The backdrop for the case involves the Clinton administrations HUD Secretary Henry Cisneros and his failure to disclose income to the IRS. The income was part of a payment plan to Cisneros’ mistress to keep quiet. When the administration caught wind of the brewing scandal, they started pulling strings inside the IRS to disrupt, block and eventually kill the investigation by the IRS field office in San Antonio.
But other than illuminating yet another Clinton administration scandal, why is this story relevant today? And why did Democrats try to hard to prevent its publication? This is probably why:
Then-IRS Commissioner Peggy Richardson, a close friend of Sen. Hillary Clinton (D-N.Y.), was involved in efforts to quash the probe, a source close to the case alleged.
But Richardson’s role was cut from Barrett’s report, which went through 26 drafts, because Democratic law firm Williams & Connolly successfully pressured Barrett to remove a section of the report naming her, a source said.
The law firm represents Cisneros, former President Bill Clinton and Hillary Clinton.
The Report tells one story in two parts, each part essential to the other. The first part concerns the investigation of Henry Cisneros and Linda Medlar in connection with his appointment as Secretary of Housing and Urban Development. The second part, wholly unanticipated when we began our work, concerns the apparent efforts of certain high-ranking government officials to insulate Henry Cisneros from independent counsel investigation or prosecution.
At the core of our investigation was the allegation that Cisneros lied to the Federal Bureau of Investigation on the road to his appointment as HUD Secretary, an accusation first leveled by his erstwhile mistress Linda Medlar. The story of Cisneros and Medlar on its face was a personal tragedy for the participants and their families, not in and of itself meriting public scrutiny. It became a problem of national concern when they and their associates decided that Cisnerosï¿½s appointment was more important than obeying the laws that are intended to ensure that important government decisions are grounded on full and honest information. This first part of our investigation was able, I believe, to uncover most of the essential facts behind these actions and to redress the serious criminal offenses involved appropriately, and therefore met the goals that I set.
The second part of our investigation was directed at the serious and unsettling possibility that certain high-ranking officials of the Department of Justice and the Internal Revenue Service had improperly attempted to shield Cisneros from independent counsel scrutiny for tax offenses. This Office was not alone in perceiving these potential problems; numerous dedicated officials within those agencies raised alerts, largely unheeded, about possible failures to pursue meritorious claims involving Cisneros. If nothing else, this portion of the story emphasizes the need to guarantee both the appearance and the reality that everyone, regardless of their status, is treated the same by their government when it comes to matters of criminal conduct. There are no parts of our government that touch more closely the individual citizens than the Internal Revenue Service and the Department of Justice, and the integrity and the reputation for integrity of both are critical to the operation of our government.
The story told in this Report about this latter phase of the investigation is incomplete. The Department of Justice and the individuals under scrutiny resisted our efforts to investigate, and the Independent Counsel Act lapsed under its sunset provisions, leaving our Office in operation but with an escalating need to complete its business. In the end, we saw that it was necessary to cease investigative operations before we had pursued the matter to its conclusion. In other words, we were only partially successful in pursuing the goals of the Office in this phase of our work. Although we are not able to say with certainty whether any criminal laws were broken, it is clear, I think, that there was questionable activity ï¿½ as well as inactivity ï¿½ by a number of government officials.
This Office also had jurisdiction to investigate Cisneros for tax offenses in one year, 1992. In the end, it elected not to press any charges against him in this matter. This decision rested principally on the difficulty of proving a willful tax violation for a single year. This Office maintained, and still is of the view, that Cisnerosï¿½s tax filings for 1991, 1992, and 1993, merited a multi-year criminal investigation and, quite possibly, prosecution for willful tax evasion. There is no real question that he seriously underdeclared his income on his tax returns, and it is hard to escape the conclusion that these actions were willful, given that his expenses (including his payments to Medlar) far exceeded the income he declared. However, because of the actions of the Department of Justice and the Internal Revenue Service, an independent counsel could never undertake a multi-year investigation.
I think it is interesting to note that this scandal began even before Clinton was inaugurated. This means that the corrupt Clinton administration was corrupt even before it was truly an administration. Probably should have sent some red flags up on what the country was in for.