Inside Bill's Last Deal

By MICHAEL WEISSKOPF/WASHINGTON

The meeting was as secret as any that Bill Clinton had ever held. Just after the new year, he sat down with his nemesis, independent counsel Robert W. Ray, for Ray's first visit to the White House since taking over from Ken Starr--and Clinton's first meeting with prosecutors since the videotaped deposition in which he admitted to an affair with Monica Lewinsky. In the Map Room, where Franklin Roosevelt plotted World War II, they discussed the broad outlines of an agreement that would avoid the first indictment of a man who had been President. On Friday, the last full day of Clinton's presidency, the deal was finally announced, and Clinton confessed his misconduct. "I tried to walk a fine line between acting lawfully and testifying falsely," he admitted in a statement, "but I now recognize that I did not fully accomplish this goal and that certain of my responses to questions about Ms. Lewinsky were false." He agreed to pay a $25,000 fine, and his Arkansas law license was suspended for five years. But the Arkansas Supreme Court's disbarment proceeding against him would be dropped, and Ray would close up shop and not prosecute. Another long national nightmare was over.

The stunning news caught Americans by surprise, but the deal was more than a year in the making--and involved clandestine negotiations between the warring parties in which Clinton helped shape "every clause, every word and every comma," as one source describes it. The agreement required compromises from both the President, who until now had insisted that he never lied under oath, and the prosecutor, who had vowed to uphold the rule of law.

Ray planted the seeds for an accord at his swearing-in as Starr's successor, in October 1999, when he said it is more important to assure that "justice shall be done" than to win cases. Within days, Ray received a call from the President's private lawyer, David Kendall, who'd spent six ugly years battling Starr. But Ray and Kendall had a clean slate. A tough prosecutor in New York City, Ray had joined Starr's team as an assistant in April 1999--months after the Clinton impeachment ended. Now he and Kendall began a series of regular talks, and Ray tried to build faith in his fairness. Over the next 11 months, he closed investigations that Starr had allowed to drag on for years: the Whitewater land deal, the firing of the White House travel office and alleged misuse of fbi personnel files. Ray issued press releases clearing the President and First Lady of criminal wrongdoing--and made sure he finished several weeks before Election Day in Hillary Clinton's run for the Senate. "The underbrush had to be cleared away," Ray told TIME.

His actions only made Clinton cockier. The President had suffered the ignominy of impeachment and a contempt of court finding, but now he was spinning hard, bragging in interviews that he had defended the Constitution by standing up to overzealous prosecutors. Ray knew he had to get Clinton's attention. In July he empaneled a new grand jury, and after the November election, called in Lewinsky for questioning, increasing pressure on Clinton to cut a deal. If there was going to be a settlement, he wanted it before Clinton left office. About three weeks ago, he asked Kendall for a meeting with the President, according to sources outside Ray's office. Clinton had let associates know that despite his public bravado, he feared the threat of indictment and wanted to put the matter behind him. He agreed to participate in the first negotiation of criminal matters between a President and a prosecutor. Kendall set up the meeting and joined the discussion. Clinton agreed to acknowledge some form of wrongdoing; the issue was what. Ray wanted him to admit that he had lied under oath when he denied having had sexual relations with Lewinsky; at the meeting, Clinton wouldn't budge. The lawyers worked on language over the next two weeks, arriving at a formula in which Clinton admitted for the first time to giving false testimony under oath. By avoiding the word "knowingly," the President skirted the legal definition of perjury. With that breakthrough, the deal came together.

With his work completed on Friday, Ray waited for the reviews. "What will the country say?" he asked aloud during an interview with TIME. He had part of the answer by day's end, when Kendall praised him as a "real prosecutor." It was hard to find anyone who wasn't grateful that, just as the country prepared to turn the page to a new President, the Great Book of Clinton Scandals could finally be closed.

--With reporting by Michael Duffy/Washington

With reporting by Michael Duffy/Washington