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Special Event

Congress Searches for Answers in Controversial Clinton Pardon

Aired February 8, 2001 - 5:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BERNARD SHAW, CNN ANCHOR: I'm Bernard Shaw in Washington. Former president Bill Clinton's pardon of a financier has triggered a Congressional hearing. For the latest, we go to CNN's Bob Franken on the Hill.

BOB FRANKEN, CNN CORRESPONDENT: And Bernie, after an entire day spent -- most of the day spent with Jack Quinn, the former White House counsel, defending charges that he used his connections with President Clinton to bypass the Justice Department proceedings and use his connections to get a pardon for Marc Rich, the very controversial billionaire fugitive who has been out of the country, renounced his citizenship for 17 years.

Much of the focus this afternoon now has been on Quinn's claim that he kept the Justice Department very thoroughly informed, particularly through Deputy Attorney General Eric Holder. Now, Holder has been going back and forth between denying that he was very well informed; and facing charges that he has been, in effect, cahoots with Quinn, to try and keep this from becoming public, because Rich was so controversial.

He is being questioned now by Henry Waxman, who's the ranking Democrat on the committee:

(JOINED IN PROGRESS)

REP. HENRY WAXMAN (D), CALIFORNIA: ... interpretation where you don't feel you violated the ethics rules.

But let's say it had been five years later, Mr. Holder, would you had been any more influenced by Mr. Quinn coming to you had it been five years as opposed to two years or three years? You knew he was representing a private client.

ERIC HOLDER, FORMER DEPUTY ATTORNEY GENERAL,: No.

WAXMAN: These waiting periods are a revolving door. You're an attorney, you were an attorney before you went to work at the White House, you were the White House counsel, and then you went back into private practice.

JACK QUINN, COUNSEL TO MARC RICH: Right.

WAXMAN: I think anybody who dealt with you knew you were in private practice. They might like you, because they know you. They might have thought well of you, because you had worked at the White House. But those things would be there no matter what period of time we're talking about.

QUINN: That's correct. And with respect to the contacts with Mr. Holder, I should be clear to you that the five-year rule doesn't apply to communications with officials outside the Executive Office of the President.

WAXMAN: And then, I guess the other thing that I thought was just peculiar, and I don't have any explanation for it, but Mr. Holder said that Mr. Quinn had stated that he sent a note about the Rich case on January 10, and you never received that note. But the Justice Department got that note at the desk of the pardon attorney on January 18. So it was mailed on the 10th, Mr. Quinn thought you were getting a note, you didn't have any idea of it. It lands on the pardon attorney's desk on the 18th, and there was very little time at that point to generate the information that you would have wanted the White House to have.

QUINN: It was messengered, not mailed.

HOLDER: I mean, what happened is the executive secretariat, that is the folks who handle correspondence within the Justice Department, got that document and referred it seeing it was a pardon matter, or interpreting it that way referred it to the pardon attorney for a response.

WAXMAN: So there was a disconnect in what the two of you thought was going to happen. You thought, Mr. Quinn, Mr. Holder was going to get it. Mr. Holder didn't get it, because it went somewhere else. Is that a fair explanation of it?

QUINN: Right. And for my purposes, what I want the committee to understand is that I wanted Mr. Holder to get the letter. I wanted him to get it on the 10th. I sent it because I had been told that his views would be important. And so, I wanted him to see the summary of the argument that I had made to the White House in the hope that he would be helpful to my effort. But I wanted that letter to arrive.

WAXMAN: Well, just in conclusion, as members of Congress we have to make decisions all the time. The president has to make decisions that are far weightier, in this case he has the exclusive decision over a pardon. But if someone comes in to me and makes a case, they usually make their case as good as it possibly can be and it's often quite convincing, until I hear the other side. And then I have to weigh two competing arguments.

It appears from what we have, for whatever reason and it's not a happy situation, that the president really didn't get all the information that he should have had in evaluating this request by Mr. Rich for a pardon. And if that's the case, and I don't think either of you disagree with that conclusion; is that safe to say?

HOLDER: I wouldn't disagree. WAXMAN: If that's the case, I think we can say there was a disconnect of failure in the process, the president was not well- served. And he made his decision out of ignorance to a great extent without getting all the information, which means he made a bad judgment, and we all wish he had made a better judgment with all the facts.

But that, again, illustrates the point that I made in the very beginning of this hearing; that he made it on that basis, and that was a decision that we can now say, looking at all the information, was a wrong decision. But it doesn't show any illegality, it doesn't show any corruption. It shows that the president was poorly served.

This is, no one doubts, a very smart man, and I think if he had had all the information, he would have been able to weigh it a little bit more carefully. He might have agreed with Mr. Quinn still on the indictment itself and whether the indictment was proper, but he might not have.

QUINN: And I'm glad you added that, because I don't want to leave the impression that I have changed my view of this. I think he made the correct decision.

WAXMAN: Well, even though all the evidence now that everybody's bringing to us, and you appear to tell us -- you're telling us that in your view, not only because it's your client, but your personal view as you look at all the evidence, you reach a different conclusion...

(CROSSTALK)

QUINN: Absolutely. But to that point, sir, the pardon only goes to the indictment. If Mr. Rich is guilty of any of these other things that have been addressed today by the committee, he's not free and clear of those charges. It's important, I think, to bear that in mind.

WAXMAN: Well, that's a good point.

REP. DAN BURTON (R-IN), CHAIRMAN: We understand that.

QUINN: The pardon only goes to the...

BURTON: Mr. Platts, could I convince you to yield to me?

REP. TODD PLATTS (R), PENNSYLVANIA: Thank you, Mr. Chairman, yes, I appreciate Mr. Quinn and Mr. Holder making themselves available to the committee, but I will yield my time back to you.

BURTON: Thank you, sir, very much.

First of all, I think it needs to be made very clear that the president was not as unaware of all these facts as we're being led to believe. He knew about Marc Rich. He knew Mr. Rich's wife, Denise Rich. He received correspondence and other things about Mr. Rich. He had access to all the security briefings. He knew of Mr. Rich's flight from the country. He knew he'd given up his citizenship. He knew all of that. The president knew these things when he pardoned him. And he did not -- according to what we've been told, he did not look into national security issues or CIA issues or FBI issues or investigations that may have taken place.

And you would think when a person, who is an international figure, who is one of the six most wanted people in the world by the FBI, you would think that the president would at least check all of those things before he granted the pardon.

So, you know, I mean, to say the president was not well-served may be correct. But to say that he wasn't aware of the gravity of the situation, I think is an error. The president knew. He had to know that.

Now, let me just ask a couple of other questions here on another issue. Mr. Quinn, you worked for Arnold & Porter?

QUINN: I did, sir.

BURTON: Yes. And you were getting a retainer of $55,000 a month with $330,000 up front, as a retainer, right?

QUINN: Yes, sir.

BURTON: OK. You left them and I guess the contract stayed with them; is that right? Well, what happened?

They went on to just a fee for service with that law firm.

QUINN: Yes, sir.

BURTON: And you have said that you didn't receive any fees from Mr. Rich.

BURTON: You said something about a box of chocolates -- it was all going to be voluntary if you got the -- that just seems very unusual to me. Don't most attorneys have some kind of a contractual agreement when they leave a law firm with a new client?

QUINN: Yes, let me try to explain this to you. The fees you just reported were received by Arnold & Porter, and, of course, as a partner and because I had a contractual relationship with the firm, I benefited to some extent from those fees. To another extent, the fees went to other partners in the firm.

After leaving Arnold & Porter, I did consider and discuss with Mr. Fink whether we should have a new arrangement. I came to the conclusion that, particularly because of the fact that we were unsuccessful in achieving a resolution of this at the Southern District, and because I didn't think, frankly, there would be that much more additional time in it, and because I believed that the earlier payments had been fair and reasonable, that I would see this through to the end, simply on the basis of the fees that had been paid earlier.

BURTON: So you received nothing further from Mr. Rich? QUINN: I have not received any further fees from him on this pardon matter.

BURTON: But have you received any fees from him for anything?

QUINN: No, sir.

BURTON: You received no fees from Marc Rich or any of his -- how about any of his companies or any of his friends or associates?

QUINN: No, sir.

BURTON: All that was received was from the -- to the law firm that you previously worked with.

QUINN: Now, it is clear to me that, as we move forward in the future, I can bill him additional fees. It's clear to me that I'm going to have to spend some additional time on this. And as you've no doubt noticed, I've had to retain my own counsel, and I expect to be reimbursed for that.

But I had no contingency fee arrangement with him. I had no success fee arrangement with him. He is not legally obligated to pay me anything.

BURTON: Do you have any kind of an understanding where he's going to give you a lump sum of money or funds down the road for the services you've rendered?

QUINN: No, sir. The only understanding I had was that I would be able to bill him reasonable additional fees for additional services. I have no agreement that I'm going to get any lump sum of money down the road.

BURTON: You know, he is one of the wealthiest men, I guess, in the world. He is the number one commodities trader in the world, as I understand it. And it just seems unusual that you would be representing him, getting him a pardon from major crimes -- one of the six most wanted people in the world by the FBI -- you get this pardon for him, and you don't get anything for it just because he's a good- looking guy.

QUINN: Congressman, I'm going to be on the losing end of this discussion because no matter which way I had done it, because if I had had the kind of commitment to receive some large lump sum down the road, I'm sure you'd be very critical of my having done that.

BURTON: Yes, probably. That's why I'm asking these questions.

QUINN: Right.

BURTON: But you're not getting any funds, here or abroad or anyplace else, from Mr. Rich?

QUINN: No, sir. But again, let me be clear.

BURTON: Yes.

QUINN: I anticipate being able to bill him additional fees for my services. And I anticipate receiving from him reimbursement for the legal expenses that I have to incur.

BURTON: And you're going to bill him on the regular, or what's consider a reasonable lawyer's fee per hour?

QUINN: Yes, sir.

BURTON: But no lump sums, no money coming in from any place?

QUINN: No, sir.

BURTON: If I ever get in trouble, would you do that for me? I mean, I'd really like for you to work for me for nothing.

(LAUGHTER)

BURTON: I mean, I know, maybe, I look half as good as Mr. Rich. I don't have his money. But I could sure use the help if I have legal problems, to get you to do that for nothing. You're a heck of a guy.

QUINN: Well, I don't think it's right to say I'm doing it for nothing. I was finishing up a matter for which I had been paid.

BURTON: But the money is at the law firm over there. Are you still getting money from that? Are you still getting fees for that?

QUINN: No, but I did.

BURTON: But when you left, you left that, didn't you?

QUINN: When I left, I left. But again, I didn't think that I need to -- there weren't that many additional hours involved. He had paid a generous fee at the time.

BURTON: My counsel said that there were 60 to 100 hours that you put in; is that correct?

QUINN: Yes, I think that was my estimate of how much additional time I spent.

BURTON: Well, 60 to 100, may I ask what you charge an hour?

QUINN: Over a pretty long period of time.

BURTON: Yes, but most attorneys around this town charge $500 an hour or so. I mean, you probably charge more than that. But 100 hours at $500 an hour is a pretty good hunk.

QUINN: Again, I'm trying to be very precise here. It has always been clear to me that if I put in significant additional time on that matter that I would be able to be compensated for it.

But what I am telling you is that I had no specific arrangement with him. I had no contingency fee. I had no success fee promise. I had no commitment from him to pay me a particular sum of money.

BURTON: Mr. Barr?

REP. BOB BARR (R), GEORGIA: Thank you, Mr. Chairman.

Mr. Holder, looking back on this case, is it clear in your mind now that Mr. Rich should not have been granted the pardon?

HOLDER: I think somebody asked me a question similar to that before. I wasn't exposed to everything. I can't know all that the president considered. The question that was put before was...

BARR: Well, in your opinion.

HOLDER: Knowing all that I know now, would I have made a recommendation against the pardon?

And the answer to that was yes.

Knowing everything I know now, I would have recommended against it.

BARR: Was the pardon attorney -- were they ever made aware of this case before the pardon was granted?

HOLDER: They received, on the 18th, that letter from Mr. Quinn that was sent to me but got routed to them. The January 10 letter to me that enclosed the January 5 letter to the president from Mr. Quinn. So that would be the night before -- the day before, the 18th.

BARR: What did they do with that?

HOLDER: As I understand it, the pardon attorney prepared a draft of some sort, which I've not seen, indicating that Mr. Rich, for some reason, didn't fit the criteria for a person eligible for a pardon. But I've never seen the draft.

BARR: So it's your impression that they were opposed to the pardon?

HOLDER: As I understand it -- I've not, again, seen the draft. But that is my understanding, that for technical reasons they...

BARR: Mr. Chairman, have we subpoenaed that? Will we get that?

BURTON: Excuse me, I was reading something.

BARR: Apparently, in response to the two letters that Mr. Quinn sent to Mr. Holder, but which Mr. Holder never got, they were mistakenly routed to the pardon attorney. And Mr. Holder says that it is his impression that they prepared a document in response to that. And the sense of it seems to be that they had objections to the pardon. We don't know that because we haven't seen it. Can we get that document?

BURTON: Yes, we would like to request that. And if necessary, we will be glad to send a subpoena for it. But hopefully, that will...

HOLDER: Again, I've heard about this document. And I'm sharing that with you. I don't know 100 percent that that exists.

BURTON: If the gentlemen would yield.

That document would be at Justice right now, would it not?

HOLDER: I assume so. I've never seen it, but I assume it will be.

BURTON: We'll instruct our staff. We'll check into that. And if necessary, we'll have the staff contact Justice about that.

BARR: Did the Southern District of New York oppose the pardon?

HOLDER: You mean before the -- well, they never weighed in on the pardon.

SHAW: CNN's coverage of the House Government Reform Committee and to the pardon by former President Clinton of financier Marc Rich will continue in just a moment.

(COMMERCIAL BREAK)

SHAW: Moments ago, in hearings before this House Government Reform Committee, former Deputy Attorney General Eric Holder said something that raised eye brows.

He said,"Knowing what I know now, I would have recommended against former President Clinton's pardon of financier Marc Rich. Eric Holder is at the witness table along with attorney Jack Quinn a attorney for Mr.Rich. Our coverage continues.

BARR: ... Milken -- "is not getting it."

One question I have for you, Mr. Quinn, is who is B?

QUINN: I believe it's a friend of Denise's, Beth Dozoretz.

BARR: Finance chair of the DNC?

QUINN: Former. I think hasn't been for at least a year. That's my impression anyway.

BARR: Pardon?

QUINN: I don't believe she has been for the last year or so.

BARR: I think you'll find it's a lot more recent than that.

QUINN: OK. I don't know when. I know that she's not at this time.

BARR: Why would the president be sharing this information with the finance chair of the DNC? What did they have to do with it? QUINN: I was on the receiving end of this e-mail, and I don't know the answer to that. I was aware of this e-mail...

BARR: Work with me. Speculate a little bit. Why would the DNC finance chair be involved here?

QUINN: Oh, well, I believe -- my impression was that Denise and Beth have been friends, and that, in fact, they grew...

BARR: I suspect so.

QUINN: ... that they grew up in the same town in Massachusetts or somewhere up north.

BARR: Well, Denise Rich is a major contributor to the DNC, isn't she?

QUINN: I now know that to be the case.

BURTON: Would the gentleman...

BARR: Well, I mean, you knew it then.

BURTON: Would the gentleman yield?

QUINN: No, I did not know the extent of her...

BARR: See, there you go. I know that you may not have known the extent, and that a weasel word, and that's the word you used on TV also.

QUINN: Well...

BARR: But you certainly knew that Denise Rich is a major contributor to the DNC.

QUINN: I assumed she was a contributor.

BARR: And you'd be right.

Mr. Chairman?

BURTON: Yes. The call from POTUS, the president, was not to Denise Rich, it was to the former chairman of the Finance Committee for the DNC. Wonder why he was calling her and talking about this pardon? I can understand him calling Denise Rich; why did he call the former head of the...

QUINN: Yes. But let me be clear, I don't know that he called her about this.

BURTON: Well, didn't she say -- didn't it say in the memo, maybe I misheard...

BARR: No, clearly it was about this. QUINN: My impression was that, in the course of a conversation they were having, she asked him what's happening with these two pardon applications and apparently was with Denise Rich at the time, which may have motivated her to ask the president in the course of the conversation. But I was not of the impression -- and I want to be careful to say this accurately -- that the call was placed for the purpose of discussing the pardons.

BARR: But the president is talking with the finance chair of the DNC about the Rich pardon and lamenting the fact that he's having to try and turn around all these recalcitrant White House counsels. Why would that be something that would be of interest to the finance chair of the DNC?

QUINN: Again...

BARR: Why would the president feel obligated to tell her about this?

QUINN: Again, my impression is these two women were friends, that they were together at a time when the president called one of them.

BURTON: The gentleman...

BARR: So if other people had been there he would have discussed it with them, too.

BURTON: The gentleman's time has expired. My time is coming up and I'm going to yield it to you. I just have one comment and then we'll go to our colleagues on that side because we're going to the second round now, finishing up the second round.

The comments have been made time and again that the president was not well-served and he did not know all about this, and yet here he is talking to the former head of the DNC Finance Committee, talking about this, saying he's got to turn White House counsels around so everybody'll be on board to pardon Mr. Rich. This shows very clearly that the president was very engaged and had to know about all these things.

Now, he chose not to look at the national security issues, evidently, because as far as we know he didn't ask the CIA, the DIA, the FBI or the other intelligence agencies, the NSA. But he did know about this. He was engaged, so engaged that in a conversation with the former head of the DNC, when Ms. Rich was in attendance, that he went into it in some detail and said he was trying to turn White House counsels around.

You know, that shows, I think, very clearly that he was much more involved and aware of this than any of us have thought.

I'll yield the balance of my time to you, Mr. Barr.

BARR: Thank you, Mr. Chairman.

Exhibit 67 is another e-mail, Mr. Quinn. I think this one is from Bob Fink at the law firm Arnold & Porter to you.

QUINN: Yes, sir.

BARR: In which he states, "Mike Green (ph) called after speaking with Peter, who spoke with Podesta. It seems that while the staff are not supportive, they are not in veto mode and that your efforts with POTUS are being felt. It sounds like you are making headway and should keep at it as long as you can." Who is Peter? Is that Peter Cadzik (ph)?

QUINN: Yes, sir.

BARR: Podesta's personal attorney? Is that who he is?

QUINN: That's my understanding. And he's a partner of Mr. Green's.

BARR: OK. So he's now involved also, along with B.

Podesta indicated that the White House staff were not supportive of the pardon request. If that's the case, who, other than the president, at the White House was in favor of it? Was he the only one that was in support of it?

QUINN: I genuinely don't know how this broke down at the end of the day.

BARR: I think you're being too modest. You knew all these people, you know all these people, you were having a lot of conversations with them.

QUINN: Right.

BARR: These different names are coming up.

QUINN: Yes.

BARR: I'm sure you didn't go back to your client and say, "Hey, I have no idea what's going on over there." I mean, I suspect you did. I'm just trying to get a feel, was anybody at the White House supportive of this other than the president?

QUINN: I knew there was significant opposition, particularly in the White House Counsel's Office, and that was one reason why I made an effort to continue to sharpen the arguments and make them more compelling. I'm trying to be precise.

And I have to tell you that -- therefore, that come Friday when he makes this decision, I don't know who was in the room with him. And I don't know what advice he got from Beth Nolan, or what he heard Beth say about a conversation with Mr. Holder.

BARR: Did you only have one conversation with Ms. Nolan, Mr. Holder, about this?

HOLDER: No, I think, I had two. I think I had the one on the 19th and the one sometime before that, but I'm not sure exactly when. I think I had a very brief conversation -- both of them were very brief conversations, but I think I had one other one. I'm not sure exactly when.

BARR: Apparently -- I don't want to put words in anybody's mouth -- apparently, Ms. Nolan was -- I don't know, was she in favor of this petition, Mr. Quinn? What was her position?

QUINN: Again, Congressman, I know that at some point she was not favorably disposed, but I do not know what her advice was at the time he made the decision.

BARR: Did she ever make her views known or her position made known to you, Mr. Holder?

HOLDER: No, she did not.

BARR: What did you all talk about?

HOLDER: We had very clipped conversations. As I indicated before, the conversations would start out with the process question of trying to get the Justice Department to be more efficient in the processing of pardons. And then, just, kind of...

BARR: How can they be more efficient if the White House doesn't even tell you what's going on? I mean, in fairness to you all, didn't you say, "Hey, look, if you all want us to be more efficient, why don't you tell us what's going on?"

HOLDER: Well, you got to understand, I don't know at that point that there are things that are not being presented to Justice. I was talking about things that we had at the Justice Department.

BARR: But you had to have known. How could not know? You knew that the Southern District of New York, the people who prosecuted the case were opposed to it.

HOLDER: No, I was talking about other pardons. I thought you were referring to the other 40 or so that the Justice...

BARR: You said that in here. You said that law enforcement in New York would strongly oppose it. You knew they were going to oppose it.

HOLDER: Yes.

BARR: That's your testimony.

HOLDER: I'm not sure what the question is.

BARR: The question is, you knew that there was a lot of opposition to this. I don't think you can really sit there and legitimately and say you didn't know that.

HOLDER: And that's right. And I tried to convey that to Ms. Nolan when I said that I was neutral, but that there were people in law enforcement who were opposed to this.

BARR: That's conveying opposition?

BURTON: Would the gentleman yield?

BARR: I'd hate to see how you would convey a case that you were really opposed to.

HOLDER: I think what I actually said to her was that the Southern District would go nuts. I think that's what I actually said to her.

BURTON: Would the gentleman yield will briefly?

BARR: Certainly.

BURTON: Let me just point out that in your telephone logs you talked to Beth Nolan seven times -- seven times on the 19th, the day before the pardon was granted. And you're saying there was just a cursory conversation twice in those seven calls about Marc Rich, even though the president said he was trying to turn White House counsels around on this.

It seems to me that Ms. Nolan, if she was opposed to it, would have been, you know, hollering to high heaven trying to convince the president not to do it. And he said he was trying to turn them around so that they would all be on board. And you're saying you only talked to her twice, very briefly?

HOLDER: Yes, but one conversation on the 19th, the other conversation, I believe, was sometime before that.

BURTON: But you only talked to her one time out of those seven calls about Marc Rich on the 19th?

HOLDER: I think that's correct.

BURTON: You think that's correct or do you know?

HOLDER: I can't say now 100 percent, but I would be about 99 percent certain that we just had that one conversation about Marc Rich.

BURTON: Well, we'll ask her that question when we see her.

Gentleman's time has expired.

Mr. Kanjorski?

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Yes, Mr. Quinn, I'm not up on pardon law, but I think you've become an expert in the last couple of months.

Pardons, obviously, don't only apply to American citizens, they apply to foreign citizens; is that correct?

QUINN: Yes, sir.

KANJORSKI: By virtue of the fact that the president did issue a pardon, does that resolve what Mr. Rich's citizenship is? By receiving and accepting that pardon from the president, does that waive all his contention that he hasn't been an American citizen for the last 18 years?

QUINN: No, sir. And, again, as I commented to Mr. Waxman earlier, the pardon only goes to the allegations within this indictment. If there are other matters that were not addressed by the indictment, whether it's trading with Libya or Cuba or anything like that, and if, and I'm emphasizing if, he were guilty of some crime, the pardon would not relieve him of responsibility for that.

KANJORSKI: Well, if I'm reasonable to believe he's one the wealthiest men in the world, he's obviously a multibillionaire and his income must be extraordinarily high, hundreds of millions of dollars a year. And...

SHAW: The pardon of financier Marc Rich will continue in a moment.

KANJORSKI: ... prosecutors suggested that there's an 18-year tax obligation. Is there any assurances that were made to the president...

(COMMERCIAL BREAK)

SHAW: Jack Quinn, the lawyer for financier Marc Rich pardoned by former President Clinton, remains in the hot seat before the House Government Reform Committee, as we resume our coverage.

(JOINED IN PROGRESS)

QUINN: ... you may say it came too late or that it was too abbreviated, or that it didn't involve everyone it should have involved.

KANJORSKI: Well, maybe I'm a little confused here. I thought I heard Mr. Holder say he really wasn't involved, and he had no real opinion, and he didn't know basis work. Was he dealing with somebody else at the Department of Justice other than Mr. Holder?

QUINN: No. But let me just point out that on the Monday afterwards, Mr. Holder told me that he had expressed a point of view, and he has described it accurately here today, or he described it in the same way he did to me that Monday; neutral, leaning toward.

Beth Nolan, when I said to her that I understand from Mr. Holder that that had been his point of view, she said to me the pardon wouldn't have been granted without his input, or without his expressing a point of view.

And thirdly, the former president said to me that it was his understanding at the time he granted it that he had had advice from the Department of Justice. KANJORSKI: So on the basis of that interpretation, what Mr. Holder was saying is that he is neutral but leaning in favor if there's a foreign policy consideration, was being interpreted by the staff at the White House and the president that, in fact, the Justice Department was on board.

But as we've heard Mr. Holder's testimony, that was a false impression.

QUINN: And -- but, Congressman, all I can tell you is what Mr. Holder said to me, what Ms. Nolan said to me and what President Clinton said to me.

Now, in fact, what each of them said to me is consistent. Again, one may say, "I wish the president had had additional input from the Department of Justice or input from Mr. Auerbach," but what I'm telling you is that President Clinton, White House counsel Beth Nolan and Mr. Holder all confirmed to me that he had made his point of view known.

KANJORSKI: No further questions.

BURTON: Thank you.

Mr. Cummings?

REP. ELIJAH E. CUMMINGS (D), MARYLAND: Who had made that point of view known? I mean, just following up on what you just said.

QUINN: Right. On the Monday after the pardon was granted...

CUMMINGS: No, just tell me who is. You just said...

QUINN: I want to be sure you have all three of these conversations. On the Monday following the pardon, Mr. Holder told me that he had said to the White House counsel he was neutral leaning toward favorable on the pardon.

I had a subsequent conversation with the White House counsel and I said to her that Mr. Holder had told me that. Her response to me, while not confirming his advise, in so many words was, "If Mr. Holder hadn't participated in the process," or something to this effect, "this pardon wouldn't have happened."

I had a yet further conversation with President Clinton in which the subject of my conversation with Mr. Holder came up. And I repeated what I understood him to have told the White House counsel. And he said to me, something to the effect, "That was my understanding, too," or "That's my recollection."

CUMMINGS: You know, I'm just sitting here, and I've got to tell you: It's very frustrating, because it seems as if we have a decision that was made by the president, and I don't care how I look at it -- I can look at it upside-down, right-side-up -- it, sort of, reminds me of my 6-year-old. When she was three, she would say, "Daddy, let's play hide and go seek." And she would stand right in front of me and put her hand up to her face and say, "Daddy, you can't find me."

It just seems to me that there was enough information available. I mean this is the United States of America. This is the most powerful government. We've got information flowing everywhere. We've got so much information, we can't even keep up with it.

It seems to me that the president should have had the appropriate information to make this decision. Mr. Holder says he never got a file. He says that he was a neutral leaning toward. But that wasn't really based on too much information. Then you've got Ms. Nolan, who -- now correct me if I'm wrong, Mr. Quinn -- says -- I mean, did she have information? Did she have the file? I mean, did she have all of the -- she had the information?

QUINN: Well, she had what I filed. And she may have had other materials, too, but I don't know that.

CUMMINGS: So it just seems to me that the president -- I don't care how I look at it, it's hard for me to believe that he was properly served. I always say that in order to make a proper decision, you've got to have proper information. And I don't -- it just seems like a series of errors that happened in this case.

And I still conclude that what the result was was very unfair. It's clear that there is nothing too much we can do about this decision. The damage of the decision is far-reaching. I don't think we even understand the damage.

In about an hour, I'm going to return to the inner city of Baltimore. And there will be a few people who can afford cable TV who will have seen this hearing. And they're going to ask me about $330,000 retainers and $55,000 a month. They're going to ask me about a guy who evaded taxes -- I mean, allegedly, evaded taxes when they can barely afford to go to H&R Block to even have theirs filled out.

And they're going to talk about the fact that this is the government of the United States. And they're going to say, "Mr. Cummings, how can that happen when the police are arresting us for simple things?"

I tell you, in some kind of way -- and the reason why I say it has done so much damage is because if we are going to have justice, we must not only have justice, we must have the perception of justice. Very important. When American people lose their faith in this government, we've got a problem. And I think it was Mr. Barr or somebody who said a little bit earlier, we were talking about the elections down there in Florida -- and I'm not just trying to bring this up, but it is a point. When people lose faith in the process of this government, we've got a problem.

And so, President Bush, when we met with him the other day, he said he wanted to restore faith. And I hope that, you know, somebody will give him some clips from this because I hope that when it comes time for him to do his pardons, that he will have the information that is appropriate, so that he can make good decisions because I just don't think that we realize how this effects people. They tell me that there are people who -- when I spoke a little bit earlier, the phones rang off the hook. Americans calling in, saying, when I spoke, saying, "He's right. In some kind of way, we have got to correct this system."

And so I just want to -- I hope that it will -- you know, I hope we learn from this. I hope that, you know, in some kind of way people will realize that this is not the way government is supposed to operate, because the little fellow who lives in Indiana, in your district, Mr. Burton, and the little fellows and ladies that live in my district, they don't even understand this. They don't have a clue.

Thank you very much.

BURTON: Thank you, Mr. Cummings, I think you summed up the feelings of a lot of us very, very well.

We will now go to -- excuse me. Ms. Davis, you are going to yield to Mr. Barr. And as soon as Mr. Barr concludes his questioning, we will go to the counsel for his questions.

BARR: Thank you.

Mr. Quinn, going back to Exhibit 63, it goes on. We first have the president calling B -- Beth, who is the finance chair of the DNC. I just want to make sure we all understand that. The president was calling her and tells her he thinks, basically, "You are doing a bang- up job, but it is those persnickety White House counsels that are standing in the way, but to keep praying."

The last point that is made -- and this is from Avner, who sent this e-mail -- "I shall meet her and her friend next week. She will provide more details."

What was the result of that meeting with the DNC finance chair?

QUINN: I don't know, sir. I don't know. I mean, there may be some other e-mail reporting something further, but...

BARR: Well, if there were, wouldn't they be in the documents here?

QUINN: Yes, sir.

BARR: But they're not.

QUINN: What I am saying to you is, I don't believe I heard anything further, anymore details about this.

BARR: Did this have to do with further contributions, do you know?

QUINN: The way I interpret this is that he had a phone conversation that he was going to see one or both of these people in the next week and would find out additional details about the phone conversation. That's what I understood it to mean. And I, to the best of my recollection, never heard any further details about the phone conversation.

BARR: That might be something we want to check into also, Mr. Chairman.

SHAW: CNN's coverage of these hearings will continue in just a moment.

(COMMERCIAL BREAK)

(INTERRUPTED BY BREAKING NEWS)

SHAW: Now back to Capitol Hill, Senator Dan Burton, the chairman of the House Government Reform Committee -- Mr. Burton of Indiana holding this hearing into former President Clinton's pardon of financier Marc Rich.

This is attorney Jack Quinn, Mr. Rich's lawyer.

BARR: ... reaching out to, possibly, to Chuck Schumer. Did anybody ever stop and think about such things as national security, justice?

QUINN: It has been my testimony repeatedly here today that on more than one occasion, I encouraged the White House counsel to seek the views of the Department of Justice.

BARR: You keep saying that. There's nothing on the record that backs you up on that. And you might have suggested it to him. And I suspect you suggested to him to call Mr. Holder, because you had conversations with him and apparently something led you to believe that he would back you up.

QUINN: Well, I wouldn't go that far, but I thought he was -- I thought he was...

BARR: Well, you certainly wouldn't encourage people to call him if you knew he was going to oppose it, I would think.

QUINN: But I thought I should encourage them to call the Department of Justice. And more than that, I expected them to. I didn't think they would act on this pardon application without consulting with the Justice Department. I thought that would happen.

BARR: And I believe you. I think -- I mean, what the president has done here is utterly unbelievable. And that's why some people might think that there's some other reason why he would do something so preposterous it even surprised you. And it certainly surprises us.

QUINN: I think he did it on the basis of the legal arguments I put in front of him. Others may disagree with the legal arguments I put in front of him, and may say they wouldn't have decided it this way, but I have no basis to think that he was motivated by anything other than the legal arguments I put in front of him.

BARR: Why would he talk with the head of the DNC Finance, the DNC finance director? Why wouldn't he have shared his legal theories with Mr. Holder?

QUINN: Look, on that conversation, again, I don't think that's a fair characterization of it. As I recall hearing this, my impression was that he had a conversation with this person who happened to be with the ex-wife of Marc Rich at the time of the conversation...

BARR: But the president called this woman. It wasn't that he called Denise Rich, he called this woman.

QUINN: But you're assuming that he called her about these pardons. And I don't understand that.

BARR: I'm not assuming it. All I know is based on the e-mail. They talked about that. Now it may have been the purpose of his call, it may not, but they obviously talked about it.

QUINN: That's right. My impression is that she raised these questions in the course of a conversation with him.

BARR: So you are somewhat familiar with that conversation? Because that isn't what the e-mail says; you're adding to it.

QUINN: I'm just telling you the impression I came away from it with. I did not -- in other words, when I read this e-mail, I did not have the impression that he was calling her to discuss these pardons. Because I wouldn't have a reason to think he would do that; that that would be the purpose of placing that phone call.

BURTON: Let me take five minutes.

And if you need time, I'll be glad to yield to you, my colleague, as well.

I want to read to you some e-mails. The first one is from -- who is that? It's to Robert -- Gershon Kest (ph) to Robert Fink. It says, "Good point. Can Quinn tell us who is close enough to lean on Schumer? I am certainly willing to call him, but have no real clout. Jack might be able to tell us quickly who the top contributors are." Maybe Bernard Schwartz (ph) of the Loral Corporation in California that got all those -- got all the --what was that, those transfers to allow a technology to go to China, Bernard Schwartz, the largest contributor to the DNC.

So you were talking -- did you talk to Bernard Schwartz about this?

QUINN: No, sir. In fact, I didn't follow up on that...

BURTON: You didn't follow up on that e-mail?

QUINN: ... in any way.

BURTON: But you did get that e-mail?

QUINN: I did get the e-mail, but I never reached out...

BURTON: Did you talk to Schumer?

QUINN: No, sir.

BURTON: Didn't talk to Schumer. Did you ask anybody to talk to Schumer for you?

QUINN: No, sir.

BURTON: Did you ask anybody to talk to Schwartz for him?

QUINN: No, sir.

BURTON: You didn't.

QUINN: No.

BURTON: So this was just a dead issue then?

QUINN: It just wasn't something I was going to follow up on.

BURTON: OK, here's another one. Here's another message from Avner which you did not receive. "Avner is looking for suggestions on who could contact the senior senator and ask for support, so that the only request for help from the Jewish community is not to HRC. It may be that DR" -- Denise Rich -- "can play this role as well. What do you think? And what do you think of Pinky's suggestion?" Who's Pinky?

QUINN: That's the other -- that's Mr. Rich's partner, Pincus Green.

BURTON: Oh, Pincus Green. I see, OK.

Here's another one.

BARR: Excuse me, Mr. Chairman. Can I ask, what was Pinky's suggestion?

BURTON: I don't know what that refers to.

QUINN: There was a lot of speculation and a lot of kicking around of ideas that were not part of the pardon application I submitted to the president.

BURTON: No, we understand that, Mr. Quinn. But I think this is one of the things that the American people would like to know about, what goes on when you're trying to get a pardon, where you're trying to use influence and money and everything else to get it done.

QUINN: As long as we're clear that that was not followed through on. I never...

BURTON: Well, these were people with whom you did business legally, weren't it, that were sending you these e-mails?

QUINN: Sure. BURTON: OK. All right.

QUINN: But that doesn't mean it happen.

BURTON: Well, I know. But I mean you were talking about it. How do we know it didn't happen?

QUINN: Well...

BURTON: You're telling me it didn't happen.

QUINN: Yes, sir.

BURTON: They're suggesting you do it.

QUINN: Right.

BURTON: But you didn't do it.

QUINN: That's correct.

BURTON: But let's just see what they said, OK?

QUINN: OK.

BURTON: OK. "I have been advised that HRC" -- Hillary Rodham Clinton -- "shall feel more at ease if she is joined by her elder senator of New York, who also represents the Jewish population. The private request from DR shall not be sufficient. It seems that this shall be a prerequisite for her formal position" -- Hillary Rodham Clinton. "All senators are meeting on January 3 and then shall take off. Bob, can you check with Gershon (ph) which is the best way to get him involved. I shall check with Abe." Who's Abe?

QUINN: I think that's a reference to a man named Abe Foxman.

BURTON: Who's he?

QUINN: He is a senior official of some American Jewish organization, I'm not sure which one.

BURTON: But I see in this other memo that we talked about, exhibit 45, a while ago, once again it says in this memo, "Thus, I think we, but mostly you and Avner, should discuss the possibility of a call from Denise and Abe, maybe together, otherwise I would have you do what you are already doing and volunteer our help if there are any questions raised by the White House lawyers or by the SDNY" -- Southern District of New York -- "if it is contacted." So Denise and Abe evidently were asked to work together to try to use their influence on this?

QUINN: But, Mr. Chairman, I do not believe that ever happened.

BURTON: All of these e-mails and all of these memos and all of this stuff suggesting people you can go to to push the buttons to get the pardon for Mr. Rich and Mr. Pincus, none of that ever happened? QUINN: I do not believe...

BURTON: No, no, you know, you say you do not believe. You know, we've had the White House people...

QUINN: Well, you have me under oath and I want to be careful.

BURTON: No, I understand. But we've had you before I want to just clarify one point. We've had a lot of people before the committee from the White House before, Mr. Ruff, God rest his soul, and others, and they always say, "I do not believe," "I can't remember," "I don't recall." All those are very good things to do to make sure you don't step in a bear trap.

QUINN: Right.

BURTON: But you're not saying categorically that none of this happen?

QUINN: I'm saying that I believe it did not happen.

BURTON: You're not saying categorically it did not happen?

QUINN: Well, Mr. Chairman, I'm under oath, OK. I am telling you that it is my testimony...

BURTON: You don't believe.

QUINN: ... that as far as I know this did not happen. I did not...

BURTON: As far as you know it could not happen, you do not believe it could not happen.

QUINN: I did not participate in following up on any...

BURTON: You did not in any way participate?

QUINN: In following up on these suggestions.

BURTON: On these suggestions.

QUINN: I do not believe that anyone approached Senator Schumer. I do not believe that anyone approached Senator Clinton. That's the best I can do, sir.

BURTON: But you do not believe. But it was suggested by your law partners to you and to others that these are avenues that should be pursued and that maybe, if certain people got together, that some would come along.

QUINN: Yes. There's no doubt those ideas were suggested, and I think they died there.

BURTON: OK. OK. I think that we will now go to the counsel for his questions, and then we'll adjourn this. I will tell you this, though: We will be looking at other documents, and if necessary, subpoenaing documents and other individuals. And if they take the Fifth Amendment or choose not to testify, we will get them immunity and we will force them to testify. Because there are so many questions being raised about possible influence peddling -- I don't want to put words in your mouth -- possible influence peddling and possible other things that we just can't let this thing die.

And I understand that the new president wants to move ahead with his agenda and I am for that, tax cuts and all the things we're talking about, education reform and everything, I'm for that and I wish him well and we want to work with him to do that and move on from this. But today additional questions have been raised that must be answered if we're going to get to the bottom of this.

And so we'll now yield to the general counsel for his comments.

QUINN: May I take a five-minute men's room break?

BURTON: Boy, you got to do something about your bladder.

QUINN: Well, I keep drinking this water.

BURTON: All right. We'll take a five-minute break.

SHAW: Well, as we can hear, nature is calling. Attorney Jack Quinn has sought the consent of the chair, Dan Burton of Indiana, to leave and go to the men's room.

And we get the sense, as you no doubt do, that very shortly this hearing is going to wrap up into former President Clinton's pardon of Marc Rich.

CNN's live coverage from the committee will continue in just a moment.

(COMMERCIAL BREAK)

JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington.

President Clinton is no longer in office, but he's still very much under the microscope of a Republican-controlled House of Representatives. Over at the Capitol at this hour, hearings have been under way -- the House Government Operations Committee, a committee chaired by Congressman Dan Burton of Indiana.

Our Bob Franken has been keeping a close watch -- Dan, what new has come out today in these hearings?

BOB FRANKEN, CNN CORRESPONDENT: Nothing new, but sort of a restatement of the questions that have been raised by Dan Burton and the committee. They have been able to leave an impression that there might have been some use of connections. There might have been some influence-peddling. And I underline "might." There might have been some disputes over whether the Justice Department was adequately involved. We were able to witness, during what has been about eight hours of testimony of really almost angry dispute between Jack Quinn, who is the president's -- was the president's White House counsel and the one who went directly to the president and asked for the pardon for Marc Rich -- one of the claims that he made is that Rich had been overzealously prosecuted so long ago and he fled the country because he was worried he would face prison for something that he had not done criminally.

The prosecutors from that time were here. And they vigorously denied that. And they said that Rich, who got the pardon from the president, in fact had been guilty of evading $48 million in income taxes -- had in fact traded with Iran, which was illegal at the time, in his capacity as a commodities dealer dealing in oil. This was a man who made billions, they said, by laundering money, by secreting records out of the country, by refusing to cooperate with the judge's order, even accepting a $50,000-a-day fine.

This was a bad man, they said, who should have been prosecuted, should not have been pardoned. That's been the gist of the hearing. There was also an argument about whether Quinn had adequately informed the Justice Department. He said he did: through Deputy Attorney General Eric Holder. Holder is saying that he only really had a peripheral knowledge of it.

Let's go back to the hearing now, as Congressman Dan Burton turns things over to his counsel.

REP. JO ANN DAVIS (R), VIRGINIA: ... dated Friday, January 12, to Jack Quinn. And it says, "Following Marc Rich's meeting with the prime minister, the latter called the president of the United States this week, and the president of the United States said he is very much aware of the case," in quotes, "said he is looking into it, and that he saw two fat books which were prepared by these people."

We've heard a lot of testimony here that the president didn't have all the information. What is the two fat books and who are these people?

QUINN: The two volumes were the pardon application, which was filed in two parts. And "these people," I think, refers to me and the other lawyers who submitted the petition.

DAVIS: So he was well-aware of this pardon request and all the information going on on the 12th. That's eight days prior to his final day, so it wasn't like he just got the information on the 19th and had to give a quick decision?

QUINN: That's right. And, in fact, when I heard this, you know, I was encouraged that he was actually looking at it, because he clearly had the petition itself.

DAVIS: Thank you, Mr. Chairman.

BURTON: We'll now go to the counsel and try to wrap this up. JAMES WILSON, CHIEF COUNSEL: I'll try and go quickly. I've got a number of subjects to cover.

Mr. Quinn, the chairman asked you some questions about compensation.

(CROSSTALK)

WILSON: Mr. Quinn, the chairman asked you some questions about compensation earlier. Apart from your attorney's fees, will you accept any money from Mr. Rich in the future?

QUINN: Well, look, I don't think it would be fair to ask me to commit never to accept monies from him. As I've said to you, if I do work that justifies my billing him for it, I will do so. I expect to be reimbursed for the expenses I'm put to in connection with this. Those are the only monies I anticipate receiving from him.

WILSON: But as far as your work done in pursuit of obtaining a pardon for him, you do not anticipate him -- well, you're not going to ask him to pay you any money?

QUINN: That's correct.

WILSON: And you're not going to accept any money, if he did offer it to you. Is that correct?

QUINN: I only anticipate receiving from him monies in connection with work I may do...

WILSON: Well, but my question was: Will you accept any money if he offers it to you for the work you did in obtaining the pardon?

QUINN: I have no idea what he might offer. And it's a hypothetical question. I don't think I should be required to say...

WILSON: Well, no. No, it's not a hypothetical question. It's a very clear question. If Mr. Rich offers to pay you money in the future for work you did in pursuit of obtaining his pardon, will you accept it or will you not accept it?

QUINN: I will not bill him for and I will not accept any further compensation for work done on the pardon.

WILSON: Fair enough.

Mr. Holder, could you please describe for us, just so we have this clear on record, each of your contacts with the White House, anybody employed in the White House.

HOLDER: I think there would be two, the two conversations that I've described with Ms. Nolan.

WILSON: And those are the extent of your contacts on the Marc Rich matter, correct? HOLDER: I believe that that is right. Yes, I think so. The one on January the 19th and then the one that happened sometime before that.

WILSON: And what was the duration of each contact, as far as the Marc Rich matter was concerned?

HOLDER: It's hard to say, but I really think a couple of minutes, I mean, or perhaps even shorter than that. These were very clipped conversations, very abbreviated conversations.

WILSON: Mr. Quinn, do you know whether or not former President Clinton has ever met Marc Rich?

QUINN: I have no reason to think he has. I don't believe he has. But I don't know that firsthand. I don't believe he has.

WILSON: One thing we discussed earlier was the material that you provided to Mr. Holder -- I'm directing this at Mr. Quinn. You sent him a cover letter and a two-page letter. And it was misdirected, and we covered that at some length earlier on. Why did you not send Mr. Holder the pardon application?

QUINN: I believed that a good deal of the material included in the pardon application consisted of, at least in their central parts, of materials that I had provided to him in October of '99 when he asked Mr. Margolis to take a look at this matter.

But you're correct, I did not at that time send him a copy of the full pardon petition.

WILSON: But the question was, why did you not do that? Is it because you thought he had all the material from over a year previous?

QUINN: Well, I thought he was sufficiently familiar with the underlying case that when he was asked he'd be in a position to advise the White House.

WILSON: OK, fair enough. That's an interesting observation, because the pardon application you prepared is comprised of many tabs. The first tab is your legal reasoning as to why Mr. Rich merited a pardon. Had you prepared that in 1999?

QUINN: No, but I had provided to Mr. Holder a summary of the flaws in the indictment in the case.

WILSON: But you had not provided the extent of your ultimate argument to the president. So you didn't feel that he needed to see that?

QUINN: Well, again, I think in fairness you have to say if you look at the material I provided to him earlier about the flaws in the indictment, you'll see that it is the same argument made in the pardon petition.

WILSON: The concern that we feel, and you can help us answer the concern or disabuse us of our error, is that when you prepare -- and I've worked in big law firms, and you prepare large binders of material, and you're generally very proud of them, you work late into the night, you get everything just right and make sure every comma is appropriate, every period is there -- and you want, because you're proud of your work and you believe in your work, you want to provide it to people. It's not a matter of how much it cost, because that's not the issue. You'd like to provide it to people so they can see the extent of what you are representing in whatever matter you're pursuing.

And generally it seems when you don't provide material to people, it's because you don't want them to review it or you don't want them to poke holes in it or perhaps find a flaw. I mean, the courts require briefs. You have to provide them so they can see your legal reasoning. In this case were you concerned that if you provided Mr. Holder your application that Mr. Holder might send it on to somebody who might actually read it and look at it?

QUINN: Absolutely not. Again, I had provided these arguments to him at an earlier point...

WILSON: Well, you hadn't provided all the arguments, because all the letters and the other things that are in the tabs, you couldn't have provided them the previous year.

QUINN: Fair enough. But the other point I was going to make is that, as I've said earlier, I encouraged the White House Counsel's Office to reach out to him. And there's no reason in the world why they couldn't have shared a copy of the pardon petition when they did so.

WILSON: I understand, but I've not yet heard of a lawyer who's decided to take a weak argument and leave it on the table when he's strengthened his argument. And presumably the point of the pardon application is you've made it bigger and better and more thorough and you've put all the letters in and you've gotten everything just right.

And if you believed in your argument, it seems, and if you thought it would withstand the scrutiny of Southern District lawyers or Mr. Holder's staff or the pardon attorney, it's hard for us to understand, even if it was the 11th hour, why you simply wouldn't put it in an envelope, messenger it over, and let Mr. Holder take a look at it. He could take it home, spend a couple of hours, he could think to himself. Maybe he'd want to talk to security people, maybe he'd wanted to send it over to the FBI.

I guess what you've said is, you provided material the previous year and that was enough for Mr. Holder.

QUINN: Well, look, you can disagree with me on this. I didn't make that decision in an effort to hide the pardon petition from anybody. I encouraged the White House to reach out to the Justice Department and seek their views. That's my testimony.

WILSON: We've had these e-mails about secrecy and under the radar. And, Mr. Holder, do you think -- would you have liked to have had a copy of the pardon application?

HOLDER: Sure. And I thought that we would get one from the White House. I thought that that's where, at a minimum, we would get it from them, that something having gone to them that they would refer that back to the Justice Department so that we could do the things we do when it comes to pardons.

WILSON: Just shift for a minute.

Mr. Quinn, what happened when Otto Obermier (ph) went to Switzerland in the early 1990s? Tell us about the negotiations with Mr. Rich.

QUINN: And I wasn't on the case. I know that they had conversations, but I'm really not the person to tell you in detail about them.

WILSON: OK. Well, you told us about the intransigence of the Southern District of New York, how they weren't working with Mr. Rich.

Mr. Holder, you've been a U.S. attorney. Give us each time that you can remember when a United States attorney has flown to a foreign country to negotiate with a fugitive. How many occasions are you aware of?

HOLDER: How many times did I do that?

WILSON: No, any in the history of the United States...

WOODRUFF: As this congressional hearing into the president's pardon of financier Marc Rich winds down to a close, we'll take a break. We'll be right back with more live coverage.

(COMMERCIAL BREAK)

WOODRUFF: Back to live coverage of the House Government Operations Committee looking into the -- President Clinton's pardon of Marc Rich.

QUINN: And in subsequent years, the department refused to talk to Mr. Rich's attorneys about developments in the law, about the analysis of the tax professors, about the contrary position that the Department of Energy had reached.

WILSON: Our problem here is that you tell us that the process doesn't work because of the bad actions of prosecutors in the Southern District in New York, including your former partner, Mr. Lid (ph), and including Judge Gerald Lynch (ph) and including the two gentlemen that testified earlier today.

You're telling us these people engaged in -- you haven't gone as far as saying bad faith -- but they've acted badly. They've done things they shouldn't have done. They've overcharged. You've told us all of these things, and yet you're unable to address whether they made an effort to recover. Perhaps, when Mr. Obermier (ph) went over, he said, "We'll drop the RICO count; if you give us X, we'll do Y." You don't know.

QUINN: But I've also acknowledged to you that this impasse did have a good deal to do, not just with the prosecutors, but with Mr. Rich and the lawyers who represented him initially. They were very much to blame for it as well.

But, look, I was simply trying to get this thing to a resolution. I didn't come on to get him a pardon. I came on to try to persuade the Department of Justice and, later, the Southern District of New York to look at the case through a different set of glasses.

WILSON: And it sounds like you were unable to obtain a meeting, and you had to go the next phase.

QUINN: That's correct.

WILSON: OK, one of the big factual issues -- and we don't want to go into this at great length -- but the prosecutors, this morning, told us about how Mr. Rich set up duplicate bookkeeping. They set of fraudulent books to hide the transactions that were conducted back in the early 1980s. Tell us a little bit about the duplicate book arrangement and how that is OK in your eyes.

QUINN: Well, my understanding of these transactions is that, in fact, they were structured lawfully.

WILSON: No, I wanted to ask about the duplicate books, not the transactions so much, but the duplicate books. Have you ever seen the duplicate books?

QUINN: No, sir.

WILSON: Did you ever ask?

QUINN: No, but I, again, this is an allegation that has been made by the Southern District. I do not think that it undercuts the argument that these transactions were lawfully structured and that, as the tax professors concluded, that there was, in fact, no further tax due and owing to the United States.

BURTON: They had a duplicate set of books. As I understand it, they had one set of books that was handled in a pretty formal way. And then they had a set of handwritten books where they put the money, and it was called "the pot." And the handwritten books were the ones that showed very clearly that they were trying to hide money so that they wouldn't have to pay taxes on them.

You haven't seen those books?

QUINN: No, sir. But what was going on here was that oil companies, like Arco and Rich...

WILSON: If I can interrupt, we don't want a recitation of your theory of the case. I'm just asking you about the dummy books.

QUINN: No, I understand that. And I'm not trying to filibuster by reciting the case.

WILSON: You told us, a moment ago, there was an allegation about dummy books. But the prosecutors actually have the dummy books. They exist. And I'm just asking you for the reason for the dummy books. I mean, when you have fraudulent transactions set out in meticulous detail, why do you do that?

I mean, it's one thing if you say you don't understand the Department of Energy regulations, your lawyers got it wrong, the law is bad, you had a bad day. All of these things, you can say. But when you go through a conspiracy with individuals to set up fraudulent bookkeeping techniques -- I'm only asking you, why did they set up the dummy books?

QUINN: The bookkeeping...

WOODRUFF: As these hearings by the House Government Operations Committee, chaired by Representative Dan Burton of Indiana, get to near a close, CNN's live coverage of the hearings will wrap up now. But we will, of course, continue to monitor them until they do end.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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