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	Ben's Guide to U.S. Government

Final Report of the Independent Counsel In Re: Bruce Edward Babbitt

Carol Elder Bruce, Independent Counsel, August 22, 2000

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TITLE	Page
COVER	Cover
FINAL REPORT OF THE INDEPENDENT COUNSEL IN RE: BRUCE EDWARD BABBITT	Title Page
U.S. COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ORDER FILED AUGUST 22, 2000	Order
ACKNOWLEDGMENTS	i
TABLE OF CONTENTS	xi
PREFACE	1
A. The Mandate	1
B. Structure of the Investigation	2
C. Purpose and Approach of the Report to the Special Division	5
I. SYNOPSIS OF EVENTS LEADING TO THE APPOINTMENT OF THE INDEPENDENT COUNSEL	7
II. REVIEW OF EVIDENCE	13
A. Origins of the Hudson Casino Proposal	13
1. Indian Gaming in Minnesota and Wisconsin Is a Lucrative Industry in Which Established Participants Have the Ability to Protect Their Financial Interests	14
2. The City of Hudson Is an Attractive Site for Gaming Because of Its Proximity to the Twin Cities	19
3. The Hudson Dog Track Owners First Attempted to Establish An Indian Casino by Seeking a Partnership with the St. Croix Tribe in 1992	22
4. Minnesota Indian Gaming Association Opposition to the Initial Hudson Proposal	23
5. The Hudson Dog Track Owners Form the Four Feathers Partnership with Three Wisconsin Indian Tribes in a Second Effort to Establish An Indian Casino at the Dog Track	26
B. The BIA Area Office Consideration of the Hudson Casino Proposal	29
1. Legal Framework and Procedures Governing Land to Trust Acquisitions for Off-Reservation Gaming	29
a. The Indian Reorganization Act of 1934	29
b. The Indian Gaming Regulatory Act of 1988	32
2. DOI Experience and Procedures for Reviewing Gaming Applications	39
3. Consultation Process and Review of the Hudson Application	49
a. Responses by Local Governments	50
b. Responses by Local Residents and Activists	51
c. Responses by Wisconsin and Minnesota Tribal Governments and Associations	54
1) Tribal Opposition to the Hudson Application Was Led by the Minnesota Indian Gaming Association	54
2) MIGA and Its Members Contact the BIA in Washington	55
3) MIGA and Its Members Contact the Minneapolis Area Office of BIA	58
4. The BIA Issues a Draft Finding of No Significant Impact	63
5. Minneapolis Area Office Recommends Approval Under IGRA 66	66
C. Coordinated Opposition Efforts By Minnesota and Wisconsin Tribes	71
1. Opponents Mobilize Congressional Support	72
2. MIGA Considers Political Contributions	75
3. The Coordinated Opposition Lobbying Effort Focuses Its Political Arguments and Agenda	77
a. The Tribal Opponents Identify Their Arguments, and Their Audience	77
b. O'Connor & Hannan Joins the Opposition	82
c. The Opponents Secure a Feb. 8 Meeting with Secretary Babbitt's Counselor, John Duffy	86
D. Events Occurring During Early Analysis of the Hudson Application by DOI's Indian Gaming Management Staff (December 1994 - May 1, 1995)	89
1. IGMS's Initial Analysis Identifies Concerns With the Best Interests Analysis, But Finds That The Casino Would Not Be Detrimental to The Surrounding Community	89
2. The Feb. 8, 1995 Meeting of Opponent Tribal Representatives and DOI Officials at Congressman Oberstar's Office	93
a. The "Strategy" Meeting	94
b. The Meeting with John Duffy and George Skibine	95
3. Opponent Representatives Meet with DOI Chief of Staff Thomas Collier on March 15, 1995	100
4. DOI Sets April 30, 1995, Deadline For Additional Comments	103
5. The Secretary and Senior DOI Officials Meet with Wisconsin Tribes on April 8, 1995	105
6. Additional Comments Submitted to DOI on the Hudson Proposal	107
a. New Materials Indicating Changes In Support by Local Governments and Other Officials	107
b. Additional Materials, Including Economic Impact Studies, Submitted by Opposition Tribes and Tribal Associations	111
E. Tribal Opponents' Continuing Lobbying Efforts (Feb. 9, 1995 - June 8, 1995)	114
1. Opposition Lobbying on Capitol Hill	117
a. Opponent Representatives Continue to Lobby Individual Congressmen	117
b. Hudson Opponents Lobby Sen. McCain With False Information Regarding the Ownership of the Hudson Dog Track	124
2. Tribal Opponents Seek and Obtain the Assistance of the Democratic National Committee	128
a. Emergence Of A Strategy For DNC Involvement	128
b. DNC's Fund-Raising Strategies in Anticipation of the 1996 Presidential Election	131
c. DNC Native American Fund-Raising Prior to Spring 1995	135
d. Patrick O'Connor and Larry Kitto Meet with DNC Chairman Fowler on March 15, 1995	139
e. Discussions Among the Tribal Opponents in Anticipation of the April 28, 1995 Meeting	142
f. Tribal Opponents Meet with Fowler on April 28, 1995	147
g. The DNC Contacts DOI and the White House About Hudson	158
1) DNC Contact with the White House	158
2) DNC Contact with the Department of the Interior	160
h. DNC Policies and Practices Concerning the Intersection of Fund-raising and Contacts with Administration Officials	161
1) DNC Finance Policies on Administration Contacts	162
2) Evidence of DNC Conduct in Other Matters Involving Both Contributions and Issues Pending Before the Administration	165
3. Tribal Opponents Seek Assistance of Clinton/Gore Campaign	172
4. Tribal Opponents Contact the White House, and the White House Contacts Interior	177
a. Patrick O'Connor's First Attempts to Involve the White House	177
b. O'Connor Speaks to President Clinton and Bruce Lindsey	178
c. O'Connor's May 8, 1995, Letter to Harold Ickes	185
d. Thomas Schneider's Contacts With Ickes	187
e. Ickes's Office Contacts the Interior Department	191
1) Jennifer O'Connor's May 18, 1995, Memo	193
2) Heather Sibbison's June 6, 1995, Conversation with the White House	197
3) Department of the Interior Assistance in Responding to the June 12, 1995, Congressional Letter to Ickes	199
f. White House Policy Regarding Contacts With Agencies	201
g. O'Connor & Hannan Curtails Its Lobbying of the White House Prior to the Decision on July 14, 1995	206
5. Other Tribal Opponents Continue Lobbying	207
F. Events Occurring During On-Going Analysis of Application by DOI in Washington, D.C. (May 1, 1995-June 8, 1995)	209
1. Collier, Duffy and Skibine Meet with Congressman Oberstar on May 2, 1995	209
2. The Four Feathers Partnership Enlists Lobbyists	211
3. Four Feathers Partners Meet with Duffy and IGMS Staff on May 17, 1995	213
4. White House Contacts with Interior During Consideration of the Hudson Application	216
5. Tribal Opponents Meet with Michael Anderson and IGMS Staff on May 23, 1995	218
6. Four Feathers Representatives Meet with IGMS Staff on May 31, 1995	220
7. Further Contact Between IGMS Staff and Applicant Representatives	222
8. IGMS Concludes that the Hudson Casino Proposal Would Not Be Detrimental to the Surrounding Community	224
G. The Department of the Interior Decides to Deny the Hudson Application	229
1. Internal Debates Over the Basis of Denial: IGRA Section 20 or IRA and Part 151 Regulations	229
2. Skibine Drafts a Decision Letter Denying the Hudson Application Based Only Upon the Secretary's Discretion Under IRA and Part 151 Regulations	233
3. Duffy Directs that Denial Be Based Upon Section 20 of IGRA, As Well As Section 465 of IRA and its Part 151 Regulations	237
4. Recusal of Assistant Secretary Ada Deer	241
5. The Issuance of the Decision Letter	242
6. Interior Department Witnesses Deny Both Being Influenced by Political Party Affiliations and Being Aware of the Hudson Opponents' Efforts to Obtain Assistance from the DNC	245
7. The Policy Reason Given for the Hudson Decision Was Neither a Long-Standing, Nor a Consistently Applied, Interior Policy	247
8. Secretary Babbitt's Involvement in Consideration of the Hudson Application	253
a. Babbitt's Participation in Indian Gaming Matters Generally	253
b. Babbitt's Role in the Hudson Decision-Making Process and Early Contacts with Interested Parties	256
c. Secretary Babbitt's Contact with Paul Eckstein	265
d. Eckstein and Babbitt's May 17 Meeting	272
e. Additional Approaches to Babbitt by Applicant Representatives	274
H. Events of July 14, 1995	277
1. Eckstein Arranges a Meeting with Duffy	277
2. Eckstein and Moody Meet with Duffy on July 14, 1995	278
3. Eckstein's July 14, 1995, Meeting with Secretary Babbitt	282
4. Further Efforts By the Applicant Representatives to Delay the Decision	290
I. Efforts to Reverse the Hudson Denial	293
1. The Applicants and Havenick Seek Reconsideration of the Denial	293
2. Eckstein Provides an Affidavit Regarding Contact with Secretary Babbitt in Litigation Challenging DOI's Denial of the Hudson Application	306
3. Applicant Tribes Meet with IGMS Director Skibine and Staff Members on Dec. 3, 1996	308
J. The Opponent Tribes Contribute Heavily to Democrats in the 1996 Election Cycle	311
1. 1995 Contribution Activity Prior to the Hudson Decision	312
2. DNC Contacts with the Tribal Opponents in the Aftermath of the Hudson Decision	313
3. Other DNC Native American Fund-Raising Efforts in 1995	317
4. The DNC's Parallel Indian Fund-Raising Efforts Collide in August 1995	321
5. DNC Indian Solicitations and Contributions by the Hudson Opponent Tribes in Late Summer and Fall 1995	327
6. Summary and Evaluation of Tribal Opponents' National Democratic Contributions in 1995-96	333
K. Secretary Babbitt's Various Statements and Testimony	352
1. The Wall Street Journal July 12, 1996, Article	352
a. Ickes's Office Examines the Hudson Matter Internally in Anticipation of the Wall Street Journal Article Alleging Potential Impropriety in the Hudson Decision	354
b. Sen. McCain Writes Letters to Secretary Babbitt, President Clinton and Deputy Chief of Staff Ickes	356
c. The White House Responds to Sen. McCain's Letters to the President and the Deputy Chief of Staff	359
d. Babbitt Responds to McCain's July 1996 Correspondence	364
e. McCain's Reaction to the Responses	368
2. Secretary Babbitt's Oct. 10, 1997, Letter to Sen. Thompson	370
3. Secretary Babbitt's Telephone Conversation with Sen. McCain Regarding Babbitt's Aug. 30, 1996, Letter	377
4. Secretary Babbitt's Testimony Before the Senate Governmental Affairs Committee	379
5. Secretary Babbitt's Testimony Before the House Government Reform and Oversight Committee	394
6. Secretary Babbitt's Interviews During the DOJ Preliminary Investigation	398
7. Secretary Babbitt's Grand Jury Testimony	401
III. LEGAL ANALYSIS OF EVIDENCE	415
A. There Is Insufficient Evidence to Warrant Criminal Prosecution of Any Conduct Related to the Hudson Casino Proposal, Including Secretary Babbitt's Congressional Testimony	415
1. Babbitt's Testimony and Other Evidence Before the Senate Committee on Governmental Affairs Raised Questions About Whether the Hudson Casino Decision Had Been Criminally Corrupted by Campaign Contributions	415
2. These Well-Founded Concerns About the Secretary's Testimony and the Facts and Circumstances Surrounding the Casino Decision Led to the Appointment of an Independent Counsel	417
3. After a Thorough Investigation and Analysis of the Facts and Circumstances Surrounding the Alleged Corruption and Perjury, the OIC Has Concluded that No Prosecution Is Justified	418
B. There is Insufficient Evidence to Prove that the Hudson Casino Decision Was Criminally Corrupted	425
1. A Campaign Contribution Can Form the Basis of a Federal Bribery Charge Only If an Official and a Contributor Specifically and Corruptly Agree that a Contribution Is Being Given and Received in Exchange for an Official Act	425
2. There Is Insufficient Evidence to Prove that the Hudson Matter Was the Subject of a Corrupt Quid Pro Quo	430
3. There Is Insufficient Evidence to Support a Finding that Any Other Federal Criminal Corruption Statutes Were Violated in the Hudson Matter	442
C. There Is Insufficient Evidence to Prove that Secretary Babbitt Perjured Himself Before Congress	445
1. There Is Insufficient Evidence to Prove that Babbitt Perjured Himself in Testifying About What He Said to Paul Eckstein About Harold Ickes's Involvement in the Hudson Casino Proposal	447
a. Evidence Relating to Whether Babbitt's Testimony About His Conversation with Eckstein Was True or False	452
1) Eckstein Repeated Key Parts of the Babbitt-Eckstein Conversation Shortly After the Meeting to at Least Four People, Each of Whom Has Corroborated Eckstein's Version of the Conversation	453
2) Babbitt's Asserted Purpose for Invoking Ickes's Name Undermines His Subsequent Insistence that He Did Not Tell Eckstein the Decision Had to Be Issued "That Day"	455
3) Babbitt's Testimony About the Eckstein Conversation Was Internally Inconsistent	456
4) Babbitt Fully Understood the Meaning of the Senators' Questions	457
5) The "Two-Witness Rule" Is Satisfied	459
b. Babbitt's Testimony about His Conversation with Eckstein Was Material to the Senate Committee on Governmental Affairs	462
c. There Is Insufficient Evidence to Prove that Babbitt Possessed the Requisite Intent to Provide False Testimony	464
2. There Is Insufficient Evidence to Prove that Babbitt Perjured Himself in Testifying About Whether He Intended to Mislead Sen. McCain with His Aug. 30, 1996 Letter	466
a. Evidence Relating to Whether Babbitt's Testimony That He Did Not Intend to Mislead McCain Was True or False	469
1) The Text of Babbitt's Letter to McCain Shows He Misled McCain	470
2) Babbitt's Letter to McCain Was Drafted as a Flat Denial that Babbitt Invoked Ickes's Name	475
3) Babbitt's Subsequent Conduct Is Probative of Whether He Intended to Mislead McCain	477
(a) Babbitt Wrote a Letter to Thompson in October 1997, Admitting That He Invoked Ickes's Name to Eckstein	477
(b) Babbitt Telephoned McCain and Apologized for Misleading Him	478
4) Babbitt Had a Motive to Mislead McCain	479
b. Babbitt's Testimony About His Letter to McCain Was Material to the Senate Committee on Governmental Affairs	480
c. There is Insufficient Evidence to Prove that Babbitt Possessed the Requisite Intent to Provide False Testimony with Respect to the McCain Letter	482
APPENDIX	App. 1
Responses Filed
March 20, 2000, Michael Brozek	App. 2
April 20, 2000, JoAnn Jones	App. 5
May 12, 2000, Gerald E. Sikorski	App. 9
May 30, 2000, Shakopee Mdewakanton Sioux Community, Stanley R. Crooks, Glynn A. Crooks, Susan Totenhagen, Paul Kempf, Kurt V. BlueDog, and William J. Hardacker	App. 14
June 2, 2000, The Honorable Bruce Edward Babbitt	App. 24
June 2, 2000, Patrick J. O'Connor	App. 40
June 5, 2000, Thomas Collier	App. 46
June 5, 2000, Cheryl D. Mills	App. 52
June 5, 2000, David Mercer	App. 56
June 5, 2000, Scott Dacey	App. 62
June 5, 2000, Donald L. Fowler	App. 76
June 5, 2000, The Honorable Albert Gore, Jr.	App. 82
June 5, 2000, Chris McNeil, Jr.	App. 86
June 7, 2000, Elena Kagan	App. 90
MAP - Principal Tribal Locations and Cities	App. 97