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S P E C I A L_.R E P O R T_.|_.P A R T_.T H R E E
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David Hale

The $50,000 lie
The Whitewater case wasn't the only time David Hale invoked Bill Clinton's name -- falsely -- to help himself.

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By Murray Waas

Aug. 14, 1998 | -- BIRMINGHAM, ALA. -- David Hale, the central witness in independent prosecutor Kenneth Starr's Whitewater investigation, received at least $50,000 in covert payments in 1990 from a health-care company in exchange for using his purported influence with then-Gov. Bill Clinton and other political figures to try and obtain an Arkansas state contract, Salon has learned.

The payments to Hale, then a Little Rock, Ark., municipal court judge, were made on behalf of Correctional Health Care Inc. (CHC), a Birmingham, Ala., company that at the time was seeking a three-year, $30 million contract to provide health-care services to the Arkansas Department of Corrections.

But Hale was unable to deliver the promised contract, leading officials of the now-defunct company and others involved in the effort to conclude that he was lying about how much influence he actually had with Clinton and other decision-makers.

Details of the payments were described to Salon by four sources with firsthand knowledge of them, including CHC's former president, Robert Berryman. Another source made available accounting and banking records -- including invoices and canceled checks -- that document a portion of the payments to Hale.

The previously unreported case casts new doubt on Hale's credibility as a witness against Clinton in the Whitewater investigation. Salon has also found that Hale's influence peddling was known to Starr's prosecutors while they were building their Whitewater case around him, raising questions about why the independent prosecutor chose to overlook this crucial information. Hale himself admitted receiving the payments from the Alabama health company during debriefings with FBI agents and federal prosecutors working for Starr. Hale's own account of receiving the payments is described in confidential FBI reports and other law enforcement records obtained by Salon.

Hale had assured CHC executives that they would obtain the multimillion-dollar contract with the Arkansas prison system if they made $50,000 in payments to him. Hale told the CHC officials they were virtually assured of being awarded the contract because of his close personal friendship and political influence with then-Gov. Clinton and other Arkansas state politicians, two sources said in interviews.

But the contract never materialized. CHC officials and two other individuals assisting the firm in the effort to obtain the contract said that they now believe Hale lied to them about his political influence with Clinton and other politicians.

"I was advised that $50,000 was to be paid to Hale in exchange for assurances of delivery of the contract," Berryman said. "Needless to say, despite the promises that he made to us that he had the political influence to deliver the contract, it was not awarded to us."

Another source said that Hale not only "deceived CHC, he defrauded the company and its officers" by falsely claiming his political influence would lead to CHC obtaining the contract.

Berryman said he did not disagree with that assessment. "When you looked at his [Hale's] background, it was quite impressive," he recalled. "He was a sitting judge. I really thought he was a circuit judge or a federal judge or something like that. I didn't know until later that he was just some kind of community judge or justice of the peace, which he turned out to be. It never dawned on me to question his credentials.

"He was walking around that statehouse up there [in Little Rock] like he owned the place. Everyone seemed to know him, and he did get us in to see some of the right people."

The extent to which Hale invoked Clinton's name is a matter of some dispute among those involved in efforts to obtain the Arkansas contracts for CHC. "Judge Hale said he had contacts with state senators and the prison board," Berryman said. "But Clinton's name was not prominent in our discussions."

But another source involved in the effort to obtain the contract said Hale's purported relationship with Clinton was key: "He told Berryman that he could deliver the contract because he knew Clinton. Hale said that Clinton had some obligations due him. And Hale could call them in."

Another individual involved agreed: "Hale got the payments because he told [CHC] that he was very tight with the governor."

. Next page | Starr's office sits on damaging information about Hale





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