answer. David Cohen, Jim Fitzpatrick, Larry Pedowitz.
          Question. Jim Fitzpatrick who is representing Bernie 
          Answer. That's right. And I'm trying to remember if I 
        spoke to Randy Turk about it. I may have.
          Question. Were you aware that Bernie Nussbaum was 
        going to go into a grand jury appearance shortly after 
        you had your conversations with his attorney?
          Answer. No.\480\
    \480\ Id.

    Ms. Sherburne contacted people in and outside the White 
House. Those in the White House contacted by Sherburne included 
officials in the White House Counsel's Office and the Chief of 
Staff 's Office. Kathleen Wallman is the Deputy Counsel to the 
President. Evelyn Lieberman is the Assistant to the President 
and Deputy Chief of Staff for White House Operations. Harold 
Ickes is the Assistant to the President and Deputy Chief of 
Staff. Mark Fabiani, Sally Paxton, and John Yarowsky are 
Special Associate Counsels to the President.
    Once she had notified officials within the White House, 
Sherburne began to contact lawyers for different individuals 
who were the subjects of a variety of investigations into the 
White House Travel Office and the FBI files controversy. 
Sherburne contacted David Cohen, a lawyer with Miller, Cassidy, 
LaRocca & Lewin, who represents Craig Livingstone. She 
contacted Jim Fitzpatrick, a lawyer with the firm of Arnold and 
Porter, and Larry Pedowitz, a lawyer with Watchell, Lipton and 
Associates, both of whom represent Bernard Nussbaum. The 
subjects of the investigation into the FBI files matter were 
privy to the machinations of the investigation, itself.
    In a hearing before the committee, members expressed dismay 
at the level of closeness between the White House and the FBI. 
In his questioning of Shapiro, Congressman Stephen Horn made 
clear the nature of his concerns:

          Mr. Shapiro, I will tell you what makes me very 
        curious. You are a very bright young man, you are 
        obviously very sophisticated, you have conducted a 
        major prosecution, and suddenly you get some 
        information, and you pick up the phone and call the 
        White House. Did you want to curry favor with them . . 
        .? \481\
    \481\ Security of FBI Files hearings, August 1, 1996, pp. 93-94.

Shapiro once again denied the impropriety of informing the 
White House of information uncovered in an investigation of the 
White House. Horn continued:

          What bothers me is that with Mr. Freeh coming in, we 
        were assured that the FBI would be independent. Then we 
        have the Vincent Foster press release bit, and it looks 
        like the FBI is trying to curry favor with the White 
        House. I don't think the FBI should curry favor with 
        anybody. I think they should be independent, call them 
        as they see them, but they shouldn't be playing one 
        side where they are giving them all the cues as to what 
        is in the file, and it bothers me that that has 
        occurred on several occasions.\482\
    \482\ Id.

2. Shapiro dispatches agents to interrogate Sculimbrene

    In addition to notifying the White House about details of 
the committee's investigation, Shapiro sent two agents to 
interrogate Agent Sculimbrene at his home early on July 
16.\483\ Agent Sculimbrene interviewed Bernard Nussbaum in the 
course of preparing Livingstone's background investigation, and 
recorded Mrs. Clinton's involvement with Mr. Livingstone. 
Because some at the White House had questioned Agent 
Sculimbrene's information, Shapiro claims that he wanted to 
confront Sculimbrene with the discrepancies.\484\ FBI Agents 
searched Sculimbrene's work station and papers that day.
    \483\ Shapiro deposition, pp. 70-71.
    \484\ Id.
    Shapiro and Kelley made the decision to send Duncan 
Wainwright, an Assistant Inspector, and Special Agent Jennifer 
Esposito to interview Sculimbrene. Inspector Wainwright had 
been assigned to work with Shapiro on the FBI files 
investigation. Special Agent Esposito, the wife of William J. 
Esposito, Deputy Assistant Director of Financial Crimes, Public 
Corruption, Civil Rights, and Operational Support, was sent 
because, according to Shapiro, she was ``from [Wainwright's] 
squad.'' \485\
    \485\ Id., p. 72.
    Inspector Wainwright telephoned Agent Sculimbrene to inform 
him of Shapiro's intent to send agents to Sculimbrene's home on 
that day to interview him. Agents Wainwright and Esposito 
arrived at Sculimbrene's home at approximately 11 a.m. on July 
16, 1996.
    Sculimbrene reviewed the memorandum in question and said 
that it appeared to be written by him. Although Sculimbrene 
could not remember the precise interview with Nussbaum, he 
described the process by which he recorded his interviews. 
Sculimbrene performed thousands of interviews in the normal 
course of his work at the White House. The memorandum written 
by Esposito and Wainwright describes their interview with 

          SA [Special Agent] Sculimbrene stated that his 
        interview report should accurately summarize Nussbaum's 
        comments concerning Livingstone. He noted that he took 
        pride in his work and sought to make his reports 
        accurate and complete. SA Sculimbrene noted that is was 
        his general practice to prepare his interview reports 
        on the same day that an interview took place. He 
        followed this practice because it caused him to prepare 
        his reports while the information was fresh in his 
    \486\ Supervisory Special Agent Duncan J. Wainwright and Special 
Agent Jennifer Esposito, Federal Bureau of Investigation 302 Interview 
of Special Agent M. Dennis Sculimbrene, Washington, DC, July 16, 1996.

In addition to recounting the procedures he used to record 
interviews, Sculimbrene stated that he did recall a significant 
fact regarding Livingstone. Agents Wainwright and Esposito 
wrote that, ``SA Sculimbrene does recall being told by 
Livingstone that Livingstone's mother was a friend of Hillary 
Clinton.'' \487\ Clearly, the information from this interview 
buttresses the informaton found in Sculimbrene's original 
memorandum of the interview of Nussbaum.
    \487\ Id.
    In his statement regarding Shapiro's actions surrounding 
the improper contacts with the White House, Chairman Clinger 

          On July 16 there was another unusual occurrence. Two 
        senior headquarter FBI agents appeared at the home of 
        FBI agent Dennis Sculimbrene to talk with him about 
        this interview of Bernard Nussbaum and ask for his 
        notes of the interview. According to Mr. Shapiro, this 
        action was taken at his direction and without any 
        consultation with the Independent Counsel. Why after 
        the Attorney General had clearly stated that these 
        matters would be handled by the Independent Counsel 
        because they presented a conflict of interest for the 
        Justice Department and the FBI, did Mr. Shapiro take 
        this disturbing action? \488\
    \488\ Statment of William F. Clinger, Jr., chairman, Committee on 
Government Reform and Oversight, U.S. House of Representatives, August 
1, 1996.

This action perpetuated the feeling among members of the 
committee that the FBI was wrongly involved in protecting the 
White House. The FBI wasted resources to hide the embarrassing 
facts contained in Sculimbrene's memorandum. Some saw the FBI's 
tactics as heavy handed. Regarding the choice of agents to 
conduct the interview, Congressman Horn engaged in the 
following colloquy:

          Mr. Horn. Who picked the particular agents that 
        interviewed Mr. Sculimbrene?
          Mr. Kelley. I did.
          Mr. Horn. How did you happen to pick them?
          Mr. Kelley. Actually, the one I picked was Duncan 
        Wainwright. I picked Duncan Wainwright for several 
        reasons. First, he used to work for me, and he is very 
        steady and reliable and intelligent.
          Mr. Horn. How about the second agent?
          Mr. Kelley. May I finish? The second agent was picked 
        by Duncan Wainwright.
          Mr. Horn. Did one of the agents have a spouse who 
        worked for the FBI?
          Mr. Kelley. Yes.
          Mr. Horn. And what did that spouse do?
          Mr. Kelley. The spouse is the assistant director of 
        the Criminal Investigative Division.
          Mr. Horn. A fairly high position in the FBI.
          Mr. Kelley. Yes, it is.
          Mr. Horn. Now, if somebody with that relationship 
        showed up on my doorstep, and I am an FBI special 
        agent, as Mr. Sculimbrene was, I would worry that 
        somebody is after me, wouldn't you? Don't you think 
        that is intimidation? \489\
    \489\ Security of FBI Files hearings, August 1,1996, pp. 91-92.

Members of the committee were concerned with the mere fact that 
the interview took place, and that it was done after the entire 
investigation had been turned over to the Independent Counsel. 
The committee was equally concerned about the way the interview 
was conducted. Agents telephoned Sculimbrene, told him they 
were on their way, and soon arrived at his home to conduct the 

3. Shapiro made his own assessment that the matter was not within 
        Independent Counsel Starr's jurisdiction

    The initial discovery of the information in the Nussbaum 
interview resulted from Shapiro's staff reviewing files for 
release to this committee. The files that were reviewed were 
those of the two figures central to the FBI files investigation 
being conducted by the committee and the Independent Counsel. 
The committee's review came at the suggestion of Director 
Freeh, who was well aware of both the committee's investigation 
of the FBI files matter and that these files were requested in 
that matter. Nonetheless, despite overwhelming evidence to the 
contrary, Shapiro claimed not to know the purpose of the 
committee's request for these files.
    In an appearance before the committee, Shapiro testified 
that he did not believe that the contents of the Nussbaum 
interview were related to the FBI files investigation. Chairman 
Clinger asked Shapiro if he knew the Attorney General had 
referred the ``filegate'' matter to the Independent Counsel in 
response to concerns that any such investigation might provide 
a conflict of interest for the FBI. Shapiro responded that he 
was aware of the referral. However, Shapiro testified that he 
``did not think that this information specifically was at the 
time part of the Independent Counsel's investigation.'' \490\ 
Steven Schiff, vice chairman of the committee, attempted to 
clarify the matter. Responding to Schiff 's question about 
whether he thought ``that Mr. Livingstone's hiring was related 
to the matters to be investigated by the Independent Counsel,'' 
Shapiro replied,
    \490\ Security of FBI Files hearings, August 1, 1996, p. 46.

          My misunderstanding, if I had one, was whether the 
        question of how Craig Livingstone came to be hired was 
        a matter within the scope of the criminal investigation 
        of the Independent Counsel's Office looking into what I 
        understood to be the criminal investigation, was the 
        request for and acquisition of the FBI files.\491\
    \491\ Id., p. 82.

The qualifications of Livingstone for a position in the White 
House Office of Personnel Security and whether he was placed 
there for political purposes is central to any investigation of 
the White House's improper retrieval of FBI files. According to 
Shapiro, he did not see the relevance of how Livingstone got 
his job to that investigation. Members of the committee did not 
believe that Shapiro could see the need to relay this 
information to the White House, yet not see the bearing it had 
on the investigations being conducted. In a hearing before the 
committee, Congressman Burton said:

          Let me get this straight here. The people you did not 
        advise about this were the Independent Counsel, the 
        Senate Judiciary Committee, or the members of this 
        committee before you advised the White House Counsel, 
        the Deputy Attorney General's office, who has a lot of 
        liaison and connection with the White House. It's 
        widely known that since Mr. Hubbell left the Justice 
        Department, Ms. Gorelick, the Deputy AG, has the most 
        intimate relationship with the White House, both 
        political and otherwise. If you step back and look at 
        the results of your decisions to notify the White House 
        and the Justice Department, the Democrats who needed to 
        perform damage control were made aware but the 
        Republicans and the Independent Counsel investigating 
        the matter knew much later. So we gave the people who 
        were trying to defend themselves a heads up first.\492\
    \492\ Id., pp. 157-158.

Many members of the committee were angered over Shapiro's 
statements that the hiring of Livingstone was not related to 
the White House retrieval of FBI background files.
    Soon after Shapiro notified the White House about the 
contents in the memorandum of Mr. Nussbaum's interview, private 
lawyers were notified about that information. It was reported 
that Mr. Nussbaum was to testify before the Independent Counsel 
shortly after learning of this information. Showing concern for 
this series of events, Congressman Gilman posed the following 
question to Shapiro at the committee's hearing.

          In your opinion, how should the Department of Justice 
        react if a representative of the FBI, on his own, 
        shares FBI information with an outside party that bears 
        on the party's possible testimony or other derogatory 
        information or leads that would assist that party in 
        thwarting the government's inquiry? How do you think 
        the Justice Department should react to that kind of 
        statement? \493\
    \493\ Id., p. 113.

Shapiro responded that ``if the Department thinks that someone 
at the FBI is interfering with an investigation, it is a matter 
they should take very seriously.'' \494\ Later in that hearing, 
Congressman Gilman asked Shapiro, ``[W]asn't there an ongoing 
grand jury inquiry on the files and on Livingstone at the time 
you made your telephone calls?'' \495\ Shapiro replied, 
``There--well, I'm obviously not fully aware of what inquiries 
there are. I understand that the Independent Counsel's office 
was conducting and is conducting a grand jury investigation 
into what--into the request for and acquisition of FBI files by 
the White House.'' \496\ The fact that Shapiro, a former 
prosecutor with the U.S. attorney's office, took actions that 
may have interfered with an ongoing investigation is simply 
unacceptable for the FBI's top lawyer.
    \494\ Id.
    \495\ Security of FBI Files hearings, p. 114.
    \496\ Id., p. 115.

4. Nussbaum's criminal referral

    Shapiro knew the clear significance of the information in 
the FBI background file, which contained contemporaneous notes 
of an interview of Nussbaum. Nussbaum relayed information about 
Livingstone to FBI Agent Sculimbrene in March 1993, at a time 
when Nussbaum had no reason to be dishonest. In addition, Agent 
Sculimbrene had no reason to attribute any significance to 
Nussbaum's comments.
    Shapiro knew of the controversy surrounding the hiring of 
Craig Livingstone, which developed in June 1996. In his 
deposition before the Committee on Government Reform and 
Oversight, Shapiro first hypothesized about why his staff would 
have alerted him to the contents of the memorandum in question. 
Shapiro said:

          [I]t was brought to my attention because it referred 
        to a matter which had already been the subject of much 
        public controversy and many articles in the newspapers 
        and on--stories on television about the allegation that 
        there was a connection between Hillary Clinton and the 
        hiring of Craig Livingstone; more specifically, that 
        Hillary Clinton was a friend of Craig Livingstone's 
        mother and had recommended for the job.\497\
    \497\ Shapiro deposition, p. 59.

In the same interview, Shapiro gave his reason for alerting the 
White House to this information. He said, ``Knowing that was a 
matter which had already been a matter of considerable public 
controversy . . . . I decided that it was appropriate to advise 
the White House.'' \498\
    \498\ Id.
    At the June 26, 1996 hearing before the Committee on 
Government Reform and Oversight, ``Security of FBI Background 
Files,'' none of the witnesses, including Craig Livingstone, 
could remember who hired Craig Livingstone. In that hearing, 
Chairman Clinger asked Bernard Nussbaum, Counsel to the 
President, ``Do you know who hired Craig Livingstone?'' \499\ 
Nussbaum replied, ``I don't know who brought Mr. Livingstone 
into the White House.'' Later, following Kennedy's statement 
that he ``never discussed Mr. Livingstone with Mrs. Clinton in 
any way, shape or form,'' Nussbaum said, ``Nor did I.'' \500\ 
Several other witnesses denied knowing who hired Livingstone.
    \499\ Security of FBI Files hearings, June 26, 1996, p. 57.
    \500\ Id.
    At that hearing, Nussbaum was under oath. He swore to tell 
the truth. He was the White House Counsel while Livingstone was 
Director of White House Security. Livingstone worked for 
Nussbaum. When he professed not to know who hired Craig 
Livingstone, committee members were perplexed. When Chairman 
Clinger discovered a contemporaneous memorandum written by an 
FBI agent that shed some light on who hired Livingstone, he was 
alarmed. Chairman Clinger was disappointed to learn that the 
document quoted Nussbaum as saying that Livingstone ``had come 
highly recommended to him by Hillary Clinton.'' \501\ 
Accordingly, this information ``calls into question Mr. 
Nussbaum's June 26, 1996 statements made under oath before the 
Government Reform and Oversight Committee.''
    \501\ Sculimbrene memo contained in the FBI background file of 
Craig Livingstone.
    Upon discovering this information, Chairman Clinger 
believed that it warranted the attention of every Member of the 
House of Representatives and the American people. He stood on 
the floor of the House chamber and described the events 
surrounding the Sculimbrene memorandum. Calling this ``a very 
serious issue,'' Chairman Clinger concluded his statement, 
saying, ``This is a matter I will refer to the U.S. Attorney 
for the District of Columbia. Because Attorney General Reno has 
designated Independent Counsel Kenneth Starr to investigate 
potential criminal wrongdoing in the White House Travel Office 
and FBI Files matters, I am simultaneously forwarding this 
matter to Judge Starr's attention.'' \502\
    \502\ Congressional Record, July 25, 1996, pp. H8520-H8521
    On July 30, 1996, the matter of Nussbaum's statements to 
the FBI and before the Committee on Government Reform and 
Oversight was referred to the Office of the Independent Counsel 
and the U.S. attorney for the District of Columbia. Chairman 
Clinger and other members of the Committee on Government Reform 
and Oversight wrote to Independent Counsel Kenneth Starr and 
U.S. Attorney Eric H. Holder, Jr., to refer the matter to their 
    \503\ Letter to the Honorable Kenneth W. Starr, Independent 
Counsel, from Chairman Clinger and members of the Committee on 
Government Reform and Oversight; July 30, 1996.

5. Shapiro edits letter for White House Counsel that is critical of 
        Chairman Clinger

    Upon the announcement that Chairman Clinger was making a 
criminal referral of Bernard Nussbaum, Quinn called Shapiro to 
request his assistance in writing a letter to Director Freeh. 
Shapiro testified about this matter in his deposition:

          Ms. Olson. The day of Chairman Clinger's referral or 
        the day of Chairman Clinger's Floor statement about the 
        statements by Mr. Nussbaum and the statement that he 
        had read in the file, did you have any conversations 
        with the White House?
          Mr. Shapiro. Yes, I was called that day by Jack Quinn 
        and Kathleen Wallman--this is prior to the chairman's 
        Floor speech--advised by them that they had learned 
        from press, who I think they told me had a copy of his 
        speech, that he was going to be making a Floor speech, 
        and they told me that they were writing a letter.
          I think what they said is, ``The White House is 
        writing a letter to the FBI director,'' and they wanted 
        to ask me a couple questions about it, primarily was 
        there anything in the tone of it that we would find 
        offensive that would--that they would sort of be 
        unaware, would hit somebody the wrong way at the FBI, 
        that they would unintentionally offend somebody about.
          Ms. Olson. You mean by the tone of--the tone of the 
          Mr. Shapiro. The letter. They weren't asking me for 
        my opinion on Mr. Clinger's speech. And also whether I 
        had an opinion on who that letter should come from, 
        from the White House.
          Ms. Olson. And so they faxed you a copy of the 
          Mr. Shapiro. No. They read me some language. I told 
        them that as to most of it, I had no opinion and didn't 
        think it was appropriate for me to comment, which is 
        not to say I had no opinion, but didn't think it 
        appropriate for me to comment.
          They highlighted one sentence that was in one draft 
        one way and one in the other, and I concurred with 
        their apparent decision that they already were telling 
        me that in the second statement would be taken as less 
        of an accusation against the FBI, and I said--and as to 
        the question about who was appropriate to come from, I 
        asked Jack Quinn, was he suggesting--I believe he asked 
        me, did I think it more appropriate that it come from 
        Leon Panetta? and I said, ``If your question is, are 
        you a sufficiently high level Government official to 
        write to the director of the FBI? I think you shouldn't 
        worry about that.''
          Ms. Olson. And what was the one sentence?
          Mr. Shapiro. Let me look at the letter as it was 
        sent, and I might be able to tell you.
          In the letter as sent, which we received some time 
        later that evening--first time I had actually seen it--
        it says--after the first three paragraphs, it says: 
        That is why we are troubled, as we know you must be, by 
        the implication that an FBI background investigation 
        might include a false report.\504\
    \504\ Shapiro deposition, p. 150.

In the letter that finally went to Freeh, and was released to 
the public, Quinn wrote:

          It is equally troubling that a Member of Congress can 
        publicly reveal confidential information, whether for 
        partisan purposes or otherwise. It should not escape 
        notice that this is done at a time when Members of 
        Congress have expressed worry that employees of the 
        executive branch might have sought out confidential FBI 
        information about certain individuals and planned to 
        somehow use it publicly. While that charge has never 
        been established against anyone in the executive 
        branch, we now witness the same objectionable behavior 
        by the very people who professed to be the guardians of 
    \505\ Letter from White House Counsel Jack Quinn to FBI Director 
Louis Freeh, July 25, 1996.

The general counsel of the FBI edited a letter for the White 
House that was harshly critical of the chairman of the 
Committee on Government Reform and Oversight, who was 
performing his oversight duties. Shapiro's actions raise 
questions about the independence of the FBI.
    Members of the committee were particularly angered by the 
participation of the FBI in editing a letter critical of the 
chairman of a congressional committee. Congresswoman Ros-
Lehtinen confronted Shapiro about his participation in the 
drafting of the letter from Quinn to Director Freeh. When 
Shapiro was trying to belittle his cooperation with the White 
House regarding the letter, Ros-Lehtinen said:

          Based on your testimony, you said that you conversed 
        with this gentleman, talked about who the letter should 
        go to, talked about the tone, and I would say that you 
        had a very direct hand in the drafting of this 
    \506\ Security of FBI Files hearings, August 1, 1996, p. 137.

Congressman Souder told Shapiro he was wrong in editing the 
letter. He said:

          You said you helped edit a letter for the White House 
        Counsel which attacked both our Chairman and your own 
        FBI agents. Now you say it wasn't editing, you were 
        consulted. Almost any definition of ``editing,'' you 
        had the opportunity to edit. You say you made changes. 
        By most definitions, that is editing, and it was a 
        political letter which you should have withdrawn 
    \507\ Security of FBI Files hearings, August 1, 1996, pp. 176-177.

                     VII. Politicization of the FBI

    The FBI serves as the principal investigative arm of the 
Department of Justice and as such, is charged with gathering 
and reporting facts, locating witnesses, and compiling evidence 
in cases involving Federal jurisdiction. The FBI investigates 
all violations of Federal law except those that have been 
assigned by legislative enactment or otherwise to another 
Federal agency.
    In response to the politicization of the FBI during the 
Nixon administration, the Congress passed a law giving the 
Director of the FBI a fixed term. Public Law 90-351, provided 

          (b) Effective with respect to any individual 
        appointment by the President, by and with the advice 
        and consent of the Senate, after June 1, 1973, the term 
        of service of the Director of the Federal Bureau of 
        Investigation shall be ten years. A Director may not 
        serve more than one ten-year term.\508\
    \508\ Pub.L. 90-351, Title VI, Sec. 1101, June 19, 1968, 82 Stat. 
236, as amended by Pub. L. 94-503, Title II, Sec.  203, October 15, 
1976, 90 Stat. 2427.

    On the Floor of the Senate, Senator Robert C. Byrd spoke in 
support of limiting the term of the Director of the FBI and 
about the importance of FBI independence. Senator Byrd said, 
``This amendment would aid in insulating the FBI Director 
against politically motivated manipulation from the executive 
branch by giving the office a tenure of 10 years.'' Senator 
Byrd reasoned that:

          A 10-year term is desirable because it would 
        generally overlap the tenure of a two-term President 
        and would eliminate many of the pressures that could be 
        brought to bear on the Director if he were to be 
        reappointed every 4 years. In this way, the Director 
        can be more effectively insulated from political 
        pressures liable to be placed on him by a President and 
        he will not be considered a politically oriented member 
        of the President's `team.' ''

After Watergate, the Congress was wary of the President's 
political influence over the Nation's police force. It sought a 
way to remove the Director of the FBI and the FBI, itself, from 
political involvement.
    When Louis Freeh was appointed by President Clinton in 
1993, he immediately took steps to change the internal 
structure of the FBI. He eliminated two associate deputy 
directors and four dozen management positions. Perhaps his most 
controversial move involved the appointment of his closest 
aides. An article in the Los Angeles Times reported about some 
dissension in the FBI ranks about Freeh's appointments: \509\
    \509\ Ronald J. Ostrow, Freeh Reign He's Eliminated Red Tape and 
Senior Posts, Given Agents More Power and Fewer Desk Jobs, Promoted 
International Cooperation and His Friends--In Just 17 Months, Louis 
Freeh has Made a Mark on the FBI as Indelible as J. Edgar Hoover's, the 
Los Angeles Times Magazine, Sunday, February 5, 1995.

          Some of the controversy emanates from Freeh's 
        appointment of a triumvirate of federal prosecutors he 
        knew when he served in the U.S. attorney's office in 
        Manhattan. He named Robert B. Buckham, 43, chief of 
        staff; Howard M. Shapiro, 34, is the FBI's first 
        general counsel, and Buckham's brother, James R., 32, 
        heads up the new office for ending interagency turf 
        fights. ``He may be relying too heavily on the views of 
        a certain group of friends, including their estimates 
        of other people in the organization, creating a 
        clique,'' worries a former senior Justice Department 
    \510\ Id.

    Howard Shapiro met Director Freeh right out of Yale Law 
School when he first began his clerkship for Judge Leval and 
Director Freeh was appearing before the Judge as an assistant 
U.S. attorney in a major case in his career known as the 
``pizza connection'' case.\511\ Mr. Shapiro testified that the 
``unusually close relationship'' they developed during the 
course of this case led to Freeh requesting he come to work at 
the U.S. attorney's office in New York. Mr. Shapiro testified 
that he believed that Director Freeh ``assisted him in being 
selected for the job.'' \512\
    \511\ Deposition of Howard Shapiro, 7/30/96, p. 10.
    \512\ Id., p. 11.
    Director Freeh again tapped Mr. Shapiro to join him on a 
``special assignment by the Attorney General'' to investigate 
and prosecute the December 1989 tragic mail bombing case that 
killed Judge Robert Vance. They worked closely throughout the 
course of this case until Direct Freeh was sworn in as a 
Federal district court judge. Mr. Shapiro left the U.S. 
attorney's office and accepted a teaching position at Cornell 
Law School but managed to stay in contact with then-Judge 
    When Director Freeh was first asked by President Clinton if 
he would accept the position of Director of the FBI in the 
summer of 1993, he sought the advice of Howard Shapiro.\513\ 
Mr. Shapiro testified that he ``urged him to take the job and 
encouraged him to do so.'' \514\ In return, Director Freeh told 
Shapiro that he ``expected'' him to ``come down and work for 
him'' at the FBI to which Shapiro agreed and took leave from 
his teaching position at Cornell. Because Director Freeh had 
not yet formally created the office of the general counsel and 
first had to move out the current FBI career legal counsel, 
Shapiro began working for Director Freeh as his ``special 
counsel'' for 2 to 3 months.\515\
    \513\ Id., p. 12.
    \514\ Id.
    \515\ Id., p. 13. Mr. Shapiro described this as a ``somewhat 
delicate personnel matter'' that Director Freeh had to move out the 
current Assistant Director who served as the Director of the Office of 
Legal Counsel Division before Shapiro could ``replace'' him. Then 
Assistant Director Joe Davis thereafter retired from the FBI after a 
long and distinguished career with the Bureau.
    After the retirement of the previous legal counsel, Shapiro 
began to ``recreate'' the Office of the General Counsel and 
immediately brought two deputies that work with his at the U.S. 
attorney's office. Mr. Shapiro testified that he and Director 
Freeh believed these outside attorneys ``could improve the 
overall quality of the office'' since only career FBI agents 
had been allowed in these positions before. Mr. Shapiro, 
deriding their experience, stated that in the past the Bureau 
tended to promote individuals ``based on their prediction of 
who would be the best agent.''\516\ Mr. Shapiro immediately 
stopped this practice however, and filled the office with 
former colleagues of his and the Director's.
    \516\ Id., p. 15.
    As revelations of numerous contacts between FBI General 
Counsel Shapiro and the White House materialized, concerns 
about the politicization of the FBI have resurfaced. We learned 
that Shapiro had his own White House pass allowing him to come 
and go as he pleased in the White House complex.\517\ Director 
Freeh's appointment of close friends rather than ``the best 
agent'' is at the center of this problem. No longer does the 
top lawyer for the FBI have an allegiance to the law 
enforcement agency whose laws he has taken an oath to uphold. 
Instead the relationships created within the Office of the 
General Counsel created allegiances to the Director and his 
allegiances to the White House that gave him his appointment.
    \517\ Director Freeh sent a letter on May 25, 1994 to Craig 
Livingstone requesting that Shapiro receive a permanent OGA White House 
pass. Director Freeh cited the numerous meetings Shapiro attends at the 
White House complex: ``no fewer than 14 meetings within the White House 
gates, including a meeting with the President'' over the past month. We 
believe that no other FBI legal advisor or general counsel has required 
such access to the White House complex in the past.
    Shapiro has protested any political savvy, testifying that 
he has had only non-political, career, Department of Justice 
appointments,\518\ and that he would therefore not have any 
political issues in mind when in contact with the White 
House.\519\ Given the great attention paid by the public, the 
media and the Congress to past indiscretions by the FBI in its 
contacts with the White House, Shapiro should have been ever 
aware of the political consequences of his actions. Instead of 
protestations that he was not ``competent'' to commit a 
political act,\520\ Shapiro owed his agency and the public to 
be especially vigilant in his conduct, in matters involving the 
White House, an inherently political entity. The years that 
Shapiro spent in law enforcement deny him such flimsy excuses.
    \518\ This is not a credible statement, given that Shapiro was a 
professor at Cornell University before taking a leave of absence to 
work for his mentor and good friend, Louis Freeh. Shapiro is an SES 
employee appointed by Director Freeh as a result of his appointment by 
the Clinton White House.
    \519\ Shapiro deposition, p. 125.
    \520\ Security of the FBI Files, hearing, August 1, 1996, p. 33.

A. General Counsel of the FBI Hand Delivers Gary Aldrich Book to White 
                             House Counsel

    As a condition of employment at the FBI, agents must sign a 
contract by which they agree to obtain clearance before 
publishing information which they gain during their duties at 
the FBI. When an agent or former agent seeks to publish 
information gained while in the employ of the FBI, he must 
first submit the information he seeks to publish to the FBI for 
its review. Offices within the FBI who are affected by the 
written materials are asked to review the contents and decide 
whether its publication would jeopardize the functions of the 
FBI. While the review is to be completed in 30 days,\521\ 
records supplied to the committee by the Department of Justice 
show that the process of review by the FBI took almost 6 
    \521\ Letter to Mr. Jay Stephens, attorney for Agent Gary Aldrich; 
January 4, 1996. OPCA maintains liaison with the authors of the 
submitted manuscripts--and formally advises them, within 30 working 
days, whether, or under what conditions, approval for publication is 
granted (as per responses from the substantive agencies).
    \522\ Letter to Howard Shapiro, general counsel of the FBI, from 
Lisa Kate Osofsky, deputy general counsel of the FBI, July 31, 1996.
    Former FBI agent Gary Aldrich had written a book about his 
service in the FBI and in the White House. He submitted a draft 
of his book to the FBI for its review. Once Shapiro had a copy 
of Aldrich's manuscript, he waited less than a month to hand 
deliver a copy to White House Counsel to the President, Jack 
Quinn.\523\ To date, the White House has refused to reveal what 
it did with the book prior to its publication.
    \523\ Shapiro deposition, July 30, 1996, p. 82.

1. Justifications

    Shapiro's justification for his ``heads up'' to the White 
House regarding Bernard Nussbaum'' 1993 interview that linked 
the First Lady to Craig Livingstone's hiring, was that the 
White House was an ``affected party.'' \524\ He did not, either 
in deposition or hearing testimony, ever indicate the Federal 
Bureau of Investigation rule or policy he was adhering to by 
his conduct. Thus, the true purpose of his action has not fully 
been explained. Similarly, while inquiring into the reason for 
his White House delivery of the Aldrich book, Shapiro was asked 
in committee deposition if he ``communicated the substance of 
[the Aldrich] book [to the White House] because they were an 
interested party?'' \525\ Shapiro replied, ``Yep.'' But, in 
hearings before the committee 2 days later, he gave a more 
rehearsed response for the media.
    \524\ Letter from Shapiro to Chairman Clinger, July 19, 1996.
    \525\ Shapiro deposition, p. 88.
    In his opening statement before the committee hearings, 
Shapiro gave a more lengthy explanation for his distribution of 
the Aldrich manuscript.

          The first draft of the book was replete with 
        sensitive internal White House information that went to 
        their internal procedures and went to White House 
        security matters, as well as to the--directly to the 
        result of his conduct of his official business. I 
        delivered a copy of that to the White House Counsel's 
        Office because, as I in fact somewhat presciently 
        advised them, I could not ensure, the FBI could not 
        ensure that Mr. Aldrich would not go forward and 
        publish that book prior to receiving clearance, and in 
        fact that is what he did.\526\
    \526\ Security of FBI Files hearings, August 1, 1996, p. 33.

Congressman Burton attempted to obtain a more detailed 
explanation from Shapiro about why he delivered the book to the 
White House. Congressman Burton asked:

          Question. What were they doing [with the book]?''
          Answer. I knew that Mr. Aldrich could publish that 
        document, as he did, without waiting for our approval, 
        without--without concurring with our objections, and 
        that they should know and have it in their hands before 
        internal White House procedures were disseminated to 
        the world.\527\
    \527\ Id., pp. 58-59

    First, it is implausible that, in February of this year, 
Shapiro anticipated that Aldrich would consider publishing his 
book without FBI concurrence, when Aldrich had adhered to FBI 
policies in submitting the book for review. Furthermore, it 
strains credulity to believe that Shapiro delivered the book to 
Quinn out of concern about White House security. Why would 
Shapiro go directly to the White House Counsel's Office, which 
has become a public relations/political entity for the 
President, rather than the U.S. Secret Service, whose central 
mission is to protect the security of the President and the 
White House complex?
    In addition to the ``security review'' being conducted by 
the White House, the FBI was also conducting a review in 
accordance with the employment agreement signed by Aldrich upon 
his employment. Records obtained by the committee show that the 
FBI had extensive consultation with Jay Stephens, former U.S. 
attorney, and counsel for Aldrich, regarding the prepublication 
review of the manuscript by the FBI.\528\ Indeed, many of the 
concerns that the FBI had were allayed in this process. 
Stephens, on three separate occasions, sent to the FBI 
revisions in the manuscript that were made at their request.
    \528\ Letter to Howard Shapiro, general counsel of the FBI, from 
Lisa Kate Osofsky, deputy general counsel of the FBI, July 31, 1996.
    Shapiro's explanation regarding the White House's security 
concerns simply does not survive scrutiny. We know that the 
book was delivered in February, less than 30 days after the 
FBI's receipt of the manuscript, and the initial meetings 
between the Bureau and Stephens on the editing process. Why did 
Shapiro see the urgent need to provide the pre-publication 
manuscript to the White House, without the permission of the 
author or publisher, months before its release?

2. Hearing testimony

    To obtain a better understanding of Shapiro's motive for 
taking the Aldrich book to the White House, Congressman Shays 
asked Shapiro to define ``interested party.'' In response, 
Shapiro gave another, detailed reason for sending the book to 
the White House:

          [T]he first draft of his book contained numerous 
        lengthy passages about internal White House procedures, 
        White House security matters and the text of interviews 
        of White House people. Those--I told them that I could 
        not ensure and ultimately was unable to ensure that Mr. 
        Aldrich would comply with our requirements as to what 
        material could be published and what material could 
        not, that it could be published any day without prior 
        notice to us, as it was, and that I thought given how 
        much it divulged about White House processes, they 
        needed to see it.\529\
    \529\ Security of FBI Files hearings, p. 125.

What Shapiro fails to acknowledge is that he delivered the book 
in February, well before any fears could have developed that 
Aldrich would publish without complete FBI approval.
    Shays then attempted to pinpoint the reason for taking the 
book to the White House, rather than other agencies.

          Mr. Shays. Wasn't it replete with other information 
        that would affect other people? Why did you decide it 
        should only go to the White House?''
          Mr. Shapiro. Who else do you have in mind, sir?
          Mr. Shays. Any other interested party?
          Mr. Shapiro. I'm not sure--Mr. Aldrich wrote a book 
        about his time at the White House, sir, and it was 
        about the White House and the White House and the White 
        House procedures.
          Mr. Shays. What about all the people that were 
        mentioned, weren't they interested parties?
          * * * * *
          Mr. Shays. How about the Secret Service, did you 
        notify the Secret Service? I would like an answer.\530\
    \530\ Security of FBI Files hearings, pp. 125-126.

Shapiro did not answer the question regarding other agencies 
mentioned in the Aldrich book, but not made aware of the 
contents of the book before it was published. Moreover, the 
Secret Service is responsible for the security of the White 
House. Yet the Secret Service received no notifications or 
information regarding the Aldrich book from either the FBI or 
the White House Counsel's Office.

             B. Distribution of Book Within the White House

    The first people in the White House to see the copy of the 
Aldrich book were Jack Quinn and Kathleen Wallman. Apparently, 
the book was divided up among several staff members for their 

1. Cheryl Mills' review

    Cheryl Mills, Associate Counsel to the President, was given 
a copy of the Aldrich book to review. She was asked about her 
knowledge of the book in a deposition before this committee.

          Question. Were you aware that Howard Shapiro had 
        given Mr. Quinn a copy of Gary Aldrich's book?
          Answer. Yes.
          Question. Did you review a copy of that book?
          Answer. Portions of it.
          Question. Were you tasked to review that by Mr. 
          * * * * *
          Answer. I think ``tasking'' is a bit strong, but 
        maybe that is always strong, whenever you are referring 
        to me.
          With regard to the portions of the book that I 
        reviewed, the question that I was looking at was 
        whether or not there were disclosures of nonpublic or 
        confidential information within it, and also whether or 
        not--what the impact of these types of disclosures 
        would be on the security personnel process with respect 
        to people's willingness to be candid and open and 
        forthright with regard to the FBI background process; 
        and to the extent that it did have any implications for 
        that process, whether or not these implications were 
        sufficient to be debilitative to people's desire to 
        enter government and serve as a public servant.
          * * * * *
          Question. Do you know if anyone else in the Counsel's 
        office was given portions of the book to read or given 
        the book to read?
          Answer. I was only given a portion, so I am sure that 
        others were also probably reviewing with regard to 
        disclosures of nonpublic or confidential information as 
        well as whether or not such disclosures have an impact 
        on the integrity of and the ability of people to 
        provide candid and open and honest information to the 
        FBI in the process of securing or being reviewed for 
        government positions.\531\
    \531\ Mills deposition, pp. 70-80.

Mills could give no additional information about who reviewed 
the book and why. But Mills is not the only White House lawyer 
questioned by the committee who was assigned to review the 

2. Christopher Cerf 's review

    Cerf was asked about his knowledge of the Aldrich book at a 
deposition before the committee. He told the committee that he 
had responsibilities for reviewing the manuscript similar to 
those of Mills.

          Question. Do you recall the circumstances of your 
        learning about [the Aldrich book], whether it was in a 
        meeting, a counsel office meeting, or outside of that?
          Answer. It was in the context of my duties in the 
        Counsel's office.
          Question. Were you asked to review portions of the 
        book or a portion of the book?
          Answer. Yes.
          Question. And who asked you to do that?
          Answer. It was either Kathi Whalen or--it probably 
        was Kathi Whalen.
          Question. And did she explain the reason why she was 
        asking you to review the book?
          * * * * *
          Answer. While I am not inclined to talk about the 
        process that led to the deliberations on this issue, 
        here is what I feel very comfortable telling you, and 
        that is that I and others were asked to review portions 
        of the book and with an eye towards whether or not 
        there was information that would compromise security in 
        the White House. That was my particular mission. We 
        reported back up the line on this and, to the best of 
        my knowledge, the outcome was that the White House did 
        not take a position one way or the other on what the 
        FBI should do with this matter.\532\
    \532\ Cerf deposition, pp. 89-95.

    The committee has yet to determine the purpose of the White 
House Counsels' review of Aldrich's book, though not for lack 
of attempts. The committee subpoenaed all notes and memoranda 
from the White House related to the matter. However, Special 
Counsel Jane Sherburne reported that those documents were not 
``maintained.'' \533\ Why is the White House Counsel's Office 
``not maintaining'' notes? Why were no memoranda created on a 
project that ostensibly affected White House security? Were 
there memoranda that were destroyed?
    \533\ Letter from Sherburne to committee Chief Investigative 
Counsel Barbara Olson, September 10, 1996.
    Additionally, why did the review of pre-publication 
manuscripts fall within the purview of White House counsel 
``duties''? Was this not more suitably a matter for a security 
related agency? The White House's lack of response to committee 
requests continue to be of great concern.
    The committee learned on September 18 from the FBI that 
they refused to accept back from White House Counsel Jack Quinn 
a copy of Gary Aldrich's book Unlimited Access, given to Mr. 
Quinn by FBI General Counsel Shapiro. The FBI refused to accept 
the book saying, ``Because this is a document in the possession 
of the White House which you have described as `responsive' to 
a congressional subpoena, we believe it would be inappropriate 
for the FBI to become involved in this matter.'' \534\ The FBI 
and the Justice Department are under subpoena for these 
documents. Why is the White House playing hot potato with Gary 
Aldrich's book? It is amazing, but not surprising, that the 
White House continues to withold documents relevant to this 
committee's investigation. Actions such as these increase the 
skepticism toward this administration. Mr. Quinn should explain 
his actions in trying to avoid responding to the committee's 
    \534\ Letter from John Collingwood to Jack Quinn, dated September 
18, 1996.

           C. Summary of 4 Years of Politicization of the FBI

1. Past procedures for White House utilized the Department of Justice

    In the past, as a result of concerns about the political 
use of the FBI, White House contacts have been managed 
primarily through the Department of Justice. The Assistant 
Attorney General is the primary liaison for contacts between 
the White House and the FBI. The current FBI has abandoned that 
formality. Why has the FBI general counsel now taken on the 
role of White House contact? At Director Freeh's request, 
Shapiro has held a permanent White House pass since 1993. To 
the committee's knowledge no other FBI general counsel has had 
such unfettered access to the White House.

2. First Counsel's Office not staffed with agents

    In the past, FBI Directors have staffed all offices with 
career agents within the FBI, agents whose loyalty was to law 
enforcement, and not to the political winds of 1600 
Pennsylvania Avenue. When Freeh was appointed, he appointed 
three associates from outside the FBI, and created the first 
Office of the General Counsel. As the person to fill the fist 
general counsel position at the FBI, Freeh chose his long time 
friend and confidante, Howard Shapiro.
    In his deposition before the committee, Shapiro defended 
Director Freeh's decision to staff the FBI with nonagent 
attorneys. He said:

          And we had--although we had some absolutely, and we 
        still do, some absolutely fabulous agent attorneys who 
        had decided to make a career of it, for the most part I 
        thought we could improve the quality and the experience 
        and the expertise of the office by transitioning from 
        agent attorneys to nonagent attorneys.\535\
    \535\ Shapiro deposition, p. 18.

Although Shapiro and Director Freeh may have intended to 
``improve the quality'' of the attorneys at the FBI, they have 
politicized the FBI, through the actions of Shapiro which 
indicate the astute political skills and the intent to protect 
the President and Mrs. Clinton. Shapiro, whether at the behest 
of Director Freeh or not, has been the most prolific contact 
with the Clinton administration and the White House--it's ally 
at the FBI. His permanent White House pass and frequent White 
House visits allowed and encouraged the spreading of 
information to the White House as an ``affected party.''

3. Travel Office, FBI files, and Aldrich book

    Evidence of the White House's political use of the FBI can 
be found in the Travel Office scandal, the improper retrieval 
of FBI files and the improper dissemination of a manuscript to 
the White House. In the Travel Office matter, the White House 
improperly requested that the FBI conduct an investigation into 
the fired Travel Office employees. The Clinton administration 
has made liberal use of the FBI and tarnished its reputation in 
the process.

                    VIII. Secret Service Explanation

                            A. Introduction

    When it was revealed that the White House had 
inappropriately sought and obtained hundreds of FBI files of 
former Reagan and Bush officials, the first line of defense 
adopted by the White House came from Craig Livingstone's 
attorney and was adopted by the White House.\536\
    \536\ White House Admits Having Background Files, the Washington 
Post, June 8, 1996, p. A1.
    Mr. Livingstone's attorney, Randall Turk, who interviewed a 
number of other former White House employees about the matter 
when Billy Dale's FBI file was discovered, claimed the matter 
had a ``completely innocent explanation'' and blamed the 
problem on a ``Secret Service list that still contained Dale's 
name as a current White House passholder.'' \537\ White House 
spokesman, Mark Fabiani, immediately adopted Turk's 
explanations.\538\ Livingstone's attorney also briefed the 
White House Counsel's Office on Livingstone's explanations of 
problems with the FBI files.
    \537\ Id., at 1:41 p.m.
    \538\ ``White House Admits Having Background Files,'' the 
Washington Post, June 8, 1996.
    On June 7, Mr. Turk refused to reveal the name of the 
``Army detailee,'' but his identity was revealed to be Anthony 
Marceca, an old political friend of Livingstone's, not a low 
level clerk, as had initially been portrayed. Mr. Marceca did 
not begin working at the White House until August 1993, long 
after Mr. Dale's name was removed as a current White House 
passholder and his Secret Service pass summarily revoked.
    Another attorney for Livingstone, David Cohen, claimed that 
``neither Marceca nor Livingstone noticed at first that the 
lists included so many names that should have been purged from 
them.'' \539\ Yet an undated memo, which appears to be from 
March 1993, demonstrates that Livingstone clearly understood 
that there were some names on Secret Service lists that needed 
to be removed and Livingstone knew that it was his job to 
remove them.\540\
    \539\ ``Panetta Offers Apology Over Files `Mistake' '', the 
Washington Post, June 10, 1996.
    \540\ Confidential memorandum from Craig Livingstone to William 
Kennedy, undated. Livingstone refers to the date on which the green/tan 
access badges will expire as March 15, 1993. From this information, the 
committee believes the date of this memorandum to be between March 4, 
1993 and March 15, 1993.
    There was no list after May 19, 1993 which would have 
contained Mr. Dale's name as a ``current White House 
passholder,'' since Mr. Livingstone himself sent a memo to the 
Secret Service to place Mr. Dale and his colleagues on ``do not 
admit'' status at the White House, as of May 19, 1993.\541\
    \541\ May 19, 1993 memo from Craig Livingstone to Arnold Cole, CGE 
    Of the hundreds of FBI files that were gathered by 
Livingstone and Marceca, most of them were never ``current 
White House passholders'' at any time in 1993. As the Secret 
Service concluded in the committee's July 17, 1996 hearings on 
The Security of the FBI Files, on any list created in 1993, 
most of the 476 names of individuals whose files were 
improperly obtained would have been listed as inactive.\542\ 
The explanations offered by the White House and Livingstone 
were implausible from the start but, since the Secret Service 
is not in a position to publicly respond to such attacks, the 
assault on the Secret Service served its purpose as a useful 
tactic to shift blame.
    \542\ Security of FBI Files hearing, July 17, 1996, pp. 46-47.
    But even Livingstone had a hard time sticking with the 
``blame the Secret Service'' strategy. On June 7, 1996, the 
very day his attorney was blaming the Secret Service, 
Livingstone went to Secret Service Agent Arnold Cole to discuss 
the matter. In his deposition, Agent Cole revealed:

          On June 7, 1996 I received a phone message that Craig 
        Livingstone wanted to see me about a case. On the same 
        day, at approximately 3:45 p.m., I met with Mr. 
        Livingstone outside his office in the Old Executive 
        Office Building. We briefly discussed a temporary 
        passholder case under review.
          Unsolicited, Mr. Livingstone asked whether or not I 
        had seen the press release made by his attorney 
        concerning the Billy Dale files. I responded in the 
        affirmative, at which point Mr. Livingstone stated, 
        ``We just wanted you guys to know that we weren't 
        blaming the Secret Service. Using an old list was our 
        fault, and we had the current stuff you guys gave us. I 
        don't know what happened.''
          I told Mr. Livingstone that I did not think he could 
        blame us. Basically the conversation was terminated and 
        I reported to my supervisor.\543\
    \543\ Cole deposition, pp. 41-42.

Cole testified before the committee that he had clearly briefed 
Livingstone on the use of Secret Service lists.\544\ At any 
rate, no combination of errors attributed by the White House to 
the Secret Service can explain how and why the Office of 
Personnel Security inappropriately obtained hundreds of FBI 
files of former Reagan and Bush officials.\545\
    \544\ Security of the FBI Files hearing, July 17, 1996, p. 47.
    \545\ Id., pp. 24-41.
    In testimony before the Senate Judiciary Committee on June 
28, 1996, Livingstone appears to deny talking to anyone in the 
Secret Service about the matter:

          Senator Abraham. Once this was reported, I mean, a 
        few weeks ago, when it became clear that obviously 
        there were some files that were in this category we are 
        discussing, did you talk to the FBI, the Secret 
        Service, or anybody about how this could have happened?
          Livingstone. I remember talking to a lot of people 
        because I was mortified once it became apparent what we 
        had, and I informed counsel. As I recall it 
        specifically, I informed my counsel, and my counsel 
        informed White House counsel later that night, separate 
        from me. The FBI came in immediately and removed the 
          Senator Abraham. You had talked to the FBI then and 
        the Secret Service about it?
          Mr. Livingstone. No.
          Senator Abraham. You never did at that point?
          Mr. Livingstone. No.\546\
    \546\ White House Access to FBI Summaries; hearing before the 
Senate Committee on Judiciary, 104th Cong., 2d. Sess., June 28, 1996 p. 

    Livingstone did speak with the Secret Service about this 
matter. Agent Cole, a decorated Secret Service employee, 
testified that Livingstone left a copy of his attorney's press 
release for him in his office and that Livingstone was making 
efforts to contact him throughout the week.\547\ When Agent 
Cole spoke with Livingstone, Cole testified that Livingstone 
did not want to speak in his office. Cole asked him if he 
thought his office was bugged and Livingstone ``indicated to 
[Cole] that he just didn't think it was safe to talk in his 
office.'' \548\
    \547\ Cole deposition, p. 38.
    \548\ Id., p. 184.
    While the White House continued to place blame on the 
Secret Service, no one from the White House ever contacted the 
Secret Service to make any complaints about any problems with 
Secret Service lists.\549\ When Secret Service Agents Libonati, 
Undercoffer and Cole testified before the committee on July 17, 
1996, it became clear that the Secret Service was not culpable 
for the ``egregious violations of privacy'' that took place in 
the Office of Personnel Security. The Secret Service spent an 
extraordinary amount of time and resources carefully reviewing 
the quality of information they provided to the White House. 
There were no systemic problems for which the Secret Service is 
responsible that would account for these actions.\550\
    \549\ Security of the FBI Files hearing, July 17, 1996, p. 44.
    \550\ Id., pp. 24-41.

      B. The Secret Service's Role in Obtaining White House Access

    The Secret Service maintains the E-Pass system. It is a 
computerized access and pass holder system that produces hard 
passes for the White House and computer printouts of pass 
holders. The lists produced by the E-Pass system are used to 
show who has and who does not have access to the White House. 
John Libonati, Supervisory Special Agent with the Secret 
Service, testified before the committee that ``[t]he printouts 
are not designed, and should not be used for other purposes. 
The printouts are produced for uses related to access issues.'' 
    \551\ Id. Opening statement of Agent Libonati.
    As Agent Libonati testified, ``the request for FBI files by 
any White House administration is made solely for active 
employees.'' \552\ The Secret Service provides lists of active 
employees, inactive employees or a master list which contains 
the names of approximately 24,000 active and inactive White 
House passholders for the previous 8 years.\553\ Letter from 
William H. Pickle, Executive Assistant to the Director of the 
Secret Service, to Chairman Clinger, August 23, 1996.\554\
    \552\ Id., p. 25.
    \553\ Id., pp. 27-28; On August 23, 1996, William H. Pickle, 
Executive Assistant to the Director of the Secret Service, wrote to 
Chairman Clinger to explain why the Secret Service retains 8 years 
worth of inactive passholder records. He wrote, ``In April of 1982, a 
study was conducted by the Secret Service Office of Management and 
Organization. The study concluded that due to a recurring need for 
information in these files, an 8-year retention period would be 
recommended to the National Archives for review. The request was 
reviewed and approved by Archives appraisers in January of 1983.''
    \554\ Thus, Secret Service Records would include the names and 
status of those who held White House passes for 8 years.
    The master List, kept by the Secret Service, includes 8 
categories of a File Number; First, Middle, and Last Names; 
Pass Type; Month, Date and Year, Date of Birth; Status; Month, 
Date, and Year; and Office Name. The pass type indicates the 
areas to which the passholder has access. The first listing of 
month, date, and year is listed only for those whose pass is 
scheduled to expire, and the date listed is the date of 
expiration. The office name is the office in which the 
passholder works. The status is the place where a notation is 
made of whether the passholder's access is ``active'' or 
``inactive.'' That status is indicated by an ``A'' or an ``I.''

   C. The Lists Used By the White House Office of Personnel Security

    One of the excuses offered by the White House as to why the 
Office of Personnel Security improperly obtained FBI background 
files was that they were updating their files because the 
previous administration had removed all personnel files from 
the White House. According to the Clinton administration, the 
list provided to them from the Secret Service, which they used 
to find out who should have access to the White House, 
incorrectly included names of people from previous 
administrations who should not have had access to the White 
House. White House officials insistently refer to the Secret 
Service's list as defective.
    Craig Livingstone testified before the committee, ``[T]his 
mistake occurred simply because the passholder list provided to 
my office by the Secret Service contained some names of former 
staffers who no longer had access to the White House complex, 
interspersed among the names of actual, current passholders and 
others who continued to have access.'' \555\ Liza Wetzl, now 
Confidential Assistant to the Secretary of the Army, testified 
before the committee that, ``I . . . concluded that Tony must 
have ordered previous reports for every person on whatever out-
of-date Secret Service list he had been working from.'' \556\ 
This was an attempt to shift the blame for improperly ordering 
hundreds of FBI background files from the White House to the 
Secret Service. However, we learned that any list that was 
produced in 1993, would have identified the vast majority of 
the people whose files were wrongfully obtained as 
    \555\ Security of FBI Files hearings, June 26, 1996, p. 30.
    \556\ Id., p. 47.
    At the time Livingstone and Marceca testified, the 
committee did not have the benefit of documents withheld by the 
White House. When the White House finally produced subpoenaed 
documents, they revealed that the White House knew that it was 
required to keep the Secret Service apprised of changes of 
those with access.\557\ These memoranda demonstrate that the 
White House clearly knew that to remove names from access lists 
was their job.
    \557\ Memorandum from Craig Livingstone, Director of White House 
Security to Arnold Cole; ``Please place the following people on 
restricted access. They are restricted from gaining access to the White 
House Complex without written authorization of Mr. David Watkins.'' 
Document CGE 33034; May 19, 1993.

              D. The Only List they Could be Talking About

    Because it had been accused by the White House of providing 
inaccurate lists for use by the White House Security Office, 
the Secret Service undertook an exhaustive audit of their E-
Pass system and any lists that may have been provided to the 
White House. At hearings before this committee, the Secret 
Service spoke in detail about the lists available to the White 
    \558\ Security of the FBI File hearing, July 17, 1996, pp. 24-41.
    Agent Libonati described the information which led to the 
search for mistakes in Secret Service lists. Agent Libonati 
told the committee, ``Upon receipt of two lists which total 476 
individuals [whose FBI background files the White House 
obtained improperly] the Secret Service set out to determine 
if, in fact, we had provided ANY LIST which would have 
inaccurately reflected any or all of these 476 names as ACTIVE 
passholders in 1993 or 1994.'' \559\ And because, according to 
Libonati, [t]he Secret Service has for many years provided 
printouts containing passholder information to the White House 
Office of Personnel Security,'' Libonati characterized the 
issue before the Secret Service in the following manner: ``Did 
the Secret Service produce and/or provide any list or lists 
which would have inaccurately reflected these 476 individuals 
as ACTIVE passholders?'' Libonati presented to the committee 
evidence uncovered by the Secret Service search and audit of 
their files, which clearly demonstrated that the Secret Service 
could not have provided such a list.\560\
    \559\ Id., p. 25. (Emphasis in original.)
    \560\ Id., pp. 24-41.
    The Secret Service conducted an exhaustive audit of its 
records. Libonati told the committee, ``The audit confirms that 
from 1984 to July of 1993, 379 of the 476 names on the subject 
list were made Inactive. We can account for 8 errors . . .'' 
\561\ Names were made inactive only at the request of the White 
House. However, many of the names mentioned above were entered 
into the E-Pass system when it was installed, and they were 
entered as Inactive. Thus, at no time were many of the names on 
the list of 476 in the E-Pass system as active passholders.
    \561\ Id., p. 25.
    Libonati recounted before the committee the evidence 
uncovered by the Secret Service in their search for lists 
produced by the E-Pass system at certain times. According to 
Libonati, the evidence showed:
         Ninety-four of the names of the 476 on the 
        list were inactivated between 1984 and 1989, before we 
        installed our current E-Pass system.\562\
    \562\ Id., pp. 33-34.
         In a printout of inactive passholders, the 
        evidence shows that ``182 of the 476 names in question 
        appear as they should on this inactive printout.'' 
    \563\ Id., p. 34.
         In a printout of active passholders from May 
        2, 1994, ``368 of the 476 names in question do not 
        appear on this list, and they should not appear on this 
        list. This is an active passholder list.'' \564\
    \564\ Id., p. 34.
         In a printout of active passholders as of July 
        31, 1993, ``379 of the 476 names in question do not 
        appear on this list.'' \565\
    \565\ Id., p. 35.
         In a printout of inactive passholders as of 
        August 19, 1994, 429 of the 476 names in question do 
        and should appear on this inactive list.'' \566\
    \566\ Id.
         In a March 31, 1993 active passholder list 
        provided to the committee by the White House, 408 of 
        the 476 names are not on the list. In addition, the 
        name of Elizabeth Belfore was not on the March 31, 1993 
        list, but is among the 476 people whose background 
        files were requested by the White House. Belfore did 
        not receive a pass until after July 8, 1993.\567\
    \567\ Id., pp. 35-36.
    The data compiled by the Secret Service clearly 
demonstrated that the only way Marceca could have obtained all 
of the names he sought files on would have been by utilizing a 
master list with both ``Active'' and ``Inactive'' employees, 
with the notations ``A'' and ``I'' clearly indicated on the 
printout. In using the master list, Marceca would have had to 
deliberately order the files of hundreds of individuals 
identified as ``Inactive.'' Agent Cole testified that he 
briefed Marceca's supervisor, Livingstone, on the ``Active'' 
and ``Inactive'' list notations:

          Question. You would have meetings where you 
        instructed--I believe you testified you instructed 
        Craig Livingstone on procedures and how to get material 
        from your office and get updated lists, that type of 
          Answer. Yes, we have had conversations about that.
          Question. In terms of reading the lists, what ``A'' 
        and ``I'' meant, active and inactive; that kind of 
        thing had been explained to Mr. Livingstone?
          Answer. Yes.\568\
    \568\ Cole deposition, pp. 47-48.

    Marceca has testified that he believed the designations, 
``A'' and ``I'' on the Secret Service lists meant ``Access'' 
and ``Intern.'' \569\ To believe this story, one would have to 
accept that Marceca, whose involvement in political campaigns 
is extensive, believed that such well known former White House 
officials as James Baker, A.B. Culvahouse, Ken Duberstein and 
many others were ``holdover interns,'' a category of 
passholders which does not exist.
    \569\ Security of the FBI Files hearing, July 26, 1996.
    Another fact uncovered by the Secret Service discredits 
Marceca's explanation that he was working with an old, or 
outdated list. One of the names on the list of files he 
obtained, Elizabeth Belfore, did not begin working at the White 
House until July 1993. Thus, any list Marceca worked from which 
included her name was created after this date. Since Marceca 
did not begin working at the White House until August 1993, it 
is apparent that he must have used a list created during that 
time period. A list made at that time would not have included 
most of the names of individuals whose files were eventually 
requisitioned by the White House.

                            E. Deactivation

    At hearings before the committee, committee members 
questioned why some former administration employees remained as 
active passholders in the Secret Service E-Pass System. 
Libonati and Cole explained that it is the responsibility of 
the White House to inform the Secret Service when an employee's 
status should change from active to inactive.
    Libonati made the process of deactivation of passes clear 
in his opening statement:

          A pass is also made inactive solely at the request of 
        the White House. It is the responsibility of each 
        administration to identify those pass holders whom they 
        wish to remove from the active passholder list. 
        Regardless of how obvious it may seem to anyone in the 
        Secret Service, we cannot, should not, and do not 
        inactivate a pass without clear instruction from the 
    \570\ Id., p. 27. (Emphasis added.)

After Libonati's explanation, Congresswoman Collins, the 
ranking minority member of the committee, was still confused 
about the process used to deactivate a pass.

          Mrs. Collins of Illinois. Could you explain to me why 
        Senator Tower, who had died 2 years earlier in a plane 
        crash, still had an active White House pass in '93?
          Mr. Cole. Because [the May 27, 1993 memorandum] was 
        the first notice we got from the White House to 
        deactivate his pass.
          Mrs. Collins. Did you know he had died?
          Mr. Cole. I wasn't aware of the fact that he had a 
        White House Pass, Ma'am.
          Mrs. Collins. Did you know he had died?
          Mr. Cole. Yes.
          Mrs. Collins. Does anybody ever cull the lists to 
        take out people who are deceased?
          Mr. Cole. The requirement for deactivation of passes 
        that is the same requirement that took place for 
        Vincent Foster, that we would have to have someone from 
        the White House to tell us to deactivate it. It is 
        obvious that person would not pose a threat to the 
        complex, because they are deceased.
          Mrs. Collins. Why would you have to have somebody 
        tell you to deactivate a file of somebody that the 
        Service knows is not going to use it?
          Mr. Cole. Because that documentation belongs to the 
        White House.

    Although White House staff feigned ignorance of it, the 
process of deactivation of passes for deceased or retiring 
personnel was well known to the White House Security Office. 
The fact that Livingstone made the request that the Secret 
Service deactivate Senator Tower's pass establishes his 
knowledge of the process of updating the Secret Service access 
list as a White House responsibility.\571\ Other evidence 
points to the fact that Livingstone was well acquainted with 
the process of removing Bush administration officials from 
Secret Service access lists.
    \571\ Memorandum from Craig Livingstone, Director of White House 
Security; Re: deactivation of Senator Tower; May 27, 1993. ``Please 
deactivate the pass issued to Senator Tower.'' CGE 047989.
    In a confidential memorandum from Craig Livingstone to 
William Kennedy, Livingstone notes, ``Please note that there 
are many Bush administration employees that still have active 
badges. USSS informs me that it is WHS responsibility to 
deactivate badges. I am working with WHOMA to begin this 
process.'' Because of information contained in the memorandum, 
it's date appears to be between March 4, 1993 and March 15, 
    \572\ Confidential memorandum from Craig Livingstone, Chief of 
White House Security, to William Kennedy, Associate White House 
Counsel, undated. Within the memorandum, Livingstone refers to a crash 
of the WAVE computer system occurring on March 4, 1993. Livingstone 
refers to the date on which ``green/tan access badge[s]'' will expire 
as March 15, 1993. From this information, the committee believes the 
date of this memorandum to be between March 4, 1993 and March 15, 1993.
    Documents dated August 9, 1993 include notes made by 
Marceca from a meeting with Nancy Gemmell that included Lisa 
Wetzl and Craig Livingstone. In those notes, Marceca writes, 
``De-Activate former staff FBI contact to remove STOP on 
[illegible].'' \573\ The White House staff was clearly familiar 
with the process of updating Secret Service lists and the 
language associated with it.
    \573\ Anthony Marceca, notes from meeting with Nancy Gemmell, 
August 9, 1993.
    In addition to the notes and memoranda of Livingstone and 
Marceca, testimony before the committee also points to the fact 
that the staff of the White House Security Office was aware of 
the process for deactivating White House passholders. In his 
deposition to the committee, Agent Cole stated that he briefed 
Livingstone on such matters.
    Livingstone and Marceca knew the process of deactivating 
White House access passes was a primary function of their jobs, 
and they were fully briefed on the process required to do that. 
Nonetheless, they tried to blame the Secret Service for their 
malfeasance. Because of their attempts to shift the blame, the 
Secret Service was forced to spend countless hours and 
resources responding to inquiries and allegations. The only 
logical conclusion to the audits conducted, was that no active 
Secret Service list could have produced the list of names of 
those whose FBI files were wrongfully requested by the White 

               IX. White House Passes and Security Issues

 A. Lax White House Security Procedures Were a Precursor to FBI Files 

1. Problems with White House passes

    The gathering of hundreds of FBI files was a consequence of 
the White House placing highly unsuitable personnel and 
supervisors in charge of the Security processes at the White 
House. The fact that the Clinton White House followed lax 
security procedures and was negligent in obtaining White House 
passes became apparent over 2 years ago, in March 1994, after 
lengthy congressional inquiries.
    A GAO inquiry into the delays in obtaining White House 
passes was requested by Chairman Clinger, and Representatives 
Frank Wolf and Porter Goss in March 1994, and released in 
October 1995. The GAO report outlined the unprecedented delays 
of the Clinton White House in obtaining passes.\574\ In keeping 
with the Clinton administration's pattern of resistance to 
investigations, the GAO inquiry examining the delays in 
obtaining the passes was met with numerous obstacles for over a 
    \574\ GAO report to Congress, ``Personnel Security: Pass and 
Security Clearance Data for the Executive Office of the President,'' 
October 19, 1995.
    \575\ The GAO inquiry which was requested in March 1994 was still 
stalled in October 1994 when Chairman Clinger, Representative Wolf and 
Representative Goss wrote to White House Chief of Staff Leon Panetta on 
October 7, 1994 concerned about the delay in the investigation.
    When the GAO inquiry finally concluded, it reported the 
following findings:
         A mere two permanent passes received final 
        approval prior to September 20, 1993--9 months into the 
        new administration.\576\ (In the past, permanent White 
        House passes were obtained for all staff by 
        approximately 6 to 9 months into a new 
        administration.\577\ )
    \576\ GAO report, p. 21.
    \577\ Staff interview with Jane Dannenhauer.
         In 1993, new Clinton White House staffers held 
        temporary passes for an average of 341 days, thus 
        requiring numerous renewals. (A temporary pass is 
        usually issued for 90 days.) \578\
    \578\ GAO report, p. 28.
         In 1993, the Secret Service stated that it 
        routinely granted eight or more extensions to 
        individuals for temporary passes as requested by the 
        Executive Office of the President.\579\
    \579\ GAO report, p. 29.
         There were 190 new Clinton White House 
        staffers who took more than 100 days to complete the 
        SF-86--the basic paperwork needed for the FBI to 
        initiate a background investigation.\580\
    \580\ GAO report, p. 22.
         There were 36 new Clinton White House staffers 
        who took over 300 days--almost a year--to complete 
        their SF-86s.\581\
    \581\ GAO report, p. 22.
         Of the 400 staff entering on duty during 1993, 
        250 took over 300 days to be approved for permanent 
    \582\ GAO report, p. 21.
         In 1993, 361 of 398 individuals took 200 days 
        or more to be approved for a permanent pass.\583\
    \583\ GAO report, p. 29.
         Only about two dozen staffers had ``interim 
        clearances'' according to the White House in the first 
        8 months of the administration.\584\
    \584\ GAO report, p. 34.
         Individuals entering on duty during 1993 
        received final approval for permanent White House 
        passes ``an average of 346 days from their start 
        date.'' \585\
    \585\ GAO report, p. 3.
         ``The longer time needed to process 1993 
        entrants was primarily attributable to the time 
        individuals took to complete the SF-86 and to 
        subsequent actions taken by the Executive Office of the 
        President.'' \586\
    \586\ Id.
    When White House advisor George Stephanopoulos was 
questioned about the problems with obtaining passes during 
``This Week with David Brinkley,'' on June 30, 1996, he 
erroneously claimed:

          Stephanopoulos. Well most people did go get their 
        interviews. Most people got their passes. If there was 
        slippage, that was a mistake. It was wrong.
          Sam Donaldson. Aldrich [FBI agent Gary Aldrich] says 
          Stephanopoulos. Well, I'm not sure that's true . . . 
        I don't have the exact number.

    According to a White House memo from Craig Livingstone, 
Stephanopoulos' temporary pass was renewed for an additional 90 
days on December 13, 1993.\587\ Stephanopoulos, like most of 
the White House staff at that time, had numerous renewals of 
his temporary pass.
    \587\ White House production CGE 047029. Memorandum for U.S. Secret 
Service Pass Section from White House Security, Re: extension of 
passes, December 13, 1993.
    The GAO inquiry was preceded by months of congressional 
inquiries into the inordinate delay in obtaining White House 
passes.\588\ Senior officials, including the then-Chief of 
Staff Mack McLarty, did not obtain permanent passes until March 
1994. Once this serious security breach of the Clinton 
administration was brought to light in March 1994, the White 
House was forced to respond.
    \588\ Representative Frank Wolf began inquiring about the delays in 
White House passes and the lack of procedures being followed with 
passes in July 1993. Throughout the fall of 1993 and into 1994, then-
Chief of Staff Mack McLarty assured Wolf that clearances were being 
handled ``in a timely manner.''
    The press began reporting on the delays in the issuance of 
permanent White House passes in early 1994. On March 10, 1994, 
the Wall Street Journal first pointed out that the White House 
had not approved passes for senior White House officials such 
as the Director of the Office of Administration, Patsy 
Thomasson.\589\ This article appears to have generated a memo 
from Associate Counsel William Kennedy to Mack McLarty 
explaining the procedures to receive a permanent pass.\590\ The 
next day the Washington Post reported that, ``15 White House 
aides, including press secretary Dee Dee Myers and another 
unidentified senior official, have yet to receive security 
clearances because they failed to complete necessary paperwork 
. . .'' \591\
    \589\ ``Who is Patsy Thomasson?'' Wall Street Journal, March 10, 
    \590\ Memorandum to Thomas F. McLarty from William H. Kennedy III, 
re: procedures to receive a permanent pass, March 10, 1994, CGE 054752.
    \591\ ``After Year, 15 White House Aides Have Yet to Receive 
Security Clearances,'' the Washington Post, March 11, 1994.
    By March 12, 1994, the White House conceded that the 
situation was actually much worse than it originally admitted 
and that hundreds of staff did not have permanent passes: 
``White House Press Secretary Dee Dee Myers . . . confirmed 
that about a third of the 1044 employees designated as White 
House staff, including herself, have not received their 
permanent passes.'' \592\ Of the 125 senior staff, 
approximately one-third still did not have their permanent 
passes.\593\ By March 14, 1994, the White House raised the 
number of officials who did not have security clearances to 100 
rather than the 15 individuals originally reported.\594\ 
Clearly, the responses provided to Congress by McLarty were 
misleading, incomplete and inaccurate.\595\
    \592\ ``White House lags badly on background checks,'' the 
Washington Times, March 12, 1994.
    \593\ Id.
    \594\ ``100 on White House Staff Lack Clearance,'' the Washington 
Post, March 14, 1994.
    \595\ See letters to Rep. Frank Wolf from Mack McLarty dated August 
19, 1993, October 27, 1993 and February 24, 1994.
    Ms. Jane Dannenhauer, Assistant to the Counsel to the 
President in charge of the Security Office during the Nixon, 
Ford, Reagan and Bush administrations, reported that a new 
administration normally completed its pass issuance within 
approximately 6 months, or at most 9 months.\596\ In 
comparison, the GAO reported that only two Clinton staffers had 
permanent passes 9 months into the administration.\597\ Messrs. 
Kennedy and Livingstone, who were responsible for White House 
pass issuance, did not obtain their own passes until November 
23, 1993.\598\
    \596\ Staff interview of Jane Dannenhauer.
    \597\ GAO report, p. 21.
    \598\ GAO documents prepared for GAO report, January 5, 1995. (In 
committee files).

2. Unsuitable personnel in charge of overseeing the Office of Personnel 

    While the committee and the public have yet to learn who 
hired Craig Livingstone, the committee discovered information 
on the hiring of his supervisor, William Kennedy. Mr. Kennedy 
testified that Mrs. Clinton participated in his selection as 
Associate White House Counsel.\599\ At the time of his 
background investigation, Kennedy informed the FBI's SPIN Unit 
Chief Bourke that he was a ``close personal friend of the 
President and Mrs. Clinton for twenty years and was a managing 
partner in the same Arkansas law firm in which Mrs. Clinton was 
employed.'' \600\
    \599\ Kennedy deposition, June 18, 1996, p. 4:
    Question: Did the First Lady have any involvement in your hiring?
    Kennedy. She did.
    \600\ February 26, 1993 memo to Mr. Brekke from Mr. Bourke 
regarding ``Meeting with William Kennedy, Associate Counsel, the White 
House, February 18, 1993. (FBI document production, July 10, 1996, 
    Mr. Kennedy, in his position as an Associate Counsel, 
reviewed the sensitive background investigations of 
Presidential appointees and White House staff, including 
Director of Personnel Security Craig Livingstone. Although 
Kennedy supervised Livingstone's office and was aware of 
problems in Livingstone's background, he favorably adjudicated 
his file.\601\
    \601\ Kennedy deposition, June 18, 1996, p. 9.
    Mr. Kennedy had background problems of his own. Mr. Kennedy 
did not properly disclose his failure to pay Social Security 
taxes for a servant in his home. He paid the taxes belatedly 
under his wife's former married name.\602\ Just as Kennedy had 
ignored the problems in Livingstone's background, Livingstone 
adjudicated Kennedy's background favorably, ignoring the 
derogatory information.\603\ Although each had completed the 
adjudication of the other's file, Kennedy did not forward 
either his or Livingstone's file to the Secret Service for 
    \602\ ``Patsy Takes the Fiske,'' Wall Street Journal, March 24, 
    \603\ CGE 054658, undated document titled ``Deconcini'' with 
questions and answers, CGE 54654-662.
    \604\ Ann Devroy, 100 on White House Staff Lack Clearance, the 
Washington Post, March 14, 1994.
    Four Counsels to the President and two Chiefs of Staff kept 
Mr. Livingstone in his position despite serious concerns about 
his background. Livingstone was retained despite his penchant 
for short working hours and routine demands for large salary 
increases. Keeping Craig Livingstone employed seemed more 
important to Clinton administration officials than maintaining 
the security of some of the Nation's most sensitive files.\605\
    \605\ Three attorneys in the White House Counsel's Office wrote 
letters requesting a raise for Craig Livingstone, even though there was 
a salary freeze. CGE 048622, 048627; Mr. Livingstone wrote several 
letters to Abner Mikva requesting a raise, stating, ``[T]his is my last 
try to remain part of the team.'' CGE 048058; See, supra section III.
    Former White House Counsels have testified that the process 
of reviewing FBI files ``is a solemn, legal and ethical 
obligation.'' \606\ After the committee discovered that the 
Office of Personnel Security ordered the files of hundreds of 
former Reagan and Bush administration officials, the Director 
of the FBI, Louis Freeh, called the actions ``egregious 
violations of privacy.'' \607\ Director Freeh continued to 
state that the files were ordered ``without justification.'' 
\608\ As Director Freeh pointed out, the system utilized relied 
on the ``good faith and honor'' of those involved in the 
process.\609\ As the Washington Post opined on June 17, 1996:
    \606\ Security of FBI Files hearing, June 19, 1996, p. 32. 
(Testimony of A.B. Culvahouse.)
    \607\ Howard M. Shapiro, general counsel, FBI; Report of the 
General Counsel on the Dissemination of FBI FIle Information to the 
White House; June 14, 1996. (Statement of FBI Director Louis Freeh).
    \608\ Id.
    \609\ Howard M. Shapiro, general counsel, FBI; Report of the 
General Counsel on the Dissemination of FBI FIle Information to the 
White House; June 14, 1996.

          . . . damage was done from Day 1 when Craig 
        Livingstone was put in this job. The last people in 
        government to have access to, let alone be custodians 
        of, sensitive background investigation reports and 
        material should be political operatives. That, 
        unfortunately, is what the Clinton administration seems 
        to have done. And that's for starters.\610\
    \610\ ``The FBI Files Flap: Take 2,'' the Washington Post, June 17, 

    FBI Special Agent Tom Renaghan, who supervised the FBI 
agents who conducted background investigations at the White 
House, remembered issues in Livingstone's background:

          that were not totally favorable . . . they [FBI 
        agents Aldrich and Sculimbrene who conducted background 
        investigations at the White House] both felt that he 
        wasn't the right guy to be the Security Director. They 
        didn't think he had the background or demeanor, didn't 
        appear to be the kind of guy that would be the type of 
        person that would be--you would expect in that position 
        . . . He was unprofessional in many ways, as 
        unprofessional as they would perceive a guy to be who 
        had that type of a job. . . . They voiced their opinion 
        to me about that periodically asking me to take some 
        kind of action to get something done with respect to 
    \611\ Renaghan deposition, July 19, 1996, pp. 62-65.

    Mr. Kennedy allowed Livingstone to retain his sensitive 
position after reviewing Livingstone's background file. 
Although both FBI and Secret Service agents raised suitability 
and security concerns about Livingstone, Kennedy ignored 
them.\612\ Senator Dennis DeConcini, the then-Democratic 
chairman of the Treasury Postal Service and General Government 
Subcommittee of the Appropriations Committee, which approved 
appropriations for the White House, as well as chairman of the 
Senate Intelligence Committee, recommended that Livingstone be 
replaced in 1994 with a professional careerist. Senator 
DeConcini's recommendations were ignored by then-White House 
Counsel, Lloyd Cutler.\613\
    \612\ Cole deposition, July 10, 1996, pp. 21-22.
    \613\ August 11, 1994 letter to the President from Senator 

    B. The Process by Which Background Investigations Are Conducted

    The process for obtaining a permanent access pass to the 
White House generally requires the following steps:

1. Pre-employment steps

            a. Security interview
    Prior to each person's appointment, applicants must undergo 
a security interview conducted by the relevant security 
office.\614\ In the case of the political staff, generally the 
``White House staff,'' the interview would be conducted by the 
Office of Personnel Security, supervised by Livingstone. For 
the career staff, the Office of Administration Security Officer 
would conduct the interviews.\615\ During the first year-and-a-
half of the Clinton administration, hundreds of employees did 
not submit to this interview prior to employment, or for many 
months after being hired.\616\
    \614\ GAO report, p. 15.
    \615\ Easley deposition, July 26, 1996.
    \616\ GAO report.
            b. Submit to a drug test
    All applicants must submit to a drug test. If the test is 
positive, the person is supposed to be disqualified from 
appointment.\617\ Many of the new employees in the Clinton 
administration did not take drug tests prior to employment at 
the White House, and they were often conducted months later.
    \617\ GAO report, p. 15.
            c. An initial name check
    Applicants must undergo an initial name check in which 
their name, date of birth, place of birth, and Social Security 
number are checked through the Secret Service's Workers, 
Appointment, and Visitors Entrance System (WAVES). This 
consists of checks through four computer databases: the FBI's 
National Crime Information Center database; a criminal history 
database; a Secret Service database; and a Washington-area law 
enforcement database.\618\ This is the type of name check that 
is conducted for visitors at the White House. For many Clinton 
White House staff in the first year-and-a-half, this was the 
only background check conducted on them.
    \618\ GAO report, p. 15.
            d. An extensive FBI name check
    In this process, the White House forwards a request form to 
the FBI to check the name through the FBI Central Records, 
computer databases and the Criminal Justice Information 
Services database to identify any derogatory information and 
prior arrest records.\619\ Any previous report is also provided 
if the individual already has an FBI background investigation 
on file.
    \619\ GAO report, p. 15.
            e. Obtaining a temporary pass
    Each new employee who is expected to work 90 days or more 
has 30 days from the date of employment in which to complete 
the SF-86, an FBI investigation consent form, and a tax check 
waiver.\620\ This 30 day standard was the regular practice in 
past administrations; however, there was no such legal 
    \620\ GAO report, p. 16.
    Mr. Charles Easley, who headed up the Security Office for 
career employees at the White House, stated that if someone did 
not turn in their SF-86s and other background information 
within 30 days, ``they had a lot of time to sit at home and do 
their forms'' because he would not allow someone to work at the 
White House.\621\ Mr. Easley said that this was not the case 
for the staff handled by Livingstone. Easley acknowledged that 
he was aware that Livingstone allowed staff to work at the 
White House and obtain a temporary pass without turning in 
paperwork, a change in normal procedure.\622\
    \621\ Easley deposition, p. 48.
    \622\ Easley deposition, pp. 48-50.
    Previously, the practice had been that an individual had to 
stay on an ``access list'' prior to completing the SF-86 and 
related paperwork, which meant the person would have to present 
positive identification each time he or she entered the White 
House complex.\623\ Once the FBI name check is returned, the 
individual would be issued a temporary pass for a period not to 
exceed 90 days. After one extension, the Secret Service is 
supposed to contact the requesting office to provide a 
rationale for an additional extension.\624\ Each new employee 
also is required to attend a security briefing at which his or 
her attendance should be documented.\625\
    \623\ GAO report, p. 16.
    \624\ GAO report, p. 16.
    \625\ GAO report, p. 16.
            f. Obtaining a permanent pass
    Before a permanent pass is obtained, the FBI or some other 
agency must conduct a full-field background investigation. If 
the investigation reveals information that warrants attention, 
the FBI notifies the White House Counsel's Office, the White 
House Office of Personnel Security, or the Security Office of 
the EOP (administered by Charles Easley) and might provide an 
interim report.\626\
    \626\ GAO report, p. 17.
    Once the reviewing office receives the FBI background 
investigation summary, it determines suitability and decides 
whether to forward the file to the Secret Service. A written 
request is sent to the Secret Service for a permanent access 
pass for the employee and, if the Secret Service agrees there 
is no danger to the President or other protectees, a permanent 
pass is issued.\627\
    \627\ GAO report, p. 18.
    During the first year-and-a-half of the Clinton 
administration, this process was neglected and hundreds of new 
White House staff worked in positions, including the most 
senior positions, with only very limited checks on their 
backgrounds and no permanent passes. The importance of 
following procedures and determining the suitability of staff 
members is to protect both the President, personally, and the 
vast amount of sensitive information at the White House.
    At no place is it more important that individuals of the 
highest caliber serve in positions of responsibility than at 
the White House. The White House handles matters of life and 
death on a daily basis and the American people must be able to 
rely upon stable and suitable people being involved in this 
process. Because the White House had failed in this process, 
Presidential Assistant Patsy Thomasson made this alarming 
admission in her March 22, 1994 testimony before the House 
Treasury Postal Appropriations subcommittee: ``We don't think 
we have any Aldrich Ameses at the White House . . . But we 
certainly could.'' \628\
    \628\ Patsy Takes the Fiske, the Wall Street Journal, March 24, 
    This admission prompted then-Congressman Dan Glickman, 
chairman of the House Intelligence Committee to write to the 
Director of the CIA asking what steps he had taken to ensure 
that White House staffers without clearances did not have 
access to classified material.\629\ Representative Glickman 
noted at the time, ``The urgency of this matter has been 
highlighted by the arrest of Aldrich Ames.'' \630\ Early in the 
administration, there was cause for concern about White House 
    \629\ Id.
    \630\ Id.

       C. Background Investigations of Clinton White House Staff

1. White House staff provided minimal cooperation to the FBI

    The FBI agents who worked on a day-to-day basis in 
conducting FBI background investigations on the new Clinton 
White House staffers were very familiar with the delays in 
obtaining White House passes. From the start, the process was 
slower than with previous administrations and staff cooperation 
was liminted.
    FBI Agent Dennis Sculimbrene testified that the incoming 
administration usually starts sending cases on Cabinet-level 
personnel and appointees in December, before the Presidential 
Inauguration. But that did not occur with the Clinton 
administration.\631\ Agent Sculimbrene said there was a marked 
contrast with this administration: ``the forms were poorly 
filled out and they didn't even start getting them until 
July.'' \632\ When they received the forms, they were often 
    \631\ Sculimbrene deposition, July 15, 1996, p. 28.
    \632\ Id., p. 29.
    \633\ Id.
    Agent Sculimbrene's supervisor, Tom Renaghan, also reported 
that backgrounds were received late and were backdated.\634\ 
FBI Agent Cecelia Woods, another agent assigned to the White 
House, reported that she saw the dates on SF-86s visibly 
changed and received SF-86s sometimes 8 months after they had 
been completed by the appointee.\635\
    \634\ Renaghan deposition, pp. 13-15.
    \635\ Woods deposition, July 10, 1996, pp. 20-22.
    FBI Agent Greg Schwarz testified that he had trouble 
setting up interviews or getting people to appear for 
interviews and was aware of this happening to other agents at 
the White House.\636\ Agent Woods testified that Renaghan, her 
supervisor, advised Unit Chief Bourke of these irregularities 
and that Bourke should have discussed the problems with 
Associate White House Counsel Bill Kennedy.\637\ Woods, 
however, never saw any corrective actions taken on issues she 
or her colleagues raised with her supervisors.\638\
    \636\ Schwarz deposition, July 11, 1996, pp. 27-30.
    \637\ Woods deposition, July 10, 1996, pp. 22-23.
    \638\ Id., p. 61.
    FBI Agent Gary Aldrich explained that he had problems 
conducting background interviews, including: problems in 
locating individuals, an inability to contact them directly and 
appointments being made and broken.\639\ As a result of these 
problems, Deputy White House Counsel Vincent Foster sent out a 
memo to all staff on February 17, 1993 instructing them to 
cooperate with FBI Agents Aldrich and Sculimbrene. Mr. Foster 
    \639\ Aldrich deposition, July 18, 1996, p. 20.

          There are a large number of staff members yet to be 
        interviewed and only a few weeks left to complete them 
        before your temporary clearance expires. Please be 
        responsive to the Agent's request for an interview and 
        accommodate his schedule.\640\
    \640\ Memorandum to all White House Office Staff from Vincent 
Foster and William Kennedy, CGE 048210.

There was such laxity in submitting the names of new White 
House staff for background investigations that Bourke resorted 
to clipping newspaper articles which identified new staffers 
and sending them to Bill Kennedy with notes that the FBI had 
not received the backgrounds of the individuals named.\641\
    \641\ FBI document production, July 10, 1996 (unnumbered). March 1, 
1993 letter to Bill Kennedy from Jim Bourke; April 7, 1993 letter to 
Bill Kennedy from Jim Bourke; October 20, 1993 letter to Bill Kennedy 
from Jim Bourke.
    Agent Bourke's letters to Kennedy highlight the fact that 
the FBI had not been provided information on many top White 
House officials as late as October 1993. In an April 7, 1993 
letter to Bill Kennedy, Bourke wrote: ``I read an article in 
the April 6, 1993, edition of USA Today on Jocelyn Elders. It 
reminded me that we still do not have the paperwork to do her 
background investigation (BI).'' \642\ At the same time that 
the White House was negligent in obtaining background 
investigations on new White House staff members, Livingstone 
and Marceca were ordering the background investigations on 
former Reagan and Bush officials.
    \642\ April 7, 1993 letter to Bill Kennedy from Jim Bourke.

2. Problems in the background investigations of Clinton administration 

    Almost immediately FBI agents reviewing the background 
files of the new Clinton White House officials noticed 
significant problems. According to Sculimbrene, the problems in 
the backgrounds included, ``using illegal drugs repetitively, 
lying to law enforcement officers, lying about school records, 
being fired.'' \643\
    \643\ Sculimbrene deposition, July 15, 1996, p. 42.
    Agent Sculimbrene noted that the drug use was by ``older 
people who had used illegal drugs much more recently, as 
recently as the Inaugural.'' \644\ According to Sculimbrene, 
these drugs included:
    \644\ Id.

          designer drugs . . . I think the first time I heard 
        the word `designer drugs' was off an appointee. Cocaine 
        . . . possibly crack cocaine . . . hallucinogenic 
        mushrooms. I think some people used LSD. It was much 
        more than the one or two times when they were 18 or 19 
        years old . . . this was not just junior staffers, 
    \645\ Id., p. 43.

Agent Sculimbrene noted that he did not believe that ``a single 
person'' was terminated because of any information of this 
nature that became apparent from an FBI background 
    \646\ Id., p. 44.
    FBI Agent Cecilia Woods also found recent drug use in the 
backgrounds of some appointees and noted one instance where 
drug usage stopped as recently as the day before an individual 
filled out the SF-86.\647\
    \647\ Woods deposition, p. 29.
    It was in a White House having its own problems completing 
background investigations that Livingstone and Marceca were 
busy at work on the ``Update Project,'' which resulted in the 
procurement of hundreds of background investigation files of 
former Reagan and Bush officials.

                       D. Secret Service Concerns

1. Delays in submitting background investigations to the Secret Service

    The Secret Service also became concerned about the delays 
in the Clinton White House obtaining permanent passes.\648\ 
Secret Service Agent Arnold Cole was the supervisor of the 
White House Access Control Branch and was the individual tasked 
with interfacing with Livingstone's office.\649\
    \648\ Cole deposition, p. 18
    \649\ Id., p. 6.
    During the transition, Cole and other security personnel 
met with Clinton officials regarding security matters. At that 
time, David Watkins was the point of contact and Cole met with 
him on several occasions.\650\ At some point later in February, 
Livingstone was identified to Cole as the person who would be 
heading up the office.\651\
    \650\ Id., p. 8.
    \651\ Id., p. 10.
    During the spring of 1993, Cole convened a meeting of 
security officers for March 31, 1993 to meet ``new members of 
the administration and discuss any security issues pertaining 
to the White House complex.'' \652\ These meetings were 
convened monthly through November 1993.\653\ Agent Cole 
testified that the Secret Service received very few background 
files before the end of 1993.\654\
    \652\ Id., p. 15.
    \653\ Id., p. 17.
    \654\ Deposition of Arnold Cole, July 10, 1996, p. 25.
    As the meetings proceeded through the year, it became 
apparent that there were problems with staff obtaining 
permanent passes. Agent Cole testified:

          . . . the obvious concern that we had from a security 
        standpoint was that anyone with a temporary pass 
        exceeding 90 days and they have close proximity to the 
        President, we would want to know whether or not this 
        person would pose a possible immediate or projected 
        threat later on. So those were our concerns.\655\
    \655\ Deposition of Arnold Cole, July 10, 1996, p. 18.

    Agent Cole testified that he raised these concerns with 
Bill Kennedy and explained to him the importance of having the 
background investigations completed.\656\ Yet neither Kennedy's 
own background file nor Livingstone's were forwarded to the 
Secret Service until September 20, 1993.\657\ Following the 
submission to the Secret Service of both of their backgrounds, 
it took another 2 months before the Secret Service issued 
permanent passes to Kennedy or Livingstone on November 23, 
1993.\658\ Earlier that month, on November 7, 1993, 
Livingstone's neighbor filed a complaint with the Montgomery 
County Police Department, charging Livingstone with a simple 
assault for threatening her. Mr. Livingstone reportedly said, 
``If you don't keep that (expletive deleted) dog quiet, I'm 
going to beat your face in.'' \659\ The neighbor informed 
police that Livingstone made previous threats to her in the 
past, which Livingstone admitted.\660\
    \656\ Id., p. 19.
    \657\ GAO draft of data for GAO report, 1/5/95.
    \658\ Id.
    \659\ November 7, 1993 event report to Montgomery County Police of 
threat to Barbara Ann Sable by Craig Livingstone, #B93-240485.
    \660\ Id.
    Background files with no problems take only several days 
for the Secret Service to issue a permanent pass. No one at the 
White House was alarmed when the people whom they put in charge 
of reviewing backgrounds had problems significant enough to 
cause a 2 month delay in issuing their permanent passes. A man 
who made assault threats against a woman was put in charge of 
security at the White House. This should never have occurred.

2. The Secret Service raised concerns about the content of the 
        background files

    The Secret Service raised concerns about whether 
Livingstone should be granted a White House pass,\661\ when it 
obtained his background file in September 1993. Agent Cole said 
that he became aware of ``derogatory information'' in 
Livingstone's file and raised it with Kennedy:
    \661\ Cole deposition, pp. 21-22.

          What I recall discussing with Mr. Kennedy was my 
        concerns on the derogatory information and whether or 
        not he concurred or not . . . he wanted to understand 
        specifically what my concern was as it related to our 
        mission . . . \662\
    \662\ Id., pp. 22-23.

Agent Cole said there was also information in Kennedy's 
background file which was brought to his attention that he 
reviewed from a security standpoint and ultimately resolved in 
favor of Mr. Kennedy.\663\
    \663\ Id., pp. 24-25.
    As background investigations of other individuals started 
coming into the Secret Service in late 1993 and early 1994, it 
became apparent that there were issues of recent drug use in 
many files. Agent Jeff Undercoffer, who reviewed files in early 
1994, testified: ``I would say more than 30, more than 40, 
perhaps, had drug usage [beyond college age]'' . . . and ``a 
few dozens who were recent.'' \664\ Agent Undercoffer testified 
to what the files he reviewed included:
    \664\ Id., p. 41.

          I have seen cocaine usage. I have seen hallucinogenic 
        usages, crack usages . . . I would say those are the 
        big three.\665\
    \665\ Undercoffer deposition, p. 42.

    In late 1993, the Secret Service raised concerns over an 
individual's pass request ``based on our review of the 
background investigation'' in which they ``felt that the 
derogatory information was such that it may compromise the 
security of the White House without some other mechanism in 
place to ensure that our concerns were just merely concerns.'' 
    \666\ Cole deposition, p. 31.
    The Secret Service initially denied pass requests for a 
number of individuals because of very recent drug use.\667\ Out 
of this situation, a program was developed whereby the 
offending individual was required to participate in a special 
drug testing program for White House employees with recent drug 
    \667\ Id., p. 32.
    \668\ Cole and Undercoffer depositions.

                  E. White House Drug Testing Program

    In order to obtain the approval of the Secret Service in 
issuing permanent passes to individuals with recent drug use, 
the White House instituted a random drug testing program. Agent 
Cole explained the program: ``I think it was a compromise 
between both the White House and the Secret Service as a 
suggestion as to what would be amenable to both parties.\669\ 
According to the White House, the program included as many as 
21 people over the past several years according to the White 
House. These were individuals who had drug use in the year 
before they began work at the White House. Nine such 
individuals still are employed at the White House.\670\ As 
White House Counsel Jack Quinn explained the program:
    \669\ Cole deposition, p. 32.
    \670\ July 31, 1996 letter to Chairman Clinger from Jack Quinn.

          In a small number of instances, the Office of White 
        House Counsel in consultation with the Secret Service, 
        determined that an individual should be issued a pass 
        only if he or she agrees to be subject to the more 
        frequent, non-random special drug testing protocol 
        described above. This means being tested unannounced 
        twice a year under the same conditions as the standard 
        random testing program in the EOP's Drug-Free Workplace 
        Plan. These individuals are so designated because 
        information developed in the course of the security 
        clearance process or supplied by the individual 
        suggested that it would be prudent to do so.\671\
    \671\ Id.

It is important to recognize that this program is handled 
entirely by the White House Counsel's Office and the drug 
testing is administered by the EOP random testing program. When 
an individual is placed in this program, a ``drug letter'' is 
placed in his or her file with the Secret Service. The Secret 
Service is then informed if there is any positive drug testing.
    The individual must sign this ``drug letter'' indicating 
that they acknowledge the drug use set forth in his or her FBI 
background investigation and the individual is informed that 
any positive drug test would be grounds for immediate 
    \672\ July 31, 1996 letter to Chairman Clinger from Jack Quinn.
    The Secret Service has no role in the procedures for the 
drug testing program and relies entirely upon the information 
provided by the White House. There is no independent 
verification of the information by the Secret Service, which is 
entirely dependent upon the good faith efforts of the Counsel's 
Office to comply with the requirements in the ``drug letter.'' 
The White House Counsel's Office staff who have been involved 
since 1993 in overseeing or supervising the special drug 
testing are Bill Kennedy, Beth Nolan and Chris Cerf.\673\
    \673\ Id.
    While the White House went to extraordinary lengths to have 
recent drug users on staff--it even created a special program 
to keep them employed at the White House--a June 10, 1993 memo 
suggests that Bill Kennedy and Craig Livingstone seemed to 
think drug users might have some kind of ``right'' to a job at 
the White House! \674\
    \674\ June 10, 1993, ``Assignment from Bill Kennedy & Craig 
Livingstone,'' CGE 047888.
    In regard to staff who admit present or prior drug use, the 
June 10, 1993 memo asks: ``Does the President have the 
authority to (1) refuse employment; (2) hire on conditions: 
send the individual to a health care professional to assess the 
individual's suitability/risk as a pre-condition of employment; 
and, (3) hire without any conditions?'' \675\ Mr. Kennedy, who 
oversaw the frivolous firings of the Travel Office, had to ask 
whether or not the President could deny present drug users a 
job at the White House.
    \675\ Id.

                    F. CIA Compartmented Clearances

    The Clinton White House issued the highest of national 
security clearances, CIA compartmented clearances, to 
Livingstone, Wetzl and other young staffers in the Office of 
Personnel Security. Although CIA officials reviewed 
Livingstone's drug history and FBI background file, it does not 
appear that the CIA made any objections to issuing Livingstone 
at least three separate compartmented clearances.\676\ Records 
the committee has now reviewed make it clear that the Clinton 
White House gave Craig Livingstone access to the most 
classified sensitive information.
    \676\ CIA documents, located in committee files.
    The committee was troubled by the ease with which 
unsuitable candidates were given the highest levels of security 
clearances. The CIA explained to the committee that it 
authorized the clearances, including that of Livingstone, 
because the White House made the requests.
    Finally, even when the White House decided to upgrade the 
security clearance process, Livingstone was given special 
treatment again. Current White House Security Chief Charles 
Easley testified that he did not review Livingstone's file when 
he was updating the clearances of everyone at the White 
House.\677\ Mr. Easley testified that even though he reviewed 
the file of everyone else he worked with at the White House, he 
declined to review Livingstone's file and approved him for a 
security clearance in December 1995.\678\ This is the 
individual the White House put in charge of the security office 
when Craig Livingstone resigned.
    \677\ Easley deposition, p. 72.
    \678\ Id.
    The lax and cavalier attitude the Clinton White House has 
regarding security was evident from the day Kennedy and 
Livingstone were placed in positions of responsibility at the 
White House. Mrs. Clinton had a role in Kennedy's hiring. Mr. 
Kennedy took full advantage of his connections to the President 
and Mrs. Clinton, informing FBI liaison Bourke of the 
relationship. Both Kennedy and Livingstone were unsuited to 
this sensitive work given problems with their own backgrounds 
and evidence of questionable conduct.
    Despite complaints from the FBI and Secret Service about 
inordinate delays and abuse of past processes, the White House 
continued to allow unsuitable individuals to preside over the 
office. The White House ignored FBI and Secret Service 
concerns, and the office was eventually found to have 
inappropriately gathered FBI background files on hundreds of 
former Reagan and Bush officials.
    The White House is at the center of policies and debates 
that may determine matters of life or death, war or peace. For 
the past 30 years, the White House has engaged in a careful 
process of security clearances and background checks on 
individuals to determine their suitability for positions in the 
White House and throughout the executive branch.
    The clearance and background process is designed to protect 
the security of the President as well as the national security 
of the country. One need only recall the case of Aldrich Ames 
to realize what kind of problems can spring from a lack of 
vigilance in security matters. As important as it is to have 
solid procedures in place to guard against breaches of 
security, the people who operate such procedures must be 
carefully selected and remain above reproach. Clearly, that did 
not happen in the Clinton White House where cronies and 
political operatives were put in charge of these sensitive 
    Whether or not these events are shown to be a blunder, the 
result of colossal incompetence, or whether they are 
established to be more serious or even criminal, the casualness 
with which this White House has approached many areas of 
security and access provided a climate for either of these 
troubling alternatives. The modus operandi of this White House 
allowed persons of questionable backgrounds to remain in the 
White House.

    Nothing in the hearing record or the entire course of our 
inquiry into this matter has established any improper contacts, 
dealings, or relationship whatsoever, between FBI Director 
Louis Freeh and former White House Security Director Craig 
    Neither, is there any evidence of anything in the record of 
our inquiry (particularly as relates to the subject matter of 
the inappropriate disclosure by FBI General Counsel Howard 
Shapiro to the White House), which indicates any intent 
whatsoever by Director Freeh to protect the President or Mrs. 
Clinton in this matter.
    FBI General Counsel Shapiro's lack of judgement in an ill 
advised disclosure to the White House, should not be viewed as 
reflecting adversely on the professionalism or independence of 
Director Louis Freeh, nor the many dedicated men and women of 
the FBI, who proudly serve our Nation so well, each and every 
    In addition, we recommend that in the future, all 
supervisory, operational, and line positions, including that of 
general counsel at the FBI, shall be filled solely by FBI agent 
                                   Hon. William F. Clinger, Jr.
                                   Hon. Benjamin A. Gilman.
                                   Hon. Constance A. Morella.
                                   Hon. John L. Mica.
                                   Hon. Dick Chrysler.

    We agree that the requests by White House staff for files 
on former employees were wrong, and we have supported the 
committee's efforts to investigate the reasons for and 
circumstances surrounding the obtaining of these records from 
the FBI. The issue for this committee is whether the files were 
requested for political purposes with the intent of getting 
damaging information on these former employees, or instead were 
requested as the result of errors.
    After taking sworn depositions from dozens of present and 
former White House employees, the committee has uncovered no 
evidence that the individual who requested the files had been 
ordered to purposely obtain them by higher-ups in the Clinton 
administration. Nor has it uncovered any evidence that anyone 
higher than Craig Livingstone was aware that the files had been 
improperly requested. Even more importantly, the committee has 
no evidence that the files were improperly disclosed to anyone 
outside the White House Personnel Security Office.
    If the majority had issued an honest report by pointing out 
the deficiencies of the Office of Personnel Security while 
acknowledging the lack of evidence that it was anything more 
than a bureaucratic mistake, we would have supported it. But 
when the majority makes such reckless findings as that this 
somehow ``leads to the possibility that the Clinton 
Administration was attempting to prepare a political `hit 
list','' without even a shred of evidence or testimony 
supporting that charge, we can only conclude that honesty is 
not in the majority's vocabulary. This report is yet another 
blow to this committee's long tradition of oversight which is 
honest, fair, non-partisan, and credible.
    In addition, the majority's claim that the FBI files would 
not have been revealed without the committee's threat of 
contempt is disingenuous and inaccurate. The White House never 
exerted a claim of privilege over the Dale FBI file, and the 
majority report's allegation of White House stonewalling is no 
more credible here than it was in the Travel Office report.
    Further, the majority's shameless attack on FBI General 
Counsel Howard Shapiro, a career, non-partisan law enforcement 
professional with unimpeachable credentials, for actions which 
were clearly appropriate, is outrageous and an embarrassment to 
the committee. If the majority believes that Mr. Shapiro should 
resign for disclosing what it claims was ``confidential law 
enforcement information,'' then Chairman Clinger should also 
resign for disclosing that very information in a public 
statement on the House Floor. It is transparently obvious that 
the majority is angry at Mr. Shapiro only because his efforts 
to act in a fair and non-partisan manner thwarted its attempt 
to score points in the press.
    For these reasons, we strongly dissent.
    We in the minority have addressed the problems identified 
in the FBI's report, ``The Dissemination of FBI File 
Information to the White House'' in order to guarantee that 
this sort of potential invasion of privacy could not happen 
again. We support the bill introduced by Ranking Minority 
Member Cardiss Collins, H.R. 3785, the Background Security 
Records Act of 1996, to ensure that FBI records containing 
sensitive background security information provided to the White 
House are properly protected for privacy and security.
    The bill would amend both the Privacy Act and the 
Presidential Records Act to enact procedural safeguards so that 
individuals could be certain their confidential background 
files would not be disseminated without their permission. If 
the majority were truly interested in conducting responsible 
oversight and addressing these types of problems, they would 
support these types of meaningful legislative reforms. Instead, 
they are intent on turning this serious issue into partisan 
politics. The Republicans have also refused to hold even a 
single hearing on the bill.

                  what the committee hearings revealed

    The committee's hearings revealed a number of relevant 
facts about the FBI files. We learned that it was standard 
practice for each administration to engage in what is now known 
as the Update Project--that is, the recreation of personnel 
security files for holdover employees from the previous 
administration. This was required, because each administration 
removes all of its files when it leaves office. The procedure 
for requesting files was to use a preprinted Xeroxed form with 
the name of the White House Counsel typed at the top, but 
requiring no signature. These forms date back 30 years to the 
Johnson administration. This procedure was, as the FBI found, 
ripe for abuse, and it now appears that these forms were 
inadvertently used to obtain the FBI files on former employees. 
The White House has taken unprecedented steps to change these 
procedures and bring accountability to the process, but the 
files were already requested.
    Witnesses interviewed by the committee could only speculate 
on the reasons for what happened. A common theme expressed by 
Bush administration White House Counsel C. Boyden Gray and 
Nancy Gemmell, a longtime-aide in the Personnel Security 
Office, was that the use of detailees and interns with 
insufficient background in security or name recognition was a 
key problem.\1\ We agree. Security work is extremely sensitive, 
but there appears to have been an extremely lax attitude in the 
treatment of FBI files.
    \1\ It should be noted that neither Ms. Gemmell nor Jane 
Dannenhauer, Mr. Livingstone's predecessor, had any background in 
security issues.
    One important witness was Lisa Wetzl, who was the first to 
discover that Anthony Marceca had requested ``too many files'', 
meaning those no longer employed by the White House. Ms. Wetzl 
notified her supervisor, Craig Livingstone, of that fact, and 
proceeded to determine which of the files involved employees no 
longer working in the White House. Although the files should 
have been returned to the FBI, they were boxed and apparently 
indexed and placed in the White House archives, where there is 
no evidence they were seen again, with the apparent exception 
of files for active employees mistakenly placed there.
    Ms. Wetzl's testimony is extremely relevant, because she 
has stated that when she worked on the Update Project after Mr. 
Marceca, she requested a Secret Service list of employees 
holding active passes. In her view, the list was out-of-date, 
and required cross-checking with offices. She also recalls 
seeing an out-of-date Secret Service list, which she believes 
was requested by Ms. Gemmell, and used by Ms. Gemmell to 
prepare requests to the FBI, and that the list may have had the 
names of Marlin Fitzwater and James Baker.
    On June 20, 1996, Secret Service witnesses testified before 
the Senate Judiciary Committee that they did not believe the 
list was generated by them, but the actual evidence suggests a 
less clear picture. For example, during the committee's 
depositions of Secret Service witnesses, it was noted that in 
one case, the White House requested the previous report on a 
person named Agin--``A'' ``G'' ``I'' ``N''. It now appears that 
there was no such person. The correct individual was named 
Hagin--``H'' ``A'' ``G'' ``I'' ``N''. It just so happens that a 
Secret Service list from 1993 also listed the individual as 
Agin, with a space rather than an ``H'' at the beginning of the 
    The significance of this fact is that it suggests that the 
White House Office of Personnel Security was in fact working 
off of some Secret Service list, and not a list it generated. 
This was further confirmed by Ms. Wetzl, who recalled both Ms. 
Gemmell and Mr. Marceca working off a list with the distinctive 
green and white computer paper used by the Secret Service.
    The Senate hearing also showed other problems with the 
Secret Service lists. For example, in what was described as a 
``computer glitch'', names that were being deactivated from one 
Secret Service passholder list were not automatically being 
deactivated from another list. The committee also received a 
list from the White House dated March 31, 1993, which may have 
been generated by the Secret Service. That list is entitled 
``E-Pass Possible Admin Holdover Passholders by Name'', and 
includes among other names, George Bush, James Baker, and 
Marlin Fitzwater.
    In addition, the committee received a list generated in 
February 1994 as part of an effort to develop a list of White 
House staff for such things as invitations to the White House 
Easter Egg Roll. That list has names such as Spencer Abraham 
and James Baker as working in the White House. The source of 
the names is listed as the Secret Service. A follow-up agenda 
from a July 7, 1994, meeting between White House personnel and 
Secret Service shows a complaint that former employees, such as 
James Baker, continued to show up on Secret Service lists.
    The other interesting fact about the FBI files requests is 
that the requests were made for all other offices, such as GSA, 
before any requests were made for White House staff. If there 
were an underhanded effort to get the files on former White 
House employees, presumably those files would have been 
requested first and not last.

                     chairman clinger's disclosures

    Ironically, the only public disclosure of an FBI background 
file to date has been Chairman Clinger's disclosure on the 
House Floor of the contents of the FBI file on Craig 
Livingstone, which he was permitted to review by the FBI. 
Contained within this file was the summary report by Special 
Agent Dennis Sculimbrene that White House Counsel Bernard 
Nussbaum told him that Craig Livingstone had the backing of the 
First Lady, who was a friend of Livingstone's mother.
    This tidbit was the first item of news from our 
investigations and hearings on the FBI files that the chairman 
deemed important enough to take to the House Floor. The 
chairman's special order insinuated that Bernard Nussbaum, 
Craig Livingstone, William Kennedy and the First Lady must have 
lied, because they had denied this allegation.
    Perhaps the chairman was just raising an issue for 
investigation; but that could have been done in a letter to the 
Independent Counsel. We can only conclude that the clear 
purpose of the Floor statement was to plant in the minds of the 
American people the unsubstantiated thought that the First 
Family and all of their lawyers were lying about this matter. 
Indeed, who after watching this special order wouldn't think 
they were lying and raise the question of why an FBI agent 
would write this note if it weren't true?
    Yet, just like every other time that there has been a wild, 
unsubstantiated accusation hurled at the occupants of the White 
House, only half the facts were released. In this case, neither 
House Members on the Floor nor the public who was watching were 
given information on the credibility of the agent who had 
written the note.
    The allegation that Mrs. Clinton was behind the hiring of 
Craig Livingstone and knew his mother was hardly news. Agent 
Gary Aldrich, a friend and colleague of Mr. Sculimbrene, had 
made the charge in the Wall Street Journal and in his widely 
discredited book, Unlimited Access. The allegation had also 
appeared in the Wall Street Journal on June 25, but in this 
case, Mr. Sculimbrene was reported to have attributed the 
remark not to Mr. Nussbaum, but to William Kennedy and Craig 
    Then on July 15, in what the chairman described in his 
letter to Ranking Minority Member Collins not as a deposition 
under Rule 19 of the committee rules, which requires 3 days 
written notice, but something called a ``sworn interview,'' Mr. 
Sculimbrene told the majority staff that it was Mr. Livingstone 
who actually told him this fact. He also said he did not put 
the statement in Mr. Livingstone's background file.
    Mr. Sculimbrene in fact has told numerous stories about how 
he came to know this so-called fact. We might have never known 
about the discrepancies in Mr. Sculimbrene's statements to the 
majority staff in his interview, if the minority had not 
insisted on getting the transcript, which the majority had 
initially refused to provide. In assessing Agent Sculimbrene's 
credibility, we must also look at an FBI memo in the 
committee's possession, in which Special Agent David Bowie 
stated that Mr. Sculimbrene's behavior was ``abnormal and 
indeed irrational'' in a conversation with him. Agent 
Sculimbrene, who is described in the memo as a close personal 
friend of fired Travel Office head Billy Dale, is recalled as 
``voicing very bitter political feelings against the Clinton 
White House.'' Agent Bowie expressed his concern that 
Sculimbrene, who appeared as a defense witness at the Dale 
trial, might ``provide erroneous testimony.''
    We cannot help but wonder why, if this allegation was truly 
troublesome, the committee's investigators did not go to Craig 
Livingstone's mother, Gloria, to ask her directly whether she 
knew the First Lady. She has subsequently denied that she does. 
Perhaps a cursory review of her background could have revealed 
if there were any truth to the allegation. We suspect the 
reason was obvious--they knew she would deny it, and they knew 
that the more they investigated this matter, the more 
implausible the allegation would become.
    We must also address the issues of whether the FBI should 
have told the White House about the existence of this summary 
in the file, the majority's finding that FBI General Counsel 
Howard Shapiro provided confidential FBI law enforcement 
information to the White House, and the majority's shameless 
demand that he resign.
    First, it is obvious that the reason the majority was upset 
about the notification is simply that the White House had an 
opportunity to present its side of the story at the same time 
the chairman went to the Floor, as opposed to a day later. 
There is little doubt that the other side of the story would 
not have been released by the chairman and become available to 
the White House.
    Second, the notion that the information was confidential 
law enforcement information which should not have been shared 
with the White House is absurd. The information, as is standard 
practice, was gathered at the specific request of the White 
House in order to determine whether Mr. Livingstone was 
suitable for employment. It was not part of some sort of 
criminal investigation. A summary of that information, 
including any derogatory information, had already been provided 
to the White House. The information which Mr. Shapiro 
communicated to the White House was not derogatory, nor was it 
confidential as far as the White House was concerned.
    Third, the statement that Mr. Shapiro notified the White 
House about the information before the committee was allowed to 
review it is simply not true. As Mr. Shapiro testified at the 
August 1, 1996, hearing, he had offered to make it available to 
the majority, but they had rescheduled:

          My intent was to notify roughly simultaneously both 
        the committee and the White House, for whom this 
        information had originally been gathered. Knowing that 
        committee majority staff was due to examine the 
        materials that same afternoon, I placed a call to the 
        Justice Department, where I advised the Chief of Staff 
        to the Deputy Attorney General of the information and 
        of my intent to advise the White House Counsel's 
        office. I then called the Counsel's office, and spoke 
        with Deputy Counsel to the President, Kathleen Wallman. 
        Because of a last minute rescheduling by the committee 
        staff of which I had been unaware, the majority staff 
        did not in fact see the information until the following 

    In no way did Mr. Shapiro withhold the information, as 
claimed by the majority.
    Fourth, before the FBI took any action with this 
information, it asked the one law enforcement entity which 
might have an interest, the Independent Counsel. As Mr. Shapiro 
testified, the Independent Counsel had no problems with 
Congress reviewing the files, nor did they ask that any 
conditions be placed upon its release, which could have 
included release to the White House. They did not even want to 
review the file. To the extent Mr. Nussbaum would have been 
testifying to a Grand Jury, the issue would not have been who 
hired Craig Livingstone.
    Finally, Chairman Clinger's Floor statement criticized two 
FBI agents for going to Agent Sculimbrene's home and telling 
him that the White House was unhappy with what he had written 
about Mr. Nussbaum's interview. Once again, the question is 
what type of investigation did the committee do to determine 
the veracity of this charge against the two agents before 
making these public charges. Mr. Shapiro testified that the 
agents in question denied the allegation:

          At no time did the agents tell agent Sculimbrene that 
        the White House was unhappy and concerned about this 
        particular interview. No such thing occurred.

Therefore, it appears that this may be one more case in which 
Agent Sculimbrene's account of a conversation is disputed.
    The concern of the FBI that in light of the denials, Agent 
Sculimbrene's report may have been inaccurate, was a real one. 
Just recently, FBI Agent Halbert Harlow was convicted of 
falsifying over 50 White House interviews.
    When this committee began its hearings into the FBI files, 
we in the minority fully concurred. We too wanted to get to the 
bottom of how and why the files were requested, and what was 
done with them. However, as the committee's investigation 
increasingly demonstrated that the requests were in fact a 
bureaucratic error and not a sinister plot, the committee 
hearings kept shifting their focus.

                 revealing confidential fbi information

    The majority has repeatedly disclosed sensitive, internal 
FBI files, despite the majority's criticism of the White House 
for its handling of FBI records. As previously discussed, when 
Chairman Clinger went to the House Floor on July 25, 1996, he 
divulged certain contents in the FBI file of Craig Livingstone. 
The divulging of confidential derogatory information found in 
that file is exactly the concern that the committee had 
expressed concerning the White House request of FBI files of 
former administration employees. Ironically, the committee has 
uncovered no evidence that the White House ever disseminated 
the information contained in those FBI files. On the other 
hand, the chairman did.
    The disclosure stands in stark contrast to his comments to 
Ranking Minority Member Collins in a letter dated July 15, 
1996, in which he wrote: ``I have been extremely reluctant to 
directly review FBI files. It is the abuse of such files by the 
Clinton White House which initiated this congressional 
investigation.'' He then stated that he ``would determine what, 
if any, information may be shared with the Members of this 
Committee.'' Instead of consulting with any member of the 
committee, the speech was made on the House Floor before the C-
Span public.
    Even before the chairman went to the House Floor, the 
contents of Mr. Livingstone's files were in the press. An AP 
story of 4:39 p.m. on July 25, 1996, describes an FBI agent's 
notes alleging that he was told by Bernard Nussbaum that Mr. 
Livingstone had been recommended by the First Lady and that 
Mrs. Clinton knew his mother. Before rushing to the Floor to 
raise questions about the integrity of the First Lady, Mr. 
Nussbaum, and Mr. Livingstone, the committee might have done at 
least a minimal amount of investigation.
    Minimum fairness to the individuals would have required 
full disclosure of the trustworthiness of Special Agent 
Sculimbrene. Among the documents requested by subpoena was a 
memo by SSA David Bowie, dated August 7, 1995, who recounted a 
discussion he had with Agent Sculimbrene concerning the 
prosecution of Billy Dale (Document FBI-00005437-00005442):

          It became immediately apparent that SA SCULIMBRENE 
        held extremely intense feelings about the indictment of 
        subject BILLY DALE whom he described as a personal and 
        professional friend. It became equally apparent that SA 
        SCULIMBRENE blames the CLINTON WHITE HOUSE and the FBI 
        for the predicament in which subject DALE finds 
        himself. During the course of a sometimes heated 
        conversation between the writer and SA SCULIMBRENE, it 
        became equally apparent that SA SCULIMBRENE has allowed 
        both his personal and political feelings to obscure his 
        judgement relative to this entire matter.
          * * * * *
          Specifically, SA SCULIMBRENE erroneously stated that 
        he had provided a memo to the writer in the White House 
        Travel Office matter allegedly containing the 
        information relevant to the inquiry. . . . The writer 
        never received a memo from SA SCULIMBRENE dealing with 
        the above subject matter.
          * * * * *
          In fact, the information provided by SA SCULIMBRENE 
        during conversations with the writer merely implies 
        that he has very strong political views involving the 
        CLINTON Administration and a close personal 
        relationship with the subject of this matter, BILLY R. 
        DALE. . . .
          The writer is very concerned about the overall 
        temperament and demeanor of SCULIMBRENE reflected on 8/
        4/95. While the writer is not in a position to render 
        Psychological judgements/conclusions about others, it 
        is the opinion of this writer that SA SCULIMBRENE's 
        conduct/behavior, on 8/4/95, is clearly outside the 
        norm. The writer notes that SA SCULIMBRENE was 
        involved, approximately a year ago, in a serious 
        accident which almost cost him his life. It is 
        noteworthy to point out that during the course of the 
        8/4/95, discussions with the writer, SCULIMBRENE 
        commented, while pointing towards his head, that he 
        could get away with anything because ``I am 
          * * * * *
          SSA BOWIE is very concerned that SA SCULIMBRENE has 
        allowed his personal and political feelings toward the 
        CLINTON White House to destroy his objectivity in 
        dealing with this issue. It is equally perplexing to 
        understand why any FBI Agent would allow his personal 
        relationships with a subject of a criminal probe to 
        become this involved as such behavior constitutes, as a 
        minimum, the appearance of a conflict of interest. The 
        writer is persuaded that SA SCULIMBRENE is 
        contemplating either testimony before a Congressional 
        Committee and/or plans to serve as a defense witness 
        for subject BILLY DALE. Should he decide to do this, 
        his credibility as a witness and as a FBI Agent will be 
        destroyed in the aftermath. The situation detailed 
        above is potentially embarrassing for the FBI and is 
        potentially a disaster for SA SCULIMBRENE.
          * * * * *
          It is highly suggested that WMFO management look at 
        the possibility that SA SCULIMBRENE may be in need of 
        EAP and/or some form of emotional support. The writer 
        is persuaded that SCULIMBRENE's behavior is abnormal 
        and indeed irrational. In addition, SA SCULIMBRENE 
        should be made aware of the consequences should he 
        decide to provide erroneous testimony in an effort to 
        help his friend, and C-7 subject, BILLY R. DALE.

    Instead of alerting House Members and the public that the 
FBI agent whose notes conflict with the testimony of Mr. 
Nussbaum and Mr. Livingstone was a close personal friend of 
Billy R. Dale, and whose credibility was challenged by another 
FBI agent, Chairman Clinger was silent, leading an average 
listener to assume that Mr. Sculimbrene was an ordinary FBI 
agent. Chairman Clinger might have disclosed that Mr. 
Sculimbrene was an associate of Mr. Gary Aldrich, whose 
credibility on White House matters has been, to put it mildly, 
called into question.\2\ He also never stated that Agent 
Sculimbrene was quoted in the Wall Street Journal as stating 
that he knew of the purported relationship between Mr. 
Livingstone's mother and the First Lady from Mr. Livingstone 
and Mr. Kennedy (June 25, 1996), and that he had told Senate 
investigators that Mr. Kennedy was the source of his 
    \2\ It is ironic that in light of the majority's repeated claims of 
stonewalling by the administration, Mr. Aldrich refused to answer under 
oath more than 30 questions asked by minority counsel regarding 
statements he made in his book. Rather than assisting in this 
committee's efforts to obtain relevant information regarding the 
credibility of a witness, majority staff also obstructed the minority's 
efforts to have these questions answered by Mr. Aldrich.
    In a letter dated August 2, 1996, Ranking Minority Member Collins 
subsequently requested Chairman Clinger to instruct Mr. Aldrich to 
respond to these 36 questions. To date, he has not responded.
    The majority does not merely raise questions when making 
charges such as those made in Chairman Clinger's special order. 
If the sole intent was to bring this to the attention of the 
Independent Counsel, a private letter to Mr. Starr would have 
    But this was not the only example of the majority's rushing 
to a partisan judgment without conducting even a minimal amount 
of investigation. On June 5, 1996, Chairman Clinger held a 
press conference detailing a request for Billy Ray Dale's FBI 
background file that bore Mr. Nussbaum's typed name. The 
chairman alleged that ``At the very least, there is a strong 
implication President Clinton's counsel acted unethically in 
requesting confidential background checks of a former 
employee.'' According to an article distributed by the 
Associated Press, ``U.S. Rep. William Clinger, R-Pa., suggested 
the written request might be a false statement that could be 
prosecuted as a felony.'' Subsequent investigation quickly 
established that Mr. Nussbaum, like his predecessors, never 
reviewed such requests.
    As Mr. Nussbaum testified at the committee's June 26, 1996, 

          So, on the basis of a printed form, Mr. Chairman, you 
        told the country, Mr. Chairman, that, at best, I was 
        unethical as White House Counsel; at worst, I was a 
        felon. . . . But you had no member of your staff call 
        me, to ask me a simple question--did I ever request 
        Billy Dale's FBI files six months after he was fired? 
        Was I really trying to dig up dirt on Billy Dale when 
        he was being investigated by the Justice Department? 
        Those notions are absurd on their face. They are false. 
        But no one called to ask. (Emphasis added).

    Mr. Nussbaum then testified under oath that he had no 
knowledge that Mr. Dale's or any other former White House 
employee's FBI files had been requested, and that he certainly 
did not order copies of FBI files.
    The chairman responded by saying that the ``documents speak 
for themselves,'' and dismissed Mr. Nussbaum's demand for an 
apology by suggesting that he was attempting to ``demonize'' 
him. We believe this is a wholly inadequate response. The 
chairman very publicly--and wrongly--accused Mr. Nussbaum of 
possible criminal behavior, without conducting even a minimal 
amount of investigation. Whether those accusations were 
innocent or intentional, the record clearly demonstrates that 
they were false.
    When we in the minority requested, in a letter dated June 
28, 1996, that the chairman take the fair and decent course by 
admitting that he overreached and apologizing to Mr. Nussbaum, 
he once again refused. Instead, he replied:

          . . . (A)s you will see, I never made reference to 
        Mr. Nussbaum as a ``felon,'' as he has alleged. In fact 
        when I was specifically asked, ``How much trouble is 
        Mr. Nussbaum in?'' I stated, ``Well, I think it's 
        premature to say whether, you know, whether he's in any 

    However, the transcript of that press conference, provided 
by the chairman himself in his reply, confirms that the 
chairman did make those statements about Mr. Nussbaum to the 

          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 . . .

    The chairman has yet to admit his error or to apologize to 
Mr. Nussbaum. Nor has he apologized to Presidential Advisor 
George Stephanopoulos for partisan leaks suggesting that Mr. 
Stephanopoulos was somehow responsible for Mr. Livingstone's 
position as Director of the Personnel Security Office without 
releasing other information in the committee's possession 
demonstrating that that was not the case.

                      who hired craig livingstone?

    The majority is obsessed with determining who hired Craig 
Livingstone, as if that startling mystery was the key to 
unraveling their entire conspiracy theory. However, the records 
provided to the committee, if the majority would take the time 
to read them, reveal exactly how Mr. Livingstone was hired. The 
answer is much less exciting than the majority would have us 
    The resume of David Craig Livingstone lists his current job 
as ``Presidential Inaugural Committee, Director of Security'' 
from November 1992 to present. Prior to that he lists his 
occupation as ``President-Elect Clinton and Vice-President-
Elect Gore, Lead and Site Lead Advance'' in November 1992. 
Prior to that his job is listed as ``Senior Consultant to 
Counter-Event Operations, Clinton/Gore '92'' from October, 1991 
to November 1992.
    At the top of the resume is a handwritten notation stating 
``Sponsored by Eli Segal.'' Mr. Segal, who was a campaign 
manager in the Clinton Campaign is also the first reference in 
Mr. Livingstone's resume, and is listed as ``Chief Financial 
Officer, Clinton-Gore Presidential Transition Team.''
    On February 8, 1993, Mr. Livingstone signs a ``Declaration 
of Appointee'', which is a form used in determining fitness for 
    The job of Director of the Office of Personnel Security is 
supervised by the Office of White House Counsel. In a 
memorandum from David Watkins, Assistant to the President for 
Management, to Bernard Nussbaum, Assistant to the President and 
Counsel, and Vincent Foster, Deputy Assistant to the President 
and Deputy Counsel, dated February 16, 1993, Watkins lays out 
the budget and full-time employees, which are to be proposed 
for the Counsel's Office budget.
    It appears from the memo that Watkins had authorized 28 
slots at $1,100,000. The Counsel's Office had responded with a 
budget of 25 slots at $1,100,000 along with a proposal to shift 
the three employees of the Security Office, other than its 
head, to the Personnel account. Watkins responds that if the 
slots are shifted, the Office of White House Counsel must 
reduce its budget by $85,000.
    On February 17, 1993, Craig Livingstone sends a memo to 
William Kennedy, Associate Counsel to the President, describing 
the functions of the Security Office.
    On February 18, 1993, Kennedy sends a memo to Vincent 
Foster attaching Livingstone's memo. He writes, ``The result of 
all of these functions is that the Office moves much paper. I 
need to discuss this subject with you when you have time.''
    On February 23, 1993 Kennedy sends a memo to Nussbaum 
describing the major functions of the White House Security 
Office, apparently based upon Livingstone's memo.
    On February 24, 1993, Nussbaum and Foster (now also joined 
by William Kennedy, Associate Counsel to the President) respond 
to the Watkins memo taking issue with their allocation. They 
note that they propose to spend just $91,000 on the three 
assistants (compared with $121,000 under the Bush 
administration) and just $45,000 on the head of the office 
(compared with $67,000 for the incumbent), apparently implying 
that they should not have their budget reduced by $85,000 in 
light of their savings.
    On March 1, 1993, David Watkins sent a memo to Bernard 
Nussbaum stating, ``I understand from your budget that you 
believe the position currently held by Jane Dannenhauer, 
Assistant to the Counsel to the President for Security, should 
be part of your budget and should be compensated at a rate of 
$42,000 per year. Please let me know when you have identified 
the new staffer to fill Ms. Dannenhauer's position. At the 
moment, her salary of $70,255 is counting against your budget. 
But this amount will be reduced when you replace Ms. 
Dannenhauer.'' Watkins also consents to giving the Counsel the 
full $1,100,000 for 25 slots.
    On March 9, 1993, in a memo to David Watkins from Bernard 
Nussbaum and Vincent Foster, they state that ``Craig 
Livingstone was hired in February as Assistant Counsel to the 
President for Security with a salary of $45,000, not $42,000 as 
originally budgeted.''
    On March 10, 1993, William Kennedy sends a memo to David 
Watkins. It states ``This is a request that the start date of 
the employment of two individuals employed in the White House 
Security Office be established as of the following dates: David 
Craig Livingstone; Title: Assistant to the Counsel to the 
President (Security); Effective Employment Date: 2/8/93; Annual 
Salary $45,000.'' The other individual is Mari Anderson, who is 
listed as Security Assistant with an effective employment Date 
of 2/15/93. The memo states, ``Mr. Livingstone and Ms. Anderson 
have been on the job and working since the start dates 
indicated above while the budget parameters were being 
    A document entitled, ``The White House Office, Request for 
Personnel Action'' dated 3/11/93, bears the initials ``DW/CL'' 
(presumably David Watkins; the CL may also be CC). It requests 
Livingstone be put on the payroll retroactively to 2/8/93.
    A document entitled, ``Notification of Personnel Action'' 
with an approval date of March 11, 1993, shows that Mr. 
Livingstone has been placed on the payroll retroactively to 
February 8, 1993, as Assistant to the Counsel to the President 
(Security). The document bears the typed name of Mary Coutts 
Beck, Acting Director of PMO, along with some form of an 
    It would appear that Mr. Livingstone's recollection of the 
events leading up to his hiring, described when he appeared as 
a witness, are generally accurate. He apparently moved into the 
White House by way of the campaign and the Inauguration, where 
he served as Director of Security for the Inaugural Committee. 
His resume shows he was sponsored by Eli Segal, a campaign 
official and involved in the transition.
    Mr. Livingstone apparently came to the White House on 
February 8, 1993 on an unpaid basis, and appears to have spent 
his first week reviewing the operations of the Security Office. 
The work would appear to have been done on behalf of William 
Kennedy, since the memo of February 17, 1993 was sent from 
Livingstone to Kennedy.
    It appears that during the week from February 16, 1993 to 
February 24, 1993, the Counsel's Office was primarily 
interested in achieving a larger budget by moving the personnel 
from the Security Office (except for its head) onto the payroll 
of the Personnel Office.
    Eventually, in memos to David Watkins dated March 9, 1993, 
and March 10, 1993, Nussbaum, Foster, and Kennedy all take 
responsibility for the hiring of Livingstone. Watkins on the 
subsequent day takes the final action resulting in 
Livingstone's hiring retroactive to the date of his declaration 
on February 8, 1993.
                                   Hon. Cardiss Collins.
                                   Hon. Henry A. Waxman.
                                   Hon. Tom Lantos.
                                   Hon. Robert E. Wise, Jr.
                                   Hon. Major R. Owens.
                                   Hon. Edolphus Towns.
                                   Hon. John M. Spratt, Jr.
                                   Hon. Louise McIntosh Slaughter.
                                   Hon. Paul E. Kanjorski.
                                   Hon. Gary A. Condit.
                                   Hon. Collin C. Peterson.
                                   Hon. Karen L. Thurman.
                                   Hon. Carolyn B. Maloney.
                                   Hon. Thomas M. Barrett.
                                   Hon. Barbara-Rose Collins.
                                   Hon. Eleanor Holmes Norton.
                                   Hon. James P. Moran.
                                   Hon. Gene Green.
                                   Hon. Carrie P. Meek.
                                   Hon. Chaka Fattah.
                                   Hon. Bill K. Brewster.
                                   Hon. Tim Holden.
                                   Hon. Elijah E. Cummings.