Civic Economics - Page A1
March 22, 1997
NEW PROBE OF WEB HUBBELL'S SECRET DEALS WITH PACIFIC TELESIS/SPRINT LOBBYING
Howard Hobbs, JD PhD Economics & Legal EditorSAN FRANCISCO DESK - The California based Pacific Telesis Group [Computers, Communications, Telecommunications] announced over the week-end that in 1994 when they hired Webster Hubbell to be one of the communication firm's private advisors on Clinton's telecommunications legislation, that he was a paid advisor to the corporate board of their toughest competing telephone company, Sprint. Pacific is today's version of Pac-Bell the provider of a variety of telecommunications services in California and Nevada.
Hubbell's simultaneous consulting deals with Pacific Telesis, which provides local phone service in California and Nevada, and Sprint Corp., a long-distance carrier, raise a thicket of ethical and legal issues, according to interviews with Washington lobbyists and experts.
As a former Clinton administration associate attorney general, Hubbell was prohibited from lobbying the Justice Department for up to five years under federal statutes and ethics guidelines adopted by the White House.
To make matters worse, at the time Hubbell was a lawyer and member of the American Bar Association. Bar association rules required Hubbell to disclose all potential conflicts of interest to Pacific Telesis and to Sprint while actively working both sides of the telecommunications bill.
A Los Angeles Times story on Sunday reported an interview with USC Law School professor, Erwin Chemerinsky, about the apparent Hubbell double-dealing. 'Lawyers are not allowed to represent clients whose interests would come into conflict with one another ... the lawyer would have to disclose it to both clients and get their consent. Otherwise the lawyer could be sued by an aggrieved client or disciplined by the bar association.'
The Times has reported that Hubbell, a close friend of President Clinton and former law partner of First Lady Hillary Rodham Clinton, landed sweet deals with Sprint and Pacific Telesis between April 1994, when he resigned his Justice Department post, and December 1994, when he pleaded guilty to fraud and tax-evasion charges.
The income from such 'deals' easily surpassed the $123,100 salary Hubbell was paid as the No. 3 official at the Justice Department. Republicans have questioned whether friends of the first family helped provide Hubbell hush money as investigators were probing Hillary Clinton's dealings with a failed Arkansas saving and loan.
At Pacific Telesis, high-ranking employees acknowledged that Hubbell continued to receive his paycheck even though the telephone company never saw Hubbell in the Washington office during the 10 months he received a monthly retainer from the company.
Sources knowledgeable about Pacific Telesis told reporters the California-based company is particularly sensitive about any adverse publicity stemming from its previous employment of Hubbell because the firm's merger with SBC Corp. is now pending before California's PUC.
Bill Brittingham of Pacific Telesis said on Friday that officials in Washington had no idea that Hubbell had gone to work for Sprint while he was employed by Pacific Telesis from July 1994 to May 1995. That was six months after he made a guilty plea on federal fraud charges in connection with client over billing schemes.
Sprint officials declined to comment on whether they knew of Hubbell's employment with Pacific Telesis at the time the firm hired him in late 1994. The company also refused to disclose the dates of Hubbell's employment, the type of work he performed or his involvement in the telecommunications legislation.
Hubbell's guilty plea was to separate fraud and tax-evasion charges related to his bilking his former law partners and his firm's clients of $482,410.
Hubbell's hiring by Pacific was part of their campaign strategy to influence the Democrat Party sponsored Communications Bill to deregulate the telecommunications industry.
The Communication bill called for granting the Justice Department's antitrust division strong oversight role in approving future providers of long-distance service. Sprint, AT&T Corp., MCI Communications Corp. and other long-distance carriers supported the Justice Department provision, while the seven regional Bell companies vigorously opposed it.
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