The End of the Scandal
The final gasps of the campaign-finance investigation.

January 8, 2002 11:20 a.m.

emember the campaign-finance scandal? For those who have forgotten their Clinton-corruption chronology, it's the one that happened after Whitewater and Filegate and before Lewinsky and Pardongate. It's been out of the news for years now, so much so that in December, when Ernest Green, an old friend of Bill Clinton's, pleaded guilty to scandal-related tax charges, virtually no one noticed. If they had, they would have discovered a microcosm of the scandal itself — a case in which what once appeared to be convincing evidence of wrongdoing ended not in crusading prosecution but rather in murkiness and minor plea-bargaining.

Ernest Green is widely known as a pioneer of the civil-rights movement — he was a one of the "Little Rock Nine," the first students to desegregate Central High School in the 1950s. Green later served in the Labor Department during the Carter administration and since the late 1980s has been a top executive at Lehman Brothers. In the Clinton years, he was also a big fundraiser for the Democratic party, once making Terry McAuliffe's list of the party's top-ten supporters.

In 1997, Green came to the attention of congressional and Justice Department campaign-finance-scandal investigators. Prior to Clinton's reelection campaign, Green had extensive dealings with Yah Lin "Charlie" Trie, the man who laundered tens of thousands of dollars in illegal foreign contributions to the party. It was a relationship that investigators probed for years but could never fully unravel. They discovered that Green and Trie had once talked about joining in real-estate transactions. The two men also tried to start a business selling novelty balloons (the novelty was that the balloons inflated themselves). And according to Democratic National Committee documents subpoenaed in the investigation, Trie was the solicitor of a suspicious $50,000 contribution that Green made to the party in February 1996.

The donation, which became the subject of intense scrutiny, was made at virtually the same time that Green helped arrange for Chinese arms dealer Wang Jun to attend a coffee at the White House with President Clinton. Investigators suspected that the money actually came from Trie, who used Green as a conduit to funnel another $50,000 into the Democratic party. Looking for evidence that Trie had reimbursed Green, investigators discovered that around the same time as the contribution, Green made several trips to a Washington bank to make cash deposits, usually between $1,000 and $5,000. One day he went to the bank twice, first to deposit $3,000 in cash and then to put in $5,000, also in cash. Another day, he went to the bank three times, to deposit $3,000, $1,000, and then $3,000, all in cash. In all, investigators say, Green put more than $30,000 in cash into his account between December 1995 and February 1996.

In 1997 and 1998, Green answered questions under oath three times in depositions before both House and Senate committees investigating the scandal (to his credit, Green did not join the "pled and fled club," the dozens of witnesses who pleaded the Fifth Amendment or left the country to avoid testifying). During Green's first deposition, before the Senate, investigators asked Green, "Did you ever receive any money from Mr. Trie?" Green answered, "No, I have not."

At the time, Senate investigators did not know about the cash deposits. Later, when House lawyers had found out about the money, they asked Green where it came from. He told them he did not recall. They asked why he made so many trips to put cash in the bank. He said he did not recall. But he did testify specifically that none of the money came from Trie or any of Trie's associates.

Still later, House investigators discovered a series of traveler's checks that they traced to Trie. They also discovered that Trie had given two of the checks, each for $1,000, to Green. When the investigators showed Green evidence of the $2,000, his memory, once so fuzzy, became quite clear.

"Charlie Trie gave you these traveler's checks, is that correct?" the House lawyer asked.

"Yes," Green answered.

"Why did Mr. Trie give you these two traveler's checks?"

"We had a gentlemen's bet on a basketball game."

"Which basketball game was that?" the lawyer asked.

"It was the Bulls playing — the Bulls were playing Indiana," Green answered.

"It was a Sunday game. I think it was on the 18th, and the bet was that Michael Jordan would score — I bet that he would score 40 points or better, and Charlie was not a big Michael Jordan fan, so he took the bet."

"I take it you won this bet, is that correct?"

"I did," Green answered. "I think Michael Jordan scored 43 points."

The contrast between Green's detailed memory of the $2,000 traveler's checks and his lack of memory of his cash bank deposits only served to heighten investigators' suspicions. In March of 1999, House Government Reform Committee chairman Dan Burton sent Attorney General Janet Reno the information he had gathered about Green. "During his depositions before this committee and the Senate," Burton wrote Reno, "Mr. Green made several false statements regarding his relationship with Mr. Trie which raise concerns warranting investigation." As it turned out, the Justice Department was already investigating Green, who had talked to prosecutors and testified before a grand jury at about the same time he was answering questions from the House and Senate.

The investigation finally ended last month, when Green agreed to plead guilty to not paying taxes on $30,000 given to him by...Charlie Trie. Although the agreement says Trie gave Green the money in connection with a proposed business venture, there is no doubt that, contrary to Green's under-oath assertions, Green received a significant amount of money from Trie.

Yet the department chose not to prosecute Green for giving false testimony — or for anything else directly related to the campaign-finance scandal. That decision seems somewhat baffling in light of the wording of the plea agreement, which seems to suggest that prosecutors had significant evidence against Green. "If the Court accepts the defendant's plea of guilty," the agreement reads:

The United States agrees that it will not further prosecute the defendant...for 1) offenses relating to federal campaign contributions made to presidential candidates or presidential campaign committees...2) offenses relating to the failure to disclose on federal tax returns filed with the Internal Revenue Service the following income: a) for 1995, $32,000 and for 1996, $20,000; and 3) offenses...relating to defendant's testimony and statements: provided to Congress on June 18, 1997, December 17, 1997, and September 25, 1998; provided to the grand jury on January 28, 1998; and provided to the United States on February 20, 1997 and January 7, 1998.

With so many specific problems with Green's actions, why did the department choose to walk away? Most likely because a prosecution would have been long, difficult, and quite possibly unsuccessful. "It's the best they [prosecutors] were going to get," says one congressional source. "The absolutists of the world will criticize this, but the fact is that in the real world this case would have been tried in the District of Columbia [where Green is widely admired]. There's no way a jury would have convicted him, and it's just murky enough that he could make a credible case that the money wasn't for contributions but for business deals. So the prosecutors said, 'Let's get what we can out of this guy, or otherwise we're going to get nothing.'"

And that is the end of the Ernest Green story. And in some ways, it seems to be the story of the campaign-finance scandal itself. While the evidence of illegal contributions seemed clear enough, the combination of an uninterested Clinton Justice Department, uncooperative witnesses, and sometimes murky financial transactions made it difficult to prove in court what seemed so obvious: that there was a wide-ranging scheme, originating at the highest levels of the Clinton administration, to bring large amounts of illegal foreign money into Democratic campaign coffers. In today's world, it all seems quite distant and irrelevant, but the details of the Green case remind us that it was serious stuff, and that Republicans were right to pursue the investigation even when few others seemed interested.