Kenneth Starr's Ill-Starred Real Estate Deal
Since 1994, Republican special prosecutor Kenneth Starr has been
scouring the back woods of Arkansas for evidence to convict
President Clinton's friends in the Whitewater scandal. Two of
Clinton's friends in the Whitewater land deal are now on trial.
Clinton is an expected witness.
But Starr has a mysterious land deal in his own past, one with
striking parallels to Whitewater. As a Justice Department
official in the 1980s, Starr plunked $20,000 into an obscure
outfit called "Lubbock AK Ltd." Starr says it was a total loss.
But hie won't divulge the names of his partners
By Robert Parry
- Kenneth Starr's Ill-Starred Real Estate
WASHINGTON -- Special prosecutor Kenneth Starr, who heads the
two-year-old-plus Whitewater investigation into Bill and Hillary
Clinton's failed Arkansas real estate venture, had a busted real
estate deal in his own past. But while prying into the
Clintons' Whitewater land scheme, Starr has kept secret key
details of his investment in an outfit known only as "Lubbock AK
Starr's financial disclosure forms listed "Lubbock AK Ltd." as a
holding during the 1980s and early 1990s, when Starr served in
the Reagan-Bush administrations. The forms, however, gave no
address, no listing of his partners and no other information to
aid in tracking down the company.
Authorities in Lubbock, Texas, and the Texas state capital in
Austin could locate nothing about Lubbock AK in their business
records. However, Texas law requires that limited partnerships
be registered with the secretary of state's office and that the
partnership certificate state the names of the limited partners,
the name of the general partner, the principal place of business
and the amounts invested.
For his part, Starr rebuffed requests for an interview about the
holding. Only after I contacted law professor Samuel Dash,
ethics adviser to the Whitewater investigation, did Starr
instruct his personal lawyer, Terry Adamson, to speak with me.
But Adamson offered only sketchy details about Lubbock AK. He
described it as "a start-up exploratory fund for possible
acquisition of property" in Texas. "Someone wanted to start a
business and asked the Starrs for a $20,000 investment, but it
never started. ... Like some business ventures, it does not get
to the point of documents. It was a loss."
Adamson said Starr and his wife invested $20,000, as limited
partners, in 1982 and lost it all. Starr "would have liked his
money back," said Adamson. "He chalked it up to life's
Still, Starr never declared the $20,000 loss as a tax write-off,
according to Adamson. It was unclear why. As for Starr's
associates, Adamson refused to give names, citing "the privacy
of the individuals." He only would characterize the partners as
"a small group of acquaintances" from Texas.
Lubbock AK vs. Whitewater
Ironically, Starr's Lubbock AK investment has several parallels
to Clinton's Whitewater venture that is at the center of Starr's
investigation. Both partnerships were started at a time of
rapid appreciation in real estate values, with an eye toward
cashing in on the boom market. Both Clinton and Starr were
senior law-enforcement officials at the time of the investments:
Clinton as attorney general of Arkansas in 1979 when the
Whitewater partnership formed and Starr as counselor to U.S.
Attorney General William French Smith in 1982. Like Starr,
Clinton claimed to lose tens of thousands of dollars, although
the exact amount has remained in question.
Lubbock AK adds one more question mark to Starr's fitness for
his job as Whitewater special prosecutor, an issue that has
dogged him since his appointment in August 1994. A federal
three-judge panel, headed by conservative Appeals Court Judge
David Sentelle, picked the conservative Starr after ousting
another Republican, Robert Fiske. Conservative activists and
some Republicans in Congress had objected to Fiske for
supposedly lacking aggressiveness.
Before removing Fiske, Judge Sentelle had lunch with two of his
conservative political patrons from North Carolina, Sens. Jesse
Helms and Lauch Faircloth, both vocal critics of President
Clinton and strong advocates for a tougher Whitewater probe.
The three North Carolina conservatives insisted that they did
not discuss Whitewater.
Sentelle cited the appearance of a conflict of interest for
ousting Fiske (his interim appointment by Attorney General Janet
Reno). But Starr seemed to have far more conflict problems. As
U.S. solicitor general under President George Bush, Starr lost
his government post because of Clinton's 1992 election. In
1994, Starr was active in Republican politics and even
volunteered his legal assistance to Paula Jones, a former
Arkansas state employee who had filed suit against Clinton for
alleged sexual misconduct. Starr's well-known ambition to rise
to the U.S. Supreme Court also would stand a far better chance
if Clinton loses in November.
Then, this month, new conflict-of-interest charges arose in The
Nation magazine. An article by Joe Conason and Murray Waas
cited Starr's dual role in investigating officials at the
Resolution Trust Corp. while simultaneously continuing as a
senior partner in his law firm, Kirkland & Ellis, which had been
sued for professional negligence by the same RTC officials.
The RTC accused Kirkland & Ellis in May 1993 of "aiding and
abetting breaches of fiduciary responsibility" at the First
America Savings Bank in Colorado. The suit echoed similar
complaints about Hillary Clinton's Rose Law Firm for its
representation of a savings and loan owned by the Clintons'
Whitewater partner, Jim McDougal. But this past January, with
Starr's Whitewater investigation bearing down on senior RTC
officials, the RTC agreed to a secret settlement of the suit,
saving Starr's firm, Kirkland & Ellis, an estimated $700,000.
Starr saw no conflict in his dual roles. But other independent
counsels, such as the Iran-contra affair's Lawrence Walsh and
Fiske, left their law firms to avoid such appearance problems.
Starr didn't, earning more than $1.1 million in 1994 as a senior
partner at Kirkland & Ellis and as a member of the firm's
Starr's refusal to explain the circumstances of his own failed
real estate partnership and to identify his associates could
raise new doubts about a Republican lawyer who is scouring
Arkansas for every unsavory detail about President Clinton's
past business deals.
Without disclosure of Starr's partners, it's impossible to judge
potential conflicts when Starr was an influential figure at the
Justice Department in the 1980s. His refusal also looks like a
classic case of hypocrisy.
(c) Copyright 1996 -- Please Do Not Re-Post
Return to Other Stories
Return to Main Archive
Return to Consortium