Misconduct denied in Whitewater case


WASHINGTON -- An extraordinary all-star lineup from the White House went before the House Banking Committee yesterday, with all the president's men and women declaring their actions in the Whitewater matter legal, ethical and proper.

"No one did anything wrong," said Thomas F. "Mack" McLarty, the senior White House adviser and former chief of staff, one of the 10 top administration officials to testify before the committee in the second day of its hearings to examine a small slice of the Whitewater episode.

One by one, members of the high-powered group -- from the high-profile George Stephanopoulos to the little-known but influential chief of staff to the first lady, Margaret Ann "Maggie" Williams -- raised their arms to swear to tell the truth, and then read statements about their Whitewater-related activities.

Mr. McLarty, along with such senior aides as Mr.Stephanopoulos, Bruce Lindsey, Harold Ickes and John D. Podesta, stated that no one in the White House tried to influence the government's investigation into the failure of an Arkansas savings and loan with ties to the Clintons.

"Nothing happened," said Mr. McLarty, a lifelong friend of the president's.

Contentious and at times eye-glazing, Day 2 of the hearings gave the Democrats the opportunity for made-for-TV sound bites about how wasteful and nonsensical they felt the proceedings were. "What is going on here?" said Rep. Stephen L. Neal of North Carolina. "I think it is politics at its worst."

"McCarthyism," charged Bill Orton of Utah. "Wastewater," quipped Carolyn B. Maloney of New York.

The Republicans, for their part, were far more organized than RTC they were Tuesday, with many of the minority members yielding their allotted five minutes to a designated handful of colleagues -- most of them former prosecutors, such as Bill McCollum of Florida -- to help sustain a line of questioning.

Still, there were no new revelations, only blow-by-blow accounts of meetings that took place in the White House and vast disagreement between Democrats and Republicans over the propriety of those meetings.

The bank of White House witnesses was preceded by nearly seven hours of sometimes emotional testimony by former White House counsel Bernard W. Nussbaum, who resigned in April as a result of his clumsy handling of the Whitewater matter. Mr. Nussbaum, fighting tears as he recalled the honor he felt in serving the president, admitted that he made mistakes and unintentionally hurt Mr. Clinton.

"I was not a perfect counsel to the president," Mr. Nussbaum said. "I made mistakes."

But he insisted that the meetings in question, at which Treasury officials briefed White House staff about the status of a government probe of the Whitewater affair, were "proper."

The 10 White House officials, sitting elbow to elbow at the witness table, each had had at least one contact last winter with officials from the Treasury Department or the Resolution Trust Corp., an independent agency that Treasury oversees.

Late last fall, the RTC recommended that the Justice Department conduct a criminal investigation of a failed Arkansas thrift, Madison Guaranty Savings & Loan. Its referral included mentions of the Clintons as possible beneficiaries of alleged wrongdoing at Madison, which cost taxpayers $60 million when it collapsed.

MA The thrift's owner, James McDougal, was the Clintons' partner

in the Whitewater land deal.

"No one in the White House attempted in any way to influence the RTC's decision-making," Mr. McLarty said.

Nussbaum on stand

He and his fellow Clintonites echoed the testimony of Mr. Nussbaum, the first Whitewater casualty, asserted that the meetings -- at which Treasury officials briefed White House aides about the status of the RTC probe -- were appropriate and in fact, necessary. The discussions did not include the substance of the RTC referrals, he said. Rather, they focused on how to respond to press questions, and as such enabled him and his staff -- and the president -- to do their job effectively.

"We don't want [the president] to be blind-sided," said Mr. Nussbaum, who has returned to private law practice in New York.

But the Republicans expressed a sharply different view, saying it was unethical for Treasury officials to give White House officials a "heads-up" about the investigation, because the Clintons, though not targets of the probe, were mentioned as possible witnesses.

The House committee's ranking Republican, Jim Leach of Iowa, said that the administration's actions were based on the premise that the president was above the law.

"In law enforcement, little is more inappropriate than to give insider notification to individuals who may be parties to criminal probes," Mr. Leach said at the opening of yesterday's televised hearings. "In the case of a powerful political figure, insider notification provides that individual the option either to attempt to sidetrack the investigation and/or frustrate it by warning other possible targets of the probe or by causing the possible destruction of documents or other evidence."

Mr. Nussbaum, maintaining that neither he nor anyone else at the White House tried to interfere with the investigation, said the president is a "unique figure." "The president is not above the law," he said, ". . . . But you're operating in a White House that is the center of press attention, the center of media attention. All sorts of charges come at us all the time. I was told the president was a witness in something. . . . What a responsible lawyer does then is put his client or his client's organization -- the White House -- in a position to respond truthfully, accurately, promptly. . . . That's all we were doing."

Advice to Altman

Much of his nearly seven hours of testimony focused on his February advice to Deputy Treasury Secretary Roger Altman, then acting head of the RTC and a longtime friend of Mr. Clinton's, not to recuse himself from the RTC's handling of the Whitewater matter.

When he testified Tuesday, White House counsel Lloyd N. Cutler criticized Mr. Nussbaum for giving such advice. And yesterday, even New Jersey Democrat Herbert C. Klein broke party rank and questioned the wisdom of such advice.

Mr. Nussbaum defended his actions, saying he did not pressure Mr. Altman, who eventually did recuse himself, to stay on the case. He said he felt strongly, and still feels, that officials and agency heads should not remove themselves from sensitive issues unless they are ethically or legally obliged to do so.

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