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ST PETETIME Whitewater: What's it all about? By ELLEN DEBENPORT Analysis saying "I haven't done anything Times Political EdMor wrong." Nor has Hillary, he adds. All anyone knows for sure about Why should you care about Whitewater? 13A They talk as if Whitewater were a ter- Whitewater is that Bill and Hillary Clin- rible nuisance that diverts them from ton bought some land with a friend in Profiles of all the players involved saving the world. 1978 and say they lost money. in the scandal. 13A But Clinton's character is in doubt The deal became complicated again. Americans remember time after because their friend, James McDougal, thing awful to hide. time when the truth had to be dragged owned a savings and loan that col- For months, the president wouldn't out of him - about avoiding the Viet- lapsed, like so many in the 1980s release documents and wouldn't agree nam draft. for example. Clinton is not Investigators have plenty of suspi- to a special investigator. Clinton not known for candor when he's cornered. cions about the way McDougal handled only refused to explain Whitewater but llis reflex is to stonewall Hillary Redham S&L money. And they want to know left his spokespeople clueless, unable to Since Christmas, however, Clinton President Clinton whether Clinton benefited somehow. Clinton might be the defend him with any facts. has turned over files to investigators, That's the simple part. Democrats dared not rush to his side. keeps saying: "I most hurt by making sure they remained sealed from haven't done Whitewater. She What has made Whitewater seem so They didn't know what was under this the public, and has agreed to a special anything wrong." But handled the couple's sinister is the furious outery from the ruck. Still don't counsel H he did break laws Investments, and the White House, the righteous indignation To date. Clinton has not formally been Last week, he answered some ques- back in Little Rock It Iswyers Involved are and whining whenever questions are accused of any criminal act, any ethical tions about Whitewater and urged could damage his her friends. asked, the mysterious files and secret breach, any wrongdoing involving presidency. meetings, as if the Clintons had some- Whitewater. And that's what he keeps Please see WHITEWATER 13A Vhitewater from 1A tryone at the White House to perate with the special cound 1 Congress. "We're not covering wp," Clio- } said. "We're opening Whitewater The Whitewater story has two parts, the first in and the ext m Washington. Arkansas 1978: The Clintons and the McDougals were fast friends. Bill Clinton ru a 32-year-old whis kid with hair carling over his cara. He was Artassas attorney general and a aboc-ia to become be nation's youngest governor that November. His wife was Hillary Rodham, a Seminist flower child with friazy small towns. S&L funds to Clinton. brown hair and encemous glasses. La 1982, McDougal bought a "Why should IF 'divert' it when I the had just joined the Rose Law tiny savings and loan. Madison invoed the controlling interest (in Firm in Little Rock. & firm with Guaranty. in rural east Arkansas. Madison Guaranty) and I could prestige and political connections. The next year be opened a branch perely have walked back and said Clinton had made friends a de- in Little Rock. and the prom was to one of the bookkeepers to will me a check and mark it 'bonual' ade earlier with James McDougal. be told the Washington Post last # man six years older, when they McDougal became a high roller. fall. both worked for Arkansas Sen. J. wheeling around town in a baby William Fulbright. The buddies When the feds finally threw blue Beotley. Susan McDougal lived and breached politics. McDou- McDougai out of the S&L io 1986, marketed the S&L and develop- cal even cocked his king cigarette be had 2 stroke and was hospital- ments like Whitewater. She ID- colder like his bero. FDR ized as a (PERIC depressive. He peared in one TV commercial her- recovered in jume to stand trial for McDougal's wife. Susan, was a welf, wearing hotpants and riding a bank traud in 1990 and was acquit- strong feminist and businesswom white horse. ted an like Hillary or 2 hubble headed Flash and cash. One writer Meantime, the government ambo, depending DO which version called them the Donald and Ilvana shut down Madison Guaranty for t the story you bear. The Dubble- head version comes (nomly from Trump of Little Rock good in 1989 at - loss to taxpayers of $47 million. Susan, who paints herself as a Awash in cash As for Whitevates, DO - - vide-eyed kid along for the ride. any exactly what happened. Re- be was 23 when - Trouble was, Samo McDoaged cords are missing, and memories carted. A couple of months before Clar said in an interview last year, - differ sharply. on was elected governor, the four ther of them bad a bead for busi- When Whitewater was first them bought 230 acree of land to - "We were the worst paper mentioned by the New York Time to Orarks about three hours north organizers in America." in 1992. the Clintons hired an audi- tor who concluded they had lost f Little Rock. The tota overlated That's exactly what S&L lives- $68,800. But they have dever e be junction of Crooked Creek and tigators lound when they took their leased any documents to show what the White River, a place they first shocked look at Madison Guar- they paid or what they lost, and hought was ideal for mixts to anty in 1984. The place was awash they never took a loss on their wild homes. in cash. Property was bought with income taxes They paid $203,000. terrowing aut appraisals. Bomeses and com- The Clintons sold their White- every peany It wasn't hard missions were awarded before water share to McDougai in 1992 McDougal had some personal mon- sales were made. Easy credit van for $1,000. y to back it 120, and Clinton was available to politicians and McDon- The couples' friendship was about to become governe. gal's friends. long since dead. They bad grown "You bring in one of these poli- AB this time, the governor of distant as the CEntons rose politi- ticians just to use their name," Arkanses let James McDougal cally and the McDougals' lives fell Steven Sanders. who was then a oversee their investment in the spart. work director, told the New York Ozarka. McDougal had occurioual Times last month. "You say, 'Ob. assists from Hillary Clinton, who be governor's involved in this Washington handled the family money. (Arkan- in 120 reporters say Clinton's eyes That wasn't the end of the sto- McDougal and he was doing bis glase over when talk turns to busi- ry. poung friend= ! favor. Clinton 1 Lovestigation from the Reache- would make only $35,000 year as Whitewater never Clourished. tion Trust Corp. which sorts out all governor. The retirees didn't arrive. Instead, the failed S&La, said in 1992 that 1 wanted to make them some interest rates went up. and & bad they had found evidence of criminal money." McDougal told the Wash recession hit is the earty 380m. wrongdoing at Madison Guaranty. ington Post in Ortober. "I knew if The RTC handles only civil they were going to build mything, One of the things investigators still want to know is whether matters, so it asked the Justice they needed to make some." McDougal illegally used deposi- Department to explore criminal They called their four-person corporation Develop tors' money from his SAL to keep charges. But in 1992. nobody world touch it President Bank was Whitewater aflost. He says be neat. The lots for sale - White didn't still in office, running against Clin- ater Estates. ton Too hot politically. Clinton put McDougal in his They also want to know wheth- Clinton had been in office six 2 cabinet all director of economy er McDougal funneled S&L money months when his boybood friend, development, but McDougal to his political cronies, including Vancent Foster, the deputy White n left to buy the tiny Bank of Clinton. To be sure, McDougal Home counsel. apparently killed agston in Kingmon Ark. He helped with fund raising. timself in a Virginia park on July sn't leaving adition For his 1984 campagn, Christon 20, 1993. In Arkansas, where the popula- borrowed $50.000 at another bank Two days later, the Clintons' a M only sightly larger than the McDoogal later bosted a fund-rain Watervater file WM secretly re- mps Bay area. bankers are en- er at the S&L to help Clinton pay it moved from Foster's office by Ber- with politi $ and wield L They r. $30,000. But card Nussha the White H litical 1 expecially in the McDouga says be never diverted counsel and a friend of Hina. chading Roger Altran, who I RTC Why should Now. it in not - for hv- yers to try to find out what the other side has against thair charta. you care? Bot when such questions come from the White House, it could be . Became work in the na- (matrued as Imparior, tion's Capitol will come to a halt until it is settled. Nossbaum, the top White House lawyer, was invilved in . Because if Cantos broke three mch meetings, Two out love or cut ethical corners gides were blabbing about it on the back in Little Rock, it could phone and in the hallways too. image his residency. Numbers took the fell for k a Because Hillary Rod- Be lost this job March 5. kam Clinton might be the Three of 10 people involved in most hart by Whitewater. those gabfests - the Witevater She handled the coople's in- 10 appeared Thursday before a estments, and the lawyers grand jury in Washington. Others involved are ber friends were granted pustponements. . Because it a chance to No one involved in the meet- see top officials in action as ings has used that the White they investigate the matter House tried to top the restige- or respond to inquiries. tion or to convince the RTC or Character is on display. Po- fustice to back off. Eves so, the ital reputations could be ry's. turned over the file subject of a criminal ligation made - destroyed. Elec- to the Clinton's personal lawyer. not supposed to know head of tions are coming up in the time. fall There has been DO evidence at Foster's death was related to It's still not dear who: Cintro n Because even d White- rhitewater. It was't 24 issue at knew and when be knew i. water turns cot to be noth- the DUDE. The U.S. Park Police, Clinton says he didn't know ing. it's a chance to study the who investigated the death. say no about the roeetings between his exting of the press and of one they reviewed mentioned own staff and the Treasury Depart- particapalip in Washington. Whitewater. ment. although Mack McLarty, the 1 bas the fascination of a chief of staff says his dffice M- train wreck And Tel ranged one meeting. The mides death The myste- nous file. Did Foster foresee the Clarton also says be didn't know political eruption? His death has about the RTC's request for a crim- become part of the Whitewater nal investigation of Madian Guar- The obvious anty before it was made On & but mystery. be did hear about it before it be- The RTC came back on Oct. 8, questions care public 1993, to ask again for a crumual Then there's the shretding investigation at Madison Guarapty. These are some of the ob- At the Rose Law Form in Little The Cluntons were named - not vions questions facmg loves- Rock where Hillary Rode accured, tast samed M possible varied with Vincent Forter and beneficiaries of criminal actions - Whitevater. others sow in the admin stration, The investigation ended up = the . Did depositors' unly hands of three bagtime Juntice De- - couniers my they - ordered from Matinon Granty to abred a bas of Forter's files is partment trayers. S&L Regaly end up in Clin- January, after the special produce- too's ACCOUNT If That - fine -Attorney for and be 1 re-inventique no. did be know it? General Janet Reno, and she re- Foster's death. They aud they sisted Republican dereande to brins didn't see anything about Whitewe . Was depositors' money in at special (ramme) Her realizing from Madison Guaranty ile- ai was this: The Justice awyers had palty diverted to keep the Apparenty the Rose firm bas worked through many administra- Whitewater Development been on 1 shredding spice nince name of different political parties, Corp. affict? If so, did the Clistre amount be would run for know it? chereas a special connect would be president. They shred daily to - Remo's appointee and could be ac- B Did Madison Generacty, tect cheats' privacy, they say. cused of playing politics. a S&L re- Keeps regarters out of the trank, The Chintons also resisted a they my. reive any special treatment while Chotos was governor? special until political pres- Shoulday mared after Chatom are overshelmed them In law- was elected Rone shredd ed buses . Was any money made in ary, Reno appointed Robert Finke, of files behnging to Hillas y Clinton the Waisewater Develop- I Republican Lawyer from Wall and the partners she took to Wash- ment Corp.) Who paid, who Street agton Foster, Webster Hubball lost? Among his tasks: and William H. Kemarks III. . What's in the Whitewa- ter files taken from Vincent = To learn whether depositors' money from Madison Guaranty ile- Far from over Foster's office? # What was in the files raily benefited Clinton or White Whitewater isn't going away. shredded at the Rose Lov g Fiske, the special countrel, vil Firm? = To learn whether Clinton or be randing up documents and wit- . What's in 10 boxes of state regulators did favors for the DESSES for the formative future. documents that Clinton SAL. He will have grand juries. working turned over to the special ! To learn whether Vincent in Little Rock and Weshington counsel? Foarer really filled himself. That's The Republicacio in Care . Did White House and why. after all these months, it has suddenly become an "alleged - have found a way to air this, too. Treasury staff violate any Twice 1 year. the House Banking laws or ethics rules by cide." Committee has I hearing the review whing about the Madison PT126 the S&L balout and Respections Guaranty investigation? Did The handling hope to turn the March 244 having Clarton know about the into a fub-down because - talks' Did be secretly order The most damaging part of tiestion them? Whitewater so far 13 the White They have stready - 40 a When did Clinton find House's handling of if people they want as V1 item, out be would be mentioned Even before the Oct. & request starting with James and Suana ML 1 request for & criminal in- McDougal. of Madisoo Guar- SPT (or a criminal investigation, the White House was keeping tabs on Fiske. meanwhile, says be anty? the RTC. investigation of Maritaco might do what 00 procession in - Did Vincent Foster real- Guar 1. While He artes history c put the president by hill himself Why? And if bank with officials of the Tr a Der of the Ua States under each brut set part - which oversees RTC. in- start asking question The GOP needs to restrain itself The temptation is understandable, but suc- contacts between officials at the White House cumbing to it is dangerous. and officials in the Treasury Department han- Republicans in Congress, encouraged by the dling the Whitewater probe. sight of Bill Clinton in political trouble, would At that point, Fiske has said, he would have dearly love to hold televised congressional no problem with congressional hearings into hearings into what has become known as the that part of the scanda). Whitewater scandal. From their viewpoint, the Those contacts between the Clinton White delicious task of slowly roasting Clinton would House and supposedly independent regulatory be one of the few fringe benefits of having a agencies are probably the most appropriate Democrat in the White House. areas for congressional concern. They involve The time, for that may come. But at the Clinton's activities after he became president, moment it's a bad idea, mainly because it. including allegations that he or his aldes mis- would endanger the ongoing investigation into used the power of his office. Whitewater by independent counsel Robert However, Fiske has warned that the rest of Fiske Jr. his investigation, going all the way back to the Fiske has pleaded with congressional mid '80s, won't be completed for months. He Republicans to avoid hearings, at least tempo- strongly objects to any congressional interfer- rarily, warning that they "would pose a severe ence Into that part of his work, and that's risk to the integrity of our investigation." understandable. It is probably the most sensi- House Republicans SO far aren't buying that tive part of his probe, because of the many wit- argument, but they may not have the political nesses and documents involved. By its nature, clout to demand hearings. Senate Republicans, It is also the area most likely to produce crimi- on the other hand, probably could force hear- nal charges, although at this point such talk is ings if they pushed hard enough, but to their pure conjecture. credit they are giving Fiske's pleas consider- If there was illegal activity, if a cover-up has able weight. been attempted, there is every reason to expect Impressed perhaps by the speed and aggres- that Flake will find it. siveness demonstrated by Fiske, Republican At that point, Republicans would be served senators have agreed not to push for hearings the feast of roast Clinton that has already set until at least June 1. By then, Fiske may have their saliva flowing. concluded his probe into allegedly improper Until then, they need to restrain themselves. ATLANTA JOURNAL & CONSTITUTION 100 NATION Saturday. March 12 1994 AS WHITEWATER CASE New charges hurled at White House GOP lawmaker claims S&L investigators were gagged By Julia Malone In other developments: tional Paper, which sold the ance Heights land, 12 miles and Andrew Mollison The Treasury Department property to Whitewater and later southeast of Little Rock in a: WASHINGTON BUREAU turned over about 3,700 pages of tock the land back in the fore- sparsely populated area of pine documents to Fiske, while seven closure. forest But Fiske apparently has- Washington - Rep. Jim more administration officials White House aides say the made the matter part of his in- Leach (R-Iowa) lobbed another prepared to testify before a fed- Clintons, Whitewater co-owners vestigation. Whitewater charge at the Clinton eral grand jury next week. from 1978 to 1992, didn't know Our news services contributed White House on of- Senate Republican leader about the purchase of the Lor- to this article. ficials muzzled the Kansas City Bob Dale said Clinton should regional office of the Resolution suspend two high-ranking offi- Trust Carp. that is probing cials - Associate Attorney Gen- I Whitewater-related matters. eral Webster Hubbell and Depu- "Tm suggesting the White ty Treasury Secretary Roger Alt- House very improperly intruded man - because of their in this process," Leach, the rank- statements about the matter. ing Republican member of the Senate Majority Leader House Banking Committee, toid George Mitchell ackowledged reporters. He has been one of the that congressional hearings will administration's most persistent be held - something be has re- critics on the Whitewater affair. sisted - but not until it is clear "I am particularly concerned that they will not undermine that officials of the Kansas City Fiske's investigation. RTC office are being gagged and The Chicago Tribune re- possibly coerced by the Wash- ported that Fiske has subpoe- ington RTC office," Leach said in naed records of a second failed a letter to Whitewater indepen- real estate deal financed by dent counsel Robert Fiske, who Whitewater. Whitewater Devel- AJC is conducting a criminal investi- opment Corp.'s involvement in gation of Whitewater. the 810-acre Lorance Heights Leach said he had sent Fiske project ended with lawsuits by a memo that he said gives evi- angry landowners, foreciosure dence of coercion. He declined to and a $510,000 judgment against release the information to re- the company and a related firm. porters. Clinton's business associates re- Stephen Katsanos, spokes- ceived $249,000 from land and man for the Washington RTC of- timber sales at Lorance, but the fice, said, "We don't try to gag money was never collected from any of our people." But he said them in the foreclosure, and it is his agency would look at Leach's not known how it was spent C ges. Fiske has subpoenaed rec- The RTC is the independent ords of the Lorance Heights land federal savings and loan bailout deal, according to Carl Gag- agency that is conducting its own liardi, a spokesman for Interna- investigation of whether Madi- son Guaranty Savings and Loan Association, a failed thrift with ties to President and Mrs. Clin- ton, illegally diverted funds to both the gubernatorial campaign of then-Gov. Bill Clinton and also to Whitewater Development Carp., a failed real estate venture that was partly owned by the Clintons in the 1980s. The RTC is also investigating whether a fed- eral Small Business Administra- tion loan was used to prop up Madison Fiske is investigating many of the same matters. 22A TIMES SATURDAY MARCH 12. 1994 EDITORIALS Risking Yeltsin's wrath Whatever his other fauits. Richard Nix- tionalist whose world view fails to fit pre- on has unquestioned foreign policy exper- cisely with ours, but we need not associate tise. and his relationship with the former with unstable racists such as Vladimir Zhiri- Soviet Union is as extensive as any Ameri- novsky. Similarly, our efforts to build rela- can's. Nixon shouldn't have been surprised, tions with Yeltsin's political opponents need then, when Russian President Boris Yeltsin not extend to those, such as Rutskoi, who reacted angrily to his meeting in Moscow have attempted to subvert democracy with former Vice President Alexander Rut- through violence skoi, the leader of the bloody effort to There is a point at which broad contact overthrow Yeltsin's government last Octo- with Russia's political opposition has the ber. effect of eroding the Yeltsin government's Nixon has used past quasi-official visits authority. Since the Soviet Union began to to Moscow and Beijing to help rehabilitate crumble, though, Washington has tended to his post-Watergate image in this country. err in the opposite direction, placing too Now he has a salvage job to do in Russia, much reliance on the fate of an individual too. More seriously, the former president's leader It wasn't that long ago, remember. diplomatic indelicacy points up the much that our government staked all its chips on broader and more treacherous task facing Mikhail Gorbachev - and caricatured Yelt- President Clinton as he attempts to main- sin as an intoierable buffoon in the process. tain appropriate relations with Yeltsin and his Russian opponents. The political imperative of our coexis- Yeltsin's overreaction to Nixon's mis- tence with Russia's nuclear superpower step was almost comical, but Russia's cur- transcends the fate of any particular person rent political crisis is deadly serious. With - o: any particular system of government. Yeltsin's personal power steadily weaken- And because Russia has yet to establish a ing and the future of Russia's democratic stable democracy such as ours. the Clinton and free-market reforms seriously in doubt, administration has no choice but to spread our government must maintair. 3 delicate its attention accordingly. balance. Support for Yeitsin's democratic That may not always please President government should remain steadfast, but Yeltsin - and when President Clinton we also should make every effort to main- earns Yeitzin's wrath. the ramifications can tain respectful contact with a broad spec- be far more serious than the snub Nixon trum of Yeltsin's philosophical adversaries. received this week. even at the risk of incurring Yeltsin's in the long run. though, attempting to wrath. establish that tricky balance among Rus- Our outreach to Russian political fac- sia's competing political forces serves tions should have its limits. We shouldn't American interests far better than blind write off every conservative Russian na- faith if Yellsin's future 97 Attacks on Saturday, March 12. 1994 17 A Mrs. Clinton Mrs. Clinton's allies call Whitewater attack sexist called sexist Conduct from Page 1A with whom the Clinions bad Some of Mrs. Cliston's defenders is grader Decisal You (AD) rub " to take her OD formed the Whitewater Develop believe her detracture are wang the The flood of away and my. I'm just . girl I'm Republicans ip the foretions of caral Curp By Anne Reifenberg Whitewater turer to put women is resentment and just girl. they re belog mean me the Whomewster blinkring kell at It was her old law firm partner, their places. Insurting what Her because Tm pill and Kathy Lewis the des that they glorially forms Deputy White House Countel Via not Woods chairman of the No fingerpointing I'm Mrs Clisten herself has nut com Mrs Chairu because of her gender real Fusher. who committed suicide tional Women's Political Concer, seeing goes way beyond meated on the question of geoder Washington Bureau of The Dallas Morning News or her role as a precedent setting last summer and Left Whiteweler called "a kind of sig anti (eminism" beend criticisms - and has had In presidential spouse documents behind to bm office. into the debete. just politics.' the to say about Whilewster WASHINGTON While HII- Independent analysis also dis And It -- her good friend and Mr. Ciagrich's press secretary. lary Rodham Clinton took her - sech claims Sherry Bebetch mentor. Becard Nambeem who Ann Lewis, Her only recent remarks care Tomy Blankley. said what Republi from an Interview with the letters Jelle a polatical science professor was (arced to resign - White House cane are doing to "fort the opposite" Democratic consultant magazine Elle lumps in the Whitewater affair at the Claremont Graduate School. countri not giving her "special favors in SQ excerpt released by the in conspicuous silence this MM some women are tuo quick 10 Now, with a special cuposel in - because she la the wife of the grand jury, one was forced to resign magazine. she complained that " "RISE vestigating Whitewater is the pulli- president "and one's deed 1 wouldn't stand "people who have 8 different politi week, her defenders tested a 10 like to think I'm as good a Ical libur at the day Patricia Isaland, president of the too close to her cal agends or have another person termist - anyone but 1 think Rep Newt Glagrich of Georgia, strategy: Suggest her attackers National Organization for Women. Ms Ireland clied an Arisona - al and financial reason to: attack got to get that.' Ms Aelie the Blouse Republican whip mid acknowledged that the first lady's Mrs. Clintec world find M demond public political cartoon - an exam lag us" more behind . are sexists. said critics In Congress have generally pie of the way the media are using ellorgenized well heared at Mrs Clinton's attackets and de Ing to be gived special treatment Women's rights leaders, choses their words carefully Whitevater - a way of enbotaging tempt to undermine my husband feaders are both entering eachart because who to first lady. Bet some remarks she dem Democratic Party Insiders and Her defenders believe she as be health care" and bringing Mrs. and by extension myself ed territory. accurding 10 Ms. Julie onstrate how deeply some recent log B11 upon with vigor not because Coston dows . pag The cartoon The president contencted the and other ensiysis Hillary Rodhum Clinton and fear Mrs. Clisten because "abe White House aides questioned She to & wained figure in the of Whitewater, bet because of Re deplete Mrs CHarge as Tooys Has- crincises forge directly At . lec Republican critice is the does not III the image of the little publicans resentment of her in ding above the caption. "She's wrn prending news conference he the motives of those siming hinory of first Indues." said analyst Whitewater controversy a to the White House Stephen Hers of the nonpartisen 3111-ug women and their distike of tough. She's ruesa. She conspired declared that her "motal company is broadsides at the first lady. scoff at the Idea that they Our Republican Sea. Allonse with ber busband and friends to as strong as budy in this coun Brooklegs Institution Politics is her health reforms plan pretty cuttbrual business But here gleefully focus on Mrs. Clin Amale of New York quipped on 'She'l been personally attecked cripple the competition in Most avoided using the spithet your political upponent is a women by the same people committed to ton because of her gender termst visit to Albeay. "Howard Ms. Incland and other activists SUIL even some Democrate and Itself, but Democratic consul- Baker. Iblak asked the right ques and . mother and a alle It's agree that Mrs Clinten can't hope women leaders have begun ques billing healths BIT reform." Sen excaped attach But 00 other first tion during the days of Watergate. Jay Rochedeller. said 00 to sacape scretify on Whiteweter. doalng Mrs. Clinion's IOW profile tant Ann Lewis charged flatly strange this public official also hap lady moved Into the White House and 11 applies bere with a little at: the Senate floor "When Eleanor or on any political matter to which Sen Beb Grabam of Flerida, who peas to be the president's spease. with a Law degree No other was that what's behind the criti- of . 1w(st: What did the president she is involved heads the Democratic Sepatorial In the Whitewater matter, Mrs Rocement was is the While House appointed to head a bigh profile du know and when did Niltary tell she was attacked. too must vocif. And Mancy Reagen's formst Campaign Committee. celled on her clam is "sexist crap." is - rentral figure an her mestle policy task force and NO oth him?" Lusband when she champloned PR press secretary, Shella Tase, said the to answer questions publicly and er earned more money than her Another GOP figure. former the antilyurhing BILL Now first lady is "getting what she Get take endue advantage of has "The flood of resentment She was a partner in the Little . new husband before coming to the capt die trategust Roges After now pres Hock law Item that delended a fail for and that is to be taken and status as the president's wife generation of will appointed judges 1st and finger-pointing I'm seeing Ident of CNBCTV mentioned der ously." she were another person on Ing serings and loan before # state wants to tear down this the lady Welcome to the brave new IDA . radio Interview that of three and her work She has become a political fly. related to the president. who had goes way beyond Just poll. regulator appointed by her him would of the political fellow lawyers Mrs Clinton bond the government The now de None of Mrs Chaton's predices use She brought It on herself So served to the tame positions family. Ms Jeite seld "This real tics,' Ms. Lewis said. "White hrought with her to Washington whill was owned by a man 2013. from Morths the has to stand up and take It." business. legal representation lengt Wathington On. is new terribury one is under investigation by a Mrs Tate ast "Putitics at that level she would be legitimate Aguse for water. because Hillary Clinton questioning be inid Knight Ridder Newspapers was involved in it, is giving There has been speculation that people for whom the Idea of a Mrs Cliente and ber bushand will powerful woman is threatening make . joint appearative rhage OR # news show in dis a chance to speak out In ways cuse the Waltowater controvery that weren't practical before. But so aide to Mrs Clinion sold he knew of no such plans They're tripping over each oth. "I don't think she should hald Please see MRS. on Page 17A. prem conterence.' Neal Lettimore sold "I don't blak it's proper for a first lady of the United States to hold # pross conference 100 this togic) The president has already answered the questions and he has asked the stall in be fortherning "Is there # reason for be to has beer like everyone sise position usual; the rhiculous DALLAS MORNING NEWS - n - setereay, searce 14 1979 GOP lawmaker accuses RTC superiors of hindering probe Lawmaker Continued from Page 1A. Correnty as alsogation that NTC officials in mind about that," Mr Contain and for saying that Mr. Gonerales said be and the Kansas City were being "proved" - the White House was being very letters because Mr. Leach "tree Mr Plader makt "No These are two Other Whitewster related devel response and rouperative" with bis investigation passed the norms of common - reporate Issues. Be declined to ejements Priday slams RTC Tabling issue with that state in his seal to mp the president and comment further The Treatory Department his wills, and be's becoming vindte Mr. Consuler also released a in turned OFFE shoot 3,700 pages of mest, Mr Leach wrote Tem perur. for be nebt to special counsel Flate doc amonts to Mr Fishe while 98% marly concerned that efficials of tive, which is momething don't tol- the Kansas City NTC office are be creas La anybody." - Priday is which he reported bis en more administration officials Median Guaranty's failure cost piodge to block DOP aftere to - prepared to a before . federal on Madison leg agreed and possibly correed by the Wesbington RTC office (See at tempeyers 847 million Mr Flake is the March 24 hearing to Investigate grand jury Mr. Fishe subplensed termed confidential memo 5" Investigating Allegations that - Whitewater I them after 1-arning that Treasury RTC Kansas City spokesman by from the sevings and toop was would never parmit our - officials disc nesed the Whitewater Jane Jankowski said her whice improper (unceled late White dated RTC accountability heariage Investigation with the Whice House would "not have any response" water Development or Mr. Cliente's to sticroach on the Justice Do A Treasury efficial said m/d of the Agency chief denies The Kanas City office of the gebernatorial campaign rheat perment's ongoing proceedings." documents were routine such as BTC. the agency created to clean up Mr. Leach wrote to the RTC and be wrote "One with boat to draits of news releases the OTS earlier in the week request enough . ABC's World News Tonight investigators 'gagged' the sevings and less mess be to vastigated the falled Madison Guar leg their documents - Medison, *Nace becousing chairman," be showed photographs that appear to saty Savings and Load Association according to the Gonerales letters to added. "[ have constructly reminded support police pad medic al reports Madison) owner was a partner of thom agencies with and every member of the cose- that White House deputy countel By Richard Whittle President Clinica and Hillary Red "A hearing does net provide the miries, all and sandry that com- Vincent Fuster's death last suramet Jim Leash am has Clinton in Devel signaling basis for a member of Congress to mittee is . legislative body, not a Heary B. Genzales Jim -- . welche Mr Fishe agreed in Washington Bureau of The Dellar Morning News openent Corp. B real estate venture today that people ought to obtain documents to which he or processional of judicial DEL re- Leach "10 becoming vindic. reesemine his death after ques when Mr. Clinion was government of pay . great deal of attention she is not otherwise entitled.' Mr. gree the Mr. Leach, deople Hoos about the suicide ruling were WASHINGTON - A leading Arbansas Goarales told the agencies. "I will abderable service on the committee. tive, which is something to the city of Katimas City." raised Mr Facter . former law House Republican charged Fri- Mr. Leach, who retrased the let. request any Information needed by and elements of the jorkal prem. don't tolerate in anybody periner of Mrs CHALM was work Whitewater related questions the committee and will make If refuse to - this ty. the Walle House." Ing - Whiteweter matters at the day that federal regulators in- for at a breakfast with reporters, released to explain his allegation Their plan bee brought them is available to members of the com. At the breakfast with reporters, "T'm not confident that Mr Con time of his death to confiict with the committee vestigating an Arkansas thrift Mer would he discuss the contents mitter, - appropriate" Mr. Leach declared that be was tales has the discretion to hold the . Senate Republican Leader Rob of his confidential memo N Mr. chatrman, Rep. Heary B Gonzales Leach spokesmen Joe Plader de "Heary Goomlers biggest fen to bearing." Mr. Leach added "I sus Dole, R.Kan. called for Mr Chorop involved in the Whitewater af- D-San Autonio Fleke. bough be reid: "What's to clined to comment ou Mr. Gonsa the Valted States Congress think pect . decision Is being made high to surgend deputy Treasury Secre Mr Consules has voted to pre- let's actions fair were "being gagged and he's - of great Individual jodg or up than bis position tary Roger Allman and At the memo makes my antence me. vent the GOP from asing the bear. erstatement by a significant di Mr. Plader mid. however, that ment and personality I recognita Mr. Container replied "There he torney General Webster Hubbell be possibly coerced" by superiors. measive Ing to attack the prevident Mr Leach bad been writing letters completely how much I examperate goes again He's suspecting He's or casse They up to their PATE in On Friday. Mr Gonsales seld he 10 the RTC and talking w staff store bim Rep. Jim Leach of lowa, "Tam signating today that people Regaling to himself knowledge of misstements and deception had written the RTC and the Office organ to pay A great deal of atten November seeking copies of all doo Mr. sech add he mispacted that majority side things the I'm and Mr Assment is Interim head of ranking Republican on the tion to the city of Kensas City," Mr. of Thath riston. which regu- umentation that they have related Mr Container was resirved Regubli. sware of Nebody's trand to pressure the Inc. Mi Hubbett worked with Leach seld lates healthy savings and lowns, to to the Madison case and wa've 2nd reas' desire 10 Investigate White me from any level except his Mrs (Tinted " . Little Rock law House Banking Committee, tell them that bey need NCI 16 "Kansas City is a higher priority ten * paucity. water in part because "be 15 under "The oversight hearing 11 well firm that represented Medison made the accusation about the spend to . request from Mr. Leach then Washington at this time. he Asked If Mr beach's Inability to very intense pressure by his (Demo defined and It's mandated by law The Associated Press contribut added, attending to Mr. Floke's of for documents relating kg Medison gut documents was the - for cratic) concus and, In all probabili- and nothings going to change my ed to This report Resolution Trust Corp., in a let- forts to determine whether invel- ter to special counsel Robert B. lags between Treasury Department Fiske Jr. and White House officials compro are the federa Investigation RTC Washington office My (each said he had asked Mr. spokeeman Mike Fulwider said Place to subscens members of the Kapear City RTC office the letter was "the first, I've "I would not be making A state heard of Mr. Leach's concerns. - this strong unless felt 11 was merited and unless also felt " was If he would bring specific de- important for the special commel in intervese and protect andividuals tails of his concerns to our at- in the Kannas City effice." he said tention, we'd be happy to look Mr. Lanch also and Republicant hape to discuss the malls at . hear into it." log or. the RTC by the House Bank The Leach letter took Mr. Committee acheduled for March * Fiske to task for opposing Re- Required. - agreed by Demo publican demands for congres. /mic refusals to activite special Diagnessional hearings. have said sional bearings on Whitewater they world 012 the aversight hearing to delve into Please see GOP on Page 16A. Wh'te F se should focus on basics It is occasionally noted that one of the first acts of the Clin- ton White House was to bus a group of high-level appointees to Camp David and hold a touchy-feely encounter session. In a brave ac: that may have augured future divergences. RICHARD Treasury Secretary Lloyd Bent- ESTRADA sen chose to go to bed instead The above recollection only reinforces the sense that the current administra. tion suffers from a Big Chill complex - after the 1980s movie about a reunion of near middle-aged friends remembering the good old 1960s. Indeed. many of the president's key government tal appointments. both Inside and outside the White House, have been based on friendships forged or solidified in the era of Woodstock Many of the challenges facing Mr. Clinton today are neither in his stars nor in his personnel. They have to do with his own willingness to get to the bottom of the Whitewater situation. But to the extent that personnel problems are an issue. he has done well to bring in an old hand like 76-year-old Lloyd Cutler as his new temporary counsel. But he The Ballas Morning Nelus should also turn to Mr. Bentsen himself for advice Quite likely, the oldest member of the sabinet might Saturday, March 12, 1994 advise the president to at long last say good-bye to the touchy-feeliness of the 1960s. The Clinton White House is a place that longs to be friendly and secure. In the comments of aides and former aides. the theme of trying to run the place like a cozy little law firm keeps popping up. The problem is. in a place where so much of the public trust reposes. avoiding a sense of formality of gravites. is dangerous for appointees and the nation alike. This is not to say that outright incompetence is - not an issue in some instances Such is the case with the soon to be departing Bernard Nussbaum the White House counsel now being replaced by Mr. Cutler. If given the chance. one fears. he might have OK'd Hannibal Lector as head of the Food and Drug Administration. Then there is the case of Mr. Clinton's one-time roommate at Georgetown University. Roger Altman In bis additional role as acting head of the Resolu- tion Trust Corp.. Mr. Altman met with White House senior staffers to brief them on developments per. taining to the RTC's plans in the Whitewater case. The upshot of that is that Mr. Clinton must now con- tend with the fact that Secretary Bentsen. Mr. Aluman's immediate boss, has called for an ethics investigation into the meetings. Now. it's one thing for Republicans like Bob Dole. Al D'Amato or Newt Gingrich to call for investiga- tions. (PBS commentator Mark Shields warned that if Sen D'Amato continued to take the high ethical ground in the Whitewater controversy. he could be subject to nose bleeds.) But for the most distin guished member of the president's own dabinet to do so is both embarrassing and politically damaging. Over at the Department of Justice the presence of Webster Hubbell as the No. 3 person there makes him a direct link to Mr. and Mrs. Clinton. with whom Mr. Hubbell once worked at the Rose Law Firm in Little Rock. Such a relationship can only serve to inhibit the attorney general. Still. when Janet Reno does assert herself, she chooses to be attorney general for social work. or the chief inspector for root causes Regardless of the failings of other high-level offi- cials in the administration. the consequences of White House chief of staff Mack McLarty's failure to perform may be the most serious. He has failed to bring discipline to the operation. He has been unable to instill the combination of for and respect that is so vite? to un organiza. tion as important as the White House staff. and the gabinet itself. If the disarray in the White House is to be brought under control. a new message will have to filter down from the top Administration personnel must at long last grow up and get down to basics. They must focus on pursuing the mission of their particular baillwick. They must understand that they are something less than God's gift to governance. At that point, the administration's standing in the public eye may begin to improve. Richard Estrada is an associate editor of The Dailas Morning News editorial The Ballas Morning Nelus Saturday, March 12. 1994 The question of character Do we himself? named Paula Jones corroborated really know President Clinton is an emo- the troopers' story that while got- the real Bill tionally labile man. According to ernor. Mr. Clinton had troopers Clinton yet? a Wall Street Journal account. invite her to a hotel room where He surely 18 even scasoned political handler the governor made sexual advanc- one of the David Gergen was shocked when es. The White House said her story most simble he witnessed a Clinton temper was "just not true. RENA of presi. tentrum on Air Force One Last Justice Department nominee PEDERSON dents. The June, Time magazine noted that Lani Guinier recalled recently in president when the president cried at the $ New York Times Magazine ard. can be seen introduction of Supreme Court cle that when Mr. Clinton greeted talking earnestly and knowledge- nomince Ruth Bader Cinsburg. it several new nominees at the ably just about everywhere you wasn't the first time. The maga- White House, he reminisced turn. One night he's on Larry zine listed 11 news accounts when fondly about an old friend from King Live, one night he's got Ted Mr. Clinton cried visibly at public Arkansas by saying, That was Koppel on Air Force One with events. such as when listening to when I had & real life." When him. another night he's on Wash- hymns. introducing friends or speaking in February to an sudi- ington Week in Review saying hugging a crime vicum. The Hous- ence of auto workers. he evoked good-bye to the returing modera- ton Chronicle reported Jan. 17, the same nostalgle when he said. tor. Paul Duke. Has Mr. Clinton 1993. the president-elect "When I was 0 younger man and done a guest spot on Roseanne described the last days in bis had a life. I owned an E1 Camino yet? He sometimes seems more home state as an emotional roller- pickup. It was a real sort of South- ubiquitous than the Men's Wear. coaster ride. At times. be said, he ern deal. I bad Astroturf in the house salesman. was overcome with tears for no back. You don't want to know But for all this exposure, I'm apparent reason. why. but did." not sure we know what Bill Clin- or course. there 12 nothing is this a mature person who ton is really Like - yet. If you wrong with venting steam and understands that his role as have seen The War Room. the being emotionally open. One of leader of the most powerful coun- clever documentary about the the things many people like about try is his "real life" and that Clinton presidential campaign. Mr. Clinton is that he seems public allusions to youthful pro- you'll understand better how human. He is a man of large emo- miscuity are unbecoming the dig. political spinmasters like James tions, but perhaps in need of nity of the office? Cerville and George Stephanopou- self-control. Which brings us back to the lous help control the presidential Bill Clinton often cites issues of judgment and character. image. Was what we saw in the former President John F. While these examples are admit- 1992 campaign what we got? Yes Kennedy as a role model. He met tedly selective, they were selected and no. with author Richard Reeves last precisely because they raise ques. The personality and character year to discuss his new book Pres tions of maturity and credibility. of the man from Hope are surely ident Kennedy. When asked what As The Economist pointed out. germane as the nation is trying to the president said about the study back in 1992 Americans forgave understand what is at the bottom in presidential power Mr. Reeves Mr. Clinton his weaknesses of of the Whitewater controversy. if recalled that Mr. Clinton seemed character because he represented anything. As the temporary White fascinated with Mr. Kennedy , vigor and change. will they be as House counsel. Lloyd Cutler, tell- ability to conceal his serious phys- forgiving now that they are learn. ingly put it last week as he was ical problems from the public and ing more about him? Let me bor. brought in to shore up the White asked several questions about it. row from the British magazine's House legal front. Trust is the Mr. Reeves said he was struck by analysis in January of Mr. coin of the realm." The president Mr. Clinton's interest since Mr. Clinton's ethical problems: may get his legal power from the Clinton refused during the prem- There is # point, though possi- Constitution. but he gets his dential campaign to release his bly a hard one to define. at which moral authority from the trust of own medical records. private behavior begins to make a the American people. The Clinton cempaign did difference to the effectiveness of Polls now show a growing finally release 1 statement from the office. Abuse of power and number of people believe the his physician that he was in good privilege brings Americans up president may have done some- health. But that leaves the public short a man in , special position thing unethical if not illegal In in wonder about his reluctance to should behave with care and the Madison Sevings and release details about his past integrity. Deceiving covering up. Loan/Whitewater investment. Are health even refusing to talk have a long there past clues to Mr. Clinton's Bill Clinton got the nick- history of undermining press- character that may look different name "Slick Willie" while in dents. A stream of titillating STO- in light of the Whitewater allega- Arkansas for his ability to maneu- ries with some substance behind tions of insider ver out of difficulties. Mr. Clinton them can. in the end, leave . wheeling-and-dealing? Labeled Gennifer Flowers' claim sense of unsettling discrepancy Certainly Bill Clinton is that they had an affair as "trash between the gravity of the office exceptionally intelligent. Stories for cash." But be did not deny that and the man who holds it. abound of his grasp of compli- a tape recording of their cozy tale- "Each of these instances in cated policy issues and how be phone conversation was genuine itself. may be apparently harm- gives flawless presentations on and Indeed had to apologize to less: as harmless in some eyes, as material he has only read in a Gov. Mario Cuomo for unflatter- . quick fling in a parked car, or an glance. When the new editor of ing remarks on the tape. Tran- unwise investment. But , pattern the New York Times crossword scripts of the tape show Mr. Clin- or habit of bad behavior erodes puzzie, will Shorts lound out that ton wondering if be will be respect for an office for which Mr. Clinton likes to do crossword "blown out of the water" by stories Americans, after the modern fash- purzies. he prepared a special pus- about their relationship. He asks isa have somewhet less respect zie challenge. Mr. Clinton com- Ms. Flowers how she likes holding in any case. It damages the bond pleted it perfectly in six minutes. his future in his hands. He says of trust between president and cit. 54 seconds. while taking an that If the women who are named izen: cynicism and suspicion set urgent phone call deny It. "you've got no problem in These in turn, will eventually Yet could it be that someone He also says that If anyone asks damage . president's capacity to with such a facile intellect may her if she talked to him about get- do what be wants to do. To that feel that he can finease his way ting . state job that she 'can say degree the practices of bedroom out of difficulties with his brains no." and boardroom still reverberate and charm) When four state troopers and still matter. in the Oval Bill Clinton is a man of great offered new details about extra- Office." appecites. When he invited net- marital affairs in interviews with work TV anchors correspondents the American Spectator. Mr. Clia- Rena Pederson is editor of The in for a lunch chat, they came ton declined to discuss the claims Dallas Morning News editorial away astounded that he ate all last December and an aide said page. three of the meet choices offered they were "ridiculous." But the rather than selecting one. "He ate Los Angeles Times corroborated everything but the drapes." said some of the president-elect's con- NBC's Tom Brokaw. tacts with women through phone Among the fascinating details records. And in February a in the accounts of four Arkansas former Arkanias state employe state troopers was that while gov- ernor, Mr. Clinton would gulp down an apple core and all and swallow . baked potato in three EDITORIAL big bites. ROUNDUP 92 Could it be that this is a man who literally feeds his appetites Gonzalez cuts GOP tewater I's BY TERRY LEMONS Republicans investigating need for the witnesses to ap- Gonzalez's decision appar- ington RTC office," Leach said Democrat-Gazette Washington Bureau Whitewater and Madison Guar- pear. He said the hearing deals- ently stymies an effort by Iowa in a letter to special counsel WASHINGTON - The House anty Savings and Loan Associa- with reviewing the Resolution Rep. Jim Leach, the committee's Robert Fiske Jr. Banking Committee chairman tion have asked Gonzalez to in- Trust Corp. oversight board ranking Republican. Leach Leach is spearheading the said Friday he will block a Re- vite 40 witnesses for a March 24 not politically generated White- asked Gonzalez on Tuesday to House GOP's Whitewater re publican request to bring committee hearing. water issues. Invite the witnesses. view. Arkansans and White House of- The GOP list includes "This is a legislative commit- The witnesses would include At the heart of the contro- ficials before Congress to testi- Arkansans such as Thomas F. tee, not a prosecuting commit- several investigators from the versy is Whitewater, a 230-acre fy about the Whitewater Devel- "Mack" McLarty, White House tee," Gonzalez said. RTC's Kansas City office that Marion County real estate de- opment Corp. affair. chief of staff; presidential ad- House rules allow Republi- Leach wants to testify about velopment along the White Riv- "I'm not going to allow this viser Bruce Lindsey; Little Rock cans to invite witnesses to vol- their Whitewater research. er. President Clinton and first committee to be degraded by a businessman Dan Lasater; and untarily testify before such "I am particularly concerned lady Hillary Rodham Clinton witch hunt," Chairman Henry Little Rock attorney Sheffield hearings. But committee chair- that officials of the Kansas City once were partners with James Gonzalez, D-Texas, told the Nelson. men have wide leeway over how RTC office are being gagged and and Susan McDougal in the de-: Arkansas Democrat-Gazette. Gonzalez said he sees no to run the hearings. possibly coerced by the Wash- See HEARINGS, Page 10A opportunities to interview wit- "had exceeded his bounds" in Hearings Senate Minority Leader behind us so that we can move nesses," Leach said. his request for 40 witnesses. Bob Dole, R-Kan., continued his ahead to the vital issues facing Before Gonzalez made his "None of the witnesses I saw calls for Associate Attorney our country," Dole said. comments about the 40 witnesses, Continued from Page 1A listed have anything to do with General Webb Hubbell to step Senate Majority Leader Leach said Republicans had lit- the oversight board." Conzalez aside. George Mitchell, D-Maine, indi- velopment. tle control over how the Democ- said. Repeating comments from cated that congressional White James McDouga 1 also owned rats handle the March 24 com- Actually, two of the 40 people earlier in the week, Dole said water hearings would eventual- Madison Guaranty, which failed mittee meeting. Leach predicted on Leach's list would routinely Hubbell should temporarily re- ly be held but only at a time in 1989 at a cost to taxpayers of it "will be a very limited hear- appear at the committee's RTC move himself from the Justice when they would not endanger at least $47 million- ing" under Gonzalez' control. hearing. They are Roger Alt- Department post until White- Fiske's investigation. Allegations that noney was il- Republicans want to raise man, the deputy Treasury De- water questions are resolved. Mitchell said Republicans legally transferr ed between Whitewater issues during the partment secretary who has Hubbell is a former partner are only interested in "instant Madison Guaranty and Whitewa- hearing. But Gonzalez promised served as interim RTC head, of Hillary Clinton at Little publicity" on Whitewater. "This ter are among the issues being to keep a light rein. and Jonathan Fiechter, acting Rock's Rose Law Firm. Both is an effort to embarrass the investigated by Fis ce. His inves- He said Leach and the Re- director of the Office of Thrift worked on Rose cases relating president in any way possible," tigation is based in Little Rock. publicans have been exploiting Supervision. to Madison. he said. Fiske has said he fears that Whitewater "in hopes of win- Altman and Fiechter ap- Attorney General Janet Reno House Speaker Tom Foley, special congressional hearings ning an election they lost in '92." peared at a similar Senate has rejected GOP calls for re- D-Wash., criticized the media requested by Republicans "It's nothing but crap," Gon- Banking Committee hearing last moving Hubbell. for engaging in "wild specula- would interfere with his inde- zalez said of GOP efforts. "It's month. Dole also called for Altman tion" about Whitewater. pendent criminal investigation. no excuse for assassinating the Gonzalez added that the wit- to be suspended. Altman par- "This is getting to be a sort of Democrats echo Fiske's senti- president's character. nesses requested by Leach ticipated in a Whitewater meet- thing that you read on the ment and oppose any special Gonzalez noted that the com- could still come to the commit- ing between Treasury Depart- checkout counter '225-pound Whitewater hearings. mittee hearing will be a routine tee hearing — but only as spec- ment and White House officials. baby born to Amazon woman,' Leach said Friday he was review of the Thrift Depositor tators. Dole continued to hammer at Foley said. willing to delay the Banking Protection Oversight Board, "If they want to come forward the need for special congres- Foley said Whitewater Committee hearing by up to two which oversees the Resolution to witness the hearing, they can sional hearings. He said they "would not even be a matter of weeks if it would help Fiske's Trust Corp. The RTC oversees along with the rest of the pub- are needed to stop the "daily remote interest, I don't think investigation. Leach and House the disposition of assets from lic," Gonzalez said. drip, drip, drip" of Whitewater even in Arkansas, if it were not GOP leaders plan to meet with failed savings and loans such as In other congressional de- allegations. for the fact that there is an at. Fiske next week. Madison. velopments Friday on White- "Hearings are the only way tempt to connect the president "We're giving him plenty of Gonzalez added that Leach water: to put the Whitewater episode and the first lady to it." The Bes Moines Register SAT 3/12 GIVES No DETAILS House Banking Committee on March 24. Leach, the senior Republican on the panel. has included four Resolu- Leach tion Trust investigators from Kansas City on the list of witnesses he has requested for the hearing: Lee Au- sen. L. Richard lorio. Jean Lewis and alleges Mike Caron. The four could not be reached for comment Friday. meddling Leach had said earlier this week there could be disclosures of "block- buster proportions" about White- water at the hearing. in probe The Resolution Trust Corp. is the government agency that disposes of failed savings and loans, and the Kansas City regional office has been investigating the failed Madison Investigators of a failed Guaranty Savings and Loan of Little Rock. James McDougal, the owner of Arkansas S&L with ties to Madison. was partners in the White- the Clintons 'are being water real estate venture with then- Gov. Bill Clinton and his wife, Hilla- gagged and possibly ry. coerced. he charges. Leach said he outlined the basis of By JANE NORMAN LEACH Please turn to Page SA Washington, D.C. Iowa Repub- Mean Jim Leach charged Friday that Whitewater investigators in the Kansas City, Mo., office of the Reso- lution Trust Corp. "are being gagged and possibly coerced" by the Wash- Leach hints ington office of the agency - al- though Leach offered no details on his allegation. at meddling He urged the special counsel inves- tigating Whitewater to move quickly to "protect a small group of very in S&L probe courageous people" in the Kansas City regional of- fice of the RTC. LEACH INSIDE which has been investigating the Documents Continued from Page LA failure of an Ar- turned over to his allegations in a memo to Robert kansas savings special Fiske, the special counsel appointed and loan at the prosecutor. to investigate Whitewater. Leach did center of the Page 4A not give reporters a copy of the Whitewater affair. memo, but he did release a separate Leach also issued a strong defense four-page letter he has sent Flake, in of the right of Republican members which Leach made & one-sentence of Congress - who are in the minor- reference to gagging and coercion. ity in both houses - to demand hearings probing Whitewater. "The No Knowledge Democratic Party of the United Anne Freeman, a Washington States of America is on trial." he said spokeswoman for the Resolution at a breakfast with reporters. Trust Corp., said she had no knowl. "In a great historical context. the edge of any constraints placed on Democratic Party has been A party Kansas City investigators. "That government Whether would be an unusual practice for the RTC. she said. "We're not 8 political agency. We're an agency of civil Freeman said she had not seen Leach's memo and was not familiar Resolution Trust investigators with his allegations. "I can speak for one of the significant stories" the the integrity of the agency 85 The Des Hoines Register SHT-3/12 Rules. Limits Banking what Leach was talking about Leach told reporters he dido't Henry Gonzalez, D-Texas, who has wast to make details of the Kansas declined to conduct a biparthma City assuarion transactely public be cause he wants Finise to have time to Whitewater investigation told the interview the investigators before Dow Jones news service Thorsday they are asked to testify at the that be will hold the March 34 has March 24 hearting. ing. But be also and he world keep a "If be returns within that use tight reta on questions that are quate time, I can't be held account- asked MI know ere rules. 1 know the able for K," Leach said. "R limits and by God on the appointment that he's got an overvished office. hour of the appointed day, : will IfI were to make some agains, rule," Gormles and. Kansas City is & higher priorley than Gormales did not indicate which, If Washington at this ame." any, of Leach's required vireum In an interview later Friday, he will call Lesch said Fiske is "obligated" to In a letter Friday to Fishe, released move quickly on the confidential by the committee, Gonzales also told memo. "I have no doubt" he will, the special counsel he would not Leach and "I would be shocked If he allow the hearing to encruach on hasn't today." Whilever Investigations because Defends Request "one witch humt is mongh" added: Since burneting in his public letter to Plake. Leach chairmen, I have community 1 defended his request that the ed each and every member of the March 24 hearing. actual- committee that the consulting is a ly ON the progres of the savings- Legislative body, not a processional and-loss ballout, also be used to a or judicial one. I repez that Mr. amine Resourdon Trust Corp. action Leach, despite his considerable NEV. on Whitewater. Leach said he is will- ice on the committee, and elements mg to wak a week or two beyond of the jackal press refuse to see March 24 for the hearing so that this." Finke will have time to interview the Gonsales sent a letter to Leach ear- witheress on 8 list submitted by lier this week noting that he had Leach read of Leach's highly critical COST- But Leach said that "given the marts on the noor about Whitewater manner in which the makering party eartier this week has failed for over four months to an "Now, Jim, 1 saw your sermon in code to a restrained request for 2 the Weshtngton Times Frankly, hearing," Republicans have "no there's nothing more absurd even choice" but to traint on an overaight repugnent - than the speciacle of hearing on the Trust you bunch of Republicants and the Corp. within the next four weeks. Washington Times - in fits and per- While Democrate wield all control oxyams of morality," Gormales wrote over the hearing actualle a twice-e- Leach. Leach and he is preparing a year hearing on the bailout is - response. quired under the law. In two more letters, Governmer has Leach rebutted Fiske's concerns written officials at the Resolucion about any congresional hearing con- Trust Corp. and the Office of Thrift ducted while the special coursel's tn- Supervision about a request by vestigation is continuing. Leach said Leach for documents for the March Fiske's "public lobbying" of Con- 24 heartng Gonzalez said that the gress to hah hearings "has the effect committe is not conducting an in- of sending a chilling precedent for verrigation and that Leach's request congressional oversight and a (stu- oue pretext for the majority party. does not constitute an Investigation under House rules. which controls the machinery or Company dollar Leach said he was preparing a for constitutional responsibilities. mai, legal response to these state- ments by Gonzalez because they were to damaging. 2/2 MARTIN SCHRAM JOSEPH SOBRAN First came that ham-fisted Muddled muscling of White House travel office staffers and the shameless Human sacrifice phase misuse of the FBI to claim evidence of wrongdoing. nyone who isn't cackling over her husband, sounding faintly dis responses Then, the moment your deputy counsel and friend, Vincent Foster, A the Whitewater scandal tant even as he defends her. "I must be lacking some ingre- everybody in this country had I was found shot dead in what has dient of basic humanity. character half as strong as hers, we been ruled a suicide, your counsel, This is getting rich. It has already wouldn't have half the problems r. President. we don't Mr. Nussbaum, began acting in your reached the human sacrifice phase. we've got." M believe every Johnny (W. behalf like the heavy in a Perry Out went poor little Bernie Nuss- Yes, Hillary has always stood for Dean III)-Come-Lately Mason rerun: initially preventing baum, as the administration tried to Virtue. No sense of her own frailty who is now racing to be investigators from questioning staff tell us it has pinpointed the source or fallibility has inhibited her as the first Republican on his block to members; withholding the suicide of the Whitewater trouble: a rogue she denounced the greed of the Rea- sound a Whitewatergate warning note evidence, which turned up lawyer in the White House. Appar- gan years, of corporations, of whole that there's a cancer growing on somehow torn into 27 pieces; slip- ently he'd been scurrying around industries. The Hillarists in the your presidency. ping Whitewater files out of Mr. Fos- hiding documents, like a squirrel press have covered her worshipful- It's no cancer but let's be can- ter's office. Even without Yale Law hiding acorns, without consulting ly, with no sense of irony, as she did: It's more than a mere staff degrees, we know Whitewater files the Clintons. Once they found out asserted her claim to be our moral infection. shouldn't be walking out of the office about it, naturally, he had to go. empress, making sure we don't reap And that's become clear to every of a guy who was just shot dead. The Nussbaum firing staved off excessive profits, abuse our chil- ordinary American. All of those Finally, those three briefings the press for a few hours. Then The dren or smoke. White House mistakes, misdeeds Deputy Treasury Secretary Roger Washington Times reported that It's fitting, somehow, that she has and perhaps misconduct in the Altman, the acting-chief regulator Hillary Clinton had ordered the been a "spokesperson" for chil- unraveling probe of your and of savings and loans, gave to Mr. shredding of large quantities of dren's rights a cause that reeks of Hillary's investment in the Nussbaum and your White House Whitewater-related documents moral arrogance. Its champions Arkansas land deal called White- gang. We know it was blatantly back in 1992. There was no way this always imply that they care more water cannot be sloughed off as wrong. And we remember how could be pinned on Bernie Nuss- about your kids than you do. acts of well-meaning staff mem- Democrats thought it was scan- baum. In one respect, you have to feel bers, for which you are not dalous when S&L regulators briefed Our young president now says a little sorry for Bill Clinton. When accountable. President Bush's son, Neil, on the there is no parallel between White- other presidents got into trouble, That is why the old intransitive- investigation of his S&L misdeeds in water and Watergate. "No one has they could retreat into the com- impersonal "mistakes were made" Colorado. accused me of any abuse of author- forts of domesticity with their now emanating from yet another Mr. President, you can never ity in office," he says, carefully wives. He can't. He and Hillary are generation of White House spokes- hope to put this matter behind you defining the issue to his own advan- both up to their necks in public life, persons has not worked, is not by being silent. You can't prevent tage. "That's what Watergate was and his interests and hers may working, and will not work. Just revelations of the whole story from about." diverge sharply. How can he con- look at the latest precarious polls, becoming public. But you can con- True, Whitewater keeps remind- fide in her, when anything he says which show that Americans may trol the timing of the revelations. ing people of Watergate - cover-up, may be used against him? Anyway, support you on various policies You can have them surface now. Or denial, complaints of wallowing, the things he'd really like to confide but a majority just don't trust you. you can have them surfacing as charges that the inquiry is politi- to someone would probably blister It is imperative that you make a news bulletins during the campaign cally motivated but the parallel her ears. full and complete accounting to the of 1996. isn't exact. After all, the first lady In fairness to Hillary, Bill isn't American people of just what hap- wasn't implicated in Watergate. exactly a model spouse either. His pened, and why. So far, absent a Y You must address the Ameri- Say what you will about Richard lifestyle may be no worse than that clear and unambiguous accounting can people. Lay out the facts Nixon, Pat Nixon was clean. She of a lot of French politicians, but from you, we have been left to find on Whitewater. Level with us was a quiet woman who preferred then sophisticated Parisians don't the truths for ourselves. about mistakes, gifts, abuses - to stay in the background. She did- usually do it in a pickup truck. As of now, we know or think we whatever. And better yet: Do it with n't have moral pretensions, a polit- But here is one of the unexpect- know - that behind the mess of your partner in matrimony and in ical agenda or a fawning press ed fruits of feminism: a first lady Whitewater there must be some presidency playing an active role, corps. She never got into shredding landing her husband in the soup. problem you and/or Mrs. Clinton which, after all, she did in the documents before the prosecutors Imagine Eleanor, Bess, Mamie or fear could cause you legal damage. investment itself. could get to them. Lady Bird embarrassing their hus- That seems the only plausible Mr. Nussbaum, in his resignation The delicious part of this one is bands. explanation of why, for months, your letter, insisted he was a victim of that Hillary Clinton, one of the star- By all reports, Hillary Rodham White House compounded White- "those who do not understand, nor lets of the most morally pampered Clinton doesn't blame herself. Her water actions taken almost a decade wish to understand, the role and generation in history, should be the inner circle is afraid to criticize her. ago (by your associates, your wife, obligations of a lawyer, even one center of the scandal. Hillary Rod- She complains that "our friends" or yourself) with new cover-up- acting as White House counsel." But ham was a leading young voice of (presumably in the press) aren't styled actions taken in the White no! he wasn't a lawyer hired to protest at Wellesley, awing her defending her. She tells Elle maga- House (by your associates, your find loopholes so a guilty client can elders with her moral passion. She zine that she and Bill are the victims wife, or yourself). beat the rap. He was the lawyer for went on to Yale Law School, then of a "well-organized and well- We who are not blessed with Yale the American presidency, paid by joined the staff of the Rodino Com- financed" campaign. Law degrees had no trouble sensing the American people. mittee in 1974 as it hunted down the She is a very able woman. But she that your White House (with coun- Mr. Nussbaum never did get it. evil Mr. Nixon. Ambitious though has yet to acquire one important sel Bernard Nussbaum playing the Here's hoping you do. she was, she never dreamed she'd skill: self-criticism. lead) seemed to be acting improp- one day be the quarry in a similar erly, if not illegally - in assorted hunt. matters dating back to its earliest Martin Schram is a nationally "I do not believe for moment that Joseph Sobran is a nationally days in office. syndicated columnist. she has done anything wrong," says syndicated columnist The Bashington Times SATURDAY. MARCH 12. 1994 79 The Washington Times SATURDAY, MARCH 12, 1994 / PAGE All Foreign aid redirected for post-Cold War goals terday. the agency's budget, in addition to new aid categories would be cre- By Shu-Ching Jean Chen low spending for such things as "We have attempted to show THE WASHINGTON TIMES $3 million in military assistance ated to reflect the new policy ob- population and environmental how those resources actually budgeted elsewhere. jectives. programs. Unveiling a new approach to- benefit individual countries, we do The newly independent states The remaining budget funds Although there is no new money ward foreign aid, the Clinton ad- not try to do the same thing for the that were formerly a part of the are earmarked for sustainable de- in the latest AID budget, the ad- ministration is asking Congress to '93. Therefore it will appear that Soviet Union together account for velopment, humanitarian assis- ministration drew praise yester- authorize spending of almost $7.5 there are increases from '93 and $900 million, roughly half of which tance and advancing democracy. day for seeking to redirect aid to billion to further help countries es- '94, when in fact it's just a different is planned for Russia. The programs themselves are serve post-Cold War goals. The Bashington Times SATURDAY. MARCH 12. 1994 tablish democracy, promote hu- way of distributing the same re- The new thing is not where the the more traditional ones of help- AID's official said that in com- man rights and embark on sustain- sources." money goes but what it now aims ing international relief efforts and parison with the past request, the able development. According to AID figures, about to accomplish. The goals them- emergency feeding and develop- new way of appropriating the bud- "There is a difference between half of the total $7.5 billion budget selves are a new approach to the ment programs. Together the bud- get will see a shorter list, more the way we had portrayed the num- is going to four countries Rus- international community in a post- get maintains the same level of focused on objectives. ber," said an official from the U.S. sia, Israel, Egypt and Turkey. Cold War world. funding for these programs as was AID officials described the Agency for International Develop- As usual, Israel and Egypt to- Under the proposed 1994 Peace, spent the year before. overall modifications in the bill as ment (AID) during a briefing yes- gether take more than $2 billion of Prosperity and Democracy Act, Small cutbacks actually will al- "charter" legislation. Democrats want Hillary to speak up Larry Speakes named postal spokesman CLEVELAND (AP) - Fellow paigns, many Democrats are in- Others go further. to be what she is, which is our Larry M. Speakes, who was Democrats are looking to Presi- creasingly worried that the con- Roaming the halls of the Demo- leader on the health care reform White House press secretary un- dent Clinton to put the Whitewater- troversy could prove more than Madison affair to rest before it cratic meeting, where White- issue." der President Reagan, has been just a distraction. named to the top public informa- takes hold as an election-year is- water-Madison is a frequent sub- There is widespread agreement "I just think we need to keep our ject, longtime party activist Lynn here that Mrs. Clinton needs some tion job at the U.S. Postal Service. sue. Some suggest he start by hav- eye on the ball and deliver the ing his wife answer questions Cutler handed out "Don't pillory forum to answer Whitewater- Mr. Speakes, who will be vice change" promised by Mr. Clinton, about her role. Hillary" stickers. Madison questions, although the president for corporate relations Democratic National Chairman But while accusing Republicans party leaders stress that the venue at the post office, most recently A tip sheet for discussing the David Wilhelm said. of taking cheap shots at the first must be "very limited and digni- was a vice president of Northern controversy assures Democratic But as they bludgeon Republi- lady, Ms. Cutler also said Hillary fied," to use Mr. Slagle's words. Telecom Ltd., which has offices National Committee members cans for suggesting Mr. Clinton Rodham Clinton could play a big "If you spend too much time in Washington and Toronto. that they need not worry, that the has done something wrong and brouhaha is little more than "a role in calming the controversy. prattling about your innocence, Mr. Speakes became Mr. Rea- insist Whitewater-Madison isn't a "It is time for her to find the people start asking why an inno- concerted partisan effort" by Re- gan's chief spokesman after big issue back home many party publicans to smear Mr. Clinton. right venue in which to talk to the cent person would be so worked Press Secretary James Brady leaders are anxious for the White American people about a lot of this up," Mr. Slagle said. As loyal soldiers, party leaders was wounded in the 1981 assas- House to defuse the issue. And stuff," Ms. Cutler said. She said Also, many of the Democrats meeting here scornfully take aim sination attempt on Mr. Reagan. some aren't shy about offering ad- Mrs. Clinton and the Democratic here want the issue of whether at Republicans when the subject vice. Party have much more at stake there will be a congressional in comes up. But their indignation "People are not going to be vot- doesn't hide Whitewater jitters: than just convincing people she vestigation resolved quickly. Most ing about Whitewater when they Nearly every assertion that the did nothing wrong in handling the in this group say hearings are in- are voting for the U.S. Senate and family's investments or in rep- evitable. Whitewater-Madison affair isn't a U.S. Congress," Texas Democratic big issue ends with the same word resenting a Little Rock savings A handful of Republicans are Chairman Bob Slagle said. and loan involved in the contro- using the issue against Democrats yet. But he added, "I'd haul all you Eager to make health care, wel- versy. in House and Senate races, equat- fare reform and crime the party's press guys in and hand you every "Her integrity and effectiveness ing opposition to a congressional piece of paper I had on White- are at stake," Ms. Cutler said. investigation with acquiescence in central issues in the fall cam- water." "They are peeling away her ability a cover-up. MORTON KON RACKE The imperative Decision time for hearings ongressional Democ- C rats may as well face the fact: Unless they behind Special Counsel Robert want to be branded as Fiske's requests that Congress not the party of shredding Democrats are trying interfere with his criminal probe. and cover-up, they But as both Mr. Leach and Sen. to forestall have to agree to hold hearings on Alphonse D'Amato, New York the Whitewater scandal, preferably Republican, have pointed out, congressional inquires in the House and Senate banking committees. there's a long history of Congress by charging The appointment of Lloyd Cut- conducting hearings parallel with ler as White House counsel pre- criminal investigations without Republicans with sumably will halt the pattern of undermining prosecutions - as stonewalling that's characterized long as witnesses were not grant- playing raw politics the Clinton entourage's response ed immunity. and by hiding behind to Whitewater dating as far back As to Republicans' playing pol- as March 1992, but damage to its itics, of course they are just as Special Counsel Democrats did during the Reagan ethical standing can only increase and Bush years by holding hear- Robert Fiske's requests as reports come out about prior cases of concealment and docu- ings on matters ranging in seri- that Congress not ousness from United Staes Infor- ment destruction. Congress has to decide whether mation Agency Director Charles interfere with his it wants to share the administra- Wick's taping of telephone calls to the Iran-Contra affair. criminal probe. tion's reputation for cover-ups, and decision-time is now. A House Senate Minority leader Bob banking committee hearing is Dole, Kansas Republican, recent- already scheduled for March 24, ly put into the Congressional and ranking Republican Jim Record a Congressional Research As of the moment the subpoe- Service intern's summary of 30 nas arrived last Friday, the Leach of Iowa has submitted a congressional investigations that White House ordered all docu- tantalizing list of witnesses. This Democrats conducted into alleged ments to be protected and all hearing was agreed to by Banking Republican wrongdoing. witnesses to cooperate. Howev- Committee Chairman Henry As Mr. Leach laid out in a er, for two years, from March Gonzalez, Texas Democrat, after Chicago speech on March 4, 1992 - when the Whitewater Republicans reminded him that Whitewater could involve pay- story was first broken by the federal law requires savings and New York Times - until last loan bailout officials to testify ment of illegal gratuities from Arkansas S&L owner James week, the Clinton response to annually on their activities. McDougal to Bill and Hillary Whitewater has been conceal- To stifle Mr. Leach's inquiry - Clinton in the 1970s and 1980s, ment, not disclosure. either by canceling the hearing or refusing to allow him to call his failure to report such receipts on When Times reporter Jeff their income taxes and conflicts of Gerth first asked the Clinton cam- witnesses- would open Mr. Gon- interest involving state supervi- paign about Whitewater, a special zalez, House Democratic leaders sion of the S&L industry. legal team was created to handle and the Clinton White House to a Mr. Leach believes he can show the case - headed by New York storm of abuse. That could well lead to demands for a select com- - contrary to the version of attorney Susan Thomases, a close events put out by the White House friend of Mrs. Clinton's, and mittee with a circuslike atmos- - that the Whitewater investment including Arkansas lawyer James phere. the Clintons were involved in con- Lyons - and official campaign Democrats are trying to fore- tributed to the demise of the lawyers were cut out. Campaign. stall congressional inquires by Madison Guaranty Savings and workers who urged openness charging Republicans with play- Loan, linking the first family to the were pilloried. ing raw politics and by hiding nationwide S&L debacle of the Embarrassing and politically 1980s. damaging as this mess is, nothing Mr. Leach apparently also in it yet rises to the level of Water- knows the contents of the Resolu- gate or amounts to the kind of tion Trust Corp.'s criminal refer- high crime and misdemeanor ral of the Madison case to the Jus- that could end the Clinton presi- tice Department. which mentions dency. the Clintons, and some of the wit- Nor do Whitewater hearings The Washington Times SATURDAY, MARCH 12, 19 nesses he's called for the March necessarily preclude Congress 24 hearing are RTC investigators from being able to pass health from Kansas City who prepared reform, crime legislation and the referral. other items on Mr. Clinton's agen- Numerous documents connect- da. These are initiatives that ed to Whitewater have been lost members of Congress presum- some, allegedly, shredded on ably will want to enact all the orders of Hillary Rodham Clinton. more urgently if it appears that It's practically certain that Mr. President Clinton is in political Fiske eventually will have to sub- trouble. poena Mrs. Clinton to get to the bottom of such charges. causing a bigger embarrassment to the Morton Kondracke is a senior Clintons than last week's subpoe- editor for Roll Call and is a nation- na of White House aides. ally syndicated columnist. White House aides lash out at media on coverage reporting that the stock markets By Paul Bedard THE WASHINGTON TIMES Clintons seek prime-time TV slot to explain Whitewater were jittery over the report. "You have to report it. You just The White House bashed the can't say stocks are dropping and media for its coverage of the Whitewater-Madison yesterday showed that Mr. Clinton has re- average and other market indexes. A spokesman said the newslet- then not say why," he said. Whitewater-Madison affair yester- and demanded restraint. ceived more headlines than for- "The report was completely ir- ter stands by its report. Over the weekend, the White day as reports indicated President Mr. Nussbaum, ousted effective mer President Bush in his first 15 responsible and unsubstantiated; Christopher Callahan, assistant House communications depart- Clinton and his wife, Hillary, were April 5 for hosting the secret Trea- months. So far, Mr. Clinton has not a shred of credible evidence dean of journalism at the Univer- ment hopes to settle on a strategy seeking a prime-time television sury meetings to discuss a crimi- been named in 11,434 headlines. suggests that is true," said Miss sity of Maryland, said it is com- to fight the escalation of White- slot to explain their involvement. nal probe of Madison Guaranty Miss Myers, echoing comments Myers. "I didn't see anybody rush- mon for politicians in trouble to hit water-Madison coverage. New The Treasury Department also Savings and Loan Association and made by Mr. Clinton in New York ing to knock that story down yes- press coverage. White louse Counsel Lloyd Cutler, turned over about 3,700 doc- its links to Whitewater Develop- on Thursday, charged that Amer- terday in the nation's news media." "It's a good litmus test to see for example, plans to appear on uments to Whitewater-Madison ment Corp., told a black-tie crowd icans are confused over the Miss Myers added that "it's how much pressure the adminis- "Meet the Press" to explain the special counsel Robert B. Fiske Jr. in New York that the media is Whitewater-Madison affair be- more of a question of how do these tration is feeling," Mr. Callahan White House's actions so far. - far more than the White House more focused on the scandal than cause it "is complicated and it's stories get any credibility? I think said yesterday. has provided under subpoena. administration initiatives. gotten buried in an avalanche of that's the issue here. Why are It was not certain if the Clintons "To blame the press is an old Treasury Secretary Lloyd Bent- "I have learned that most of the political posture and people trying these unsubstantiated allegations card that politicians play when were going to appear on a news- sen told reporters the number of pundits and press in Washington to use this for partisan gain." taken seriously? Why are they re- they are really in bad shape," he magazine show such as "60 Min- documents did not mean his de- and around the country consider She slammed wire services and peated? It's an outrage." said. utes" to explain their role in partment was more deeply in- the possibility of scandal, however newspapers for excerpting a story Miss Myers called the Johnson Whitewater-Madison. The Clin- Stephen Hess of the Brookings volved in the case than the White remote, to be far more newswor- in an expensive financial newslet- Smick International Report, tons used a "60 Minutes" interview Institution suggested that the House, which a day earlier gave thy than the reality of accomplish- ter published Thursday that said which originated the article, a White House feels under attack. to help rescue the Clinton pres- prosecutors just 1,000 pages of ment or the potential for positive former White House Deputy "second rate" publication. How- "You do get this siege mentality idential campaign in 1992 after a documents detailing the secret change," he said late Thursday Counsel Vincent W. Foster Jr. died ever, it is co-published by a former former Arkansas state employee and that the enemy is beating at White House talks with Treasury night. in a Northern Virginia apartment vice chairman of the Federal Re- the door," he said. said she had a 12-year affair with officials on Whitewater-Madison "We in the administration have and was then dumped at Fort serve, Manuel H. Johnson. His While Mr. Callahan said it is un- then-Gov. Clinton. Ousted White House Counsel had better luck making history Marcy Park, where his body was company also has been hired by likely that a small newsletter "Everyone has a request in. Bernard W. Nussbaum and pres- than making headlines," he said. found July 20. Police have said it the State Department to set up G-7 would beat the mass media to a Right now there is not something idential spokeswoman Dee Dee A search of headlines in The was a suicide at the park. meetings with members of the story as explosive as the moving of locked down and I don't know that Myers both blasted the intensive Washington Times and its sister The report played a role in the world's seven largest industrial Mr. Foster's body, he defended there will be," said Neel I attimore, media coverage surrounding publication Insight, however, plunge of the Dow Jones industrial countries. news agencies such as Reuters for spokesman for Mrs. Clinton. The Washington Times SATURDAY, MARCH 12, 1994 Leach accuses White House of gagging regulators avoid its constitutional responsi- By Michael Hedges bilities." THE WASHINGTON TIMES The moderate Republican noted Rep. Jim Leach says the Clinton that congressional hearings dur- White House has "gagged" federal ing Watergate helped uncover new regulators who reported possible facts and that a recent Senate criminal impropriety to the Jus- hearing prompted Mr. Altman to tice Department in the White- admit for the first time that he and water-Madison affair. other Treasury officials had What's more. the Iowa Repub- briefed the White House on the lican said Whitewater-Madison RTC's probe of Madison Guaranty special counsel Robert B. Fiske Savings and Loan. Jr's efforts this week to delay con- Madison was owned by a former gressional hearings into the affair business partner of the Clintons', are having a "chilling effect" on and its failure cost taxpayers more the congressional process. than $50 million. Mr. Leach's comments, made in Mr. Leach. ranking GOP mem- a letter to Mr. Fiske released yes- ber of the House Banking Com- terday, were immediately de- mittee. added that he would read- nounced by the White House as a ily delay hearings for "a week or Republican attempt to score two" to let Mr. Fiske interview points against the Democratic ad- some 40 witnesses the Republican ministration. wants to question in a March 24 In his letter to Mr. Fiske, Mr. Banking Committee oversight Leach said he was "particularly hearing on the RTC. concerned that officials at the The RTC has declined to give Kansas City RTC [Resolution Mr. Leach documents he said he Trust Corp.] office are being needs to examine the Whitewater- gagged and possibly coerced by Madison matter. the RTC office in Washington." "Mr. Leach is an individual The RTC, which manages the member of Congress. He does not savings and loan cleanup, is inves- have the authority of the [Bank- tigating the failure of an Arkansas ing] committee," said Mr. Kat- thrift linked to President Clinton sanos, RTC spokesman. "As an in- and first lady Hillary Rodham dividual member of Congress. he Clinton. does not have the authority to look Steve Katsanos, spokesman for into any RTC file he wants to." the Washington RTC office, said: The White House quickly ac- "I have no idea what Mr. Leach is cused Mr. Leach of seeking to talking about." make political capital out of Jane Jankowski, spokeswoman Whitewater-Madison. "It's pretty for the RTC's office in Kansas City, clear that there's a very organized Mo., headquarters for the region effort on the Hill among the Re- publicans [to make] a political is- that includes Little Rock, Ark., sue out of this," said Clinton said: "We have no comment on the spokeswoman Dee Dee Myers. Leach letter." A simmering feud between Mr. Asked about the letter at a press Leach and Rep. Henry B. Gon- breakfast yesterday, Mr. Leach zalez. Texas Democrat and Bank- said: "I'm suggesting the White ing Committee chairman, erupted House very improperly intruded after Mr. Leach sent his letter to in this process." Mr. Fiske. He added that there was a "dis- Mr. Gonzalez sent a letter to the tinct possibility" that Mr. Clinton RTC, saying, "The Banking Com- has interfered in proceedings mittee is not conducting an inves- against himself. referring to meet- tigation of Madison Guaranty Sav- ings and Loan at this time." He ings between top White House added that Mr. Leach's request for aides and the RTC's acting direc- RTC documents wasn't supported tor. Deputy Treasury Secretary by House rules. Roger C. Altman. The Gonzalez letter prompted In his letter. Mr. Leach also said Mr. Leach to say it was "unprec- he is concerned that Mr. Fiske's edented" for one member of Con- "public lobbying of Congress has gress to tell a federal agency to had the effect of sending a chilling deny another member informa- precedent for the majority tion. party which controls the machin- Paul Bedard contributed to ery of Congress to delay: defer or this report. The Washington Times SATURDAY. MARCH 12. 1994 73 Can this operation be saved? By Rod Dreher THE WASHINGTON TIMES Is the Rose Law Firm's reputa- ington Times reported yesterday How should the Rose firm pro- tion being shredded by the con- that Mr. Hubbell's former Rose tect its reputation for the duration tinuing Whitewater-Madison af- partners are considering filing of the Whitewater-Madison inves- fair? ethics charges against him after tigation? A seasoned Washington Here's the word from Little an internal probe found that Mr. lawyer with experience in manag- Rock: Hubbell failed to document hun- ing crises offers the following ad- "Everybody's talking about the dreds of thousands of dollars in vice: allegations put forward. People expenses billed to clients. "Stick to your work. Don't do are kind of wondering if it's going The Clinton presidency should anything underhanded. Don't de- to survive as a firm," says Daryl have been a boon to Rose's reputa- stroy any files, for heaven's sake. Glascot, a lawyer. "Street talk is tion. Four of its senior partners Don't do anything that adds a ca- wondering if there's not going to including Mrs. Clinton, Mr. Hub- boose to the existing scandal train. be a bust-up in the firm." bell, Vincent W. Foster Jr. and Wil- Work hard at representing your Columnist John Brummett, liam Kennedy III - moved to clients." writing in Tuesday's editions of the Washington to take prominent Mr. McConnell agrees, to a Arkansas Democrat-Gazette, says roles in the new administration. point. "The problem is that, to Rose is being unfairly attacked for With influence like that, Rose some extent. [Rose] doesn't have shredding legal papers. Neverthe- whose business quadrupled in the control over the situation any- less, writes Mr. Brummett, the go-go 1980s - had reason to ex- more. They have the ability to do latest barrage of press reports on pect it to increase even more. their work and respond as is ap- the firm gives reason to suspect Instead, the firm has suffered propriate to inquiries. On the other that lawyers there are at odds with devastating setbacks, including hand, there are stories coming one another. the July 20 death of Mr. Foster, from all locations, founded or un- "A house divided against itself then White House deputy counsel. founded, and that makes it a dif- cannot stand," he writes. "One di- Mr. Foster's body was found in a ficult environment for them to vided against itself while under Virginia park in what U.S. Park deal in." front-page external attack might Police have said was a suicide. Without commenting specifi- spontaneously combust." There also have been accusa- cally on Rose, Harris Weinstein Dick Hatfield, a lawyer, says he tions of ethics violations dating who successfully prosecuted the takes press reports about mis- from Mrs. Clinton's days as senior government's 1992 S&L-related deeds at the Rose firm, where first partner - when she represented case against the New York firm lady Hillary Rodham Clinton and Madison before state banking reg- Kaye, Scholer says it is vital for ulators as well as the reports of Associate Attorney General Web- a law firm to maintain collegiality ster L. Hubbell were partners, overbilling and document shred- and internal trust among its part- "with a very large grain of salt." ding. ners in the face of criminal inves- Robert B. Fiske Jr., special Still, "it wouldn't sound good to me tigations. counsel in the Whitewater-Madi- if the FBI was looking into what I He doesn't think a public rela- son affair, has said he will investi- was doing." tions counteroffensive is possible. That's about as forthcoming as gate the Rose firm's role in the "Lawyers are at an inherent dis- matter. Little Rock lawyers get these days advantage in defending them- The firm's Washington office, on the subject of Rose. Aside from selves because of lawyer-client expressions of shock and dismay which senior partner Allen Bird II confidentiality." he says. "The in- at what is happening to the firm, opened in October, has had trouble formation needed for a full public most prefer to withhold comment. scaring up business, a source defense just can't be revealed." Controversies like those buffet- close to the operation says. Ms. Spaeth disagrees. She gives ing the Rose firm are a source of "The office is developing, per- the Rose firm low marks for worry and distraction to lawyers haps not at the pace I expected, but sounding "very defensive" in the within a firm, making daily work I feel very welcomed," Mr. Bird press and for being "way behind difficult, according to lawyers in told USA Today this week. He did the curve in understanding strate- both Little Rock and Washington. not return a phone call yesterday gic communication." for comment. "Even though it may be unfair, this kind of publicity probably Clearly, having White House- chills some people as they are Little Rock connections in the cur- looking at who they want to go to rent political climate is no advan- for counsel," says Washington law- tage. yer Bob McConnell. "The problem is not that the Ronald M. Clark, Rose's manag- Rose Law Firm is being investi- ing partner, did not respond to a gated. The issue is that this is a telephone inquiry. firm that absolutely flourished on Founded in 1820, the Rose Law their reputation for political savvy. Firm has long enjoyed a reputation It certainly doesn't look like there for legal skill and integrity. was much savvy there," says a top The legal corporation has been Washington lawyer with political dragged into the Whitewater- experience. Madison tempest because of re- Merrie Spaeth, a Dallas-based ports that it destroyed documents communications consultant who that may have shed light on the has counseled lawyers on improv- Clintons' involvement with Madi- ing their public image. says the son Guaranty Savings and Loan Rose firm faces problems "of Association and Whitewater De- enormous magnitude" concerning velopment Corp. relationships with clients. The firm's reputation took an- "The question you (as a client] other hit recently when it was re- ask yourself is 'What happened to vealed that it was conducting an their judgment?' They may be internal review of Mr. Hubbell's great for Little Rock, but they are billing practices. Rose is trying to out of their league in the big city." determine whether Mr. Hubbell overbilled clients, including the Federal Deposit Insurance Corp., during a 1989 case involving Madi- son. Mr. Hubbell has denied this. The crisis at the Rose firm ap- pears to be deepening. Citing a The Washington Times SATURDAY. MARCH 12, 1994 source inside the firm. The Wash- VV me fails to buck Whitewater off its back BY RANDY ULLESTON Democrat-Gazette Washington Bureau WASHINGTON - The Clin- ton administration made a few attempts in vain to get the na- Many major actions at the tional spotlight off the White- White House last week had at water affair last week but was least a tie to the Whitewater in- overwhelmed by developments. vestigation. Three administration offi- Clinton named Lloyd Cutler, cials - White House Communi- a respected Washington lawyer, cations Director Mark Gearan: as his new counsel after the res- Margaret Williams. first lady ignation March 5 of Bernard Hillary Rod- Nussbaum. Cutler's appoint- ham Clin- ton's chief of White ment is temporary. but he is ex- pected to help the president and staff; and House his staff deal with Whitewater Lisa Caputo. fallout. the first week in "I wanted a Lloyd Cutler type lady's press of lawyer. so I just decided I secretary - review would go to the original first and all testified see how I could do." Clinton Thursday be- said in announcing the ap- fore a federal grand jury in pointment. Washington. Republicans in both cham- That grand jury, at the direc- bers of Congress increased the tion of the Whitewater special pressure for Capitol hearings counsel. Robert Fiske Jr.. is in- despite Fiske's requests that vestigating contacts between ad- they wait. ministration officials and the Rep. James Leach, R-Iowa, Treasury Department while the senior minority member of Treasury was investigating the House Banking Committee, Madison Guaranty Savings & announced he wanted to bring Loan Association. The now- 40 witnesses with potential failed Arkansas S&L has ties to Whitewater ties to a committee Whitewater Development Corp., hearing later this month. a Northwest Arkansas land de- In the meantime. adminis- velopment firm the president tration officials waited for fur- and first lady entered into in the ther subpoenas from Fiske's of- late 1970s. fice. but those subpoenas had Three more administration not been issued by late in the officials. as well as three cur- week. rent and one former official of Clinton announced develop- Treasury. received permission ments on several items on his from Fiske to delay their ap- domestic agenda last week. in- pearances. That delay was al- cluding reform of the federal lowed to give them more time to unemployment insurance sys- consult with newly hired attor- tem and the announcement of neys. an economic summit in Miami. The grand jury appearances Meanwhile. Secretary of were among many Whitewater State Warren Christopher trav. developments during the week. eled to Asia. where he consult- virtually all of which placed the ed on economic issues with administration in an unfavor- Japan and China. able light. President Clinton answered questions about the controver- sy at two news conferences last week. including an unusually lengthy one Tuesday. - Again and again. Clinton said He had instructed his subpoe- pg135 naed aides to "tell the truth" and said the administration's New Your actions on Whitewater would be openly disclosed to investiga- TOTAL P ac 3/13 WHITEWATER: WHAT'S NEXT Just the facts, says D'Amato New Yest Republican Son Afforts D'Ammic is the COP's Senate point on because. Republicant the Senate Banking Committee passion Democrat-comtrolled hold one warry Re Friday by the Date Senate office in [o] Ban. D'Arate. how do 1 make "G assumption y:s sersuade the as we are 80.14 on whose icau publi the: the GOP call 10 fine place: for congressional hearings wanted to Could the Wattewer " notaing more than person new 1 can attack on a Democratic RTC con.roverby tring our President? twing LAIS matter the Cliston presidency' lol What will be the TEF. gel of your hearings He will And ce have Our initial thrust by the at the be nothing And Walle House Her. of the we facts c: inde- say that le De delighted a What the public's ad. van.sge in having Ir 11# handling of the |or| If you could ask H1 Redham gress.com. hearings raiher 10 C than Just have Whitewater do special coursel Moderi F.ske DECL the White House has conduct 3:1 probe been or just inept? You would have have nan A nied Clai for the Congress asking for rdve the of that are No. 2 But say be to Magage A Mrs. 01 staff done for the President ane the that the in grand was taking have (Depats place. Wrst Roger Do you suspect that the d.o the If Clinicas have commit. not : any crimes in this eftair ⑉ : have the Resplation Corp. A certainly don't have 01 Having had your anv of any. come but certainly attack, to are you Y% nons ane allegations as for the nave earned of be reuted through the Clintons the secret 0.0 10 those hearings leve to find ow: There B"2 a What in :RC end du yes alegations c. shredding (&) ng to expect to find? Millary Rodham Cinica ... New York New york News FOLLOWING THE TRAIL OF WHITEWATER A real estate deal struck 16 years ago in Arkansas is creating a legal, ethical and political mess for President Clinton and his wife, Hillary Rodham Clinton. What's happened so far: What is Whitewater? IN ARKANSAS IN WASHINGTON McDougal owned a A cover up? financially shaky S&L that was ehut down in 1989. Missing facts and records Investigators wondered make conclusions difficult: why It cadn't ahut sooner. Clinion and state officials RESORT Whitewater files in White House deny they protected lawyer Vincent Cliston's friend and Foster's office partner. Here's why some are withheld from people doubt them: JM HILLARY BILL police McDOUGAL CLINTON CLINTON investigating his of A 230-acre real estate venture in apparent sucide. the Arkansas mountains. In 1978. McDougale say they gave Bill and Milliary Clinton knowledge partnership with Little Rock friends James and Susan McDougal to buy and develop the land. The project falled; Clintons sold their share for ,000 in 1992. The growing problems S&L RESORT Special Legal counsel investigating S&L ELECT BILL Whitewater dealings Justice Dept. investigating S&L collapse Alleged shredding of files may be obstruction of justice Republicans Political demanding congressional hearings RD welfare reform, crime Ethical BILL: bank Clintons on the may $47-million defensive: reputations. credibility tarnished Hillary with S&L regulator named Rodham Clinton's by husband questionable Sources Kreght-Ridder Washington correspondent Frank Grave news reports Knight-Ridder Tribune/JEFF DIONISE and JUDY TREIBLE What is Madison Guaranty? By ELLEN DEBENPORT Times Political Editor Madison Guaranty was a mom- and-pop thrift bought in 1982 by James McDougal. a political wheel- er-dealer and friend of then-Gov. Bill Clinton's. By 1984, federal regulators be- gan to question loans made to McDougal's friends. pras other risky ventures. In 1986, the feds threw out McDougal, and in 1989, they sbut down the S&L at a $47- million loss to taxpayers. Bill and Hillary Clinton became involved in different ways. Had Madison's books been ad- justed to show real profits instead of inflated profits, federal examin- ers said, the S&L would have been 120 insolvent as early as 1984. Under state law, the securities commis- ROSE LAW FIRM sioner was supposed to shut down any insolvent institution. Clinton, who knew Madison was in trouble, appointed a new securi- ties commissioner in January 1985. Beveriy Bassett Schaffer, whose law firm had been representing Madison, said she didn't think the feds' findings were proof of insol- vency and kept Madison open. About the same time, Clinton stopped by Madison Guaranty on one of his jogs through Little Rock and complained to McDougal about being broke. McDougal says he immediately put Hillary Rodham Clinton's firm, the Rose Law Firm in Little Rock. Photo JOHN c. SYKES JR. on retainer for $2,000 a month to James McDougal at one time had Hillary Rodham Clinton's help out. firm, the Rose Law Firm, on retainer for $2,000 a month. Hillary Rodham Clinton pre- pared plans to keep Madison open. recover what they could for tax- Development Corp. plans that were approved by Schaf- payers in 1989. hired the Rose Law There's evidence that $12,000 fer, the new securities commission- Firm to help theru. Investigators from Madison Guaranty ended up er. will decide whether that was a con- with Clinton's 1984 campaign, but Schaffer and Clinton say Madi- flict of interest for Rose. that alone doesn't prove wrongdo- SOC received NO special treatment. But mainly. investigators are ing. Investigators also want to Hillary says her involvement was checking to see whether deposi- know whether state-regulated minimal. Schaffer eventually ap- tors' money from the S&L was Madison Guaranty got special proved the shutdown of the S&L. diverted into Clinton's campaign treatment while Clinton was gover- Federal regulators, trying to accounts or into the Whitewater nor. 129 SPT What is In 1985. Whitewater traded its unsold land in the Ozarks to a real Whitewater? estate agent, Chris Wade. in return for a $35,000 airplane. Wade agreed to repay $35,000 of the $100,000 By ELLEN DEBENPORT that Whitewater still owed for the Times Palitical Editor land. It started as a deal among When Whitewater first came up friends. Bill and Hillary Rodham during the 1992 campaign. Clinton Clinton got together in 1978 with said he and Hillary had lost about James and Susan McDougal to buy $25,000. Then they hired a Denver 230 acres in the gorgeous Arkansas accounting firm that concluded the Ozarks. The idea was to sell parcels McDougals lost $92,200 and the to retirees who were then flooding Clintons $68,800. Arkansas. No supporting documents have The foursome borrowed all been released. McDougal says the $203,000 to buy the land. Chintons lost far less. In 1979, during Clinton's first The Clintons sold their White- term as governor, the couples water share to McDougal in 1992 formed the Whitewater Develop- for $1,000. Vincent Foster was the ment Co. and transferred the land to Clintons' lawyer for the sale. it. The Clintons were responsible for half the debt and entitled to half . the profits. Two other items of note: The land sold slowly - only a - In 1986 when Madison Guar- few houses are up there now - anty was in trouble, Susan McDou- because interest rates were high gal's marketing firm was granted a and recession bit in the early '80s, $300,000 small business loan - Clinton says. backed by federal tax money - Details are difficult to pin down. from a mao named David Hale, a Some records are missing, and the former municipal judge in Little Clintons have refused to make oth- Rock. Hale" could finance loans for era public. disadvantaged entrepreneurs and McDougal's lawyer says justified Mrs. McDougal's loan be- McDougal invested another cause she was female. Now Hale $46,000 in roads, surveying and says he was pressured by Clinton subdividing the land. and McDougal to grant the loan to White House aide Bruce Lindsey "clean up' Madison Guaranty's says the Clintons paid $22,000 on books before regulators saw them. the bank loan in 1978 and 1979. Clinton and McDougal deny it. The They have not released documents loan was never repaid. Hale has to show this. been charged with defrauding the To try to spur sales in 1981, Small Business Administration. Hillary Rodham Clinton bought a mode! house to put 00 one of the . Later in 1986, Whitewater lots. She borrowed $30,000 for it bought a $550,000 parcel of land from Kingston Bank and Trust, a from the International Paper Co. little bank owned by McDougal. The McDougal says the Clintons knew loan was in her name, but Whitewa- nothing about it. Apparently the ter made the payments. The Clin- $110,000 down payment came out tons have acknowledged that they of that $300,000 loan to Susan improperly deducted the interest on McDougal. Two months later, the that loan from their income taxes. land was transferred to another No land"was sold in 1983 and McDougal-related entity, which de- 1984. As debts piled up, McDougal, faulted. International Paper sued to who by this time owned Madison get the land back. Guaranty S&L in Little Rock. began shuffling money from his other ven- tures to pay for Whitewater. He denies using any S&L depositors' money, however. Whitewater overdrew its ac- count at Madison Guaranty, one of many companies to do so. The Washington Post quoted unnamed sources saying the Whitewater overdrafts amounted to $60,000 in 128 one six-month period. The money went to McDougal and to pay off loans at a bank where Whitewater and the Clinton campaign had bor- rowed money. SFT The grand jury convened. Congress wrestled over whether to hold hearings. The Clintons planned to take their case to TV. And the president blew up at the media frenzy. Last week, Whitewater hit the boiling point. Clintons to defend themselves on TV From staN and wire reports WASHINGTON - Amid mounting calls for first lady Title's the same, Hillary Rodham Clinton to speak out on Whitewater, the but job's different White House is making plans Lawrence Walsh. the Iran- for her and President Clinton- Contra prosecutor. held the to appear on at least one same title Robert Fiske Jr. prime-time television news does now: special counsel. magazine show. But Walsh's post was a cre- Until now, Hillary Clinton ation of Congress, under a law has been consistently silent on since expired. and he report- the Whitewater issue. But she ed to a special three-judge gave interviews to several panel of the U.S. Court of Ap- weekly news magazines Satur- peals in Washington. day. and White House press Fiske. conversely, serves secretary Dee Dee Myers con- as an arm of the executive firmed that the Clintons prob- Associated Press branch. under Attorney Gen- ably will give a joint network IN PURSUIT Reporters swarm special counsel Robert Fiske Jr. Thursday. eral Janet Reno. but he has TV interview this week. extracted from Reno a char- Myers told that to two about an international jobs itated, wagged his finger in ad- ter that gives him as much lat- Knight-Ridder News Service conference he is sponsoring to- monishment. The news,media itude as Walsh had. reporters after President Clin- day in Detroit but there are in a "frenty" over White- Walsh spent more than $40 on angrily cut short an Oval was a sharp change bear- water, making unreasonable million and seven years on Office interview with them. ing at the first Whitewater the Iran-Contra case but got The news service reported question. Shifting to the edge of his Fiske no convictions of major Bush administration figures impli- hat Clinton sat calmly and seat, the president, visibly ag- cated in the scandal. alked quietly for 15 minutes Continued from Page 1A demands, distorting the truth an aggressive one, with a rapid and fomenting dangerous pub- series of subpoenas if needed. lic cynicism about government, Fiske subpoenaed 10 admin- he complained. istration officials only davs af- As he stood to end the inter. ter disclosures of White House view, Clinton was asked whether meetings with Treasury De- he would make public his tax partment officials investigating returns from 1978 and 1979, Whitewater. Those still to testi- which could reveal information fy include senior adviser Bruce about his investment in the Lindsey, an Arkansan and long- Arkansas real estate deal at the time close friend of the presi- root of the Whitewater contro- dent. versy. On Friday, the Treasury De. His face reddening, Clinton partment surrendered 3,700 said he has given all relevant fl- pages of subpoenaed documents nancial records to special coun- describing contacts with the sel Robert Fiske Jr., and that le- White House and other federal gal procedure now prohibits agencies regarding its investi- him from releasing the records gation of Whitewater. to the public. But there was good news for He argued that there is no ev- the White House when Hou idence that be did anything Banking Committee chairman wrong, "not one credible charge. Henry Gonzalez, D-Texas. id The burden is always on us. and he would block a Republican at- I have discharged that burden. I tempt to raise Whitewater at a have a special counsel. and I am March 24 hearing on the over- trying to let that person do his sight of the Resolution Trust job. And I wish the American Corp. news media would. and let us go While President Clinton de- back to the work of being presi- voted two lengthy news confer- dent." ences to Whitewater last week. "You've set a real precedent Hillary Clinton has found her- now." Clinton fumed. "Every self in an awkward position. president from now on, every Since the beginning of the ad- new president. you're going to ministration, she has sought to have to go back 15 years before limit the kind of publicity she they ran for president and dig receives. into everything. "And if somebody just asks a question, then you'll have to ask for a special counsel. Is that what we're going to do? We did it in this case. Now let it hap- pen. That's my answer." His jaw clenched. Clinton 127 ended the interview. strode past the two reporters without shak- ing hands and stood behind his Oval Office desk until they were escorted out. The incident reflects the mood of the White House after a week in which three top admin- istration aides testified before SPT a federal grand jury about Whitewater. Fiske has made his position clear: The investigation will be Whitewater: What's it all about? By ELLEN DEBENPORT Times Political Editor Analysis saying. "I haven't done anything wrong." Nor has Hillary, he adds. All anyone knows for sure about Why should you care about They talk as if Whitewater were a ter- Whitewater is that Bill and Hillary Clin- Whitewater? 13A rible nuisance that diverts them from ton bought some land with a friend in Profiles of all the players involved saving the world. 1978 and say they lost money. in the scandal. 13A But Clinton's character is in doubt The deal became complicated again. Americans remember time after because their friend, James McDougal, thing awful to hide. time when the truth had to be dragged owned a savings and loan that col- For months, the president wouldn't out of him - about avoiding the Viet- lapsed, like so many in the 1980s. release documents and wouldn't agree nam draft, for example. Clinton is not Investigators have plenty of suspi- to a special investigator. Clinton not known for candor when he's cornered. cions about the way McDougal handled only refused to explain Whitewater but llis reflex is to stonewall. S&L money. And they want to know left his spokespeople clueless, unable to Hillary Redham Since Christmas, however, Clinton President Clinton whether Clinton benefited somehow. Clinton might be the defend him with any facts. has turned over files to investigators, keeps saying: "I That's the simple part. Democrats dared not rush to his side. most hurt by making sure they remained sealed from haven't done Whitewater. She What has made Whitewater seem SO They didn't know what was under this the public, and has agreed to a special anything wrong." But handled the couple's sinister is the furious outcry from the rock. Still don't counsel H he did break laws investments, and the White House, the righteous indignation To date, Cinton has not formally been Last week, he answered some ques- back in Little Rock It lawyers involved are and whining whenever questions are accused of any criminal act, any ethical tions about Whitewater and urged could damage his her friends. asked, the mysterious files and secret breach, any wrongdoing involving presidency. meetings, as if the Clintons had some- Whitewater. And that's what he keeps Please see WHITEWATER 13A Vhitewater from 1A tryone at the White House to perate with the special counsel 1 Congress. "We're not covering Kp." Clin- 1 said. "We're opening up." Whitewater The Whitewater story has two parts, the first in Arkansas and the next in Washington. Arkanses 1978: The Clintons and the McDougals were fast friends. Bill Clinton was a 32-year-old whis kid with hair curling over his cara. He was Arkansas attorney general and a shoo-in to become the nation's youngest governor that November. His wife was Hillary Rodham, a Seminist flower child with frizzy small towns. S&L funds to Clinton. brown hair and enormous glasses. In 1982, McDougal bought a "Why should I 'divert' it when I She had just joined the Rose Law tiny savings and loan, Madison owned the controlling interest (in Firm in Little Rock, a firm with Guaranty, in rural east Arkansas. Madison Guaranty) and I could prestige and political connections. The next year be opened a branch merely have walked back and said Clinton had made friends a de- in Little Rock, and the boom was to one of the bookkeepers to write ade earlier with James McDougal, on. me a check and mark it 'bonua?' I man six years older, when they be told the Washington Post last McDougal became a high roller. both worked for Arkansas Sen. J. fall. wheeling around town in a baby William Fulbright. The buddies When the feds finally threw blue Bentley. Susan McDougal lived and breathed politics. McDou- McDougal out of the S&L in 1986, marketed the S&L and develop- gal even cocked his long cigarette ments like Whitewater. She ap- be had 3 stroke and was hospital- older like his hero, FDR. ized as a manic depressive. He peared in one TV commercial her- McDougal's wife. Susan, was a recovered in time to stand trial for self, wearing hotpants and riding a strong feminist and businesswom- white horse. bank traud in 1990 and was acquit- an like Hillary or a bubble-headed ted. Flash and cash. One writer ambo, depending on which version Meantime, the government x the story you hear. The bubble- called them the Donald and Ivana shut down Madison Guaranty for head version comes mostly from Trump of Little Rock. good in 1989 at a loss to taxpayers Susan, who paints herself as , of $47 million. vide-eyed kid along for the ride. Awash in cash As for Whitewater, no one can las was 23 when Whitewater say exactly what happened. Re- tarted. Trouble was, Susan McDougal cords are missing, and memories A couple of months before Clin- said in 30 interview last year, nel- differ sharply. - was elected governor, the four ther of them bad a bead for busi- When Whitewater was first # them bought 230 acres of land in sees. "We were the worst paper mentioned by the New York Times to Orarks about three hours north organisers in America." in 1992, the Clintons hired an audi- tor who concluded they had lost of Little Rock. The lots overlooked That's exactly what S&L inves- $68,800. But they have never re- be junction of Crooked Creek and tigators found when they took their leased any documents to show what the White River, a place they first shocked look at Madison Guar- they paid or what they lost, and hought was ideal for retirees to anty in 1984. The place was awash they never took a loss on their wild homes. in cash. Property was bought with- income taxes. They paid $203,000. borrowing out appraisale. Bomeses and com- The Clintons sold their White- every peany. It wasn't hard. missions were awarded before water share to McDougal in 1992 McDougal had some personal mon- sales were made. Easy credit was for $1,000. 7 to back it up, and Clinton was available to politicians and McDou- The couples' friendship was about to become governor. gal's friends. long since dead. They had grown "You bring in one of these poli- All this time, the governor of distant as the Clintons rose politi- ticlase just to use their name." Arkansas let James McDougal cally and the McDougals' lives fell Steven Sanders. who was then a oversee their investment in the apart. bank director, told the New York Ozarks. McDougal had occasional Times last month. "You say, 'Ob, assists from Hillary Clinton, who the governor's involved in this handled the family money. (Arkan- Washington teal." saa reporters say Clinton's eyes That wasn't the end the sto- McDougal said he was doing his glase over when talk turns to busi- is. young friende I favor. Clinton ness.) Investigators from the Resolu- would make only $35,000 a year as Whitewater never flourished. tion Trust Corp., which sorts out all governor. The retirees didn't arrive. Instead, the failed S&Ls, said in 1992 that "I wanted to make them some interest rates went up, and a bad they had found evidence of criminal money," McDougal told the Wash- recession bit in the early 1980s. wrongdoing at Madison Guaranty. ingion Post in October. "I knew if One of the things investigators The RTC handles only civil they were going to buid anything, they needed to make some." still want to know is whether matters, 30 it asked the Justice They called their four-person McDougal illegally used deposi- Department to explore criminal tors' money from his S&L to keep charges. But in 1992, nobody corporation Whitewater Develop- mest. The lots for sale were White- Whitewater aflost. He says be would touch it. President Bush was pg 175 ater Estates. didn't. still in office, running against Clin- ton. Too hot politically. Clinton put McDougal in his They also want to know wheth- Clinton had been in office six 1 cabinet as director of econom- er McDougal funneled S&L money months when his boybood friend, development, but McDougal to his political cronies, including Vincent Foster, the deputy White X left to buy the tiny Bank of Clinton. To be sure, McDougal House counsel. apparently killed ngstom in Kingston, Ark. He helped with fund raising. himself in a Virginia park on July SPT sn't leaving politics. For his 1984 campaign, Clinton 20, 1993. In Arkansas, where the popula- borrowed $50,000 at another bank. Two days later, the Clintons' SUN a is only slightly larger than the McDougal later hosted a fund-raie- Whitewater file was secretly re- mps Bay area, bankers are en- er at the S&L to help Clinton pay it moved from Foster's office by Ber- wield L They I $30,000. Bet nard Nussbaum, the White H 3/13 with politi especially in 1 McDougal says never diverted counsel and a C. fi 1 of Hilla- cluding Roger Altman, who beads RTC. Now, it is not unusual for law- Why should yers to try to find out what the other side has against their clienta. you care? But when such questions come from the White House, it could be . Because work in the na- construed as tampering. tion's Capitol will come to a Nussbaum, the top White halt until it is settled. House lawyer, was involved in a Because if Clinton broke three such meetings. Time out laws or cut ethical corners aides were blabbing about it on the back in Little Rock, it could phone and in the hallways too. damage his presidency. Nussbaura took the fill for it. Because Hillary Rod- He lost bis job March 5. ham Clinton might be the Three of 10 people involved in most hurt by Whitewater. those gabfests the Whitewater She handled the couple's in- 10 appeared Thursday before a vestments, and the lawyers grand jury in Washington Others involved are her friends. were granted postponemests. Because it's a chance to No one involved in the meet- see top officials in action as ings has suggested that the White they investigate the matter House tried to stop the investign- or respond to inquiries. tion or to convince the RTC or Character is on display. Po- Justice to back off. Eves so, the litical reputations could be ry's. Noasbaum turned over the file subject of a criminal investigation made or destroyed. Elec- to the Clinton's personal lawyer. isn't supposed to know head of tions are coming up in the There has been 00 evidence time. fall at Foster's death was related to It's still not clear wha: Clinton . Because even if White- Whitewater. It wasn't an issue at knew and when be knew i. water turns out to be noth- the time. The U.S. Park Police, Clinton says he didr't know ing. it's a chance to study the who investigated the death, say no about the meetings between his workings of the press and of one they interviewed mentioned own staff and the Treasury Depart- partisanship in Washington. Whitewater. ment, although Mack McLarty, the h has the fascination of a And yet chief of staff, says his office ar- train wreck. The sudden death. The myste- ranged one meeting. nous file. Did Foster foresee the Clinton also says be didn't know political eruption? His death has about the RTC's request for a crim- become part of the Whitewater inal investigation of Madimn Guar- The obvious mystery. anty before it was made On 8, but be did bear about it before it be- The RTC came back on Oct. 8. came public. questions 1993, to ask again for a criminal investigation at Madison Guaranty. Then there's the shreeding. These are some of the ob- The Clintons were named - not At the Rose Law Firm in Little vious questions facing inves- accused, but named as possible Rock. where Hillary Rode beneficiaries of criminal actions. worked with Vincent Forter and on Whitewater: The investigation ended up in the others sow in the stration, . Did depositors' money hands of three longtime Justice De- two couriers any they were ordered from Madison Guaranty partment lawyers. to shred a box of Foster's files in S&L illegally end up in Clin- January, after the special prosecu- That was fine with=Attorney ton's campaign accounts? If tor: said be would restigate General Janet Reno, and ahe re- so, did be know it? Foster's death. They asid they sisted Republican demands to bring didn't see anything about Whitewe- . Was depositors' money in a special counsel. Her reasoning ter. from Madison Guaranty ille- was this: The Justice lawyers had Apparently the Rose firm has pity diverted to keep the worked through many administra- Whitewater Development tions of different political parties, been OR a skredding spree since Corp. afloat? If so, did the Clinton announced be wou run for whereas a special counsel would be Clintons know it? president. They shred daily to pro- Remo's appointee and could be ac- tect cheats' privacy, they say. . Did Madison Guaranty, cused of playing politics. Keeps reporters out of the trash, a state-regulated S&L, re- The Clintons also resisted a they say. ceive any special treatment special counsel until political pres- Shredding soared after Chaton while Chnton was governor? sure overwhelmed them. In Janu- was elected. Rose skredd ed bones . Was any money made in ary, Reno appointed Robert Finke, of files belonging to Hillary Clinton the Whitewater Develop- a Republican lawyer from Wall and the partners she took to Wash- ment Corp.? Who paid, who Street. ington Foster, Webster: Hubbell lost? Among his tasks: and William H. Kennedy III. a What's in the Whitewa- ter files taken from Vincent To learn whether depositors' Far from over Foster's office? money from Madison Guaranty ille- gally benefited Clinton or Whitewa- # What was in the files ter. Whitewater im't goings away. shredded at the Rose Law Fiske, the special counsel, vill Firm? . To learn whether Clinton or state regulators did favors for the be rounding up documents and wit- # What's in 10 boxes of S&L. nesses for the foreseeable future. documents that Clinton He will have grand juries. working turned over to the special . To learn whether Vincent Foster really killed himself. That's in Little Rock and Washington. counsel? why, after all these months, it has The Republicans in (Congress . Did White House and suddenly become an "alleged sui- have found a way to air this, too. Treasury staff violate any Twice a year. the House Banking laws or ethics rules by cide." Committee has a hearing to review talking about the Madison Pg12 the S&L bailout. and Regublicans Guaranty investigation? Did The handling hope to turn the March 246 hearing Clinton know about the into a full-blown Whitewatter irves- talke? Did he secretly order The most damaging part of tigation. them? Whitewater so far IS the White They have already named 40 - When did Clinton find House's handling of it. people they want as witnesses, out be would be mentioned Even before the Oct. 8 request starting with James and Susan in a request for a criminal in- for a criminal investigation, the McDougal. vestigation of Madison Guar- SPT White House was keeping tabs on Fiske. meanwhile, says be anty? the RTC. investigation of Madison might do what no proseecutor in Did Vincent Foster real-. Guaranty. White House aides met history has done: put the president ty bill himself Why? And if with officials of the Treasury De- of the United States under oath partment, which oversees RTC. in- bccl gr!) start a I questions. MOVIES Gary Arnold Haunting lines connect 'Firm' and the novel, screenwriters Robert A memorable whisper is ex may now find them- Towne and David Rayfiel had in- changed between Mitch indefinitely, by troduced the billings issue as a Abby in the film, but in this a to Whitewater points of convergence be tactical weapon for hero Mitch it's him warning her that 1 the fictional plot of "The McDeere. Struggling to extricate has bugged their Firm-finance and the tangled web of sus- himself from the Bendini mess and furnished home. It would and-conjecture that Tink (and escape Bendini execution) creepy if this kind of whisperi he People's Choice Madison Guaranty Savings, the without becoming a government had to become commonplace i T Awards may need to sur- Whitewater Development Corp., snitch, resigned to a lifetime in the White House for the durat vive a few more decades the Rose Law Firm and the tragic hiding, Mitch realizes that Ben- of the Whitewater investigatio to rival the prestige once death of Rose partner and Clin- dini has been overbilling clients However, if you're a movie enjoyed by the annual Photoplay with intimate Vincent Foster. systematically. He hoards evi- person, it's difficult to resist th or Look Magazine awards. Never- The clincher would be evi- dence of this cavalier malprac- impression that the Clintons' theless, I was surprised and in- dence of foul play in Foster's tice as part of an elaborate get- reputation may hinge on which trigued when the movie version death, adding a grisly criminal away scheme. McDeeres they end up resem- of "The Firm" out-polled all com- twist to the real-life mystery. The pivotal line of the movie bling most when this controve ers as the most popular dramatic The first obvious change is the was entrusted to Steven Hill as and its mysteries are resolved. film of 1993. connotation of the title itself. Voyles, the Justice Department Will it be the fundamentally m Why surprised? Because "The "The Firm" now brings to mind official who puts Mitch's limited cenary, self-serving McDeeres Firm" was the respectable Holly- not Bendini, Lambert & Locke, options in stark relief: "Your life imagined by novelist Gr am wood picture shortchanged most the sinister Memphis law firm as you know it is over." In the con- the fundamentally honest, gall conspicuously in preliminary bal- that imperiled its youngest asso- text of the film that blunt state- McDeeres portrayed by Tom loting for the Academy Awards. ciate, Mitch McDeere, portrayed ment meant the following: Agree Cruise and Jeanne Tripplehorn With the imposing exception of in Sydney Pollack's admirable to cooperate with the feds or go It's a pretty clear-cut choice "Schindler's List." the strongest movie version by Tom Cruise. down with the Bendini ship when ethical and -ntimental terms. Hollywood movie of 1993 was The term is now synomous with we torpedo it. be interested in seeing how thi: "The Firm." the Rose Law Firm of Little The real-life connotations for plot turns out, but I suspect the It certainly deserved nomina- Rock, formerly adorned by Hil- anyone at risk of disgrace or The Firm" can already be reli tions that failed to materialize in lary Rodham Clinton. presecution as a result of the upon as a suggestive, in- several major categories, so I Let me hasten to explain that I Whitewater probes will be just as dispensable blueprint. was gratified to see an irksome am not equating the infamous Oscar oversight corrected from and fictitious Bendini revealed ominous. The lives they knew who an unexpected, nonpro quarter. to be a Mafia front by FBI agents be radically altered. Not that the movie's popularity who attempt to recruit Mitch as Power brokers and Bright had ever been in doubt. It was the an informant with the real and Young Assistants will need all third biggest blockbuster thriller legit but now eminently notorious their ingenuity and tenacity in of the summer, outdrawn by only Rose. It has simply happened. self-defense. More power to them "Jurassic Park" and "The Fugi- If they can escape calamity as as- tive." Moreover, I had seen the Say "The Firm" now and Rose tutely and honorably as the Mitch in the film, whose line of defense movie with three different full dini. springs to mind faster than Ben- was considerably improved by houses in three different theaters The association would have screenwriters Towne and Rayfiel; and could testify to its consis- had no currency outside Little the movie Mitch is permitted see FIRM, page D4 Rock when the John Grisham several heroic alternatives to the best seller was new in 1991. It mercenary slipperiness of Mr. Grisham's literary Mitch. wasn't a foregone conclusion when the movie was in theatrical I would guess that the trust Tom Cruise's Mitch decides to tently gripping effect. circulation last summer and fall, People is. the movie commu- even though the Rose Law Firm place in the law, despite finding had become a recognizable name himself at severe legal risk, nity are often weirdly oblivious to might stand some Whitewater Hollywood professionalism when to the public at large. Things are different as of March 1994. principals in good stead. "It's it stares them in the face; they of- ten prefer polemical pretension The billings parallel surfaced strange," he confides to his su- and hysteria in some exotic guise, only a week ago. The publication perb wife, Abby, played by such as the overwrought "In the in The Washington Times of bill- Jeanne Tripplehorn, "but if we ing records from Webster Hub- follow the law, it just might save Name of the Father" from the us." British Isles. bell, the third-ranking official at This is one of several lines Why intrigued? Because I'd the Justice Department, while apparently toiling on a Madison that register with disarming im- taken a look at "The Firm" on pact in the movie, and I recom- video recently and noticed some- Guaranty case in his Rose days couldn't help but startie con- mend its wisdom to anyone thing different about the movie. A supplementary topical dimen- firmed moviegoers. All those caught up in serious trouble. hourly totals adding up to a There were certain moments sion has emerged to enhance the movie's melodramatic interest. $20,000 fee. Inevitably, the list re- in the movie that evoked some- As an unintended consequence of sembled some of the doc- thing that passed between Hil- the Clinton administration's umentation invented for the lary and Bill Clinton during the movie. inaugural festivities. I can't re- Whitewater woes, "The Firm" has In tinkering with the plot of member exactly what the occa- acquired fresh fascination. sion was, but the first lady whis- >It now looks like a possibly pered something in her husband's historic fable about how to elude ear while millions of us were a compromising and potentially watching. ruinous association with a law Assuming you value the mari- firm where, shall we say, skel- tal bond and had no particular etons have begun to crowd the reason to wish misfortune on the closets. Clintons, it was satisfying to imagine that her confidence might have anticipated the stir- ring reconciliation scene at the conclusion of "The Firm," when Abby assures Mitch that he's kept his trust and their marriage is whole again. Totally presumptuous, of course, but it felt nice to feel that way about the first couple. The parallels are spotty, of course. In actuality it's the wife rather 119 than the husband who has a Curse of the Firm to finesse or transcend. SUNDAY, MARCH 13, 1994 The Washington Times C ARENCE PAGE Whitewater rafting 108 OUR P resident Clinton sounded memory lapses about what they properly noble as he came did during the go-go years, and in out swinging, thumping the White House, it doesn't sound his podium, in defense of quite as forgivable. After all, the his wife's ethics. Clintons are supposed to be smart. "I [thump, thump] have never They're yuppies. They went to known a person [thump, thump] Yale! with a stronger (thump) sense of Beltway wisdom has turned right [thump] and wrong [thump] against Bill and Hill. Especially in my life ever [thump!], he said Hill. The feeding frenzy is on. "Is In a Monday press conference. "I She a Political Liability?" asked a do not believe for a moment headline on a Michael Barone col- [thump] that she has done any- umn in last week's U.S.News & SUNDAY, 13, 1994 The Washington Times thing [thump] wrong." World Report. "At Center of Em- the administration - Bernard But what, the nation wonders, Maybe, maybe not. Unfortu- barrassing Ethical Issues," says Nussbaum, who was forced to re- will this mean for health care, Hil- nately, it is not just her honesty the subhead on a Page One Mau- sign after causing more damage lary Clinton's pet issue? Nothing and integrity that have come un- reen Dowd story in Sunday's New than he controlled; Vince Foster, good, I'm afraid. Tbo complicated der question lately. As Michael Du- York Times. who committed suicide last sum- to please the left or the right, the kakis once famously said, it is her TV talk host John McLaughlin mer; and Assistant Attorney Gen- Clinton plan will be lucky to re- competence. Recent Whitewater speculates as to whether the next eral Webster Hubbell, whom Rose main as more than a shadow of its developments have put Hillary White House resignation might be is investigating for possibly over- former self, and that's probably Rodham Clinton in an awkward po- the first lady. "Hillary to the Pil- billing. clients and misusing just as well At least they opened sition: She either looks remark- lary!" shouts a headline on a Mon- money. up the debate. Now maybe we can ably unethical or remarkably ig- day story in The Washington Post It is important to note and per- get something leaner and cleaner norant. about the sudden anti-Hillary smitthat, last time that won't be so difficult for folks Neither position is very flatter- backlash. Oh, fickle, fickle media. I checked, the Clintons have not to understand. ing to a woman The Washington How begrudging we are to talk not beth charged with anything more On top of this, just when Bill Post said was "replacing Madonna of the good news on the Clinton than penny-ante breaches of eth- Clinton's embarrassing kid as our leading cult figure" only a watch: unemployment down, in- ics, the sort of breaches 80 compli- brother, Roger, was learning how few months ago. terest rates down, inflation down, cated that One's eyes quickly glaze to lower his profile, Hillary's em- MARCH The last president in such a pre- consumer confidence up. over when one tries to sort it all barrassing kid brother, Hugh Rod- dicament was Ronald Reagan dur- Why, ask the Clintonites, don't out. ham, jumps up and trades on his ing the Iran-Contra scandal. Given we report that? The economy is But that's why we have an op- family name to run a long-shot bid the choice, Mr. Reagan chose to be what Americans really care about. posing party. The Clintons have for the U.S. Senate in Florida. perceived as ignorant. Amazingly, Still, one cannot help but think unwittingly opened a big door of How appropriate. For reasons few people were willing to argue, the Clintons brought this somehow opportunity to Republicans who no one has been able to explain, as if it was somehow unpatriotic or on themselves. Somewhere along already are peeved that their hot- embarrassing brothers seem to downright disrespectful to hold the line, the Woodstock children test hot-button issues crime and come with the job of being pres- him accountable for what went on turned into Reagan babies, the welfare reform - have been ident. Now that we have a co- in his own administration. very stereotype of yuppie ambi- appropriated by Bill Clinton and president, as Bill once called Hill, When Mr. Reagan said, "I don't tion Bill Clinton knocked so vigor- that they haven't got a clue as to we have two embarrassing broth- recall" more than 100 times dur- ously during his election cam- how to respond in any unified way ers. ing the criminal trial of his aide, paign and Hillary Clinton knocked to the nation's health insurance Cheer up. Maybe our next près- John Poindexter, it sounded per- just as vigorously, if a bit less elo- crisis. Suddenly, the Grand Old ident will be an unmarried only fectly plausible. Some of us won- quently, in her speeches about the Party is having a grand old time child. dered whether he even remem- "politics of mear ing." riding the Whitewater raft. bered being president. Suddenly, Mrs. Clinton is en- Yes, Reaganauts, you, too, can But now that the bright young, meshed in controversy along with stop worrying and love the special Clarence Page is a nationally yuppie Clintons also are showing the three lawyers she brought into prosecutor law. syndicated columnist. SUNDAY, MARCH 13, 1994 The Washington Times D' Amato urges Clinton to fire 2, denies he's seeking a 'payback' publicans will force a vote on hold- By Joyce Price THE WASHINGTON TIMES ing hearings "if we continue to be stonewalled by the Democrats." Sen. Alfonse M. D'Amato said Mr. D'Amato said public opinion yesterday that Senate Republicans supports his calls for congres- will block administration appoint- sional inquiries. Constituents are ments if Democrats block con- backing his efforts by a margin of gressional hearings into the 2 to 1, he said. Whitewater-Madison affair. Moreover, he denied sugges- Mr. D'Amato, a New York Re- tions by some critics that his cam- publican who has often called for paign for hearings on Whitewater- hearings, also said two adminis- Madison amount to a "payback" tration officials - Deputy Trea- for investigations conducted into sury Secretary Roger C. Altman some of his past activities. and Treasury general counsel "That's silly," the GOP senator Jean Hanson should be fired for said. "The fact is, what I have briefing White House aides on a attempting to do is to get the facts. Resolution Trust Corp. (RTC) in- It has nothing to do with quiry in which President Clinton back." was named. If the Senate does hold hear- In Senate testimony last month, ings on Whitewater-Madison, Mr. Mr. Altman, who is also interim D'Amato said he would not rule out head of the RTC, disclosed that he the possibility of calling on first briefed White House officials Sen. Allonse D'Amato pushed lady Hillary Rodham Clinton to about the RTC's investigation of harder for hearings. testify. Madison Guaranty Savings and "I do believe that Mrs. Clinton Loan Association, the failed thrift should be and will be held ac- linked to the Clintons. hearings but not until Mr. Fiske countable, as anyone else who ex- Mr. Altman "absolutely should completes his inquiry. ercises great power in govern- be fired" because "he was not "This is a criminal investiga- ment," he said. "And she d truthful with us" about the num- tion. Don't let Congress mess it exercise great power in this gov- ber of contacts he had with White up," Mr. Breaux said. ernment. Let's not kid ourselves." House officials, Mr. D'Amato, New Congressional Republicans But he said the special COL York Republican, said on CNN's such as Mr. D'Amato and Senate should have the opportunity to talk "Evans and Novak." Minority Leader Bob Dole of Kan- to the Clintons before any congres- "The fact is that be had previous sas have rejected such a delay, ar- sional panel does. contacts. He corrected his testi- guing that no one knows how long Both Mr. D'Amato and Mr. mony on two occasions and failed it will take Mr. Fiske to complete Breaux said they believe Mrs. to mention them. Secondly his investigation. Clinton's popularity has suffered Jean Hanson definitely should be Yesterday, Mr. D'Amato dis- as a result of Whitewater-Madison. fired. She had numerous contacts. missed reports that Republicans But Mr. Breaux said he does not She should know better. She's the would filibuster on major legisla- believe it will affect her ability to counsel," said Mr. D'Amato, rank- tion, such as the crime bill or continue as the White House ing Republican on the Senate health care reform, if they are not leader on health care and that she Banking Committee. allowed to begin hearings into should not be replaced in that posi- Mr. Altman and Ms. Hanson are Whitewater by June 1. tion. among the 10 former and current "I think we'll do everything we Mr. D'Amato said there has Clinton administration officials can to try to get those hearings, but been "some damage" to the first who have been subpoenaed by spe- we will not hold up necessary leg- lady's influence, but he refused to cial counsel Robert B. Fiske Jr. to islation," he said. "We will stop ap- say if he believes she may be testify about the briefings. pointments, for example, to the forced out of her role in health In a separate appearance on the agencies in question but not care over Whitewater-Madison. CNN program. Sen. John B. filibusters as it relates to impor- "That's a judgment she and the Breaux, Louisiana Democrat, said tant legislation." president have got to make," he there should be congressional He also made it clear that Re- said. THE NEW YORK TIMES, SUNDAY, MARCH 13, 1994 The Mysterious Chemistry That Turns Whiff to Stench venality, thwarted love or the corrupt use of power." By DAVID E. ROSENBAUM That is why the suicide of Vincent W. Foster, the White House counsel, is such a central aspect of the Whitewater WASHINGTON case, Ms. Jamieson said. It smacks of a mystery novel. FTER lingering in a vaporous state for two years, One element seems common to all the incidents that A the Whitewater case seemed to begin crystalliz- the public comes to think of as political scandals. Suzanne ing last week. Garment, whose 1991 book, "Scandal," is the most thorough One Indication was the words on the front recent exploration of the subject, explained it this way: page: shredding, special prosecutor, subpoenas, grand "Scandals take hold particularly well when they reinforce a jury, cover-up, immunity, Congressional hearings. Another pre-existing idea." was the images on television: President Clinton parrying Qualms about Richard M. Nixon's trustworthiness and razor-edged questions from reporters about his and his his "Tricky Dick" appellation were embedded in the public wife's conduct; officials leaving the Federal Courthouse consciousness. So people were more willing than they with their lawyers and climbing into government sedans to might have been otherwise to accept the view that he had be driven back to the White House. seriously abused the power of the Presidency. These are the familiar signs of the first stage of More recently, the flap in 1991 over the members' bank Washington fireworks. Sometimes they burst into scandals in the House of Representatives caught the fancy of the that capture the imagination and alter the politics of the public and led to the retirement or defeat of dozens of nation. T e obvious example, of course, is Watergate, the representatives. Hiroshima of Washington explosions. Other times, the The circumstances were mundane. The loosely run chemical eaction never occurs; the matter simply turns bank honored personal checks from representatives even if back into vapor, leaving not so much as a smudge in the they did not have sufficient funds in their account and then history books. A case in point is the long-forgotten question recovered the money the representatives owed afterward. of whether Jimmy Carter illegally used proceeds from his No public money was involved, and all the representatives family's peanut warehouse to finance his 1976 Presidential paid their debts. But the situation fit the stereotype of election campaign. politicians as deadbeats who get privileges not available to The answer to the question "Which scandals will ordinary citizens. captivate the public, and why?" is mysterious and seem- The Iran-contra affair presented much more serious ingly unpredictable. Relatively minor transgressions, like problems than the House bank. United States policy in Iran those associated with overdrawn accounts at the House and Nicaragua was turned over to and carried out by a bank, may infuriate the people, while wrongdoing that secret band of mid-level officials, shady international arms challenges the core of constitutional government (the Iran- dealers and private operatives outside of scrutiny by contra affair) may anger only columnists and civics teach- Congress and the public. But it never reached the level of ers. public concern that might have been expected from such Into which category will Whitewater fall? The most abuses. recent polls suggest it is too early to tell. The main reason was that few Americans were pre- "What causes a scandal to take root," said Kathleen pared to believe that Ronald Reagan was venal. The Hall Jamieson, dean of the Annenberg School of Communi- prevailing view was that trading arms for hostages and cations at the University of Pennsylvania, "is what in- giving illicit assistance to the contras may have been a bad volves a reader in an Agatha Christie novel: the anticipa- Idea. But Mr. Reagan was seen as trying, wisely or not, to tion that a full-blown plot is going to be revealed that is going to explain something basic to mankind, like human Continued on page 6 1/2 34 My Chemistry: Fro Whiff to Stench Continued from page have discounted this already." The outcome of the process this time is free the hostages in Lebanon and promote unpredictable. But politicians have become democracy Central America. 80 familiar with it over the last 20 years that Other elements are also generally present they have developed techniques to promote in a full-ecale/wcaridal. Big scandals normal- or retard the mysterious chemical reaction ly can be used for partisan advantage, and that leads to scandal. Last week, Republicans they tend to have one central villain. Those and Democrats alike were trying to find the aspects were lacking in the collapse of the right switch that would turn the reaction on savings and loan industry, the worst debacle or off. in public finance in American history, which An axiom learned from Watergate is that never jelled as a real political scandal. Politi- the worst position a President can take under cians in both parties were culpable and were fire is to hunker down and refuse to answer happy to have it swept under the rug. Only questions. With that in mind, Mr. Clinton after the questionable real estate and loan held an exhaustive news conference Monday practices of Charles H. Keating Jr. and his afternoon, answering one question after an- ties to five senators made news did the public other until no reporter had anything left to begin to blame politicians at all for a disaster ask. that cost the Federal Treasury well over $100 Another lesson is that it helps a President billion. to have a beacon of propriety at his side. So It also helps concentrate the public mind if Mr. Clinton brought in Lloyd N. Cutler as his someone has his hand in the till. And the White House counsel, the same person Jim- timing of disclosures can make a big differ- my Carter turned to for the same job when ence. One reason that Mr. Reagan was able his Administration had troubles. to slip the grasp of the Iran-contra allega- From the Republicans' perspective, they tions was that by the time the case was recall how the senators and representatives developed, his eight-year term was almost who investigated the Iran-contra affair came over. But these other conditions of a scandal pale compared with the importance of what the public is predisposed to believe. In the case of Whitewater, politicians, pollsters and schol- Cover-up, subpoena, ars disagree over whether the perception of Mr. Clinton will help or hurt him. Questions of grand jury - such Mr. Clinton's character have dogged him since he first started his campaign for Presi- terms alert the public. dent. He addressed questions about woman- izing, marijuana smoking and draft avoid- ance in a lawyerly way that left the impres- sion he was withholding something. across on television as bombastic bullies. So The latest New York Times/CBS News poll when Senator Alfonse M. D'Amato of New taken last week showed that the public con- York met last week with the special prosecu- tinues to approve of Mr. Clinton's perform- tor, Robert B. Fiske Jr., and then went before ance in office by 50 perc it to 39 percent, the cameras for a news conference, he had at essentially unchanged from last month, and his side Senator William S. Cohen of Maine. it indicated that many people are withholding Senator Cohen has a calm manner, and he is judgment about Whitewater because they remembered as an impartial investigator know too little about it. But when CBS News, who voted to impeach Mr. Nixon over Water- trying to measure the President's credibility, gate and to chastise Mr. Reagan over Iran- asked people in a separate poll last month contra. Mr. Cohen, who had previously shown THE NEW YORK TIMES, SUNDAY, MARCH 13, 1994 whether they thought Mr. Clinton generally little interest in the Whitewater case, was, in said what he believed or merely what he effect, an antidote to Mr. D'Amato's inherent thought Americans wanted to hear, they shrillness. pointed to the latter by a margin of nearly 2 The Republicans also remember from past to 1. episodes how important it is for the press to "This has all the earmarks of serious keep the story alive. So at a breakfast meet- problems," said Patrick H. Caddell, who was ing with reporters Friday morning, Repre- Jimmy Carter's pollster and strategist and sentative Jim Leach of Iowa offered the now lives in a sort of political exile in Califor- tantalizing revelation that he had sent Mr. nia. "You've got a guy here the public still Fiske a "confidential memo" about how offi- doesn't basically trust. A majority of the cials at the Resolution Trust Corporation people do not believe he has the character to office in Kansas City were being "gagged be President." and possibly coerced" by R.T.C. officials in But the counterweight is that the public Washington. Mr. Leach provided nary a clue very much wants Mr. Clinton to succeed as to what he was talking about. But three dozen President. Reporters who interviewed people reporters left the breakfast table ready to around the country last week were im- scramble all weekend to find out. pressed by that sentiment time and again. What the Whitewater case lacks so far are Trudi Clark, a 42-year-old clerk in a market immediately identifiable words or symbols in Philadelphia, was typical. "Give him some to conjure an iniquitous image without fur- time," Ms. Clark said. "He's only been in ther explanation. There is no vicuna coat or office a year. He's got three more years to do Tidal Basin or 181/2-minute gap. something." What the case does not lack is a shredder. Tony Coelho, the former Democratic News that files had been shredded at the House whip who left office in 1989 after Rose Law Firm in Little Rock added a nefar- accusations that he had failed to disclose a ious twist, even without knowing what was in $50,000 investment loan, argued that If Mr. the files. Outside of gardening and cooking, Clinton was ever harmed by the public per- the word shredder scarcely appears in con- ception of his character, the damage was versational English unless It relates to a done long ago. Mr. Coelho explained: "It's political scandal. like when people say to me, 'I thought Wall "You'd think they'd have more sense," Street would really react to this or that,' and said Stephen Hess, a senior fellow at the I say, 'Wall Street reacted to that weeks ago; Brookings Institution who has seen countless it's been discounted.' That's the way it is with scandals rise and fall over the years. "I Clinton. They didn't elect him with a high mean, don't they have fireplaces or flush credibility quotient. The American people toilets in Little Rock?" 35 2/2 THE WASHINGTON Post MARCH 13, 1994 Nussbaum for the Defense The Legal Life and Times of the President's Former Counsel By Rita Henley Jensen in an American Lawyer roundtable discussion of the case. "It did nothing J UST FOR for the heck of it wrong." he was quoted as saying, let's say that departing White "and acted properly as any lawyer House counsel Bernard W. would have acted under the circum- Nussbaum is not stupid, clumsy stances." In other words. the memo or even politically tone deaf. After and its other actions on behalf of all, those who know him well say that in fact he is brilliant, ethical and Keating were nothing more than Kaye Scholer's modest attempt to savvy. What then could he have been provide its client the type of zealous thinking as he searched the office of advocacy required by ethics rules. Vincent Foster on the weekend of Not everyone thought so. Nussbaum his violent death with no law en- persuaded Fishbein and the firm to forcement authorities present? Or settle for $41 million in restitution when he was sitting in on interviews and to agree that Fishbein be barred between Whitewater investigators from practicing before federal bank- and White House staff? Or when he ing regulators. was being briefed about the prog- However, as time passed, sup- ress of the Whitewater investiga- porters of Fishbein and the firm tion? would come to argue that for Kaye Nussbaum says he was only being DAN YACCARINO FOR THE Scholer to have done anything other a good lawyer, vigorously represent- In March 1992, Nussbaum signed than what it did would be tanta- ing his client. Now, I am a fan of good, even zealous, lawyering. Why on to defend Kaye, Scholer, Fier- mount to its becoming a government then did his actions seem. man. Hays & Handler-a large, stool pigeon. And the vast majority well wrong to me? I called sev- prosperous and well-regarded law of the organized bar seemed to eral leading New York and Washing- firm based in New York-against agree. In fact, the New York Bar As- ton attorneys but they were of little charges brought by federal banking sociation this year, in an extremely help-they said they would have authorities. Kaye Scholer had done rare move, officially vindicated Fish- done just what Nussbaum did. They $10 million in work in the late 1980s bein's position. agreed. even the Republicans among for either Charles Keating Jr. or the them, that Nussbaum's only mistake thrift he owned. Lincoln Savings & was one of ignoring appearances in Loan, or both (depending on whom N 0 one has suggested that any shenanigans-if in fact there his aggressive attempt to do an ex- you asked and when you asked it). were any-at Madison Guar- cellent job. The work had been supervised by anty Savings and Loan or White- I know that in many cases. the es- Kaye Scholer's then-managing part- water Development Co. even re- sence of good lawyering is maintain- ner Peter M. Fishbein and had come motely approach what was going on ing your client's confidences. During back to haunt Fishbein and the firm: at Lincoln. And Nussbaum's connec- the Foster office search, Nussbaum regulators were demanding a pay- tion to Whitewater appears to be could have been simply checking to back. long after the fact. Yet it is discom- see that the Clintons' personal files From 1987 until Lincoln was tak- fiting that Nussbaum is taking a posi- were properly transferred to the en over by federal banking authori- tion similar to that of Kaye Scholer Clintons' new lawyer. Another hall- ties in 1989. Fishbein and others in by writing to President Clinton that mark of excellent lawsmithing is the firm. master litigators by all ac- his unhappy departure is being finding out as soon as possible what counts, had stiff-armed the govern- caused by those who "do not under- problems could be facing your client. ment bank examiners. They told the stand. nor wish to understand the Hence, Nussbaum may have wanted regulators that all requests for infor- role and obligation of a lawyer." to see for himself if there was a mation about Lincoln's operations Perhaps it is true that those of us Whitewater smoking gun in Foster's had to go through the firm. But Kaye outside the profession just don't briefcase and then inform his client. Scholer attorneys did more than know good lawyering when we see Maybe it would have been wiser for that-according to federal regula- it. We know the essence of zealous the Park Police to have been present tors' allegations. They sent one advocacy is the use of boldness and and at least make notes of which memo in 1987 to federal banking knowledge to head off problems. We files were in the office and which regulators that went so far as to say also know, however, that too often ones were removed. but was it this: members of the bar believe that strictly required? "In making real estate loans. Lin- And maybe during the interviews their license to practice law is a per- coln has always undertaken very and the briefings, Nussbaum was mit to throw their weight around, to careful and thorough procedures to earnestly seeking information about obfuscate, to push the envelope of analyze the collateral and the bor- who was saying what to the investi- rower. What is unusual about Lin- what they and their clients can get gators so that his client might better by with, and the difference between coln's underwriting is its particular cooperate-sort of a time-saving de- emphasis on, and the thoroughness the two is not always a bright line. vice. of, its underwriting of the collater- We also might wish that Kaye Put another way, Nussbaum al although. at times. its 'paper Scholer had thought part of its obli- seized the moment. trail' has been incomplete." gation was to protect investors from This was said even though the the likes of Keating before the losses I would buy all of that-except firm had information quite to the mounted to $2.5 billion. And we that Nussbaum's explanation contrary, according to the govern- might hope that Nussbaum. with the sounds exactly like those argu- ments advanced on behalf of one of ment's later allegations. In fact, the nation watching. might have acted as his previous clients, a law firm with banking agency's notice of charges if he had an obligation to his client's connections to a failed savings and quoted what it said was a 1986 Kaye constituency to act as a paragon of loan. Scholer memo that said the thrift's fair play: to step back. to second- loan files "ran the spectrum from guess his take-no-prisoners litigation Rita Jensen, a former senior writer disaster to non-existent." instincts and to serve the interests at the National Law Journal, is an The firm did not lie to the govern- of justice. For that. in the end, is in Alicia Patterson fellow. ment, Nussbaum would argue later the best interests of his client. 83 THE WASHINGTON Post SUNDAY, MARCH 13, HOBART ROWEN Cutler Offers a Steady Hand For a Wavering White House Ithough he won't officially take can be sure that Cutler will do Clinton no A up his duties at the White House harm. At his age, he deserves great until April 1, President Clinton's credit for responding to Clinton's new special counsel, Lloyd N. Cutler, a emergency call, even if he felt the need Washington icon, already has begun the to limit his service to 130 days. process of damage control, reassuring In a telephone interview, Cutler the public through TV and newspaper stressed to me that the White House interviews that an experienced old hand credo from here on will be "openness has control of the rudder. and cooperation" with the Whitewater Clinton named Democrat Cutler last investigator and with the public. week to succeed Bernard Nussbaum in a "My conception [of the job] is that you desperate effort to restore trust and are counsel to the incumbent president dignity to the White House. and to the institution, and while you The 76-year-old corporate lawyer rarely need to distinguish between those knows full well that uncertainty over two responsibilities, the president's what is happening to the Clinton private affairs ought to be handled by a administration threatens economic private lawyer," he said. recovery and markets worldwide. The The key thing to remember about the nation can ill-afford another failed Cutler appointment is less that he is a presidency. skilled attorney than the fact that he No one can be sure whether Cutler knows the Washington political scene can help Clinton-and, by extension, the like the back of his hand. In Cutler, the country-out of the present jam, but we See ROWEN, H5, Col. 1 ROWEN, From H1 When Carter in 1980 was faced with the need of selecting a esident has latched onto a nominee to succeed World Bank teran who not only knows his President Robert S. MeNamara. ay around Washington and whose term would expire just reign capitals, but who has good before incoming President Ronald dgment and a special feel for Reagan could select a new bank institutional issues. official, he turned to Cutler. Cutler Much of Clinton's difficulty over then negotiated the appointment e past year, running from the of A.W. "Tom" Clausen, head of iwed Zoe Baird appointment as the Bank of America, with torney general. to the representatives of the Reagan ishandling of the Whitewater team. tuation, can be traced to the fact at he has drawn most of his key Cutler is widely experienced in foreign policy and foreign lvisers from a small group of rmer Arkansas buddies, and to economic affairs. But he doesn't lose who fought the 1992 figure to be a general adviser on impaign with him. such issues: He must be Other presidents also have concerned primarily with irrounded themselves with image-building, especially for the ronies. That's only natural. But institution of the White House. e danger is that close friends BY LARRY WASHINGTON POST But Cutler told me he will join ay instinctively put personal Lloyd Cutler with the besinged client who sought his political wisdom. in the debate, during his yalty ahead of common-sense four-month stint, on some egard for propriety and topics that any Washington president was doing his job. Two substantive policy matters. "There esponsibility. business lunch would include at a themes emerged. First, doubt of are issues where I will be Ironically, this subject came up time when the White House was the wisdom of Clinton's involved." he said. He specified a small private lunch Cutler irra political jam and-struggling to aggressive trade stance toward the crime bill, and certain aspects ave last month at Washington's evolve a foreign policy. Japan. And second, concern that of foreign policy-intelligence xclusive Metropolitan Club for The Whitewater affair in Clinton had hurt himself by failing affairs is one area-in which he isiting German politician Count February had not reached its to draw on the large pool of has had a long-standing interest. tto Lambsdorff. Cutler had three current point of frenzy, complete experienced people available to But because he and his law firm ther guests, including former with appointment of a special him. had been counsel for major I.S. ambassador to Moscow counsel, Nussbaum's resignation Now, deep in the-trauma of automotive companies, he will tobert S. Strauss. himself a and then subpoenas to key self-inflicted wounds, Clinton has disqualify himself from Vashington fixture, and former members of the White House staff dipped into that pool for Cutler, involvement in many trade issues. J.S. ambassador to Bonn Richard to appear before a grandjury, who served President Jimmy That's too bad, because/Cutler is a 4. Burt. But Whitewater had begun to Carter in a similar capacity more strong free-trade advocate, and The conversation was off the intrude seriously on the than a decade ago. Like his friend the administration is in need of a ecord, but Cutler sees no harm-in Washington scene, and auther Strauss, Cutler-has the respect of powerful inside voice to dilute the ny observing here that it covered Cutler lunch, different opinions top Republican as well as influence of the "managed trade" he same inside-the-Beltway were expressed on how well the Democratic politicians. bloc on the economic team. 65 Democratic Party Chief Questions Ethics of Clintons' GOP Critics By Dan Balz tacked on ethics by Al D'Amato is White House for more disclosure on leading the fight to reform the na- have put their partisan interests sight responsibilities as senior Reput Washington Post Staff Writer like being called ugly by a frog. "Be- Whitewater and demanding congres- tion's health care system. ahead of the country's. lican on the Senate Banking Commi ing accused of ethics violations by sional hearings, Wilhelm's tough "They can't stand her success, In attacking the Republicans per- tee." CLEVELAND, March 12-The Phil Gramm is like being called low speech today represented a Demo- and that's why they're on the at- sonally, Wilhelm said more questions Wilhelm said Gramm should expla chairman of the Democratic Party by a snake. Being attacked on ethics cratic strategy to take some of the tack," he said. should be raised about old ethics the subsidy he received from the Tex today escalated the partisan warfare by Bob Dole is like being called a tax heat off the president and force Re- Wilhelm ridiculed the Republicans charges leveled at D'Amato and as owner of a failed savings and logo over Whitewater with a pointed and cheat by Leona Helmsley." publicans into a debate with the na- for attempting to obstruct the Dem- Gramm and about Dole's connections for a vacation house Gramm built. personal attack on Republican critics GOP attacks on Whitewater, Wil- tional party leader. ocratic agenda in Congress and said with a former campaign treasurer At the time of the initial disclosus of President Clinton and Hillary Rod- helm said, reveal the "true colors" of Wilhelm's caustic oratory had an- they had become, in the words of who was charged with tax fraud relat- of the matter, Gramm said he ham Clinton and charged that the Republicans "wallowing in whatever other purpose as well, which was to former vice president Spiro T. Ag- ed to political campaign contributions. agreed to pay up to a fixed amount GOP "would rather see the country sleaze and mud they can create." help set the tone for a midterm cam- Wilhelm and D'Amato have tangled the work on the house. He later fail than Bill Clinton succeed." new, "the new nattering nabobs of The DNC members here clearly paign in which Democrats are seek- negativism of the '90s." already on Whitewater. Frank Cole- tacted federal regulators in behalf In a sharply worded speech to the supported Wilhelm's partisan at- ing to hold down the losses typically He characterized the Republicans man, a D'Amato spokesman, said to- the savings and loan owner, but call spring meeting of the Democratic Na- tacks. But privately some said the day, "We've already been through the referral routine. tional Committee, David Wilhelm ac- White House must do more to satis- suffered by the party in power. as divided and devoid of fresh ideas, these ridiculous charges from the Wilhelm also raised questions abd cused Senate Minority Leader Robert fy public concern that the Clintons Saying the rising economy takes saying the GOP is "a party whose in- president's political hatchet man, news reports of testimony in a J. Dole (R-Kan.). Sen. Phil Gramm (R- have not yet told the full story of away a key issue from the Republi- tellectual leader is a radio talk show which certainly do nothing to respond fraud trial involving a former Doe Tex.) and Sen. Alfonse M. D'Amato their involvement in the Whitewater cans, Wilhelm charged that "their on- host, Rush Limbaugh." to the numerous allegations that have aide. The testimony said Dole had (R-N.Y.) of having past ethics prob- land development and its connec- ly political strategy [is to] destroy the The successes of the Clinton ad- arisen around the Whitewater scan- pressured the aide, David C. Owen, to lems of their own that he said de- tions to the failed Madison Savings president, run him into the ground." ministration, Wilhelm asserted, have dal." make certain contributions that area served greater public attention. & Loan Association, which was Wilhelm also accused Republicans put Democrats in the driver's seat He said D'Amato has said such an part of the case. No accusation Wilhelm mocked D'Amato, owned by their Whitewater business of targeting Hillary Clinton because heading into the midterm elections, "ill-conceived attempt to silence him wrongdoing by Dole has been made Gramm and Dole as "experts on eth- partner, James B. McDougal. "she is a symbol of what is great "and it's driving the Republicans cTa- would only make him that much Gramm and Dole could not ical misbehavior" and said: "Being at- With Republicans pressuring the about the Democratic Party" and is zy." In reaction, he said, Republicans more tenacious in pursuing his over- reached for comment. 1661 'EI IDW/N Avenue Pase THE HOW OFFICIALS RESPONDED TO-WHITEWATER T he Clinton Whitewater Development Corp. first became an issue for Bill and Hillary concern. It reemerged last October with a report in The Washington Post that during the 1992 presidential campaign but soon evaporated as a major failed Madison Guaranty Savings & Loan, formerly owned by the Clintons' Whitewater Resolution Trust Corp. investigators had asked for a criminal investigation of the to business the partner. James McDougal. In two sets of criminal referrals. the last forwarded gubernatorial campaign as possible beneficiaries of Madison's illegal activities. Justice Department in October, the RTC has cited the Clintons and the Clinton QUESTIONS ARISE WHITE HOUSE/TREASURY COMMUNICATIONS March 8, 1992: New York Times reports James McDougal, owner of defunct Madison Guaranty Savings & Loan, provided more money in Sept. 29: At White House meeting, Hanson tells Nussbaum about the initial Whitewater land development than Bill and Hillary Rodham additional referrals naming the Clintons. Clinton, and questions whether regulatory treatment of McDougal was lax in Clinton administration. Oct. 8: Second set of referrals sent to U.S. attorney in Little Rock. March 23: Denver lawyer James Lyons, chosen by Clinton campaign, Oct. 14: Prompted by press inquiry about requests for criminal releases report on Whitewater, saying Clintons lost $68,900 in the investigation. SIX persons attend second White House meeting: deal. No backup documentation is released. The findings would later From the White House: Nussbaum; Mark Gearan, communications be questioned by some tax experts. director; and Bruce Lindsey, assistant to the president. From the Treasury Department: Jean Hanson, general counsel: Jack CLINTONS NAMED BY RESOLUTION TRUST DeVore, press secretary; and Josh Steiner, chief of staff. Participants October: Resolution Trust Corp. (RTC), agency responsible for say they discussed only how to respond to the press, not the substance of the requests for investigation. overseeing disposition of failed thrifts, refers the Madison case for possible criminal investigation to U.S. Attorney's Office in Little Rock, Oct. 27: RTC's first referral for criminal investigation rejected by Paula Ark., naming the Clintons as potential beneficiaries of possible Casey, Little Rock U.S. attorney and former law student of Bill Clinton, diversion of funds from Madison to the Whitewater Development Corp., who later recuses herself from case. which had an account at Madison. RTC's referral is forwarded to the Justice Department. Oct. 30: Lindsey says he knows nothing about RTC criminal referrals Nov. 3: Clinton elected president. beyond what reporters have told him. Oct. 31: The Washington Post reports that RTC is investigating CLINTONS SELL WHITEWATER Madison and that Clintons are mentioned in requests for criminal Dec. 24: Clintons sell Whitewater interest back to McDougal for investigation. $1,000. Vincent Foster, Rose law firm partner with Hillary Clinton, handles sale. Nov. 3: Associate Attorney General Webster L. Hubbell, a former partner of Rose law firm, recuses himself from anything to do with Whitewater. Nov. 9: Special Justice Department team sent to Little Rock to investigate second set of referrals. June 1993: Three years of delinquent corporate tax forms for Whitewater-prepared under the direction of Foster, then deputy White Dec. 24: Clinton instructs his personal lawyer to turn over to the House counsel-are filed. Justice Department all Whitewater documents, as cries for a special June: Justice sends RTC request for criminal investigation back to U.S. counsel rise after disclosure Nussbaum took Foster files. attorney in Little Rock, instructing prosecutors to proceed as they see fit. July 20: A U.S. magistrate signs an FBI warrant to search the offices of David Hale, owner of federally subsidized company, Capital Management Services, that provided $300,000 loan in 1986 to the Clintons' SPECIAL COUNSEL APPOINTED Whitewater partner, Susan McDougal (former wife of James McDougal). Jan. 20, 1994: After White House yields to political pressure, Robert Part of the loan went to help Whitewater buy land from International Paper Co. near Little Rock. B. Fiske Jr. IS appointed by Attorney General Janet Reno as special counsel to investigate Whitewater and Foster death. FOSTER FOUND DEAD Feb. 2: Altman, Hanson and Steiner meet at White House with July 20: Foster dies in what is ruled a suicide. One of his last phone Nussbaum, Margaret Williams, chief of staff to Hillary Clinton, and calls was from attorney Lyons. Lyons denies they discussed Harold Ickes, White House deputy chief of staff. Meeting described as Whitewater. "procedural brief" on RTC investigation at Madison. July 22: Whitewater documents removed from Foster's office by White Feb. 24: Altman attends congressional hearing, at which he reveals House counsel Bernard Nussbaum and later given to Clinton's personal that he initiated and attended Feb. 2 meeting between Treasury and lawyer. This does not become public knowledge until December. White House officials. August: Randy Coleman, Hale's lawyer, calls associate White House Feb. 25: Altman recuses himself from further Madison-Whitewater counsel and former Rose partner William Kennedy to tell him that Hale investigation and announces he will step down as interim head of RTC intends to say Clinton pressured him to make Small Business at the end of March. Administration-backed loan to Susan McDougal. Kennedy alerts Nussbaum but declines Coleman's offer to discuss the matter. March 3: The Washington Post discloses Sept. 29 and Oct. 14 meetings between Treasury and White House staff to discuss September: Then senior vice president of the Resolution Trust Corp., Whitewater. Bill Roelle, briefs Deputy Treasury Secretary Roger C. Altman and Jean Hanson, general counsel atsTreasury, about additional requests March 5: Fiske subpoenas Nussbaum, Ickes, Lindsey, Williams, for criminal investigation naming the Clintons, which RTC is preparing Gearan, Altman, three current and former Treasury aides and Lisa to send to Justice. Caputo, press secretary to Hillary Clinton. March 5: Nussbaum resigns, effective April 5. March 8: Clinton names Lloyd Cutler counsel to the office of the president. THE WASHINGTON Post SUNDAY, MARCH 13, 1994- -Compiled by the National and Investigative staffs of The Washington Post 58 THE WASHINGTON POST SUNDAY, MARCH 13, 1994 Hardin Jr., a Houston homicide prosecutor Conspiracy Theorists Find to review the findings. While comfortable with the suicide conclu sion. many federal law enforcement official: Foster Case Hard to Resist said there are other unsettling aspects of the Foster case that have already piqued the in terest of Fiske's investigators. Park police found ample reason to con Rumors Abound Despite Lack of Supporting Evidence clude that Foster was despondent about his life in Washington and had sought the names of psychiatrists. But their efforts to discover By Michael Isikoff investigators probing Foster's death and cir- if there were any particular work-related Washington Post Staff Writer culated his "findings" in regular faxes to concerns that caused him to take his life news organizations. were repeatedly blocked by White House Sherman Skolnick. self-styled "citizens" in- Perhaps the most persistent of the Foster counsel Bernard Nussbaum. Nussbaum re- vestigator and conspiracy expert, once de- stories suggests that, contrary to the official cently resigned the counsel's job. in part be- voted his energies to uncovering the myster- findings of the U.S. Park Police, the White cause of criticism over his handling of the ies of the Kennedy assassination and House aide was murdered. This view gained Foster suicide investigation. Watergate. But these days, Skolnick is hard circulation in January when the New York Invoking "executive privilege," he refused at work unraveling a more recent conun- Post quoted George Gonzalez, a Fairfax to permit park police investigators to enter drum: the death of deputy White House County paramedic who was the first medical- Foster's office the day after his death. The counsel Vincent Foster. ly trained person to reach Foster's body. next day, Nussbaum agreed to conduct his Based on information he says he learned Gonzalez said the scene was unlike other own "search" in the presence of Justice De- from an unidentified Secret Service "consul- suicides he had observed. describing how partment lawyers. FBI agents and park po- tant" with "underworld ties," Skolnick claims Foster's body was lying neatly on a gentle in- lice investigators but refused to let them in- that Foster actually was murdered by a cline with a .38-caliber revolver in one hand. spect any of Foster's papers, rapidly three-man hit squad from Germany. "They "Usually a suicide by gunshot is a mess." identifying them in a way the investigators snuck Foster out of the lower level of the Gonzalez said. Yet Gonzalez said there was found incomprehensible. White House, then they had a Foster double only a "thin trickle of blood" in the corner of It was during this search-not. as some leave his office and go somewhere else," said Foster's mouth. He said Foster's body was Skolnick. who links the death to an aborted have reported, during a late night visit to laid out neatly "as if ready for a coffin." coup against Iraqi President Saddam Hussein Foster's office the night of his death-that Gonzalez's observations quickly were Nussbaum removed Whitewater-related doc- and the firing of FBI Director William S. Ses- pounced upon by conspiracy buffs in part be- uments that later were transferred to Presi- sions. cause the official park police report, includ- Skolnick's theories may be wholly lacking ing the Fairfax County coroner's autopsy, dent Clinton's personal attorney, David Ken- in supporting evidence. But he recently has never had been released by the Justice De- dall. Foster had been handling the been airing them on a public access cable partment. Now, the release has been blocked preparation of Whitewater's overdue corpo- television show in Chicago. He is one more pending further investigation by special rate tax returns. volunteer in a burgeoning army of conspira- counsel Robert B. Fiske Jr. Federal law enforcement officials say they cy theorists who are springing up around the But federal law enforcement officials say have no evidence that Foster was concerned Foster case and confounding the Clinton that some of Gonzalez's recollections are di- or worried about Whitewater, an issue that White House. rectly contradicted by police photographs at that point had largely sunk from public In recent weeks, the events surrounding taken at the scene as well as a statement view. But they say there are other reasons the July 20 suicide of President Clinton's filed that evening by park police investigator to be concerned about the thoroughness of boyhood friend have been the subject of a John Rolla. who arrived about 20 minutes af- the park police investigation: A torn-up. un- seeming avalanche of speculative news re- ter Gonzalez. dated note written by Foster suggesting his ports, rumors and gossip that is fast turning Rolla, whose written observations are part job despair was not turned over to the park Foster's death scene at Fort Marcy Park in of the park police report, reported seeing police until more than a week after his death: Northern Virginia into a 1990s version of blood in Foster's nose and on his mouth, and no finger or palm prints were ever iden- Dealy Plaza. One widely circulated theory right shoulder and underneath his head-an tified. has Foster driven to suicide by news of an observation further bolstered by photo- The park police never reviewed entries n imminent FBI raid in Little Rock, Ark., graphs, one of which was shown by ABC on Foster's office computer nor did they inter- linked to the Whitewater affair. Another. ac- its Friday night news program. view potentially key witnesses. such as tively being probed by Republican investiga- Rolla also reported that "blood on the Brantley Buck, the Rose Law Firm partner tors. connects Foster's death with the un- ground and on his shirt was still wet"-a who placed one of the last known phone calls solved execution-style murder of a former finding consistent with the conclusion that to Foster the morning of his death. Park po- Clinton campaign security official in Little the death took place several hours earlier at lice investigators established that Foster Rock last September. the park and not somewhere else. tried to return the call but never got Yet a third theory, reported last week by a Law enforcement officials said other fo- through. He placed the call shortly before he financial newsletter. has Foster dying in a rensic evidence in the park police report sup- left his office at 1 p.m., the last time he was Northern Virginia safe house used by senior ports the suicide finding: the black powder seen alive. White House aides-a report that caused burns on Foster's hand and mouth, the ab- Later news reports revealed that Buck the stock market to plunge and prompted a sence of defensive wounds and the position vehement White House denial. of Foster's right hand, with his thumb was handling an internal law firm inquiry "How is it acceptable that completely un- trapped in the trigger of an antique Colt re- the billing practices of former partner Web- ster L. Hubbell. Foster's close friend who substantiated rumors become the fodder for volver owned by his family. legitimate news organizations?" said White "There's absolutely nothing to lead the po- now serves as associate attorney general. House press secretary Dee Dee Myers when lice or the medical examiner to believe that The park police also never interviewed asked about the report. "Since when are we anything happened other than a suicide." said Clinton, who spoke to Foster for about 20 in the position of having to prove a nega- one federal law enforcement official who has minutes by phone the night before Foster tive?" reviewed the evidence. "The guy was no death. Clinton has never explained all the David Smick, a former top aide to Republi- more killed in an apartment in Northern Vir- matters the two discussed that evening. can presidential hopeful Jack Kemp, is co- ginia than there is a man in the moon." Asked recently about the suicide on owner of the newsletter that published the Fiske has piedged to conduct a "thorough CNN's "Larry King Live." Clinton said curt- unsubstantiated story. and complete" investigation of Foster's ly: "I don't think we know any more than in Then there is conservative political activ- death. In court papers filed in New York. the beginning because I just really don't be- ist Floyd Brown. As chairman of Citizens Fiske said he will retain outside forensic ex- lieve there is any more to know. You know United. Brown has employed two full-time perts and pathologists and will ask Russell he left a note: he was profoundly depresser 57 THE WASHINGTON Post SUNDAY, MARCH 13, 1994 Campaign Cowboys Still Learning to Tread Whitewater By Ann Devroy White House influence" by an internal manage- Al ment veterans and many former campaign work- Washington Post Staff Writer ment review. ers most comfortable with the campaign war Now, three such contacts between Treasury A month after President Clinton took office, Department officials and Clinton aides, including room style of rapid and aggressive response to White House counsel Bernard Nussbaum set political threats. Nussbaum, involving the federal investigation of out in a memo to the staff severe restrictions the president's and Hillary Rodham Clinton's Clinton campaign war room veteran George on contacts they could have with government ties to a failed Arkansas savings and loan have Stephanopoulos, now a senior adviser to the regulators. "Violations," the memo noted, "may ensnared the White House in serious legal and president, acknowledged last week that White result in significant embarrassment to the political trouble. House damage control efforts in response to in- individual involved and the White House." Asked why this keeps happening, administra- quiries about the Clintons' Whitewater land deal Five months later, contacts between White tion officials and political observers pointed once have caused more political and legal damage House officials and the FBI over the firing of the again to a Clinton White House culture still more than they have controlled. White House travel office staff were deemed attuned to the operating methods of a political "A campaign is a campaign." said newly named campaign than to the rules of governing. The White House counsel Lloyd Cutler in an inter- "improper and insensitive to the appearance of White House remains populated by few govern- See CLINTON, A10, Col. 1 CLINTON, From A1 the RTC named the Clintons as possible ben- The final meeting, in February. was called eficiaries of Madison's illegal activities. Part by Deputy Treasury Secretary Roger C. Alt- view. "Those are private people who are not of the investigation focused on checks writ- man, who is heading the RTC on a tempo- part of the government set in a particular, ten from and deposited in a Whitewater ac- rary basis because Clinton has not nominated peculiar situation. count at Madison. RTC investigators also a permanent chairman. Altman has said he "But now, you are the government of the found irregularities in a series of Madison was giving the White House a "heads-up" on United States. In a campaign, [strategist] cashier's checks written to the Clinton gu- the process the RTC follows in civil, not James Carville could answer a question in a bernatorial campaign. criminal, cases. manner that was 75 percent correct and 25 The White House knew that the story of Altman vehemently denies that the ses- percent incorrect and that would be fine. the RTC investigation was about to break sion was meant to warn the White House of a The next day in a campaign, you are on to when Jack DeVore, the Treasury Depart- schedule that might potentially affect Hillary something else. Now, you are the govern- ment's press secretary, arranged an Oct. 14 Clinton and her former law firm, whose rep- ment, and the government got it wrong." White House meeting. DeVore along with Another administration official put it more resentation of Madison is being reviewed by Treasury's chief of staff and general counsel succinctly. "In a campaign, you can afford to the RTC. Altman said the meeting showed met with White House communications di- be a cowboy, you're even expected to be a poor judgment and was a terrible mistake rector Mark Gearan, Nussbaum and Bruce cowboy. In the White House, you have to but was intended only to keep the White Lindsey, a White House adviser whose long- keep your gun in the holster a lot of the House informed of potential trouble spots. time ties to Clinton made him the person time." "Have a little heart here," said one adviser most knowledgeable about the Clintons' per- White House counselor David R. Gergen, sonal finances. to the White House, who said his comments like Cutler a veteran of previous administra- Participants who have described that ses- are based on "the theory that there is noth- tions, said the grand jury subpoenas of White sion say it was devoted almost entirely to de- ing further to these meetings." House and Treasury aides, the elaborate vising a White House response for reporters "You got a bunch of people trying to pro- search for documents and Cutler's appoint- tect the president and the White House. It is ment last week served as a "wake up call" to what all White Houses do or they don't sur- a traumatized White House staff. vive." Many others make the case that the seri- "In a campaign, you can But critics of the Clinton team say that the ousness of the week's action has focused the White House the way no string of memos afford to be a cowboy, Whitewater defense operation fits a pattern of actions, large and small, that suggest inat- could. In an effort to convince the public that new rules are in place and will be taken seri- you even expected to tention to the responsibilities of those who serve in government. ously, Cutler will speak for the administra- be a cowboy. In the They point to reports of White House tion on today's Sunday news interview shows. Hillary Clinton, who remained mostly aides failing to perform required paperwork out of sight the past week, will reemerge White House, you have to get their passes and security clearances; this week in a business-as-usual schedule. of State Department aides last year retriev- "We are still going to be explaining the to keep your gun in the ing personal files of Bush administration offi- past," said one official, referring to the Clin- cials and leaking information about them to tons' role in Whitewater, "but we are confi- holster a lot of the time." the press; of White House procedures in the dent that this sort of thing in the White days following the suicide of deputy White House won't happen again." Clinton administration official House counsel Vincent Foster that have led Others are not so sure. Said one adminis- to questions about the integrity and thor- tration official, "The campaign cowboy analo- and deciding that Lindsey would be the oughness of the police investigation. gy goes only part way. This remains a build- spokesman on the matter. White House Chief of Staff Thomas F. ing that lacks discipline. There is a When the story broke Oct. 31 in The "Mack" McLarty attributed many of the diffi- sloppiness. A lack of seriousness. A group- Washington Post, the White House denied culties to the daily rush of problems that en- grope quality where everyone rushes to one knowing of the RTC action and said it would gulf the White House. "We had procedures problem and gropes around for a solution have no comment. put in place to ensure that White House peo- while other problems pop up everywhere White House spokesman Jeff Eller's state- ple maintain the highest ethical standards," else." ment to that effect was widely quoted. Lind- he said, White House officials contend that two of sey had told The Post that weekend, as re- Added Cutler: "They just tended to get ig- the three meetings between White House porters were preparing the story, that he nored in the pressure of time." and Treasury officials now being investigat- was aware of the referral only through press "There is a special thing about the White ed by Whitewater special counsel Robert B. inquiries. But the White House later acknowledged House," said Cutler. "It is not like a new Fiske Jr. were motivated by damage control. that the first of the three meetings Fiske is team at a business. Everything, every- The other, they say, comes close. In two separate criminal referrals. the last looking into occurred on Sept. 29, when body changes when a new administration of which was forwarded on Oct. 8, the Reso- Treasury general counsel Jean Hanson told comes in. People have no history of all Nussbaum of a criminal referral mentioning working with one another. It takes awhile to lution Trust Corp., an independent govern- ment agency that handles failed savings and the Clintons. Nussbaum told Lindsey. RTC learn to work together, to learn the rules loans, asked the Justice Department to con- criminal referrals are secret, and White and to learn the lessons of not following duct a criminal investigation into the collapse House officials now view that contact as the them." of Madison Guaranty Savings & Loan, a fail- most serious breach of their internal rules. How long should the Clinton team be giv- ure that cost taxpayers an estimated $60 At the time it was revealed. a senior admin- en to make the transition from the campaign million. The Arkansas thrift was owned dur- istration official described that Hanson-Nuss- to the government? Cutler answered: "It ing the mid-1980s by James McDougal, who baum conversation as "the first Treasury ought to by the end of the first year." Now, was a business partner with the Clintons in heads-up," a tip-off from Treasury to the with Clinton two months into his second the Whitewater Development Corp. White House that a potentially damaging sto- year, Cutler said, "Certainly, certainly. we Without accusing them of any wrongdoing, ry was bearing down. have room for improvement." 51 THE NEW YORK TIMES, SUNDAY, MARCH 13, 1994 The Nation Untangling the Threads Of the Whitewater Affair By STEPHEN ENGELBERG Who knew what about WASHINGTON HITEWATER DEVELOPMENT COMPA- whom - and when? We W NY began in 1979 as a small investment between the Clintons and an Arkansas busi- don't know yet. nessman. But in recent weeks, the name Whitewater has come to stand for a host of tangentially related issues, from the 1993 suicide of Deputy White House Counsel Vincent W. Foster to the propriety of the White House's contacts with regulatory agencies whose Mr. Fiske, in his inquiry, is painstakingly recom inquiries touched the Clintons. structing the savings and loan's tangled finances and IS As Robert B. Fiske Jr., the special counsel looking looking at a range of deals in Arkansas and beyond. One into the matter, took his first grand jury testimony from set of transactions that has already drawn atten White Hour officials last week, nearly every aspect of stem from a fundraiser Mr. McDougal held in 1985 to the case remained shrouded in uncertainty. help pay off a $50,000 bank loan taken out by the Clint This mi h is known for sure. In 1978, the Clintons to finance Mr. Clinton's 1984 re-election bid. Even bel bought 230 acres of land with James B. McDougal, an Mr. Fiske's appointment, the Resolution Trust Corpora- Arkansas businessman whose failing savings and loan, tion, the Federal agency that disposes of savings Madison Guaranty, later sought lenient treatment from loans, had obtained evidence that some of the appr state regulators. The parties believed they would earn mately $35,000 raised by Mr. McDougal had been divert- quick profits. That didn't happen. And by 1985, as White- ed from Madison. But present and former ai to Mr. water was struggling to sell off its remaining lots, Hillary Clinton vehemently insist the President had no role or Rodham Clinton appeared before state officials on behalf knowledge of how Mr. McDougal raised the money. of Madison Guaranty. Mrs. Clinton, a lawyer retained by The inquiry by R.T.C. investigators is itself the focal the savings and loan, was asking regulators appointed by point of considerable confusion. Last fall, the ag her husband to make a favorable ruling for her client, prepared a detailed request for an Investigation of who was also the couple's business partner. possible criminal activity at Madison. The document, No evidence has emerged that the governor inter- called a "criminal referral," suggested that the Clintons vened to help Mr. McDougal, a longtime friend and had been beneficiaries of possibly illegal transact former gubernatorial aide. But Madison remained in involving the campaign fundraising. business despite considerable evidence of its shaky fi- Even before the referral was sent to the Justice nances. Several years later, the institution collapsed with Department, the White House learned of its existence. in losses to taxnayers of more than $60 million. a news conference last week, Mr. Clinton acknowleds as much, saying he heard of the referral at some unspecified point last October. "It was just something I Hillary Rodham Clinton, Associate Attorney General absorbed," Mr. Clinton said. Webster Hubbell, and Mr. Foster, destroyed evidence possibly relevant to Mr. Fiske's inquiry. Two couriers at Conflicting Stories the firm said they shredded a box of documents from Mr. Foster's files, clearly identified with such labels as In responding to Mr. Fiske's subpoena for docu- "VWF: Correspondence." But the firm's spokesman ments about three White House sessions in which the said that two lawyers and two clerks were prepared to R.T.C. action was discussed, the Administration came up testify that it was all a misunderstanding, that the box with nearly 1,000 pages of material and a list of 30 to 40 contacts. Lloyd Cutler, the newly appointed special White changed offices. contained miscellaneous papers collected when a lawyer House counsel, said the conversations would be shown to With subpoena power and two grand juries on call, be inconsequential. Mr. Fiske has the means to resolve this and other There are conflicting accounts about whether the conflicts. But he must operate as a prosecutor that is, Rose law firm, which once numbered among its partners in secret - and so It is unclear when or how fully the public will share in the fruits of his investigation. 9 By WARREN E. LEARY ed a study of 2,350 infants in the United WASHINGTON, March 12 Tests of children in Italy and fewer than 10 States to look at 13 second-generation a new type of whooping cough vaccine percent in Sweden currently get acellular pertussis vaccines that had being conducted in Italy and Sweden whooping cough inoculations. proved promising in earlier tests. All of under United States sponsorship may the American infants in the trials re- Risks of Vaccine Cited be uftethical, critics say, because the ceived one of the vaccines. The experts said the majority of the trials deny thousands of infants vac- Approval in Both Countries people and many doctors in the two cines that would protect against the countries countries believe the risks of disease. After comparing the vaccines' safety the vaccine now used worldwide out- The studies, sponsored by a unit of and ability to raise. an immune re- weigh benefits, and so do not strongly the National Institutes of Health, in- sponse, the agency solicited proposals advocate its use. As a result, pertussis volve more than 25,000 babies, with from scientists worldwide to test four is common among children in these morethan 4,000 of them receiving vac- of the vaccines in larger trials. Sweden countries. In Italy, for example, the cinations that do not include protection and Italy were selected because per- rate is at least 5 percent annually, an against pertussis, or whooping cough. tussis vaccination was not compulsory average of about 40,000 cases each Smaller trials suggested that the vac- in those counties and both nations had year. cines being tested may not only be large numbers of unimmunized chil- The America experts argue that if effective but have fewer side effects dren at risk, officials said. the new vaccines, which appear to have than the whooping cough vaccine cur- In both countries, the design for the rently in use in the United States. vaccination trials, including the control fewer and milder side effects, prove "Itis unethical to do this trial," said groups whose members did not get a effective in the trials, it could lead to a a leading critic, Dr. Michele Grandolfo, whooping cough vaccine, were ap- resurgence of interest in having all a senior epidemiologist with the Isti- proved by the national health minis-| children worldwide immunized against tuto Superiore di Sanita in Rome. The tries and ethical review boards. instituto, the Italian equivalent to the In each country, participants were) pertussis. The low level of vaccination in the Critics Question Ethics of U.S.-Sponsored Vaccine Tests in Italy and Sweden National Institutes of Health, is con- divided into four groups: Two received two countries is an important factor in ducting the study in Italy under a $11.5 one of two acellular pertussis vaccines designing an ethically acceptable trial, million contract from the N.I.H. said Dr. Mark Siegler, director of the "Tithink ethics requires us to break Center for Clinical Medical Ethics at into the trial and vaccinate all the combined with the diphtheria the University of Chicago. "Since only children who did not get the pertussis vaccines; one received the convention- 4 in 10 Italian children are immunized, vaccination," Dr. Grandolfo said in a al D.P.T vaccine licensed in the United it seems that any trial that assured 9 recent telephone interview. "It is incor- States, and the last, the control group, out of 10 participants were likely to rect to use children in this manner." received a diphtheria-tetanus vaccine receive a safe and effective pertussis without a pertussis component. Defense by U.S. Officials The inoculations in Sweden were ad- immunization is an ethically appropri- United States health officials say the ministered from March 1992 to April ate trial," he said. 1993 and involved 9,829 infants, with But Dr. Siegler said to avoid all criti- studies comply with international standards on testing with human sub- 2,600 of them in the control group. In cism, the best approach would be to jects and adhere to traditional stand- the Italian trials, in which 15,550 in- offer all parents interviewed for the ards; of medical ethics because the fants received shots from September study a chance to get the recommend- ed vaccinations first, and then try to rates of vaccination for pertussis in 1992 through September 1993, the con- Italy, and Sweden are so low that in- trol group consisted of 10 percent of the enroll those who declined. fants are not being denied care they participants. Officials at the N.I.H. said they were would normally receive. All subjects are to be followed for sensitive about the ethical aspects of The officials said that such studies two years after they received the third the overseas vaccine trials and had could not be done in the United States inoculation in the series, to see if they their plans approved by ethics panels because almost all infants are vacci- later contract any diseases, including at the infectious diseases institute, nated against whooping cough. Beyond whooping cough. which is paying for the trials, the the constraint of a limited pool of un- Critics of the studies, particularly N.I.H., and by the Food and Drug Ad- vaccinated infants, conducting such a the one in Italy, con 'end that the Na- ministration. trial in the United States would not be tional Institutes of Health took advan- Review by Special Panel permitted because of ethical prohibi- tage of researchers i both country by tions on large-scale experiments that tying the contracts to provisions for In addition, the institute established deny participants an effective avail- control groups. The European scien- a special study group of vaccine ex. able treatment. Pertussis vaccination tists initially opposed this requirement. perts, headed by Dr. Frederick C. Rob- is recommended by Federal health bins of Case Western Reserve Univer- agencies and the American Academy sity in Cleveland, to monitor all aspects of Pediatrics and is mandatory in al- The N.I.H. insisted that such control of the trials. most all states for admission to school. groups were statistically essential for "We reviewed the protocols, dis- "The concerns of people are under- evaluating the effectiveness of the new cussed them with the Italians and standable when you have trials involv- vaccines. Swedes, and were satisfied that the ing children," said Dr. Anthony S. Dr. Fauci denied that American offi- programs had been cleared through Fauci, director of the National Institute cials "steam rolled" the Italians into the proper channels in each country," of Allergy and Infectious Diseases, conducting a trial they did not want. said Dr. Robbins, a Nobel laureate and which is sponsoring the studies. "But Both sides compromised, he said, former president of the Institute of we have taken extraordinary care to agreeing on a smaller control group Medicine, in an interview. "We felt that assure that these studies are scientifi- than originally proposed. with the large number of people in Italy cally and ethically valid." "A 10 percent group was the small- not getting the pertussis vaccine any- Whooping cough is a highly conta- est you could have to get statistically way, there were no ethical problems gious respiratory disease caused by meaningful results," Dr. Fauci said. with having a placebo group during the "These considerations were mulled the bacterium Bordetella pertussis. It course of this trial." is responsible for a half million deaths over extensively and we came away Dr. Daniel Wikler, professor of medi- annually worldwide, primarily among with a trial that almost everyone could cal ethics at the University of Wiscon- infants, according to estimates by the agree with," he said, "But there will sin in Madison, said the issues raised World Health Organization. always be some people who will dis- are not uncommon in research involv- There were about 5,500 cases of the agree with the design of a trial" ing populations that are not getting disease and about a dozen deaths re- Disagreement about the ethics of the health care that is as good as it should ported in the United States in 1993, vaccine trials were disclosed earlier be. "There is no clear answer for me, compared with a. peak of 265,000 cases this year in Science & Government he said, "because both sides have ar and almost 7,000 deaths annually in the Report, a science policy publication ethical argument. You as a researcher 1930's, before use of the first vaccines whose editor, Daniel S. Greenberg, ob- can't be responsible for the condition If became widespread in the 1940's. tained records on the Italian project which you find your subjects, but you through the Freedom of Information can't be exploitive." Looking for More Safety Act. Dr. Fauci said there are two majo The vaccine, made from whole killed The World Health Organization, as ethical questions to ask about conduct pertmesis organisms, is usually com- well as the national health agencies of ing foreign trials: Are you withholding bined with vaccines for diphtheria and Sweden and Italy, recommend pertus- something beneficial in the trial tha tetanus into what is known as the sis vaccination. Critics say the national the subjects would normally get? Ar D.P.I. inoculation. Children typically health institutes should not have is- you giving something you would no get four inoculations between the ages nored these recommendations by in- give to subjects in the United States? of 2 months and 18 months and a boost- sisting upon having some unvaccinated "If the answers are 'no' then you'r er shot at the age of 5 or 6. subjects. usually okay," he said. Reports in the 1970's that the vaccine The leading Italian critic, Dr. Gran- had been linked to seizures, brain dam- dolfo, said other ways to test the effica- age and death in a tiny percentage of cy of vaccines without denying partick- children led to concern among some pants pertussis shots could have been parents and health professionals. Re- explored. For example, beg sponding to calls for a better vaccine, searchers could have inocal THE NEW YORK TIME drug companies developed vaccines children in a small area made from parts of the pertussis bac- vaccines and observed terium's outer coat and detoxified pertussis in that area chemicals from the organism. Some of similar areas where these so-called acellular vaccines, not used. SUNDAY, MARCH 13, 1994 which appear to cause fewer adverse Dr. Fauci and other effects than the old vaccine, have been perts said the children available for several years for use in did not get pertusals older children, but not infants. unduly at risk compared Inl the health institutes conduct- because fewer than 14 also invite even tougher re- PARTY ATTACKIN the Republicans. This is a great way to pump up your said Terry Michael, a former for the Democratic Nation- CLINTONS' CRIT mittee who was at the meeting spectator, "but it risks sounding ensive to the increasing number of who pollsters say have ques- Party Chairman Revisits Old dons about Whitewater. When you sound defensive, people wonder if you have something to hide." Allegations to Try. to Dull Mr. D'Amato lost no time in retort- tng that Mr. Wilhelm's remarks about Republicans' Attacks allegations of kickbacks when Mr. D'A- mato was a county executive in New York were "a desperate attempt by political spin doctors to divert attention By RICHARD L. BERKE from the real issue." Larry Neal, a Special to The New York Times spokesman for Senator Gramm, said, CLEVELAND, March 12 Trying to The problem that we see is that the deflect the glare of the Whitewater President and Wilhelm are reluctant to affair from the White House, the chair- let the facts out." Mr. Wilhelm had also man of the Democratic Party harshly raised allegations about a vacation attacked three Republican Senators to- home of Mr. Gramm's and campaign day, calling them unfit to criticize contributions to Mr. Dole. President Clinton because of questions As much as party leaders argued about their own behavior. that the mid-term elections would not The chairman, David C. Wilhelm, be affected by the Clintons' involve- asserted at the close of the party's ment in Whitewater, a failed real es- spring meeting here that it was "most tate deal in Arkansas years ago, they bizarre" for the Republicans to turn to repeatedly raised the affair during a leaders like Senators Alfonse M. D'A- three-day meeting that ended today. mato of New York, Phil Gramm of And though they said President Clinton Texas and Bob Dole of Kansas in "an and his wife, Hillary, would ultimately obsession with Whitewater." He said, be vindicated, some party leaders ac- "Their true colors have been showing knowledged privately that they were in the past week as they grope for their worried about how the case might play mother's milk, wallowing in whatever out. sleaze and mud they can create from Vice President AI Gore, who ad- the Whitewater investigation." dressed the gathering on Friday Dusting off old allegations about the evening, took a more cautious ap- Senators, Mr. Wilhelm engaged in the proach than Mr. Wilhelm and other sort of name-calling that he had said speakers here, never mentioning was standard fare for Republicans. Whitewater except indirectly, when he "Being attacked on ethics by Al D'A- criticized "the politics of negativism." mato is like being called ugly by a White House Informed frog," he said. "Being accused of ethics violations by Phil Gramm is like being Party members were particularly called low by a snake. Being attacked protective this weekend of Mrs. Clin- on ethics by Bob Dole is like being ton, and some urged her to be more called a tax cheat by Leona Helmsley. aggressive in speaking out about her The strategy of counterattacking is a role in Whitewater. Today, Mr. Wil- gamble for Mr. Wilhelm because it helm's biggest applause came not could make the party appt. besieged when he took on the Senators but when he defended the First Lady. "Hillary Clinton, in particular, is a huge threat to the Republican Party," he said. "She is a symbol of what is great about our party. They can't stand her success, and that's why they're on the attack." Indeed, the most popular handouts here were stickers declaring, "Don't Pillory Hillary," stickers passed out by Lynn Cutler, who has long been promi- nent in Democratic Party circles. Say- ing that Mrs. Clinton had unfairly tak- en the brunt of criticism for White- water, Ms. Cutler spoke of the First Lady's background and said, "It's not THE NEW YORK TIMES, SUNDAY, MARCH 13, 1994 like she was a matzo ball before she became First Lady." She said it was time for Mrs. Clinton to go public in defending herself. White House officials said they were exploring ways to have the Clintons explain their side of the Whitewater case. They considered having both of them appear on a network broadcast this week but decided instead to have Mrs. Clinton grant interviews today to the majer news magazines. For now, Mr. Wilhelm is the princi- pal defender of the Clintons, and he repeatedly accused Republicans of be- ing consumed by Whitewater. But it was Mr. Wilhelm who talked about the affair all weekend. Y

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Whitewater, March 1994 [Folder 6]

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