Trust in Clinton's Word is the Issue

THE BALTIMORE SUN

Washington. -- Whitewater began as a routine, if disquieting, peek into a presidential candidate's personal finances. But it has become something else.

Whitewater has evolved -- and not just in the eyes of Republican opponents and snoopy reporters -- into a symbolic word for something that has always troubled a sizable segment of the voting public about Bill Clinton.

It's as basic as this: Can his word be trusted?

"This always was, is and will be Bill Clinton's Achilles heel," said Larry Sabato, University of Virginia political scientist. "Deep down, people don't believe he is telling them the truth, the whole truth."

"I'm gonna serve four years. I told you when I announced for governor, and that's what I'm gonna do." This was Mr. Clinton's 1990 promise to the people of Arkansas not to run for president. Months after his new term began, he was exploring a White House bid.

"We will lower the tax burden on middle-class Americans. . . ." Mr. Clinton made this pledge to cut middle-class taxes during the 1992 campaign. Rival Paul E. Tsongas accused Mr. Clinton of "pandering" for votes, and, as president, Mr. Clinton attempted a middle-class tax increase, in the form of a gasoline tax. Congress didn't go along.

"I didn't inhale." That also was a 1992 response, given grudgingly to queries about whether he'd ever smoked marijuana. For a decade, in Arkansas, Mr. Clinton had finessed this question by saying: "I didn't violate the drug laws of my country."

To Mr. Clinton's critics back home, these were the kind of answers someone gives his probation officer, not the voters. And after years of such statements, they hung a nickname on the governor: "Slick Willie." It was this baggage that Mr. Clinton brought to Washington -- and to the Whitewater affair.

As this scandal has unfolded, the president has seemed genuinely perplexed as to why it won't go away. Last week, at a town hall meeting in Charlotte, N.C., the questions that came from everyday Amer- icans provided a strong clue:

"Mr. President, with the recent news reports about the first lady's cattle futures earnings, and with all these Whitewater allegations, many of us Americans are having a hard time with your credibility," one woman said.

She is hardly alone. Although the public is critical of the press and Republicans for pushing Whitewater too hard, opinion polls this spring show half to two-thirds adults surveyed suspect the Clintons of hiding information about Whitewater.

Another questioner at the Charlotte town meeting cited the middle-class tax cut and several Bush foreign policies that Mr. Clinton criticized during the campaign but has left essentially intact. He also cited presidential statements about Whitewater that left him "incredulous" and asked: "Given all of that, why should we believe you as to Whitewater allegations or as to statements made of positions taken by you as president?"

In other words, it's not just the allegations about Whitewater that bother people; it's also the way the Clintons have responded.

In the two years since the New York Times story first detailed the partnership between Bill and Hillary Clinton and James and Susan McDougal in an Ozark land development known as Whitewater, Mr. Clinton, his wife and their aides have issued a series of denials and responses.

A review of these responses shows that many of them have been incomplete and misleading. Some have been proven wrong at a later date. And, despite the emotion that accompanies them, these responses are almost always couched in legalistic language.

"First of all, I've not been accused of doing anything wrong," Mr. Clinton said in Charlotte. "I'm still waiting for the first credible source to come up and say what I did was wrong."

Mr. Clinton has been accused of doing something wrong, however. His accuser's name is David Hale, and he maintains that Mr. Clinton pressured him into making a $300,000 Small Business Administration loan to Susan McDougal -- $110,000 of which found its way into Whitewater.

But the key word in Mr. Clinton's sentence, according to White House officials, is "credible." Mr. Hale, White House press secretary Dee Dee Myers says, is lying.

Interviewed in 1992, Mrs. Clinton referred to a cellular phone venture that netted her $46,000 after five years on a $2,000 investment as her most successful single investment.

In fact it wasn't. Her office released documents this month that show she made $99,000 in 10 months playing the commodities market.

Ethicist Michael Josephson refers to this kind of dissembling as "quick lies," and says that it is a common, if unfortunate, part of everyday life in modern America.

Asked in mid-March, "Did you tell a lie last week?" 38 percent of adults surveyed by the Yankelovich polling organization answered "yes."

Moreover, says Mr. Josephson, founder of an ethics institute in ,, Marina del Rey, Calif., these types of lies about personal matters -- even when told by a president -- pale in comparison to some of the whoppers told by previous presidents.

"As an ethicist, I hate all lies . . . and I'm not thrilled with conflicts of interest back in Arkansas, either," he said. "But as a practical matter . . . it depends on what they're lying about."

Mr. Josephson says that he is far more troubled by implausible and contradictory statements made by Presidents Ronald Reagan and George Bush over the Iran-contra scandal.

"If branches of government cannot trust each other to tell the truth, democracy can't function at all," he said. "We need to keep perspective on what's important."

The problem with this defense, however, is that some of the Clintons' fibs or misdirections concern highly material facts about Whitewater -- and have come at crucial times in their political lives.

The New York Times broke the story of Mr. and Mrs. Clinton's tangled relationship in Whitewater Development Corp. with a free-wheeling savings-and-loan executive on March 8, 1992, just as the primary season was headed South to Mr. Clinton's political stronghold.

By then, Mr. Clinton already had proven he was the most articulate and attractive of the Democratic candidates, but opinion polls exploring the nation's attitudes toward him revealed that he hadn't quite closed the sale with the voting public. Credibility seemed to be the sole issue standing between Mr. Clinton and the nomination.

This was evident to Mr. Clinton's Democratic rivals, and on March 15, a day and a half before the crucial primaries in Illinois and Michigan, former California Gov. Jerry Brown ambushed Mr. Clinton over Whitewater.

Accusing Mr. Clinton of "corruption" and "conflict of interest," Mr. Brown added, "His wife's law firm is representing clients before the state of Arkansas' agencies -- his appointees."

Mr. Clinton responded with a personal attack on Mr. Brown. He also said, "During the whole time I've been governor, my wife, who is in the oldest law firm west of the Mississippi, and is a highly regarded lawyer, never lobbied me or any state agency that I'm aware of."

This claim -- central to the Clintons' protestations of innocence -- was repeated by Mrs. Clinton the next day. Only after the press discovered it did the the Clintons acknowledge that the Rose Law Firm received a $2,000 retainer to represent Mr. McDougal's Madison Guaranty Savings and Loan -- and that Mrs. Clinton exchanged letters on behalf of Madison with a Clinton-appointed regulator.

Those facts trickled out later. By then, Mr. Clinton had won the Illinois and Michigan primaries and was well on his way to the nomination.

His juggernaut was stalled temporarily in Connecticut, where he lost to the underfinanced, unorthodox Mr. Brown. Asked as they left the polls whether Mr. Clinton had "the honesty and integrity to serve effectively as president," half of Connecticut's Democrats replied "no."

Today, Mr. Brown feels vindicated.

"He attacked me, then used his wife as a shield," he said in an interview from Oakland, Calif. "But I don't know that I could have put it any more accurately."

Mr. Clinton's response to all of this is that he's appointed a special counsel to look into the whole mess.

"So let him do his job," he says, "and let me be president."

But as the town hall meeting in Charlotte showed, telling the truth is still considered one of the demands of the job. It's been this way from the beginning. George Washington's biographers felt obliged to include a possibly apocryphal story of how young George admitted to his father that he'd cut down a cherry tree with the memorable confession: "I cannot tell a lie."

Abraham Lincoln was celebrated as "Honest Abe" for supposedly walking miles to return a few cents in change to a customer he'd overcharged.

Modern presidents have had a tougher time. Harry S. Truman confided to a friend that he had but one problem with Franklin D. Roosevelt, but it was a big one. "He lies," Truman complained.

Lyndon B. Johnson was said to have a "credibility gap." Every president since has been buffeted by similar allegations.

Historian George Colburn, producer of two television documentaries on President Dwight D. Eisenhower, believes it's essential for a nation to trust its presidents -- the way Americans trusted Ike.

"Whitewater helps breed a disdain for everything inside the Beltway, a cynicism," Mr. Colburn said. "When we come to the decision 'they' can't be trusted, voting participation drops off. It destroys the fabric of democracy."

Mr. Sabato talks of a more immediate ramification: a possible threat to the Clinton administration's ambitious social agenda, especially its plans to revamp health care.

"Every new government program is a leap of faith," he said. "And faith requires credibility, trust and integrity. If the public or the Congress don't have those feelings toward the president they are less likely to follow him into the unknown."

Finally, there is one other danger of not being candid: the internal danger to the person doing the lying.

Mr. Clinton once ruminated about how he looks wistfully across the Mall from his White House bedroom at Thomas Jefferson's statue. He chuckled as he recalled that he sometimes wished that Jefferson would climb down off his memorial and come give him some advice.

Well, Jefferson had some rather specific advice about those who cut corners with the truth because they believe they are serving a higher cause:

"He who permits himself to lie once finds it much easier to do it a second and third time, till at length it becomes habitual," Jefferson wrote. "He tells lies without attending to it, and truths without the world believing him. The falsehood of the tongue leads to that of the heart and, in time, depraves all its good dispositions."

WHITEWATER: THE WHOLE TRUTH?

Here are some key examples in which the original response on a Whitewater-related question from the Clinton team proved to be incomplete, misleading or only partially true:

"This has been an evolving story of a very complex matter, transactions that happened 16, 17 years ago," White House communications director Mark Gearan responded Friday. "It may appear (to be) imperfect, but it's a good-faith effort to comb their recollections of an investment they made when they were barely 30 years old."

* The original Whitewater expose by the New York Times' Jeff Gerth revealed that the Rose Law Firm, where Hillary Rodham Clinton was a partner, had represented Madison Guaranty Savings and Loan, which was owned by James McDougal, their partner in Whitewater.

This revelation was potentially the most damaging politically because it suggested that Mrs. Clinton represented a client with whom the Clintons were financially involved before state regulators who had been appointed by Mr. Clinton himself.

At a hastily arranged news conference in Austin, Texas, Mr. Clinton asserted that it was actually another lawyer in the Rose Law Firm, Richard Massey, who had handled the Madison litigation and that Mrs. Clinton had had no substantive role. A statement from the campaign said Mrs. Clinton did not "intervene or attempt to influence" state banking regulators about Madison.

But records unearthed later show that Mrs. Clinton was directly involved in the Madison account. Two letters written on Rose Law Firm letterhead asked Arkansas state securities officials to direct their replies to either Mrs. Clinton or Mr. Massey. One was written by Mrs. Clinton. And when Barbara Bassett Schaffer, a lawyer and Clinton family friend whom Mr. Clinton had appointed as commissioner of the state Securities Department, ruled favorably for Madison, she sent the letter to Mrs. Clinton, not Mr. Massey.

* At that March 8 news conference, Mr. Clinton challenged the New York Times' suggestion that Ms. Schaffer -- a former lawyer for Madison Guaranty -- was appointed by Mr. Clinton in order to help the thrift.

Campaign aides issued a statement under Ms. Schaffer's name maintaining that she couldn't have been hired to influence the Madison case because the thrift wasn't found to be insolvent until 1986 -- pointing out that she was hired on Jan. 16, 1985.

But this contention does not jibe with the records of the Federal Home Loan Bank Board. In a report issued Jan. 20, 1984, banking examiners painted a dire picture of Madison's future. Asserting that the "viability of the institution is jeopardized," the report detailed how the thrift was burdened by unsound loans, poor underwriting procedures, bad investment practices and dubious accounting methods that overstated its profits.

"Correcting [the] entries," it added ominously, "will adversely affect net worth and result in an insolvent position."

* On March 23, 1992, the Clinton campaign released a report it had commissioned in response to Whitewater from a longtime Clinton friend, James M. Lyons, a Denver lawyer.

Mr. Lyons, conceding that he had been hampered by a lack of Whitewater documents, said in the report that the Clintons had pumped $68,900 into Whitewater without taking any money out. This report became the Clintons' stock answer to any Whitewater-related questions for the rest of the campaign -- and helped the story die down.

But it, too, turned out to be inaccurate, as Mr. Clinton finally acknowledged at a news conference two years later. The correct amount that he and his wife lost, the president now says, is JTC about $47,000 -- roughly half the losses sustained by the McDougals.

* On July 21, White House communications director Mark Gearan told reporters that the office of deputy White House counsel Vincent W. Foster Jr. had been sealed after Mr. Foster committed suicide. But five months later, the White House confirmed -- after a newspaper account -- that Whitewater files found in his office had been removed and given to the Clintons' personal attorney.

* Two weeks ago, at a news conference devoted predominantly to Whitewater, the president told reporters, Mr. McDougal "has always told you that I had nothing to do with the management of Whitewater, that Hillary had nothing to do with it, we didn't keep the books or the records . . . that we were were essentially passive investors."

Mr. McDougal has made those representations about Bill Clinton, but he has made the opposite assertion about Hillary Clinton. He insists that she was intensely interested in the workings of the company, was a hands-on investor and that she had demanded the Whitewater records after the company went under.

* At the same news conference, the president was asked about allegations made that day by Republican Rep. Jim Leach of Iowa. Mr. Leach charged that April Breslaw, a lawyer with the Resolution Trust Corp., the independent savings-and-loan cleanup agency, visited the Kansas City office of the RTC and passed the word that officials in Washington desired a report exonerating Whitewater from blame in Madison's demise.

In reply, Mr. Clinton suggested that he would have trouble pressuring RTC officials because most were appointed by his predecessors. "So [Mr. Leach] may be talking about an internal dispute within the RTC from career Republican appointees, for all I know," the president said.

"What the president said is not correct," said RTC spokeswoman Elizabeth Ford, referring to Mr. Clinton's charge that RTC officials who supervised Ms. Breslaw are Republican appointees. are career, civil service employees, not political appointees."

Ms. Breslaw's supervisor is Thomas Hindes, who is assistant general counsel, office of professional liability. Mr. Hindes was hired during the Bush administration, but is a career employee, not a political appointee.

Mr. Hindes reports to Ellen Kulka, general counsel for RTC, who was appointed by Deputy Treasury Secretary Roger Altman -- a Clinton administration appointee and a longtime personal friend

of Mr. Clinton's.

Carl M. Cannon covers the White House for The Baltimore Sun.

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