

			   THE WHITE HOUSE

		    Office of the Press Secretary
_____________________________________________________________________
For Immediate Release                                  April 11, 1994

	     
			 BACKGROUND BRIEFING
		  BY SENIOR ADMINISTRATION OFFICIAL

 
			  The Roosevelt Room


4:13 P.M. EDT
	     
	     
	     
	     MS. MYERS:  The ground rules for this will be the same 
as the last time, which is that David Kendall will read a statement 
on the record, and the rest of this briefing will be on background.  
	     
	     Q    Couldn't we have it on the record, Dee Dee?
	     
	     MS. MYERS:  David Kendall will read a statement on the 
record, and the rest of this will be on background -- senior 
administration official and someone familiar with the -- David, how 
do you want to describe someone familiar with --
	     
	     MR. KENDALL:  Familiar with the records.
	     
	     MS. MYERS:  -- with the records.  David will talk about 
the tax return issues, and [name deleted] will talk more about the commodities 
trading part of this.
	     
	     Q    And you object to having [name deleted] on the record?
	     
	     MS. MYERS:  Yes.  I think we intended to do this on 
background.
	     
	     MR. KENDALL:  This is my on-the-record statement.
	     
	     The President and Mrs. Clinton today released additional 
documents relating to their tax returns and commodity trading in 
1978-80.  Our review of these records discloses that the Clintons' 
1979 tax returns were audited and approved by the Internal Revenue 
Service; that there was a small, unreported capital loss in 1979; and 
that a short-term capital gain of $6,498 from 1980 commodities 
trading was not reported.  The federal tax on this gain would have 
been $3,315; the state tax would have been $514.  
	     
	     The Clintons are today paying these taxes plus accrued 
interest.  Even though taxpayers have no obligation to correct newly-
discovered errors from 14 years ago, the President and Mrs. Clinton 
have repeatedly said that they will correct any mistakes in their tax 
returns if any errors are found; and they are doing so today.
	     
	     The Clintons do not know how the error occurred, but 
accept responsibility for it.  They view it as their duty to come 
forward, disclose the mistake and pay what is owed.  They've made a 
payment to the federal government of $3,315 -- the amount of 
additional tax due on the 1980 return; along with a payment of 
$10,134 representing interest due on this amount.  They have also 
made a payment of $514 along with a payment of $652 in interest 
representing the amount due the state of Arkansas.  The Internal 
Revenue Service audited the Clintons' 1979 tax returns with a 
particular focus on commodity training gains and the interest 
deductions for that year.  The IRS audit concluded that their income 
from commodities trading and their interest deductions were 
accurately reported, and no additional taxes or adjustments were 
required.
	     
	     The Clinton's tax returns for 1979 and 1980 were 
professionally prepared by the their CPA in Little Rock.  And in 1980 
they paid $17,680 in federal income tax, and $2,836 in Arkansas state 
income tax.  The Clintons provided their accountant with relevant 
financial records, including commodity trading records that they had 
received.
	     
	     In 1978, Mrs. Clinton opened an investment account with 
Stephens, Inc. in Little Rock.  Beginning in October 1979, her broker 
at Stephens initiated several commodity trades.  He dealt 
sequentially with three commodities brokers -- Clayton Brokerage 
Company, 1978; Peavey Company, 1979-'80; and ACLI International 
Commodity Services, Inc. in 1980.  This trading began with a $5,000 
deposit by Mrs. Clinton on October 12, 1978, and ended when the ACLI 
account was closed on May 14th, 1980.
	     
	     Stephens, Inc., prepared annual year-end statements on 
which the Clintons and their CPA relied the preparation of the 
family's tax returns.  The Stephens year-end statement for 1980 
attached to the tax return only included information on securities 
and bonds.  Documentation provided by Peavey enabled the Clintons' 
CPA to document a short-term capital loss on Schedule D of their 1980 
return amounting to $449.00.  Although Mrs. Clinton received monthly 
statements from ACLI while the ACLI account was open, she apparently 
did not receive any year-end summary or account closing summary of 
the ACLI gains and losses.  At that time, brokerage firms dealing 
with -- (inaudible).
	     
	     In the analysis of the record by the Clintons' attorneys 
and accountant concluded over the weekend, it was determined that a 
small capital loss made in dollars from the Clayton account was not 
reported on the 1979 return.  It was also determined that a short-
term capital gain of $6,498 from the ACLI account was not reported on 
the 1980 return.
	     
	     Three of the last five presidents have been required to 
pay back taxes that the IRS determined were due --.  Here the 
Clintons have reached back 14 years to a time long closed by the IRS, 
and after careful investigation, have made the determination 
themselves to pay not only the tax, but also interest for that entire 
period in amount that dwarfs the tax paid.
	     
	     A quick correction -- that should be '79.  On the second 
page -- one, two, third paragraph -- I beg your pardon.  There is a 
typographical error.  The last sentence of the third paragraph which 
begins, "This trading began with a $5,000 deposit -- (inaudible) --
1979."
	     
	     Q    When were they audited?
	     
	     MR. KENDALL:  They were audited --
	     
	     Q    Shouldn't this be '79 also at the beginning of that 
paragraph -- the Stephens account?
	     
	     MR. KENDALL:  No, the Stephens account was -- let me 
make a brief on the record statement and then we'll take your 
questions on background.  That's the statement you have, and the 
whole statement's available for the record, so let me highlight a 
couple of paragraphs.
	     
	     The White House is today making available additional 
records of the First Lady's commodity transactions as documented by 
her brokerage house, REFCO, as well as records from commodities 
trading that was conducted through Stephens, Inc.  The transactions 
covered by these records occurred during 1978 through 1980.  
	     
	     At the request of the White House, Mr. Leo Melamed of 
Chicago, Illinois, an internationally recognized expert on the 
commodities markets, reviewed the records over the weekend of the 
First Lady's commodity transactions.  A statement by Mr. Melamed 
accompanies my statement and is available for the record with the 
additional documents being released today.
	     
	     I would note that Mr. Melamed at the time was the 
Chairman of the Executive Committee of the Chicago Mercantile 
Exchange and is a former Chairman of the Chicago Mercantile Exchange, 
one of the foremost experts in the industry.  And he concludes that 
she paid normal full commissions; she made money on a lot of trades, 
lost money on some; sometimes those losses were substantial; and on 
balance she did well.  She received some valuable market advice and 
assistance and violated no rules in the course of these transactions.  
	     That concludes my ON THE RECORD statement.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  A question was already 
asked.  Let me clarify that.  Now we're ON BACKGROUND.  The Stephens 
account was opened in 1978, but the commodity trading didn't begin 
until October 12, 1979.  
	     
	     Q    The $5,000, is that -- that's a different account 
from the --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That is a different 
account.
	     
	     Q    Do you think you were candid with us the last --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  She started the 
Stephens account with $5,000 cash.  
	     
	     Q    And what did she wind up that Stephens account with 
when she closed it?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  When the account was 
closed, $10,489 was withdrawn in May of 1980.
	     
	     Q    Have other funds been withdrawn during the course 
that that account was active?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, they have not.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  If you want, I could 
explain the math; which is, if you add the $6,498 which we reference 
in Mr. Kendall's statement on the taxes and I believe the $1,009 
which had been deducted from her base, that she deducted from her 
1979 and 1980 tax returns from the Peavey account, you get to the -- 
you can calculate the amount then.
	     
	     Q    The last time we were here talking about the 
Stephens account, you said she opened it with $5,000, lost $1,000 and 
got out.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That's correct.
	     
	     Q    Now, that's inoperative.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That is inoperative.   
In the course of collecting these records, we discovered this --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We determined that 
there was -- we finally determined that there was, in fact, a gain 
and that the gain of $6,498 had been unreported, and we've taken 
corrective action.
	     
	     Q    How did you finally determine it?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  By a review of the 
records, by a collection of the records, by following through what 
are really three trading accounts kept by one separate brokerage 
account; and by really beginning back in October of '79 and doing the 
analysis all the way up to when the commodity accounts were closed.
	     Q    Do you think you were candid with us when you first 
explained Mr. Blair's role; then two weeks later you come back and 
tell us something different?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Yes.  I think the 
question that was on the table at the time and the question I tried 
to respond to at the time was, did Mrs. Clinton control her own 
account; was she making trading decisions?  And that was the thrust 
of the questions.  I tried to give you -- in the course of preparing 
for this briefing, I went back and looked at the answers that I gave.  
I don't think I gave you any inaccurate information with regard to 
that.
	     
	     As further questions were asked, I learned more 
information; and I, frankly, was able -- based on questions about how 
the transactions were actually carried out, and I provided that The 
Washington Post when asked.
	     
	     Q    Did you know at that time --
	     
	     Q    Did you learn more by talking to Mrs. Clinton?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I did.
	     
	     Q       subsequently.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Subsequent to the last 
briefing.
	     
	     Q    For those of us who weren't at the original 
briefing, you did not say then that Mrs. Clinton made her own trades, 
but Mrs. Clinton was making her own trade decisions.  Is that what 
you said in the first briefing -- I'm sorry.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I don't have the 
transcript in front of me -- maybe we can get that; but I said that 
she was in control of her account; she made her trading decisions.  I 
think that, again, what was clear in my comments to The Post over the 
weekend --
	     
	     Q    Did you know what his role --
	     
	     Q    Let him finish.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  -- was that she would 
discuss it with Mr. Blair at times, make a decision, then Blair would 
pass along the information.  Actually, the brokers at REFCO would 
place the trade in a technical sense with the brokerage house.
	     
	     Q    Who advised her on her Stephens trading?  That was 
a whole different account, a bunch of different commodities, it was 
in a difference city.  Who was giving her advice on trading all those 
commodities through Stephens?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Primarily her broker, 
Bill Smith.
	     
	     Q    Bill Smith, at Stephens, Inc.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  At Stephens Inc.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Who was at that time at 
Stephens, Inc.
	     
	     Q    So at the time of the last briefing, you were not 
aware that Blair was making most of those transactions --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I was not aware that he 
was passing along the trading decisions that Mrs. Clinton was making.
	     
	     I want to be clear about that.  I think that she was 
making the decisions.  He was not exercising discretion over her 
account.  He would check with her, they would talk about it; 
sometimes she would take his advice, sometimes she wouldn't.  When 
they reached a conclusion, he would pass along the decision.
	     
	     Q    But how do you know she made the decision to get in 
and out?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Because she has told me 
that and he has -- well, she has told me -- with specific reference 
to getting in and out, she has told me that.
	     
	     Q    Why is the amount of interest here so different?  
On the federal government's interest payment, it's 300 percent of the 
amount owed, whereas on the state payment, it's only about 30 percent 
bigger.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I can't give you a 
logical answer, but I can give you a factual answer.  The IRS 
quarterly publishes interest charges, and those in the relevant 
period have ranged from 7 percent to 20 percent.  It's a complicated 
calculation, depending upon what the quarterly interest charge is.  
The state of Arkansas, you simply call up the revenue people, give 
them the year and the date and they tell you how much you owe in 
interest.
	     
	     Q    Is there no penalty?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We did not feel that 
any penalty would be applicable here in either case.  This is a 
strictly voluntary payment.  It is 14 years old.
	     
	     Q    Is there any question, though?  Could the IRS not 
come back and say, you do owe a penalty as a result of this?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We don't believe so 
because the tax year has long ago closed.
	     
	     Q    In the earlier description of Mrs. Clinton's 
trading you said that she became pregnant which caused her to get 
cold feet or she lost the stomach for it.  But these new records show 
she was actively trading in February, March, April, during the month 
that the baby was born.  Right?  February?  And March, April, and 
even into May when she had a week's old infant in her arms.  Does 
that mean that that statement was not true also?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think if you look at 
the trading from the time her baby was born -- and I think it's her 
recollection that that affected her desire to trade -- that largely 
she was closing out her positions through March.  She made one small 
trade in May.
	     
	     Q    What was the margin call that the President talked 
about at the town meeting?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Well, the President 
made the reference to a time in which the baby was born.  I don't 
believe -- I think that the --
	     
	     Q    He said she got a margin call and then she got out.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, I think he said 
that you haven't received a margin call; she did, and then she got 
out.  She was having a baby.  I think that that, again -- we are 
talking about recollections that are 15, 16 years old, and I don't 
believe that there was a margin call at the time Chelsea was born.
	     
	     Q    Was there a margin call along the way somewhere, 
however?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  The REFCO records we 
released two weeks ago indicate there were margin calls.
	     
	     Q?        you and I talked about this, you indicated you 
believed that the margin call to which the President was referring 
was in this trading account, the second trading account, the Stephens 
account.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  You know, we are trying 
the best we can to  reconstruct this.  These are 16-year-old 
recollections, they're 16-year-old records.  And I think that she did 
-- I have to get the records out -- I'll get back to you on that, but 
I think there was a loss that Mrs. Clinton remembered that occurred 
right around the time that Chelsea was born, and I think that that 
really was the memory that was triggered in the President's mind.  
	     
	     Q       margin call?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I don't think that 
resulted in a margin call, it was just a substantial loss, and she 
closed her position out and got out.  
	     
	     I think at this point we're just trying to match 
recollections with documents, rather than having a really specific 
recollection that there was a margin call at that point.  I believe 
that one -- she was -- right after the baby was born, there was, as I 
say, a loss in one of those positions that ended up being closed in 
March.
	     
	     Q    Can you clarify when and why the IRS audit was done 
in '79 --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We know that the audit 
letter went out in January of 1982.  I can't tell you why it was 
done.  You have the letter itself, which indicates the primary areas 
of interest, and it was -- yes, it' back of my statement.
	     
	     Q    There was no audit in the '80 tax return, correct?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That's correct.
	     
	     Q    And what is the statute of limitations on filing 
back taxes that were missed?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Three years.  Criminal 
statute is five years.
	     
	     Q    So, legally, they didn't have to do this, but they 
voluntarily decided to do it?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Exactly right.  The 
President has said on many occasions that whatever the legal 
obligation, if they determine that a tax has not been paid that they 
will pay it.  And this was the determination that was made here when 
we finally, just last weekend, the last few days, put all of the 
records together and ascertained that indeed there was this gain 
here.
	     
	     Q    Well, what's your best guess -- how did they miss 
the $6,400 --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I don't have a best 
guess and I don't have a precise explanation.  The records are 
complicated.  There were no year-end summaries either from ACLI or 
Stephens on the commodities part.  If you look to the 1980 tax 
return, you will see a schedule from Stephens that does indicate bond 
and stock capital gains and losses.  I think that the best answer is 
this was simply overlooked.  It was not obvious from the records at 
hand, and it went unreported.
	     
	     Q    So some of the other profits from the Stephens 
account were reported, but the profits for the commodities were not.  
That's the only thing that was not reported.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That's correct.
	     
	     Q    But the other aspects of the Stephens account were 
reported.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  They were.  And 
Stephens again was largely -- did the stock and bond trading.  It 
went to other commodity brokers -- first to Clayton, second to 
Peavey, third to ACLI.  And of those entities, it appears that only 
Peavey sent out year-end statements.  You'll see the two Peavey year-
end statements.  They are there; they were reported.
	     
	     Q    Who were the Presidents?
	     
	     Q    Other than Nixon.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Reagan, Bush and Nixon 
were the ones I was thinking of.  Bush, while he was Vice President.
	     
	     Q    $198,000.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  $198,000, I think, for, 
I think, Bush.  We know  that the Reagans paid $20,000, and then 
their only estimate to the amount of tax imposed, due to Mrs. 
Reagan's gifts.  And then, I believe that President Nixon, we know, 
paid $280,000.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  He also had liability 
for $148,000 in 1969.
	     
	     Q    Did Bush, because of his house in Texas and the 
thing in Maine -- Kennebunkport -- this was the legal argument over 
which one was the residence and which --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Right.  And he ended up 
paying, I believe, in three -- it was not reported until later --
	     
	     Q    Well, this wasn't -- not unreported income; this 
was a dispute over which one of his --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  It was $198,000.
	     
	     Q       residences he could claim.  
	     
	     Q    He paid taxes on $198,000 or he paid $198,000 --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  -- pay $198,000 in 
taxes.
	     
	     Q    Can you clarify for us again how you came to 
discover  -- additional $6,500 in unreported taxes?  Did Mrs. Clinton 
recall it in reviewing her own records, or did you recall it 
reviewing her records?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I'll try and describe 
it.  We tried to put the records together as we found them from these 
three trading accounts that were done through Stephens.  As my 
colleague has indicated, you begin with a $5,000 deposit in the 
Clayton account.  There's some trading in the Clayton account, 
because they don't send a year-end statement, a small capital loss 
goes unreported.  That was $80.00.  Peavey does send a year-end 
statement for 1979, and you see that loss of $560.00 reflected on the 
'79 tax returns.  
	     
	     Early in 1980, and again you see this on the 1980 tax 
returns, Peavey has another loss in the amount of $449.  Now, going 
into the ACLI account, is $3,911.  However, that is $80 short of what 
you do when you work out the math because the Clayton commissions 
weren't included in there.
	     
	     You get from the Peavey to ACLI transfer of $3,911.  You 
then go through a large variety of trades, which are reflected in the 
ACLI records.  You finally come to transfer out on 5/14/80 of $10,489 
that goes back to Stephens.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  For those of you who 
would like to find it quickly, we provided an easy-to-use chart.
	     
	     Q    I think you're missing -- our point is, were you 
going through records in your basement and said, oh, my God, here's 
some Peavey account --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Your questions caused 
us to focus on these records and do an analysis.  And that analysis 
has been difficult.  We have just completed it on the tax aspects, 
and these are the results.
	     
	     Q       was not complete when you briefed on this before 
-- is that what it is?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That's absolutely 
right.
	     
	     Q    When did you start the analysis?  You said your 
questions prompted us to do an analysis.  When did you start going 
back over this?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We really began it in 
the last week or so in looking, at least, at least at the tax aspects 
of it trying to figure out what, how the numbers fit together from 
the various accounts.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I'd like to add 
something.  I'd like to add two points.  One is that in my 
colleague's going through the history of '79, we should add that the 
$72,996.00 gain reflected on the REFCO end-of-the-year statement was 
provided to the accountant and properly included in their -- that's a 
gain which they properly included in their 1979 tax returns.
	     
	     Secondly, when we briefed the last time, we were 
primarily briefing on REFCO.  At that time we said we were trying to 
get these other records together.  When we began to assemble them, 
they were with my colleague, and he began to pull them together, and 
we tried to understand what was in them.  And through the course of 
that, we discovered this --
	     
	     Q    But my question is, how come in one week, 14 years 
after the fact, you were able to these ACLI records showing a $6,500 
gain that was not available to the Clintons in early 1981 when they 
were preparing their taxes?
	     
	     Q       their does record go to ACLI?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I can't answer the 
question.  The records are confusing.  They are over two years and 
three trading accounts.  There are no summaries.  The Clintons have 
accepted responsibility.  It was an oversight.  We don't know how it 
happened.  They had a professional return preparer, a good 
accountant, as the audit indicates when the IRS checked out the 1979 
returns.  Everything was in order.
	     
	     Q    But why can't you answer that --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  These were all the 
Clintons' records.  They were in their possession at one place or 
another.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  And we believe they 
were -- and, as we said, we believe they were turned over to the 
accountant.
	     
	     Q    The evidence was there --
	     
	     Q    They were turned over to the accountant?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We believe so.  That 
was their standard practice.
	     
	     Q    You didn't have to call up -- the records were 
there.  You didn't --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No one else has 
records.
	     
	     Q       call up ACLI and say, hey, we're missing these 
records?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  ACLI is long out of 
business.  These were the Clintons' own records.  And they have 
preserved them for 14 years.  It was our own analysis that determined 
this.  It wasn't the IRS or anything else.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think that in --
	     
	     Q    On whose initiative did you go after these records?  
Was it Mrs. Clinton's, was it the President's or was it both? 
	     
	     Q    Or yours?
	     
	     Q    Or Dee Dee's?  (Laughter.)
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think that we were 
trying -- you had questions; we were trying to be as forthcoming as 
possible.  The question was asked earlier why it took us two weeks to 
get it together.  Frankly, we're trying to reconstruct things that 
happened 15 or 16 years ago.  We found the records in a variety of 
places.  But they were in the possession of the Clintons.  We've 
pulled them together, and we're trying to provide as much information 
as quickly as we can.  And when we get additional information, we'll 
provide it to you.  If we find additional record -- you now have the 
records we have; if you find additional records, we'll be happy to 
provide --
	     
	     Q    So it was your initiative and not the Clintons.  It 
was your initiative.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, it was the -- no, I 
didn't say that.
	     
	     Q    That's what I'm asking, was it the Clintons or was 
it yours?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  They directed us to 
review these records top to bottom.
	     
	     Q    Are these all the records or are there more records 
yet to come?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  These are all the 
records we have been able to locate.  Believe me, we have looked very 
hard for records that would indicate some loss that would 
counterbalance the gain.  (Laughter.)
	     
	     Q    When were the taxes paid?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  They were paid today. 
	     
	     Q    They paid today?  How were they paid?  Were they 
like hand-delivered in a certified check?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Sent to the Treasury in 
the State of Arkansas.
	     
	     Q    [name deleted], are you doing a similar reconstruction of the 
Whitewater records --
	     
	     Q    Their income tax --
	     
	     Q    Are you doing a similar reconstruction with the 
Whitewater records as it relates to the taxes?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No.  We are analyzing 
issues as they come along on Whitewater, and we'll follow the same 
procedure here.  Anything we determine to be erroneous will be 
corrected.
	     
	     Q    So with the documents coming out in Little Rock 
tomorrow, you don't know anything that's going to come out tomorrow 
that's going to cause you to have another one of these sessions on 
Thursday?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I'm not aware of 
anything right now.
	     
	     Q    The one question I have is, when she pulled the 
$10,000 out of the account, she put $5,000 in and you took $10,500 
out, doesn't that tell you you have a gain?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  If you look at these 
trading records, you will see a complicated pattern of gains and 
losses.  You will also not see any easy way to define the basis for 
determining what your gain is.
	     
	     Q    Okay, except my question is, whatever -- if you go 
up and down and up and down in a single year, this was a relatively 
short period of time -- you put in $5,000 and you take out $10,500.  
No matter what the trading pattern is, don't you have to pay capital 
gains on that $10,000?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  You do, but what I'm 
suggesting to you is, that's not an easy calculation where you have 
two years at issue, three trading accounts and no year in summaries.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  And it was being traded 
through an account in which there was a year-end summary provided.
		  
	     Q    Was the $5,000 account opened with cash or is there 
a cancelled check on --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  There's a wire 
transfer.

	     Q    A wire transfer?
	     
	     Q       discretionary?  She was the one who made those 
decisions?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  It was a discretionary 
account.  The broker was able to make decisions, but did so in 
consultation with her.
	     
	     Q    Stephens was a discretionary account.
	     
	     Q    Did you offset the unreported capital loss of $80?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Yes, we did.
	     
	     Q    In your discussions with Mrs. Clinton, or a 
discussion in which you learned that her trade, in fact, were 
sometimes placed by Mr. Blair, what else have you learned in the last 
week on a colter of how she made her decisions, and who else she got 
advice from; how she contacted him on a daily basis in order to 
instruct him to make trades for her?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think that depended 
on how active she was in the market at the particular time.  I think 
she'd talk to him frequently.  I think there were other people who 
she talked with, but that he was, I think -- he was particularly 
active following the market on a daily basis.  And, as I said in the 
last briefing, he was her important advisor and gave her trade 
advice.  She didn't always take it -- sometimes she did, sometimes 
she didn't.
	     
	     Q    Can you tell us who else she got advice from?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I'll try to get that.
	     
	     Q    Did she ever actually place a trade herself?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I believe she did.  I 
believe she did.  I believe she did at REFCO.  But, again, everyone's 
memory is not crystal clear on this, but I believe she did.
	     
	     Q    Have you asked her that?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I have asked her that, 
and she believes she did.
	     
	     Q    With Mr. Bone?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  It's not clear whether 
it was with Mr. Bone or with one of the other brokers.  I think she's 
met Mr. Bone.

	     Q    Did Blair play any role, formal or informal, in the 
Stephens account?

	     SENIOR ADMINISTRATION OFFICIAL:  I don't think so, but I 
can't say that they didn't talk about some of these areas.

	     Q    My calculation is that the Clintons today wrote out 
a check for $14,615 to the state and to the federal government.

	     Q    If you add up the state and the federal --

	     Q    Two checks totaling $14,615.

	     SENIOR ADMINISTRATION OFFICIAL:  Whatever the numbers 
add up to, those are the checks --

	     Q    So it would be two checks totaling that amount?

	     SENIOR ADMINISTRATION OFFICIAL:  Yes.

	     Q    And they went out today?

	     SENIOR ADMINISTRATION OFFICIAL:  Right.  Yes.

	     Q    If it's cost them so far $14,000, this whole review 
has cost them $14,615 -- (laughter.)

	     SENIOR ADMINISTRATION OFFICIAL:  One might ask, do your 
lawyers exist to make you pay more taxes or save you taxes.

	     Q    Well, the question I have is, obviously your legal 
fees will be added to this, whatever they may be.  How much so far 
has this review cost the Clintons out of their pocket?

	     SENIOR ADMINISTRATION OFFICIAL:  I don't know and I'm 
not going to speak to the legal fees.  It has cost them the amounts 
that you've indicated.  Again, there is not a legal obligation to do 
that.  It was a voluntary payment which they felt was the right thing 
to do, and they've done it.

	     Q    Are they paying you legal fees?

	     SENIOR ADMINISTRATION OFFICIAL:  Well, I'm billing them, 
and they're paying me, and that's all I'm going to say about it.

	     Q    Dee Dee, can you talk about that?  Do you know 
whether they've paid any legal fees to Mr. Campbell?  Could you find 
out for us --

	     Q    Are you billing them at your standard hourly rate 
that you would bill me?

	     SENIOR ADMINISTRATION OFFICIAL:  I am.
	     
	     Q    Is there any review or second-guessing going on 
about the internal process here at the White House, which has managed 
to drag this whole thing out over an extended period of time?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We are trying to 
provide information and answers as quickly as we can get them.  We're 
sort of damned if we do, and we're damned if we don't.  If we don't 
provide you information, you're pounding on us that we haven't put it 
out quickly enough; and if we get information out and then come back 
with more after we've gathered and analyzed it, then we're dragging 
it out.  Our modus operandi is to get -- as we get information that 
we can provide to you, we'll provide it to you.   And I think the 
Clintons are both fully supported that.  And they have -- that really 
goes back to the last question.
	     
	     Q    Did you know that Mr. Blair executed a number of 
trades before The Washington Post asked you?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think that's a 
technical question, and I answered it, which is, he passed along the 
information.  I did not know that before they asked.
	     
	     Q    Did you know before The Washington --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I did not know that 
before The Washington Post --
	     
	     Q    Have they filed their --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I never asked either 
one of them that.  And I --
	     
	     Q       on the 15th? 
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We'll put out a 
statement on the 15th.
	     
	     Q    Mrs. Clinton has always been such an effective 
spokeswoman for any issue that's come up.  Why hasn't she just 
directly taken this thing on head on, like tell -- a Geraldine 
Ferraro-type news conference on this and just dealt with all the 
questions that have come along?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think she's answered 
questions as they're posed to her, and she's going to continue to do 
that.
	     
	     Q    Is there some concern about her legal exposure on 
this?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No.
	     
	     Q    Any plans for her to conduct a news conference 
along these lines?
	     
	     Q    What you're referring to are things that have 
happened on the run.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  On the run?
	     
	     Q    Yes, trips to Denver and other places.  
	     
	     SENIOR ADMINISTRATION OFFICIAL:  What's that?
	     
	     Q    Questions that she's entertained on this subject.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  She's held press 
availabilities in every city she's been in.  She's answered any 
questions --
	     
	     Q    How about Wall Street?  
	     
	     Q    How about the White House?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Maybe you guys ought to 
invest some time and money and follow us on the road.
	     
	     Q    We've invested lots of time and money.
	     
	     Q    Why do we have to?  I mean, why can't we operate 
from here, in the White House?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I'd like to add one 
point, which is that lost through in all this is the Melamed 
statement.  I would reference the fact that with these additional 
documents, you can see that full commissions were paid in overnight 
trading, as opposed to day trading.  It's virtually impossible to 
allocate trades.  Many of the issues that have been sort of thrown up 
as problems in the trading account, I think, are answered by that 
statement.  And if you'd like to get additional information --
	     
	     Q       ask him to make this review?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  He did it over the 
weekend.
	     
	     Q    Part of the Melamed statement, there's a line that 
reads as follows:  "It must be noted that she was trading was 
incredibly correct on the market directions of that day."  Do I take 
it day means that era in time?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Era, yes.
	     
	     Q    When he says, "incredibly correct," I assume he 
means that in a colloquial --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think that he means 
they made a lot of money for their clients, for a lot of clients.
	     
	     Q       (inaudible.)
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, no.
	     
	     Q       read that whole story and figured that and I 
didn't have to?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  It won't do you any 
good.
	     
	     Q    No.  
		  
	     (Inaudible segment away from microphone.)
	     
	     Q    How much time has Mrs. Clinton spent on all of 
this?  Reconstructing stuff, talking to you -- can you give us an 
idea of how much times she's put into this?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think she's primarily 
working on health care --
	     
	     Q    Well, yes, but I mean she's devoted some time to 
this.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think she has been 
totally responsive to me.  When I ask a question, she's tried to give 
me the information.
	     
	     Q    But you don't have any idea of how many hours or -- 
do you see her -- do you talk to her every day on this?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  
No -- but I talk to her quite frequently.  And she's tried -- again, 
these are 16-year-old records.  She's trying to jog her memory, and 
new questions come up and, frankly, with all of you pouring over the 
records, I'm sure they'll be more questions.  I'll taken them, and 
I'll try to get the answers.
	     
	     Q    But the fact that she was still trading in 
commodities in 1980 is new.  We were told she got out and --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, that's not true.
	     
	     Q    But everything you say --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I said at the last 
briefing that following the birth of Chelsea, she basically got out 
of the market.  She was winding her way out of the market.
	     
	     Q    But everything you say is what she's told you 
basically.  You haven't gone to try to corroborate --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I've talked to Blair.
	     
	     Q       tried to corroborate the recollections.  You've 
talked to Blair.  Have you talked to Bone?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No.
	     
	     Q    So you don't know if these records or the records 
you gave us before actually reflect what happened, or not.  They're 
just records that they've provided you.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Sure, I do.  Of course, 
they do.
	     
	     Q    Well, if trades were allocated, they can just make 
up a record for a trade after the fact.  I mean, you don't know if 
they did that or not.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No, no, no, no.  I 
mean, I think that's more on this point, which is you can allocate 
trades -- if you're going to allocate trades, you need to do that on 
a daily basis.  Once you open a position up and hold it overnight, 
you're at the mercy of the market.  There's no more good trade for 
you, bad trade for him.  You're at the mercy of the market.  And the 
30 out of 32 trades are overnight trades.
	     
	     Q    Okay, the stuff that you gave us the first time 
could not show whether or not her trades were allocated.  You're 
saying this does.
	     
	     SENIOR ADMINISTRATION OFFICIAL:  Yes.  This shows that 
they were not.
	     
	     Q    I mean -- that's what I mean.
	     
	     Q    These 32 were REFCO or Stephens trades?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  REFCO.  The Stephens 
trades were held open for long periods of time.  There's one trade 
that was probably for five months.
	     
	     Q    There was a time when the expression was she was 
exasperated that people cared this much about this old stuff.  Was 
that correct, and is there still that sense or --
	     SENIOR ADMINISTRATION OFFICIAL:  I think she's 
understands that people are going to have questions, and she's trying 
to answer them.
	     
	     Q    What was her reaction when she was told that in 
fact they had -- that was unreported? 
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think she -- we had a 
hard time really sort of understanding how that was true and wanted 
to know exactly how that could have been possible because she was in 
the habit of always providing all the information and paying her 
taxes.  And as I said in the briefing, the fact that she paid taxes 
on the $26,000 in 19 -- $26,000-plus in 1978, the $72,000-plus in 
1979 indicates that.
	     
	     So she was, I think, at first wanted to know precisely 
how that happened.  But then when she -- when Kendall explained to 
her, she --
	     
	     Q    So these were ACLI records -- based on ACLI records 
that the accountant presumably had at the time but overlooked?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  You know, we can't be 
certain.  The standard practice was to -- .  But there was no year-
end statement.  And again, these were complex and confusing records.  
If you took these records and said -- after someone explained to you 
what you're looking for -- and said, go find it, it'd be pretty easy 
to find it.  But they were -- you know, when I think Kendall first 
looked at them and I first looked at them, they were complex and 
confusing.
	     
	     Q    These things didn't immediately pop out when you 
first saw these records --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No --.  It took him a 
long time, and he did -- he did significant --
	     
	     Q    And the thing -- on the REFCO booking, was he 
pouring over -- as well over the weekend or just Stephens or --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I think the REFCO 
documents, whether he was or I was, the REFCO documents -- 
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I checked the numbers.  
(Laughter.)
	     
	     Q    And you don't expect to be releasing any more 
records to us?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  We have no more 
records, but if we get any more I'm sure we're probably get a request 
for them and we'll probably end up releasing them.
	     
	     Q    The total gains now goes up to $106,000 on 
$100,000?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  No.  It could support 
another five gain.  That was $5,000 cash.  So it's $98,000 plus 
$6,000.  Well, it was $98,000 -- it was actually $98,000 plus $5,500 
because the reason there's a $6,500 gain is because she took $1,000 
loss.  So it's about $103,000 -- $104,000 on $6,000.
	     
	     Q       $104,000 on $6,000.  The ratio is getting 
better.
	     
	     Q    I don't mean to belabor this point, I just want to 
understand --
	     
	     SENIOR ADMINISTRATION OFFICIAL:  I suppose you can make 
money outside of Springdale.  (Laughter.)
	     
	     Q    These numbers that we have -- are these the ones 
that Kendall went over a couple weeks ago?  I mean, you're saying 
there are no other records?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  That's right.
	     
	     Q    That he has no more details than we have?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  These are the commodity 
records.  That's it.
	     
	     Q    Now, where were these records kept?  Did the 
Clintons have all these in the White House?  Were they in Arkansas, 
or were they scattered around?
	     
	     SENIOR ADMINISTRATION OFFICIAL:  They were scattered 
around.

				 END4:55 P.M. EDT

