Experts say Hubbell indictment merely a means to an end for Starr Observers say tax charges rare, but prosecutor wants to apply pressure


WASHINGTON -- It is very unusual for someone to be prosecuted for the tax violations that President Clinton's old friend and former appointee, Webster Hubbell, was accused of Thursday.

But it is not remotely unusual for a prosecutor to use any lever he can get his hands on to tighten the vise around a potential witness he thinks can advance an important case.

In that sense, suggested tax lawyers and former prosecutors interviewed yesterday, the prosecution of Hubbell on tax charges is merely a means to an end -- which is itself a means to a further end.

Kenneth Starr, the Whitewater prosecutor, appears to be trying to put pressure on Hubbell in hopes of extracting information that could be used to build a case against Clinton or Hillary Rodham Clinton, the central quarries in the four-year inquiry into the Whitewater land deal and related matters.

While several tax lawyers raised their eyebrows over the indictment of Hubbell, former prosecutors noted that the law was clear.

"It's not like Starr has made up the crime," said John Barrett, an assistant professor at St. John's University School of Law who was an associate counsel during Lawrence Walsh's inquiry of the Iran-contra matter. "The statute is there, and I'm assuming the facts are there."

But, Barrett added, "If Webb Hubbell was alone, without the bigger picture of Whitewater and him as a potential witness, my sense is that you wouldn't see this prosecuted criminally."

Usually a case like this might begin with an IRS audit. Fewer than 2 percent of all tax returns are audited, and "only one of every 1,000 returns that is even audited ends up producing an indictment," said Richard Schmalbeck, a professor specializing in tax issues at Duke University Law School.

Starr's decision to prosecute Hubbell raises a central question: whether Hubbell is refusing to tell the truth in the Whitewater inquiry, or whether Starr is simply dissatisfied with the truth that Hubbell is telling.

Rahm Emanuel, a senior Clinton adviser, accused Starr of a "pattern and practice" of squeezing witnesses to alter their stories. "When they have not altered the record of events to their liking, the Office of Independent Counsel and Ken Starr have ruined these people's reputations and lives," Emanuel said.

But some former prosecutors said Starr might have come to regret the plea agreement he struck with Hubbell in 1994. That agreement apparently did not include a specific description of what Hubbell would testify to regarding Whitewater. Tape recordings of Hubbell's conversations from prison may have persuaded prosecutors that he is withholding information.

Several people interviewed wondered why Hubbell, knowing he was under scrutiny, would do anything remotely suspicious.

Hubbell served almost 17 months in prison for tax evasion in 1994. Starr has also charged Hubbell's wife, Suzanna, as well as two of his advisers, Michael Schaufele, an accountant, and Charles Owen, a lawyer.

Charging Hubbell's wife and advisers increases the pressure on him, and it also could cause one or more of the accused to implicate the others.

"Starr wants to put all the spiders in the same bottle and let them fight it out," said Paula Junghans, a criminal defense lawyer with Martin Junghans Snyder & Bernstein in Baltimore.

Pub Date: 5/02/98

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad