White House Travel Office Controversy - Initial White House Actions

Initial White House Actions

According to the White House, the incoming Clinton administration had heard reports of irregularities in the Travel Office and possible kickbacks to an office employee from a charter air company. They looked at a review by KPMG Peat Marwick which discovered that Dale kept an off-book ledger, had $18,000 of unaccounted-for checks, and kept chaotic office records. White House Chief of Staff Mack McLarty and the White House counsels thus decided to fire the Travel Office staff and reorganize it. The actual terminations were done on May 19, 1993, by White House director of administration David Watkins. There was also a feeling among the White House and its supporters that the Travel Office had never been investigated by the media due to its close relationship with press corps members and the plush accommodations it afforded them and favors it did for them. (Congress would later discover that in October 1988, a whistleblower within the Travel Office had alleged financial improprieties; the Reagan White House counsel looked into the claim but took no action.)

Republicans and other critics saw the events differently. They alleged that friends of President Bill Clinton, including his third cousin Catherine Cornelius, had sought the firings in order to get the business for themselves. Dale and his staff had been replaced with Little Rock, Arkansas-based World Wide Travel, a company with a substantial reputation in the industry but with several ties to the Clintons. In addition, Hollywood producer and Inauguration chairman Harry Thomason, a friend of both Clintons, and his business partner, Darnell Martens, were looking to get their air charter company, TRM, the White House business in place of Airline of the Americas. The Clinton campaign had been TRM's sole client during 1992, collecting commissions from booking charter flights for the campaign. Martens wanted the White House to award TRM a $500,000 contract for an aircraft audit, while also seeking Travel Office charter business as an intermediary which did not own any planes.

Attention initially focused on the role of the Federal Bureau of Investigation (FBI), since on May 12, 1993, a week before the firings, associate White House counsel William Kennedy had requested that the FBI look into possible improprieties in the Travel Office operation. FBI agents went there and, although initially reluctant, authorized a preliminary investigation. Deputy White House Counsel Vince Foster became worried about the firings about to take place and ordered the KPMG Peat Marwick review. The review started on May 14 and the report was given to the White House on May 17. KPMG was unable to do an actual audit, because there were so few records in the Travel Office that could be audited and because the office did not use the double-entry bookkeeping system that audits are based upon. One KPMG representative later described the office as "an ungodly mess in terms of records" with ten years of material piled up in a closet. When the review came back with its reports of irregularities, Watkins went ahead with the terminations on May 19.