WASHINGTON -- Arkansas Gov. Jim Guy Tucker, whose business dealings have come under scrutiny as part as the investigation into President Clinton's financial affairs, was indicted yesterday by the Whitewater grand jury on charges of lying to obtain a $300,000 government-backed loan.
The Tucker indictment does not relate to Mr. Clinton directly.
But some of the figures involved in the case against Mr. Tucker have been linked to Mr. Clinton's financial affairs before he became president.
Mr. Tucker, a Democrat who succeeded Mr. Clinton as governor, was charged, along with an associate, with making false claims to a lending company backed by the federal Small Business Administration.
They said the money they sought was for an Arkansas cable television venture, but prosecutors say there was no such venture.
The governor and his associate, William J. Marks, were indicted on three felony counts: conspiracy to make false statements, making false statements, and conspiracy to defraud the Internal Revenue Service.
John H. Haley, one of Mr. Tucker's lawyers, was also indicted but solely on the charge of conspiracy to defraud the IRS.
Another lawyer for Mr. Tucker, George Collins, said the governor has "absolutely done nothing wrong" and would plead innocent at his arraignment next week.
Kenneth W. Starr, the Whitewater independent counsel who was appointed in August to examine Mr. Clinton's ties to a failed Little Rock savings and loan, has cast a wide net in his investigation.
He has already racked up a half-dozen indictments and convictions on issues related, sometimes tangentially, to Whitewater.
Yesterday's action marks the first indictment against a prominent official in the Whitewater inquiry; most of the other criminal cases brought by Mr. Starr have been built around little-known Arkansas businessmen.
The indictment of Mr. Tucker also suggests that the original crux of the investigation -- the link between the Clintons' ill-fated investment in the Whitewater land deal and Madison Guaranty Savings and Loan, the failed Arkansas thrift -- has expanded to a review of the entanglements among Arkansas' political and financial power brokers, including Mr. Clinton.
Prosecutors are looking specifically at the source of money used to boost Mr. Clinton's 1984 gubernatorial campaign.
The White House stressed yesterday that there was no direct connection between the Tucker indictment and Mr. Clinton.
Mark Fabiani, a lawyer in the White House counsel's office, released a statement saying: "We are not aware of anything in this indictment that relates to the president or the White House."
But some of those involved in Mr. Tucker's business dealings have been mentioned in connection with the president.
Chief among them is David L. Hale, a former Little Rock judge who, as president of Capital Management Services, made the $300,000 loan to Mr. Tucker in 1987 that is part of yesterday's indictment.
Capital Management, licensed by the SBA, was to make loans to socially and economically disadvantaged small businesses.
Mr. Hale pleaded guilty last year to charges that he misused his SBA-backed lending company. He has been cooperating with Whitewater prosecutors.
He has said that in 1986, then-Governor Clinton pressured him to make a $300,000 loan to Susan McDougal, the wife of Madison's president, James McDougal.
More than one-third of that money, which was never repaid, was used by Whitewater Development as a down payment on the purchase of property near Little Rock, Mr. McDougal has said.
Mr. Clinton has denied the charge that he pressured Mr. Hale to make the loan.
And no credible witness has corroborated the former judge's assertion.
L Mr. Clinton continues to be dogged by the Whitewater affair.
The Senate banking committee is to begin a second round of Whitewater hearings within weeks that are likely to stretch through next winter, just when the presidential campaign will be in high gear.
The House banking committee is also expected to begin hearings some time this summer.
Rep. Jim Leach of Iowa, the Republican chairman of the House banking committee, said yesterday's indictment of Governor Tucker "underscores the seriousness of the independent counsel's inquiry."
If convicted on the felony charges, Mr. Tucker, 51, could get up to 12 years in prison and $750,000 in fines and would have to resign.
He is the 10th sitting governor to be indicted this century. Under state law, he would be replaced by Lt. Gov. Mike Huckabee, a Republican.