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Curtain rises this week on Whitewater affair

THE BALTIMORE SUN

WASHINGTON -- There will be no talk of bloody gloves, and the testimony is likely to be about as gripping as watching paint dry. But that won't keep official Washington, deep in its midsummer slump, from perking up this week for its long-awaited and high-stakes spectacle of the season: Whitewater hearings.

After six months of Republican pushing, Democratic pulling and White House angst over the prospect of congressional inquiries, the House Banking Committee will raise the curtain tomorrow, and the Senate Banking Committee on Friday, on hearings to examine one small portion of the multifaceted Whitewater affair.

With high-ranking administration officials as witnesses -- such as Treasury Secretary Lloyd M. Bentsen, White House counsel Lloyd N. Cutler and senior adviser Thomas F. "Mack" McLarty -- zealous, sound-biting lawmakers as questioners and a nationwide audience courtesy of CNN's live coverage, the hearings are sure to be full-scale, Washington-style political theater.

But the content will be extremely limited. The House and Senate hearings will focus on whether White House and Treasury officials, in contacts last winter, tried to influence a regulatory agency's investigation of Whitewater. The hearings will not deal at all with the Clintons' Whitewater land deal or their connection to a failed Arkansas thrift, Madison Guaranty Savings & Loan, that is at the heart of the matter.

Even Rep. Jim Leach of Iowa, who has led the Republican drumbeat for hearings, laments that because of concessions to Democratic leaders and Whitewater special prosecutor Robert B. Fiske Jr., who recently narrowed the scope of these proceedings even further, the hearings will deal with only "2 or 3 per cent" of the Whitewater story. And, at that, the least important parts.

And while there are important issues at stake -- namely the veracity of senior administration advisers -- and the potential exists for public relations damage to the Democrats and, of course, the president, the hearings are unlikely to lead to indictments, as the Iran-contra hearings did, or even to findings of criminal wrongdoing.

"We're not advertising a blockbuster," said one Republican banking committee staff member. "The heart of this thing is still down in Arkansas."

This week's hearings, expected to spill into next week, will deal only with the portions of the case that Mr. Fiske has finished investigating. That includes two areas: the circumstances of the July 1993 death of deputy White House counsel Vincent W. Foster Jr., and possible attempts by White House and Treasury Department officials to influence a Resolution Trust Corp. investigation into Madison Guaranty that was run by the Clintons' business partner in the Whitewater land deal.

In a report issued last month, Mr. Fiske concluded that Mr. Foster's death was a suicide caused by depression and was unrelated to Whitewater. Banking committee members are not likely to delve into his death.

On the second matter, Mr. Fiske said that he found nothing criminal about the conversations between White House and Treasury officials. But he left open the question of whether they were ethical.

Splashing down on Capitol Hill in a highly charged partisan atmosphere -- amid a difficult health care debate, and just months from congressional elections -- the hearings could be significant for both parties.

Democrats, who believe the hearings are unnecessary given Mr Fiske's investigation, expect the Republicans to bash the administration and try to embarrass and weaken the president.

"They're going to make GOP stand for Grandstanding Old Politicians," says Paul Begala, an adviser to the White House.

He and other Democrats believe the hearings are a waste of time and money -- Sen. Christopher J. Dodd of Connecticut estimates a cost of $400,000 -- and thus could backfire for Republicans like Mr. Leach who have doggedly pursued Whitewater even though there's little evidence that the public is all that interested.

"I would not want to go home to Iowa," says Mr. Begala, referring to Mr. Leach, "and say: 'I know crime is out of control, I know we have allthese problems, but I have chosen to spend my time and your money investigating the only people in the entire federal government we know did nothing wrong because they've been cleared by a special prosecutor, a grand jury and 100 FBI agents.' "

Republicans, conceding that they are unlikely to turn up criminal activity, say that their charge is to examine the ethics and appropriateness of such behavior.

"People may learn something about the way some of the people who have the most trusted jobs in government do business," says Joe Pinder, press secretary for Mr. Leach.

Democrats are concerned about the images that will be conveyed, and worry that the partisan wrangling could damage the president's attempts to get health care and crime bills passed.

"There's definitely a lot of anxiety," says a Democratic staff member, "especially because of the timing. You don't want an incredibly partisan environment when a major piece of legislation is coming up."

The questioners will likely focus on Roger C. Altman, the deputy Treasury secretary, who acknowledged in Senate banking hearings in February that he had recently given a "heads up" to the White House about the status of the RTC's examination of Whitewater while he was acting head of the independent agency. He has already admitted, as have other administration officials, to "a piece of awful judgment."

One potential trouble spot for him: He told Congress that he hadn't learned until March that the White House had been warned as early as September that the RTC was referring the Whitewater matter to the Justice Department for a criminal investigation. But, according to recent reports, Treasury counsel Jean Hanson -- expected to be a key witness -- has told Senate staffers that she briefed the White House on these matters last fall at Mr. Altman's instruction.

Treasury Secretary Bentsen also is a likely target for grilling about what he knew and when he knew it. And a potentially embarrassing source of documentation could be the personal diaries of Treasury Department chief of staff, Joshua Steiner, who reportedly chronicled meetings and conversations in detail.

Congress might also examine recent disclosures that President Clinton had a brief conversation last winter with Comptroller of the Currency Eugene A. Ludwig, a top bank regulator and longtime Clinton friend, during which he asked for advice on the administration's handling of Whitewater. Mr. Ludwig has said that he declined.

Congressional aides on both sides of the aisle have been working furiously to prepare, with three teams of attorneys on each side interviewing potential witnesses and staff members poring through thousands of pages of documents.

At the White House, Mr. Cutler, who is scheduled as the only witness to be called tomorrow by House Banking Committee Chairman Henry B. Gonzalez, D-Texas, has been preparing himself and other likely White House witnesses for the hearings as he would for a trial, even calling in public relations specialists.

Even before the opening gavel, the partisan atmosphere has revved up. Republican staffers have complained that the White House has been uncooperative, and that some officials, such as Mr. McLarty and Lisa Caputo, press secretary to Hillary Rodham Clinton, have been unavailable for prehearing interviews.

In a memo to Republican members of the House Banking Committee, Mr. Leach listed impediments that the administration and Democrats were throwing into the works, adding that his preliminary review of documents "has revealed a striking pattern of lack of public candor at very high levels within the executive branch. It is increasingly evident that this administration has everyreason not to want the sun to shine on its affairs."

Feeling shortchanged by this first round of limited hearings, he and other Republicans are continuing to press for a full public airing of the whole Whitewater story.

Although they had hoped to devote much of these hearings to White House officials' handling of Whitewater documents in Mr. Foster's office after his suicide, Mr. Fiske eliminated that portion about a week ago, saying that he had not finished his work in this area.

Republicans have said they will insist on a second round of hearings on those events when Congress returns in September -- closer to the midterm elections and thus fraught with even more political peril.

THE WITNESSES

Expected witnesses at House and Senate Banking Committee hearings on Whitewater (not necessarily in order of appearance):

From the White House:

Special counsel to the president Lloyd N. Cutler; senior adviser and former chief of staff Thomas F. "Mack" McLarty; former counsel Bernard W. Nussbaum; senior policy adviser George Stephanopoulos; communications director Mark D. Gearan; presidential assistants Harold Ickes, Bruce R. Lindsey and John D. Podesta; Margaret Ann "Maggie" William, chief of staff to Hillary Rodham Clinton; Lisa Caputo, press secretary to Mrs. Clinton.

From the Treasury Department:

Secretary Lloyd M. Bentsen; deputy secretary Roger C. Altman; general counsel Jean Hanson; deputy general counsel Dennis I. Foreman; chief of staff Joshua Steiner.

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