Whitewater hearings just raise more questions

WASHINGTON — WASHINGTON -- From a month of Whitewater hearings in the Senate and a week in the House, Americans gained an insight into President Clinton's White House two years ago and Governor Clinton's Arkansas 10 years ago.

The public listened to a secretly taped conversation, saw handwritten memos, heard emotional stories about tearful nights and angry phone calls and broken promises.


But what the public gained mostly was a series of conflicting stories and facts that raise more questions, could even heighten suspicions, but don't offer hard evidence of wrongdoing on the part of President Clinton or first lady Hillary Rodham Clinton.

Chances are, those who suspected the White House engaged in a cover-up to hide or destroy papers potentially incriminating the Clintons had their suspicions reinforced over the past four weeks. Most likely, so did those who felt there were no misdeeds at the bottom of Whitewater.


Senate Whitewater committee Chairman Alfonse M. D'Amato of New York, a Republican, said the range of conflicts he heard "blows my mind," and he threatened to subpoena phone records of calls involving Mrs. Clinton.

Said Texas Rep. Henry B. Gonzalez, ranking Democrat on the House Banking Committee, "This week has added nothing to the sum of knowledge. It will not make a chapter, a line or a footnote in anyone's history of the late 20th century."

Apart from these hearings, independent counsel Kenneth W. Starr has racked up convictions and indictments against a dozen people in his investigation of Whitewater.

The Senate committee is expected to hold more hearings in the fall and into election year 1996. In the House, the Banking Committee will continue to investigate Whitewater, but Republican Chairman Jim Leach of Iowa has not yet decided whether he will hold more hearings.

Bitter clash over search

The key element revealed in the Senate's hearings, which focused on the aftermath of the 1993 suicide of deputy White House counsel Vincent W. Foster Jr., was the bitter clash between the White House and the Justice Department about the search of Mr. Foster's office.

Top Justice officials said a proper search should include Justice lawyers and police. But then-White House counsel Bernard W. ** Nussbaum insisted that he look at the files in the office alone, with the lawyers and police standing nearby, to determine which ones were appropriate to turn over to officials.

Mr. Nussbaum testified, over two days last week, that he was merely trying to protect the privacy and privilege of potentially sensitive presidential documents in Mr. Foster's office, not trying to hide anything, as Republicans aimed to prove.


But even Democrats on the committee thought his actions were heavy-handed, "casting a cloud of suspicion over matters that would have had a perfectly simple explanation," as Maryland's Sen. Paul S. Sarbanes put it.

Republicans clearly saw the cloud. "Why would anyone put up barriers unless he had something to hide?" Alabama Sen. Richard C. Shelby repeatedly asked witnesses.

If Mr. Nussbaum had something to hide, Republicans could not pull from any of the 32 witnesses any hint of what it was. The file on the Clintons' Whitewater land deal was among their personal papers in Mr. Foster's office, but at the time, Whitewater had not become the subject of great interest or controversy.

Still, Republicans and Democrats were troubled by discrepancies in the testimony.

For instance, top Justice officials insisted that Mr. Nussbaum reneged on an initial agreement to allow their lawyers to look at the files in the Foster office with him.

Mr. Nussbaum, however, testified that he merely said he would "consider" a joint search but never had agreed to it.


The conflict is important because it buttresses the GOP theory ++ that Mr. Nussbaum changed the rules and tightened up the search only after receiving instruction to do so either directly or indirectly from Mrs. Clinton, who feared that certain papers might fall into unfriendly hands.

Differences in testimony between Mr. Nussbaum and Susan Thomases, a close friend of Mrs. Clinton's, regarding a phone conversation they had, also seem to bolster this scenario, Republicans said privately.

They sought to prove -- but faced with denials and varying stories, could only imply -- that Mrs. Clinton expressed her desire to keep tight control of the office search to Ms. Thomases, who relayed that wish to Mr. Nussbaum.

"If Hillary Clinton wants to say something to me, she says it to me," Mr. Nussbaum stated. "She doesn't need a messenger."

Conflicting stories about why the Clintons' personal files from Mr. Foster's office were stored temporarily in the White House residence also raised suspicions among Republicans. They maintain the Clintons had the opportunity to review, and even remove, documents before sending them to their lawyer.

Unfortunately for Republicans, their theories require complex and unproven connections since there has been no solid evidence linking the Clintons directly to any of the questioned activities.


Unfortunately for the Democrats and for the White House, however, there are just enough conflicts in the stories to keep people wondering.

Seeking the quid pro quo

The House Banking Committee spent the week examining other aspects of the sprawling Whitewater controversy including the relationship between the Clintons and a failed Little Rock savings and loan owned by their partner in the Whitewater land deal, James B. McDougal.

Republicans, through witnesses and thousands of pages of documents, tried to prove that the Clintons improperly benefited from their association with Mr. McDougal, and that in return for financial gain, Mr. Clinton, as governor, helped his partner in state regulatory matters.

Documents, including a report by the Resolution Trust Corp. -- the federal agency overseeing the savings and loan cleanup -- showed that most of Whitewater's costs were paid by Mr. McDougal and his various companies, including Madison Guaranty Savings and Loan. And although the Clintons and McDougals were supposed to be 50-50 partners, the report said Mr. McDougal covered more than three-quarters of the venture's losses.

One witness, Jean Lewis, an RTC criminal investigator, said she found a bad-check scheme at Madison, and testified that about $88,000 of Madison funds were illegally diverted to Whitewater and about $12,000 from Madison to Mr. Clinton's gubernatorial campaign fund.


She and Republicans insisted that it was "common sense" that Yale-educated lawyers such as the Clintons would know where funds used to make payments on property they owned were coming from.

And a record of more than 150 contacts and communications between the McDougals and Clintons in the late 1970s and 1980s cast doubt on the Clintons' claim that they were "passive investors" in the Whitewater deal, unfamiliar with its operation.

Still, Republicans failed to produce any direct evidence that the Clintons were aware of the source of the funds that ended up in the gubernatorial campaign treasury and Whitewater.

The GOP did, however, produce some evidence that Mr. McDougal sought favors from Mr. Clinton in exchange for his apparent largess.

Documents showed the thrift operator advised Mr. Clinton on appointments to state regulatory agencies. They showed, too, that Mr. McDougal sought the governor's help on a brewery project and with regulatory officials who were pushing him to upgrade sewage treatment at several of his real estate developments.

The White House insisted that "claims of a quid pro quo have been shown to be false."


Ms. Lewis also asserted that there was a "concerted effort" among top government officials in 1992 and 1993 to "obstruct, hamper and manipulate" a report she wrote outlining suspected criminal conduct with regard to Madison and Whitewater.

Her claims were highlighted with the playing of her secretly taped conversation with an RTC lawyer from Washington, April Breslaw, who, she said, tried to influence her work.

The White House, committee Democrats and Ms. Breslaw -- who said Ms. Lewis was putting a sinister spin on the conversation -- tried to knock down the investigator's accusations. They showed that career and Republican prosecutors felt Ms. Lewis' report was not sufficient to trigger prosecution and suggested she had political motives.

Late last week, the committee examined Mrs. Clinton's Madison-related work for Little Rock's Rose Law Firm, releasing letters and memos that showed her involvement was more extensive than she had disclosed. Her work included matters that required action by state regulators appointed by her husband.

And it probed the law firm's failure to disclose actual and possible conflicts of interest when it represented the government in a case involving Madison. Mr. Leach said the firm's activities would become "a case study of legal impropriety at law schools for decades to come."

But he appeared to be speaking for everyone, not just his fellow Republicans, when on Thursday he looked out at a panel of federal regulators and sighed, "This is one of the most confusing presentations that I've ever heard."